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While the main purpose of this report is to draw key lessons from the case studies, a summary of quantitative survey evidence on the diffusion and impacts of workplace change is important for situating the cases. It should be noted that surveys cannot offer the detail or interpretive power of more “intensive” case studies. As well, there are various methodological difficulties in gathering precise statistics on organizational change.⁸ Nevertheless, it is possible to sketch out a general profile of workplace practices in Canada and the extent to which organizational change has moved that profile from the traditional systems described above.

We draw primarily on two establishment surveys to describe the incidence and impacts of different workplace strategies and practices in Canadian industry in the 1990s. The first is the Human Resource Practices Survey (HRPS), a 1993 survey of four major Canadian sectors. The strength of this database is its detailed information on a large number of human resource practices. The second is the Workplace Training Survey (WTS), a 1995 survey that covered virtually all industries in the private sector. This survey has a large sample and weighted results that permit us to estimate the incidence of individual practices in Canadian industry.⁹

Incidence of Workplace Innovation

The Human Resource Practices Survey (HRPS)

The Human Resource Practices Survey (HRPS) gathered data from 714 Canadian establishments on their “environment,” business strategy, various performance measures, and detailed evidence on their practices in a number of human resource areas. The sample included establishments with 40 or more employees in wood products, fabricated metal products, electrical and electronic products, and a range of business services.¹⁰ The survey collected data on a large number of practices which enabled the analysis to focus on HRM systems, or bundles of practices. The study identified three dominant HRM systems, with their (weighted) establishment distribution shown in Exhibit 2:¹¹

• The traditional system. Establishments fitting into this model have undergone very little workplace change, with their traditional system more or less intact. The study estimated that this cluster included 70 per cent of all establishments with 40 or more employees in the four sectors covered. Firms reporting traditional systems tended to be small, with business strategies based primarily on cost reduction.
• The participation-based system. Just under 20 per cent of the firms reported organizational and human resource changes that were designed above all to increase the direct contribution of employees in the workplace. These organizations emphasized some combination of job redesign, team work, employee involvement, and information sharing. Firms in this group tended to have competitive strategies based on innovation and quality.
• The compensation-based system. This system described about 13 per cent of the sample. While the direction of workplace change in the previous group stressed intrinsic rewards associated with job quality and involvement, this group focused on increasing extrinsic rewards largely through compensation innovations (e.g., pay-for-skill/ knowledge, gainsharing, profit-sharing). These firms were disproportionately large and in business services.

The Workplace Training Survey (WTS)

Although the Workplace Training Survey (WTS) did not gather as much detail on work organization and human resource practices as the HRPS, it offers the benefits of a large sample of establishments (n=2,584) in all industries except agriculture and government. The sampling frame included establishments with two employees or more, so it is one of the few surveys that has covered micro and small firms. The sample was weighted to reflect the regional, size, and industrial composition of the economy.

Evidence from the WTS on the incidence of four types of organizational/human resource innovations is shown in Exhibit 3. The data indicate that two-thirds of establishments report formal communication or information-sharing policies; just over half indicated that they had team-based systems in place; slightly less than half had formal employee involvement programs (e.g., labour-management committees, quality circles); and just over one-quarter reported variable compensation plans (e.g., profit sharing). The WTS data showed that the incidence of these workplace changes was positively correlated with size, technological change, competing in international markets, and “people-centred” business strategies.

Outcomes of Workplace Innovation

These surveys also addressed the issue of workplace change outcomes, although only from the perspective of the firm.¹² Before turning to the results, recall that in the preceding section we identified a number of methodological difficulties involved in accurately identifying these relationships. Nonetheless, a limited research base now exists, consisting mainly of U.S. studies, that suggests that firms introducing workplace changes involving intangible investments (e.g., in human capital) and flexible work practices do experience positive payoffs (e.g., Macy, Bliese, and Norton 1991; MacDuffie and Krafcik 1992; Ichniowski, Shaw, and Prennushi 1993; for a Swedish example, see NUTEK 1996).¹³

The HRPS and WTS data offer support for this conclusion. In the former survey, establishments that had adopted non-traditional workplace systems — i.e., the compensation- and participation-based practices — were more likely to report improved performance trends than respondents with traditional systems (Betcherman et al. 1994).¹⁴ A similar analysis based on the WTS data found that establishments that had introduced innovations such as those included in Exhibit 3 reported significantly better revenue and performance trends than other establishments (Betcherman, Leckie, and McMullen 1997).

One other important point regarding the link between workplace innovation and firm performance comes from Wagar’s (1994) survey of organizations in Atlantic Canada. In this analysis, qualitative variables capturing the degree of social responsibility and the sharing of decision-making and information were more powerful determinants of performance than any concrete programs or practices. This result under-lines the fact that effective workplace change depends, above all, on the social context within the firm, especially the culture, the trust, and the commitment to genuine innovation.

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Footnotes

8	In the first place, it is difficult to define and measure the concept of “organizational change,” especially in ways that are appropriate across different types of workplace settings. Measurement is particularly problematic in small firms where strategy and practices tend to be informal and not codified. Also, as might be expected, there are often differences across surveys in terms of sampling and other aspects of methodology. And, as we have already noted, collecting quantitative data on outcomes raises special challenges for a number of reasons including difficulties involved in isolating impacts of workplace change from other (often related) factors, such as technological change.
9	The HRPS was part of a national project on human resource innovation conducted by Queen’s University. The results are reported in Betcherman et al. (1994). The WTS was undertaken as part of a project undertaken by Ekos Research Associates for the Canadian Policy Research Networks. Results are published in Betcherman, Leckie, and McMullen (1997).
10	While the HRPS sample frame did not cover all industries, it does represent a selection from resources, manufacturing, and services.
11	The weighting procedure was undertaken to establish an establishment size distribution that reflected the actual size distribution in each sector.
12	Most of the research on outcomes has had this focus. Very few studies, particularly in Canada, have examined outcomes for workers or the community. For a synopsis of what has been found on employee impacts in the international literature, see Betcherman (1997).
13	A consistent finding emerging from this research is that positive outcomes are more apparent where organizations have adopted a bundle of complementary practices — i.e., a high performance system — as opposed to individual practices. See Ichniowski et al.(1996), and Huselid (1995).
14	Econometric analysis confirmed this relationship for a number of performance indicators with the advantages most clearly identified for firms fitting into the participation-based model. However, the analysis did not identify any significant differences in financial performance across the three HRM clusters. This could mean either that there is no discernible financial payoff to innovative workplace practices or that payoffs do exist but that these could not be captured with the data and methodology. Without being definitive, the latter explanation seems plausible because one would expect that the observed positive impacts on outcomes such as productivity and turnover would eventually translate into financial gains as well.