Industrial Relations Climate, Employee Voice and Managerial Attitudes to Unions: An Australian Study

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Industrial Relations Climate, Employee Voice and Managerial Attitudes to Unions: An Australian Study Amanda Pyman, Peter Holland, Julian Teicher and Brian K. Cooper Abstract This article examines how employee voice arrangements and managerial atti- tudes to unions shape employees’ perceptions of the industrial relations climate, using data from the 2007 Australian Worker Representation and Participation Survey (AWRPS) of 1,022 employees. Controlling for a range of personal, job and workplace characteristics, regression analyses demonstrate that employees’ perceptions of the industrial relations climate are more likely to be favourable if they have access to direct-only voice arrangements. Where management is perceived by employees to oppose unions (in unionized workplaces), the indus- trial relations climate is more likely to be reported as poor. These findings have theoretical implications, and significant practical implications for employers, employees, unions and the government. 1. Introduction Consistent with social information processing theory (Pfeffer and Salancik 1978), the general workplace environment is assumed to exert a significant influence on the motivation, attitudes, satisfaction and behaviour of the parties to the employment relationship (Clark 1989; Dastmalchian 1986). In turn, the workplace environment is influenced by contextual factors that shape industrial relations outcomes, such as the organization of work, employment terms and conditions, and conflict. Together, the workplace environment and the contextual factors are sometimes described as the indus- trial relations climate, and this concept has been used to explain behaviour and attitudes in the workplace, and interactions between unions, employees Amanda Pyman is at the University of Kent, UK. Dr Peter Holland, Julian Teicher and Brian K Cooper are at Monash University, Australia. British Journal of Industrial Relations doi: 10.1111/j.1467-8543.2009.00772.x 48:2 June 2010 0007–1080 pp. 460–480 © Blackwell Publishing Ltd/London School of Economics 2010. Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

Transcript of Industrial Relations Climate, Employee Voice and Managerial Attitudes to Unions: An Australian Study

Industrial Relations Climate, EmployeeVoice and Managerial Attitudes toUnions: An Australian Studybjir_772 460..480

Amanda Pyman, Peter Holland, Julian Teicher andBrian K. Cooper

Abstract

This article examines how employee voice arrangements and managerial atti-tudes to unions shape employees’ perceptions of the industrial relations climate,using data from the 2007 Australian Worker Representation and ParticipationSurvey (AWRPS) of 1,022 employees. Controlling for a range of personal, joband workplace characteristics, regression analyses demonstrate that employees’perceptions of the industrial relations climate are more likely to be favourableif they have access to direct-only voice arrangements. Where management isperceived by employees to oppose unions (in unionized workplaces), the indus-trial relations climate is more likely to be reported as poor. These findings havetheoretical implications, and significant practical implications for employers,employees, unions and the government.

1. Introduction

Consistent with social information processing theory (Pfeffer and Salancik1978), the general workplace environment is assumed to exert a significantinfluence on the motivation, attitudes, satisfaction and behaviour of theparties to the employment relationship (Clark 1989; Dastmalchian 1986).In turn, the workplace environment is influenced by contextual factorsthat shape industrial relations outcomes, such as the organization of work,employment terms and conditions, and conflict. Together, the workplaceenvironment and the contextual factors are sometimes described as the indus-trial relations climate, and this concept has been used to explain behaviourand attitudes in the workplace, and interactions between unions, employees

Amanda Pyman is at the University of Kent, UK. Dr Peter Holland, Julian Teicher and BrianK Cooper are at Monash University, Australia.

British Journal of Industrial Relations doi: 10.1111/j.1467-8543.2009.00772.x48:2 June 2010 0007–1080 pp. 460–480

© Blackwell Publishing Ltd/London School of Economics 2010. Published by Blackwell Publishing Ltd,9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

and employers (e.g. Clark 1989; Dastmalchian 1986). Industrial relationsclimate is also a function of work practices (the organization of work) andemployment practices (the management of people), and thus may be linkedto organizational performance (company and worker outcomes) (Boxalland Macky 2009). Despite heightened interest in both co-operative union–management relations and direct employment relations, the literature onindustrial relations climate predominantly deals with the United States, andthere is a paucity of empirical research relating to Australia.

Academic interest in individualistic and direct employment relations, highperformance work systems and sophisticated HRM practices as sourcesof sustainable competitive advantage (see Boxall and Macky 2009; Boxalland Purcell 2003; Gollan 2005; Lawler 2005), have paralleled an interest inco-operative employer–union relationships in the UK and ‘social partner-ship’ in Europe (e.g. Bryson 2001; Deery et al. 1999; Heery 2002; Oxenbridgeand Brown 2004). It has been shown that co-operative employer–unionrelationships based on mutual gains can improve both the working lives ofindividuals and organizational outcomes, particularly firm performance(Bryson 1999; Guest 1997). Co-operative employer–union relationships(Oxenbridge and Brown 2004) and mutual gains workplace practices(Kochan and Osterman 1994) have also been linked to enhanced organiza-tional commitment and union loyalty, where they are underpinned by trust,consultation, and information and communication sharing.

‘Partnership agreements’ or ‘workplace partnerships’ founded on thenotion of co-operative relationships and mutual gains have not, however,escaped criticism, with evidence pointing to a range of negative outcomes.These include: little positive impact on employees’ satisfaction or sense ofattachment, heightened workplace stress, more negative evaluations of unionperformance, and a lack of genuine partnership in the form of informationsharing, trust and the sharing of power (Danford et al. 2008; Dobbins andGunnigle 2009; Kelly 2004). These outcomes led Danford et al. (2008) toquestion the inevitability of mutual gains and the necessity of employer–union partnerships. In this light, it is important that assessments of organi-zational outcomes incorporate data from both companies and workers(Boxall and Macky 2009).

Despite the fact that industrial relations climate has been identified as acritical factor in understanding the dynamics of employee, union and man-agement relationships, as noted above, there has been little empirical researchconducted in Australia. A notable exception is Deery et al. (1994, 1999) andDeery and Iverson (2005), who analysed industrial relations climate, absen-teeism, the role of unions and organizational performance. The lack ofattention directed to analyses of industrial relations climate in Australia is allthe more surprising, in light of two decades of legislative changes that pro-gressively dismantled Australia’s highly centralized and regulated industrialrelations system based upon assumptions of the collective representation ofemployees. In addition, at a practical level, the predominance of HRM withits focus on direct employment relationships has contributed to an emphasis

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on minimizing third-party intervention, particularly union representation inregulating the employment relationship (Holland et al. 2000). A focus ondirect employment relationships and the marginalization of unions andindustrial tribunals were central precepts of the Workplace Relations Act1996 (Cth.), which was enacted by the right-wing conservative government(1996–2007) led by Prime Minister John Howard. These and other measuresimplemented by the Howard government resulted in claims of a more hostileindustrial relations climate, characterized by employer intransigence in bar-gaining and disputes (e.g. Briggs 2004).

However, the zenith of the Howard government’s efforts to re-shapethe Australian workplace and labour market was its Work Choices (2007)amendments to the Workplace Relations Act 1996 (Cth.) As Cooper andEllem (2008: 543) note:

the new laws attacked the old regulatory institutions . . . the attack on arbitration,collective bargaining and unions was comprehensive . . . Work Choices placedmore restraints on union activity.

A hardening of employer attitudes following the implementation of aneoliberal industrial relations agenda is not unique to Australia. Similarevidence exists in the United States and UK, with employers preferring todeal directly with employees (e.g. Bryson 1999; Freeman and Rogers 1999).However, it could be argued that the 2008 election of a Labor government ledby Prime Minister Rudd, and the enactment of Labor’s Forward with Fair-ness (Rudd and Gillard 2007) policy,1 is likely to be a catalyst for majorchanges in the industrial relations climate. The new laws aim to: achieve abetter balance between the interests of employers and employees, provideincreased protection for individual rights, including in relation to workplacediscrimination, and provide an expanded role for industrial tribunals. Ofparticular relevance is that the Fair Work Act 2009 (Cth.) has created a newsystem of bargaining, which: greatly restricts the scope for making individualagreements, enables unions to gain bargaining rights where this is supportedby a majority of employees, and is underpinned by requirements for‘good faith’ bargaining. Predictably, however, Forward with Fairness has notescaped criticism, with Hall (2008: 371) arguing, for example, that the legis-lation fails to represent a significant sea change, and, instead, is ‘something ofa calculated political compromise . . . [whereby] the influence of the WorkChoices laws is still very much apparent’.

In light of the lack of empirical analyses of industrial relations climate inAustralia alongside policy and practical changes that have had a directimpact on climate, this article aims to examine how employee voice arrange-ments and managerial attitudes to unions shape employees’ perceptions ofthe industrial relations climate. The article achieves this aim by drawing onresponses from the Australian Worker Representation and ParticipationSurvey (AWRPS, 2007). The article begins with an examination of theconcept of industrial relations climate, tracing its origins to organizational

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theory. The survey instrument, sample and analytical techniques are outlinedin the following section of the article. In section 4, the results are presented,followed by an examination of the theoretical and practical implications ofthe findings and concluding remarks.

2. Industrial relations climate

At its simplest, industrial relations climate depicts the state and quality ofunion–management relations in an organization (e.g. Dastmalchian et al.1989; Martin 1976; Nicholson 1979). However, since the 1980s, industrialrelations climate has increasingly been recognized as a multidimensionalconcept, particularly in light of the decline in trade union density and cov-erage, and an associated increase in non-union workplaces, the increased useof direct voice, and the relationship between workplace practices and orga-nizational performance (e.g. Kersley et al. 2006). As we have observed above,the rise of direct relations is particularly important in the Australian context,in view of the pronounced decline in union density from 42 per cent in 1988to 18.9 per cent in 2007 (ABS 2008), and, the shift to a decentralized indus-trial relations system over the past three decades (Holland et al. 2000).

As Barrett (1995), Bryson (2005), Kersley et al. (2006) and Purcell (1983)have commented, a more comprehensive study of industrial relations climatewould consider organizational structures, practices, processes and outcomesthat influence, and are influenced by, daily union–management andemployee–management interactions at the workplace, because union–management relations are only one dimension of climate. This notion cap-tures what Dastmalchian et al. (1989) describe as a characteristic atmospherein the organization, as perceived by ‘organizational members’. Thus, indus-trial relations climate is a subset of the organizational climate and refers tothe atmosphere, norms, attitudes and behaviours reflecting and underpinninghow workers, unions and managers interact collectively with each other inthe workplace, which in turn, affects workplace outcomes (Kersley et al.2006). Because industrial relations climate is a function of the interactionsbetween ‘organizational members’, individuals and groups within an organi-zation may hold differing perceptions or attitudes (Schneider and Reichers1983).

It is axiomatic that the way the ‘organizational members’ behave in aworkplace will affect their attitudes to, and perceptions of, industrial rela-tions processes and outcomes at individual, group and organizational levels,and vice versa (Baltes et al. 2009). Blyton et al. (1987: 211) argue that thepersonality of the ‘key industrial relations actors’ will affect aspects of struc-ture (unionization), climate and outcomes, and that industrial relations hastended to understate the importance of social psychological variables such aspersonality.

Scholars have examined a range of issues related to the dimensions, ante-cedents and consequences of industrial relations climate (e.g. Kersley et al.

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2006). There have been many attempts, for example, to identify both theprerequisite elements and practices that define high-quality union–management relationships (e.g. Clark 1989; Huszczo and Hoyer 1994;Martin and Biasatti 1979), and the range of different types of union–management relationships (e.g. Derber et al. 1958). Prior research has alsoaddressed the antecedents of co-operative labour management programs,such as gain sharing, quality of work-life initiatives and labour managementcommittees, and the relationship between these programs and industrialrelations outcomes (e.g. Cooke 1990; Deery and Iverson 2005; Katz et al.1983; Kersley et al. 2006; Rubinstein 2000; Wagar 1997a; Wu and Lee 2001).For example, jointly administered programs have been shown to have a morefavourable impact on organizational outcomes (e.g. product quality), and inturn, performance. Furthermore, the effectiveness of jointly administeredprograms, rather than the level of participatory management, has been foundto better predict industrial relations climate (e.g. Cooke 1990, 1992; Hammeret al. 1991; Rubinstein 2000; Schuster 1983; Voos 1989), reinforcing Huszczoand Hoyer’s (1994) notion that the ideal union–management relationshipmay be best categorized as ‘constructive’.

More recently, industrial relations climate has been identified as a keymediating factor in the link between high-performance work systems andorganizational performance and effectiveness (see Buttigieg and Gahan 2005;Ferris et al. 1999; Kersley et al. 2006). A mutual gains approach with employ-ers has been shown to have positive performance effects because it induces amore co-operative industrial relations climate, enhancing both dual commit-ment and the participation of employees in organizational decision making(e.g. Deery and Iverson 2005; Godard and Delaney 2000; Snape and Chan2000). Other outcomes that have been found to be associated with a favour-able industrial relations climate include: positive perceptions of organiza-tional prestige, positive attitudes towards supervisors, reduced absenteeism,turnover and conflict, innovation, customer satisfaction, and service/productquality (e.g. Carmeli 2004; Clark 1989; Cooke 1992; Dastmalchian et al.1982; Deery and Iverson 2005; Deery et al. 1994, 1999; Iverson et al. 2003;Wagar 1997b).

While there is a large body of literature examining union–managementrelations and industrial relations climate, this research is largely confined tothe United States and to unionized firms in the manufacturing industry.More recently, there has been increasing interest in industrial relationsclimate in the UK, in comparing industrial relations climates in unionizedand non-unionized firms, and comparing employers’ and employees’ percep-tions (e.g. Bryson 1999; Cooke 1992; Fernie and Metcalf 1995; Kersley et al.2006). A review of the Australian literature identified only five studies ofindustrial relations climate (see Buttigieg and Gahan 2005; Deery andIverson 2005; Deery et al. 1994, 1999; Iverson et al. 2003). This articleaddresses these gaps by using national survey data to analyse industrialrelations climate in unionized and non-unionized firms. The distinctive con-tribution of this article is that it examines the way in which employee voice

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arrangements and managerial attitudes to unions shape climate. These rela-tionships have not been examined in previous Australian studies of industrialrelations climate.

Employee voice arrangements represent governance mechanisms foremployment contracts, and exist where institutions or processes are presentto generate two-way communication between managers and employees(Bryson et al. 2007: 395) Voice arrangements vary from direct to indirect(union centred or non-union representative) in nature, and can be deliveredas a single channel, or via a combination of channels (Bryson et al. 2007).Direct voice refers to direct communication between individuals and/or smallgroups of employees and their immediate manager(s). Indirect voice refers tocontact between management and an employee intermediary (union repre-sentative(s) and/or other employee representative(s)) (Rollinson and Dundon2007). Employers’ decisions to adopt, or not to adopt, direct and/or repre-sentative voice arrangements will be driven by external economic pressuresand the ‘internal contradictions of industrial relations’ (Bryson et al. 2007;Edwards 2003). The ‘internal contradictions of industrial relations’; meaninghow the contradictions of co-operation and conflict are regulated’ within theworkplace, will be organized by employers in different ways, leading not onlyto diverse outcomes (Belanger and Edwards 2007), but also: diverse indus-trial relations climates and diverse managerial attitudes to unions, and,diverse experiences of the workplace for the ‘key industrial relations actors’.This uncertainty has led many scholars to investigate what institutionalconstraints and/or workplace conditions are necessary for voluntaryco-operation, workplace partnership and mutual gains to materialize in apositive and sustainable manner (e.g. Belanger and Edwards 2007; Bryson1999; Dobbins and Gunnigle 2009; Fernie and Metcalf 1995; Kochan andOsterman 1994). In this light, the way in which employee voice arrangementsand managerial attitudes to unions shape industrial relations climate war-rants a more extensive analysis, particularly in the Australian context, wherethere have been continuing government and employer efforts to displaceunions in favour of direct voice arrangements, and government and employerattitudes to unions have been regarded as hostile (Cooper and Ellem 2008).

3. Method

Sample and Procedure

The data reported in this article were drawn from responses to the 2007Australian Worker Representation and Participation Survey (AWRPS), arepresentative, multi-purpose national survey which investigated workers’responses and attitudes to workplace participation, representation and influ-ence. The survey instrument was based on the 1994–1995 Worker Represen-tation and Participation Survey conducted in the United States (Freemanand Rogers 1999), the British Worker Representation and ParticipationSurvey (2001) (Diamond and Freeman 2002), the New Zealand Worker

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Representation and Participation Survey (2003) (Haynes et al. 2003), and aprevious AWRPS (2004) (see Teicher et al. 2007). Questions from othercountry surveys were adapted to conform to the institutional and demo-graphic contexts in Australia, and questions from the original AWRPS (2004)were revised and updated.

A total of 1,022 employees sampled randomly from the residential tele-phone directory were surveyed nationally. Respondents were given theoption of completing the survey by telephone interview (using computer-assisted telephone interviewing) or online (a web-based survey) at a timeof their choice. Potential respondents were contacted between October andNovember 2007. The sample was limited to Australian residents in paidemployment of more than 10 hours2 per week who had left secondary school.Self-employed persons and company owners were excluded from the survey.The sample was stratified by Australian state/territory to reflect the geo-graphical distribution of the population as reported in the Australian Bureauof Statistics (ABS) Census of Population and Housing.

Fifty percent of the respondents were female, and the mean age of thesample was 40.8 years (s.d. = 12.19). The mean number of hours worked perweek was 35.65 (s.d. = 12.68), with 62.1 per cent working full time (defined as35 hours or more per week). The majority of respondents (78.2 per cent) werenon-manual workers, and 68 per cent were employed in the private sector.Just under a third of respondents (32.2 per cent) reported that they worked inorganizations with 500 or more employees and a quarter in organizationswith less than 20 employees. The mean number of years that employees hadworked for their current employer was 6.09, with a median of 3 (s.d. = 7.27).Of the respondents, 18 per cent were union members, a figure consistent withthe official national estimate of 18.9 per cent (ABS 2008). Overall, we believeour sample is a reasonable representation of the Australian working popu-lation with respect to demographic characteristics. For example, our esti-mates are similar to ABS data, indicating that 45 per cent of the labour forceis female with an average age of 39 years (ABS 2008). In addition, our medianorganizational tenure and occupational profile are comparable with officialestimates (ABS 2008).

Measures

(a) Industrial relations climateOur dependent variable was based on responses to the question: ‘In general,relations between management and employees are good?’ Responseswere rated on a five-point scale ranging from 1 = ‘strongly disagree’ to5 = ‘strongly agree’, with a neutral midpoint. Our question is a modifiedversion of the single measure of industrial relations climate used by Freemanand Rogers (1999) in the original WRPS survey,3 and the measure used in boththe British Social Attitudes Survey and the Workplace Employment RelationsSurvey (WERS) 2004.4 Despite the limitations of a single-item measure, it is

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noteworthy that widespread differences in measures of the industrial relationsclimate construct are a characteristic feature of previous empirical research.

(b) Employee voice arrangementsOur measures of voice were adapted from Bryson (2004). Union voice wasoperationalized as collective representation and managerial recognition,referring to the presence of a union, of any kind, at the workplace. Directvoice was present where one of the following two-way communicationmechanisms existed: (i) regular meetings with all staff, (ii) a formal employeeinvolvement program, such as quality circles, or (iii) a semi-autonomousworkgroup.

(c) Managerial attitudes to unionsRespondents were asked the following question: ‘Would you say your man-agers are “in favour of unions”, “neutral about unions”, or “opposed tounions”?’ This question is similar to the measure of managerial attitudes tounions used by Bryson (1999). For the purposes of analysis, this variable wascoded on a three-point ordinal scale from (1) ‘in favour of unions’ to (3)‘opposed to unions.’

(d) Control variablesConsistent with the recommendations of Bryson (2004), we controlled for arange of individual, job and workplace characteristics in the regression analy-ses. Specifically, the analyses controlled for gender, age, occupation (manualvs non-manual), hours worked each week, organizational size (as measuredby the estimated number of employees in the organization), sector (privateversus non-private organizations), gross weekly wage, organizational tenureand individual union membership.

Method of Analysis

As our dependent variable was ordinal in nature, we used ordered probitregression. Following Bryson (2004), we coded the employee voice arrange-ments into four mutually exclusive configurations: (a) union-only voice, (b)direct-only voice, (c) dual-channel (both union and direct voice), and (d)neither union nor direct voice. The voice mechanisms were then dummycoded (1 = present, 0 = not present), and neither union nor direct voice wasused as the reference (omitted) category in the regression analyses. In ouranalyses, positive regression coefficients indicate voice mechanisms are asso-ciated with more favourable perceptions of the industrial relations climate.Prior to analysis, the data were screened for outliers and multicollinearityamong the predictors and was found to be adequate.

4. Results

Table 1 describes the distribution of voice arrangements within our sample.

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Table 1 shows that 27.5 per cent of employees reported the presence ofdirect voice as a single channel in the workplace. Dual-channel (both unionand direct) voice was present in 23 per cent of cases. Only 12.1 per centof respondents reported that their workplace had union-only voice, whilealmost a quarter (23.8 per cent) of respondents reported that they had neitherunion nor direct voice arrangements in the workplace. It should also be notedthat in 13.6 per cent of cases, voice arrangements were unidentifiable, due tomissing data on at least one or more of the measures of employee voice.

As shown in Table 2, the overwhelming majority of employees (70.4 percent) agreed or strongly agreed that relations between management andemployees were good. Fifteen per cent of respondents were neutral in theirattitude, while 14 per cent disagreed or strongly disagreed with the statementthat relations between management and employees were good.

The results of the ordered probit regression analyses predicting the indus-trial relations climate are shown in Table 3. Following Bryson (2004), weincluded managerial and professional employees in the analyses because theyare likely to be managed by other senior people in an organization. The effecton results is negligible if managerial and professional employees are excludedfrom the analysis.

It can be seen from model 1 in Table 3 that direct-only voice was positivelyrelated to employees’ perceptions of the industrial relations climate, relativeto workplaces with neither union or direct voice (B = 0.55, p < 0.05). Thisfinding is comparable with the WERS 2004 data, which revealed that direct-only voice mechanisms were associated with more favourable employer

TABLE 1Distribution of Voice Arrangements

Voice arrangements %

Union only 12.1Direct only 27.5Union and direct (dual channel) 23.0Neither union nor direct voice 23.8Not known 13.6

n = 1,022.

TABLE 2Employees’ Perceptions of Industrial Relations Climate

Relations between management and employees are good %

Strongly disagree 4.3Disagree 9.7Neither agree nor disagree 15.0Agree 48.5Strongly agree 21.9No answer 0.6

n = 1,022.

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perceptions of climate (Kersley et al. 2006). It can be seen from Table 3 thatthere was no statistically significant relationship between dual-channel voiceand perceived industrial relations climate (B = 0.20, p > 0.05). Kersley et al.(2006) found similar results in the WERS 2004 data, with direct-only voicebeing associated with significantly better employee perceptions of climate,than direct voice in combination with union or non-union representativevoice. Interestingly, our data revealed that union-only voice was negativelyassociated with perceptions of the industrial relations climate (B = -0.47,p < 0.05). This latter finding is consistent with the work of Bryson (1999,2001) and Deery et al. (1994).

Having established that direct-only voice was positively associated withemployees’ perceptions of the industrial relations climate, we examinedwhich of the three direct voice arrangements were most influential. As shownin model 2 in Table 3, with controls included in the model, regular meetingsbetween management and staff increased the probability of a favourableindustrial relations climate (B = 0.41, p < 0.05), as did semi-autonomousworkgroups (B = 0.24, p < 0.05). However, there was no statistically signifi-cant relationship between the presence of an employee involvement programand employees’ perceptions of the industrial relations climate (B = 0.08,p > 0.05). Kersley et al. (2006) analyses of the WERS 2004 data revealed thatregular meetings between senior management and the workforce increasedthe probability of a favourable industrial relations climate for employers, yetnot for employees.

Finally, we examined the relationship between perceived managerialattitudes to unions and employees’ perceptions of the industrial relations

TABLE 3Results of Ordered Probit Regression Analyses Predicting Perceptions of the Industrial

Relations Climate

B s.e.

Model 1: employee voice arrangements (reference category: no unionor direct voice)

Union only -0.47* 0.18Direct only 0.55* 0.13Union and direct (dual-channel) 0.20 0.15

Model 2: direct voice arrangementsRegular meetings with all staff 0.41* 0.09Employee involvement program 0.08 0.14Semi-autonomous workgroups 0.24* 0.12

Model 3: employees’ perceptions of managerial attitudes to unionsand employee voice arrangements — unionized workplaces only

Perceived management opposition to unions -0.76* 0.14Presence of any direct voice 0.47* 0.18

Note: Nagelkerke pseudo R2 for: model 1 = 0.11; model 2 = 0.08; model 3 = 0.28. Controlsinclude: gender, age, gross weekly income, occupation, hours worked, organizational tenure,organizational size, sector, union membership.* p < 0.05.B, probit regression coefficient; s.e., standard error.

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climate. We limited analysis to unionized workplaces, since employees innon-union workplaces are less likely to be aware of managerial attitudes tounions. As shown in model 3 in Table 3, where employees perceived thatmanagerial attitudes were opposed to unions, the industrial relations climatewas more likely to be reported as poor (B = -0.76, p < 0.05). This finding isconsistent with extant evidence that managerial attitudes to unions are animportant determinant of the quality of the industrial relations climate (Voos1989). Indeed, as Freeman and Medoff (1984) argued, it is the ‘institutionalresponse’ to unionism, described simply as how management responds tounions, that matters for the industrial relations climate, rather than thepresence of a union per se. As in the full sample, direct voice was positivelyrelated to employees’ perceptions of the industrial relations climate in union-ized workplaces (B = 0.47, p < 0.05). Finally, we tested whether the relation-ship between direct voice and the industrial relations climate in unionizedworkplaces was moderated by perceived managerial attitudes to unions. Nostatistically significant interaction between direct voice and perceived mana-gerial attitudes was found (B = -0.30, p > 0.05).

5. Discussion

Two significant findings emerge from the empirical analysis. First, the resultsdemonstrate that the presence of direct-only voice arrangements is morelikely to be associated with favourable employee perceptions of the industrialrelations climate. Second, the results reveal that employees’ perceptions ofmanagerial attitudes to unions are a reliable predictor of employees’ views ofthe industrial relations climate in unionized workplaces. Where employeesperceive managerial attitudes are favourable to unions, they are more likelyto report a more positive industrial relations climate.

The association between direct-only voice arrangements and a morefavourable industrial relations climate is consistent with evidence in the UKthat non-union channels of voice reduce employees’ workplace problems andneeds (Bryson and Freeman 2007). This association may also be seen to beconsistent with literature, which has demonstrated a relationship betweendirect voice channels and favourable industrial relations outcomes moregenerally, such as information sharing, reduced absenteeism, and increasedcommitment, job satisfaction and job discretion (e.g. Charlwood and Terry2007; Purcell and Georgiadis 2007; Pyman et al. 2006). Furthermore, theresults provide some support for studies that identify the importance ofdimensions such as harmony, openness, trust and joint participation inshaping the industrial relations climate (see Blyton et al. 1987; Dastmalchianet al. 1989).

The relationship between direct-only employee voice arrangements andmore favourable perceptions of the industrial relations climate reinforces theimportance of extending the theorization of the climate construct. The ten-dency of previous climate research to focus on unionized workplaces and

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‘union–management relations’ needs to be broadened, particularly in light ofour findings, which demonstrate the significance of ‘employee–managementrelations’ in shaping the industrial relations climate.

It cannot be assumed, however, that direct voice arrangements will beassociated with a favourable industrial relations climate for all employeesin all circumstances. Two possible reasons for this are identified. First, anorganization can use a multiplicity of direct voice arrangements, beyond, orin addition to, regular meetings, a formal employee involvement programand semi-autonomous workgroups, such as 360 degree feedback tools, whichmay also affect work outcomes. Second, direct voice arrangements may alsobe contingent upon, or complementary to, the use of other employmentpractices, such as an employee assistance program, which also enhanceemployees’ perceptions of the industrial relations climate.

We also acknowledge that our measure of direct voice arrangements islimited, as it does not permit an analysis of the dynamics of: regular meetingswith staff, employee involvement programs, or semi-autonomous work-groups. For example, we cannot assess issues such as: the number of staffinvolved in regular meetings, the origin and nature of issues discussed inmeetings or workgroups, and, more fundamentally, the ‘key actors’ experi-ences’ of the impact of direct voice channels upon individual and organiza-tional outcomes. These questions concerning the depth and embeddedness ofdirect voice arrangements, in terms of how workplace dynamics, processesand systems influence climate at the individual, group and organizationallevel, require in-depth investigation through organizational case studies.

In relation to the depth and embeddedness of voice, the degree of ‘inde-pendence’ of direct voice arrangements is also critical, given evidence thatsuggests such arrangements are rarely accompanied by a power shift, insteadbeing co-opted by management, whereby unilateral decision making reignssupreme (Campolieti et al. 2007). Direct voice arrangements must be effectivefor, and meaningful to, employees, in order to reap mutual gains. As Purcelland Georgiadis (2007: 197) argue, direct arrangements need to be comple-mented with consultative forums, whereby employee representatives meetregularly with management to engage in meaningful dialogue about themanagement of the organization. Thus, it is not only voice arrangementsper se that society, employers and employees have a stake in supporting,but a workplace climate and set of relationships that support high trust,co-operation and problem solving between employers and employees(Kochan 2007).

In policy terms, developing co-operative workplaces requires an institu-tional structure that both supports a diverse set of voice arrangements, inline with the variegated nature of employees’ needs, and, is conducive toco-operative employee engagement with management (Freeman et al. 2007).To the extent that the Rudd Labor government in Australia can meet theseneeds and encourage ongoing experimentation with employee voice arrange-ments that best fit individual workplace circumstances, recent legislativereforms and new institutions may contribute to enhancing the industrial

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relations climate. Significantly, section 205 of the Fair Work Act requiresemployers who are parties to enterprise agreements (which accounts for thevast majority of employers in Australia) to consult with employees on ‘majorworkplace changes that are likely to have a significant effect on employees’,and for that purpose, employers are required to provide for the representa-tion of employees. For those employees covered by awards of the tribunal,Fair Work Australia, section 139 of the Act also requires there to be provi-sions for ‘consultation, representation and dispute settlement’. The Act con-tains no explicit restrictions on the subject matter for consultation.

Notwithstanding the importance of legislation and institutions, whenimplementing and operating direct voice arrangements, diversity in the pathsthat organizations follow, differences in the management of the ‘internalcontradictions of industrial relations’ and differences in management styleare inevitable (e.g. Boxall and Macky 2009). This uncertainty will stronglyinfluence the industrial relations climate at an organizational level, andcannot be easily generalized, providing a further rationale for case studyresearch.

In addition to the public policy implications, the positive relationshipbetween direct-only voice arrangements and employees’ perceptions of theindustrial relations climate has implications for employers and employees.For both parties, implementing and operating such arrangements entailsstrategic decisions about the nature of their relationships with one another,and may require structural change(s) or a cultural shift in attitudes andbehaviours. For employers, intense global competition, the prevalence of theknowledge economy and attempts to foster a highly committed workforcemean there is a need to consider the human capital variables (individual skillsand abilities) and the social capital variables (the quality of intra-group andinter-group relations, collaboration and trust levels) when implementingdirect voice arrangements (Boxall and Macky 2009: 16). As Boxall andMacky (2009: 16) elaborate, for employers and employees:

the costs of training, of participative structures are not trivial. . . . a process ofbargaining — formal and/or informal — over the quid pro quos is inevit-able . . . [we] need more research on the contexts which are conducive, and on thestrategies which are needed, to manage the tensions inherent in reaching a sustain-able win-win pattern.

The second significant finding flowing from the research, that employees’perceptions of managerial attitudes to unions (in unionized workplaces)are a reliable predictor of employees’ views of the industrial relations climate,reinforces Bryson’s (2001) findings that poorer perceptions of climate wereassociated with perceptions of management opposition to unions, and alsothe WERS (2004) data (Kersley et al. 2006). Our findings are also consistentwith the broader literature, which has shown the importance of managerialattitudes to union representation in influencing industrial relations climate(e.g. Voos 1989) and in influencing an employee’s desire to join or not join aunion (Freeman et al. 2007).

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One explanation for the negative association between union-only voiceand employees’ perceptions of the industrial relations climate isvoice-induced complaining (Bryson 2005): the notion that unionized workersare more prone to voice their grievances than non-union employees, becausethey are more likely to be made aware of problems through union delegates/shop stewards, and, because they have the protection of a union. As aconsequence, complaining offers a means to extend unions’, and conse-quently, employees’, bargaining power and influence (see Bryson 2005). Asecond explanation of this finding may lie in the ‘experience’ of unionism (e.g.Bryson 2005); that those negative employee perceptions of the industrialrelations climate in unionized workplaces may result from a perceived lack ofunion efficacy or instrumentality in achieving valued outcomes for members.

The finding that union-only voice was negatively related to employees’perceptions of the industrial relations climate must, however, be interpretedcautiously. Our measure of union voice arrangements was based on presence— it did not permit a measure of union strength in the workplace (e.g.number of delegates/activists), union effectiveness or union responsiveness.These variables have been shown to be important influences on favourableemployee perceptions of the industrial relations climate (e.g. Bryson 1999,2001), and have also been identified as conditions underpinning sustainableco-operative employer–union relationships (Oxenbridge and Brown 2004). Inaddition, our study did not analyse employees’ perceptions of other impor-tant individual and workplace characteristics, which have been shown to becorrelated with employees’ perceptions of climate, including job security, jobsatisfaction, pay satisfaction, industrial action, redundancies and termina-tion, and fair and just treatment (e.g. Bryson 2001; Dastmalchian et al. 1989;Deery et al. 1994; Kersley et al. 2006; Schneider and Reichers 1983).

For employers, the implications of the above findings are clear. Shouldemployers wish to enhance the industrial relations climate, one option is toutilize direct voice arrangements. Where this is not feasible, particularly instrongly unionized workplaces, consideration should be given to buildingco-operative union–employer relationships. By implication, the developmentof co-operative relationships necessitates that employers make adjustmentsto their strategies and behaviour. Irrespective of which option is pursued,enhancing the industrial relations climate should be a desired outcome ofemployers. This priority for employers is supported by other scholars whoidentify the industrial relations climate as a determinant of organizationaleffectiveness (e.g. Deery et al. 1999).

For unions, the above findings reinforce the importance of strategicchoices regarding their relationships with employers: where managerial atti-tudes to unions were perceived to be positive, employees’ perceptions of theindustrial relations climate were more favourable. In practical terms, unionsmust therefore consider their strategies of engagement, particularly how theycan induce, influence and/or develop positive managerial attitudes as a meansto improve the industrial relations climate for employees. A strategy ofenhancing co-operation with employers requires reciprocal ventures, yet not

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at the expense of pursuing members’ interests through passive compliancewith management (Freeman et al. 2007). As Boxall and Haynes (1997) note,only when a union has real workplace power is management likely to treat itas a partner.

Co-operative relationships require active engagement and maintenanceof the relationship from both parties, but this entails significant time andresource demands. However, such co-operative relationships have receivedempirical validation; Gill (2009), for example, demonstrates that unions thathave a co-operative relationship with management can play an importantrole in overcoming barriers to the effective adoption of practices linked toorganizational competitiveness. Gill (2009: 39) further argues that:

Organisations that want to capture the value that unions can add must move awayfrom a pluralist model of autocratic management, hostile unions and adversarialindustrial relations, beyond a unitarist model that sees no role for unions, to acooperative partnership with unions that shares the gains of implementing highperformance work practices.

Such a strategy entails unions delivering added value on two fronts toenhance the industrial relations climate: first, by providing tangible benefitsto members, and, second, by co-operating with employers, which in turn canpositively influence employees’ attitudes towards union membership (Brysonand Freeman 2007).

Recommendations for the adoption of co-operative partnerships betweenunions and employers as a means to enhance the industrial relations climateand deliver positive organizational outcomes are given greater credence whenwe consider the findings of the worker representation and participationsurveys collectively across the six countries (see Freeman et al. 2007).Overwhelmingly, employees (both union and non-union) in all the Anglo-American countries desired a relationship that involved ongoing union–management negotiation, the resolution of conflict, and, the development ofareas of common interest (Peetz and Frost 2007). However, as Bryson andFreeman (2007) note, unions cannot impose such a relationship on manage-ment: co-operation only works when unions are operating from a position ofsome strength. This then requires unions to strategically manage theirongoing relationships with employers by simultaneously embracing the ele-ments of conflicting interest and co-operation (Peetz and Frost 2007): the‘internal contradictions of industrial relations’.

As Peetz and Frost (2007) also argue, unions require new capabilities inorder to succeed in building co-operative relationships: constructing anagenda for workplace change, communicating this effectively to members,employing trained activists to negotiate and liase with employers, andremaining open and responsive to diverse worker needs for voice will beparamount. The establishment of trust between the parties and the existenceof mutual recognition are also prerequisites of co-operative relationships.

The tangible benefits of co-operative relationships between unions andmanagement are also supported by individual country level data. In the UK,

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for example, unionized workers reported fewer problems where they had astrong union that had a working relationship with management (Bryson andFreeman 2007). However, the prospects for building union–managementpartnerships on any significant scale in Australia in the short term must beviewed cautiously, given the legacy of adversarial union–management rela-tions and the lack of tangible examples of successful ‘partnerships’.

6. Conclusions

The purpose of this article was to address gaps in the literature on industrialrelations climate, which to date has been dominated by studies in the UnitedStates. We achieve this by using Australian survey data to analyse howemployee voice arrangements and managerial attitudes to unions shapeindustrial relations climate. Given the paucity of Australian literature onindustrial relations climate, this article makes important theoretical andempirical contributions. We conclude by acknowledging the limitations ofthe study and highlighting further research avenues that should be explored.

First, causal inferences concerning the relationship between employeevoice arrangements and the industrial relations climate must be made withcaution, particularly as the data used in this study is cross-sectional. Indeed,there is always the possibility of reverse relationships among the variables.For example, it is entirely possible that the industrial relations climate influ-ences the type of employee voice arrangements observed in a workplace. Asrecognized in the literature, industrial relations climate both influences, andcan be influenced by, endogenous and exogenous factors. In other words,climate both determines and can be determined by industrial relations inputs,processes and outputs (Dastmalchian et al. 1989). The use of a longitudinalor experimental design would help to strengthen causal inferences.

Second, it is acknowledged that the data are self-report, and while this isuseful in examining the attitudes and perceptions of employees, such data canbe subject to error, such as incomplete knowledge of organizational practices.However, we believe that since our measures of voice arrangements reflectobjectively measured characteristics of involvement and representation in theworkplace (e.g. presence of a union, regular meetings with staff, employeeinvolvement program), they are less likely to be influenced by potentialresponse biases, such as social desirability bias, which are commonly associ-ated with subjective measures (Podsakoff et al. 2003).

A related issue is the measurement of industrial relations climate, which inthis study was captured by a single item. This measure ignores other pertinentdimensions of climate, particularly structural features of the workplace,external environmental factors, and attitudinal dimensions of climate such astrust. While previous research has used single-item measures of climate (e.g.Bryson 2001; Buttigieg and Gahan 2005), further research should adoptmulti-dimensional measures of industrial relations climate to provide a morefine-grained analysis. This recommendation is particularly important in light

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of the volatile and dynamic nature of the industrial relations climate, and thefact that the employment relationship does not operate in a vacuum (Bryson2005; Derber et al. 1958). For example, one avenue for research may be toexamine how climate is shaped by external influences, such as legislation andeconomic pressures, and the consequences of transformations in workplaceclimate over time for the key actors and for individual-level andorganizational-level outcomes. An analysis of patterns and changes in theindustrial relations climate is best achieved using a longitudinal approachthat draws on both surveys and case studies.

Notwithstanding the limitations that we have identified, this research con-tributes to the study of industrial relations climate in Australia theoreticallyand empirically, and supports the proposition that direct-only voice arrange-ments, and positive perceptions of managerial attitudes to unions, areassociated with favourable employee perceptions of the industrial relationsclimate. To the extent that employers, employees, unions and the governmentmake conscious strategic choices about employment relationships, the find-ings may prompt a reconsideration of the structure and dynamics of socialand workplace relations under a changed political environment in Australia.

Final version accepted on 7 October 2009.

Acknowledgements

We would like to thank the referees for their constructive comments andsuggestions on earlier drafts.

Notes

1. The Fair Work Bill (on which the Forward with Fairness policy is based) wasintroduced into the Australian federal parliament on 25 November 2008. TheFair Work Act (2009) received royal assent on 7 April 2009. See: http://www.workplace.gov.au/workplace/Publications/Legislation/FairWorkBill.htm

2. The rationale for using a minimum of 10 hours a week in paid employment as thebaseline was to ensure that the employees sampled worked more than one day perweek (>8 hours). This, we believed, was the minimum requirement to ensure thatthe employee had sufficient experiences within the workplace to be able to provideassessments of work patterns and processes.

3. Freeman and Rogers’ (1999) measure of industrial relations climate was based onthe following question: Overall, how would you rate relations between employeesand management at your (company/organization)? Would you say they are. . . Excellent? Good? Only Fair? Poor? We recognize that the wording of thequestion stem used by Freeman and Rogers (1999) and the WERS (2004) survey ispotentially less prone to bias, as the inclusion of the word ‘good’ in our measuremay lead to positive bias.

4. The Workplace Employment Relations Survey (WERS) (2004) measure asksrespondents a single question: In general, how would you describe relationsbetween managers and employees here?

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