Projects

Workplace Transformation

Background

This proposal describes a multi-stage, multi-method study of workplace organization and human resource practices in the pulp and paper industry. This industry, a major manufacturing branch of production, has undergone major changes in recent years, owing to far-reaching shifts in process technology, labor relations, regulatory environments, and industry consolidation (Zuboff 1988; Vallas and Beck 1996, Birecree 1993; Eaton and Kriesky 1994). Because of the industry's economic difficulties, its financial performance has been much scrutinized. Yet its human resource practices have only seldom been the object of systematic empirical research. The absence of such research has carried with it two different sorts of costs. First, although labor represents a small proportion of mill operating budgets (typically between 15 to 20 per cent), even small variations in employee attitudes and behaviors are likely to have major effects on the performance of production units. Documenting the performance-related impacts of innovative HR practices will therefore be of practical importance to management and labor union officials alike. Second, and in more theoretical terms, neglect of the paper industry has led scholars to overlook a potentially rich source of data with which to address a number of substantive questions of interest to students of manufacturing operations in the United States. We believe that the paper industry can provide an especially opportune site for research centering on questions relating to workplace change -a matter that holds significance not only for the paper industry, but far beyond it as well.

The questions that drive this study are four-fold.

1. How prevalent are non-traditional work systems in the pulp and paper industry?
   
2. What organizational and human resource factors seem to condition the spread of non-traditional work systems, whether across different firms, mills, or production areas?
   
3. What effects do HR innovations have on the performance of business units within the industry (as measured by percent uptime, percent culled paper, on-time delivery, etc.), holding constant relevant technical variables?
   
4. What effects do HR innovations have on the quality of employment experienced by hourly employees (as measured by various industrial attitudes and behaviors, wages, and other job rewards)?

To address these questions, our study will build on previous Sloan-funded research conducted by one of the principal investigators (Vallas, 1999; cf. Vallas and Beck 1996). The study relies on observational and survey methods, applied at several distinct levels of analysis -specifically, the firm, the mill, the business unit, and the production crew. Demonstrating how organizational factors are linked across these levels of analysis will be an important contribution of the study, one not accomplished by previous organizational research. Because the study is designed to engage officials in both management (e.g., through PIMA) and labor (e.g., PACE International Union, AFL-CIO), it aims to develop a bank of knowledge concerning workplace change that can be widely disseminated in the form of working papers, conference presentations, and articles in the business press, all dealing with the link between HR practices and organizational functioning. In addition, the project will seek to establish mechanisms for the diffusion of such knowledge across the industry and its major labor organizations.

Although the issue of workplace change has consumed the energy of many paper company HR departments and industry consultants alike, there has been no systematic, industry-wide analysis from a social scientific point of view. Consequently, industry practitioners typically operate on the basis of either generic axioms developed with other industries in mind (an approach that can actually increase the distance between management and its workers) or else on the basis of stereotypical conceptions that can hamstring workplace change (such as the belief that "you can't bring team systems into a brownfield environment"). Hence a major goal of the study will be to provide systematic research geared to the industry's traditions and experience.

The thinking that underlies this study operates at several interrelated levels of analysis; from the corporate and mill level to the micro or individual level. We address the macro level of analysis through various debates among management theorists concerning the broader HRM function and its role in supporting such workplace transformations as well as contributing to overall firm performance. We address the micro level of analysis in terms of debates over the nature of workplace transformation, job redesign, employee involvement, and the utilization of new process technologies.

Recent management practice in the HRM area has been guided by prescriptions based on Transaction Cost Economics, Human Capital Theory, and Resource-based Theory of the firm. Though each of these begins with somewhat different assumptions about the foundations of management decision-making and the effectiveness of organizational structure choices, each assumes that management will make rational choices in the design of human resource systems and the acquisition of personnel. Both situational circumstances and strategic opportunity will result in different employment systems. One of the consequences of such strategic HR decisions is the degree to which a firm invests in long term employment relationships with individuals versus utilizing the external labor market to secure cost efficient human resources. At one extreme, an organization may adopt high performance work practices while at the other extreme an organization may rely heavily on a contingent workforce with constantly changing personnel.

Strategic HRM theory has also focused on the organization of the HR function within the firm itself. Centralized HR can yield efficient delivery of administrative services (for example, Weyerhaeuser and other firms have created employee transaction centers staffed by experts to handle generic HR requests, while retaining much smaller HR staff to look after multiple operating units and consolidating 'hands-on' HR functions at regional centers). Arguably, a centralized HR department will benefit from a stronger and more centralized position within the structure of corporate decision-making, enjoying a greater capacity to shape the character of operations management. At the same time, Baron and Kreps (1999) have argued that in many corporate structures, a highly centralized HR function can restrict the adaptability to local conditions by the various operating units. The point is that the structure, philosophies, and capacities of top management (together with the linkages that exist between them and each firm's operating units) will shape the nature of the work systems that unfold within local mills.

Much previous research on the HR function has been couched solely at the macro-level of the firm. While such studies are of obvious importance, they have tended to neglect the linkage between firm-level characteristics and outcomes at the micro, operating unit level. Mindful of this shortcoming, our study will seek to trace the impact of firm-level structures on social relations at the level of the mill. Proceeding in this manner will enable us to develop a deeper understanding of the organizational processes that underlie particular outcomes than has previously been possible.

The study is organized into two distinct stages. During stage one, we will collect observational and survey data designed with several goals in mind. First, through site-visits at a small group of strategically selected mills, and then through a survey of 200 pulp and paper mills, the study will develop a rich set of data on the prevalence of different types of work systems in the industry, ranging from "traditional" bureaucratic to "transitional" to "transformed" (or High Performance) work systems. By designing our survey items with previous studies in mind, our research can compare the industry's work systems to the levels of development that exist in other industries, using data presented in Lawler et al. (1995), Appelbaum (2000), and Batt et al. (2000). Second, by extending our analysis "up the ladder" (from each mill to HR managers within its parent firm, where applicable), we can gather contextual data on those economic and organizational conditions that affect the successful implementation of non-traditional work systems.

Based on previous theory, we expect to find that key economic and organizational variables at the contextual level of the firm will predict the degree of emphasis that firms place on the adoption of non-traditional work systems. Key economic variables will involve the firm's position relative to its competitors. Thus, we expect that the greater the global competition firms encounter in their product markets, the more likely they will be to adopt innovative forms of work organization. Likewise, firms oriented toward the production of consumer products, which are often more dynamic and publicly visible, will be more likely to emphasize non-traditional work systems. The stronger the organizational capacities of the corporate HRM department (as measured by the size of its department and involvement in strategic decision making) and the greater the mobility of top managers across many firms, the greater the interest in developing non-traditional work systems across its mills. By testing these and other hypotheses, we can begin to identify macro-level determinants that help explain variations in the implementation of organizational change.

In stage two of our study, we intend to focus on the consequences or effects that particular work systems have for key outcome variables of interest to both management and labor union members alike. Here again we address a number of goals. Based on the data gathered from stage one, we will construct a stratified random sample of 35 mills that encompass work systems of various types. These mills will be selected to permit comparisons across similar production areas, but which employ distinct types of work systems. Through site visits to each of these mills and interviews with mill management and local union officials, we will collect detailed performance data on a subsample of distinct production units that range from "traditional" to "transformed." Critical to our analysis will be an awareness of local operating conditions and processes, as well as the ability to hold constant relevant technical and product variables. Of particular interest here will be the question of whether particular "bundles" of HRM practices seem to have especially beneficial effects, as previous theory contends (Ichniowki, Shaw, and Prennushi 1997), and whether non-traditional work systems seem to have particularly beneficial effects on performance in production areas utilizing highly sophisticated process technologies (Appelbaum et al., 2000). This aspect of our research will contribute toward a clearer and more systematic analysis of the factors driving organizational performance. Equally important, by conducting a sample survey of production workers employed at each of the operating units included in stage two, our research will be able to address the consequences of non-traditional work systems for hourly workers' well-being, focusing particular attention on such outcome variables as job stress, trust toward management, work involvement, and wages. This portion of our research will help contribute to an important gap in the literature on workplace transformation: the lack of attention to how workplace changes are experienced from the workers' point of view.

This proposal and the accompanying budget focus primarily on the first, macro-level portion of the research. It should be kept in mind, however, that the study's full contribution will depend on its ability to extend its analysis more deeply into the mills, gathering data on the performance of discrete production areas and on the job rewards experienced among front-line hourly employees.

References

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Barley, Stephen and Gideon Kunda. 1992. Surges of rational and normative management ideology. Administrative Science Quarterly. 37, 363-399.

Baron, J.N., & Kreps, D.M. (1999). Strategic Human Resources: Frameworks for General Managers. New York: John Wiley & Sons, Inc.

Batt, R., Colvin, A., Katz, H., & Keefe, J. (2000). Telecommunications 2000: Strategy, HR Practices & Performance. Report provided to Alfred P. Sloan Foundation.

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Vallas, Steven P. 1999. Rethinking Post-Fordism: The Meaning of Workplace Flexibility. Sociological Theory 17, 1: 68-101.

____________. 1999. Technological Change, Skill Requirements, and Workplace Inequality in American Manufacturing. Proposal funded by the Alfred P. Sloan Foundation.

___________. 2001. Symbolic boundaries and the new division of labor: Engineers, workers and the remaking of factory life. Research in Stratification and Social Mobility. 18: 3-32.

Walton, R. E., J. E. Cusher-Gerschenfeld and R. B. McKersie. 1994. "The Pulp and Paper Industry: Shifts in Power and Agendas." Chapter four in Walton et al., Strategic Negotiations: A Theory of Change in Labor-Management Relations. Boston: Harvard Business School Press.

Zuboff, Shoshana. 1988. In the age of the smart machine. New York: Basic.