Human Resource Management, Employee Participation and European Works Councils: The Case of Pharmaceutical Industry in Greece

Abstract

Employee participation is a broad notion that encompasses sets of practices that enable employees to participate in the decision-making process on issues affecting them leading to a committed workforce. According to the 2009/38/EC Directive, a European Workers’ Council (EWC) is established in all undertakings and all community-scale groups of undertakings for the purpose of informing and consulting employees. This study investigates the impact of employee participation on employees and organizations and more specifically the potential benefits and the added value of participation for employees and organizations, the potential costs and threats of employee participation and the added value of EWCs in multinational subsidiaries in the pharmaceutical industry in Greece. The data gathering was carried out through in-depth semi-structured interviews with management, HR executives, trade union representatives and EWC representatives using a semi-structured questionnaire based on the state-of-the-art literature review. Organizations participating in the study are subsidiaries of multinational companies with an active European Works Council in the pharmaceutical industry in Greece. Findings suggest that there are potential benefits of employee participation practices for the employees and added value for the pharmaceutical companies and provide a useful perspective for managers and researchers in the field of labor relations and human resource management.

1. Introduction

Although employee relations are related to Human Resources Management (HRM), the study of employee relations within multinational corporations has not been explored as much as HRM in multinational corporations. Frequently asked questions in the international literature are whether multinationals try and follow the same policies and practices for all their operations regardless of location, essentially exporting the successful parent country approach [1]. This strategy allows for a degree of strategic integration and coherence between the various units. The next question is whether multinational companies follow policies and practices that are more harmonized and ensure adaptability to the requirements of local regimes. These questions and these issues have occupied many scientists for years. Extensive research has been carried out to determine the importance of the influences of the host country and the mother country in the management of employment relationships in the subsidiaries [1].

Multinational companies are a source of innovation in the dissemination of new HRM policies and employee relations management practices. Human resource management and employee relations as a function of HRM are vital and challenging issues in the pharmaceutical industry. There are a few recent studies analyzing the role of HRM in the pharmaceutical firms [2,3].

Employee participation is a broad notion that encompasses sets of practices that enable employees to participate in the decision-making on issues affecting them leading to a committed workforce. According to the 2009/38/EC Directive, a European Workers’ Council (EWC) is established in all undertakings and all community-scale groups of undertakings for the purpose of informing and consulting employees [4].

This study investigates:

• the participation practices and in particular the forms of direct and indirect participation, the degree of participation, the structure and the levels of participation.
• the factors that affect participation as well as barriers that hinder the development of participation practices.
• the perceived results of employee participation and in particular organizational commitment, employee motivation and empowerment, trust and justice.
• the perceived results of the participation at the level of organizations and in particular the perceived benefits and opportunities, costs and threats, efficiency and added value.

The multinational companies participating in the study hold a subsidiary in Greece, have an EWC and are active in the pharmaceutical industry.

This study is part of a research project aiming to explore European Works Councils and Human Resource Management in multinational companies in the pharmaceutical sector in Greece. The results of the research are divided into two studies. The first study [5] examines how and to what extent employee participation practices are applied in multinational companies with a subsidiary in Greece that have EWCs and are active in the pharmaceutical industry. More specifically, the study examines the design of employee involvement and participation practices, the similarities and differences of employee participation practices in the group of companies internationally, corporate employee communication and consultation mechanisms, corporate policy towards trade unions and the EWC nature and agreements. There are three groups of participants in the research study: the management, the HR department, and the employees. The study presents only the research results of interviews with management and HR. This study focuses on the impact of employee participation on employees and organizations, and more specifically: a. the potential benefits and the added value of participation on employees, b. the potential benefits and the added value of participation on organizations, c. the potential costs and threats of employee participation, and d. the added value of EWCs in multinational subsidiaries with an active EWC in the pharmaceutical industry in Greece. In this study, there are four groups of participants in the research study: the management, the HR department, the trade union members and the EWC members.

2. Literature Review

2.1. Employee Participation

Employee participation is a broad notion that encompasses sets of practices with the aim to achieve objectives [4]. The existing literature explores the context of employee participation, which includes the forms of participation, the degree of participation, the structure and levels of participation and the purpose of participation. The forms of employee participation are distinguished in direct participation that includes vertical communication (e-mail, internal network—intranet, newsletters—newsletters), two-way communication (team briefing, meetings—meetings at work) and upward problem solving (teamwork, quality cycles, problem-solving teams, submission systems, stop surveys) in indirect—representative participation (trade union, EWC—European Works Councils, JCC—Joint Consultation Committees, NER—non-union employee representatives) and in financial participation (profit sharing, a concession of shares, granting of options) [6]. The degree of work participation can be high or low. A high degree of work participation (deep or high involvement), means that all categories of employees are involved in the planning process of a product or a service while the low degree of participation (shallow or low involvement), means that only the high-level management participates in the planning process [7,8]. This means that employee participation in the design process of a product or a service emerges opportunities for innovation that could facilitate the identification of opportunities throughout the organization [9]. Regarding the structure and the levels of participation, the relevant literature refers to a. the participation structure: formal, based on rules and procedures or informal structure, based on open issues and decisions; and b. the participation levels: individual level, work unit, organization level, work group, department, board level. Examples of the purpose of participation are [6,10] creativity, commitment, organizational democracy, ability, collaborative team spirit, motivation, performance, power redistribution, information sharing and knowledge development.

The existing literature [11,12] investigates the factors that influence participation and the barriers that hinder the application of participation. Factors that can influence employee participation are the leadership—commitment of management, the provision of training, support by unions and employee representatives, trust in management and the collaborative working climate. Factors that make it difficult to adopt participation practices (barriers to participation) are the lack of trust on the part of employees and management, the lack of time (slowing down decision-making processes, increasing bureaucracy) and other competitive priorities of the organization [13,14,15,16].

According to [10], the benefits of employee participation are that it increases employee morale, satisfaction and production efficiency and it gives employees the opportunity to use their personal information, which can lead to better decisions for the organization. There is a widespread belief that participation can affect employee job satisfaction, employee productivity, employee commitment and all this can create a comparative advantage for the organization. The perceived results of employee participation include organizational commitment and engagement [17,18,19,20], motivation—empowerment of employees [21,22,23], increasing employee confidence in management [23,24] (and the consolidation of organizational justice [24]. The perceived outcomes of participation at the organization level include the perceived benefits and opportunities of the participation, the perceived costs and threats of participation and the effectiveness and added value of EWCs as a form of indirect participation [25,26,27,28,29]. Perceived benefits and opportunities of employee participation are that employee participation ensures the right of employees to receive information at the group level and management to be informed of the views of employees, participation has a positive effect on the co-operation between management and employees, it develops a European dimension of the company and its working relations, it has a positive effect on labor relations within the group, it gives employees the opportunity to achieve the goals of the organization by assigning tasks and taking responsibility, it is useful for the search of ideas among employees—new business ideas emerge from employees that improve the growth and efficiency of the organization and it contributes to the successful implementation of new management strategies [23].

2.2. European Works Councils

According to the 2009/38/EC Directive, a European Workers’ Council is established in all undertakings and all community-scale groups of undertakings for the purpose of informing and consulting employees. The EWCs are bodies that represent the European employees of a company. Through them, the employees are informed by the management about the progress of the company and any important decision at the European level that could affect their employment or working conditions. The role of the human resources department is to facilitate the convening, communication and conduct of meetings within the framework of the operation of the EWC. High-ranking executives of the international human resources department often attend the EWC meetings and present the company’s plans for the next period. At the same time, the human resources managers in each country ensure that EWC representatives are appointed in accordance with national legislation and practices. In some cases, the EWC establishment agreements provide for specific roles and responsibilities for the human resources management executives. In particular, the head of the corporate human resources department worldwide may be a vice president or secretary to the EWC [30].

Regarding the efficiency and added value of EWCs, they promote communication between employees and management, they are a platform for integrated communication and facilitate cross-sectoral communication and they are an opportunity to promote international contact and exchange of views and to create a sense of “belonging” to an international company. EWCs contribute to the exchange of information and views with employee representatives, in dialogue and in promoting a spirit of cooperation and the development of corporate culture [30,31,32]. EWCs help to develop the European dimension of HRM and to increase the transparency of decisions and coherence and they support the exchange of good practices (best practices) within the company [33].

Based on the pertinent literature, the research objectives of this study are to explore the participation practices, and in particular, the forms of direct and indirect participation, the degree of participation, the structure and the levels of participation; the factors that affect participation as well as barriers that hinder the development of participation practices; the perceived results of employee participation and in particular organizational commitment, employee motivation and empowerment, trust and justice; the perceived results of the participation at the level of organizations and in particular the perceived benefits and opportunities, costs and threats, efficiency and added value.

Regarding the relationship between participation and organizational learning, in the literature [34,35,36,37] the seven dimensions of organizational learning include: (1) the creation of continuous learning opportunities; (2) the promotion of equality and dialogue; (3) encouraging collaboration and group learning; (4) creating knowledge acquisition and sharing systems; (5) empowering employees towards a collective vision; (6) the connection of the organization with its environment and (7) the provision of strategic learning leadership [36]. Work participation is an integral part of a dialogue that contributes to the promotion of equality, the encouragement of cooperation, the empowerment and motivation of employees to work collectively to achieve common goals. Work participation is therefore associated with five (2,3,4,5,6) of the seven dimensions of organizational learning. Work participation contributes to the promotion of equality and dialogue, to the encouragement of collaboration and group learning, to the sharing of knowledge, to the empowerment of employees towards a collective vision and to the internal acquisition of knowledge [38,39,40].

Perceived costs and threats of employee participation are that it raises employees’ expectations (creating unrealistic expectations and delusion of employees regarding their ability to influence the decision-making process), it may increase bureaucracy, it slows down the administrative decision-making process, it may violate confidential data and internal information and it constitutes internal financial information costs for the subsidiary.

2.3. The Pharmaceutical Industry in Greece

The pharmaceutical sector is part of the health sector and is characterized as one of the most dynamic sectors of the Greek economy. The pharmaceutical industry is dominated by large multinational pharmaceutical companies, which bear the increased costs of Research and Development (R&D) [41]. Pharmaceutical companies are the part that composes the offer of the pharmaceutical industry. The pharmaceutical industry is overseen by the institutional framework at both demand and supply levels. The pharmaceutical industry is characterized by global mergers and acquisitions as well as an increase in research centers and research and development organizations. Pharmaceutical companies are under pressure to comply with regulations regarding safety, quality assurance and the environment, research, development, licensing and marketing of pharmaceuticals and are required to implement a regulatory framework that includes specific arrangements for packaging, safety of use, prescribing, distribution and promotions. The strict institutional and regulatory framework that governs the pharmaceutical industry makes it one of the most closely monitored and regulated sectors of the Greek economy [41]. The regulatory framework is shaped by a variety of laws, regulations and decisions of national governments and supranational organizations such as the European Union and the World Health Organization. In the 2000s there were acquisitions, mergers, acquisitions between large multinational pharmaceutical companies and this trend continued in the subsidiaries of pharmaceutical multinationals in Greece.

3. Materials and Methods

The aim of this study is to investigate the practices of employee participation, the factors that influence them and the perceived results of the participation at the level of employees and Organizations, which are multinational companies with a subsidiary in Greece, have an EWC and are active in the pharmaceutical sector. More specifically, the following are investigated:

• RQ1: the participation practices and in particular the forms of direct and indirect participation, the degree of participation, the structure and the levels of participation.
• RQ2: the factors that affect participation as well as barriers that hinder the development of participation practices.
• RQ3: the perceived results of employee participation and in particular organizational commitment, employee motivation and empowerment, trust and justice.
• RQ4: the perceived results of the participation at the level of organizations and in particular the perceived benefits and opportunities, costs and threats, efficiency and added value.

To understand the factors that affect the effectiveness of employee participation and the perceived benefits and costs and the specific conditions and relationships related to participation framework, the qualitative research strategy provides the necessary tools. In addition, the qualitative methodology is considered appropriate and is used in several publications and dissertations on employee participation in multinationals (for example: [42,43]). For the purposes of the research, we adopted semi-structured interview questionnaires (see Appendix A) to understand the experiences and the perceptions of management and employees regarding the outcomes of employee participation. Most of the interviews were conducted by telephone or via the internet due to the COVID-19 pandemic. The interviews were conducted in the time between November 2020 and January 2021. In several interviews the participants were very willing to discuss, with the result that the interviews lasted longer than the 20 min schedule.

The focus in the interviews with management and HR representatives lies on the value of employee participation in general and the focus in the interviews with employee representatives and EWC members lies on the added value of the respective EWC. The difference in research focus is due to the relevant existing literature that distinguishes direct participation and EWCs, to the researchers’ perspective and to the ignorance—knowledge of few elements about EWCs of the local management and HR. The perspectives of HRM representatives, trade union representatives and representatives in EWCs complement each other although they are not convergent.

The selection criterion of the organizations participating in the study is to belong to the pharmaceutical industry and to fall within the scope of Directive 2009/38/EC/6.5.2009 on the establishment of a European Works Council or a procedure in community-scale undertakings and community-scale groups of undertakings for the purposes of informing and consulting employees (recast). The pharmaceutical sector has been selected as most companies with an EWC that have a subsidiary in Greece exist in this sector [41].

In Greece, the companies that meet the above characteristics amount to 17. Efforts were made to get access to all potential companies. Based on these selection criteria, a total of six organizations accepted to participate in the study and have been successfully interviewed. The research data collection was carried out conducting 19 interviews with three Greek representatives of management (MGM), five Human Resource Executives (HR), five Trade Union (TU) and six Greek representatives in the European Works Council (EWC) of six multinational pharmaceutical companies that have a subsidiary in Greece and in which the European Works Council (EWC) operates. The following table (

Table 1. Characteristics of the Greek subsidiaries participating in the study.

Company	Central Management	Staff in Greece	Turnover in Greece (€)	Business Activities
Ch1	Switzerland	430	310,566,097	Production, exclusive imports and trade of medicines. Import countries: Germany, Switzerland. It mainly imports pharmaceutical products from Germany.
Ch2	Luxembourg	1135	125,629,948	Production (for third parties) of pharmaceutical products and cosmetic products. It deals with the production of pharmaceutical products on behalf of companies—its customers, in the domestic market and abroad.
Ch3	Germany	335	325,922,365	Production, exclusive imports and wholesale of medicines. Produces pharmaceutical products and distributes the products of the German parent company, which are all original. Exports account for a large part of the total turnover.
Ch4	UK	210	132,069,800	Exclusive imports, production and wholesale of medicines. Import countries: Ireland, United Kingdom, France, Germany.
Ch5	USA	165	102,144,591	Exclusive imports and wholesale of medicines. Import Countries: Belgium, Switzerland, Ireland. It is jointly controlled by an American company.
Ch6	USA	300	226,980,853	Production, imports and wholesale of medicines and veterinary preparations. Import countries: USA, France, Germany, Belgium.

Source: ICAP, 2019.

) describes the characteristics of the Greek subsidiaries of the multinationals participating in the study.

Regarding the analysis of the interviews, the process was carried out in steps. The first step was the transcribing of the interviews. The second step was the selection of an appropriate analysis method. The type of analysis chosen is the narrative content analysis of thematic interviews. The next step was the identification of thematic units and the aggregation of excerpts that correspond to each research question. Afterwards, the data of the interviews were coded in terms of thematic categories. The thematic categories are defined in accordance with research questions after the interviews. The last step was to report the interview findings by participant group and by thematic section [42,43,44].

4. Results

4.1. HR & Management Views on Employee Participation

All organizations (Ch1, Ch2, Ch3, Ch4, Ch5, Ch6) participating in the research have explicit and recognized employee participation practices that are included in the broader human resources practices. According to HR (Ch1, Ch2, Ch3, Ch5, Ch6) and management (Ch1, Ch2, Ch3) executives, practices of direct participation including vertical communication (e-mail, internal network—intranet, news-letters—newsletters) and two-way communication (team information, team-briefing, meetings—meetings in the field working) exist in all organizations. Most of the mechanisms such as upward problem solving (teamwork, quality cycles, problem-solving teams, submission systems, attitude surveys) are present in all organizations. In one organization (Ch3) there is no suggestion submission system and in one (Ch6) there are no quality cycles. Regarding the practices of indirect—representative participation (trade union, EWC, JCC, NER) in three (Ch1, Ch4, Ch5) of the six organizations, there is no trade union, but an EWC exists in all of them. Regarding practices of financial participation (profit sharing, concession of shares, granting of options) in one organization shares are given only after 3 years of working and to high-ranking executives (Ch1), in one organization (Ch2), there is a concession of shares and participation in profits for the executives. In one organization, shares and stock options are granted only to senior executives (Ch3), in the other organization (Ch5), there is a level of bonus that has to do with the performance of the company and not individual goals and in the last organization (Ch6) there is no financial participation (RQ1). In the organizations participating in the study, the employees are expressed through the union (where it exists) but also individually in the HR department and in the head of the division. The parent companies are involved in the design of the programs and the structure of participation schemes involves the parent company that approves or directs them. The initiatives for participation programs are continuous improvement, and a strong HR department caring for the staff. The purposes of the employee participation programs in the organizations are mainly the development and the dedication as the organizations want the employees to stay in the company and to develop both the employees and the company. The major factor that influences employee participation is the management, while the reasons why participation is not widely applied are other priorities and not the cost, the lack of motivation, the lack of time. While there is a mood for participation if employees and organizations do not apply any participation mechanism, it is usually because they do not find the benefit to do so. According to the representatives of HR (Ch1, Ch2, Ch3, Ch5, Ch6), the middle executives facilitate the participation practices as it is also part of their work and if there are any obstacles, the data is adjusted and an effort is made to overcome the obstacles. (RQ2)

Regarding the role of the operation of the HR department within the organization, the executives of the human resources department answer that:

“It shapes the internal conditions so that people are empowered and brings the desired results.”

(“Ch1”)

“HR manages all personnel issues from the simplest to the most complex, and of course, the strategic planning for the development of both the staff and the company itself.”

(“Ch2”)

“The role of the HR department is understood through the support in daily operations, payroll, labor law, overtime, payments, benefits, employment issues, training-coaching.”

(“Ch3”)

“There are procedures in which the HR department is practically involved, there is direct communication with employees, there is a relationship with institutions, e.g., communication with trade unions—at an institutional, practical, personal level.”

(“Ch4”)

The general framework for the strategies of the organizations participating in the study, according to the answers of the human resources executives, are the focus, the cost reduction, the improvement of flexibility (agility), the achievement of a larger market share and the innovation. The primary goal of the organization for most companies (four out of six companies) is the development, investments and expansion. Regarding the initiatives, HR policies that are implemented and coordinated worldwide and HR executives state that:

“There are company core policies that each subsidiary is required to implement, e.g., global parental leave, global policy for new parents minimum 14 weeks for both men and women.”

(“Ch1”)

“We have global policies like mobile benefits and the recruitment policy.”

(“Ch2”)

“There are many practices from abroad, e.g., evaluation but more specific things are custom made from country to country because the needs are different. There are pr e-defined things e.g., bonus policy, assignments and the budget by the country for increases comes from outside. The Greek HR has the responsibility to respect these, not to offend any employee, and to ensure that the policies will be done correctly. The HR department is the guardian of practices and policies.’’

(“Ch3”)

“Budgeting, evaluation process, staffing process, training, almost all the activities of the personnel department meet to some extent with a global initiative.”

(“Ch5”)

“There are additional benefits for more days off in case of loss of a relative and for paternity leave. There are global policies and each country has adapted them according to its legal framework.”

(“Ch6”)

Regarding the local HR practices that apply only to the subsidiary in Greece, the following were mentioned:

“There are policies according to the Greek market. For similar companies, the market gives some benefits because the companies compete to give something better. Organizations have to be competitive and for this reason, they implement such programs.”

(“Ch1”)

“Each country has its own peculiarities.”

(“Ch2”)

“One country may differ from another, but this is not a peculiarity of Greece alone. I cannot say that there is something in Greece that does not exist anywhere else. There is no particularity in Greece.”

(“Ch3”)

“Local practices depend on the legal framework.”

(“Ch5”)

The following table (

Table 2. Potential benefits (added value) of participation for employees (sample: management n = 3).

Potential Benefits and Added Value of Employee Involvement and Participation (EIP) for Employees	Yes	No
□ strengthens organizational commitment	3/3	0/3
□ increases the commitment of employees to the Organization	2/3	1/3
□ contributes to the motivation and empowerment of employees	2/3	1/3
□ increases employees’ trust in management	3/3	0/3
□ consolidates of the sense of justice	3/3	0/3

Source: data processing survey.

) summarizes the views of management on the potential benefits (added value) of employee participation for employees. (RQ3)

The following table (

Table 3. Potential benefits (added value) of participation for employees (sample: HR n = 5).

Potential Benefits and Added Value of Employee Involvement and Participation (EIP) for Employees	Yes	No
□ strengthens organizational commitment	5/5	0/5
□ increases the commitment of employees to the organization	5/5	0/5
□ contributes to the motivation and empowerment of employees	5/5	0/5
□ increases employees’ trust in management	5/5	0/5
□ consolidates of the sense of justice	5/5	0/5

Source: data processing survey.

) summarizes the views of HR executives on the potential benefits (added value) of employee participation for employees. (RQ3)

Among the main benefits mentioned is the increase in employee trust in management. The goal is to improve the company and make the employee feel a member of the company as well as provision of better information to employees. The following table (

Table 4. Potential benefits (added value) of participation for the organization (sample: management n = 3).

Potential Benefits (Added Value) of Employee Involvement and Participation (EIP) for Organizations	Yes	No
□ gives employees the opportunity to achieve the goals of the organization by delegating tasks and assuming responsibilities	2/3	1/3
□ is useful for finding ideas among employees	3/3	0/3
□contributes to the successful implementation of new management strategies	3/3	0/3
□ ensures the right of employees to receive information at group level and management to be informed of the views of employees	3/3	0/3
□ has a positive effect on the cooperation of management and employees	3/3	0/3
□ develops a European dimension of the company and its employment relationships	3/3	0/3
□ has a positive effect on employment relationships within the group of the multinational	3/3	0/3

Source: data processing survey.

) summarizes the views of management on the potential benefits (added value) of work participation for the organization. (RQ4)

The following table (

Table 5. Potential benefits (added value) of participation for the organization (sample: HR n = 5).

Potential Benefits (Added Value) of Employee Involvement and Participation (EIP) for Organizations	Yes	No
□ gives employees the opportunity to achieve the goals of the organization by delegating tasks and assuming responsibilities	5/5	0/5
□ is useful for finding ideas among employees	4/5	1/5
□contributes to the successful implementation of new management strategies	5/5	0/5
□ ensures the right of employees to receive information at group level and management to be informed of the views of employees	4/5	1/5
□ has a positive effect on the cooperation of management and employees	5/5	0/5
□ develops a European dimension of the company and its employment relationships	4/5	1/5
□ has a positive effect on employment relationships within the group of the multinational	5/5	0/5

Source: data processing survey.

) summarizes the views of HR executives on the potential benefits (added value) of work participation for the organization. (RQ4)

The following table (

Table 6. Potential costs of employee participation (sample: management n = 3).

Potential Costs—Threats of Employee Involvement and Participation (EIP)	Yes	No
□ raises employee expectations	2/3	1/3
□ creates unrealistic expectations and misconceptions about employees’ ability to influence the decision-making process	2/3	1/3
□ increases bureaucracy	1/3	2/3
□ slows down the decision-making process	2/3	1/3
□ violates confidential inside information	0/3	3/3
□ is an additional financial cost for the subsidiary	2/3	1/3

Source: data processing survey.

) summarizes the views of management on the potential costs and threats of employee participation. (RQ4)

The following table (

Table 7. Potential costs of employee participation (sample: HR n = 5).

Potential Costs—Threats of Employee Involvement and Participation (EIP)	Yes	No
□ raises employee expectations	4/5	1/5
□ creates unrealistic expectations and misconceptions about employees’ ability to influence the decision-making process	0/5	5/5
□ increases bureaucracy	2/5	3/5
□ slows down the decision-making process	1/5	4/5
□ violates confidential inside information	0/5	5/5
□ is an additional financial cost for the subsidiary	1/5	4/5

Source: data processing survey.

) summarizes the views of HR executives on the potential costs and threats of employee participation. (RQ4)

To the question of whether employee participation practices are related to organizational learning, HR executives answered that:

“They are connected but not to such an extent.”

(“Ch1”)

“Employee participation in the narrow sense not, but in the broad concept that includes quality circles, meetings, health and safety committees, is linked to organizational learning and is part of it, it is in the measurable goals. It also depends on the people involved.”

(“Ch2”)

“Yes, but this is not primary, it is more because of improving the Organization, the employee engagement than in the learning itself. It helps but the biggest impact is not there.”

(“Ch3”)

“Obviously, if they participate and are enabled then they attend the training more actively.”

(“Ch5”)

“Employee participation is a source of knowledge to the extent that it enhances the sense of belonging and gives impetus to the employee to participate with greater zeal in the established trainings of the company.”

(“Ch6”)

4.2. Trade Union Views on Employee Participation and EWC

According to a trade union representative “at the central level, the management complies with the EU constitutional framework, because all multinationals care about good outside testimony. The EWC without resolving issues and without being a decisive body, gives a democratic assertion that everything flows within the EU and this means that the multinational is a democratically favored multinational and has a good work climate. Decisions are made at the central level and the EWC does not play a decisive role but only that it creates an environment where it sometimes puts a brake on the choices of lower management for fear that if the EWC realizes something wrong, that will reach the ears of the central management” (Ch3). According to the testimony of a trade union representative: “in fact, the EWC institution functions as a tool of the employer, which is in complete sympathy, conciliation and consensus with the employer and has appeared in the last 15 years for 1 to 1.5 times (because there is an EWC we have a trade union representation in the company and we do not need a trade union). An attempt was made by the employer to describe it as a trade union institution which in fact was not. When the issue was raised openly at a level of conflict due to redundancies, the EWC representative acknowledged that he was not a trade union representative, but the company tried to present the EWC in this way, blurring a bit the landscape. One time EWC was seen as a union, when the EWC representative sat at the table on the employer’s side and together with the employer explained the reasoning on the basis of which employees should be fired. Most employees today do not know that the EWC exists. In practice, it ends up being a tool controlled by the employer, it does not guarantee employee participation and independent representation of employees and appears as a tool to legitimize employer decisions with the logic that we co-decided on redundancies with the EWC and so with the company’s employees. So there is no reason for a trade union to exist and to protest. In all other matters such as participation, information of employees, improvement of communication, there is no activity related to the EWC.” (Ch1) “There is no information and contact of the EWC with employees and the EWC has no essential role in reaching out employees despite the changes and the reorganization made in the company with the elimination of departments and job positions.” (Ch4)

At the end of the interview, the trade union representatives were asked to answer six closed-ended questions regarding the added value of the EWCs. The following table (

Table 8. The added value of EWC as a form of indirect participation (sample: Trade Union n = 5).

The Added Value of EWC	Yes	No
□ EWC promotes communication between employees and management and operates as a platform for integrated communication and facilitate cross-sectoral communication	2/5	3/5
□ EWC is an opportunity to promote international contact and exchange of views and to create a sense of “belonging” to an international company	3/5	2/5
□ EWC contributes to the exchange of information and views with employee representatives, to dialogue and to the promotion of a spirit of cooperation and the development of a corporate culture	3/5	2/5
□ EWC helps to develop a European human resources management policy	2/5	3/5
□ EWC contributes to increased transparency of decisions and coherence	2/5	3/5
□ EWC supports the exchange of best practices within the business group	3/5	2/5

Source: data processing survey.

) summarizes the views of trade union representatives of participant organizations on the added value of EWC as a form of indirect participation. (RQ4)

4.3. EWC Views on Employee Participation and EWC

According to EWC representatives (Ch1, Ch6), an issue and a big question surrounds what the role of the EWC is. There is the role that the EWC wants to have and there is the role that management wants EWC to have. An EWC member states that “the role of EWC is not only to be reactive to what it comes from management but also to be able to raise in management and consultation issues that exist in the way the company operates. The role of the EWC is an advisory role, an interest for the employee, a colleague—fellow human being, a role that can help. Good knowledge of the company for the EWC members can give good advice and suggest solutions that can differentiate to some extent the decisions of the company and of course good communication because it has to do with people and cooperation” (Ch6). Representation in the EWC takes part at the European level. EWC members represent a European entity. It is difficult for some people to get out of the narrow confines of a country, the EWC goes beyond the borders of the country and it concerns the general good for the whole of Europe. According to an EWC member “the EWC is often used to resolve disputes concerning the local level and some EWC members care for their personal promotion. This has to do with personality, e.g., I will go ahead; I will not follow the rules. There are also disagreements in the handling of information. There are different people, different cultures, you see a lot of different perspectives” (Ch1). EWC members were asked to rate the overall success of the EWC through closed-ended questions. The following table (

Table 9. The added value of EWC as a form of indirect participation (Sample: EWC n = 6).

The Added Value of EWC	Yes	No
□ EWC promotes communication between employees and management and operates as a platform for integrated communication and facilitate cross-sectoral communication	5/6	1/6
□ EWC is an opportunity to promote international contact and exchange of views and to create a sense of “belonging” to an international company	6/6	0/6
□ EWC contributes to the exchange of information and views with employee representatives, to dialogue and to the promotion of a spirit of cooperation and the development of a corporate culture	6/6	0/6
□ EWC helps to develop a European human resources management policy	5/6	1/6
□ EWC contributes to increased transparency of decisions and coherence	6/6	0/6
□ EWC supports the exchange of best practices within the business group	6/6	0/6

Source: data processing survey.

) summarizes the views of EWC representatives of participant organizations on the added value of EWC as a form of indirect participation. (RQ4)

5. Discussion

The main factor affecting employee participation is management, while the reasons for not implementing such practices are other priorities of the company and not the cost. Lack of motivation and lack of time and lack of benefits are also mentioned as barriers. Research findings are in line with previous research [14] which argued that management commitment and perceived benefits are the key factors influencing work engagement.

According to the research findings, employee participation to a large extent strengthens organizational engagement, increases the commitment of employees to the organization, contributes to the motivation and empowerment of employees, increases the trust of employees towards the management and consolidates the feeling of justice within the organization. The findings of the research are in accordance with the previous research of [16,17,18,19,21,24,25].

Employee participation to a large extent gives employees the opportunity to achieve the organization’s goals by assigning tasks and assuming responsibilities, it is useful for seeking ideas among employees, it contributes to the successful implementation of new management strategies, it ensures the right of employees to receive information at group level and the management to be aware of the views of the employees, has a positive effect on the cooperation between management and employees, it develops a European dimension of the company and its labor relations, it has a positive effect on the labor relations within the group. The findings of the research are in accordance with the previous research of [15,22,23].

Employee participation increases the expectations of employees. However, it does not go so far as to create unrealistic expectations and misleads employees regarding their ability to influence the decision-making process, nor does it breach confidential internal information data. However, it may increase bureaucracy, create a slowdown in the decision-making process and be an additional financial cost to the subsidiary. The findings agree with the research of [15,26].

The EWCs are an opportunity to promote international contact and exchange of opinions and to create the feeling of “belonging” to an international company; they contribute to the exchange of information and opinions with the representatives of the employees, to the dialogue and the promoting a spirit of cooperation and developing a corporate culture and to a certain extent support the exchange of best practices within the business group. However, it is not unanimously accepted that they promote communication between employees and management, are a platform for unified communication and facilitate inter-departmental communication, that they help to develop a European human resources policy and that they contribute to increasing the transparency of decisions and coherence. The research findings partially agree with the research of [15,22,23,32]. Although EWC’s are a body of information and consultation of employees and not of a company management, in two cases (Ch1 & Ch4) company management used EWCs as a mechanism to devalue union presence in the corporate context. EWCs promote labor issues and problems that exist collectively, but when multinationals decide to restructure a department that results in a large loss of jobs and steps are to be taken to reduce the negative effects the results of the actions of EWCs were minimal.

This research is also in line with [5]. The aim of the research [5] is to examine how and to what extent employee participation practices are applied in multinational companies with a subsidiary in Greece that have EWC and are active in the pharmaceutical industry. There were three groups of participants in the research study: the management, the HR department, and the employees. The study presents only the research results of interviews with management and HR. This study presents the impact of employee participation on employees and organizations and more specifically; a. the potential benefits and the added value of participation on employees, b. the potential benefits and the added value of participation on organizations, c. the potential costs and threats of employee participation and d. the added value of EWCs in multinational subsidiaries with an active EWC in the pharmaceutical industry in Greece. In this study there are four groups of participants in the research study: the management, the HR department, and the trade union members and the EWC members. The study presents the views of all participants.

6. Conclusions

Employee participation is a broader set of functions that includes learning, coaching, motivation, and a host of other functional issues related to human resource management. The role of the human resource department in labor relations management policies is critical in any organization operating in a competitive environment both to achieve better performance and to maximize competitive advantage. The HR departments could act out the part in European Works Councils as they have the expertise to facilitate smooth transitions, prevent and de-escalate potential conflicts, ensure compliance with laws and regulations and provide training and guidance in employee relations.

The EWCs play a vital role in shaping labor relations within multinational companies as bodies representing the European employees of a company. Practical experience argues that the management has discovered EWCs as a helpful tool in the pursuit of their business and HR objectives. EWCs are conventionally considered labor-friendly institutions but this does not mean that they cannot be used simultaneously as employer-friendly HRM tools. It must be recognized that EWCs are not the exclusive domain of employees and can just as easily be used to incorporate new HRM practices and encourage internal competition. EWCs have the potential to help increase engagement across the workforce and serve as a vehicle to expand and promote awareness of corporate culture. With a concerted effort on the part of central management, the EWCs can be used as a means of communicating the need for restructuring, building corporate culture, coordinating a European strategic HRM policy and promoting cooperation in employee relations.

Limitations of the Study

This study attempts to depict the impact on employee participation on employees and organizations in multinational subsidiaries with an active EWC in the pharmaceutical industry in Greece. It is noted that the validity of the comparison with other research is affected to the extent that the research is conducted in other countries, other industries and other time periods. Among the limitations of this study are the orientation in one industry and one country. Another limitation is that the local management is ignorant about the significance of the EWCs and local HR departments know few elements related to the operation of the EWC. It is recommended that future research is transnational taking into consideration the differences of practices among the different countries of multinational subsidiaries. It is also suggested that future research examines further the link of employee participation to organizational learning as well as the relationship between employee participation and quality of work life. Although the findings of this research cannot provide generalizations for the whole of multinationals, they can provide a useful perspective for managers and researchers in the field of labor relations and human resource management.