Dynamics of organisations and work in Finland interim results of the MEADOW survey

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1 Dynamics of organisations and work in Finland interim results of the MEADOW survey Introduction This article is a compilation of the interim results of Finland s MEADOW survey. MEADOW (Measuring the Dynamics of Organisations and Work) is a tool developed and tested with the funding of the EU Commission to collect information reliably, from multiple aspects and comparably about the change at work and in organisations at the European level. Finland s MEADOW survey is to be carried out during with Tekes funding. Its contents have been influenced not only by the European project that created the MEADOW methodology but also by the contents of national MEADOW surveys of Sweden, Norway and Denmark. Some parts of the contents of Finland s MEADOW survey, however, differ from the corresponding surveys in other Nordic countries. Finland s survey, among other things, contains more questions related to organisational changes and ways to implement them as well as to the role of employees in those changes and their wellbeing. Implementation of the survey The data in Finland s MEADOW survey consists of employer and employee interviews. Employer interviews were carried out in March June They consist of 1531 telephone interviews (net response rate: 76%). For the private sector, company was used as the unit of data collection. The number of interviews in industrial companies was 540 and in service companies 599. In the public sector, the corresponding units of data collection were either government office (N=136) or parish (N=134) and in the municipal sector depending on the case either municipality as a whole (N=62), administrative unit of a municipality (N=124) or federation of municipalities (N=66). Growth companies were handled as a separate sampling unit (N=209). Companies whose staff had increased on average at least 15 percent annually in were defined as growth companies. The interviews were directed only to employer units who had at least 10 employees. Employee interviews of the employer units whose representative had been interviewed were carried out in September December The employees to be interviewed were randomly selected from these units, based on the registration data. The number of interviews carried out per unit was one or two depending on the size of the employer unit. The total number of interviews amounted to Their distribution by sector was the following: industrial companies (N=591), service companies (N=502), municipal sector (N=315), state sector (N=170) and parishes (N=133). The employees interviewed do not, therefore, represent random sampling of all Finland s wage earners. The sample excludes, among others, those working in employer units of less than 10 persons and those who have worked less than 1.5 years in the unit in question. The purpose of the employee interviews was to complement the information obtained from registration data and employer interviews about the employer units under investigation. The results of the employer and employee interviews were published in Finnish in September 2013 in the form of two electronic Tekes reviews. The distributions of the surveys have been corrected, with a weight factor, in such a way that they statistically represent each reporting population in question. In the report dealing with the employer interviews, the units were mutually compared according to the sector, size, innovativeness, growth and export-

2 orientation, among other things. For this article, sector and innovativeness were selected as the primary viewpoints. Of the many themes of the report concerned with the employee interviews, this article will primarily focus on the changes carried out at workplaces as well as on the employees' role in those changes and their experiences about them. The last phase of the survey will analyse, in more detail, factors on the organisational level that are connected with the organisations productivity and innovativeness and the wellbeing of the employees. These results will be completed in the first half of Once the MEADOW survey has come to an end, the interview data in its entirety will be freely available for the use of researchers. Innovative companies and other companies Based on the employer interviews, organisations were divided into four groups according to their innovativeness: The first group consisted of those who, during the past two years, had developed a new or significantly improved product or service for the markets. The second group included organisations that had launched a product or service that was new for them but not for the markets. The third group consisted of organisations who had not developed these kinds of products or services but who had either improved production processes or implemented new or improved marketing methods or business innovations. The fourth group was made up of those who hadn t done any of these things during the past two years. Innovativeness was clearly greatest in information-intensive industry (e.g. chemical industry, electro-technical and electronics industry, and manufacturing of machines and equipment). On the other hand, it was least in construction, in mining and in those services that are not information intensive. During the past two years, one in five industrial and service companies had produced new innovations to the markets. The companies that had produced products or services new only for themselves had a share somewhat greater than that. Just under one-fifth of both industrial and service companies had not carried out any reforms for the past two years. The proportion is about the same in the public sector (Figure 1).

3 Figure 1. Innovativeness by company/organisation s field of industry. Innovativeness increased in accordance with the size of the company among both industrial and service companies. Of the companies with more than 250 employees, close to half in both groups had developed new products or services for the markets during the last two years. Exporting companies were more innovative than companies operating only on the domestic markets. Of the exporting companies, about 30% had brought new products or services to the market; of those operating only on the domestic markets, just half of that had done so. Prevalence and reasons for organisational changes Almost half of the companies, but up to about 60% of municipal and state sector organisations, had implemented an organisational change during the past two years. On the basis of the open answers by the employers, the changes were classified into four main types: incremental changes in responsibilities and division of labour, centralisation of power and responsibility or organisational contraction, decentralisation of power and responsibility or organisational expansion, and transformation of organization s operating principle. Incremental change was the most common type in the companies. In the public sector, however, centralisation was as common as incremental changes (Figure 2).

4 Figure 2. Incidence of the main types of organisational changes by sector. In industrial and service companies, the most often quoted reasons for changes in organisational activities were changes in demand and growth in competition. Both of these were mentioned as reasons by more than 40 percent of the employer respondents. Implementation of new technology was mentioned by 38 percent. The importance of increased wage costs was brought up by about one-quarter of the service companies and about one-fifth of the industrial companies. In the public sector, the most common reasons clearly differed. The most often quoted reasons coming up were implementation of new technology (54%) and cuts in appropriations (46%). Increased wage costs were mentioned by about onethird of the respondents. It was possible for the respondents to mention several reasons for changes. Impacts of changes on employees work Employees were asked, with three questions, whether during the past two years work tasks had been redistributed in a new way between employees at their workplace and whether there had been renewals in the organisation or renewals concerning work methods or systems. Most often, changes in all three issues asked about had taken place in the state sector. In the case of companies, each change had concerned more than one in two of them. All the employees, who had given an affirmative answer to at least one of the three changes asked about above, were also inquired about the impacts of the changes in relation to seven issues related to their own work. Their experiences about the impacts of the changes were often surprisingly positive. For example, a clear majority saw the impacts as positive in relation to own work tasks and in relation to the meaningfulness of work, both in companies

5 and public organisations. The impacts of work on mental or physical load were seen as the most negative. In the public sector, the impacts were experienced as negative by 44 percent of the respondents and also in companies by 29 percent. In all the other issues asked about, the share of those seeing the impacts as positive was clearly greater than the share of those who saw the impacts as negative (Figures 3A 3C). Figure 3A. Impacts of changes on work by sector.

6 Figure 3B. Impacts of changes on work by sector.

7 Figure 3C. Impacts of changes on work by sector. The role of employees in the changes Employee respondents attitudes on the changes that had occurred at their own workplace during the past two years were surprisingly positive. The changes were regarded as useful by 80 percent, needed by 76 percent and even necessary by 64 percent of all employee respondents. The attitudes in companies were clearly more positive than in public bodies. Public sector respondents were slightly more critical than others. Regardless, also nearly half of them thought the changes implemented as necessary. The majority of employees regarded themselves as having an important role in the development of their own work and workplace. Nearly three in four stated having developed, during the past year, solutions to improve their own work and having proposed new ideas to the management or supervisor. More than one-third had participated in the development of products or services. State sector employees proposed new ideas and participated in the development of products and services less than in the other sectors. In this respect, also municipal organisations were somewhat lagging behind the other sectors (Figures 4 6). There was a consistent connection between the degree of innovativeness in a company and the employees role in development. In companies that had introduced product or service innovations, employee participation and initiatives were most common. In those companies

8 that had not implemented innovations of any kinds during the last two years, participation was less usually than in the other groups of companies. Figure 4. During the past 12 months, the employee has developed solutions to improve his/her own work. Respondents answering Yes, according to sector and company innovativeness. Figure 5. During the past 12 months, the employee has developed new or improved products or services to his/her employer. Respondents answering Yes, according to sector and company innovativeness.

9 Figure 6. During the past 12 months, the employee has proposed new ideas to the management or the supervisor. Respondents answering Yes answers, according to sector and company innovativeness. Wellbeing of employees Of the employee respondents, 90 percent stated being very or fairly satisfied with his/her job. Of them, 60 percent stated feeling a lot or a fair amount of joy at work. In addition, they were inquired about the strength of work engagement. A sum variable consisting of three questions was constructed to measure work engagement. The questions concerned whether the employee felt him/herself strong and vigorous at work, felt zest for work and/or felt satisfaction when concentrating on work. Work satisfaction, work joy and work engagement were further used to construct a sum variable, the reliability of which proved good. The sum variable was referred to as work pleasure. Work pleasure was experienced, more often than elsewhere, in companies that had brought new products and services to the markets. Work pleasure was the least in companies that had not carried out any changes. However, the differences between the groups were not statistically significant (Figure 7).

10 Figure 7. How often work pleasure is felt in relation to a company's innovativeness. Work pleasure had a clear connection to the type of organisational change. Work pleasure was greater where the change had meant the organisation s growth, new operations or decentralisation of responsibilities. Also in organisations which had continuously developed their activities, work pleasure was slightly greater than on average (Figure 8). On the other hand, in organisations that had centralised responsibilities, work pleasure was clearly lower. However, it was at its lowest in organisations that had axed their activities, for example by outsourcing. Big changes in the operating principles of organisation, such as moving from a traditional line organisation to a matrix, produced experiences of similar negativity. It was also interesting that in companies or public bodies that had not changed their organisation during the past two years, work pleasure was clearly below average. The results tell us that success in organisational change requires special know-how. This applies especially to big policy changes. Even though changes of this kind may seem justified in light of pure economic calculations, they often fail because the management is not able to anticipate the negative impact on productivity caused by disappearance of engagement and joy of people in their work. The solution, however, is not to avoid changes. Without constant fine-tuning, organisations erode. The results indicate that people do the best in organisations that grow or dare to delegate power and responsibility.

11 Figure 8. Work pleasure (average), according to the type of organisational change. Conclusion The interim results of Finland s MEADOW survey bring up many interesting questions in consideration with more detailed further analyses. The results will be utilised also in planning the future priorities of research on working life and its development. One way to deepen the discussion over the dynamics of organisations and work are mutual comparisons among MEADOW surveys of different countries. So far, only four Nordic countries have carried out the survey. In fact, there is an agreement among them that the results of the surveys will be mutually compared. It is hoped that the results of the surveys of Nordic countries and the opportunities provided by international comparisons motivate, in future, also other European countries to carry out their own national surveys employing the MEADOW methodology. Sources Aho, S. & Mäkiaho, A. (2013) Organisaatioiden ja työn dynamiikka työnantajien näkökulmasta: MEADOW-tutkimuksen I väliraportti. Tekesin katsaus 299/2013. Helsinki. (1st interim report of the MEADOW survey, in Finnish)

12 Minkkinen, J., Aho, S. & Mäkiaho, A. (2013) Organisaatioiden ja työn dynamiikka työntekijöiden näkökulmasta: MEADOW-tutkimuksen II väliraportti. Tekesin katsaus 300/2013. Helsinki. (2nd interim report of the MEADOW survey, in Finnish) The MEADOW Guidelines. Authors The article was compiled by Tuomo Alasoini in collaboration with Simo Aho, Jaana Minkkinen and Ari Mäkiaho. It is based on two Finnish-language interim reports of the MEADOW survey.