Answer to Question #275697 in Management for Ayla

Question

Compare Germany, UK and Sweden's national employment systems in regards to the similarities, differences, advantages and disadvantages of the state as the main actor of employment relations?

Answer 1

Discussion

Employment practices define the relations between employers and employees. They include: wages, an employment contract, workplace rules, supervision methods, training, and security of employment. National institutional conditions relate to employee involvement across countries. Drawing on the 2015 European Working Conditions Survey (EWCS), decomposition analysis explains between 40% and 65% of the cross-national differences. These differences stem from key national employment systems domains like, the management system, information and communication technology use, as well as training and education. These domains contribute simultaneously and with different weights to cross-national differences, and conclude that domains’ contributions reflect the specific institutional characteristics of the investigated national employment systems.

In comparative studies on organizational practices and employee involvement, Germany, the UK and Sweden represent core. According to recent empirical studies, opportunities for involvement in the workplace are lower in Germany as compared to the UK and Sweden. The UK is usually considered an example of low employee involvement, stressing the low-road approach taken by UK firms and the focus on managerial workplace. Accordingly, the considerably lower employee involvement levels in Germany compared to the UK present a puzzle that has not yet been solved in the literature.

Germany is often seen as a role model of highly regulated market. Traditionally, national institutional conditions should foster longer job tenure, which enables employees to build firm-specific skills. However, the traditional regulated logic of Germany’s employment system is increasingly shaped by a sub-notion of dualism in the labor. The UK is often considered a key example of a lightly regulated market economy. In contrast to Germany, market mechanisms shape the relationships between firms and employees. A lack of regulation has led researchers to assume that UK firms follow a low-road approach to workforce management that leads to overall poorer working conditions. The UK’s employment system is therefore more market-based and more manager-focused. Compared to Germany, the Swedish employment system provides more support for marginalized employee groups. Thus, the Swedish employment system follows a regulated and more inclusive approach. In the Swedish management system, workplace authority is traditionally shared with regular employees in a decentralized organizational model. Sweden’s workers traditionally enjoyed high involvement levels in semi-autonomous teams. This team approach was a key element of the so-called socio-technical model. The country’s workplace’s development followed this tradition, as high discretionary teamwork prevailed. This allows for a job design with high variability and high uncertainty. International comparisons show that Swedish employees enjoy the highest learning organization rates.

Employment is the base of the family prosperity. It creates satisfaction and happiness to the people by earning. People become active, creative and inter-related. Economically, employment provides income to poor families, revives domestic demand for goods and services, and stimulates overall growth. Socially, employment can also promote social healing, encourage the return of displaced persons, and improve social welfare in the long run.

Between mass unemployment, poor working conditions, wage gaps, discrimination and other concerns, finding a job can be a challenge, and having one does not guarantee decent living conditions, particularly in low-income countries. Poor working conditions are the main global employment challenge, according to the International Labor Organization (ILO).

Reference

Dobbin, F., & Boychuk, T. (1999). National employment systems and job autonomy: Organization Studies, 20(2), 257-291.