An EI climate is defined as consisting of these four attributes: participative decision-making, information sharing, training and performance-based rewards.
Research based on 92 insurance companies in the US and Canada concluded that a perceived EI climate is related to increased employee loyalty or organisational commitment. Such a combination of effects implies that creating an EI climate is a potent intervention that could provide competitive advantage.
This combines with other studies in this area by the research team to offer compelling evidence that the stronger the perceived climate for involvement, the stronger the financial performance of the organisation, the lower its staff turnover rate and the higher the morale of its employees.
In other words, organisations that implement practices aimed at increasing employee perceptions of all four EI attributes should enjoy the greatest increases in overall performance. This study charts new ground by providing a pioneering test of EI from the organisational climate perspective.
Planning the creation of an EI climate is one of the most difficult challenges confronting an organisation. However, precisely because it is so difficult to create, it is well worth the effort in terms of the competitive advantage it offers a company.
Managers should recognise that the organisation is most likely to succeed when employees have the appropriate tools, training and knowledge to do their best work. It is also important to give employees appropriate authority and decision-making powers to enable them to do their jobs effectively.
In addition, information sharing is vital because it is central to the understanding of the business required by EI, and rewards must be linked to the performance standards expected.
Finally, because employee perceptions about the EI climate appear to be crucial to achieving the desired effects, companies should regularly monitor employees' beliefs about their EI attributes to ensure that they are being recognised and favourably received.
Source: Employee involvement climate and organisational effectiveness
Christine M Riordan, Robert J Vandenberg and Hettie A Richardson
Human Resource Management, Vol 44 No 4, winter 2005
Review by Roger Trapp