What Do Unions Do? Unionization, Work Innovations, and Firm Performance in Jamaica

Abstract

To respond to competition emanating from globalization, many firms have adopted work innovations that are related to human resource management (job analysis, employment tests, performance appraisals, and internal promotions), high performance work systems (total quality management, quality circles, job rotation, and teams), training, and employee involvement (information sharing, attitude surveys, worker-management committees, and grievance procedures) (Huselid 1995; MacDuffie 1995; Osterman 1994; Kaufman 1991). Research has shown that work innovations have a positive impact on firm performance (Ichniowski et al. 1996). Our objective is to examine the impacts of the presence of a union on the adoption of work innovations and firm performance as well as the impacts of work innovations on firm performance. Our data are taken from a national survey conducted in 1995 in Jamaica. The results of a structural equation model (SEM) show that unions are neither an impediment nor an encouragement to work innovations and firm performance. Our data also show that work innovations are not a determinant of firm performance. Based on these results, we argue that unions cannot be demonized for impeding work innovations and firm performance. Work innovations, in addition, may not have universal applicability (Osterman 1994).