Employee Participation and Involvement in Korea: Evidence From a New Survey and Field Research

Abstract

This paper provides much-needed systematic evidence on the incidence, scope and nature of various forms of employee participation and involvement in Korea. We do so by using a new comprehensive and unusually well-responded survey of publicly traded firms in Korea. The key findings from our analysis of the survey include: (i) to be consistent with the presence of the statute mandating the establishment of WCs (Works Councils) in Korea, the incidence of WCs is higher than most other countries; (ii) however, not all WCs are functioning well in Korea with a little less than 70% of Korean firms having functioning WCs; (iii) WCs may be functioning as a substitute for traditional union collective bargaining in some instances even in unionized firms; (iv) there is evidence on complementarity: between EI (Employee Involvement) programs and trade unions (especially FKTU-affiliated unions); between EI programs and training; and between representative participation at the top and direct participation at the shop floor; (v) there is evidence for an alarming degree of dysfunctional QC (Quality Control) programs and weakening QC programs; and (vi) to be consistent with our hypotheses, firms with EI programs (especially effective EI programs) in Korea are found to be generally larger; more capital intensive; spend more on training; and more productive than other firms. Finally, we use qualitative data from our field research at two large manufacturing firms in Korea and demonstrate the reality of the use of employee participation and involvement programs vividly and shed further light on the scope and nature of EI programs in Korea. Since one firm is known for successful representative participation and labor-management cooperation through WCs and the other is famous for the use of self-directed teams, our field research also offers a point of hope for the future of employee participation and involvement in Korea.