The impact of workplace practices on business profitability in New Zealand

Ray Markey*

Business School, Auckland University of Technology, Auckland, New Zealand

rmarkey@aut.ac.nz

and

Boaz Shulruf*

University of Auckland and Department of Labour, New Zealand

Boaz.Shulruf@dol.govt.nz

The impact of workplace practices on business profitability in New Zealand

ABSTRACT

This study identifies the effects of a bundle of workplace practices on business profitability in New Zealand, analysing data from the Business Operations Survey 2006. Results suggest that workplace practices explain 4.8%-24.4% of variance in business profitability. Employer-employee collaborative workplace practices increase business profitability. Flexible job arrangements based on employer-employee collaboration have positive effect on business profitability but the effect is negative when decisions regarding work arrangements are made unilaterally. Workplace training has positive effect on business profitability in some industries, but this decreases when more than 50% of employees participate. Non-performance based pay is the preferreable pay arrangement to increase business profitability. Union and collective bargaining coverage do not affect business profitability. Implications for policy makers are discussed.

Keywords: human resource management and organisational performance, employee relations, performance management, human resource development, employee involvement, voice

Implementing workplace policies that promote an employee friendly environment is commonly

assumed to increase business profitability (Faleye & Trahan 2006; Lau 2000; Patterson, West,

Lawthom & Nickell 1997). A comprehensive meta-analysis by Harter, Schmidt and Keyes (2002) on

the effect of workplace well-being on profitability suggested that business units at the top quartile on

employee engagement were 1%-4% more profitable than businesses at the bottom quartile. Lau’s

(2000) model suggests that high quality services within organisations increase employees’

satisfaction, which then increases employee retention and productivity leading to greater external

service value. Greater external value increases customer satisfaction and loyalty and this creates more

revenue and higher profitability. Although Lau’s model mostly relates to service industries it could be

generalised since all businesses have customers who wish to receive quality products and services.

However, research in this area is scarce, particularly in New Zealand (NZ). Hence, it was important to

undertake the current study to attempt to identify and quantify the effects of some major workplace

practices on business profitability in NZ.

LITERATURE REVIEW

Pay arrangement and performance

Growing market competition and demand for skilled labour have motivated a variety of alternative

pay arrangements to fixed salary or wage, the most common being performance based pay, including

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share options (Cowling 2001; Gross & Bacher 1993; Oyer 2004). Performance pay is most common

in small and new businesses (Lazear 2003). A distinction can be drawn between skill-based and

group-based performance pay arrangements, with a sample of 153 NZ firms revealing that skill-based

pay systems improved employee retention, whereas group incentive plans were associated with

greater turnover, which increased with organisation size (Guthrie 2000). Drawing on incentive theory,

Gross and Bacher (1993) suggested that to be successful, performance pay arrangements should be

based on collaboration and broad based agreement in the workplace. However, Lazear (2003) argued

that output-based pay is more for sorting purposes (i.e. retaining the most productive employees) than

incentives, which may partially explain why major economic reform in the 1980s in NZ did not meet

expectations regardless of the shift to an individualised labour market (Hazledine 2002; Sautet 2006).

Flexible (family friendly) job arrangement and performance

Family friendly workplaces or flexible work arrangements are generally perceived as beneficial for

both employees and employers. They include childcare (provision or subsidy), flexible work time,

leave arrangements for caring for others (young, sick, old), work from home, and job share (Lewison

2006; Strachan & Burgess 1998). Arguments supporting family friendly arrangements mostly focus

on relationship improvement between employers and employees, enhancement of mutual trust,

increasing job satisfaction and eventually business productivity (Akerlof & Yellen 1986). However,

this literature provides more evidence of benefit for employees than for employers (Amin 1989;

Heiland & Macpherson 2004; Lewison 2006). NZ research suggests that the most important family

friendly policy for employees is childcare provision (Pringle & Tudhope 1996), as well as flexible

leave arrangements and flexible working hours (Liddicoat 2003). A recent Department of Labour NZ

study (Yasbek 2004) suggests that by providing family friendly job arrangements in a competitive

labour market, employers can attract better recruits and reduce cost by improving staff retention, but

these conclusions are context specific with no evidence for generalisability. Hence, the importance of

the current study is in its broad coverage across most industries and regions in NZ.

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Training and performance

Skilled personnel at all levels within the organisation (management, professionals and other staff)

appear to enhance business productivity and profitability (Bassi & McMurrer 2005; Black & Lynch

2001; Van Buren 2002; Faleye & Trahan 2006). Many businesses enhance their human capital

through workplace training (Durbin 2004), which has been found to increase employees’ performance

directly associated with business productivity (Levenson 2003; O'Connell 2001). Bartel’s (2000)

review of the literature, suggested that the return on investment in workplace training/education is

estimated to be 7%-50%, though it may reach 200%. Within the OECD NZ is ranked high on both

employees’ rate of participation in workplace training and hours per employee (Brunello, Bassanini,

Booth, De Paola & Leuven 2005), but NZ’s GDP per capita is below most OECD countries. This

raises an important question about the effectiveness of employee training on productivity and

profitability.

Health promotion programmes

Health promotion programmes at any of primary (preventive), secondary (when event occurs), or

tertiary (remedial) levels are perceived as important tools to improve employee physical and mental

health as well as workplace productivity (Grawitch, Trares & Kohler 2007; Tetrick & Quick 2001).

There is mounting evidence of huge cost relating to occupational health risks (Dorman 2000; Pearce,

Dryson, Feyer, Gander & McCracken 2004; Tooney, Borthwick & Archer 2005; Burton, Conti, Chen,

Schultz & Edington 1999). Furthermore, a recent study reports that satisfaction with healthy

workplace practices can predict employee outcomes, suggesting that it is not only what practices are

actually put in place, but also employees’ perceptions about these practices that matter (Grawitch et

al. 2007). Therefore, health promotion programmes in workplaces are likely to improve businesses

performance (Aldana 2001; Grawitch, Gottschalk & Munz 2006). Chapman's (2005) meta-evaluation

estimated that workplace health promotion programmes decreased about 25% of employers’ cost for

sick leave, workers’ compensation and disability However, no empirical analysis of the effect of

health promotion programmes on business profitability/productivity was found for NZ.

Employee voice and performance

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The concept of employee voice encompasses direct task-oriented practices (problem solving groups or

quality circles, semi autonomous teams) as well as representative structures (trade unions, joint

consultative committees, works councils). An extensive literature argues that employee participation

in decision-making improves motivation, communications and cooperation in the workplace, and

hence, productivity. Employee participation has been recognised as a key ingredient in high

performing work systems, potentially increasing output by 15-20% (Arthur 1994; Delaney & Huselid

1996; Doucouliagos 1995; Meyer & Topolnytsky 2000). No studies directly addressing these

connections have been undertaken in NZ, however.

Employment relations grievances and performance

Employment relations grievances are perceived as destructive workplace processes, yet inevitable

(Ryan 1998). Recent NZ Department of Labour studies suggest that the median cost of individual

grievances is about NZ$5,000 (Department of Labour 2007; Woodhams, McDermott Miller, Howard,

Johri, Shulruf & Yee 2007). Employers, however argue that the cost could be twice that (Miller

2006). Hence, it is apparent that there is negative association between occurrence of grievances and

business performance i.e. profitability. How these grievances are resolved also significantly effects

business financial outcomes. Grievances resolved internally are least expensive for employers,

whereas litigations are most expensive for employers as well as employees (Rowe 1997; Woodhams

et al. 2007). The frequency and severity of grievance disputes also may affect business productivity

and profitability (Budd & Colvin 2005). Since no robust NZ evidence could be found to either support

or reject that assumption, the current study may provide important insight into the issue.

Collective employment agreements

Neo-classical economics perceives unions as ‘imperfections’ in an otherwise free competitive market

(Aidt & Tzannatos 2002). Unions are seen to negatively affect labour market outcomes through

collective bargaining over wages, which otherwise would be left to real market value. Hence

traditionally, unionisation and collective agreements are associated with low business profitability

(Aidt & Tzannatos 2002; Hirsch 1997; Layard & Nickell 1985). Other scholars present data

suggesting that unionisation has a positive or no effect on productivity (Cavalluzzo & Baldwin 1993;

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Haskel 2005; Milner & Nombela 1995; Clark 1984). Doucouliagos and Laroche (2000) undertook

meta-regression analysis to resolve the theoretical debate, but could identify no association between

unions and productivity. Nonetheless, a recent macroeconomic analysis of 18 OECD economies

suggests positive association between trade union density and per worker output (Asteriou &

Monastiriotis 2004). Hence, the inconclusiveness of the literature emphasises the importance of

further research in this area.

This brief review of the literature indicates major gaps of knowledge regarding the effects of

workplace practices on business performance, particularly in NZ. The Business Operations Survey

2006 (BOS) provides a unique opportunity to examine these issues comprehensively.

METHODS

The data for this study were taken from the BOS 2006 undertaken by Statistics NZ. It includes three

major modules: A- Business Operations; B- Information and Communication Technology (ICT); and

C- Employment Practices. The current study used data from Modules A and C, which were

confidentialised by Statistics NZ. The estimated population for BOS was 35,436 enterprises, which

includes businesses with six or more employees, annual GST turnover greater than NZ$30,000, that

have been operating at least one year and were not classified as Government Administration and

Defence; Libraries, Museums and the Arts; Personal and Other Services; Central Bank; Private Non-

Profit Organisations Serving Households; Households; and Rest of World. The sample data included

6066 enterprises, 81.7 per cent of the total enterprises sampled for BOS 2006. For the purpose of this

survey, the Australian and NZ Standard Industrial Classification (ANZSIC) of businesses was slightly

changed by merging some small industry groups to allow reasonable statistical analysis.

The dependent variable is business profitability. However, the BOS dataset does not provide

actual data on profitability, but only respondents’ estimate whether their business profitability

increased, stayed the same or decreased over the past financial year. Since 2876 (47.4 per cent) of

businesses reported a decrease, 2021 (33.3%) reported an increase and only 185 (3.0%) reported no

change in business profitability (984 or 16.2% were missing data), it was decided to compare the

successful (profitability increased) businesses with the unsuccessful (profitability decreased)

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businesses. It is noteworthy that business profitability is a tangible outcome, since normally every

business has the bottom line of its financial performance. This was evident in the BOS data where

compared with 83.7% of businesses reporting on profitability, only 43.2% could provide information

regarding whether their productivity increased or decreased in the past year. Hence with the lack of

actual financial data within the BOS data, using employers’ reports on their change in profitability

was deemed to be the best proxy for business performance. Finally, since the infrastructure group,

comprising mining and electricity, gas and water industries, included only 73 enterprises, which was

insufficient to allow robust statistical analysis comparable to other groups, it was excluded from the

analysis. The actual analysis included 4662 businesses (77.8%) (see Table 2) once all records with

missing data were excluded throughout the regression analysis.

Logistic regression models were used to identify the effect of a range of workplace variables

on the likelihood of businesses having their profitability increase (in comparison to decrease) over the

past year. The generic logistic models comprised two blocks of independent variables. The first block

includes variables relating to business demography and workplace practices since all relate to the

normal business operating characteristics. The second block includes independent variables relating to

changes in the workplace over the past year. This approach was taken to allow clear identification of

the effect that changes in workplace practices can have on profitability. Since the literature on effects

of workplace practices on business profitability in NZ is limited and indecisive, it was important to

adopt an exploratory methodology, namely taking a broader view at the starting point and narrowing

the analysis through stepwise method. Thus, the regression models used backward method for each

block dropping off any variable that did not meet the inclusion criteria (SPSS Inc. 2002).

To overcome the wide spread of missing data, variables with more than 15% of missing data

within each industry group were excluded from analysis. Then, for each regression model (devised for

each industry group) the set of relevant variables was tested for combined data availability. Variables

were removed (from high to low percentage of missing data) gradually until the combined dataset

yielded at least 70% of non-missing data.

Once these initial datasets were established, each regression model was tested using backward

stepwise method. For increasing the data inclusion the regression models were repeatedly tested but

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without variables that did not survive the stepwise process and were removed from the regression

model. That process was repeated by removing one variable at a time until the stepwise model did not

remove any further variables. By following that method it was possible to maintain the largest

possible number of business in the analysis and minimise the effects of the missing data. The results

reported in Table 2 below include the final regression models for each industry group.

RESULTS

Most of the businesses reported a decrease in profitability over the past year with the exception of the

Agriculture, Forestry and Fishing industries (henceforth: Agriculture industry) (Table 1).

The nine final regression models (see Table 2) indicate that workplace practices affect

business profitability differently across industries. The variance explained by the workplace practices

ranges from 4.8% (Wholesale & Retail Trade ) to 24.4% (Construction), which indicates that

workplace practices are important determinants for business profitability and in some industries

(Construction, Health & Education and Finance & Insurance) they could be crucial. Business size

affected profitability only within the Wholesale & Retail Trade where businesses with more than 50

employees were less likely (OR= .56), and middle size businesses were slightly more likely (OR=1.13

- 1.14 n.s.) to be profitable than small businesses (6-19.9 employees). The proportion of managers and

professionals amongst the employees had a very small but statistically significant positive effect on

profitability within three industry groups only: Transport & Communication (OR 1.01), Property &

Business Services (OR=1.01) and Health & Education (OR=1.01). For Transport & Communication

the trend reversed with regard to the proportion of technicians and associate professionals (OR=.99),

which indicated that in these particular industries a high level of professionalism had the greatest

positive affect on profitability. In Health & Education, increasing the number of technicians and

associate professionals positively affected profitability (OR=1.01), which indicates that skilled staff at

both middle and high levels would positively affect business profitability.

Pay arrangements had different effects on business profitability across industries. Associating

pay with performance had a negative effect on profitability within Manufacturing, Construction and

Wholesale & Retail Trade (See Table 2). Negative associations were found between performance

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based pay and profitability for managers and professionals in Manufacturing (OR=.58). Profit sharing

also had a negative effect on profitability when received by managers and professionals and

technicians and associate professionals in Construction (OR=.29), by tradespersons and related

workers in Manufacturing (OR=.76), and by all other occupations in Wholesale & Retail Trade

(OR=.58). However, receiving benefits unrelated to employees’ performance had positive effects on

business profitability. Superannuation arrangements for managers had a strong positive effect on

business profitability in Construction (OR=12.42) and Agriculture (OR=3.33). Fringe benefits for

managers and professionals had a strong positive effect on business profitability in Agriculture

(OR=3.21) and Hospitality (OR=2.79). In Finance & Insurance health benefits for other occupations

and fringe benefits for technicians and associate professionals were positively associated with

business profitability (OR=5.68 and 6.18 respectively). In Health & Education superannuation

arrangement for technicians and associate professionals (44% of employees in the industry) had a

positive effect on profitability (OR=1.75).

Flexible working hour arrangements also had a positive effect on business profitability across

most of the industries. Positive effects were associated with ability to contract hours (not working on

school holidays etc.) in Agriculture (OR=1.69); flexible job design in Manufacturing (OR=1.43);

work from home in Construction (OR=2.10); and ability to buy extra annual leave in Health &

Education (OR=4.19). Provision of childcare facilities or allowance, which assists employees in

managing their time and duties, also had a positive effect on profitability in Transport &

Communication (OR=1.89) and Finance & Insurance (OR=2.79).

The proportion of employees participating in professional/technical skills training

programmes positively affected business profitability across two industries only: Finance & Insurance

and Property & Business Services. However, in both the greatest impact occurred for a limited

percentage of employees receiving training: 1%-25% in Property & Business Services (OR=2.22),

with increased participation decreasing the impact of training on profitability; and 26%-50% for

Finance & Insurance, where the impact decreased at either higher or lower participation rates.

Employee participation had mixed effects on profitability. Problem solving teams had strong

positive impact in Construction (OR=2.553), but negative impact in Transport & Communication

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(OR=0.311). In Health & Education information sharing also had a positive effect (OR=1.859).

However, employee participation in health and safety had no significant impact in any industries.

Employment relations impacted on profitability in some industries. Grievance disputes only

had an effect in Property & Business Services, where increasing the number of grievances per

employee also increased the likelihood for the business to be more profitable (OR=1.60). Signing a

new employment agreement was identified as the most important change in the last two years by three

industries, and for two of them the effect on profitability was statistically significant: a positive effect

in Wholesale & Retail Trade (OR=1.43), but a negative effect in Health & Education (OR=.53).

Undertaking health measures did not have a major impact, since only two had a statistically

significant effect on business profitability. Measuring air quality positively affected profitability in

Manufacturing (OR=1.40), as did stress management programmes in Finance & Insurance (OR=2.56).

Notwithstanding the positive impact of various work practices on profitability, increasing

their coverage of the workforce did not necessarily improve profitability further. The exception was

Manufacturing (see Table 2) where increasing the number of employees participating in any of

flexible work arrangements, engagement in decision making, or health and safety programmes had a

strong positive effect on profitability (OR=8.64). The percentage of employees who are covered by

collective agreements did not survive any of the regressions stepwise, which suggests that collective

agreement coverage has neither positive nor negative effect on business profitability.

DISCUSSION

The most important finding was that workplace practices could explain up to 25% (in Construction)

of the variance in the likelihood to increase profitability. This finding is significant, particularly in

relation to previous studies which could provide only limited information on effects of workplace

practices on profitability (Doucouliagos & Laroche 2000; Harter et al. 2002; Orlitzky, Schmidt &

Ryan 2003). Since employers can affect workplace practices more than external factors (e.g. interest

and exchange rates), this suggests that investment in workplace practices might provide opportunities

for higher return in profit, particularly in the Construction, Finance & Insurance, and Health &

Education industries where workplace practices have the greatest effect on profitability.

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One of the most interesting findings in this study was that performance based pay had a

negative effect on profitability across Manufacturing, Construction and Wholesale & Retail Trade

industries, but not in Transport & Communication. This suggests that performance based pay is

probably overused in some industries. Based on incentive theory, it is probable that performance

based pay was used for sorting purposes rather than building collaborative relationships within the

workplace (Gross & Bacher 1993; Lazear 2000a, 2000b), except in Transport & Communication

where there was a positive effect of performance based pay among technicians.

In most industries a positive association was found between non-performance pay

arrangements and profitability. No previous studies on this could be found within NZ. It is possible

that more profitable businesses are more generous and can afford non-performance pay arrangements.

However, non-performance pay arrangements also may reflect good human resources practices,

which lead to profitability improvement, as suggested by Wright, Gardner, Moynihan and Allen

(2005) and Guthrie (2001).

Generally, flexible work arrangements have a positive effect on business profitability, as does

childcare support. Successful arrangements are those in which flexibility is achieved by mutual

agreement or discussion between employees and employers (work from home, contracted hours,

possibility for part time work etc). On the other hand, flexible work arrangements that could be

decided by employees only (e.g. selection of own roster and leave to care for others) had negative

effects on business profitability. The literature already suggests that when either employers or

employees lack sufficient influence on employment conditions this may act as a barrier to good

employment relations and business performance (Kerr 2005; Lazear & Oyer 2004; Spoonley &

McLaren 2003). The current study confirms that best practice is instigation of flexible work

arrangements mutually agreed by employers and employees. This supports Gross and Bacher’s (1993)

agument that more effective pay arrangements can be achieved through employee-employer

collaboration, rather than by unilateral decision.

Another important component of workplace quality is the extent to which occupational

hazards are dealt with. In the current study measuring air quality was positively associated with high

profitability in Manufacturing and measuring stress was positively associated with high profitability

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in Finance & Insurance. These findings, in line with previous studies (Aldana 2001; Grawitch et al.

2006), suggest that when businesses address relevant health issues it may affect their profitability.

It was not surprising to find positive effects of workplace training on business profitability,

given the wide perception of this as an important investment. Nonetheless, the findings here suggest

that workplace training, measured by the percentage of employees’ participation, positively affected

profitability in only two industries (Finance & Insurance and Property & Business Services). Most

importantly, the association between training and profitability had an inverted U shape, suggesting

that it is possible to have too many employees in training for optimal impact, though a positive effect

was found across all levels of employee participation in training (compared to none). Given the

already high NZ participation rate in workplace training (Brunello et al. 2005), it is therefore

suggested that the most effective approach is to target those whose performance will benefit most

from appropriate training. Since previous studies reviewed for this research project used linear

models, none could identify any non-linear association (Bassi & McMurrer 2005; Black & Lynch

2001; Durbin 2004; Faleye & Trahan 2006; Leckie, Leonard, Turcotte & Wallace 2001; O'Connell

2001; Van Buren 2002).

It has been suggested that employment relations affect business performance (Guthrie 2001;

Harter et al. 2002). Patterson et al. (1997) argued that up to 29% of the variance in business

productivity could be explained by human resources management. This was confirmed in some

industries in this study by the positive impact of providing opportunities for employee voice. Good

human resource practices might also be expected to lower the rate (and cost) of employee grievance

disputes. Nonetheless, this study found that the proportion of employment grievances per full time

employee was not related to business profitability except in Property & Business Services, where

unexpectedly it was found that the higher the ratio of grievances per full time employee the more

likely the businesses were to be profitable. This might be explained by the low cost of employment

dispute resolutions to businesses in NZ, which would not affect business profitability (Martin &

Woodhams 2007; Woodhams et al. 2007).

Unionisation and collective agreement coverage did not affect business profitability. This

confirms Doucouliagos and Laroche’s (2002) meta-analysis. However, the impact of signing a new

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collective agreement was positive in some industries and negative in others. In Health & Education

the signing of a new collective agreement was related to a decrease in profitability, whereas in

Wholesale & Retail it was associated with an increase in profitability. The positive impact might be

because of increased workforce morale sometimes associated with new agreements, or with improved

work practices resulting from a new agreement (Grint 2005; Hyman 1977), whereas the negative

impact is probably associated with increased costs to the employer. The different impact between

industries may only be explainable by the detail of different agreements, but these data were not

available in this dataset. Hence, further investigation is needed in this particular issue.

The greatest effect (OR= 8.64) on business profitability was increasing the number of

employees participating in workplace practices such as flexible work arrangements and collaboration

(e.g. ‘problem-solving teams’) in Manufacturing. Although this finding was found only in this

particular industry it provides more support to the need to enhance employer-employee collaboration.

In general the evidence suggests that the major factor underlying workplace practices with the

greatest effect on business profitability is collaborative employee-employer relations. This however,

does not relate to the proportion of employees working under collective agreements. In line with

Harter et al. (2002) it is suggested that employers who encourage employee engagement in workplace

practices perform better. It is not enough to put in place flexible work arrangements to make the

workplace friendlier to employees if business needs are not addressed. Linking performance to pay

would not work if the employee turnover increases so that recruitment cost would outweigh the

difference in productivity. It is also not optimal practice to provide training to as many employees as

possible without identifying actual needs. To appropriately address these issues, employers and

employees need to work together to mutual advantage, and the evidence presented here suggests that

where they do, profitability is enhanced.

The results of this study should be regarded as indicative only and the need for further

research in specific areas is obvious. This should be addressed within the context of specific labour

environments where relationships within workplaces appeared to be an important determinant

affecting business outcomes.

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Table 1 Distribution of businesses by change in profitability

Industry Classification Decreased Stay the

same Increased Total

N % N % N % N % Agriculture, Forestry and Fishing 183 41.9 22 5.0 232 53.1 437 100.0 Infrastructure (mining and electricity, gas & water) 38 62.3 5 8.2 18 29.5 61 100.0 Manufacturing 527 49.6 13 1.2 522 49.2 1062 100.0 Construction 166 65.6 10 4.0 77 30.4 253 100.0 Wholesale &Retail Trade 424 51.3 15 1.8 387 46.9 826 100.0 Hospitality & Culture (accommodation, cafes and restaurants; cultural and recreational services) 164 53.9 12 3.9 128 42.1 304 100.0 Transport & Communication (transport and storage, communication services 171 55.0 9 2.9 131 42.1 311 100.0 Finance and Insurance 231 71.5 13 4.0 79 24.5 323 100.0 Property and Business Services 715 64.1 55 4.9 345 30.9 1115 100.0 Health & Education (Education, Health and Community Services) 257 65.9 31 7.9 102 26.2 390 100.0 Total 2876 56.6 185 3.6 2021 39.8 5082 100.0

* These figures include all businesses that reported on profitability in all industries including infrastructure.

Page 17

Table 2 Summary of the logistic regression models

Industry Ag

ricu

ltu

re,

Fo

restr

y

an

d F

ish

ing

Man

ufa

ct-

uri

ng

Co

nstr

uct-

ion

Wh

ole

sale

&

Reta

il

Tra

de

Ho

sp

itality

&

Cu

ltu

re

Tra

nsp

ort

&

Co

mm

un

ic-

ati

on

Fin

an

ce &

In

su

ran

ce

Pro

pert

y &

B

usin

ess

Serv

ices

Healt

h &

E

du

cati

on

1 3 4 5 6 7 8 9 10

Variable Categorie

s Ref Exp(B) Exp(B) Exp(B

) Exp(B

) Exp(B

) Exp(B

) Exp(B

) Exp(B

) Exp(B

)

Business Size(1) 20-29.9 RME*

6-19.9 RME 1.131

Business Size(2) 30-49.9

RME 6-19.9 RME 1.149

Business Size(3)

50 or more RME

6-19.9 RME 0.556

Operating expenditure per RME 1 Percent Managers per RME 1.014 1.006 1.056 Percent Technicians per RME 0.989 1.043 Percent Trade persons per RME 0.98 Managers receive performance based pay(1) Yes No 0.583 Managers receive profit sharing(1) Yes No 0.289 Technicians receive profit sharing(1) Yes No 0.293 2.557 Tradespersons receive profit sharing(1) Yes No 0.76 1.441

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All other occupations receive profit sharing(1) Yes No 0.586 6.004 Managers receive superannuation(1) Yes No 3.333 12 42 1.901 Managers receive other fringe benefit(1) Yes No 3.206 0.296 2.786 0.644 All other occupations receive health benefit(1) Yes No 2.818 5.676 Tradespersons receive superannuation(1) Yes No 1.39 2.302 Technicians receive other fringe benefit(1) Yes No 6.179 Technicians receive superannuation(1) Yes No 1.747 Work contracted hours(1) Yes No 1.585 1.396 Flexible job design(1) Yes No 1.434 Job sharing(1) Yes No 0.522 Work from home(1) Yes No 2.097 1.633 Leave to care others(1) Yes No 0.422 Problem solving team(1) Yes No 2.553 0.561 0.311 Employee participate in health and safety(1) Yes No 1.679 Childcare(1) Yes No 1.885 2.788 Buy extra annual leave(1) Yes No 0.38 4.191 Information sharing(1) Yes No 1.859 Part time work(1) Yes No 1.653 Selection of own roster(1) Yes No 0.354 Noise measurement(1) Yes No 0.734 Measure indoor air quality(1) Yes No 1.399 2.097 Measure stress programme(1) Yes No 2.555 Training needs identified(1) Yes No 2.544 0.69 Percent Customer skills Participate in training(1)

50% or less

25% or less 0.394

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Percent Customer skills Participate in training(2)

75% or less

25% or less 0.566

Percent Customer skills Participate in training(3) 76-100%

25% or less 6.252

Percent Professionals Participate in Training(1)

25% or less 0% 3.818 2.217

Percent Professionals Participate in Training(2)

50% or less 0% 7.696 1.582

Percent Professionals Participate in Training(3)

75% or less 0% 1.353 1.525

Percent Professionals Participate in Training(4) 76-100% 0% 1.442 1.085 Calculated grievance per RME 1.602 Percent grievance resolved internally 0.43 Most Important Change Employment Agreement(1) Yes No 1.434 0.639 0.527 Result of EDR improve relation with union(1) Yes No 3.67 Result of EDR introduce new employment agreement(1) Yes No 0.561 Change in business practices Q 19(1)

Stayed the same

Decreased 0.964

Change in business practices Q 19(2) Increased

Decreased 8 642

N 552 1,291 309 957 356 363 378 1,322 465 Inclusion 415 897 220 811 292 301 310 1,057 359 Inclusion % 0.75 0.69 0.71 0.85 0.82 0.83 0.82 0.80 0.77 Nagelkerke R Square Block1: Practices 0.062 0.049 0.244 0.048 0.124 0.115 0.199 0.052 0.189 Nagelkerke R Square Block2: changes 0.058 0.056 0.127 0.218 0.052 0.221

Bold p< 05 RME= Rolling Mean Employment

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