Performance of unionized employees under collective bargaining agreements: the role of HRM practices, employee and firm characteristics

Abstract

This paper presents findings of a study that investigated the determinants of performance of unionized shop-floor employees engaged in private sector firms operating with collective bargaining agreements in Sri Lanka. The specific objectives of the study were to investigate the effects of 1) HRM practices, 2) employee characteristics, and 3) firm characteristics on the performance of unionized shop-floor employees under collective bargaining agreements. The HRM practices under consideration were training, job security, employee empowerment, and employee relations. Age, gender, the duration of employment, the highest education qualification, and skill category were considered as employee characteristics, whereas firm size and firm age were considered as firm characteristics. Data were collected from unionized shop-floor employees attached to private sector firms that have active trade unions and maintain formal collective agreements. The results underscore a strong positive relationship between HRM practices and employee performance; training and employee relations practices had the strongest effects. Further, the years of business operation had a significant effect on employee performance. However, the effect of employee characteristics was not significant. The effect of firm size was also not significant. The findings have important implications for HRM professionals and business leaders working in unionized work environments.