A promise made is a promise kept: Union voice, HRM practices, implicit contracts and workplace performance in times of crisis

• Published date: 01 January 2021
• Author: Paolo Pamini,Hossam Zeitoun
• Date: 01 January 2021
• DOI: http://doi.org/10.1111/1748-8583.12308

ORIGINAL ARTICLE

A promise made is a promise kept:

Union voice, HRM practices, implicit

contracts and workplace performance

in times of crisis

Hossam Zeitoun

1

| Paolo Pamini

2

1

Warwick Business School, University of

Warwick, Coventry, UK

2

Centre for Law and Economics, ETH Zurich,

Zurich, Switzerland

Correspondence

Hossam Zeitoun, Warwick Business School,

University of Warwick Coventry, CV4 7AL,

UK.

Email: hossam.zeitoun@wbs.ac.uk

Funding information

Schweizerischer Nationalfonds zur Förderung

der Wissenschaftlichen Forschung, Grant/

Award Number: PBZHP1_143612

Abstract

Sociological debates on financialisation emphasise that work-

place-based productivity bargains between employers and

employees are often precarious. This literature suggests

that where employers are unable to keep their side of

the bargain, participative arrangements with employees

are likely to become unsustainable in generating high

workplace performance. Recessions substantially increase

the pressures on employers to breach (unwritten and invisi-

ble) implicit bargains with employees. We propose that a

robust (rather than shallow) implementation of union voice

and Human Resource Management (HRM) practices will

make implicit bargains more resilient and benefit workplace

performance if recession impact is high. Using two waves of

the British Workplace Employment Relations Survey (2004

and 2011), we examine our hypotheses in the context of

the deep 2008–2009 recession and find supportive evi-

dence –especially in (a) firms without a dominant individual

or family owner and (b) growing markets.

KEYWORDS

financialisation, HRM practices, implicit contracts, recession,

union voice, workplace performance

Received: 8 January 2019 Revised: 14 April 2020 Accepted: 31 May 2020

DOI: 10.1111/1748-8583.12308

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and

reproduction in any medium, provided the original work is properly cited.

© 2020 The Authors. Human Resource Management Journal published by John Wiley & Sons Ltd.

Hum Resour Manag J. 2021;31:277–292. wileyonlinelibrary.com/journal/hrmj 277

Practitioner Notes

What is currently known about the subject matter

•Workplace-based productivity bargains between employers and employees are often precarious.

•Workplace performance crucially depends on (unwritten and invisible) implicit contracts between

employers and employees.

•External economic pressures, such as a recession, can induce managers to breach implicit contracts with

employees.

What our paper adds to this

•Union voice and HRM practices are mechanisms that can support these (unwritten and invisible) implicit

contracts.

•Therefore, especially when recession impact is high, strong union voice and a full implementation of

HRM practices can benefit workplace performance.

•This key finding depends on the company's context.

•Specifically, the finding is corroborated for firms without a dominant individual or family owner, and in

growing markets.

Implications of the study findings for practitioners

•A shallow implementation of union voice and HRM practices may not sufficiently support implicit con-

tracts when there is an ‘external shock’such as a recession.

•Strong union voice and a full implementation of HRM practices are likely to benefit workplace perfor-

mance especially after such a ‘shock’.

•Focussing on the short-term costs of these practices can therefore be myopic.

•Managers need to consider their company's context (i.e., ownership structure and market conditions)

when evaluating these practices.

1|INTRODUCTION

Research frequently suggests that participative arrangements with employees can be a source of mutual gains

for employers and employees and can lead to high workplace performance (e.g., Kochan, 1995). Such arrange-

ments often rely on (unwritten and invisible) implicit bargains that, in return for employees' increased involve-

ment and participation, management will aim to safeguard employees' interests (Appelbaum, Batt, &

Clark, 2013; Thompson, 2013). As implicit bargains cannot be enforced in courts, employees need to be able to

rely on management's commitment to protect them (Mayer, 2013). Crucially, it is often difficult for management

to safeguard employees' interests when their firms are under short-term financial pressures. To the extent that

implicit bargains are protected, such bargains facilitate efficient collaboration and high workplace performance

(Blair, 1995).

278 ZEITOUN AND PAMINI