High-involvement management, economic recession, well-being and organizational performance

High-involvement management was introduced as a means of overcoming economic crises; but it has been argued that the inevitability of cost-cutting measures when organizations face such crises would undermine its efficacy. This paper first presents theories of why tensions may exist between high-involvement management and actions typically taken by management during recessions, such as wage and employment freezes. It then reports research aimed at testing whether the performance effects of high-involvement management were lower in organizations where management took such actions to combat the post-2008 recession, due to their adverse effects on employees' job satisfaction and well-being – and even whether high-involvement management still had a performance premium after the recession. Using data from Britain’s Workplace Employment Relations Survey of 2011, the research shows that both dimensions of high-involvement management – role- and organizational-involvement management – continued to be positively associated with economic performance as the economy came out of recession. Recessionary actions were negatively related to both employee job satisfaction and well-being, while job satisfaction mediated the relationship between role-involvement management and economic performance, which is consistent with mutual gains theory. However, recessionary action reduced the positive effect that role-involvement management had on job satisfaction and well-being, and thus may have reduced its positive performance effects. In the case of organizational-involvement management, it reduced the level of job dissatisfaction and ill-being, suggesting that it may provide workers with more information and greater certainty about the future.