Employee Participation in Decision Making - Literature review Example

?Employee Participation in Decision Making Introduction Although employee participation is not a newly proposed management concept, the approach was only recently accepted as an integral part of human resources management. Corporate managements have recently realised that effective team working is an essential part of employee empowerment process, which is a key to achieve faster organisational growth. Hence, nowadays many organisations encourage their employees to involve in the decision making process in line with stated guidelines and frameworks of self managing teams. Nowadays, top level executives hold the view that organisations can effectively develop and expand their human resources by allowing employees to form decisions for themselves and the whole organisation. This paper will deeply discuss the concept of employee participation in decision making by giving a specific focus on current issues associated with this management approach. Definition, elements of employee participation As a modern approach to creative human resources management applications, corporations encourage employee participation in response to their quality movement needs within the organisational framework. Employee participation can be simply defined as the “part of a process of empowerment in the workplace whereby employees are involved in decision-making processes, rather than simply acting on orders” (Singh & Kumar, 2011, p.381). There are numerous employee participation programmes to make sure that every employee gets the opportunity to take part in decision making process. According to Parasuraman (2007), Quality circles, suggestions schemes, consultation exercises and meetings, delegation of responsibility, and multi-channel decision making process are the major approaches designed to promote employee participation. Quality circles or project teams are some of the employee participation measures in which employees work on specific projects or tasks with equal footing on the decision making process. Under this approach, relevant responsibilities are delegated to project team members based on their skill and experience. As Marshall (n.d) points out, suggestion scheme is the most widely acceptable form of employee participation approach under which managements provide their employees with effective communication channels whereby they (employees) are able to suggest innovative ideas to the top level management. Often, managements motivate their employees with financial and other forms of reward for making potential and promising suggestions. In addition, some organisations conduct consultation exercises and meetings to empower their employees and thereby contribute to operational efficiency. Through such practices, managements arrange a common platform for their employees to join together and share work/growth improvement ideas. Top executives listen to those employees suggestions and accept potential improvement ideas. Delegation of responsibility among employees is another potential element of employee participation. Since ground level employees need to directly interact with customers, they are given the power to make decisions for themselves and for the organisation. Finally, the multi-channel decision making process assists the organisation to ensure that its decisions are not made in a downward direction. In other words, a series of upward and downward communications are made before forming a business decision under this approach. Significance of employee participation According to modern management practitioners, the concept of employee participation is a key tool to ensure business success. In the words of Moorhead and Griffin (2009, p. 127), this approach would assist the organisation to effectively promote employee motivation. When employees are trusted and involved in the firm’s decision making process, they feel that they are an integral part of the organisation; and this positive feeling itself would motivate employees to contribute their best to the company’s growth (ibid). In other words, the employee participation approach would give employees the belief that the organisation’s management values their suggestions and opinions. Therefore, it significantly increases employees’ commitment to their organisations. When a company practices the employee participation strategy, it obtains a comprehensive view of the various organisational issues because employees are the individuals who more closely interact with customers and hence they can easily identify causes of customer dissatisfaction, if any. Thus, this approach aids the management to identify potential organisational issues and thereby timely and effectively respond to them. Furthermore, this policy enables the management to distribute various responsibilities among its employees and thereby focus more on strategic decisions rather than customer management. As we discussed earlier, employee participation is an effective tool to promote employee empowerment. When an employee is given more freedom within the organisation, he may be self-motivated and which in turn may foster his creativity. Finally, the employee participation concept is capable of amplifying team spirit among employees. Benefits of employee participation Proctor & Proctor (2012, p. 292) hold the view that job satisfaction is the most potential benefit of employee participation. When employees are trusted and allowed to make decisions for them, they get a positive energy from the workplace environment. In other words, this approach would meet mental worksite requirements of employees. As a result, employees get job satisfaction and which in turn would probably add value to employee commitment. It is obvious that a committed employee would not waste job time or often he may be willing to take overtime duty shifts. According to International Labour Organisation (1993), when an employee is completely satisfied with his worksite environment; he would go beyond actual job requirements and this situation may directly enhance employee productivity, which is a potential way to raise business profitability (p.102). Furthermore, an increase in productivity may benefit an organisation to improve its market competitiveness and thereby think of business expansion. As we discussed earlier, employee motivation is another notable advantage of employee participation. In addition, a committed employee would be always careful to avoid maximum production wastage and other additional expenses. Therefore, effective employee participation would assist an organisation to reduce cost of production to a great extent. Naturally, reduced production costs may enhance profitability and which in turn may improve the overall organisational performance. Management experts argue that an effectively structured employee participation approach would result in the development of higher quality products simply due to increased employee vigilance. An organisation’s strategic management may be very easy if it adopts employee participation approach. Demerits of employee participation Like any other potential concept, employee participation also has some disadvantages. According to Bridgland & Grad (2004), slowing down of decision making is one of the important demerits of this approach. Since managements need to ensure employee involvement in decision making process, it is difficult to quickly reach a decision under this approach. For a huge organisation, it involves a long time to gather employee suggestions and analyse them to form the final decision. Consequently, organisations cannot quickly respond to a situation due to the complexity of the employee participation approach. In addition, top executives cannot maintain secrecy of information while practicing employee participation because of employees’ free involvement in decision making. As a result, the concept of employee participation is likely to cause security loss of organisational affairs. Similarly, all employees may not be experienced enough to make a potential decision and hence some employee decisions may adversely affect the organisational performance. Even a senior employee may often fail to analyse a situation or issue properly and such a condition would probably end up in a wrong response. In addition, although the employee participation approach would promote team spirit, this strategy may sometimes lead to worksite conflicts and ego clashes among employees. Current issues in employee participation Although modern managements consider employee participation in decision making as key to achieve organisational growth, there are a range of impediments to the effective implementation of this policy. Firstly, organisations need to quickly respond to a market trend change since a late response may cause them to lose their market share. However, employee participation in decision making would force the management to wait until all employee suggestions are collected and scrutinised. As a result, organisations that practice employee participation approach face huge difficulties in effectively dealing with market fluctuations, trend changes, or any other organisational issue. Hence, many of the modern firms are hesitant about implementing this employee empowerment approach. Likewise, marketers nowadays really struggle to confront with the stiff market competition. The global economic recession 2009 has adversely affected global economies and majority of them are still struggling to recover from the impacts of the crisis. Under such a situation, even a minute flaw in strategic management or decision making would threaten the long term sustainability of their business. Evidences show that involvement of ground level employees in decision making would often result in the formation of wrong decisions as many of those employees may not effectively comprehend the specific situation. In order to overcome the impacts of recent crisis rapidly, organisations have to quickly and strategically respond to various events. Under such crucial circumstances, any wrong assumption or decision of employees would cost a company hugely in terms of monetary value and market reputation. Therefore, modern managements fear that employee participation approach would prevent them from effectively identifying a situation or issue and strategically responding to it. Writers like Parker and Slaughter argue that the approach of promoting greater employee participation is “a smoke screen for tighter managerial control” (as cited in Anstey, 1997, p.161). Many other authors also opine that employee participation approach just tries to extend managerial control over the workplace. When an employee is given the power over a range of work activities, he may be required to perform a wide range of cognitive work too. However, his participation in decision making is very limited. In addition, it seems that modern managements do not try to involve every employee in decision making process; rather, they listen to suggestions of trade union leaders. Even though firms argue that trade union leaders represent interests of the whole employee group; in fact, majority of the companies unduly influence such employee representatives. According to an opinion, on the strength of this provision, organisations impose huge pressures on employees for “defect-free work and increased volumes with reduced resources” (Anstey, 1997, pp.160-161). The author clearly states that “scope of participation may appear to have expanded but the actual scope of independent decision making in places of work remains very limited” (ibid). In some cases, it has been identified that workers take unfair advantages of the employee participation policy. When employees are allowed to participate in decision making, they may give more focus on their personal financial gains rather than the company’s sustainability. Hence, it would be a cumbersome task for managements to implement a strategic decision if it is likely to hurt employees’ interests in the future. Sometimes, mangers may put all the worksite responsibilities on shoulder of employees and such a practice would lead to misuse of powers and inappropriate decision making. Therefore, many of the management practitioners hold the view that the demerits of employee participation approach may outweigh its merits. Even though this concept may assist organisations to reduce production costs, the employee participation approach results in some additional costs. To illustrate, the management has to invest huge costs in establishing effective downward and upward communication channels and arranging employee training programmes that are necessary to make the approach of employee participation effective. In addition, different employee participation methods like quality circles would involve costs and time (Office of the Minister for Labour, n.d). Methods such as consultation exercises and meetings would probably reduce job hours and this situation may adversely affect firms if obtained benefits of employee participation are not enough to cover the impacts of cut in production hours. According to Yukl & Becker (2006), the concept of employee participation may not bring intended results unless there are no efficient top level executives to manage this organisational approach. For this purpose, it is essential to eliminate possible positional barriers between managers and employees. Although this concept contributes to worksite interests of majority of employees, some workers may not be much interested in taking part in decision making. These employees like to carry out their assigned tasks only and go home. For such employees, the employee participation approach may be an overburden. Conclusions From the above discussion, it is clear that the employee participation in decision making nowadays is considered as a vital strategy to promote organisational growth. Quality circles, suggestions schemes, and delegation of responsibility are some major methods of employee participation approach. It is a crucial policy to promote employee creativity, employee commitment, and team spirit. This approach has a range of advantages including job satisfaction, motivation, productivity improvement, and cost reduction; whereas, it has some disadvantages also - such as security issues, slowing down of decision making, and improper decisions. Even though modern managements widely adopt this approach, employees do not actually get a role in decision making process. References Anstey, M., 1997. Emerging trends and issues in employee participation at the level of the enterprise. In: Employee Participation and Workplace Forums. South Africa: Juta and Company Ltd. Bridgland, N & Grad, B., 2004. History of the European company proposal, White & Case, pp. 1-91, [Online] Available at: [Accessed 23 April 2012]. International Labour Organization., 1993. Recent Developments in the Metal Trades. Geneva: International Labour Organization. Marshall, W., n.d. Suggestion schemes, pp. 1-4, [Online] Available: [Accessed 23 April 2012]. Moorhead, G & Griffin, RW., 2009. Organizational Behavior Managing People and Organizations. New Delhi: Dreamtech Press. Office of the Minister for Labour., n.d. Change to the health and safety in employment act: Employee participation, Cabinet Finance, Infrastructure and Environment Committee, pp. 1-3, [Online] Available at: [Accessed 23 April 2012]. Proctor, RW & Proctor, JD., 2012. Sensation and perception. In: G. Salvendy, ed. Handbook of Human Factors and Ergonomics. New Jersey: John Wiley & Sons. Parasuraman, B., 2007. An examination of employee participation in the private sector: Malaysian case studies, University of Wollongong Theses Collection, pp. 1-325, [Online] Available at: [Accessed 23 April 2012]. Singh, PN & Kumar, N., 2011. Employee Relations Management. India: Pearson Education India. Yukl, GA & Becker, WS., 2006. Effective empowerment in organizations, Organizational Management Journal, 3(3), pp.210-231. Read More