Employee Involvement & Competitive Advantage - Term Paper Example

 Employee Involvement & Competitive Advantage Introduction The literature that is currently available on the topics of employee participation, employee relations, employee involvement, and employee satisfaction and so on has been growing exponentially over the past few years (Wilkinson, Bacon, Redman & Snell, 245-248, 2009). However, interestingly, the bigger chunk of this literature is no more than two decades old. Despite the fact that the fields of organizational behavior and human resource management did exist before the 1990s but the writers related to these field did not shed much light on these topics (Cummings & Worley, pp. 350-356, 2008). However, after the early 1990s, the world a saw a certain boom or explosion and perhaps these areas caught the attention of all experts from all over the world. Obviously, this was not a result of any coincidence but some of the happenings of that era triggered this boom. With the decade of the 1990, people from all over the globe witnessed the birth of globalization, a global economy, and cultural homogenization, rapid technological advancements, the shrinking of the world, end of isolation or tribalism (Wilkinson, Gollan, & Marchington, pp. 136-138, 2010). Certainly, all these developments were so intense that sooner or latter every human being on this planet felt the after effects of these advancements. In fact, the world that we live in today is a product of all these changes and without them; the world would appear to be a completely different place (Kaufman & Taras, pp. 550-552, 2000). Quite understandably, the effects of these developments were felt by the business and management circles of the world too and the corporate people had no choice but to adapt to these changes (Wilkinson, Bacon, Redman & Snell, 245-248, 2009). Competition became rough, customer awareness increased drastically, quality, not quantity became the focus, the need of strategic human resource management came on the scene and employers quickly realized that they needed brand new strategies, attitudes, approaches and plans to cope with this new business world (Cummings & Worley, pp. 350-356, 2008). One of them was the idea of harnessing the potential of employees by encouraging their participation and involvement (Kirkman, Lowe & Young, pp. 79-84, 1999). Today, most of the top multinational companies on this planet do advocate, believe, and implement this approach as much as they can. This paper is an attempt to evaluate this idea that employee involvement and participation provides any organization with a competitive advantage over its competitors. Discussion As mentioned above, the increasing global competition has forced organization to make serious, constant, and continuous efforts towards improving their strategies and the execution of these strategies. Managers and employers now have to switch themselves on the “proactive” mode where they must constantly upgrade these strategies and find new, creative, and cost effective methods of enhancing productivity. However, firms have had some disagreement as to how would one enhance this element of productivity. While some firms have opted the way of investing heavily in capital and technology, others have strongly believed that the same goal is achievable through improvement in employee relation practices. Let us consider the example of General Motors versus Ford. According to Alan Smith, who was the former Chief Financial Officer of General Motors, estimated that Gm spent more than 80 billion US dollars in order to cope up with the competitive pressures from the automobile companies rising from Japan in the era of 80s and 90s (Wilkinson, Gollan, & Marchington, pp. 136-138, 2010). However, in an attempt to outclass its competitors through capital investment and technological advancements, GM found out that this technique has not been cost effective and the other Japanese companies took full advantage of the same. In fact, critics calculated that it spend even more money than it would have needed to buy all the shares of Toyota and Nissan (Torrington, Hall & Taylor, pp. 52-59, 2008). Quite obviously, the result of this mess was evident on the financial statements and stock price of General Motors. General Motors market share fell almost 50 percent in the late 70s and almost by one third in the mid 90s (Kirkman, Lowe & Young, pp. 79-84, 1999). While General Motors was investing heavily in capital and technology, Ford was comparatively making smaller investments in terms of capital and technology. However, Ford was more concerned regarding the implementation of its “Quality is Job 1” program where all the employees of Ford were grouped into small teams often lead by a fellow employee (Kirkman, Lowe & Young, pp. 79-84, 1999). Their job was to assist their bosses in decision making whenever required, come up with ideas and suggestions for improvement and quality assurance and suggest all sorts of possible changes and developmental opportunity (Hyman & Mason, pp. 112-115, 1995). During all this time, managers at Ford made sure that this program runs smoothly and produces effective results. The philosophy at ford was simple; try to tap the enthusiasm and ideas of the employees by providing them with a good “quality of work life (QWL) (Wilkinson, Gollan, & Marchington, pp. 136-138, 2010). The results were evident. The eighty billion US dollars of General Motors were in vain. The same car type for which General Motor required Forty-one worker hours to build it; Ford showed the world that it could complete the car with twenty-five worker hours (Cummings & Worley, pp. 350-356, 2008). Someone has rightly said, “Brains and wits will beat capital spending ten times out of ten” (Mathis & Jackson, pp. 261-267, 2009). Today, Most of the blue chip organizations all over the world practice the idea of employee relations and involvement (Kirkman, Lowe & Young, pp. 79-84, 1999). American Express, Bank of America, Chrysler International, Citibank Corporation, Bavarian motor works, Control Data Corporation, Ford Motor Company, General Electric Company, General Motor Company, Inland Steel Company, Lincoln Electric Company, Motorola Incorporation, Toyota Motor Corporation, Nissan Motor Company Limited, Standard Chartered Bank, Western Electric and many others (Mathis & Jackson, pp. 261-267, 2009) (Griffin & Moorhead, pp. 125-127, 2009). As mentioned earlier that the literature on the same is growing rapidly and experts are trying their best to find new dimensions and areas in this topic (Wilkinson, Gollan, & Marchington, pp. 136-138, 2010). It is not difficult to understand that how employee participation and involvement enhances the productivity of any organization and provides it with a competitive advantage over its competitors (Cummings & Worley, pp. 350-356, 2008). Employee involvement is essential if a company wants to improve its customer service or efficiency. Employee participation provides managers with worthy and hidden dimensions of looking at the work processes (Bratton & Gold, pp. 21-27 & 56-58, 2001). Certainly, employees are much better aware of the floor problems, issues and their solutions as well as compared to an administrator or a manager who is sitting in his office most of the time (Harley, Hyman & Thompson, pp. 19-25, 2005). If a manager gets hold of that insight of the job, he or she can improve things to quite an extent. Furthermore, companies involve and empower their employees so that when these employees deal with the customers they are motivated enough to provide customers with improved and better customer service experience, and that they can make the customer feel that they are talking to someone who has some sort of power and authority in the organization (Mathis & Jackson, pp. 261-267, 2009). Secondly, participation from the employee side can seriously increase the moral of the employee. In other words, it can increase job satisfaction and experts agree the employee satisfaction is directly proportional to customer satisfaction (Kirkman, Lowe & Young, pp. 79-84, 1999). Job Characteristics Model (JCM) could be possible way to prove this point. JCM has “five dimensions, which are skill variety, task identity, task significance, autonomy, and feedback and various researchers have shown that by meeting all these criteria employers can boost employee satisfaction” (Bratton & Gold, pp. 21-27 & 56-58, 2001) (Wilkinson, Gollan, & Marchington, pp. 136-138, 2010). A careful look at these five dimensions would reveal that task significance, autonomy, and feedback are influenced by employee participation and involvement. It is also important to note that if employees get a say in the decision making process of an organization then they are more likely to adhere, contribute, serve, and put their efforts to make that plan possible (Torrington, Hall & Taylor, pp. 52-59, 2008). They key here is to make the employees own the strategy or decision. Its is human psychology that we try our level best to resist, oppose and avoid all those decisions or plans that are imposed on us or that we think are not of our own (Lawler, Mohrman & Ledford, pp. 31-35, 1992). However, one is more likely to show its enthusiasm if he or she is working on his own plan. Therefore, with participation employees are found putting in more effort to make the plans of the company successful since they believe they own these plans because they were a part of the decision-making (Mathis & Jackson, pp. 261-267, 2009). Moreover, involvement and participation of employees also mean that employers get a chance to view the situation from a different yet essential dimension. Lincoln Electric provides its employees bonuses worth of hundreds of dollars every year for their involvement in the idea generation process, along side with the administration and management of the company (Torrington, Hall & Taylor, pp. 52-59, 2008) (Cummings & Worley, pp. 350-356, 2008). Managers that empower and involve their employees no longer find themselves standing on the other side but they work alongside with their employees in an environment of shred interests, shared responsibilities, unity, harmony and understanding, where decision making is mutual, respected and implemented and accepted by all of the employees (Kirkman, Lowe & Young, pp. 79-84, 1999). This way, the company is able to breed a workforce that is understanding, helping, proactive, problem solvers, and contributors. Additionally, these companies avoid all the friction between the employees and employers and the time and energy that is wasted on negotiating, meeting, and solving the tension between these two sides (Bratton & Gold, pp. 21-27 & 56-58, 2001). Since this paper has to present a critical analysis, therefore it would be unfair if we did not look at the other side of the picture too. Mandatory employee involvement or participation has similar disadvantages as of any democratic system (Lawler, Mohrman & Ledford, pp. 31-35, 1992). Letting your employees participate and have their say in major organizational decisions could prove costly in terms of the time required for doing the same and they might end up wasting worthy internal resources of the company (Smith, pp. 318-323, 2006). The more the number of employees has their say in decision-making, the more ideas and perspectives, the employer would get but at the same time, it would result in more consumption of time (Wilkinson, Bacon, Redman & Snell, 245-248, 2009). In addition, this idea may cause trouble in times of dangers, disasters, and hazards or in any situation when quick decision-making and spontaneous actions are required (Biagi, pp. 56-59, 2007) (Lewis & Thornhill, pp. 85-89, 2003). Besides, at times, it becomes complicated to empower all of employees and the same is not true for all conditions and firms (Pfeffer, pp. 96, 1996). For example, not all labors at any factory can be empowered enough to influence the major decision-making processes relating organizational change and development especially considering their educational qualifications (Mathis & Jackson, pp. 261-267, 2009). In fact, this concept is only applicable to the firms that employ skilled and qualified labour. However, if a firm decides to empower their employees by training and counseling that may mean heavy investment of finance and time (Wilkinson, Bacon, Redman & Snell, 245-248, 2009). Another problem due to which employee involvement in decision-making may backfire is that at times, employees may have conflicting interests (Gennard & Judge, pp. 5, 2005). In this way, this may end up in employees founding grudges against each other, which certainly is, undesirable for any firm (Lawler, Mohrman & Ledford, pp. 31-35, 1992). Another problematic situation for employers that can arise from continued and heightened employment involvement is in form of stronger bargaining power of employees (Biagi, pp. 56-59, 2007). It is quite usual to find the interest of employees and employers conflicting and disagreement between these parties on many issues (Dicker, pp. 88-91, 2004). Therefore, with strong employee involvement and participation, employees might implement decisions that may distort corporate performance (Kirkman, Lowe & Young, pp. 79-84, 1999). In addition, employee empowerment may also backfire in terms of demoralization of the employees (Bratton & Gold, pp. 21-27 & 56-58, 2001). Most employers have the habit of assuming that his employees like him, are also hungry for power, control and authority and the concomitant rewards. However, the same is not the case. Many employees choose to remain employees and try to run from administrative duties and power because it also brings with itself stress and pressure (Cummings & Worley, pp. 350-356, 2008). If these people are forced to take an active part in management and decision-making then the employer may find them dissatisfied and demoralized (Kirkman, Lowe & Young, pp. 79-84, 1999). Even if the management finds a way to cope up with the above-mentioned drawbacks of employee involvement and participation but it is important to note here that, it has become difficult to gain a competitive advantage with the same (Leopold & Harris, pp. 163-167, 2009). By definition, competitive advantage has to be anything, any idea, approach, plan, strategy, or mission that helps the company to stand out of the crowd of its competitors (Mathis & Jackson, pp. 261-267, 2009). Competitive advantage has to be unique, exceptional, and uncommon. Also important to note is that if any competitor replicates, copies or becomes successful in following the competitive advantage then it no longer remains a competitive advantage since it fails to fulfill the criterion of “unique” and “exceptional” (Biagi, 56-59, 2007) (Haim, pp. 79, 2002). Quite understandably, almost all the big companies are trying to ensure maximum employment involvement and participation through their human resource or personnel departments (Lawler, pp. 199-201, 2008). Therefore, if everybody is doing this, then it does not fulfill the criteria of “competitive advantage” (Torrington, Hall & Taylor, pp. 52-59, 2008). Conclusion Despite the fact that there are some drawbacks of employee involvement and participation but still the advantages and positive outcomes of the same are undeniable. In fact, the gain outweighs the drawbacks (Leopold & Harris, pp. 163-167, 2009). Moreover, the drawbacks are not the ones that are bound to happen but are much very avoidable with proper planning and careful analysis (Torrington, Hall & Taylor, pp. 52-59, 2008). However, the firm should pay special attention and make sure that its takes its own employee participation and involvement programs to unusual and different heights and dimensions so that it can become its competitive advantage (Cummings & Worley, pp. 350-356, 2008). References Biagi, Marco. (2002). Quality of work and employee involvement in Europe. Kluwer Law International. Bratton, John, & Gold, Jeffrey. (2001). Human Resource Management: Theory and Practice. Routledge. Cummings, Thomas G. & Worley, Christopher G. (2008). Organization development & change. Cengage Learning. Dicker, Laurie. (2004). Employee relations: how to build strong relationships with your employees. Allen & Unwin. Gennard, John, & Judge, Graham. (2005). Employee relations. CIPD Publishing. Griffin, Ricky W., & Moorhead, Gregory. (2009). Organizational Behavior: Managing People and Organizations. Cengage Learning. Haim, Aviad Bar. (2002). Participation programs in work organizations: past, present, and scenarios for the future. Greenwood Publishing Group. Harley, B., Hyman, J. & Thompson, P. (2005). Participation and Democracy at Work Basingstoke. Macmillan. Hyman, J. & Mason, B. (1995). Managing Employee Involvement and Participation London. Sage. Kaufman, Bruce E. & Taras, Daphne Gottlieb. (2000). Nonunion Employee Representation: History, Contemporary Practice, and Policy. M.E. Sharpe. Kirkman, Bradley Lane, Lowe, Kevin B., & Young, Dianne P. (1999). High-performance work organizations: definitions, practices, and an annotated bibliography. Center for Creative Leadership. Lawler, Edward E. (2008). Talent: Making People Your Competitive Advantage. John Wiley and Sons. Lawler, Edward E., Mohrman, Susan Albers., & Ledford, Gerald E. (1992). Employee involvement and total quality management: practices and results in Fortune 1000 companies. Jossey-Bass. Leopold, John & Harris, Lynette. (2009). The Strategic Managing of Human Resources. Prentice Hall. Lewis, Philip, & Thornhill, Adrian, & Saunders, Mark. (2003). Employee relations: understanding the employment relationship. Financial Times Prentice Hall. Mathis, Robert L., & Jackson, John H. (2008). Human resource management. Cengage Learning. Pfeffer, Jeffrey. (1996). Competitive advantage through people: unleashing the power of the work force. Harvard Business Press. Smith, Vicki. (2006). Worker participation: current research and future trends. Emerald Group Publishing. Torrington, Derek, Hall, Laura, & Taylor, Stephen. (2008). Human Resource Management. Financial Times Prentice Hall. Wilkinson, Adrian, Bacon, Nick A., Redman, Tom, & Snell, Scott. (2009). The SAGE Handbook of Human Resource Management. SAGE Publications Ltd. Wilkinson, Adrian, Gollan, Paul J., & Marchington, Mick. (2010). The Oxford Handbook of Participation in Organizations. Oxford University Press. Read More