Employee Participation leads to Increased Performance - Research Paper Example

Running Head: Employee Participation leads to Increased Performance Employee Participation leads to Increased Performance Introduction Since Stone Age, humans have endeavored and strived to acquire a high-quality life, as compared to their predecessors, and such vision of improvement and advancement brought humans from the Stone Age to this era of information technology. During such evolution, history witnessed a number of changes, and particularly in business sector, humans worked like components of a machine to produce until few decades ago. Such practice still exists in developing countries that treat human workforce as machines. However, endeavors of experts related to human resource management played a vital and crucial role in altering such perspective of employers in developed countries, and in process of doing the same in developing parts of the globe. In this regard, a number of experts have argued that it has now become essential to discontinue abovementioned practice, and it is imperative that employers should motivate their employees and ensure their satisfaction, in order to acquire their increased performance, and consequently, increased production and prosperity of the organization. After consideration of such perception, motivation and satisfaction was limited to only money or financial aspect for a longer period; however, recent studies have argued that money is not the only aspect that motivates employees, and a number of steps can ensure job satisfaction and thus, increased performance of employees in the company. In other words, any step that brings an employee towards the identified goal or objective of the employer, it is motivation. However, studies (Peccei, pp. 207-36, 2001) indicated that although definition and discussion of motivating employees seem simple; however, implementation of efficient human resource approaches is one of the most challenging tasks in the field of management that ensures enhancement of employees, as well as organizational performance. In the result, various researches are in process of identifying effective plans to implement such strategies that may motivate employees to increase and improve their performance in the company. Last few decades witnessed have major changes in world economies that affected major aspects of the management around the globe. For instance, adaptation of information technology, reduction in human workforce in heavy-manufacturing labor, and globalized competition are some of the major changes that altered the direction of HRM researches as well. It is an observation that globalization has enhanced the quality standards, and thus, employers are now hunting for higher qualified workers that can ensure improved production in the company. Moreover, studies indicated a rapid decline in trade unions as well, and experts and employers are now focusing specifically on individualized characteristics, rather than collectivist approach in the management. However, due to major focus on qualified workforce, it has now become essential to provide comfortable working environment that was not an issue with less-qualified workforce in the past. In addition, some of the other issues raised by newcomers are equality, employee rights, benefits, and involvement in company’s decisions (Cheney, pp. 163-167, 2002). On the other hand, employers look forward to higher efficiency and continuance in employees’ performances. In such a neck-to-neck competition, experts introduced the concept of ‘Employee participation’ that agreed to ensure increased performance of the employees, as well as the company by implementing various strategies to make sure that employees are satisfied, comfortable, and motivated in their workplace environment. In this regard, the paper will discuss and analyze different aspects of employee participation with respect of HRM strategies, in order to study the impact of employee participation on increased performance of employees in the company. In terms of definition, employee participation is a process that allows distribution of authority and control to individuals in the company that does not possess equal status in the company (Jones, pp. 532-534, 1995). In other words, employers share their influence and authority with employees to motivate their performance in the company. Unlike conventional management practices, employee participation allows employees to participate in decision-making processes, as well as, offer monetary benefits as well to enhance their motivation level and contribution in different processes of the organization. Recent studies (Armstrong & Murlis, pp. 29-33, 2007) noted that employee participation could not be limited to one perspective, as it is not possible that if one organization welcomes a strategy, employees of other organizations will appreciate it as well. In this regard, employee participation has now become an umbrella that deals with varying practices and strategies that endeavor to motivate employees and increase their performance, such as share schemes, involvement in decision-making processes, leadership opportunities in lower-level jobs, monetary benefits and incentives, employer-employee partnership, and a wide range of strategies under the sunshade of employee participation. Consequently, studies (Ramsay, pp. 111-119, 1989) indicated wide range of impact of employee participation due to its huge range of practices. Some of the theorists have specified that as long as employers involve employees even for the sake of involvement, one can observe a positive alteration in their behavior that will result in cooperative and expected outcomes. In this regard, various studies attempted to identify relation of various strategies of employee participation with increased performance of the employees, as well as the organizations, and majority of them acquired positive outcomes except few that contradicted with the masses. This is one of the reasons that majority of organizations around the globe are now attempting to implement employee participation plans and approaches to motivate their employees and provide their comfortable workplace environment. Few studies have noted that employees’ level of satisfaction increases after their participation in decision-making processes. In other words, involvement in authorizing processes fulfills self-actualization needs of the employees that are very imperative for their increased performance in the company. Research indicated that various theories and studies indicated similar impact of employees’ participation on their productivity and performance; however, such works did not receive appreciation until two decades ago, and only recent major changes in world economies inclined organizations to consider approaches in a significant manner (Cooper, pp. 413-417, 2007). Such a consideration inclined employers to share their goals and objectives with their employees and managers, rather than limiting it and thus, improved productivity. Recent studies have indicated that newer companies are even involving their identified workforce in the process of development of mission statement and policies of the company that will provide a sense of ownership to the employees, and thus, their increased performance and productivity in the future (Gall, pp. 353-75, 2001). Business experts believe that inclusion of employees and managers in such process increase their morale and satisfaction even before they commence their job in the new workplace environment. In order to understand the positive impact of employee participation, it is imperative to comprehend employee participation in a detailed manner, and thus, research identified its two major divisions that are financial participation and work-related participation. In this regard, paper will now endeavor to focus on the two categories that will enable an improved conclusion regarding the topic in the end. Financial Participation Financial participation has two main perspectives that allow an effective implementation of financial division of the employee participation. One of the major approaches of financial participation is the provision of opportunity to the employees to acquire shares of the company (Ramsay, pp. 44-53, 1989). HRM experts believe that provision of such an opportunity stimulates behavioral characteristics in a positive manner, as a sense of ownership brings positive change in employees’ attitude towards the work. In the United Kingdom, companies implement such share schemes in two methods. In some companies, employers offer shareholdings to the employees along with their compensation (Summers, pp. 111-114, 2002). On the other hand, few companies provide shareholdings as an alternative option, and so, employees may decide to invest in the company individually. Research identified first-ever distribution of shareholdings to the employees in the year 1978 when shares were allocated to permanent employees only according to a standard criterion. The later strategy of alternative option introduced after two years that enabled employees to invest in shares at encouraging rates. However, recent studies indicated that companies now offer discussed approaches to part-time employees as well, as recent changes in economies have encouraged part-time employment in a significant manner. Later division in the financial participation focuses on comfortable provision of remuneration to the employees with inclusion of appropriate profits based on performance of the employees, as well as the company. In the year 1997, more than fourteen thousand individuals benefited from PRP schemes that provided income tax relief to the employees in the United Kingdom. Studies indicated relief provision of approximately 1.5 billion pounds, and reports indicated a rapid improvement and enhancement in employees’ performance during the same year (Cooper, pp. 413-417, 2007). However, in January 2000, the UK Government ended the tax relief scheme due to loss of huge income tax. (Cooper, pp. 413-417, 2007). In this regard, although financial participation plays a significant role in motivating employees and increasing their job performance and productivity; however, government intervention in various countries are causing inefficiencies in this category of employee participation. Work-related Participation Second category of employee participation is work-related participation that focused on almost all the aspects of employment and employees excluding the financial aspect. In this regard, work-related participation endeavors to enable employees’ participation in individual, collective, direct, or indirect manner. Such participation ensures distribution of authority and control to the managers and employees in organization in a balanced manner. Besides distribution of influence, work-related participation attempts to involve employees through individualized, as well as collective management strategies. One of the imperative and effective approaches of work-related participation is employer-employee participation that encourages involvement of employees in decision-making processes through succinct surveys, and experts noted that such steps bring significant and positive outcomes in terms of individual performances of employees (Summers, pp. 58-67, 2002). A recent study (Leat, pp. 352-356, 2007) considered a company implementing similar approach, after a period of six months, managers noted commitments from employees on voluntary basis for different work, and direct participation was increased and enhanced in the company. Although studies and literature review have indicated effective outcomes of these participatory approaches; however, communication strategies play a crucial role in the success or failure of such approaches. Experts believe that the way an employer communicates while offering and implementing employee participation plans to employees matters a lot to the success of that plan. In other words, it is imperative and essential that employers should portray a positive behavior while implementing such plans, as a number of organizations indicated contradictory results due to the same reason. While reviewing the literature related to impact of employee participation of increased performance of the employees in the company, research identified few factors that ensured constructive effect of employee participation. Economic justification is one of the factors associated with financial category of employee participation that guaranteed positive impact on the employees’ performances (Leat, pp. 351-352, 2007). Experts noted that money is the major cause of boundaries or walls between employees and their employers, and implementation of financial participation results in the removal of conflicts between the two divisions in the company. In other words, employee participation and specifically, status of a shareholder provides a sense of equality to employees at the workplace that influence their behavior in a constructive manner. Further analysis indicated that employees offer high levels of dedication and commitment as they feel a sense of responsibility by acquiring a share in profits of the company. In this regard, while employees acquire a sense of ownership, the organization confronts lesser conflicts in terms of right of employees or any other issue related to authority, as employees focus on his/her responsibility, in order to ensure his winning in the company’s profitability (Foot & Hook, pp. 71, 2008). Besides economic justification, employee participation results in a positive impact on employees’ performance socially as well. For instance, involvement in decision-making processes results in the enhancement of cooperation between employees and their employers through team building and accommodating working policies through mutual decisions. In this regard, such involvement does not only cause increased contribution; however, ensures creation of a harmonious and motivated workplace environment to work and cooperate in a collective manner, rather than working and competing individually, as noted in organizations lacking employee participation approaches. Another benefit of employee participation is the emergence of assumption by employers that organizational commitment will result in effective results that indirectly incline employers to provide a quality and flexible working environment to the employees (Cooper, pp. 414-419, 2007). Thus, all such steps and efforts improve and enhance productivity and satisfaction, and experience of employees in the organization, subsequently, resulting in increased performance of the organization as well, thus fulfilling employers’ objectives. In this regard, it is not essential that only economic or monetary gains will motivate employees, and thus, should be the primary focus of initiatives and efforts by employers and management. Alternatively, work-related participation is an efficient methodology that enhances employees performance in a social, psychological, and emotional manner, rather than financial participation that although is an essential and imperative factor, but is limited to monetary aspect of the employees. Criticisms For instance, few studies indicated that government and union legislations in some countries do not even allow implementation of employee participation, and thus, it is very essential for an organization to acquire cooperation from the government that is significant for the success of any strategy of employee participation (Jones, pp. 532-534, 1995). In addition, experts suggest that organizations should take policies of other companies and markets into consideration, as current era of globalization will not allow positive impact of considered policies in an isolated manner. Adversaries of employee participation argue that implementation of employee participatory programs enforce employee to increase their efforts and take greater responsibilities that often result in inefficiency at home or other responsibilities in the life. In other words, employee participation creates an imbalance between workplace and family environments. Moreover, they argue that majority of organizations confront social discrimination that cannot allow any such strategy to result in constructive outcomes, as existing inequalities and discriminatory factors will lead to detrimental outcomes. Conclusion After analyzing advocacies, as well as adversaries of employee participation, it seems obvious that employee participatory plans and approaches wield stimulated and constructive effects on performance of the employees through its financial and work-related divisions. In addition, the paper discussed that employee participation offers positive and constructive changes in the employees by altering their economic, social, psychological, and emotional aspects of life. Studies noted that employees’ level of satisfaction increases after their participation in decision-making processes, employer-employee participation encourages involvement of employees, and thus, their increased performance. Furthermore, work-related participation ensures distribution of authority and control to the managers and employees in organization in a balanced manner. On the other hand, provision of opportunity to become a shareholder stimulates behavioral characteristics in a positive manner. In brief, share schemes, involvement in decision-making processes, leadership opportunities in lower-level jobs, monetary benefits and incentives, employer-employee partnership, and a wide range of strategies exist under the umbrella of employee participation that is playing a significant and crucial role in increasing performance of the employees, as well as the organizations around the globe. Although the paper focused on positive outcomes and constructive impact of employee participation; however, a few studies indicated negative or contradictory results as well, and only further research will allow a more concrete standing on the topic. In this regard, studies are attempting to identify and explore unidentified aspects of HRM to ensure increased productivity and efficiency while providing a comfortable and flexible workplace environment to the employees. However, experts believe that world economies are experiencing major alterations at a higher rate, as compared with conditions few decades ago that witnessed gradual changes. In this regard, it is imperative that experts and organizations should implement HRM and specifically, employee participation strategies after considering cross-cultural principles and standards. In addition, future researches should consider samples from various organizations that will facilitate in acquiring more valid and efficient results. Furthermore, current research considered the secondary methodology; however, primary research while considering few organizations as case studies will be more effective in acquiring concrete results related to the impact of employee participation. Conclusively, the paper has discussed some of the significant and positive effects of employee participation on employee performance in the company. It is an expectation that the paper will be beneficial for students, teachers, and professionals in better understanding of the topic. References Armstrong, M. & Murlis, H. (2007) Reward Management. London: Kogan Page. Cheney, George. (2002). Values at Work. Cornell: Cornell University Press. Pp. 163-182. Cooper, Cary L. (2007). Research Companion to the Dysfunctional Workplace. London: Edward Elgar Publishing. Pp. 413. Foot, M. & Hook, C. (2008). Introducing Human Resource Management. Harlow: Prentice Hall. Pp. 71. Gall, G. (2001). ‘From adversarialism to partnership? Trade unions and industrial relations in the banking sector in the UK’. Employee Relations. Vol. 23, No. 4, pp. 353–75. Jones, D.C. (1995). ‘Employee participation, ownership, and productivity: a theoretical framework’. Industrial Relations. Vol. 34, No. 4, pp. 532–54. Leat, Mike. (2007). Exploring Employee Relations. Butterworth-Heinemann. Pp. 352. Peccei, R. (2001) ‘Partnership at work: mutuality and the balance of advantage’. British Journal of Industrial Relations. Vol. 39, No. 2 pp. 207–36. Ramsay, H. (1989). People’s Capitalism? A Critical Analysis of Profit sharing and Employee Share Ownership. London: Routledge. Summers, J. (2002). Family-friendly Working? Putting Policy into Practice. York: York Publishing Services. Read More