Employee Involvement In Decision Making Management Essay

In recent years, there seems to be an increase in interest, in the use of employee involvement and participation (employee voice) mechanisms in corporate decision making. Often, these employee voice mechanisms are initiated by employers, as a way to harness employees’ skills and expertise in decisions to introduce new technologies, and also to gain employees’ cooperation in any organizational change; and changes to work practices which need to be improve in order for the organization to compete with its competitors. This article analyses employee involvement and employee participation (employee voice) in terms of processes and practices that affects the conditions and structure of work and organization by showcasing research on employee voice. The article concludes by discussing implications for future analysis.

1.2 Objective

To discuss and critically examine the proposition that to ensure effective performance, all employees need a voice.

2.0 Employee Involvement & Employee Participation

2.1 Employee Voice

Literatures on employee relations have been and is still looking into the role of employee involvement (EI) and employee participation (EP) affecting a workplace, prompting debates on what external and internal changes in an organization’s environment that can initiate such strategies (Ramsey, 1977; Harley et al, 2005). Mathieson et al. (2007) explained that ‘…employee voice seeks to incorporate much as its EI and EP role is the ability for employees to have an impact into decisions that are made in organizations’. Marchington (2005) intricately expanded this definition to showcase the different workplace elements that can affect the degree of influence employees may have over decisions and at which organizational level that may occur.

Employee voice is a two-way communications between the employer and employee.To employee, in general, they want to contribute ideas to the improve the organization whereas to the employer, they need the employee voice to further strengthen their business competitiveness.

In principle, allowing employee voice at workplace will assist management to improve employees’ knowledge and skills leading to higher productivity; employee are more likely to stay longer because they feel their contributions are valued by the management, conflicts is reduced if not avoided and co-operation between management and employee will be cordial and interdependence. Employee, on the other hand will have greater influence over their job leading to higher job satisfaction,opportunity to develop skills and job security.

Employee voice can be divided in two categories: Employee Involvement (EI) and Employee Participation (EP). Literatures often interpret them differently depending on the writer’s perspective.

2.2 Employee Involvement : Definition

Employees involvement(EI) is when employees want to be included in all issues that concern them. They want to know about anything that may affect their livelihood like how the organization is doing and what the future holds for them.

EI refers to any methods use by managers to tap employees opinions and ideas using a two-way communications channels or through a special systems set up for the employees to share ideas and voice their opinions (CIPD 2010). It is usually management-initiated and works directly between the manager and employee. The methods includes electronic media such as e-mail, regular briefing, suggestion schemes and project teams (TQM).

Encouraging EI is based on the thought that employee involve in a process know it best and are more motivated to improve their performance while encouraging employees to assume common interest between employees and management thus allowing employee to directly contribute to the improvement of the organization’s operations (Farnham 2002).

2.3 Employee Participation : Definition

Employee participation (EP) unlike EI, is collective. EP is a process of employee involvement architectured for them, where befitting, to have influence and the opportunity to be involved in decision making on issues impacting them (CIPD 2010). EP is a process of sharing information in platforms such as production incentive scheme negotiation, collective bargaining for union members, proposing of new working shift system such as changing from three groups three shifts to four group three shift system, often supported by guidelines and policies of the organization. In other words, EP is pluralistic.

Farnham (2002) explained that employee relationship is managed via four policy choices, namely EP, union incorporation through collective bargaining, worker subordination through managerial prerogative, and employee commitment through employee involvement.

2.4 Employee Involvement versus Employee Participation

Two levels of employee’s involvement will be observed and differentiate for their clarity. For example: Kanter (1983:410) uses the terms ‘participation’ equivalently to ‘teamwork’ and ‘participative management’ equivalent to ‘team building’, while ‘involvement is used in her analysis as means to participation. Others such as Mason (1991), Pounsford (1991), Mclagan and Nel (1995), uses the terms involvement and participation interchangeably. Kaufman and Kleiner (1993:1) uses the terms ’employee representation’ and ‘industrial democracy’ to describe what has been called ‘participation’ in this discussion, that is, opportunities for workers to ‘have an explicit [collective] voice in the governance and operation of the workplace’. On the other hand, Verma and Cutcher-Gershenfeld (cited in Bruce et al., 1993, p.7) contrast ‘joint governance’, where worker representatives and management engage in decision making with equal voices and equal power. With employee involvement, where workers engage in process improvement programs, with no access to decision making.

In this discussion, EI is defined as the influence employees have over changes in the production and operational processes that occur in their local departmental area. For example, employee inputs to the development of Standard Operating Procedure (SOP), and employees’ involvement in the various production process improvement groups such as Kaizen Groups, Quality Circle (QC) and Continuous Improvement Group (CIQ). These groups are able to make changes in local operational arrangements, which can have far-reaching effects. However, these groups operate within specific framework therefore may not necessarily influence the higher management’s decision-making substantially.

EP refers to the influence that employee have on decision-making at management level. Influential employee representatives achieve EP through their work on the various management-employee committees. Advocate employees of influence used formal, individual meetings with management to influence their thinking. In this discussion, this includes management seeking employee’s input to decision-making and the employee offer input to managers for consideration in decision-making.

Clearly, there are distinctions between employee involvement and employee participation. EI is task-based while EP is collective-based. Literature suggests that EP is a collective/pluralistic method with a progression from ‘no involvement’ to ’employee control’ (Blyton & Turnbull 1998). Therefore it may involve processes and mechanisms such as works councils, collective bargaining, employee share schemes, etc.

EI, at the other end of the spectrum, is more unitarist/individualistic. It aims to harness commitment to organizational goals, but is dependent on the final decision or critical issues by higher management. McLagan and Nel (1995) put forward a taxonomy of EI requiring different levels of corporate responsibility. At the least power of the order is ‘prescribed action’, such as collect on SOPs which the group then agrees to abide by. Activity involvement such as working in QCs or the use of Statistical Process Control (SPC) to determine process adjustments are examples where, in their estimation, there can be ‘real and meaningful’ employee involvement. ‘Role involvement’ is where employees making decisions with customers to determine their needs. For instance, employee with his or her own discretion, alter the position of a product on a shelf to a place convenient for customers reach to. ‘Context involvement’ includes involvement in activities that are outside the immediate concern of the workplace team, such as influencing the size of budgets and deciding on the capital expenditure for the purchase of particular equipment. Lastly, they refer to ‘vision involvement’ in which employee assist in the development of the enterprise’s goals, values and mission, determining who will be involved in strategic planing and when it will occur (Mclagan and Nel 1995: 189-192). The employee in this situation is merely voicing out how they think and feel but are not involved in decision making.

EP may be expected to have the effect of dampening employee grievance and decreasing labor turnover, but reducing the impact of negative events in the organization, is not the only effect. Developing a collective voice, where in different levels of organizational participant can contribute to decision making, alter the relationship between management and employees and creates processes of decision-making that rely heavily on cooperation and shared information (Freeman and Rogers 1993:19).Indeed, as Lewin and Sherer (1993: 236, 238). From a pragmatic perspective.

McLagan and Nel (1995:3) declare that a shift to participative workplace is ‘inevitable’ and ‘necessary’ because the decisions faced in today’s workplaces are much more complicated. Therefore more workforce and feedback is require to solve the issue.

A typical EP program such as Safety Committee which is formed to looked after the improvement regarding Occupational Health Safety (OSH) plan in the organization. In itself, the activities of the safety committee were significant and provided an important learning ground for both management and employees on participative decision making. Another typical example of EP program will be Works Committee, which is the formal union negotiation forum. The Works Committee played a strong role in calming industrial unrest by providing an in-house negotiating point for dispute resolution.

EP can be applied in certain business strategy. For example, management intending to convert from giving paychecks to issuing employees pay-card deposited monthly. For the management, it meant cost/time savings of printing and distributing checks besides being convenient. Since this was something new, some of the employees resisted this idea. A task force consisting of employees who were for and against the idea was formed. The task force’s function was to study the pay card system, clarify it to the employees, collect their feedback and report back the results to the management. By involving the employees, they saw the positive aspects of the pay card system and it was successfully adopted. This change required full involvement and commitment of the employees and management.

2.5 Rationale for Employee Involvement and Participation in an Organization

The Chinese philosopher Lao-Tse has an insightful advice for those who wanted to manage change: “Be like the willow tree, whose roots go deeper than other trees. When the storm comes, the willow tree bends with the winds of time and change and remain standing, while other trees crack and break”. The face-value of the advice implies that the ability to be resilient and adapt to changes in the environment is one critical element for survival. Upon further contemplation of the saying, one question begs: how do we grow roots, as deep as the willow tree?

In contemporary organizational management, infrastructures and organization systems forms the trunk and branches of the tree whilst the roots are metaphor for leadership style and corporate core values. Hence, with good leadership and strong corporate core values, an organization will be able to ride out market storms and thrive in good market weather.

Employees who have a a good relationship with their superiors are likely to be motivated. This relationship is determine by the managers’ leadership personality traits and attitudes which will reflect on the managers’ behavior towards their employees. An sign of good leadership in an organization is the ability of the managers to instill the necessary corporate core values effectively to its employees through EP and EI.

Hagermann (1992) pointed out that giving opportunities to employees to participate will promote the staff’s loyalty and commitment while reducing conflicts. It can also provide possibilities of self-realization. Mondy and Noe (1996) emphasized that participation is also more effective when permitted in early planing stages. Through participation, resistance to change can be minimized and in some cases eliminated.

Executives (managers) and employees see change differently. For employees, change is perceived as a disruptive and intrusive whilst it means opportunity for employers both for the business and for themselves. Therefore to close this gap, Strebel (1996) suggested that managers must evaluate their employee’s mutual commitments and obligations that exists between them and the organization. EI will be applicable here.

Three elements made up the personal compacts: formal, psychological, and social. Employees determine their responsibilities, level of commitment to work, and the company’s values by asking the questions along these dimensions.

Motivation is the drive within a person to achieve good. According to Maslow’s Hierarchy of needs, self-actualization is the diving force that wants to continue growth, achievement, and self-fulfillment (Hall and Nougalm 1968). Herzberg et al. (2009) describes that creating positive hygiene factors such as recognition and rewards will make the environment very favorable for employees to accept challenges and change. Goal-setting theory assumes that mankind likes to be challenges and motivated by tough goals, therefore this would give employees a strong sense of common direction to perform better. It also unites the whole group or teamwork towards the same objective to create a synergistic effect for advancement. Building trust and confidence is the first step that removes the fear of change. Open communication, motivation, participation and involvement are steps that support the continuity of change and facilitate the changes to proceed smoothly.

2.6 Effective Organization Performance and Employee Voice

2.6.1 Performance

The definition of performance differ from one person to another. It is obvious in fact, that supervisors may neglect to be specific about performance with his or her employees by assuming that the employee knows what is meant by ‘performance’. It is the supervisor’s responsibility to clearly define performance standard for them.

In order to gather feedback on whether these objectives/goals are achievable and practical or not, participating and involvement of employees is paramount. Employees who are involved in developing performance standards are more likely to discuss the obstacles that might impede their efforts so one can deal with those obstacles before they get in the way. They are also more likely to understand the standards and the reasons behind them, so one won’t need to work so hard to communicate them. Consequently, they are more likely to accept those standards and be willing to try to meet them.

However, it must be noted that performance is often a question of expectations. Expectations influence behavior. Employees achieve higher levels of performance when their supervisors tell them up front what performance is expected of them. These studies and other underscore the validity of the Pygmalion Effect (Eden and Ravid 1982; Eden 1992) . Therefore supervisors can influence the behaviors, feelings, and attitude of subordinates, if expectations are communicated implicitly and explicitly. In order to use the Pygmalion Effect to improve employee performance and motivation, managers have to show that they are committed to their employee by nurturing a high performance climate, share rewards of a successful performance, and inspire others to higher-level performance.

Among the more prominent structural elements related to performance are, status inequities, role perception group size, demographic composition, the group’s cohesiveness and task.

Size of work teams: The best work teams tend to be small. Studies have shown, when they have more than 10 members it becomes difficult to get much done. This is because, group members will have trouble interacting constructively and agreeing on much. Large number of people usually cannot develop the cohesiveness, commitment, and mutual accountability necessary to achieve high performance. So in designing effect teams, managers should keep them to under a dozen people.

Member attributes: To perform effectively, a team will need three different skills. First it needs people with technical know-how. Second, it needs people who can address problems and issues, formulate and assess alternatives, and make appropriate decisions. Finally, the teams will need people who can communicate well within the team as well as with other team.

Performance potential will be impossible without developing all three skill sets. The right mix is crucial but teams do not need to begin with all the complementary skills. For the group to achieve full potential, it is common for team members to pick-up skills that is deficient in the group.

2.6.2 Impact of Employee Voice in Effective Performance

Applebaum et al. (2003) in their detailed study on industries such as apparel, steel and medical equipment parameters such as performance and job satisfaction reinforced the notion of employee voice contributing positively to effective performance. Another study by Easton and Jarrell (1998), investigated the impacts of applying total quality management (TQM) programs in the finance department to evaluate the subsequent financial performance of firms. The findings again validated that TQM involving EP and EI, had a positive impact towards financial gains and prices. However, Bolle de Bal (1992) points out that there are different perspectives regarding benefits and cost of providing direct participation or involvement mechanisms for employee especially at the different hierarchy in the organization have different interests in their mind. This findings of the pros and cons from the different perspective is shown in in Figure 1.

Function

Employer Pro

Employer Con

Worker Pro

Worker Con

Union Pro

Ideological

Work humanization; worker integration, union weakening

Criticism of managerial authority or capitalist property

Recognition, achievement, promotion

Manipulation, managerial reassessment of influence

Exercise counter-power

Economic

Improvement of work force and management efficiency

Cost

Profit sharing, acquisition, use of skills

Cost, time, energy

Psychological

Motivation, stress reduction

Tensions and frustrations

Job enrichment, stress reduction

Additional responsibilities, loss of freedom

Organizational

De-bureaucratization, modernization, decision emergence, training

Bureaucracy, slowness, disorganization

Decentralization, delegation

Sociological

Social regulation, cooperation, control

Middle management frustration, union opposition

Integration

Alienation

Figure 1: The Pros and Cons of Direct Participation from Different Perspectives (Bolle de Bal 1992)

3.0 Conclusion

EI and EP are not interchangeable. EI is designed for direct employee input at the workplace level and more management driven. Contrarily, EP is generally enacted through indirect participation via employee representatives occuring at higher places in the organization, generally pertaining to inputs for the organization’s strategies.

According to Kotter (1982), future organization will be more flexible with a smaller workforce and require a lot of network building to get things done. Kanter (1989) further reassured this point. As organizations shift from the conventional bureaucratic organization structure to a more organic structure, high level of coordination, collaboration, teamwork and commitment will be needed. Employees need to be highly involved in all activities related to their portfolio with the manager playing the role of facilitator rather then driver of the team. Organization’s goals and objectives have to be in-sync withe the individual’s interest and benefits. They have to understand that those changes will generate some level of benefits to them. As mentioned by Mullins (2007), the concept of psychological contract implies a series of mutual, unspoken and unwritten expectations and satisfaction of needs arising from the relationship between the individuals and the organization. It is difficult to quantify the effectiveness of employee voice because of the influence of confounding factors on ‘voice’ mechanisms where some mechanisms often overlap into each other, and will evolve other time. For an organization to be successful as a high performance, there is the need for its leadership at all strata together with employees to adopt honesty and openness as corporate culture. Therefore, it is important that employees and organization need to be calibrated to ensure that the management create an environment that meets the organization’s goals while concurrently addressing employee’s needs by actively involving EI and EP.