Employee Influence On Decision Making Management Essay

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1st Jan 1970 Management Reference this

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‘One of the biggest problems with the literature on participation is the lack of a clear and unambiguous definition of its subject matter….(and) because participation is such an elastic term….(it) needs to be deconstructed into degree, scope, level and form’ (Marchington 2005: 26-27)

Using Marchington’s guidance provide a critical assessment of the rationale for and

the main developments in worker participation in decision-making in Britain over the past 25 years .

Critically evaluate the impact of these developments on employee influence on decision-making in their organisations

Participation of workers in decision-making in Britain has been a subject of debate. It is an essential component of industrial democracy. Conventionally, workers’ participation in management refers to involvement of non managerial workforce in managerial decisions.

Rationale behind increase in workers’ participation in decision making in the last 25 years and associated directives supporting it is that rights of employees’ on participation has been surpassed by globalization of organizations and amplification of competition. There has been a social political need for such reformation. Also, this concept has stemmed from the changes in human relations towards management.

Employee involvement is not about joint regulation or power sharing. The decision to reject or accept an employee’s views rests with the management (Colling & Terry, 2010). It is management who makes the final decision. According to Walton (1985), “employee involvement concentrates on individual employees and is designed to produce a committed workforce more likely to contribute to the efficient operation of an organization. By introducing employee involvement mechanisms, management seeks to gain the consent of employees to its proposed actions on the basis of commitment rather than control.” (Gennard & Judge, 2005).

Increase in productivity is possible when there is complete cooperation between management and labor. Participation helps in increasing sense of satisfaction, gratification and belongingness to an organization forging increased degree of commitment towards the organization. Further participation helps in reducing the root cause of industrial conflict. Industrial conflict arises when two structured groups which are provoked by the idea that their interests are endangered by the self interests of the other. Workers’ involvement in decision making keeps such conflict to the minimum by increasing homogeneity and cooperation. Decisions are then made which are mutually beneficial keeping common organizational goals in mind. Participation leads to overall development of employees as the informal leaders amongst employees get an opportunity to actively participate and influence decisions by suggesting members of these groups to stand by them. Another important aspect of worker’ participation in decisions leads to less resistance on important changes. Structural and management changes are part of a growing business. Workers’ first reaction to change is refutation. When employees are involved in decision making, their fears and opinions get addressed, leading to less resistance in implementation of changes (Walton & Krabbe, 1995).

With changing times, contemporary thoughts and higher expectations of customers, the demand for highly specialized products and workforce has increased. This has resulted in flexibility, both in terms of quality and quantity of the labor. Today there is increased demand for multi skilled, flexible workforce with high technological bent of mind who need minimum supervision (Leat, 2007). With new technologies, new audiences to reach, there is an increased commitment to provide authoritative information based on extensive research which can be possible by involving more skilled minds together (Mbaknol, n.d.).

The underlying principle of increased workers’ participation in decision making is that when workers have job satisfaction, overall firm competence and stability increases resulting in positively influencing managerial decisions.

Radical change has been experienced in Britain over the last twenty five years in the area of workers’ participation in decision making (Marchington & Wilkinson, 2002). In seventies, managers had authoritarian decision making style. They did not involve workers in their decisions as they were considered to be lacking skill and experience which led to under utilization of workforce substantially. In early part of twentieth century, F.W.Taylor shaped control oriented approach towards workers. Employees were expected to take orders, execute and not challenge management decisions. Soon Fordism stepped in. This management style required enormous amounts of investment in plant and technology to facilitate factory production of products. Fordist system of management had its own disadvantages as it resulted in bored, dissatisfied and alienated workforce.

But in mid seventies, there were ideas on power sharing and decision making in organizations with democracy centering on trade unions. The main reason was to resolve conflicts in industrial relations between management and workers by involving unions in managerial decisions. By 1980s with political and regulatory changes in place, demand for labor led to development of ‘flexible firm’, a term devised by Atkinson (Stuart & Lucio, 2005).

Industrial structure in Britain went through a sea change. This change is evident in all sectors-Manufacturing, service, IT and small firms. From 1979 to 1997, there was a dramatic political change. Minister Tony Blair notified EU that Britain consented to the ‘social charter’ and set up the forms of worker participation provided in it (Morgan, 2001). During this time, trade union movement also declined to a considerable extent. It was thought that this would lead to lack of interest on management part to involve workers in decision making. However, interest to involve employees has been exceedingly high since. The concept ’employee involvement’ developed. It was about heightened interest of management to involve employees in decisions. This was mainly because management understood that employee motivation and commitment has direct impact on achievement of organizational goals. A new language ‘social participation’ in public context evolved. With the end of conservative rule, active regulation of the labour market (National Minimum wage, Statutory trade union recognition, directive on EU working time ) and more active engagement of EU social policy and EU work council (EWC), there has been growing social dialogue between employers and employees through representative bodies. The EU policy supported employee contribution as broadening of employee citizen rights and not just business expedience.

Ever since, there have been sectoral shifts and increasingly workers have been employed on something called ‘atypical contracts’. There has been significant increase in the number of females in the workforce over the years. Most of the employee involvement has been in localized issues solving and knowledge sharing. The recent most development has been information and consultation directive. Decline in union memberships along with inclination towards private sector, larger part of the workforce employed in SMEs meant that new methods for ensuring effective worker participation are vital. Now in UK, workers participation extends to board level (Koslow & Scarlett, 1999). Labor now influences decision making guiding motive being improvement of efficiency and production with a spirit of cordial relations and goodwill.

Critically evaluate the impact of these developments on employee influence on decision-making in their organisations.

Employees are the key sources of an organization. As Marchington (1992) states, employee involvement practices are initiated by management and designed to increase commitment of employees to the organization.

Post Information and consultation charter, there has been an improvement in risk anticipation. Organizations have become more flexible in their approach and workers are given access to training and development. It has come to management’s purview that timely information and consultation is the prerequisite for success.HRM practitioners have an active role in administering new information and consultation procedures.

Decision making at senior management level always impacts the employees. ‘Employees as stakeholders’ has originated as more and more employees have gained a voice in organizational decision making. The concept is political in terms of giving employees their rights, psychological in a way that employees derive pride out of their work and economic as their livelihood depends upon their jobs (Lewis & Sargeant, 2004).

Employees can now influence decision making in many ways, unionization being one of them. There are now participation systems and forums which employees can use effectively to influence managerial decision making. Grievance systems help employees to raise their grievances if they feel they have been wronged by the management.

Some companies implement feedback programs like employee surveys or direct interaction sessions between management and employees which can prove to be a cost effective way of employee feedback on certain policies or news or management. Many companies have quality teams in place which take into account individual employee suggestions, synthesize them and provide better solutions to organization’s concerns.

Employee participation has resulted in increased economic efficiency gains. Employee involvement theory permeates through the assumption that employees are a source of untapped knowledge and skill base which can be used if given ample opportunities for growth to the employee. Further it has been observed that employee participation leads to employees getting intrinsic rewards from work. It results in job satisfaction leading to enhanced motivation to achieve higher goals.

Workforce jobs are now designed in such a way that planning and managing are included in order to add value to a job at hand. Thus it can be said that today’s employee has been empowered (Gennard, J. & Judge, G., 2005). Workers, now have more insight to management news and information. They are better informed about company’s visions and achievements which lead to mutual trust and commitment leading to reduced number of workers leaving jobs. Also, once the workers are empowered, there is a lesser need for intricate control systems. Nowadays employees are also working remotely from their home or any location outside office as the management trusts that work assigned to employees will be accomplished. The impact of the above mentioned developments has led to increased employee autonomy, flexibility and support.

A thinking performer according to Marchington (2005) is the one who sets out his professional objectives along with prioritized plan for time management and delivery of set goals.

Today’s employee is a thinking performer as he understands business issues and needs of the organization. He tries to look out for opportunities to add value and make recommendations accordingly. He adopts a continuous approach to learning and development. He not only exhibits understanding of strategies but is also capable of contributing to it. He has ‘active listening’ capabilities and communicates positively and clearly with others. As a result, management can adopt new methods of working to match new technologies with minimum resistance. Employee involvement provides an opportunity to employees to influence decisions which are likely to impact their work life. Also, when employees are involved, there is improved productivity performance. Voicing opinions and suggestions helps employees to contribute in an effective way. They become essentials of the Human resource system of the organization which helps in increasing the overall quality of human capital. This results in designing effective learning and development plans for employees allowing them to develop, grow and achieve their goals. In the process, able and skilled employees get promoted and influence managerial decisions. Such companies with effective employee influence experience a higher financial ROI. With increased productivity levels, organizations are better able to meet customer needs and adapt easily to rapidly changing environments.

Despite all the pros of increasing employee influence in the organization, employee involvement in decision making is not the norm in all organizations. ‘Participative leadership’ undoubtedly is gaining importance in today’s business world as creative and rational thinking amongst employees helps to solve complex problems. However, Managers sometimes feel loss of power if they ask for team’s opinions on critical matters. Such managers feel that they need to be strong and in control to be regarded as effective managers. Also, usually some decisions require quick thinking as pressure from client’s end is there. In such scenario, if managers take team’s opinions/suggestions, it would result in prolonged time span to respond resulting in unsatisfied clients. Often it is not practically possible to involve all employees in a decision.

Therefore it is very essential to define the scope of decision making of employees in a business. Managers can actively involve employees in decisions. But if they decide not to, then they end up micromanaging their team. Employees can be involved in a ‘partner’ approach wherein employees with specific skills, attitude, behavior and understanding of critical issues are considered as business partners to the business. Or they can be involved in decisions related to their work area in which they are skilled.

Firstly through assessment methods, involvement of employees needs to be gauged. The kind of management style followed in the organization also needs to be reviewed. Questions like importance of employee influence in a particular organization, benefits to the business need to be understood. Then strategies need to be made to involve employees on a regular basis rather than on occasional times as then they will have a better understanding of the business situations and will be able to take good decisions. Measurement systems need to be built to measure success or failure of employee involvement. People contributing positively- towards cost saving, innovation or newer style of work process should be rewarded and given recognition. Employees negatively influencing decisions need to be controlled as they undermine the organization’s energy, efforts, focus, time and morale of fellow employees.

The key is to understand how much employee involvement is enough. Employee involvement should be treated as management and leadership philosophy so that their contribution to organizational success is a continuous process.

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