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THE EFFECT
OF EMPLOYEE PARTICIPATION IN DECISION MAKING ON ORGANIZATIONAL PERFORMANCE
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
Participation
of employee describes the involvement of employee in decision making which is
concerned with shared decision making in the work situation [Mitchell, 1973].
[Locke & Schweiger, 1979] defines employee participation as a joint
decision making between managers and subordinates. According to [Noah, 2008] it
is a special form of delegation in which the subordinate gain greater control,
freedom of choice with respect to bridging the communication gap between the
management and workers. It refers to the degree of employee involvement in
organization’s strategic planning activities. A company can have deep or
shallow employee participation in decision making [Barringer & Bleudorn,
1999]. The employee participation in the planning process leads to potential
innovation, which may facilitates opportunity and recognition in the
organization [Zivkovic et al, 2009]. Managers provide opportunities for
participation of subordinates in decision making on the basis of their merits
as it has been proved by researchers to have improved organizational
performance [Witte, 1980; Sagie & Aycon, 2003]
The
advantages of employee participation in an organization:
It increases
employee’s morale and enhances the productivity [Chang& Lorenzi, 1983]
It provide
employees the opportunity to use their intellectual which will lead to better
decisions for the organization [Williamson, 2008]
Employee
participation contributes to trust and sense of control[Chang& Lorenzi,
1983]
As a result
of employee participation, resources required to monitor employee can be
minimized thus reduced cost [Arthur, 1994; Spreitzes &Mishra, 1999]
Employee
participation in an organization maximizes the view points and give diversity
of perspectives [Kemelgor, 2002]
There are
too many evidences that shows organizational’s performance increase with the
increase in employee participation [Arthur, 1994; Daft & Lewin, 1993;
Denninson & Mishra, 1995;
Productivity
is the performance measure encompassing both efficiency and effectiveness, high
performing and effective organization posses a culture of encouraging employee
participation. Therefore, employees are more willing to get involved in
decision making process, like goal setting, problem solving activities which
results in higher performance [ Hellriegel, Slocum & Woodman 1998].
Encourage more modern participative style of management raise employee
productivity and satisfaction even with low compensation rates [Madison,
Wisconsin, 2000]. Job satisfaction increases productivity through high quality
motivation and through increasing working capabilities at the time of
implementation [Miller & Mange, 1986]. These were the evidences that
participative working environment has more substantial effects on workers’
productivity.
Every
organization seeks to improve and increase its performance level by providing
learning opportunities to its workers (Weiss et al., 1998). Organizations must
perform at individual level to improve their performance of whole
organizational. All subdivisions of the organizations must perform well to
achieve overall performance level (Ward, 2007). Organizations in all over the
world have designed different processes to improve performance level from
functional to employees and till organizational level to perk up overall
organizational performance. Organizations are also required to manage
performance of its employees and functions by setting goals and achieving those
(Good et al., 2004). According to Dess & Robinson (1984), organizational
performance can be enhanced by improving employee participation and management
must have certain tools to improve employee participation in that sector.
Wheelen and Hunger (1998) says that level of performance is based on objectives
and goals set by an organization. For every company working in market the main
goal is to earn profit and reduce expenses. Organizations can improve their
profit and reduce their expenses by improving employee participation (Sorenson,
2002). According to Lee et al., (2004) level of progress and participation is
different in every company. Many organizations delegate authority and power to
their employees and due to that authority organizations performance also
increases. An organization which gives authority to their employee to take
decision also enhances their own skills. Organizations which perform well also
involve employees in decision making and other organizational decisions.
Rashid, et al., (2003) says that organizations also require more profit on
their input and financial benefits on all expenses occurred. According to Ho et
al., (2006) organizations require different analysis to measure their
profitability and this shows that organization profitability can be increased
when performance level of an organization also increases.
1.2
STATEMENT OF THE PROBLEM
Employee
participation shows that each employee is a different person, not just a
component in a mechanism, and every employee is concerned in serving the
business to get together its objective. Each employee contribution is asked for
and appreciated by organization. Workers and management recognize that each
employee is involved in running the business (Apostolou, 2000). Employee
participation is a procedure to authorize workers to contribute in
decision-making behavior suitable to their rank in the association.
Employee
participation can therefore be seen as an umbrella title under which can be
found a wide range of practices, potentially serving different interests. Any
exploration of ‘employee participation’ has therefore to encompass terms as
wide-ranging as industrial democracy, cooperatives, employee share schemes,
employee involvement, human resource management (HRM) and high-commitment work
practices, collective bargaining, employee empowerment, team working and
partnership to capture the full picture of employee participation. However, the
researcher will investigate the effect of employee participation on
organizational performance.
1.3
OBJECTIVES OF THE STUDY
The general
objective of this study is to examine the effect of employee participation on
organizational performance while the following are the specific objectives:
To examine
the effect of employee participation on organizational performance
To find out
ways/methods of introducing effective employee participation programme in an
organization
To determine
the challenges that are associated with employee participation.
1.4 RESEARCH
QUESTIONS
What are the
effects of employee participation on organizational performance?
What are the
ways/methods of introducing effective employee participation programme in an
organization?
What are the
challenges associated with employee participation in an organization?
1.5
HYPOTHESIS
HO: There is
no significant relationship between employee participation and organizational
performance.
HA: There is
significant relationship between employee participation and organizational
performance.
1.6
SIGNIFICANCE OF THE STUDY
This study
will help management and administrators of corporate business organization as a
guide in implementing an effective employee participation programme to
encourage employee involvement in decision making. By doing so, employee will
put in their intellectual contribution towards improved organizational
performance. The findings of this research work will also serve as reference
for academic endeavour to lecturers and students and also help the public who
would want to know about some advantages and disadvantages (if any) of employee
participation and its effect on organizational performance.
1.7
DEFINITION OF TERMS
Organization:
A social unit of people that is structured and managed to meet a need or to
pursue collective goals
Participation:
Joint consultation in decision making, goal setting, profit sharing, teamwork,
and other such measures through which a firm attempts to achieve organization
performance
Performance:
The accomplishment of a given task measured against preset known standards of
accuracy, completeness, cost, and speed. In a contract, performance is deemed
to be the fulfillment of an obligation, in a manner that releases the performer
from all liabilities under the contract.
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