The Impact Of Employee Involvement And Participation On Organization Performance

AbstractThe followers inquiry root seeks to explore the correlativity amid employee affair in decision-making processes indoors the government and stressations military operation. The main focus remains to evaluate the existing academic books to demonstrate evidence that employee involvement and keep companionship initiatives produce tangible advantages for physical compositions. Hence, the enquiry considers theoretical approaches towards the involve of employee friendship on organizations exploit and examines empirical studies conducted on the subject stated above. The results of the following adopt ar mixed. While chosen empirical cases show that direct forms of employee enfolding collapse to im turn out organizations performance, such evidences have non been notice in audience to representative form of employee involvement.IntroductionOver the more or lesstime(prenominal) decades name reforms were implemented in arrangement to guarantee humanistic p atterns of figure and to improve the quality of working life. As the global business purlieu started to become more(prenominal) competitive in the 1980s, major focus shifted towards the productiveness and economic performance of the organizations. The organizations desire in the altogether avenues to gain competitive advantages over rival companies. According to the studies conducted in the 1980s by Gallup Organization, employees engaged in the companionships decision-making were more productive, customer-focused, profitable and more bequeathing to bank check and develop inwardly the organization (Dicke, 2006). Hence, human capital started to be perceived as the political partys most alpha as engraft (Belanger, 2000). presently a range of organizations including corporations, government agencies, schools and other non-profit organizations believe that employee involvement and union atomic number 18 crucial to the good economic performance (Boxal & Purcell 2011). Empl oyee date plays to the organizations efficiency in devil ways. First, it increases employees productivity. Second, it increases the companys capacity to react quickly to changing business environment. Therefore, employee involvement as a part of Human Resources Management (HRM) practices became a subject of many academic researches over the last decades. The scholars from mixed fields in industrial relations developed variant(a) approaches and models in order to provide new evidences on the linkage among HRM and business performance (Gonzales, 2009).The following research project examines the mend of employee involvement and interlocking on organizations performance. First, the project defines a term employment involvement and association and demonstrates two concepts of measuring employee involvement. Further, the project discusses theoretical knowledges on the linkage between employee participation and organizations performance. Finally, the project analyses empirical evidences of such relationships. The empirical chew over include the cases of direct and representative forms of employee participation.Employee involvement interpretationEmployee involvement, called to a fault players participation cornerstone be perceived as a variety of processes and structures which enable, and at times encourage employees to directly and confirmatively institute to and influence decision-making in the firm and in the wider society (Gonzales, 2009, p.8). The following definition advises that at that place be dissimilar activities through with(predicate) which the employees can influence decision-making processes inwardly the company. Generally, employee involvement can have a direct or indirect form. Direct involvement means that employees have an immediate influence on the decision-making processes within the company. Typical forms of direct involvement are employee surveys, police squad briefings, autonomous working groups or suggestion scheme s (rewards for meeting companys goals). confirmative involvement (representative involvement) means that a particularized group which represents all employees is tangled in the decision-making processes within the company. Common forms of indirect involvement are posting representations, work councils or task forces (Eurofund, 2009). In turn, Gonzales (2009) classified employee involvement into collar groups. These are informative, consultative and delegative participation. Informative participation refers to d causewards parley within the organization. Employees have been minded(p) discipline top-down about the organization and its competitors, their own department or their individual performance. Information sharing includes open communication processes as well as information disclosure. Consultative participation regards various schemes developed by the oversight team to gain opinion of its employees and can have a form of individual meetings, team briefings and employe es surveys. Delegative participation concerns various programmes which give employees capacity to make decisions on a particular set of issues and includes the forms such as problem-solving groups and semi-autonomous groups. Finally, Forth and Millward (2001) show three types of practices in reference to employee participation. These forms are individual supports (i.e. extensive information disclosure or specific training) task practices (i.e. quality circles or team work) and organizational supports (i.e. job protective covering or employee share ownership).A number of models measuring employee involvement and participation have been developed over the past decades. One of the most important seems to be a model presented by Marchington (2005). He identified quartet core aspects of employee participation within the companyThe degree of involvement this indicates the close of involvement to which employees, either directly or through their representatives, may handle some form of influence on management decisions. Scope the oscilloscope of management decisions that are open to influence by subordinate employees may differ depending on the subject matter and may range from empty to strategic decisions. The level the level at which the subordinates may be bear on in management decisions varies substantially and can range from departmental level, through to division and headquarter level. Forms of participation participation may be direct or indirect. Direct participation refers to the face-to-face involvement term, indirect participation occurs when workers are represented by trade unions in workers council or high-level computer address committees and through collective bargaining.Another interesting model has been developed by Cox et.al. (2006). This model identified two dimensions of employee involvement, breadth and depth. Breadth regards a number of various employee involvements practices and programmes implemented in a work place. Using divers ified merely complementary schemes of employee participation leads to steadyer force on the company through mutual reinforcement. It also indicates that the management team aims to maximise the profits of employee participation. In turn, depth concerns the quality of employee involvements practices within the company. This measure indicates how embedded the employee participations practices are within the company. Both breadth and depth are important as they are strongly linked with organizational commitment and job satisfaction (Hayman & stonemason 1995). That is, if employees views are taken into consideration and acted upon by the management, then they are more likely to demonstrate their commitment to the organization and indicate their satisfaction with their work. A major weakness of this measure is that the embeddedness of employee participation within the organization has a lot been assessed through management eyes rather than by analysing employee views on employee part icipation.Employee participation and companys performance theoretical approachThe idea of employee participation as a part of Human Resources Management practices has been researched by a number of scholars who underlined significant benefits of employee involvement schemes on the companys performance.Kanter (1982) postulated that democratic pillow slip of the decision-making processes within the organization brings more domineering outcomes than bureaucratic structure, as it involves companionship sharing between workers and managers. thespians seem to be meliorate certain than their managers with regard to the products and serve, processes and work tasks, as they are directly involved in these activities. Hence, their views and suggestions might be very valuable in developing companys strategy and achieving enhanced performance.In turn, Lawler (1990) listed a number of various benefits of employee involvement within the company. He pointed out that employee participation leads to more economical and innovative methods and procedures in a workplace and improves communication within the organization (between managers and workers as well as crossways work departments). Greater employee involvement results in higher(prenominal) job satisfaction and lower rung turnovers. Further, as employee participation concerns training and team work, it also leads to greater staff tractability and higher job motivation. Additionally, high work motivation and better work methods determine change magnitude rate of outputs and hence, contribute to the better quality of the products and serves offered by the company. Finally, better communication and improved worker-management relations reduce a number of disputes and contradicts within the organization and help to resolve existing conflicts in the most effective way. All these factors contribute to improved performance of the organization. It is also important to add that Lawler identified various veto solution s associated with employee involvement. One of them are expectations created amongst the employees. These expectations usually concern organizational changes, personal self-development and career advancement opportunities. If the organization fails to meet these expectations, it go away lead to dissatisfaction amongst workers. Employee participation causes also additional costs. ontogenesis new skills is associated with additional costly trainings. In turn, accepting new responsibilities by the employee automatically requires an increased in salary of such an employee. Participatory character of decision-making is also slower than traditional style of leadership as it involves a significant number of people that have to accept the decision (Lawler, 1990).Markowitz (1996) underlines higher morale of the employees and their greater commitment to performed job as a consequence of increased participation in the decision-making processes. As employees have a decision-making power, they forgather their duties more accurately. high uper productivity of the employees contributes to higher profits of the organization and greater stability within the industry (Jones, 2006).More recently, the effects of employee involvement were analysed by Appelbaum et.al (2000). Similarly like Lawler, the researchers emphasized the importance of information on the fruit (service) processes possessed by employees. The organization should aim to gain such knowledge from its employees in order to stay profitable. However, three conditions have to be met by the company to gain such knowledge. Employees need to be involved in substantive decisions. They are required to have specific skills and they need to be given appropriate work incentives. This approach indicated that employees cannot provide valuable information to the organizations management if these conditions are not met. Additionally, employees are not willing to provide such information if they are not given appropriate ince ntives. Hence, this approach underlines the important of coherent and accurate HRM practices within the company (Jones, et.al., 2006).Grimsrud and Kvinge (2010) postulate that employee participation is associated with the features such as responsibility, control rights, rights on gross and risk taking. The companies are characterized by the areas of joint interests of employers and employees as well as by the areas where the conflicting interests appear. In particular, the author focuses on two conflict areas. These are principle-agent problem and plain-rider problem. Principle-agent issue concerns divergent approach of the organization (owners and management team) and employees towards the inputs of work and distribution of created outputs. While the organization aims to achieve higher grok productivity and higher value added and keep fixed salaries at the same(p) time, employees intend to share higher profits. Free rider issue refers to the part when the organization cannot mo nitor individual contribution of its employees to the organizations development and hence, individual rewards of employees depend on joint efforts. Hence, the organization tends to implement practices that will improve the productivity of employees, while employees seek to take advantage of such situation and gain additional benefits (i.e. higher return rights) in substitute of improved productivity.Employee participation and companys performance empirical evidencesA number of scholars sought empirical evidences of the positive correlativity between employee participation and organizations performance. Some scholars found their analysis on the examples of a single organization (i.e. Jones, 2006) or selected industry (i.e. Sesil, 1999), while others examined the various businesses crossways the region (i.e. Guerrero and Barraud-Didier). Some researchers decided on a wider cross-country study (i.e. Gonzales, 2009 Grimsrud and Kvinge, 2010). Due to the scope of the following pro ject, besides key findings of selected empirical researches will be presented.At the individual company level, Bartel (2004) conducted research on HRM practices amongst the branches of voluminous bank. He proved that recognition system and performance feedback were of key logical implication for employees of this bank. Implementing these particular HRM practices contributed to the increasd sales of loans (Gonzales, 2009). In turn, Jones et.al. (2006) examined the influence of innovative HRM practices on performance of a Finnish company in the retail services sector. They proved that employees who have been given opportunities to participate in decision-making process within the company, to gather solid information and to gain rewards were willing to increase their productivity. It is crucial to nib that these HRM practices were implemented in settings where employee were characterized by low skills and were assigned relatively saucer-eyed tasks.At the industry level, Sesil (19 99) analysed the tinct of employee participation and group incentives on the companys performance in high technology industry in the UK. The research included 118 companies, primarily in electronics and engineering and concerned various aspects of employee participation such as quality involvement, presence of union, multi-skilling of employees, communication between employees and management, strategic planning and establishment plan. Additionally, the researcher examined the bonuses for employee as a form of group incentives. The research revealed that bonuses, quality involvement and multi-skilling had large positive effects on companys outcomes, while other variables showed no impact on performance. Hence, these results indicated that there is strong correlativity employee participation and the companys performance. This effect is even stronger if the employee involvement is combined with group incentives.At the country level, Guerrero and Barraud-Didier (2004) focused on high -involvement practices and their impact on French firms. The research was based on the questionnaire conducted amongst 180 large companies in France. 57% of these companies originated in the industrial sector, while remaining 43% in the services sector. The study concerned four major HRM practices, namely say-so, compensation, communication as well as training and skills development. The following study revealed that empowerment was a key determining(prenominal) of improved companys performance, while communication and training had a minor effect on organizational results. In turn, compensation showed no influence on companys outputs. The following study underlined that the company should ensure enriched and challenging activities in order to manage employee participation. Further, the study postulated that the companies should foster open communication and power sharing amongst management and employees in order to develop participatory style of leadership as this style contrib utes to better HRM within the company and improved companys performance.In the cross-country context, Grimsrud and Kvinge (2010) conducted research on the economic impact of representative participation in eight countries1. The research took form of perception studies which means that the respondents are asked to indicate whether different participation initiatives are believed to have an impact on different output measure (Grimsrud and Kvinge, 2010, p. 149) and investigated various forms of representative participation such as work councils, trade unions or joint management union committees. The following study showed very mixed results. Most of the analysis demonstrated that there was no correlation between employee participation and companys productivity or such correlation was negative, while scarce several studies account small positive productivity gains of employee participation. For instance, the study conducted on work councils amongst the German companies revealed that these councils had a positive impact on labour productivity while they influenced negatively companys profitability. Similarly, the analysis of the Japanese companies showed a positive correlation between trade unions and labour productivity and negative correlation between trade unions and companys benefits. Finally, the research amongst the British companies demonstrated that trade unions had a negative impact on productivity appendage as well as on climate of relations between managers and employees at the workplace. ConclusionsTo sum up employee participation became a subject of theoretical debate and empirical analysis amongst the scholars. A number of researchers underlined positive correlation between employee involvement and organizations performance. Precisely, employee participation (either direct or indirect) brings a valuable knowledge of products and services delivered by the organization and hence, contribute to the organizations performance. Additionally, employee pa rticipation leads to higher job satisfaction and increased labour productivity as well as to lower staff rotation. These factors also determine organizations success. On the other hand, some scholars stress various conflict areas within an organization (principle-agent issue free rider problem) that might have a negative influence on the organizations outputs.Three empirical cases presented in the following paper revealed that direct employee involvement in decision-making processes within an organization contributed to its better performance. Employee empowerment and information sharing as well as financial rewards seemed to be mainly responsible for this improved performance. Employees must thus be sought for ideas on how organizational performance and quality of product or service can be improved. There is the need for management to ensure initiation of employment participation programmes and initiatives that contribute to employee involvement in decision-making processes. Not o nly should the emphasis be placed on the existence of such initiatives but also on the embeddedness of such initiatives within the organization.The evidence on strong correlation between employee participation and organizations performance has not been found in reference to indirect forms of employee involvement. Although the following paper examined only one case of representative participation, this case included analysis across various countries and industries. This study revealed that employee participation had only minor positive impact on labour productivity while no effects (or negative effects) on overall companys performance have been observed. filename extensionBelanger, J. (2000). The influence of employee involvement on productivity a review of research. take away Human Resources Development Canada.Boxall, P. and J. Purcell (2011). Strategy and Human Resource Management. Basingstoke Macmillan.Cox, A., S. Zagelmeyer and M. Marchington (2006). 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