Why should Employee’s participate in management decisions? The advantages of participative management<br />Habet Madoyan<b...
Why should Employee’s participate in management decisions? The advantages of participative management
Why should Employee’s participate in management decisions? The advantages of participative management
Why should Employee’s participate in management decisions? The advantages of participative management
Why should Employee’s participate in management decisions? The advantages of participative management
Why should Employee’s participate in management decisions? The advantages of participative management
Why should Employee’s participate in management decisions? The advantages of participative management
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Why should Employee’s participate in management decisions? The advantages of participative management

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Why should Employee’s participate in management decisions? The advantages of participative management

  1. 1. Why should Employee’s participate in management decisions? The advantages of participative management<br />Habet Madoyan<br />Trulaske Business School<br />Participative management is a part of the broader concept of Employee Involvement. Employee involvement is defined “as a participative process that uses the entire capacity of employees and is designed to encourage increased commitment to the organizational success” (cited in Robbins 2003). However, participative management is a technique of joint decision making; “That is, subordinates actually share a significant degree of decision-making power with their immediate superiors” (Robbins 2003). Participative management increases performance, productivity, job satisfaction and motivation. However there are papers that doubt the efficiency of participative management. “But there also are situations in which participative management, saying can be time-wasting and counterproductive. It can reduce people’s effectiveness and job satisfaction” (Herman 1989). Robbins (2003) says that there are dozens of research showing that participation has only a modest influence on productivity, motivation and job satisfaction. But the problem is not in participation itself. Participation is effective if it is done in the right conditions (Robbins 2003) and with the right implications (Juechter 1982).<br />Participation is an effective motivational tool because when subordinates take part in the decision making process, they are more motivated to implement the decision, as it becomes their own. As Enrick et al (1983) says “When people are permitted to participate in solving problems relating to their work, they will become personally and often keenly interested in making their ideas succeed. By contrast, people who are simply told what they must do will have little motivation to commit extra effort towards accomplishing goals”. Thus involving employees in the decision making process is not only a good source for recommendations from lower levels of hierarchy but also a good impulse of motivation; although, “once they realized that recommendations are put into action, they became ardent supporters of the program” (Witzcak et al 1987). In 2007, BMW effectively used a participative management program in order to solve a problem of mixing old and new workers on the same production line (Loch et al 2010). In this case the company arranged a new production line based on the recommendations from employees. According to the research (Searfoss and Monczka 1973) which was done among five manufacturing divisions of five different industrial organizations, the perceived participation in the budget process and the motivation to achieve the budget were positively related. <br />Spector (1986) conducted a meta-analysis of 88 studies about the impact of employee’s perceived control on the number of outcomes. He found that employment participation was associated with an improvement in general satisfaction, as well as satisfaction with the work, supervision, pay, opportunities for promotion and growth, and organizational involvement. Employee participation was associated with higher motivation and performance, fewer intentions to quit, and lower turnover (Cotton 1993). Another meta-analysis (Miller and Monge 1986) found that the average correlation between job satisfaction and participation is .34, while between participation and productivity is .15. However, here we can see that correlation but not necessarily the cause and effect. <br />Research done among 308 Taiwanese companies (Huang 1997) also supports the positive impact of participative management on employees’ behavior and financial outcomes of the company. The study reveals another interesting aspect of participative management – even informal participation can have positive effects. Huang (1997) asked whether employee participation should be institutionalized and formal. His answer is not necessarily, as the results “of this study shows that if management gives employees more responsibility in decision making and more autonomy in daily work, both the turnover rate and the absenteeism rate will decline, even though no formal participation scheme is institutionalized”. <br />We can see that different studies indicate the fact of positive effect of participation in decision making on employee job satisfaction and motivation. However, participative management has another important role which is to assist in making comprehensive and effective managerial decisions. Tjosvold (1987) defines participation as a joint decision making in which employees are invited to help solve organizational problems. Tjosvold says “Participation gives employees the legitimacy to discuss organizational issues and problems and provides a setting for decision making.” Lawler (1986) insists that if employees are involved in decisions that affect their work situation then better working methods will be devised. However, Lawler brings three conditions for effective employee participation: knowledge, motivation and mechanisms for decision implementations. A good example of this kind of participation is the quality circle. Using Dachler and Whilpert’s (1978) topology, Cotton (1993) defines quality circles as “a formal program of direct, face-to-face involvement with a medium level of influence.” Quality circles often involve employees from the company’s different departments with different skills and knowledge, as a result the Circle can make broader and more comprehensive decisions about problem (in this case-quality). In addition circle, members are gaing deeper information about the company’s overall operations, organizational structure etc. (Lawler E.L. 1986). <br />Probably the most extreme type of participative management is the self-directed work team. Cotton (1993) describes them as a “formal system of employee involvement, direct employee participation, and a high degree of control. The content of the involvement is on day-to-day work decisions, and it involves groups of lower level employees”. Lawler (1986) states the fact that such work teams create very satisfying and rewarding work environment that increase productivity and decrease costs.<br />Overall, we can say that participative management is an effective tool to increase an organization’s performance. However, it cannot be seen as a universal panacea. Moreover, a lot of research (Cotton 1993) has reported results that do not support participative management. It has become clear that the success of participative management depends on organizational environment and a lot of other factors that must be considered in implementation. <br />References<br />Cotton, J.L. (1993). Employee Involvement: Methods for improving performance and work Attitudes. Sage Publications. <br />Dachler, H., & Wilpert, B. (1978). Conceptual Dimensions and Boundaries of Participation in Organizations: A Critical Evaluation. Administrative Science Quarterly, 23(1), 1-39. Retrieved from EBSCOhost.<br />Enrick, N. L., Lester Jr., R. H., & Mottley Jr, H. E. (1983). Quality Circles: Motivation Through Participation. Industrial Management, 25(2), 1. Retrieved from EBSCOhost.<br />Herman, S. M. “Participative Management Is A Double-Edged Sword”. Training; Jan 1989; 26, 1; ABI/INFORM Global pg. 52<br />Huang, T. (1997). The effect of participative management on organizational performance: the case of Taiwan. International Journal of Human Resource Management, 8(5), 677-689. doi:10.1080/095851997341450<br />Juechter, W.M. (1982). The pros and cons of participative management. Management Review, 71(9), 44. Retrieved from EBSCOhost.<br />Lawler, E.I. (1986). High-Involvement management: Participative Strategies For Improving Organizational Performance. San Francisco CA: Jossey-Bass Inc.<br />Loch, C. H., Sting, F. J., Bauer, N., & Mauermann, H. (2010). How BMW Is Defusing the Demographic Time Bomb.Harvard Business Review, 88(3), 99-102. <br />Miller, K. I., & Monge, P. R. (1986). Participation, Satisfaction, And Productivity: A Meta-analytic Review. Academy of Management Journal, 29(4), 727-753. Retrieved from EBSCOhost.<br />Witczak, Bernie, McGrane, Eugene, Sr., Marvil, Joel, & Krassner, George. (1987, April). Participative Management Programs. Small Business Report, 12(4), 26.  Retrieved February 6, 2011, from ABI/INFORM Global. (Document ID: 792154). <br />Searfoss D.G., Monczka R. M. (1973). Perceived Participation in the Budget Process and Motivation to Achieve the Budget. The Academy of Management Vol. 16, No. 4 (Dec., 1973), 541-554.<br />Tjosvold, D. Participation: A Close Look At Its Dynamics. (1987). Journal of Management, 13(4), 739.  Retrieved February 5, 2011, from ABI/INFORM Global. (Document ID: 586699)<br />

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