THE EFFECT OF EMPLOYEE PARTICIPATION ON ORGANIZATIONAL PERFORMANCE

Project TopicsTHE EFFECT OF EMPLOYEE PARTICIPATION ON ORGANIZATIONAL PERFORMANCE

THE
EFFECT OF EMPLOYEE PARTICIPATION 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:

1.  It
increases employee’s morale and enhances the productivity [Chang& Lorenzi,
1983]

2.  It
provide employees the opportunity to use their intellectual which will lead to
better decisions for the organization [Williamson, 2008]

3.  Employee
participation contributes to trust and sense of control[Chang& Lorenzi,
1983]

4.  As
a result of employee participation, resources required to monitor employee can
be minimized thus reduced cost [Arthur, 1994; Spreitzes &Mishra, 1999]

5.  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:

1.  To
examine the effect of employee participation on organizational performance

2.  To
find out ways/methods of introducing effective employee participation programme
in an organization

3.  To
determine the challenges that are associated with employee participation.

1.4   RESEARCH QUESTIONS

1.  What
are the effects of employee participation on organizational performance?

2.  What
are the ways/methods of introducing effective employee participation programme
in an organization?

3.  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   SCOPE/LIMITATIONS OF THE STUDY

        The scope of this study on the effect of
employee participation on organizational performance will cover the process of
employee involvement in decision making process in an organization carefully describing
the benefits that is accrue to it.

1.8   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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