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,
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
- 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 &
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?
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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