Employee Involvement

the Concept of Employee Involvement and Participation

Employee involvement and participation covers a wide range of practices. As defined by Marchington et al (1992) these practices are initiated principally by management and are designed to increase employee information about, and commitment to, the organization.

Employee involvement concentrates on individual employees and is designed to produce a committed workforce more likely to contribute to the efficient operation of an organization.

Employee participation, on the other hand, concerns the extent to which employees—often via their representatives—are involved with management in the decision-making machinery of the organization. This includes joint consultation, collective bargaining and worker representation on the board. These systems focus on collective representative structures.

Exhibit I: Employee Involvement Practices
The different practices as noted by Marchington et al (1992) are direct and indirect employee participation practices. Direct participation consists of:
    downward communication practices
  • team briefing
  • workplace-wide meetings
  • staff newsletters
  • cascading of information via the management chain
  • upward problem-solving communications practices
  • suggestion schemes
  • employee/staff attitude surveys
  • employee groups established to solve specific problems or discuss aspects of performance or quality
  • financial participation
  • profit-related bonus schemes
  • deferred profit-sharing schemes
  • employee share ownership schemes
The main form of indirect employee participation is through some form of employee representative structure, such as a joint consultative committee (JCC) or in some multinational companies a European Works Council. Ramsay (1996), however, divides employee involvement and participation initiatives into four broad types:
  • communications and briefing systems – which include downward and upward communications systems
  • task and work group involvement – which included teamworking, quality circles and total quality management (TQM) programmes
  • financial participation – which embraces profit sharing, profit-related pay and share ownership schemes
  • representative participation

By introducing employee involvement mechanisms, management seeks to gain the consent of the employees to its proposed actions on the basis of commitment rather than control (Walton, 1985). These mechanisms are thus aimed at enabling individual employees to influence management decision-making processes.

It is management, however, who makes the final decision on whether employees are to be involved, and to participate, in management decision-making. Employee involvement, unlike collective bargaining and worker representation on the board, is not about employees’ sharing power (jointly regulating) with management alone.

Exhibit II: The Benefits of Employee Involvement and Participation
The involvement of and participation by employees in any organization should have these benefits:
  • generate commitment of all employees to the success of the organization
  • enable the organization better to meet the need of its customers and adapt to changing market requirements
  • help the organization to improve performance and productivity, adapt new methods of working to match new technology
  • improve the satisfaction employees get from their work
  • provide all employees with the opportunity to influence and be involved in decisions which are likely to affect their interests.

Ramsay (1996) argues that the improved economic performance stemming from employee involvement participation is the result of employers’ being able, on behalf of their employees, to change the employees’ attitude, to increase their business awareness, to improve their motivation, to enhance their influence/ownership and to involve their trade unions.

For Ramsay, if the businesses awareness of employees can be improved, they are more likely to be better and more accurately informed, the ‘rumour grapevine’ will be reduced and there is a higher probability that they will have greater job interest, improved knowledge and understanding of the reasons for management decisions and greater support for (or resistance to) to management action.

Exhibit III below suggest that by using employee involvement schemes to increase employee influence/ownership, management is more likely to provide its employees with greater job control and at the same time, via financial participation schemes, create increased employee ownership in the company and enhanced employee ties to company performance and profitability.

Exhibit III: Management Objectives in Introducing Employee Involvement Practices
    Attitudes
  • Improved morale
  • Increased loyalty and commitment
  • Enhanced sense of involvement
  • Increased support for management
    Business awareness
  • Better, more accurately informed
  • Greater interest
  • Better understanding of reason for management action
  • Support for/reduced resistance to management action
    Incentive/motivation (Passive)
  • Accept changes in working practices
  • Accept mobility across jobs
  • Accept new technology
  • Accept management authority
  • Incentive/motivation (Active)
  • Improve quality/reliability
  • Increase productivity/effort
  • Reduce costs enhance co-operation and team spirit
  • Incentive/motivation (Personal)
  • Greater job interest
  • Greater job satisfaction
  • Employee development
    Employee influence/ownership
  • Increase job control
  • Employee suggestions
  • Increase employee ownership in the company
  • Increase employee ties to company performance and profitability
    Trade unions (Anti-union)
  • Keeps union out of company
  • Representative needs outside union channels
  • Win hearts and minds of employee from union
  • Trade unions (With union)
  • Gain union co-operation
  • Draw on union advice
  • Restrain union demands
Adapted from: H. Ramsay in B. J. Towers (ed.) The Handbook of Human Resource Management, 2nd edn

Ramsay (1996) also argues that if management can change employee incentive and motivation in a positive direction, it may have passive, active and personal impacts. The employees may benefit from greater job interest, enhanced job satisfaction and increased opportunities to develop themselves. Active advantages may arise for the organization stemming from improved quality/reliability of the product or service, increased labor productivity and effort, reduced costs and enhanced co-operation and team spirit.

Among the probable passive advantages accruing to the organization that Ramsay notes are a greater willingness on the part of employees to accept changes in working practices, flexibility across jobs, the implementation of new technology and enhanced front/first line management authority. If management can achieve a positive change in employee attitudes, it is likely to improve not only the morale of employees but also their loyalty and commitment to the organization. Their sense of belonging and involvement is also likely to be enhanced.

In addition, there will be greater probability that employees will give greater support to management’s position. Employee involvement practices are thus an important means by which management can bring about organizational cultural change. However, such cultural change can only be achieved in any organization on an incremental basis—the full benefits to the organization from cultural change arising from the successful implementation of involvement methods will not accrue immediately.

The attitudes of every employee, or manager, will not change in a positive direction at the same moment in time. Some will take longer than other to develop a positive change in attitude towards the actions of management. Management must be aware of this phenomenon of incremental cultural change when reviewing and monitoring the impact of the introduction of employee involvement practices.

WHY INVOLVE EMPLOYEES?

The case for employee involvement and participation stems from economic efficiency gains. There are a number of reasons for such an outcome. First, employees generally are better informed about their work tasks and processes than their managers and are therefore better placed to achieve enhanced performance.

Second, advocates of employee involvement and participation argue that its associated practices provide employees with greater intrinsic rewards from work than from other forms of workplace management such as collective bargaining. It is said that these rewards will increase job satisfaction and in turn enhance employee motivation to achieve new goals.

Then it is also hypothesized that by granting workers greater access to management information, mutual trust and commitment will be increased, thereby employee turnover. In addition, empowering workers reduces the need for complex systems of control, and hence leads to improved efficiency.

There is thus an important assumption behind employee involvement theory—namely, that employees are an untapped resource with knowledge and experience which can be used by employers if they provide opportunities and structures for worker involvement.

Wilkinson (2001) has also pointed out that the theory assumes that participative decision-making is likely to lead to better-quality management decisions, so that empowerment represents a win/win situation with gains available to both employers (increased efficiency) and employees (job satisfaction).

Financial forms of employee involvement are said to improve productivity performance for a number of reasons. First, it is argued that employees will work more co-operatively because they can all gain by operating with each other rather than competing amongst themselves.

Second, some argue that performance-related pay schemes indirectly enhance employee effort and commitment by improving communication about company performance and by educating employees about the significance/importance of profitability. There are also those who suggest that such payment schemes increase employees’ identification with the organization.

The research of Marchington et al(2001) demonstrated that employers in the 18 organizations they studied valued the voice of the employee in contributing to management decision-making because they believed it contributed to business performance.

Employee voice (by communication systems, project team membership and joint consultation) was perceived to contribute to business performance via better employee contributions, improved management systems and productivity gains. This was seen to be the result of the number of ideas that emerged through employee feedback and joint problem-solving teams.