Employee Participation

Employee Participation

Defining Participation

• Some authors refer to involvement as participation while others use empowerment or communications .

• Empowerment can be used as an umbrella term to cover all initiatives .

• There are two differing ideologies behind the nature of participation.

• One sees participation as a fundamental democratic right for workers to extend a degree of control over managerial decision making in an organization.

• The second is the notion of economic efficiency which implies it may make sense for employers to encourage greater participation in the organization as it could help to create more understanding and hence commitment and allows employees to contribute more to business.

• Branen (1983) defines participation as a process by which individuals or groups may influence, control, be involved in, exercise power within or be able to intervene in decision making within organizations.

• Boxall and Purcell (2003) define employee participation as a range of mechanisms which enable and at all times empower employees directly and indirectly to contribute to decision making in the firm.

Context of employee Participation

• In the 1960’s employee participation was preoccupied with a search for job enrichment and enhanced worker motivation. Managerial objectives tended to focus on employee skill acquisition and work enrichment.

• Organizations included semi autonomous work groups to promote skill variety and job autonomy.

• These schemes were more concerned with employee motivation as an outcome rather than a mechanism that allowed workers to have a say on organizational decisions(Dundon and Wilkinson , 2006).

Context of employee Participation cont.

• In 1970’s there was a shift to focus toward industrial democracy which emphasized worker rights to participate. This reached its height when the question of how workers might be represented at Board Level came up.

• In the 1980’s there was a different agenda for participation. The term involvement became more fashionable and associated with managerial initiatives designed to elicit employee commitment. In the 1980’s the political climate in some countries like Britain was of reducing Union Power and promoting more individualistic, anti collectivist philosophies .

Context of Employee Participation cont.

• In the 1990’s there was a consolidation in the use of employee participation techniques.

• Tapping into employees ideas and drawing on their tacit knowledge was seen as one solution to the problems of managing in an increasingly competitive market place, in part due to globalisation and market liberalization by governments and also due to increasing customer demand for more choice ,quality and design.

• The move to customised products with flexible specialization , flatter and leaner structures was seen as the new route to competitive advantage which meant increasing attention to labour as a resource

Framework for Analysing employee Participation

• There is greater employee participation when employees can directly influence those decisions that are the preserve of management.

• The level at which participation takes place ,that is at a work group level,plant or corporate level also determine the level of participation .

Framework for Analysing employee Participation

• The form in which participation takes place either direct or indirect. Direct schemes include individual techniques such as written and electronic communications, face-to face meetings between managers and employees or between team leaders and small groups of employees ( such as quality circlesand team briefing)

• Indirect participation is via employee representatives, either union stewards or employee work council representatives in consultation with management.

Framework for analysing employee Participation

• Another form of participation is task based (or problem solving) participation where employees contribute directly to their job, either through focus groups or attitude surveys.

• There is also financial participation through variable pay and/or bonus schemes ,such as profit sharing.

Depth of Employee Participation

• 1. Information• 2. Communication• 3. Consultation• 4.CoDetermination• 5.Control• This framework allows for more accurate

description.

Schemes of Participation

• 1.Communications- this is a weak form of participation but is a means by which management share information with employees, ranging from written memos, email, or informal face to face communications

• The main problem with communication as a form of participation is its lack of objectivity.

Schemes of Participation cont.

• Information is political and power centred, the messages managers seek to communicate to workers may be used to reinforce management agendas.

• The way information is communicated can also be ineffective as many line managers are responsible for disseminating corporate messages ,lack effective communication skills, or information is conveyed in an untimely manner (often when bad news has passed to the media before employees are told).


• 2. Upward Problem Solving- techniques seek to go one step further than communications by tapping into employee ideas for improvements.

• Upward problem solving techniques are designed to increase the stock of ideas available to management as well as encourage a more cooperative industrial relations climate.

• Specific techniques can be individual or collective.


• The fundamental difference between these practices and communication methods is that they are upward (from employees to managers)rather than downward (managers disseminating information to workers).

• Upward communication techniques offer a certain degree of depth than managerial communications.


• 3. Task Based Participation- the objective is to focus attention on the actual job rather than the managerial processes for participation.

• Task based participation has been celebrated as a root to sustained organizational performance via employee commitment and motivation.

• The types of practices include a great degree of job enlargement and job enrichment where employees perform a greater range of tasks with a greater degree of job autonomy.


• Criticisms of task based participation are that outcomes often result in work intensification rather than job enrichment.

• 4) Team-working-includes elf managed teams as an integral component to achieving better organizational performance.

• 5) Representative Participation-most typically via trade union representation, collective bargaining and/or joint consultation.

New management practices in employee Involvement

• 1. Team Briefs• 2. Staff Attitude surveys• 3. Problem solving Groups• 4.SingleStatus between managers and non-managerial

employees• 5. Regular meetings of the entire workforce• 6.Profit sharing schemes operated for non managerial

employees.• 7.Workplace level joint consultative committee.• 8.Employee share ownership scheme for non- managerial

employees.

Management Objectives in Introducing Employee Involvement Practices

• Attitudes-Improved Morale-Increased loyalty and commitment-Enhanced sense of involvement-Increased support for management

Management Objectives in Introducing E I Practices

• Business Awareness- Better , more accurately informed- Greater Interest- Better understanding of reason for

management action- Support for/reduced resistance to

management action


• Incentives/Motivation-Accept changes in working practices-Accept mobility across jobs-Accept new technology-Accept Management authority-Improve Quality/Reliability-Increase productivity/effort-Reduce costs-Enhance co-operation and team spirit-Greater job interest-Greater job satisfaction-employee development


• Employee Influence/Ownership-Increased job control -employee suggestions-Increased employee ownership in the company-Increased employee ties to company

performance and profitability


• Trade Unions-Gain union cooperation-Draw on union advice-Restrain union demands

Communications and Briefing Systems

• Good communication and consultation are central to the management process. All managers have to exchange information with other managers which necessitates lateral or interdepartmental communications.

• Failure to recognize this need is likely to result in inconsistency of approach or application.

Advantages of Good Employee Communications

• Improved Organizational Performance-time spent communicating at the outset of new project or development can minimize subsequent rumour and misunderstanding.

• Improved Management Performance and Decision Making-Allowing employees to express their views can help managers arrive at sound decisions that are more likely to be accepted by the employees as a whole.


• Improved Employee Performance and Commitment-employees will perform better if they are given regular, accurate information about their jobs such as updated technical instructions, targets, deadlines and feedback.

• Their commitment is likely to be enhanced if they know what the organization is trying to achieve and how they as individuals can influence decisions.


• Greater Trust-Discussing issues of common interest and allowing employees an opportunity of expressing their views can engender improved management-employee relations.

• Increased Job Satisfaction-Employees are more likely to be motivated if they have a good understanding of their job and how it fits into the organization as a whole and are actively encouraged to express their views.

Employee Attitude Surveys

• These surveys are an important upward channel of communication from the employees to management.

• Management normally uses information from employee attitude survey to obtain specific data on employee perceptions of fairness, pay systems, training opportunities and employee awareness of an organizations business strategy and long term goals.

•

Advantages of Employee attitude Surveys

• Provide managers with an early warning of issues of concern before they lead to major employee relations difficulties.

• Help managers make internal comparisons of employee morale and behaviour across a number of departments and sites.

• Provide employee views on specific personnel/HRM policies, such as the operation of multidisciplinary and grievance procedures.

• Provide data that can be used in problem –solving , planning and decision making.

• Many organizations use information gained to benchmark employees morale and satisfaction against other organizations

Financial Participation

• Offering employees a direct stake in the ownership and prosperity of the business for which they work is one of the most direct and tangible forms of E.I.

• By giving employees the chance to participate in financial success , employees can acquire and develop a greater sense of identity with the business and an appreciation of business needs.


• Employers also benefit as it is argued that a financial stake gives employees increased enthusiasm for the success of the organization and often for a voice in its operation.

• In it ‘s most developed form employee share ownership means that employees become more significant shareholders in the business , or even their own employer.


• Financial employee involvement and participation schemes link specific elements of pay and rewards to the performance of the unit or the enterprise as a whole.

• They provide an opportunity to share in the financial successes of their employing organization.

Main Forms of Financial Participation

• Deferred Profit Sharing Schemes- Profits are put into a trust fund to acquire shares in the company of the employees.

• Profit Related Pay• Employee Share Ownership Plans

Profit sharing

• Aims to increase employee motivation and commitment by giving employees an interest in the overall performance of the enterprise.

• In this way management aims to raise employee awareness of the importance of profit to their organization and to encourage team working by demonstrating that rewards accrue from cooperative effort rather than individual effort.

• Profit sharing schemes ensure that employees benefit from the organization making profits.

Profit Related Pay

• It is a mechanism by which employers can reward employees for their contribution to the business.

• It works by linking a proportion of employees’ pay to the profits of the business for which they work.

• Employees are encouraged in this way to strive for commercial success. Employers who have introduced these schemes argue that they help to create a more committed workforce.

• PRP also provides greater flexibility in the negotiation of pay settlements.

Share Ownership

• Share Ownership takes financial involvement a step further by granting shareholding ownership to employees .

• It grants them shareholder rights to participate in decision making

• Employee shareholder schemes give individual employees a long term commitment to the organization and not just to a short term financial gain from the sharing of a profit.

Share Ownership

• Such schemes are linked to profit but the employees portion is distributed in the form of shares.

Documents

Employee Participation