MEANING AND
CONCEPT
It is known as employee involvement or participative decision making.
This is a dynamic group oriented concept. It encourages the involvement of
stake holders at all levels of an organization. Employees are invited to be the
shareholders of the company or stand at board of directors to solve and raise
the problems at work level and argue on collective agreement on rules,
regulations, orders and delegation. It provides autonomy to employee for doing
their job it helps to ensure the increment in productivity, job satisfaction.
It ensures higher level of motivation, improves quality of work done and so on.
It plays the role of non financial reward for motivation and happiness. It
considers human feeling and aspiration. Business organizations are now an
important social institution. Newer policy regarding social goals and value are
also to be implemented. Participative management helps to enrich the social
norms and increase the profit on all aspect of the society and economy. It
gives oneness feeling to the employees too.
PARTICIPATIVE
MANAGEMENT
Participative (or participatory)
management, otherwise known as employee involvement or participative decision
making, encourages the involvement of stakeholders at all levels of an
organization in the analysis of problems, development of strategies, and implementation of solutions.
Employees are invited to share in the decision-making
process of the firm by participating in activities such as setting goals,
determining work schedules, and making suggestions. Other forms of
participative management include increasing the responsibility of employees
(job enrichment); forming self-managed teams, quality circles, or
quality-of-work-life committees; and soliciting survey feedback. Participative
management, however, involves more than allowing employees to take part in
making decisions. It also involves management treating the ideas and
suggestions of employees with consideration and respect. The most extensive
form of participative management is direct employee ownership of a company.
Four processes influence participation. These processes create employee
involvement as they are pushed down to the lowest levels in an organization.
The farther down these processes move, the higher the level of involvement by
employees. The four processes include:
1. Information
sharing, which is concerned with keeping employees informed about the economic
status of the company.
2. Training, which
involves raising the skill levels of employees and offering development
opportunities that allow them to apply new skills to make effective decisions
regarding the organization as a whole.
3. Employee decision
making, which can take many forms, from determining work schedules to deciding
on budgets or processes.
4. Rewards, which
should be tied to suggestions and ideas as well as performance
BENEFITS OF
PARTICIPATIVE MANAGEMENT
A participative management style offers various benefits at all levels of
the organization. By creating a sense of ownership in the company,
participative management instills a sense of pride and motivates employees to
increase productivity in order to achieve their goals. Employees who
participate in the decisions of the company feel like they are a part of a team
with a common goal, and find their sense of self-esteem and creative
fulfillment heightened.
Managers who use a participative style find that employees are more
receptive to change than in situations in which they have no voice. Changes are
implemented more effectively when employees have input and make contributions
to decisions. Participation keeps employees informed of upcoming events so they
will be aware of potential changes. The organization can then place itself in a
proactive mode instead of a reactive one, as managers are able to quickly
identify areas of concern and turn to employees for solutions.
Participation helps employees gain a wider view of the organization.
Through training, development opportunities, and information sharing, employees
can acquire the conceptual skills needed to become effective managers or top
executives. It also increases the commitment of employees to the organization
and the decisions they make.
Creativity and innovation are two important benefits of participative
management. By allowing a diverse group of employees to have input into
decisions, the organization benefits from the synergy that comes from a wider choice of options.
When all employees, instead of just managers or executives, are given the opportunity
to participate, the chances are increased that a valid and unique idea will be
suggested
REQUIREMENTS OF
PARTICIPATIVE MANAGEMENT
A common misconception by managers is that participative management
involves simply asking employees to participate or make suggestions. Effective
programs involve more than just a suggestion box. In order for participative
management to work, several issues must be resolved and several requirements
must be met. First, managers must be willing to relinquish some control to
their workers; managers must feel secure in their position in order for
participation to be successful. Often managers do not realize that employees'
respect for them will increase instead of decrease when they implement a
participative management style.
The success of participative management depends on careful planning and a
slow, phased approach. Changing employees' ideas about management takes time,
as does any successful attempt at a total cultural change from a democratic
or autocratic style of management to a participative style. Long-term employees may resist changes, not believing
they will last. In order for participation to be effective, managers must be
genuine and honest in implementing the program. Many employees will need to
consistently see proof that their ideas will be accepted or at least seriously
considered. The employees must be able to trust their managers and feel they
are respected.
Successful participation requires managers to approach employee
involvement with an open mind. They must be open to new ideas and alternatives
in order for participative management to work. It is important to remember that
although the manager may not agree with every idea or suggestion an employee
makes, how those ideas are received is critical to the success of participative
management.
Employees must also be willing to participate and share their ideas.
Participative management does not work with employees who are passive or simply
do not care. Many times employees do not have the skills or information
necessary to make good suggestions or decisions. In this case it is important
to provide them with information or training so they can make informed choices.
Encouragement should be offered in order to accustom employees to the
participative approach. One way to help employees engage in the decision-making
process is by knowing their individual strengths and capitalizing on them. By
guiding employees toward areas in which they are knowledgeable, a manager can
help to ensure their success.
Before expecting employees to make valuable contributions, managers
should provide them with the criteria that their input must meet. This will aid
in discarding ideas or suggestions that cannot be implemented, are not
feasible, or are too expensive. Managers should also give employees time to
think about ideas or alternative decisions. Employees often do not do their
most creative thinking on the spot.
Another important element for implementing a successful participative
management style is the visible integration of employees' suggestions into the final
decision or implementation. Employees need to know that they have made a
contribution. Offering employees a choice in the final decision is important
because it increases their commitment, motivation, and job satisfaction.
Sometimes even just presenting several alternatives and allowing employees to
choose from them is as effective as if they thought of the alternatives
themselves. If the employees' first choice is not feasible, management might
ask for an alternative rather than rejecting the employee input. When an idea
or decision is not acceptable, managers should provide an explanation. If
management repeatedly strikes down employee ideas without implementing them,
employees will begin to distrust management, thus halting participation. The
key is to build employee confidence so their ideas and decisions become more
creative and sound.
CONCERNS
Participative management is not a magic cure for all that ails an
organization. Managers should carefully weigh the pros and the cons before
implementing this style of management. Managers must realize that changes will
not take effect overnight and will require consistency and patience before
employees will begin to see that management is serious about employee
involvement. Participative management is probably the most difficult style of
management to practice. It is challenging not only for managers but for
employees as well.
While it is important that management allows employees to participate in
decision making and encourages involvement in the organization's direction,
managers must be cognizant of the potential for employees to spend more time
formulating suggestions and less time completing their work. Upper-level
management will not support a participative management program if they believe
employees are not meeting their daily or weekly goals. Some suggestions for
overcoming this potential problem are to set aside a particular time each week
for workers to meet with management in order to share their ideas, or to allow
them to work on their ideas during less busy times of the day or week. Another
idea that works for some managers is to allow employees to set up individual
appointments to discuss ideas or suggestions.
Managers should remember that participative management is not always the
appropriate way to handle a given situation. Employees often respect a manager
that uses his or her authority and makes decisions when it is necessary. There
are times when, as a manager, it is important to be in charge, make a decision,
and then accept the responsibility for the choices made. For example,
participative management is probably not appropriate when disciplinary action
is needed.
When managers look upon their own jobs as a privilege instead of as a
responsibility, they will fail at making participative management work. They
will be less willing to turn over some of the decision-making responsibility to
subordinates. Another reason that participative management fails is that
managers do not realize it is not the same as delegating or simply shifting responsibility.
Participation alone has no value; it is only an effective tool if it is used to
solve problems and meet goals. Some managers believe that inviting employees to
join in meetings and form committees will create a successful participative
management program. However, these measures are only successful when employees'
ideas are accepted by management and implemented.
The larger the organization, the more difficult it becomes to institute a
participative management style. Large organizations have more layers and
levels, which complicate effective communication and make it difficult to
register the opinions and suggestions of a diverse group of employees and
managers. Critics argue that unions are often more effective than participative
management in responding to employee needs because union efforts can cut
through bureaucratic organizations more quickly.
Participative management programs can be threatened by office politics.
Due to hidden agendas and peer pressure, employees may keep their opinions to
themselves and refuse to tell a manager if they feel an idea will not work.
Managers also play a part in politics when they implement participative
management programs to impress their own bosses but have no intention of seeing
them through.
Many companies have experienced the positive effects of participative
management. Employees are more committed and experience more job satisfaction
when they are allowed to participate in decision making. Organizations have
reported that productivity improved significantly when managers used a
participative style. Participative management is not an easy management style to
implement. It presents various challenges and does not succeed overnight.
Managers will be more successful if they remember that it will take time and
careful planning before they will see results. Starting with small projects
that encourage and reward participation is one way to get employees to believe
that management is sincere and trustworthy.
METHODS/WAYS OF
PARTICIPATION OF EMPLOYEES IN DECISION-MAKING
Participation of
workers in decision-making process has resulted in successful value creation in
many organizations. Though the extent to which employees should participate in
organizational decision making is still a matter of debate. Some say that
workers’ union should participate with management as equal partners while some
believe in restricted or bounded participation, that is, participation of
employees or workers to a limited extent. However, there are a number of ways
through which employees can participate in decision-making process of any
organization.
i. Participation at the Board Level: Representation of employees at the board
level is known as industrial democracy. This can play an important role in
protecting the interests of employees. The representative can put all the
problems and issues of the employees in front of management and guide the board
members to invest in employee benefit schemes.
ii.
Participation
through Ownership: The other
way of ensuring workers’ participation in organizational decision making is
making them shareholders of the company. Inducing them to buy equity shares, advancing
loans, giving financial assistance to enable them to buy equity shares are some
of the ways to keep them involved in decision-making.
iii. Participation through Collective Bargaining: This refers to the participation of workers
through collective agreements and by deciding and following certain rules and
regulations. This is considered as an ideal way to ensure employee
participation in managerial processes. It should be well controlled otherwise
each party tries to take an advantage of the other.
iv. Participation through Suggestion Schemes: Encouraging your employees to come up with
unique ideas can work wonders especially on matters such as cost cutting, waste
management, safety measures, reward system, etc. Developing a full-fledged
procedure can add value to the organizational functions and create a healthy
environment and work culture. For instance, Satyam is known to have introduced
an amazing country-wide suggestion scheme, the Idea Junction. It receives over
5,000 ideas per year from its employees and company accepts almost one-fifth of
them.
v.
Participation
through Complete Control:
This is called the system of self management where workers union acts as
management. Through elected boards, they acquire full control of the
management. In this style, workers directly deal with all aspects of management
or industrial issues through their representatives.
vi. Participation through Job Enrichment: Expanding the job content and adding
additional motivators and rewards to the existing job profile is a fine way to
keep workers involved in managerial decision-making. Job enrichment offers
freedom to employees to exploit their wisdom and use their judgment while
handling day-to-day business problems.
vii. Participation through Quality Circles: A quality circle is a group of five to ten
people who are experts in a particular work area. They meet regularly to
identify, analyze and solve the problems arising in their area of operation.
Anyone, from the organization, who is an expert of that particular field, can
become its member. It is an ideal way to identify the problem areas and work
upon them to improve working conditions of the organization.
Employees can
participate in organizational decision making through various processes
mentioned above. However, there are other ways such as financial participation,
Total Quality Management, participation through empowered teams and joint
committees and councils through which they can contribute their share in making
the organizations a better place to work.
FEATURES OF
PARTICIPATIVE MANAGEMENT
Employees have always been bossed around their
managers and told what they are supposed to do. They never had the authority to
decide things in the company. Gradually, times are changing and employees are
encouraged to participate in organization’s decision making process. Management
motivates them to come up with ideas and suggestions that can make
organizational processes far more efficient. The main idea behind adopting
participatory form of management is to work together, achieve targeted goals in
minimum possible time and stay ahead of competition.
For some companies,
participative management is still a foreign subject. The concept is not
widespread and is still restricted to a few organizations. They have such a
weird perception towards it that they can’t even picture it working. The
management in such companies doesn’t like employees questioning its authority.
But the organizations that have successfully adopted this particular style of
management they look upon it as a means to achieve their targets and create a
sound working environment. The concept is gaining world-wide recognition and
popularity day by day.
Some companies still
stick to conventional ways of management while others are encouraging employees
to contribute to the suggestion box. Let us know about its features and see
how participative management can work wonders:
i. Ethical Dimensions: Participatory management has ethical
dimensions and based on morals, principles and values. In this form of
management, every one is treated equally when it comes to organizational
decision making. It is based on employee empowerment, responsibility sharing
and delegation of authority.
ii.
Proper
Channel of Communication:
Participative form of management encourages two-way communication. It is not only
management that decides what employees need to do but it also encourages
employees to participate in decision making and give ideas and suggestions to
make organizational processes better and more efficient. They are allowed to
share their problems, views, ideas and feedback with their managers.
iii. Empowers Employees: Participative style of management gives
employees a chance to participate in management processes. They are encouraged
to come up with their views. Gone are the days when employees were bossed
around by their managers. Now they are to be treated like co-workers. This
provides a higher status to employees as they also have a say in decision
making.
iv. Recognition of Human Dignity: In this form of management, all employees
are treated equally irrespective of their designations when it comes to giving
ideas and suggestions for organizational decision-making process. Employees are
no more the servants of managers but are the most important assets of an
organization.
v.
Psychological
Satisfaction to Employees:
Most of our lives are spent at workplace. It is important for everyone to have
psychological satisfaction as far as our employment is concerned. Commitment
from the organization, respecting the dignity of individuals and co-determining
the company policies are some of the features of participative management that
provide psychological satisfaction to employees.
Participative
Management is a universally recognized concept but still most organizations
hesitate to adopt it. Through this style of management, both the parties,
employer and employees, are satisfied. It brings management and employees
closer and thus, should be adopted open heartedly.
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