Employee Participation and its impact on their performance

Dr. Nuzhath Khatoon

(Associate Professor-Padala Rama Reddi College of Commerce and Management- Affiliated to O.U)

Introduction:

Participation of employee in decision making is concerned with shared decision making in the
work situation [Mitchell, 1973]. [Locke & Schweiger, 1979] defines it as 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 firm’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
[Witte, 1980; Sagie & Aycon, 2003].
The advantages of employee participation in decision making are:
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 decision making maximizes the view points and give diversity
of perspectives [Kemelgor, 2002]
There are too many evidences that shows firm’s performance increase with the increase in
employee participation [Arthur, 1994; Daft & Lewin, 1993; Denninson & Mishra, 1995;

Figure 1: Advantages of Employee Participation in Decision Making

 Spreitzer & Mishra, 1999]

Objectives of the Study:

 To find out the significant relationship between employee participation in decision making
and organizational performance
 To find out the depth of employee participation in decision making process

Methodology of the study:

The present study is carried out in 30 BPO’s of the city of Hyderabad, which includes the service
and IT sectors like ( Wipro, Tata consultancy, G-Tech, Genpact, ICICI, HDFC, HSBC Infosys,
Oracle, and Sunera technologies others. Data was collected from these BPO based on random
sampling. We distributed the close ended questionnaire, which was designed using a Likert
(five-point rating) scale (1. Strongly disagree, 2. Disagree 3. Neutral 4. Agree and 5 strongly
agree) to the concerned Team leaders (Operation, Business Development, Technology, Analysis
and HR) and collected questionnaire were assessed through the suitable statistical tools. The
above choice of BPO is made because they contribute much towards economic development of
the country. Currently in India BPOs are focused on the domestic segment and off shoring. BPO
role in India’s economic growth is set towards making a significant impact in future. The driving
force is the increases in Foreign Investment through the BPOs in India are:
 Emphasis on Quality service
 Skilled sets and Workers
 Cost effectiveness
 Quality Products
 Qualified manpower
Interpretation:
1. Employee performance based on participation in decision making:
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.
Table 1: Level of Employee Participation in Decision making and their performance

Level of Employee participation in Decision making Performance of the employees

( Independent Variable) ( Dependant Variable)
Involvement of the Employees Average Criteria Average
Executive level 2.2 Sharing ideas with company 3.5
Managerial level 2.5 Being aware of the company 3.2
status
Operational level 3.5 Commitment to the training 4.0
Group Level 3.7 Improving knowledge 4.3
Individual Level 3.0 Reward for better performance 4.5
Total 2.98 Total 3.8
 Table 2: Correlation between participation in Decision making and performance

Paired Differences
95% Confidence Interval of
the Difference
Std. Std. Error Sig. (2-
Mean Deviation Mean Lower Upper t df tailed)

Sharing of idea- Executive Level 1.267 1.015 .185 .888 1.646 6.836 29 .000

Aware of company status – Managerial Level .733 1.413 .258 .206 1.261 2.843 29 .008

Commitment to training – Operational Level .500 .777 .142 .210 .790 3.525 29 .001

Improving knowledge – Group Level .667 1.061 .194 .270 1.063 3.440 29 .002

Reward for Performance – Individual Level 1.003 .183 1.025 1.775 7.642 29 .000

Table 1 states the average level of employee participation in decision making ( at different
situation and circumstances and it is also based on the intellectual ability of the employee) and
averages the criteria of performance of the employee, (which includes sharing ideas at common
platform like seminars conferences and meeting, being aware of the company status relates to the
financial condition, products and customer relation, commitment to training is the after effects of
the training and updating the latest information in their field). Table 2 indicates that there is a
significant relationship between employee participation in decision making and their
performance.
2. Depth of employee participation in decision making:
Table 3 mentions the depth of the employee participation in decision making which show many
employees are involved in collective bargaining (salary, Working conditions and facilities
provided by the organization) and there is only few participation in analysis of skill gaps and job
evaluation, if that is done by the organization then they can further increase the productivity,
because through participation of employees in job evaluation leads to recognize the skill gap and
rectify it through the effective way.
Table 3: Depth of the Employee participation in Decision Making

Employee Involvement Average

Collective bargain 4.3
Co- determination 3.8
State of technical equipment 3.5
Training 3.6
Expected skill gaps 2.5
Expected increase in qualification demand 3.0
Job Evaluation 2.6
Total 3.32
Conclusion:
The study in different BPOs shows what makes an excellent performance of the organization and
smooth employer-employee relation is the employee participation in decision making. Based on
the research carried out we can state that there is greater significant link between employee
participation in decision making and their performance towards the organization. If the
organizations enhance participation of their employees in decision making which may lead to
commitment, pool of ideas, loyalty, citizenship and trust towards the organization. The
researcher further can study the relation and impact of different performance criteria with the
same level of employee participation.
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