1.1 BACKGROUND TO THE STUDY
Employee participation in decision making has been recognized as a managerial tool for improving organizational performance by striving for the shared goals of employees and managers. This is actualized by way of allowing workers’ input in developing the mission statement, establishing policies and procedures, pay determination, promotion, and determining perks. Employee participation in decision making has become significant topic in human resource management (HRM), and is regarded as one of the chief ingredients of employee voice, which many management scholars have observed to be a growing management concept (UK Essays,2013).
Several studies have shown that allowing employees to participate in decision making leads to increase in motivation, job performance, and organizational growth Gollan and Wilkinson, (2007).However , many studies also have conflicting views on whether or not an increase in employee participation directly affects organizational performance. Some critics, such as Sashkin (1976) feel that participation is not only effective, but that its use by management is an ethical imperative. Locke and Schweiger (2001) believe that worker participation is merely a managerial technique that can be used effectively in certain situations.
In Nigeria, the institutionalization of worker participation within the nation’s industrial relations system was championed by several scholars such as Adewumi,(1997), Fashoyin, (1992) and Imaga, (1994) who suggested that worker participation in management decision making will reduce industrial conflict, raise workers’ productivity, ensure rapid grievance procedure and motivate workers.
However, kandu Damachi (1990) is of the view that participative decision making can be possible in a certain sector of the economy and not in all government owned enterprises and private enterprises.
More so, in today’s turbulent environment and intense competition, firms are forced to seek ways to be more flexible, adaptive and competitive as they are faced with competitive pressures and rapidly changing markets (David, 2005). Above all, firms are discovering that people really are the most important asset (David, 2005).Success depends on involving the workforce’s entire capacity to generate new ideas and ways of working to outsmart the competitors. Employees must be involved if they are to understand the need for creativity and employees must be involved if they are to be committed to changing their behaviors in work, in new and improved ways. Employee participation is one of the important aspect of organizational life to achieved increased organizational effectiveness and positive employee perceptions.
Through participatory decision making, productivity is expected to increase since commitment by employees towards implementation of decisions to achieve enhanced productivity and overall organizational goals will be high and help reduce agitations, misconceptions and lack of commitment on the part of employees. Bevandam posits that opportunity, adequate authority and leadership are among a myriad of factors that influence employee satisfaction and commitment.
The importance of Employee participation in decision making in an organization can never be over emphasis . Managers are encouraged to allow a high degree of employee participation and autonomy, which are intended to increase workforce commitment and to humanize the workplace with the intention of improving work performance and good citizenship behavior (Cohen, Chang & Ledford, 1997).
Decision making in many organizations are done by top management team without considering the input of the employees at the other managerial levels. In these organizations the decisions taken by top management is however implemented by the lower level of employees. Because lower management do not take part in the decision making, it sometimes becomes difficult for some of the decisions taken by top management to be implemented especially when the decisions seem not to be favourable. Somech argues that flatter management and decentralized authority structures carry the potential for achieving outcomes unattainable by the traditional top-down bureaucratic structures.
Some researchers think involving employees in decision making is a risk on the organization. To some,with ideas coming from many people, it will be time consuming, inefficient, indecisiveness and incompetence. Evidence shows that when employees are involved in decision making, staff absenteeism is reduced; there is greater organizational commitment, improved performance, reduced turnover and greater job satisfaction ’ Employees feel as being part of the organization and this raise their degree of worth importance within the organization.
To the end, the study is aimed at examining the effect of employee participation in decision making on organizational performance.
1.2 Statement of the Problem
Many organizations have experienced the lack of commitment by employees towards implementation of decisions taken by top management which undoubtedly has serious repercussions on organizational success. It is for this reason many organizations are employing methods for employees to participate in decision making process which has led to setting up of organizations within, such as Industrial and Commercial Workers Union (ICU) as representatives for employees during decision making and other methods.
Much dissatisfaction emanating from decisions taken by management has led to many actions taken by employees including strike actions. For example, the strike action of staff of Barclays Bank occurred as a result of employee dissatisfaction with the decisions of management and the Board of directors involving employees and it was seen as a disadvantage to their welfare, growth and survival of the organization (Ghana News Agency, 2006). Research has shown that when employees are not made to participate in decision making process, it leads to job dissatisfaction, lack of organizational commitment, low labour – management relations which reduce productivity.
This research therefore seeks to investigate whether allowing employees participate in decision making has an effect on productivity and finding the effect of not allowing employees to participate in decision making process and measures to address them.
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?
1.5 Hypothesis of the Study
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 contributions 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 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.
1.9 Breakdown of the Chapters
The chapters in the study were break down as follows:
The chapter one of the study contains the Introduction/background of the study, in chapter two, the study review some related literature in the study, while chapter three contains the methodological details the researcher employed in the study. Chapter four of the study deals with the data presentation, analysis and interpretation of the research questions posited in the study, whilst chapter five focused on the findings, conclusion and recommendations of the study.