Topic One: Concept of employee participation in decision making

Several management strategies have been developed to enable organizations attain their
objectives, one of which is participatory management. Areola S. (1994, p. 23) Defines
participation as the active involvement of subordinates of followers in the making of decisions
that directly affect them in the work place. Participation in decision making is generally
regarded as a sign of enlightened and democratic management. It may be through of the
giving and receiving of information, achieve and suggestion and the sharing of experience
among members of an organization. In management, opined that "participation particularly
applies to allowing the employees) to have a voice in shaping policies, procedures and
processes that directly or indirectly affect". It is therefore a process of sharing among
managers and employees. Though the use of participation also, individual members are involved
in a wide range of objective setting, problem solving, and decision-making activities of the
organization.

Section One: Meaning of Employee Participation

Employee participation is the process whereby employees are involved in decision making
processes, rather than simply acting on orders. Employee participation is part of a process of
empowerment in the workplace. Empowerment involves decentralizing power within the
organization to individual decision makers further down the line. Team working is a key part of
the empowerment process. Team members are encouraged to make decisions for themselves in
line with guidelines and frameworks established in self managing teams. Employee participation
is in part a response to the quality movement within organizations. Individual employees are
encouraged to take responsibility for quality in terms of carrying out activities, which meet the
requirements of their customers. The internal customer is someone within the organization that
receives the ‘product of service’ provided by their ‘supplier’ within the organization. External
customers are buyers and users outside of the organization. Employee participation is also part of
the move towards human resource development in modern organizations. Employees are trusted
to make decisions for themselves and the organization. This is a key motivational tool.1

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Sub Section One: Dictionary meaning of Employee Participation
Employee participation in organizational decision making allows employees to have a say in
decisions that affect their working lives in some way. Nevertheless, this apparently benign
definition masks a number of complexities. The main problem is that different parties in the
employment relationship may differ on the procedure by which employee voice is expressed and
on the substantive content of the participation. For this reason, the history of employee
participation (EP) is long and tortuous, with no simple, uncontested objective. Many managers
see EP as largely job centered, established as a means to offer expanded task discretion to
individual employees as a way to enhance their fulfillment and hence job performance.
Employees may accept these prescriptions, but under conditions of insecurity or hostility (e.g.,
following downsizing exercises), they may interpret these initiatives more negatively as being
orientated toward satisfying primarily employer, rather than employee, needs. Managers may
also adopt EP principally as a means to disclose information of managerial intentions or
decisions, which they hope will engender employee trust and goodwill.2

A. Meaning according to oxford dictionary

Monetary benefit offered to consumers, employees and organizations to encourage behavior or
actions which otherwise would not take place. A financial incentive motivates actions which
otherwise might not occur without the monetary benefit. An otherwise might not occur without
themonitorybenefit. Incentive to do something because it is less expensive than not doing so. For 
example, a company may have a financial incentive to open a factory in Town A instead of Tow
n B because Town A's property taxes are lower.

B. Meaning According to Business Dictionary

Apart from the monetary and future security needs, an individual also has
psychological, social and emotional needs. Satisfying these needs also plays an important role in
their motivation. Non-financial incentives focus mainly on the fulfillment of these needs and thus
cannot be measured in terms of money. However, there are chances that a particular non-
financial incentive may also involve the financial incentive as well. For example, when a person
is promoted his psychological needs are fulfilled as he gets more authority, his status increases

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but at the same time, he has benefitted monetarily also as he gets a rise in salary. The most
common non-financial incentives

Sub Section two: Meaning according to top five websites

Job satisfaction refers to a person’s feeling of satisfaction on the job, which acts as a motivation
to work. It is not the self-satisfaction, happiness or self-contentment but the satisfaction on the
job. Job satisfaction relates to the total relationship between an individual and the employer for
which he is paid. Satisfaction means the simple feeling of attainment of any goal or objective.
Job dissatisfaction brings an absence of motivation at work. Perceived satisfaction on the job is
reflected by the needs of sense of fulfilment and expectation for the job to be interesting,
challenging and personally satisfying. Job satisfaction is also an achievement indicator in career
developmental tasks.3
A. Meaning employee productivity
Nowadays many companies use some kind of incentive system to motivate and reward their
employees. In the last two decades, incentives have become more popular and companies
use lots of money in their incentive systems. A study, for example, which researched how
incentives and rewarding have develop in Finland in last decade re-ported that almost 65
per cent of companies have introduced a new rewarding system during last three years and 50
per cent have planned to adopt an incentive system during the next three years (Salami,
Swains, Heiskanen & Lausanne 2009, p.6). Usually companies considered incentives
important in motivating employees and making me- player more attractive among possible future
employees.

B. Stable Environment

In a turbulent environment where things change too frequently (government, competition,

economy and consumers) participatory management is derived only in a stable environment
where participants are with relevant knowledge, information experience and willingness to
participate . Mary et al notices that in Nigeria, the benefits of participatory management cannot
be fully derived because of constant changes in economic policies and frequent industrial
disputes which has characterized the Nigerian employee management relations in recent times.

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Section two: (Definitions of Job Satisfaction)
Job Satisfaction, as the name suggests, is the feeling of contentment or a sense of
accomplishment, which an employee derives from his/her job. It is a result of appraisal that
causes one to attain their job values or meet out their basic needs. It helps in determining, to
what extent a person likes or dislikes his/her job. The employee’s attitude towards the job and
organization as well becomes positive when they realize that their job facilitates them in
achieving their needs and values, directly (by performing it) or indirectly (by the package they
get). In short, it represents the difference between employee’s expectations and experience
he/she derives from the job. The wider the gap, the more is the dissatisfaction.4

Sub Section two: Definition According to Law and Legal

Employee participation is the process whereby employees are involved in decision making
processes, rather than simply acting on orders. Employee participation is part of a process of
empowerment in the workplace. Empowerment involves decentralizing power within the
organization to individual decision makers further down the line. Team working is a key part of
the empowerment process. Team members are encouraged to make decisions for themselves in
line with guidelines and frameworks established in self managing teams. Employee participation
is in part a response to the quality movement within organizations. Individual employees are
encouraged to take responsibility for quality in terms of carrying out activities, which meet the
requirements of their customers. The internal customer is someone within the organization that
receives the ‘product of service’ provided by their ‘supplier’ within the organization. External
customers are buyers and users outside of the organization. Employee participation is also part of the
move towards human resource development in modern organizations. 

Sub Section one: Definition According to English Language Learners

Employee participation is defined in this way that it is a process of employee involvement
designed to provide employees with the opportunity to influence and where appropriate, take part
in decision making on matters which affect them. People management is a complex part of
business management, the terms employee involvement and employee participation are
frequently used in this field. The main objective of this essay is to establish the fact that
employee involvement and participation bring the positive outcome of the organization. To

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establish this fact, firstly it is necessary to define their meaning in human resource management
and also find out the difference between participation and involvement, and then to examine
where empowerment fits within these perspectives to prove that this method is used for positive
outcomes of employee relationship illustrating the literature review of this practice in the
business management.

Topic Two: Generalities

For the best effect in future, both employee participation and employee involvement could be
practiced simultaneously. Employees have to be both involved and made to undertake for the
sake of both the organization and the individual employee.

Section One: History of Job Satisfaction

One of the biggest preludes to the study of job satisfaction was the Hawthorne studies. These
studies (1924-1933), primarily credited to Elton Mayo of the Harvard Business School, sought to
find the effects of various conditions (most notably illumination) on workers’ productivity.
These studies ultimately showed that novel changes in work conditions temporarily increase
productivity (called the Hawthorne Effect). It was later found that this increase resulted, not from
the new conditions, but from the knowledge of being observed. This finding provided strong
evidence that people work for purposes other than pay, which paved the way for researchers to
investigate other factors in job satisfaction. Scientific management also had a significant impact
on the study of job satisfaction. Frederick Winslow Taylor’s 1911 book, Principles of Scientific
Management, argued that there was a single best way to perform any given work task. This book
contributed to a change in industrial production philosophies, causing a shift from skilled labor
and piecework towards the more modern approach of assembly lines and hourly wages. The
initial use of scientific management by industries greatly increased productivity because workers
were forced to work at a faster pace. However, workers became exhausted and dissatisfied, thus
leaving researchers with new questions to answer regarding job satisfaction. It should also be
noted that the work of W.L. Bryan, Walter Dill Scott, and Hugo Munsterberg set the tone for
Taylor’s work. Some argue that Maslow’s hierarchy of needs theory, a motivation theory, laid
the foundation for job satisfaction theory. This theory explains that people seek to satisfy five
specific needs in life – physiological needs, safety needs, social needs, self-esteem needs, and
self-actualization. This model served as a good basis from which early researchers could develop
job satisfaction theories.5

Historical Background of employees’ participation

The idea of employees’ participation emerged first in the United States in the early 1800s. But
the progress was very slow. A few (less formal types of employee representation) were found in
the latter part of the nineteenth century in the United States. The Filene Cooperative Association
of 1898 had certain characteristics of employee representation plan. In 1904 the American
Roiling Mill Company formulated its plan for employee representation. A few other companies
also followed it. These plans were, however, not similar. In England, Works Councils appeared
during the early part of the twentieth Century. The British coal mines have had for long a
tradition of allowing the work groups the maximum discretion in determining work, methods,
allocation of functions within the group and production standards. One of the most systematic
experiments on South Wales Mines was the one conducted by the Tailstock Institute. Thus, even
in the early years of the 20th century there have been wide ranging experiments in participatory
democracy conducted in a great variety of organizations including voluntary bodies, factories,
offices, scientific laboratories and stores. These experiments revealed that people, if they are
given a hand in formulating a decision, find it more acceptable. These plans also made them
more responsible. However, these experiments were very much limited in their scope and the
purpose served by them was also very little. Of the various well defined experiments, the earliest
and the most quoted one is chat which was conducted by Kart Lewis on after school clubs of
young boys engaged in handicraft activities. The most famous, and most widely known
experiment, however, is that conducted by Elton Mayo in the late twenties and early thirties in
the Hawthorne works of the Western Electric company, one of the largest producers of telephone
equipment’s in the United States.(The first experiment was conducted in 1929) Elton Mayo
placed emphasis on human relations. The workers were consulted before decisions relating to
rest hours, lunch breaks or the length of the working days.6

Human Resources (HR) and Human Resource Management (HRM)

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%20United%20States.
Armstrong (2006) defines Human Resource Management (HRM) as a strategic and coherent
approach to the management of an organization’s most valued assets - the people working there
who individually and collectively contributes to the achievement of the objectives. HRM
involves all management decision and practices that directly affects the people, or human
resources, who work for the organization. Pfeiffer (1998) proposed that seven human resource
management practices: employment security, selective hiring of new personnel, self-managed
teams and decentralization of decision making as the basic principles of organization design,
comparatively high compensation contingent on organizational performance, extensive training,
reduced status distinctions and barriers, including dress, language, office arrangements, and
wage differences across levels, extensive sharing of financial and performance information
throughout the organization are characteristics of successful organizations. Many organizations
have been faced with intensity of competition that increases day by day. Hence, managers must
be on constant lookout for ways to maximize the utilization of human resources for improving
organizational performance.

Sub Section one: Employee Participation

Employee Participation is generally defined as a process in which influence is shared among
individuals who are otherwise hierarchically unequal (Wagner, 1994). Participatory management
practice balances the involvement of managers and their subordinates in information processing,
decision making and problem solving endeavors (Wager, 1994).Making decisions closer to the
point at which they are actually carried out has advantages and provide economic motivations
(Malone, 1997). At the same time people are more energetic and creative if they have autonomy
in both how they work and what they do. Nykodym et al., (1994) and Cotton (1988), emphasized
decision-making as a major determinant of participation. Dainty et al., (2002); Ford and Bottler
(1997), hypothesized that genuine empowerment is likely to include decision-making authority
over not just job content, but job context as well. The best way to improve productivity is by
striving for the shared goals of employees and managers. By allowing worker input into
developing the mission statement, establishing policies and procedures, determining perks, etc.,
you can improve communication and increase morale and satisfaction. By realizing the
tribulations of employee participation, the government of Tanzania introduced Public Service
Regulation of 2003 and Public Service Scheme of 2003 in regulation 108 which states that “The
participation of the public servants in discussing and making decisions pertaining to their
employment welfare shall be through the workers councils and negotiating machinery.” (URT,
2003)In line with the research on Employee Participation has been emphasized in relation to job
satisfaction (Cotton et al 1988). In past studies showed that employee participation is positively
related to performance, satisfaction, and productivity of an employee (Pfeiffer 1994 and Wagner
1994).

A. Employee Participation in Decision Making

Several studies have identified employee involvement in decision making as an important high
performance HRM practice (Arthur, 1994 and Pfeiffer, 1995). It enhances employee
commitment to the organization. Researchers have found that employee participation in decision
making can have a significant effect on employee satisfaction and performance at work (Wager,
1994).

A. Practical Financial Advantages

Financial rewards are advantageous to employees first and foremost because extra income is
always useful. According to MSN Money, 43 percent of Americans spend more than they earn
each year. This figure is only one example of the widespread phenomenon of personal income
being insufficient to cover daily necessities, if not discretionary spending. Nearly everyone can
find some use for the extra money included in a raise or a cash bonus, so providing extra income
for an employee provides practical, tangible benefits.

Sub Section two: Employee Retention Advantages

Financial rewards are also advantageous to employees because they increase the likelihood of
personnel staying with the company, allowing employers to retain experience and knowledge
base, and providing workers with a measure of familiarity and stability. An employee who earns
enough to cover his basic needs--and some extra--will be less likely to give notice and look for
another job, saving himself the stress of a job search and saving his employer the hassle of
having to replace a valuable worker. Employee’s commitment increases the employee’s
performance and reduces turnover, and thus loyalty of employees depends on the satisfaction
of their wants and desires. The base of relationship continuation between employees and
employer monetary incentives and rewards because these monetary incentives and rewards
provided to employees on the performance of their tasks. According to Maslow (1954) there is a
hierarchy of human needs and when one want is satisfied then employees try to satisfy another
want. Maslow divide human needs into five types (1) physiological needs for example
food, clothing, (2)security needs, (3) social needs for example need for affection, friendship,
and sense of belonging, (4) self-esteem needs and (5) self-actualization needs Vroom
(1964:134) presented expectancy theory and found significant association between loyalty
and expectation of financial rewards and which resulted in better performance of tasks. If
their expectation is high then they will perform better and will be more committed and vice
versa (Martin & Shawn, 1984:273). Coyle-Shapiro et al. (2002) found that those organizations
who instead of giving the financial rewards only to managers because of better performance of
organizations, should also concentrate on awarding their lower level of employees to retain
them for long time in the organization. And organizations should introduce collective
plans for example cash-based rewards, promotion and profit sharing because these may
impact positively on employee’s loyalty (Gerhard & Ryne’s, 2003). Thus, high level of
employee job performance is significantly associated with high level of loyalty and negatively
related to employee’s turnover (Zaiden & Ramey, 2010).

Section Two: Impact of Employee Participation in the workplace

Participation in workplace decision making may have positive effects on employees’ attitudes
toward their work, it may have less impact on employee performance. In addition, the cost of
implementing participatory management systems may far exceed the actual return. A number of
American studies have been conducted by share scheme evangelists, keen to demonstrate
associations between shares and performance. Thus Logue and Yates (2001), who dedicate their
book to employee owners ‘who are building a better way of doing business every day’, aim to
identify the ‘best’ employee ownership practices to ensure optimum levels of economic
performance. Examining a sample of 270 mainly small companies, positive links between share
schemes and company performance were found. There were doubts, however: material was
gathered from senior managers who were instrumental in the establishment of the scheme.
Participation in decisions is also associated with higher efficiency. The involvement of
employees, it is argued, taps their very considerable knowledge about their work and their often
under-used abilities. The more they are informed and involved, the more ready they will be to
accept technological change, even unpleasant change. By helping management to be better
informed of workers' views, participation improves the quality of the decisions made. The
involvement of workers spurs managers on to greater efficiency, and the satisfaction of workers'
needs and moral rights makes for a contented and efficiency by its contribution to industrial
peace. 7

A. Financial participation
Financial participation schemes ta.ke two main dimensions and both are important from policy
perspective. The first approach involves distribution of shares to employees, based on the
assumption that share ownership induces positive attitudinal and behavioral responses. Both
approaches have subsequently been improved financially and participation has been extended to
part-time employees. Business owners need employees that are able to get the job done, because
employee performance is critical to the overall success of the company. Business leaders need to
understand the key benefits of employee performance so that they can develop consistent and
objective methods for evaluating employees. Doing so helps determine strengths, weaknesses
and potential managerial gaps in the business organization. Although performance evaluations
are never fun, they help business leaders determine performance levels for each employee.

B. Decision Making

Decision making can be defined as choosing between alternatives (Moorhead and Griffin, 2004).
It can be regarded as an outcome of mental process (cognitive process: memory, thinking,
evaluation) leading to the selection of a course of action among several alternatives. Decision-
making can be defined as the process of selecting an alternative course that will solve a problem
(Verbal and Bevis, 2002). Traditional decision making involves mapping the likely
consequences of decisions, working out the importance of individual factors, and choosing the
best course of action to take. It is now recognized that the involvement of various people in
decisions can have a positive impact both on the quality of the decision and on the commitment
that people feel towards the decision. Research has pointed out that if people have a say in the
decision, they are more likely to feel a sense of commitment to the decision. Secondly, involving
those with some expertise in the area or interest in the decision can improve the quality and the
support for the decision.

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Sub Section One: Types of decision making
There are four types of decision making in an organization. According to (Benet 1997), these
levels are: strategic decisions, tactical decisions, operational decisions and welfare decisions.

Strategic decision
Strategic decisions are broad decisions about a firm’s direction and its relations with the outside
world. They are made by senior level management. According to Cambric and Snow cited in,
Harrison (1987:20), broadly speaking, strategic decisions are those, which are "important" to the
organization either through the scope of their impact and/or through their long-term implications.
Tactical decision
Tactical decisions are concerned with implementation of strategic decisions.
These include overall decisions defining the means to realize the goal of company, central
decisions at company or workplace level concerning technology and work organization,
principles guiding job design, personnel management, operation hours and so on. They include
decisions on issues such as the acquisition and deployment of resources, secondary objectives,
monitoring performance and reporting to higher levels of authority (Benet, 1997).

Operational decision
Operational decisions on the other hand are concerned with minor administrative matters and day
to day activities of the organization. Operational decisions are more specific decisions taken,
usually at department or workshop level, as to how the work should be carried out within the
given technical organizational framework. The concrete deployment of labor defined through
such measures as the definition of tasks, the assigning of workers to the specified tasks, the
monitoring of the labor process, the definition of shift-work schedules and the allocation of
working hours for individual employee are covered by operational decisions.8
Welfare decisions
Decisions concerns with company-specific welfare arrangements, such as canteen facilities,
housing facilities, sports and other recreational activities, scholarships, and other forms of
financial support separate from the ordinary remuneration fall under welfare decisions.

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Sub Section Two: Factors that influence job satisfaction
There are a number of factors that influence job satisfaction. These include salary, supervision,
promotions, status and recognition, utilization, working conditions, remuneration, the work
groups, and the work itself. A few of these factors will be discussed below.
Salary
Salary refers to payment made by an employer to an employee for work performed. Money is
vital not only in the sense that it helps people attain their basic needs, but it is of utmost
importance in providing upper level need satisfaction. It appears that a perceived low salary,
which leads to job dissatisfaction, is a main contributor to employee turnover. Believes that
salary is a key determinant of job satisfaction because it serves as a symbol of achievement and a
source of recognition. It is evident that pay is an essential aspect of job satisfaction despite self-
report surveys, which place pay as being of low importance to overall job satisfaction. Pay has
different meanings to individuals. It can be an indication of achievement and recognition or
alternatively can be viewed as failure. It appears that money means different things to various
groups, and is likely to have greater importance for individuals who cannot gain other
satisfactions from their job. Employees often see pay as a reflection of how management views
their contribution to the organization. Fringe benefits are also important, but they are not as
influential .The reason is that most employees do not know how much they are receiving in
fringe benefits. Many employees tend undervalue these benefits because they do not realize their
significant to monetary value, However, if employees are allowed some flexibility in choosing
the type of benefits they prefer within a total package, called a flexible or cafeteria benefits plan,
there is a significant increase in both benefits satisfaction and overall job satisfaction.
Supervision
Supervision is another important source of job satisfaction. Vroom1964: 53), emphasized that a
supervisor's function is to provide a link between the workers and higher management for the
sole purpose of securing worker benefits Furthermore, the supervisor may impart some vital
skills that are required to master the job. If the mastery of job is achieved, in many cases a proud
and satisfied worker will emerge. State that the potential advantages of supervision may account
for the job satisfaction. Employees derive satisfaction from appreciation of their work as
expressed by persons in apposition of authority. Conclude that job satisfaction is considerably
improved when supervisors are perceived to be fair, helpful, competent and effective. This
includes the supervisor's skill as a problem solver, coach, trainer and listener. Insensitive,
incompetent and uncaring supervisors seem to have the most negative effect on employee job
satisfaction. This includes unfair, biased treatment by supervisors, failure of supervisor’s to listen
and respond to employee's problems or concerns and problems with management communication
credibility.
Promotion
Promotion opportunities seem to have a varying effect on job satisfaction as they take on
different forms. Lack of opportunity for promotion leads to a negative feeling of satisfaction as
frustrated ambition can give rise to particularly intense feelings of dissatisfaction.
Individuals who are promoted based on seniority also experience job satisfaction, but not to the
same extent as those who are promoted based on performance. Giselle and Brown (1995: 38),
believe that the recipient considers promotion only if he desires it. On the contrary, if a person is
promoted into what he perceives as not a stimulating job, dissatisfaction results. (Campbell and
Pritchard, 1976: 57) In recent years with the flattening of organizations and accompanying
empowerment strategies, promotion in the traditional sense of climbing the hierarchical
corporate ladder of success is no longer available as it once was. Employees working in this new
set-up know that not only are traditional promotions not available, they are not even as desired.
A positive work environment and opportunities to grow intellectually and to broaden their skill
base has for many become more important than promotion opportunities.

Working conditions
The working condition under which an employee works depends on the perceptions of the
worker (Herzberg et al, 1959: 79). If the working conditions are clean and attractive, the
employees will find it easier to carry out their jobs. If their working conditions are unpleasant,
employees will find it more difficult to concentrate on the job at hand (Robbins, 2003 Nelson &
Quick (2003: 45), state that features such as temperature humidity, ventilation, lighting and
noise, hours of work, cleanliness of the workplace, and adequate tools and equipment all affect
job satisfaction.
 Chapter Two
Analysis & Findings
Topic one: Different Levels of employee participation
Levels of participation refer to the extent, which employees or their representatives influence
decision making in an enterprise. This can range from employees simply being informed about
management decisions through two-way communication, and up to a stage where employees
have joint or full control over decision making in an enterprise (Du Toit et al, 2010). A
distinction is usually drawn between three levels of participation within an organization (Nell et
9
al., 2005).

a) Low-level participation
At this level of participation, management makes an effort to improve communication and
attitudes, but still views employees as relatively passive (Du Toit et al, 2010). Here participation
of employees is usually via staff bodies.
b) Mid-level participation
This takes place when an employee participates in the decision making processes of the plant or
establishment, concerning, for example, the way in which the company’s rules, regulations, and
disciplinary procedures should be applied and executed (Nell et al., 2005). According to Du Toit
et al, (2010), at this level management seeks to actively involve the employees in productivity
and cost management.
c) Top-level participation
At this level management views the employees as partners in the enterprise and rewards
efforts through gain sharing or profit sharing schemes (Du Toot et al, 2010). Here, top
management and the representatives of employees decide on issues of strategic importance for
the organization as a whole (Nell et al., 2005).

Section One: Organizational Performance and Employee Participation

Gunasegaram et al (1994) define organizational performance as a combination of the
efficiency and effectiveness of an organization. There is growing evidence that organizational
performance rests increasingly on the involvement of workers in decision making. Scholars have
argued that employee involvement contributes to organizational efficiency because it has the
capacity to enhance the quality of decision making by increasing the inputs and promotes

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commitment to the outcomes of the decision making process in the workplace (Markey, 2006).
According to Spritzer et al. (1997), workers who have greater choice concerning how to do their
own work have been found to have high job satisfaction and consequently high
performance. A significant relationship between frequency of employee’s consultation and
organization commitment has also been established (Noah, 2008). While employee
involvement may reside at the core of many contemporary practices and research, the extent to
which organizational-level performance gains are actually achieved through decentralizing
decision-making authority to lower level employee remains unclear (Richardson al., 2002).
Latham et al. (1994) contend that there is much less research evidence for the value of
employee involvement on quality decision making. Scholars have also argued that employees‟
involvement in decision making may primarily serve to make them feel good about their jobs
and organizations but do little to increase firm’s performance (Wagner, 1994). Amos et al.
(2008) define organizational performance as the ratio of outputs to inputs, where
performance effectiveness and efficiency are measures of organizational performance.
Effectiveness refers to achieving organizational goals, which is directly linked to levels of
customer satisfaction, while efficiency refers to the cost of resources in relation to goal
achievement (Amos et al., 2008).

Sub Section one: Benefits of Employee Involvement in Decision Making

There is an assumption held by many scholars and managers that if employees are adequately
informed about matters concerning them and are afforded the opportunity to make decisions
relevant to their work, then there will be benefits for both the organization and the individual
(Shakur et al., 1999). Hence, the following are the benefits of employee involvement in decision
making:

1. It increases employee’s morale or job satisfaction and enhances productive efficiency.

2. It provides employees the opportunity to use their private information, which can lead to
better decisions for the organization.
3. As a result of the incorporation of the ideas and information from employees,
organizational flexibility, product quality, and productivity may improve.
4. It contributes to greater trust and a sense of control on the part of the employees
 5. Through employee involvement, resources required to monitor employee compliance
(erg. supervision and work rules) can be minimized, hence reducing costs
6. When employees are given the opportunities of contributing their ideas and suggestions
in decision making, increased firms‟ performance may result since deep employee
involvement in decision making maximizes viewpoints and a diversity of perspectives.
Financial incentives are the direct attracting factors to the employees towards work
performance. It is a sort of reward to the employees which influence the efficiency and
effectiveness of the employees in the particular organization. If it is practiced well in the
organization automatically will result into the best organization’s performance.
Managers in managing the development of the corporations are to think much on
strengthening manpower and the corporations’ management should consider that; the
motivation and employees’ needs are the basic thing and are to be focused at large so as
to encourage the employees to work.10

Employee Participation
You may say “we ask employees what incentives they want”. Responses can vary and be
situational. As a leader, your team looks to you to know what’s best for them and the company.
It’s important to shift the thinking around incentives away from reward to investment. And what
do all investors want? That’s right, a good, consistent return. A common mistake among
incentive plans is that they are geared toward an individual’s performance. We know now this is
temporary and only demonstrates what someone was hired to do instead of teaching them how to
do it better. In the U.S., an average of $90 billion was spent on incentives in 2015. Some of this
is a total loss in the form of ineffective incentivizing. Companies paid for rewards, not results.

Sub Section two: Employee Participation in Decision Making: Problem

Many organizations have experienced lack of commitment by employees towards
implementation of decisions taken by top management which undoubtedly has serious
repercussion on organizational success. As a result of this many organizations are currently
involving staff participation in decision making process. Even the Nigeria Labor Union has
suggested it to the government the need for staff participation in public service organizations. In
most cases dissatisfaction emanating from decisions laterally taken by management has led to

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some negative actions by employees, such negative action includes loss of interest in the job and
strike action. Research has shown that when employees are not made to participate in
decision making process, its result or led to job dissatisfaction, lack of organizational
commitment, low labor management relation which reduce productivity. This study therefore
seeks to investigate whether employee’s participation 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.

Section two: Employee productivity

In economics, productivity is the ratio of what is produced to what is required to produce as
measure of production efficiency over a given period of time (Cole, 2002). To the engineer;
productivity means new technology, machines and equipment, measurement and controls. To a
business manager, productivity has various meanings including effectiveness and efficiency.
This is because in management there are no measurable units of output, no productivity function
and the non-existence of an effective data base. (Agora, 1991) uses the word productivity to
mean the output per unit of factor input over a given period of time. It is the ratio between the
output of wealth produced and the input of resources consumed in the process of production.
(Adakai, 1991), emphasis that productivity is a measure of how well labor resources/skills are
brought together in a firm and utilized for accomplishing a set result. Efficiency in production is
measured by the ratio of input to output. Efficiency in the utilization of labor in an organization
involves obtaining the highest level of performance from the employees with the least
expenditure in labor wages. The International Labor Organization (ILO) as cited in
(Prokopenko, 1992) defined productivity to be the effective and efficient utilization of all
resources; capital, labor, material, energy, information and time. In this paper, (Nasik’s, 1991)
defined productivity as the efficiency with which inputs are used to produce the desired output.
Earlier, (Duo-Aka, 1993) defined productivity as a measure of overall production efficiency,
effectiveness and performance of the individual organization. (Karlee, 1991) contends that
productivity is the measure of how well a nation’s resources are utilized for accomplishing a set
of result reaching the highest level of performance with the least expenditure of resources. This
is a synthesized definition of productivity, (Karlee, 1991) further maintained that productivity is
an attitude of the mind. It is the mentality of progress and constant improvement of that which
exists. It is the certainty of being able to change that which exists. It is the certainty of being able
to do better today than yesterday. It is the will to improve on the present situation, no matter how
good it may look. It is the constant adaptations of economic conditions. It is the continued effort
to apply new techniques and it is the faith in human capabilities. From the above, it is clear that
the applicability of the productivity concept to every sphere of human endeavor remains
constant, the relevance and centrality of productivity to human existence can never be denied
(Kempner, 2001).11

Sub Section one: Concept of participation

Several management strategies have been developed to enable organizations attain their
objectives, one of which is participatory management. Adela S. (1994, p. 23) defines
participation as the active involvement of subordinates of followers in the making of
decisions that directly affect them in the work place. Participation in decision-making is
generally regarded as a sign of enlightened and democratic management. It may be through of
the giving and receiving of information, achieve and suggestion and the sharing of experience
among members of an organization. In management, Murrow (1967 p. 83) opined that
"participation particularly applies to allowing the employees) to have a voice in shaping
policies, procedures and processes that directly or indirectly affect". It is therefore a process
of sharing among managers and employees. Though the use of participation also, individual
members are involved in a wide range of objective setting, problem solving, and
decision-making activities of the organization. Davis (1981 p.156) stated that participation is a
mental and emotional involvement of persons in group situations that encourage them to
contribute to group goals and share responsibility for them. Lewis (1969 p. 21) defined it as a
mode of organizational operation in which decision as to activities are arrived at by the
person , who are to execute those decisions. However, participation from my own point of
view, I can say is a process in which two or more parties influence each other in making
decisions. The parties to the decision making process may be in their capacities as individuals or
as groups. In participatory management, management selectively shares, some of its powers
with employees. It takes into consideration the wishes and suggestions of the members as
well as those of the leader. It is a human relations approach where all members of the group
are seen as important contributors to the firm's decisions. Guerin, Verify and Feld (1979)
concluded that participation is really a middle-class value, and grows out of the prior
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expectations of those being supervised. Vroom (1964) points out two distinctions in the
definition of participation. The first he calls "psychological" (you think you are participating
in the decision that affect you), and the second "objective" (you actually participate strongly
in the decisions that affect you whether you know it or not). Vrooms study is essence shows or
through some interesting light on how follower personalities affect participation per se, is not
a Programmed but rather a dramatic change in the way most companies take decisions and
operate on a day-to-day basis, which efficiency and productivity by managers of
organizations and on the oath The concept of participation in an organization can therefore
be summarized as a process by which an organization attempts to unlock the creative
potentials of its people by involving them in decisions affecting their work lives. It is a
structured effort to enable employees at all levels in an organization to use their
knowledge, skills and abilities more effectively in their work and to participate more fully in
decisions about their work life.

A. Productivity improvement strategy

A sound productivity improvement strategy calls for a systems approach to productivity
improvement which recognizes the inter-relationships between the elements of the system and
their environment. It defines the performance of the system and maintains equilibrium while
effecting change. Guide-lines for a good strategic approach were given by Stephen Moss as
follows Translate competitive requirements into specific goals for operations in the light of the
present and potential operating strengths and weaknesses of the company and its competitors.
Review and rethink the entire operating system from product design through service after sale.
Consider the full range of inputs, and do not be constrained by conventional wisdom, always
keep in mind the interdependencies within the system. Assume ongoing change is both inevitable
and desirable. New technologies become available, market requirements and resources change,
and competitors act and react. Therefore, the system must be innovative and flexible so it can
improve and adapt continually. Thus, productivity strategy is the pattern of decisions in the
enterprise that determine its objectives, procedures and principal policies and plans for achieving
long-term productivity improvement goals. A good productivity improvement strategy should, as
a minimum: develop a clear and easily communicated definition of the productivity improvement
concept; Organizations with clear productivity concepts should identify clear goals and
objectives. The objective of productivity improvement should always be expressed in terms of
organizational “improvement” in recognition of the past and current success of the divisions and
subsidiaries within an organization. Some of the objectives could be broad; for example, to
improve the organization’s productivity by 8 per cent in two years, with detailed objectives for
individual units in the organization. The overall goals and objectives should be supplemented by
detailed action plans on how to improve productivity. In this connection it is useful to set the
objectives for identifiable smaller groups so that performance can be assessed. A productivity
improvement plan is most effective if it is integrated into the organization’s strategy planning. It
should assign priorities and must be written in order to ensure that it is on the record for follow
up. Below are some examples of questions which can indicate the state of this planning and
which draw attention to potential areas of productivity improvement:

a. Promoting creativity and innovation, creating an environment which encourages new

ideas;
b. Introducing a suggestion scheme and inviting suggestions on specific problems; setting
up a permanent or temporary task force or study groups where necessary for multi-
disciplinary study of problems;
c. Identifying research and development activities.12
B. Purpose of Inventive Schemes in Organization
According to Carat, Middlebrooks and Frank (1992), the general purpose of financial incentive
schemes is to improve employee’s motivation and increase productivity in the organization. By
relating compensation to output, an employer is attempting to induce employee to turn out a
greater volume of work thereby lowering the cost of producing a single unit of output (services).
Specifically, the purpose of financial incentives to both an employee and the organization is to;
Improve employees motivation, tie pay to performance, recognize differences in employee’s
performance, also, increase competition among employees, attract and retain productive
employees and reduce absenteeism.

Sub Section two: Job Satisfaction & Motivation Benefits the Workplace
Employers are faced with the task of motivating employees and creating high job satisfaction
among their staff. Creating programs and policies that develop job satisfaction and serve to

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motivate employees takes time and money to create. When the employer understands the
benefits of job satisfaction and motivation in the workplace, though, the investment in
employee-related policies can be justified. Employees who are satisfied with their jobs and
motivated by the company to succeed will also work to create more efficient job processes.
Managers should meet at least monthly with employees to discuss the efficiency of their job
duties and how they can be improved to increase productivity. The company that sets out to
create a satisfying workplace will be privy to feedback from employees who would like to
increase the level of job satisfaction they experience, resulting in open communication between
management personnel and workers. Employees will want to maintain that satisfying work
environment, and they will regularly supply opinions and feedback that they feel is necessary
to preserve the positive workplace atmosphere. When staff members are unmotivated and
dissatisfied with their jobs, they tend to not pursue additional tasks that may help the company
succeed. For example, dissatisfied employees will generally not offer to volunteer for
committees that plan the annual company picnic or help move departments from one part of the
office to another. When the company creates an atmosphere of job satisfaction and properly
motivates employees, it can be easier to find volunteers to complete outside projects that are
necessary for improving company morale or the operation of the organization.
A. Conditions and influences on participation
Certain prerequisite conditions are necessary for participation to succeed in any
organization. Some of these conditions exist in the environment while some actually occur in the
individual. These conditions as stated by Davis (1981) are as follows: 1. there must be adequate
time to participate before action required for participation is hardly appropriate in emergency
situations. The main purpose of financial incentive is to motivate to greater performance of their
duty and to increase productivity. Financial Incentives give employees a sense of belonging, also
help management to increase output (Lyman, 1995). Financial incentives plans is related to
productivity of individual, other to the productivity of group or to the productive and profitability
of entire organization. In UBA, financial incentives are used as an instrument for improving
employee’s motivation, thereby leading to the accomplishment of higher productivity (Louder,
1994). Affective commitment is defined as the emotional association of an employee with its
organization and objectives (Monday et al, 1997, Meyer & Allen, 1993). Porter et al. (1974)
further state that the affective commitment thus based on (1) “faith of the employees in
the organization’s objectives (2) their readiness to put forth effort in order to achieve
organizational objectives, and (3) a strong wish to be a part of the organization”. Whereas
Continuance commitment is the readiness of employees to be with an organization because of
the cost associated with leaving the organization (Reaches, 1985) and further state that
continuance commitment based on years of employment in the organization, job tenure
and financial incentives rewarded to employees. According to Normative commitment.13

B. Arguments for participative management

Social scientists have done extensive research in the subjects of leadership, organization,
and communications. Some of their discoveries have been widely hailed as breakthrough in
management, or new patterns that will eventually supplant existing methods of managing. Most
of these work have been extended to the prescriptive conclusion that participative decision
making is better than non-participative decision making. Perhaps the leading exponent of
participative decision making has been Douglas McGregor. In describing how management
by objectives works he says "Genuine commitment is seldom achieved when objectives
are externally imposed. Passive acceptance is the most that can be expected, indifference
resistance are the more likely consequences" McGregor (1960). The participative style of
leadership has been recommended in the management literature dating back to the early say
1950s. Many organizations today are achieving good results with participative management. A
case in point as noted by William (1989 P.332) is Cipher Data Products. He says within one year
of implementing participative leadership throughout the firm, the company experienced a 10
percent increase in customer-quality acceptance in every product line. However Cipher used
participative leadership styles effectively through careful planning, including a training program
and frequent monitoring of results. Participation I can say leads to better decisions because it
encourages a spirit of co-operation among those participating but the effect on morale should be
regarded as a by-product. Unless the primary aim of a manager in using participation is
improved decision making his sincerity will be challenged and the long-run effect on
morale may be harmful rather than helpful. Newman (1971 P.538) has also noted that
participation is a convenient way for a manager to top the diverse knowledge different
viewpoints, and complementary abilities of his subordinates. As with many good things,

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however, these benefits come at some sacrifice and only under favorable circumstances. Peter
(1993) maintains the desirability of participative management and supports his argument as he
says "The value of participation had been seen as a contributing factor to optimization of
individual freedom and self-determinant within a collective context".

Topic two: Questionnaire

This project was undertaken to study the impact of financial incentives on the employee
performance in the organization. The data was collected using Questionnaire which is analyzed
and presented below

Section One: Analysis of questionnaire

Question 1: Gender
Table 1: Gender

Gender Frequency %age

Male 20 80
Female 5 20
Total 25 100
 1.Gender

30%
Male
Female

70%

Figure 1: Gender

Explanation
This research is conducted from 25 people which 80%of them are male and remaining 20 are
female.

Question2: Describe the type of business you work with?

Table 2: type of business you work

Business you work with Frequency %age

Private Sector 9 36
Public Sector 14 56
Service Sector 1 4
 Partnership 0 0

Sole Trader 1 4
Total 25 100

Type of business you work

4% 4%

Private Sector
36% Public Sector
Service Sector
Partnership
Sole Trader

56%

Figure 2: Type of business you work

Explanation
This research is conducted from 25 people which 11 of them are strongly agree 7 of them are
Agree 2 of them Neither agree and we don’t have any Disagree.

Question 3: Since how many years have you been working in this organization?

Table 3: Working in this organization

Working in this organization Frequency %age

0-5 Years 9 36
 5-10 Years 12 50
10-15 Years 1 4
15 -20 Years 2 2

Above 20 Years 1 4
Total 25 100

Working in this organization

4%
8%
4%
0-5 Years
36% 5-10 Years
10-15 Years
15 -20 Years
Above 20 Years

48%

Explanation
Figure 3: Working in this organization

The above graph shows that since how many years they have been working in this organization;
out of total respondents. 36 percent have worked 0-5 years, 48 percent have worked 5-10 years, 4
percent have worked 12-20 years, and 12 percent have worked 15-20 years, 8 percent have
worked above 20 years.

Question 4: Employees response on whether their perception of participative management

is in line with the firm’s policy?

Table 4: Perception of participative

Perception of participative Frequency %age

Yes 4 25
No 9 42
 Not sure 7 32
Total 25 100

Perception of participative

25%
32% Yes
No
Not sure

42%

Figure 4: Perception of participative

Explanation
The above graph shows that that 4 constituting 25% of the respondents agreed that their
perception of participation is in line with the firms policy, 42,5% of the 25 respondents was on
the negative side of this issue while 7 being 32.5% was not sure of the this fact.

Question 5: How employee react when the supervisor insists only on his own way of
accomplishing tasks?
Table 5: Accomplishing tasks

Accomplishing tasks Frequency %age

I feel highly dejected 1 4
I feel demoralized 10 60
I feel happy 5 20
 I'm often indifferent 4 16
Total 25 100

Accomplishing tasks

4%
16%

I feel highly dejected

I feel demoralized
I feel happy
I'm often indifferent
20%

60%

Figure 5: Accomplishing tasks

Explanation

The above graph shows that when the supervisor insists only on his way of accomplishing
tasks, 72.5% of 25 respondents feel demoralized, then 5% feel happy while 9 being 22.5%
were often indifferent to this matter.

Question 6: The level at which employees are allowed to participate in decision making?

Table 6: Participate in decision making

Participate in decision making Frequency %age

Top Management Level 8 32
Middle Management Level 14 56
Lower Management level 2 8
All of the above 1 4
 Total 25 100

Participate in decision making

4%
8%

32% Top Management Level

Middle Management Level
Lower Management level
All of the above

56%

Figure 6: Participate in decision making

Explanation

The above graph indicates that 8 respondents being 32% of 25 believe that employees
participate in decision making at the top management level, 56% of them said is at the middle
management level as 8% agreed is lower management level while 4% believe that the
participation is at all levels.

Question 7: If employees inform managers when they feel there is a better way of doing a
particular job than the firms stated way?
Table 7: A particular job

A particular job Frequency %age

Yes 15 65
No 10 35
Total 25 100
 A particular job

35%
Yes
No

65%

Figure 7: A particular job

Explanation
The above graph shows that when there is a better way of doing a job than the firms stated way
65% of 25 respondent employees in government press said they inform the managers while 35%
do not do so

Question 8: Considering employee involvement in decision making as a major reason

to improve productivity?
Table 8: Major reason to improve productivity

Incentives or rewards affect Frequency %age

motivation
Yes 18 82.5
No 5 10
Not sure 2 7.5
Total 25 100
 Major reason to improve productivity

8%
10%
Yes
No
Not Sure

83%

Figure 8: Major reason to improve productivity

Explanation
The above graph indicates that out of 25 respondents in Government Press 82.5% agreed
that employee involvement in decision making is considered a major reason for
productivity improvement, 10% of them disagreed while 7.5% were not sure of this fact.

Question 9: Direct consequences of employee participation in decision making?

Table 9: Direct consequences

Direct consequences Frequency %age

Increased productivity 11 40
Increased wastage of time and many 2 5
Weakens Management Effectiveness 7 35
Added responsibility to the employee 5 20
Total 25 100
 Direct consequences

20% Increased productivity

Increased wastage of time and
many
40% Weakens Management
Effectiveness
Added responsibility to the
employee

35%
5%

Figure 9: Direct consequences

Explanation
The above graph shows that that of 25 respondents in Government Press 42.5% of them
believe that increased productivity is the direct outcome of participative management, 5%
said is increased wastage of time and money as 37.5% agreed that it is cordial
manager/subordinate employee.

Question 10: Managers response on the main objectives they intend to achieve by involving
subordinates in the decision making process of the organization?
Table 10: Decision making process

Decision making process Frequency %age

To seek and compare decision options in task accomplishment 5 20
To enable subordinates share in responsibility 10 40
To boost employee morale for increased productivity 7 33
All of the above 3 7
 Total 25 100

Decision making process

To seek and compare decision

options in task accomplishment
To enable subordinates share in
responsibility
To boost employee morale for
48% increased productivity
52%
All of the above

Figure 10: Decision making process

Explanation
The above graph indicates that 22% of 25 respondents in Government Press agreed that
their objectives of involving subordinates into decision making process is to seek and compare
decision options in task accomplishment, 4 representing 45% agreed that their main
objective is to enable subordinates share in responsibility as 3 constituting 33% believe that
it is to boost employee morale for increased productivity..

Question 11: Managers response on whether the present level of workers participation is
enough to motivate them towards job satisfaction and improved productivity?
Table 11: Towards job satisfaction

Towards job satisfaction Frequency %age

Yes 11 45
No 9 33
Not sure 5 22
 Total 25 100

Towards job satisfaction

22%

Yes
45% No
Not sure

33%

Figure 11: Towards job satisfaction

Explanation
The above depicts that 11 respondents representing 45% agreed that the present level of
workers participation is enough to motivate them towards job satisfaction and improved
productivity, 9 making 33% disagreed to this issue while 22% of them were not sure of the
situation

Sub Section one: Monetary incentives and employee productivity

After depth study of various organizations, it is found that in every organization different steps
have been taken and there is no similarity in steps in performance management process. It
entirely depends upon the requirement of the organization and the management working pattern.
Some organizations take help form the consultants and some are having their own internal
experts for scanning the business the business environment, identifying and prioritizing the
goals, fixing responsibility and accountability, expected performance standards and many more
work related aspects. In large organization mostly the below mentioned steps are followed but in
small and further smaller organizations some of the steps may be or may not be followed. It is
summarized that the following steps have been involved in different organizations in general but
exactly not similar in all:

(a) Step 1: Planning is the process in which the future course of actions has been decided in
advance. This helps in giving the direction while performing the tasks. Without planning the
objective of doing the work will not be clear. There may be many confusions such as what is to
be done, how it is to be done, when it is to be done etc. That is why to go for performance
management process the first step will be planning. The first step during which the supervisor
and employee accomplish will discuss regarding current business environment, mission of the
organization, present goals, and jobs to be performed for achieving goals. Methods of performing
the jobs, competencies needed performance standards and assigning the responsibility and
accountability of employees. Planning stage will make the whole process working smoothly.

(i) Scanning of business environment: Every business is carried in an atmosphere or

surrounding. That is called business environment. There are internal and internal factors of it.
The internal environmental factors are within control of the management whereas the external
factors like social, cultural, economic, legal, political, technology and competition etc., are
beyond control of management. These factors are uncontrollable and out of reach of
management to control. They change very rapidly and create a lot of uncertainty. A high degree
of risk is involved in the business. For proper and effective planning the study of environment
becomes inevitable. The study of these factors is to be carried out and try to find out the threats
and opportunities for the business of the company. This will provide inputs to the planning for
performance management.

(ii) Mission and goals: Every organization has been established with an objective in the business.
The mission shows the objective of existence in the business. To achieve the objectives the
certain goals or targets are to be fulfilled. The goals are to be decided for everyone concerned.
The goals can be for individuals, team, section, department and organization as a whole. The
managers, supervisors, and employees through discussion will agree for the goals to be achieved.
The special care should be taken that the goals should be realistic and feasible to achieve. These
should not be beyond capacity to achieve.
(iii) Developing job-description and job specification: To fulfill the goal requirement the certain
tasks are to be decided. What jobs are to be performed and how these will be performed. First of
all the jobs profile is to be prepared. The work, jobs and tasks are too ascertained. The decision is
to be taken regarding the major work, its components, level of responsibility, reporting system,
location of the jobs and sub jobs etc. Next, the procedure or method of doing the jobs is to be
finalized. In method the involvement of manpower machines, equipment’s and steps for
performance of jobs are to be decided. After finalizing jobs and methods of doing the jobs, the
job specification is to be finalized. For performing the skills, knowledge, educational
qualification, work experience, attitude, ability, capability, the level of risk involved etc. are to
be discussed and finalized. If the required competencies are available then it is alright. Otherwise
efforts should be there to find out how the required competencies can be acquired and developed.
Finally in this the job responsibility and accountability of everyone is to be agreed and fixed.
This will give the clear guidelines regarding the jobs is to be performed, method of performing
the job, competencies required for performing the jobs, responsibility and accountability of the
jobs.14

A. Employee Ownership
Employee ownership is one of the formal ways of making employees to be part of the financial
owners of the organization usually through equity shares. Employee ownership as a form of
participatory decision making serves as an intrinsic and extrinsic from of motivation. According
to Klein (1987), there are three models of the psychological effects of employee ownership. The
first is the “intrinsic satisfaction model” of employee’s commitment and satisfaction which
leads to positive impact on productivity. The second model is the “instrumental satisfaction
model” of employee ownership. By this model employee ownership increases employee‘s
influence in decision making which turns to increase the commitment level of the workers. The
third model, is the “extrinsic satisfaction model” which suggests that employee ownership
increases organizational commitment and productivity thus employee ownership is financially
rewarding to the employee. Emotional attachment to financial ownership enhances commitment
and increases productivity. According to Marsh, (1981), 1400 organization were surveyed on
Employee stock Ownership plans (ESOP) during the years 1975-1976. It was observed
that 229 organizations implemented the program, one-third stated that the quality of work
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was improved. Other results were on level of turnover. There was a smaller percentage
improvement in lateness, absenteeism and employee grievances. Though the results were
mostly positive, approximately five percent (5%) of the firms experienced levels employee and
turnover and one percent (1%) decline in work quality whilst the majority of the companies
surveyed felt that ESOPs had a positive influence in workplace.15

Sub Section two: Forms of Employee Participation

It is the form of participation where employees have a high influence on the decision made. It
involves formal and direct means where employees participate in decision concerning the
organization directly. White and Robert, (1973), looked at participation in work decisions by
surveying 2775 employees in six manufacturing plants in Midwest. They looked at general
employee participation in work decisions, job involvement, motivation and personal
identification within work group in the organization. The correlation between employee
participation and job attitude were consistently positive and significant for the total sample
within the six separate plants. The reports shows that employees are more involved, motivated
with a higher degree of participation regardless of any difference in actual participation. This
form of participation is noted to yield higher positive impacts since employees are directly
involved in the decision making process.

Section two: Representative Participation

Representative participation is where workers elect execute or some members to represent
their interest in management meetings. With representative participation workers participate in
decision through their selected executives. With this form of participation employees input and
grievances are made known through their representation. This is indirect form of participation
because not all workers involves directly in the decision making. Unions are the most used types
of representative participation. In their meta-analytic review Coldly et al. (2003, p. 52) found that
non-monetary tangible incentives improved performance on average 13 per cent. Jeffrey and
Shaffer (2007, p. 45) state that non-monetary tangible incentives are effective because they
are very visible. Because of visibility, the symbolic value of non-monetary tangible incentives is
higher than other incentives. Another reason for the effectiveness of non-monetary tangible
incentives can be that these incentives are usually distributed right after performance.

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ent_Evidence_from_higher_education_sector/link/568b5ba208ae1975839dcd5e/download
Instead in monetary incentives’ case it can take months before incentives are distributed to
employees. In this case reward-compensation relation is not so tight than in situation where
reward is given right after performance. This can have effect on motivation and performance.
Jeffrey and Shaffer (2007, p. 45─46) also state that monetary incentives are easily perceived as
part of a basic pay. In this case monetary incentives can lose their motivating impact. Instead
non-monetary tangible incentives are really noted and employees perceived them as extra
reward. Because of that in some cases non-monetary tangible incentives can be more
effective than monetary incentives. One problem in non-monetary tangible incentives is that
people like different things (Jeffrey & Shaffer 2003, p. 48). One can be motivated through
football tickets whereas the other can find a holiday trip more attractive. It is challenging for
manager to decide which would be appropriate incentive in different situations. Another problem
is that at lower income level non-monetary tangible incentives can be perceived worthless
because of the need for money (Jeffrey & Shaffer 2007, p. 49). Usually non-monetary tangible
incentives are delivered unexpectedly. This means that there is not a special incentive plan
according to which the rewards are distributed. Be-cause of unexpectedness, non-monetary
tangible incentives do not have similar negative effect on intrinsic motivation as monetary
incentives have (Deco et al. 1999, p. 639─640). For example individuals do not perceive non-
monetary tangible incentives as controlling because incentives are not evidently contingent on
performance. Because of unexpectedness non-monetary tangible incentives neither have
similar drawbacks as monetary incentives have (Deco et al. 1999, p. 639─640). For
example non-monetary tangible incentives do not lead so easily to the situation where
employees lose the imp-mediate goal because of incentives, than in monetary incentives’
case. That is because unexpected incentives do not create the goal which employees should
attain. However, it is important to notice that according to some studies non-monetary tangible
incentives have usually no effects on performance because of unexpectedness (Deco et al. 1999,
p. 639─640; Cameron et al. 2001, p. 15─22). That is because these incentives do not guide
employees’ actions. The goal-setting theory supports this finding.

Sub section one: Consultative Participation

Consultative participation is a formal means where employees can take part in decision making.
This is usually done through the use of quality circles. Bradley (1987), defined quality circles as
semi-autonomous work groups wherein employees can work together and participate in the
decision making process. It can also be seen as group of employees from different levels of a
company who meet regularly to discuss ways of improving quality and to resolve problems
related to production. Consultative participation is seen to have positive impact on the success of
an organization through job satisfaction, commitment, productivity and other array of a
company.16

Sub section two: Expressed views concerning employee participation

Different views have been expressed regarding employee participation. These views range from
outright rejection of the idea to religious belief that only participation will make companies
productive and competitive. Labor leaders and workers while continuing to press primarily
for increased economic benefits and related gains in working conditions, have become
increasingly persistent in demands for more direct involvement in the decision making
processes of the companies that employ them. Politicians have allied themselves to the union
for political gains. Participation has become a familiar focus of political debates in a
number of countries where its backers seek legislation to establish new participation formats or
expand existing procedures in companies to include more participation. Some executives
on the other hand have held on to the belief that worker participation has no place in the
enterprise. In the light of the above McFarland (1968 p.502) tells us that the root of
participative decision making lies in the company philosophy and managerial style and in
the overall organizational climate. Organizational climate as used by McFarland includes
people, laws, economic and market conditions and technology. Liker and his associates who
conducted elaborate research studies at the institute for social research of the University of
Michigan stressed and prescribed participative group management system as universally
acceptable which is characterized by high degree of trust, confidence and participation. Here
there is a great deal of interaction between managers and subordinates and there is extensive
upward and lateral communication. He goes further to say "The leadership and other
process of the organization must be such as to insure a maximum probability that in all
interaction and in all relationship, within the organization, each number in the light of his
background, values, desires, and expectations will view the experience as supportive and
one which builds and maintains his sense of personal worth and importance".

16
https://hbr.org/1985/01/quality-circles-after-the-fad
Recommendations
Based on the results of the present study, a series of suggestions are considered, which are as
follows:
This study recommends that organizations should increase employee awareness of
participation programs, especially in decision making, in order to increase job satisfaction.
Likewise, they should encourage the introduction of a full participation program among their
employees, so that they can become more aware of their participation and increase their job
satisfaction.
Organization should provide an environment in which employees can express their ideas
freely and without fear of being rejected.
Managers need to increase worker participation in decision making because they are the people
who perform the core operational tasks and have more information about operational activities.
This study examined various indicators of participation in decision making that affect
employee satisfaction.
However, some indicators need to be improved because of their low beta value. Therefore,
further studies need to be conducted to test variables in different contexts for comparison.
This study was carried out in only one organization for more accurate results. Further research
can be carried out in different private and public organizations to obtain more accurate results.