Scope of Participative Management

The scope of participative style of management certainly depends on the organization, its nature, functions and processes. Though associating employees at every stage of decision-making is not possible still regular exchange of information, ideas, consultations, thoughts, decisions and negotiations between employer and the employees definitely is a boon to the organization. Few of the world’s biggest organizations like Toyota, HSBC, British Airways, Satyam, British Gas and Nokia Cellular have achieved considerable profits and value creation by implementing the most amazing ideas of their employees. Their success witnesses the importance of workers’ participation in the process of decision making.

The scope of workers’ involvement in managerial decision-making may extend to social, economic and personnel decision making depending upon the requirements of the organization. But there is a difference of opinion about the extent to which employees can participate in managerial decision-making process. Should they be equal partners and make joint decisions or should workers be given opportunities through their seniors to come up with the ideas. The first school of thoughts favors the actual participation of workers while the second school of thoughts suggests the consultation of workers in managerial decision making. It is up to the management to decide which style it prefers and till what extent it requires involvement of employees.

However, if we talk about the scope of workers’ participation in social, economic and personnel decision-making, it may have a direct impact on some of the most crucial activities of the organization. Let’s read further to understand how these three groups of managerial decision-making can affect any industrial establishment:

• Social Decision-Making: It refers to employee involvement in decision making regarding hours of work, rules and regulations at workplace, welfare measures, workers’ safety, employee welfare, health and sanitation. In this category, employees have a say in decisions in these areas. They may take an advantage of their liberty and sometimes, can dominate the management. Here the concept of bounded or restricted participation can work well.

• Economic/Financial Decision-Making: It includes involvement of employees on various financial or economic aspects such as the methods of manufacturing, cost cutting, automation, shut-down, mergers and acquisition and lay-offs. Inviting ideas from employees on various issues like how to cut down the operating cost can work wonders.

• Personnel Decision-Making: The employees’ participation in personnel decision-making refers to their involvement in various management processes including recruitment and selection, work distribution, promotions, demotions and transfers, grievance handling, settlements, voluntary retirement schemes and so on. Participation of employees in these processes can safeguard their interests and motivate them to work hard for the betterment of self as well as the organization.

Employee participation in decision-making process although is beneficial. However, there may be some limits on it to ensure that they do not take advantage of their liberty and right of participation. There are several ways through which employees can participate in the whole process. Some of them are financial participation, participation through collective bargaining, participation at the board level, participation through ownership, participation through work councils and committees and participation through suggestion schemes. Anyone of these ways or processes can be adopted by the management to ensure participation from workers.