EMPLOYEE INVOLVEMENT AND

PARTICIPATION

Presented By:

M.Tulasinadh, MBA., (

INTRODUCTION
When an organization truly wants to create a positive work environment that is based on
high

trust,

exceptional

customer

service,

collaborative

teamwork,

operational

excellence, and creative problem solving, then the leadership team must begin to
understand, invest in, and be responsive to the needs of the group that represents the
organizations most valuable assets, and is also one of its most important customers,
the employees. The return on such nominal investments will come in the form of higher
levels of employee motivation, creativity, productivity, and commitment that will move
the organization forward with greater profitability.
A fundamental Total Quality Management precept is that employees must be involved
and empowered.

History Of Employee Involvement And Participa

Employee involvement and participation have been at the heart of industrial relations
since its inception, although much of the contemporary terminology has moved away from
industrial democracy employed by the Webbs in 1898.
The labels and terms for employee involvement and participation have expanded and
varied over time, reflecting different disciplinary bases (industrial relations, human
resource management, psychology and political science), changing socio-economic
contexts, competing goals between management, labour and government, and a variety of
practices.

What is Employee Involvement

Employee involvement is creating an environment in which people have an impact on
decisions and actions that affect their jobs.
Employee involvement means that every employee is regarded as a unique human being,
not just a cog in a machine, and each employee is involved in helping the organization meet
its goals. Each employees input is solicited and valued by his/her management. Employees
and management recognize that each employee is involved in running the business.
Intrinsic to most employee involvement processes is training in team effectiveness,
communication, and problem solving; the development of reward and recognition systems;
and frequently, the sharing of gains made through employee involvement efforts.

 Employee involvement is a process for empowering employees to participate in managerial

decision-making and improvement activities appropriate to their levels in the organization.
Since McGregors Theory Y first brought to managers the idea of a participative
management style, employee involvement has taken many forms, including the job design
approaches and special activities such as quality of work life (QWL) programs.
There is at the end of the day only one thing that differentiates one company from another
its people. Not the product, not service establishments, not the process, not secret
ingredients; ultimately any of these can be duplicated.
The Japanese have always recognized this and it is one of the reasons for their success in
world markets they place tremendous value on the integration of people with
organizational objectives, equipment and processes.

Continued

Employee Participation
Although the difference may be subtle, there is a difference between employee participation
and employee involvement. When the two phrases are used within the human resources
context, it can denotes two separate company policies and levels of employee company
interaction. However, both processes can yield a more productive work force.

Employee Participation
When an employee participates in a business activity, it means he shares the activity with
others. These others form one team with the employee and the team is responsible for
completion of a goal or project. The team provides the forum where the employee can suggest
ideas to make the item more efficiently and make decisions about his portion of the team's
project. Whether the level of the employees' involvement is major or minor, all team members
are encouraged to participate.

ADVANTAGES
Combining both management styles can yield a work force that is more motivated and
employees who enjoy their jobs more as they feel part of the process.
It can lead to longer employment periods with the same employees, requiring fewer new
employee hires and reducing company turnaround.
The projects can be completed and implemented faster and more efficiently given that the
workers are more aware of the methods to streamline the process than management, as the
employees are responsible for the daily maintenance.

The keys to involvement are several and complex:

(a) Financial
Share ownership and profit distribution plans can help to foster an interest in a companys
affairs at the competitive level which is often hard to get across in the normal day to day
routine of workplace activity.
(b) Job security
Doubt as to whether you will still be with the company next week are hardly likely to
encourage a sense of belonging. Again the Japanese have recognized this rather obvious
truism for many years.

IMPLEMENTATION
In order to implement employee involvement and empowerment to an enterprise the
following key actions need to take place:
Giving employee the responsibility
Training employee to accept responsibility
Communicating and giving feedback
Giving rewards and recognition

Objectives of Participative Management

To Make Best Use of Human Capital: Participative management does not restrict
organizations to exploit only physical capital of employees. Rather it makes the best use of
human intellectual and emotional capital. It gives employees an opportunity to contribute
their ideas and suggestions to improve business processes and create a better working
environment.
To Meet the Psychological Needs of Employees: When employees have a say in decision
making process, it gives them a psychological satisfaction. It is a simple force that drives
them to improve their performance, create a proper channel of communication and find
practical solutions to design better organizational processes.
To Retain the Best Talent: Participatory management is one of the most effective
strategies to retain the best talent in the industry. It gives employees a sense of pride to have
a say in organizational decision making process. Once they are valued by their seniors, they
stick to the organization and become managements partners in meeting specific goals and

 To Increase Industrial Productivity: In todays competitive world, motivation, job security

and high pay packages are not enough to increase industrial productivity. Leadership,
flexibility, delegation of authority, industrial democracy and employee say in decision making
are important to increase annual turnover of any organization.
To Establish Harmonious Industrial Relationship: Participatory from of management is an
unbeatable tact to establish and maintain cordial relationships with employees and workers
union. The success of an organization depends on its human resources. Employee
empowerment acts as a strong force to bind the employees and motivate to give them their
best to the organization.
To Maintain a Proper Flow of Communication: Two-way communication plays an
important role in the success of any organization. Employee participation in decision making
ensures proper flow of communication in the organization. Everyone contributes their best and
tries to strengthen the organization by contributing their best to improve business processes.

Methods/Ways of Participation of Employees in

Decision-Making
Participation at the Board Level: Representation of employees at the board level is known
as industrial democracy. This can play an important role in protecting the interests of
employees.
Participation through Ownership: The other way of ensuring workers participation in
organizational decision making is making them shareholders of the company. Inducing them
to buy equity shares, advancing loans, giving financial assistance to enable them to buy
equity shares are some of the ways to keep them involved in decision-making.
Participation through Collective Bargaining: This refers to the participation of workers
through collective agreements and by deciding and following certain rules and regulations.
This is considered as an ideal way to ensure employee participation in managerial processes.
It should be well controlled otherwise each party tries to take an advantage of the other.

 Participation through Suggestion Schemes: Encouraging your employees to come up with

unique ideas can work wonders especially on matters such as cost cutting, waste management,
safety measures, reward system, etc. Developing a full-fledged procedure can add value to the
organizational functions and create a healthy environment and work culture. For instance,
Satyam is known to have introduced an amazing country-wide suggestion scheme, the Idea
Junction. It receives over 5,000 ideas per year from its employees and company accepts almost
one-fifth of them.
Participation through Complete Control: This is called the system of self management
where workers union acts as management. Through elected boards, they acquire full control of
the management. In this style, workers directly deal with all aspects of management or
industrial issues through their representatives.
Participation through Job Enrichment: Expanding the job content and adding additional
motivators and rewards to the existing job profile is a fine way to keep workers involved in
managerial decision-making. Job enrichment offers freedom to employees to exploit their
wisdom and use their judgment while handling day-to-day business problems.

Examples of Employee Involvement Program

Suggestion Box

The old-fashioned suggestion box that is rarely opened, let alone utilized, will not do much for
company morale, however, a suggestion box with a kick will involve employees from throughout
the company.
Safety Committees
Reducing

accidents

can

reduce

your

liability

and

improve

attendance

and

productivity.

Implementing safety committees at your business can help you achieve this goal. Each
committee member should serve a one-year term. Provide a place for monthly safety meetings
and make sure a member of management attends to consider any safety suggestions.
Ideas Campaign
Placing dry-erase boards in each department and promoting an "ideas campaign" will help keep
employees involved. When employees come up with new ideas to make the business run more
smoothly, they can put them on the board.
Peer Picking Program

Participative Schemes In India

The introduction of works committees through the Industrial Disputes Act in 1947 was hailed
by many as an encouraging measure for participation. The works committee was envisaged
as an industrial relations (IR) tool to resolve or reduce differences between managements and
labour.
The National Commission on Labour, 1969, recommended that the recognized union be given
the right to nominate worker representatives to the works committee.
In 1956, the government suggested at the annual labour conference that a delegation should
go to Europe and study how the system worked in countries where many of the joint bodies
were still active. The delegation reported back to the conference and proposed that JMCs be
set up in all establishments employing 500 or more workers. The conference adopted this
recommendation as a resolution in 1958.
After the JMC experience, the Government decided to make a fresh attempt at participation in
public sector units (PSUs) at least. It announced in 1971 a scheme for worker directors on PSU
boards. One worker director was made mandatory for each PSU, the representative being a

 In 1975, one of the populist measures adopted by the Government was a 20-point
programme, and workers participation was one of the points. A new scheme of shop councils
and joint councils was formulated in October that year.
When the Janata Party came to power in 1977, it appointed a committee under Labour
Minister Ravindra Verma to investigate statutory imposition of participation. The Verma
Committee in 1978 duly recommended a statute on participation.
The final step in the rather prolonged introduction of participation was taken in 1990, when
the new Government drafted a Participation of Workers in Management Bill, and circulated it
among chambers of commerce and major unions for comments. The annual labour
conference that year had an almost single-point agenda statutory participation.

FORMS OF EMPLOYEE PARTICIPATION

SALAMONS FORMS (1998)

Industrial Democracy: worker control
Employee Participation: influence decision making
Employee Involvement: engage support,

understanding, commitment & contribution

RAMSEYS TYPES

1. Task Involvement
2. Team Briefing Systems

3. Consultative Arrangements

THE PUSH FOR PARTICIPATION

Ideological
Institutional (EU)
Higher expectations
Attitudes towards authority
Alienation & dissatisfaction at work
Organisational change
HRM

DIRECT PARTICIPATION

Team Working
Quality Circles
Attitude Surveys
Suggestion Scheme

INDIRECT (REPRESENTATIVE) PARTICIPATION

Collective Bargaining
Works Councils
Worker Directors

CYCLES OR WAVES OF PARTICIPATION

Cycles:

history of participation shows periods of development

followed by periods of decay with little/no overall change (Ramsey
1983)

Waves:

interest in participation ebbs & flows at both the micro

and macro levels (Marchington 1992)

EU INFORMATION AND CONSULTATION DIRECTIVE 2002

This is the best opportunity ever, to reform the Irish industrial

relations system. Prof Keith Sisson

Right to be informed and consulted on matters currently affecting their

jobs and those likely to impact on their future work life.

A CASE OF GOOD PRACTICE

In this organisation commitment to informing and consulting employees comes

from the top. They employ multiple mechanisms for both purposes. Material is
presented in good time and is broad and deep in scope. Both direct and
representative mechanisms are used. Decisions can and do change as a result.

A CASE OF POOR PRACTICE

There is no real commitment to informing and consulting employees.

The organisation pays lip service by having mechanisms in place that

are not active. Employee representatives are marginalised. The
preference is for direct mechanisms to be used for informing (at short
notice). Decisions should not and do not change.

ETHICAL CODES

ETHICAL CODES
Subpart A General Provisions
Subpart A establishes the framework for the

rest of the regulation. It includes definitions,

provides authority for supplementation of the
regulation when necessary by individual
agencies, and encourages employees to seek
advice from agency ethics officials.

 Restates the 14 principles of ethical conduct and instructs

employees to apply them when considering situations not

specifically addressed by the regulation; and
For situations that involve appearances of conflicts,

provides that the circumstances be judged from the

perspective of a reasonable person with knowledge of the
relevant facts.

SUBPART B GIFTS FROM OUTSIDE SOURCES

Subpart B prohibits employees from soliciting or accepting gifts from

prohibited sources or gifts given because of their official position.

The term prohibited source includes anyone seeking business with
or official action by an employees agency and anyone substantially
affected by the performance of the employees duties. For example,
a company bidding for an agency contract or a person seeking an
agency grant would be a prohibited source of gifts to employees of
that agency.

 The term gift is defined to include nearly anything of market

value. However, it does not include items that clearly are not gifts,
such as publicly available discounts and commercial loans and it
does not include certain inconsequential items, such as coffee,
donuts, greeting cards, and certificates.

SUBPART C GIFTS BETWEEN EMPLOYEES

Subpart C prohibits employees from:

Giving or soliciting for a gift to another employee who is an official

superior; or
Accepting a gift from a lower-paid employee, unless the two

employees are personal friends who are not in a superiorsubordinate relationship.

 The following are among the exceptions to these prohibitions:

On an occasional basis, employees may give and accept items aggregating $10 or less per

occasion, food and refreshments shared in the office, or personal hospitality at a residence. This
exception can be used for birthdays and those holidays when gifts are traditionally exchanged.
On infrequent occasions of personal significance, such as marriage, and on occasions that

terminate the superior-subordinate relationship, such as retirement, employees may give and
accept gifts appropriate to the occasion and they may make or solicit voluntary contributions of
nominal value for group gifts.

SUBPART D CONFLICTING FINANCIAL

INTERESTS
Subpart D contains two provisions designed to deal with financial interests that conflict with

employees official duties.

The first provision, entitled Disqualifying financial interests, prohibits an employee from

participating in an official government capacity in a matter in which he has a financial interest or in

which his spouse, minor child, employer, or any one of several other specified persons has a
financial interest. For example, an agency purchasing agent could not place an agency order for
computer software with a company owned by his wife. The provision includes alternatives to
nonparticipation, which may involve selling or giving up the conflicting interest or obtaining a
statutory waiver that will permit the employee to continue to perform specific official duties.

 The

second provision, entitled Prohibited financial

interests, contains authority by which agencies may
prohibit employee from acquiring or retaining certain
financial interests.

Employees required by Subpart D to sell financial interests

may be eligible to defer the tax consequences of that

divestiture.

SUBPART E IMPARTIALITY IN PERFORMING

OFFICIAL DUTIES
There may be circumstances other than those covered by Subpart D

in which employees should not perform official duties in order to

avoid an appearance of loss of impartiality. Subpart E contains two
disqualification provisions addressing those appearance issues.
The first provision, entitle Personal and business relationships,

states that employees should obtain specific authorization before

participating in certain Government matters where their impartiality
is likely to be questioned. The matters specifically covered by this
standard include those:

 Involving specific parties, such as contracts, grants, or investigations,

that are likely to affect the financial interests of members of

employees households; or
In which persons with whom employees have specific relationships

are parties or represent parties. This would include, for example,

matters involving recent employers, employers of spouses or minor
children, or anyone with whom the employees have or seek a
business or financial relationship.

SUBPART F SEEKING OTHER EMPLOYMENT

Subpart F prohibits an employee from participating in their official capacities in

particular matters that have a direct and predictable effect on the financial
interests of person with whom they are seeking employment or with whom they
have an arrangement concerning future employment.
The term seeking employment encompasses actual employment negotiations

as well as more preliminary efforts to obtain employment, such as sending an

unsolicited resume. It does not include:

 Sending an unsolicited resume, for example, to someone only affected by the

employees work on general rulemaking;

Requesting a job application or rejecting an unsolicited employment overture. An

employee generally continues to be seeking employment until the employee or

the prospective employer rejects the possibility of employment and all discussions
end. However, an employee is no longer seeking employment with the recipient
of an unsolicited resume after two months have passed with no response.

SUBPART G MISUSE OF POSITION

Subpart G contains four provisions designed to ensure that employee do not misuse

their official positions. These include:

A prohibition against employees using public office for their own private gain for the

private gain of friends, relatives, or persons with whom they are affiliated in a nonGovernment capacity, or for the endorsement or any product, service, or enterprise;
A prohibition against engaging in financial transactions using nonpublic information,

or allowing the improper use of nonpublic information to further private interests;

 An affirmative duty to protect and conserve Government property

and to use Government property only for authorized purposes; and

A prohibition against using official time other than in an honest

effort

to

perform

official

duties

and

prohibition

against

encouraging or requesting a subordinate to use official time to

perform unauthorized activities.

SUBPART H OUTSIDE ACTIVITIES

Subpart H contains provisions governing employees involvement in outside activities including

outside employment. These provisions are in addition to the provisions set out in other parts of
the regulation. The provisions in Subpart H include:
Synopses of statutes and a constitutional provision that may limit certain outside activities;
A prohibition against engaging in outside activities that conflict with employees official duties;
Authority by which individual agencies may require employees to obtain approval before

engaging in outside activities;An outside earned income ban applicable to certain Presidential
appointees and certain non-career employees;

CONCLUSION

The notion of employee participation and involvement to foster the growth of

business organizations is one that is only a few decades old. Sceptics initially
feared that such an approach would be doomed to devolve into chaos, similar to a
bus driver who allows multiple passengers to steer simultaneously. However,
when used effectively, employee participation can lead to greater workplace
satisfaction, increased profitability and faster growth.