Participative (or participatory) management, otherwise known as employee involvement or participative decision making, encourages the involvement of stakeholders

at all levels of an organization in the analysis of problems, development of strategies, and implementation of solutions. Employees are invited to share in the decision-making process of the firm by participating in activities such as setting goals, determining work schedules, and making suggestions. Other forms of participative management include increasing the responsibility of employees (job enrichment); forming self-managed teams, quality circles, or quality-of-work-life committees; and soliciting survey feedback. Participative management, however, involves more than allowing employees to take part in making decisions. It also involves management treating the ideas and suggestions of employees with consideration and respect. The most extensive form of participative management is direct employee ownership of a company. Four processes influence participation. These processes create employee involvement as they are pushed down to the lowest levels in an organization. The farther down these processes move, the higher the level of involvement by employees. The four processes include: 1. Information sharing, which is concerned with keeping employees informed about the economic status of the company. 2. Training, which involves raising the skill levels of employees and offering development opportunities that allow them to apply new skills to make effective decisions regarding the organization as a whole. 3. Employee decision making, which can take many forms, from determining work schedules to deciding on budgets or processes. 4. Rewards, which should be tied to suggestions and ideas as well as performance.

BENEFITS OF PARTICIPATIVE MANAGEMENT

A participative management style offers various benefits at all levels of the organization. By creating a sense of ownership in the company, participative management instills a sense of pride and motivates employees to increase productivity in order to achieve their goals. Employees who participate in the decisions of the company feel like they are a part of a team with a common goal, and find their sense of self-esteem and creative fulfillment heightened. Managers who use a participative style find that employees are more receptive to change than in situations in which they have no voice. Changes are implemented more effectively when employees have input and make contributions to decisions. Participation keeps employees informed of upcoming events so they will be aware of potential changes. The organization can then place itself in a proactive mode instead of a reactive one, as managers are able to quickly identify areas of concern and turn to employees for solutions. Participation helps employees gain a wider view of the organization. Through training, development opportunities, and information sharing, employees can acquire the conceptual skills needed to become effective managers or top executives. It also increases the commitment of employees to the organization and the decisions they make.

Creativity and innovation are two important benefits of participative management. By allowing a diverse group of employees to have input into decisions, the organization benefits from the synergy that comes from a wider choice of options. When all employees, instead of just managers or executives, are given the opportunity to participate, the chances are increased that a valid and unique idea will be suggested.

REQUIREMENTS OF PARTICIPATIVE MANAGEMENT

A common misconception by managers is that participative management involves simply asking employees to participate or make suggestions. Effective programs involve more than just a suggestion box. In order for participative management to work, several issues must be resolved and several requirements must be met. First, managers must be willing to relinquish some control to their workers; managers must feel secure in their position in order for participation to be successful. Often managers do not realize that employees' respect for them will increase instead of decrease when they implement a participative management style. The success of participative management depends on careful planning and a slow, phased approach. Changing employees' ideas about management takes time, as does any successful attempt at a total cultural change from a democratic or autocratic style of management to a participative style. Long-term employees may resist changes, not believing they will last. In order for participation to be effective, managers must be genuine and honest in implementing the program. Many employees will need to consistently see proof that their ideas will be accepted or at least seriously considered. The employees must be able to trust their managers and feel they are respected. Successful participation requires managers to approach employee involvement with an open mind. They must be open to new ideas and alternatives in order for participative management to work. It is important to remember that although the manager may not agree with every idea or suggestion an employee makes, how those ideas are received is critical to the success of participative management. Employees must also be willing to participate and share their ideas. Participative management does not work with employees who are passive or simply do not care. Many times employees do not have the skills or information necessary to make good suggestions or decisions. In this case it is important to provide them with information or training so they can make informed choices. Encouragement should be offered in order to accustom employees to the participative approach. One way to help employees engage in the decision-making process is by knowing their individual strengths and capitalizing on them. By guiding employees toward areas in which they are knowledgeable, a manager can help to ensure their success. Before expecting employees to make valuable contributions, managers should provide them with the criteria that their input must meet. This will aid in discarding ideas or suggestions that cannot be implemented, are not feasible, or are too expensive. Managers should also give employees time to

think about ideas or alternative decisions. Employees often do not do their most creative thinking on the spot. Another important element for implementing a successful participative management style is the visible integration of employees' suggestions into the final decision or implementation. Employees need to know that they have made a contribution. Offering employees a choice in the final decision is important because it increases their commitment, motivation, and job satisfaction. Sometimes even just presenting several alternatives and allowing employees to choose from them is as effective as if they thought of the alternatives themselves. If the employees' first choice is not feasible, management might ask for an alternative rather than rejecting the employee input. When an idea or decision is not acceptable, managers should provide an explanation. If management repeatedly strikes down employee ideas without implementing them, employees will begin to distrust management, thus halting participation. The key is to build employee confidence so their ideas and decisions become more creative and sound.

CONCERNS
Participative management is not a magic cure for all that ails an organization. Managers should carefully weigh the pros and the cons before implementing this style of management. Managers must realize that changes will not take effect overnight and will require consistency and patience before employees will begin to see that management is serious about employee involvement. Participative management is probably the most difficult style of management to practice. It is challenging not only for managers but for employees as well. While it is important that management allows employees to participate in decision making and encourages involvement in the organization's direction, managers must be cognizant of the potential for employees to spend more time formulating suggestions and less time completing their work. Upper-level management will not support a participative management program if they believe employees are not meeting their daily or weekly goals. Some suggestions for overcoming this potential problem are to set aside a particular time each week for workers to meet with management in order to share their ideas, or to allow them to work on their ideas during less busy times of the day or week. Another idea that works for some managers is to allow employees to set up individual appointments to discuss ideas or suggestions. Managers should remember that participative management is not always the appropriate way to handle a given situation. Employees often respect a manager that uses his or her authority and makes decisions when it is necessary. There are times when, as a manager, it is important to be in charge, make a decision, and then accept the responsibility for the choices made. For example, participative management is probably not appropriate when disciplinary action is needed. When managers look upon their own jobs as a privilege instead of as a responsibility, they will fail at making participative management work. They will be less willing to turn over some of the decisionmaking responsibility to subordinates. Another reason that participative management fails is that managers do not realize it is not the same as delegating or simply shifting responsibility.

Participation alone has no value; it is only an effective tool if it is used to solve problems and meet goals. Some managers believe that inviting employees to join in meetings and form committees will create a successful participative management program. However, these measures are only successful when employees' ideas are accepted by management and implemented. The larger the organization, the more difficult it becomes to institute a participative management style. Large organizations have more layers and levels, which complicate effective communication and make it difficult to register the opinions and suggestions of a diverse group of employees and managers. Critics argue that unions are often more effective than participative management in responding to employee needs because union efforts can cut through bureaucratic organizations more quickly. Participative management programs can be threatened by office politics. Due to hidden agendas and peer pressure, employees may keep their opinions to themselves and refuse to tell a manager if they feel an idea will not work. Managers also play a part in politics when they implement participative management programs to impress their own bosses but have no intention of seeing them through. Many companies have experienced the positive effects of participative management. Employees are more committed and experience more job satisfaction when they are allowed to participate in decision making. Organizations have reported that productivity improved significantly when managers used a participative style. Participative management is not an easy management style to implement. It presents various challenges and does not succeed overnight. Managers will be more successful if they remember that it will take time and careful planning before they will see results. Starting with small projects that encourage and reward participation is one way to get employees to believe that management is sincere and trustworthy.

Participative Management refers to as an open form of management where employees are actively involved in organizations decision making process. The concept is applied by the managers who understand the importance to human intellect and seek a strong relationship with their employees. They understand that the employees are the facilitators who deal directly with the customers and satisfy their needs. To beat the competition in market and to stay ahead of the competition, this form of management has been adopted by many organizations. They welcome the innovative ideas, concepts and thoughts from the employees and involv them in decision making process.

Participative Management can also be termed as Industrial Democracy, Co-determination, Employee Involvement as well as Participative Decision Making. The concept of employee participation in organization decision making is not new. However, the idea couldnt gain that much popularity among organizations. Studies have shown that only 3-5 percent of organizations have actually implemented this concept in their daily operations. Though the theory of participative management is as old as the institution of employees and

employers still it is not applied by a large proportion of organizations. The idea behind employee involvement at every stage of decision making is absolutely straight. Open and honest communication always produces good results both for organization as well as workers. Freedom and transparency in companys operations take it to the next level and strengthens the basis of the organization. On the other hand, there are several companies that straightway rule out the possibility of participative decision making process. According to them, employees misuse their freedom of expression and participation in decision making as it provides higher status to employees and empowers them. However, there are many companies who have embraced this particular style of management and are now getting positive results. Toyota is the best example. The company has been following suggestion schemes and employee involvement procedures for over a decade now. The management receives almost 2,000,000 suggestions and ideas every year and around 95 percent of these are implemented by the company. Who is not aware of Toyotas success rate? Around five thousand improvements per year have made Toyota one of the fastest growing organizations globally. The need is to develop and implement a comprehensive company policy and everything works well. British Airways is another great example of participatory management. During economic downsizing, employees suggestions helped them cut annual cost of their operations by 4.5 million pounds. This is just unbelievable. The company would have suffered from huge losses, had it not adopted employees suggestions. It is right to some extent that employees can misuse industrial democracy but with a proper management of HR functions, this problem can be solved and the operations of organization can be taken to the next level. Satyam is another great example. It has been implementing company-wide suggestion scheme, The Idea Junction, since 2001. A real-time web-based portal is present in Intranet that can be accessed by all its employees all across the globe to support the entire life cycle of an idea right from its generation till its implementation. The main idea behind adopting this management style was to create values and bring sense of belongingness in the employees through ideas, suggestions and complaints. The whole procedure is backed by a strong and comprehensive reward policy that encourages employees to perform better each time. Employee participation at each level of decision making process is not at all harmful if managed efficiently. The whole process can be well coordinated and controlled by the sincere and honest efforts of human resource managers.

he 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 exchang of information, ideas, consultations, thoughts, decisions and negotiations between employer and the employee definitely is a boon to the organization. Few of the worlds 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 personn decision making depending upon the requirements of the organization. But there is a difference of opinion abo 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 o 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. Lets read further to understand how these three groups of managerial decisionmaking 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 decisionmaking 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. bjectives of Participative Management inShare

Participative management acts as a force to motivate employees to meet specific organizational goals. The ma idea behind this style of management is not only using physical capital but also making optimum utilization of intellectual and emotional human capital. This is the process of involving people in decision making process to ensure that everyones psychological needs are met. It, in turn, increases the job satisfaction among employee and improves the quality of their work life. Motivated employees are the biggest assets of an organization and participative management is an effective strategy to retain the best talents of the industry. Participatory Management or co-determination is seen as the quick cure for poor morale, employee attrition, low productivity and job dissatisfaction. However, it may not be appropriate to empower employees at every level but use of joint decision making at certain levels in organization can work wonders. Let us read further to explore the main objectives to introduce participative style of management in organizations:

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 achieving success. 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. Participative management is beneficial to organization as well as employees. It gives employees a higher degree of enjoyment at work place that drives them to work harder. It is equally rewarding for the management as it ensures tremendous improvement in work culture within the organization as well as increase in its productivity.

Participative Management Advantage

Participative Management is an approach, which gives everyone in the organization an opportunity to contribute their skills, knowledge and talent to improve the organization.

The Methodology Participative management is a method, which gives employees responsibility, accountability, and authority over their work. The method provides simple tools for employees to improve their work performance and positively impact the bottom line. The process provides an environment to make employee needs known and creates a vehicle for improved communication between all areas of the organization. What differentiates this work is that people's recommendations are actually implemented and acted upon. People solve their own issues and feel empowered within the process of doing so. Executives and employees learn to redesign their workplace to be participative and self-managing. This does not mean you do away with management. People are not asked to do things that they are not capable of accomplishing. There may be training involved to improve skill sets. This does not resemble laissez-faire management in any way. Managers and employees look at a piece of work and ask what roles and responsibilities need to be placed within the boundaries of the work in order to achieve individual and organization goals? The idea is to allow as much responsibility, accountability and reasonable authority to people actually doing the work. Participative management addresses the criteria for superior performance. These criteria have been researched, field-tested, around the world and their validity has been proven in many work settings. Participative management creates a workforce that is committed to obtaining positive results for the organization such as increased productivity and improved quality. People are engaged and motivated and are willing to put forth energy to improve work performance. Participative management works best when the organization has a clear and compelling mission and vision. Employees then can align their personal mission and vision to the organization. Participative management has clear goals and does not turn over the organization to employees. There is still a hierarchy but it is not a dominant hierarchy, which dictates everything to employees. A non-dominant hierarchy has as many levels as are necessary to do the work of the organization. People have clear roles and responsibilities and manage themselves as much as possible. Management tells people what the strategy is and what is expected in terms of results and then allows people to figure out the how to deliver on management expectations. Top management still decides strategy and front line employees still focus on their primary tasks. The difference is that the criteria for superior performance are utilized and leveraged for the success of the organization. The criteria for superior performance are drivers of behavior, reasons why people get up in the morning and are enthusiastic about their work. Pay is considered a satisfier all things being equal. The criteria for superior performance are:

Control Learning Variety Mutual Support and Respect A Promising Future Engage one or several of their preferred life interests Challenges that match and stretch individual skills Concentration and Focus Fun

When the criteria for superior performance are leveraged in an organization the performance will dramatically improve. This has been demonstrated over and over again in thousands of organizations all over the world. Management in most organizations is constantly attempting to get people more involved in improving the organization. People run up against a brick wall because of the bureaucratic structures that still exist in their organizations. This occurs even after many attempts at improvement. Management has not made it to people's advantage to participate, communicate, and share what they know with teammates. Why participate and give ideas for improvement when they are disregarded and not rewarded. People will always do what is in their best interest. If the stated culture of the organization is one thing and the actual behavior of management is not congruent with how management behaves, then people do not trust what is communicated by management. People are very resourceful and learn to survive in any culture. Management can attempt to dictate results and people will do what is required of them to meet the very minimum of expectations in this kind of environment. They will rarely do excellent work. The majority of people want to do good work yet the work structures they find themselves in do not reward good work. When you are competing within an organization to get a raise or a promotion and you have to impress your supervisor you will not share important information with your team members. It is not to your advantage to do this because you are not paid and rewarded to do so. So how we structure work, pay for work and appraise work has to change. Participative management makes it to people's advantage to share their knowledge because when their team is successful they are successful. The group excels because the criteria for superior performance are being applied and top management sees the benefit of all employees contributing to the organization. They want to acknowledge a resource they already pay for their people. Participative management enables organizations to improve performance through a fast, an economical method called the participative design workshop. It clearly states that the design principle underlying the work is a participative method that has clear goals and simple tools for work process improvement. It can be utilized to improve the structure of the organization or just for work process improvement. This will depend on the needs of the organization. The workshop begins with the assessment phase, which begins with briefing one. Briefing one is a short presentation of the bureaucratic design principles and its inverse relationship to the criteria for superior performance. Participants fill out the criteria for superior performance and the skills assessment matrix. The design phase begins with briefing two which is an introduction to the participative design principle and why it leverages the criteria for superior performance. It explains why organizations perform better using these methods. Groups chart their current work process or work flow and flag areas for improvement. They are given clear boundaries in which to work by management. Next, they design improvements for the areas that are deficient and negotiate with management on what is possible to change within the work process. If management wants structure addressed then the group can tackle this issue as well. The workshop gets excellent results even without addressing the issue of organizational structure.

Resistance to the Participative Management Process Whenever there is change we can expect resistance to the process. Many people do not welcome change even if it is in their best interests. People do not want to lose power and control. It is the fear of the unknown that causes problems for people. Wilfred Bion's work on group process, or what he calls fight or flight behaviors, or dependency is constantly at play in most bureaucratic organizations. Most organizations are still in part bureaucratic. People will either fight or run away and these behaviors can be very subtle in nature. A question to ask is what does the person acting out perceive they have to lose if a new initiative takes root? An effective method for managing this type of situation is to reassure the person or group that the change is for the best interest of the organization. From our facilitation experience, all stakeholders are likely to reap tangible and intangible rewards. A top manager that is interested in having a successful Participative Management initiative will be on the constant look out for sabotaging behaviors from threatened individuals. Another behavior to be on the look out for is pairing. Threatened individuals will want to pair up with another individual or one who he/she perceives has power and attempt to inhibit the new participative initiative. Examples and possible results using participative management... Results using Participative Management at a Manufacturing Plant were dramatic. Mr. Daniel reports the situation at QuietFlex has dramatically improved. Workers in one department have been able to increase production from 2500 lbs per hour to 4000 lbs, and continue to progress. In the meantime, scrap and reject have been reduced dramatically. Safety has greatly improved, since the work redesign. People's ability to participate has greatly improved the speed and quality of production.

By incorporating participative strategies at our company, employees have been given a role in solving future problems. Participative Design has "given the managers a way to deal with specific issues. Now they know to ask the employees to really define the problem and what they think the solution should be." Mr. Daniel is pleased how CCI helped his organization both increase quality production and communicate with their workers. "I ask everyone to bring me solutions with their problems," he says. Participative Management at a Mental Health Clinic (healthcare) helped turn around the performance and increase productivity. Immediate Results: Ms. Driscoll reports that group performance has improved dramatically. They have increased face time with clients by 33%. Another positive result of incorporating Flow into their work is that people who enjoy working with children or with geriatric clients are able to choose that work. This choice creates a greater fit between the individuals interests and skills and the work they do. Although it may seem small, the individual's opportunity to choose greatly improves both the quality of service and overall morale.< Long-term Results: The mental health group used the output of the work redesign to create two cross-functional teams, a specialized clinical unit and a service coordination team and to institute a better process for conducting rounds. Communication is more effective and overall administration works more effectively. People take positive control over their work and strive to problem-solve creatively and continuously. Other clinic locations now use the work of the Southwest group to improve their own work processes. Incorporating the criteria for superior performance is allowing these organizations to dramatically improve their performance. Internal consultants at an Oil Company in Canada have reported that several business units have been using participative management tools and report dramatic results. For example the company reported a 40% increase in productivity with minimal technical changes. The results came about through modifications of organizational structure. They define productivity, as making more oil with fewer people. In addition costs were reduced. The excellent results represent the benefits of participative management. In an organization with participative design people are multi-skilled in a variety of technical as well as social tasks. When people are able to perform multiple functions, they add more value to the whole system. Responsibility is located where the work is done, not in levels above. People's are more likely to implement ideas they have had a hand in creating. If organizations want to create an environment where people give their best and create positive results then Participative Management is a useful and practical tool. These are methods that honor people and the creative talent they have to offer. With Participative Management, all stakeholders, management, employees, clients and the community, win.