Participative management is a leadership structure that encourages people from multiple levels of a company to contribute to managing the organization. Companies that employ this style typically hold positions with formal management roles, but those managers prioritize taking feedback and requesting input from other employees.
Definitions of Participative Management:
According to Keith Davis, “Participation is defined as an individual’s mental and emotional involvement in group goals and to share responsibility for them”.
As per The International Institute for Labour Studies, workers participation in management is, “the participation resulting from practices which increase the scope for employees’ share of influence in decision making at different tiers of organisational hierarchy with concomitant assumption of responsibility”.
Participative management has many benefits. For example:
- Employees may feel more personally invested in achieving goals, meeting deadlines and developing solutions.
- Teams may feel more supported in developing innovative and diverse ideas
- Employees may experience increased morale and job satisfaction.
- A company’s employee retention may improve.
Participative Management Features
- Outlook of workers: It develops a sense of belonging among the workers and brings about a change in the outlook of the workers.
- Higher Status: Workers’ participation in management provides workers’ representative to be a part of decision making process along with the top executives of the company and it gives higher status to the employees.
- Employer-employee relations: Participative management brings the workers and the management closer through meaningful discussions for achievement of organisational goals.
- Beneficial to both parties: The management is able to make use of the rich experience of and suggestions of workers, for improving the productivity of the organisation.
- Universally recognised concept: It has universal recognition and has been practiced in many countries.
- Industrial democracy: Workers and management jointly manage the affairs of the company and it is a part of industrial democracy.
- Increase in responsibilities: An opportunity is given to workers to direct their initiative and creativity towards the objectives of the organisation. It encourages workers to accept responsibility as they are involved in discussions and decision making.
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.
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.
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.
Participative Management Objectives
- To raise productivity, production and efficiency of workers.
- To establish harmonious relations between workers and management.
- To satisfy the desire of workers for self-expression and improve the morale of the workers.
- To obtain the fullest co-operation of workers in the working of the organisation.
- To encourage social education which promotes solidarity in the working class.
- To remove grievances, misunderstandings in the minds of employees regarding the policies and practices of the organisation.
- To create a common platform for direct negotiations and collective bargaining.
- To make the workers more responsible and give constructive suggestions to solve problems.
Participative Management necessary Pre-Requisites
- Education and training should be developed comprehensively. Workers should be given proper training to improve their effectiveness during participation.
- Working environment should be congenial to motivate workers to give wholehearted cooperation to the schemes.
- The decision taken at various participatory forums must be implemented within the stipulated period so as to repose faith in the scheme.
- The employers and employees should come to an agreement as to how the various schemes would work at various levels.
- The objectives to be achieved should be realistic and clear to all the participants.
- All the schemes must be based on mutual trust and understanding and attempts to enforce it by law or force would defeat the very purpose of the scheme.
- The participative schemes should be introduced in stages starting from shop floor to board room.
- There should be free flow of information between labour and management throughout the organisation and this will lead to co-operation and understanding.
- The trade union movement should be developed on sound lines so that the workers’ involvement in various schemes would be very effective.
- The management should design a proper system so that effectiveness of the scheme can be assessed periodically.
- The management should take steps to ensure that the workers feel that they are an integral and important part of the organisation and increasing production and productivity would be beneficial to the both the parties in the long run.
- Management should have a positive attitude towards trade union and should consider trade union as a highly valuable and powerful instrument for increasing production and productivity.