Job Satisfaction And Performance Via Participative Management Management Essay

Chapter 1

INTRODUCTION

Researchers have argued that today’s organizations operate in hypercompetitive markets characterized by continuous technological change, shortened product life-cycles, and competitors who compete in aggressive ways (D’Aveni, 1998). Although the exact processes that generate profitability in such environments remain unclear, there is some agreement that successful organizations are flexible and responsive and react quickly to and anticipate changes in the competitive landscape (D’Aveni, 1998; Bruhn, 2001). Taking this argument a step further, some authors (e.g., David et al., 1995; Patria, 2001) specifically argue that participative management is one way in which organizations can achieve the responsiveness needed in a hypercompetitive world.

An HR system enables sustainable competitive advantage to the extent that it helps create a workforce whose contributions are valuable, unique, and difficult for competitors to imitate (Davis, 2004). Thus, by creating a value-adding employment system, high-involvement work practices can contribute to competitive advantage. In this view, firms can achieve sustainable competitive advantage by creating value in a rare and inimitable manner (Guthrie, 2001).

Background of the Study

The concept of Participative management has been discussed by many scholars in their literature for more than four decades. Some of the prominent work related to this area was done by Vroom (1960); Locke and Schweiger (1979); Lawler (1982); Sashkin (1984); Cotton et al., (1988); Cooke (1994). Some researchers have claimed that employee participation is significant factor for bringing change in employee job satisfaction and performance (John, 1994).

The appeal of the participative approach was suggested as early as 1937 by H.H. Carey in his definition of “consulting supervision” as the procedure whereby supervisors and executives consult with employees or their peers on matters affecting employees’ welfare or interest prior to establishing policies or initiating action (Vroom, 1960). From such beginnings the concept of participative management has grown into a full fledged approach to administration affecting both patterns of organizational relationships and leadership style (Powell & Schlacter, 1971).

Participation is a technique in which sharing of influence is done among individuals who are otherwise not hierarchically equal (Locke & Schweiger ,1979). It is a system which encourages employees to participate in the process of making decisions that directly affect their work lives (Bechtold, 1997). According to John (1994) and Wagner, (1994) participation aids in improving employees’ moral and their performance.

Participation is also depicted in encouragement of ideas and viewpoint of employees by their supervisor or subordinates (Andaleeb & Wolford, 2004). Participation has been examined in terms of its ability to enhance outcomes such as productivity and quality, processes such as communication, decision making, innovation, and labor-management relations, and intrapsychic states such as employee satisfaction and commitment (John, 1994; Patria, 2001; Guthri, 2001; Kim, 2002; Yohe & Hatfield, 2003; Shan& Kiyani, 2009).

The concept of employees participation refers to, in general, the participation of the employees with non-managerial functions in the process of making decisions in the organization (Joseph & Franklin, 1974), considering an interests union between the employer and the employee (Alutto & Acito, 1974), in achieving the long term objectives for the organization and for the persons that work in the organization (Camelia, 2008).

The participative management style involves a wide cross-sectional employees in various important decision-making of the organization (Sashkin, 1984). Yohe and Hatfield (2003) states that participative management style involve employee input, allowing the employees to resolve work-related issues. Participative management is utilized to improve work practices, productivity, and organizational performance (Vroom, 1960; Guthri, 2001).Many scholars argue (e.g Wagner, 1994; Finchman & Rhodes, 1994; Scott-Ladd et al. 2006; Bhatti & Qureshi, 2007) that employee participation is likely to increase job satisfaction and performance.

Rationale of the Study

Initially, it appears that participative management may lead to high employee job satisfaction and it does seem eminently logical that a happy employee is a “better” employee which may perform well in the organization. However, thousands of studies have been carried out seeking to establish a positive and unmistakable correlation between participative management, employee job satisfaction and performance with nothing conclusive being proven. The unfortunate consequence of this lack of a clear cause and effect relationship, as Dogan (2009) notes, is that “when management discovers there is no guarantee of a one-to-one correlation between participative management, employee job satisfaction and performance interest usually wanes.”

The investigations studied (presented below) shows that the results about the relationship between participative management and employee job satisfaction and performance are mixed. This relationship is neither certain nor well understood. It has remain unresolved, and inconsistencies in the broader literature on participation make it reasonable for theorists to question whether research has shown evidence of substantial relationships between participative management and satisfaction or performance.

The research basically aims at resolving the question that “Does the participative approach to management pay off in terms of employee job satisfaction and performance?” Research results in this area would clarify the relationship.

Problem Statement

“Finding Impact of Participative Management on employee job satisfaction and performance.”

Research Objectives

The research objective of this study is evident fom its topic, which was to examine the possible relationship among dependent variables that is employee job satisfaction and employee performance and independent variable that is participative management.

The research also identified the association and magnitude of different dependent variables (employee job satisfaction and employee performance) on the dependent variable ( participative management).

Research Hypotheses

H1: There is a positive relationship between participative management and employee job satisfaction.

H2: There is a positive relationship between participative management and employee performance.

Limitations of the Study

The study has definite limitations which hold suggestions for future research.

Study was conducted in Pakistani settings and therefore may not be generalisable to all countries. So the findings may not be replicable in other countries.

The investigation was limited to a single time period. There is a need for longitudinal research to possibly produce stronger relationship between the tested variables.

Survey was only conducted and other empirical data collection methods were ignored.

Sample size was sufficient but not very large.

Convenience Sampling was only used as sampling design.

Sampling done in Islamabad only which may not be representative of the whole country.

The study was delimited to banking sector of Pakistan.

Chapter 2

LITERATURE REVIEW

Before examining the theoretical impact of participative management on employee job satisfaction and performance, a brief review of the extensive literature relating participation in decision making to satisfaction and performance is in order.

Participative Management Style

Participative management has been a growing area of enquiry and debate ever since the seminal work by Lewin and his colleagues. Participative management has been called the “third managerial revolution” (Alutto & Acito, 1974). Scholars have noted that it has become a major social, political and economic issue throughout the world, in a variety of organizational environments (Vroom, 1960).

In recent years, the concept of participative management has become a focal point of interest among both scholars and practitioners of administration. Its acceptance has coincided with the increasing contribution of the behavioral science to managerial thought (Powell & Schlacter, 1971). Reportedly there has been a growing movement towards more “participative” methods of decision making. Academics and practitioners have endorsed participative methods in areas as different as the organization of work and government regulation (Cooke, 1994).

Participative management, employee job satisfaction and performance have received considerable attention from psychologists, sociologists and various management scientists. Three thousand studies have been done on these topics by the time Locke prepared his study nearly 20 years ago (Locke & Schweiger, 1979).

Organizational change and innovation are not simply a matter of front end planning and back end implementation. Similarly, participation is not just about decision-making process that starts with executive decisions and ends up with employees deciding to accept or reject a change. It is more about formulating important decisions outside the planning process and on specific basis by both the management and employees (Perillo, 2008).

Participative management can be described as a process in which employees are engaged as motivated co-producers of a better future. It speaks of mutual trust where employees are acknowledged as valuable contributors and co-owners to help develop better decisions. Participative management and autocratic management style are contrary to each other (McCaffry et al., 1995).

In evaluation, the participatory approach has been defined as “social research that involves trained evaluation personnel (or research specialist) and practice-based decision makers working in partnership”. This approach implies collaboration between facilitators, researchers, or professional evaluators and those who have stakes in the program, project development, or entity. Thus, all groups whose interests are affected by the objective of the evaluation must be involved (Julnes, 2001).

Employee Job Satisfaction

In today’s intensely competitive global environment, there is a strong demand for workforce participation in organizational decision making to enhance individual performance enabling the achievement of higher productivity of an organization. One aspect of workforce participation is job satisfaction. Job satisfaction in general is defined as how much employees like or dislike their work and the extent to which their expectations concerning work have been fulfilled (Dogan, 2009).

Locke (1979) has defined job satisfaction as a pleasurable positive emotional state resulting from the appraisal of one’s job experiences. It is considered as positive affect of employees toward their jobs or job situations. Many advocate this definition as it has captured the effective nature of job satisfaction, which is something “more like a feeling about one’s job rather than their thoughts about it” (Finchman & Rhodes, 1994).

Job satisfaction is simply as the affective orientation that an employee has towards his or her work (Alutto & Acito, 1974). In other words, it is an affective reaction to a job that results from the comparison of perceived outcomes with those that are desired (Creevy, 1998). Furthermore, it is defined as the degree to which employees enjoy their jobs (John, 1994). Shortly, job satisfaction describes the feelings, attitudes or preferences of individuals regarding work (John, 1994).

Researchers perceive job satisfaction as a general attitude, rather than specific or actual (Julnes, 2001). Therefore, job satisfaction varies across different jobs due to different personality attributes and dispositions, nature of job(McCaffry et al,. 1995), positive affectivity, time gap between different job satisfaction surveys, self-esteem and locus of control (Camelia, 2008). Income, occupation and age had significant effects on job satisfaction at α = 0.05(Guthri, 2001). Huang et al. (2009) study shows that there are approaches of measuring job satisfaction – single overall feeling towards the job or separate feelings towards different job facets.

Employee Performance

There is confusion over the exact definition of performance. However it is considered as an important criterion for organizational outcomes and success. The most commonly recognized theories of job performance are given by John P. Campbell and colleagues. According to psychological perspective, Campbell and colleagues described job performance as an individual level variable. Job performance is most commonly referred as whether a person performs their job well (http://en.wikipedia.org).

Previous researches propose that participation in decision making affects work practices, rewards and conditions and these are associated with job satisfaction and effective performance. When employees affect the preexistence to work effort, such as problem solving, locus of knowledge, goal setting, satisfaction and performance are improved (Kim, 2002). Further it is discussed that the process is strengthened when employees’ needs are satisfied and put in towards attaining organizational goals and this as a result would add to satisfaction and employee performance (Scott-Ladd et al., 2006).

Benefits of Participative Management Style

Numerous articles and books have argued that work organizations need to move toward more of a participative management style to the design and management of work organizations (see, e.g., Alutto, & Acito 1974; Locke & Schweiger 1979; Cotton et al. 1988). Lawler and his colleagues, for example, suggest that participative management taps into employees’ capabilities in a way that traditional, top-down management cannot (Lawler, 1982).

By helping organizations to actively develop and utilize their human resources, participative management should enable organizations to produce high-quality products/ services, increase the quality of the decision, smoothes the process of organizational change, enhances the administrative control (McCaffry et al.,1995), increase the speed of work operations and innovation, and improve employee performance, motivation, and attitudes less absenteeism, less turnover, better decision making, better problem solving, and less management overhead-in short, greater organizational effectiveness (Scott-Ladd & Marshall ,2004). Empirical research indicates that successful participative management style efforts can substantially impact organizational financial productivity (Riordan et al., 2005).

Andaleeb & Wolford (2004) explain that participation provides individuals the opportunity to be involved with management in the decision making process. It gives employees the legitimacy and sense of control regarding of their authority within the organization. More over it increases their understanding of how decisions are made; reducing the various interpretations employees can have of a situation.

Further, Cooke (1994) study explains that it resolve problems and minimize impediments to greater performance by utilizing more fully the unique production experience, knowledge, and creativity of employees. It results in long-term employment relationships, group cohesiveness, and guaranteed individual employee rights (Yohe & Hatfield, 2003). It also increases intrinsic rewards from having a greater say in how work gets accomplished, heightened self-esteem and pride, improved working conditions, better employee-supervisor relationships (David et al., 1995), reduced grievances and quicker resolution of problems, greater employment security, and enhanced financial rewards from gain-sharing and other incentive arrangements (McCaffry et al.,1995).

Drawbacks of Participative Management Style

The arguments against this approach are that because the use of these practices increases the uniqueness and value of employees, it will also increase the costs associated with the loss of these employees. In keeping with these arguments, Bechtold (1997) proposed that in high-involvement workplaces, the “organizational centrality” of each individual employee is increased. Since high-involvement firms place greater skill requirements on employees, maximum performance will demand greater levels of tenure and experience (McCaffry et al., 1995).Greater use of participative management will increase the cost of resources required by the organization. Potential costs to the employee include having to work harder (rather than more intelligently), displacement or loss of employment as a result of increased productivity and efficiency, and unwanted peer pressure (David et al., 1995).

Forms of Participation in Decision Making (PDM)

Cotton et al., (1988) defines “participation in decision making (PDM) as an approach of sharing decision making with others to achieve organizational objectives”. There are six forms of participative decision making including participation in work decisions, consultative participation, short-term participation, informal participation, employee ownership, and representative participation.

Creevy, (1998) study explains participation in work decisions includes formal PDM schemes in which workers have a great deal of influence in decisions focusing on the work itself. Consultative participation refers to situations where employees engage in long-term, formal, and direct participation, and the content of the PDM is focused on job issues. Short-term participation is characterized as formal, direct, and concerned with work itself; through it, workers have complete influence in the decision-making process.

Informal participation is done through the interpersonal relationships between managers and subordinates (Joseph & Franklin, 1974). Employee ownership can be classified as formal and indirect PDM. It is formal because the employee has the formal “right” to participate as any stockholder does. It is indirect because although most of these organizations are owned by employees, they are operated conventionally (managers make both daily and strategic decisions). Representative participation is classified as formal, indirect, and of medium to low influence. Employees do not have direct participation; instead they are represented through elected governing council or through board of directors (Cotton et al., 1988).

Theoretical Models for Participative Management Style

Shetzer(1993); Larry (1993);Huang et al. (2009) studies discuss the two widely used theoretical models for explaining the effect of the participative style of superiors on subordinates’ work performance includes motivational and exchange based model. The motivational model holds that more opportunities to participate in decision making provide subordinates with greater intrinsic rewards from work and higher levels of psychological empowerment, which may result in improved work performance (Shetzer,1993). The exchange based model asserts that since participative leadership behavior sends a message that the superior has confidence in, and concern and respect for the subordinates, such leadership behavior is likely to foster higher levels of trust in the superior (Larry, 1993). As a result, the subordinates are likely to reciprocate their superiors as well as their organizations by exhibiting a higher level of work performance (Huang et al., 2009).

Characteristics of Participative Culture Organization

The creation of a participative decision climate in the company is an indication of organizational maturity and a stimulating factor for obtaining quality results. This can be seen at the operational level, where the propitious representatives are increasing of the productivity, of the employees’ motivation and of the clients’ satisfaction (Camelia, 2008). The organizations that have strong inbuilt culture in their organizations would easily adapt to the changing environment (D’Aveni, 1998).

Participative culture organizations’ have core beliefs about the value of people, fulfilling needs of stakeholders, and ready to learn and change. Participation and inclusion are part of their cultural norms (Bechtold, 1997). A community, by its nature, is built on people themselves. It develops over time from the interdependency, caring, and common purpose that bonds the system together. A community starts by recognizing the dignity of each person and the responsibility of each for the common good (Riordan et al., 2005).

Mumford (1983) believes that participative cultures are based on democratic principles. Participation is related to control, and that participation consists of those democratic processes that enable employees to exercise control over their own work environments and work futures. Study shows strongly in the right of people to be able to influence the nature of their own work environments and the learning processes and decision-taking opportunities.

Slate & Vogel (1997) study explains that by providing employees with a right to be heard in the dealings of the organization is an influential approach for superiors to indicate the worth of an employee. Democratic managers who are generally open to and encourage employee participation in decision making provide work environments that have less stress and an atmosphere where employees have higher morale and job satisfaction (Bass& Shackleton, 1979).

Mumford study shows that participation cannot be forced on managements or employees and must not be forced on people at lower levels in the organization. If this happens it becomes both manipulative and despotic. Further, Davis (2004) argued that it should only apply when management and the employees have agreed that a specific change shall take place and there is mutual recognition of the fact that there is a complex problem-solving task ahead, in which all with a stake in the change should share.

According to Riordan et al. (2005) correctional employee participation in work place decision making has been explained as a means for bolstering social support on the job and as a mechanism for reducing factors that have been found to contribute to burnout.

Propositions of Participative Management Style

At the heart of basic proposition that participative management enhance firm performance is the contention that employees generally have more complete knowledge and information about their work tasks and processes than do managers and are in a better position than managers to plan and schedule work, to organize work tasks and work flow, and to otherwise identify and resolve obstacles to achieving optimal performance (Alutto & Acito1974; Singh 2009). A second basic proposition is that participative management styles provide employees with greater intrinsic rewards from work than do traditional forms of management. These better rewards from work enhance job satisfaction and as a result increase employees’ motivation to attain new production goals (Singh 2009).

Also it been anticipated that giving employees access to management or organization information boosts mutual trust and commitment leading to achievement of organizational goals (Driscoll, 1978). Hence, employee-supervisor relationship improves; employees are willing to be more flexible regarding changes in human resource policies. As a result employees are more inclined to channel their power in positive ways than they otherwise would be (Cooke, 1994).

Measurement of Variables

In line with the research on employee participation has been emphasized in relation to job satisfaction and performance.

Participative Management Style

Participative management has been measured in many ways. Various instruments have been developed to consider the diverse types of participative management. Scholars have measures it in terms of management considering opinion of employees, allowing employees to make autonomous decisions regarding their work activities (Driscoll, 1978), employees are involved in setting goals, objectives and other major decisions within their company and how much employees are allowed to take risk in the organization (Scott et al. 2003). Further, this concept is measured in terms of capabilities of the management itself. Special focus has been given on the attributes of the immediate supervisor of the employee. The supervisor must be receptive, has ability to convey the knowledge properly, has potential skills regarding the nature of job, can cope up with variety of challenges, good listener, fair and honest, treat employees with respect (Bruhn et al.,2001; Kim 2002).

Employee Job Satisfaction

Several instruments have been developed to measure employee satisfaction with the job and ultimately with the organization. As satisfaction is a qualitative variable hence to quantify this concept has gain attention of many practitioners and researchers. To measure this variable the factors considered includes working conditions, kind of work, challenges received from job, variety of tasks (Alutto & Acito 1974;Davis, 2004), importance of the job within the organization, opportunity given to use skills and abilities, sense of accomplishment, recognition of work performed(Kim 2002; Scott et al. 2003;Scott-Ladd & Marshall 2004).

Employee Performance

To measure whether employees are performing well on their job will be a difficult. As each employee performance measurement criteria may vary on the basis of job nature, type of organization and sector within which the organization is performing. To quantify the performance for managerial employees would be relatively different from non-managerial employees. As the managerial jobs are broader and difficult to define and the non-managerial tasks usually performed by lower level employees are more specified. Hence, different criteria would be developed for both types (Haung et al., 2009). In general performance is measured in terms of achievement of tasks and duties mentioned in the job description, complete tasks within the specified time period, punctual at work and identify the relevant problems and solve the problems (Riordan et al.2005; Wagner 1994).

Chapter 3

RESEARCH METHODOLOGY

Theoretical Framework

The research study has following variables:

Employee Performance ( Dependent)

Employee Job Satisfaction ( Dependent)

Participative Management ( Independent)

Participative Management

Employee Performance

Job Satisfaction

Independent Variable Dependent Variables

Based on the work of several researchers (e.g., Driscoll 1978; Slate & Vogel, 1997; Cotton et al. 1988; Riordan et al. 2005; Bhatti & Qureshi 2007; Yohe & Hatfield 2003; Scott-Ladd et al. 2006; Scott-Ladd & Marshall 2004; Shan & Kiyani 2009) the study shows that employee job satisfaction and performance are dependent on participative management. Employees will be satisfied from their job and will perform well if participative practices are implemented within the organization.

Many practitioners like managers, employers, trade union leaders and writers in the business media express their opinion that participative have considerable, positive effects on performance and satisfaction of employees at work (e.g., Bass & Shackleton 1979; Bruhn 2001; Bhatti & Qureshi 2007). Many of the researchers have cited a review article by Cotton et al. (1988) as support to their arguments (see details as cited Wagner III, 1994). Many studies show participative decision making as a managerial strategy that has been advocated as a means of improving both the performance and satisfaction of individuals in organizations (Alutto & Acito, 1974).

Method

Our research study was relational for exploring association among participative management, employee job satisfaction, and employee performance. These variables are tested.

Purpose of the Study

Hypothesis testing was done in order to test the relationship between variables such as participative management, employee job satisfaction and performance.

Type of Investigation

A causal study was conducted to explore the association among participative management on employee job satisfaction and performance. These variables were tested.

Extent of Researcher Interference

The data was collected with minimum interference by the researcher from different organizations.

Study Settings

The study was conducted in noncontrived settings as the data was collected from different Pakistani organizations.

Unit of Analysis

The research questions focused on the participative management impact on employee job satisfaction & performance and the concerning data was gathered from different private banks.

Time Horizon

The data was gathered just once from different private banks therefore the study was cross-sectional or one-shot study.

Sampling Design

The sample was selected by using convenience sampling where the data collection was done from the employees of private banks who were conveniently available to provide it.

Sample

Sample considered was 250 employees from private banks in Islamabad. Private Banks were only selected as participative management styles are more implicated in private banks than in public banks of Pakistan. The 05 private banks were included in the survey.

Instrument

A single questionnaire (See Appendix) was distributed which was adapted from Scott, Bishop& Chen (2003); Kim (2002). The questions were carefully worded to avoid misinterpretation. The questionnaire layout was formatted in logical manner to ensure a higher response rate. Structured questionnaire were designed. Questionnaire includes only closed-ended questions.

Questionnaire was comprised over three sections; first part consisted of questions in order to analyze the participative management style used in organization. The second part of questionnaire consisted of questions in order to identify job satisfaction of the employees. The third part includes assessing the job performance of employees.

The instrument used to measure the participative management variables was measured on a 4 & 5-point likert scale. For employee job satisfaction the scale was 5- point likert scale. The job performance of the employee was measured on a 4-point likert scale.