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Employee involvement in decision-making: the more the better?

Employee involvement in decision-making: the more the better? The purpose of this paper is to relate participative decision-making (PDM) to organizational learning, and examine the impact of PDM on organizational performance.Design/methodology/approachThe paper integrates the resource-based theory with organizational learning theory to develop a framework, and distinguishes PDM in which decisions are jointly made by employees and managers from employee decision-making (EDM) in which decisions are completely in the hands of employees. The paper incorporates an augmented Cobb–Douglass production function into a structural equation model to estimate the performance impact of PDM and EDM.FindingsThe paper tests the framework against firm-level data form China, and finds that PDM provides an opportunity for collective learning, and has a positive relationship with productivity-based profit gains; the positive relationship is stronger in firms whose management has greater accumulated knowledge and experience; EDM fails to provide an opportunity for collective learning, and has a negative relationship with productivity-based profit gains.Originality/valuePrior research focused on the role of PDM in enhancing the motivation and performance of individual employees, considered the degree of employee involvement as a continuum with the highest being decision-making “completely in the hands of employees,” and concluded that the more involved are employees in decision-making the better. This paper relates PDM to organizational performance, and challenges this conventional view from an organizational learning perspective. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

Employee involvement in decision-making: the more the better?

Tian, Xiaowen; Zhai, Xiaoxuan
International Journal of Manpower , Volume 40 (4): 15 – Jul 12, 2019
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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0143-7720
DOI
10.1108/ijm-05-2017-0090
Publisher site
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Abstract

The purpose of this paper is to relate participative decision-making (PDM) to organizational learning, and examine the impact of PDM on organizational performance.Design/methodology/approachThe paper integrates the resource-based theory with organizational learning theory to develop a framework, and distinguishes PDM in which decisions are jointly made by employees and managers from employee decision-making (EDM) in which decisions are completely in the hands of employees. The paper incorporates an augmented Cobb–Douglass production function into a structural equation model to estimate the performance impact of PDM and EDM.FindingsThe paper tests the framework against firm-level data form China, and finds that PDM provides an opportunity for collective learning, and has a positive relationship with productivity-based profit gains; the positive relationship is stronger in firms whose management has greater accumulated knowledge and experience; EDM fails to provide an opportunity for collective learning, and has a negative relationship with productivity-based profit gains.Originality/valuePrior research focused on the role of PDM in enhancing the motivation and performance of individual employees, considered the degree of employee involvement as a continuum with the highest being decision-making “completely in the hands of employees,” and concluded that the more involved are employees in decision-making the better. This paper relates PDM to organizational performance, and challenges this conventional view from an organizational learning perspective.

Journal

International Journal of Manpower – Emerald Publishing

Published: Jul 12, 2019

Keywords: Organizational performance; Organizational learning; Exclusive participative decision-making; Inclusive participative decision-making

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