Participative decision-making in organizations


Participative decision-making is the extent to which employers allow or encourage employees to share or participate in organizational decision-making. According to Cotton et al., the format of PDM could be formal or informal. In addition, the degree of participation could range from zero to 100% in different participative management stages.
PDM is one of many ways in which an organization can make decisions. The leader must think of the best possible way that will allow the organization to achieve the best results. According to Abraham Maslow, workers need to feel a sense of belonging to an organization.

Introduction

"Participative management is known by many names including shared leadership, employee empowerment, employee involvement, participative decision-making, dispersed leadership, open-book management, or industrial democracy".
"The basic concept involves any power-sharing arrangement in which workplace influence is shared among individuals who are otherwise hierarchical unequals. Such power-sharing arrangements may entail various employee involvement schemes resulting in co-determination of working conditions, problem solving, and decision-making".
The primary aim of PDM is for the organization to benefit from the "perceived motivational effects of increased employee involvement"

Advantages

PM is important where a large number of stakeholders are involved from different walks of life, coming together to make a decision which may benefit everyone. Some examples are decisions for the environment, health care, anti-animal cruelty and other similar situations. In this case, everyone can be involved, from experts, NGOs, government agencies, to volunteers and members of public.
However, organizations may benefit from the perceived motivational influences of employees. When employees participate in the decision-making process, they may improve understanding and perceptions among colleagues and superiors, and enhance personnel value in the organization.
Participatory decision-making by the top management team can ensure the completeness of decision-making and may increase team member commitment to final decisions. In a participative decision-making process each team member has an opportunity to share their perspectives, voice their ideas and tap their skills to improve team effectiveness and efficiency.
Participatory decision-making can have a wide array of organizational benefits. Researchers have found that PDM may positively impact the following:
By sharing decision-making with other employees, participants may eventually achieve organization objectives that influence them. In this process, PDM can be used as a tool that may enhance relationships in the organization, increase employee work incentives, and increase the rate of information circulation across the organization

Outcomes

The outcomes are various in PDM. In the aspect of employees, PDM refers to job satisfaction and performance, which are usually recognized as commitment and productivity In the aspect of employers, PDM is evolved into decision quality and efficiency that influenced by multiple and differential mixed layers in terms of information access, level of participation, processes and dimensions in PDM.
Research primarily focuses on the work satisfaction and performance of employees in PDM. Different measurement systems were applied to identify the two items and the relevant properties. If they are measured with different processes in PDM, the relationship is as described below:
  • Identifying problems: Do not have strong relationship with performance. Because even with full participation, participants may not explore their skills and knowledge in identifying problems, which is likely to weaken the desires and motivation then influence performance.
  • Providing solutions: Positive and "potentially strong" relations with performance. It is not only attributed to the skills and knowledge could be explored but also the innovative ways employees can provide and generate.
  • Selecting solutions: Positive to performance but not likely to enhance satisfaction. If the solutions generated are not acknowledged by the employees who are absent at the previous stage, the satisfaction could lessen.
  • Planning implementation: Positive and strong relationship with both performance and satisfaction. Participants are given the possibility to affect the achievement of a designed plan. As the "value attainment" is attached, the extent of performance and work satisfaction increase.
  • Evaluating results: Weaker relationship with performance, but positive relationship with satisfaction due to the future benefit.

    Disadvantages

One of the primary risks in any participative decision-making or power-sharing process is that the desire on the part of the management for more inclusive participation is not genuine. In the words of Arnstein,
"There is a critical difference between going through the empty ritual of participation and having the real power needed to affect the outcome of the process. This difference is brilliantly capsulized in a poster ... highlights the fundamental point that participation without redistribution of power is an empty and frustrating process for the powerless. It allows the powerholders to claim that all sides were considered, but makes it possible for only some of those sides to benefit."
When PDM takes place in a team setting, it can lead to social situations which cause adverse outcomes. These situations include group domination, where one person takes control of the group and urges everyone to follow their standpoints, and peer pressure, where a larger group pressures a smaller group into compromise that they would not otherwise agree to. Time constraints can also be an issue, especially for larger groups; it takes time to come up with ideas, communicate them, and then to rework plans to incorporate the ideas, and when there are many people involved in each step the time can add up and slow down the overall flow of decision-making. Setting time limits and hard deadlines can mitigate this at the risk of missing needed input if time runs out before all parties are heard.
Possible negative outcomes of PDM are high costs, inefficiency, indecisiveness, and incompetence.
Van der Helm, an independent futurist based in the Hague, The Netherlands, outlines ten major disadvantages, or dilemmas, of increased participation. According to him, there are ten dilemmas and the only way to deal with them is to use foresight.
Ten dilemmas:
  1. Participation as the answer and as the problem
  2. The involvement of the actors
  3. The level of ambition of the initiators, the context and the participants.
  4. Representation and legitimization – participation works best in a situation where it is not needed, i.e. in an environment in which all interests are taken into consideration
  5. Knowledge, power and strategic behavior
  6. Formalism or freedom
  7. Entering the debate: between timing and perseverance
  8. Going beyond information: communication and mediation
  9. Results and non-results
  10. Appreciating and apprehending success and failure

    Types

Decisions are made differently within organizations having diverse environments. A PDM style includes any type of decision transfer from a superior to their subordinates. PDM may take many forms and can run the gamut from informal suggestion systems to direct high involvement at the policy and administrative level. Most researchers agree that PDM is not a unitary concept. Somech delineates five aspects of PDM: decision domain, degree of participation, structure, target of participation, and rationale for the process.
Steinheider, Bayerl and Wuestewald cited Huang as separating PDM into informal and formal types. Ledford distinguishes between three types of PDM: Suggestion Involvement, Job Involvement, and High Involvement. High involvement PDM entails power and information sharing, as well as advanced human resource development practices.

Democratic

Democratic leadership, also known as participative leadership, is a type of leadership style in which members of the group take a more participative role in the decision-making process. Researchers have found that this leadership style is usually one of the most effective and leads to higher productivity, better contributions from group members, and increased group morale.
The democratic leadership style involves facilitating the conversation, encouraging people to share their ideas, and then synthesizing all the available information into the best possible decision. The democratic leader must also be able to communicate that decision back to the group to bring unity to the plan is chosen.
The democratic leader delegates authority, encourages participation, and relies on personal power to manage subordinates.
The subordinates with democratic leadership:
  • Will perform just as highly as autocratic leaders when he/she is present.
  • Will have positive feeling with this style of leadership.
  • Will perform well even when the leader is absent.
When the workplace is ready for democratic leaders, the style produces a work environment that employees can feel good about. Workers feel that their opinion counts, and because of that feeling they are more committed to achieving the goals and objectives of the organization.

Autocratic

In an autocratic participative decision-making style, similar to the collective style, the leader takes control of and responsibility for the final decision. The difference is that in an autocratic style, members of the organizations are not included and the final outcome is the responsibility of the leader. This is the best style to use in an emergency when an immediate decision is needed.