Participative Management: The elements, characteristics and impediments

A look at the necessary elements for participation as a management style, the characteristics of a participative manager, and the difficulties often faced when implementing this management across an organization.

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.

Participation as a management style was suggested in the classical Hawthorne experiments of the 1930s. The experiments represent that when small groups of workers feel their work environment is supportive, gain more satisfaction and work better (Crane, 1979). Interest in this management style gained traction after World War II (WWII), appearing in the academic literature writings of scholars such as Kurt Lewin, Douglas McGregor, Chris Argyris, H. Igor Ansoff, and Michael Porter (Kaufman, 2001).

Participatory management is one of the most difficult management styles to implement, and its implementation must be done in a phased approach. It requires greater sharing of information, rewards, and power with front-line employees, as well as considerably greater investment in training. But its benefits far outweigh its investment cost, and thus it has become one of the most important as well as most widely utilized strategies for developing organizations.

Elements of Participatory Management

Recognizing the mechanisms by which participative leadership influences performance will help practitioners better designing training and development programs aimed at enhancing participative management. There are five broad dimensions of participatory management: the decision domain, degree of participation, structure, target area, and rationale.

Decision Domain:

This dimension relates to the actual contribution of the participation. Employees can participate in setting organizational goals (as in OKRs), designing the job (for example in Jobs-to-be-done), making operational decisions around resource allocation or the distribution of human resources, solving client-oriented problems (which involves defining the issues and/or setting alternative courses of action), impacting evaluation and development efforts, and in making organizational changes (such as setting company policies that might involve hiring, layoffs, profit sharing or investments).

Degree of Involvement:

The degree of participation ranges in a sliding scale from suggestions all the way to ownership of outcomes. The higher the degree of participation, the greater the impact of this management style but also the greater the difficulty in implementing it. If we are to imagine a continuum of involvement we could identify four degrees, moving from individualism to collectivism:

• Informational. Where a two-way flow of information is established,
• Consultative. Where final decisions are revised in group before implementation,
• Democratic. Where problems are analyzed together and mutually acceptable solutions are decided on, and
• Collective. Where the collective benefit outweighs the needs of the individuals.

Structure:

Though participation can have no informal structure, higher degrees of involvement require explicit rules and procedures concerning who participates, the expected citizenship behavior (how the participation occurs), and what are the deliverables of participation. From the beginning, ground rules and boundary conditions need to be established. When participation is confined to informal structures, employee role tends to be limited to giving suggestions or advice. Too many choices can be frustrating, and the fewer constraints placed on a team, the more time they will spend defining their structure than accomplishing the task. Agile methodologies provide ample examples of structures to incite participation.

Target Area:

It is also necessary to clearly define which areas should participation be limited to, and this can also serve as a roadmap for the expansion of the program as participants become more versed. These are the areas which are common to most environments:

• Technical. Refers to contributing in the area of domain knowledge of the employee
• Social. Regarding hours of work, rules and regulations at the workplace, welfare measures, workers’ safety, employee welfare, health and sanitation.
• Financial. Such as methods of value creation, cost cutting, mergers and acquisitions, and lay-offs.
• Personnel. Recruitment and selection, work distribution, promotions, demotions or transfers, succession planning, grievance handling, settlements, and voluntary retirement.

Rationale:

The last dimension of participative management has to do with the reason for implementing the program. Leaders sometimes present participation as a gift rather than a results-oriented tool. Presenting participation as a luxury may backfire as it is often insulting to employees. However, introducing participation along with clear explanations of what management hopes to gain from this concept is more readily accepted by employees. Typically we have seen two main motives for PM being presented: humanistic or pragmatic.

• Humanistic relies on the idea that individuals have the right to participate in the decisions that affect their lives.
• Pragmatic suggests that the program is a tool to achieve productivity, efficiency, or other valued organizational results.

Benefits

A participative management style offers various benefits at all levels of the organization, some tangible — higher productivity, greater product quality, lower turnover rate and absenteeism, and some intangible — increased work morale, improved organizational climate, higher employee motivation and job satisfaction.

• Psychological Empowerment. By creating a sense of ownership in the company, it 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. This increases the degree of “we” feeling or cohesiveness in the organization.
• Change Resilience. A participative environment increases receptivity to change, as employees have input and make contributions to decisions while at the same time are provided with an overall organizational point of view. Participation keeps employees informed of upcoming events so they will be aware of potential changes.
• Creativity and Innovation. A more creative and innovative work environment is often the first visible outcome as a more diverse group of voices give input to decisions, and the organization benefits from the synergy that comes from a wider choice of options. The chance to exercise creativity also strengthens motivation as well as increases job satisfaction.
• Increased Productivity. Higher productivity follows as new ideas as discovered from practical experience and a greater focus is placed on customer orientation, continuous learning, and quality and control.
• Collaboration. Teamwork takes on a new meaning as employees cooperate in solving problems, combine knowledge in different ways, and make decisions that benefit from wider range of knowledge, information, and experience.
• Conflict Reduction. An interesting by-product of participative management is the decrease in the amount of conflict, hostility, and cut throat competition between co-workers. The increased understanding leads to higher tolerance and patience towards others, and the feeling of hostility towards orders from the top level of organization are often eliminated. Employees feel able to drop their defenses and expand their energy productively instead, and often develop interest and enthusiasm on their coworkers.

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. 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.

Requirements

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, and often several issues must be resolved and several requirements must be met. Here we list the ones we have encountered most often.

• Managers must be willing to relinquish control to their workers. They must feel secure in their position, and should realize that employee respect from them usually increases when their management style turns participative.
• The transition must be slow and phased. Changing the mindset of the employees takes time, as does the cultural change from democratic (or autocratic) to participative style. Individuals need time to see how contributions are handled from start to finish.
• Managers must be genuine and honest. The acceptance of both positive as well as negative responses is necessary, as most of this transition is done experimentally, and both parties are learning with experience.
• Managers must approach employee involvement with an open mind. Though managers will not agree with every idea or suggestion made, how reception is handled even more important than the ideas themselves.
• Information must be shared. One cannot expect people to make correct decisions with only part of the information. Training should be used to bridge any necessary skill gap.
• Make it about leading instead of directing. When managers look upon their own jobs as a privilege instead of a responsibility, they are less willing to turn over some of the decision-making responsibilities to subordinates.
• Make the results visible. Employees should see their contribution on the final implementation. If multiple options are identified and one selected, it should be made visible the discarded alternatives also — along with an explanation as to the selection process.
• Capitalize on individual strengths. Participation should be merit-based, and delegation should match each individual’s capability profile. This management style enables workers to shine in areas previously hidden.

Factors to consider in its implementation

Participative management is not an easy management style to implement, and it is often accompanied by conflict and struggle (Yohe 2008). Like all cultural changes, it requires a great amount of effort to penetrate the culture before the organization can reap its rewards. 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.

The barriers to participative management can be overcome with the proper implementation, training, and communication by management on corporate objectives. Communication, managerial and employee attitudes, leadership, training, and human resource strategy are all significant moderating factors to participative management, that if not minded will create barriers to participation. (Press, 2010). We have found some common factors that affect most implementations:

• Time to benefit. 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.
• Lower (initial) Productivity. Collective decision-making takes longer, and employees will spend more time formulating contributions and less time completing their work. Though there is an initial reduction in productivity, once adopted organizations achieve much higher levels that previously possible.
• Organizational Bureaucracy. True benefits of participative management only come when voices from all perspectives are heard. Silos, hierarchical requests, and traceable paperwork often get in the way of individual involvement. It is a good idea to assess the bureaucratic culture before implementing a participative management style.
• High Power Distance. Enterprises that focus on uniformity, consistency, and control from the top have difficulty making the transition. Authoritative and command-based leadership styles are excellent for fast responses but terrible for adaptive ones, where participative management shines. Organic rather than mechanistically oriented structures are more appropriate.
• Rewards Systems. As higher levels of participation are achieved, there are fewer indications of where contributions actually come from — as no one “owns” the solution by virtue of organizational assignment. The organizational rewards systems must be adapted to handle collective ownership of deliverables, such as in a meritocracy.
• Office Politics. Hidden agendas, peer pressure, and punishment-reward systems make it too risky for individuals to expose their ideas. Some managers implement this program to impress their superiors, leading to an even lower participation level. Conflicting managerial priorities can also undermine this management style.
• Organizational Size. The larger the organization, the more difficult it becomes to institute this 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.
• Conflict Management. Giving individuals with different interests more ownership of issues often results in more interpersonal conflict. Organizational structure and rationale for the participative program may either strengthen or reduce the conflictive effects.