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Participative decision-making in organizations

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Participative Decision-Making (PDM) is the extent to which employers allow or encourage employees to share or participate in organizational decision-making (Probst, 2005). According to Cotton et al. (1988), the format of PDM could be formal or informal. In addition, the degree of participation could range from zero to 100% in different PM stages (Cotton et al., 1988; Black & Gregersen, 1997; Brenda, 2001).

PDM is one of many ways in which an organization can make decisions. The leader must think of the best possible style that will allow the organization to achieve the best results. According to psychologist Abraham Maslow, workers need to feel a sense of belongingness to an organization (see Maslow's Hierarchy of Needs).

Introduction

"Participative management (PM) is known by many names including shared leadership, employee empowerment, employee involvement, participative decision-making, dispersed leadership, open-book management, or industrial democracy" (Steinheider, B., Bayerl, P.S. & Wuestewald, T.,2006).

"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" (Locke & Schweiger, 1979).

The primary aim of PDM is for the organization to benefit from the “perceived motivational effects of increased employee involvement" (Latham, as cited in Brenda, 2001).


Advantages

PDM is most effective where a large number of stakeholders are involved and all from different walks of life, coming together to make a decision which benefits everyone. Some such examples are decisions for the environment, healthcare, 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. {Citation needed}

Organizations benefit from the perceived motivational influences of employees in PDM. When employees participate in the decision making process, they improve understanding and perceptions among colleagues and superiors, and enhance personnel value in the organization (Probst, 2005).

Participatory decision making by the Top Management Team (TMT) "ensures the completeness of decision making and increases team members' commitment to final decisions" (Ling et al., 2008). 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. As each member can relate to the team decisions, there is a better chance of their achieving the results. There is a positive relationship between decision effectiveness and organisational performance. The better the effectiveness, the better the performance.

The implementation of PDM techniques has been shown to have a wide array of organizational benefits. Researchers have found that PDM may positively impact the following (Steinheider, Bayerl, & Wuestewald, 2006):

  • Job satisfaction
  • Organizational commitment
  • Perceived organizational support
  • Organizational citizenship behaviour
  • Labor-management relations
  • Job performance and organizational performance
  • Task productivity (Locker & Schweiger, as cited in Lowin, 1968)
  • Organizational profits (Cotton et al., 1988)
  • Employee absenteeism (Probst, 2005)

When everyone in an organization participates in the decision-making process, organizational communication is much more effective and everyone produces more efficient results (Walker, 2007).

By sharing decision-making with other employees, participants eventually achieve organization objectives that influence them (Brenda, 2001). In this process, PDM can be used as a tool that enhance relationships in the organization, explore incentives of employees and increase the rate of information circulation across the organization (Anderson & McDaniel, as cited in Brenda, 2001).

Outcomes of PDM

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 (Allen & Meyer, as cited in Brenda, 2001). 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 (Cotton et al., 1988; Gregersen & Black, 1997; Lowin, 1968; Brenda, 2001). 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 (Black & Gregersen, 1997):

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 (Black & Gregersen, 1997, p. 865). 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 on the achievement of a designed plan. As the “value attainment” is attached, the extent of performance and work satisfaction increase (Black & Gregersen, 1997, p. 863).
  • Evaluating results: Weaker relationship with performance, but positive relationship with satisfaction due to the future benefit.

Additionally, employee outcomes can also be measured according to the following six dimensions of PDM (Brenda, 2001): 

  1. Rationale:  No distinct relationship with performance. However, high level of self-efficacy contributes to higher performance (Mitchell, Gist, & Silver, 1995).
  2. Structure:  Informal PDM encourage job satisfaction, likewise higher level of commitment and motivation (Cotton et al., 1988).
  3. Form:  Direct PDM is more effective than indirect PDM. The greater influence enhances work satisfaction. Whereas the power range of indirect PDM could vary from partial to decisive.
  4. Decision issues:  The major issue relevant to decision contents is the skills and knowledge owning by employees (Latham, Locke, & Winters, 1994). Relevant knowledge brings higher decision quality and efficiency; participants achieve “value attainment” (Black & Gregersen, 1997, p. 863), thereby raising performance and satisfaction.
  5. Degree of involvement:  Higher degree of involvement leads to greater control and then encourages employees’ performance and satisfaction.
  6. Decision process:  Planning task implementation is key to improving performance (Latham, Winters, & Locke, 1994).


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 (Arnstein, 1969). In her words, "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 painted last spring by the French students to explain the student-worker rebellion.* (See Figure 1.) The 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."


(( Insert graphic of french poster here ))


When participative decision-making takes place in a team setting, it can cause many disadvantages. These can be anything from social pressures to conform to group domination, where one person takes control of the group and urges everyone to follow their standpoints. With ideas coming from many people, time can be an issue. The meeting might end and good ideas go unheard. Possible negative outcomes of PDM are high costs, inefficiency, indecisiveness and incompetence (Debruin, 2007).

With participation comes dilemmas. Ruud van der Helm an independent futurist based at the Hague, The Netherlands, outlines ten major disadvantages in form of dilemma. According to him there are ten such dilemmas and the only way to deal with them is to use foresight. (Ruud van der Helm 2007).

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 behaviour
  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 organisations having diverse environments. A PDM style includes any type of decision transfer from a superior to their subordinates (Sager, 1999). 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 participative decision making is not a unitary concept. Somech (2002) delineates five aspects of PDM: decision domain, degree of participation, structure, target of participation, and rationale for the process.


Huang (1997) simply separates PDM into informal and formal types. Ledford (1993) 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.


[[[[[ WHEN EDITING REAL WIKIPEDIA PAGE, INSERT SOME BOX COMMENT HERE TO SAY THAT THE INFO BELOW IS SUSPECT AND NEEDS ATTENTION ]


PDM can be broken down into four sub-types: Collective PDM, Democratic PDM, Autocratic PDM, and Consensus PDM. {citation needed},


Collective

In a collective participative decision making style, the members of the organization have some say in the decision process. This is the most common type used by organizations and is proven to be very effective. Although employees are asked for their opinions, the leader alone makes the final decision, has all control of how the decision will pan out, and takes full responsibility for all of the consequences (Connor, 2003).


Democratic

In a democratic participative decision making style, the leader gives up complete ownership of the decision and lets employees vote. The majority vote wins. This causes a fast and effective decision to be made. Although the team might reach a fast decision, no one takes responsibility for the decision and if something goes wrong, an employee can simply state that they did not vote for it. {Citation needed}


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. {Citation needed}


Consensus

In a consensus participative decision making style, the leader gives up complete control and responsibility of the decision and leaves it to the members of the organization. Everyone must agree and come to the same decision. This might take a while, but the decisions are among the best since it involves the ideas and skills of many other people. Team work is important in this style and brings members closer together while trust and communication increase. {Citation needed}

Delegated PDM based on Expertise ( Grace is working on converting Tas' references into useable format)

Decision makers cannot be experts in all fields. In such situations, the decision maker delegates full or partial responsibility of decision making for a particular area of concern, to the expert on the team for best management outcomes. The participative leader retains the responsibility of final compilation of the draft responses from all . Such delegation is work specific and singular. It depends on the decision maker to compile the expert reports for the final response. Advantages of this type of decision making process makes the group members feel engaged in the process, more motivated and creative. Expertise brings focussed and result oriented solutions for BATNA (Best Alternative To a Negotiated Agreement) as and when necessary. Best Management Outcomes are obtained by utilizing this strategy. An authorative decision maker would have a higher rate of success than the Democratic decision maker. This strategy would be a disaster, when applied incorrectly or inappropriately is a major disadvantage. {Citation needed} 





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Disadvantages of Participative Decision-Making

When participative decision-making takes place in a team setting, it can cause many disadvantages. These can be anything from social pressures to conform and also group domination, where one person takes control of the group and urges everyone to follow their standpoints. With ideas coming from many people, time can be an issue. The meeting might end and good ideas go unheard. Negative outcomes of PDM are: high costs, inefficiency, and incompetence (Debruin 2007).

Decision-making through computer-mediated technology

A new kind of participative decision-making is communication through the computer. Although a relatively new approach, this way can involve endless possibilities in order to reach a major organizational decision. There is a huge increase in more active and equal member participation. Individuals can talk to many other individuals at any time, regardless of geographic location and time zone. An organization can come together on a virtual site developed to make it easier to share emails, share presentations and even have a chat room where anyone can add their input. Through a chat room, members of the organizations are able to see what everyone says and no one is blocked from saying their ideas. There is also now a record of past archives of what was said (Berry 2002).

Some disadvantages of a computer-mediated meeting is that sometimes feedback can be slow. Also, there can be many conversations under way at the same time and it might cause confusion. Flaming is also known as a computer-mediated problem and is when a person uses inappropriate behavior or language. Members also feel less personal and relational to their team members (Berry 2002).

Vigilant Interaction Theory

According to Papa et al., the vigilant interaction theory is a theory that states the quality of the group in a decision-making team, is dependent on the group's attentiveness during interaction. Critical thinking is important for all group members in order to come up with the best possible solution to the decision. Four questions that should be asked:

1. Analyze the problem- What needs to be fixed?

2. Think of objectives- What are we trying to accomplish with this decision.

3. Discuss choices- Think of possible choices that can be used.

4. Evaluate- After coming up with choices, think of all the positive and negative aspects of each.

Kinds of Participative Decision-Making

In organizations, when coming together to make decisions there are many different types. They are: Collective PDM, Democratic PDM, Autocratic PDM, and Consensus PDM. A PDM style includes any type of decision transfer from a superior to their subordinates (Sager 1999).

Collective

In a collective participative decision-making style, the members of the organization have some say of the decision process. This is the most common type used by organizations and is proven to be very effective. Although employees are asked for their opinions, the leader alone makes the final decision and has all control of how the decision will pan out, and takes full responsibility of all the consequences (Connor 2003).

Democratic

In a democratic participative decision-making style, the leader gives up complete ownership of the decision and lets employees vote. The majority of the votes will win. This causes a fast and effective decision to be made. Although the team might reach a fast decision, no one takes responsibility for the decision and if something goes wrong, an employee can simply state that they did not vote for it.

Autocratic

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

Consensus

In a consensus participative decision-making style, the leader gives up complete control and responsibility of the decision and leaves it to the members of the organization. Everyone must agree and come to the same decision. This might take a while, but the decisions made are usually the best since it involves the ideas and skills of many other people. Team work is important in this style and brings members closer together while trust and communication increase.

Making Decisions Based on Information

To make a good decision, there needs to be a good amount of information that you are basing the outcome from. Information can include anything from charts, surveys, past sales reports, to prior research. When making a decision primarily based from the information you are given from your organization, you can come to a conclusion in four different ways.

Decisive - Little amount of information and one course of action. Decisions are made fast, direct, and firmly.

Flexible - Little information available, but time is not an issue and they come up with many different courses of action.

Hierarchic - Much information available, but one course of action is made.

Integrative - Much information is available, and many decisions are made out of it.


See also

References

Allen, J.F., & Judd, B.B.,(2007). Participation in decision-making and job satisfaction: Ideal and reality for male and female university faculty in the United States. Human Communication 10(3), 157-179.

Asmub,B., & Svennevig, J., (2009). Meeting talk. Journal of Business Communication. 46(1), 3-22

Berry, G.R.,(2006). Can computer-mediated, asynchronous communication improve, team processes and decision-making?. Journal of Business Communication. 43(4),344-366.

Brousseau, K.R., Driver, M.J., Hourihan, G., & Larsson, R.(2006). The seasoned executive's decision-making style. Harvard Business Review. 84(2), 110-121.

Connor, P.E., & Becker, B.W.(2003). Personal value systems and decision-making styles of public managers. Public Personnal Management. 32(1), 155-181.

DeBruin, W.B., Parker, A.M., & Fischhoff, B. (2007). Individual differences in adult decision-making competence.Journal of Personality & Social Psychology 92(5),938-956.

McMahon, M.(2007).Career Coach: Decision Making. Pulse. United Kingdom

Papa, M.J., Daniels, T.D., & Spiker, B.K.(2008). "Organizational Communication: Perspective and Trends" Sage.

Sagie, A., & Aycan, Z.,(2003). A cross-cultural analysis of participative decision-making on organizations. Human Relations 56(4), 453-473.

Sager, K.L., & Gastil, J.,(1999). Reaching consensus on consensus: A study of the relationships between individual decision-making styles and the use of the consensus decision rule. Communication Quarterly. 47(1), 67-79.

Walker, G.B.,(2007). Public participation as participatory communication in environmental policy decision-making: From concepts to structured conversations. Environmental Communication. 1(1), 99-110.

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