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The Impact Of Employee’s Participation In Decision Making On Organizational Performance (A Study Of Some Selected Private Organizations)

CHAPTER ONE

1.0 INTRODUCTION

 Employee participation is creating an environment in which

people have an impact on decision and actions that affect their jobs.

Employee participation is not the goal nor is it a tool, as practiced in

Nigerian Public sectors. Rather, employee participation is a

management and leadership philosophy about how people are most

enabled to contribute to continuous improvement and the on going

success of the public sectors.

 Anyanwuocha (2003) explained that public sector are

government or state owned business organizations, which are

usually set up by act of legislation, with the main aim of maximizing

public welfare.

 Moving decision making power downward in public sector is at

the core of what employee participation is all about. Teams are a

potentially powerful way to move power downward. The employee

participation have also been implemented in the Nigerian public

sectors in order to motivate the employees by involving them with

the management for taking serious decisions about the public sector.

 Research on employee participation begun to provide

information on the number and types of programmes that exist, their

structure and their effects on a variety of social-psychological,

production and economic issues in the public sector.

 To date, little is known about the financial condition of the

Nigerian public sectors with employee participation in decision

making. Although the popular literature suggest that employee

participation in decision making has been implemented in the

Nigerian public sector in distress and has been effective in restoring

financial health.

1.1 BACKGROUND OF THE STUDY 

 It should be recent that a decision is a choice whereby a

person forms a conclusion about a situation. Gostell L. Wand Zalkind

S.S. (1963) defined the term decision making as a choice process,

choosing one from among several possibilities. This depicts a course

of behaviour about what must be done or vice versa. Decision

however translated into concrete action. Planning engenders decision

guided by company policy and objectives, policies, procedures and

programmes.

 The aim of decision making is to channel human behaviour

towards a future goal. Decision-making is however one of the most

important activities of management. It has been the pre-occupation

of all management of multifarious organization to multi-national

corporations.

 Managers often consider decision making to be the heart of

their job in that they must always choose what is done, who will do

it, when, where and most of the time how it will be done.

 Traditionally, managers influence the ordinary employers and

specifically their immediate subordinate in the organization. This has

resulted in managers‟ unnatural decision even in areas affecting their

subordinates. In Germany around 1951 a law was enacted which

provides for code termination and requires labour membership in the

supervisory board and executive committee of certain large

corporation enabling subordinates to participate in decision making

process resulted to relatively and peaceful labour management

relations.

 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.

 It is in this context the researcher wishes to assess the “impact

of employee participation in decision making in Nigerian public

sector” using Power Holdings Company of Nigeria (PHCN) Enugu as a

case study.

1.2 STATEMENT OF THE PROBLEMS   

 There has been a lot of controversy as to whether an employee

should participate in management decision making or not. Some

writers argued that employees should contribute in making decision

more especially where it affects them or their jobs. It is expected

that such participation will serve as training and testing ground for

future members of upper management.

 In Nigeria, experts that refuted the above assertion see the

arrangement as a symptom of mal-organization. They maintained

that qualified, reasonable, honest and company oriented individuals

are not available at these lower organizational levels. But the big

question is, are skilled individuals really available? All these underlay

the need for an investigative study.

1.3 OBJECTIVES OF THE STUDY

 The general purpose of this empirical study is to assess the

employee‟s participation in managerial decision making in public

sector organization in Nigeria with reference to Power Holding

Company of Nigeria Enugu. The specific objectives are;

1) To asses the impact of employee participation in

management decision making.

2) To determine the impact of employee participation and non-

participation in management decision on productivity of the

Nigerian Public Sector.

3) To make recommendations based on the research findings.

1.4 SIGNIFICANCE OF THE STUDY

 It is expected that the study will inform the management of

the Power Holding Company of Nigeria (PHCN) Enugu that to

increase productivity and to ensure harmony between management

and the workers, there is need for employees participation in

decision making in the organization as it is a good motivation factor.

It will also help develop and maintain a quality work life, which will

provide an opportunity for employees job satisfaction and self-

actualization. It will also aid management of Power Holding Company

of Nigeria to introduce modern schemes for good relationship with

their workers, to enable them meet the challenges of change in the

future.

 Finally, this work is also beneficial to the Nigerian Public Sector

in general and also important to government, academic potential and

future researchers on the issue of employees participation in decision

making.

1.5 SCOPE OF THE STUDY

 The study is limited as it looks at the impact of employees

participation in decision making in Nigerian Public Sectors, A case

study of Power Holding Company of Nigeria (PHCN) Enugu. Power

Holding Company of Nigeria is typical of public sector, but it has the

responsibility of providing the citizenry with power (electricity). And

it holds a large population of employees.

1.6 LIMITATIONS OF THE STUDY

 In the process of carrying out this project work, the researcher

was confronted with many challenges and limitations which are as

follows:

Time: There was time constraint for the research project and within

the time specified, the normal lecturer were also in progress,

therefore, the researcher was faced with a lot of stress to combine

the research work with her personal affairs and running from one

lecture to another. The effect of this work was that the period the

researcher was supposed to spend on findings and data collection

was limited and as a result more quality work was hindered.    

Finance: The researcher was also faced with financial problems.

Researcher work is very tedious because it requires running from

one place to another in search of information, books, Journals, paper

and reports must be consulted but are not always available within,

there was the need to travel to gather some of the materials which

involved money. Also the researcher printed questionnaires which

was distributed to the staff of Power Holding Company of Nigeria

(Enugu) which also involved money.

Quality of Information: The analysis of the data in chapter four is

based on the information provided by the staff of Power Holding

Company of Nigeria (PHCN) Enugu. After administering

questionnaires, it was expected that the information needed will be

provided by both the senior and junior staff of the company. The

junior staff were reluctant to provide some of the important

information needed. This was on the ground that such information

are very secret, and it is called industrial espionage. This challenge

also affected the quality of information provided for the research

findings.

1.7 RESEARCH QUESTIONS

 In a view accomplishing this research work effectively, the

researcher poses the following:

1) Does management make decision without pre decision and

consultation with employees?

2) Does management change decision when rejected by

employees?

3) To what extent do employees participate in decision

making?

4) How often do employees meet to discuss with managers?

1.8 RESEARCH HYPOTHESIS 

 The researcher formulates the following based on the

objectives and problems of this research work.

Hi: Employees participation serves as a training and testing

ground for future members of upper management.

Ho: Employees participation does not serve as a training and

testing ground for future members of upper management.

Hi: Lack of qualified and company oriented individuals undermine

employees participation in decision making at lower

organizational levels.

Ho: Lack of qualified and company oriented individuals does not

undermine employees participation in decision making at lower

organizational levels.

Hi: Availability of skilled individuals in public sectors decision

making promotes productivity.

Ho: Availability of skilled individuals in public sectors decision

making does not promote productivity.

1.9 DEFINITION OF TERMS 

1) DECISION MAKING: The selection from among alternative a

course of action.

 2) MANAGEMENT: Management can be defined as an art of

science of achieving the objective of a business in the most efficient

way. It is made up of top and middle level management. Top

management include: share holders, Board of Director, Managing

Directors or the Chief Executive/General Manager above department

level. middle level managers include: level of department manager,

deputy and assistant managers.

3) PRODUCTIVITY:  A measure of how well resources are

brought together in organization and utilized for accomplishing a set

of result.

4) PUBLIC SECTOR: This is an organization that is owned and

managed by Government.

5) EMPLOYEES PARTICIPATION: This is creating an

environment in which people have an impact on decisions and

actions that affect their jobs in the organization.

 17

1.10 THEORETICAL FRAMEWORK

 The Neoclassical theorists recognized the importance of

individual or group behaviour and emphasized human relations.

Based on the Hawthorne experiments, the neoclassical approach

emphasized social or human relationships among the operations,

researchers and supervisors (Roethlisberger and Dickson, 1943) it

was argued that these considerations were more consequential in

determining productivity than mere changes in working conditions.

Productivity increase were achieved as a result of high morale, which

was influenced by the amount of individual personal and intimate

attention workers received through participation in managerial

decision making.

 The classical approach stressed the formal organization. It was

mechanic and ignored major aspects of human nature. In contrast,

the neoclassical approach introduced an informal organizational

structure and emphasized the following principles.

1) Individual: An individual is not a mechanical tool but a

distinct social being with aspirations beyond mere fulfillment

of a few economic and security works. Individuals differ

from each other in pursuing these desires. Thus, an

individual should be recognized as interacting with social

and economic factors.

2) The work Group: The neoclassical approach highlighted the

social facets of work groups or informal organizations that

operate within a formal organization. The concept of „group‟

and it‟s synergistic benefits were considered important.

3) Participative Management: Participative management or

decision making permits workers/employees to participate

in decision making process. This was a new form of

management to ensure increase in productivity.

The system approach views organizations as a system

composed or interconnected and thus mutually dependent –

subsystem. These sub-system can be perceived as composed of

some components, function and process Albrecht (1983). Thus, the

organization consists of the following basic elements. Bakke, (1969).

  1. i) Components: There are 5 basic interdependent parts of the

organizing system namely:

  1. a) Individual
  2. b) The formal and informal organization
  3. c) Patterns of behaviour emerging from role demands of the

organizations.

  1. d) Role comprehension of the individual
  2. e) The physical environment in which individuals work.

  1. ii) Linking Processes: The different components of an organization

are required to operate in an organized and correlated manner. The

interaction between them is contingent upon the linking processes

which consist of communication, balance and decision making.

  1. a) Communication: Is a means for eliciting action, enacting

control and effecting coordination to link decision centre in

the system in a composite form.

  1. b) Balance: Is the equilibrium between different parts of the

system so that they keep a harmoniously structured

relationship with one another.

  1. c) Decision Analysis is also considered a linking process in the

system approach. Decision may be to produce or participate

in the system. Decision to produce depends upon the

attitude of individuals and the demands of the organization.

Decision to participate refers to the individuals decision to

engross themselves in the organization process, that

depends on what they get what they are expected to do in

participative decision making.

Conclusively, these theories are of the opinion that

workers/ employees should be seen as human beings with

social and economic needs and as such be allowed to

participate in managerial decision making as it affects them

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