Employee Involvement and Participation in Service Industry

Employee Involvement and Participation in Service Industry INTRODUCTION The paper will discuss employee involvement and participation in the service industry with reference to Canary Wharf GBK. The paper starts with the objective of the research and ends with the conclusion and recommendation of the research. Employee involvement is a very important programme to utilize the tacit knowledge of the employees to increase commitment and performance with a limited cost. This paper will discuss different types and models of employees involvement and their benefit and limitations. The research start with the secondary research through collected theories to write the literature reviews to build the base of the research. In the literature reviews, it has explained views of different writer on employees involvement. The literature reviews includes types of involvement, models of employees involvement and management support for employees involvement Further, this research includes a methodology where the research strategy, approach, data collection and sample of the research are outline. Research methodology is crucial, as it is giving the researcher ways to conduct the primary research. The research is base on a case study and the data collection methods are interviews and a survey. In the third section the researcher, outline the finding of interviews and survey. In this research, there are three interviews and one survey conducted by the researcher. The participants in the interviews are the managers and the respondent in the survey are the employees of the organisation. Finally, in the last section the researcher presented analysis and conclusion of the research. In the analysis, the data collected from the research has been tested with the theories of literature. The research concludes with a brief conclusion where the result of the research has discussed. In the end, the researcher gives recommendation and discusses the scope, limitation, and interesting issue of the research. Research objectives are Critically analyse the importance of employee involvement as outlined in the literature review that includes its importance in recession. Evaluate Gourmet Burger Kitchen employee involvement strategy in the light of the research finding and theoretical literature. Discuss the benefits and limitations of Employee involvement. Benchmark the GBK canary wharf case study with other restaurant. Reason for choosing this topic The purpose of this study is to investigate the methods of effective involvement of the employees in a company where the researcher is working. Employees are the most valuable assets of a company. Employee involvement is important as it can result in empowerment and democracy in the organisation. This may result in increased motivation to take more responsibility (Judge and Gennard (2005). In this current economic situationwhen the confidence of the employees is low, EIP can motivate the employees to deliver good customer services, which can eventually result in improved profitability. The researcher aims to explore the role of employee involvement in the hospitality industry where the employees turn over is highest. The researcher is presently working at GBK and has accessto conduct interviews and surveys. Furthermore, the researcher is interested in opening a business in India that is why the researcher has chosen this topic. PART ONE LITRETURE REVIEW Definition of employee involvement Employees, the strongest pillar of the organization are the most valuable asset that contributes significantly to its success and prosperity. According to Price (2004), the involvement of employees in the organizational operation not only motivates them but also enables them to contribute more effectively and efficiently. Further, he explains employee involvement as a process involving participation, communication, decision making which leads to industrial democracy and employee motivation. Further CIPD (2009) explain employee involvement as a commitment of the employees towards the values of the organisation and willingness to help each other to achieve the organisational goal. The results are not only to increase job satisfaction, or motivation but the increasing performance of that organisation. In short, employee involvement is creating an environment where people have a continuous impact on decisions and actions that affect their jobs. Employee involvement Vs participation Understanding and defining the concept Employee involvement and employee participation are like two sides of a coin. Both are supplementary to each other and existence of one depends on the other. There is not any significant difference between the two terms. Participation is an act of sharing information and the meaning of involvement is the day-to-day activity of the organization. Many writers have contributed towards the development of this thought of employee involvement or participation. For example Delaney (1996) had used the term participation as a voice of the employee in the decision making process and to describe different types of involvement of employee in the organizations affair. But very few writers tried to find the difference between the two concepts. Kale (1999) argues that participation is any organizational arrangement under which employees have some sort of share in some aspect of the business which is not specific types of employee involvement. Furthermore Ang (2002) has contributed towards the development of the difference between the two terms and concluded that, Employee involvement calls for participation which is all about sharing information, training, mutual decision making process whereas traditional participative managementviews participation as a part of other organizational process. Marching ton et al. (1993) have used employee participation in a different context and as an umbrella term covering all forms of employee influence in the organization. Employee involvement is used to describe managerially inspired initiatives aimed at winning employee commitment, as part of the practices of industrial democracy, whose aim is to increase the rights of employees to participate in management decisions. This not only results in enhanced employee morale but also retaining the potential manpower resulting in lower attrition rate. Many writers have contributed differently and each one of them has different approach to the concept and the context. Employee involvement was and is still known and referred to by different writers under such headings as participative management, employee participation, and worker involvement. Employee involvement and empowerment The concept of employee involvement is incomplete without it being associated with employee empowerment. According to Cunningham and Hyman (1999) there cannot be a single or simple definition of empowerment as some writers see empowerment as a recent development after increase employee involvement. Further Apostolouain (2000) explains that empowerment is the next step of employee involvement means where the employees have the power to take decisions. Blanchard et al. (1999) has defined its scope referring it as a means for involving team members as business partners in determining company success or failure. The real essence of which comes from releasing the knowledge, experience, and motivational power that is already in people but is being severely underutilized. In short it can be said that employee involvement leads to empowerment of the employees in different management decision process. Importance of Employee involvement The increasing competition and technological changes in the last 20 years have demanded higher skills and flexibility from the employees for the organisation. Walton (1985) stated that the highly competitive environment needs a different strategic approach to manage the employees. He further stated that in order to achieve that the jobs needs to be broader. The jobs structure should be made with proper planning and implementation to improve the performance unless just to maintain it. This situation leads to formation of teams, which are accountable for the performance. Employee involvement not only maintained the standard of the operation process but gives emphasis on continuous improvement and it is reflecting the requirement of the market place. Further Marchington (2001) argues that the employee involvement come into focus in the early 90s when the employer looking for a participative way to manage the work force. Judge and Gennard (2005) further outline the other important aspect of employee involvement is the increases job security of the employees by offering them priority in training and retraining. The training equipped them with the skill and knowledge that the job demands. Greater employee commitment leads a growing expectancy to better job satisfaction and performance. It is difficult for the organisation in current business scenario to improve the performance without employee commitment towards the organizations mission and objective. Employee involvement allows the employee to input their views and ideas on performance and the quality of the service. This will lead the development where the employees want to be part of successful organisation, which provides them a good income and opportunity to enhance their skills for a secure employment. Grates (2009) stated that the engaged employees significantly contributes to the success of the organisation to achieve the goal and objective. H e further said that employee involvement could give competitive advantage in the market. It can help to reduce turnover and increase the productivity. An industrial services survey conducted in 1999 on 49 organisations experiences on employee involvement over the period of 1991-1999 has reported that more then 33% people believe that it enhanced employee commitment and motivation. The same number of people believes that it is really help to improve the relationship between the employee and the employer. Approximately 60% people said that the quality of the product and the services has improved. More then 50% believe that their job satisfaction had increased and the organisational profit has increased. Importance of employee involvement in recession The world has seen its worst recession since 1930s and most of the world economies are fighting against it. The economic crisis forces the employers to introduce cost-cutting measure and one of them is redundancies. According to an article HR focus (2009) most of companies in the world complete the lay offs of employees. Now the big question is how this organisation can use the most of the remaining employees. The other important question is how the company survive and can increase their performance in this difficult time. One of the measures that the organisation uses to give confidence to their employees is greater emphasis on employee involvement and participation scheme. According to Frauenheim (2009) the importance of employee involvement is more crucial in this difficult environment of economic trouble. As it is revels by many experts that worker commitment is more important then before as the confidence of the employees are badly hit by the lay offs. Haters stated that its the employees help that improving the situation during this economic turmoil as employee involvement can give the sense of value to the employees and can increase the job security. Juile Gebauer managing director of Towers Perrin believe that the company must give more attention to employee involvement to survive and performing good in recession as his organization found there is direct link between performance and involvement. Low employee satisfaction or confidence may results poor customer services and in recession where customers are very reluctant to spend, companies can not afford bad customer service. In this difficult time companies have to be more efficient to attract more customers to surviveand customer service isof the tool to do that. It is found that EIP can increase employee satisfaction which can lead better performance Types of employee involvement Employee involvement practices/ approaches According to Ang (2002) the idea of employee involvement is still developing although there is large amount of research done in the last decade still there is not any developed ways to use employee involvement as a management approach. The management approach depends how the employer wants to involve their employee in different operation. According to Lawler et al (1998) the most important factor of employee involvement approaches is how it can represent comprehensively in the process of problem solving, sharing information, rewards for performance and developing knowledge and ideas. He further says that in order to implement these practices the organization needs a particular employee involvement program. Traditional versus current perspective There is a significant difference between the current and the traditional way of employee involvement and participation. According to Gary and Sisson (1994) the traditional way is mostly indirect participation and limited direct participation. Further indirect participation includes trade union and work council and direct participation was limited to improve the quality of the work to counter turnover and absenteeism. He further explains that current employee participation is more direct as it concern with improve the performance of the organization that can be linked with the objective of the organization like customer satisfaction. The types of jobs in the current environment is changing as more and more company recruiting part time employees and they need to adopt different strategy to involve them in the process. Representative participation According to Apostolou (2000) one of the main ways to achieve representative participation is joint consultation where employees elected representative to discuss with the management on various issues which concern them. These processes give the employees an opportunity to influence the proposal before it is finally made. Further Judge and Generd (2004) explain that, joint consolation involves seeking acceptable solutions to problem through a genuine exchange of views and information .Employee communication is concerned with the interchange of information and ideas within an organization. Direct, indirect and financial participation In 1999 Oosthuizen and du Toit classify the employee involvement and participation practice as direct, indirect and financial. Direct participation is the communication between the management and the employees regarding different function of the organization like decision making process to problem solving. Whereas in indirect participation the employees are involve through their representatives who are elected leaders. Financial participation is the economic participation of the employees in the success or failure of the organization through share ownership, profit sharing scheme. Marchington et al (1992) talk of direct and indirect employee participation practices the direct participation consist of downward communication from management to employees which includes team briefing, workplace wide meeting ,staff newsletters and cascading of information down via the management chain. Downward Communication from Managers to Employees According to Marchington et al (1992) the downward involvement technique is used to inform employees of management plans. The management can use different ways to do that. Regular and continuous distribution of the company reports, journal, company publication and videos are the effective way to inform employees about the development of the company. Team briefing and regular team meeting is another ways for the top management to aware the employees about the organization news and development. Upward involvement Marchington et al (1992) explain the other way of direct communication which are upward problem solving communication practices and that includes suggestion schemes, employee attitude surveys, and employee groups established to solve specific problems or discuss aspect of performance or quality and suggestion scheme. Further Taily et al (2003) outline the importance of employees attitude survey and it can be done through questionnaire to a sample of employees to find out their views about different factors of the work. He further explain that formal processes like suggestion scheme can be put forward to find out employees thinking on different issues like quality improvement to enhance performance. Financial participation Financial participation is one of the best direct and tangible forms of employee involvement. The financial participation allows the employee to be a part of the financial success and failure of the organization. This will encourage the employees to show greater commitment and encourage them to take extra responsibility.Further, it is argued that a financial stake gives employees increased enthusiasm for the success of the organization. In its most developed form employee share ownership means that employees become significant shareholders in the business or even their own employer (Judge and Gennard, 2005). Financial employee involvement scheme can be carried out in three ways and that is profit sharing, profit related pay and share ownership. Profit sharing According to Judge al (2004) profit sharing methods can help to build a motivated and committed workforce. Further Taily et al (2004) explains that these schemes encourage employees to work as a team rather then individual as the rewards for working together is more then working individually. Profit sharing scheme ensure that employees benefit from an organization that makes profits. Profit related pay Taily et al (2003) explains that profit related pay scheme where employer rewards the employees for their contribution to the business. Further he outlines that it works where a group of people get pay to the profit of the business for their work. This kind of scheme generally found in the sales business where there is bonus for achieving the target. This scheme can increase the motivation and commitment of the employees. Share ownership Judge et al (2004) stated that latest way of financial participation of the employees is share ownership where the employees are owner of some part of the company through share. It means that they have shareholders right. Further Apostolou (2000) stated that it produces interest among the employees about the company matters. In UK one of 5 employees have share ownership in their company .This kind of schemes seeks long term commitment from the employees and its take the employee involvement in a new stage where employees are promoting to some part of the ownership of the company. Owing share makes the employees more motivated and committed as the loss or the profit directly have an impact on them. Task based participation Task based participation is mainly to the job and an integral part of day-to-day life. It is all about perform the task in the same level or higher level, which can be managers or supervisor. Team working and self management Teamwork one of the important ways of employee involvement described by Pfeiffers (1998) as it is one of the seven key HRM practise. It allows employees to take extra responsibility for the task, without direct supervision, to have discretion over work method and time, to multi skill and to recruit team members. Managerial control is at it most subversive and effective when employees take on responsibility for peer surveillance (Marchington and Wilkinson (1998 Benefit of Team working Team meeting benefit both the employer and the employees. Through introducing team working the employer can improve productivity, customer service, cost cutting. In addition the employers can spread the ideas and be competitive in the market by improving the performance. Further its increase the employees motivation to extra responsibility and care for the organization. Team working is benefited for the employees as well as the outcome of team working are greater job satisfaction and motivation. Service industry characteristics and customer driven attitude or orientation is suits team working (Wilkinson et al 1998).Cully et al (1999) claim that team working participation is used in two third of the British industries. In order to introduce team working the organization needs skillful management and resources. Employee Involvement Model Psychological contracts First used in 1960s the psychological contract became very popular following the development in the world economy like globalization and economic crisis in 1990s.It is described as mutual obligations without any written contract between the employee and the employer. As it is not a written contract these obligations are informal and imprecise and are made in the requirement process or in the performance appraisal. Some obligation is seen as a promise whereas others are term as an expectation. The important part of that is the belief by the employees to be part of good relationship with the employer (CIPD, 2009). The difference between the legal contract and psychological contract can be easily distinguished. Legal contract is a paper sign contract between the employee and the employer which represent the limited reality of the employment. The nature and importance of that can be found in an employment tribunal. On the other hand Psychological contract is more influential than the formal contract as it is affecting the employee behavior. This contract helps the employee to understand the requirement to represent their side and bargain and what they can expect from the job. The contract is based on mutual trust and understanding and cant be enforceable as it is not a legal one (CIPD2009). Professor David Guest (2002) of Kings College London outlines the importance of psychological contracts and what it can offer to the employee and the employer. The model suggests that the importance of employer to adopt people management as it is directly influence the psychological contract .The contract is based on mutual trust and fairness of the employee and the belief that the employer is respecting the deal between them. Further he explains that positive psychological contract increase employee commitment and satisfaction which results increase performance. Limitation of psychological contract The main problem with Psychological contract arises when it is broken by management by not delivering the promises. This can leads to low job satisfaction, low morale and dispute between the employee and management. The employees are feeling cheated if the promise like rewards, training is not fulfilled or negative feedback from the managers about the work. Another limitation could be emerging when the company merges or restructure and the employees concerns are not listened to, this can raise dissatisfaction among the employees. What Psychological contract is important? The nature of the jobs changed dramatically in the last 20 years and there are more temporary and part time jobs available and the people do not have a permanent future in that company, they need to build a relationship with the management to secure their future. The cost of labor is increasing and most of the organization wants to work more with less employees makes the jobs more hectic stressful. Human resources are becoming more critical to get competitive advantage by their tacit and explicit knowledge. Team work culture is increasing. Finally positive psychological can result in high efficiency. Black box model People, Performance link In order to understand the importance or significance of employee involvement and participation it is really important to understand the people and performance link. A research team lead by Professor John Purcell (2003) at Bath University carried out an investigation on people and performance link called as black box model. In that they have carried out interviews in 18 organizations which lasted over three years. In the interview with the managers the aim is to collect the information regarding their attitudes, level commitment, views about the job, team and reporting relationship. There information had been investigating in depth the relationships between practice and performance to develop understanding of the nature and mechanics of the relationship. After analyzing the data the team develops the people and performance model famously called as black box model. These models found that the people management creates the building blocks of performance and that are ability, motivation and opportunity. As in the figure shows Purcell make four pillars to describe the people performance link. The first pillar is the human resources; the second is the AMO factors which is with the help of the line management in pillar three can result in employee commitment, job satisfaction and motivation which can finally lead to discretionary behavior. Further he explains that ability is the willing to learn new skill and apply and recognized, motivation assume that the use of ability in an effective way and finally opportunity assume the involvement of the employees in different operation like problem solving and the decision making process. These factors like ability, motivation and opportunity are very important as they are directly related to job satisfaction and commitment of the employees. It will encourage the employee to exhibit discretionary behavior which means the way doing the job like in speed, care and innovation. These activities are the heart of the employment relationship as it is very difficult for the employer to monitor all the activities in an organization. This behavior makes the performance of the organization to a next level with greater job satisfaction and better performance. (CIPD, 2009). Role of line managers According to Judge and Gennard (2005) the main reason of the failure of employees involvement is the attitude of the middle and lower management. The middle and lower management fail to support the scheme as they think they will lose power to control employees Further a research done by CIPD the role of line managers are the most important to implement the employee involvement and practice. Line managers are constantly in the communication with the employees. The line managers are the best person in explaining the variation in both job satisfaction and discretionary behavior as it one of the most important factors in order to developing commitment in the organization .The managers can encages employees towards their jobs and make them responsible for their jobs. The line managers can evaluate the performance through performance appraisal and motivates them by introducing more bonuses for better performance (CIPD, 2009). Organization culture According to CIPD (2009) it is found that the practice and performance is highly influenced by the organization environment. The practice performance link depends on the origination goal mission statement which must influence by the values the organizations stands for. And want to achieve in the future. The goal or the mission is very important for employee commitment. The goals or the mission should be spread throughout the organization to embed that in the policies of the organization. These values encourage employees to achieve new height in their jobs. This will motivate them as they are feeling valued and that eventually result in better performance. Comparison between Psychological contract and black box model Black box model is a medium for creating the atmosphere that reinforces psychological contract through the power of line managers. While psychological contract is a state of mind that already exists between the management and the employees. Implementation of employee involvement schemes Different organization operates differently so it is very important to understand that the schemes good for one organization may be not appropriate for the other one. There are few factors that are really important in order to successfully implement the schemes. The factors are good employee relations, the organization culture and the top management support, monitoring and reviewing and resources. Good employee relation Judge and Gennard (2005) explains that good employee relation is the basic need in order to implement employee involvement scheme as it is very important to motivate the employees and the management to take part in the process. The management and the employees must be open in their attitude and behavior. The scheme cant be successful in a case of dispute between them. Employee involvement can gain and develop in the background of trust and motivation among the management and the employees. Commitment by the top management The most importance factor regarding the success of employee involvement is the support of the top management. It is the top management who can encourage employee involvement and participation. According to Lawler et al (1995) it is essential, as employee involvement needs the management support to develop and smooth implementation without any obstacle. It is the management responsibility to introduce EI through suggestion programs and problem solving teams. The management can give more training to the employees to increase their skills and when they believe that the employees are knowledgeable and more skilled they can involve them in different organization function through EIP. This can leads to introduce reward and recognition for better performance to encourage employee involvement. Further Judge et al (2005) explain that the management must be keeping the momentum after the introduction of the scheme. This will develop trust and motivation among the employees and the employees feel the seriousness of the management about the scheme. Any inconstant management behavior in the workforce involvement can put the scheme in trouble as the employees will de motivates and questioning the management commitment about the scheme. According to Apostolou(2000) there are four important actions the management needs to take to run the scheme successfully and those are trust the employees and give them more responsibility, always updating the training programme to train the employees about the recent change in the business and technology the third action is effective communication and regular feedback of the work. This is the most crucial one as its shows the management seriousness about the scheme and that can motivate the workforce. Finally introducing of rewards and recognition for good work really helps to increase the commitment of the employees. Free flow of information is another important aspect of employee involvement. The management must provide information about the company through different sources to their employees .But the management should be careful to provide too much or too little information as it may create confusion among the employees. The role of leader is even more crucial in the time of recession and economic turmoil where the environment is not conducive for employee involvement because of lay offs. According to Day(2009) the roles of leader is more important then before as it is not possible for them to maintain the same employee involvement scheme if the company is not getting profit. The leadership should be aware the workforce the reason behind the lay off and must use the most remaining talent. The leadership must regain the confidence of the employee by regular informing about the company progress and make them understand about the difficult time. By giving more seriousness on employee involvement the management can help the organizat Employee Involvement and Participation in Service Industry Employee Involvement and Participation in Service Industry INTRODUCTION The paper will discuss employee involvement and participation in the service industry with reference to Canary Wharf GBK. The paper starts with the objective of the research and ends with the conclusion and recommendation of the research. Employee involvement is a very important programme to utilize the tacit knowledge of the employees to increase commitment and performance with a limited cost. This paper will discuss different types and models of employees involvement and their benefit and limitations. The research start with the secondary research through collected theories to write the literature reviews to build the base of the research. In the literature reviews, it has explained views of different writer on employees involvement. The literature reviews includes types of involvement, models of employees involvement and management support for employees involvement Further, this research includes a methodology where the research strategy, approach, data collection and sample of the research are outline. Research methodology is crucial, as it is giving the researcher ways to conduct the primary research. The research is base on a case study and the data collection methods are interviews and a survey. In the third section the researcher, outline the finding of interviews and survey. In this research, there are three interviews and one survey conducted by the researcher. The participants in the interviews are the managers and the respondent in the survey are the employees of the organisation. Finally, in the last section the researcher presented analysis and conclusion of the research. In the analysis, the data collected from the research has been tested with the theories of literature. The research concludes with a brief conclusion where the result of the research has discussed. In the end, the researcher gives recommendation and discusses the scope, limitation, and interesting issue of the research. Research objectives are Critically analyse the importance of employee involvement as outlined in the literature review that includes its importance in recession. Evaluate Gourmet Burger Kitchen employee involvement strategy in the light of the research finding and theoretical literature. Discuss the benefits and limitations of Employee involvement. Benchmark the GBK canary wharf case study with other restaurant. Reason for choosing this topic The purpose of this study is to investigate the methods of effective involvement of the employees in a company where the researcher is working. Employees are the most valuable assets of a company. Employee involvement is important as it can result in empowerment and democracy in the organisation. This may result in increased motivation to take more responsibility (Judge and Gennard (2005). In this current economic situationwhen the confidence of the employees is low, EIP can motivate the employees to deliver good customer services, which can eventually result in improved profitability. The researcher aims to explore the role of employee involvement in the hospitality industry where the employees turn over is highest. The researcher is presently working at GBK and has accessto conduct interviews and surveys. Furthermore, the researcher is interested in opening a business in India that is why the researcher has chosen this topic. PART ONE LITRETURE REVIEW Definition of employee involvement Employees, the strongest pillar of the organization are the most valuable asset that contributes significantly to its success and prosperity. According to Price (2004), the involvement of employees in the organizational operation not only motivates them but also enables them to contribute more effectively and efficiently. Further, he explains employee involvement as a process involving participation, communication, decision making which leads to industrial democracy and employee motivation. Further CIPD (2009) explain employee involvement as a commitment of the employees towards the values of the organisation and willingness to help each other to achieve the organisational goal. The results are not only to increase job satisfaction, or motivation but the increasing performance of that organisation. In short, employee involvement is creating an environment where people have a continuous impact on decisions and actions that affect their jobs. Employee involvement Vs participation Understanding and defining the concept Employee involvement and employee participation are like two sides of a coin. Both are supplementary to each other and existence of one depends on the other. There is not any significant difference between the two terms. Participation is an act of sharing information and the meaning of involvement is the day-to-day activity of the organization. Many writers have contributed towards the development of this thought of employee involvement or participation. For example Delaney (1996) had used the term participation as a voice of the employee in the decision making process and to describe different types of involvement of employee in the organizations affair. But very few writers tried to find the difference between the two concepts. Kale (1999) argues that participation is any organizational arrangement under which employees have some sort of share in some aspect of the business which is not specific types of employee involvement. Furthermore Ang (2002) has contributed towards the development of the difference between the two terms and concluded that, Employee involvement calls for participation which is all about sharing information, training, mutual decision making process whereas traditional participative managementviews participation as a part of other organizational process. Marching ton et al. (1993) have used employee participation in a different context and as an umbrella term covering all forms of employee influence in the organization. Employee involvement is used to describe managerially inspired initiatives aimed at winning employee commitment, as part of the practices of industrial democracy, whose aim is to increase the rights of employees to participate in management decisions. This not only results in enhanced employee morale but also retaining the potential manpower resulting in lower attrition rate. Many writers have contributed differently and each one of them has different approach to the concept and the context. Employee involvement was and is still known and referred to by different writers under such headings as participative management, employee participation, and worker involvement. Employee involvement and empowerment The concept of employee involvement is incomplete without it being associated with employee empowerment. According to Cunningham and Hyman (1999) there cannot be a single or simple definition of empowerment as some writers see empowerment as a recent development after increase employee involvement. Further Apostolouain (2000) explains that empowerment is the next step of employee involvement means where the employees have the power to take decisions. Blanchard et al. (1999) has defined its scope referring it as a means for involving team members as business partners in determining company success or failure. The real essence of which comes from releasing the knowledge, experience, and motivational power that is already in people but is being severely underutilized. In short it can be said that employee involvement leads to empowerment of the employees in different management decision process. Importance of Employee involvement The increasing competition and technological changes in the last 20 years have demanded higher skills and flexibility from the employees for the organisation. Walton (1985) stated that the highly competitive environment needs a different strategic approach to manage the employees. He further stated that in order to achieve that the jobs needs to be broader. The jobs structure should be made with proper planning and implementation to improve the performance unless just to maintain it. This situation leads to formation of teams, which are accountable for the performance. Employee involvement not only maintained the standard of the operation process but gives emphasis on continuous improvement and it is reflecting the requirement of the market place. Further Marchington (2001) argues that the employee involvement come into focus in the early 90s when the employer looking for a participative way to manage the work force. Judge and Gennard (2005) further outline the other important aspect of employee involvement is the increases job security of the employees by offering them priority in training and retraining. The training equipped them with the skill and knowledge that the job demands. Greater employee commitment leads a growing expectancy to better job satisfaction and performance. It is difficult for the organisation in current business scenario to improve the performance without employee commitment towards the organizations mission and objective. Employee involvement allows the employee to input their views and ideas on performance and the quality of the service. This will lead the development where the employees want to be part of successful organisation, which provides them a good income and opportunity to enhance their skills for a secure employment. Grates (2009) stated that the engaged employees significantly contributes to the success of the organisation to achieve the goal and objective. H e further said that employee involvement could give competitive advantage in the market. It can help to reduce turnover and increase the productivity. An industrial services survey conducted in 1999 on 49 organisations experiences on employee involvement over the period of 1991-1999 has reported that more then 33% people believe that it enhanced employee commitment and motivation. The same number of people believes that it is really help to improve the relationship between the employee and the employer. Approximately 60% people said that the quality of the product and the services has improved. More then 50% believe that their job satisfaction had increased and the organisational profit has increased. Importance of employee involvement in recession The world has seen its worst recession since 1930s and most of the world economies are fighting against it. The economic crisis forces the employers to introduce cost-cutting measure and one of them is redundancies. According to an article HR focus (2009) most of companies in the world complete the lay offs of employees. Now the big question is how this organisation can use the most of the remaining employees. The other important question is how the company survive and can increase their performance in this difficult time. One of the measures that the organisation uses to give confidence to their employees is greater emphasis on employee involvement and participation scheme. According to Frauenheim (2009) the importance of employee involvement is more crucial in this difficult environment of economic trouble. As it is revels by many experts that worker commitment is more important then before as the confidence of the employees are badly hit by the lay offs. Haters stated that its the employees help that improving the situation during this economic turmoil as employee involvement can give the sense of value to the employees and can increase the job security. Juile Gebauer managing director of Towers Perrin believe that the company must give more attention to employee involvement to survive and performing good in recession as his organization found there is direct link between performance and involvement. Low employee satisfaction or confidence may results poor customer services and in recession where customers are very reluctant to spend, companies can not afford bad customer service. In this difficult time companies have to be more efficient to attract more customers to surviveand customer service isof the tool to do that. It is found that EIP can increase employee satisfaction which can lead better performance Types of employee involvement Employee involvement practices/ approaches According to Ang (2002) the idea of employee involvement is still developing although there is large amount of research done in the last decade still there is not any developed ways to use employee involvement as a management approach. The management approach depends how the employer wants to involve their employee in different operation. According to Lawler et al (1998) the most important factor of employee involvement approaches is how it can represent comprehensively in the process of problem solving, sharing information, rewards for performance and developing knowledge and ideas. He further says that in order to implement these practices the organization needs a particular employee involvement program. Traditional versus current perspective There is a significant difference between the current and the traditional way of employee involvement and participation. According to Gary and Sisson (1994) the traditional way is mostly indirect participation and limited direct participation. Further indirect participation includes trade union and work council and direct participation was limited to improve the quality of the work to counter turnover and absenteeism. He further explains that current employee participation is more direct as it concern with improve the performance of the organization that can be linked with the objective of the organization like customer satisfaction. The types of jobs in the current environment is changing as more and more company recruiting part time employees and they need to adopt different strategy to involve them in the process. Representative participation According to Apostolou (2000) one of the main ways to achieve representative participation is joint consultation where employees elected representative to discuss with the management on various issues which concern them. These processes give the employees an opportunity to influence the proposal before it is finally made. Further Judge and Generd (2004) explain that, joint consolation involves seeking acceptable solutions to problem through a genuine exchange of views and information .Employee communication is concerned with the interchange of information and ideas within an organization. Direct, indirect and financial participation In 1999 Oosthuizen and du Toit classify the employee involvement and participation practice as direct, indirect and financial. Direct participation is the communication between the management and the employees regarding different function of the organization like decision making process to problem solving. Whereas in indirect participation the employees are involve through their representatives who are elected leaders. Financial participation is the economic participation of the employees in the success or failure of the organization through share ownership, profit sharing scheme. Marchington et al (1992) talk of direct and indirect employee participation practices the direct participation consist of downward communication from management to employees which includes team briefing, workplace wide meeting ,staff newsletters and cascading of information down via the management chain. Downward Communication from Managers to Employees According to Marchington et al (1992) the downward involvement technique is used to inform employees of management plans. The management can use different ways to do that. Regular and continuous distribution of the company reports, journal, company publication and videos are the effective way to inform employees about the development of the company. Team briefing and regular team meeting is another ways for the top management to aware the employees about the organization news and development. Upward involvement Marchington et al (1992) explain the other way of direct communication which are upward problem solving communication practices and that includes suggestion schemes, employee attitude surveys, and employee groups established to solve specific problems or discuss aspect of performance or quality and suggestion scheme. Further Taily et al (2003) outline the importance of employees attitude survey and it can be done through questionnaire to a sample of employees to find out their views about different factors of the work. He further explain that formal processes like suggestion scheme can be put forward to find out employees thinking on different issues like quality improvement to enhance performance. Financial participation Financial participation is one of the best direct and tangible forms of employee involvement. The financial participation allows the employee to be a part of the financial success and failure of the organization. This will encourage the employees to show greater commitment and encourage them to take extra responsibility.Further, it is argued that a financial stake gives employees increased enthusiasm for the success of the organization. In its most developed form employee share ownership means that employees become significant shareholders in the business or even their own employer (Judge and Gennard, 2005). Financial employee involvement scheme can be carried out in three ways and that is profit sharing, profit related pay and share ownership. Profit sharing According to Judge al (2004) profit sharing methods can help to build a motivated and committed workforce. Further Taily et al (2004) explains that these schemes encourage employees to work as a team rather then individual as the rewards for working together is more then working individually. Profit sharing scheme ensure that employees benefit from an organization that makes profits. Profit related pay Taily et al (2003) explains that profit related pay scheme where employer rewards the employees for their contribution to the business. Further he outlines that it works where a group of people get pay to the profit of the business for their work. This kind of scheme generally found in the sales business where there is bonus for achieving the target. This scheme can increase the motivation and commitment of the employees. Share ownership Judge et al (2004) stated that latest way of financial participation of the employees is share ownership where the employees are owner of some part of the company through share. It means that they have shareholders right. Further Apostolou (2000) stated that it produces interest among the employees about the company matters. In UK one of 5 employees have share ownership in their company .This kind of schemes seeks long term commitment from the employees and its take the employee involvement in a new stage where employees are promoting to some part of the ownership of the company. Owing share makes the employees more motivated and committed as the loss or the profit directly have an impact on them. Task based participation Task based participation is mainly to the job and an integral part of day-to-day life. It is all about perform the task in the same level or higher level, which can be managers or supervisor. Team working and self management Teamwork one of the important ways of employee involvement described by Pfeiffers (1998) as it is one of the seven key HRM practise. It allows employees to take extra responsibility for the task, without direct supervision, to have discretion over work method and time, to multi skill and to recruit team members. Managerial control is at it most subversive and effective when employees take on responsibility for peer surveillance (Marchington and Wilkinson (1998 Benefit of Team working Team meeting benefit both the employer and the employees. Through introducing team working the employer can improve productivity, customer service, cost cutting. In addition the employers can spread the ideas and be competitive in the market by improving the performance. Further its increase the employees motivation to extra responsibility and care for the organization. Team working is benefited for the employees as well as the outcome of team working are greater job satisfaction and motivation. Service industry characteristics and customer driven attitude or orientation is suits team working (Wilkinson et al 1998).Cully et al (1999) claim that team working participation is used in two third of the British industries. In order to introduce team working the organization needs skillful management and resources. Employee Involvement Model Psychological contracts First used in 1960s the psychological contract became very popular following the development in the world economy like globalization and economic crisis in 1990s.It is described as mutual obligations without any written contract between the employee and the employer. As it is not a written contract these obligations are informal and imprecise and are made in the requirement process or in the performance appraisal. Some obligation is seen as a promise whereas others are term as an expectation. The important part of that is the belief by the employees to be part of good relationship with the employer (CIPD, 2009). The difference between the legal contract and psychological contract can be easily distinguished. Legal contract is a paper sign contract between the employee and the employer which represent the limited reality of the employment. The nature and importance of that can be found in an employment tribunal. On the other hand Psychological contract is more influential than the formal contract as it is affecting the employee behavior. This contract helps the employee to understand the requirement to represent their side and bargain and what they can expect from the job. The contract is based on mutual trust and understanding and cant be enforceable as it is not a legal one (CIPD2009). Professor David Guest (2002) of Kings College London outlines the importance of psychological contracts and what it can offer to the employee and the employer. The model suggests that the importance of employer to adopt people management as it is directly influence the psychological contract .The contract is based on mutual trust and fairness of the employee and the belief that the employer is respecting the deal between them. Further he explains that positive psychological contract increase employee commitment and satisfaction which results increase performance. Limitation of psychological contract The main problem with Psychological contract arises when it is broken by management by not delivering the promises. This can leads to low job satisfaction, low morale and dispute between the employee and management. The employees are feeling cheated if the promise like rewards, training is not fulfilled or negative feedback from the managers about the work. Another limitation could be emerging when the company merges or restructure and the employees concerns are not listened to, this can raise dissatisfaction among the employees. What Psychological contract is important? The nature of the jobs changed dramatically in the last 20 years and there are more temporary and part time jobs available and the people do not have a permanent future in that company, they need to build a relationship with the management to secure their future. The cost of labor is increasing and most of the organization wants to work more with less employees makes the jobs more hectic stressful. Human resources are becoming more critical to get competitive advantage by their tacit and explicit knowledge. Team work culture is increasing. Finally positive psychological can result in high efficiency. Black box model People, Performance link In order to understand the importance or significance of employee involvement and participation it is really important to understand the people and performance link. A research team lead by Professor John Purcell (2003) at Bath University carried out an investigation on people and performance link called as black box model. In that they have carried out interviews in 18 organizations which lasted over three years. In the interview with the managers the aim is to collect the information regarding their attitudes, level commitment, views about the job, team and reporting relationship. There information had been investigating in depth the relationships between practice and performance to develop understanding of the nature and mechanics of the relationship. After analyzing the data the team develops the people and performance model famously called as black box model. These models found that the people management creates the building blocks of performance and that are ability, motivation and opportunity. As in the figure shows Purcell make four pillars to describe the people performance link. The first pillar is the human resources; the second is the AMO factors which is with the help of the line management in pillar three can result in employee commitment, job satisfaction and motivation which can finally lead to discretionary behavior. Further he explains that ability is the willing to learn new skill and apply and recognized, motivation assume that the use of ability in an effective way and finally opportunity assume the involvement of the employees in different operation like problem solving and the decision making process. These factors like ability, motivation and opportunity are very important as they are directly related to job satisfaction and commitment of the employees. It will encourage the employee to exhibit discretionary behavior which means the way doing the job like in speed, care and innovation. These activities are the heart of the employment relationship as it is very difficult for the employer to monitor all the activities in an organization. This behavior makes the performance of the organization to a next level with greater job satisfaction and better performance. (CIPD, 2009). Role of line managers According to Judge and Gennard (2005) the main reason of the failure of employees involvement is the attitude of the middle and lower management. The middle and lower management fail to support the scheme as they think they will lose power to control employees Further a research done by CIPD the role of line managers are the most important to implement the employee involvement and practice. Line managers are constantly in the communication with the employees. The line managers are the best person in explaining the variation in both job satisfaction and discretionary behavior as it one of the most important factors in order to developing commitment in the organization .The managers can encages employees towards their jobs and make them responsible for their jobs. The line managers can evaluate the performance through performance appraisal and motivates them by introducing more bonuses for better performance (CIPD, 2009). Organization culture According to CIPD (2009) it is found that the practice and performance is highly influenced by the organization environment. The practice performance link depends on the origination goal mission statement which must influence by the values the organizations stands for. And want to achieve in the future. The goal or the mission is very important for employee commitment. The goals or the mission should be spread throughout the organization to embed that in the policies of the organization. These values encourage employees to achieve new height in their jobs. This will motivate them as they are feeling valued and that eventually result in better performance. Comparison between Psychological contract and black box model Black box model is a medium for creating the atmosphere that reinforces psychological contract through the power of line managers. While psychological contract is a state of mind that already exists between the management and the employees. Implementation of employee involvement schemes Different organization operates differently so it is very important to understand that the schemes good for one organization may be not appropriate for the other one. There are few factors that are really important in order to successfully implement the schemes. The factors are good employee relations, the organization culture and the top management support, monitoring and reviewing and resources. Good employee relation Judge and Gennard (2005) explains that good employee relation is the basic need in order to implement employee involvement scheme as it is very important to motivate the employees and the management to take part in the process. The management and the employees must be open in their attitude and behavior. The scheme cant be successful in a case of dispute between them. Employee involvement can gain and develop in the background of trust and motivation among the management and the employees. Commitment by the top management The most importance factor regarding the success of employee involvement is the support of the top management. It is the top management who can encourage employee involvement and participation. According to Lawler et al (1995) it is essential, as employee involvement needs the management support to develop and smooth implementation without any obstacle. It is the management responsibility to introduce EI through suggestion programs and problem solving teams. The management can give more training to the employees to increase their skills and when they believe that the employees are knowledgeable and more skilled they can involve them in different organization function through EIP. This can leads to introduce reward and recognition for better performance to encourage employee involvement. Further Judge et al (2005) explain that the management must be keeping the momentum after the introduction of the scheme. This will develop trust and motivation among the employees and the employees feel the seriousness of the management about the scheme. Any inconstant management behavior in the workforce involvement can put the scheme in trouble as the employees will de motivates and questioning the management commitment about the scheme. According to Apostolou(2000) there are four important actions the management needs to take to run the scheme successfully and those are trust the employees and give them more responsibility, always updating the training programme to train the employees about the recent change in the business and technology the third action is effective communication and regular feedback of the work. This is the most crucial one as its shows the management seriousness about the scheme and that can motivate the workforce. Finally introducing of rewards and recognition for good work really helps to increase the commitment of the employees. Free flow of information is another important aspect of employee involvement. The management must provide information about the company through different sources to their employees .But the management should be careful to provide too much or too little information as it may create confusion among the employees. The role of leader is even more crucial in the time of recession and economic turmoil where the environment is not conducive for employee involvement because of lay offs. According to Day(2009) the roles of leader is more important then before as it is not possible for them to maintain the same employee involvement scheme if the company is not getting profit. The leadership should be aware the workforce the reason behind the lay off and must use the most remaining talent. The leadership must regain the confidence of the employee by regular informing about the company progress and make them understand about the difficult time. By giving more seriousness on employee involvement the management can help the organizat