By Liz Evans
Employees are the resources of an organization in the same way as material assets but they are also the firm’s stakeholders. The concept of employees as stakeholders refers to the interest employees have in the success of the company and the fact that actions taken by the organization directly affect the employees (Olson, 2003). Employees’ stakes in the company are economic in the fact that their livelihood comes from the firm, psychological in that they derive pride from their work, and political in terms of their rights as employees and citizens. Though employees are the stakeholders who are arguably most visible to management on a day-to-day basis, they do not often command the majority of attention in terms of decision-making influences. The short-term, economic duties to stockholders often command more managerial attention in the decision making process than employee opinion (Peterson, 2005). According to Jones, the best way to incorporate employees' stake to improve firm performance is through employee participation and influence (Employees as Stakeholders, 1997).
Apart from unionization, employees can obtain influence in organizational decisions in several ways. Grievance and Due Process Systems allow employees to address grievances and to argue their point if they feel they are wronged by management or another employee. Participation Systems provide employees with influence in the organizational or managerial decision making processes. This subchapter will discuss the ways employees are given voice and influence in non-unionized workplaces, with particular attention paid to influence in decision-making and organizational success. This will include the benefits of employee input to the firm, the difference between voice and influence, and the many participation mechanisms management can use to harness employee influence into decision-making.
There are benefits to a firm for providing employee influence. For one, strong employee voice and influence mechanisms are an important part of a High-Performance Human Resource System in which the human resources of the firm are coordinated and “designed to maximize the quality of human capital in the organization” (Becker & Huselid, 2001). Voice and influence mechanisms allow employees to give input and to contribute their expertise to business success; these mechanisms allow firms to get the most benefit from the skills of their human capital. Thus, firms with employee influence mechanisms get higher financial return from their employee assets; high-performance HR systems improve the financial bottom line of the firm (Becker & Huselid, 2001).
Despite the many benefits, there are various reasons not to implement voice and influence mechanisms perceived by employees and management. Voice and influence can benefit employees by helping them to protect their rights and most “employees want a voice in their workplace” (Peterson, 2005). However, employees may be hesitant to organize into employee associations or push for voice mechanisms for fear of retribution due to perceived opposition to influence by management (Peterson, 2005). Employers benefit from the increased trust that comes from sharing information and giving employees influence (Pfeffer & Viega, Putting People First for Organizational Success, 1998). However, managers who are used to having control often find it “disconcerting, difficult and even impossible” to share power in the form of influence in exchange for the many organizational benefits (Marken, 2004).
Voice and influence are different, but both are necessary to garner the benefits to the firm. Many managers recognize the importance of giving their employees a voice, but often this open communication does not result in authentic employee involvement or influence on the actual decision making process (Golan, 2003). Hearing employee voice is not the same as giving consideration to the received information; consideration is what gives employees influence in the organization (Garvin & Roberto, 2001). Visible action is as important to influence as consideration (Solnik, 2006). Action provides the follow up that allows management to make it apparent to employees that they have influence; it also allows management to see real change and benefit from the insight provided by employees. Voice without consideration and action creates little benefit for employees or the firm.
Many different participation systems can be implemented to authentically get employee input and to capitalize on the benefits associated with employee influence. Open book management empowers employees with the information they need to see the reality of the organizational situation and to give relevant and helpful input (Case, 1997). Similar to open book management are open-door policies, where management makes it clear that employees can informally raise issues or give input at any time. The open-door policy page on the Central Parking Corporation website provides an example of such a policy and the procedures employed by the company for submitting and receiving employee input (Central Parking Corporation, 2004). Feedback programs, sometimes implemented in the form of employee surveys or through direct employee-management interaction, can be a less expensive way to get feedback from employees concerning specific programs or policies (Solnik, 2006). Surveys are particularly economical, especially when done online using free survey programs such as SurveyMonkey.com (Survey M onkey, 2007). Team mechanisms such as quality circles, work teams, and total quality management teams provide employees with the ability to synthesize their individual input into a better solution to organizational problems.
In conclusion, there are many possible benefits to a firm associated with providing employees with voice and influence within the organization. However, in order for these benefits to be realized, management must not only provide employees with an outlet to speak, but must also take the information into consideration and follow up with visible action. In this way, an organization can attend to its most important stakeholders, the employees, and garner return on its investment in its human capital.