Employee involvement is regarded as the powerful behavioural tool for managing the industrial relations system. This is being viewed differently by different people. It is a joint consultation prior to decision making.

The management experts look upon it as a tool for improving the overall performance of an enterprise. For them it means that employees are given an opportunity to take part in the decisions that concern them most.

Employee involvement is a system of communication and consultation, either formal or informal by which employees are kept informed about the affairs of the undertaking through which they express their opinion and contribute to the management decisions.

It gives to the employees’ representatives the right to criticize, to offer constructive suggestions and to become aware about the issues involved in decision-making.


In short employees’ involvement enhances employee ability to influence decision making with corresponding assumption of responsibility.

Learn about:-

1. Meaning of Employee Involvement 2. Objectives and Features of Employee Involvement 3. Essential Elements 4. Levels

5. Types 6. Importance 7. Methods 8. Reasons for Failure 9. Suggestions for Success Implementation.

Employee Involvement: Meaning, Objectives, Features, Elements, Levels, Types, Importance and Suggestions

Employee Involvement – Meaning

Employee involvement is regarded as the powerful behavioural tool for managing the industrial relations system. This is being viewed differently by different people. It is a joint consultation prior to decision making. The management experts look upon it as a tool for improving the overall performance of an enterprise. For them it means that employees are given an opportunity to take part in the decisions that concern them most.


The objective is to gain control over the decision making process within an enterprise. The employee involvement crystallizes the concept of industrial democracy and indicates the efforts on the part of the employer to form a team of employees, which works towards the realization of the common objectives. It is a mental and emotional involvement which encourages contributing to goals and sharing responsibilities with them.

Employee involvement is a system of communication and consultation, either formal or informal by which employees are kept informed about the affairs of the undertaking through which they express their opinion and contribute to the management decisions.

It gives to the employees’ representatives the right to criticize, to offer constructive suggestions and to become aware about the issues involved in decision-making. In short employees’ involvement enhances employee ability to influence decision making with corresponding assumption of responsibility.

Employee Involvement – Top 5 Objectives and Features

Objectives of Employee Involvement:

The objectives of the employee involvement are:


1. To Make Worker’s Role Important – The basic objective of employee’s involvement is to make employees’ role important in an organisation. For successfully attaining the objectives and goals of the organisation, it is essential to make employees’ involved in the achievement of goal because without them it is not possible to achieve the goals.

2. To Increase Productivity – When employees are involved in the decision making with the management, this motivates them and their morale increases. This leads to increase in their efficiency which brings increase in the level of productivity.

3. To Satisfy the Needs of the Employees – Every employee wants to be recognized for his capabilities, so participation in management makes them feel recognized and they will be motivated to perform hard work. And moreover, employees social and esteem needs will also be satisfied.


4. To Develop Human Personality – The employees’ involvement in management gives them opportunity to express themselves. They express their views freely at various levels and their hidden talent comes out. Thus they get an opportunity to develop their personality.

5. To Strengthen the Employee Management Cooperation – Coordination and cooperation between the employees and management improves the relationship between them. Employees don’t feel neglected and when they participate in decision making they feel recognized. And their relations with their superiors also improve.

Features of Employee Involvement:

The features of employee involvement are:

1. Employee involvement means emotional and mental involvement and not only the physical involvement.


2. Employee involvement is done through the representatives of the employees.

3. Employee involvement can be formal and informal.

4. Collective bargaining and employee involvement is different.

5. Employee involvement is done at the different levels of management.

Employee Involvement – 8 Essential Elements

Below are the different essential elements of employee involvement:


1. Free Flow of Communication – For making the employee involvement in management a success, there should be a free flow of information. Because through communication employees can express their views freely and don’t hesitate. This two way communication is necessary for both employees and management.

2. Impartial of Both Employers and Employees – Both employers and employees should express their ideas and views. There should be no personal benefit for both. The employee involvement in management scheme cannot be successful unless the employer and employee should have positive attitude towards each other.

3. Wide Publicity – Employee should know the benefits of their participation with the management in decision making. If they don’t know the importance of involvement, they will not express their views freely and will not be able to provide fruitful suggestions.


4. Responsible Trade Union – Not only the trade unions should be stronger but they should be responsible also. So that they contribute in the success of employee involvement. Responsible trade union will look for the interest of both the employees and the management to facilitate effective decision making.

5. Mutual Trust – For making employee involvement in management a success, there is a need that management and employees should trust each other and also cooperate with each other. If they don’t have faith in each other, their relations will be disturbed and employee involvement will loose its importance.

6. Idea from within – When involved with the management in the decision making, the employees should give the ideas, which come straight from their heart. They should not have to fulfill any legal formality while giving their views. So they should suggest what they feel.

7. Arrangement of Training – Employees should be properly trained and while their training they should be made clear about the benefits and their participation with the management. Training will also improve their skills and they will provide good suggestions to the management.

8. Implementation of Decision – For making the employees involvement in management a success there is a need to implement the decisions which are suggested by the employees. By this employees will be motivated and also suggest good ideas in future. The delay in implementation of the decisions can adversely affect the morale.

Employee Involvement – 3 Different Levels:  Informative Level, Consultive Level and Decision Making Level

The involvement of the employees can be done at different levels. It can start from the lowest level and move up to the highest level.


The following are the different levels of the employee involvement:

1. Informative Level – This is the lowest level of the employee involvement. In this the employees are allowed to obtain the required information from the management and can also present their views to the superior. It is the first level of involvement of the employees with the management.

2. Consultive Level – This is the second step in the employee involvement with the management. In this suggestions relating to the welfare of the employees are invited from the employees. But this is not necessary that these suggestions will be implemented or not.

3. Decision Making Level – This is the highest level of involvement of the employees in the management. In this employees are involved in decision-making process relating to different matters in the organisation. So we can say that at this level both the employees and the management take decision with the cooperation with each other.

Employee Involvement – 3 Major Types: Participative Management, Representative Participation, Quality Circle and Employee Stock Ownership Plans (ESOPs)

The major types of employee involvement are as follows:

I. Participative Management


II. Representative Participation

III. Quality Circle

IV. Employee Stock Ownership Plans (ESOPs)

Type # I. Participative Management:

This is defined as the process in which subordinates share a significant degree of decision-making power with their immediate superiors. It is the type of management in which employees at all levels are encouraged to contribute ideas towards identifying and setting organizational- goals, problem solving, and other decisions that may directly affect them. It is also called as consultative management. It enhances employee morale and productivity.

Four processes influence involvement , which are as follows:

a. Information sharing- It is concerned with keeping employees informed about the economic status of the company.


b. Training- It involves raising the skill levels of employees and offering development opportunities that allow them to apply new skills to make effective decisions regarding the organization as a whole.

c. Employee decision making- It can take many forms, from determining work schedules to deciding on budgets or processes.

d. Rewards- It is tied to suggestions and ideas as well as performance.

Pros and Cons of Participative Management:


1. It enhances employee morale and productivity by creating a sense of ownership among them.


2. Managers using participative style find their employees more receptive to change.

3. Participation helps employees gaining a wider view of organization.

4. Employees become more creative and innovative.


1. Employees get less time to finish their daily work or achieve their daily standard.

2. Sometimes the management is less willing to turn over some of the decision-making responsibility to subordinates.


3. The larger the organization, the more difficult it becomes to institute a participative management style.

Type # II. Representative Participation:

This is defined as a process of employee involvement in organizational decision making through a small group. It is the most widely legislated form of employee involvement around the world. The objective of representative involvement is to redistribute power within an organization, keeping labour on a more equal footing with the interest of management and stakeholders.

The two most important forms of representative participation are:

1. Works Councils

2. Board Representatives

1. Woks councils are groups of nominated or selected employees who must be consulted when management takes decisions involving personnel. It is also defined as a “shop-floor” organization representing workers, which functions as local/firm-level complement to national labour negotiations. Very often being dominated by management it has little impact on employees of the organization.

2. Board representatives are employees who sit on a company’s board of directors and represent the interests of the firm’s employees.

Various studies suggest that overall impact of representative participation is minimal.

Type # III. Quality Circles:

Quality is conformance to the claims made. Quality circle is a volunteer group composed of workers who meet together to discuss workplace improvement, and make presentations to management with their ideas. Typical topics are improving safety, product design, and manufacturing process. Quality circles have the advantage of continuity; the circle remains intact from project to project.

Quality Circles have been extensively used in Japan since the introduction of quality control techniques, in the 1950s and 1960s by W.Edwards Deming, Joseph Juran, and A.W. Feigenbaum. Kaoru Ishikawa of Tokyo University integrated these techniques with the theories of American behavioural scientists such as Maslow, McGregor, and Herzberg, and thus, the quality circle was born.

Prof. Ishikawa, who believed in tapping the creative potential of workers, innovated the Quality Circle movement to give Japanese industry that extra edge in creativity. The movement in Japan was coordinated by the Japanese Union of Scientists and Engineers (JUSE). The Lockheed Missile and Space Company appeared to be the first American firm to study the emerging Japanese approach and to implement an extensive programme.

By 1995 it was estimated that over 90 percent of the Fortune 500 companies were utilizing quality circles, including such firms as Honeywell, Digital Equipment, TRW, and Westinghouse. In India, some of the companies where the QC movement has found its way include BHEL, TELCO, Bajaj Auto, SBI, HMT etc.

A Quality Circle is a small group of employees (10-12) from the same work area who voluntarily meet at regular intervals to identify, analyze, and resolve work related problems. This can not only improve the performance of any organization, but also motivate and enrich the work life of employees.

Prior to the formation of quality circles, those supervisors who have volunteered to participate are trained by quality control experts and facilitators in matters such as quality control concepts, including the necessary statistical tools, in leading participative group discussions, and in group dynamics and communications skills. In turn, the supervisors, with the help of facilitators, train those subordinates who volunteer to participate.

The facilitator also helps each circle in its linking with other groups and with the overall coordinating committee. Groups are encouraged to use experts from within the organization when their specialties are relevant and are frequently authorized by management to make changes without the consent of higher authority whenever feasible. Once or twice a year, a member of higher management meets with each group.

Favourable results have also been reported through the use of cross-functional (or multifunctional) quality circle teams at such organizations as Ford and IBM. The latter has an extensive programme using “process improvement teams” whose members are drawn from multiple functions.

The use of Quality Circles in many highly innovative companies in the Scandinavian countries has been proven. The practice of it is recommended by many economist/business scholars.

Pros and Cons of Quality Circle:


1. The use of quality circle has been one of the central aspects in the evolution of total quality management, a much broader intervention strategy.

2. It meets the psychological needs of the workers (self-expression, involvement, recognition, etc.).


1. It suffers from various structural problems.

2. Sometimes the concept has not been well understood by managers, supervisors and workers.

Type # IV. Employee Stock Ownership Plans (ESOPs):

These are company established benefit plans in which employees acquire stock as part of their benefits. Employees are often given a share of the business after a certain length of employment or they can buy shares at any time. They also often have boards of directors elected directly by the employees.

An employee stock ownership fund is created. Companies contribute stock or cash to buy stock for the trust and allocate the stock to employees. Employees cannot take physical possession of their shares. They cannot sell them as long as they are employed in the company.

Employee Involvement – Importance

The importance of employee involvement are as follows:

1. Increased Commitment – When employees are consulted for taking important decisions and also to formulate policies. They express their views and ideas. The employees feel that they are important to the organisation and their commitment also increases.

2. Organisational Peace – Organisational conflicts occur between the employees and the management and they become opponent of each other. But employee involvement brings the cooperation between them and they come closer to each other.

3. Growth and Development of Employees – When employees are allowed to express their views freely, this makes them creative. They also design new methods for performing the work. Therefore, involvement of employees in management leads to their growth and development.

4. Increase in Mutual Understanding – In the present scenario the employees and the employers both think each other as their rivals. But involvement of employees bring both the parties on the common platform, they come close to each other and understand each other’s problem. This increases their mutual understanding.

5. Acceptance of Change – Whenever change is introduced, employees are first to resist the change and when the employees are the part of the decision, which introduces the change, they will accept it easily. So in this way resistance to change is reduced through employee involvement in decision making.

6. Increased Production – The employees’ involvement will increase the morale and the efficiency of the employees, which will lead to the increase in the production. Further, the organisational peace will also lead to increase in the contribution made by each employee.

7. Way of Self Expression – The employee involvement in management provides an opportunity to the employees to express themselves. They explain their views, difficulties, problems, suggestions, freely and without any fear. This makes them to do their work without any pressure.

8. Motivation and Job Satisfaction – The importance given to the employees by consulting them on various decisions will motivate them and provide them job satisfaction. Goals are set up with the consent of employees and they feel motivated to achieve them on time. The improved performance of the employees will give them job satisfaction.

9. Solidarity among Employees – It will help in creating solidarity among the employees. They will become an organized force. Since employees will be required to send their representatives for participating in various bodies they will come on the common platform. The employees will come together under the common banner for increasing their bargaining power. So employees’ involvement will bring solidarity among them.

Employee Involvement – 7 Important Methods of Employee Involvement in the Management

Following are the methods of employee involvement in the management:

Method # 1. Work Councils:

Work council consists of equal representatives from both the parties i.e. employees and the employers. They meet regularly for discussing the different problems. Both the parties present their suggestions and decisions are taken jointly. And these jointly taken decisions are binding on both of them. The matters which are normally discussed are education, accidents, safety, welfare facilities etc.

Method # 2. Collective Bargaining:

An individual employee does not have the full knowledge about the appropriate pay rates for his services. So he joins the employee union and the representatives of employee union equally participate with the management, discuss the aspects and fix the pay rates for the employees. Negotiations in this way are done on equal basis. So this process is known as collective bargaining.

Method # 3. Co-Ownership:

In this method employees are provided with the ownership rights. Employees are encourages to purchase the shares, they will get the voting right to elect their directors and will be able to send their representations in the board of directors and can influence decision making process.

Method # 4. Representation in the Board of Directors:

In this method the representative from the employee is taken in the Board of Directors. He is also named as employee director. But this method is not very much effective because he would be in minority and his suggestion will have little weight. This may bring inferiority complex in him and he may be completely suppressed or frustrated.

Method # 5. Joint Consultation:

In this method the joint committee represented by the employees and the management is set up to discuss and give suggestion for improvement with regard to matters of mutual interest. The decision of such committee will be binding on both the parties.

Method # 6. Discussions:

In this system managers call the meeting of the employees and share the information with them. He explains the problem to the employees, gives information to them and invites suggestions. The employees give their opinion to their problem and decision making authority is not transferred to them.

Method # 7. Suggestions System:

Under this system the employees are encouraged to make suggestions for the improvement. The employees may suggest some new methods of production or new schemes for the particular work. The employee who provides innovative suggestions are provided with monetary and other rewards.

Employee Involvement – 7 Reasons of Failure

The employee involvement in management is seemed to be very effective and beneficial but it has failed to achieve the objectives in many organisations.

Following are the reasons of failure:

1. Lack of mutual trust and faith between the management and the employees.

2. Lack of knowledge about the benefits of the employee involvement in management to both employer and employee.

3. Opposition of trade union because they think they will loose the control on employees.

4. Employees are more interested in financial benefits than in participation, with the management.

5. Lack of adequate knowledge to employees and employers.

6. Delay in implementation of the joint decisions.

7. Sometimes the negotiations between the management and employees do not come up with the decisions.

Employee Involvement – Top 9 Suggestions for the Successful Implementation of Employee Involvement in Management

Following are the suggestions for the successful implementation of the employee involvement in the management:

1. There should be proper communication at all levels of the management and there should not be blockage in the communication between the employers and employees.

2. The employer should adapt a broad, progressive, and democratic attitude. They should be willing to associate with the employees and discuss the problems freely and frankly with them.

3. The employers should be conscious of their obligation towards the employees and the benefits of employee involvement. Employers and employees should agree on the objectives of the industry and their mutual rights and obligations.

4. Managers should not treat involvement as an imposed liability and employees should not use it for expressing and demands only.

5. There should be mutual trust and faith among all the parties. Mere legislation cannot make participation successful. Existence of an atmosphere of trust, faith and confidence and recognition is must on the part of the employers and the employees.

6. Proper training should be provided to both employers and the employees. Employees and their representatives should be provided training and education in the philosophy and the process of employee involvement. They should be taught what is expected from them and how they are expected to perform.

7. Employees should be provided proper knowledge of their involvement in the decision making.

8. Involvement should be done at all levels. Involvement should be a continuous process. To begin with it must start at the operating level.

9. Employer employee relations should be cordial or at least there should not be any tension in their relations. The objectives of involvement should be decided mutually.