Understanding the impact of employee involvement on organizational productivity: the moderating role of organizational commitment.

Author:Phipps, Simone T.A.
Position:Report
 
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INTRODUCTION

Organizational development (OD) and change are critical if organizations are to be successful and remain competitive in this era of unremitting advancement and progress. According to Beer and Walton (1987), increasing international competition, deregulation, the decline of manufacturing, the changing values of workers, and the growth of information technology have changed the concepts and approaches managers must use. By definition, OD comprises a set of actions or interventions undertaken to improve organizational effectiveness and employee well-being (Beer & Walton, 1987). Friedlander and Brown (1974) described it as a planned change effort where the intervention is at the individual, process, technological, and/or structural level. Therefore, organizational development and change are intertwined concepts that can involve numerous facets or components of the organizational system, and that have the potential to result in positive outcomes for the organization.

Successfully implementing change inevitably requires encouraging individuals to enact new behaviors so that desired changes are achieved (Armenakis & Bedeian, 1999). The authors' review mentioned behaviors, processes, practices, and attitudes that enable positive change to occur, including active participation by affected parties (e.g., vicarious learning, enactive mastery, and participative decision making), human resource management practices (e.g., selection, performance appraisal, compensation, and training and development programs), management of information (i.e. internal and external), and commitment (e.g., compliance commitment, identification commitment, and internalization commitment). These behaviors, processes, practices, and attitudes are reflective of the culture that the organization espouses.

In these current dynamic times that require organizational development and change, culture plays a pivotal role in determining how well organizations perform. For example, change efforts elicit improvements in performance criteria such as quality, service, productivity, profitability, efficiency, effectiveness, and risk-taking (Armenakis & Bedeian, 1999; Porras & Silvers, 1991). Burke and Litwin (1992) asserted that when management establishes a working climate of participation, coupled with pay for performance, positive results occur. Evidence to support this claim is provided through an earlier study by Rosenberg and Rosenstein (1980) as their results revealed that increased participative activity was associated with an increase in productivity. A literature review by Katzell and Guzzo (1983) revealed that OD interventions, including training and instruction activities, financial compensation, and decision-making techniques, frequently influence productivity improvement. These interventions are reflective of an organization that strives to cultivate and sustain a culture that values employee participation and involvement.

One of the major indicators of operational fruition is organizational productivity. In fact, productivity is a standard measure often used to assess organizational performance (Newlin, 2009). However, productivity can be delineated in many ways. It has been defined in terms of output, sales, profitability, work quality, and processes completed on schedule (Culnan & Bair, 1983; Pritchard, 1990). Another major organizational productivity indicator is absenteeism (Kyoung-Ok, Wilson, & Myung Sun, 2004). How productivity is measured varies based on what is important to the organization (Newlin, 2009). Therefore, in this paper, productivity is generally defined as increased value over time. This definition enables the inclusion of all the aforementioned indicators, which embrace both effectiveness and efficiency.

Organizational productivity is crucial as it is directly tied to an organization's formula for success (Schneider, 1995). Therefore, it is important to determine what factors influence productivity as organizational development occurs and interventions are introduced and implemented.

A culture of increased employee involvement (EI) has been acknowledged as one means of augmenting organizational productivity. Wolf and Zwick (2008) found that employee involvement raised establishment productivity. Jones, Kalmi, and Kauhanen (2010) also found that participation had a strong positive effect on value added, with an establishment that improved its score on participation from the first to the third quartile, seeing its "value added" increase by five percent. Results also revealed that information sharing had a positive and statistically significant effect on value added.

Another cultural factor that has been associated with organizational productivity is organizational commitment. There has been an explosion of interest in the concept of high performance-high commitment (HP-HC) work systems, of which an underlying premise is that superior technology, efficient task design, congruent structure and processes, and good planning are necessary but not sufficient for high performance, productivity, or quality (Woodman, 1989). The author asserted that individuals and work groups must be committed to make the technology, task design, structure, and strategy work. A review by Passmore and Fagans (1992), although mentioning participative management as having positive effects on productivity, also referred to commitment as a contextual factor that determines the effectiveness of participation in organizations.

The literature suggests that both employee involvement and organizational commitment should play a role in organizational productivity. Therefore, the primary purpose of this manuscript is to explore the possible influence of employee involvement on organizational productivity, as well as to investigate the moderating effect of organizational commitment on the involvement-productivity relationship.

This review is significant in that it serves as a preliminary stride to provide a theoretical basis and conceptual framework from which an actual study can be designed. Results obtained from the study can be used as organizations strive to promote development and implement cultural changes that would increase their productivity. If findings show that employee involvement does indeed influence organizational productivity, EI practices should be used within HR systems, with a focus on the EI elements that are shown to impact productivity most, and organizations, as a cohesive unit, should endeavor to promote a culture that inspires participation and involvement. Also, if organizational commitment is found to be a moderator, steps should be taken to motivate employees to be committed to their organizations and to create a culture that embraces and encourages commitment.

DOMAIN AND BOUNDARIES

Employee involvement has long been seen as an important aspect of organizational life, and a key to achieving increased organizational effectiveness (Shadur, Kienzle, & Rodwell, 1999). The authors mentioned numerous varying definitions and conceptualizations of the construct and proposed that three factors (i.e., communication, teamwork, and participation in decision-making) accounted for the majority of processes and programs used in the field of involvement. Boxall and Macky (2009) stated that a high-involvement goal implied making better use of employee capacities for self-management, personal development, and problem solving. Employee involvement, then, is a broad term, which covers an extremely broad range of concepts (Collins, 1994). Therefore, it is important to delineate the boundaries of this manuscript.

Primary focus is placed on employee involvement as described by Lawler (1986), and the concept is discussed within the confines of human resource (HR) practices that constitute a high-performance work system (HPWS). This decision was made because HR practices do provide ample insight about what matters to organizations and what culture they support. HPWS consists of work practices that lead in some way to superior organizational performance (Boxall & Macky, 2009). The authors further described work practices as being affiliated with the way the work itself is organized, including its normal structure and any associated opportunities to engage in problem-solving and change management regarding work processes. They also discussed the link between involvement and commitment as firms that invested in high-involvement work practices and processes had better economic performance, including higher productivity, in conditions of low labor turnover. Thus, these work practices that encourage employee involvement can potentially interact with organizational commitment, as well as impact organizational productivity, which, as aforementioned, is a performance indicator.

EMPLOYEE INVOLVEMENT

Glew, O'Leary-Kelly, Griffin, and Fleet (1995) defined employee participation (i.e., involvement) as a conscious and intended effort by individuals at a...

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