change management facilitation
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The benefits of involving stakeholders in matters that affect them are innumerable.

David Levin’s research (reviewing 495 organisations) concludes that:

  • Companies that share information broadly and have employee participation in intellectual activities such as decision-making and problem-solving perform significantly better than companies that are run autocratically.
  • Companies that combine group economic participation, intellectual participation, flexible job design, and training and development get an added productivity boost.
  • Two-thirds of the difference observed in bottom-line impact was due to the combined effect of these practices.

Both Levin and Kravetz studied participative work practices, but Levin’s (1988) research went further, because he used statistical techniques to identify causal relationships between human resources practices and bottom-line performance. The finding was that participative practices are not just related to financial success - they actually help cause it.

In the mid 1980's Dennis Kravetz noted deliberate changes in management style and workplace philosophy, reflecting a commitment to emphasize the human side of business. Questioning whether such management practices (which he termed ‘progressive’) were associated with bottom-line results, he set out to see how financially successful companies interacted with their employees. He studied human resource management and philosophy across nine dimensions of 150 large companies and compared these measures to financial performance.

He found that ‘...nearly every financial criterion examined showed a strong relation to human resources progressiveness. The more progressive companies had much better financial results than the less progressive firms. The results were significant not only from a statistical standpoint but from a practical standpoint as well. The magnitude of group differences in sales growth, profit margins and other criteria has a tremendous impact on each company's success’. He concluded that a participatory workplace outperforms its ‘non-participatory’ rival in every possible respect. The difference is quite astounding:
  • 1.6 x growth
  • 4.15 x profits
  • 1.8 x growth in equity
  • 1.6 x better current-year profits

Based on research conducted in the European Union, Manfred Weiss reports that employee participation, amongst others:

  • Leads to better management
  • Enables management to predict workers’ social needs and aspirations
  • Exposes worker representatives to the complexities of management
  • Absorbs enormous amounts of conflict
  • Increases the legitimacy and authority of decisions...
  • ...with resultant smooth implementation of policies and decisions
  • Increases the motivation of workers
  • Allows for a more co-operative form of management

Commissioned research conducted by Opperman and Felicity Steadman (2002) found similar results for South African companies, confirming significant improvements in both working environments and productivity as a direct result of employee participation.

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© 2014 Change Management Facilitation (Pty) Ltd
© Text : Harvard Law School (PON) and Conflict Dynamics. © Images : CTI, Die Burger, Microsoft and Kobus Opperman