Abstract
<p>The objective of this study is to examine the influence of employee participation in decision-making on firm performance in Saudi Arabia’s manufacturing sector. Data were collected through pre-validated, piloted questionnaires, which were e-mailed to 341 manufacturing firms. The questionnaires asked about employee involvement in decision-making and performance variables. The response rate was 63.4 percent. Dimensions of PDM were rendered into 20 statements in the form of a five-point Likert scale. The scale, ranging from no involvement to substantial involvement, measured the degree of PDM. Additionally we used a five-point Likert scale to determine the extent of the firms’ performance in terms of the 10 criteria. The scores of the 10 items were summed and averaged to establish the mean index of the firms’ performance. An index of less than 4.0 was regarded as low firm performance; an index of 4.0 and above was considered to represent high firm performance. Statistical tools were used in analysis. Through product–moment correlation, we examined whether a relationship existed between employee participation in decision-making and firm performance. Regression analysis provided the extent of variation in the dependent variable and Z-test (approximated by the independent samples t-test). Findings showed a significant positive relationship exists between PDM and firm performance, suggesting that PDM is an essential component influencing firm performance. The higher the level of employee participation in decision-making, the higher the level of firm performance.Future studies involving the service industry would shed light on PDM in industries besides manufacturing.</p>
Highlights
A certain logic supports the opinion that an organization benefits from their managers and employees collaborating, and research has shown the close link between organizational and individual effectiveness (Irawanto, 2015)
Are the outcomes of these previous studies done in Western culture relevant in Saudi culture? Hofstede’s (1994) cultural study revealed that a Middle East country as Saudi Arabia scored high on masculinity, high on uncertainty avoidance, quite high on collectivism, and very high on power distance, as compared to other cultures
In considering Hofstede’s findings, specialists may wonder whether Saudi workers are culturally prepared to take on management practices such as PDM, though this austere view of Saudi culture is somewhat fading
Summary
A certain logic supports the opinion that an organization benefits from their managers and employees collaborating, and research has shown the close link between organizational and individual effectiveness (Irawanto, 2015). The relationship between job performance and participation has been an area of interest for business researchers. If employees are to understand the need for creativity and commit to changing their work behaviors in new and improved ways, they must be involved (Singh, 2009; Kingir & Mesci, 2010). Employee involvement in decision-making creates a sense of belonging among workers and an agreeable environment in which both management and employees willingly contribute to healthy relations (Noah, 2008). Workers’ involvement in decision-making can be seen as a motivational tool for encouraging high productivity and positive attitude (Noah, 2008). Skepticism regarding the relevance and value of employee participation in decision-making to firm performance persists, and as such this study assesses whether employee participation in decision-making has a significant impact on firm performance
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