EMPLOYEE VOICE & PERFORMANCE

Employee Ensure & Performance

Employee Ensure & Performance

Introduction

The purpose of this assignment to discuss and critically examine the proposition that all employees need a voice to ensure effective performance. Employee voice refers to the participation of employees in influencing corporate decision making. Employees are given a voice through informal and formal means to minimise conflict, improve communication and encourage staff performance through motivation and fair treatment (Stone, 2005). Employee participation is a form of empowerment and motivation that leads to increased productivity and performance

Employee voice is attained through both informal and formal mechanisms. Informal employee voice mechanisms include general conversation between employees and employers, email communication, employee feedback, social functions and meetings at the workplace. Employees can also influence corporate decision making through their actions, such as turnover and absenteeism.

Formal mechanisms include communication tools implemented by an organisations human resource department, such as employee surveys and suggestion boxes. Some organisations promote employee voice through financial participation, such as share ownership and profit-sharing opportunities. Employee consultative committees and representation through trade unions are also formal ways of ensuring employees are informed and are given a voice in decisions that affect their employment.

Workplace Democracy and Stakeholder Voice

The developments in stakeholder relations have implications for corporate governance structures in providing 'voice' mechanisms to the major actors. Significant international differences in the voice mechanisms provided to workers and shareholders have therefore emerged and these differences are highly influential in the extent to which a particular stakeholder's voice gets heard.

Shareholders may be seen to own the firm; however, they do not control the firm on a day to day basis. Rather, theories of shareholder democracy suggest that shareholders exercise their right to control the firm through their ability to appoint and dismiss those who directly control the firm. Yet, as Schwartz (1983) identifies, corporate governance structures do not always sufficiently uphold the ability of shareholders to exercise this power.

The notion of one share, one vote is the most commonly held tenet of shareholder democracy. Yet, there are significant deviations from this principle amongst nations and even amongst individual firms. Whereas 97% of German firms adopt this principle, only 2/3 of the firms listed on the FTSE Eurofirst 300 index operate under these guidelines (Montagnon, 2005). This basic principle alone, however, does not guarantee wide-spread shareholder voice in the decision-making of who operates the firm.

Rebérioux (2002) cogently argues that two broad systems of corporate governance have emerged - the Anglo-Saxon and the European Continental and that these have developed through distinctly different market conditions. Market capitalisation as a percentage of GNP in both the United Kingdom and United States is significantly higher than the European examples of France and Germany. In addition, large and medium sized firms are owned by a much broader base of shareholders in the Anglo-Saxon nations. This broader ownership base and larger market capitalisation means that Anglo-Saxon markets are more liquid and that shareholders can more potently exercise voice. Poorly performing managers are dismissed through what has become known ...