Effect of Direct Participation on Perceived Organizational Performance: A Case Study of Banking Sector of Pakistan

Abstract

Purpose: The purpose of this study was to find out the association between the HR practices and perceptions of firm performance and to know, understand and investigate the scope of relationship among different types of employee participation (Delegative & Consultative) and organizational performance in banking sector of Pakistan.

Methodology: To investigate the relationship that exists between employee participation and firms, performance cross sectional survey design was used for collecting data based on subjective measures. Data was analyzed through MS Excel 2007 & SPSS (17.0), then descriptive, correlations and regression analysis was applied to find out the result for describing empirical and statistical relationship between dependent and independent variables.

Findings:  Correlation results shows that the direct participation (Delegative & Consultative) have weak, positive and significant impact on organizational performance. Whereas, regression model results also depicts that employee participation has significant impact on organizational performance. The variation in organizational performance is explained about 23% by the independent variables e.g; delegative & consultative participation which is very minor so, we can conclude that contribution of other HRM variables towards organizational performance is comparatively high. These results are consistent with (Singh, 2004) for the same variable.

Research Limitations: The study was limited to only banking sector of Pakistan. This was based on perceived measures that the organizational performance and the forms of direct participation. So the data collected was based on perceptual and subjective measures, generally objective measures are more reliable and consistent to the outcome and results.

Practical Implications: Results revealed that direct participation has minor contribution towards organizational performance in Pakistani settings but one could not achieve the desired results by ignoring this key variable. So it is advisable that direct participation must be used in combination of with other HRM variables to boost the performance.

Originality/Value: This paper furthers our understanding of the role that employee participation attributes organizational performance.

Key Words: Banking Sector, Direct Participation: Delegative & Consultative, HRM Practices, Perceived Organizational Performance, Pakistan