Employee involvement and organizational effectiveness

Purpose The purpose of this paper is to examine the extent to which employee involvement influences organizational effectiveness and to examine the extent to which employee involvement influences profitability, productivity, and market share. Design/methodology/approach The correlational study was conducted as a cross‐sectional survey. Research questionnaires were administered and interviews were held with managers in the organizations studied. A total of 388 managers were randomly drawn from a population of 13,339 managers of all the 24 banks in Nigeria. The independent variable, “employee involvement” was measured by empowerment, team orientation, and capacity development. The dependent variable, “organizational effectiveness” was measured by profitability, productivity, and market share. The measures all used a five‐point Likert scale (ranging from 1=strongly disagree to 5=strongly agree) and Spearman's rank correlation statistical tool was used to test the hypotheses. Findings The descriptive statistics of the study variables indicate that employee involvement positively influences organizational effectiveness. The result (Rho=0.515, p <0.05) shows a positive significant relationship between employee involvement and profitability. The result (Rho=0.126, p <0.05) shows a positive relationship between employee involvement and productivity. The result (Rho=0.256, p <0.05) shows a positive relationship between employee involvement and market share. Research limitations/implications The result cannot be generalized because the study was carried out only in the banking industry. Not all the questionnaires given out were retrieved. Some respondents were reluctant to give out information about their organizations because of fear that such information will get to their competitors. Relevant literature on the topic of African origin were scarce, thus most of the literature reviewed was from Europe and America. Practical implications The results imply that increase in the level of employee involvement in organizations will enhance profitability, productivity, and market share. This means that employee involvement is associated with organizational effectiveness. Originality/value The study provides increased understanding, prediction, and appreciation of human behaviour. It enables us analyze the relationship that exist between employee involvement and organizational effectiveness. The study significantly enhances the body of knowledge in this area of management, as it provides reliable empirical results that can be used by scholars and practitioners. It will also help to alert managers to the implications of cultivating a culture of employee involvement that can serve as a competitive advantage. The study will be a challenge to further research because of its findings.