---
authors:
- Aya.elfadil
categories:
- business
- management
contributors:
- Aya.elfadil
summary: Workplace democracy applies democratic principles to the workplace, involving
  voting, referendums, and public debate. It can take various forms and has several
  arguments such as economic, citizenship, ethical, and employee power and representation.
  Research has shown potential positive impacts on organizational effectiveness, productivity,
  and citizenship skills.
tags:
- workplace democracy
- democratic principles
- employee power
- organizational effectiveness
- citizenship
title: Workplace Democracy
---

## Definition

Workplace democracy refers to the application of democratic principles
to the workplace, such as voting, referendums, and public debate.
Workplace democracy can take many forms, ranging from full-scale *direct
democracy* in which every employee's vote carries equal weight to
smaller initiatives that may apply only to a specific area or department
of the business. It can be deployed in a number of ways, depending on
the size, culture, and other characteristics of an institution.

## Arguments of Workplace Democracy

- Economic argument.
- Citizenship argument.
- Ethical justification.
- Employee power and representation.

### Economic argument

The researchers sought to determine whether involving employees in
organizational decision-making results in increased organizational
effectiveness and productivity. According to Lewin, those involved in
decision-making also exhibit a greater capacity for change. Different
participatory techniques may have a greater effect on morale than on
productivity, while others may have the opposite effect.
[Mondragon](https://en.wikipedia.org/wiki/Mondragon_Corporation/)'s
success demonstrates the economic benefits of workplace democracy.

### Citizenship argument

Workplace democracy serves as an agent for increasing public
participation in the political process of a government.
Democracy-related skills acquired in the workplace can be transferred to
improved citizenship, resulting in a more functional democracy. Workers
in a democratic environment may also develop a stronger sense of
responsibility for the common good, which translates into basic
citizenship.

### Ethical justification

According to philosopher Robert Dahl, 'if democracy is justified in the
governance of the state, it must also be justified in the governance of
economic enterprises.' However, some political scientists have
questioned whether the analogy of the state-firm is the most appropriate
one for justifying workplace democratization.

### Employee power and representation

Employees who work for democratic leaders report positive outcomes such
as group member satisfaction, friendliness, group mindedness, 'we'
statements, employee motivation, creativity, and commitment to
organizational decisions.

## Implementing Workplace Democracy

1.  Encouraging contribution.
2.  Improving dialogues between the teams.
3.  Assigning tasks.
4.  Recognizing individual performance.

### 1. Encouraging contribution:

One democratic method that can be implemented is to encourage everyone
to contribute. To be effective, the team must first feel valued for
their opinions and ideas.

- This can be made by:
  - Regular questionnaires or surveys.
  - Voting when making team decisions.
  - Inquiring whether anyone can think of a more efficient way to
    complete a task.
  - Directly acquire the opinion of colleagues, rather than leaving
    questions open.
  - Suggestion boxes for those who prefer to provide feedback
    anonymously.

### 2. Improving dialogues between the teams:

Establishing a dialogue within teams (which does not have to be about
work) demonstrates to them that they can talk if they have any questions
or suggestions. When in a management position, managers want to be
alerted to any issues immediately. Thus, ensuring that their team feels
comfortable bringing them items can expedite this process.

### 3. Assigning tasks:

Delegating tasks to other team members (wherever possible) demonstrates
to them that their manager trusts them to do a good job. Not only that,
but it allows them to demonstrate their capabilities to their manager
and may eventually relieve them of tasks.

### 4. Recognizing individual performance:

Workplace democracy also entails providing feedback to the team, not
just the other way around. Therefore, if a manager notices someone doing
an excellent job, they must acknowledge it and inform the employee.
Recognizing the team's accomplishments on a regular basis helps to keep
them motivated and engaged at work.

## The impacts of workplace democracy

According to research, workplace democracy has an effect on
productivity, the longevity of businesses, and the workers.

### 1. Effects on Productivity

An analysis of 43 studies on worker participation discovered a small but
significant positive relationship between workplace democracy and
increased efficiency and productivity. A report examining research on
democratic workplaces in the United States, Europe, and Latin America
discovered that workplace democracy resulted in employees working
'better and smarter' and production being more efficiently organized.
Additionally, they were more efficient at organizing on a larger scale
and in capital-intensive industries than in hierarchical workplaces.

A 1987 study of democratic workplaces in Italy, the United Kingdom, and
France discovered a positive relationship between workplace democracy
and productivity, as well as the fact that democratic firms do not
become less productive as they grow larger. According to a report on
democratic workplaces in the United States, they can boost worker
incomes by 70% to 80%, growing at a 2% annual rate faster than other
businesses, and have 9-19% higher levels of productivity, 45 percent
lower turnover rates, and are 30% less likely to fail in the first few
years of operation. A 1995 study of workplace democracy in the Northwest
United States' timber industry discovered that workplace democracy
increased productivity by 6 to 14%. According to a 2006 meta-study on
workplace democracy, it has the potential to 'equal or exceeds the
productivity of conventional businesses when employee involvement and
ownership are combined' and 'enrich local social capital.'

### 2. Effects on Business Longevity

According to an analysis conducted in the 2000s in British Columbia,
Alberta, and Quebec, businesses with democratic workplaces were nearly
half as likely to fail in ten years as businesses with hierarchical
workplaces. According to a 1997-2009 analysis of all businesses in
Uruguay, businesses with democratic workplaces have a 29% lower chance
of closing than other businesses.

In Italy, businesses with democratic workplaces that were created as a
result of workers purchasing a business that was about to close or be
put up for sale have an 87 percent three-year survival rate, compared to
48 percent of all Italian businesses. In 2005, 1% of German businesses
failed, but the figure was less than 0.1 percent for businesses with
democratic workplaces.

According to a 2012 study, democratic workplaces in Spanish and French
businesses "were more resilient than conventional enterprises during the
economic crisis." In France, businesses with democratic workplaces have
a three-year survival rate of between 80% and 90%, compared to a 66
percent survival rate for all businesses. During the 2008 economic
crisis, employment in democratic workplaces increased by 4.2 percent in
France, while employment in other businesses fell by 0.7 percent.

### Effects on Workers

In general, the effects of workplace democracy appear to be positive for
workers. According to a 2018 study from South Korea, workers were more
motivated in democratic workplaces. According to a 2014 study from
Italy, democratic workplaces were the only type of workplace that
increased worker trust. According to a 2013 study conducted in the
United States, democratic workplaces in the healthcare industry resulted
in significantly higher job satisfaction. According to a 2011 study
conducted in France, democratic workplaces "had a positive effect on
employees' job satisfaction." According to a 2019 meta-study, "the
impact \[of democratic workplaces\] on employee happiness is generally
positive." According to a 1995 study conducted in the United States,
"employees who embrace increased influence and participation in
workplace decisions report higher job satisfaction."

## Employee Ownership

Firms where democratic processes in the workplace contribute to the
success of the business. The best examples have been condensed into what
one noted expert refers to as the Combining ownership and participatory
management creates a potent competitive advantage. However, neither
ownership nor participation alone accomplishes much.

### Definition

Employee ownership is a term that refers to any arrangement in which
employees own stock or the right to the value of their company's stock.
Employee ownership is a broad concept that encompasses a variety of
structures, ranging from straightforward stock grants to highly
structured plans.

### Forms of Employee Ownership

Employee ownership is most prevalent in the United States, its forms
include:

- [Employee Stock Ownership Plans](employee-stock-ownership-plans.md) (ESOPs)
- [Equity Compensation Plans](equity-compensation-plans.md)
- [Worker Cooperatives](worker-cooperatives.md)
- [Employee Ownership Trusts](employee-ownership-trusts.md)

Employee ownership plans are most frequently used as a vehicle for
business transition in closely held businesses. Employee ownership is
also frequently used to help attract and retain employees, build
long-term wealth, and foster a high-engagement work culture in which
employees are encouraged to think and act like owners.

## Sources:

- <https://www.hrzone.com/hr-glossary/what-is-workplace-democracy/>
- <https://blog.caw.ac.uk/index.php/caw-news/how-you-can-implement-workplace-democracy-in-your-practice/>
- <https://learning-in-action.williams.edu/breaking-the-mold/what-is-workplace-democracy/>
- <https://en.wikipedia.org/wiki/Workplace_democracy/>
- <https://www.nceo.org/what-is-employee-ownership>


## See also

- [Cooperative](cooperative.md)
- [Worker Cooperatives](worker-cooperatives.md)
- [Economic Democracy](economic-democracy.md)
- [Community Business](community-business.md)
- [Employee Stock Ownership Plans](employee-stock-ownership-plans.md)
- [Employee Ownership Trusts](employee-ownership-trusts.md)
- [Co-operative Bonds](../organisations/cooperative-bonds.md)
- [CAPAD](../organisations/capad.md)
