It is not the first time I've encountered this corporate practice: workers invited to participate in the management of a corporation. In my experience, instead of this tactic increasing productivity and morale, it only increases expenses and paralyzes the company.
What is going on?
The company is attempting to solve a problem. Namely, by bringing the workers into the decision-making process the company intends to improve morale and increase productivity which in turn will reduce losses and/or increase profits.
It backfires because it is half a solution, and half a solution is worse than no solution; or to put it another way, half ignorance is worse than total ignorance.
With a half solution you tend to believe you have solved the problem and can relax. Meanwhile the company's problem continues and probably is getting worse. It is like taking less than the full dose of antibiotics.
What actually happens with worker participation? Elected worker representatives are invited to be on the Board. In Israel, the trade union of the Electricity company (IEC) even has the right to approve who the VPs will be.
What is wrong?
There is sharing of power but not of rewards.
To increase productivity and higher morale, people who are interdependent organizationally need to share power. But they also expect to share the rewards the interdependence produces. If they only share power but not rewards, it leads to a dysfunctional power shift: workers use the power to improve their interests and fight reductions in employment or any other decision they believe attacks their interests.
I attribute this mistake to decisions that are made for political purpose, or are based on good intentions but lack a solid theory to support it.
To increase productivity and morale, the four PAEI subsystems (Producer, Administrator, Entrepreneur, Integrator) must be aligned and that is what I would call a "full solution" like we do with the Adizes program.