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CHAPTER OBJECTIVES

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Module 4: Workers' Participation In Management

4.01 Define and identify ways for industrial democracy.

4.02 Describe the most dynamic Human Resources.

4.03 Discuss the ways to satisfy the workers’ social and esteem needs.

4.04 Analyze and strengthen labor-management co-operation and thus maintain Industrial peace and harmony.

4.05 Discuss the ways to promote increased productivity for the advantage of the organization, workers and the society at large.

DEFINITION OF WPM-1

According to G.S. Walpole, participation in management gives the workers a sense of importance, price and accomplishment; it gives him the freedom and the opportunity for self-expression; a feeling of belonging to his place of work and a sense of workmanship and creativity. It provides for the integration of his interest with those of the management and makes him a joint partner in the enterprise”.

DEFINITION OF WPM-2

Dr. Alexander considers a management to be participative, “if it gives scope to the workers to influence its decision making process on any level or sphere or if it shares with them some if its managerial prerogatives”.

WPM CONCEPT ENCOMPASSES THE FOLLOWING :-

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It provides scope for employees in the decision making of the organization.

The participation may be at the shop level, departmental level or at the top level.

The participation includes the willingness to share the responsibility by works as they have a commitment to execute their decisions.

The participation is conducted through the mechanism of forums which provide for association of workers representatives.

The basic idea is to develop self control and self discipline among works, so that the management become “Auto Management”.

OBJECTIVES

The scheme has economic, psychological, ethical and political objectives.

Its psychological objective of the scheme is to secure full recognition of the workers. Association of worker with management provides him with a sense of importance, involvement and a feeling of belongingness. He considers himself to be an indispensable constituent of the organization.

Socially, the need for participation arises because modern industry is a social institution with the interest of employer, the share-holders, the community and the workers equally invested in it.

The ethical objective of participation is to develop workers free personality and to recognize human dignity.

The political objective of participation is to develop workers conscious of their democratic rights on their work place and thus bring about industrial democracy.

LEVELS OF PARTICIPATION

Workers’ participation is possible at all levels of management; the only difference is that of degree and nature of application. For instance, it may be vigorous at lower level and faint at top level. Broadly speaking there is following five levels of participation:

Information participation: It ensures that employees are able to receive information and express their views pertaining to the matters of general economic importance.

Consultative participation: Here works are consulted on the matters of employee welfare such as work, safety and health. However, final decision always rests at the option of management and employees’ views are only of advisory nature.

Associative participation: It is extension of consultative participation as management here, is under moral obligation to accept and implement the unanimous decisions of employees.

Administrative participation: It ensure greater share of works in discharge of managerial functions. Here, decision already taken by the management come to employees, preferably with alternatives for administration and employees have to select the best from those for implementation.

Decisive participation: Highest level of participation where decisions are jointly taken on the matters relation to production, welfare etc. is called decisive participation.

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6. COLLECTIVE BARGAINING

ILO has defined, "Collective bargaining as, negotiation about working

conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another”.

is a continuous process which aims at establishing stable relationships between the parties involved.

is a collective process in which representatives of both the management and employees participate.

not only involves the bargaining agreement, but also involves the implementation of such an agreement.

democratic way of life in industry

attempts in achieving discipline in the industry

is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

7. WORKS COMMITEES

Under the Industrial Disputes Act, 1947, every establishment employing 100 or more workers is required to constitute a works committee

It consists of equal number of representatives from the employer and the employees.

The main purpose of this committee is to provide measures for securing and preserving amity and good relations between the employer and the employees.

Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees are concerned with:

Conditions of work such as ventilation, lighting and sanitation.

Amenities such as drinking water, canteens, dining rooms, medical and health services.

Educational and recreational activities.

Safety measures, accident prevention mechanisms etc.

Promotion , Festive holidays

Welfare

8. SHOP / DEPARTMENT COUNCIL

In every Industrial establishment employing 500 or more workmen, the employer shall constitute a shop council.

Shop council represents each department or a shop in a unit.

Each shop council consists of an equal number of representatives from both employer and employees.

The employers’ representatives will be nominated by the management and must consist of persons within the establishment.

The workers’ representatives will be from among the workers of the department or shop concerned.

The total number of employees may not exceed 12.

All decisions taken will be implemented within one month.

Duration of Shop council is two months.

Shop council has to meet at least once in a month.

FUNCTIONS OF SHOP COUNCIL

Assist management in achieving monthly production targets.

Improve production and efficiency, including elimination of wastage of man power.

Study absenteeism in the shop or department and recommend steps to reduce it.

Suggest health, safety and welfare measures to be adopted for smooth functioning of staff.

Look after physical conditions of working such as lighting, ventilation, noise and dust.

Ensure proper flow of adequate two way communication between management and workers.

9. JOINT COUNCIL

The joint councils are constituted for the whole unit, in every Industrial Unit employing 500 or more workers.

Only such persons who are actually engaged in the unit shall be the members of Joint Council.

A joint council shall meet at least once in a quarter.

The chief executive of the unit shall be the chairperson of the joint council.

The vice-chairman of the joint council will be nominated by the worker members of the council.

The decisions of the Joint Council shall be based on the consensus and not on the basis of voting.

It for a period of two years.

The decisions will be binding on both parties and will be implemented within one month.

The organizations include hotels, hospitals, railway and road transport, post and telegraph offices, state electricity boards.

Joint councils are bodies comprising representatives of employers and employees. This method sees a very loose form of participation, as these councils are mostly consultative bodies.

FUNCTIONS OF JOINT COUNCIL

Fixation of production norms

Work planning

Achieving production targets

Training

Reward policy

Creative suggestions

Health

Security

10. BOARD REPRESENTATION

This would be the highest form of industrial democracy.

The workers’ representative on the Board can play a useful role in safeguarding the interests of workers.

The worker can serve as a guide and a control element.

The worker can prevail top management not to take measures that would be unpopular with the employees.

The worker can guide the Board members on matters of investment in employee benefit schemes like housing, and so forth.

11.QUALITY CIRCLES

It consists of seven to ten people from the same work area who meet regularly to define, analyze, and solve quality and related problems in their area.

These circles require a lot of time and commitment on the part of members for regular meetings, analysis, brainstorming etc

Most QCs have a definite life cycle – one to three years. Few circles survive beyond this limit either because they loose steam or they face simple problems.

QCs can be an excellent bridge between participative and non-participative approaches.

QCs are said to provide quick , concrete, and impressive results when correctly implemented

ADVANTAGES OF QC

Employees become involved in decision-making, acquire communication and analytical skills and improve efficiency of the work place.

Organization gets to enjoy higher savings-to-cost ratios.

Chances of QC members to get promotions are enhanced

FORMS OF PARTICIPATION

The forms of workers participation in management vary from industry to industry and country to country depending upon the political system, pattern of management relations and subject or area of participation.

The forms of workers participation may be as follows:

Joint Consultation Model

Joint Decision Model

Self-Management, or Auto Management Scheme

Workers Representation on Board

1. JOINT CONSULTATION MODEL

Joint consultation model:

In joint consultation model the management consults with the workers before taking decisions. The workers represent their view through ‘Joint consultative Committees’. This form is followed in U.K., Sweden and Poland.

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Worker participation in Japanese companies is practiced most visibly and formally through the scheme of joint consultation. This is the system where representatives of both employees (usually union representatives) and management participate.

The main objective of the joint consultation system is to share information between workers and management on a relatively broad range of issues relating to corporate management and working conditions.

This is the place to share information and discuss issues and not the place for bargaining.

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2.JOINT DECISION MODEL

Joint decision model: In this form both the workers and management jointly decide and execute the decisions. This form of participation is followed in U.S.A. and West Germany.

3.SELF MANAGEMENT / AUTO MANAGEMENT

Self-management or auto management: In this model, the entire control is in the hands of workers. Yugoslavia is an example to this model. Where the state industrial units are run by the workers under a scheme called ‘Self-Management or Auto Management Scheme’.

4.WORKERS’ REPRESENTATION ON BOARD

Workers’ representation on board: Under this method, the workers elect their representative and send them to the Board to participate in the decision making process. The participation of workers may be formal or informal.

In the formal participation, it takes the forms of formal structures such as Works Committee, Shop Councils, Production Committee, Safety Committee, Joint Management Councils, Canteen Committee etc.

The informal participation may be such as the supervisor consulting the workers for granting leave, overtime, and allotment of worked or transfer of workers from one department to another

BENEFITS OF WPM-

1.Productivity and quality improvements:

Worker participation of various forms at various levels as described above has contributed greatly to promote productivity and quality improvements at the workshop, company and industry.

Productivity improvement has been attained through both cost cutting and introducing new technologies.

Quality improvement has been attained by increasing care and control of workers and also implementing new production methods.

Increased productivity and improved quality of products contributed not only to management but also to workers in the form of higher wages and security of employment.

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2. Labor adjustment:

With changes in business conditions, changes in production structure, and introduction of new technology, work loads and work assignments need to be altered.

The consequent labor adjustment may require transfer of workers to new jobs, new workshops or to new plants somewhere else, if not dismissals.

Such labor adjustment plans are normally discussed first at the table of joint consultation before actually put into practice.

Usually, the total plan of adjustment is presented and discussed at the corporate level joint consultation, and after reaching agreement, broken down plans more specific to plants or workshops are discussed at joint consultation of relevant levels. These adjustment plans are often negotiated at collective bargaining.

However, these plans are almost always disclosed, explained and discussed at joint consultation tables prior to be picked up at collective bargaining. Through this process, relevant information is shared somewhat more in advance and more in detail also with contextual information so that both workers and employers can prepare and adjust for changes more smoothly.

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3. Adaptation to economic changes:

The complex system of worker participation and information sharing of various forms and at various levels, as described above, has served the purpose of moderating shocks of economic changes and provided more room for both management and workers to prepare to adapt such changes.

With cooperation of workers, companies, and industries have been able to adjust wages and working hours more flexibly, thereby maintain employment more stably. This has been beneficial both to industry and economy with a long-term perspective, and to workers in the sense of assuring them employment security.

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REASONS FOR FAILURE OF WPM

The factors responsible for the failure are:

Employers resist the participation of workers in decision-making. This is because they feel that workers are not competent enough to take decisions.

Workers‟ representatives who participate in management have to perform the dual roles of workers‟ spokesman and a co-manager. Very few representatives are competent enough to assume the two incompatible roles.

Generally Trade Unions‟ leaders who represent workers are also active members of various political parties. While participating in management they tend to give priority to political interests rather than the workers‟ cause.

Schemes of workers‟ participation have been initiated and sponsored by the Government. However, there has been a lack of interest and initiative on the part of both the trade unions and employers.

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Workers do not feel the urge to participate in management, having an innate feeling that they are born to serve and not to rule.

The focus has always been on participation at the higher levels, lower levels have never been allowed to participate much in the decision-making in the organizations.

The unwillingness of the employer to share powers with the workers "representatives, the disinterest of the workers and the perfunctory attitude of the government towards participation in management act as stumbling blocks in the way of promotion of participative management

Thus workers’ participation in management has yet to succeed. It can be done only by educating the workers, creating an environment in the organization for coordination of workers and management.

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MEASURES FOR MAKING EFFECTIVE PARTICIPATION-

Employer should adopt a progressive outlook. They should consider the industry as a joint endeavor in which workers have an equal say.

Employers and workers should agree on the objectives of the industry. They should recognize and respect the rights of each other.

Workers and their representatives should be provided education and training in the philosophy and process of participative management. Workers should be made aware of the benefits of participative management.

There should be effective communication between workers and management and effective consultation of workers by the management in decisions that have an impact on them.

Participation should be a continuous process. To begin with, participation should start at the operating level of management.

A mutual co-operation and commitment to participation must be developed by both management and labor.

Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a manager; never the twain shall meet” should be replaced by “managers and workers are partners in the progress of business”.

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