WORKERS’ PARTICIPATION IN

MANAGEMENT

Introduction:

Three groups of managerial decisions affect the workers of any industrial establishment
and hence the workers must have a say in it.
• Economic decisions – methods of manufacturing, automation, shutdown, lay-offs,
and mergers.
• Personnel decisions – recruitment and selection, promotions, demotions,
transfers, grievance settlement, work distribution.
• Social decisions – hours of work, welfare measures, questions affecting work
rules and conduct of individual worker’s safety, health, and sanitation and noise
control.
Participation basically means sharing the decision-making power with the lower ranks of
the organization in an appropriate manner.

Evolution of participative management in India:

The beginning towards WPM was made with the Industrial Disputes Act, 1947, which
made Works Committees mandatory in industrial establishments employing 100 or more
workers. The Industrial Policy Resolution adopted by the government in 1956 stated that
there should be some joint consultation to ensure industrial peace, and improve
employer-employee relations. The functions of both these joint bodies were to be
consultative and were not binding on the management. The response to these schemes
was encouraging to begin with, but gradually waned.
• A study team was appointed in 1962 to report on the working of joint councils and
committees. The team identified some reasons for their failure.
o No concrete steps were taken to remove the difficulties, or change the
pattern of participative management.
• During the emergency of 1975-77, the interest in these schemes was revived by
the then Prime Minister by including Workers’ Participation in industry in the
government’s 20-point programme (refer for detail Page 246 of Industrial
Relations, Trade Unions and Labour Legislation by P.R.N.Sinha, Indubala Sinha,
Seema Priyadarshini Shekhar).
• The government started persuading large enterprises to set up joint consultative
committees and councils at different levels.
 • The Janata Government who came to power in 1977 carried on this initiative. It
was again emphasized by the Congress government who came back in 1979. This
continued in a “non-statutory vein” till the late 1980s, and the response from the
employers and employees stayed Luke-warm. Then, the 42nd Amendment to the
Constitution was made.
• Now, Article 43-A reads: The State shall take steps, by suitable legislation, or in
any other way, to secure the participation of workers in the management of
undertakings, establishments or other organizations engaged in any industry. Thus,
participative management is a constitutional commitment in India.
• And then, on May 30, 1990, the government introduced the Participation of
Workers in Management Bill in the Rajya Sabha.
o The bill requires every industrial enterprise to constitute one or more `Shop-
Floor Councils’ at the shop floor level, and `Establishment Council’ at the
establishment level. These councils will have equal representation of employers
and employees. Shop-Floor councils enjoy powers over a wide range of
functions from production, wastage control to safety hazards. The
Establishment Council enjoys similar powers. The bill provides for the
constitution of a Board of Management of every corporate body owning an
industrial establishment.
o The bill also provides for penalties on individuals who contravene any
provision of the bill.

In spite of all these efforts, only the government and the academicians have been
interested in participative management. But participative management is staging a
comeback. The compulsions of emerging competitive environment have made employee
involvement more relevant than ever before. Managers and the managed are forced to
forget their known stands, break barriers, and work in unison. Managers and workers are
partners in the progress of business.

Definitions:

The concept of WPM is a broad and complex one. Depending on the socio-political
environment and cultural conditions, the scope and contents of participation change.

International Institute of Labour Studies: WPM is the participation resulting from

the practices which increase the scope for employees’ share of influence in decision-
making at different tiers of organizational hierarchy with concomitant (related)
assumption of responsibility.

ILO: Workers’ participation, may broadly be taken to cover all terms of association
of workers and their representatives with the decision-making process, ranging from
exchange of information, consultations, decisions and negotiations, to more
institutionalized forms such as the presence of workers’ member on management or
 supervisory boards or even management by workers themselves (as practiced in
Yugoslavia).

The main implications of workers’ participation in management as summarized by

ILO:
• Workers have ideas which can be useful;
• Workers may work more intelligently if they are informed about the reasons for
and the intention of decisions that are taken in a participative atmosphere.

Objectives:

According to Gosep, workers’ participation may be viewed as:

• An instrument for increasing the efficiency of enterprises and establishing
harmonious relations;
• A device for developing social education for promoting solidarity among workers
and for tapping human talents;
• A means for achieving industrial peace and harmony which leads to higher
productivity and increased production;
• A humanitarian act, elevating the status of a worker in the society;
• An ideological way of developing self-management and promoting industrial
democracy.

Other objectives of WPM can be cited as:

• To improve the quality of working life (QWL) by allowing the workers greater
influence and involvement in work and satisfaction obtained from work; and
• To secure the mutual co-operation of employees and employers in achieving
industrial peace; greater efficiency and productivity in the interest of the
enterprise, the workers, the consumers and the nation.

Importance:

• Unique motivational power and a great psychological value.

• Peace and harmony between workers and management.
• Workers get to see how their actions would contribute to the overall growth of the
company.
 • They tend to view the decisions as `their own’ and are more enthusiastic in their
implementation.
• Participation makes them more responsible.
• They become more willing to take initiative and come out with cost-saving
suggestions and growth-oriented ideas.

Essential condition for WPM:

The success of workers portion in management depends upon the following conditions.
• The attitude and outlook of the parties should be enlightened and impartial so that
a free and frank exchange of thoughts and opinions could be possible. Where a
right kind of attitude exists and proper atmosphere prevails the process of
participation is greatly stimulated.

• Both parties should have a genuine faith in the system and in each other and be
willing to work together. The management must give the participating institution
its right place in the managerial organization of the undertaking and implementing
the policies of the undertaking. The labor, on the other hand, must also whole
heartedly co-operate with the management through its trade unions. The foremen
and supervisory cadre must also lend their full support so that the accepted policies
could be implemented without any resentment on either side.

• Participation should be real. The issues related to increase in production and

productivity, evaluation of costs, development of personnel, and expansion of
markets should also be brought under the jurisdiction of the participating bodies.
These bodies should meet frequently and their decisions should be timely
implemented and strictly adhered to. Further,
o Participation must work as complementary body to help collective
bargaining, which creates conditions of work and also creates legal relations.
o There should be a strong trade union, which has learnt the virtues of unit
and self-reliance so that they may effectively take part in collective bargaining
or participation.
o A peaceful atmosphere should be there wherein there are no strikes and

lock-outs, for their presence ruins the employees, harms the interest of the
society, and puts the employees to financial losses.
o Authority should be centralized through democratic management process.
The participation should be at the two or at the most three levels.
 o Programs for training and education should be developed comprehensively.
For this purpose, Labor is to be given education not to the head alone, not to
the heart alone, not to the hands alone, but it is dedicated to the three; to make
the workers think, feel and act. Labor is to be educated to enable him to think
clearly, rationally and logically; to enable him to feel deeply and emotionally;
and to enable him to act in a responsible way.

Conclusion:

Management should be prepared to give all information connected with the working of
the industry and labor should handle that information with full confidence and
responsibility. The workers should become aware of their responsibilities. The leaders
should initiate this in them. Similarly, the top management should make the lower
echelons to show a new attitude in the light of the new relationship.

Scope and ways of participation (Forms):

One view is that workers or the trade unions should, as equal partners, sit with the
management and make joint managerial decisions.
The other view is that workers should only be given an opportunity, through their
representatives, to influence managerial decisions at various levels.

Methods Of Workers’ Participation In Management:

1. Board level participation

2. Ownership participation
3. Complete control
4. Staff or work councils
5. Joint councils and committees
6. Collective Bargaining
7. Job enlargement and enrichment
8. Suggestion schemes
9. Quality circles
10.Empowered teams
11.TQM
12.Financial participation
 1. Participation at the Board level:

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. He or she can serve as a guide and a control element.
• He or she can prevail upon top management not to take measures that would be
unpopular with the employees.
• He or she can guide the Board members on matters of investment in employee
benefit schemes like housing, and so forth.
The Government of India took the initiative and appointed workers’ representatives on
the Board of Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized
banks. The Tatas, DCM, and a few others have adopted this practice.

Problems associated with this method:

• Focus of workers’ representatives is different from the focus of the remaining
members of the Board.
• Communication and subsequently relations between the workers’ representative
and the workers suffers after the former assumes directorship.
• He or she tends to become alienated from the workers.
• As a result, he or she may be less effective with the other members of the Board in
dealing with employee matters.
• Because of the differences in the cultural and educational backgrounds, and
differences in behaviour and manners, such an employees’ representative may feel
inferior to the other members, and he or she may feel suffocated. Hence, his or her
role as a director may not be satisfying for either the workers or the management.
• Such representatives of workers’ on the Board, places them in a minority. And the
decisions of the Board are arrived at on the basis of the majority vote.

2. Participation through ownership:

This involves making the workers’ shareholders of the company by inducing them to buy
equity shares.
• In many cases, advances and financial assistance in the form of easy repayment
options are extended to enable employees to buy equity shares. Examples of this
method are available in the manufacturing as well as the service sector.
• Advantage: Makes the workers committed to the job and to the organization.
• Drawback: Effect on participation is limited because ownership and management
are two different things.
3. Participation through complete control:

Workers acquire complete control of the management through elected boards. The
system of self-management in Yugoslavia is based on this concept. Self-management
gives complete control to workers to manage directly all aspects of industries through
their representatives.
Advantages:
• Ensures identification of the workers with their organization.
• Industrial disputes disappear when workers develop loyalty to the organization.
• Trade unions welcome this type of participation.
Conclusion: Complete control by workers is not an answer to the problem of
participation because the workers do not evince interest in management decisions.

4. Participation through Staff and Works Councils:

Staff councils or works councils are bodies on which the representation is entirely of the
employees. There may be one council for the entire organization or a hierarchy of
councils. The employees of the respective sections elect the members of the councils.
Such councils play a varied role.
• Their role ranges from seeking information on the management’s intentions to a
full share in decision-making.
Such councils have not enjoyed too much of success because trade union leaders fear the
erosion of their power and prestige if such workers’ bodies were to prevail.

5. Participation through Joint Councils and Committees:

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.
Work committees are a legal requirement in industrial establishments employing 100 or
more workers. Such committees discuss a wide range of topics connected to labour
welfare.
Examples of such committees are welfare committee, safety committee, etc. Such
committees have not proven to be too effective in promoting industrial democracy,
increasing productivity and reducing labour unrest.

6. Participation through Collective Bargaining:

Through the process of CB, management and workers may reach collective agreement
regarding rules for the formulation and termination of the contract of employment, as
well as conditions of service in an establishment. Even though these agreements are not
legally binding, they do have some force. For CB to work, the workers’ and the
employers’ representatives need to bargain in the right spirit. But in practice, while
bargaining, each party tries to take advantage of the other. This process of CB cannot be
called WPM in its strongest sense as in reality; CB is based on the crude concept of
exercising power for the benefit of one party. WPM, on the other hand, brings both the
parties together and develops appropriate mutual understanding and brings about a
mature responsible relationship.

7. Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production in industries,

leads to boredom and associated problems in employees.
Two methods of job designing – job enlargement and job enrichment – are seen as
methods of addressing the problems.
• Job enlargement means expanding the job content – adding task elements
horizontally.
• Job enrichment means adding `motivators’ to the job to make it more rewarding.
This is WPM in that it offers freedom and scope to the workers to use their
judgment. But this form of participation is very basic as it provides only limited
freedom to a worker concerning the method of performing his/her job.
The worker has no say in other vital issues of concern to him – issues such as job
and income security, welfare schemes and other policy decisions.

8. Participation through Suggestion Schemes:

Employees’ views are invited and reward is given for the best suggestion. With this
scheme, the employees’ interest in the problems of the organization is aroused and
maintained. Progressive managements increasingly use the suggestion schemes.
Suggestions can come from various levels. The ideas could range from changes in
inspection procedures to design changes, process simplification, paper-work reduction
and the like. Out of various suggestions, those accepted could provide marginal to
substantial benefits to the company. The rewards given to the employees are in line with
the benefits derived from the suggestions.

9. Participation through Quality Circles:

Concept originated in Japan in the early 1960s and has now spread all over the world. A
QC 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. For QCs to succeed in the long run, the management needs to show its
commitment by implementing some of the suggestions of the groups and providing
feedback on the disposition of all suggestions.
Training in problem-solving techniques is provided to the members. QCs are said to
provide quick, concrete, and impressive results when correctly implemented.

Advantages:
• 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.

The Indian Scenario:

• Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others.
• Experienced mixed results:
o M&M (jeep division) with 76 QCs has experienced favourable results.
 Technical problems got solved.
 Workers got to get out of their daily routine and do something
challenging.
• Trade unions look at it as: A way of overburdening workers, and
An attempt to undermine their role.

10. Empowered Teams:

Empowerment occurs when authority and responsibility are passed on to the employees
who then experience a sense of ownership and control over their jobs. Employees may
feel more responsible, may take initiative in their work, may get more work done, and
may enjoy the work more. For empowerment to occur, the following approach needs to
be followed as compared to the traditional approach:

Element Traditional Organization Empowered Teams

Organizational Layered, individual Flat, team
structure Narrow, single task Whole process, multiple tasks
Job design Direct, control Coach, facilitate
Management role Top-down Shared with the team
Leadership Controlled, limited Open, shared
Information flow Individual, seniority based Team-based, skill-based
Rewards Managers plan, control, Teams plan, control, and
Job process improve improve

Features of empowered or self-directed teams:

• Empowered to share various management and leadership functions.
• Plan, control and improve their work.
• Often create their schedules and review their performance as a group.
• May prepare their own budgets and co-ordinate their work with other departments.
o Usually order materials, keep inventories and deal with suppliers.
o Frequently responsible for acquiring any new training they might need.
o May hire their own replacement to assume responsibility for the quality of
their products or services
Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are
empowering employees – both frontline as well as production staff, and are enjoying
positive results.

11. Total Quality Management:

TQM refers to the deep commitment, almost obsession, of an organization to quality.

Every step in company’s processes is subjected to intense and regular scrutiny for ways
to improve it.

Some traditional beliefs are discarded.

• High quality costs more.
• Quality can be improved by inspection.
• Defects cannot be completely eliminated.
• Quality in the job of the QC personnel.

New principles of TQM are:

• Meet the customer’s requirement on time, the first time, and 100% of the time.
• Strive to do error-free work.
• Manage by prevention, not correction.
• Measure the cost of quality.
 • TQM is called participative because it is a formal programme involving every
employee in the organization; making each one responsible for improving quality
everyday.

12. Financial Participation:

This method involves less consultations or even joint decisions. Performance of the
organization is linked to the performance of the employee. The logic behind this is that if
an employee has a financial stake in the organization, he/she is likely to be more
positively motivated and involved.

Some schemes of financial participation:

• Profit-linked pay
• Profit sharing and Employees’ Stock Option schemes.
• Pension-fund participation.

Pre-requisites for successful participation:

• Management and operatives/employees should not work at cross-purposes i.e. they
must have clearly defined and complementary objectives.
• Free flow of communication and information.
• Participation of outside trade union leaders to be avoided
• Strong and effective trade unionism.
• Workers’ education and training.
• Trade unions and government needs to work in this area.
• Trust between both the parties.
• Workers should be associated at all levels of decision-making.
• Employees cannot spend all their time in participation to the exclusion of all other
work.

Limitations of participation:
Technology and organizations today are so complex that specialized work-roles are
required.
• This means employees will not be able to participate effectively in matters beyond
their particular environment. Everybody need not want participation.
• The role of trade unions in promoting participative management has been far from
satisfactory.
• Employers are unwilling to share power with the workers’ representatives.
Managers consider participative management a fraud.
Reason for Limited Success :

1. Firstly, the fundamental difficulties in the way lie in the concept itself. There is a
basic conflict of interests between the workers and the owners of the business
enterprise. Participation involves parting with power. Managements have been
reluctant to part with their authority and prerogative to manage the enterprises.
Similarly trade unions have not been prepared to divest themselves of their power
manifested in bargaining and pressure.

2. Secondly, multiplicity of trade unions and factionalism has been a serious obstacle
in the way of workers’ participation in management. In view of the claims and
counter claims, apathy and willingness, hostility and cooperation displayed by rival
unions or their factions, designation of workers’ representatives on the participative
forums often becomes a very difficult task.

3. The government with its anxiety of maintaining cordial relations between labour
and management, increasing production and productivity, achieving planned targets
and accelerating the pace of economic and industrial development, came forward with
different schemes of workers’ participation in management. Many employers and
trade unions still considers them as imposition from outside. Its enforcement by law
or compulsion would thwart the very purpose of scheme and would act as serious
constraint on its successful implementation.

4. Fourthly, both managements and trade unions have often complained of a plethora
of joint bodies in Indian industries for example, works committees, joint management
councils, shop councils, unit councils, plant councils, establishment councils, canteen
committees, production committees, safety committees, welfare committees,
grievance committees , and so on. Thus, it is natural for them to become bewildered
by this multiplicity of joint bodies.

5. Another hurdle has been lack of specific arrangements for sharing the gains of
participation. Workers are assured in a vague manner, that they would gain if
production increases and quality of products improves as a result of participation, but
vague and remote expectations cannot be expected to enthuse the workers. A prior
arrangement for sharing the fruits of participation is a necessary condition for the
success of the scheme on a lasting basis.
6. It is the government in India which is more anxious for the establishment of the
schemes of participation than the parties which have to work them out. However,
displaying an attitude of cooperation with the government in maintaining industrial
 harmony, most national organizations of employers and trade unions supported the
schemes at the national forums, but they have generally failed to enthuse their
affiliates about the usefulness of the schemes.

7. Lastly, it has also been realized that lack of education and training with regard to
the content, process, utility and other relevant aspects of participation have also
proved an impediment to the growth of workers’ participation in the country.

Suggestions for Improvement:

For the successful initiation and functioning of the institutions of workers’ participation
in management, serious attention has to be given to the removal of the hurdles (as
above). Efforts should be made to stir up the management and workers at the local or
enterprise level to understand the schemes and to derive concrete benefits from them.
The government efforts should be confined to giving guidelines and to remove the
impediments in the way, for example, reducing trade union rivalry by amending trade
union laws, regulating procedural aspects of collective bargaining, expanding workers’
education programme and evolving a system of sharing the fruits of participation.

Workers' Participation at TISCO

Since Tata Iron and Steel Company are the pioneers in establishing joint consultation in
India, it is worthwhile to look at workers' participation at TISCO.
Closer association of employees with management at TISCO began in 1919 and was
formalized in August 1956. The purpose was to promote increased productivity, provide a
better understanding to the employees of their role and importance, and to satisfy the urge
for self expression. The scheme as set up at TISCO consist f a three-tiered system with
joint department councils (JDCs) constituted at the departmental level. Next, joint works
councils (JWC) for the entire work, and at the top the joint consultative council of
management (JCCM). The specific functions of these three bodies were as follows:

JDCs were “to study operational results and production problems, advice on the steps
deemed necessary to promote and rationalize production, improve productivity and
discipline and economize cost. Promotion of welfare and safety, encouragement of
suggestions and improvement of working conditions also fell within their purview.”

JWCs were “to discharge special function of reviewing every month the working of JDCs
and other committees such as Suggestion Box Committee, Safety Committee, Canteen
Managing Committee, etc.”

JCCM was given the task of advising management on production and welfare and also
looking at matters referred to by JDCs and JWCs

In order to ensure that these committees did not overlap the functions of other committees,
separate task groups were formed. Special courses were offered to prepare both
management and union representatives to effectively utilize the facility. TISCO's
experience with workers' participation has been satisfactory. From 1957 to the middle of
1972 JDCs have discussed a total of 14,104 suggestions of which 70.3 per cent have been
implemented. These suggestions have covered a wide range of topics and issues, but the
most important point to remember, perhaps, is that the councils have been successful in
involving workers equally in the process of production.