WORKERS’ PARTICIPATION

IN
MANAGEMENT
 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.
• Participation basically means- sharing the decision-making power with
the lower ranks of the organization in an appropriate manner
• 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 hierarch with concomitant assumption
of responsibility.(International Institute of Labour Studies)
• 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.
Participation refers to involvement of individuals or group of individual for common
purpose. it will be effective only if there is interaction among individuals or groups.
Workers Participation in management refers to the emotional and mental involvement
of an employee to contribute for the goals and share responsibilities of an
organization.

Participation, in effect, refers to the influence of the subordinates over decisions taken
by their superiors. A subordinate can influence his superior’s decisions at least in two
ways : (i) by giving suggestions and ideas for improvement in work-related areas in the
form of joint consultations (ii) by actually participating in the decision making process
before a decision is taken.

Three groups of managerial decisions affect the workers of any industrial

establishment and hence the workers must have a say in it.
1. Economic decisions – methods of manufacturing, automation, shutdown, lay-
offs, mergers.
2. Personnel decisions – recruitment and selection, promotions, demotions,
transfers, grievance settlement, work distribution.
3. Social decisions – hours of work, welfare measures, questions affecting work
rules and conduct of individual worker’s safety, health, sanitation and noise
control.
Collective Bargaining and Participative Management:
Difference
Collective bargaining refers to an institutional arrangement where the
representatives of the workmen negotiate with the management on
various “interest related” issues relating to better wages, bonus, hours
of work and other service conditions with right to agree or disagree.

Participation is conceived as any process whereby workers have a share

in reaching of managerial decision in enterprises. This process of share
may be achieved through such different methods and levels of
participation as collective bargaining, the appointment of worker
directors, consultation, autonomous work groups and particular styles of
management.
 Objectives of Workers participation in management

Primary objective:
a)industrial harmony
b)sense of commitment
c)sense of belongingness
d)good communication skills
e)handles the resistance

Secondary objectives
a)Economical
b)Social
c)Psychological
 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.
• 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.
 Merits of Workers participation in management
a)Increase productivity
b)Increase efficiency of employee.
c)Establish industrial peace
d)Establish industrial democracy
e)Well being of individual
f)Personality development
g)Mutual understanding
h)Social well being
i)Welcome changes
j)Rapid industrialization

Participation:
• 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.
 Scope and ways of participation:

• In practice, the participation of workers can take place by one or all the methods listed below:
• Board level participation
• Ownership participation
• Complete control
• Staff or work councils
• Joint councils and committee
• Collective Bargaining
• Job enlargement and enrichment
• Suggestion schemes
• Empowered teams
• Financial participation
• Quality circles – This is a group of labour and management personnel who belong to a single department, do
same or similar work, meet periodically to discuss manufacturing problems, analyze them and find solutions to
quality problems
• TQM - Total Quality Management is the management of quality, totally and fully in all respects, small areas and
all activities of organizations, right from top to bottom. It aims at continuous improvement in organizations and
focuses primarily on total satisfaction of consumers, both internal and external. The 3 terms required to make
this concept:
– (1)Total- Everyone associated with the company is involved in continuous improvement including
customers and suppliers
– (ii) Quality – Customers’ stated and implied requirements are fully met
– (iii) Management – Executives are fully committed.
 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.
• 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.
 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 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-
–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.
• 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. In was again emphasized by the Congress government who
came back n 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 and 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.
•On May 30,1990; the government introduced the Participation of Workers in
Management Bill in the Rajya Sabha. 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. 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.
Workers’ Participation in Management in India -The major course
followed are:

Works Committees: Works committee is the first government measure in the

country in the area of participative management. The system of works committees was
introduced in the country with the enactment of the Industrial Disputes Act, 1947.
Section 3 of the Act empowers the Central and State governments in their respective
jurisdictions to make general or special orders requiring the employer to constitute a
works committee in any industrial establishment employing 100 or more workmen.

Joint Councils of Management: The Industrial Truce Resolution, 1947, had

recommended the formation of unit production committees in industrial
establishments for promoting the efficiency of workers and improving production. The
Industrial Policy Resolution of 1948 also suggested the setting up of bipartite
production committees. A model constitution for a unit production committee was
prepared by the Central government in 1948 and steps were suggested to enable the
existing works committees to function as production committees.
Other Governmental Approaches
1. The Trusteeship Approach (1966)
2. Board Level Participation (1970)
3. Schemes of Workers’ Participation in Industry at the Shop floor and
Plant Levels (1975)
4. Schemes of Workers’ Participation in Management in Large-scale
Commercial and Service Organisations (1977)
5. Adding Article 43A in the Indian Constitution
6. Verma Committee (1977)
7. Scheme for Employees Participation in Management (1983)
8. The Participation of Workers in Management Bill (1990)
Hurdles in The Way of Workers’ Participation in India
The foregoing discussions reveal that ever since the independence of the
country, Government has been keen on promoting workers’ participation in
management in the country. There has been a growing realisation in the
country, especially in the Government circles, that promotion of workers’
participation would lead to increase in productivity and would be helpful in
maintaining industrial peace and accelerating the pace of economic
development. With the adoption of planning as an instrument of economic
and industrial development, maintenance of cordial relations between
labour and management is considered all the more desirable. To achieve
these objectives, Government embarked upon different programmes of
workers’ participation at different intervals of time, for example, Works
Committee (1947) Joint Management Councils (1977), Shop Floor and
Plant Councils (1983) and so on. However, experience has shown that
these schemes, which were launched so enthusiastically have on the whole
proved to be a failure. This has been supported by the findings of the
studies conducted in regard to their functioning.
Forms of Participation in Western Countries
A review of the existing literature confirms the extent of interest on participative
management in various countries under different socio-economic systems. However,
the research findings on various facets of participation are not consistent. These are
the objectives, scope, processes, extent of involvement, as well as the outcomes in
terms of change in attitude and behaviour, motivation, commitment, job satisfaction,
efficiency productivity, turnover and profitability.

In the West, formal representative participation has taken the following forms:

1. Joint Consultation

2. Joint Decision Making

3. Workers Control