WORKERS

PARTICIPATION IN
MANAGEMENT

Team 9
Abhishek Dasani(16P181)
Animesh Sinha(16P187)
Karun Nair (16P204)
Sanyam Goyal(16P221)
Sejal Kucheria(16P222)
Nami Patni(16P210)

WORKERS PARTICIPATION IN MANAGEMENT

(I) (i) 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 workers 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.
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.
(I) (ii) 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.
(I) (iii) 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, 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,
1. Participation must work as complementary body to help collective bargaining, which creates
conditions of work and also creates legal relations.
2. 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.
3. 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.
4. Authority should be centralized through democratic management process. The participation should be
at the two or at the most three levels.
5. 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. The management at different levels also needs to be trained and oriented to
give it a fresh thinking on the issues concerned.
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.

Pre-requisites for Effetive Participation

The pre-requisites for the success of any scheme of participative management are the following:
1. Firstly, there should be a strong, democratic and representative unionism for the success of
participative management.
2. Secondly, there should be mutually-agreed and clearly-formulated objectives for participation to
succeed.
3. Thirdly, there should be a feeling of participation at all levels.
4. Fourthly, there should be effective consultation of the workers by the management.
5. Fifthly, both the management and the workers must have full faith in the soundness of the
philosophy underlying the concept of labour participation.
6. Sixthly, till the participative structure is fully accepted by the parties, legislative support is
necessary to ensure that rights of each other are recognised and protected.
7. Seventhly, education and training make a significant contribution to the purposeful working of
participative management.
8. Lastly, forums of participation, areas of participation and guidelines for implementation of
decisions should be specific and there should be prompt follow-up action and feedback.

(I) (iv) 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.
In practice, the participation of workers can take place by one or all the methods listed below:
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

Levels of workers participation in management

workers participation may exist in all levels of management, however it may vary from management to
management. Participation of workers in management is more likely at lower level and less involvement
at top level of management. Broadly speaking there are following file levels of participation of workers
in management.
1. Information participation of workers: It ensures that employees are able to receive information and
express their views pertaining to the matters of general economic importance.
2. Consultative participation of workers: Under this kind of workers participation in management,
May act as a consultant in the matters of workers safety, health and their welfare at workplace. Even so,
ultimate decision lie in the hands of management, only employees views are considered as advise.
3. Associative participation of workers: This kind of workers participation in management is next
level to consultative participation. under associative participation of workers in management, morally
bound to accept and implement the opinion of employees.
4. Administrative participation of workers: Under this kind of participation of workers in
management, workers the part in discharge of managerial functions. Here employees take part in
decisions, which were already taken by the management, thereupon employees have to select the best
from those decisions for the purpose of implementation.
5. Decisive participation of workers: Decisive participation is the highest level of workers
participation in management, where employees and management together taking decisions on the
matters related to workers welfare and production related issues.
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 selfmanagement 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 managements 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
Organizational structure
Job design
Management role
Leadership
Information flow
Rewards
Job process

Traditional Organization
Layered, individual
Narrow, single task
Direct, control
Top-down
Controlled, limited
Individual, seniority based
Managers plan, control, improve

Empowered Teams
Flat, team
Whole process, multiple tasks
Coach, facilitate
Shared with the team
Open, shared
Team-based, skill-based
Teams plan, control, and 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 companys 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 customers 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.

(I) (v) 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.

(I) (vi) 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.

(I) (vii) 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 governments 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 nonstatutory 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.

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.

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