By-

Sapana Agarwal 08-702

Priyanka Bapat 08-708
Ketaki Bhirdikar 08-711
 Evolution of Participative
Management in India
 WPM was made with the Industrial Disputes Act, 1947.

 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 in the
government’s 20-point program.
 Cont…
 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.

 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.
 Cont…
 And then, on May 30, 1990, the government introduced the
Participation of Workers in Management Bill in the Rajya
Sabha.

 In spite of all these efforts, only the government and the

academicians have been interested in participative
management.
“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 (related) assumption of responsibility.”
 Cont...
ILO:

The main implications of workers’ participation in management –

 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 –
 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;

 A humanitarian act, elevating the status of a worker in the

society;

 An ideological way of developing self-management and

promoting industrial democracy.
 Cont...
 To improve the quality of working life (QWL) by allowing the
workers greater influence and involvement in work and
satisfaction obtained from work.

 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.
 SIGNIFICANCE
 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.

 They become more willing to take initiative and come out with
cost-saving suggestions and growth-oriented ideas.
 Essential condition for WPM
 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.

 Both parties should have a genuine faith in the system and in

each other and be willing to work together.

 There should be a strong trade union, so that they may

effectively take part in collective bargaining.

 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.
 Scope and ways of participation
There can be two ways –

 Workers or the trade unions should, as equal partners, sit with

the management and make joint managerial decisions.

 Workers should only be given an opportunity, through their

representatives, to influence managerial decisions at various
levels.
 Methods
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. TQM
10. Financial Participation
11. Empowered Teams
12. Quality Circles
 Cont...
1. Board Level Participation
 Board of Hindustan Antibiotics (Pune), HMT.
 TATA & DCM.

2. Ownership Participation
 Manufacturing and Service Sector.

3. Complete Control
Advantages:
 Ensures identification of the workers with their
organization.
 Industrial disputes disappear when workers develop
loyalty to the organization.
 Cont...
4. Staff or work councils
 Not much successful.

5. Joint Councils and Committees

 Not effective in promoting industrial democracy, increasing
productivity.

6. Collective Bargaining
 It is based on the concept of exercising power for the
benefit of one party. Whereas WPM brings both the parties
together.
 Cont...
7. Job Enlargement and Enrichment
 It is very basic as it provides only limited freedom to a
worker concerning the method of performing his job.

8. Suggestion Schemes
 Employees’ views are invited and reward is given for the
best suggestion.

9. TQM
 It is a formal programme involving every employee in the
organization; making each one responsible for improving
quality everyday.
 Cont...
10. Financial Participation
 Scheme - Profit sharing and ESOP.

11. Empowered Teams

 Empowerment occurs when authority and responsibility are
passed on to the employees who then experience a sense of
ownership.

 Titan, Reliance, ABB, GE Plastics (India), Wipro

Corporation and Wipro InfoTech are empowering
employees.
 Cont...
12. Quality Circles
 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.
 BHEL, Mahindra and Mahindra, Godrej.
 M&M (jeep division) with 76 QCs.
 Technical problems got solved.
 Trade unions look at it as a way of overburdening workers.
 Pre-requisites for successful
participation
 Management and employees must have defined and
complementary objectives.

 Participation of outside trade union leaders to be avoided.

 Workers’ education and training.

 Trade unions and government needs to work in this area.

 Trust between both the parties and free flow of information.

 Workers should be associated at all levels of decision-making.

 LIMITATIONS
 Technology and organizations today are so complex that
specialized work-roles are required.

 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
 There is a basic conflict of interests between the workers and
the owners of the business enterprise.

 Multiplicity of trade unions and factionalism has been a

serious obstacle in the way of workers’ participation in
management.

 Both managements and trade unions have often complained of

a plethora of joint bodies in Indian industries as
 works committees,
 joint management councils,
 shop councils etc. as it creates confusion.
 Cont…
 Lack of specific arrangements for sharing the gains of
participation.

 It has also been realized that lack of education and training

with regard to the content, process and utility of participation
have also proved an impediment to the growth of workers’
participation in the country.
 SUGGESTIONS
 Serious attention has to be given to the removal of the hurdles.

 Efforts should be made to stir up the management and workers

at the local or enterprise level to understand the schemes.

 The government efforts should be confined to giving

guidelines and to remove the obstructions in the way.

 Expanding workers’ education program.

 Evolving a system of sharing the fruits of participation.