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Monday, 20 June 2011

Workers’ Participation in Management

Workers’ participation in management is an essential ingredient of Industrial democracy. The concept of workers’ participation in management is based on Human Relations approach to Management which brought about a new set of values to labour and management.
                Traditionally the concept of Workers’ Participation in Management (WPM) refers to participation of non-managerial employees in the decision-making process of the organization. Workers’ participation is also known as ‘labour participation’ or ‘employee participation’ in management. In Germany it is known as co-determination while in Yugoslavia it is known as self-management. The International Labour Organization has been encouraging member nations to promote the scheme of Workers’ Participation in Management.
Workers’ participation in management implies mental and emotional involvement of workers in the management of Enterprise. It is considered as a mechanism where workers have a say in the decision-making.

Definition: According to Keith Davis, Participation refers to the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share the responsibility of achievement.

According to Walpole, Participation in Management gives the worker a sense of importance, pride and accomplishment; it gives him the freedom of opportunity for self-expression; a feeling of belongingness with the place of work and a sense of workmanship and creativity. 

The concept of workers’ participation in management encompasses the following:
ð  It provides scope for employees in decision-making of the organization.
ð  The participation may be at the shop level, departmental level or at the top level.
ð  The participation includes the willingness to share the responsibility of the organization by the workers.

Features of WPM:

1.       Participation means mental and emotional involvement rather than mere physical presence.
2.       Workers participate in management not as individuals but collectively as a group through their representatives.
3.       Workers’ participation in management may be formal or informal. In both the cases it is a system of communication and consultation whereby employees express their opinions and contribute to managerial decisions.

4.       There can be 5 levels of Management Participation or WPM:

a.       Information participation: It ensures that employees are able to receive information and express their views pertaining to the matter of general economic importance.
b.      Consultative importance: Here workers are consulted on the matters of employee welfare such as work, safety and health. However, final decision always rests with the top-level management, as employees’ views are only advisory in nature.
c.       Associative participation: It is an extension of consultative participation as management here is under the moral obligation to accept and implement the unanimous decisions of the employees. Under this method the managers and workers jointly take decisions.
d.      Administrative participation: It ensures greater share of workers’ participation in discharge of managerial functions. Here, decisions already taken by the management come to employees, preferably with alternatives for administration and employees have to select the best from those for implementation.
e.      Decisive participation: Highest level of participation where decisions are jointly taken on the matters relating to production, welfare etc.

Objectives of WPM:

1.       To establish Industrial Democracy.
2.       To build the most dynamic Human Resources.
3.       To satisfy the workers’ social and esteem needs.
4.       To strengthen labour-management co-operation and thus maintain Industrial peace and harmony.
5.       To promote increased productivity for the advantage of the organization, workers and the society at large.
6.       Its psychological objective is to secure full recognition of the workers.

Strategies / Methods / Schemes / Forms of WPM:

1.       Suggestion schemes: Participation of workers can take place through suggestion scheme. Under this method workers are invited and encouraged to offer suggestions for improving the working of the enterprise.  A suggestion box is installed and any worker can write his suggestions and drop them in the box. Periodically all the suggestions are scrutinized by the suggestion committee or suggestion screening committee. The committee is constituted by equal representation from the management and the workers. The committee screens various suggestions received from the workers. Good suggestions are accepted for implementation and suitable awards are given to the concerned workers. Suggestion schemes encourage workers’ interest in the functioning of an enterprise.

2.       Works committee: Under the Industrial Disputes Act, 1947, every establishment employing 100 or more workers is required to constitute a works committee. Such a committee 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.
Functions: Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees are concerned with:
ð  Conditions of work such as ventilation, lighting and sanitation.
ð  Amenities such as drinking water, canteens, dining rooms, medical and health services.
ð  Educational and recreational activities.
ð  Safety measures, accident prevention mechanisms etc.
Works committees function actively in some organizations like Tata Steel, HLL, etc but the progress of Works Committees in many organizations has not been very satisfactory due to the following reasons:
ü  Lack of competence and interest on the part of workers’ representatives.
ü  Employees consider it below their dignity and status to sit alongside blue-collar workers.
ü  Lack of feedback on performance of Works Committee.
ü  Undue delay and problems in implementation due to advisory nature of recommendations.

3.       Joint Management Councils: Under this system Joint Management Councils are constituted at the plant level. These councils were setup as early as 1958. These councils consist of equal number of representatives of the employers and employees, not exceeding 12 at the plant level. The plant should employ at least 500 workers. The council discusses various matters relating to the working of the industry. This council is entrusted with the responsibility of administering welfare measures, supervision of safety and health schemes, scheduling of working hours, rewards for suggestions etc.
                          Wages, bonus, personal problems of the workers are outside the scope of Joint management councils. The council is to take up issues related to accident prevention, management of canteens, water, meals, revision of work rules, absenteeism, indiscipline etc. the performance of Joint Management Councils have not been satisfactory due to the following reasons:
·         Workers’ representatives feel dissatisfied as the council’s functions are concerned with only the welfare activities.
·         Trade unions fear that these councils will weaken their strength as workers come under the direct influence of these councils.

4.       Work directors: Under this method, one or two representatives of workers are nominated or elected to the Board of Directors. This is the full-fledged and highest form of workers’ participation in management. The basic idea behind this method is that the representation of workers at the top-level would usher Industrial Democracy, congenial employee-employer relations and safeguard the workers’ interests. The Government of India introduced this scheme in several public sector enterprises such as Hindustan Antibiotics, Hindustan Organic Chemicals Ltd etc. However the scheme of appointment of such a director from among the employees failed miserably and the scheme was subsequently dropped.

5.       Co-partnership: Co-partnership involves employees’ participation in the share capital of a company in which they are employed. By virtue of their being shareholders, they have the right to participate in the management of the company. Shares of the company can be acquired by workers making cash payment or by way of stock options scheme. The basic objective of stock options is not to pass on control in the hands of employees but providing better financial incentives for industrial productivity. But in developed countries, WPM through co-partnership is limited.

6.       Joint Councils: The joint councils are constituted for the whole unit, in every Industrial Unit employing 500 or more workers, there should be a Joint Council for the whole unit. 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.  
                         In 1977 the above scheme was extended to the PSUs like commercial and service sector organizations employing 100 or more persons. The organizations include hotels, hospitals, railway and road transport, post and telegraph offices, state electricity boards.

7.       Shop councils: Government of India on the 30th of October 1975 announced a new scheme in WPM. 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.

Functions of Shop Councils:
1.       Assist management in achieving monthly production targets.
2.       Improve production and efficiency, including elimination of wastage of man power.
3.       Study absenteeism in the shop or department and recommend steps to reduce it.
4.       Suggest health, safety and welfare measures to be adopted for smooth functioning of staff.
5.       Look after physical conditions of working such as lighting, ventilation, noise and dust.
6.       Ensure proper flow of adequate two way communication between management and workers.

Workers’ Participation in Management in India

               Workers’ participation in Management in India was given importance only after Independence. Industrial Disputes Act, 1947 was the first step in this direction, which recommended for the setting up of works committees. The joint management councils were established in 1950 which increased the labour participation in management. Since July 1975 the two-tier participation called shop councils at shop level and Joint councils were introduced.
                             Workers’ participation in Management Bill, 1990 was introduced in Parliament which provided scope for upliftment of workers.

Reasons for failure of Workers participation Movement in India:

1.       Employers resist the participation of workers in decision-making. This is because they feel that workers are not competent enough to take decisions.
2.       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.
3.       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.
4.       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.
5.       In India, labour laws regulate virtually all terms and conditions of employment at the workplace. Workers do not feel the urge to participate in management, having an innate feeling that they are born to serve and not to rule.
6.       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.
7.       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.

Measures for making Participation effective:

1.       Employer should adopt a progressive outlook. They should consider the industry as a joint endeavour in which workers have an equal say. Workers should be provided and enlightened about the benefits of their participation in the management.
2.       Employers and workers should agree on the objectives of the industry. They should recognize and respect the rights of each other.
3.       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.
4.       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.
5.       Participation should be a continuous process. To begin with, participation should start at the operating level of management.
6.       A mutual co-operation and commitment to participation must be developed by both management and labour.
 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”

6 comments:

  1. Nice....informative and helpful

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  2. Thank for the article :-)

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  3. note is nearly perfect... it helped me lot....

    ReplyDelete
  4. good and helpful for MBA students...

    ReplyDelete
  5. its helpful and good information

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