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WORKERS PARTICIPATION

IN MANAGEMENT (WPM)

WPM is a system of communication and

consultation, either formal or informal, by which

employees of an organization are kept informed

about the affairs of an undertaking and throughwhich they express their opinion and contribute to

management decisions.

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MEANINGWorkers participation in management means giving

scope for workers to influence the managerial

decision-making process at different levels by various

forms in the organization.

The principal forms of workers participation are

information sharing, joint consultation, suggestion

schemes, etc.

Redistribution of power between management and

workers in the direction of industrial democracy

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Workers participation in Management

Within the last four decades in the realm of HRM, thetechnique of the workers participation in management

has been regarded as a powerful behavioral tool for

managing the industrial relations system. For

management, It is joint consultations prior todecision making

The management experts and executives look upon it

as a tool for improving the overall performance of an

enterprise. For them, it means that workers are given

an opportunity to take part in those decisions which

affect their working conditions, their very jobs and this

participation increases productivity and efficiency.

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Workers participation in Management For laborers, it is just like co-decision or co-

determination. The concept of workers participationin management crystallizes the concept of industrial

democracy, and indicates an attempt on the part of an

employer to build his employees into a team which

works towards the realization of a common objective. Participation : taking part in sharing of power and

status between the managers and the workers.

WPM seeks to bridge this gap authorizing workers to

take part in the managerial process.

WPM gives scope for workers to influence the

managerial at different levels by various forms in the

organization.

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EVOLUTION OF CONCEPT

The employers realization of the need for workers

participation in management was considerably

influenced b the following factors:

The increased use of technology in the industry has

necessitated the growing co-operation of workers

because of the complex operation of the production.

The changed view that employees are no longer

servant but are equal partners with their employers

in their efforts to attain the goals of the enterprise.

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EVOLUTION OF CONCEPT The growth of the Trade Unions which safe guard the

interest of the workmen and protect them against

possible exploitation by their employers

The growing interest of the government in the

development of industries and the welfare of workers.

The need for increased and uninterrupted production

which can be achieved only when there is a contented

labor class.

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IMPORTANCE OF WPM1. Mutual Understanding

2. Higher Productivity

3. Industrial Harmony

4. Industrial Democracy (right of self expression and

opportunity to communicate views on policies,

worker as responsible partner in decision making)

5. Less Resistance to change

6. Creativity and Innovation

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Forms/level/degree of Participation

Communication : to give and get info (sharing )

Consultation : exchange opinions and views beforedecision taken

Co-determination : joint decision making

Self management : enjoying complete authority right

from decision making to execution

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List of items WPM can deal with Conditions of work such as ventilation, lighting, temperature

and sanitation

Amenities such as drinking water, canteen, dining , crches,

rest rooms, medical and health rooms services

Safety and accident prevention, occupational diseases and

protective equipment.

Adjustment of festivals and national holidays.

Administration of welfare funds.

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List of items WC can deal with

Educational and recreational such as libraries,

reading rooms, cinema-shows, sports, games,community welfare and celebrations, games,

Implementation and review of decisions arrived at

meeting of works committees

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CONDITIONS NECESSARY FOR EFFECTIVEWORKING OF THE SCHEME

Congenial work environment

Well defined roles Faith in the efficacy of the scheme

Wide publicity

Should be evolutionary

Free flow of information throughout the enterprise

Should be based on mutual trust

Decisions taken by different participatory forums

must be sincerely carried out in the stipulated time

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GAINS The participation enhances employees ability to

influence decision making at different tiers of theOrganizational hierarchy with concomitant (GOING

TOGETHER) assumption of responsibility.

The participation has to be at different levels ofmanagement:

1. At the shop floor level,

2. At the departmental level,

3. At the board level.

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Gains

The participation incorporates the willing acceptance of responsibilitiesby the body of workers. As they become a party to decision making, theyhave to commit themselves to the implementation of decisions made.

The participation is conducted through the mechanism of forum andpractices which provide for the association of workers representatives,The broad goal of participation is to change basically the organizationalaspect of production and transfer the management function entirely to

the workers so that they can experience intricacies ofautomanagement.

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METHODS OF JOB DESIGNING

JOB DESIGNING

JOB ENRICHMENTJOB ENLARGEMENT

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SACHAR COMMITTEESachar Committee on workers participation: Set up by the Government of India under the chairmanship of

Rajinder Sachar in 1977.

Main Recommendations:

Regarding Representation of workers on Board of Directors:

Participation shall be limited to companies which employ

1000 or more.

The participation at the board level should be introduced if at

least 51% of the workers vote in favor of participation.

The worker Director will be elected by all the workers.

The worker Director must be from amongst the workers

employed by the company and not an outsider.

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SACHAR COMMITTEESachar Committee on workers participation:Regarding Workers Participation in Share Capital:

In all future issues of shares by companies, a portion of new

shares, say about 10%to 15%, should be reserved exclusivelyfor workers called workers shares.

Employees will be provided a loan up to 12 months salary or

wages not exceeding Rs. 12,000 for the purchase of the shares

of the company.

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Varma Committee on Workers

Participation in Industry: The Janata Government set up a committee in September

1977 under the chairmanship of Ravindra Varma, the then

Union Minister of Labor.

Main Recommendations:

A three tier system of participation, viz., at the shop floor,

plant and board levels should be adopted.

Legislation on workers participation should be introduced.

The representative for the participative forms should be

elected by secret ballot.

The issue of equity participation was recommended as

optional.

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Comprehensive Scheme for WPM (1983):

Main Features:

The scheme will not have any legislative backing to begin with.

It would cover all PSU.

It will operate both at the Shop Floor and Plant Levels.

The employees and employers shall have equal representation

on all the participative forums.

The function of the participative forum would be as laid down

in the scheme and can be modified with the consent of boththe parties.

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Second Meeting of Labor Ministers on WPM

(1985):Salient Features:

The scheme shall have legislative backing.

It shall cover industrial establishments employing 500 or more

persons.

The Scheme shall work at three levels i.e. shop level, the plant

level and the board level.

Only employees of the establishment shall be eligible for

representation in the participative forums.The functions of various participative forums shall be laid down

in the framework of the scheme. All the decisions of the shop

and plant councils shall be arrived at by the consensus.

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PARTICIPATIVE FORMS

PREVALENT IN INDIA:1. Works Committees.

2. Joint Management Councils.

3. Joint Councils.

4. Unit Councils.

5. Plant Councils.

6. Shop Councils

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1. Works Committee (1947)

The industrial disputes act, 1947 provides for the setting up ofworks committee consisting of representatives of management

and workers .

Establishment employing 100 or more workmen.

It meets frequently for discussion on common problems of

the workers and the management.

After discussion, joint decisions are taken.

Problems of day to day working are attended to.

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Reasons for failure of WC

Exclusion of important items

Lack of competence of representatives

Inter union rivalry

Recommendations are just advisory in nature

No machinery to enforce the decision

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2. Joint Management Council(1958) Consists of equal number of representatives of

management and employees, not exceeding 12 in all.

Employees Representatives nominated by recognized

trade union

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2. Joint Management Council(1958)

AN UNDERTAKING MUST MEET THE FOLLOWING

REQUIREMENTS FOR SETTING UP JMCs

It must have 500 or more employees.

It should have a fair record of industrial relations.

It should have a strong and well organized tradeunion.

Willingness of employers, workers and trade

unions

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FEATURES OR FUNCTIONS of JMC1. Consultative Functions -council consulted by

management on

Administration

New methods of production

Retrenchment

Closure, reduction in or cessation of operation

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3. SHOP COUNCILS

For each dept or shop floor, establishment having

more than 500 workmen

Each council consists of equal number of

representatives of employers and workers.

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Shop CouncilFUNCTIONS :

Assistance to management in achieving monthly/

yearly production targets

Improvement of production-elimination of wastage

and optimum utilization of resources Study of absenteeism in shops/dept and steps to

reduce that

Assistance in maintaining general discipline

Physical conditions of working etc.

Welfare and health measures

Two way communication

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4. JOINT COUNCILS Operate for industrial unit as a whole, more than 500

workmen The chief executive of the unit is the chairman of the

JC

Meets at least once in quarter

Decision on the basis of consensus

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JOINT COUNCILS Functions:

Optimum production

Matters not solved in shop council or having bearing on

another shop/dept

Development of skills of workmen

Awarding of rewards for valuable suggestions

General health, safety and welfare measures for the unit or

the plant

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UNIT COUNCILS It consists of representatives of workers and

management of the organization employing 100 or

more workers may be formed in each unit to discuss

day to day problems and find solutions.

Every unit shall consist of an equal number of

representatives of management and workers

All decisions of an unit council shall be implemented

within the month

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PLANT COUNCIL There shall be one plant council for the whole unit

Each plant council should consist of not less than six

and not more than 18 members

Should meet once in a quarter

Every decision of the plant council shall be on the

basis of consensus and not by voting and shall be

binding on both the employees and the employer

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WPM IN INDIA

1947 - ID Act

1958 - Ind. Policy

1970 - Nationalization

1975 - Article 43 A

1985 - ESOP

Works Committee

Joint Mgmt. Committees

Director on Banks

WPM

Workers Share in Equity

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INFOMATIVE PARTICIPATION

CONSULTATIVE PARTICIPATION

ASSOCIATIVE PARTICIPATION

ADMINISTRATIVE PARTICIPATION

DECISIVE PARTICIPATION

LEVELS OF PARTICIPATION

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Refers to sharing of information with workers

regarding: Economic position, State of market,

Production & sales programmes, Work methods,

Balance sheet..etc.

But here workers have no right to analyze or

investigate the information.

INFORMATIVE PARTICIPATION

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CONSULTATIVE PARTICIPATION

Workers are given the chance to express their views

on various issues concerning work, workplace,

working condition, market standing, financial status

etc.

But joint council works as advisory body only.

Management may or may not accept the suggestion.

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Can be said BOARD LEVEL PARTICIPATION

The workers representative on the Board can play a

useful role in :

Safeguarding the interests of workers

Can prevail upon top management not to take

measures that would be unpopular with the

employee Can guide the Board members on matters of

investment in employee benefit schemes like

housing, and so forth

ADMINISTRATIVE PARTICIPATION

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DECISIVE PARTICIPATION

This is the form of participation where decisions are taken

jointly on matters related to production, safety, welfare etc.

ASSOCIATIVE PARTICIPATION

Council is not purely advisory. The management is under

moral obligation to accept and implement the decision of

the council.

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PARTICIPATIVE SCHEMES ININDUSTRIALLY ADVANCED COUNTRIES

U K The whitley councils have been functioning since 1917.

The addition of joint consultation machinery was made in

1947 These are single committees with sub committees in small

forums, while shop committees function in large factories.

At the national level, joint consultation is the rule.

The management nominates its representatives, while therepresentatives of workers are elected by secret ballot.

The free and frank discussions generally take place on such

subjects as safety, health, welfare, training, discipline among

employees improving production etc.

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PARTICIPATIVE SCHEMES IN

INDUSTRIALLY ADVANCED COUNTRIES FRANCE

The schemes was started in 1945 when works committees

and joint consultation started under legal sanctions

prescribing that all non state organizations must have works

committees if 50 or more workers are employed and

workers delegates if 10 or more employees are employed.

These bodies perform both advisory and administrative

functions and cooperate with the management by offering

valuable suggestions on increasing production, fixing prices,

welfare schemes, housing facilities etc.

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PARTICIPATIVE SCHEMES ININDUSTRIALLY ADVANCED COUNTRIES

GERMANY The scheme is known as co-determination which may be

economic, personnel and social co- determination. The

economic co-determination relates to management policy. The

personnel co-determination relates to policy including

recruitment, training, transfer etc. The social co-determinationdeals working hours, vacations , sanitations etc.

In all industries employing up to 500 employees, one third of

the members of the supervisory boards must be elected by the

employees qualified to vote. The work councils consist exclusively workers representatives

which make recommendations to the employer for benefitting

the employees, hear their grievances, promote employment of

di bl d b id d d h l h