Worker’s Participatio

n in Managemen

t Presented by:-Pooja Bhayani – 05Shruti Poddar – 24

WPM

Worker’s participation is a system where workers and management share important information with each other and participate in decision taking.

WPM encompasses the following:-

• It provides scope for employees in decision-making of the organization.

• The participation may be at the shop level, departmental level or at the top level.

• The participation includes the willingness to share the responsibility of the organization by the workers.

• It is conducted through the mechanism of forums which provide for association of workers representatives.

• It is done to improve self discipline & control among workers & for the smooth running of management.

Definition of WPM

A system of communication and consultation, either formal or informal, by which employees of an organization are kept informed about the affairs of the undertaking and through which they express their opinion and contribute to the management decisions.

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.

- Keith Davis

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. 

- Walpole

Objective • To elevate worker’s status in industry.

• To promote democratic practice.

• Increase productivity with joint efforts.

• Promote cordial relations.• Prevent exploitation of worker’s.

• Create good communication system.

• To build the most dynamic Human Resources.

Importance of WPM• Mutual understanding• Higher productivity• Industrial harmony• Industrial democracy• Less resistance to change• Creativity & Innovation

Forms of participation• Consultative participation• Informative participation • Administrative participation• Associative participation• Decision / Decisive participation

• Ownership participation

1. Consultative• Involves a high degree of sharing

of views of the members and giving them an opportunity to express their feelings.

• Members are consulted on matters such as:-– Welfare amenities (work, health)

– Adoption of New Technology– The problems emanating from it Safety measures.

• Final decision always rests with the top-level management, as employees’ views are only advisory in nature.

2. Information • It ensures that employees are able to receive

information and express their views pertaining to the matters of:-– General economic situation.– The state of market, production & sales programmes.

– Organisation & general running of the undertaking.

– The annual balance sheet & profit & loss account statement & connected documents with explanations.

– Methods of manufacture & work.– Long term plan for expansion etc.

3. Administrative • Involves a greater degree of sharing of

authority and responsibility of the management functions.

• It ensures greater share of workers’ participation in discharge of managerial functions.

• 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.

• Members are given little for autonomy in the exercise of administrative and supervisory powers with regard to – – Welfare measures– Supervision of safety measure– Operation of vocational training & apprenticeship schemes

– Preparation of schedules of working hours, breaks, holidays

– Payment of rewards for valuable suggestions

4. Decision • Highest form of participation.• Maximum delegation of authority and

responsibility of managerial function.• Decisions mutually taken. • Matters concerned are

– Economic, – Production – Welfare – Financial and – Administrative policies

5. Associative • Extension of consultative participation

• Management here is under the moral obligation to accept and implement the unanimous(agreed) decisions of the employees.

• Under this method the managers and workers jointly take decisions.

Levels of Participation1. Collective Bargaining2. Works Committees3. Shop / Department Council4. Joint Councils5. Board Representations6. Workers Ownership of

Enterprise7. Quality Circles8. Kaizen

1. Collective Bargaining

ILO has defined, "Collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another”.

• Collective :-because both the employer and the employee act as a group rather than as individuals.

• Bargaining :- because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations.

• It is a technique adopted by two parties to reach an understanding acceptable to both.

• Thus collective bargaining:– is a continuous process which aims at establishing stable relationships between the parties involved.

– is a collective process in which representatives of both the management and employees participate.

– not only involves the bargaining agreement, but also involves the implementation of such an agreement.

– democratic way of life in industry– attempts in achieving discipline in the industry

– is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

Loopholes in Collective Bargaining

• The 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.

2. Works Committees• Under the Industrial Disputes Act,

1947, every establishment employing 100 or more workers is required to constitute a works committee

• It 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.

• Purpose is to promote good IR.• Representatives of employees will be

selected by secret ballot.

Functions of Work Committee

• Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees are concerned with:– Conditions of work such as ventilation, lighting and

sanitation.– Amenities such as drinking water, canteens, dining

rooms, medical and health services.– Educational and recreational activities.– Safety measures, accident prevention mechanisms

etc.– Promotion – Festive holidays– Welfare

Loopholes in Works Committees

• Lack of competence and interest on the part of workers’ representatives.

• Employees consider it below their dignity and status to sit alongside blue-collar workers.

• Lack of feedback on performance of Works Committee.

• Undue delay and problems in implementation due to advisory nature of recommendations.

3. Shop / Department Council

• 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.

• All decisions taken will be implemented within one month.

• Duration of Shop council is two months.• Shop council has to meet at least once in

a month.

Functions of Shop Council

• Assist management in achieving monthly production targets.

• Improve production and efficiency, including elimination of wastage of man power.

• Study absenteeism in the shop or department and recommend steps to reduce it.

• Suggest health, safety and welfare measures to be adopted for smooth functioning of staff.

• Look after physical conditions of working such as lighting, ventilation, noise and dust.

• Ensure proper flow of adequate two way communication between management and workers.

4. Joint Councils • The joint councils are constituted for the whole

unit, in every Industrial Unit employing 500 or more workers.

• 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.  

• It for a period of two years. • The decisions will be binding on

both parties and will be implemented within one month.

•  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.

•  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.

Functions of Joint Council • Fixation of production norms• Work planning• Achieving production targets• Training• Reward policy• Creative suggestions• Health • Security

5. Board Representation • 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.

• The worker can serve as a guide and a control element.

• The worker can prevail top management not to take measures that would be unpopular with the employees.

• The worker can guide the Board members on matters of investment in employee benefit schemes like housing, and so forth.

Loopholes of Board Representation

• Focus of workers’ representatives is different from the focus of the remaining members of the Board

• The worker tends to become alienated from the workers.

• The worker may be less effective with the other members of the Board in dealing with employee matters.

• Due to the differences in the cultural ,educational backgrounds and behaviour, the employees’ representative may feel inferior to the other members, and 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.

6.Worker’s Ownership Of Enterprise

• 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.

7.Quality Circles(QC)• It 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.

• QCs are said to provide quick , concrete, and impressive results when correctly implemented

Advantages of QC

• 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

8. Kaizen • It is also called as “Continuous

Improvement”• It  is a policy of constantly introducing small

incremental changes in a business in order to improve quality and/or efficiency.

• This approach assumes that employees are the best people to identify room for improvement, since they see the processes in action all the time.

• A firm that uses this approach therefore has to have a culture that encourages and rewards employees for their contribution to the process.

Features of Kaizen • Improvements are based on many, small changes rather

than the radical changes that might arise from Research and Development

• As the ideas come from the workers themselves, they are less likely to be radically different, and therefore easier to implement

• Small improvements are less likely to require major capital investment than major process changes

• The ideas come from the talents of the existing workforce, as opposed to using R&D, consultants or equipment – any of which could be very expensive

• All employees should continually be seeking ways to improve their own performance

• It helps encourage workers to take ownership for their work, and can help reinforce team working, thereby improving worker motivation

WPM in India• In 1920 Mahatma Gandhi had

suggested that workers contributed labour and brains, while shareholders contributed money to enterprise, and that both should, therefore share in its prosperity.

• The influence of Mahatma Gandhi bore fruit and for the first time Joint Consultation was adopted in the Cotton Textile Industry.

• The first major step came during the enactment of Industrial Disputes Act, 1947.

• Workers’ participation in Management Bill, 1990 was introduced in Parliament which provided scope for upliftment of workers.

• The Industrial Policy Resolution had suggested that labour should be consulted in all matter concerning industrial production & 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.

Reasons for failure of WPM in India:

• Lack of initiative & interest.• Ideological differences.• Delay in implementation.• Political unionism.• Narrow scope of participative

forum with limited issue.• Not decisive participation.• Multiplicity of participative forums.

• Employers resist the participation of workers.

• Dual roles of workers’ spokesman and a co-manager.

• “Born to serve and not to rule”.• Lack of lower-level participation.• Unwillingness of the employer to share powers

• The disinterest of the workers • The perfunctory attitude of the government.

Decisions affecting WPMThree groups of managerial decisions affect the

workers of any industrial establishment and hence the workers must have a say in it

• Economic Decisions – Economic Decisions like methods of manufacturing, automation, shutdown, lay-offs, mergers.

• Personnel Decisions – Personnel Decisions like recruitment and selection, promotions, demotions, transfers, grievance settlement, work distribution.

• Social Decisions – Social Decisions like hours of work, welfare measures, questions affecting work rules and conduct of individual worker’s safety, health, sanitation and noise control.

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 of a three– Tiered system with joint department councils (JDCs) 

constituted at the departmental level.– Joint works councils (JWC) for the entire work– 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.

Workers' Participation at BHEL

• BHEL stands for “Bharat Heavy Electrical Limited”

• According to BHEL, WPM is the process, by which authority and responsibility of managing industry are shared with workers.

Significance of WPM in BHEL

• To improve the efficiency of enterprise.• To establish harmonious industrial relation.

• To attain industrial peace and harmony.• To give the workers and acceptable status.

• To develop self management in the industry.

• To increase the productivity level with mutual understanding.

• Easy to implement the change may by possible by WPM.

• Information sharing and decision making.

• Improving the self control degree.

Factors considered by BHEL in WPM

• Subject matter of participation

• Level of participation

• Time factor• Extend of

participation• Significance of

decision

• Industrial practices• Past experience

data• Degree of

possibility• No. of workers• Methods of

participation• Managerial views

regarding workers

BHEL’s principle for WPM

• Experience• Possibilities• People building and mutual

development.

BHEL’s ways & methods of WPM

• Maximum adopt the method of :-–QCQuality Circle –TQMTotal Quality Management

Pre-requisites for successful participation:-

• Strong & Democratic union.• Mutually agreed objectives which

should be clearly defined & complementary.

• Feeling of participation at all levels.• Favourable attitude of all.• Training of participants is essential.• Prompt action & feedback.

• Free flow of communication and information.

• Participation of outside trade union leaders to be avoided

• Strong and effective trade unionism.• Workers’ education and training.• Lack of positive attitude. • Trade unions and government needs to

work in this area.• Trust between both the parties.• Employees cannot spend all their time in

participation to the exclusion of all other work

How can WPM be more effective???

• Employer should adopt a progressive outlook. They should consider the industry as a jointendeavour in which workers have an equal say. Workers should be provided and enlightened about the benefits of their participation in the management.

• Employers and workers should agree on the objectives of the industry. They should recognize and respect the rights of each other.

• 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.

• 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.

• Participation should be a continuous process. To begin with, participation should start at the operating level of management.

• A mutual co-operation and commitment to participation must be developed by both management and labor.

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”