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Participative management acts as a force to motivate employees to meet specific organizational goals.

The main idea behind this style of management is not only using physical capital but also making
optimum utilization of intellectual and emotional human capital. This is the process of involving people in
decision making process to ensure that everyones psychological needs are met. It, in turn, increases the
job satisfaction among employees and improves the quality of their work life. Motivated employees are
the biggest assets of an organization and participative management is an effective strategy to retain the
best talents of the industry.
Participatory Management or co-determination is seen as the quick cure for poor morale, employee
attrition, low productivity and job dissatisfaction. However, it may not be appropriate to empower
employees at every level but use of joint decision making at certain levels in organization can work
wonders. Let us read further to explore the main objectives to introduce participative style of
management in organizations:

To Make Best Use of Human Capital: Participative management does not restrict organizations
to exploit only physical capital of employees. Rather it makes the best use of human intellectual
and emotional capital. It gives employees an opportunity to contribute their ideas and suggestions
to improve business processes and create a better working environment.

To Meet the Psychological Needs of Employees: When employees have a say in decision
making process, it gives them a psychological satisfaction. It is a simple force that drives them to
improve their performance, create a proper channel of communication and find practical solutions
to design better organizational processes.

To Retain the Best Talent: Participatory management is one of the most effective strategies to
retain the best talent in the industry. It gives employees a sense of pride to have a say in
organizational decision making process. Once they are valued by their seniors, they stick to the
organization and become managements partners in meeting specific goals and achieving
success.

To Increase Industrial Productivity: In todays competitive world, motivation, job security and
high pay packages are not enough to increase industrial productivity. Leadership, flexibility,
delegation of authority, industrial democracy and employee say in decision making are important
to increase annual turnover of any organization.

To Establish Harmonious Industrial Relationship: Participatory from of management is an


unbeatable tact to establish and maintain cordial relationships with employees and workers union.
The success of an organization depends on its human resources. Employee empowerment acts
as a strong force to bind the employees and motivate to give them their best to the organization.

To Maintain a Proper Flow of Communication: Two-way communication plays an important


role in the success of any organization. Employee participation in decision making ensures proper
flow of communication in the organization. Everyone contributes their best and tries to strengthen
the organization by contributing their best to improve business processes.

Participative management is beneficial to organization as well as employees. It gives employees a higher


degree of enjoyment at work place that drives them to work harder. It is equally rewarding for the
management as it ensures tremendous improvement in work culture within the organization as well as
increase in its productivity.

Features of Participative Management


Employees have always been bossed around their managers and told what they are supposed to do.
They never had the authority to decide things in the company. Gradually, times are changing and
employees are encouraged to participate in organizations decision making process. Management
motivates them to come up with ideas and suggestions that can make organizational processes far more
efficient. The main idea behind adopting participatory form of management is to work together, achieve
targeted goals in minimum possible time and stay ahead of competition.
For some companies, participative management is still a foreign subject. The concept is not widespread
and is still restricted to a few organizations. They have such a weird perception towards it that they cant
even picture it working. The management in such companies doesnt like employees questioning its
authority. But the organizations that have successfully adopted this particular style of management they
look upon it as a means to achieve their targets and create a sound working environment. The concept is
gaining world-wide recognition and popularity day by day.
Some companies still stick to conventional ways of management while others are encouraging employees
to contribute to the suggestion box. Let us know about its features and see how participative
management can work wonders:

Ethical Dimensions: Participatory management has ethical dimensions and based on morals,
principles and values. In this form of management, every one is treated equally when it comes to
organizational decision making. It is based on employee empowerment, responsibility sharing
and delegation of authority.

Proper Channel of Communication: Participative form of management encourages two-way


communication. It is not only management that decides what employees need to do but it also
encourages employees to participate in decision making and give ideas and suggestions to make
organizational processes better and more efficient. They are allowed to share their problems,
views, ideas and feedback with their managers.

Empowers Employees: Participative style of management gives employees a chance to


participate in management processes. They are encouraged to come up with their views. Gone
are the days when employees were bossed around by their managers. Now they are to be
treated like co-workers. This provides a higher status to employees as they also have a say in
decision making.

Recognition of Human Dignity: In this form of management, all employees are treated equally
irrespective of their designations when it comes to giving ideas and suggestions for organizational
decision making process. Employees are no more the servants of managers but are the most
important assets of an organization.

Psychological Satisfaction to Employees: Most of our lives are spent at workplace. It is


important for everyone to have psychological satisfaction as far as our employment is concerned.

Commitment from the organization, respecting the dignity of individuals and co-determining the
company policies are some of the features of participative management that provide
psychological satisfaction to employees.
Participative Management is a universally recognized concept but still most organizations hesitate to
adopt it. Through this style of management, both the parties, employer and employees, are satisfied. It
brings management and employees closer and thus, should be adopted open heartedly.

Pre-requisites of Participative
Management
Participative management can best be described as a style of decision making that ensures that
involvement of stakeholders at all levels. This operates at three levels, Problem analysis, strategy
formulation and final implementation of the solution. There are certain prerequisites to be met before
participative management can be put to work.
Participative management first of all requires a willingness from the managers to give up some
charge to the workers and they must in turn be in a position such that the successful participation of all
is ensured. It cannot be successful in any organization unless is carefully planned, timed and well thought
upon.
Since participative management is a style of decision making, therefore its implementation essentially
requires a change in the employees idea of the latter. This change also means that there is a cultural
change required in the organization vis--vis a change from a certain other style of decision making to
participative style. It also brings with it a certain amount of resistance from the employees specially so
from the older or the long term employees.
The resistance is a reflection of the disbelief of the employees that their participation will not be respected
and implemented. The onus here lies on the managers in putting in sincere efforts to convince them of the
usefulness of their role in the decision making. The employees need proof that their ideas will be
considered, discussed seriously and implemented finally if found beneficial to the organization. This is
precisely why participative management needs to be implemented in phases; this way the employees are
able to see proof that their ideas and suggestions hold weight. It also encourages them to come forth in
future and also keeps them continuously engaged in thinking about the welfare of their organization.
One more prerequisite for successful participative management is attitude of the top and middle
management or those who seek employee interventions in decision making. They must approach
employee involvement with a receptive and open mindset. This encourages participation. They must be
open to new ideas and innovations. This may sound problematic in large organizations but how the

suggestion is being received decides to a large extent whether or not the style of decision making can be
successful.
Since decision making is based on inputs of one and all, therefore its success also depends on
the degree of participation of employees. In certain organizations despite obvious proofs, the
employees decide not to participate or make contribution. In yet another organizations the employees are
not skilled enough to make meaningful contributions to the final decision making process. This can be
overcome by imparting the right kind of training and by the manager himself by ascertaining the individual
strengths of his team members and asking for relevant contributions based upon the same.
In large organizations in order to ascertain the relevance of suggestions, managers also need to set
certain benchmarks for making inputs to various groups so that discussions are held at levels that are
consequential and the solutions are feasible economically.
Proof of implementations serves as the biggest marketing vehicle that encourages the employees to
become more forthcoming. This also communicates to them that they are important and also motivates
them more. Ideas that cannot be implemented need to be explained to the employees. This is important in
order to avoid mistrust and promote participation.

A Basic Understanding of Participative


Management
Participative Management refers to as an open form of management where employees are actively
involved in organizations decision making process. The concept is applied by the managers who
understand the importance to human intellect and seek a strong relationship with their employees. They
understand that the employees are the facilitators who deal directly with the customers and satisfy their
needs. To beat the competition in market and to stay ahead of the competition, this form of management
has been adopted by many organizations. They welcome the innovative ideas, concepts and thoughts
from the employees and involve them in decision making process.
Participative Management can also be termed as Industrial Democracy, Co-determination,
Employee Involvement as well as Participative Decision Making. The concept of employee
participation in organizations decision making is not new. However, the idea couldnt gain that much
popularity among organizations. Studies have shown that only 3-5 percent of organizations have actually
implemented this concept in their daily operations. Though the theory of participative management is as
old as the institution of employees and employers still it is not applied by a large proportion of
organizations.
The idea behind employee involvement at every stage of decision making is absolutely straight. Open and
honest communication always produces good results both for organization as well as workers. Freedom
and transparency in companys operations take it to the next level and strengthens the basis of the
organization. On the other hand, there are several companies that straightway rule out the possibility of

participative decision making process. According to them, employees misuse their freedom of expression
and participation in decision making as it provides higher status to employees and empowers them.
However, there are many companies who have embraced this particular style of management and are
now getting positive results. Toyota is the best example. The company has been following suggestion
schemes and employee involvement procedures for over a decade now. The management receives
almost 2,000,000 suggestions and ideas every year and around 95 percent of these are implemented by
the company. Who is not aware of Toyotas success rate? Around five thousand improvements per year
have made Toyota one of the fastest growing organizations globally. The need is to develop and
implement a comprehensive company policy and everything works well.
British Airways is another great example of participatory management. During economic downsizing,
employees suggestions helped them cut annual cost of their operations by 4.5 million pounds. This is just
unbelievable. The company would have suffered from huge losses, had it not adopted employees
suggestions. It is right to some extent that employees can misuse industrial democracy but with a proper
management of HR functions, this problem can be solved and the operations of organization can be taken
to the next level.
Satyam is another great example. It has been implementing company-wide suggestion scheme, The Idea
Junction, since 2001. A real-time web-based portal is present in Intranet that can be accessed by all its
employees all across the globe to support the entire life cycle of an idea right from its generation till its
implementation. The main idea behind adopting this management style was to create values and bring
sense of belongingness in the employees through ideas, suggestions and complaints. The whole
procedure is backed by a strong and comprehensive reward policy that encourages employees to perform
better each time.
Employee participation at each level of decision making process is not at all harmful if managed
efficiently. The whole process can be well coordinated and controlled by the sincere and honest efforts of
human resource managers.

Scope of Participative Management


The scope of participative style of management certainly depends on the organization, its nature,
functions and processes. Though associating employees at every stage of decision-making is not
possible still regular exchange of information, ideas, consultations, thoughts, decisions and negotiations
between employer and the employees definitely is a boon to the organization. Few of the worlds biggest
organizations like Toyota, HSBC, British Airways, Satyam, British Gas and Nokia Cellular have achieved
considerable profits and value creation by implementing the most amazing ideas of their employees. Their
success witnesses the importance of workers participation in the process of decision making.
The scope of workers involvement in managerial decision-making may extend to social, economic and
personnel decision making depending upon the requirements of the organization. But there is a difference
of opinion about the extent to which employees can participate in managerial decision-making process.
Should they be equal partners and make joint decisions or should workers be given opportunities through
their seniors to come up with the ideas. The first school of thoughts favors the actual participation of
workers while the second school of thoughts suggests the consultation of workers in managerial decision
making. It is up to the management to decide which style it prefers and till what extent it requires
involvement of employees.

However, if we talk about the scope of workers participation in social, economic and personnel decisionmaking, it may have a direct impact on some of the most crucial activities of the organization. Lets read
further to understand how these three groups of managerial decision-making can affect any industrial
establishment:

Social Decision-Making: It refers to employee involvement in decision making regarding hours


of work, rules and regulations at workplace, welfare measures, workers safety, employee welfare,
health and sanitation. In this category, employees have a say in decisions in these areas. They
may take an advantage of their liberty and sometimes, can dominate the management. Here the
concept of bounded or restricted participation can work well.

Economic/Financial Decision-Making: It includes involvement of employees on various


financial or economic aspects such as the methods of manufacturing, cost cutting, automation,
shut-down, mergers and acquisition and lay-offs. Inviting ideas from employees on various issues
like how to cut down the operating cost can work wonders.

Personnel Decision-Making: The employees participation in personnel decision-making refers


to their involvement in various management processes including recruitment and selection, work
distribution, promotions, demotions and transfers, grievance handling, settlements, voluntary
retirement schemes and so on. Participation of employees in these processes can safeguard their
interests and motivate them to work hard for the betterment of self as well as the organization.

Employee participation in decision-making process although is beneficial. However, there may be some
limits on it to ensure that they do not take advantage of their liberty and right of participation. There are
several ways through which employees can participate in the whole process. Some of them are financial
participation, participation through collective bargaining, participation at the board level, participation
through ownership, participation through work councils and committees and participation through
suggestion schemes. Anyone of these ways or processes can be adopted by the management to ensure
participation from workers.

Objectives of Participative
Management
Participative management acts as a force to motivate employees to meet specific organizational goals.
The main idea behind this style of management is not only using physical capital but also making
optimum utilization of intellectual and emotional human capital. This is the process of involving people in
decision making process to ensure that everyones psychological needs are met. It, in turn, increases the
job satisfaction among employees and improves the quality of their work life. Motivated employees are
the biggest assets of an organization and participative management is an effective strategy to retain the
best talents of the industry.
Participatory Management or co-determination is seen as the quick cure for poor morale, employee
attrition, low productivity and job dissatisfaction. However, it may not be appropriate to empower
employees at every level but use of joint decision making at certain levels in organization can work
wonders. Let us read further to explore the main objectives to introduce participative style of
management in organizations:

To Make Best Use of Human Capital: Participative management does not restrict organizations
to exploit only physical capital of employees. Rather it makes the best use of human intellectual
and emotional capital. It gives employees an opportunity to contribute their ideas and suggestions
to improve business processes and create a better working environment.

To Meet the Psychological Needs of Employees: When employees have a say in decision
making process, it gives them a psychological satisfaction. It is a simple force that drives them to
improve their performance, create a proper channel of communication and find practical solutions
to design better organizational processes.

To Retain the Best Talent: Participatory management is one of the most effective strategies to
retain the best talent in the industry. It gives employees a sense of pride to have a say in
organizational decision making process. Once they are valued by their seniors, they stick to the
organization and become managements partners in meeting specific goals and achieving
success.

To Increase Industrial Productivity: In todays competitive world, motivation, job security and
high pay packages are not enough to increase industrial productivity. Leadership, flexibility,
delegation of authority, industrial democracy and employee say in decision making are important
to increase annual turnover of any organization.

To Establish Harmonious Industrial Relationship: Participatory from of management is an


unbeatable tact to establish and maintain cordial relationships with employees and workers union.
The success of an organization depends on its human resources. Employee empowerment acts
as a strong force to bind the employees and motivate to give them their best to the organization.

To Maintain a Proper Flow of Communication: Two-way communication plays an important


role in the success of any organization. Employee participation in decision making ensures proper
flow of communication in the organization. Everyone contributes their best and tries to strengthen
the organization by contributing their best to improve business processes.

Participative management is beneficial to organization as well as employees. It gives employees a higher


degree of enjoyment at work place that drives them to work harder. It is equally rewarding for the
management as it ensures tremendous improvement in work culture within the organization as well as
increase in its productivity.

Features of Participative Management


Employees have always been bossed around their managers and told what they are supposed to do.
They never had the authority to decide things in the company. Gradually, times are changing and
employees are encouraged to participate in organizations decision making process. Management
motivates them to come up with ideas and suggestions that can make organizational processes far more
efficient. The main idea behind adopting participatory form of management is to work together, achieve
targeted goals in minimum possible time and stay ahead of competition.
For some companies, participative management is still a foreign subject. The concept is not widespread
and is still restricted to a few organizations. They have such a weird perception towards it that they cant

even picture it working. The management in such companies doesnt like employees questioning its
authority. But the organizations that have successfully adopted this particular style of management they
look upon it as a means to achieve their targets and create a sound working environment. The concept is
gaining world-wide recognition and popularity day by day.
Some companies still stick to conventional ways of management while others are encouraging employees
to contribute to the suggestion box. Let us know about its features and see how participative
management can work wonders:

Ethical Dimensions: Participatory management has ethical dimensions and based on morals,
principles and values. In this form of management, every one is treated equally when it comes to
organizational decision making. It is based on employee empowerment, responsibility sharing
and delegation of authority.

Proper Channel of Communication: Participative form of management encourages two-way


communication. It is not only management that decides what employees need to do but it also
encourages employees to participate in decision making and give ideas and suggestions to make
organizational processes better and more efficient. They are allowed to share their problems,
views, ideas and feedback with their managers.

Empowers Employees: Participative style of management gives employees a chance to


participate in management processes. They are encouraged to come up with their views. Gone
are the days when employees were bossed around by their managers. Now they are to be
treated like co-workers. This provides a higher status to employees as they also have a say in
decision making.

Recognition of Human Dignity: In this form of management, all employees are treated equally
irrespective of their designations when it comes to giving ideas and suggestions for organizational
decision making process. Employees are no more the servants of managers but are the most
important assets of an organization.

Psychological Satisfaction to Employees: Most of our lives are spent at workplace. It is


important for everyone to have psychological satisfaction as far as our employment is concerned.
Commitment from the organization, respecting the dignity of individuals and co-determining the
company policies are some of the features of participative management that provide
psychological satisfaction to employees.

Participative Management is a universally recognized concept but still most organizations hesitate to
adopt it. Through this style of management, both the parties, employer and employees, are satisfied. It
brings management and employees closer and thus, should be adopted open heartedly.

Pre-requisites of Participative
Management

Participative management can best be described as a style of decision making that ensures that
involvement of stakeholders at all levels. This operates at three levels, Problem analysis, strategy
formulation and final implementation of the solution. There are certain prerequisites to be met before
participative management can be put to work.
Participative management first of all requires a willingness from the managers to give up some
charge to the workers and they must in turn be in a position such that the successful participation of all
is ensured. It cannot be successful in any organization unless is carefully planned, timed and well thought
upon.
Since participative management is a style of decision making, therefore its implementation essentially
requires a change in the employees idea of the latter. This change also means that there is a cultural
change required in the organization vis--vis a change from a certain other style of decision making to
participative style. It also brings with it a certain amount of resistance from the employees specially so
from the older or the long term employees.
The resistance is a reflection of the disbelief of the employees that their participation will not be respected
and implemented. The onus here lies on the managers in putting in sincere efforts to convince them of the
usefulness of their role in the decision making. The employees need proof that their ideas will be
considered, discussed seriously and implemented finally if found beneficial to the organization. This is
precisely why participative management needs to be implemented in phases; this way the employees are
able to see proof that their ideas and suggestions hold weight. It also encourages them to come forth in
future and also keeps them continuously engaged in thinking about the welfare of their organization.
One more prerequisite for successful participative management is attitude of the top and middle
management or those who seek employee interventions in decision making. They must approach
employee involvement with a receptive and open mindset. This encourages participation. They must be
open to new ideas and innovations. This may sound problematic in large organizations but how the
suggestion is being received decides to a large extent whether or not the style of decision making can be
successful.
Since decision making is based on inputs of one and all, therefore its success also depends on
the degree of participation of employees. In certain organizations despite obvious proofs, the
employees decide not to participate or make contribution. In yet another organizations the employees are
not skilled enough to make meaningful contributions to the final decision making process. This can be
overcome by imparting the right kind of training and by the manager himself by ascertaining the individual
strengths of his team members and asking for relevant contributions based upon the same.
In large organizations in order to ascertain the relevance of suggestions, managers also need to set
certain benchmarks for making inputs to various groups so that discussions are held at levels that are
consequential and the solutions are feasible economically.
Proof of implementations serves as the biggest marketing vehicle that encourages the employees to
become more forthcoming. This also communicates to them that they are important and also motivates
them more. Ideas that cannot be implemented need to be explained to the employees. This is important in
order to avoid mistrust and promote participation.

Ground Preparation for Participative


Management
Participative management in itself does not ensure success and should not be seen as tool to create
magic within no time. There is certain ground preparation required before an organization can decide for
implementation of the management style.
The following things need to be taken care of:
1. Clearly Defined Objectives: Each party to decision making called as the participants namely the
management and the workers must have clearly defined objectives. Operationally there should be
no clash between the objectives of the two.
2. Clear Communication: There should be clear and timely communication between the
management and the workers or the employees. This helps in building trust between the two
parties. Workers also gain a sense of responsibility increasing their stake in their work and in the
organization as a whole.
3. Choosing the Representative: It is important for the workers to choose their representative from
among themselves and not any person from outside the labor union. This is important for two
reasons. First, the person is able to better understand the problems of his colleagues and report
the same to the management. Second, the management is keener to talk and listen from a
person who works within the organization.
4. Training the Workers: Training and awareness regarding the usefulness of participative
management is required to make it more effective. Further training is required to ensure that
every person at every level knows his what contribution he/she has to make. For example,
participation at the level of middle management is different compared to participation at lower or
top level.
5. Confidence: Both parties workers and the management need a trust to develop between the two.
Participation should not be perceived as intimidation to the position of any. If workers think that
their status will be adversely affected, they refuse to participate. Similarly, if managers suspect
that they will lose their authority, they will decline to participate.
6. Increasing Workers Participation: Workers participation needs to be increased at each level in
order to encourage them to contribute meaningfully. Further, their suggestions and
recommendations need to be treated with dignity and respect. Nothing can be more motivating
than seeing your recommendation being put to practice.
7. Legal Action: Since participative management requires structural and cultural change which
takes time. There is resistance to change offered by the employees especially those who
perceive it as a threat to their status and authority within the organization. If allowed to take shape
a natural speed, it will take time to show results. Therefore, some legislative action is required
against the erring employees.

8. Ensuring ROI: Participation should not be at the cost of the values of the organization. It has to
be carefully planned; employees should devote a certain time for participation and the rest upon
their own specific area of work.
Participative management may be a solution for each and every type of organization. It is a big challenge
in big organizations with big employee size. The implementation needs to be carefully planned and
implemented gradually.

Participation and Performance Importance of Participation


The greatest and widely accepted benefit of participation is the increased work ownership of employee.
An employee is better able to relate himself/herself with his or her work and this improves performance
and efficiency at work.
John Newstrom and Keith Davis worked extensively upon the subject. They identified three variables that
lead to increased performance. These variables are a part of participative management.
According to them, the three variables that collectively enhance performance are:

Removing conditions of powerlessness

Enhance job related self efficacy

Perception of empowerment

Removing conditions of Powerlessness: This implies empowering the employees to take


decisions on their own, be enterprising and take more risks. This requires a wholesome change in
the entire organizational structure and culture. Then leadership becomes a crucial aspect. The
choice of a leader who can inspire, motivate and delegate with equal efficacy assumes
importance.
The reward system needs a revamp. Psychologically empowerment connotes increased
responsibilities in the mind of an employee, a hike is required.
Finally, participation should result in either job enrichment or job enlargement. Job enlargement
means expanding the job responsibilities - adding task elements horizontally. Job enrichment on
the other hand means that the job becomes more rewarding - monetarily and otherwise.

Enhance Job Related Self Efficacy: Increase in responsibilities also demands increased
efficiency at work. This is achieved by providing training helping an employee achieve job
mastery. Laying down benchmarks for a certain set of responsibilities by the use of role models
(those who have already accomplished tasks in similar capacities under similar workload) also
benefits.

Since training induces behavioral changes there is a need for reinforcing the new behaviors. It is
this change in attitude and behavior that brings in increased efficiency. Each employee also
requires support from those above him and people working his supervision. Support functions
become important because the individual now himself delegates his own work. This trickles down
to the bottom or the lower level and this is how participation happens across various levels.

Perception of Empowerment: Employees often misunderstand the idea of participation. There


may be a certain group of employees who participate aggressively and in the process their own
work gets affected. These perceptions need to be taken care of otherwise they may be well the
undoing of all the good work.
Empowerment means more competence and value addition to work. It means that individual
accepts the responsibilities with humility and fulfills them with grace and efficacy. It calls for
increased use of talent. It is in wake of this that the concept of talent management is fast
evolving.

One limitation of participative management is that the results or decision making doesnt improve
overnight. The above mentioned three variables have been effectively used in organizations implementing
participative management. They can act as a catalyst in speeding up the results.

Benefits of Participative Management


Participative management as a decision making style is not welcome by one and all! Labor or trade
unions, for example do not approve of this. They argue that it is in fact disadvantageous to welfare of the
workers because the participative processes give deep insights to the management, which in turn puts
the latter in a better bargaining position while dealing with unions.
Denison in the year 1990 elaborated on a large number of benefits of participative management. This is
after Kanter made useful contributions in the subject from 1983-1989. According to him participative
management allows for innovation and knowledge sharing between the managers and the workers, those
who are contiguous to the products being made. They being the closest can give better feedback for
quality control, devise efficient manufacturing processes and strategize for the same.
Apart from the above mentioned workers, Markowitz and Lawler have also worked independently in the
field. Nonetheless we may enumerate the benefits of participative management as follows:

Innovation and increased efficiency: The problem solving process and openness to new ideas
can result in innovation. Apart from this as mentioned above there is also knowledge sharing
amongst the workers and the managers. This means that those who are part of a certain process
at the ground level give inputs for improved efficiency of the same. This has dual implications,
helping improve the quality of product and curtailing the cost of manufacture.

Timeliness: There is improved communication between the managers and the workers and
between workers across different units. A loophole or flaw is reported in time.

Employee satisfaction and Motivation: Empowering the employees increases their ownership
or stake in their work. This increases efficiency and productivity. Consequently there is decreased
absenteeism and less employee turnover. This also works in attracting more people towards the
organization and the job.

Product quality: A say in decision making means that workers can immediately pin point and
suggest remedial measures for improving the efficiency of the process they are apart of. This
means that quality control in product or service is exercised for the lowest level.

Less supervision requirements: There is greater focus on management of self with due
emphasis of widening ones skill set. One of the major benefits of this is that there is a lesser
need of supervision and support staff.

Better grievance redressal: Increased communication paves way for reduced number of
grievances and quick and effective resolution of dispute (often on the spot). Union - management
relationship is also benefited and strengthened.

Hiring Flexibility: Hiring flexibility is increased as a result of cross training. Increased


coordination among team members also offers a comfort zone for the newly hired.

Participative management thus results in overall increase of the ownership of work of an employee. This
empowerment can lead to increased efficiency, better productivity, improved morale and job satisfaction.
But the fact the participative management requires an overall change in the organizational culture, the
implementation of the same, specially when there is a bureaucratic style of decision making in place, can
be a major challenge!

Limitations of Participative
Management
Participative management is undoubtedly one of the better approaches to management. But like any
other style of decision making there are certain limitations. These limitations arise either externally or
internally vis--vis the implementation.
The following are certain limitations of participative management:

Complexity of Technology and Organizations: Organizations and Technology are so


complicated these days that there are specialized workers required for each job. Workers cannot
extend beyond a certain limit in participation. There are instances when a certain department or
group participates aggressively and a corresponding group acts equally opposite. Then there are
limitations at the level at which you work. Workers, for example, can participate in matters
pertaining to operations, policy matters remain outside their reach.

Employees right of not participating: An employee has the right to not participate. Certain
people do not believe in the usefulness of participation and therefore opt out of the same. Some
labor unions for example question the usefulness of participation reasoning that participation
offers the management deep insights into the workers and they may then use it against the latter.

Manipulation: Managers may sometimes use participation to manipulate employees. This may
be both conscious and subconscious. Similarly, representatives of the labor unions may also
exploit the workers in the name of participation.

Workers Psychology: An existent psyche amongst the employees, that they are the workers
and their primary purpose is to serve their masters (management) prevents them from
participating. It is therefore of little interest to such people.

General Bias: Resistance to change inside the organization as mentioned earlier is the biggest
hurdle to participative management. Managers decline to share power or to delegate
apprehending that they may lose authority by doing so. Workers similarly show disinterest in the
participation presuming everything to be well in order. Further there is bias from the top

management who step back on their promises when they fail to see participation deliver results in
quick time.

Trade Unions: Trade unions are integral to the success of participative management; they may
be equally detrimental to the success of the same. Most of the trade unions engage in politics and
are little bothered about participation. Add to it, the approach of representatives or individuals is
also not very favorable. Workers join trade unions for personal rather than organizational
reasons. Membership is regarded as a kind of protection against mishaps like accidents,
dismissal and other problems whereby union interventions can rescue the worker. Naturally, the
motive of participation is diluted.

Participative management cannot work in isolation. It involves each and every member of the
organization. For deriving benefits and success out of the same, no single member or employee group
can be left out. There are limitations but they arise because there either one or the other group is left out
or there is serious communication gap that needs to be taken care of.

Methods/Ways of Participation of
Employees in Decision-Making
Participation of workers in decision-making process has resulted in successful value creation in many
organizations. Though the extent to which employees should participate in organizational decision making
is still a matter of debate. Some say that workers union should participate with management as equal
partners while some believe in restricted or bounded participation, that is, participation of employees or
workers to a limited extent. However, there are a number of ways through which employees can
participate in decision-making process of any organization.

Participation at the Board Level: Representation of employees at the board level is known as
industrial democracy. This can play an important role in protecting the interests of employees.
The representative can put all the problems and issues of the employees in front of management
and guide the board members to invest in employee benefit schemes.

Participation through Ownership: The other way of ensuring workers participation in


organizational decision making is making them shareholders of the company. Inducing them to
buy equity shares, advancing loans, giving financial assistance to enable them to buy equity
shares are some of the ways to keep them involved in decision-making.

Participation through Collective Bargaining: This refers to the participation of workers through
collective agreements and by deciding and following certain rules and regulations. This is
considered as an ideal way to ensure employee participation in managerial processes. It should
be well controlled otherwise each party tries to take an advantage of the other.

Participation through Suggestion Schemes: Encouraging your employees to come up with


unique ideas can work wonders especially on matters such as cost cutting, waste management,
safety measures, reward system, etc. Developing a full-fledged procedure can add value to the
organizational functions and create a healthy environment and work culture. For instance,
Satyam is known to have introduced an amazing country-wide suggestion scheme, the Idea
Junction. It receives over 5,000 ideas per year from its employees and company accepts almost
one-fifth of them.

Participation through Complete Control: This is called the system of self management where
workers union acts as management. Through elected boards, they acquire full control of the
management. In this style, workers directly deal with all aspects of management or industrial
issues through their representatives.

Participation through Job Enrichment: Expanding the job content and adding additional
motivators and rewards to the existing job profile is a fine way to keep workers involved in
managerial decision-making. Job enrichment offers freedom to employees to exploit their wisdom
and use their judgment while handling day-to-day business problems.

Participation through Quality Circles: A quality circle is a group of five to ten people who are
experts in a particular work area. They meet regularly to identify, analyze and solve the problems
arising in their area of operation. Anyone, from the organization, who is an expert of that particular
field, can become its member. It is an ideal way to identify the problem areas and work upon them
to improve working conditions of the organization.

Employees can participate in organizational decision making through various processes mentioned
above. However, there are other ways such as financial participation, Total Quality Management,
participation through empowered teams and joint committees and councils through which they can
contribute their share in making the organizations a better place to work.

Employee Empowerment - Good or


Bad
What motivates people to work? Money may be the primary reason, but beyond a certain limit it fails to.
Organizations have been trying out different things to increase the level of motivation of its employees.
Employee empowerment is one of them.
Employee empowerment means that an employee is given a chance to be enterprising, take risks without
compromising with the organizational goals, mission and vision. His say in the process of decision making
in increased. This can be for one particular individual or for the entire organization. In the latter case it is
called participative management.
There are pros and cons to this employee empowerment. Whereas it is said and has been observed that
participative management may lead to increased productivity, motivation, job satisfaction and quality
enhancement; it may also slow down the process of decision making and act a potential security threat in
terms of ease of access of information it offers to the employees.
From an organizational perspective the following pros and cons may be associated with employee
empowerment.

Pros of Employee Empowerment

It leads to greater job satisfaction, motivation, increased productivity and reduces the costs.

It also leads to creativity and innovation since the employees have the authority to act on their
own.

There is increased efficiency in employees because of increased ownership in their work.

Lesser need of supervision and delegation.

Focus on quality from the level of manufacturing till actual delivery and service of goods.

Employees when empowered become more entrepreneurial and start taking more risks. Greater
the risk, greater are the chances to succeed.

Cons of Employee Empowerment


At the individual level employee empowerment means you are an integral component of the organization.
This may sprout egotism or arrogance in the workers.
Apart from disadvantages at the organizational level, there are certain challenges that emerge at the
individual level. Supervisors often complain disgust from the empowered workers. The following points go
against employee empowerment:

Egotism / arrogance: Worker arrogance can create a big trouble for the supervisors and the
managers. There can be problems in delegating. Employees avoid reporting about their work and
feedback can be taken negatively.

Security: Since information comes and is shared by all, there are apprehensions about leakage of
critical data.

Risk: Creativity and innovation demands a greater risk bearing capacity and there are equal
chances of success and failure. Workers often lack the expertise to execute are enterprise, which
can cost big.

Industrial Democracy: Labor unions and workers are empowered and they may misuse the same.
Strikes and lock outs become more frequent. Also, labor unions gain insights into management
and their functioning and they leak the same.

Participative management or employee empowerment does not mean relentless transfer of authority. It
has to be in a controlled and regulated manner. Each aspect has to be carefully studied and levels of
participation decided. For example, the level of participation of knowledge workers is different from that of
a floor worker.

Advantages and Disadvantages of


Participative Management
After having read lots of stuff about participative management and its implementation, lots of questions
arise in the mind of the reader. Is participative management really beneficial? What are the pros and
cons? What are the challenges involved in implementation? What effect does it have upon ROI, after all
change comes at a cost! These and lot more, I am sure. Continue reading for getting your answers.

Advantages of Participative Management


Undoubtedly participative approach to management increases the stake or ownership of employees. But
there is more to it. The following points elucidate the same.

Increase in Productivity: An increased say in decision making means that there is a strong
feeling of association now. The employee now assumes responsibility and takes charges. There
is lesser new or delegation or supervision from the manager. Working hours may get stretched on
their own without any compulsion or force from the management. All this leads to increased
productivity.

Job Satisfaction: In lots or organizations that employ participative management, most of the
employees are satisfied with their jobs and the level of satisfaction id very high. This is specially
when people see their suggestions and recommendations being implemented or put to practice.
Psychologically, this tells the individual employee that, he too has a say in decision making and
that he too is an integral component of the organization and not a mere worker.

Motivation: Increased productivity and job satisfaction cannot exist unless there is a high level of
motivation in the employee. The vice versa also holds true! Decentralized decision making means
that everyone has a say and everyone is important.

Improved Quality: Since the inputs or feedback comes from people who are part of the
processes at the lowest or execution level. This means that even the minutest details are taken
care of and reported. No flaw or loophole goes unreported. Quality control is thus begins and is
ensured at the lowest level.

Reduced Costs: There is a lesser need of supervision and more emphasis is laid on widening of
skills, self management. This and quality control means that the costs are controlled
automatically.

Disadvantages of Participative Management


There is a flip side to everything; participative management stands no exception to it. Whereas this style
of leadership or decision making leads to better participation of all the employees, there are undoubtedly
some disadvantages too.

Decision making slows down: Participative management stands for increased participation and
when there are many people involved in decision making, the process definitely slows down.
Inputs and feedback starts pouring from each side. It takes time to verify the accuracy of
measurements which means that decision making will be slowed down.

Security Issue: The security issue in participative management also arises from the fact that
since early stages too many people are known to lots of facts and information. This information
may transform into critical information in the later stages. There is thus a greater apprehension of
information being leaked out.

The advantages seem to outnumber the disadvantages. This however is no assurance that one should
blindly adopt it for his/her organization. Organizations are different and therefore the culture, the human
resources. A deep understanding of both is required in order to ascertain a decision making style and
adopt the same.

Reasons for Failure of Participative


Management
Participative management is an effective decision making tool. It is often the managers who implement it
the wrong way.
Participative management calls for a change and this change can not come overnight. You require
patience and consistency before employees realize the usefulness of the management style.
There are other problems that often arise with the managers. The problems may arise because of the
following:
1. Managers often view it as the ends and not as a tool.
2. There is confusion if whether participative management means democratization.
3. Managers sometimes manipulate the process for their own advantage.
Participative Management may fail because of the following reasons:

Resistance to Change: Participative Management calls for a change in the entire organizational
culture. Older employees specially resist change and do not welcome it. They take it as a device
to curtail their powers. Training is also not welcome.

Workers tendency to deviate: Managers must be aware of the tendency of the workers to try
spending more time formulating strategies than focus on job in hand. This needs to taken care of.
Again top level management may not support this style if they find existent inefficiencies.

One stop Solution: Participative management can not always be a one stop solution for every
problem. Often the manager needs to delegate or take a decision on his own without consulting
or seeking others advice. For example, cases where disciplinary action is needed do not qualify
for participative management.

Size of the Organization: This style of management can be more difficult to implement in
organizations that are big in size. Big size means that there are large numbers of management
layers. This often makes registering opinions and suggestions difficult. More difficult can be the
implementation of the same.

Abuse of Authority: Managers sometimes look upon their own jobs as a license instead as a
responsibility. They are unwilling to give away some authority to their subordinate which slows
down and chokes the process of decision making. Often such managers complain of being
overburdened with responsibilities. This fails the idea of participative management.

Misunderstanding Participation: This is yet another reason for failure of participative


management. Managers sometimes fail to understand that participative management is not the
same as delegating or distributing responsibility. They fail to realize that participative style also
involves considering the suggestions and recommendations of employees with respect and
dignity.

Participation is isolation can be of no use to the organization. It is a mere wastage of time and resources
then. Most of the organizations view it an end per se and not a mere tool. Once this happens then
participation can be used as an effective tool to problem solving.

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 sociopolitical 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 decisionmaking 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
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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, and 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,
o Participation must work as complementary body to help collective
bargaining, which creates
conditions of work and also creates legal relations.
o 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.
o 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.
o Authority should be centralized through democratic management process.
The participation
should be at the two or at the most three levels.
o 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
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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.
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.
(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
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.
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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.
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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 nonparticipative approaches. For
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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 Traditional Organization Empowered Teams
Organizational structure
Job design
Management role

Leadership
Information flow
Rewards
Job process
Layered, individual
Narrow, single task
Direct, control
Top-down
Controlled, limited
Individual, seniority based
Managers plan, control, improve
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
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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.
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Limitations of participation:
Technology and organizations today are so complex that specialized workroles 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.
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(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.
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This Text should be used as reference for MLFIR. Students should also go through
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(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. ShopFloor 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.
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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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COLLECTIVE BARGAINING
(II) (i) Meaning:
Collective bargaining is process of joint decision making and basically
represents a democratic way of
life in industry. It is the process of negotiation between firms and workers
representatives for the
purpose of establishing mutually agreeable conditions of employment. It is a
technique adopted by two
parties to reach an understanding acceptable to both through the process of
discussion and negotiation.
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 bargaining involves discussions and negotiations between two
groups as to the terms and
conditions of employment. It is called collective because both the employer
and the employee act as a
group rather than as individuals. It is known as bargaining because the
method of reaching an
agreement involves proposals and counter proposals, offers and counter
offers and other negotiations.
Thus collective bargaining:
is a collective process in which representatives of both the management
and employees participate.
is a continuous process which aims at establishing stable relationships
between the parties involved.
not only involves the bargaining agreement, but also involves the
implementation of such an
agreement.
attempts in achieving discipline in the industry
is a flexible approach, as the parties involved have to adopt a flexible
attitude towards negotiations.
Importance:
Collective bargaining includes not only negotiations between the employers
and unions but also
includes the process of resolving labor-management conflicts. Thus,
collective bargaining is, essentially,
a recognized way of creating a system of industrial jurisprudence. It acts as a
method of introducing
civil rights in the industry, that is, the management should be conducted by
rules rather than arbitrary
decision making. It establishes rules which define and restrict the traditional
authority exercised by the
management.
Importance to employees
Collective bargaining develops a sense of self respect and responsibility
among the employees.
It increases the strength of the workforce, thereby, increasing their
bargaining capacity as a
group.
Collective bargaining increases the morale and productivity of employees.
It restricts managements freedom for arbitrary action against the
employees. Moreover,
unilateral actions by the employer are also discouraged.

Effective

collective bargaining machinery strengthens the trade unions


movement.

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The

workers feel motivated as they can approach the management on


various matters and
bargain for higher benefits.
It helps in securing a prompt and fair settlement of grievances. It provides a
flexible means for
the adjustment of wages and employment conditions to economic and
technological changes in
the industry, as a result of which the chances for conflicts are reduced.
Importance to employers
It becomes easier for the management to resolve issues at the bargaining
level rather than taking
up complaints of individual workers.
Collective bargaining tends to promote a sense of job security among
employees and thereby
tends to reduce the cost of labor turnover to management.
Collective bargaining opens up the channel of communication between the
workers and the
management and increases worker participation in decision making.
Collective bargaining plays a vital role in settling and preventing industrial
disputes.
Importance to society
Collective bargaining leads to industrial peace in the country
It results in establishment of a harmonious industrial climate which supports
which helps the
pace of a nations efforts towards economic and social development since
the obstacles to such a
development can be reduced considerably.
The discrimination and exploitation of workers is constantly being checked.
It provides a method or the regulation of the conditions of employment of
those who are directly
concerned about them.
(II) (ii) Functions or Type of Activities:
A collective bargaining process generally consists of four types of activitiesdistributive bargaining,
integrative bargaining, attitudinal restructuring and intra-organizational
bargaining.
Distributive bargaining:
It involves haggling over the distribution of surplus. Under it, the economic
issues like wages, salaries

and bonus are discussed. In distributive bargaining, one partys gain is


another partys loss. This is most
commonly explained in terms of a pie. Disputants can work together to make
the pie bigger, so there is
enough for both of them to have as much as they want, or they can focus on
cutting the pie up, trying to
get as much as they can for themselves. In general, distributive bargaining
tends to be more competitive.
This type of bargaining is also known as conjunctive bargaining.
Integrative bargaining:
This involves negotiation of an issue on which both the parties may gain, or
at least neither party loses.
For example, representatives of employer and employee sides may bargain
over the better training
programme or a better job evaluation method. Here, both the parties are
trying to make more of
something. In general, it tends to be more cooperative than distributive
bargaining. This type of
bargaining is also known as cooperative bargaining.
Attitudinal restructuring:
This involves shaping and reshaping some attitudes like trust or distrust,
friendliness or hostility
between labor and management. When there is a backlog of bitterness
between both the parties,
attitudinal restructuring is required to maintain smooth and harmonious
industrial relations. It develops
a bargaining environment and creates trust and cooperation among the
parties.
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Intra-organizational bargaining:
It generally aims at resolving internal conflicts. This is a type of maneuvering
to achieve consensus with
the workers and management. Even within the union, there may be
differences between groups. For
example, skilled workers may feel that they are neglected or women workers
may feel that their
interests are not looked after properly. Within the management also, there
may be differences. Trade
unions maneuver to achieve consensus among the conflicting groups.
(II) (iii) Process of Collective Bargaining:
The collective bargaining process comprises of five core steps:
1. Prepare: This phase involves composition of a negotiation team. The
negotiation team should

consist of representatives of both the parties with adequate knowledge and


skills for negotiation.
In this phase both the employers representatives and the union examine
their own situation in
order to develop the issues that they believe will be most important. The first
thing to be done is
to determine whether there is actually any reason to negotiate at all. A
correct understanding of
the main issues to be covered and intimate knowledge of operations,
working conditions,
production norms and other relevant conditions is required.
2. Discuss: Here, the parties decide the ground rules that will guide the
negotiations. A process
well begun is half done and this is no less true in case of collective
bargaining. An environment
of mutual trust and understanding is also created so that the collective
bargaining agreement
would be reached.
3. Propose: This phase involves the initial opening statements and the
possible options that exist to
resolve them. In a word, this phase could be described as brainstorming.
The exchange of
messages takes place and opinion of both the parties is sought.
4. Bargain: negotiations are easy if a problem solving attitude is adopted.
This stage comprises the
time when what ifs and supposals are set forth and the drafting of
agreements take place.
5. Settlement: Once the parties are through with the bargaining process, a
consensual agreement is
reached upon wherein both the parties agree to a common decision
regarding the problem or the
issue. This stage is described as consisting of effective joint implementation
of the agreement
through shared visions, strategic planning and negotiated change.
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Collective bargaining consists of negotiations between an employer and a


group of employees that
determine the conditions of employment. Often employees are represented
in the bargaining by a union
or other labor organization. The result of collective bargaining procedure is
called the collective
bargaining agreement (CBA). Collective agreements may be in the form of
procedural agreements or

substantive agreements. Procedural agreements deal with the relationship


between workers and
management and the procedures to be adopted for resolving individual or
group disputes.
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(II) (iv) Pre-requisites for Collective Bargaining:

Employers recognition of the trade union.


Bargaining must precede other measures:
o Neither party should take any unilateral action.
o Results of bargaining should be awaited.
Employers and employees attitude calls for a change:
o The workers and the employers should be quite clear that they are not looking for

third party
intervention in the form of litigation and adjudication.
o They want to sort out their differences in a peaceful way.
Top priority to plant level bargaining:
o The representatives of the employees must have a firm resolution to have an
agreed solution to
their individual matters.
Negotiations on differences:
o Both the parties should negotiate on their points of differences or demands with
the sole purpose
of making an agreement.
Reliance on facts and figures:
o In order to make the negotiations result into success, the workers and the
management agents
must rely on facts and figures to substantiate their claims.
Giving up unfair labour practices.
Written agreement:
o The final decisions should be incorporated in a written agreement.
o The agreement should include the validity of the agreed matters as also the
frequency of its
review.
Progress review:
o Agreements should not be signed and forgotten.
o During their implementation, regular meetings should be held between the
representatives of
both the parties to watch the progress of the implementation. This way any
changes, adjustments
and amendments can be effected.
Respect of agreement:
o Both the parties must respect the agreement and see that it is implemented in a
fair and justifiable
manner.
Arbitration provision:
o The agreement must include an arbitration clause.

o Whenever the parties have any differences pertaining to the interpretation of the

terms and
conditions, the arbitration clause can be resorted to.
The Indian Scenario on CB:
In India, trade unions gained prominence much later only after 1900.
In 1918, Gandhiji - as the leader of the Ahmedabad textile workers advocated the
resolution of conflict
through CB agreements. But the idea gathered interest only after the Second World
War.
The Government of that time took steps like setting up of machinery for
negotiations, conciliation and
arbitration.
The trade union movement and also CB agreements became popular after Indian
independence. Moving
from agreements at the plant level, such agreements spread to industries such as
chemicals, petroleum,
tea, coal, oil and aluminum.
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In ports and docks, banking and insurance, collective agreements were arrived at,

right at the national


level.
Assessment of Collective Bargaining in India:
Other than in Ahmedabad and Mumbai, so far, collective agreements have not
made much headway in India.
Reasons:
o Lack of statutory recognition of unions by the country as a whole.
o Lack of provisions requiring employers and workers to bargain in good faith.
o The historical problem of lack of trust between the parties
Causes of limited success of CB in India:
Problems with unions:
o CB mainly depends on the strength of unions.
o Weak trade unions cannot initiate strong arguments during negotiations.
o Not many strong unions in India.
o Indian unions are bogged down by the problems of: multiplicity, inter and intraunion rivalry,
weak financial position and non-recognition.
So, unanimous decision is unlikely to be presented at the negotiating table.
Problems from Government:
o The Government has not been making any strong efforts for the development of
CB. Imposition
of many restrictions regarding strikes and lockouts has removed the `edge` of the
CB process.
Political interference:
o Interference of political leaders in all aspects of union matters has increased over
the years.
Almost all unions are associating themselves with some political party or the other.
Legal problems:

o Now that adjudication is easily accessible, the CB process is losing its importance.
Management attitude:
o In India, managements have a negative attitude towards unions.
o They do not appreciate their workers joining unions.

Suggestions for better functioning of CB:


The Indian Institute of Personnel Management has offered the following suggestions:
A progressive and strong management that is conscious of its obligations and
responsibilities to the
various stakeholders.
A truly representative enlightened and strong trade union should come into
being and should function
on strictly constitutional lines.
There should be unanimity between labour and management on the basic
objectives of the organization
and a mutual recognition of their rights and obligations.
When there are several units of the company, there should be a delegation of
authority to the local
management.
A fact-finding approach and a willingness to use new tools should be adopted for the
solution of
industrial problems.
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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 then intention of decisions that are taken in a participative atmosphere

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.

Clegg says, It implies a situation where workers representatives are, to some


extent, involved in the process of management decision making, but where the
ultimate power is in the hands of the management.

According to Dr. Davis, it is a mental and emotional involvement of a person in a


group situation which encourages him to contribute to goals and share
responsibilities in them.

Objectives of Workers Participation in Management


The objectives of workers participation in management are as follows:

To raise level of motivation of workers by closer involvement.

To provide opportunity for expression and to provide a sense of importance to


workers.

To develop ties of understanding leading to better effort and harmony.

To act on a device to counter-balance powers of managers.

To act on a panacea for solving industrial relation problems.

Gujarat High Court


Gujarat Kamdar Sahakari Mandal ... vs Ramkrishna Mills Ltd. on 7 April,
1994
The provisions of article 43A intended to herald industrial democracy and in the words
of Krishna Iyer J., it marks the "end of industrial bonded labour". The Constitutional
mandate is, therefore, clear that, the management of the enterprises should not be left
entirely in the hands of suppliers of capital, but the workers should also be entitled to
participate in it because in a socialist pattern of society the enterprise, which is the
centre of economic area, should be controlled not only by suppliers of capital but also
by labour, The workers, therefore, have a special place in a socialist pattern of society.
They are not mere vendors of toil. They are not a marketable commodity to be
purchased by the owners of capital. They are producers of wealth as much as
capital. They supply labour without which the capital would be impeded and they
are at the least equal partners with capital in the enterprise. It is in the light of the
aforesaid Constitutional philosophy, that the scheme which is put forward by the society
of workers is required to be approached.

Specific of Purpose of Workers' Participation


1. It helps in managing resistance to change which is inevitable. For the growth and
development of industry, changes have to be welcomed, otherwise the organization will
stagnate and be left behind. If the need for change is jointly felt by all partners of
production its acceptance can be high. Workers' participation in change strategy can
facilitate acceptable solutions with a view to secure effective and smooth
implementations of decisions.
2. Workers' participation can encourage communication at all levels. Since both
partners of production are involved in the decision-making there will be fewer changes
of distortion and/ or failure in communicating the decision.
3. Joint decision- making ensures the there will be minimum industrial conflict an
economic growth can be free form distracting strife.
4. Workers' participation at the plant level can be seen as the first step to establishing
democratic values in society at large.

Elements of Participation
The term participation has different meanings for different purposes in different
situations. McGregor is of the view that participation is one of the most misunderstood
idea that has emerged from the field of human relations. Keith Davis has defined the
term participation as the mental and emotional involvement of a person in a group

situation which encourages him to contribute to group goals and share responsibilities in
them. This definition envisages three important elements in participation. Firstly, it
means mental and emotional involvement rather than mere physical activity; secondly,
participation must motivate a person to contribute to a specific situation to invest his
own resources, such as initiative, knowledge, creativity and ingenuity in the objectives
of the organisation; and thirdly, it encourages people to share responsibility for a
decision or activity. Sharing of responsibility commits people to ensure the success of
the decision or activity.

Forms of Participation
Different forms of participation are discussed below:
Collective Bargaining: Collective bargaining results in collective agreements
which lay down certain rules and conditions of service in an establishment. Such
agreements are normally binding on the parties. Theoretically, collective
bargaining is based on the principle of balance of power, but, in actual practice,
each party tries to outbid the other and get maximum advantage by using, if
necessary, threats and counterthreats like; strikes, lockouts and other direct
actions. Joint consultation, on the other hand, is a particular technique which is
intended to achieve a greater degree of harmony and cooperation by emphasising
matters of common interest. Workers prefer to use the instrument of collective
bargaining rather than ask for a share in management. Workers participation in
the U.S.A has been ensured almost exclusively by means of collective
agreements and their application and interpretation rather than by way of labour
representation in management.
Works Councils: These are exclusive bodies of employees, assigned with
different functions in the management of an enterprise. In West Germany, the
works councils have various decision-making functions. In some countries, their
role is limited only to receiving information about the enterprise. In Yugoslavia,
these councils have wider decision-making powers in an enterprise like;
appointment, promotion, salary fixation and also major investment decisions.
Joint Management Councils and Committees: Mainly these bodies are
consultative and advisory, with decision-making being left to the top management.
This system of participation is prevalent in many countries, including Britain and
India. As they are consultative and advisory, neither the managements nor the
workers take them seriously.
Board Representation: The role of a worker representative in the board of
directors is essentially one of negotiating the workers interest with the other
members of the board. At times, this may result in tension and friction inside the
board room. The effectiveness of workers representative at the board depend
upon his ability to participate in decision-making, his knowledge of the company

affairs, his educational background, his level of understanding and also on the
number of worker representatives in the Board.
Workers Ownership of Enterprise: Social self-management in Yugoslavia is an
example of complete control of management by workers through an elected board
and workers council. Even in such a system, there exist two distinct managerial
and operative functions with different sets of persons to perform them. Though
workers have the option to influence all the decisions taken at the top level, in
actual practice, the board and the top management team assume a fairly
independent role in taking major policy decisions for the enterprises, especially in
economic matters.
Levels of Participation
Workers participation is possible at all levels of management; the only difference is that
of degree and nature of application. For instance, it may be vigorous at lower level and
faint at top level. Broadly speaking there is following five levels of participation:
1. Information participation: It ensures that employees are able to receive information
and express their views pertaining to the matters of general economic importance.
2. Consultative participation: Here works are consulted on the matters of employee
welfare such as work, safety and health. However, final decision always rests at the
option of management and employees views are only of advisory nature.
3. Associative participation: It is extension of consultative participation as
management here is under moral obligation to accept and implement the unanimous
decisions of employees.
4. Administrative participation: It ensure greater share of works in discharge of
managerial functions. Here, decision already taken by the management come to
employees, preferably with alternatives for administration and employees have to select
the best from those for implementation.
5. Decisive participation: Highest level of participation where decisions are jointly
taken on the matters relation to production, welfare etc. is called decisive participation.
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.

Workers participation in management includes following.

Workers participation in management provides a chance to employees in organisation's


decision making process.

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

The workers participation in the management is that the willingness to share the
responsibility and accept commitment by workers in executing decisions of management
with consultation of workers.

The workers participation is conducted through the mechanism of forums which provide
for association of workers representatives.

the idea behind worker's participation in management is to dole of self discipline and
control among workers and for the smooth running of management.

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.

Forms of Workers Participation in Management


The forms of workers participation in management vary from industry to industry and country to
country depending upon the political system, pattern of management relations and subject or
area of participation. The forms of workers participation may be as follows:
1. Joint Consultation Model
2. Joint Decision Model
3. Self Management, or Auto Management Scheme

4. Workers Representation on Board

1. Joint consultation model: In the joint consultation model the management consults with the
workers before taking decisions. The workers represent their view through Joint consultative
Committees. This form is followed in United Kingdom, Sweden and Poland.
2. Joint decision model: In this form both the workers and management jointly decide and
execute the decisions. This form of participation is followed in U.S.A. and West Germany.
3. Self management of auto management: In this model, the entire control is in the hands of
workers. Yugoslavia is an example to this model. Where the state industrial units are run by the
workers under a scheme called Self Management or Auto Management Scheme.
4. Workers representation on board: Under this method, the workers elect their
representative and send them to the Board to participate in the decision making process.
The workers participation in management maybe informal or formal. In the formal form of
workers participation in management takes the formal structures such as Works Committee,
Shop Councils, Production Committee, Safety Committee, Joint Management Councils,
Canteen Committee etc. The informal form of workers participation may be such as the
supervisor consulting the workers for granting leave, overtime, and allotment of worked or
transfer of workers from one department to another.
Employee welfare -Activities - Statuary welfare benefits - APPROACHES TO LABOUR
WELFARE

However, the [International Labour Organization] ILO at its Asian Regional Conference, defined
labour welfare as a term which is understood to include such services, facilities and amenities
as may be established in or in the vicinity of undertakings to enable the persons employed in
them to perform their work in healthy, congenial surroundings and to provide them with
amenities conducive to good health and high morale.
Welfare includes anything that is done for the comfort and improvement of employees and is
provided over and above the wages. Welfare helps in keeping the morale and motivation of the
employees high so as to retain the employees for longer duration. The welfare measures need
not be in monetary terms only but in any kind/forms. Employee welfare includes monitoring of
working conditions, creation of industrial harmony through infrastructure for health, industrial
relations and insurance against disease, accident and unemployment for the workers and their
families.
Labor welfare entails all those activities of employer which are directed towards providing the
employees with certain facilities and services in addition to wages or salaries.
Labor welfare has the following objectives:

To provide better life and health to the workers

To make the workers happy and satisfied

To relieve workers from industrial fatigue and to improve intellectual, cultural and
material conditions of living of the workers.

The basic features of labor welfare measures are as follows:

Labor welfare includes various facilities, services and amenities provided to workers for
improving their health, efficiency, economic betterment and social status.

Welfare measures are in addition to regular wages and other economic benefits
available to workers due to legal provisions and collective bargainin.

Labor welfare schemes are flexible and ever-changing. New welfare measures are
added to the existing ones from time to time.

Welfare measures may be introduced by the employers, government, employees or by


any social or charitable agency.

The purpose of labor welfare is to bring about the development of the whole personality
of the workers to make a better workforce.

The very logic behind providing welfare schemes is to create efficient, healthy, loyal and
satisfied labor force for the organization. The purpose of providing such facilities is to make their
work life better and also to raise their standard of living. The important benefits of welfare
measures can be summarized as follows:

They provide better physical and mental health to workers and thus promote a healthy
work environment

Facilities like housing schemes, medical benefits, and education and recreation facilities
for workers families help in raising their standards of living. This makes workers to pay
more attention towards work and thus increases their productivity.

Employers get stable labor force by providing welfare facilities. Workers take active
interest in their jobs and work with a feeling of involvement and participation.

Employee welfare measures increase the productivity of organization and promote


healthy industrial relations thereby maintaining industrial peace.

The social evils prevalent among the labors such as substance abuse, etc are reduced
to a greater extent by the welfare policies.

Facts [+]

India. The Factories act >> was enacted in the year 1948. The main objective of this law is to
maintain healthy, safety and welfare of every employee at workplace in factory . According to
this law any factory with above 500 workers should have separate welfare officer, factory with
1000 above workers should have separate safety officer, for 500 workers should have
ambulance facility and for above 250 workers canteen facility with concession should be
provided.

Employee welfare -Activities - Statuary welfare benefits - APPROACHES TO LABOUR


WELFARE
Industrial Relations

Industrial Relations
o

Causes & Effects of Poor Industrial Relations

Approaches to Industrial Relations

Collective bargaining
o

Principles of Collective Bargaining

Workers participation in Management


(The Constitution of India, Art 43A)
o

Levels and Forms of Workers Participation In Management

Employee welfare

Occupational health and safety


o

Occupational healthy and safety (Indian context)

Industrial Disputes

Strikes

Lockouts

Lay Offs / Laid off and Retrenchment

Labour Courts for disputes in India

Grievance procedure
o

Methods of Identifying Grievances

Alternative Dispute Resolution


o

Arbitration & conciliation

USA

Grievance Management

However, the [International Labour Organization] ILO at its Asian Regional Conference, defined
labour welfare as a term which is understood to include such services, facilities and amenities
as may be established in or in the vicinity of undertakings to enable the persons employed in
them to perform their work in healthy, congenial surroundings and to provide them with
amenities conducive to good health and high morale.
Welfare includes anything that is done for the comfort and improvement of employees and is
provided over and above the wages. Welfare helps in keeping the morale and motivation of the
employees high so as to retain the employees for longer duration. The welfare measures need
not be in monetary terms only but in any kind/forms. Employee welfare includes monitoring of
working conditions, creation of industrial harmony through infrastructure for health, industrial
relations and insurance against disease, accident and unemployment for the workers and their
families.
Labor welfare entails all those activities of employer which are directed towards providing the
employees with certain facilities and services in addition to wages or salaries.
Labor welfare has the following objectives:

To provide better life and health to the workers

To make the workers happy and satisfied

To relieve workers from industrial fatigue and to improve intellectual, cultural and
material conditions of living of the workers.

The basic features of labor welfare measures are as follows:

Labor welfare includes various facilities, services and amenities provided to workers for
improving their health, efficiency, economic betterment and social status.

Welfare measures are in addition to regular wages and other economic benefits
available to workers due to legal provisions and collective bargainin.

Labor welfare schemes are flexible and ever-changing. New welfare measures are
added to the existing ones from time to time.

Welfare measures may be introduced by the employers, government, employees or by


any social or charitable agency.

The purpose of labor welfare is to bring about the development of the whole personality
of the workers to make a better workforce.

The very logic behind providing welfare schemes is to create efficient, healthy, loyal and
satisfied labor force for the organization. The purpose of providing such facilities is to make their
work life better and also to raise their standard of living. The important benefits of welfare
measures can be summarized as follows:

They provide better physical and mental health to workers and thus promote a healthy
work environment

Facilities like housing schemes, medical benefits, and education and recreation facilities
for workers families help in raising their standards of living. This makes workers to pay
more attention towards work and thus increases their productivity.

Employers get stable labor force by providing welfare facilities. Workers take active
interest in their jobs and work with a feeling of involvement and participation.

Employee welfare measures increase the productivity of organization and promote


healthy industrial relations thereby maintaining industrial peace.

The social evils prevalent among the labors such as substance abuse, etc are reduced
to a greater extent by the welfare policies.

Facts [+]

India. The Factories act >> was enacted in the year 1948. The main objective of this law is to
maintain healthy, safety and welfare of every employee at workplace in factory . According to
this law any factory with above 500 workers should have separate welfare officer, factory with
1000 above workers should have separate safety officer, for 500 workers should have
ambulance facility and for above 250 workers canteen facility with concession should be
provided.

Employee Welfare Benefits Schemes

Organizations provide welfare facilities to their employees to keep their motivation levels high.
The employee welfare schemes can be classified into two categories viz. statutory and nonstatutory welfare schemes. The statutory schemes are those schemes that are compulsory to
provide by an organization as compliance to the laws governing employee health and safety.
These include provisions provided in industrial acts like Factories Act 1948, Dock Workers Act
(safety, health and welfare) 1986, Mines Act 1962. The non-statutory schemes differ from
organization to organization and from industry to industry.

Some of employee welfare Laws in India

Factories Act, 1948

Maternity Benefit Act,1961 (with latest amendments)

Employee State Insurance Act, [ESI] 1948

Employees' Provident Fund Scheme, 1952.

Payment of Bonus Act, 1965

Statuary welfare benefits


The statutory welfare benefits schemes include the following provisions:

1. Drinking Water: At all the working places safe hygienic drinking water should be
provided.
2. Facilities for sitting: In every organization, especially factories, suitable seating
arrangements are to be provided.

3. First aid appliances: First aid appliances are to be provided and should be readily
assessable so that in case of any minor accident initial medication can be provided to
the needed employee.
4. Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in
the office and factory premises and are also to be maintained in a neat and clean
condition.
5. Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to
provide hygienic and nutritious food to the employees.
6. Spittoons: In every work place, such as ware houses, store places, in the dock area
and office premises spittoons are to be provided in convenient places and same are to
be maintained in a hygienic condition.
7. Lighting: Proper and sufficient lights are to be provided for employees so that they can
work safely during the night shifts.
8. Washing places: Adequate washing places such as bathrooms, wash basins with tap
and tap on the stand pipe are provided in the port area in the vicinity of the work places.
9. Changing rooms: Adequate changing rooms are to be provided for workers to change
their cloth in the factory area and office premises. Adequate lockers are also provided to
the workers to keep their clothes and belongings.
10.
Rest rooms: Adequate numbers of restrooms are provided to the workers with
provisions
of
water
supply,
wash
ba
sins, toilets, bathrooms, etc.
11.
Maternity & Adoption Leave Employees can avail maternity or adoption
leaves. Paternity leave policies have also been introduced by various companies.
12.
Medi-claim Insurance Scheme: This insurance scheme provides adequate
insurance coverage of employees for expenses related to hospitalization due to illness,
disease or injury or pregnancy.
13.
Sexual Harassment Policy: To protect an employee from
harassments of any kind, guidelines are provided for proper action and also
for protecting the aggrieved employee. For more information go through
- Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013

NON STATUTORY BENEFITS


Many non-statutory welfare benefits may include the following schemes:
Big Business, Bad Suppliers

Walmart

Walmart workers in some supplier companies in Bangladesh, China, Indonesia, Nicaragua and
Swaziland were denied minimum wages and mandated health care and they were forced to
work overtime without compensation.

Apple Inc.

March, 2002: and Apple Company commissioned audit at Foxconn Electronics, with a big
presence in China, had documented violations like unpaid wages, excessive over time and low
salaries.

Sports goods major


the report said Adidas, Reebok, Nike and Puma were sourcing from companies whose workers
suffered seven working days a week, 16 to 18 working hours a day, sexual harassment of
women, and forced to do overtime without payment for over time.

Nestl USA

Its suppliers have been accused of child labour, repression of workers rights, and violation of
National health and in government the laws. In 2006, the International labour rights fund and
Birmingham-based law firm filed a class action suit against Nestl and some of its suppliers on
behalf of former child slaves.

source: the economic times

1. Personal Health Care (Regular medical check-ups): Some of the companies provide
the facility for ext
2. ensiv
e health check-up
3. Flexi-time: The main objective of the flextime policy is to provide opportunity to
employees to work with flexible working schedules. Flexible work schedules are initiated
by employees and approved by management to meet business commitments while
supporting employee personal life needs
4. Employee Assistance Programs: Various assistant programs are arranged like
external counseling service so that employees or members of their immediate family can
get counseling on various matters.

5. Employee Referral Scheme: In several companies employee referral scheme is


implemented to encourage employees to refer friends and relatives for employment in
the organization.

APPROACHES TO LABOUR WELFARE


Approaches to employee welfare refer to the beliefs and attitudes held by agencies which
provide welfare facilities. Some agencies provide welfare facilities inspired by religious faith,
others as a philanthropic duty and the like.
The various approaches to labour welfare reflect the attitudes and beliefs of the agencies which
are engaged in welfare activities. Welfare facilities may be provided on religious, philanthropic
or some other grounds. Moreover, the different approaches to labour welfare reflect the
evolution of the concept of welfare. In bygone days, the government of the land had to compel
the owner of an industrial establishment to provide such basic amenities as canteens, rest
rooms, drinking water, good working conditions, and so forth, for their employees. Such
compulsion was necessary because the employer believed in exploiting labour and treating it in
an unfair manner. But times have changed, and the concept of welfare, too, has undergone
changes. Many progressive managements today provide welfare facilities, voluntarily and with
enlightened willingness and enthusiasm. In fact, welfare facilities are not restricted to the
workers alone. They have now been extended to the society in general. In other words, labour
welfare has been extended to include social welfare. Tata Steel Works at Jamshedpur, for
example, spends Rs 10 crore each year on social welfare. Brooke Bond have set up a free
animal welfare clinic at Gevrai, Aurangabad, under the direct charge of a qualified veterinary
doctor. Jindal Aluminium, Bangalore, maintains the famous Naturopathy and Yogic Sciences
Centre and a public school for the benefit of the public. The Jindal Scholarship Trust has been
set up, under which deserving students are given scholarships. The Hindustan Machine Tools
has a big playground and a community hall, which are let out for competitions and functions.
A study of the approaches to labour welfare is desirable for the management, the workers and
the general reader. For the general reader, a study of approaches is essential because his/her
knowledge of the subject is incomplete without a knowledge of these approaches, and a
knowledge of approaches enables the manager and the worker to have a better perspective on
welfare work.

The approaches and their brief descriptions are:


1. The policing theory of labour welfare.
2. The religion theory of labour welfare.

3. The philanthropic theory of labour welfare.


4. The paternalistic theory of labour welfare.
5. The placating theory of labour welfare.
6. The public relations theory of labour welfare.
7. The functional theory of labour welfare.
8. The social theory of labour welfare.

Policing Theory
According to this view, the factory and other industrial workplaces provide ample opportunities
for owners and managers of capital to exploit workers in an unfair manner. This could be done
by making the labour work for long hours, by paying workers low wages, by keeping the
workplaces in an unhygienic condition, by neglecting safety and health provisions, and by
ignoring the provision of elementary human amenities, such as drinking water, latrines, rest
rooms and canteens. Clearly, a welfare state cannot remain a passive spectator of this limitless
exploitation. It enacts legislation under which managements are compelled to provide basic
amenities to the workers. In short, the state assumes the role of a policeman, and compels the
managers of industrial establishments to provide welfare facilities, and punishes the noncomplier. This is the policing theory of labour welfare.8

Religion Theory
The religion theory has two connotations, namely, the investment and atonement aspects. The
investment aspect of the religion theory implies that the fruits of today's deeds will be reaped
tomorrow. Any action, good or bad. is therefore treated as an investment. Inspired by this belief,
some employers plan and organise canteens and creches. The atonement aspect of the religion
theory implies that the present disabilities of a person are the result of the sins committed by
him/her previously. He/she should undertake to do good deeds now to atone or compensate for
his/her sins. There is the story of a big Jain employer who firmly held the belief that the
provision of welfare facilities for workers was outside the duties of the management. Whatever
he did provide was under government compulsion and supervision. It so happened, however,
that the children born to him died as soon as they were born. Later, his own health suffered. He
felt that, as a compensation, or expiration or even as an investment in a good deed (punyam),
he should liberally contribute to the creche in the factory (as well as to other child-welfare
institutions), and also to medical services for his workers. Consequently, in this particular
factory, there came to exist an excellent creche and a well-organised dispensary.9

Philanthropic Theory
Philanthropy means affection for mankind. The philanthropic theory of labour welfare refers to
the provision of good working conditions, creches and canteens out of pity on the part of the
employers who want to remove the disabilities of the workers. Robert Owen of England was a
philanthropic employer, who worked for the welfare of his workers. The philanthropic theory is
more common in social welfare. Student hostels, drinking water facilities, the rehabilitation of
crippled persons, donations to religious and educational institutions, and so forth are examples
of philanthropic deeds.

Paternalistic Theory
According to the paternalistic theory, also called the trusteeship theory, of labour welfare, the
industrialist or the employer holds the total industrial estate, properties and the profits accruing
from them, in trust. The property which he/she can use or abuse as he/she likes is not entirely
his/her own. He/she holds it for his/her use, no doubt, but also for the benefit of his/her workers,
if not for the whole society. For several reasons, such as low wages, lack of education, and so
forth the workers are at present unable to take care of themselves. They are, therefore, like
minors, and the employers should provide for their well-being out of funds in their control. The
trusteeship is not actual and legal, but it is moral and, therefore, not less real.

Placating Theory
This theory is based on the assumption that appeasement pays when the workers are
organised and are militant. Peace can be bought by welfare measures. Workers are like
children who are intelligent, but not fully so. As crying children are pacified by sweets, workers
should be pleased by welfare works.

Public Relations Theory


According to this theory, welfare activities are provided to create a good impression on the
minds of the workers and the public, particularly the latter. Clean and safe working conditions, a
good canteen, creche and other amenities, make a good impression on the workers, visitors
and the public. Some employers proudly take their visitors round the plant to show how well
they have organised their welfare activities.

Functional Theory
Also known as the efficiency theory of labour welfare, the functional theory implies that welfare
facilities are provided to make the workers more efficient. If workers are fed properly, clothed
adequately and treated kindly, and if the conditions of their work are congenial, they will work

efficiently. Welfare work is a means of securing, preserving and increasing the efficiency of
labour.

Social Theory
The social obligation of an industrial establishment has been assuming great significance these
days. The social theory implies that a factory is morally bound to improve the conditions of the
society in addition to mproving the condition of its employees. Labour welfare, as mentioned
earlier, is gradually becoming social welfare.

Occupational health and safety at workplace - legislation


Human resources professionals are assuming health, safety, and security responsibilities within
organizations. Such responsibilities include the identification of hazardous conditions and
practices, exposure control and mitigation strategies, legal compliance, development of a safety
culture, and measurement of health, safety and security program effectiveness.

Industrial Relations

Industrial Relations
o

Causes & Effects of Poor Industrial Relations

Approaches to Industrial Relations

Collective bargaining

Principles of Collective Bargaining

Workers participation in Management


(The Constitution of India, Art 43A)
o

Levels and Forms of Workers Participation In Management

Employee welfare

Occupational health and safety


o

Occupational healthy and safety (Indian context)

Industrial Disputes

Strikes

Lockouts

Layoff / Laid off and Retrenchment

Labour Courts for disputes in India

Grievance procedure
o

Methods of Identifying Grievances

Alternative Dispute Resolution


o

Arbitration & conciliation

USA

Grievance Management

Occupational health and safety is a cross-disciplinary area concerned with protecting the
safety, health and welfare of people engaged in work or employment. The goal of all
occupational health and safety programs is to foster a safe work environment. As a secondary
effect, it may also protect co-workers, family members, employers, customers, suppliers, nearby
communities, and other members of the public who are impacted by the workplace environment.
It may involve interactions among many subject areas, including occupational medicine,
occupational (or industrial) hygiene, public health, safety engineering,chemistry, health physics.
The Occupational Safety and Health Administration estimates the costs associated with
repetitive strain injury (RSI) to businesses to be between $15 billion and $20 billion per year in
the U.S. RSI in the workplace may be reduced by providing ergonomic workstation configuration
and by providing appropriate pointing devices, monitors and keyboards to computer users.
USA.The National Whistleblower Center was established in 1988 to improve environmental
protection, nuclear safety, and government and corporate accountability. Its primary goal is to
ensure that disclosures about government or industry actions that violate the law or harm the
environment are fully heard, and that the people who risk their careers to expose wrongdoing
are defended.

Definition
Since 1950, the International Labour Organization (ILO) and the World Health
Organization (WHO) have shared a common definition of occupational health. It was adopted
by the Joint ILO/WHO Committee on Occupational Health at its first session in 1950 and revised
at its twelfth session in 1995. The definition reads: "Occupational health should aim at: the
promotion and maintenance of the highest degree of physical, mental and social well-being of
workers in all occupations; the prevention amongst workers of departures from health caused by
their working conditions; the protection of workers in their employment from risks resulting from
factors adverse to health; the placing and maintenance of the worker in an occupational
environment adapted to his physiological and psychological capabilities; and, to summarize, the
adaptation of work to man and of each man to his job". This standard is based on the

methodology known as Plan-Do-Check-Act (PDCA)


Human resources professionals are assuming health, safety, and security responsibilities within
organizations. Such responsibilities include the identification of hazardous conditions and
practices, exposure control and mitigation strategies, legal compliance, development of a safety
culture, and measurement of health, safety and security program effectiveness.

Elements of Workplace Safety and Health


and legislation

Safety: Involves protecting employees from injuries due to work-related accidents.

Facts [+]
India. The Factories act 1948 >> was enacted in the year 1948. The main objective of this
law is to maintain healthy, safety and welfare of every employee at workplace in factory .
According to this law any factory with above 500 workers should have separate welfare officer,
factory with 1000 above workers should have separate safety officer, for 500 workers should
have ambulance facility and for above 250 workers canteen facility with concession should be
provided.
Occupational Safety and Health Act 1970 is the law of United States governs safety and
health of the employees working in factories or companies. This law prescribe safety and health
measures to be followed and implemented to ensure safety and healthy working environment
where employees are working especially in manufacturing places. United States gives emphasis
on mass production which is only possible only through use of high-level of machines where
ensuring safety of employee become must according to this law.
Occupational Safety and Health Act 1994 is the principle Act in Malaysia is "To make
provision for ensuring the safety, health and welfare of employees at working environment, for
protecting employees or workers against risks maintaining safety or health environment in
connection with the activities relating to manufacturing process and to establish the National
Council for Occupational Safety and Health.

USA. The Fair Labor Standards Act was passed in June 1938. The main objective of the law was
to establish minimum standards of living necessary for health, efficiency, and well being of
workers. A major provision of the act was the establishment of a minimum wage, initially 25
cents an hour, along with a maximum workweek of 44 hours. Child labor standards were also

enacted.
The United States Department of Labor is a Cabinet department of the United States
government responsible for occupational safety, wage and hour standards, unemployment
insurance benefits, re-employment services, and some economic statistics. Many U.S. states also
have such departments. The department is headed by the United States Secretary of Labor.
The Employment Standards Administration (ESA) is the largest agency within the U.S.
Department of Labor. The ESA enforces and administers a wide array of employment and labor
laws, such as wages and working conditions, child labor, overtime and family and medical leave,
equal employment opportunity, workers' compensation, labor unions, and employment
standards and practices.

TAIPEI: Foxconn Technology Group, the top maker of Apple Inc's iPhones and iPads whose
factories are under scrutiny over labour practices. Working practices at Foxconn's huge plants in
China came under intense scrutiny in 2010 after a series of suicides among young workers.
Last June three workers died in an explosion at a Foxconn plant in Chengdu, western China.
In Jan 2012 New York Times published an investigation into working practices at Apple
supplier's plants in China that documented poor health and safety conditions and long working
hours. In response Apple said the Washington D.C.-based Fair Labor Association would monitor
conditions at supplier plants.

The unintended costs associated with irregular schedules, night shifts and extended hours are
eroding the profits of American businesses, according to a study by Circadian Technologies, Inc.
The profit-eroding factors for businesses with shift operations include lower productivity, higher
absenteeism, greater employee turnover, increased health care costs, and more job-related
accidents.

The Bureau of Labor Statistics (BLS) is the government's principal fact-finding agency for labor
economics and statistics. The BLS is an independent national statistical agency that collects,
processes, analyzes, and disseminates essential statistical data to the American public,
Congress, other federal agencies, state and local governments, business, and labor.

According to the Bureau of Labor Statistics, the most dangerous jobs in America are: timber
cutters, fishers, pilots and navigators, structural metal workers, drivers-sales workers, roofers,
electrical power installers, farm occupations, construction laborers, and truck drivers.

On an average U.S. workday, 152 workers will lose their lives as a result of workplace injuries
and illnesses, and nearly 12,000 more will be injured. The workplace fatality rate has been cut
by nearly 78% since the passage of the Occupational Safety and Health Act (OSHA) in 1970.

Health: Refers to the employees freedom from physical or emotional illness.

Facts [+]
U.S. companies pay significantly higher employee health care costs in comparison to all other
industrialized nations. U.S. companies take two approaches to address the higher costs
associated with health care. They look for ways to reduce or eliminate health care costs through
changes in coverage levels. They also try to reduce the number of individuals covered by
eliminating jobs.

According to the Asthma and Allergy Foundation of America (AAFA), asthma costs nearly $14
billion in medical expenses and results in 14.5 million missed days of work for adults each year.
Based on factors such as the prevalence of asthma, outdoor air quality, and smoking laws,
AAFA identified the top three U.S. metro areas for the prevalence of asthma as Knoxville, Little
Rock, and St. Louis.

Safety programs may be designed to accomplish their purposes in two primary ways. The first
approach is to create a psychological environment and attitudes that promote safety. A strong
company policy emphasizing safety and health is crucial. The second approach to safety
program design is to develop and maintain a safe physical working environment.

Physical Conditions: Conditions resulting from the workplace environment that include
occupational diseases and accidents, such as:
o

Repetitive motion injuries

Back pain

Cancer Etc.

Psychological Conditions: Conditions resulting from the workplace environment that


result from organizational stress and low quality of working life. These include:
o

Dissatisfaction, withdrawal

Mistrust in others, irritability

Safety Programs
Today, it has become clear that optimal health can generally be achieved through environmental
safety, organizational changes, and different lifestyles.
a) Developing Safety ProgramsOrganizational safety programs require planning for
prevention of workplace accidents. Plans may be relatively simple or more complex and highly
sophisticated in order to fit the organizations size. Top managements support is essential if
safety programs are to be effective. Tremendous economic losses can result from accidents.
1.

Job hazard analysis: The main goal of safety and health professionals is to prevent
job-related injuries and illnesses.

2.

Employee involvement: One way to strengthen a safety program is to include


employee input, which provides workers with a sense of accomplishment.

Facts [+]

Software employees, More hours spent in front of computer screens is increasing incidents of
eye stress and strain. Suggestions for reducing eye strain include: reduce glare by positioning
computer monitors away from windows, position screens five to nine inches below line of sight,
use drops for dry eyes or contact lenses, take a 20-second break every 20 computer work
minutes.

b) Accident InvestigationAccidents can happen even in the most safety-conscious firms.


Each accident, whether or not it results in an injury, should be carefully evaluated to determine
its cause and to ensure that it doesnt recur. The safety engineer and the line manager jointly
investigate accidentswhy, how, and where they occur and who is involved. Main causes that
can create accidents at workplace are:

Chance occurrences

Unsafe working conditions

Unsafe acts by employees

Unsafe conditions
o

Physical conditions

Defective Equipment

Inadequate Machine Guards

Lack of Protective Equipment

Environmental conditions

Noise

Dust, Fumes

Stress

Unsafe behaviors

c) Evaluation of Safety Programsperhaps the best indicator that a safety program is


succeeding is a reduction in the frequency and severity of injuries and illnesses.
d) Rationale for Safety and Health TrendsFirms are spending an increasing amount of
money on safety. Reasons include; (1) profitabilityemployees can produce only while they are
on the job, (2) employee relationsfirms with good safety records can attract and retain good
employees, (3) reduced liabilityan effective safety program can reduce corporate and
executive liability, (4) marketinga good safety record may well provide companies with a
competitive edge, and productivity(5) an effective safety program may boost morale and
productivity while simultaneously reducing rising costs.

Coca- Cola Company Health & Welfare Facilities:

Medical (including vision), Dental, Accidental Death & Dismemberment, Group Life Insurance,
Dependent Life Insurance, Flexible Spending Accounts, Business Travel Accident Insurance,
Short-Term Disability, Long-Term Disability, Survivor's Benefits Program and an Employee
Assistance Program with confidential counseling services.

Ways to manage Safe and Healthy


environment in organization
To cope with physical hazards and other hazards such as stress, unsafe behavior, and poor
health habits, employers often design comprehensive safety and health programs. Among these
are safety programs, employee assistance programs, and wellness programs.
a. Safety Programs
A safe working environment does not just happen; it has to be created. The organizations with
the best reputations for safety have developed well-planned and thorough safety programs.
b. Employee Assistance Programs (EAPs)
EAPs are programs designed to help employees whose job performance is suffering because of
physical, mental, or emotional problems.
c. Wellness Programs
As health care costs have skyrocketed over the last two decades, organizations have become
more interested in preventative programs. A complete wellness program has three components:

It helps employees identify potential health risks through screening and testing.

It educates employees about health risks such as high blood pressure, smoking, poor
diet, and stress.

It encourages employees to change their lifestyles through exercise, good nutrition, and
health monitoring.

Facts [+]
Many organizations are using "wellness management" as a proactive approach to employee
health benefits. The emphasis is to identify preventable, long-term health problems that
represent significant medical expenses, with the goal of prevention versus treatment. Employees
with potential health problems work with health educators and coaches to plan and track their
health progress.

d. Smoking in The work place


Numerous studies have concluded that workplace smoking not only is hazardous to employees
health, but also is detrimental to the firms financial health. Increased costs of insurance
premiums, higher absenteeism, and lost productivity cost huge amount a year. These factors,
along with rising opposition from nonsmokers and widespread local and state laws, have
spurred many firms into action, and the trend continues.

Effective safety programs share the following features:

They include the formation of safety committee and participation by all departments
within the company. Employees participate in safety decision and management carefully
considers employee suggestions for improving safety.

They communicate safety with a multimedia approach that includes safety lectures,
films, poster, pamphlets, and computer presentations.

They use incentives, rewards, and positive reinforcement to encourage safe behavior.

They communicate safety rules and enforce them.

They use safety directors and/or the safety committee to engage in regular selfinspection and accident research to identify potentially dangerous situations, and to
understand why accidents occur and how to correct th em.

Policies to prevent workplace violence


Every organization should have a two-pronged policy in place to (a) prevent workplace violence
and (b) to deal with violent incidents when they occur. An HR manager's major responsibility is
to be certain that s election policies include careful screening and reference checking.
Furthermore, the HR manager should take the lead to enforce policies pertaining to the fair
treatment of employees. This may require training managers to recognize performance
problems, refer troubled employees for counseling, and apply disciplinary procedures
consistently.

Benefits of a Safe and Healthy Workforce

More productivity

Increased efficiency and quality

Reduced medical and insurance costs

Lower workers compensation rates and payments

Greater workforce flexibility