Contents

Concept of Workers Participation ...................................................................................................... 2

Introduction ...................................................................................................................................... 2
Definitions......................................................................................................................................... 2
Objectives ......................................................................................................................................... 3
Importance........................................................................................................................................ 3
Essential condition for Workers Participation .................................................................................... 4
Scope and ways of participation (Forms) ........................................................................................... 5
Participation at the Board level...................................................................................................... 6
Participation through ownership ................................................................................................... 6
Participation through complete control ......................................................................................... 7
Participation through Staff and Works Councils ............................................................................. 7
Participation through Joint Councils and Committees .................................................................... 7
Participation through Collective Bargaining ................................................................................... 8
Participation through Job Enlargement and Job Enrichment .......................................................... 8
Participation through Suggestion Schemes .................................................................................... 8
Participation through Quality Circles.............................................................................................. 9
Empowered Teams ........................................................................................................................ 9
Total Quality Management .......................................................................................................... 10
Financial Participation ................................................................................................................. 11
Evolution of participative management in India............................................................................... 12
Workers' Participation at TISCO ....................................................................................................... 14

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Concept of Workers Participation

Workers Participation in Management is a system of communication and consultation, either

formal or informal, by which employees of an organisation are kept informed about the
affairs of the undertaking and through which they express their opinion and contribute to
management decisions.

It is industrial democracy in action based on the principles of equity, equality and

voluntarism. It is distribution of social power in industry so that it tends to be shared among
all who are engaged in the work rather than concentrated in the hands of minority.

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 worker’s 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 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

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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.

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
 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.

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  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.

Essential condition for Workers Participation

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.

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 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 handsalone, 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.

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

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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.
 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.

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.

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  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.

Participation through complete control: Workers acquire complete control of the

management through elected boards. The system of self- management 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.

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 management’s 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.

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.

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.

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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.

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.

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.

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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 non-participative
approaches. For 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:
o A way of overburdening workers, and
o An attempt to undermine their role.

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.

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Employees may feel more responsible, may take initiative in their work, may get more work
done, and may enjoy the work more.

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

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.

Total Quality Management: TQM refers to the deep commitment, almost obsession, of
an organization to quality. Every step in company’s 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 customer’s 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.

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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.

Limitations of participation:

Technology and organizations today are so complex that specialized work-roles 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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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
government’s 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 “non- statutory 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

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 establishment level. These councils will have equal representation of
employers and employees. Shop-Floor 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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