PARTICIPATIVE

MANAGEMENT
NAMES ROLL NO
Payal Dave 525
Nehal Padalia 510
Krishita Sheth 560
Geeta Cheda 504
Aakansha Verma 545
Nikita Dodhia 554
Santosh Banerjee 511
 In its narrow sense, participative management
refers to the constitution of consultative councils
and committees, comprising representatives of
employees and employers, to recommend steps
for improving productivity, machine utilization,
job loading; for effecting savings in power, light;
for identifying lazy workers, safety, so on and so
forth.
 In its broad sense, employee participation

means associating representatives of

workers at every stage of decision making.

Participative management is considered as a

process by which the worker’s share in

decision making extends beyond the

decisions that are implicit in the specific

contents of the jobs they do. This, in actual

practice, amounts to the workers having a

 Economic objectives

Social objectives

Psychological objectives
 P.I.R.K.
Power

Information
Rewards
Knowledge

INVOLVEMENT=POWER X INFORMATION X REWARDS X

KNOWLEDGE
 www.mubeen

 Power to act and make decisions

about the work
in all its aspects

INVOLVEMENT=POWER X INFORMATION X REWARDS

XKNOWLEDGE
 www.mubeen

 Information about processes,

quality, customer feedback, events
and business results

INVOLVEMENT=POWER X INFORMATION X REWARDS x

KNOWLEDGE
 Rewards tied to business results and
growth in capability and contribution

INVOLVEMENT=POWER X INFORMATION X REWARDS X

KNOWLEDGE
 Knowledge of the work, the business,
and the total work system

INVOLVEMENT=POWER X INFORMATION X REWARDS X

KNOWLEDGE
 POWER w/o knowledge, info. & rewards = poor decisions

 INFORMATION & KNOWLEDGE w/o power = frustration

 REWARDS w/o power, knowledge & info. = frustration &

lack of motivation

 INFO., KNOWLEDGE & POWER w/o rewards = danger

 nothing will ensure people will exercise their power in ways that will
contribute to organizational effectiveness
 creating a sense of ownership in
the company
 motivates employees
 more receptive to change
 Improves performance
 Participation helps employees gain
a wider view of the organization.
 Creativity and innovation are two
important benefits of participative
management
 Better communication
Remove conditions
of powerlessness
•Changes
•Leadership
•Reward system
•job
Perception of
empowerment
•Competence
Performance
•High value
•Job meaning
•Increased use
Enhance job-related of talent
self-efficacy
•Job mastery
•Role models
•support
 Information sharing

Training

Employee decision making

Rewards
 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 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.
 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.
 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.
 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 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.
 Jointcouncils 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.
 Examples of such committees are welfare
committee, safety committee, etc.
 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.
 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.
 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.
 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.
 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.
 Training in problem-solving techniques is
provided to the members.
 QCs are said to provide quick, concrete,
and impressive results when correctly
implemented.
 Tried by BHEL, Mahindra and Mahindra, Godrej
and Boyce among others.
 Experienced mixed results:
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.
 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.
o Few circles survive beyond this limit either
because they loose steam or they face simple
problems.
 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
 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.
 They are empowered to share various management and
leadership functions.
 They plan, control and improve their own work processes.
 They set their own goals and inspect their own work.
 They often create their own schedules and review their
performance as a group.
 They may prepare their own budgets and co-ordinate
their work with other department.
 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.
 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.¬
o High quality costs more.
o Quality can be improved by inspection.
o Defects cannot be completely eliminated.
o Quality in the job of the QC personnel.
New principles of TQM are:¬
o Meet the customer’s requirement on time, the first time,
and 100% of the time.
o Strive to do error-free work.
o Manage by prevention, not correction.
o 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.
 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:
o Profit-linked pay
o Profit sharing and Employees’ Stock Option
schemes.
o Pension-fund participation.
 In the words of Tannenbaum R., and Massarik,
the term workers’ participation implies “a
formal method of providing an opportunity for
every member of the organization to contribute
his brain and ingenuity as well as his physical
efforts to the improvement of organizational
effectiveness”.
 According to Arun Monappa and Mirza
Saiyadain, the degree of influence that workers
are allowed to exercise, can be classified into
five levels — from the minimum to the maximum
degree of 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.
 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.
 Ashok Leyland
 Ashok Leyland (AL), the Indian
automobile major, whose performance
reached a peak in 1996-97 with a PAT of
nearly Rs. 125 crore, collapsed in 1997-
98. After two painful years, the company
regained its position of strength in 1999-
2000. What contributed to its
turnaround?
 Special attention was paid to employee morale
 made the workers aware of the situation so that they
knew what the management was looking at
 Quality Circle teams were very helpful at this juncture,
and the worker involvement made it easier to address
cost-cutting
 The collective motto: ‘There is always a better way’
 AL took everyone’s ideas into account, and figured out a
way to keep things going and reduce production without
having to inflict pain.
 Executives agreed to salary cuts, and the workers
agreed to half-weeks (four-day working schedules,
which were reduced to three days later on).
 employee involvement in AL’s manufacturing
processes started rising, with suggestions for
improvement coming in from all corners.
 And AL claims that the effort yielded a cost benefit
of Rs 1.8 crore, with recurring annual savings of Rs
2.5 crore to follow.
The power of genuine worker
participation.
THANK
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