WORKERS ’ PARTICIPATION

IN
MANAGEMENT
 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.
• Participation basically means- sharing the
decision-making power with the lower ranks of
the organization in an appropriate manner
• 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 hierarch with concomitant
assumption of responsibility.(International Institute
of Labour Studies)
• 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
Pa rticip a tio n re fe rs to in vo lve m e n t o f in d ivid u a ls o r g ro u p o f
in d ivid u a lfo r co m m o n p u rp o se . it w illb e e ffe ctive o n ly if th e re is
in te ra ctio n a m o n g in d ivid u a ls o r g ro u p s.
W o rke rs Pa rticip a tio n in m a n a g e m e n t re fe rs to th e e m o tio n a la n d
m e n ta lin vo lve m e n t o f a n e m p lo ye e to co n trib u te fo r th e g o a ls a n d
sh a re re sp o n sib ilitie s o f a n o rg a n iza tio n .

Pa rticip a tio n , in e ffe ct, re fe rs to th e in flu e n ce o f th e su b o rd in a te s

o ve r d e cisio n s ta ke n b y th e ir su p e rio rs. A su b o rd in a te ca n in flu e n ce
h is su p e rio r’ s d e cisio n s a t le a st in tw o w a ys : ( i) b y g ivin g su g g e stio n s
a n d id e a s fo r im p ro ve m e n t in w o rk -re la te d a re a s in th e fo rm o f jo in t
co n su lta tio n s ( ii) b y a ctu a lly p a rticip a tin g in th e d e cisio n m a kin g
p ro ce ss b e fo re a d e cisio n is ta ke n .

Three groups of managerial decisions affect the workers of

any industrial establishment and hence the workers must have
a say in it .
1 . Economic decisions – methods of manufacturing , automation ,
shutdown, lay-offs, mergers.
2 . Personnel decisions – recruitment and selection , promotions ,
demotions, transfers, grievance settlement, work distribution.
3 . Social decisions – hours of work, welfare measures , questions
affecting work rules and conduct of individual worker’s safety,
health, sanitation and noise control.
Collective Bargaining and Participative
Management : Difference
Collective bargaining refers to an institutional
arrangement where the representatives of the workmen
negotiate with the management on various “interest related”
issues relating to better wages, bonus, hours of work and
other service conditions with right to agree or disagree.

Participation is conceived as any process whereby

workers have a share in reaching of managerial decision in
enterprises. This process of share may be achieved through
such different methods and levels of participation as
collective bargaining, the appointment of worker directors,
consultation, autonomous work groups and particular styles
of management.
 Objectives of Workers participation in
management


Primary objective:
a)industrial harmony
b)sense of commitment
c)sense of belongingness
d)good communication skills
e)handles the resistance

Secondary objectives
a)Economical
b)Social
c)Psychological
 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.
• 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.
 Merits of Workers participation in
management
 a)Increase productivity
b)Increase efficiency of employee.
c)Establish industrial peace
d)Establish industrial democracy
e)Well being of individual
f)Personality development
g)Mutual understanding
h)Social well being
i)Welcome changes
j)Rapid industrialization


 Participation:
• 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.
 Scope and ways of participation:
• In practice, the participation of workers can take place by one or
all the methods listed below:
• Board level participation
• Ownership participation
• Complete control
• Staff or work councils
• Joint councils and committee
• Collective Bargaining
• Job enlargement and enrichment
• Suggestion schemes
• Empowered teams
• Financial participation
• Quality circles – This is a group of labour and management personnel
who belong to a single department, do same or similar work, meet
periodically to discuss manufacturing problems, analyze them and find
solutions to quality problems
• TQM - Total Quality Management is the management of quality, totally
and fully in all respects, small areas and all activities of organizations,
right from top to bottom. It aims at continuous improvement in
organizations and focuses primarily on total satisfaction of consumers,
both internal and external. The 3 terms required to make this concept:
– (1)Total- Everyone associated with the company is involved in
continuous improvement including customers and suppliers
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.
 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
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-
– 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.
• The government started persuading large enterprises to set up
joint consultative committees and councils at different levels.
The JanataGovernment who came to power in 1977 carried on
this initiative. In was again emphasized by the Congress
T h e n , th e 42nd Amendment to the Constitution w a s m a d e a n d
A rticle 4 3 -A re a d s: ‘ T h e S ta te sh a llta ke ste p s, b y su ita b le le g isla tio n ,
o r in a n y o th e r w a y , to se cu re th e p a rticip a tio n o f w o rke rs in th e
m a n a g e m e n t o f u n d e rta kin g s, e sta b lish m e n ts o r o th e r o rg a n iza tio n s
e n g a g e d in a n y in d u stry.’ Thus , participative management is a
constitutional commitment in India .
On May 30,1990; the government introduced the Participation of Workers
in Management Bill in the Rajya Sabha. 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.
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. 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.
Workers ’ Participation in Management in India - The
major course followed are :

Works Committees : Works committee is the first government

measure in the country in the area of participative management. The
system of works committees was introduced in the country with the
enactment of the Industrial Disputes Act, 1947. Section 3 of the Act
empowers the Central and State governments in their respective
jurisdictions to make general or special orders requiring the
employer to constitute a works committee in any industrial
establishment employing 100 or more workmen.

Joint Councils of Management : The Industrial Truce

Resolution, 1947, had recommended the formation of unit production
committees in industrial establishments for promoting the efficiency
of workers and improving production. The Industrial Policy Resolution
of 1948 also suggested the setting up of bipartite production
committees. A model constitution for a unit production committee was
prepared by the Central government in 1948 and steps were suggested to
enable the existing works committees to function as production
committees.
Other Governmental Approaches
1 . The Trusteeship Approach ( 1966 )
2 . Board Level Participation ( 1970 )
3 . Schemes of Workers ’ Participation in Industry at
the Shop floor and Plant Levels ( 1975 )
4 . Schemes of Workers ’ Participation in Management in
Large - scale Commercial and Service Organisations
( 1977 )
5 . Adding Article 43A in the Indian Constitution
6 . Verma Committee ( 1977 )
7 . Scheme for Employees Participation in Management
( 1983 )
8 . The Participation of Workers in Management Bill
( 1990 )
Hurdles in The Way of Workers ’ Participation
in India
The foregoing discussions reveal that ever since the
independence of the country, Government has been keen on
promoting workers’ participation in management in the country.
There has been a growing realisation in the country,
especially in the Government circles, that promotion of
workers’ participation would lead to increase in productivity
and would be helpful in maintaining industrial peace and
accelerating the pace of economic development. With the
adoption of planning as an instrument of economic and
industrial development, maintenance of cordial relations
between labour and management is considered all the more
desirable. To achieve these objectives, Government embarked
upon different programmesof workers’ participation at
different intervals of time, for example, Works Committee
(1947) Joint Management Councils (1977), Shop Floor and Plant
Councils (1983) and so on. However, experience has shown that
these schemes, which were launched so enthusiastically have
on the whole proved to be a failure. This has been supported
by the findings of the studies conducted in regard to their
Forms of Participation in Western Countries
A review of the existing literature confirms the extent of interest
on participative management in various countries under different
socio-economic systems. However, the research findings on various
facets of participation are not consistent. These are the objectives,
scope, processes, extent of involvement, as well as the outcomes in
terms of change in attitude and behaviour, motivation, commitment, job
satisfaction, efficiency productivity, turnover and profitability.
In the West, formal representative participation has taken the
following forms:
1. Joint Consultation
2. Joint Decision Making
3. Workers Control