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Employee Involvement
UNIT 13 DESIGN AND DYNAMICS OF
PARTICIPATIVE FORUMS
Objectives
After going through this unit, you should be able to understand:
G the rationale behind the participation
G the issues involved in the participative forums; and
G the design and dynamics of participative forums
Structure
13.1 Introduction
13.2 Rationale for Participation
13.3 Issues Involved in Participative Forums
13.4 Designing Appropriate Participative Forums and Dynamics Involved in
Participation
13.5 Summary
13.6 Self-Assessment Questions
13.7 Further Readings
13.1 INTRODUCTION
Rapid industrial development and attainment of economic self reliance are the two
major tasks which the country among others has set out to accomplish. The key to
achieve these objectives is increased production. Output cant be increased unless
there is effective co-operation between labour and managment at all levels. The way of
ensuring this is to satisfy their social ad physiological need besides economic ones.
Workers participation in management is one of the most significant modes of resolving
industrial conflicts and encouraging among workers a sense of belongingness in
establishment where they work. It affords due recognition to the workers and enables
them to contribute their best in all round prosperity of the country in general and
industrial prosperity in particular. Moreover, India which has launched a vast
programme of industrialisation, the need for workers participation is all the more
important. It is in recognition of these needs that under the second, third, fifth and
seventh plans specific measures have been suggested for workers participation.
The last five decades are witnessed a striking development in the arena of workers
participation. Although the institution of workers committee consisting of the
representatives of employers and workmen was provided as early as 1947 which seeks
to promote measures for securing and preserving amity and good relations between
the employer and the workmen and to discuss day-to-day problem of the industry, the
scheme of Joint Management Council (JMC) popularly known as workers
participation in management, was introduced on voluntary basis only after over a
decade. However, the scheme of joint management council for various reasons could
not succeed. In order to meet this unhappy state of affairs and to secure greater
meassure of co-operation between labour and management to increase efficiency in
public service, the Government of India on October 30, 1975 introduced a scheme of
workers participation in management at shop floor and plant levels. In addition to
these, there are voluntary schemes of making the workers shareholders and Directors
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Design and Dynamics of
Participative Forums
in the Board of Management. The inclusion of the concept worker participation in
management in the directive principles of state policy through the Constistution
(Forty Second) Amendment Act, 1976 gave momentum to the institution of workers
participation in management. After the Constitutional Amendment the Central
Government expressed its intention to amend the 1975-scheme and provide for
effective participation of workers in production processes and accordingly amended
the scheme in January 1977.
13.2 RATIONALE FOR PARTICIPATION
The logic behind workers participation in management is to create an atmosphere
where workers and management feel closer to each other and work in Unions unison
to further the cause of development and prosperity of the nation. The feeling that the
factory system led to subordination, regimentation and rendered workers as mere
commodity for sale necessitated the exercise of self-government by those who are
entangled in its coils (Roberston & Dennison: 1961, p. 121). This clearly underlines
the need for workers participation and control in management. Regarding workers
participation in management, there are many schools of thought. But the following
three approaches are most common.
1) Behaviouralist and Human Relations Schools
The main arguments of the behaviouralist and human relations schools in favour of
workers participation are that: (i) in large complex organisations work is repetitive,
boring and alienating; (ii) these organisations also tend to block individual growth and
self-development leading to apathy, a wasting of humanabilities, and dysfunctional
activities such as strikes, work restriction and destructive competition; and (iii)
participation releases the creative abilities of the individual.
2) The Argument of Advocates of Industrial Democracy
The advocates of industrial democracy extend the concept of participation from
political democracy. They see an industrial organisation as a society in miniature; and
argue that the democratic principles can be applied to a great extent in an industrial
organisation. According to them, employees as important stakeholders have a claim to
the formulation of policies and the decision-making process.
3) The viewpoint of the Diehards (Radical sociologists and Marxists)
Following the classical Marxist approach, the diehards advance the argument that
as workers invest their lives in industries, toil and put everything, so they have a claim
for greater control over industries and their management. They must have the right to
share authority and power to manage. In other words, it is not so much workers
participation in management that they advocate but workers control by which it is
possible the establishment of working class centres of authority within the hostile
framework of capitalist society.
Thus power seems to be an underlying factor in all the three schools. The basic
difference in orientation between the protagonists of the human relations school and
the Marxist approach is that for the former, power equalisation is seen to lead to more
productive, efficient organisations as well as happier, better adjusted human beings.
For the Marxists, workers control would signify an important attribute of social
change.
What forms of Workers Participation are acceptable to the advocates of the above
three approaches?
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Employee Involvement
As indicated in Table 13.1 it will be easy to observe that those who accept the
rationale of the human relations school could remain content with some of the
manifest forms of participation. On the other hand, advocates of industrial democracy
would want some representation in the decision-making process of participative
forums (in consonance with the representative form of parliamentary democracy).
Table 13.1: Relationship of Rationale with Participative Form
Approach Focus Acceptable Forms/Forums of Participation
Behaviourist Power/Power Information sharing, consultation and
equalisation sharing of views.
Industrial Power/Some Providing representation to workers/unions
Democracy representation in the in the decision-making forums (Associative
policy-making decision Participation and Decisive Participation).
making process
Marxist Power/Workers control A participative forum where, at the very
Approach over industrials and their least, workers representatives (selected
management through direct worker election) can exercise
control in the decision-making process. In
the terms of form, parity is expected at all
levels of the decision-making process i.e.
from top to the grass root level.
For them the extent of representation and the degree of control are secondary issues.
The supporters of Marxist approach demand total control of the industry and its
management at all levels by the worker representatives who are selected through direct
worker elections (since the worker control goes beyond trade union representation).
13.3 ISSUES INVOLVED IN PARTICIPATIVE FORUMS
One of the important aspects of participative management is the issues involved in the
participative forums. Broadly speaking, the range of issues in any enterprise on which
decisions need to be taken from time to time can be classified into five major heads
safety and welfare issues, work-related issues (such as production on the shop-floor
or quality), sharing of gains (wages, incentives, allowances), production related
issues (product-mix, plant production targets, technology) and business policy
(expansion, contraction, pricing).
When an enterprise contemplates to introduce a scheme of participation, its choice of
the forms of participation that can be used to take decisions in respect of the above
mentioned issues largely depends on: (i) the degree of influence the workers have over
the management (as perceived by the management); (ii) the importance that the
management attaches to each of these issues, and (iii) managements perception
regarding the effectiveness of each of the forms of participation.
The various types of managements involvement with workers i.e., participative forms,
are: information-sharing, bargaining, consultation, associative participation and
decisive participation. The last two forms i.e., associative participation and decisive
participation are identified together as Participative form by some academicians.
These variations range along the degree of influence that the workers have over the
management.
The enterprises choice with regard to the forms of participation to take decisions in
respect of different issues can be represented as a matrix, with a possible
configuration as given in Figure 13.1.
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Design and Dynamics of
Participative Forums
Participation
Consultation
Bargaining
Information-
sharing
Forms Safety and Work Sharing of Production Business
Issues Welfare related Gains related Policy
Figure 13.1 Issues and Forms in Participation of Workers
The matrix represents a model of participation in an enterprise where safety and
welfare and work-related issues are determined through participation (associative and
decisive participation), sharing of gains is decided through bargaining, production
related issues are placed for consultation. Business policy is merely informed to
employees. This could become a model for a cautious management, and the success or
failure of these possibilities could be used to make a final decision on how far to
extend participation in terms of both depth and coverage.
Activity A
Explain the objectives of workers participation in management in any organisation
your are familiar with. How these objectives are successful in improving the workers
participation in management
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Issues covered in the Participative Forums in India
In order to assess the effectiveness of the participative forums from the perspective of
workers in the Indian context, we have to focus more on the issues involved in these
forums rather than on the structure of the forums and the participative forms adopted
by the enterprises to deal with the issues.
Table 13.2 gives a brief description of the participative forums introduced and the
forums proposed to be established and the main issues involved in these forums. From
the Table it is clear that the Governments intention has always been to improve
productivity and enhance production. The titles of the issues proposed to be covered
by the 1983 scheme and 1990 Bill appear to be interesting for, economic and financial
and personnel issues do figure in the lists. But when we analyse from the perspective
of workers, the specific issues that concern the workers most both in the economic and
social spheres do not figure in the issues proposed to be covered by the participative
forums envisaged in the scheme/Bill. Unlike the Works Councils and Supervisory
Boards of (West) Germany which have wide-ranging powers to co-determine such
issues like dismissal, retrenchment, re-training and re-deployment of workers arising
out of technological upgradation, the 1983 participative scheme and the 1990 Bill in
India allow workers to deliberate on matters like absenteeism, alcoholism and
gambling. Now, problems relating to absenteeism or women workers, even in worst of
times, do not affect over three-quarters of the workforce. Apart from the fact that
these are complex social problems, many workers do end up taking higher take-home
pay on account of overtime generated by absenteeism. In such circumstances, it will
not be difficult to surmise the degree of worker interest in such participative forums.
G G
G
G
G
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Employee Involvement
In contrast, issues like the introduction and consequences of new technology,
redundancy, manning levels, retrenchment, recruitment or dismissal, closure and such
matters that are of cardinal importance to workers find no mention in the scheme. But
these are the issues that workers are most concerned about. If it is argued that these
matters come under the purview of collective bargaining negotiations, then it must
also be acknowledged that participative forums only deal with those issues that have
tertiary interest to workers.
The inclusion of economic and financial matters is certainly an area having significant
consequences for workers lives and it is reasonable to expect workers to evince keen
interest on such issues. This interest is however likely to be contingent on two factors:
(i) the level of information supplied by management, and (ii) the extent to which
workers can utilise their participative rights in furthering their bread and butter
concerns.
Although the 1983 scheme and the 1990 Bill are more comprehensive, their primary
stress on productivity and profitability is unmistakable.
Actually, therefore, what the Supreme Court observed in 1960 about the role of works
committees can be extended to reflect the general status of participative bodies
operating in our country to this day:
the role assigned to these committees is only limited to promote measures for
ensuring and preserving amity and good relations between employers and
workmen; they are not authorised to take decisions on real or substantive
changes in the conditions of service (emphasis added).
The overwhelming concern of these participative bodies is therefore with production
and raising productivity levels. Any improvement in these areas would certainly be
beneficial to the organisation. In real times, the rewards of such a benefit would
accrue to the shareholders in terms of sustained or increased dividends, with senior
mangers likely to earn higher bonus and advancement. The workers on the other hand,
do not get any immediate benefit. Serious students of industrial relations would
perhaps agree that any increase in workers wages and benefits are more dependent on
their collective bargaining power as manifested in the long term agreement that the
union negotiates every three or four years. There is no evidence to suggest that with
improved financial health of an organisation, workers wages and benefits
automatically rise. In other words, workers are least likely to involve themselves in a
participative scheme where the resultant benefits accrue to other parties but not to
them. It is primarily because of this logic that trade unions demand sharing of
productivity gains that come about from enhanced worker involvement.
Table 13.2 : Issues involved in the Participative
Forums in India
Participative Forums Purpose/Issues Involved
1. Works Committees As per Sec. 3(2) of the I.D. Act, a works committee
(under the Industrial is required to promote measures for securing and
Disputes Act, 1947) preserving amity and good relations between the
employers and workmen, and in order to achieve the end,
to comment upon methods of common interest or concern
and endeavour to remove any material difference of
operation in respect of such matters. However, no
illustrative list of matters that are to be dealt by the works
committees is given in the Act.
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Design and Dynamics of
Participative Forums
The Indian Labour Conference (a tripartite body)
endorsed in 1961 the following list of matters proposed
by a tripartite committee (appointed by the ILC) which
the works committees should normally deal with: (i)
conditions of work such as ventilation, temperature,
lighting, etc.
(ii) committees such as drinking water, canteens, crches,
medical and health services, (iii) safety and accident
prevention; occupational diseases and protective
equipment, (iv) adjustment of festivals and national
holidays,
(v) administration of welfare and fine funds, (vi)
educational and recreational activities such as libraries,
reading rooms, sports, games, community welfare and
celebrations,
(vii) promotion of thrift and savings and (viii)
implementation and review of decisions arrived at
meetings of works committee.
2. Joint Management Purpose:
Councils (introduced i) Promoting increased productivity
in 1958) ii) Giving employees a better understanding of their
roles and their importance in the working of the
industry, and in the process of production.
3. The Participative Issues: Production and productivity; management of
Schemes of 1975, and waste reduction; absenteeism, safety, etc.
1977 (Voluntary schemes)
4. Employees Participation Issues:
in Management Scheme, i) Operational Areas like productivity quality
1983 (Voluntary scheme) and technological improvements, storage,
housekeeping and maintenance.
ii) Economic and Financial Areas- like reviewing
operating expenses, financial results, labour costs,
and market conditions.
iii) Personnel Matters like absenteeism, social security
schemes and special problems of common workers.
iv) Welfare Areas such as sports and control of
gambling, drinking and indebtedness.
v) Environmental areas
5. Participation of Issues: Same as that of the 1983 scheme.
Workers in
Management Bill, 1990
13.4 DESIGNING APPROPRIATE PARTICIPATIVE
FORUMS AND DYNAMICS INVOLVED IN
PARTICIPATION
In order to figure out the appropriate design of participative forums, one has to
analyse the dynamics involved in participation. A careful study of the functioning of
the participative forums in the Indian context indicates that the following dynamics are
involved in participation:
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Employee Involvement
1) Importance/ Inclusion of Substantive Issues in Participative Forums
As mentioned earlier in India, unlike in Germany substantial issues like the
introduction and consequences of new technology, manning levels, retrenchment,
recruitment or dismissal, closure and such other matters fall beyond the purview of the
participative forums. This is not to say that there was no attempt on the past of the
workers representatives to take up these in the participative forums. In fact,
in some organisations the workers representatives succeeded in taking up such
issues in the participative forums. But the management of these organisations
argued that those issues should genuinely fall under the purview of collective
bargaining and are, therefore, beyond the scope of participation. These managements
had gone to the extent of disbanding the participative forums that discussed the
substantive issues.
The argument of the managements does not see to be justified. As the ground realities
suggest, participative management and bargainable issues (substantive issues) that do
not add up to additional costs can go together. For instance, the issues like improving
productivity and cost cutting measures which are dealt by the participative forums are
the issues in respect of which managements negotiate (with the workers
representatives) in productivity bargaining. In view of the benefits that accrue to the
managements if they accept the inseparable linkage between participative management
and substantive issues which are bargainable in nature, it is suggested that the
organisations would do well to broaden the scope of the participative forums that are
at present existing and the forums that are about to be introduced in the organisations.
2) Power as an Integral Aspect
By invoking the concept of workers participation in decision-making, organisations
are actually altering the very balance of power that exists between the givers and
receivers of orders. At the very least, participative forums exalt the status of workers
to the level of managers, irrespective of the limited scope of the issues discussed and
the even more limited duration of time-span involved. But once these forums are
created, worker representatives would tend to retain the power that these bodies give
to them. Any attempt to alter this power relationship would be willy-nilly resisted by
the worker representatives.
As power is an integral aspect of participative forums, it is unwise for any
organisation to disturb the power that is given to the workers representatives.
3) Acquiring Legitimacy and Directive Authority
One of the dimensions of the power syndrome of these participative forums is their
tendency to acquire legitimacy. When the constitution of these bodies does not
specifically legitimise their existence and delineates the scope of their functioning,
such forums take on a sovereign-like role in legitimising their existence. In such
circumstances, it has been seen that one of the first acts of a participative forum is to
define its own scope and range of activities. Dimensions of power and the quest for
legitimacy make these participative bodies extend their scope of functioning to acquire
rule-making functions. They tend to legislate on new interaction pattern and reporting
system, set targets and even direct changes in workplace functioning. One of
the most effective ways to underwrite their legitimacy and rule-making powers
is for these bodies to seek compliance from executive organs. For, in the
ultimate analysis, the worth of these bodies will be judged by the extent to
which they have been able to not just emphasise their existence but underscore their
significance as well.
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Design and Dynamics of
Participative Forums
4) Impediments/hurdles to the Functioning of Participative Forums
There are many impediments to the functioning of the participative forums effectively.
Some of the most serious impediments in the Indian context are: (i) multiplicity of
unions and union rivalry; (ii) Employees and trade unions perceptions about the
schemes; (iii) lack of inadequate education and training among workers with regard to
certain aspects of participation; (iv) lack of specific arrangements for sharing the
gains of participation.
i) Multiplicity of Unions and Union Rivalry: Multiplicity of unions and the
consequent inter-union rivalry have been a serious obstacle in the way of the effective
functioning of the participative bodies. As such, organisations where this problem
prevails need to take care of the same lest the participative forums would not serve the
purpose for which they are actually meant. Through the recent amendment to the
Trade Unions Act, 1926 (the Trade Unions (Amendment Act), 2001), the Government
attempts to check the multiplicity of unions.
ii) Employers and Trade Unions Perceptions about the Schemes of
Participation: Many employees and trade unions in the country have considered and
many still consider the various schemes/forums of workers participation in the
country as having been imposed on them by the government. Experience has shown
that where the participative schemes have been the outcome of collective agreements,
they have been more successful. Any scheme of workers participation involves
attitudinal change, both for workers and employers, and as such, should be voluntary.
Its enforcement by law and compulsion would thwart the very purpose of the scheme
and would act as a serious constraint on its successful implementation.
iii) Lack of/Inadequate Education and Training among Workers with regard to
Certain Aspects of Participation: One of the impediments to the effective functioning
of the participative forums is the lack of/inadequate education and training among the
workers with regard to the content, process, utility and other relevant aspects of
participation. Therefore, the Central Board for Workers Education has started
undertaking special training and education programmes for promoting workers
participation in management in the country.
Thus, if an organisation really intends to make the participative forums effective, it
has to ensure that the workers of the organisation are educated (prior to the
introduction of participative bodies) about the content, process, utility etc. of
participation.
iv) 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. The
vague and remote expectations cannot be expected to enthuse workers. As
such, while introducing any participative scheme/forums any organisation
would do well to make a prior arrangement for sharing the fruits of participation.
Activity B
Bring out the causes for the limited success of workers participation in management
with reference to your own organisation or any organisation you familiar with.
Suggest measures to improve their performance.
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Employee Involvement
13.5 SUMMARY
In this unit we have briefly discussed the rationale for participation and outlined the
issues covered in the participative forums in India. It is noticed that the specific issues
in respect of which the workers are interested most such as scope for division-making
in such matters as retrenchment, recruitment or dismissal, closure and such other
matters, are not covered by the participative bodies in the country. We have attempted
to understand the functioning of the participative forums/schemes in the country in
order to provide practical hints as to the appropriate designing of participative
arrangements.
13.6 SELF ASSESSMENT QUESTIONS
1) Outline the rationale for workers participation in management.
2) State the issues involved in participative forums in India.
3) Briefly explain the functioning of the participative forums in India.
13.7 FURTHER READINGS
IGNOU, 1993. MS-24, Block 4, Unit-15, pp. 13-20.
Robertson, Dennis and Standby Dennison. 1961. The Control of Industry, James
Nisbet and Company.
Sen, Ratna. 2003. Industrial Relations in India Shifting Paradigms, Delhi:
Macmillan India Ltd.
Sinha, P.R.N, Indu Bala Sinha and Seema Priyadashini Shekhar. 2004. Industrial
Relations, Trade Unions and Labour Legislation, Delhi: Pearson Education Pvt. Ltd.
Government of India, Ministry of Labour, Annual Report, 1998, p. 25.
AIOE, Seminar of Workers Participation in Management, New Delhi, October
1987, p. 23.
Our analysis of the issues-forms matrix is largely based on the discussion made by
Sen (2003) on a somewhat similar matrix.
Srivastava, C.S. (2001). Industrial Relations and Labour Laws, Delhi: Vikas
Publishing House Pvt. Ltd.