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INTRODUCTION TO WORKER PARTICIPATION IN MANAGEMENT

Worker’s participation is a system where workers and management share information with each other and participate in
decision taking .Worker’s participation in management is an essential ingredient of industrial democracy. The concept of
worker’s participation is based on Human relation approach to management which brought about a new set of values of
workers and management.

Worker’s participation in management implies mental and emotional involvement of workers in the management of
Enterprise. It is considered as a mechanism where workers have a say in the decision-making. It is a process by which
authority and responsibility of managing industry are shared with workers.

In this project, you’ll discover wide range of skill and techniques that will help you to master the participation process .
You will learn how to balance gut feel with fairness. You‘ll discover how to see the best participation process for you.
(A) WORKER PATICIPATION IN MANAGEMENT:

CONCEPT OF WORKER’S PARTICIPATION IN MANAGEMENT:

At this stage , it will be interesting to know the meaning of management , worker , partipation ,and benefits of participation
,its extent degree ,scope , form ,stages ,levels.

 It provide scope for worker in decision-making of the management


 The participation may be at the shop level , departmental level or at the top level.
 The participation includes the willingness to share the responsibility of the management by the management .

1 . HISTORY:

The idea of worker’ participation arose in Europe , where collective bargaining has usually been at the branch
or industry level; this often left a gap of worker’s representation at the enterprise or plant level; which became
filled by bodies such as works councils , works committees , enterprise committees and so forth . Many
developing countries have also adopted legislative initiatives with a view to having works councils or similar
structures set up as a means of promoting worker- management. The relationship of these bodies to trade
unions and collective bargaining has been the subject of considerable legislation and negotiation.

Worker’s PARTICIPATION in Management is an essential ingredients of industrial democracy. The concept


of WPM is based on Human Relations approach to Management which brought about a new set of values to
Worker and Management.

Definitions:

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.”
Objectives of Worker’s Participation :

 To achieve industrial peace and harmony.


 To built the most dynamic Human Resources by develop internal motivation in the worker.
 To boost the morale of worker and satisfy the worker’s social and esteem needs.
 To raise the level of the worker production, productivity and product quality.
 To satisfy worker by making them feel , that they have their voice in the management.
 To give workers a better understanding of their role the working of industry.
 To develop better mutual understanding so that the workers do not resist a change for the betterment of the
concern (example – introduction of work study ).
 To minimize the number of grievances and therefore, industrial disputes.
 To make managing of the subordinates easy.

Scope of Worker’s Participation in Management :

Scope of workers participation ranges over three managerial decision-making stages.

Social Decisions: Hours of work, welfare measures, work rules, safety, health, sanitation and noise
control.

Personnel Decisions: Recruitment and selection, promotions and transfers, grievance settlements, work
distribution.

Economic Decisions: Methods of manufacturing, automation, lay off , shut-downs, mergers and
acquisitions and other financial aspect.

FORMS OF PARTICIPATION:
Different forms of participation are discussed below:

Participation through 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 counter
threats like; strikes, lockouts and other direct actions.
Participation through 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.

Participation through Suggestion Schemes:

Participation of workers can take place through suggestion scheme. Under this method workers are
invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion
box is installed and any worker can write his suggestions and drop them in the box. Periodically all the
suggestions are scrutinized by the suggestion committee or suggestion screening committee. The committee is constituted
by equal representation from the management and the workers. The committee screens various
suggestions received from the workers. Good suggestions are accepted for implementation and
suitable awards are given to the concerned
workers. Suggestion schemes encourage workers‟ interest in the functioning of an
enterprise.

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:

1. Profit linked pay

2. Profit sharing and Employees‟ Stock Option schemes.

IMPORTANCE OF WORKER‟S PARTICIPATION IN


MANAGEMENT:

Higher Productivity:

The increased productivity is possible only when there exists fullest co-operation between labour and
management. It has been found that poor labour management relations do not encourage the
workers to contribute anything more than the minimum desirable to retain their jobs. Thus
participation of workers in management is essential to increase industrial productivity.

Greater Commitment:
An important prerequisite for forging greater individual
commitment is the individuai’s involvement and opportunity to express himself.
Participation allows individuals to express themselves at the work place rather than being
absorbed into a complex system of rules, procedures and systems. If an individual knows that
he can express his opinion and ideas, a personal sense of gratification and involvement takes
place within him. I am sure you will agree that participation increases the level of
commitment and the employees start relating to the organization.

Reduced Industrial Unrest:

Industrial conflict is a struggle between two organized groups, which are motivated by the
belief that their respective interests are endangered by the self-interested behaviour of the
other. Participation cuts at the very root of industrial conflict. It tries to remove or at least minimize the
diverse and conflicting interests between the parties, by substituting it with cooperation,
homogeneity and common interests. Both sides are integrated and decision arrived at are
mutual rather than individual.

Improved Decisions:

I am sure that you will agree that communication is never a one way process, Also note that it
is seldom, if ever, possible for managers to have knowledge of all alternatives and all
consequences related to the decisions which they must make. Because of the existence of
barriers to the upward flow of information in most enterprises, much valuable information
possessed by subordinates never reaches their managers. Participation tends to break down
the barriers, and makes the information available to managers. To the extent such information
alters the decisions, the quality of decisions is improved.

Human Resource Development:

Participation provides education to workers in the management of industry. It fosters


initiative and creativity among them. It develops a sense of responsibility. Informal leaders
get an opportunity to reinforce their position and status by playing an active role in decision-making and
\by inducing the members of the group to abide by them.

ESSENTIAL CONDITIONS FOR EFFECTIVE WPM:

 The overall climate in the organization should be favourable to workers participation. There
should be an attitude of mutual co-operation, confidence, and respect for each other.
Management, in particular, should be genuinely receptive to the labour’s ideas so that
the latter can perceive that their ideas are useful.

 There must be effective system of communication and free flow of information


throughout the organization. Both labour’s representatives and management’s
representatives must be able to understand each other and express themselves without
any inhibitions. The whole idea after all is to be able to speak out one’s mind and listen to the
counter part’s point of view.

 The workers‟ representatives should have the ability such as intelligence and
knowledge, to participate. It is not appropriate to ask workers to participate in
technical aspects of the machinery; but they can participate successfully in problems
relating to their work. The contributions made by the workers should be worthwhile and
should benefit the workers in the long run. It should be in the interest of the management as
well.

 There must be sufficient time to participate before action is required; because


participation in emergent situations is hardly advisable. 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
of the participating bodies.

 Decisions taking by different participatory forums must be sincerely carried out in the
stipulated time. Participation must work as complementary body to help collective bargaining,
which creates conditions of work and also creates legal relations.

Method of Worker Participation in Management:

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.
 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.

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 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.

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 management’s intentions to a full share in decision-
making.

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.

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.

6. 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.

Prerequisites for Worker’s Participation in Management:


 Ample time must be given to participate before action is required. Participation may not be
appropriate in emergency situation.
 The financial cost of participation should not exceed the values, economic and otherwise, that
it produces.

 The participant should possess the abilities intelligences and knowledge so as to participate
effectively.

 The participant must be able to communicate in order to be able to exchange his ideas.

 No one (worker or manager) should feel that his position is threatened by participation.

 Participation for deciding a course of action in an organization can take place only within the
group’s area of job freedom.

Merits of worker’s participation in management:


 Mutual understanding:

The employees and employers nurture two different conflicting interests surprisingly both
lack the knowledge of the problems faced by them. Worker’s participation in
management brings both the parties together .The togetherness enables them to
understand eah other’s problem. This minimizes conflicts and promotes mutual
understanding.

 Efficiency of Workers increase:

The workers become the partner in decision making process. Whatever decisions are taken,
they are their own and hence to abide by them. They become enthusiastic and put lot of hard
work while working in increasing the overall efficiency of workers.

 Welcome Changes:

Some if not all the changes are resisted by the worker. But worker’s participation in
management helps in arriving at a unanimous decision whether to accept or reject any change.
The changes which bring more benefits than the costs incurred on them\, are accepted. Hence
the changes are welcomed by the workers.

 Personal Development:
Participation helps worker to express their creative instinct and they respond favourably to the challenges at
the workplace as regards performance of the job. They feel free in doing so. It is possible as participation brings
industrial democracy.
 Reduces misunderstanding:
Participation reduces misunderstanding regarding the management s outlook. This increase the organisation
balance.
Demerits of Worker’s participation:

 Workers are not enthusiastic:


The workers are not enthusiastic about the scheme and employers believe that they being incomplete cause
delay in decisions. Some of the good decision cannot be implemented for lack of support from the workers .
 Weak Trade Unions:
In India trade unions are not strong enough. There are multiplicities of trade unions and they are
dominated and led by political leaders. This makes trade unions weak. The cannot show solidarity
of workers. There should be one strong union so that they can elect competent representatives for
participation.

Limitations of Worker’s participation in Management:

 Technology and organization today are so complex that specialized work-roles are required.
 This means workers 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.
 Workers are unwilling to share power with the workers representatives.
 Managers consider participative management a fraud.

Feature of Worker’s Participation in Management:

 The main objective of worker’s participation in management is to achieve organizational effectiveness and the
satisfaction to the workers.
 It increase the scope of workers share of influencing in the decision-making process.
 The effectiveness distinction between the worker’s participation and collective bargaining in the sense that while
the worker’s participation is based on mutual trust, mutual problem solving and hearing and sharing where as
collective bargaining is based on power-play negotiations and tactics.
 It leads to promote mutual understanding between the management and worker leading to industrial harmony.
 It leads to creation of sense of commitment to the decisions among workers as they happened to be a party to the
process of decision-making.

Characteristics of Worker’s Participation in Management:

The following are the main characteristics of WPM:

 Participation implies practices which increase the scope for employees’ share of influence in

decision-making process with the assumption of responsibility.

 Participation presupposes willing acceptance of responsibility by workers.

 Workers participate in management not as individuals but as a group through their

representatives

 Worker’s participation in management differs from collective bargaining in the sense that

while the former is based on mutual trust, information sharing and mutual problem solving;

the latter is essentially based on power play, pressure tactics, and negotiations.

 The basic rationale tor worker’s participation in management is that workers invest their

labour and their fates to their place of work. Thus, they contribute to the outcomes of

organization. Hence, they have a legitimate right to share in decision-making activities of

organisation.

Evolution of Worker’s Participation in Management:

 With the outbreak of the First World War, an acute industrial unrest was experienced.
 Worker was largely regarded as a “Commodity of Commerce” and exploited to the
maximum in England, West Germany, France and USA.
 The main confirm of ideologists in advocating workers participation in Management was the
sharing of a part of management power with workers.
 Various research conducted at the Tavi stock Institute London revealed that autonomous
and cohesive work groups were more efficient and healthier.

Type of Worker’s Participation in Management:

I. Formal Participation:
Workers can participate in management through suggestion system, delegation and job
enlargement in which workers plan and decide their own work.

II. Informal Participation:


Typically at the work-group level where the foreman develops the opportunity for the
group of workers to take part in a problem-solving or decision- making.

Reasons for failure of worker’s Participation:

 Ideological differences between the employer and employees regarding the degree of
participation.
 Failure to imbibe the spirit of participation by the parties.
 Multiplicity of participative forums.
 Lack of strong trade unionism.
 Unhappy IR.
 Illiteracy of workers.
 Non co-operative attitude of the working class.
 Delays in the implementation of the decisions of the participative bodies.

Factors Influencing Worker’s Participation:

 Increased use of technology in industry necessitated the growing co-operation of workers


because of the complex operation of production.
 The changed view that worker are no longer servants but are equal partners in their effort
to attain organisation goals.
 The growth of trade unions which would safeguard the interest of workers and protect
them against possible exploitation by their employers.
Limitation of Worker’s Participation in Management:

 Technology and organization today are so complex that specialized work roles are required
for participation.
 There is no evidence that participation is good for everybody.
 Participative situation can be used to manipulate workers by management or trade union or
undercover cliques.
 Unwillingness of the worker has to share his power with the workers representatives.
 Perfunctory attitude of government towards participation.