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Participative Management refers to the process of involving employees or employee representatives at all levels of the decision making process. Participative Management is :
A process of involving those who are influenced by decisions, in making decisions Where everyone makes certain that everyone gets their needs met

The concept of Participative Management is closely related with the concept of industrial democracy. Participative Management means involving workers in the decision making process. Participative Management is based on the concept that when the worker invests his time and ties his fate to the workplace, he should be given an opportunity to participate in the decision making process of the management. The employee should be given an opportunity to express his views and due importance should be given to them by the management while framing policies. This concept was first developed in western countries and was very successful. Therefore, it has acquired world wide recognition and popularity.

It is not permissiveness. It holds people responsible. It is not weakness. It takes character to apply. It is not involvement in trivia. Only significant decisions should go through the process. It does not mean giving up authority. We delegate authority with matching amounts of responsibility and accountability. It does not mean giving up all decision making. We delegate

only the amount of decision making which is appropriate

under the circumstances. It does not mean postponing action. It should occur quickly and

avoid constant fixes.

Skills required for Participative Management :

Interest and concern Recognize and enhance talents in others Recognize and work around weaknesses in others

Communication, particularly listening

Conflict resolution Self control Negotiation

Synergy Teach ability Flexibility


Participation at the board level Participation through ownership Participation through complete control Participation through staff or works councils Participation through joint councils and committees Participation through collective bargaining Participation through job enlargement Participation through job enrichment Participation through suggestion schemes Participation through quality circles Empowered teams Total quality management Financial participation

Provides higher status to employees Employees are given a chance to participate in the decision making process of the organization. This empowers the employees.
Provides psychological satisfaction to employees Employees are allowed to express their views and their views are given due consideration. Management even frames some policies according to their expectations. Universally recognized concept Participative Management is followed and practiced in many countries. Brings employees and management closer Participative Management facilitates meaningful communication and ensures cordial relations. Beneficial to both parties Participative Management is beneficial to both parties; organization and employees. Through participative management, both the parties are satisfied.

Importance of Participation
Employees identify themselves with the work, which leads to
improved performance. Employees feel motivated since they are involved in management. This leads to self esteem, job satisfaction and cooperation of employees with management. It reduces conflict and stress, resulting in more commitment to goals and better acceptance to change. It results in better communication as people mutually discuss work problems.

Strong Trade Unions Existence of strong trade unions with creative & enlightened leadership is necessary for successful participation. Favourable attitude of Management The attitude of management should be progressive & democratic. Due importance should be given to employees views and suggestions. Clear Understanding of Objectives Employers & employees should have clear understanding of objectives of the participation. Participative management should not become a formality. Education & Training of Workers Employees & their representatives should have adequate technical, financial & managerial knowledge. Voluntary Participation desirable Participative management should be voluntary & not compulsory. Employees voluntary participation largely influences the success of participative management.

To give psychological satisfaction to workers

Cordial Labour Management relations Creating uniform approach of employers and workers To raise industrial production To create platform for direct negotiations To create responsible approach among workers To remove grievances of employees To create a feeling of involvement among employees To bring stability & prosperity to the business enterprise To introduce industrial democracy

Technology & 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 employees by management or trade union or undercover cliques Presence of feudalistic concept of master & servant prevalent in India leads to loss of interest on part of workers Trade unions indulge in politics & have little time to think about participative management Unwillingness of the employer to share his power with the workers representatives Perfunctory attitude of government towards participation

Employee empowerment is a technique of involving employees in their work through the process of inclusion. Empowerment encourages employees to become innovators and managers of giving them more control and autonomous decision making capabilities.
This concept refers to enlargement of an employees job responsibility by giving him the authority of decision without approval of his immediate supervisor. The decision can be big or small depending on the degree of power which the company wishes to provide to the employees. Further the employees are supported and encouraged to utilize their skills, abilities and creativity by accepting accountability for their work. This concept usually works when employees are adequately trained, provided with all the relevant information. 12

Accepts responsibility
Being active Boldness Creative Energetic Enjoys life Happy Healthy Imaginative Independent

Avoids taking responsibility

Being passive Timidity Conventional Lethargic Gets little joy out of life Depressed and miserable Many health problems Dull and unimaginative Dependent

Innovative Interesting Motivated Prepared to take risks Observant Satisfied with job Sensitive to subtleties Uses full potential Uses intelligence to the full

Sticks to routines Dull and boring Unmotivated Reluctant to take risks Unobservant Frustrated in job Non sensitive to subtleties Uses only fraction of potential Doesnt use full intelligence

Share Leadership Vision

Share Goals & Direction Trust People Provide Frequent Feedback Employee Evaluation & Assessment


Employees must be encouraged to take control of their work Environment must be receptive for employees with innovative ideas & encourage people to explore and take reasonable risks at reasonable costs

Employees must have access to a wide range of information

Employees should be held accountable for their behaviour towards others Culture of the organization should be open and receptive to change


Get the basics right by fully using current capability The idea is to empower people to the fullest extent of their current capability, within the scope of their current job/task.

Stretch people beyond their current capability to fulfill their full potential Enablers act as coaches to stretch people by delegation & empowerment slightly beyond their current limits.

Strengthen empowerment by creating commitment throughout the organization Foundation should be laid for a change of attitude & behaviour in the organization as a whole.


Collective Bargaining is the process whereby workers organize collectively and bargain with employers regarding the workplace. In a broad sense, it is the coming together of workers to negotiate their employment.
In the words of Jucious, Collective Bargaining refers to a process by which employers on the one hand & representatives of employees on the other, attempt to arrive at agreements covering the conditions under which employees will contribute & be compensated for their services.


Collective Bargaining allows both workers & managers to discuss specific terms that can, depending on national law : Determine the rules that govern their relationship Determine wages

Deal with other matters of mutual interest such as :

Hiring practices Layoffs and Promotions Working conditions and hours Work safety Worker discipline and termination Benefit programs

Group Action as Opposed to Individual Action Workers & managers collectively bargain for their common interests & benefits. They jointly arrive at an amicable solution through negotiations. Flexible & Mobile and not Fixed or Static It has sufficient flexibility, since no party can afford to be rigid in such situations. It is not a one way street but a give and take process.

Bipartite Process It is a mutual give & take rather than a take it or leave it method of arriving at the settlement of a dispute. Employers and employees negotiate the issues directly, face to face across the table. There is no third party intervention.
Continuous Process It does not commence with negotiations & end with an agreement. It is a continuous process which includes implementation of the agreement and also further negotiations. Dynamic & not Static The way agreements are arrived at, the way they are implemented, and the mental make up of parties involved keep changing. Power Relationship Workers want to gain the maximum from management, & 20 management wants to extract the maximum from workers.

Collective bargaining is a democratic method of regulating the terms & conditions of employment. It is a voluntary process without any third party intervention.
Collective bargaining leads to mutual understanding between the employers and workers.

Collective bargaining provides a flexible means of adjusting wages & conditions of employment to changes in economic, social, technological & political environment.
Under collective bargaining, basic standards are fixed and every worker knows that he cannot be required to work under conditions less favourable than those stipulated in the agreement. Collective bargaining facilitates better implementation of decisions due to the direct involvement of both the parties. Parties know that the decisions are their own & nobody has imposed them.

Since wages of the workers are pre decided under collective bargaining, hence there are no performance based wages. Indian Labour owing mostly to ignorance or illiteracy, is not capacitated with the responsibility to sit and discuss in the course of Collective bargaining. Collective bargaining lacks representation of the public interest at the bargaining table. When unions and companies agree on wage increase, it might cause rise in price; then the consumer will have to shoulder the full burden of their agreement. Collective bargaining leads to wage drift. Wage drift leads to higher wage costs for employers and higher inflation within the economy, which in turn leads to higher interest rates and 22 lower investment.

Conjunctive Bargaining Employers & employees try to

maximize their respective gains. Issues like wages & bonus are negotiated under conjunctive bargaining. The principle my gain is your loss & your gain is my loss is practiced in conjunctive bargaining.

Cooperative Bargaining Both parties realize the importance of

surviving in difficult times & are willing to negotiate the terms of employment in a flexible way.

Productivity Bargaining Workers wages & benefits are linked

to productivity. If they are able to exceed the standard productivity norms, they will get substantial benefits.

Composite Bargaining Labour not only bargains for wages but

also demands equity in matters relating employment levels, manning standards, etc. to work


Steps involved in the process of Collective Bargaining are :

Planning for Negotiations Employers and employees prepare a plan for discussing the complex issues and the broad range topics.
Identifying Bargaining Issues Different types of bargaining issues are identified during collective bargaining. Conducting Negotiations Demands of both the employer and employees are determined. Negotiation process continues until the final agreement is obtained. Accomplishing the Agreement It involves implementing and achieving that agreement. Passing the Agreement The agreement is examined and converted into a legal contract. Monitoring the Agreement It is ensured that the agreement is implemented according to the issues mentioned in it. 24

Trade unions should be made stronger & responsible so that they are able to honour the collective agreements. Government should encourage the parties to settle their disputes through negotiation consistent with public safety & social interest.

Compulsory adjudication of disputes should be used only as a last resort.

Workers should be educated so that they are able to build internal leadership and free unions from political control.

Both parties should develop a positive attitude towards each other. They should try to understand the viewpoints of the other side.
Collective bargaining should be restricted to matters concerning interests. Disputes concerning rights would be better settled through grievance machinery.


Changes in technology & its impact on employees Rules and regulations pertaining to work Grievances & grievance handling procedures Techniques & practices pertaining to work Wages & working conditions Transfer & promotions Incentive payments Discipline & disciplinary procedure Job security Employee benefits Recognition of employees unions Union activities & responsibilities Management rights


Weak Unions Indian unions are marked by multiplicity, inter & intra union rivalry, weak financial position and non recognition.
Problems from Government The regulatory framework covering industrial relations scene is quite tight, leaving no scope for voluntary bargaining. Legal Problems No attempt has been made by Government to simplify the multifarious laws covering labour management relations. Attitude of Management Employers do not appreciate the fact that unions have come to stay with almost equal bargaining strength. Employers Uncertainty about Who is the Recognized Bargaining Agent When there are multiple unions, bargaining with one union may be a tough battle.

Statutory Fixation of Conditions of Work Encouragement is given to wage boards, pay commissions, statutory fixation of other conditions of work and social security measures.
Political Interference Political parties interfere in the smooth functioning of the union.

A favourable political climate Government should remove all legislative restrictions which hamper collective bargaining.
Freedom of association It can be facilitated by leaving workers & employers free from associations as they please. Employees should be free to form trade unions as they are required to bargain with the employer on equal basis.

Stability of trade unions If a union is weak & unstable, employers will refuse to recognize it or negotiate with it. Union should exercise authority over its members & its membership should be sufficiently stable.
Recognition of trade unions Both employer & employees should give recognition to representative trade unions. Recognition improves industrial relations & this may react favourably on productions. Willingness to Give & Take One side should agree to reduce its demand on one item in return for some concession by the other side. Mutual Recognition & Respect Management has the right to manage & Union has the right to organize itself & fight for justice. This must be fully recognized and accepted by both sides. 28

Books :
Participative Management : Implementing Empowerment by Lorne C. Plunkett, Robert Fournier Collective Bargaining : Perspectives and Practices by B.R.Patil

Article :
Participative Management A motivation technique

Internet Websites :