Industrial Democracy: Worker’s Participation in Management in India

Industrial Democracy: Worker’s Participation in Management in India!

One of the important requirements of industrial relation is industrial democracy. Worker’s participation in management (WPM) is essentially a step in promoting industrial democracy. This is the modem trend in industrial world both in developed and developing countries. This is a concept of extending democracy of political systems in government to the industries.

The form, structure and the content of WPM vary with social norms and nature of government in each country. WPM takes the shape of self- management, co-determination, worker director and joint management councils. Despite variation in interpretation, all agree that participation means sharing the decision making power between management and workers.

Participate may protect the interests of both parties. But more than this protection, participation is a system of checks and balances which prevents exploitations and provides equity and fairness. This requires great awareness, education and conceptual skill from both the parties, to make WPM, a success.

Industrial democracy through WPM achieves the following:

1. Performance of both groups is evaluated objectively.

2. Respect workers as free persons of equal value.

3. Rule of law and natural justice.

4. Discipline through self control and self direction

5. Morale, motivation and a sense of belongingness.

6. Productivity and high quality in work.

7. Better compensation.

In other words the objectives of WPM are as follows:

a. To enlighten and involve workers to know better about their role in meeting the organisational objectives.

b. To know about importance of productivity and quality aspects in sustenance and growth of the organisation.

c. To help improve the supervisor-worker relations and management union relations.

d. Involve workers in subjects like safety and environment care.

e. Assist in team building and HRD activities.

f. Develop a culture of self involvement to reduce vigilant supervision.

g. Improve employee pride, morale and integrity.

Level of Participation:

The following are the levels of participation listed in hierarchical ascending order:

(a) Informative Participation:

This is merely information sharing of major aspects like product mix, productivity, balance sheet etc. Workers are not allowed close scrutiny of accounts.

(b) Consultative Participation:

Here workers are consulted on such aspects like welfare, work methods, safety programmes. Worker’s body or joint councils can make recommendation. It is left to management to accept the recommendations or not.

(c) Associative Participation:

Here, the consultation is extended to more areas. In addition, management has a moral responsibility to implement recommendation made by joint councils.

(d) Administrative Participation:

Here, management having accepted the recommendations of joint councils refers alternatives of implementation plans or strategies for the consideration of the councils to suggest the best one. Here authority of decision making is delegated.

(e) Decisive Participation:

Here decisions are taken jointly by management and workers on all important matter concerning the firm. Here both are equally responsible and accountable for the success or failure based on such decision. This, in a true sense, is the sharing of “profits” and “pains”.

A number of analysis have shown that significant changes of human behaviour is possible rapidly if persons who are expected to change are allowed to decide “what” and “how” about such changes.

Limitations of Participation:

Participative management suffers from many limitations, these are:

1. Technology and organisations today are so complex that specialised work-roles are required, making it difficult for people to participate successfully if they go very far beyond their particular environment. This means that low-level workers can participate successfully in operating matters, but they usually have difficulty participating in policy matters.

2. Another issue is an employee’s right not to participate there is no evidence that participation is good for everybody. Many people do not want to be bothered with participation.

3. Another problem is that participative situations can be used covertly to manipulate employees. This manipulation is not necessarily done by the management. It may be by the union or by undercover cliques led by members skilled in group dynamics, the social engineers of consent.

4. The feudalistic concept of the master and the servant is still prevalent among industrial workers, especially in India. Workers have an innate feeling that they are born to serve and not to rule. Participative management, naturally, is of little interest to such workers.

5. The role of trade unions in promoting participative management is far from satisfactory. Most of the unions indulge in politicking and have little time to think about participation and development work.

6. The unwillingness of the employers to share power with the worker’s representatives, the disinterest of the workers and the perfunctory attitude of the Govt, towards participation act as strolling shocks in the way of promotion of participative management.

Pre Requisites for Successful Participation:

To make any of the participative methods successful, the following conditions have to be fulfilled:

1. The participants, namely, the management and the operatives, must have clearly defined and complementary objectives. The objectives of one party should not work at cross purposes with the objectives of the other party.

2. There must be a free flow of information and communication between the management and the workers. In this way, distrust and suspicion are avoided, and workers become responsible and mature when they discuss their problems with the management.

3. The representative of workers must be drawn from the workers themselves. The participation of outside trade union leaders should be discouraged.

This is necessary because the problems and difficulties of the workers are better understood by the workers themselves than by outsiders. Company workers can put across their points of view to the management with confidence.

4. Strong and effective trade unionism is necessary for the success of participative management. Politicisation and multiplicity of trade unions defeat the purpose of participation in management.

5. Worker’s education and training make a significant contribution to the purpose in working of participative management. Trade unions and the Govt can play a major and meaningful role in organizing and conducting training programmes.

6. Neither party should feel that their position is threatened by participation.

7. To make worker’s participation meaningful and purposeful, workers should be associated at all levels of decision making.

8. The success of participation depends on a suitable participative structure and a change of heart on the part of employers and employees, which may take a long time to develop. To expedite this development, some sort of legislative action is necessary.

9. There could be the danger of a major position of the resources of the enterprises being diverted to workers without much consideration for further investments. It may be desirable to reserve a certain percentage of the resources for re-investment, either through mutual agreement or legislation.

10. The financial cost of participation should not exceed the values, economic and otherwise, that come from it. Employees cannot spend all their time in participation to the exclusion of all other work.

Several schemes of participation have been introduced to give effect to the policy statements.

The following description gives a brief review of these schemes:

Works Committees:

Works committees deal with matters of day-to-day functioning at the shop floor level.

According to the Indian labour conference (1959) works committees are concerned with:

(a) Conditions of work such as lighting, ventilation, sanitation.

(b) Amenities such as drinking water, canteen, medical services.

(c) Safety and accident prevention, protective equipment.

(d) Adjustment of festivals and national holidays.

(e) Administration of welfare and allotted funds.

(f) Educational and recreational activities.

(g) Promotion of thrift and savings.

(h) Implementation and review of decisions arrived in the meetings of works committees.

The following items are excluded from the purview of the works committees:

(i) Wages and allowances

(ii) Profit sharing and bonus

(iii) Rationalisation and workload

(iv) Fixation of standard labour force

(v) Quantum of leave and holidays

(vi) Retirement benefits

(vii) Retrenchment and lay off

(viii) PF and gratuity

(ix) Housing and transport schemes

(x) Incentive schemes.

The progress of works committees has not been satisfactory due to the following reasons:

1. Lack of competence and genuine interest on the part of worker’s representatives.

2. Employers considered it below their dignity and status to sit along with blue collar workers.

3. Inter-union rivalries.

4. Undue delay and problems in implementation due to advisory nature of recommendations.

The national commission on labour suggested the following measures to make the works committees effective:

(a) Adequate support from trade unions.

(b) A more responsive attitude on the part of management.

(c) Proper communication and appreciation of the scope and functions of works committees.

(d) Proper co-ordination of the functions of the multiple bipartite institutions at the plant level.

(e) Union recognition of the works committees.

Joint Management Councils:

These councils were set up in 1958 consequent upon the acceptance of socialistic pattern of society. These consist of equal representatives of management and workers, not exceeding twelve, at the plant level in selected industrial units.

These units should have at least five hundred workers, should be a well established and strong central organisation of employees union and should have a record of good industrial relations. A JMC is expected to perform the following functions.

(i) The council is to be consulted by management before introducing changes in the modes of production schedule, general administration problems etc.

(ii) The council is to receive information, discuss and give suggestions on general economic situation, state of the market, production and meeting programmes, balance sheet and profit and loss accounts, plans for expansion, modernism and development.

(iii) The council is to take up accident prevention, management of canteens, water, meals, avoidance of time and materials waste, absenteeism and training programmes. Thus the council is entrusted with the responsibility of administering welfare measures.

In 1975 another scheme of participation was introduced. Under this scheme shop floor levels shop councils and plant level joint councils were to be set up.

Shop Council:

(a) Shop councils should consist of equal number of representatives from employer and employees in consultation with recognized union. Management must decide the number of shop councils.

(b) Decision of shop councils must be on consensus and not by voting. These decisions are to be implemented within a month.

(C) Tenure of shop council members are for two years. Councils must meet at least once a month.

(d) Chairmen of shop council must be the nominees of management and vice-chairman should be elected from amongst workers.

(e) Scope of functions is production, productivity, worker’s efficiency, absenteeism, welfare and safety, medical care.

Joint Council:

(a) Tenure is 2 years, meeting at least once in 4 months.

(b) Decisions are by consensus. These must be implemented in one month.

(c) Chief executive of unit will be the chairman. Vice- chairman is nominated by workers members of council.

(d) Scope: Productivity norm, resolve matters remaining unresolved in shop councils; meet production targets, optimum use of materials, health, safety and welfare.

WPM In India:

Participative management has been an integral part of the Indian labour policy. This is due to the emphasis on industrial democracy. That a number of legislative measures have been taken to provide necessary structure and form for managers and workers to interact with each other.

The purpose is as much to prevent the conflict as that of resolving the same with minimum bitterness. Several studies on WPM in India have concluded that participative forms of statutory and voluntary one have failed in Indian industries.

Some of the reasons are given below:

1. Mere introduction of participative structure does not ensure desired result.

2. Legislative measures or legalistic attitude has its own limitation.

3. Industrial environment is not quite conducive for effective WPM in India.

4. A great deal of misconception exist to differences in attitude and approach of persons at different levels of management and among union leaders on WPM. For e.g. some perceive WPM as a tool of management, while to some other WPM is a non-financial form of extending democratic practices to industry.

To a large number of union leaders WPM is a socialist alternative to the institutions for resolution of conflicts under capitalism.

5. Lack of clarity on the objectives of scheme and workable form of such participation.

In short a change of “mind set” is called for making WPM effective in India.

Labour Turnover:

Labour turnover is defined as “The rate of charge in the working staff of a concern during a definite period”. It represents movement of people in and out of an organisation. It signifies the quantum of existing people leaving the organisation and new people coming in.

Some of the reasons for turnover are:

(a) Better employment opportunities in terms of salary, work environment and facilities.

(b) Due to decline in company image, performance and orders position.

(c) Individuals getting higher skills and knowledge then getting better prospects elsewhere.

(d) Harassment in work, lack of promotion and motivation.

(e) Personal and family related reasons, health cause

(f) Abnormal growth of opportunities.

Impact of Turnover:

It is felt that some small percentage (approx 5%) turnover is good for organisation. This will help to infuse new talents and create healthy competition for existing employees. This also enables to bring in technology, methods and process of competitor companies. However if the turnover is high of 10-20%, then it does not speak well of a company.

It will have adverse effects as follows:

(a) Costs towards recruitment, selection process will be high.

(b) Extra training, development and adjustment time and costs will have to be incurred.

(c) Existing employees are well set. Sometimes new employees do not settle well. It will be a bigger problem if key position employees do not settle well.

(d) Team will get disturbed and sometimes this affects quality and quantity of output.

Preventive Measures to Reduce Labour Turnover:

It is not possible to totally curb the labour turnover. Effects however can be made to bring it down to a maximum level of below 5%. The most commonly followed preventive measures are non-monetary and monetary motivation. Next is the improved work environment and facilities.

Sometimes even small facilities like conveyance and subsidized lunch will take good care of unhappy employees. By spending little extra amount an organisation earns much more than that by way of employee’s loyalty, better equality and improved quantity of output.

A satisfied and loyal employee is always an asset to the company. Hence it is essential to retain such employees by trying to address the grievances if any. Normally monetary motivation takes care of most of the turnover problems.

Public Sector Vs Private Sector:

In last five decades it is observed in Indian Business environment that the labour turnover in PSUs is minimum (less than 5%) and more in private sector.

The reasons can be jotted down as under:

1. Public Sector:

a. No incentive for extra efforts and Innovations.

b. Job security is ensured.

c. Competitive spirit is poor.

d. More and less merited people treated equally.

e. Excess manpower makes them Easy going type.

f. Normally don’t change jobs due to complacency.

g. Satisfied with time-scale promotions.

h. Less enterprising.

2. Private Sector:

a. Extra efforts and innovations are rewarded.

b. Job is unsafe for poor performers.

c. Abundant scope for compe­titive employees.

d. More merited people get more rewards.

e. Less manpower keeps them either industrious or overworked

f. Change jobs in 3-5 yrs for better prospects.

g. Try to go up faster in organisation.

h. More Enterprising.

From above description we find the reasons why private organisations grow faster than the public sector organisations.

Theory and Practice of WPM:

In Indian conditions the efforts of WPM is more on papers and little in practice. The noble instincts of WPM is more practiced in PSE units and very little or negligible in private sector. The past experience shows that even after being inducted as committee members in decision-making bodies, the worker representative continues to behave like a union representative rather than commenting on merit of the cases.

The difference in educational level and growth of management category and labour category is so vast that the worker finds him inferior and cannot express his views. Worker representative will be too shy and inferior or opposing just to oppose.

Thus in Indian work environment WPM will take another ten years to be meaningful. The literacy level and thinking on organisation development has to grow more to make WPM more effective.

In view of the above facts some of the PSE units and private sectors name worker representatives in various committees but do not give any importance to their presence/absence in the meeting. Only formally of involving them is completed on records.