Workers’ Participation in Management | Industries | India

In this article we will discuss about:- 1. Introduction to Workers’ Participation in Management 2. Objectives of Workers’ Participation in Management 3. Forms 4. Factors 5. Pre-Conditions for the Success 6. Advantages 7. Progress of the Schemes 8. Suggestions for the Success.

Introduction to Workers’ Participation in Management:

Workers participation in management has been given several meanings and it has varied facets in practice. For example, management interprets it as the joint consultation prior to decision making; workers take it as equivalent to co-decisions and experts practically regard it as association of labour without the final authority or responsibility in decision-making.

However, without considering these various shades of the term, it is used here as a process of delegating authority and responsibility in the general arena of managerial functions. It is also considered as a forum for the communication and consultation (formal and informal) by which the employees are kept informed about the affairs of the concern and through which they (workers) put their opinion, suggestions etc. to contribute to management decisions.

A scheme of workers’ participation in management is devised to ensure effective consultation with workers on points which ultimately concern them. The notion make the workers’ feel that they have better understanding of the industrial process in which they take part and gives them a sense of direct participation in industrial decisions.

The workers must be increasingly associated with the management of industrial undertakings so that they develop an awareness of the problems of industry and begin to feel that they have positive contributions towards the goal of business organisation.

The principle of participation seeks to meet the psychological needs of the workers, brings them closer to the management, promotes their interest in self-education, gives them an insight into the economic and technical conditions and the purpose of the undertaking where they work and serves to bridge the gulf between the management and the workers.

The term ‘Workers’ Participation in Management’ has been given several meanings. However, it is a process in which the authority and responsibility of managerial functions are shared with workers also. It is a device of ensuring effective consultation with workers on the points that are related with them.

It is considered as a system of communication and consultation also by which the employees of an organisation are kept informed about the problems and progress of their organisations. Through this system, they express their opinion on the problems of their industry and thus, contribute to management decisions.

It has been defined as- V.G. Methstas, “The concept of participation means sharing the decision-making power by the rank and file of an industrial organisation, through their representatives, at all appropriate levels of management in the entire range of managerial actions.”

Being a human being every worker wants that his opinion and voice should carry some weight in the working and management of the enterprise in which he is working. Prof. F.S. Walpole has very rightly stated that “It is not a matter of man being accorded the privileges though an employee, of stating a complaint or offering a suggestion but of having a recognised responsibility for doing so because he is investing not money but life.”

Worker-management cooperation is not a new idea. It has been in practice in different countries in different forms. In some countries, the participation was practised as a legislative measure such as Belgium, France and Germany, while in some other countries like U.K. and Sweden it was practised as a voluntary step to set up joint bodies which had only an advisory status having no legal compulsion.

Even in India, the idea was evolved by Mahatma Gandhi on voluntary basis. He put up the concept of industrial democracy through village democracy.

Objectives of Workers’ Participation in Management:

Main object of workers’ participation in management is to achieve economic development with stability.

According to the draft of second five-year plan, the main object of this scheme is to develop mutual co-operation between labour management at the level of an enterprise so that:

(i) The productivity of the enterprise may be increased for the benefit of the employees, society and the enterprise itself,

(ii) Employees may be properly conveyed their role in the operation of industry,

(iii) Desire of employees of self-expression may be satisfied so that they may contribute the best of their ability towards industrial peace and harmony.

Important objects of workers’ participation in management are as under:

1. Social Objectives:

Social objectives of workers’ participation in management are:

(i) To reduce labour problems to the minimum,

(ii) To create healthy atmosphere in the enterprise,

(iii) To bring industrial peace,

(iv) To develop a spirit of mutual faith and co-operation in place of suspicion and rivalry between labour and management to one another.

2. Economic Objectives:

Economic objectives of workers’ participation in management are:

(i) To increase the production and productivity of the enterprise,

(ii) To increase the production and productivity of the workers,

(iii) To increase the earnings of workers,

(iv) To reduce the rate of absenteeism and labour turnover.

3. Psychological Object:

The main purpose of this system is to bring about a change in the attitude of the workers. Up till now, they regard themselves a machine only works when desired and asks for nothing. If workers are given due participation in management, they will think themselves part and parcel of the unit. This sense of loyalty can only be promoted through the changing attitude of employers towards labour.

This system will bring a basic change in the thinking of the workers. They shall put themselves in the production. Psychologically, workers will accept their responsibility in an activity because they feel themselves the partners in taking the decision on the matters concerning them and they will like to see it work successfully. Participation makes them a responsible employee.

4. Establishment of Industrial Democracy:

Workers’ participation in management helps in establishing industrial democracy in an enterprise. Both the workers and management realise their duties and responsibilities. They recognise and honour the achievements of one another.

Various Forms of Workers’ Participation in Management:

Workers may participate in management in various forms.

Following are the forms that are more important and common:

(1) Co-Partnership:

Under this scheme of workers’ participation in management, the workers purchase some shares of the company in which they are working. Thus, they become shareholders of their company. Being shareholders, they take parts in the process of decision-making and policy framing of their company by taking part in the meetings of the company at various levels. They may send their representatives to the board of directors and thus, they may participate in the internal matters of the company. In addition to this, they get a share in the profits of company as dividend.

(2) Appointments of Labour Directors:

Under this form of workers’ participation in management, one or two representatives of workers are nominated or elected as directors. These directors enjoy the same status, rights and power as other directors of the company. Such directors may be elected by workers or may be nominated either by trade unions or by the management.

This system has been successfully implemented in many countries of the world. In India also, this scheme is applied in nationalised banks. In these banks two representatives of employees are elected on the board of directors. One such director is from clerical staff and another from supervisory staff.

(3) Suggestion Scheme:

A very important form of workers’ participation in management is the suggestions scheme. Under this scheme, suggestions are invited from workers on various problems of the company. This scheme is more commonly adopted on the problems related with workers. It provides new and valuable suggestions to the management and increases the feeling of integration among workers’ with their enterprise.

(4) Joint Management Councils:

Under this system, joint consultative committees are set up comprising the representatives of the workers and the employers to discuss various matters concerning the working conditions of workers in industry. The decisions of such committees are purely of advisory character though management implements the decision because it is the outcome of the deliberations between the representatives of the management and the employees otherwise workers will lose their faith in management.

The matters which are to be settled through collective bargaining such as wages, bonus etc.—are excluded from the scope of the committees. The matters which are generally taken up by these committees are prevention of accidents management of canteens, water, meals, safety etc., issue and revision of work rules, avoidance of waste of time and materials absenteeism, indiscipline, training etc. Such committees may be formed on plant or shop level.

(5) Works Committees:

Establishment of works committees in establishment employing 100 or more workers were made compulsory by the Industrial Disputes Act 1947 to introduce the system of labour management participation through legislation. Such committees consist of equal number of representatives of workers and employer.

State Governments may, by general or special order, require the employer having 100 or more workers to constitute such works committees. The main purpose of such committees is to provide measures for securing and preserving amity and good relations between the employer and employees.

Factors Influencing Workers’ Participation in Management:

Several research studies have shown that the intensity of participation depends on four factors:

(1) Subject-Matter of Participation:

By and large, the workers’ interest in participation varies with the nature of issues involved in participation: Broadly speaking, there can be two types of issues: work-related and interest-related. Examples of work-related issues are safety, welfare, such as canteen, sports water-supply, housing, etc. These-are the simplest issues. Examples of interest-related issues are wages and sharing of productivity gains. These are the most difficult issues. Workers show greatest interest in the second type of issues.

(2) Personal Characteristics:

Workers’ interest in participation is also influenced by certain personal or group characteristics. For example, several research studies have shown that both very low and very high levels of task-relevant maturity discourage participation. Participation by extremely immature workers is like the blind leading the blind. It is pooling of ignorance. On the other hand, extremely mature workers rarely participate.

They resist “group think” because they prefer only the expert in an area to make the decisions. Thus, the effectiveness of workers’ participation, in management increases as one moves from low to moderate levels of maturity and then begins to plateau and finally to decline as workers become high in task-relevant maturity.

(3) Level of Participation:

Level of participation is another factor which determines the interest of workers in participation as such. Participation can take place at 3 levels in an enterprise—floor level, plant level and corporate level.

In big enterprises there may be a fourth level also i.e., the departmental level, in between the shop— floor and the plant. Studies have revealed that most workers desire participation at the shop-floor level and not at higher levels because they feel that with their knowledge of the work place they can contribute best at that level only.

(4) Extent of Participation:

There are four degrees of participation.

These are as follows:

i. Communication, i.e., sharing of information with the management about all decisions taken by it.

ii. Self-management, i.e. enjoying complete autonomy right from decision-making to execution.

iii. Consultation, i.e., exchanging the opinion and the views with the management before the decisions are taken.

iv. Co-determination, i.e., taking joint decisions with the management.

Pre-Conditions for the Success of Workers’ Participation in Management:

Workers’ participation in management is an attempt to get co­operation of workers in the achievement of organisational objectives. Since long, workers and managers have been considered as rivals to one another. Therefore, this task is not as easy to achieve as to think or to say. The efforts of getting workers’ participation in management can be successful only, if it fulfils some requirements.

These requirements are:

1. Efforts should be made to minimise irregularities and inequalities in the income of workers.

2. Working conditions should be improved so that the workers may work with maximum efficiency.

3. Efforts should be made to improve the living standard of the workers.

4. Assurance of stability of employment should be given to the workers so that they work with maximum concentration.

5. The workers should be given opportunities to express their problems and grievances.

6. The increase in profits of the enterprise should be shared with workers also.

7. Incentive wage system should be introduced so that the workers may be motivated to produce best results.

8. The system of employee counselling should be adopted.

9. The system of grievance handling procedure should be effective and smooth.

10. Workers should be given representation at all the levels of management to make them a part of main body.

11. The workers should be free to form their union or associations.

12. The industries should be managed and organised on the basis of cooperative spirit so that workers may contribute in capital also.

13. An atmosphere should be created of mutual faith and trust among the workers to create better understanding.

14. Adequate facilities of education and training should be provided to the workers so that the efficiency may be increased.

Advantages of Workers’ Participation in Management:

Most important outcome of great industrial revolution is the change in the approach of management towards workers. The workers no more considered as machines and slaves. Their feelings, ambitions, and emotions have been duly recognised by the management. The management has realised that the organisational objectives can be achieved only if the workers co-operate with them. Therefore, all the efforts are made to get their co-operation. Workers’ participation in management is an important device to get their co-operation.

The importance of this scheme can be explained as under:

1. Increase in Production and Productivity:

The scheme of workers’ participation in management helps in increasing the production and productivity of the enterprise. The workers co­operate in the achievement of organisational objectives and work with the best of their efficiency and ability. As a result of such co­operation of workers, the wastages are reduced to minimum and as a result of it, the production and productivity of the enterprise increase.

2. Mutual Faith, Trust and Understanding:

The scheme of workers’ participation in management established harmonious relations between labour and management. Both the parties try to understand the problems of one another. Both of them try to solve all the problems through mutual discussion and negotiating. It gives employees a better understanding of their place, and importance in the industry.

3. Morale of Employees:

The scheme of workers’ participation in management helps in increasing the morale of employees also. They feel that they are an important part of their organisations and their opinions and suggestions are duly recognised by the management. It increases their morale, which in turn increases the production in the enterprise.

4. Helpful in Establishing Industrial Peace:

Main cause of all the industrial disputes is the feeling of distrust among workers to their management and the management to the workers. The scheme of workers’ participation in management creates the atmosphere of mutual faith and trust between employees and employers. Thus, the possibility of industrial disputes is reduced to minimum and the atmosphere of mutual co-operation and co-ordination develops.

5. Establishment of Industrial Democracy:

The scheme of workers’ participation in management helps in establishing industrial democracy in the enterprise. It provides an opportunity to both the parties to come close and to establish direct contact between them. It minimises the possibility of external and political interference in industrial relations. Thus, this scheme is an exercise to bring industrial democracy in the country.

6. A Way of Self-Expression:

The scheme of workers’ participation in management is an important form of self-expression for the workers. It provides them an opportunity to express their feelings, problems, and difficulties before the management. Thus, it provides psychological motivation to them. It satisfies their ego, and inner-man. It also develops interest, enthusiasm and willingness among them to put their best efforts for the enterprise.

Progress of the Schemes of Workers’ Participation in Management:

The progress of various schemes of workers’ participation in management can be summarised as follows:

1. Joint Management Councils:

The scheme of establishing Joint Management Council was started in 1958 with a view to make the scheme of workers’ participation in management more effective. These councils were supposed not only to provide better working conditions to the workers but also to play an important role in the functions of management. But this was only 96 Joint Management Councils working in different industries.

Causes of slow progress of this scheme are:

(i) Differences in the selection of labour representatives,

(ii) Unsatisfactory state of industrial relations in most of the industries of the country,

(iii) Though terms and conditions of managers,

(iv) Indifferent attitude of workers,

(v) Indifferent attitude of managers.

2. Work Committees:

Industries Disputes Act, 1947 has made it compulsory that a work committee should be established in all the industrial enterprises employing 100 or more workers. By the end of 1992, 1,745 work committees were working in different industrial enterprises of the country.

These committees have not been very successful because of following reasons:

(i) The recommendations of these committees are of advisory nature only. The management is not bound to follow these recommendations.

(ii) The scope of these work committees has not been clearly and specifically determined,

(iii) Multiplicity of trade unions and mutual conflicts between these unions have also weakened these committees.

(iv) Indifferent attitude of management,

(v) Conflicts between the scopes of labour unions are work committees.

3. Joint and Shop Councils:

This scheme was implemented in 1975. In this scheme, a two-tier modal of workers’ participation in management has been provided—Shop Council at the level of industry and Joint Councils at the level of enterprise. This scheme has been implemented in 545 units of Central Government, 167 units of State Government, 9 units of co-operative sector and 1,171 units of private sector.

4. Workers’ Representation in Board of Directors:

The scheme of workers’ representation in board of directors was introduced with view to provide an opportunity to the workers to participate at high level of management. Under this scheme one or two representatives of workers are included in the board of directors of the enterprise.

These directors participate in all the meetings and proceedings of board of directors and thus, play an active role in the process of management and decisions making. But this scheme also could not be very successful. This scheme is being implemented only in the nationalised banks, and two of the public sector enterprises i.e., Hindustan Organic Chemicals Limited, and Hindustan Antibiotics Limited.

Causes of Slow Progress of Workers’ Participation in Management:

The scheme of workers’ participation in management has not been very successful in India so far. By and large, employers have not been very enthusiastic about the scheme of workers’ participation in management. There are many causes responsible for the slow progress of this scheme in our country.

Some of the important causes may be enumerated as follows:

i. The attitude of apathy and hostility of the employers and workers.

ii. Lack of the feeling of co-operation and co-ordination among workers.

iii. Only a few representatives of workers can participate in the process of management. Therefore, the management cannot get the benefit of the ability of all the workers.

iv. Defective leadership of labour unions.

v. Failure of the scheme in the enterprise in which it has been implemented.

vi. Lack of a strong and effective labour union and multiplicity of labour unions in most of the enterprises.

vii. Lack of co-ordination and unity among different labour unions.

Suggestions for the Success of Workers’ Participation in Management:

Following are the suggestions that may help in making the scheme of workers’ participation in management successful:

1. Re-Organisation of Labour Unions:

Labour unions should be re-organised so that these organisations may be more democratic. Stress should be on the leadership of these unions. Leaders of these unions must be from among the workers themselves and they must have positive and dynamic approach.

2. Declaration of a Specific Policy by the Government:

The very first suggestion to make the scheme of workers’ participation in management more successful is that the Government should declare a clear, specific and detailed policy in this regards, so that various schemes of workers’ participation in management may be co-ordinated and implemented effectively.

3. Recognition of Labour Unions:

The management should recognise the importance of labour unions in increasing the production and productivity of the enterprise. The management must realise that their plans, policies and programmes cannot be implemented successfully without active co-operation of these unions.

4. Changes in Traditional and Institutional System:

Traditional approach of management should be changed. Along with this, some changes are required in the institutional set up of the enterprise.

These changes are as follows:

(i) Work committees should be abolished;

(ii) Joint management councils should be converted into shop councils.

(iii) There must be uniformity in the duties, scope and procedure of joint management councils,

(iv) Production committees should be merged with joint management councils or shop management councils,

(v) Two-tier system of workers’ participation in management should be adopted in single plant enterprises and three-tier system should be adopted in multiple plant enterprises,

(vi) A national collective bargaining in all the enterprise of public sector.

Such committees may be established at industry or regional basis also.

5. Quick and Effective Implementation of the Scheme:

The schemes of profit sharing and co-partnership should be implemented quickly and effectively.

6. Arrangement for the Training of Workers:

There should be arrangements of providing training to both the employers and employees so that they may implement the scheme of workers’ participation in management effectively.

7. Measures to Get Co-Operation of Workers:

Various measures should be adopted in the enterprise to get the co-operation of workers. These measures may be taken by allotting—Reasonable share to the workers in the fruits of higher productivity of workers, fair wages, minimum inequalities in the income of workers, democratic supervision and effective communication etc.

8. Classification of Areas for Workers’ Participation:

It will be better if all the functions of an enterprise are classified for purpose of workers’ participation.

This classification may be as follows:

(i) Administrative area,

(ii) Decision area,

(iii) Counselling area,

(Iv) Communication participation area,

(v) Collective bargaining area,

(vi) Area of decision making exclusively by management.

In the words of Mahatma Gandhi, “Mutual relations of workers and employers should be based upon the feeling of welfare of one another and not upon the self. It should be based upon mutual co­operation and sympathy and not upon bargaining.”

Thus, it may be concluded that the interests of both the workers and employers are inter-dependent. They are to legs of a man with which he can walk; two hands with which he can work; two eyes with which he can see. Any plan or policy or programme can be successful only when both the workers and managers co-operate with each other.