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Workers Participation In Management

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The concept of WPM is a broad and complex one. Depending on the socio-political environment and
cultural conditions, the scope and contents of participation change.
International Institute of Labour Studies: WPM is the participation resulting from the practices
which increase the scope for employees’ share of influence in decision-making at different tiers of
organizational hierarchy with concomitant (related) assumption of responsibility.
ILO: Workers’ participation, may broadly be taken to cover all terms of association of workers and
their representatives with the decision-making process, ranging from exchange of information, consultations, decisions and negotiations, to more institutionalized forms such as the presence of workers’ member on management or supervisory boards or even management by workers themselves (as practiced in Yugoslavia).
The main implications of workers’ participation in management as summarized by ILO:
• Workers have ideas which can be useful;
• Workers may work more intelligently if they are informed about the reasons for and the
intention of decisions that are taken in a participative atmosphere

Workers Participation In Management

  1. 1. Team Members: Bishwajeet
  2. 2. <ul><li>Workers Participation in Management is a system of communication and consultation, either formal or informal, by which employees of an organisation are kept informed about the affairs of the undertaking and through which they express their opinion and contribute to management decisions. </li></ul><ul><li>It is industrial democracy in action based on the principles of equity, equality and voluntarism. </li></ul><ul><li>It is distribution of social power in industry so that it tends to be shared among all who are engaged in the work rather than concentrated in the hands of minority. </li></ul>
  3. 3. <ul><li>Thinkers like Comte and Owen advocated the participation of workers in management for achieving distributive social justice. </li></ul><ul><li>Karl Marx proposed complete control of the enterprise by workers and socialisation of the means of the production. </li></ul><ul><li>Marx wanted trade unions to be developed as an alternative for self-government. </li></ul><ul><li>Thinkers favoured guilds of all classes of workers should be controlled under a charter from the state. </li></ul><ul><ul><ul><ul><ul><li>continued…! </li></ul></ul></ul></ul></ul>
  4. 4. <ul><li>With the outbreak of the First World War, an acute industrial unrest was experienced. </li></ul><ul><li>Labour was largely regarded as a “Commodity of Commerce” and exploited to the maximum in England, West Germany, France and USA. </li></ul><ul><li>The main concern of ideologists in advocating workers participation in Management was the sharing of a part of managerial power with workers. </li></ul><ul><li>Various research conducted at the Tavistock Institute, London revealed that autonomous and cohesive work groups were more efficient and healthier. </li></ul>
  5. 5. <ul><li>Increased use of technology in industry necessitated the growing co-operation of workers because of the complex operations of production. </li></ul><ul><li>The changed view that employees are no longer servants but are equal partners in their effort to attain organisation goal. </li></ul><ul><li>The growth of trade unions which would safeguard the interest of workers and protect them against possible exploitation by their employers. </li></ul><ul><li>The growing interest of the Government in the development of industries and the welfare of the workers. </li></ul>
  6. 7. <ul><li>Collective Bargaining – Issues over which the interests of workers and management are competitive such as employment conditions, wage rates, working hours and the number of holidays are usual areas for collective bargaining. </li></ul><ul><li>Joint Administration, Joint decision-making or Consultation – Issues over which parties are equally concerned such as fund money, canteen, annual sports, workers welfare facilities, etc., </li></ul><ul><ul><li>The difference between Joint Administration, Decision Making and Consultation is very narrow in nature. </li></ul></ul>
  7. 8. <ul><li>Informative and Associative Participation - Right to receive information, discuss and give suggestions on the general economic situation of the concern. For example – </li></ul><ul><ul><li>The state of the market, Production and Sales Programmes </li></ul></ul><ul><ul><li>Circumstances affecting the economic position of the company </li></ul></ul><ul><ul><li>Long term plans of expansion and redeployment </li></ul></ul><ul><li>Consultative Participation – Involves a high degree of sharing of views of the members and giving them an opportunity to express their feelings. Members are consulted on matters such as – </li></ul><ul><ul><li>Welfare amenities </li></ul></ul><ul><ul><li>Adoption of New Technology and the problems emanating from it </li></ul></ul><ul><ul><li>Safety measures </li></ul></ul>
  8. 9. <ul><li>Administrative Participation – Involves a greater degree of sharing of authority and responsibility of the management functions. Members are given little for autonomy in the exercise of administrative and supervisory powers with regard to – </li></ul><ul><ul><li>The preparation of schedules of working hours, breaks and holidays </li></ul></ul><ul><ul><li>Payment of reward for valuable suggestions </li></ul></ul><ul><li>Decision Participation – Is the highest form of participation. The delegation of authority and responsibility of managerial function is maximum in matters like – </li></ul><ul><ul><li>Economic, Financial and Administrative policies the decisions are mutually taken </li></ul></ul>
  9. 10. <ul><li>In UK </li></ul><ul><ul><li>The Whitley Councils have been functioning since 1917 </li></ul></ul><ul><ul><li>Addition of Joint Consultation was made in 1947 </li></ul></ul><ul><ul><li>The management nominates it representatives while the representatives are elected through secret ballot </li></ul></ul><ul><ul><li>Free and Frank discussions take place on subjects such as – safety, health, welfare, training, etc., </li></ul></ul><ul><li>In France </li></ul><ul><ul><li>Works Committees and Joint Consultation started in 1945 under legal sanctions prescribing that all non-state organisations must have works committees if 50 or more workers are employed and workers delegates if 10 or more workers are employed </li></ul></ul><ul><ul><li>These bodies perform advisory and administrative functions by offering valuable suggestions on increasing production, fixing prices, etc., </li></ul></ul>
  10. 11. <ul><li>In 1920 Mahatma Gandhi had suggested that workers contributed labour and brains, while shareholders contributed money to enterprise, and that both should, therefore share in its prosperity. </li></ul><ul><li>The influence of Mahatma Gandhi bore fruit and for the first time Joint Consultation was adopted in the Cotton Textile Industry. </li></ul><ul><li>The first major step came during the enactment of Industrial Disputes Act, 1947. </li></ul><ul><li>The Industrial Policy Resolution had suggested that labour should be consulted in all matter concerning industrial production. </li></ul><ul><li>Further the scheme of Joint Management Council was formulated in 1957. </li></ul>
  11. 12. <ul><li>A Study Group on Workers Participation in Management , consisting of representatives of the Government, employers and workers was set up in 1956, it favoured the system of Joint Management Councils and submitted its report in 1957 emphasising – </li></ul><ul><ul><li>In India, an education campaign should be launched so that workers and managerial supervisory staff may realise the implications of such a scheme </li></ul></ul><ul><ul><li>The joint consultation should be “in-built” </li></ul></ul><ul><ul><li>Importance should be given to reorientation of attitudes, strong self-confident trade unions and good industrial relations </li></ul></ul><ul><ul><li>No compulsion should be applied, only permissive legislation be favoured in setting up the councils </li></ul></ul>
  12. 13. <ul><li>Sachar Committee – In June 1977, a high-powered expert committee on Companies and MRTP Acts was set up by the Government of India under the chairmanship of Rajinder Sachar. The terms of reference for the Committee were: </li></ul><ul><ul><ul><li>To consider the provisions of the Companies Act and MRTP Act </li></ul></ul></ul><ul><ul><ul><li>To suggest measures by which workers participation in the share capital and management of companies can be brought about. </li></ul></ul></ul><ul><ul><ul><li>Representation of Workers on Board of Directors </li></ul></ul></ul><ul><ul><ul><li>Workers participation in Share Capital </li></ul></ul></ul><ul><li>Varma Committee – Janata Government set up a committee in September 1977, under the chairmanship of Ravindra Varma. This committee also emphasised on Representation of Workers in Management but equity participation was recommended as optional. </li></ul>
  13. 14. <ul><li>Workers Participation in Management Scheme is in vogue in three forms: </li></ul><ul><ul><li>The Works Committee – set up under the Industrial Disputes Act, 1947 </li></ul></ul><ul><ul><li>The Joint Management Councils - set up as a result of the Labour-Management Co-operation Seminar, 1958 </li></ul></ul><ul><ul><li>The scheme for workers ‘Representative on the Board of Management (under the Management and Miscellaneous Scheme, 1970) on some public and private sector enterprises, including industrial undertakings and nationalised banks </li></ul></ul>
  14. 15. <ul><li>Joint Councils – At every division/region/zonal level or as may be considered necessary in a particular branch of an organisation/service 100 or more people, there shall be a joint council. </li></ul><ul><li>Features – </li></ul><ul><ul><li>Each organisation/service shall decide the number of councils to be set up for different types of services </li></ul></ul><ul><ul><li>The tenure of the council shall be two years and every decision shall be on the basis of consensus </li></ul></ul><ul><ul><li>The joint council shall meet whenever necessary, but at-least once in a quarter </li></ul></ul><ul><li>Functions – </li></ul><ul><ul><li>Settlement of matters which unresolved by unit level councils </li></ul></ul><ul><ul><li>Review of the working of the unit level council for improvements in customer service </li></ul></ul><ul><ul><li>Development of skills of workers and adequate facilities for trading </li></ul></ul><ul><ul><li>Improvement in the general conditions of the work and preparation of schedules of working hours and holidays </li></ul></ul>
  15. 16. <ul><li>Unit Councils – Encouraged by the success of Joint Councils scheme in manufacturing and mining units, Unit Councils was set up on 5 th January, 1977 in commercial and service organisation in public sector. </li></ul><ul><li>Features – </li></ul><ul><ul><li>Representatives of workers and management of the organisation/service, employing 100 or more workers, may be formed in each unit to discuss day-to-day problems and find solutions </li></ul></ul><ul><ul><li>Every unit council shall consist of an equal number of representatives of the management and workers. Management representatives should consist from the unit concerned </li></ul></ul><ul><ul><li>The Council shall meet once in a month and the decision of a unit council shall be the parties concerned </li></ul></ul><ul><li>Functions – </li></ul><ul><ul><li>To create conditions for achieving optimum efficiency, better customer service </li></ul></ul><ul><ul><li>To study absenteeism problem and recommend steps to reduce it </li></ul></ul><ul><ul><li>To eliminate pilferage and all forms of corruption and to institute a system of rewards for this purpose and to recommend and safety, health and welfare measures with two-way communication </li></ul></ul>
  16. 17. <ul><li>Plant Council – The plant council is formed in pursuance of the recommendations of the second meeting of the Group on Labour at New Delhi on 23 rd September 1985. The scheme is applicable to all Central public sector undertakings, except specific exemption given by the Government. </li></ul><ul><li>Features – </li></ul><ul><ul><li>One plant council for the whole unit and each plant council should consist of not less than 6 and not more than 18 members </li></ul></ul><ul><ul><li>Its tenure shall be for a period of three years </li></ul></ul><ul><ul><li>The council shall meet at at-least once in a quarter </li></ul></ul><ul><li>Functions – </li></ul><ul><ul><li>Functions are based on </li></ul></ul><ul><ul><ul><li>Operational Areas </li></ul></ul></ul><ul><ul><ul><li>Economic and financial areas </li></ul></ul></ul><ul><ul><ul><li>Personnel Matters </li></ul></ul></ul><ul><ul><ul><li>Welfare and Environmental Areas </li></ul></ul></ul>
  17. 18. <ul><li>Worker’s Representation on Board of Management - On the recommendations of the Administrative Reforms Commission made in its report on public sector undertakings, the Government of India accepted, in principle, that representatives of workers should be taken on the Board of Directors of Public Sector enterprises. </li></ul><ul><ul><li>Features – </li></ul></ul><ul><ul><ul><li>Participation should be limited to companies which employ 1000 or more </li></ul></ul></ul><ul><ul><ul><li>The Worker Director shall be elected through a secret ballot </li></ul></ul></ul><ul><ul><ul><li>Presence of Worker Director on the Board shall not lead to any breach in the confidentiality of the information required </li></ul></ul></ul><ul><ul><li>Functions – </li></ul></ul><ul><ul><ul><li>The Worker Director participates in all the functions of the Board, beside they also review the working of shop and plant council </li></ul></ul></ul>
  18. 19. <ul><li>Workers representatives have been appointed on the Boards of Management of a few public undertakings on a trial basis – </li></ul><ul><ul><li>Hindustan Antibiotics Limited </li></ul></ul><ul><ul><li>Hindustan Organic Chemicals Limited </li></ul></ul><ul><ul><li>National Coal Mines Development Corporation, etc., </li></ul></ul><ul><li>Evaluation of Workers Participation in Management Scheme – </li></ul><ul><ul><li>In India though the concept of participative management is supported in principle by all parties, Government, employers and employees – no serious interest has been shown in it except by the Government. </li></ul></ul><ul><ul><li>For Example – </li></ul></ul><ul><ul><ul><li>Tripartite committee on workers participation in management remarked that 66 out of 236 Central public sector undertaking have been monitored, 108 implemented, 63 have their own participative forums, 23 could not implement, 24 did not consider it to be suitable and 18 were in process </li></ul></ul></ul>
  19. 20. <ul><li>Congenial Working environment to motivate workers to give whole-hearted co-operation with a view to ensuring its efficient operation </li></ul><ul><li>Total identity of approach on the part of both the parties to the working of schemes at different levels </li></ul><ul><li>The objectives to be achieved should not be unrealistically high, vague or ambiguous but be achievable and clear </li></ul><ul><li>There should be mutual trust and confidence for the scheme to be effective </li></ul><ul><li>The trade union movement should be developed on sound lines </li></ul><ul><li>The decisions taken at different participatory forums must be sincerely carried out in a stipulated period of time </li></ul><ul><li>There must be free flow of information between labour and management throughout the enterprise </li></ul>
  20. 21. <ul><li>Ideological differences between Employees and Employers regarding the degree of participation </li></ul><ul><li>Failure to Imbibe the Spirit of Participation by the Parties </li></ul><ul><li>Multiplicity of Participative Forms </li></ul><ul><li>Lack of Strong Trade Union </li></ul><ul><li>Unhappy Industrial Relations </li></ul><ul><li>Illiteracy of Workers and non-co-operative attitude of the working class </li></ul><ul><li>Delays in implementation of the decisions of participative bodies </li></ul>
  21. 22. <ul><li>It gives workers a feeling that he is an integral and an important part of the organisation </li></ul><ul><li>This creates a climate in which he may get reasonable opportunities to show his worth </li></ul><ul><li>Management should have a constructive attitude and should regard trade unions not as an obstacle </li></ul><ul><li>Government should take responsibility for the provision of a satisfactory workers education programme </li></ul>