Introduction To Industrial Relations

Industrial relationship are about the relationship among employee and management. This
page carries information about Industrial relations and its concept through definition and
description of industrial relation.

Industrial relations has become one of the most delicate and complex problems of modern
industrial society. Industrial progress is impossible without cooperation of labors and harmonious
relationships. Therefore, it is in the interest of all to create and maintain good relations between
employees (labor) and employers (management).
Definition of Industrial Relations
Industrial relation defined as relation of Individual or group of employee and employer for
engaging themselves in a way to maximize the productive activities.

Concept of Industrial Relations:

The term Industrial Relations comprises of two terms: Industry and Relations. Industry
refers to any productive activity in which an individual (or a group of individuals) is (are)
engaged. By relations we mean the relationships that exist within the industry between the
employer and his workmen. The term industrial relations explains the relationship between
employees and management which stem directly or indirectly from union-employer relationship.

OR
A process by which subordinate employees, either individually or collectively, become
involved in one or more aspects of organizational decision making within the enterprises
in which they work.
Workers participation in management is an essential ingredient of Industrial democracy.
The concept of workers participation in management is based on Human Relations
approach to Management which brought about a new set of values to labour and
management. Traditionally the concept of Workers Participation in Management (WPM)

refers to participation of non-managerial employees in the decision-making process of

the organization. Workers participation is also known as labour participation or
employee participation in management. In Germany it is known as co-determination
while in Yugoslavia it is known as self-management. The International Labour
Organization has been encouraging member nations to promote the scheme of
Workers Participation in Management.
Workers 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 decisionThe philosophy underlying workers participation stresses:
1. democratic participation in decision-making;
2. maximum employer-employee collaboration;
3. minimum state intervention;
4. realisation of a greater measure of social justice;
5. greater industrial efficiency; and
6. higher level of organisational health and effectiveness.
It has been varyingly understood and practised as a system of joint consultation in
industry; as a form of labour management cooperation; as a recognition of the principle
of co-partnership, and as an instrument of industrial democracy. Consequently,
participation has assumed different forms, varying from mere voluntary sharing of
information by management with the workers to formal participation by the latter in
actual decision-making process of management.
Definitions:
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 then intention of decisions that are taken in a participative atmosphere

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.

Clegg says, It implies a situation where workers representatives are, to some

extent, involved in the process of management decision making, but where the
ultimate power is in the hands of the management.

According to Dr. Davis, it is a mental and emotional involvement of a person in a

group situation which encourages him to contribute to goals and share
responsibilities in them.

Objectives of Workers Participation in Management

The objectives of workers participation in management are as follows:

To raise level of motivation of workers by closer involvement.

To provide opportunity for expression and to provide a sense of importance to

workers.

To develop ties of understanding leading to better effort and harmony.

To act on a device to counter-balance powers of managers.

To act on a panacea for solving industrial relation problems.

Specific of Purpose of Workers' Participation

1. It helps in managing resistance to change which is inevitable. For the growth and
development of industry, changes have to be welcomed, otherwise the organization will
stagnate and be left behind. If the need for change is jointly felt by all partners of
production its acceptance can be high. Workers' participation in change strategy can
facilitate acceptable solutions with a view to secure effective and smooth
implementations of decisions.
2. Workers' participation can encourage communication at all levels. Since both
partners of production are involved in the decision-making there will be fewer changes
of distortion and/ or failure in communicating the decision.
3. Joint decision- making ensures the there will be minimum industrial conflict an
economic growth can be free form distracting strife.
4. Workers' participation at the plant level can be seen as the first step to establishing
democratic values in society at large.

Elements of Participation
The term participation has different meanings for different purposes in different
situations. McGregor is of the view that participation is one of the most misunderstood
idea that has emerged from the field of human relations. Keith Davis has defined the
term participation as the mental and emotional involvement of a person in a group
situation which encourages him to contribute to group goals and share responsibilities in
them. This definition envisages three important elements in participation. Firstly, it
means mental and emotional involvement rather than mere physical activity; secondly,
participation must motivate a person to contribute to a specific situation to invest his
own resources, such as initiative, knowledge, creativity and ingenuity in the objectives
of the organisation; and thirdly, it encourages people to share responsibility for a
decision or activity. Sharing of responsibility commits people to ensure the success of
the decision or activity.
Forms of Participation

Different forms of participation are discussed below:

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 counterthreats like; strikes, lockouts and other direct
actions. Joint consultation, on the other hand, is a particular technique which is
intended to achieve a greater degree of harmony and cooperation by
emphasising matters of common interest. Workers prefer to use the instrument
of collective bargaining rather than ask for a share in management. Workers
participation in the U.S.A has been ensured almost exclusively by means of
collective agreements and their application and interpretation rather than by way
of labour representation in management.
Works Councils: These are exclusive bodies of employees, assigned with
different functions in the management of an enterprise. In West Germany, the
works councils have various decision-making functions. In some countries, their
role is limited only to receiving information about the enterprise. In Yugoslavia,
these councils have wider decision-making powers in an enterprise like;
appointment, promotion, salary fixation and also major investment decisions.
Joint Management Councils and Committees: Mainly these bodies are
consultative and advisory, with decision-making being left to the top
management. This system of participation is prevalent in many countries,
including Britain and India. As they are consultative and advisory, neither the
managements nor the workers take them seriously.
Board Representation: The role of a worker representative in the board of
directors is essentially one of negotiating the workers interest with the other
members of the board. At times, this may result in tension and friction inside the
board room. The effectiveness of workers representative at the board depend
upon his ability to participate in decision-making, his knowledge of the company
affairs, his educational background, his level of understanding and also on the
number of worker representatives in the Board.
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.

Levels of Participation
Workers participation is possible at all levels of management; the only difference is that
of degree and nature of application. For instance, it may be vigorous at lower level and
faint at top level. Broadly speaking there is following five levels of participation:
1. Information participation: It ensures that employees are able to receive information
and express their views pertaining to the matters of general economic importance.
2. Consultative participation: Here works are consulted on the matters of employee
welfare such as work, safety and health. However, final decision always rests at the
option of management and employees views are only of advisory nature.
3. Associative participation: It is extension of consultative participation as
management here is under moral obligation to accept and implement the unanimous
decisions of employees.
4. Administrative participation: It ensure greater share of works in discharge of
managerial functions. Here, decision already taken by the management come to
employees, preferably with alternatives for administration and employees have to select
the best from those for implementation.
5. Decisive participation: Highest level of participation where decisions are jointly
taken on the matters relation to production, welfare etc. is called decisive participation.
Pre-requisites for Effetive Participation
The pre-requisites for the success of any scheme of participative management are the
following:
1. Firstly, there should be a strong, democratic and representative unionism for the
success of participative management.
2. Secondly, there should be mutually-agreed and clearly-formulated objectives for
participation to succeed.
3. Thirdly, there should be a feeling of participation at all levels.

4. Fourthly, there should be effective consultation of the workers by the

management.
5. Fifthly, both the management and the workers must have full faith in the
soundness of the philosophy underlying the concept of labour participation.
6. Sixthly, till the participative structure is fully accepted by the parties, legislative
support is necessary to ensure that rights of each other are recognised and
protected.
7. Seventhly, education and training make a significant contribution to the
purposeful working of participative management.
8. Lastly, forums of participation, areas of participation and guidelines for
implementation of decisions should be specific and there should be prompt
follow-up action and feedback
FAILURE REASONS
Participative management is an effective decision making tool. It is often the managers who
implement it the wrong way.
Participative management calls for a change and this change can not come overnight. You
require patience and consistency before employees realize the usefulness of the management
style.
There are other problems that often arise with the managers. The problems may arise because
of the following:
1. Managers often view it as the ends and not as a tool.
2. There is confusion if whether participative management means democratization.
3. Managers sometimes manipulate the process for their own advantage.
Participative Management may fail because of the following reasons:

Resistance to Change: Participative Management calls for a change in the entire

organizational culture. Older employees specially resist change and do not welcome it.
They take it as a device to curtail their powers. Training is also not welcome.

Workers tendency to deviate: Managers must be aware of the tendency of the workers
to try spending more time formulating strategies than focus on job in hand. This needs to
taken care of. Again top level management may not support this style if they find existent
inefficiencies.

One stop Solution: Participative management can not always be a one stop solution for
every problem. Often the manager needs to delegate or take a decision on his own
without consulting or seeking others advice. For example, cases where disciplinary
action is needed do not qualify for participative management.

Size of the Organization: This style of management can be more difficult to implement
in organizations that are big in size. Big size means that there are large numbers of
management layers. This often makes registering opinions and suggestions difficult.
More difficult can be the implementation of the same.

Abuse of Authority: Managers sometimes look upon their own jobs as a license instead
as a responsibility. They are unwilling to give away some authority to their subordinate
which slows down and chokes the process of decision making. Often such managers
complain of being overburdened with responsibilities. This fails the idea of participative
management.

Misunderstanding Participation: This is yet another reason for failure of participative

management. Managers sometimes fail to understand that participative management is
not the same as delegating or distributing responsibility. They fail to realize that
participative style also involves considering the suggestions and recommendations of
employees with respect and dignity.

Participation is isolation can be of no use to the organization. It is a mere wastage of time and
resources then. Most of the organizations view it an end per se and not a mere tool. Once this
happens then participation can be used as an effective tool to problem solving.
When Does Participative Leadership Work Best?

Participative leadership tends to work best when you arent

making decisions under fire. This makes sense considering
gathering everyone together for strategy meetings can be a
time consuming event. If something happens that requires a
quick response, participative leadership would not be the
best style to follow in most cases.
This type of leadership works really well in creative
environments, too. Consider the multitude of unique ideas

that might arise during a meeting for a solution to a problem

that requires different perspectives.
Additionally, participative leadership is great when you may
want to find more than one solution to a problem, as in the
example above with the product that isnt selling. The
problem you have might require a set of solutions, and not
just one overall solution. Involving a team of problem solvers
can help create a list of potential fixes.
Also,
1. Interest and concern. Some people prefer to be told what to do.
2. Recognize and enhance talents in others. Some people fear they will lose power if they
build others.
3. Recognize and work around weaknesses in others. Some people are so irritated
by deficiencies of others that they cant they cant recognize and work with their
strengths.
4. Communication particularly listening. We often would rather inform than become
informed.
5. Conflict resolution. It is easier to create a conflict than to resolve one. It usually requires
forgiving others something most people dont do well.
6. Self-control. Getting the best out of others requires controlling ourselves our habits,
anger, self-serving tendencies.
7. Negotiation. It can seem difficult to negotiate when we already have the power to simply
decide and act.
8. Compromise. We often must compromise short-term personal or departmental goals.