Workers Participation In Management

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. 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 decision-making.
Definition:
 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.

The concept of workers’ participation in management encompasses the following:

 It provides scope for employees in decision-making of the organization.
 The participation may be at the shop level, departmental level or at the top level.
 The participation includes the willingness to share the responsibility of the organization by the workers.

Features of WPM:

1. Participation means mental and emotional involvement rather than mere physical presence.
2. Workers participate in management not as individuals but collectively as a group through their representatives.
3. Workers’ participation in management may be formal or informal. In both the cases it is a system of
communication and consultation whereby employees express their opinions and contribute to managerial decisions.
4. There can be 5 levels of Management Participation or WPM:
 Information participation: It ensures that employees are able to receive information and express their
views pertaining to the matter of general economic importance.
 Consultative importance: Here workers are consulted on the matters of employee welfare such as work,
safety and health. However, final decision always rests with the top-level management, as employees’ views are
only advisory in nature.
 Associative participation: It is an extension of consultative participation as management here is under the
moral obligation to accept and implement the unanimous decisions of the employees. Under this method the
managers and workers jointly take decisions.
 Administrative participation: It ensures greater share of workers’ participation in discharge of managerial
functions. Here, decisions already taken by the management come to employees, preferably with alternatives for
administration and employees have to select the best from those for implementation.
 Decisive participation: Highest level of participation where decisions are jointly taken on the matters
relating to production, welfare etc.

Objectives of WPM:

1.       To establish Industrial Democracy.

2.       To build the most dynamic Human Resources.
3.       To satisfy the workers’ social and esteem needs.
4.       To strengthen labour-management co-operation and thus maintain Industrial peace and harmony.
5.       To promote increased productivity for the advantage of the organization, workers and the society at large.
6.       Its psychological objective is to secure full recognition of the workers.

Importance of WPM:
 Unique motivational power and a great psychological value.
 Peace and harmony between workers and management.
 Workers get to see how their actions would contribute to the overall growth of the company.
 They tend to view the decisions as `their own’ and are more enthusiastic in their implementation.
 Participation makes them more responsible.
 They become more willing to take initiative and come out with cost-saving suggestions and growth-
oriented ideas.

Essential condition for WPM:

The success of workers portion in management depends upon the following conditions.
 The attitude and outlook of the parties should be enlightened and impartial so that a free and frank
exchange of thoughts and opinions could be possible. Where a right kind of attitude exists and proper atmosphere
prevails the process of participation is greatly stimulated.
 Both parties should have a genuine faith in the system and in each other and be willing to work together.
The management must give the participating institution its right place in the managerial organization of the
undertaking and implementing the policies of the undertaking. The labor, on the other hand, must also whole
heartedly co-operate with the management through its trade unions. The foremen and supervisory cadre must also
lend their full support so that the accepted policies could be implemented without any resentment on either side.
 Participation should be real. The issues related to increase in production and productivity, evaluation of
costs, development of personnel, and expansion of markets should also be brought under the jurisdiction of the
 participating bodies. These bodies should meet frequently and their decisions should be timely implemented and
strictly adhered to. Further,
o   Participation must work as complementary body to help collective bargaining, which creates conditions of work
and also creates legal relations.
o   There should be a strong trade union, which has learnt the virtues of unit and self-reliance so that they may
effectively take part in collective bargaining or participation.
o   A peaceful atmosphere should be there wherein there are no strikes and lock-outs, for their presence ruins the
employees, harms the interest of the society, and puts the employees to financial losses.
o   Authority should be centralized through democratic management process. The participation should be at the two
or at the most three levels.
o   Programs for training and education should be developed comprehensively. For this purpose, Labor is to be given
education not to the head alone, not to the heart alone, not to the hands alone, but it is dedicated to the three; to make
the workers think, feel and act. Labor is to be educated to enable him to think clearly, rationally and logically; to
enable him to feel deeply and emotionally; and to enable him to act in a responsible way.
Conclusion:
Management should be prepared to give all information connected with the working of the industry and labor should
handle that information with full confidence and responsibility. The workers should become aware of their
responsibilities. The leaders should initiate this in them. Similarly, the top management should make the lower
echelons to show a new attitude in the light of the new relationship.

Methods of Workers Participation In Management

1. Participation at the Board level:
This would be the highest form of industrial democracy. The workers’ representative on the Board can play a useful
role in safeguarding the interests of workers. He or she can serve as a guide and a control element.
 He or she can prevail upon top management not to take measures that would be unpopular with the
employees.
 He or she can guide the Board members on matters of investment in employee benefit schemes like
housing, and so forth.
The Government of India took the initiative and appointed workers’ representatives on the Board of Hindustan
Antibiotics (Pune), HMT (Bangalore), and even nationalized banks. The Tatas, DCM, and a few others have adopted
this practice.
Problems associated with this method:
 Focus of workers’ representatives is different from the focus of the remaining members of the Board.
 Communication and subsequently relations between the workers’ representative and the workers suffers
after the former assumes directorship.
 He or she tends to become alienated from the workers.
 As a result, he or she may be less effective with the other members of the Board in dealing with employee
matters.
 Because of the differences in the cultural and educational backgrounds, and differences in behaviour and
manners, such an employees’ representative may feel inferior to the other members, and he or she may feel
suffocated. Hence, his or her role as a director may not be satisfying for either the workers or the management.
 Such representatives of workers’ on the Board, places them in a minority. And the decisions of the Board
are arrived at on the basis of the majority vote.

2. Participation through ownership:

This involves making the workers’ shareholders of the company by inducing them to buy equity shares.
 In many cases, advances and financial assistance in the form of easy repayment options are extended to
enable employees to buy equity shares. Examples of this method are available in the manufacturing as well as the
service sector.
 Advantage: Makes the workers committed to the job and to the organization.
 Drawback: Effect on participation is limited because ownership and management are two different things.

3 . Participation through complete control:

Workers acquire complete control of the management through elected boards. The system of self-management in
Yugoslavia is based on this concept. Self-management gives complete control to workers to manage directly all
aspects of industries through their representatives.

Advantages:
 Ensures identification of the workers with their organization.
 Industrial disputes disappear when workers develop loyalty to the organization.
 Trade unions welcome this type of participation.
Conclusion: Complete control by workers is not an answer to the problem of participation because the workers do
not evince interest in management decisions.

4. Participation through Staff and Works Councils :

Staff councils or works councils are bodies on which the representation is entirely of the employees. There may be
one council for the entire organization or a hierarchy of councils. The employees of the respective sections elect the
members of the councils. Such councils play a varied role.
 Their role ranges from seeking information on the management’s intentions to a full share in decision-
making.
Such councils have not enjoyed too much of success because trade union leaders fear the erosion of their power and
prestige if such workers’ bodies were to prevail.

5. Participation through Joint Councils and Committees :

 Joint councils are bodies comprising representatives of employers and employees. This method sees a very loose
form of participation, as these councils are mostly consultative bodies.
Work committees are a legal requirement in industrial establishments employing 100 or more workers. Such
committees discuss a wide range of topics connected to labour welfare.
Examples of such committees are welfare committee, safety committee, etc. Such committees have not proven to be
too effective in promoting industrial democracy, increasing productivity and reducing labour unrest.

6. Participation through Collective Bargaining :

Through the process of CB, management and workers may reach collective agreement regarding rules for the
formulation and termination of the contract of employment, as well as conditions of service in an establishment.
Even though these agreements are not legally binding, they do have some force. For CB to work, the workers’ and
the employers’ representatives need to bargain in the right spirit. But in practice, while bargaining, each party tries
to take advantage of the other. This process of CB cannot be called WPM in its strongest sense as in reality; CB is
based on the crude concept of exercising power for the benefit of one party. WPM, on the other hand, brings both
the parties together and develops appropriate mutual understanding and brings about a mature responsible
relationship.

7. Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production in industries, leads to boredom and
associated problems in employees.
Two methods of job designing – job enlargement and job enrichment – are seen as methods of addressing the
problems.
 Job enlargement means expanding the job content – adding task elements horizontally.
 Job enrichment means adding `motivators’ to the job to make it more rewarding. This is WPM in that it
offers freedom and scope to the workers to use their judgment. But this form of participation is very basic as it
provides only limited freedom to a worker concerning the method of performing his/her job.
The worker has no say in other vital issues of concern to him – issues such as job and income security, welfare
schemes and other policy decisions.

8. Participation through Suggestion Schemes:

Employees’ views are invited and reward is given for the best suggestion. With this scheme, the employees’ interest
in the problems of the organization is aroused and maintained. Progressive managements increasingly use the
suggestion schemes. Suggestions can come from various levels. The ideas could range from changes in inspection
procedures to design changes, process simplification, paper-work reduction and the like. Out of various suggestions,
those accepted could provide marginal to substantial benefits to the company. The rewards given to the employees
are in line with the benefits derived from the suggestions.

9. Participation through Quality Circles:

Concept originated in Japan in the early 1960s and has now spread all over the world.  A QC consists of seven to ten
people from the same work area who meet regularly to define, analyze, and solve quality and related problems in
their area. These circles require a lot of time and commitment on the part of members for regular meetings, analysis,
brainstorming, etc. Most QCs have a definite life cycle – one to three years. Few circles survive beyond this limit
 either because they loose steam or they face simple problems. QCs can be an excellent bridge between participative
and non-participative approaches. For QCs to succeed in the long run, the management needs to show its
commitment by implementing some of the suggestions of the groups and providing feedback on the disposition of
all suggestions.
Training in problem-solving techniques is provided to the members. QCs are said to provide quick, concrete, and
impressive results when correctly implemented.
Advantages:
 Employees become involved in decision-making, acquire communication and analytical skills and improve
efficiency of the work place.
 Organization gets to enjoy higher savings-to-cost ratios.
 Chances of QC members to get promotions are enhanced.

10. Empowered Teams:

Empowerment occurs when authority and responsibility are passed on to the employees who then experience a sense
of ownership and control over their jobs. Employees may feel more responsible, may take initiative in their work,
may get more work done, and may enjoy the work more. For empowerment to occur, the following approach needs
to be followed as compared to the traditional approach:
Element Traditional Organization Empowered Teams
Organizational structure Layered, individual Flat, team
Job design Narrow, single task Whole process, multiple tasks
Management role Direct, control Coach, facilitate
Leadership Top-down Shared with the team
Information flow Controlled, limited Open, shared
Rewards Individual, seniority based Team-based, skill-based
Job process Managers plan, control, improve Teams plan, control, and improve

Features of empowered or self-directed teams:

 Empowered to share various management and leadership functions.
 Plan, control and improve their work.
 Often create their schedules and review their performance as a group.
 May prepare their own budgets and co-ordinate their work with other departments.
o   Usually order materials, keep inventories and deal with suppliers.
o   Frequently responsible for acquiring any new training they might need.
o   May hire their own replacement to assume responsibility for the quality of their products or services
Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are empowering employees –
both frontline as well as production staff, and are enjoying positive results.

11. Total Quality Management :

TQM refers to the deep commitment, almost obsession, of an organization to quality. Every step in company’s
processes is subjected to intense and regular scrutiny for ways to improve it.
 Some traditional beliefs are discarded.
 High quality costs more.
 Quality can be improved by inspection.
 Defects cannot be completely eliminated.
 Quality in the job of the QC personnel.
New principles of TQM are:
 Meet the customer’s requirement on time, the first time, and 100% of the time.
 Strive to do error-free work.
 Manage by prevention, not correction.
 Measure the cost of quality.
 TQM is called participative because it is a formal programme involving every employee in the
organization; making each one responsible for improving quality everyday.

12. Financial Participation:

This method involves less consultations or even joint decisions. Performance of the organization is linked to the
performance of the employee. The logic behind this is that if an employee has a financial stake in the organization,
he/she is likely to be more positively motivated and involved.
Some schemes of financial participation:
 Profit-linked pay
 Profit sharing and Employees’ Stock Option schemes.
 Pension-fund participation.