Everything you need to know about workers’ participation in management (wpm). Workers’ Participation in Management (WPM) is a complex concept.
Traditionally, it refers to the participation of non-managerial employees in the decision-making process of the organization. Workers get involved mentally and emotionally in the management process.
The concept of Workers’ participation in management (EPM) crystallises the concept of Industrial Democracy, and indicates an attempt on the part of an employer to build his employees into a team which work towards the realisation of a common objective.
ILO defines WPM as – “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.”
1. Meaning of Workers’ Participation in Management (WPM) 2. Definition of Workers’ Participation in Management 3. Concept of Workers’ Participation in Management (WPM)
4. Objectives 5. Scope 6. Importance 7. Levels 8. Forms 9. Methods and Other Details
Workers’ Participation in Management (WPM): Meaning, Definition, Concept, Objectives, Scope, Importance and Other Details
- Meaning of Workers’ Participation in Management (WPM)
- Definition of Workers’ Participation in Management (WPM)
- Concept of Workers’ Participation in Management (WPM)
- Objectives of Workers’ Participation in Management (WPM)
- Scope of Workers’ Participation in Management (WPM)
- Importance of Workers’ Participation in Management (WPM)
- Levels of Workers’ Participation in Management (WPM)
- Forms of Workers’ Participation in Management (WPM)
- Methods of Workers’ Participation in Management (WPM)
- Workers Participation in Organisations
- Workers’ Participation in Management and Motivation
- Experience of Employee/Worker Participation in Indian Banking Industry
- Essential Conditions for Successful Working of Workers’ Participation in Management (WPM)
- Prerequisites for the Success of Workers’ Participation in Management (WPM)
- Evaluation of Workers’ Participation in Management (WPM) in India
Workers’ Participation in Management (WPM) – Meaning
Workers’ Participation in Management (WPM) is a complex concept. Traditionally, it refers to the participation of non-managerial employees in the decision-making process of the organization. Workers get involved mentally and emotionally in the management process.
According to F.S. 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.
WPM has its roots in Human Relations approach to management which views the workers as human beings and values them as productive assets of the organization. In the modern era, WPM is a vital component of industrial democracy. International Labour Organization (ILO) encourages its member nations to promote the concept of WPM.
ILO defines WPM as- “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:
1. Workers have ideas which can be useful.
2. 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.
According to 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.”
Within the orbit of this definition, a continuum, of men management relationship can be conceived:
Workers’ Control → Joint Management → Joint Consultation
Work Place Consultation → Management Supremacy
In this continuum, workers’ control represents one extreme which suggests concentration of all powers in workers, and management supremacy represents the other extreme, which implies a zealous defense of managerial prerogatives.
Employees’ participation in management is a resounding phrase, bridging the past and the future. It echoes the millennial vision of nineteenth century thinkers while heralding the evolution of new forms of industrial organisation under twentieth century pressures. The word employees’ participation’ is plentifully supplied with ideas, institutions and opinions.”
“There are two basic ideas in the concept of workers’ participation in management: there are two groups of people in an undertaking (managers and workers) and that there are two separate sets of functions to be performed (managerial and operative). Managerial functions are essentially those concerned with planning, organising, motivating, and controlling, in contrast with “doing” or “operative” work.
It 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.
(a) The participation results from practices which increase the scope for employee’s share of influence in decision-making at different tiers of the organisational hierarchy with concomitant assumption of responsibility.
(b) The participation has to be at different levels of management- (i) at the shop level, (ii) at the department level, and (iii) at the top level. The decision-making at these different levels would assume different patterns in regard to policy formulation and execution.
(c) The participation incorporates the willing acceptance of responsibilities by body of workers. As they become party to the decision-making, the workers have to commit themselves to ensuring their implementation.
(d) The participation is conducted through the mechanism of forums and practices which provide for association of workers’ representatives.
(e) The broad goal of participation is to change basically the organisational aspect of production and transfer the management function entirely to the workers so that management becomes “Auto management.”
The forms of Workers’ Participation in Management depend on the differences in the levels of management, the subject-matter of participation, the strength of the union and the pattern of industrial relations. The important forms in which workers could participate in management are collective bargaining, joint decision-making, consultation and information sharing.
They may take the form of formal organisations like Works Committees, Joint Management Councils or an informal system, for instance, a supervisor consulting a worker before taking any decision in which the latter is interested.
The concept of Workers’ participation in management (EPM) crystallises the concept of Industrial Democracy, and indicates an attempt on the part of an employer to build his employees into a team which work towards the realisation of a common objective.
Within the last three decades in the realm of human resource management, the technique of the workers’ participation in management has been regarded as a powerful behavioural tool for managing the industrial relations system. This widely debated concept has evolved from the purely ideological and imaginative plank to an organisational reality. But the form and connotation of the term varies with the socio-economic goals of a particular country.
For example, earlier in those countries where all or most of the means of production were under public ownership, the term is used in quite a different sense as against those countries where the means of production are in private hands. Again, in a “centrally planned economy,” the nature and form of industrial democracy is not the same as in a market economy.
It means different things to different people; and most international discussions on the subject suffer from the fact that those who use the term are often thinking of one particular form of workers’ participation in management. For management, it is joint consultation prior to decision-making.
The management experts and executives look upon it as “a tool for improving the overall performance of an enterprise.” For them, it means that workers are given an opportunity to take part in those decisions which affect their wages, their working conditions, there very jobs, and this participation paves the way to harmonious industrial relations which are conducive to increasing productivity and efficiency.
For labourers, it is just like co-decision or co-determination. The trade unions view the concept as “the harbinger of a new order of social relationship and a new set of power equations within organisations. This does not mean that they are concerned with improving organisational performance; but in terms of relative importance and priorities, they hold the view that the functioning of economic activity is, by its very nature, social. The objective is to gain control over the decision-making process within an enterprise.”
The concept of workers’ participation in management crystallises the concept of industrial democracy, and indicates an attempt on the part of an employer to build his employees into a team which works towards the realisation of a common objective.
In the words of 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 with them.”
Sometimes participation is regarded as basically the same thing as Taylor’s “scientific management”, the aim of which is to secure the maximum prosperity of employers and the employed.
However, the approach is somewhat different, for “scientific management” lays emphasis on the technical aspect of work, whereas the “participation” lays primary emphasis on the human element and rests on the assumption that a worker is more than a pair of hands.
He is a human resource. The worker’s technical knowhow and an ingenuity, properly utilised, may make, more significant contribution to the effectiveness and economic welfare of an organisation than any improvement in his physical effort alone, although that is not unimportant.
When operationalized the term workers’ participation implies “a formal method of providing an opportunity for every member of the organisation to contribute his brain and ingenuity as well as his physical efforts to the improvement of organisational effectiveness” as well as enhancing his own economic welfare.
Kenneth Walker says- “Workers’ participation in management is a resounding phrase, bridging the past and the future. It echoes the millennial vision of nineteenth century thinkers while heralding the evolution of new forms of industrial organisation under twentieth century pressures. The word ‘workers’ participation’ is plentifully supplied with ideas, institutions and opinions.”
He adds that there are two basic ideas in the concept of workers’ participation in management, that there are two groups of people in an undertaking (managers and workers) and that there are two separate sets of functions to be performed (managerial and operative).
The managerial functions are essentially those concerned with planning, organising, motivating and controlling, in contrast with ‘doing’ or ‘operative’ work. A self-employed person carries on the managerial as well as the operative functions of his one-man enterprise; he is both his own manager and operative.
The Industrial Revolution and the factory system divorced managerial and operative functions, authorising persons who occupied ‘managerial’ positions to exercise managerial functions while ‘workers’ performed their operational functions.
Those who advocate workers’ participation in management seek to bridge this gap, or even to remove it, by authorising workers to take part in managerial functions…. The participation, therefore, can be defined, in neutral terms, as ‘taking part in’, leaving the question whether such participation does produce a co-operative commitment to the enterprise, or involves a sharing of powers and status between the managers and the workers to be settled by evidence.
The essence of labour participation in management lies in the firm belief and confidence in the individual, in his capacity for growth and learning, in his ability to contribute significantly with his hands, head as well as his heart; and this implies discarding the narrow conventional outlook of antagonism of interests and substituting in its place a community of purpose and extending co-operation in promoting the well-being of labour and management in industry.
The principle of workers’ participation in management affords a self-realisation in work and meets the psychological needs of workers at work by eliminating, to a large extent, any feeling of futility, isolation and consequent frustration that they face in a normal industrial setting.
In this connection, G.D.H. Cole noted that the “Industrial democracy at the top, through nationalisation, is an inefficient condition to ensure workers’ involvement in enterprises. Unlike in politics, in the case of industry, workers are connected mostly with shop floor issues. Better participation and greater responsibility in the decision-making process on the part of general workers would perhaps tend to develop in them organisational loyalty, confidence, trust, favourable attitude towards supervisors, and a sense of involvement in the organisation. The schemes of workers’ participation in management, among other measures of industrial reform, are expected to democratise the industrial milieu, and ensure egalitarianism in the process.”
In fine it can be said that the workers’ participation as 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.
It is a 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 a minority. It is industrial democracy in action based on the principles of equity, equality and voluntarism. It gives to the employees’ representatives the right to criticise, to offer constructive suggestions, and to become aware of various delicate issues involved in decision-making.
In other words:
1. The participation enhances employee’s ability to influence, decision-making at different tiers of the organisational hierarchy with concomitant assumption of responsibility.
2. The participation has to be at different levels of management- (i) at the shop level, (ii) at the department level, and (iii) at the board Level. The decision-making at these different levels would assume different patterns in regard to policy formulation and execution.
3. The participation incorporates the willing acceptance of responsibilities by the body of workers. As they become a party to decision-making, they have to commit themselves to the implementation of decisions made.
4. The participation is conducted through the mechanism of forums and practices which provide for the association of workers’ representatives.
5. The broad goal of participation is to change basically the organisational aspect of production and transfer the management function entirely to the workers so that they can experience intricacies of “auto management.”
The employer’s realisation of the need for workers’ participation in management was considerably influenced by the following factors:
(i) The increased use of technology in industry has necessitated the growing co-operation of workers because of the complex operations of production;
(ii) The changed view that employees are no longer servants but are equal partners with their employers in their efforts to attain the goals of the enterprise;
(iii) The growth of trade unions which safeguard the interests of workers and protect them against possible exploitation by their employers;
(iv) The growing interest of the government in the development of industries and the welfare of workers; and
(v) The need for increased and uninterrupted production which can be achieved only when there is a contented labour class.
The empirical researches undertaken by Kurt Lewin, French and others have shown that democratically managed groups, in which rank and file also get an opportunity to participate in decision-making, are healthier and more efficient than groups managed in an authoritarian way.
The findings of Rensis Likert, Blake and Macgregor popularised the belief that if workers are given opportunities to participate in the management, there would be positive gains for the organisation through higher productivity, on the one hand, and reduced negative behaviour on the other.
It is quite logical to believe that if people have the right to choose their own government, the workers have the right to choose the management of the enterprise to which they belong and to whose success they contribute substantially.
It rests on the fundamental premise that the worker is not a slave who has no rights at all; he is a citizen employed in an industry and has opinions of his own which, he thinks, should be taken into account when decisions are taken and policies are formulated. “The factory is not a mechanical entity which is governed by mechanical principles and economic laws, but a social system which is subject to the democratic rights of those who are involved in it.”
It is no wonder that “ever since the early days of industrialisation, the demand for democracy in a worker’s life has been an important feature of the many political programmes.”
It may therefore, be concluded that the concept of workers’ participation has its deep roots not only in political and social norms and in the ethos of our times but also in the empirical studies on human behaviour at work.
Workers’ Participation in Management (WPM) – Objectives
The main objectives of Workers’ Participation in Management include:
(i) To promote increased productivity for the advantage of the organisation, workers and society at large;
(ii) To provide a better understanding to employees about their role and place in the process of attainment of organisational goals;
(iii) To satisfy the workers’ social and esteem needs; and
(iv) To strengthen labour management co-operation and thus maintaining industrial peace and harmony.
(v) To develop social education for effective solidarity among the working community and for tapping latent human resources.
(vi) An ideological point of view to develop self-management in industry.
(vii) An instrument for improving efficiency of the company and establishing harmonious industrial relations.
(viii) To build the most dynamic human resource.
(ix) To build the nation through entrepreneurship and economic development.
Workers’ Participation in Management (WPM) – Scope
There are three groups of managerial decisions, which have a direct impact on the workers of any industrial establishment (banking is also an industry). They are social / personnel / and economic decisions. Economic decisions include financial aspects, the methods of manufacturing, automation, shutdown, layoffs, mergers and acquisitions and similar other functions. Personnel decisions refer to recruitment and selection, promotions demotions, transfers, grievances settlement, work distribution and so on.
Social decisions relate to hours of work / welfare measures / questions effecting work rules and conduct of individual worker safety, health, sanitation and noise control. The workers must have a say in the decisions, on the issue mentioned above. One view is that the workers or the trade-unions should on parity basis, sit with the management or equal parameters and make joint managerial decision on all matters.
The word participation means sharing the decision making power in the lower ranks of the organisation, an appropriate manner. Participation has a unique motivational power and a great psychological value. It promotes harmony and peace between workers and management, when workers participate in organisational decisions. They are able to see the big picture clearly i.e. how their actions would contribute to overall growth of the company.
Participation makes workers more responsible. They are willing to take initiative and contribute cost saving suggestions and growth oriented ideas. Since they are treated with respect, they begin to view the job and the organisation as their own and commit themselves to organisational activities whole heartedly.
The concept of workers participation in management is a broad and complex one workers’ participation may be viewed as:
(a) An instrument for increasing the efficiency of enterprises and establishing harmonious industrial relations
(b) Device for developing social education for promoting solidarity among workers and for tapping human talent
(c) A means for achieving industrial peace and harmony which leads to higher productivity and increased production.
(d) A humanitarian act, elevating the status of workers in the society
(e) An idea logical way of developing self-management and promoting industrial democracy.
Workers’ Participation in Management (WPM) – Importance
1. Better Industrial Relations:
Industrial unrest results because of conflict of interests between the management and the workers. But if decision-making takes the form of a collective effort where the interests of both the management and employees are accounted for, then industrial tension can be minimised. If the parties cooperate to arrive at the optimum decision, then decisions based on common interests can be taken.
2. Reduced Misunderstandings:
When there is open two-way communication between the workers and management, both the parties can clarify their doubts and clear any misunderstandings among them.
3. Higher Productivity:
Mutual understanding between the employer and the employees coupled with better industrial relations creates a work environment conducive for growth. Employees tend to work harder and more sincerely when their views are respected by the superiors. Thus, their productivity rises.
4. Decentralization of Authority:
When the decision-making process becomes a group effort instead of being concentrated at the top level, it encourages decentralization of authority. In WPM, the workers are informed about organizational problems and are asked to suggest solutions. Their views and opinions are given due importance while taking the final decision.
5. Industrial Democracy:
Industrial democracy refers to the involvement of employees in decision-making and sharing of authority and responsibility related to important industrial matters. WPM brings about equality in the organization and provides a degree of industrial balance.
6. Commitment towards Goals:
When the individual worker is involved in decision-making and gets an opportunity to express his thoughts and opinions, he feels a deeper sense of belongingness with the organization. He realizes that he has a role to play in the management of the business, and therefore is more committed towards the organizational goals.
7. Individual Growth and Development:
Individuals get a chance to develop their skills and capabilities while participating in the management processes. They are required to be creative, innovative and responsive in their interaction with the management and this helps them to develop more as a human being in the process.
8. Responsiveness to Change:
Normally, workers in any organization are resistant to change. They are reluctant to adopt the changes that the management forces upon them. But when they get a chance to participate in the decision-making process, they can clear their doubts and insecurities regarding the proposed changes. If the workers are made aware of the consequences of the change, then they will be more responsive towards it.
Workers’ Participation in Management (WPM) – Levels
1. Information participation – It is the most basic level of WPM. At this level it is ensured that the workers receive all necessary information relevant to the organization and are given a chance to express their views regarding the general issues.
2. Consultative participation – The workers are consulted on matters that directly affect them such as work, safety and health. The workers’ role is only advisory; the final decision is always taken by the top management. They may or may not consider the workers’ suggestions.
3. Associative participation – Under this arrangement, the managers and workers jointly take decisions. The management is obliged to consider the decisions of the employees and implement them. This is a natural extension of consultative participation.
4. Administrative participation – In this kind of participation, the decisions are already taken by the management, but alternative ways of implementing them are discussed with the workers. The workers review the different ways of putting the decisions to action and choose the best option.
5. Decisive participation – This is the highest level of participation where the management and the employees interact on a regular basis, discuss issues related to various aspects of management and jointly arrive at decisions that are beneficial to all the parties involved.
Workers’ Participation in Management (WPM) – Forms
The forms of Workers’ participation in management vary from industry to industry and from country to country. The important forms are- Labour-Management Consultation and Cooperation, Joint consultation and Model of Participation (U.K.), Union-Management Co-operation (USA), Codetermination Scheme (West Germany), Joint Management Plan, Joint Decision-Making Model, Workers’ Control Model, Self-Management or Auto Management Scheme.
Forms of Workers’ Employees’ Participation in Management are:
(I) Works, Committee;
(II) Joint Management Councils;
(III) Joint Councils;
(IV) Shop Councils; and
(V) Unit Councils.
(I) Works’ Committees:
The Industrial Disputes Act, 1949 provides for the setting up of works, committees as a scheme of workers participation in management which consist of representatives of employers and employees. The Act provides for these bodies in every undertaking employing 100 or more workmen.
The aim of setting up of these bodies is to promote measures for maintaining harmonious relations in the work place and to sort out differences of opinion in respect of matters of common interest to employers and employees. The Bombay Industrial Relations Act, 1946 also provides for these bodies, but under the provisions of this Act they can be set up only in units which have a recognised union and they are called joint committees. The workers directly elect their representatives where there is no union.
These works committees/joint committees are consultative bodies. Their functions include discussion of conditions of work like lighting, ventilation, temperature, sanitation etc., and amenities like water supply for drinking purposes, provision of canteens, medical services, safe working conditions, administration of welfare funds, educational and recreational activities, and encouragement of thrift and savings.
It shall be the duty of the works committee to promote measures for securing and preserving amity and good relations between the employers and workmen and to comment upon matters of their common interest or concern and endeavour to reconcile any material difference of opinion in respect of such matters.
The works committees have, as office bearers, a President, a Vice-President, a Secretary and a Joint Secretary. The President is a nominee of the employer and the Vice- President is the Workers’ representative. The tenure of these bodies is two years. The total strength of these bodies should not exceed 20. The employees’ representatives have to be chosen by the employees.
These committees functioned actively in some organisations like Tata Iron and Steel Company, Indian Aluminium Works at Belur, and Hindustan Lever. In all these, the managements have evolved joint committees independently of the statutory requirements.
(II) Joint Management Councils (JMCs):
The Second Five Year Plan recommended the setting up of joint councils of management consisting of representatives of workers and management. The Government of India deputed a study group (1957) to study the schemes of workers’ participation in management in countries like U.K., France, Belgium and Yugoslavia.
The report of the study group was considered by the Indian Labour Conference (ILC) in its 15th session in 1957 and it made certain recommendations:
(1) That workers’ participation in management schemes should be set up in selected undertakings on a voluntary basis.
(2) A sub-committee consisting of representatives of employers, workers and government should be set up for considering the details of workers’ participation in management schemes. This Committee should select the undertakings where workers’ participation in management schemes would be introduced in the first stage on an experimental basis.
The objectives of Joint Management Councils are as follows:
(i) To increase the association of employers and employee thereby promoting cordial industrial relations;
(ii) To improve the operational efficiency of the workers;
(iii) To provide welfare facilities to them;
(iv) To educate workers so that they are well equipped to participate in these schemes; and
(v) To satisfy the psychological needs of workers.
A tripartite sub-committee was set up as per the recommendations of Indian Labour Conference which laid down certain criteria for selection of enterprises where the JMCs could be introduced.
(i) The unit must have 500 or more employees;
(ii) It should have a fair record of industrial relations;
(iii) It should have a well organised trade union;
(iv) The management and the workers should agree to establish JMCs.
(v) Employers (in case of private sector) should be members of the leading employers’ organisation; and
(vi) Trade unions should be affiliated to one of the Central federations.
It was observed by the sub-committee that if the workers and employers mutually agree they can set up JMCs even if these conditions are not met.
The sub-committee also made recommendations regarding their composition, procedure for nominating workers’ representatives, the membership of JMCs etc. The details of these aspects have to be worked out by the parties themselves. A draft model was drawn up regarding the establishment of JMCs. The sub-committee was later reconstituted as the “Committee on Labour- Management Co-operation” to advice on all matters pertaining to the Scheme.
Criteria for Selecting of Units for Setting up of JMCS:
The sub-committee of the Fifteenth Indian Labour Conference which selected 48 units for introduction of the scheme of joint management council had laid down the following criteria for selecting the units-
In private sector, the industries selected were cotton and jute textiles, engineering, chemicals, tobacco, paper, cement, mines and plantations.
In public sector, industries included railway workshops and yards, posts and telegraphs, ports, shipyards, transport workshops, mines, printing and electrical undertaking.
(i) The undertaking should have a well-established, strong trade union functioning.
(ii) There should be a readiness in the parties between employers’ and workers’ union to try out experiment in a spirit of willing co-operation.
(iii) The size of the undertaking should be at least 500 workers.
(iv) The employer in a private undertaking should be member of one of the leading employers’ organisation; and similarly the trade union be related to one of the central federations.
(v) The company should have a fair record of industrial relations.
The following are the important functions of JMCs:
(i) To be consulted on matters like standing orders, retrenchment, rationalisation, closure, reduction of operations etc.
(ii) To receive information, to discuss and offer suggestions.
(iii) To shoulder administrative responsibilities like maintaining welfare measures, safety measure, training schemes, working hours, payment of rewards.
Employees’ Participation in Management Scheme of 1975:
Government of India on 30th October, 1975, announced a scheme of workers’ participation in management which consisted of establishment of Joint Councils and Shop Council as part of its 20 point economic programme. The scheme envisages for the establishment of joint councils and shop councils in manufacturing and mining industries employing 500 or more employees in public, private and cooperative sectors.
The scheme contemplated participation of workers in the decision-making process in the matters relating to production, productivity, absenteeism, safety measures, general discipline, working conditions and welfare, and over-all efficiency of the shop/department.
Important features of this new scheme are:
(1) All decisions of a Shop Council as well as of the Joint Council shall be on the edifice of the “Consensus and not by process of voting.”
(2) It is non-statutory like JMCs and there is a clear-cut function of these councils.
(3) “Consensus and time-bound implementation” are the tools for arriving at decisions. Thus, the scheme tries to eliminate the chances of direct interference by outside elements. The decisions are required to be implemented within one month.
(4) The scheme provides for participation of workers at the shop floor level; otherwise the framework is not materially different from that of WCs. and JMCs.
(5) It provides for a two-way communication and an exchange of information between the management and the workmen.
(6) The very change in the nomenclature of the scheme from participation of workers in management’ to that of participation of workers in industry’ makes it more acceptable to employees as the latter are likely to offset some of their misgivings and apprehensions caused by the former.
(7) The scheme hits at three principal objectives to which the reform of industrial democracy is directed, viz., recovery of individual human rights at the work place; consolidation of social and political freedom (to join a particular union of his own choice without any coercion); and the framing of new industrial system functionally suitable to the country’s economy.
(III) Joint Councils:
The joint councils are for the whole unit and its membership remains confined to those who are actually engaged in the organisation. The tenure of the joint councils is .for two years. The Chief Executive of the unit becomes its Chairman. Workers’ members of the council nominate the Vice Chairman. The joint council appoints the Secretary. The Secretary is responsible for discharging the functions of the council.
The joint councils will meet once in four months, but the periodicity of the meeting varies from unit to unit, it may be once in a month, quarter etc. The decisions taken at the joint council meetings are by the process of consensus and the management shall implement the decisions within one month. The scheme was implemented by the major units of the central and State governments. The government enlarged the functions of the councils in 1976.
In every industrial unit employing 500 or more workers, there shall be a Joint Council for the whole unit.
The main features of the scheme of Joint Council may be as follows:
(i) Only such persons who are actually engaged in the unit shall be members of the joint council.
(ii) The council shall function for a period of two years.
(iii) The Chief Executive of the unit shall be the Chairman of the joint council and there shall be a Vice-Chairman who will be nominated by worker-members of the council.
(iv) The joint council shall appoint one of the members of the council as its Secretary. Necessary facilities for the efficient discharge of function by the Secretary shall be provided with the premises of the undertaking/establishment.
(v) The term of council once formed shall be for a period of two years; if, however, a member is nominated in the mid-term of the council to fill a casual vacancy, the member nominated to such a vacancy shall continue in office for the remaining period of the term of the council.
(vi) The joint council shall meet, at least, once in a quarter.
(vii) Every decision of the joint council shall be on the basis of consensus and not by a process of voting and shall be binding on employers and workmen and shall be implemented within one month unless otherwise stated in the decision itself.
Functions of Joint Council:
The joint council should deal with matters relating to:
(i) Optimum production, efficiency and fixation of productivity norms of man and machine for the unit as a whole.
(ii) Functions of a shop council which have a bearing on another shop or the unit as a whole.
(iii) Matters emanating from shop councils which remain unresolved.
(iv) Matters concerning the unit or the plant as a whole, the respect of production targets; more specifically, task assigned to a shop council at the shop/department levels but relevant to the unit as a whole will be taken up by the joint council.
(v) The development of skills of workmen and adequate facilities for training.
(vi) Awarding of rewards for valuable and creative suggestions received from the workers.
(vii) The preparation of schedules of working laws and of holidays.
(viii) Optimum use of raw materials and quality of finished products.
(ix) General health, welfare and safety measures for the unit of the plant.
(IV) Shop Councils:
The shop council represents each department or a shop in a unit. Each shop council will consist of an equal number of representatives of employers and workers. The employers’ representatives will be nominated by the management and must consist of persons from within the unit concerned.
The workers representative will be from among the workers of the department or shop concerned. The number of members of each council may be determined by the employers in consultation with the recognised union. The total number of members, however, may not generally exceed twelve.
The decisions of the shop council are to be taken on the basis of consensus but not by voting. Management has to implement the decisions within one month. The tenure of the shop council is for a period of two years. Members of the shop councils meet at least once in a month. Management nominates the Chairman at least once in a month. Management nominates the Chairman of the shop council whereas workers’ members of the council elect the Vice- chairman of the council.
The number of shop councils to be established in an organisation is determined by the employer in consultation with the recognised trade unions/workers of the organisation. The decisions of a shop council which have a bearing on another shop will be referred to joint council for consideration and approval.
The main features of the scheme of Participative Management through Shop Councils are as follows:
(i) In every industrial unit employing 500 or more workmen, the employer shall constitute a Shop Council for each department or shop or one council for more than one department or shop, considering the number of workmen employed in different departments or shops.
(ii) (a) Each council shall consist of an equal number of representatives of employers and workers.
(b) The employer’s representatives shall be nominated by the management and must consist of persons from the unit concerned.
(c) All the representatives of workmen shall be from amongst the workers actually engaged in the department of the shop concerned.
(iii) The employer shall decide in consultation with the recognised union or the various registered trade unions or with workers, as the case may be, in the manner best suited to local conditions, the number of shop councils and departments to be attached to each council of the undertaking or establishment.
(iv) The number of members of each council may be determined by the employer in consultation with the recognised union, registered unions or workers in the manner best suited to local conditions obtaining in the unit; the total number of members may not generally exceed
(v) All decisions of a shop council shall be on the basis of consensus and not by process of voting, provided that either party may refer the unsettled matters to the joint council for consideration.
(vi) Every decision of a shop council shall be implemented by the parties concerned within a period of one month unless otherwise stated in the decision itself and compliance report shall be submitted to the council.
(vii) Such decision of a shop council which have bearing on another shop, or the undertaking of establishment as a whole will be referred to the joint council for consideration and decision.
(viii) A shop council once formed shall function for a period of two years. Any member nominated or elected to the council in the mid-term to fill a casual vacancy shall continue to be a member of the council for the unexpired portion of the term of the council.
(ix) The council shall meet as frequently as in necessary and that at least once in a month.
(x) The chairman of the shop council shall be a nominee of the management; the worker members of the council shall elect a Vice-Chairman from amongst themselves.
Functions of the Shop Councils:
The shop councils should in the interest of increasing production, productivity and overall efficiency of the shop department attend to the following matters:
(i) Assist management in achieving monthly/yearly production targets.
(ii) Improvement of production, productivity and efficiency including elimination of wastage and optimum utilisation of machine capacity and manpower.
(iii) Specially identify areas of low productivity and take necessary corrective steps at shop level to eliminate relevant contributing factors.
(iv) To study absenteeism in the shop/departments and recommend steps to reduce them.
(v) Safety measures.
(vi) Assist in maintaining general discipline in the shop/department.
(vii) Physical conditions of working, such as lighting, ventilation, noise, dust, etc., and reduction on fatigue.
(viii) Welfare measures to be adopted for efficient running of the shop/department.
(ix) Ensure proper flow of adequate two-way communication between the management and the workers, particularly on matters relating to production schedules and progress in achieving the targets.
(V) Unit Councils:
Encouraged by the success of the scheme in manufacturing and mining units, a new scheme of workers’ participation in management in commercial and service organisation in the public sector, having large-scale public dealings, was announced on 5th January, 1977. The Scheme envisaged setting of Unit Councils in units employing at least 100 persons.
The organisations include hotels, restaurants, hospitals, air, sea, railway and road transport services, ports and docks, ration shops, schools research institutions, provident fund and pension organisations, municipal and milk distribution services, trust organisations, all financial institutions, banks, insurance companies, post and telegraph offices, Food Corporation, State Electricity Boards, Central Warehousing, State Warehousing Corporations, State Trading Corporation, Mines and Minerals Trading Corporation, irrigation systems, tourist organisations, establishment for public amusement and training organisations of the Central and State Governments.
The scheme provides for unit level councils. These councils are to eliminate factors which hamper operations and improve methods of operation.
The main functions of the councils include creation of conditions for achieving optimum efficiency, better customer service in areas where there is direct and immediate contact between the workers at the operational level and the consumer, higher productivity, the elimination of pilferage and all forms of corruption, and the institutions of rewards to be given to those with proven ability in these areas.
Main Features of the New Scheme:
The main features of the scheme of workers’ participation through unit level councils would be as follows:
(i) A unit level council consisting of the workers and management of the organisation/ service may be formed generally in each unit, employing 100 or more workers to discuss day-to-day problems and find solutions; but wherever necessary a composite council may be formed to serve more than one unit or a council may be formed department-wise to suit the particular needs of an organisation/service.
(ii) Every unit council shall consist of an equal number of representatives of the management and workers. The actual number of members should be determined by the management in consultation with the recognised union, registered unions or the workers in the manner best suited to the local conditions obtaining in a unit or an organisation, but their total number may not exceed.
It would be necessary to nominate suitable and experienced workers from various departments irrespective of their cadre, affiliation or status, and not trade union functionaries who may not be actually working in the unit.
(iii) The management’s representatives should be nominated by the management and should consist of persons from the unit concerned.
(iv) The management shall decide in consultation with the recognised union or the registered unions or the workers as the case may be in the manner best suited to local conditions.
The number of unit councils and the departments to be attached to each council of the organisation/service.
(v) All decisions of a unit council shall be on the basis of consensus and not by a process of voting, provided that either party may refer the unsettled matters to the joint council for consideration.
(vi) Every decisions of a unit council shall be implemented by the parties concerned within a month, unless otherwise stated in the decision itself.
(vii) The management shall make suitable arrangement for the recording and maintenance of minutes of the meetings and designate one of its representatives as a secretary for this purpose who shall also report the action taken on the decisions at subsequent meetings of the council.
(viii) Such decisions of a unit council, which have a bearing on another unit of the organisation/ service as a whole shall be referred to the joint council for consideration and decisions.
(ix) A unit council once formed shall function for a period of two years. Any member nominated or elected to the council in the mid-term to fill a casual vacancy shall continue to be a member of the council for the unexpired portion of the term of the council.
(x) The council shall meet as frequently as is necessary but at least once in a month.
(xi) The Chairman of the council shall be a nominee of the management. The worker members of the council shall elect a Vice-Chairman from amongst themselves.
The main functions of the Unit Councils may be:
(i) To create conditions for achieving optimum efficiency, better customer service in areas where there is direct and immediate contact between workers at the operational level and the consumer, higher productivity and output including elimination of wastage and idle time and optimum utilization of manpower by joint involvement in improving the work system.
(ii) To identify areas of chronically bad, inadequate or inferior service and to take necessary corrective steps to eliminate the contributing factors to evolve improved methods of operation.
(iii) To study absenteeism and recommend steps to reduce it.
(iv) To eliminate pilferage and all forms of corruption and to institute a system of rewards for this purpose.
(v) The suggest improvements in physical conditions of working such as lighting, ventilation, dust, noise, cleanliness, internal layout, setting up of customers’ service points, etc.
(vi) To ensure proper flow of adequate two-way communication between the management and workers, particularly about matters relating to the service to be rendered, fixation by targets of output and progress in achieving these targets.
(vii) To recommend and improve safety, health and welfare measures for an efficient running of the unit.
(viii) To discuss any other matters which may have a bearing on the improvement of performance of the unit for ensuring better customer service.
Board Level Participation:
Various organisations provide for the employee participation at the board of directors level. Employees elect their representative to participate in the Boards. Government of India introduced a scheme for induction of employees’ representatives as a director of the Board.
Consequently, a number of public sector undertakings nominated employees’ representatives as a member of their boards. Employees welcomed this step while managements raised their doubts about the success of this scheme.
A number of multinational companies also introduced the concept of employees’ participation at the board level. This scheme would be achieve its purpose when the employees’ representatives are trained in management skills and the functions of boards.
Reasons for Slow Growth:
Various reasons have been assigned for the slow progress and unsatisfactory working of the scheme.
(i) The apathy and even hostility of the employers and the workers; the former looked upon the bipartite bodies (Works Committees and JMCs) as substitute of trade unions, while the latter considered them to be their rivals;
(ii) Lack of a proper understanding between employers and employees of the concept, purposes and benefits of the scheme;
(iii) Progressive employers, who have a long tradition of having a healthy system of communication and consultation with their employees, find the bodies to be superfluous;
(iv) Workers indirectly participate in management through their representatives. Their latent abilities and qualities have, therefore, been largely unutilised;
(v) The existence of a number of joint bodies — works committees, joint management councils, production committees, suggestion committees, canteen committees, safety committees, etc., has caused confusion and a duplication of effort as well as a waste of time and energy;
(vi) The absence of a strong trade union or the existence of more than one trade union and inter-union rivalry has made the working of the scheme somewhat difficult;
(vii) The absence of a proper education and training in the principles of human relations, cooperation and participation on the part of the workers’ representatives on these bodies;
(viii) Although the representatives of the central organisations supported the scheme of national conference and committee meetings, they have shown inadequate interest in making their affiliates enthusiastic about it. In undertaking in which employee-employer relations are not cordial and in which arrangements for works committees, grievance redressal procedure and a procedure for the recognition of a trade union are absent, the joint management councils cannot be expected to function satisfactorily;
(ix) Delay in implementing the suggestions and recommendations of these bodies often leads to the waning of the workers’ interest in such bodies;
(x) The joint management councils were created without the creation of a congenial and constructive climate for them, which would ensure that each party would trust the other and would respect its rights.
Workers’ Participation in Management (WPM) – Methods
1. Works Committee:
Every establishment employing 100 or more workers is required to constitute a works committee as specified by the Industrial Disputes Act, 1947. This committee would include equal number of representatives from the employer and the employees.
The purpose of Works Committee is to serve as a platform for joint consultation and for promoting peaceful industrial relations. It is the duty of the Works Committee to promote measures for securing and preserving amity and good relations between the employer and workmen.
Work committees are concerned with issues regarding the day-to-day working in the factory, such as:
(i) Administration of welfare and fine funds.
(ii) Educational and recreational activities such as libraries, reading rooms, cinema shows, sports, games, picnic parties, etc.
(iii) Safety and accident prevention.
(iv) Protection against occupational diseases and protective equipment.
(v) Conditions of work such as ventilation, lightening, temperature and sanitation including latrines and urinals.
(vi) Adjustment of festival and national holidays.
(vii) Amenities such as drinking water, canteen, dining rooms, medical and health services.
(viii) Implementation and review of decisions reached at meetings of works committees.
The Works Committees function actively in some big organizations like Tata Steel, Hindustan Unilever, etc. but they could not make any progress in many smaller organizations due to the following reasons:
(i) Indifferent attitude of both the management and the workers.
(ii) Lack of interest on the part of the workers’ representatives.
(iii) Managers consider it below their dignity to interact with the workers.
(iv) Lack of follow up actions on decisions of Works Committee.
(v) Delays and loopholes in implementing the decisions.
2. Suggestion Schemes:
Under suggestion schemes, workers are invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion box is installed at a convenient place in the organization and any worker can write down his suggestion and drop it in the box. There is a Suggestion Screening Committee that scrutinizes these suggestions periodically. This committee has an equal number of representatives from management and workers.
Good suggestions are considered for implementation and the concerned workers are awarded accordingly. Suggestion schemes encourage workers’ interest in the working of the enterprise. Such schemes sound good theoretically, but are rarely implemented in real business situations.
3. Joint Management Councils (JMC):
The Industrial Policy Resolution adopted by the Government in 1956 declared that in a socialist democracy, labour was a partner in the common task of development, and should be asked to participate in it with enthusiasm. The setting up of JMC at all organizations employing 500 or more employees was recommended in the second five- year plan. These councils consist of equal representatives from the employers’ and the employees’ sides, not exceeding 12 at the plant level.
The Indian Labour Conference (ILC) in its 15th session in 1957 made the following recommendations:
(i) Workers’ participation in management schemes should be set up in selected undertakings on a voluntary basis.
(ii) A sub-committee consisting of representatives of employers, workers and government should be set up for considering the details of workers’ participation in management schemes. This committee should select the undertakings where workers’ participation in management schemes would be introduced on an experimental basis.
The JMC discusses various matters related to the working of the industry. This council is responsible for activities related to the following: safety and health schemes, working hours, training schemes, accident prevention, canteen, water, sanitation facilities, absenteeism, indiscipline, etc. Problems related to wages, bonus, etc. are outside the scope of this council.
4. Joint Councils:
Any industrial unit employing 500 or more employees should have a joint council. One joint council is constituted for the whole unit. Only those people who are actually engaged in the organization shall be members of the joint council. This council deals with issues related to production, productivity and efficiency of the various resources of the organization.
A joint council shall meet whenever necessary, but at least once in a quarter. The term of the council will be two years. The chief executive of the unit will be the chairman of the council and vice chairman will be nominated by worker members. The decision of the council will be based on consensus and not on voting.
(i) Ensuring optimum use of raw material and high quality of finished products.
(ii) Dealing with issues regarding the production efficiency and productivity of men and machinery.
(iii) Preparing production schedules of working hours and of holidays.
(iv) Developing the skills of working and providing adequate facilities for training.
(v) Rewarding the workers for their valuable and innovative suggestions for improvement of the organization.
In 1977, the concept of joint council was extended to Public Sector Undertakings (PSU) like commercial and service sector organizations employing 100 or more persons. These include hotels, hospitals, railway and road transport, post and telegraph offices, and state electricity boards.
5. Collective Bargaining:
This is a process which enables the representatives of the employees who are members of labour unions to negotiate with the employers to reach collective agreement regarding rules for their terms of employment and conditions of service including pay, benefits, working hours, leave, health and safety policies, etc.
Such agreements are not legally binding upon the employers, but still they do have some impact. For collective bargaining to be successful, the representatives of both the employers and the employees need to bargain in the right spirit. But this does not happen in reality as each party tries to take advantage of the other.
But if administered properly, collective bargaining can be used to bring both parties together and develop mutual understanding so that decisions that are in the best interests of both can be taken.
6. Unit Councils:
After implementing joint council scheme in the manufacturing and mining sectors, the government in 1977 introduced the concept of unit councils in commercial and service organizations in the public sector having large scale operations. Unit councils are to be set up in units having 100 or more workers.
These councils would discuss day-to-day problems and find solutions. The council shall be composed of an equal number of representatives from management and workers, and the total number of members shall not exceed 12.
All the decisions of the council shall be taken on the basis of consensus and not by voting and such decisions shall be implemented by the parties concerned within a month unless otherwise stated in the decisions. The council is normally constituted for a period of three years. Council meetings shall be held as and when considered necessary, though a meeting should be held at least once a month.
7. Shop Council:
The concept of shop council was announced by the government in 1975. In every industrial unit employing 500 or more workers, the employers shall constitute a shop council for each department or shop. Each shop council would consist of an equal number of representatives from both the employers and the employees and the total number shall not exceed 12.
The employers’ representatives will be nominated by the management and must consist of persons within the establishment. The workers’ representatives will be from among the workers of the department or shop concerned. All the decisions of the council shall be taken on the basis of consensus and not by voting.
Functions of Shop Councils:
(i) Improve production, productivity and efficiency.
(ii) Study absenteeism in the shop/department and recommend steps to reduce it.
(iii) Suggest safety measures and improvement in physical conditions of working.
(iv) Assist in maintaining general discipline in the shop/ department.
(v) Suggest welfare measures to be adopted for efficient running of the shop/department.
(vi) Ensure proper flow of adequate two-way communication between the management and the workers.
(vii) Suggest technological innovations in the shop.
(viii) Assist in the implementation of cost reduction programme.
(ix) Ensure a periodic review of the utilization of the critical machines.
8. Worker Directors:
Under this scheme, the representatives of the workers would be taken on the board of directors of public sector enterprises. This is the highest form of WPM. The participation would be limited to companies employing 1000 or more workers (excluding temporary or seasonal workers).
The representatives of the workers should be those actually working in the organization. The worker director will be elected by all the workers of the company through secret ballot. The purpose of introducing this method was to improve employer- employee relations, encourage industrial democracy and safeguard workers’ interests.
This was aimed at increasing the active role of the workers in formulating policies and taking decisions in areas that directly concern the workers. This scheme was implemented in public sector enterprises like Hindustan Antibiotics Ltd., Hindustan Organic Chemicals Ltd. and in some nationalized banks.
However, this scheme could never be successful in India due to poor industrial relations, multiplicity of labour unions, role conflict of the worker director, lack of management support, etc.
Workers Participation in Organisations
The participation of workers in management is nothing new for India. In 1920, Mahatma Gandhi had suggested this on the ground that workers contributed labour and brains, while shareholders contributed money to an enterprise, and that both should, therefore, share in its prosperity.
He observed- “Employers should not regard themselves as sole owners of mills and factories of which they may be legal owners. They should regard themselves as trustees. There should be a perfect relationship of friendship and co-operation among them.”
As for the unions, he said- “The aim should be to raise the moral and intellectual height of labour and thus by sheer merit, make labour master of the means of production instead of the slave that it is.”
He insisted that “capital and labour should supplement and help each other; they should be a great family, living in unity and harmony.” The influence of Mahatma Gandhi bore fruit; and for the first time, the joint consultation model was adopted in the cotton textile industry.
A few works committees were also set up in the printing presses of the government. TISCO had established joint committees in 1958 and the Delhi Cloth and General Mills Co. Ltd., accepted an elected representative on the Board of its Directors. In some railway companies and the Buckingham and Carnatak Mills of Madras, works committees were set up. The year 1920 may, therefore, be regarded as a landmark in the history of joint consultation in India.
Commenting on works committees, the Royal Commission observed that- “The results achieved have been disappointing.” The Commission expressed similar views about working of joint committees on railways set up in 1923. There were several reasons for this state of affairs illiteracy of the working class, unorganised labour unions, and defective recruitment systems.
The Royal Commission reported that some employers apprehended that works committees would encroach on their management rights. The opposition of the trade unions themselves was one of the reasons, for they looked upon works committees as rival institutions.
The first major step in this direction was the enactment of the Industrial Disputes Act in 1947. Further in 1957 the scheme for joint management councils was formulated following the suggestions to this effect in the Second Five-Year Plan. Prior to it, the Industrial Policy Resolution (1948) had suggested that labour should be in all matters concerning industrial production.
The First-Five Year Plan had also called for the constitution of joint committees for consultation at all levels and reiterated the government’s faith in works committees. It said- “Works committees for the settlement of differences on the spot between the workers and the management are the key to the system of industrial relations as conceived in this Plan.”
A Study Group on Workers’ Participation in Management, consisting of representatives of the government, employers and workers, was set up in 1956, which, after closely examining the systems of workers’ participation in management in the UK, Sweden, France, Belgium, West Germany and Yugoslavia, favoured the system of joint management councils, and submitted its report in May 1957.
It emphasised that:
(i) In India, an educational campaign should be launched so that workers and managerial supervisory staff may realise the implications of such a scheme;
(ii) The joint consultation should be ‘in-built’, i.e., it should not be a matter of merely bringing together two parties, but there should be joint-ness all along the line, and technical experts and supervisors should be an organic part of the consultative scheme;
(iii) Importance should be given to reorientation of attitudes, strong self-confident trade unions, and good industrial relations for the success of any scheme of participation;
(iv) No compulsion should be applied in setting up the councils, and only permissive legislation be favoured.
The main recommendation of the Committee were:
(1) It would be advisable to have some permissive legislation empowering the government to set up joint management councils in selected undertakings.
(2) The main function of the joint management councils might include the means of communication, improvements in working and living conditions, implementation of safety measures, improvements in productivity, encouragement of suggestions and assistance in the administration of laws and agreements; alterations, in the Standing Orders; planning and execution of welfare programmes; retrenchment, rationalisation, closures, reduction in or cessation of operations; introduction of new methods of production and manufacture including re-employment of men and machinery; methods of manufacture and work operation of vocational training and apprenticeship schemes; rewards for valuable suggestions and procedures for engagement and punishment.
(3) To reduce the danger of apathy, the councils of management may be entrusted with some administrative responsibilities the administration of welfare measures, supervision of safety measures, operation of vocational training and apprenticeship schemes, and payment of rewards for valuable suggestions.
(4) There should be a strong self-confident trade union, closely connected with the machinery of participation, which should have a reasonably clear separation of functions.
(5) The co-operation of junior managers, supervisors and foremen should be sought.
(6) There should be a single council for an undertaking as a whole, provided that it is not made of units at different places. For undertakings spread over several places, there may be separate councils at local, regional or national levels.
(7) The question of size, the existence of local demand and the state of workers’ organisation and of their preparedness for participation must be taken into consideration while deciding whether the law should be applied to a particular undertaking.
These recommendations of the Study Group were accepted by the 15th Indian Labour Conference in July 1957. It appointed a 12-member sub-committee to consider further details of the scheme.
The committee recommended that:
(i) The scheme should be initially tried out in 50 selected undertakings in the public and private sectors;
(ii) There should be only one single council for the undertaking as a whole;
(iii) The employees’ representatives should be nominated by the trade union concerned, and not more than 25 per cent of the employees’ representatives should be outsiders;
(iv) The size of the joint council should be restricted to. 12 persons; and
(v) The joint council should meet during working hours.
These recommendations were discussed at a Seminar on Labour-Management Co-operation in New Delhi on January 31, and February 1, 1958. It drew up a Draft Model Agreement between management and labour for the establishment of joint management council, which was entrusted with three sets of functions- first, to fulfil its functions as an advisory body; second, to receive information on certain matters; and third, to fulfil administration responsibility.
Workers’ Participation in Management and Motivation
Participation provides greater autonomy for subordinates and often leads to increasing motivation for:
(a) Participation permits a more balanced interaction pattern and; therefore, results in less resistance to innovation.
(b) It permits members of the group to unfreeze their attitudes and engage in catharsis.
(c) It permits leaders to reinforce their position. They enhance their status both by taking a leading part in making the decision and through inducing group members to abide by it.
(d) It enables the subordinate to feel that an exchange relationship has been set up since the boss listens to his problems and permits them to be corrected.
(e) It may permit the subordinate to feel that doing the job well provides him with an opportunity to demonstrate skills which he values high, i.e., it provides him an opportunity for achievement from work.
(f) It subjects the individual to certain group pressures to implement the decision which the group participated in making it.
Worker Participation in Indian Banking Industry
Participative management is a constitutional commitment in India under Article 43-A, which provides that “The state shall take steps by suitable legislation or in any other way to secure the participation of workers in the management of undertakings establishments or other organisations engaged to any industry”.
As beginning was made towards workers participation on passing of Industrial Disputes Act, 1947 which made it mandatory for every large industrial undertaking to constitute works committees comprising representative of employers and employees. In the Industrial Policy Resolution, 1956. It was stated that there should be joint consultation to ensure industrial peace.
During emergency in India in 1975-77 workers participation in industry was part of Prime Minister 20-Point Programme. A statutory measure was adopted by the government by introducing Participation of workers management Bill on 30-05-1990.
The three reasons were advanced in support of the bill:
(i) Step in tune with Article-43 of the constitution of India
(ii) Non-statutory measures were not effective
(iii) Statutory works committee proved to be effective and hence abolished.
Workers’ Participation in Management (WPM) – Essential Conditions for Successful Working
The success of workers portion in management depends upon the following conditions:
(1) 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.
(2) Both parties should have a genuine faith in the system and in each other and be willing to work together.
(3) The experiment of labour participation in management must be given a wide publicity in order that the idea of participation is ingrained in the minds of those who are to implement the scheme.
(4) 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.
(5) Objectives to be achieved should not be unrealistically high, vague or ambiguous but practicable of achievement and clear to all.
(6) Form, coverage, extent and level of participation should grow in response to specific environment, capacity and interest of the parties concerned.
(7) Participation must work as complementary body to help collective bargaining, which creates conditions of work and also creates legal relations.
(8) Institutional participation should be discouraged but such participation should be encouraged through changes in leadership styles, communication process, and inter-personal and inter-group relations.
(9) 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.
(10) Multiple unions in one enterprise should be restricted by legislative measures. Similarly, there should be no multiplicity and duplicacy of bipartite consultative machinery at the plant level.
(11) 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.
(12) Authority should be centralised through democratic management process. The participation should be at the two or at the most three levels.
(13) Programmes for training and education should be developed comprehensively.
(14) Progressive personnel policies should ensure growth of individual workers within industry and proper policies should exist for selection, promotion, compensation, rewards and discipline.
(15) Management should be prepared to give all information connected with the working of the industry and labour should handle that information with full confidence and responsibility.
(16) 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.
(17) The follow-up action on the decisions of the participating forums should be ensured. The government may also set up machinery to act as a watch-dog for implementing the scheme.
(18) Effective two-way communication is a must for the success of the programme. The shorter is the time for communication, the greater is the probability of correct Interpretation.
Workers’ Participation in Management (WPM) – Prerequisites
The following are the prerequisites for the successful functioning of the schemes of workers’ participation in management Managements, trade unions and the workers should be concerned with these prerequisites-
(1) There should be mutual trust, faith among all the parties concerned.
(2) There should be progressive management in the enterprise and should recognise its obligations and responsibilities towards workers and trade unions.
(3) There should be strong, democratic and representative union which should represent the cause of workers without neglecting the management’s interest.
(4) There should be closely and mutually formulated, objectives for participation by trade unions and management.
(5) All parties concerned with participative management should feel that they should participate at all levels.
(6) There should be effective communication between workers and management and effective consultation of the workers by the management.
(7) Both the parties should develop a favourable attitude towards the schemes of participative management.
(8) Management and Government should provide training to all the parties concerned to prepare them for participative management.
(9) Both the parties of anticipative management should be conscious of the benefits of the schemes.
Workers’ Participation in Management (WPM) in India – Evaluation
A tripartite committee was constituted in September 1994 to examine and evaluate the success of WPM in the country. The committee after evaluation indicated that except for the government, the employees and employers have not taken the scheme seriously.
The employee representatives were more interested in the betterment of workforce rather than addressing larger issues such as absenteeism and productivity. On the other hand, the employers seem to have neglected the joint management councils (JMCs) for decisions involving critical issues such as changes in production processes and employee redeployment.
Some of the factors which can be attributed to the failure of WPM in the country include:
1. Ideological differences and lack of proper participation.
2. Multiplicity of participative firms leading to duplication, redundancy, and wastage of time.
3. Industrial relations marked by lack of trust between the management and employees.
4. Improper attitude and lack of awareness among employees.
To facilitate promotion of participative culture among Indian enterprises it would be appropriate to ensure congenial work environment, committed approach from both parties, greater awareness for the scheme, setting of realistic objectives, making WPM complementary to collective bargaining free flow of information, and more importantly carrying out the decision taken by WPM bodies.