Professional Documents
Culture Documents
Definitions:
The concept of WPM is a broad and complex one. Depending on the socio-political environment and
cultural conditions, the scope and contents of participation change.
International Institute of Labour Studies: WPM is the participation resulting from the practices
which increase the scope for employees’ share of influence in decision-making at different tiers of
organizational hierarchy with concomitant (related) assumption of responsibility.
ILO: Workers’ participation, may broadly be taken to cover all terms of association of workers and
their representatives with the decision-making process, ranging from exchange of information,
consultations, decisions and negotiations, to more institutionalized forms such as the presence of
workers’ member on management or supervisory boards or even management by workers
themselves (as practiced in Yugoslavia).
The main implications of workers’ participation in management as summarized by ILO:
• Workers have ideas which can be useful;
• Workers may work more intelligently if they are informed about the reasons for and the
intention of decisions that are taken in a participative atmosphere.
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Vikas Shrivastava Page 1
• To secure the mutual co-operation of employees and employers in achieving industrial peace;
greater efficiency and productivity in the interest of the enterprise, the workers, the consumers
and the nation.
Importance:
• 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.
• 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
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Vikas Shrivastava Page 2
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.
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• 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.
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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.
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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.
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Vikas Shrivastava Page 6
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.
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Limitations of participation:
Technology and organizations today are so complex that specialized work-roles are required.
• This means employees will not be able to participate effectively in matters beyond their
particular environment. Everybody need not want participation.
• The role of trade unions in promoting participative management has been far from satisfactory.
• Employers are unwilling to share power with the workers’ representatives. Managers consider
participative management a fraud.
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(I) (v) Reason for Limited Success :
1. Firstly, the fundamental difficulties in the way lie in the concept itself. There is a basic conflict of
interests between the workers and the owners of the business enterprise. Participation involves
parting with power. Managements have been reluctant to part with their authority and prerogative to
manage the enterprises. Similarly trade unions have not been prepared to divest themselves of their
power manifested in bargaining and pressure.
2. Secondly, multiplicity of trade unions and factionalism has been a serious obstacle in the way of
workers’ participation in management. In view of the claims and counter claims, apathy and
willingness, hostility and cooperation displayed by rival unions or their factions, designation of
workers’ representatives on the participative forums often becomes a very difficult task.
3. The government with its anxiety of maintaining cordial relations between labour and management,
increasing production and productivity, achieving planned targets and accelerating the pace of
economic and industrial development, came forward with different schemes of workers’
participation in management. Many employers and trade unions still considers them as imposition
from outside. Its enforcement by law or compulsion would thwart the very purpose of scheme and
would act as serious constraint on its successful implementation.
4. Fourthly, both managements and trade unions have often complained of a plethora of joint bodies in
Indian industries for example, works committees, joint management councils, shop councils, unit
councils, plant councils, establishment councils, canteen committees, production committees, safety
committees, welfare committees, grievance committees , and so on. Thus, it is natural for them to
become bewildered by this multiplicity of joint bodies.
5. Another hurdle has been lack of specific arrangements for sharing the gains of participation.
Workers are assured in a vague manner, that they would gain if production increases and quality of
products improves as a result of participation, but vague and remote expectations cannot be
expected to enthuse the workers. A prior arrangement for sharing the fruits of participation is a
necessary condition for the success of the scheme on a lasting basis.
6. It is the government in India which is more anxious for the establishment of the schemes of
participation than the parties which have to work them out. However, displaying an attitude of
cooperation with the government in maintaining industrial harmony, most national organizations of
employers and trade unions supported the schemes at the national forums, but they have generally
failed to enthuse their affiliates about the usefulness of the schemes.
7. Lastly, it has also been realized that lack of education and training with regard to the content,
process, utility and other relevant aspects of participation have also proved an impediment to the
growth of workers’ participation in the country.
This Text should be used as reference for MLFIR. Students should also go through
websites, books and take guidance from their respective faculty members.
Vikas Shrivastava Page 9
This Text should be used as reference for MLFIR. Students should also go through
websites, books and take guidance from their respective faculty members.
Vikas Shrivastava Page 10
(I) (vii) Evolution of participative management in India:
The beginning towards WPM was made with the Industrial Disputes Act, 1947, which made Works
Committees mandatory in industrial establishments employing 100 or more workers. The Industrial
Policy Resolution adopted by the government in 1956 stated that there should be some joint
consultation to ensure industrial peace, and improve employer-employee relations. The functions of
both these joint bodies were to be consultative and were not binding on the management. The response
to these schemes was encouraging to begin with, but gradually waned.
• A study team was appointed in 1962 to report on the working of joint councils and committees.
The team identified some reasons for their failure.
o No concrete steps were taken to remove the difficulties, or change the pattern of participative
management.
• During the emergency of 1975-77, the interest in these schemes was revived by the then Prime
Minister by including Workers’ Participation in industry in the government’s 20-point
programme (refer for detail Page 246 of Industrial Relations, Trade Unions and Labour
Legislation by P.R.N.Sinha, Indubala Sinha, Seema Priyadarshini Shekhar).
• The government started persuading large enterprises to set up joint consultative committees and
councils at different levels.
• The Janata Government who came to power in 1977 carried on this initiative. It was again
emphasized by the Congress government who came back in 1979. This continued in a “non-
statutory vein” till the late 1980s, and the response from the employers and employees stayed
Luke-warm. Then, the 42nd Amendment to the Constitution was made.
• Now, Article 43-A reads: 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 organizations engaged in any industry. Thus, participative management is a constitutional
commitment in India.
• And then, on May 30, 1990, the government introduced the Participation of Workers in
Management Bill in the Rajya Sabha.
o The bill requires every industrial enterprise to constitute one or more `Shop-Floor Councils’
at the shop floor level, and `Establishment Council’ at the establishment level. These
councils will have equal representation of employers and employees. Shop-Floor councils
enjoy powers over a wide range of functions from production, wastage control to safety
hazards. The Establishment Council enjoys similar powers. The bill provides for the
constitution of a Board of Management of every corporate body owning an industrial
establishment.
o The bill also provides for penalties on individuals who contravene any provision of the bill.
In spite of all these efforts, only the government and the academicians have been interested in
participative management. But participative management is staging a comeback. The compulsions of
emerging competitive environment have made employee involvement more relevant than ever before.
Managers and the managed are forced to forget their known stands, break barriers, and work in unison.
Managers and workers are partners in the progress of business.
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Workers' Participation at TISCO
Since Tata Iron and Steel Company are the pioneers in establishing joint consultation in India, it is
worthwhile to look at workers' participation at TISCO.
Closer association of employees with management at TISCO began in 1919 and was formalized in
August 1956. The purpose was to promote increased productivity, provide a better understanding to the
employees of their role and importance, and to satisfy the urge for self expression. The scheme as set up
at TISCO consist f a three-tiered system with joint department councils (JDCs) constituted at the
departmental level. Next, joint works councils (JWC) for the entire work, and at the top the joint
consultative council of management (JCCM). The specific functions of these three bodies were as
follows:
JDCs were “to study operational results and production problems, advice on the steps deemed necessary
to promote and rationalize production, improve productivity and discipline and economize cost.
Promotion of welfare and safety, encouragement of suggestions and improvement of working conditions
also fell within their purview.”
JWCs were “to discharge special function of reviewing every month the working of JDCs and other
committees such as Suggestion Box Committee, Safety Committee, Canteen Managing Committee, etc.”
JCCM was given the task of advising management on production and welfare and also looking at matters
referred to by JDCs and JWCs
In order to ensure that these committees did not overlap the functions of other committees, separate task
groups were formed. Special courses were offered to prepare both management and union representatives
to effectively utilize the facility. TISCO's experience with workers' participation has been satisfactory.
From 1957 to the middle of 1972 JDCs have discussed a total of 14,104 suggestions of which 70.3 per
cent have been implemented. These suggestions have covered a wide range of topics and issues, but the
most important point to remember, perhaps, is that the councils have been successful in involving
workers equally in the process of production.
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COLLECTIVE BARGAINING
ILO has defined collective bargaining as, negotiation about working conditions and terms of
employment between an employer and a group of employees or one or more employee, organization
with a view to reaching an agreement wherein the terms serve as a code of defining the rights and
obligations of each party in their employment/industrial relations with one another.
Collective bargaining involves discussions and negotiations between two groups as to the terms and
conditions of employment. It is called ‘collective’ because both the employer and the employee act as a
group rather than as individuals. It is known as ‘bargaining’ because the method of reaching an
agreement involves proposals and counter proposals, offers and counter offers and other negotiations.
Importance:
Collective bargaining includes not only negotiations between the employers and unions but also
includes the process of resolving labor-management conflicts. Thus, collective bargaining is, essentially,
a recognized way of creating a system of industrial jurisprudence. It acts as a method of introducing
civil rights in the industry, that is, the management should be conducted by rules rather than arbitrary
decision making. It establishes rules which define and restrict the traditional authority exercised by the
management.
Importance to employees
• Collective bargaining develops a sense of self respect and responsibility among the employees.
• It increases the strength of the workforce, thereby, increasing their bargaining capacity as a
group.
• Collective bargaining increases the morale and productivity of employees.
• It restricts management’s freedom for arbitrary action against the employees. Moreover,
unilateral actions by the employer are also discouraged.
• Effective collective bargaining machinery strengthens the trade unions movement.
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• The workers feel motivated as they can approach the management on various matters and
bargain for higher benefits.
• It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for
the adjustment of wages and employment conditions to economic and technological changes in
the industry, as a result of which the chances for conflicts are reduced.
Importance to employers
• It becomes easier for the management to resolve issues at the bargaining level rather than taking
up complaints of individual workers.
• Collective bargaining tends to promote a sense of job security among employees and thereby
tends to reduce the cost of labor turnover to management.
• Collective bargaining opens up the channel of communication between the workers and the
management and increases worker participation in decision making.
• Collective bargaining plays a vital role in settling and preventing industrial disputes.
Importance to society
• Collective bargaining leads to industrial peace in the country
• It results in establishment of a harmonious industrial climate which supports which helps the
pace of a nation’s efforts towards economic and social development since the obstacles to such a
development can be reduced considerably.
• The discrimination and exploitation of workers is constantly being checked.
• It provides a method or the regulation of the conditions of employment of those who are directly
concerned about them.
Distributive bargaining:
It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries
and bonus are discussed. In distributive bargaining, one party’s gain is another party’s loss. This is most
commonly explained in terms of a pie. Disputants can work together to make the pie bigger, so there is
enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to
get as much as they can for themselves. In general, distributive bargaining tends to be more competitive.
This type of bargaining is also known as conjunctive bargaining.
Integrative bargaining:
This involves negotiation of an issue on which both the parties may gain, or at least neither party loses.
For example, representatives of employer and employee sides may bargain over the better training
programme or a better job evaluation method. Here, both the parties are trying to make more of
something. In general, it tends to be more cooperative than distributive bargaining. This type of
bargaining is also known as cooperative bargaining.
Attitudinal restructuring:
This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility
between labor and management. When there is a backlog of bitterness between both the parties,
attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops
a bargaining environment and creates trust and cooperation among the parties.
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Intra-organizational bargaining:
It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with
the workers and management. Even within the union, there may be differences between groups. For
example, skilled workers may feel that they are neglected or women workers may feel that their
interests are not looked after properly. Within the management also, there may be differences. Trade
unions maneuver to achieve consensus among the conflicting groups.
1. Prepare: This phase involves composition of a negotiation team. The negotiation team should
consist of representatives of both the parties with adequate knowledge and skills for negotiation.
In this phase both the employer’s representatives and the union examine their own situation in
order to develop the issues that they believe will be most important. The first thing to be done is
to determine whether there is actually any reason to negotiate at all. A correct understanding of
the main issues to be covered and intimate knowledge of operations, working conditions,
production norms and other relevant conditions is required.
2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process
well begun is half done and this is no less true in case of collective bargaining. An environment
of mutual trust and understanding is also created so that the collective bargaining agreement
would be reached.
3. Propose: This phase involves the initial opening statements and the possible options that exist to
resolve them. In a word, this phase could be described as ‘brainstorming’. The exchange of
messages takes place and opinion of both the parties is sought.
4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the
time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of agreements take place.
5. Settlement: Once the parties are through with the bargaining process, a consensual agreement is
reached upon wherein both the parties agree to a common decision regarding the problem or the
issue. This stage is described as consisting of effective joint implementation of the agreement
through shared visions, strategic planning and negotiated change.
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Collective bargaining consists of negotiations between an employer and a group of employees that
determine the conditions of employment. Often employees are represented in the bargaining by a union
or other labor organization. The result of collective bargaining procedure is called the collective
bargaining agreement (CBA). Collective agreements may be in the form of procedural agreements or
substantive agreements. Procedural agreements deal with the relationship between workers and
management and the procedures to be adopted for resolving individual or group disputes.
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(II) (iv) Pre-requisites for Collective Bargaining:
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• In ports and docks, banking and insurance, collective agreements were arrived at, right at the national
level.
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Vikas Shrivastava Page 18