WORKERS’ PARTICIPATION IN MANAGEMENT

CHAPTER 4

 Introduction
 Objectives and Need of WPM
 Types and Forms of WPM
 Methods of Participation
 Forms of WPM
 Levels of WPM
 Forms of WPM in India
 Challenges for Success of WPM in India
1
 INTRODUCTION

 Workers’ participation
 Encompasses different forms of workers’ involvement in decision making of
an organization
 Sharing of decision making power by workers through their representatives
in activities by direct or indirect involvement
 Advanced form of cooperation between labour and management
 Nature of participation differs across enterprises in terms of power given to
workers
 Means for establishing industrial democracy
 Industrial democracy in action based on the principles of equity, equality
and voluntarism
 Beginning of joint committees in 1920 in India
 Known by different names in different countries
2
 OBJECTIVES AND NEED OF WPM

 Power sharing
 Opportunity to workers to share power with management
 Promoting cooperation
 Management and workers come together with the objective of
 Identifying problems of the organization
 Cooperating with each other in finding solutions to these problems
 Increasing labour-management communication
 Regular meetings between labour and management
 Help in maintaining interaction
 Provide a forum to express opinions
 Empowering employees
 By giving employees a voice in matters that affect them
 Promoting industrial peace
 Results in mutual trust and stable relationship, resulting in industrial peace

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 TYPES AND FORMS OF WPM

 Direct Participation
 Through teams and workers’ assemblies consisting of all employees
 Individual and collective exercise of job or task discretion and autonomy

 Indirect or Representative Participation

 Through trade unions, works committees, joint consultative committees, or
various other committees

 Financial Participation
 Through profit sharing or stock ownership or various combinations

4
 METHODS OF PARTICIPATION

 Superficial participation
 Information-sharing and suggestion schemes
 Ensures that employees are able to receive information and express their views
pertaining to matters of general economic importance
 Intermediate participation
 Collective bargaining in both traditional and non-traditional areas
 Consultation on restricted issues
 Real participation (Industrial Democracy)
 Consultation on unrestricted issues
 Co-determination on restricted and unrestricted issues
 Workers do not merely influence decisions, they participate with managers in the
management of industry on equal terms
 Not confined to peripheral or minor matters, but intrinsic to the governance of5
the establishment
 LEVELS OF PARTICIPATION

 Informative and Associative Participation

 Right to receive information, discuss and give suggestions on general
economic situation of the establishment
 E.g., state of the market, production and sales programmes, circumstances
affecting the economic position of the company, long term plans of
expansion and redeployment
 Consultative Participation
 Involves a high degree of sharing of views of the members and giving them
an opportunity to express their feelings
 Members consulted on matters such as welfare amenities, adoption of new
technology and related problems, safety measures
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 CONTD.

 Administrative Participation
 Involves greater degree of sharing of authority and responsibility of
management functions
 Members given some autonomy in the exercise of administrative and
supervisory powers
 E.g., preparation of schedules of working hours, breaks and holidays, payment
of rewards for valuable suggestions, etc.
 Decision Participation
 Highest form of participation
 Decisions are mutually taken
 Delegation of authority and responsibility of managerial function is maximum
in matters like economic, financial and administrative policies
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 FORMS OF WPM

 Works Committee
 Arrangements for representation of workers at the plant/unit level
 Collective Bargaining
 Workers’ representatives negotiate with representatives of management on
labour-related issues through dialogue
 Usually on issues over which interests of workers and management are
competitive (e.g., employment conditions, wage rates, working hours and the
number of holidays)

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 CONTD.

 Suggestion Schemes
 Workers encouraged to give their suggestions on various issues and problems
related to production and administration
 Quality Circle
 Participative management technique
 Based on principles of voluntary participation and collaborative decision
making
 Small teams of usually 6 to 12 employees voluntarily formed
 Identify and solve quality or performance-related problems
 Stock Ownership
 Workers become shareholders of company
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 LEVELS OF WPM IN INDIA

 Unit/Enterprise Level
 Through modes like collective bargaining and Works Committee
 Industry Level
 Through Industrial Committees,Wage Boards, etc.
 Regional Level
 Through bodies like State Labour Advisory Boards
 National Level
 Tripartite machinery with representatives of employers, employees and
government
 Discuss and decide problems of industrial relations and policy-related issues
 International Level
 International representation in conferences, seminars and in bodies like ILO
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 FORMS OF WPM IN INDIA

 Shop Council
 Appointed in each department or shop of an enterprise employing
500 or more workers
 Equal number of representatives of employers and workers
 Employers’ representatives nominated by management and must consist of
employees from the unit concerned
 Chairman is nominee of management
 Workers’ representatives from the department or shop
 Vice Chairman elected from among worker-members of SC
 Number of SCs and departments to be attached to each decided by
employer in consultation with recognized union
 Size restricted to 12 persons 11
 CONTD.

 Shop Council
 Functions for 2 years and meets at least once a month
 Decision-making by consensus and decisions to be implemented within
a month
 Functions
 To assist management in achieving production targets, improving production,
improving productivity and efficiency, eliminating wastage, and utilizing
capacity and manpower to the optimum level
 Identify areas of low productivity, study absenteeism and recommend
measures for their improvement
 Safety, working conditions, discipline and two-way communication 12
 CONTD.

 Joint Council
 For the whole unit
 ONE joint council for a single plant employing 100 or more
people
 Number decided by employer in consultation with recognized union
 Constitution similar to that of shop councils
 Secretary responsible for discharging the functions of the council
 Equal number of representatives of employers and workers
 Only those actually engaged in the organization are members
 Chief Executive of establishment or branch is the Chairman
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 Vice Chairman elected from among worker-members

 CONTD.

 Joint Council
 Required to meet at least once in 3 months
 Decision-making by consensus and decisions implemented within a
month
 Functions
 To discuss production and productivity, achieve efficiency, eliminate wastage,
arrest absenteeism, ensure safety measures, etc.
 Deal with physical conditions of working and welfare measures
 Ensure two-way flow of communication between management and workers
 Give suggestions for improving skills of workers and for providing adequate
facilities for training 14
 CONTD.

 Unit Council
 Set up on 5th January, 1977 in commercial and service organizations in
public sector
 Encouraged by the success of Joint Councils scheme in manufacturing
and mining units
 Representatives of workers and management of the
organization/service, with100 or more workers, formed in each unit
 Equal number of representatives of management and workers

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 CONTD.

 Unit Council
 Management representatives from the unit concerned
 Meeting once in a month
 Functions
 To discuss day-to-day problems and find solutions
 To create conditions for achieving optimum efficiency, better customer
service, study absenteeism and recommend steps to reduce it, eliminate
pilferage and all forms of corruption, institute a system of rewards for this
purpose, and recommend and ensure safety, health and welfare measures
with two-way communication

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 CONTD.

 Works Committees/Joint Committees

 Provided in Sec. 3 of Industrial Disputes Act, 1947
 Consist of representatives of management and employees
 In every undertaking employing 100 or more workmen
 Total number of representatives (including of employer) should not
exceed 20
 Number of representatives of workers
 Should not be less than that of the employer
 Chosen from workmen engaged in the establishment in consultation with
their registered union 17
 CONTD.

 Works Committees/Joint Committees

 Main duties
 To promote measures for securing and preserving harmonious industrial
relations
 Discuss matters of common interest or concern
 Discussions on lighting, ventilation, temperature, sanitation, drinking water,
canteens, dining and rest rooms, medical and health services, safe working
conditions, administration of welfare funds, educational and recreational
activities, and encouragement of thrift and savings among workers
 Resolve material difference of opinion between employer and workmen in
such matters
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 CONTD.

 Joint Management Council

 Voluntary and consultative in nature
 Function as a consultative body
 Deal with all matters except those falling within the area of collective
bargaining (wages, bonus, hours of work, etc.)
 Objectives
 To identify measures to build up trust and understanding, and hence promote
cordial labour-management relations, increase productivity, secure effective
welfare and other facilities, etc.
 Size restricted to 12 persons
 Equal representation of workers and management
 Majority of workers’ representatives should be workers themselves
 Outside members, if inducted by the local trade unions, should not exceed 25
per cent of workers’ representatives 19
 CONTD.

 Criteria for selecting undertakings in which JMCs should be established

 Well-established and strong trade unions in the undertaking
 Willingness among employers and workers or their unions for
establishing JMCs
 At least 500 workers in the undertaking
 If in private sector
 Employer should be a member of one of the leading employers’
organizations
 Trade union should be affiliated to one of the central federations

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 CONTD.

 Plant Council
 Formed in pursuance of recommendations of the second meeting of the
Group on Labour at New Delhi on 23rd September 1985
 Applicable to all Central public sector undertakings, except specific
exemption given by the Government
 One plant council for the whole unit
 Each plant council to consist of not less than 6 and not more than 18
members
 Tenure of a period of three years
 Meetings at least once in a quarter
 Functions based on
 Operational Areas
 Economic and financial areas
 Personnel Matters
 Welfare and Environmental Areas
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 CONTD.

CONTD.

 Worker Director
 On the recommendations of the Administrative Reforms Commission made in
its report on public sector undertakings
 Government of India accepted, in principle, that representatives of workers
should be taken on the Board of Directors of Public Sector enterprises
 Initiated by the Government in 1970
 Presence of Worker Director on the Board shall not lead to any breach in the
confidentiality of the information required
 Worker Director
 To be a nominee of the recognized union elected through a secret ballot
 Participates in all the functions of the Board
 Reviews the working of shop and plant council
 Appointment of a Worker Director and a Director representing Officers’ cadre
of each bank on the Board of each nationalized bank 22
 CONTD.

CONTD.

 Joint Consultative Machinery

 Set up by the Government in 1966-67
 To facilitate communication and cooperation and promoting harmonious
relations between government as employer and its employees
 Equal representation from workers and management
 Size of the Council to be restricted to 12 persons
 3-tier structure
 Meetings at least once in 4 months

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 CHALLENGES FOR SUCCESS OF WPM IN INDIA

 Non-commitment of management to the schemes

 Alienation of workers arising from non-implementation of
decisions
 General apathy among workers
 Management reluctance to share information
 Perceived differences in social status, education and awareness
between management and workers

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