INTRODUCTION

Within the last three decades in the realm of human resource management, the
technique of the employee participation in management has been regarded as a powerful
behavioral tool for managing industrial relations system. This widely debated concept
has evolved from the purely ideological and imaginative plank to an organizational
reality. But the form and connotation of the term varies with the social 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. For management, it is joint consultation prior to decision
making. The management

experts and executives look up on 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, their very jobs, and this participation paves the way to harmonious
industrial relations which are conductive to increasing productivity and efficiency. For
labourers, it is just like co decisions 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 organizations. This does not mean that they are concerned with
improving organizational 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 as enterprise.
The concept of employee participations in management crystallizes the concept
of industrial democracy, and indicates an attempt on the part of an employer to build his
employees in to a team which works towards the realization of a common objective.

EMPLOYEE PARTICIPATION IN MANAGEMENT IN GENERAL :

Definition:
Many authors have given many definitions regarding workers participation in
management. Some are given below:

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.
DAVIS
It is a system of Communication and consultation either formal or
informal by which employees of an organization are kept in formed about the affairs of
the undertaking or through which they express their opinion and contribute to
management decisions.
MAMORIA
Provides an opportunity for every member of the organization to
contribute his ingenuity as well as his physical efforts for the improvement of
organizational effectiveness and for enhancing his own economic welfare.
DOUGLAS McGREGOR

Democracy in management does not mean that supervisor need over take a
ballot. It does mean that he must consult his staff frequently. It only means that he must
given them a chance to express themselves, to think with him in arriving at a decision
rather than just to receive decisions, to be free to apply their own intelligence rather than
being told every detailed step in how they must perform them.

OGLENNSTAHL

Objectives of the study:

The following are the objectives of Employees participation:
To examine the rational behind the concept of employees participation in
management.
To critically review the various forms of employees participation in Visakha
Steel Plant.
To study the reactions of employees in Visakha Steel Plant towards workers
participative schemes.

 To suggest measures to make this schemes more effective and useful.

THE NEED FOR WORKERS PARTICIPATION IN MANAGEMENT:

The human relations movement has so much impact on industrial society today
that workers participation in management of public enterprises has become a vital issue
to be reckoned with. The need for WPM in such enterprises is increasing day-by-day on
account of various factors. Some of the important factors have been discussed briefly as
follows :

1. Constitutional requirement :Article 43(A) of the Indian constitution envisages the workers participation in
management may be secured by any means. So the PSEs are required to fulfill these
provisions by the speedier implementation of the scheme for effective workers
participation in management.

2. Psychological Requirement :The workers participation in public enterprises is also necessary to boost
psychological and emotion feelings of the workers for attaining due status in the
decision making process of the enterprise. Professor Om Prakash rightly pointed out
that where public corporations have emerged as a result of nationalization
programmes,the working class expect their status to be raised fundamentally the slogan
mines for the miners still creates considerable enthusiasm.

3. Production and productivity requirement :For enhancing productivity and production in public enterprises, workers
participation in management has an important role to play. But it largely depend on
improved conditions of work and improved methods and latest machinery and
equipment. The management should consult workers in respect of new machinery,

methods of production and the way in which economies could be effected in the cost of
production and ways which the productivity may be increased.

4. Improvement of mutual co-operation :Workers participation in management is quite necessary to improve mutual
understanding and co-operation between the management and workers. Managerial
effectiveness and willing co-operation of workers in public enterprises are the two preconditions for unimpaired organizational performance and production. Workers have
very powerful unions, and there are conflicts in attitude and approach, between
management and unions. Given a sense of identification and good mutual understanding
on the part of both, hindrances can be over come by allowing reasonable concessions to
workers. This can be achieved more easily through workers participation in
management.
5.Removal of Communication Gap:To bridge the gap between managers and workers in their feelings, workers
participation in management may be used as a successful tool. Once workers are given
an opportunity to participate in the decision making process, their doubts and
misunderstandings are removed, they are committed to the objectives of the enterprises,
becoming responsive to its need as they find greater satisfaction out of investment in
organizing the working methods, setting the production targets and controlling their
own work.
6. Improving Human Relations :Workers participation in management may be looked up on as a way of
humanization industrial work by creating opportunities for them to gain social
satisfaction. Human element is an important factor to reckon with in worker
management relations and only a contended work force, indispensable for production,
can contribute its best to the process of organization at functioning.
7. Establishment of Industrial Democracy :The workers participation is an important means to introduce the notion of
industrial democracy by giving opportunity to the workers to take part in the managerial
functions of their enterprises. This may encourage a sense of integration of workers
towards the enterprise.

8. To Act as a Pace Setter :In recent years, leading corporations in the private sector, may be in their own
commercial interest, have instituted schemes of workers participation in management.
As such, public enterprises should not lag behind in this race. Rather, they must be one
step ahead in this regard and serve as a model for them.
FORMS OF PARTICIPATION :
The form or the way in which workers can do participate in
management varies a great deal. To some extend, this variation is related to the
differences in management, the issue or areas on which participation is sought, and the
pattern of labour management relations. It may also vary from organization to
organization, depending up on the level of power or authority enjoyed by managers at
different levels in different types of organization.
The specific way in which different forms of participation may take place also
varies from situation to situation. There may be formal organizational structures, such as
the works committee, plant councils, shop councils, production committee, safety
committee, joint management council, canteen committee, P.F.Management committee,
etc. the participation may also take place through informal mechanisms and forums. A
supervisor or a foreman may consult a worker before taking a particular decision in
which the later is interested, such as granting or rejecting an application for leave,
allotment of work on overtime, transfer from one section to another.
If workers participate in management either through formal mechanisms or
through informal procedures, if should be considered as an instance of participative
management. Whatever from it may take, it is necessary, for the effective functioning, to
promote the interests of both the parties management and labour. The managements
primary interest lies in improving productivity, reducing cost and thus improving
profitability. The workers interest lies in improving their earnings. When earnings
improve through sharing gains in productivity, apparently a harmony of interests is
promoted. If participation is to be effective as a process or device, it should be
integrated with a scheme of improving productivity and gain sharing.
The participation is of two types :
Ascending participation :

The participation may be ascending participation, where workers are given an

opportunity to influence managerial decisions at higher levels through their elected
representatives to work councils or the board of the Enterprise (i.e.,integrated
participation).
Descending participation :
In descending participation, they may be given more power to plan and make
decisions about their own work (delegation and job enrichment). They may participate
through collective bargaining (i.e., disjunctive participation). They may also participate
informally when a manager adopts a participative style of supervision, or when workers
employ unofficial restrictive practices.
The important forms in which workers can participate in management are :
Collective Bargaining :
The issues over which the interests of workers and management are competitive,
such as employment conditions, wage rates, working hours, and the number of holidays
are the usual areas for collective bargaining.
Joint administration :
The issue over which the parties are equally concerned, such as the efficient
management of provident fund money, canteen, annual sports, workers welfare facilities
etc., may form the subject of joint administration, joint decision-making or consultation.
The difference between joint administration, joint decision-making or
consultation is important, but narrow. In joint administration, workers and management
share the responsibility and power of execution. In joint decision-making, even through
two groups participate in deciding the policies, execution is generally effected by the
management. In the joint consultative form, the management only consults workers
their desires, opinions, ideas, suggestions; but retains to itself the authority and
responsibility of making decisions and executing them.

It may be useful to note that the schemes in West Germany (outside of coal
mining and iron and steel), France, the UK, Israel and Poland conform to the joint
consultation model of participation in which the management takes the final decision
but allows the workers representatives to express their views. On the other hand, the codetermination scheme in coal mining and steel industry in West Germany and the joint
management plan in Israel approximate to the joint decision making model in which
workers and management representatives sit together and take decision jointly, through

the workers representatives may be in minority. Yugoslavia provides the only example of
the workers control model. These models often tend to merge in to each other to some
extent. Stray instances of every model can be found in all the countries.
In India, participation in management fall under the co-operative or joint
management model, entailing a tempering of managerial power, but not basically
altering the social system of production relations.
G.L.Nanda, after studying the scheme of workers participation in
management in some of the European Countries concluded. First, through their was a
variety of forms in which consultation between the management and workers was
maintained; the in-built character of consultation is the single important factor in their
success. Secondly, their was no attempt to by pass trade unions through the
establishment of joining consultation machinery.

LEVELS OF PARTICIPATION :
The participation is possible at all levels of management. It depends up on the
nature of functions, the strength of the workers, the attitudes of trade unions and that of
management. The areas and degrees may differ very considerably at different levels of
management. At one end, where the exercise of authority in decision-making is almost
complete, participation will be negligible; while at the other hand, where the exercise of
authority is relatively small, participation will be maximum. In between these two
extremes, the nature and extent of authority is relatively small, participation will be
maximum. In between these two extremes, the nature and extend of participation will
vary, depending on a variety of factors, including the problems or issues, the attitudes
and past experience of the management, and the development of human relations in
general and labour management relations in particular. The fact is that workers
participation in management will have to be at different levels, the workers may be
given an opportunity to influence or take part in management decisions at the higher
level through their representatives on a supervisory board or on the Board of Directors,
or through their work councils. The participation may also be at lower level at which
workers are given some authority to plan and take decisions about their work, like job
enrichment, job enlargement, delegation etc.

There are various stages of participation. Dorothea has given three stage of
development of labour management co-operation, viz.,
- Information sharing
- Problem sharing and
- Idea sharing
Information sharing :
According to her,the information stage is one in which an employer looks up on
the joint committee as a means of informing employees about business conditions and
out look of their company, as well as telling them about changes in operating methods
before they are put into effort.

Problem sharing :
The problem sharing stage is one at which the employer recognizes that workers
can make a contribution in such areas as material costs, and the quality of work, and the
management presents the facts and labour is requested to give its opinion or to make
proposals for improving the situation.
Idea sharing stage :
At the idea sharing stage , the management indicates its willingness to
have labour-initiated ideas in any kind of production and personnel activities and
labour, with certain safeguards , is willing to contribute to the operation of the
business.
Ernest Dale describes four kinds of co-operation :

Informal co-operation , where the parties merely co-operate in gathering

information. The pooled facts are then made available to both the parties for
whatever use they care to make of them.
Advisory co-operation , where each side may consult with the other . The
union gives advice on certain matters to the management and the management
consults them before action is taken.
Constructive co-operation , where each party makes suggestions for the
improvement and the suggestions are acted up on and;

 Joint determination , where policy matters are jointly decided by the union and
the employer.
Broadly speaking , there are four stages of participation.
Informative And Associative Participation:
Where the members have the right to receive information , discuss and
give suggestions on the general economic situation of the concern , the state of
the market ,production and sales programmes , organization and general running of
the undertaking , circumstances affecting the economic position of the concern
methods of manufacture and work , annual balance sheet and profit and loss
account and connected documents and explanations, long term plans for expansion
, redeployment and such other matters as may be agreed to. There are the areas
in which the members have the right to receive information and discuss these ,
and make suggestions which are binding on the management.
Consultative Participation :
Consultative participation involves a higher degree of sharing of view of
the members and giving them an opportunity to express their feelings. In the
process , members are consulted on matters releting to welfare amenities , adoption
of new technology and the problems emanating from it , safety measures etc., Its
managements prerogative to accept the suggestions of workers given at
participative forum.

Administrative Participation :
Administrative participation involves a greater degree of sharing of
authority and responsibility of the management functions. Here members are given
a little more autonomy in the exercise of administrative and supervisory powers
in respect of welfare measures and safety works, the operation of vocational
training and apprenticeship schemes , the preperation of schedules of working
hours and breaks and holidays , payment of reward for valuable suggestions
received and any other matter that may be agreed by the members.
Decision Participation :
Decision Participation is the highest form of articipation , where sharing in
decision-making power is complete and delegation of authority and responsibility
of managerial function to such a body is maximum. In matters like economic ,

financial , administrative policies the decisions are mutually taken. In short ,

workers participation in management can deal with and exercise supervisory ,
advisory and administrative functions on matters concerning safety , welfare etc;
though the ultimate responsibility is vested in the management. In short, the
creation of new rights as between employers and workers should be outside the
jurisdiction of the participation schemes.
Workers Participation In India :
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 share holders contributed money to an

enterprise , and that should therefore , share in its prosperity . He observed
employees 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 great family, living in unity and harmony. The
influence of mahatma Gandhi bore fruit ; and for the first time , the joint
consultation model was advocated in cotton textile industry. The year 1920 may
therefore be regarded as a landmark in the history of joint consultation in India.
The government has acknowledged the importance of workers participation
in management which has been indicated in various official pronouncements from
time to time. The first major step in the direction was the enactment of the
Industrial disputes act in 1947. Further in 1957 the scheme for joint management
council was formulated following the suggestions to this effect in second five
year plan. Prior to it , the industrial policy resolution(1948) had suggested that
labour should be in all matters concerning Industrail production . The first five
year plan had also called for consultation at all levels and reiterated the
governments faith in works committees . It said : Works committees for the

10

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.
The second five year plan also emphasized that increased association of
labour with management would help successful implementation of various plans
by promoting

increased

productivity, by

giving

the

employees

better

understanding of their roles in the working of the industry and in the process of
production and by satisfying the workers urge for self-expression. The plan
characterised the creation of industrial democracy as a pre-requisite for the
establishment of a socialistic society.
The government of indias industrial policy resolution of april 1956 also
laid emphasized the need for the workers participation in management. In
socialist democracy, labour is partner in the common task of the development and
should participate in it with enthusiasm. There should be a joint consultation , and
workers and technicians should wherever possible be associated progressively in
the management. The enterprises in the public sector have to set an example in
this respect .

The aim of the government in advocating workers participation in management

was part of its overall endeavor to create a socialist society where in the sharing of a
part of managerial powers by the workers was considered necessary.
A study group on workers participation in management, consisting of
representatives of the government, employees and workers was setup 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.
The seminar on labour management co-operation, 1958, took important
decision about the size of the councils, the office-bearers and term of office etc.,
The third five year plan stated that the policy of associating labour increasingly with
management should be further strengthened. It said, workers participation may
become a highly significant step in the adoptation of the private sector to fit in the frame
work of a socialist order. It can serve to bridge to gulf between labour and management,
create better mutual understanding and facilitate the adoption, on both sides, of an
objective approach to the problems of industry and workers. For the peaceful evolution

11

of an economic system on a democratic basis, it is essential that workers participation in

management should be accepted as a fundamental principle and as an urgent need.
The fourth five year plan urged the extension of workers participation to public
sector undertakings and emphasized its importance as an essential functional link in the
structure of industrial relations.
VARIOUS COMMITTEES ON WORKERS PARTICIPATION:
Sachar Committee on workers Participation
In june 1977, a high powered expert committee on companies and M.R.T.P.
Acts was set up by the Governemnt of India under the chairmanship of Rajinder Sachar.
The terms of reference for the committee were: (i) to consider the provisions of the
companies Act and M.R.T.P.Act and (ii) to suggest measures by which workers
participation in the share capital and management of companies can be brought about.
The committee submitted its report on August 1978.
The main recommendations of the Committee were:
(a) Regarding representation of workers on Board of Directors :
These were:
(i) To begin with, Participation shall be limited to companies which employee 1,000 or
more workers ( excluding badli workers).
(ii) The definition of workmen is given in the Industrial dispute Act, 1947, would be
appropriate for the scheme.
(iii)
The Participation at the Board level should be introduced if at least 51
percent of the workers vote in a secret ballot in favour of such participation. In that
event, the company will be legally bound to fall in line twith their wishes. However, any
company can voluntarily introduce this participation scheme.
(iv)Before fixing the proportion of worker Directors on the Board, a more detailed
consideration should be given to the issue by the Central Government.
(v) The worker Director will be elected by all the workers at the companys premises by
secret ballot with cumulative voting rights.
(vi)The worker Director must be from amongst the workers employed by the company
and not an outsider.
(vii) A Pre requisite of this scheme of Participation is a programme of training
designed to be in line with the business of company. It will be the responsibility of the

12

Government to organize this training programme. An awareness of industrial relations

and business techniques will certainly make the workers more aware of the actual
problems faced by the companies in modern society. The training of the employees
must, therefore be immediately taken in hand.
(viii) The presence of worker Director on the Board would bot lead to any breach in the
confidentiality of the information.
(ix)The committee did not favour a two tier representation, i.e. a supervisory Board
and the smaller Management board.
(b) Regarding workers Participation in share capital :
In regard to workers Participation in share capital the committee failed to evolve
any formula acceptable both to workers and employers. It did not, therefore,
recommend any mandatory Participation in equality by the workers. The
recommendation that emerged was:
There was, however, quite a majority in favour of the suggestion that in all
future issues of shares by companies, a portion of new shares, say about 10% to 15%
should be reserved exclusively for workers, called the workers shares. These shares in
the first instance, must be offered to the employees of the company, and failing that only
should they be offered to the existing shareholders or the public. For that purpose,
section 81 of the Act should be suitably amended permitting the companies to give to
the employees a loan upto 12 months salary or wages not exceeding Rs.1200 for the
purchase of the shares of the company. This scheme, however, has not found favour
with Indian industries.
VERMA COMMITTEE ON WORKERS PARTICIPATION IN INDUSTRY:
The Janata Government set up a committee in September 1977 under the
chairmanship of Ravindra Varma, the Union Minister of Labour. The terms of reference
of the committee were:
(i) To study the existing statutory and non statutory schemes.
(ii) To recommend on the outlines of a comprehensive scheme of workers Participation
especially keeping in view the interests of the national economy, efficient management
and workers, and
(iii)
To recommend the manner in which the concept of trusteeship in industryand
the participation of workers in equity can be given a practical shape in a scheme of
workers. Participation.

13

The main recommendations of the Committee, which submitted its report in

1979, are:
(i) A three tier system of participation, viz., at the shop floor, plant and corporate or
board levels, should be adopted.
(ii) Legislation on workers participation covering all undertakings employing 500 or
more workers, private or corporate sector should be introduced.
(iii)
There should be provision for extending the scheme to units employing at
least 100 workers.
(iv)The representative for the participative forums should be elcted by secret ballot with
a view to avoiding any possible friction between the collective bargainin agent and the
representative. The committee suggested that there should be parity between the
representative of employers and workers on the participation forums at shop and plant
levels, but it could not agree on the number of workers representatives at the corporate
level.
(v) The issue of equity participation was recommended as optional. Not less than 10%
of all new shares to be issued in future by a company should be reserved exclusively the
workers shares of the workers of that company.
The sixth Plan Observed :
At the enterprise level, workers Participation in management should become an
integral part of the industrial relations system and serve as a effective instrument if
management. It should be made a vehicle for transforming the attitudes of both
employers and workers with a view to establishing a Co operative culture, which may
help in building a strong, self confident and self reliant country with a stable industrial
base. There is a wide area of relationships in an enterprise outside the domain of
collective bargaining where employers and workers can work jointly for the common
interest of different groups ad the enterprise as a whole. Such a system of consultative
and joint decision making should ensure frictionless co operation at various levels,
provide job satisfaction, release the latent creative energy of workers, reduce their
alienation and enhance the commitment of workers and the line management to the
common ideal of better performance. But it is necessary to provide training facilities to
workers and managerial supervisory personnel so as to motivate them in making the
scheme of workers Participation a success
.it is also necessary to strengthen the tripartite consultative machinery so that
it may be possible to evolve the broad frame work of labour policies and programmes
and full consideration and discussion among all interests concerned -trade unions,

14

employers and Government. At the industry level, standing Tripartite Committees could
serve a useful purpose in identifying the bottlenecks and deficiencies and suggesting
corrective measures.
Comprehensive Scheme for Employees Participation in Management (1983):
Based on a review of the working of the various schemes of workers
participation in management introduced in 1975 and 1977 and the experience so gained,
the Government in 1983 formulated a comprehensive scheme for workers participation
in the Central public sector understanding. The main features of the scheme are:
(i) The scheme will not have any legislative backing to begin with.
(ii) It would cover all public sector undertakings, except those specifically exempted.
(iii)
All the undertakings run on departmental lines by the Central Government
will be excluded.
(iv)It will operate both at the shop floor and the plant levels.
(v) The employees and employers shall have equal representation on all the participative
forums, and
(vi)The functions of the participative forum would be as laid down in the scheme and
can be modified with the consent of both the parties.
But a host of constraints such as multiplicity of union, inter union rivalry, lack
of proper knowledge on the part of workers about the scheme have acted as a
stumbling block in successful working of the scheme.
Forms of workers participation in India :
In the country the workers participation in management scheme is vogue in three
forms, viz.,
(i) The works committees (set up under the Industrial Dispute Act, 1947)
(ii) The joint management councils (setup as a result of the labour Management
Cooperation seminar, 1958)
(iii)

The scheme for workers representative on the board of Management

(Under the management and Miscellaneous scheme, 1970) on some public

And private sector enterprises, including industrial undertakings and nationalized
Banks.
Since July 1975, a two tier Participation model, namely the shop Council and
the joint council at the enterprise level, were introduced. On 7 th January 1977, a new
scheme of workers participation in management in commercial and service

15

organizations in public sector undertakings was launched with the setting up of unit
councils. On 30th December 1983, a comprehensive scheme for workers participation in
public undertakings was introduced. It was decided that workers would be allowed to
participate at the shop level the plant level and the board level. As the scheme of shop
council and workers representation on the board of directors were already functioning,
greater emphasis was placed on the setting up of unit councils.
At present the following Participation forms are prevalent in India:
(A)

Works Committees,

(B)

Joint Management Councils,

(C)

Joint Councils,

(D)

Unit Councils,

(E)

Plant Councils,

(F)

Shop Councils,

(G)

Workers representative on the Board of Management, and

(H)

Workers Participation in share capital.

The above Participative forms are dealt with in the following paragraphs.
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
recognized union and they are called joint committees. The workers directly elect their
representatives where there is no union.
Functions :
These works Committees /Joint committees are consultative bodies. Their
functions include discussion of conditions of work like lighting, ventilation,
temperature, sanitation etc., 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

16

be the duty of the works committee to promote measures for searching and preserving
amity and good relations between the employers and workmen and to comment upon
matters of their common interest or concern and endeavor to re-council any material
difference of opinion in respect of such matters.
Structure :
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 organizations like Tata Iron and
Steel Company, Indian Aluminum works at Belur, and Hindustan Lever. In all these, the
management have evolved joint committees independently of the statutory requirements.
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 UK, 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.
(i) That workers Participation in management schemes should be set up in selected
undertakings as 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 undertaking where workers
participation on management would be introduced in the first stage on an experimental
basis.
Objectives:
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 educate welfare facilities to them,

17

(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. They are:
(i) The unit must have 500 or more employees.
(ii) It should have a fair record of industrial relations,
(iii)

It should have well organized 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
organization, and
(vi)Trade union should be affiliated to one of the central federations.
It was observed by the sub committee that if workers and employers mutually agree
they can set up JMCs even if there 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 dreaft model
was drawn up regarding the establishment of JMCs. The sub committee was later
reconstituted as the Committee on Labour Management Co operation to advise on
all matters pertaining to the scheme
Criteria for selecting of units 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 textiles, engineering,
Chemical, 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.
(ii) There would be 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.

18

(iv) The employer in a Private undertaking should be member of one of the leading
employers organization, and similarly the trade union be related to one of the central
federations.
(v) The company should have fair record of industrial relations.
Functions :
The following are the important functions of JMCs:
(i) To be consulted on matters like standing orders, retrenchment, rationalization,
closure, reduction of operations etc.
(ii) To receive information, to discuss and offer suggestions,
(iii)
To shoulder administrative responsibilities like maintaining welfare
measures, safety measures, training schemes, working hours, payment of rewards.

The tripartite committee originally prepared a list of 50 enterprises and later the
target was raised to 150 to introduce JMCs. It was found by 1966 that 124 JMCs were
in existence. This number dropped to 80 in 1978 and a good number of these were not
working. Some of the organizations which were successful with experiments of workers
participation are Bharat Heavy Electricals Limited (BHEL), Tata Iron and Steel
Company (TISCO), Indian Aluminum Company and Aluminum Industries of Kundara.
TISCO agreed to establish a comprehensive scheme of joint consultation by an
agreement with its units. Under this scheme a three tier system of consultation was set
up.
Joint Councils:
At every division /region /zonal level, or as may be considered necessary in a
particular branch of an organization /service employing 100 or more people, there shall
be a joint council. The main features of the joint council shall be:
(i) Each organization /service shall decide the number of councils to be set up for
different types of services rendered by it in consultation with the recognized union or
workers as the case may be, in the manner best suited to the local conditions.
(ii) Only such persons who are actually engaged in the organization /service shall be
members of the joint council. Each organization /service may decide the number of
members in the manner suggested in item(s) but the membership should not be
unwieldy.

19

(iii)
The tenure of the council shall be two years. if, however, a member is
nominated in the mid term of council to fill a casual vacancy, the member nominated
shall continue in office for the remaining period of the council.
(iv) The chief executive of the organization /service or of its divisional / regional /zonal
branch, as the case may be, shall be the chairman of the joint council. There shall be a
vice chairman who will be chosen by the worker members of the council.
(v) The joint council shall appoint one of its members as its secretary who will prepare
the agenda, record the minutes of the meetings and report on the implementation of the
decisions arrived at every meeting. The management shall provide the necessary
facilities with in the premises of the organization /service for the efficient discharge of
his functions by the secretary.
(vi)The joint council shall meet when even considered necessary, but at least once in a
quarter. Every meeting shall review the action taken on the decisions of earlier meetings
for an effective follow-up action.
(vii) Every decision of the joint council shall be on the basis of consensus and not by a
process of voting it shall be binding on the management and workers and shall be
implemented with in one month, unless otherwise started in the decision.
Functions of the joint councils:
The following shall be functions of the joint council:
(i) The settlement of matters which remain unresolved by unit level councils and
arranging joint meetings for resolving inter council problems.
(ii) Review of the working of the union level council for improvement in the customer
service and evolving for the best way of handling of goods traffic, accounts, etc.,
(iii)
Unit level matters which have a bearing on other branches or on the
enterprise as a whole.
(iv) Development of skills of workers and adequate facilities for trading.
(v) Improvement in the general conditions of work.
(vi) Preparation of schedules of working hours and holidays.
(vii) Proper recognition and appreciation of useful suggestions received from workers
through a system of rewards.
(viii) Discussion on any matter having a bearing on the improvement of performance of
the organization / service with a view to ensuring better customer service.

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Unit Councils:
Encouraged by the success of the Joint Councils scheme in manufacturing and
mining units, a new scheme of workers participation in management in commercial and
service organizations in the public sector, having large scale public dealings, was
announced on 5th January 1977. The scheme envisaged the setting up of unit councils
in units employing at least 100 persons. The organizations include hotels, restaurants,
hospitals, air, sea, railway and road transport services, ports and docks, ration shops,
schools, research institutions, provident fund and pension organizations, municipal and
milk distribution services, trust organizations, all financial institutions, banks, insurance
companies, posts and telegraph offices the food corporation, State electricity boards,
Central warehousing, State warehousing corporations, State Trading corporations,
mines and minerals Trading corporation, irrigation systems tourists organizations,
establishment of public amusement and training organizations of central and state
Government.

Features of the scheme :

The main features of the scheme are:
(i) A unit level council, consisting representatives of workers and management of the
organization /service, employing 100 or more workers, may be formed in each unit 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 organization /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 recognized union, registered unions or workers in
the manner best suited to the local conditions obtaining in a unit of an organization, but
their total number may not exceed 12. 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 managements representatives should be nominated by the management
and should consists of persons from the unit concerned.

21

(iv)The management shall, in consultation with the recognized union or the registered
union or workers as the case may be, determine in the manner best suited to local
conditions, the number of unit councils and the departments to be attached to each
council of the organization /service.
(v) All the 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 decision of a unit council shall be implemented by the parties concerned with
in a month, unless otherwise stated in the decisions itself.
(vii)The management shall make suitable agreements for the recording and maintenance
if minutes and designate on of its representatives as a secretary for this purpose, who
shall also report on the action taken on the decisions at subsequent meetings of the
council.
(viii) Such decisions of a unit council have a bearing on another unit of the organization
/service as a whole shall be referred to the joint council for consideration and decision.
(ix) A unit council once formed shall function for a period of three 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 period of the term of the
council,
(x)The council shall meet as frequently as is necessary but at least once a month.
Functions of unit council :
The main functions of the unit councils are:
(i) To create conditions for achieving optimum efficjiency, better customer service in
areas where there is direct and immediate contact between workers at the operational
level and the consumer, higher productivity and out put, 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 and evolve improved
methods of operation.
(iii)

To study absenteeism problem 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.

22

(v) To suggest improvements in the physical conditions of work, such as lighting,

ventilation, dust, noise, cleanliness, internal layout and the setting up of customers
service points.
(vi) To ensure a proper flow of two way communication between management and
workers, particularly about matters relating to the services to be rendered, fixation of
targets of output and the progress made in achieving these targets.
(vii) To recommend and improve safety, health and welfare measures to ensure efficient
running of the unit.
(viii) To discuss any other matters which have a bearing on the improvement of
performance in the unit for ensuring better customer service.
Plant Council :
The plant council is formed in pursuance of the recommendations of the second
meeting of the group on labour at New Delhi on 23th September 1985. The scheme is
applicable to all central public sector undertakings, except those which are given
specific exemption form the operation of the scheme by the Government. The main
features of the scheme are:
(i) There shall be one plant council for the whole unit.
(ii) Each plant council should consist of not less than six and not more than eighteen
members. There should be parity between the representatives of employees and
employers. One -third of the employees representatives should come from the
supervisory stuff level. If the number of women employees is 15% or more of the total
work force, at least one representative should be a woman employee.
(iii)
Only such persons as are actually engaged in the unit should be members of
the plant council.
(iv)Its tenure shall be for a period of three years.
(v) The chief executive of the unit shall be the chairman of the plant council. The vice
chairman shall be elected from among the employees.
(vi)The plant council shall point on of its members as secretary who will be provided
with adequate facilities for the effective discharge of his duties with in the premises of
the undertaking /establishment.
(vii) If a person quits the council for what so ever reason, the member who is nominated
to fill the mid-term casual vacancy shall serve on the council for the unexpired period of
the term of the council.

23

(viii) The council shall meet at least once in a quarter.

(ix) Every decision of the plant council shall be on the basis of consensus and not by
voting, and shall be binding on both the employees and the employer. The decisions so
arrived at shall be implemented within a month, unless otherwise stated in the decision
itself. All unsettled issues shall placed before the board of directors for their decision.
Functions of plant council :

The plant council shall normally deal with the following matters:

(A) Operational Areas

(i) Determination of productivity scheme taking into consideration the local conditions.
(ii) Planning, implementation and attainment and review of monthly targets and
schedules,
(iii)

Material supply and preventing its short fall.

(iv) Housekeeping activities.

(v) Improvement in productivity in general and in critical areas in particular.
(vi) Quality and technological improvements.
(vii) Machine utilization, knowledge and development of new products.
(viii)

Operational performance figures.

(ix) Encouragement to and consideration of the suggestion system,

(x) Matters /problems not sorted out at the shop floor level or those that concern more
than one shop, and
(B) Economic and Financial Areas
(i) Profit and loss statement, balance sheet.
(ii) Review of operating expenses, financial results, and cost of sales.
(iii) Enterprise performance in financial terms, labour and managerial cost and
market conditions and etc.,
(C) Personnel Matters
(i) Matters relating to absenteeism.
(ii) Special problems of women workers. and
(iii) Initiation and administration of workers programmes.
(D) Welfare Areas

24

(i) Implementation of welfare schemes, such as medical benefits, housing and

transport facilities.
(ii) Safety measures.
(iii) Township administration and
(iv) Control of the habits of gambling, drinking and indebtedness among the workers.
(E) Environmental Areas
(i) Environmental protection, and
(ii) Extension activities and community development projects.

Shop councils :
The main features of the shop council scheme are:
(i) In every industrial unit employing 500 or more workers, the employer shall
constitute a shop council for each department or shop or one council for more than one
department or shop, on the basis of the number of workers employed in different
departments or shops.
(ii)
(a) Each council shall consist of an equal number of representatives of
employers and workers.
(b) The employers representatives shall be nominated by the management and must
consist of persons from the unit concerned.
(c) All the representatives of workers shall be from amongst the workers actually
engaged in the department of the shop concerned.
(iii) The employer shall, in consultation with the recognized union or the various
registered trade unions or with workers, as the case may be determine 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 recognized union, registered unions or workers in the manner best
suited to the conditions obtaining in the unit. The total number of members may not
exceed 12.
(v) All the decisions of the shop council shall be on the basis of consensus and not by
voting, provided that either party may refer the unsettled matter to the joint council for
consideration.

25

(vi) Every decision of the shop council shall be implemented by the parties concerned
with in a period of one month unless otherwise stated in the decision itself, and a
compliance report shall be submitted to the council.
(vii) Such decisions of the shop council having a bearing on another shop or department
or the undertaking as a whole shall be referred to the joint council for consideration and
decision.
(viii)
A shop council, once formed, shall function for a period of three 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 is necessary but at least once 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 shop councils :
To achieve increased production, productivity and over all efficiency of the
shop department, the shop council should attend to the following matters:
(i) To assist management in achieving monthly yearly production targets.
(ii) To improve production, productivity and efficiency, including elimination of
wastage and optimum utilization of machine capacity and manpower.
(iii) To specially identify areas of low productivity and take the necessary corrective
steps at shop level to eliminate relevant contributory factors,
(iv)To study absenteeism in the shop/department and recommend steps to reduce it.
(v) To suggest safety measures.
(vi) To assist in maintaining general discipline in the shop /department.
(vii) Suggest improvements in physical conditions of working lighting, ventilation,
noise, dust etc., and reduction of fatigue.
(viii)
shop/

Suggest welfare and measures to be adopted for efficient running of the

department.
(ix) To ensure proper flow of adequate two way communication between the
management and the workers, particularly on matters relating to production
schedules and progress I n achieving the targets that have been set.

26

(x) Suggest technological innovations in the shop.

(xi) To assist in the formulation and implementation of quality improvement
programme.
(xii)To determine and implement the work system design.
(xiii)

To formulate plans for multiple skill development programme.

(xiv)

To assist in the implementation of cost reduction programme.

(xv) To supervise the group working system.

(xvi)

To ensure a periodic review of the utilization of the critical machines.

A report of the Ministry of Labour indicates that the scheme of workers

Participation in management is in operation in as many as 162 central public sector

undertakings. Some of these have claimed that participative management is working
smoothly at the shop floor level. These undertakings include the Steel Authority of
India Limited (SAIL)., the Rourkela Steel Plant, Bharat Heavy Electricals Limited
(BHEL), Cement Corporation of India, Mineral Exploration Corporation, Hindustan
Photo films manufacturing company, Bharat Gold mines, Oil India and the National
Textile Corporation.
Workers representation on Board of Management
On the recommendations of the Administrative Reforms Commission made in its
report on public sector undertakings, the Government of India accepted, in principle.
That representative of workers should be taken on the Board of Directories of public
sector enterprises. A few notable features of the scheme are :
(i) The representatives of workers on the Board should be those actually working in
the enterprise.
(ii) To begion with, participation should be limited to companies which employ 1,00 or
more persons (excluding casual and badli workers)
(iii) The definition of workmen, as given in the Industrial disputes Act, 1947, would
be appropriate for the scheme.
(iv) The participation at the Board level should be introduced if at lease 51 % of the
workers vote in a secret ballot in favour of this participation. In that event, the company
will be legally bound to fall in line with their wishes. However, any company can
voluntarily introduce this participation scheme.
(v) Before fixing the proportion of worker Directors on the Board, a more detailed
consideration should be given to the issue by the central Government.

27

(vi) The worker Director will be elected by all the workers of the company through
secret ballot. Each voter will have cumulative voting rights.
(vii) The presence of the worker director on the Board would not lead to any breach in
the confidentiality of the information required by him.
(viii)
The pre-requisite of this scheme of participation shall be training in the
business of the company. It will be the responsibility of the Government to organize this
training programme an awareness of industrial relations and of business techniques
will certainly make the workers more aware of the actual problems faced by the
companies in modern society. The training of the employees must, therefore, be
immediately taken in hand.
(ix) The reforms commission did not favour a two tier representation, i.e., a
supervisory board and the smaller Management Board.
Functions under the scheme
The employees representative /worker Director participates in all the functions of
the board. Besides this, they also review the working of shop and plant councils and
takes decisions on matters not settled by the council.
Workers participation in share capital
The Sachar committee had, in its report to the Government observed: Quite a
majority in favour of the suggestion that, in all their future issues of shares, the
companies should reserve a portion of their new shares, say about 10% to 15%,
exclusively for the workers, called the workers shares. These shares, in the first
instance, must be offered to the employees of the company, failing that they should be
offered to the existing shareholders or the public. For that purpose, section 81 of the Act
should be suitably amended. Section 77 of the Act should also be amended, permitting
companies to give to the employees a loan up to 12 months salary or wages, not
exceeding Rs. 12,000 for the purpose of the shares of the company. This scheme,
however, has not found favour with the industries in India.
Other participative forums
Safety Committee:
Chapter IV of the factories act, 1948 deals with safety section 20 to 40-B of the
said act deals with various provisions and safety precautions to be taken by both the
employer and employees. While working in the factory in which 1000 or more workers
are employed, the employer is required to appoint a safety officer. The duties,

28

Qualifications and conditions of service of such safety officer shall be prescribed by the
concerned Government of the state where the factory is situated.
For the purpose of reviewing the safety performances and ensuring
implementation of all safety measures in the factory, the employer should constitute
safety committee with the representatives of Management and employees.
Functions :
- To review the safety performance in the factory and formulate safety polices.
- To examine the reports of the investigation committee in respect of accidents which
occur and suggest measures for reduction of rate of accidents.
- Approval of safety training schemes and outlays.
- Formulation of safety standards.
- Assist the safety department in the elimination of industrial hazards.
- Encourage employees to involve in the safety movement by rendering practical
suggestion and practicing safety provisions.
- Organising and conducting social and cultural activities like dramas, dances on
safety.
- The improvement of the roads and street lighting in the colony.
- Inculcating and developing among the residents a sense of belonging and self
imposed discipline.
- Discourage rearing of cattle viz. Buffaloes, cows, goats and sheep etc.
- Eliminating the menace of stray dogs and pigs in the colony.
- Ensuring an overall improvement of the colony for a happy, healthy and safe living in
the colony under good hygienic condition.
- Inculcate safety consciousness among the employees and encourage the
experienced to guide the new entrants in developing positive attitude for
safety.
- To examine the requirements of the various departments for safety and
welfare equipment.
Colony improvement Committee:
Colony improvement committee consists of representatives of management and
the recognized union /association including officers association and SC /ST employees
welfare association and other as may agreed upon mutually.
Objectives & Functions

29

To discuss and suggest ways and means for the improvement of the hygienic,
health and sanitary condition in the colony.
Canteen Committee:
Under section 46 of the Factories Act 1948 the state Government may take rules
requiring that in any specified factory where in more than 250 workmen are ordinary
employed, a canteen or canteen shall be provided maintained by the occupier for the use
of the workmen.
Under Rule 70 of the A.P. Factories Rules, the Manager of every factory shall
appoint a Canteen Committee which shall be constituted and consulted from time to
time for the following:
- The quality and quantity of food stuffs to be served in the canteen.
- The arrangement of the menus.
- Times of meals in the Canteen.
- Any other matter as may be directed by the Committee.

The Canteen Managing Committee shall consist of an equal number of persons

nominated by the occupier and elected by the workers. The number of representatives
elected by the workmen shall be in the proportion of one for every 1000 workers
employed in the factory provided that in no case shall there be more than 5 or less than
2 workmen on the committee and in cases where the workmen refuse to elect their
representatives, the occupier shall himself nominate the workers representatives in
consultation with recognized union. The occupier shall also appoint from among the
persons nominated by him a chairman to the canteen managing committee. The
manager shall decide and supervise the procedure for election to the canteen managing
committee. The tenure of the committee will be two years from the date of its
constitution.
Employees Provident Fund Act, 1952:
This Act is applicable to all industrial establishments employing 20 or more
persons and other establishments so notified by the Government from time to time, it
aims at providing monetary relief to the employees and their dependents at the time of
employees retirement, discharge, retrenchment or death, by providing for savings during

30

the employees working lives. The scheme framed under the Act is administered by the
Central Board of Trustees constituted by the central Government.
Joint consultative machinery in Government:
The second pay commission constituted in 1959 recommended the setting up of
such machinery mainly on the model of whitely council in the U.K. The Commission
defined the objectives of the machinery as promoting harmonious relation and for
securing the best measure of Co operation between the Government in its capacity as
employees and the general body of its employees in matters common concern and with
the object of further increasing the efficiency of public services.
Other Committees:
The employer may also constitute the following committees (as per requirement)
in consultation with recognized trade union /association. The structure of the committee,
its functions and other matters may be decided in consultation with recognized unions.
Recreation club:
For the purpose of organizing the recreational activities in the colony.
Sports Committee:
For promoting sports activities among employees and for organising games
/sports and tournaments.
Educational Committee
For supervising the efficient and effective functioning of the various education
institutions run bv the organization for the benefit of the children of the employees.

Workers participation in foreign countries:

Many developed and developing countries have adopted various measures either with
help of legislation or persuasion to provide workers participation in management at
different levels of participative forums. But the nature and form of workers participation
differ from country

to country because they are guided by different ideological,

economic and political considerations. Let us discuss briefly the models of workers
participation in management in Japan, the J.K. Germany and Yugoslavia as follows:
1. JAPAN:
It has a decentralized collective bargaining system. Unions are organized at the
enterprise levels, including first line supervisions. Joint consultative committees have

31

emerged at the enterprise, plant and workshop levels. Few companies have workers
representatives at the Board level.
2. The United States of America:
In the U.S.A. quality circles is getting popular as a system of workers
participation in management. Quality circles is a team of 5 to 20 employees doing
similar work that meets regularly to analyse and solve work related problems. Leading
45 firms like General Electric, General Motors, Heavy well, TRN and Northrop have
introduced the system of workers participation in management through quality circles.
3. The United Kingdom:
The British Government has taken a very favourable view of most of the
recommendations of the report of the committee of inquiry on Industrial Democracy
(Chairman: Lord Bullock), London 1977. The main recommendation of the Committee
is to have a two tier board structure with separate policy and management boards to
effect workers participation at Board level.
Besides, participation through consultation is mainly confined to routine safety,
healthy and welfare measures. However, their have been little legal provision and
political pressure for workers participations in management. The management rarely
consults workers representatives on personnel and economic matters.
4. The Federal Republic of Germany :
In West Germany, the most prevalent practice of workers participation in
management is in form of representatives of workers sitting on the Board of the
companies. Obligatory by state legislation, a workers council is a representative body of
employees and the board of employees and the Board which makes policy decisions for
the plant companies (constituted with an equal number shareholders and employees
representatives).
It is also envisages two boards the supervisory and the executive. The
supervisory board consists of the representative of the shareholders and that of the
employees, usually, the board consists of 11, 15 or 21 members. The supervisory board,
which appoints the executive board, takes major policy dimensions and sanctions
annual accounts. The executive board normally consists of a technical director, a
commercial director and a labour director. The labour director is nominee of the
workers.

32

5. Yugoslavia :
In Yugoslavia, the power in industrial enterprise vests in the workers council.
The workers council consists of 15 to 20 members elected on a two yearly basis. Apart
from these works councils, three quarters of the management board numbers are made
up of workers directly engaged in the production.
Thus, workers in Yugoslavia have a share in the income of the enterprise, and
they are also a part of total system.
Methodology of the study:
For this study, the relevant data have been collected both from the primary and
secondary sources. While secondary data is drawn from the relevant reports and books
of the Hindustan Shipyard Limited, the collection of primary data is based on the
questionnaire administered among the employees of visakha steel plant. A sample
survey of 50 respondents is taken for this purpose. The basis of the sample is purposive
and care is taken to cover different sections of people in Hindustan Shipyard to extract
their opinions about the way in which the scheme of participative management is being
implemented.

Limitations of the study:

The sample selected may not represent the entire population due to the lack of
the time and non availability of workers in some sections. Therefore the analysis is kept
limited to the representative opinion of 50 people only.

33

PROFILE OF STEEL INDUSTRY

Steel is an alloy of iron usually containing less than 1% carbon is a versatile
material with multitude of useful properties used most frequently in the automotive and
construction industries. Steel can be cast into bars, strips, sheets, nails, spikes, wire,
rods or pipes as needed by the intended user. The consumption of steel is regarded as
the index of industrialization and the economic maturity any country has attained.
Though the production of steel in significant quantity started only after 1900, the
growth of steel industry can be conveniently studied by dividing the time in to pre and
post independence period.
The major steel and related companies in India are:
1. Bharat Refactories Limited.
2. Hindustan Steel Works Construction Limited.
3. Jindal Steel and Power Limited

34

4. Kudremukh Iron Ore Company Limited

5. Manganese Ore (India) limited.
6. Metal Scrap Trade Corporation Limited.
7. Metallurgical and Engineering Consultants India Limited.
8. National Mineral Development Corporation (NMDC)
9. Rashtriya Ispat Nigam Limited.
10. Sponge Iron India Limited.
11. Steel Authority India Limited (SAIL).
12. Tate Iron And steel Company.
Present Scenario of Indian Steel Industry:
India is uniquely placed to become a very large producer and consumer of
finished steel products in the world. Substantial reserves of high grade iron ore, low
wage rates; technical and managerial skills of a high order have all enabled India to gain
this stature, by becoming 10th largest producer of steel in the world. Unfortunately for
the Indian steel industry, the price and distribution controls to which it was subjected till
about economic liberalization process began in the early 1990's did not permit the large
integrated steel plants to modernize their steel manufacturing facilities or to upgrade
their technologies to the state of art levels from time to time.
With the economic liberalization that was initiated in 1992, Indian steel Industry
has to accept the inevitable i.e. to appreciate the implications of low import duty rated,
face foreign competition and some how improve its strengths and competitive edge to
produce good quality products at lower prices and learn to survive in the market place.
Following liberalization, the steel Industry is well set on the path of globalization. The
dynamics of the world steel industry has a close relation with Indian steel Industry.
Presently in India, Steel products are being produced from four different sources viz.
Integrated Steel Plants
Mini Steel Plants
Re-rolling Mills
Alloy & Special Steel Plants.
Integrated Steel Plants have larger capacity and produce Steel from basic raw
materials and the other three categories mentioned are characterized by low investment
and low break-even point.
Characteristics of Integrated Steel Plants:
They have large capacities.

35

 Highly capital intensive.

They have long gestation period.
Labor intensive.
They would have all facilities including raw materials resources, water supply,
power supply, testing and inspection facilities, township facilities, medical,
educational and recreational etc.
Inter dependency of all the processing units on the proceeding and succeeding
units in the path of materials flow.
A potential source for earning foreign exchange through exports.
They serve as centers for the development of ancillary industries.
They are major consumer of refractory materials.
The integrated Steel Plants in India are:
Rourkela Steel Plant
Bhilai Steel Plant
Bokaro Steel Plant
Durgapur Steel Plant
Indian Iron and Steel Company (IISCO)
Tata Iron and Steel Company (TISCO)
Visakhapatnam Steel Plant (VSP)
Jindal Steel
Essar Steel
Industry Scenario:
The Indian economy grew at 9.4% in 2006-2007 on the back of a high
growth base of 9% in 2005-2006 and achieved the fastest growth rate in 18 years, next
only to the 10.5% clocked in 1988-1989.Aided by the high growth along with a
strengthening rupee in the forex market, the economy has graduated to a trillion dollar
one, the 12th such nation globally to reach this milestone.
Indias rapid economic growth is being built on a frame of steel. Soaring
demands by sectors like infrastructure, real estate and automobiles, at home and abroad,
has put Indias steel industry on the world map. Mergers and takeovers like TATACORUS and Arcelor-Mittal led by the Indian steel companies or Indians have been
dominating the global steel happenings. In India, finished steel production at 49 million
tons, showed a remarkable growth of 10.8% in 2006-2007.

36

The International Iron and Steel Institute (IISI) ranked India as the
seventh largest steel producer in the world with an overall production of about 40
million tons in 2006.During 2006, the global steel production stood at 1240 million
tons, showing a robust growth of 8.8% over 2005.Steel use during the year grew by
8.5% to reach 111.3 million tons.
As per IISI forecast, there will be a growth of 5.9% in the global steel use
in 2007 taking the total to 1,179 million tons followed by 6.1% in 2008 to reach 1250
million tons. The global steel demand projections indicate that India will be one of the
engines of the world steel industry in the future. The National Steel Policy, published by
the Ministry of steel in 2005, envisages production of 110 million tons in India by 2020.

Production:
Steel industry was de-licensed and decontrolled in 1991 and 1992 respectively.
India is the 8th largest producer of steel in the world.
In 2012-13, finished steel production was 36.193 million tones.
Pig iron production in 2012-13 was 5.221 million tones.
Sponge iron production was 80.85 million tones during 2012-13.
The annual growth rate of crude steel production in 2011-12 was 8% and in
2012-13 was 6%. Last 4 years production performance is as under:

37

PROFILE OF VISAKHAPATNAM STEEL PLANT

Steel is such a versatile commodity that every object we seen in our day to day
life have used steels either directly or indirectly in its products. To mention a few it
is used for such a small items as nails, pins, needles etc. Steel comprises one of the
most important inputs in all sectors of economy. Steel industry is both a basic and a
core industry. The economy of any nation depends on a strong base of iron and steel
industry in that nation.

Today Steel occupies the foremost place amongst the

materials in use today and pervades all walks of life. All the key discoveries the
human genius for instance, steam engine, railway, means of communication and
connection, automobile, aero place and computers are in one way or other, fastened
together with steel and with its sagacious and multifarious application.
Steel is versatile material with multitude of useful properties making it
indispensable for furthering and achieving the continual growth of the economy Be it
construction, manufacturing, infrastructure or consumables. The level of steel
consumption has been regarded as an index industrialization and economic maturity
attained by a country. Keeping in view the importance of steel, the following integrated
steel plants with foreign collaborations were set up in the public sector in the post
independence era:
Table no 2.1: Collaboration of Steel Plant

S. NO.
1.

STEEL PLANT

COLLABORATED BY

DURGAPUR STEEL PLANT

38

BRITAIN

2.

BHILAI STEEL PLANT

ERSTWHILE USSR

3.

BOKARO STEEL PLANT

ERSTWHILE USSR

4.

ROURKELA STEEL PLANT

GERMANY

History of VSP at a glance

1951-56 - First Five Year Plan.
No new steel plant came up .The Hindustan steel Ltd. was born
on 19th January, 1954 with the decision of setting up three steel
plants each with one million tone input steel per year in at
Rourkela, Bhilai and Durgapur; TISCO stated its expansion
program.
1956.61

- Second Five Year Plan

A bold decision was taken up to increase the ingot steel output
India to 6 Million tons per year & production at Rourkela, Bhilai
and Durgapur steel plant started.

1961.66

- Third Five Year Plan

During the third five year plan the three steel plants under HSL;
TISCO & HSCO were expanded as show. In January 1964
Bokaro steel plant came into existence.

1966.69

- Recession Period
The entire expansion program was actively executed during this
period.

1969-74

-Fourth Five Year Plan

Licenses were given for setting up of many mini steel plants and
re-rolling mills.
Govt. Of. India accepted setting up two more steel plants in south.
One each at Visakhapatnam and Hospet (Karnataka).

39

 SAIL was formed during this period on 24 th January, 1973. The

total installed capacity from 6 integrated plants was 106 Mt.
1979 - Annual Plan
The erstwhile Soviet Union agreed to help in setting up the
Visakhapatnam steel plant.
1980.85- Sixth Five Year Plan
Work on Visakhapatnam steel plant was started with a big bang
and top priority was accorded to start the plant.
Scheme for modernization of Bhilai steel plant, Rourkela,
Durgapur, TISCO were initiated.
1985-91

- Seventh Five Year Plan

Expansion work of Bhilai and Bokaro steel plants

completed.

Progress on Visakhapatnam steel plant picked up and

rationalized concept has been introduced to commission the plant
with 3.0Mt liquid steel capacity by 1990.

1991-96

- Eight Five Year plan

Visakhapatnam steel plant started its production modernization of
other steel plants is also duly envisaged.

1997-2002 - Ninth Five Year Plan

Visakhapatnam steel plant had foreseen a 7% growth during the
entire plan period.
2002-2007 - Tenth Five Year Plan
Steel industry registers the growth of 9.9 % Visakhapatnam steel
plant high regime targets achieved the best of them.
2007-2012 - Eleventh Five Year Plan
Cost of schemes/project original approved by Government of
India is Rs.9, 569.18 crores

40

To meet the growing domestic needs of steel government of India decided to set up an
integrated steel plant at Visakhapatnam. An agreement was signed with ERSTWHILE
USSR in 1979 for cooperation in setting up 3.4 mt integrated steel plant at
Visakhapatnam. The foundation stone for the plant was laid by the Prime Minister Smt.
Indira Gandhi on 20th January 1971.unlike other integrated steel plants in India;
Visakhapatnam Steel Plant is one of the most modern steel plants in the country. The
plant was dedicated to the nation on 1 st august 1992 by then Prime Minister, Shri PV
Narasimha Rao.
Vsp technology: State-of-the-Art
7 meter tall Coke Oven Batteries with coke dry quenching.
Biggest Blast Furnaces in the country.
Bell-less top charging system in Blast furnace
100% slag granulation at the BF Cast House.
Suppressed combustion- LD gas recovery system
100% continuous casting of liquid steel.
Tempcore and Stelmor cooling process in LMMM& WRM
respectively.
Extensive waste heat recovery systems.
Comprehensive pollution control measures.
Table no2.2: MAJOR SOURCES OF RAW MATERIALS
RAW MATERIAL
Iron Ore Lumps & Fines
BF Lime Stone
SMS Lime Stone
BF Dolomite
SMS Dolomite
Manganese Ore
Boiler Coal
Coking Coal
Medium Coking Coal (MCC)

SOURCE
Bailadilla, MP
Jaggayapeta, AP
UAE
Madharam, AP
Madharam, AP
Chipurapalli, AP
Talcher, Orissa
Australia
Gidi/Swang/Rajarappa/Kargali

41

Water supply
Operational water requirement of 36 mgd is being met from the Yeleru Water Supply
scheme.
Power supply
Operational power requirement of 180 to 200 MW is being met through Captive Power
Plant. The capacity of the power plant is 286.5 MW. VSP is now exporting around 60
MW of power to APSEB.
Table no 2.3: MAJOR UNITS
Department
Coke Ovens

Annual Capacity(000 T)
2,261

Units (3.0 MT Stage)

4 Batteries of 67 Ovens &

Sinter Plant

5,256

7 Mtrs. Heights.
2 Sinter machines of 312

Blast Furnace

3,400

Sq. Mtr. Grate area each

2 Furnaces of 3200 Cu.

Steel Metal Shop

3,000

Mtr. volume each

3 LD Converters each of
133 Cu. Mtr. Volume and

LMMM
WRM
MMSM

six 4 strand bloom casters

4 Stand finishing Mill
2 x 10 stand finishing Mill
6 stand finishing Mill

710
850
850

Table no 2.4: MAIN PRODUCTS OF VSP

STEEL PRODUCTS
Angles
Billets
Channels
Beams
Squares
Flats
Rounds
Re-bars
Wire Rods

BY-PRODUCTS
Nut Coke
Coke Dust
Coal Tar
Anthracene Oil
HP Napthalene
Benzene
Toulene
Zylene
Wash Oil

VISION, MISSION&OBJECTIVES:
VISION
To be a continuously growing world-class company by

42

Granulated Slag
Lime Fines
Ammonium Sulphate

Harnessing the growth potential and sustain profitable growth.

Delivering high quality and cost competitive products.
Creating an inspiring work ambience to unleash the creative energy of people.
Achieving excellence in enterprise management.

MISSION
To attain 16 million ton liquid steel capacity through technological up-gradation,
operational efficiency and expansion; augmentation of assured supply of raw materials
to produce steel at international standards of cost and quality; and to meet the
aspirations of the stake holders.
OBJECTIVES
Expand plant capacity to 6.3 million ton. By 2011-12 with the mission to expand
further in subsequent phases corporate plan.
Revamp exiting blast furnaces to make them energy efficient to contemporary
levels and in the process increase their capacity by 1.0Mt, thus hot metal capacity

to 7.5Mt.
Be amongst top five lowest cost steel producers in the world
Achieve higher levels of customer satisfaction.
Vibrant work culture in the organization.
Be proactive in conserving environment, maintaining high levels of safety and
addressing social concerns.

CORE VALUES

Commitment
Customer
Continuous Improvement
Concern for Environment
Creativity & Innovation

VSP POLICIES
VSP takes all necessary actions for the fulfillment of regulatory requirements. It has
dedicated departments for this purpose. Energy conservation, environmental
preservation, safety in work place and occupational health gets highest priority in the
company. Some of the policies in this regard are reproduced below.
Quality, Environment and Occupational Health & Safety Policy
VSP are committed to meet the needs and expectations of our customers and other
interested parties, the occupational health and safety of our work force and to preserve
the environment. To accomplish this, we will
Supply quality goods and services to customers delight.

43

 Document, implement, maintain & periodically review the management systems

including the policy, objectives and targets.
Use resources efficiently and reduce waste & prevent pollution.
Comply with all relevant legal, regulatory and other requirements applicable to
products, activities and processes in respect of quality, environment,
Occupational health & safety and also ensure the same by contractors.
Continually improve quality, environment, occupational health and safety
performance with respect to products, activities, premises and services.
Encourage development and involvement of employees.
Maintain high level of quality, environment, occupational health and safety
consciousness amongst employees and contract workers by imparting education
and training
ENERGY POLICY
VSP is committed to optimally utilize various forms of energy in a cost effective to
optimally utilize various forms of energy in a cost-effective manner to effect
conservation of energy resources. To accomplish this, we will Monitor closely and control consumption of various forms of energy through an
effective Energy Management System.
Adopt appropriate energy conservation technologies.
Maximize the use of cheaper and easily available forms of energy.
HIV/AIDS POLICY
VSP is committed to prevent and control the spread of HIV/AIDS among our
employees and their family members.
To accomplish this,
We shall educate our employees and their family members on prevention, care
and counseling of HIV/AIDS and on safe blood donation and transfusion.
If any employee has been infected, we shall endeavor to keep information about
the illness confidential.

44

 A HIV positive employee shall be encouraged to continue to work in his or her

job unless medical conditions interfere with the specific job he or she is doing.
We shall ensure that co-employees do not shun their HIV positive peer or refuse
to work alongside them.
We shall not discriminate against any employee infected with HIV/AIDS with
regard to promotions, training and any other privileges applicable to all
employees of the organization.

We shall ensure that the general medical tests conducted before the issue of
appointment letter will not cover HIV/AIDS without the informed consent and
pre-test counseling of the candidate.

We shall encourage our employees to participate in voluntary counseling and

testing. However, HIV/AIDS test will not be a part of any annual or time-to-time
health check-ups without the employees consent and retest counseling.
We shall provide all AIDS patients Anti Retroviral Therapy, as and when
necessary.
We shall ensure that all Health care personnel follow Universal Precautions to
prevent the spread of the disease.
HR POLICY
VSP believes that the employees are the most important resources. To realize the
full potential of employees, the company is committed to:
Provide work environment that makes the employees committed and
motivated for maximizing productivity.
Establish systems for maintaining transparency, fairness and equality in
dealing with employees.
Empower employees for enhancing commitment, responsibility and
accountability.
Encourage teamwork, creativity, innovativeness and high achievement
orientation.
Provide growth and opportunities for developing skill and knowledge.

45

 Ensure functioning of effective communication channels with employees.

IT POLICY
RINL/VSP is committed to leverage Information Technology as the vital
enabler in improving the customer satisfaction, organizational efficiency, productivity,
decision-making, transparency and cost-effectiveness and thus adding value to the
business of steel making. Towards this, RINL shall:
Follow best practices in Process Automation & Business Processes through IT
by

in-house

efforts/outsourcing

and

collaborative

efforts

with

other

organizations/expert groups/institutions of higher learning, etc, thus ensuring the

quality of product and services at least cost.
Follow scientific and structured methodology in the software development
processes with total user-involvement and thus delivering integrated and quality
products to the satisfaction of internal and external customers.
Make the most out of the state-of-the art technologies in the IT field while going
for the suitable cost effective IT infrastructure and software.
Ensure high level of data and information security across the organization.
Strive to spread IT-culture amongst employees based on organizational need, role
and responsibilities of the personnel and facilitate the objective of becoming a
world-class business organization.
Enrich the skill set and knowledge based of all related personnel at regular
intervals to make employees knowledge-employees.
Periodically monitor the IT investments made and achievements accrued to
review their cost effectiveness.
CUSTOMER POLICY
VSP will endeavor to adopt a Customer-focused approach at all times with
transparency.
VSP will strive to meet more than the customer needs and expectations
pertaining to products, quality, value for money and satisfaction.

46

 VSP greatly values its relationship with Customers and would make efforts at
strengthening these relations for mutual benefit.
HR MANAGEMENT
Human resource initiatives at VSP are closely linked to the corporate strategy of
the organization. VSP has harmonious industrial relations where the entire work force
works as a well-knit team for the progress of the company. The productive environment
prevailing in the company fosters an atmosphere of growth both for the employees
and for the company. VSP has introduced multi-skilling concept since inception and the
employees are trained to imbibe this. VSP has adopted a system of overlapping shifts
the first of its kind in the industry. This system ensures smooth change over of the shifts
and uninterrupted pace of operation of the plant during the shift change over. The labour
productivity is 358 tonnes/man/year for (2012-13).
MANAGEMENT OF INDUSTRIAL RELATIONS
Presently, 20 registered Trade Unions are functioning at VSP. There are 17
unions operating for espousing the cause of contract labour .In addition, two unions
each are also separately registered at our captive mines located at Jaggayyapeta and
Madharam. By and large, a smooth and cordial IR climate prevails at VSP.
The Man days Lost were brought to NIL since 2003 which indicates the
peaceful and harmonious industrial relations scenario in Visakhapatnam Steel Plant. The
code of discipline adopted in the state of Andhra Pradesh has envisaged determination
of Majority union by way of secret ballot elections at an interval of every 2 years. So far
9 elections have been held at VSP since November, 1985. In the 9 th elections held in the
year 2008, Visakha Steel workers Union (Steel Progressive Front consisting of 9
registered Unions) has emerged as the majority union and was coferrthe status of
recognition for a period of 2 years. Despite intense electioneering, labour productivity
was still kept at a high peak.
Till date around 75 nos. of Memorandum of Settlements (MOS) were arrived at
by duly following proper collective bargaining process. These notable features are
getting union(s) commitment for realization of mission & objectives, increase of
Production & Productivity, improving discipline etc. Unique informal and formal
Grievance Redressal Systems have been successfully implemented in the organization
providing for an active employee participation/involvement. A separate section Central
Employees Relations coordinates with respect to all IR related issues including
holding discussions, coordinating with meetings and negotiations etc.,

47

HUMAN RESOURCE DEVELOPMENT

RINL believes that the employees are its assets and strives to realize their
potential in full of mutual advantage.
KEY INITIATIVES OF HRD GROUP
In-house training programs
Nominations to external training programs
Organization Research , Employees satisfaction surveys and Voice of

Employees Index
Organization Development
Corporate Presentations
Lectures by eminent personalities
Human resource Information system
Knowledge management
Initiatives on Six Sigma
Emancipation of women through WIPS, Women Development Programs(Spring

Board)
Pursuit of Business Excellence Model(BEM)
Dil Ki baat
Chairman tho maata
Employees are sent to other steel plants on short duration tours to find solutions to the
various issues facing the company. Employees are also sent to suppliers manufacturing
units/training institutes to get specific training in identified areas.
TABLE NO 2.5: MAN POWER AT A GLANCE AS ON 31-03-2013
WORKS

PROJECTS

MINES

OTHERS

TOTAL

EXECUTIVES 3262

344

109

1492

5207

NON

51

257

956

12622

11358

EXECUTIVES
Total Employees

17829

Production scenarios: Steel industry was de-licensed and decontrolled in 1991&1992 respectively.
India is the 8th largest producer of steel in the world.
In 2012-13 finished steel production was 36.193Mt.

48

 Pig iron production in 2012-13 was 5.221Mt.

Sponge iron production was 80.85 Mt during the year 2012-13
The annual growth rate of crude steel production in 2012-13was 8% and in 2011-12 was
6%.
DEMAND-AVAILABILITY PROJECTION: Demand-Availability of iron and steel in the country is projected by ministry of steel
annually.
Gaps in availability are met mostly through imports.
Interface with consumers by way of Steel Consumer Council exists, which is
conducted on regular basis.
Interface helps in redressing availability problems, complaints related to quality.
TABLE NO 2.6: AWARDS WON BY VSP

Award
Gold

Purpose
Award

for

Year

outstanding VSP has establish World class2010

achievement in training excellence training infrastructure since

by Green Tech foundation, New inception and
delhi.
Strategic

leadership

award

continuously

improved training facilities

for For his well known leadership2010

CMD of RINL by Asia Pacific and contribution to HRD and

Human

Resource

congress, New delhi.

Management for being a role model as a

thinker, a does and a believer
in change and for his strategic

Global

human

and iconic stature

resource In recognition of outstanding2010

development award of federation of performance in setting up of

training

and

organization, London.

development his standards in HRD and

focus on initiatives that would
motivate

and

empower

employees to do their best

49

Won the "GRAND FINALE" of VSP

won

this

Quiz2009

Almas 10th National Management successively for 3 years in a

Quiz 2009 in December 2009.

row (2007, 2008 & 2009)

achieving HAT-TRICK which

is a National Record.
Bagged third prize in Public In the Event Management2009
Relations National Awards-2009

category at the 31st All India

Public Relations conference
held in Chandigarh

Bagged the First Steel Ministers For being the best integrated2009
Trophy for the year 2006-07

steel plant in the country

(Runner Up)

Adjudged Energy Efficient Unit For

excellence

in

energy2009

award by Confederation of Indian Management

Industry Godrej Green Business
Centre at the 10th National award.

Won the TATA-Crucible Corporate For the best performance in2009

Quiz.

the inter corporate business

quiz,

TATA-Crucible

Corporate Quiz

50

QC teams won Gold & Bronze For Quality Circles

medals

at

the

2009

International

Convention on Quality Control

Circles (ICQCC) convention at
Cuba, Philippines in October 2009.

Vishwakarma Rashtriya Puraskar For the best suggestions

2009

Awards for the performance year

2007 5TH Time in a row.

The India Gandhi Rajabhasha For the best performance in2009

Award

Hindi implementation during

the

year

2007-08

in

September.
ISPAT

RAJYA

TROPHY.

BHASHA For popularizing the usage of2009

Hindi.

RINL ranked No.2 globally for the Global survey by Steel guru2009
popularity of website among the for the most popular website
global steel makers.

among steel makers all over

the world

The Best Place to work for- 2009 Award

given

by

The2009

Economic Times-Great Place

to Work Institute was won by
VSP in June.

51

ISPAT RAJYA BHASHA TROPHY For popularizing the usage of2009

Hindi.
VSP bags top assessed award

For

2007-08

for

paying2009

highest central excise.

Ukkuvani, the bi-monthly In-house For

Employee

welfare2009

journal was adjudged the Best in National Awards for House

House Journal Devoted to Welfare Journals.
of Employees

QCFI-NMDC Trophy.

For the Best Quality Circle2008

Implementing

Organization

given by QCFI
CII Award for 5-S to WRM Dept. For Workplace Management. 2008
of VSP in November.

VSP is the 1st organization in

Steel Industry implementing
5-S

at

workplace

management.

Two QC teams, Harmony from Quality Circles

WRM and Vices from RMHP
won

EXCELLENT

International

awards

Convention

at
on

Quality Control Circles (ICQCC)

at Dhaka, Bangladesh

52

2008

Spat Suresh Pulaski Award

For No fatal accident in2007

2006 & 2007 given by JCSSI
(Joint Committee on Safety,
Health & Environment in
Steel industry)

Enterprise

Excellence

Award Excellence

in

overall2008

2007 conferred by Indian Institute performance

of Industrial Engineering (IIIE) in
May 2008.

Sri PK Bishop, CMD was awarded For

his

significant2010

a Gold medal by the Honble Prime achievement for Sustainable

Minister, Dr.Manmmohan Singh at Development, Improving the
the 95th Indian Science Congress at quality of life in society and
Andhra University, Visakhapatnam Supporting

the

cause

of

Science& Technology.

Second Prize for Organizational Efficient suggestion scheme2011

Excellence.

operation given by INSSAN

Best Organization Award conferred For promoting QCs in the2012

by QCFI, Visakhapatnam Chapter

organization

VSP is one of the most modern steel plants in India incorporating State-of-the-Art
technology. Following are some of the modern technologies adopted:
7 meter tall Coke Oven Batteries with coke dry quenching.
Biggest Blast Furnaces in the country

53

Bell-less top charging system in Blast Furnace

100% slag granulation at the BF Cast House
Suppressed combustion- LD gas recovery system
100% continuous casting of liquid steel
Temporal and steamer cooling process in LMMM &WRM respectively
Extensive waste heat recovery systems and pollution control method
HALLMARK OF VIZAG STEEL AS AN ORGANIZATION

Today, VSP is moving forward with an aura confidence and with pride amongst its
employees who are determined to give their best for the company to enable it to reach
new heights in organizational excellence.

At the same time, no single advantage accruing from a knowledge society is found
wanting by the neighborhood community with the growth &development of a
phenomenon called VIZAG STEEL existing so close to its proximity. Futuristic
enterprises, academic activity, planned & progressive residential localities are but few of
the plentiful ripple effects of this transformation and each one of us take immense pride
to uphold the philosophy of mutual(i.e,,individual and societal)progress.

The remarkable performance on production front coupled with prudent financial

management has not only resulted in achieving significant net profits but also helped
RINL emerge as a NET POSITIVE COMPANY in January, 2006 by wiping out all its
accumulated losses during 2005-2006.

TABLE NO 2.7: STATISTICAL INFORMATION OF PRODUCTION

PERFORMANCE (000 Tonnes) AT VSP

54

YEAR

HOT METAL

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13

3,165
3,485
3,941
4,055
3,920
4,153
4,046
3,913
3,546
3,900
3,830
3,920
3,860

LIQUID

SALEABLE

LABOUR

STEEL

STEEL

PRODUCTIVITY(ton

2,909
3,083
3,356
3,508
3,560
3,603
3,606
3,322
3,145
3,399
3,424
3,520
3,480

2,507
2,757
3,056
3,169
3,173
3,237
3,290
3,074
2,701
3,167
3,077
3,084
3,022

nes/man/year)
211
228
253
262
398
414
413
389
359
382
358
362
359

EMPLOYEES PARTICIPATION IN MANAGEMENT IN

VISAKHA STEEL PLANT

INTRODUCTION:
Visakha steel plant believes that active association of all employees in various
aspects of productive operations in true participative spirit is essential for the creation of
involvement and commitment which alone can motivate them to contribute their best for
sustained growth and prosperity of the organization .in pursuance of the government
policy and with corporate objective of to evolve a participative style of management
which will ensure increasing production and productive, good working conditions and
job satisfaction to all employees, payment and reward system commensurate with their

55

performance, career development and good will amongst all employees and respect for
the individuals and his human potential, the management has arrived at sound
agreements with union to contribute a healthy participative system for the benefit of the
employees and organization. Accordingly a two-tier structure has been instituted to
translate the above objectives in to the real practice.
They are:
(a) shop council at shop floor level ; and
(b) joint council at corporate level
The scheme aims at ensuring an effective two way communication and exchange
of information between management and the employees in order to enable the latter to
have better apperception of the problems and difficulties of the undertaking in its
functioning.

SHOP COUNCILS
The scheme provides for one shop council for each division/growth as
mentioned under, having regard to the type of objectives and number of employees
employed.
Unit covered
Councils
Steel complex

number of shop

one

composition

a) one shop steward

b) Two union
representatives one
from staff and the other
from workmen.
c) One resource worker
nominated by the chief
manager.
d) Equal number of
manager representatives.

56

Out fit & engineering

complex
one

one

-do-

DR & SR

-do-

Tenure and other procedural guidelines

a) Each shop council shall function for tenure of one year with effect from the
date of its constitution. The normal tenure of a member shall be for a period of one year.
If, however a member is nominated in the mid-term of the council to fill a vacancy
caused by resignation, removal, death etc., of a member, the member nominated in such
vacancy shall continue in office for the remaining period of the term of the shop
council.
Not with standard the above, any member of the shop council may be changed at any
time at the discretion of the management or the union nominating the member.
However, while exercising the discretion it shall be ensured that the continued effective
needs of the functioning of the council are not unduly impaired.
b) Only such persons who are actually engaged in the shops / departments
covered under the unity indicated above table shall be eligible to become members of
the shop councils.
c) The head of the unit / division / group shall be the chairmen of the shop
council and shall be responsible for holding meetings regularly. The labour union
representative will act as the vice-chairmen and assist the chairmen in all shop council
activities.
d) The shop council shall meet once in a month.
e) All decisions of the shop council will be taken on the basis of consensus and
not by voting. Any unsettled matters or matters where no such decisions can be arrived
at will be referred for consideration of joint council.
f) The decisions of the shop councils will be implemented by the parties
concerned and a compliance report shall be submitted to the council with in one month
g) Minutes are to be recorded for every meeting and a consolidated note on the
insights gained together with suggestions implemented is to be rendered to C&MD and
other senior officers. Copies of the minutes are to be circulated to the departments
concerned and also displayed on the departments notice boards.
h) Such decisions / matters of a shop council which have a bearing on another
shop or departments will be referred for the joint council for consideration.

57

i) Personnel and industrial relations officers earmarked for each of the

complexes will act as conveners and co-ordinate these councils meetings.
j) Meetings will be attended by Chief Welfare Officer regularly and manager
(industrial relations) where required.
While going through the minutes and other records of the shop council meetings,
it was observed that various points are discussed in the following sequence.
1.

Review of minutes of the previous meeting.

2. Review of production achievement / performance for the previousmonth and

production schedule for the present month.
3. Time keeping & discipline.
4. Safety
5. Any other points with the permission of the chair.
FUNCTIONS
In the internet of increasing production, productivity and over all efficiency of
the shop / complex, the shop council shall attend to the following matters.
a) Assist the management in achieving monthly / yearly production programmes and
targets.
b) Improvement of production, productivity and efficiency including eliminating of
wastages and optimum utilization of man power, machine and shop capacity.
c) Specifically identify areas of low productivity and suggestion of necessary corrective
steps at shop level to eliminate relevant contribution factors.
d) To study absenteeism in the shop/ departments and recommended measures to
reduce them.
e) To assist in maintenance and improvement of general discipline in the shop /
departments.
f) Ensure proper flow of adequate two-many communication between the management
and workers, particularly on matters relating to production figures, production
schedules, cost and progress in achieving the targets.
g) Assist in ensuring proper safety measures, physical environment / working
conditions in the shop / departments.

58

JOINT COUNCILS
Composition
The composition of joint council will be as follows:
a)

One steward to be co-opted by the union from among the shop council
Stewards.

b)

Three union representatives including the General Secretary of the visakha steel plant
staff and workers union.

c)

One resource worker to be co-opted by the union from among three resource
workmen of the shop council.

d)

Equal number of management representatives to be nominated by the Chairmen

& Managing Director excluding C & MD.

Tenure
The council shall function for a tenure of one year with effect from the date of its
constitution. The normal tenure of a member shall be for a period of one year. If
however, a member is nominated in the mid-term of the council to fill a vacancy caused
by resignation, removal death etc., of a member, the members nominated in such
vacancy shall continue in office for the remaining period of the term of joint council.
Who will preside
The joint council will be presided over by the G.M. (technical). For the purpose
of commencing and coordinating the meetings, the manager (ODR cell) shall act as the
convener. The General Secretary of the union will be Vice-Chairmen of the joint
council.
Meetings
The joint council will meet once in three months.
In VSP the first joint council meeting was held on 22-03-1983 and it was
presided over by the chairmen and Managing Director. Manager (industrial relations)
was the convenor . Since, then joint council meetings are being conducted for every
quarter.
While going the minutes and other records of the joint council meetings, it was
observed that various points are discussed in the following sequence:
1.

Confirmation of minutes of the previous meeting.

2.

Review of production performance.

59

3.

Ship repairs activity.

4.

Absenteeism.

5.

Safety.

6.

Unsolved matters in shop council meetings.

7.

Any other points with the permission the chair.

Functions
The joint council shall deal with the following matters:
a) Optimum production, efficiency and fixation of productivity norms of man and
machine for the unit as a whole.
b) Function of the shop council which has bearing on another shop or the unit as a
whole.
c) Matters emanating from shop council which remain unsolved.
d) Matters concerning the units of the plant as a whole in respect of matters relating to
work planning and achieving production targets, tasks assigned to shop council, at the
unit levels but relevant to plant as whole will be taken up by the joint council.
e) The development of skills of workmen and adequate facilities for training.
f) Optimum rewards for valuable and creative suggestions received from workers.
g) Optimum use of raw materials and quality of finished products.
h) Framing of rules and lines from time to time for workers of the shop councils and
joint council and for establishing communications and reporting system.
General :
a) Decisions in joint council meetings will be taken on the basis of consensus and not
by voting.
b) Unsettled matters of any shop council may be referred to the joint council
consideration.
c) Decision of joint council, as far as possible, will be implemented with in one month
from the date of such decision and the council be reported at its next meeting.
Review
The structure and functions of the council may be reviewed from time to time for
effecting improvements as required.

60

GRIEVANCES REDRESSAL SCHEME

Objectives
1. Grievance procedure in an organization where human relationships are involved
forms an integral part of industrial relations system. A grievance procedure to be
effective should be simple, flexible, time-bound and capable of being understood by
majority of employees. It should also ensure a sense of satisfaction among the aggrieved
employees, participation of employees unions and reasonable exercise of authority by
the grievance machinery.
2. On the basis of experience gained during the last 2 years of working of the
grievance cell which was constituted vide I.O.CMD/ I O / 14 / 79 dated 1.10.1979 and
keeping the above objectives in view a review of the present system of handling
grievances is made and the following revised procedure is introduced w.e.f.01.12.81
Nature of grievances
A grievance is an individual complaint or feeling (either real or imaginary) of
dissatisfaction, arising out of management action or inaction. Grievance constitute a part
of human relationship in an organization and must be given immediate attention to keep
the employee at ease and to maintain high morale among them in order to achieve a
sense of involvement of the employee in the objectives of the organization and the best
possible efficiency in production and productivity.
Classification of grievances
Grievances are broadly classified into
a)
Grievances relating to conditions of services i.e., affecting the individuals status
such as seniority, promotion, super session, transfers, alleged victimization,
regularization of absence etc.
b)
Grievances relating to work conditions i.e., conditions and environments of
work, general welfare amenities, safety etc.
c)
Grievances arising out of discrepancies in payment of wage such as short
payment, O.T. allowance etc.
Handling grievances
The entire yard is divided into the following four zones in order to facilitate
effective and prompt handling of the grievances of the employees.
a) Steel complex

61

b) Outfit complex
c) Dry dock complex
d) Staff departments
The following three tier-system of handling grievances is introduced.
FIRST LEVEL :
In each shop / department a senior engineer or an officer of equal status will be
designated as Departmental Grievances Officer who will entertain grievances either
oral or in writing at the first instance. He will examine / investigates into the grievance
and counsel the aggrieved employee and resolve the grievance at his level as far as
possible within 3 days from the date of receipt of the grievance. The welfare officer
attached to the zone will render supporting services to DGO in solving the grievance at
the shop level during his visit to the department in his zone.
The grievances which could not be solved at the level of OGO will be referred to
zonal level grievance committee for examination and redressal of the grievances within
15 days from the date of receipt of the same from the DGO.
SECOND LEVEL :
ZONAL LEVEL GRIEVANCE COMMITTEE (ZLGC)
This committee will consist of
Chief manager or his nominee (he will preside over the committee meetings)
Representative from staff association.
Representative from labour union.
Welfare officer (W.O). (the W.O will act as convener for the committee in his
zone).
The welfare officer will collect the unsettled grievances from the DGO and will
analyses and collect necessary data / records and prepare a brief summary of the cases
and present the same before the zonal level grievance committee. Unanimous decisions
taken by the Z L G C falling within the frame work of the companys policies and rules
will be implemented by the concerned department after taking approval of the
competent authority wherever necessary. Such decisions will be communicated by W.O
to be aggrieved employee and also to the concerned department for implementation.
The Z L G C will meet once in a fortnight in the first week and third week of
every month or earlier, if so needed.

62

THIRD LEVEL :
CORPORATE LEVEL GRIEVANCE COMMITTEE (CLGC)
This committee will consist of
General manager
General manager (finance)
One representative each from officers association / staff association / labour
union.
Chief manager (personnel)
Deputy manager personnel (gc) who will be the Convenor of the CLGC.
The following cases are to be referred to CLGC
a) Cases on which there is no unanimous opinion among the members of ZLGC in
respect of any grievance.
b) Any particular grievance which requires to be decided at the higher level in the
opinion of ZLGC.
c) Cases where the aggrieved employees are not satisfied with the decision of the
ZLGC and request the ZLGC to refer the cases to CLGC.
The CLGC is an apex body in resolving the grievance. It does not function as
appellate body over the decisions of ZLGC.
DY.Manager personnel (GC) will study the unsolved grievances received from
ZLGC and place them before CLGC will all relevant particulars and records.
Unanimous decisions taken by the CLGC falling within the frame work of the
companys policies and rules will be implemented by the concerned department after
taking approval of the competent authority wherever necessary. Such decisions will be
communicated by DY.Manager personnel to the aggrieved employee in writing and also
to the concerned departments for implementation.
CLGC will meet once a month during the last week of every month or earlier, if so
needed. If, in any case there is no unanimous decision the Chairman & Managing
Director with full details for decision.
REPORTING SYSTEM
1. A monthly report regarding disposal of grievance by ZLGC / CLGC in a prescribed
proformal will be rendered by DMP (GC) to CM (P) by 7th of the following month. The

63

DMP (GC) will be the coordinating officer to whom W.O.S will report on the
grievances handled in the shop floor.
2. The monthly reports should contain the following details :
The DMP (GC) will analyze the grievance broadly as to its nature and other
factors which in his opinion are causative for frustration and dissatisfaction among the
employees and suggest remedial measures.
A general review of the IR in the yard will be made by DMP (GC) for the month
under report on the basis of the feed back from W.O.S and on his own.
3. The following types of grievances will not come within the preview of the grievance
committee.
Collective bargaining matters generally falling within the preview of the union
management relationship.
Representation over disciplinary cases and appeals against punishments.
Matters of industrial disputes pending before the conciliation officer/tribunals or
other authorities.
4. The following are the guiding principles in the operation of the grievance procedure.
There will be no appeal over the unanimous decisions of the CLGC.
The ZLGC and CLGC will function within the frame work of companys
policies, rules and procedures.
The CLGC may also suggest improvements over the existing procedures and also
indicate new policy guidelines wherever needed for consideration of the management.
Where the grievance committees feel that the case should be explained to the
aggrieved employee by the committee, they may do so before a formal reply is
communicated.
If the aggrieved employee is not satisfied by the decision of ZLGC, he can
request the convener of ZLGC for forwarding his grievance to CLGC for re-examining
and the decision taken by CLGC will be final.
The GC members will have access to full information concerning the grievances
wherever necessary and the same will be made available through the convener
grievance committee concerned.
No employee should leave the work spot in pursuance of his grievance unless he
is called for by DGO / GCs.

64

 Grievances once referred to the committee and disposed off will not be taken up
again.
Old grievance petitions disposed off will not be taken up again.

OTHER PARTICIPATIVE FORUMS

Safety committee
This is statutory requirement under the factories act.
Structure :
The following be the structure of the safety committee:
Chairmen

General Manager (Technical)

Convener

Dy.manager (Safety)

Member

D.G.M. (Steel)
D.G.M. (O & E)
Chief welfare officer
Chief welfare officer
Manager (OHS)
Dy.manager (Fire services)
Six representatives from H.S.Staff and workers union (recognized
union)
Dy.manager (safety) shall act as the convenor and co-ordinate all
meetings of the safety committee.

While going through the minutes of the safety committee meetings, it was
observed that various points are discussed in the following sequence.
1. Conformation of the minutes of previous safety committee.
2. Issue of boiler suites for the year.
3. Issue of safety helmets.
4. Issue of safety suits.
5. Availability of safety items in central stores.
6. Safety at work spot.
7. Stretchers.
8. Disposal of steel scrap.
9. Unsafe and unhygienic conditions in the canteen.

65

10.Any other points with the permission of the chair.

Functions
a) To review the safety performance in the factory and formulate safety policies.
b) To examine the reports of the investigation committee in respect of accidents which
occur and suggest remedial measures to prevent recurrence.
c) Approval of safety training schemes and outlays.
d) Suggestions in respect of personnel protective equipment.
e) Formulation of safety standards.
f) Assist the safety department in the elimination of industrial hazards.
g) Encourage employees to involve in the safety movement by rendering practical
suggestions and practicing safety.
h) Inculcate safety consciousness among the employees and encourage the experienced
to guide the new entrants in developing positive attitude for safety.
i) To examine the requirements of the various departments for safety and welfare
equipment.
Colony improvement committee
The aims and objectives for which the colony improvement committee is
constituted are the follows:
To discuss and suggest ways and means for
a) The improvement of the hygienic, health and sanitary conditions in the colony;
b) The recreational amenities, facilities and activities;
c) Organizing and conducting social and cultural activities like Drama, Dance and
Music;
d) The improvement of the roads and street lighting in the colony;
e) Inculcating and developing among the residents a sense of belonging and self
imposed discipline;
f)

(i) Discouraging rearing of cattle viz.,Buffaloes, cows, goats and sheep etc.,
(ii) Eliminating the menace of stray dogs and pigs in the colony ;

g) Improving the standards and facilities in the educational institutions in the colony;
h) Conducting games and sports by way of organising tournaments and
competitions at district, state and national levels;
Constitution of the committee
The committee shall consists of the following :
Chairmen

General Secretary (H.S.Staff & Workers union,

66

Recognized union)
Members

Chief Manager (GS)

S.E (Maintenance)
Chief security officer
Chief welfare officer
Manager (Yard Medical)
Manager (Colony Medical)
General secretary (H.S. SC/ST Employees Welfare
Association)
Convenor, H.S.Recreation Club
Secretary, Gandhigram Educational Society
Secretary, Bharat Scouts & Guides
Vice-president, H.S.Welfare Society
Nominee of ladies club (VSP)
Two from the workmen side and one from staff side
representing union

The S.O. housing estate shall act as the convenor and co-ordinate all meetings of
the colony improvement committee.
While going through the minutes of colony improvement committee meetings it
was observed that various points discussed in the following manner:
1. Street lighting in the colony.
2. Electrical voltage fluctuation.
3. Maintenance of quarters and roads.
4. Generator in the colony dispensary.
5. Maintenance of community hall.
6. Safety dog menace in colony
7. Stray cattle menace in colony.
8. Rank vegetation / removal of plants.
9. Plantation of trees in new colony / college ground.
10. Mosquito menace in colony.
11. Maintenance of commercial complex.
12. Cleaning of water tanks.
13. Water harvesting in colony.

67

Canteen Management Committee :

This is a statutory requirement under section 46 of factories act,1948 and the rule
70 of the A.P.Factories rules made there under.
The canteen management committee shall consist of an equal number of
representatives from management and union.
The president of Hindustan shipyard Staff & Workers union will act as the
chairmen of the canteen management committee.
The tenure of the committee will be two years from the date of its constitution.
The committee shall be consulted from time to time so as to see
a) The quality and quantity of good stuffs to be served in the canteen ;
b) The arrangements of the menus ;
c) Times of meals in the canteen ; and
d) Any other matter as may be directed by the committee.
Educational committee
In order to co-ordinate and control the activities of the educational institutions
situated in the residential colony of HSL, the management of HSL constituted an
education committee consists of the following members from management side and
employees representatives and Head of the institution.
1. President

Chief manager

2. Secretary

Manager

3. Treasurer

Management representative

4. Members

One from management representative

One from H.S. junior college

Two from H.S. Staff & Workers union

One from outside college principal

One from SC /ST cell association

One lady representative from women welfare

committee.

P.F.Trust Board
The
E.P>F.Act,1952.

constitution

of

P.F.Trust

68

Board

is

statutory

under

the

In HSL , Provident fund is administered by the board of trustees consisting of

equal representation from the management and employees with the following
composition.
Chairman of the trust

Managing trustee
Management trustees
Employee trustees

D (F & C)

G.M.

Two committees (i) Investment committee among the trustees consisting of 6

members three from the management and three from the employees side investment
committee meets as and when required and loans committee meets once in a month.
Withdrawals from the amount standing to the credit of a member may be granted
to him at the discretion of the trustees in the following circumstances of a similar
nature.
Refundable Advance
a) To pay expenses incurred in connection with the illness of a subscriber or a member
of his family.
b) To pay expenses in connection with marriages, funerals or ceremonies which by the
religion of the subscriber it is incumbent up on him to perform and in connection with
which it is obligatory that expenditure should be incurred.
Non-Refundable advance
a)

For purchasing a dwelling house / flat

b) For purchasing a dwelling site for the purpose of construction of dwelling house or
ready built dwelling house / flat from any individual.
c)

For the construction of a dwelling house on a site owned by the members or the

spouse of the member.

d) For the construction of a dwelling house on a site owned by the members or the
spouse of the member.
Refundable loan I payable on 16th & 25th of every month.
Refundable loan II payable on 28th of every month.

69

Non-Refundable advance paid once in a month.

ANALYSIS OF THE QUSTIONNAIRE

To find out the position regarding the workers participation in management in
Visakha Steel Plant, the investigator has conducted a sample survey of 50 covering
different departments the investigator got opinions from the employees. On the basis of
the opinions of the employees, the investigator made the analysis.
1. Do you know there is a scheme of workers participation in management?

NO.OF
RESPONDENTS

PERCENTAGE

YES

39

78

NO

11

22

NEUTRA
L

NIL

NIL

TOTAL

50

100

70

YES
NO
NEUTRAL

In visakha steel plant 78% of respondents are aware of workers participation in

management and 22% of them are not aware of it. This shows that majority of
employees in visakha steel plant are aware of workers participation in management.

2. If yes, what do you understand by workers participation in management.

a) Workers expressing their views on each point of management decision making.
b) Workers representing in management forums such as Canteen Committee, Shop
Floor Committee, Joint Council Committee etc.,

NO.OF
RESPONDENTS

PERCENTAGE

YES

35

70

NO

10

20

NEUTRA
L

10

TOTAL

50

100

71

YES
NO
NEUTRAL

In visakha steel plant 78% of the respondents are aware of workers participation
in management scheme. In that 70% of the respondents are agree with option a, 20% of
the respondents are agreeing with option b and 10% respondents are neutral.

3.If no, did you try to know about workers participation in management.

NO.OF
RESPONDENTS

PERCENTAGE

YES

81.81

NO

18.18

NEUTRA
L

NIL

NIL

TOTAL

11

100

72

YES
NO
NEUTRAL

In visakha steel plant 22% of the respondents are not aware of workers
participation in management scheme. In that 81.81% of the respondents are willing to
know about workers participation in management, where as 18.18% of the respondents
are not willing to know about workers participation in management.

73

4. At any time were you a member of the above forums.

NO.OF
RESPONDENTS

PERCENTAGE

YES

20

40

NO

12

24

NEUTRA
L

18

36

TOTAL

50

100

YES
NO
NEUTRAL

In visakha steel plant schemes like canteen committee, shop floor committee,
Joint council committee, etc., are working. In the sample of 50 respondents 40%
respondents are participated in these committees, 24% respondents are not
participated in above committees and 36% of respondents are neutral.

5. If yes, whether at any time your suggestions were considered for implementation.

74

NO.OF
RESPONDENTS

PERCENTAGE

YES

15

75

NO

25

NEUTRA
L

NIL

NIL

TOTAL

20

100

YES
NO
NEUTRAL

In the sample of 50, 20 respondents have participated in different schemes. In that 20

respondents

75%

said

that

their

suggestions

were

consider

for

implementation. Whereas 25% respondents said that their suggestions were

not considered for implementation.

6. Is composition of participative committee is acceptable by the workers.

75

NO.OF
RESPONDENTS

PERCENTAGE

YES

22

44

NO

16

32

NEUTRA
L

12

24

TOTAL

50

100

YES
NO
NEUTRAL

In the sample of 50, 44% respondents are satisfied with the present composition of
participative committees, 32% are not satisfied with the present composition
of participative committees and 24% of respondents are neutral.

7. Whether all these forums are functions regularly.

76

NO.OF
RESPONDENTS

PERCENTAGE

YES

32

64

NO

16

32

NEUTRA
L

TOTAL

50

100

YES
NO
NEUTRAL

In the sample of 50, 64% respondents are accepting that these committees are
functioning regularly, 32% respondents said that these committees are not
functioning regularly at 4% respondents are neutral.

77

8. Do you think that workers participation in Management would really help to

maintain harmonious relations between workers and Managements.

NO.OF
RESPONDENTS

PERCENTAGE

YES

42

84

NO

NIL

NIL

NEUTRA
L

16

TOTAL

50

100

YES
NO
NEUTRAL

78

In the sample of 50, 84% respondents are accepting that workers participation in
management help to maintain harmonious relations between workers and
management. Whereas no one is said that workers participation in management will
not effect the relation between workers and management and 16% respondents are
neutral.

9. By implementing the workers participation in management do you think

production and productivity increase.

NO.OF
RESPONDENTS

PERCENTAGE

YES

48

96

NO

NEUTRA
L

NIL

NIL

TOTAL

50

100

YES
NO
NEUTRAL

79

In the sample of 50, 96% respondents are accepting that by implementing workers
participation in management help to increase production and productivity. Whereas
4% respondents said that workers participation in management will not effect the
production and productivity.

10. Employee participation in management would help in improving industrial

relations.

NO.OF
RESPONDENTS

PERCENTAGE

YES

40

80

NO

16

NEUTRA
L

TOTAL

50

100

YES
NO
NEUTRAL

In the sample of 50, 80% respondents are accepting that workers participation in
management help in improving industrial relations. Whereas 16% respondents said

80

that workers participation in management will not effect the industrial relations and
4% respondents are neutral.

11.

what is your opinion about Workers Participation at Board Level / Corporate

Level.

NO.OF
RESPONDENTS

PERCENTAGE

YES

10

20

NO

NEUTRA
L

38

76

TOTAL

50

100

POSITIVE
NEGATIVE
NEUTRAL

In the sample of 50, 20% respondents are accepting that workers participation at
board level / corporate level has positive impact. Whereas 4% respondents said that
workers participation at board level / corporate level have negative impact and 76%
of respondents are not aware of workers participation at board level / corporate level.

81

12. Will you suggest any improvement measures for effective functioning of Workers
Participation in Management.
In the sample of 50, many respondents are neutral for this question. And some
respondents suggestions are:
(i)

Workers need training to participant in management decisions.

(ii)

Management and workers should work together to achieve the objectives

of workers participation.

(iii)

Cordial relations should be maintained by the management for the

smooth functioning of these schemes.

(iv) Management have to conduct meetings regularly.

SUGGESTIONS & CONCLUSIONS

Suggestions:
The success of any scheme of participative management will depend
upon the fulfillment of certain conditions. The following guidelines will help and
create favorable conditions and thereby ensure success of the scheme.
Faith in the system:
The most important thing is faith on the part of both the management and
employees in the system. It is such faith that will determine the right type of attitude
and approach for the success of the scheme. Development of this faith and attitude
amongst the members of the participative bodies alone is not adequate. Managers and
employees other than members of these bodies too should corporate with the scheme
and they should also have faith in participative management.
Conceptual clarity:
The concept and approach of this new way of management of the enterprise
must be clear to all those who are involved in this exercise. While the management
should not look at the scheme with apprehensions of curtailment of their power and

82

prerogatives of managing their people, the labour or trade union should not look at
the scheme as a means of enhancement of their power. It may be stressed that this is a
new way of managing the enterprise through information sharing, consultation, joint
decision making and collective endeavour for implementation of decisions. All
concerned should bear in mind it is a managerial exercise.
Unity of Objectives and Directions:
An important principle of management relates to unit of objectives and
direction, i.e., the managerial objectives and directions should be the same for all. It
means that there must be a minimum understanding and commitment with regard to
organizational objectives. The success of participative management also depends up
on unity of objectives and directions not only from the point of view of managers but
also from that of workers particularly those elected or nominated for various councils
formed under the scheme.

System of sharing Gains of increased productivity:

Involvement of all the employees in the effective functioning of organization
is a must for the success of the participative system of management. It is proved
beyond doubt that real involvement could be possible only when there is a proper
system of sharing the gains of increased productivity. When a scheme is introduced
with the main objective of increasing production and productivity, working out as a
proper system of sharing of gains of increased productivity becomes more important.
Informal participative management :
The success of the scheme of participative management depends up on the
success of the informal style of participative management not merely on formal
functioning of the councils or committees framed for this purpose. The reason is that
only few persons from the side of management and employees are involved in the
formal system. The majority of the employees and executives could be involved only
through informal system of participation management. An important exercise for all
those interested in the scheme, therefore, involvement of grass root workers, shop
floor supervisors and departmental executives who are not formally associated with
the scheme and also sustain their enthusiasm in the system. This calls for a change in
the managerial culture itself.
Representative Councils :

83

The success of the scheme depends upon these representative character of

various councils formed for this purpose and acceptability by the groups. The top
management and trade union representatives should give serious thought to the issue
of making these bodies truly representatives of employees and management. In the
absence of true representative councils, acceptability of the decisions will always be a
major problem. The question of election, nomination or both could be considered
keeping in view the strength, education and group affiliations of the employees. Inter
union revelries and groupisms in the supervisory and managerial cadres are the
greatest bottlenecks in the success of participative schemes of management.
Industrial Relations :
Effective working of participative management depends up on relationship
between the management and employees which is known as industrial relations.
Cordial industrial relations in the organization will prevail when there in mutual trust
and confidence among the parties and consequently favourable organizational climate
could be build.
Boundaries /Limitations of the scheme:
Effective working of any system of participative management depends up on
proper understanding of the boundaries and limitations of the scheme. It is necessary
to understand what does not come under the purview of these scheme.
Proper and effective communication system :
Proper and effective functioning of the participative forums depends, to a
great extent up on the communication system in the organization. The communication
system has to be strengthened to achieve the following objectives:
a) To develop understanding of the common objectives.
b) To arise interest of others in the scheme.
c) To arrive at consensus through frank and purposive discussions.
d) To improve the skills of members associated with the scheme, to convey the
thinking and decisions of the participative bodies to the employees and to represent
their views in these bodies.
e) To improve the discussion level of councils.
Review of working of the system:

84

It is always desirable to review periodically working of any scheme to know

the drawbacks in functioning and take remedial measures to overcome the drawback.
Education and Training:
Education and training should be an integral part of the management function.
It is wrong to think that education and training of workers associated with the scheme
alone would meet the requirement.

CONCLUSIONS
The movement of workers participation in management, if it is to attain any
measure of success must come from with in, not under pressure from an outside
agency or Government. Introducing the system in a concern for the sake of it will not
do much good, where conditions are not ripe for successful experiment unless both
the management and unions believe in the necessity and utility of such machinery, the
movement will not make much headway.
In general, workers and unions are appeared in favour of the scheme only
along with the employer. They are elevated to the status of decisions makers. In fact,
some of the union leaders were of the view that any scheme short of this had the
result of workers being made part and parcel of the achievement of the sole objective
of the employers i.e., profits.
It appear that the management do not want disturb the existing employer
employee relationship except that joint consultant may be encouraged to increase
production and productivity and that even if some administrative responsibility is
shared with workers, the ultimate decision should rest with management.
Prof. Zivan Tanix, an expert on the subject concludes in these words It
appears that the experiments of workers participation in India is not only at the
lowest level of evolution but also that workers, unions, employer and state do not
have any real interest in its success. The necessary economical, social, political and

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cultural conditions concomitant, to success of such an experiment are not ripe in

India .
It has been opined that the scheme of labour participation has remained
cofined to a few of the workers representatives instead of its getting popular among
general workers. Besides, the management is reluctant to share decision makin
power with the workers. In addition to the shop floor and joint management
councils, the management has to courage the constitution of quality circles and small
working groups in the shop floor /section level so as to encourage participation.
For want of empirical research in the working of the scheme, nothing can be
said about the effectiveness of this scheme. A great deal of evaluative theoretical
writing on the subject has questioned the advantage of the implementation of the
scheme. It has been argued that when, in the absence of the committees and
shop councils have failed miserably. It is futile to think of the scheme for the
representation of workers on the Board of Management of an enterprise, which calls
for a higher degree of participation. A study of the scheme in the Nationalised Banks
Conducted by the National Labor Institute has shown that it has failed fostering a
congenial relationship based on mutual trust, respect, understanding and cooperation. It has also been observed that it has had little impact on industrial relations
or on decision making.
Though the scheme of workers participation in management has not shown
satisfactory results, it should be made to work at least in the field of increasing
production and productivity of labour by giving the workers a feeling that he is an
integral and important part of the organization and so creating a climate in which he
may get reasonable opportunities to show his worth in contributing his share to the
production targets. Joint consultation should form part of the labour management
decisions an important issues affecting not only production but also the very working
lives the employees.
Management should have a constructive attitude and should regard trade unions not
as an obstacle to be overcome but as a highly valuable and powerful instrument
which, if properly handled, can be of very great help in increasing production and
productivity. Both employers and Unions should solemnly resolve to carry on the
experiment in proper spirit. The Government should take responsibility for the
provision of a satisfactory workers education programme so that they may be
properly equipped for their tasks. The scheme seems to have a bright future, if the
approach is made in a right direction.

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Last but not least in the context of new economic policies, Liberalisation of Industrial
Licensing system, the Government of India will have to consider and evolve suitable
motivational schemes such that they create interest to the Management and Trade
Unions to evince voluntary interest in the various schemes of Employee participation
in Management.

QUESTIONNAIRE

This questionnaire is intended to elicit the views of the employees and

workers with reference to workers participation in management and functioning of
various participative forums in Visakha Steel Plant.

1.

Personnel Details
a. Name

b. Age

c. Department

d. Designation

e. Educational Qualification :
PG: ____

Degree: _____

Below Degree: _____

f. Years of Service in Organization:

2. Do you know there is a scheme of Employees Participation in Management.
Y/N
3. If yes, what do you understand by Employees Participation in Management.
a. Workers Expressing his views

on each point of Management decision

making.

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b. Workers representing in Management forums such as Canteen Committee,

Shop Floor Committee, Joint Council Committee etc.
4. If no, did you try to know about Employees participation in Management.
Y/N
5.

At any time were you a member of the above forums.

Y/N

6. If yes, whether at any time your suggestions were considered for implementation.
Y/N
7.

Is composition of participative committee is acceptable by the workers.

Y/N

8.

Whether all these forums are functioning regularly.

Y/N

9.

Do you think that Employees participation in Management would really help to

maintain harmonious relations between workers and Managements.
Y/N

10. By Implementing the workers participation in management do you think

production and productivity increase.
Y/N
11. Employee participation in management would help in improving industrial
relations.
Y/N
12. what is your opinion about Workers Participation at Board Level / Corporate
Level.
Positive / Negative
13. Will you suggest any improvement measures for effective functioning of
Workers Participation in Management.

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BIBLOGRAPHY

Dynamics Of Industrial Relations.

--- Mamoria Mamoria Gankar
Administration Of Public Enterprises In India.
--- Jagadish Prakash Rao Shukla
Essentials of Human Resource Management And Industrial Relations.
--- P. Subba Rao
Hindustan Shipyard Limited Records And Annual Reports.

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