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Workers’ participation in management is an essential ingredient of Industrial democracy. The

concept of workers’ participation in management is based on Human Relations approach to
Management which brought about a new set of values to labour and management. Traditionally
the concept of Workers’ Participation in Management (WPM) refers to participation of non-
managerial employees in the decision-making process of the organization. Workers’
participation is also known as ‘labour participation’ or ‘employee participation’ in management.
In Germany it is known as co-determination while in Yugoslavia it is known as self-
management. The International Labour Organization has been encouraging member nations to
promote the scheme of Workers’ Participation in Management.

Workers’ participation in management implies mental and emotional involvement of workers in

the management of Enterprise. It is considered as a mechanism where workers have a say in the
decision-making.

Definition:

 According to Keith Davis, Participation refers to the mental and emotional involvement
of a person in a group situation which encourages him to contribute to group goals and
share the responsibility of achievement.
 According to Walpole, Participation in Management gives the worker a sense of
importance, pride and accomplishment; it gives him the freedom of opportunity for self-
expression; a feeling of belongingness with the place of work and a sense of
workmanship and creativity.

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

 It provides scope for employees in decision-making of the organization.

 The participation may be at the shop level, departmental level or at the top level.
 The participation includes the willingness to share the responsibility of the organization
by the workers.

Features of WPM:

1. Participation means mental and emotional involvement rather than mere physical presence.

2. Workers participate in management not as individuals but collectively as a group through their
representatives.

3. Workers’ participation in management may be formal or informal. In both the cases it is a

system of communication and consultation whereby employees express their opinions and
contribute to managerial decisions.
4. There can be 5 levels of Management Participation or WPM:

 Information participation: It ensures that employees are able to receive information and
express their views pertaining to the matter of general economic importance.
 Consultative importance: Here workers are consulted on the matters of employee
welfare such as work, safety and health. However, final decision always rests with the
top-level management, as employees’ views are only advisory in nature.
 Associative participation: It is an extension of consultative participation as management
here is under the moral obligation to accept and implement the unanimous decisions of
the employees. Under this method the managers and workers jointly take decisions.
 Administrative participation: It ensures greater share of workers’ participation in
discharge of managerial functions. Here, decisions already taken by the management
come to employees, preferably with alternatives for administration and employees have
to select the best from those for implementation.
 Decisive participation: Highest level of participation where decisions are jointly taken
on the matters relating to production, welfare etc.

Objectives of WPM:

1.       To establish Industrial Democracy.

2.       To build the most dynamic Human Resources.

3.       To satisfy the workers’ social and esteem needs.

4.       To strengthen labour-management co-operation and thus maintain Industrial peace and
harmony.

5.       To promote increased productivity for the advantage of the organization, workers and the
society at large.

6.       Its psychological objective is to secure full recognition of the workers.

Importance of WPM:

 Unique motivational power and a great psychological value.

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

Essential condition for WPM:

The success of workers portion in management depends upon the following conditions.

 The attitude and outlook of the parties should be enlightened and impartial so that a free
and frank exchange of thoughts and opinions could be possible. Where a right kind of
attitude exists and proper atmosphere prevails the process of participation is greatly
stimulated.

 Both parties should have a genuine faith in the system and in each other and be willing to
work together. The management must give the participating institution its right place in
the managerial organization of the undertaking and implementing the policies of the
undertaking. The labor, on the other hand, must also whole heartedly co-operate with the
management through its trade unions. The foremen and supervisory cadre must also lend
their full support so that the accepted policies could be implemented without any
resentment on either side.

 Participation should be real. The issues related to increase in production and productivity,
evaluation of costs, development of personnel, and expansion of markets should also be
brought under the jurisdiction of the participating bodies. These bodies should meet
frequently and their decisions should be timely implemented and strictly adhered to.
Further,

o   Participation must work as complementary body to help collective bargaining, which creates
conditions of work and also creates legal relations.

o   There should be a strong trade union, which has learnt the virtues of unit and self-reliance so
that they may effectively take part in collective bargaining or participation.

o   A peaceful atmosphere should be there wherein there are no strikes and lock-outs, for their
presence ruins the employees, harms the interest of the society, and puts the employees to
financial losses.

o   Authority should be centralized through democratic management process. The participation
should be at the two or at the most three levels.

o   Programs for training and education should be developed comprehensively. For this purpose,
Labor is to be given education not to the head alone, not to the heart alone, not to the hands
alone, but it is dedicated to the three; to make the workers think, feel and act. Labor is to be
educated to enable him to think clearly, rationally and logically; to enable him to feel deeply and
emotionally; and to enable him to act in a responsible way.

Conclusion:

Management should be prepared to give all information connected with the working of the
industry and labor should handle that information with full confidence and responsibility. The
workers should become aware of their responsibilities. The leaders should initiate this in them.
Similarly, the top management should make the lower echelons to show a new attitude in the
light of the new relationship.

rce Management > Methods of Workers Participation In Management

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1. Participation at the Board level:

This would be the highest form of industrial democracy. The workers’ representative on the
Board can play a useful role in safeguarding the interests of workers. He or she can serve as a
guide and a control element.

 He or she can prevail upon top management not to take measures that would be unpopular
with the employees.
 He or she can guide the Board members on matters of investment in employee benefit schemes
like housing, and so forth.

The Government of India took the initiative and appointed workers’ representatives on the Board
of Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized banks. The Tatas,
DCM, and a few others have adopted this practice.

Problems associated with this method:

 Focus of workers’ representatives is different from the focus of the remaining members of the
Board.
 Communication and subsequently relations between the workers’ representative and the
workers suffers after the former assumes directorship.
 He or she tends to become alienated from the workers.
 As a result, he or she may be less effective with the other members of the Board in dealing with
employee matters.
 Because of the differences in the cultural and educational backgrounds, and differences in
behaviour and manners, such an employees’ representative may feel inferior to the other
members, and he or she may feel suffocated. Hence, his or her role as a director may not be
satisfying for either the workers or the management.
 Such representatives of workers’ on the Board, places them in a minority. And the decisions of
the Board are arrived at on the basis of the majority vote.

2. Participation through ownership:

This involves making the workers’ shareholders of the company by inducing them to buy equity
shares.

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

3 . Participation through complete control:

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

Advantages:

 Ensures identification of the workers with their organization.

 Industrial disputes disappear when workers develop loyalty to the organization.
 Trade unions welcome this type of participation.

Conclusion: Complete control by workers is not an answer to the problem of participation

because the workers do not evince interest in management decisions.

4. Participation through Staff and Works Councils :

Staff councils or works councils are bodies on which the representation is entirely of the
employees. There may be one council for the entire organization or a hierarchy of councils. The
employees of the respective sections elect the members of the councils. Such councils play a
varied role.

 Their role ranges from seeking information on the management’s intentions to a full share in
decision-making.

Such councils have not enjoyed too much of success because trade union leaders fear the erosion
of their power and prestige if such workers’ bodies were to prevail.

5. Participation through Joint Councils and Committees :

Joint councils are bodies comprising representatives of employers and employees. This method
sees a very loose form of participation, as these councils are mostly consultative bodies.

Work committees are a legal requirement in industrial establishments employing 100 or more
workers. Such committees discuss a wide range of topics connected to labour welfare.
Examples of such committees are welfare committee, safety committee, etc. Such committees
have not proven to be too effective in promoting industrial democracy, increasing productivity
and reducing labour unrest.

6. Participation through Collective Bargaining :

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

7. Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production in industries, leads
to boredom and associated problems in employees.

Two methods of job designing – job enlargement and job enrichment – are seen as methods of
addressing the problems.

 Job enlargement means expanding the job content – adding task elements horizontally.
 Job enrichment means adding `motivators’ to the job to make it more rewarding. This is WPM in
that it offers freedom and scope to the workers to use their judgment. But this form of
participation is very basic as it provides only limited freedom to a worker concerning the
method of performing his/her job.

The worker has no say in other vital issues of concern to him – issues such as job and income
security, welfare schemes and other policy decisions.

8. Participation through Suggestion Schemes:

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

9. Participation through Quality Circles:

Concept originated in Japan in the early 1960s and has now spread all over the world.  A QC
consists of seven to ten people from the same work area who meet regularly to define, analyze,
and solve quality and related problems in their area. These circles require a lot of time and
commitment on the part of members for regular meetings, analysis, brainstorming, etc. Most
QCs have a definite life cycle – one to three years. Few circles survive beyond this limit either
because they loose steam or they face simple problems. QCs can be an excellent bridge between
participative and non-participative approaches. For QCs to succeed in the long run, the
management needs to show its commitment by implementing some of the suggestions of the
groups and providing feedback on the disposition of all suggestions.

Training in problem-solving techniques is provided to the members. QCs are said to provide
quick, concrete, and impressive results when correctly implemented.

Advantages:

 Employees become involved in decision-making, acquire communication and analytical skills and
improve efficiency of the work place.
 Organization gets to enjoy higher savings-to-cost ratios.
 Chances of QC members to get promotions are enhanced.

10. Empowered Teams:

Empowerment occurs when authority and responsibility are passed on to the employees who
then experience a sense of ownership and control over their jobs. Employees may feel more
responsible, may take initiative in their work, may get more work done, and may enjoy the work
more. For empowerment to occur, the following approach needs to be followed as compared to
the traditional approach:

Element Traditional Organization Empowered Teams

Layered, individual
Organizational structure Flat, team

Narrow, single task

Job design Whole process, multiple tasks
Direct, control
Management role Coach, facilitate
Top-down
Leadership Shared with the team
Controlled, limited
Information flow Open, shared
Individual, seniority based
Rewards Team-based, skill-based
Managers plan, control,
Job process Teams plan, control, and improve
improve

Features of empowered or self-directed teams:

  Empowered to share various management and leadership functions.
 Plan, control and improve their work.
 Often create their schedules and review their performance as a group.
 May prepare their own budgets and co-ordinate their work with other departments.

o   Usually order materials, keep inventories and deal with suppliers.

o   Frequently responsible for acquiring any new training they might need.

o   May hire their own replacement to assume responsibility for the quality of their products or
services

Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are
empowering employees – both frontline as well as production staff, and are enjoying positive
results.

11. Total Quality Management :

TQM refers to the deep commitment, almost obsession, of an organization to quality. Every step
in company’s processes is subjected to intense and regular scrutiny for ways to improve it.

Some traditional beliefs are discarded.

 High quality costs more.

 Quality can be improved by inspection.
 Defects cannot be completely eliminated.
 Quality in the job of the QC personnel.

New principles of TQM are:

 Meet the customer’s requirement on time, the first time, and 100% of the time.
 Strive to do error-free work.
 Manage by prevention, not correction.
 Measure the cost of quality.
 TQM is called participative because it is a formal programme involving every employee in the
organization; making each one responsible for improving quality everyday.

12. Financial Participation:

This method involves less consultations or even joint decisions. Performance of the organization
is linked to the performance of the employee. The logic behind this is that if an employee has a
financial stake in the organization, he/she is likely to be more positively motivated and involved.

Some schemes of financial participation:

 Profit-linked pay
 Profit sharing and Employees’ Stock Option schemes.
 Pension-fund participation.