Worker’s participation is a system where workers and management share important information with each other and participate in decision taking. 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 labor and 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. It is a process by which authority and responsibility of managing industry are shared with workers.
Most important Forms / Methods of Workers Participation in Management are:
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. Tata, 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.
- 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.
- 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:
Narrow, single task
Individual, seniority based
Managers plan, control, improve
Whole process, multiple tasks
Shared with the team
Teams plan, control, and 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.