Workers Participation in Management – Concept, Evolution, Forms and Levels,of

Participation, Conditions necessary for effective participation

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 FLOOR level, departmental level or at the
top level.

The participation includes the willingness to share the responsibility of the
organization by the workers.

OBJECTIVES OF WORKERS PARTICIPATION:

To achieve industrial peace and harmony.

To build the most dynamic Human Resources by develop internal motivation in
the workers.

To boost the morale of employees and satisfy the workers‟ social and esteem
needs.

To raise the levels of the employee production, productivity and product
quality.

To satisfy workers by making them feel, that they have their voice in the
management.

To give workers a better understanding of their role in the working of industry.

To develop better mutual understanding so that the workers do not resist a
change for the betterment of the concern (e.g., introduction of work study,
etc.)

To minimize the number of grievances and therefore, industrial disputes.

To make managing of the subordinates easy.

DEFINITIONS:
1.WORKERS’ PARTICIPATION
According to Keith Davis,
“
Participation refers to the mental and emotionalinvolvement 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 ofimportance, 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 ofworkman
ship and creativity.
”

According to ILO, “
Workers’ participation, may broadly be taken to cover all terms
of association of workers and their representatives with the decision-making process,
ranging from exchange of information, consultations, decisions and negotiations, to more
institutionalized forms such as the presence of workers’ member on
management or supervisory boards or even management by workers themselve s”
(as practiced in Yugoslavia)

Evolution:-
Workers’ Participation in Management Before Independence:
The workers’ participation in management is not a novel and imported idea from
outside. It can be dated as far back as 1920 when Mahatma Gandhi suggested
participation of workers in management on the ground that workers contributed
labour and brains while shareholders contributed money to the enterprise and that
both should, therefore, share in its property.

He said that there should be a perfect relationship of friendship and cooperation

among them. For the unions, he said that 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. It was at his instance that, in 1920,
the workers and the employers in Ahmedabad Textile Industry agreed to settle their
disputes by joint discussions and consultations.

Therefore, the Ahmedabad Agreement may be regarded as a milestone in the history

of joint consultation i.e. participative management in India. Following this, some
works committees were also set up in the Government Printing Presses and Railways.
During the same period, such committees were also set up in the Tata Iron and Steel
Company, Jamshedpur. Since then, there is no looking back in this direction.
While supporting the need for works committees, the Royal Commission on Labour
suggested that, to promoting industrial harmony and to avoid misunderstanding and
settle disputes, not only works committees be set up, but strong trade unions be
developed and labour officers be appointed.

Along with the works committee, the Commission also suggested the establishment
of a joint machinery to deal with the more general questions, and also to act as an
advisory appellate body in respect of disputes which were confined to a single
establishment. These recommendations of the Commission bore fruits with the
provision of formal statutory machinery under the Bombay Industrial Relations Act,
1946 and the Industrial Disputes Act, 1947.

Workers’ Participation in Management After Independence:

In fact, the first major step in the direction of workers’ participation in management
in India was the enactment of the Industrial Disputes Act, 1947 with the dual purpose
of prevention and settlement of industrial disputes. The Industrial Policy Resolution,
1948 advocated WPM by suggesting that labour should be in all matters concerning
industrial production. Article 43 A of the Constitution of India has provided for WPM
in these words:

“The State shall take steps, by suitable legislation, or in any other way, to secure the
participation of workers in management of undertakings, establishments or other
organisations engaged in an industry”.

The First Five-Year Plan and the successive plans emphasised the need for workers’
participation in management. For example, the Second Five-Year Plan’ stressed the
need for WPM in the following words:

“It is necessary in this context that the worker should be made to feel that in his own
way he is helping build a progressive state. The creation of industrial democracy,
therefore, is a prerequisite for the establishment of a socialist society”.
The Government of India set up a ‘Study Group on Workers’ Participation in
Management’, in 1956, consisting of representatives of the government, employers,
and workers to examine the system of WPM in the UK, Sweden, France, Belgium,
West Germany and Yugoslavia and make recommendations for the Indian case.

Workers participation in management includes following.

• Workers participation in management provides a chance to employees in

organisation's decision making process.
• The workers participation may be at the shop level, departmental level or at
the top level.
• The workers participation in the management is that the willingness to share
the responsibility and accept commitment by workers in executing decisions of
management with consultation of workers.
• The workers participation is conducted through the mechanism of forums
which provide for association of workers representatives.
• the idea behind worker's participation in management is to dole of self
discipline and control among workers and for the smooth running of
management.

Conditions necessary for effective participation

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, 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,

1. Participation must work as complementary body to help collective bargaining,

which creates conditions of work and also creates legal relations.

2. 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.

3. 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.

4. Authority should be centralized through democratic management process. The

participation should be at the two or at the most three levels.

5. 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. The management at different levels also needs to be trained
and oriented to give it a fresh thinking on the issues concerned.

Levels of workers participation in management

workers participation may exist in all levels of management, however it may vary
from management to management. Participation of workers in management is more
likely at lower level and less involvement at top level of management. Broadly
speaking there are following file levels of participation of workers in management.

1. Information participation of workers: It ensures that employees are able to

receive information and express their views pertaining to the matters of general
economic importance.

2. Consultative participation of workers: Under this kind of workers participation in

management, May act as a consultant in the matters of workers safety, health and
their welfare at workplace. Even so, ultimate decision lie in the hands of
management, only employees views are considered as advise.

3. Associative participation of workers: This kind of workers participation in

management is next level to consultative participation. under associative
participation of workers in management, morally bound to accept and implement the
opinion of employees.

4. Administrative participation of workers: Under this kind of participation of

workers in management, workers the part in discharge of managerial functions. Here
employees take part in decisions, which were already taken by the management,
thereupon employees have to select the best from those decisions for the purpose of
implementation.

5. Decisive participation of workers: Decisive participation is the highest level of

workers participation in management, where employees and management together
taking decisions on the matters related to workers welfare and production related
issues.

Forms of Worker Participation in

Management
Some of the forms of worker participation in management of the company are:
1. Co-Ownership
2. Seat On Board Of Directors
3. Works Committee
4. Joint Management Councils
5. Profit Sharing and
6. Suggestion Scheme.
The form or the way in which the workers can participate in the management varies a great deal.
The form varies from country to country and even from undertaking to undertaking. Even in
Communist countries, the methods of participation are not uniform.
Besides, the form also varies from organisation to organisation depending upon the level of power
or authority enjoyed by the managers at different levels in different types of organisations.

Workers’ participation in management may take the form of ascending or descending participation.
In ascending participation an opportunity is given to the workers to participate in the decision
making process at a higher level.

The workers’ participation in management may take the following forms:

1. Co-Ownership:

Workers are made shareholders by allotting those shares in the company. They are employees as
well as owners of the business concern. Thus, their participation in the management is
automatically guaranteed.

2. Seat On Board Of Directors:

In this case the workers’ representative is given a seat on the boards of directors. In advanced
countries like Britain and U.S.A., trade unions have already rejected this idea. It is generally felt that
the workers do not understand the intricacies of management.

Moreover, their representatives being in minority may not have much say in the decision making
whereas that decision will be applicable to all the employees. By remaining out of the board, they
can keep a better check on the management.

The Sachar Committee studied the problems of workers’ participation in management and
observed “Conditions must be created where the worker directors are able to play a helpful and
effective role. It is apparent that as a member of the board, the worker director will familiarise
himself with subjects with which he was not associated before. The training of the employees must,
therefore, be immediately taken in hand”.

3. Works Committee:

These committees have been regarded as the most effective social institution of industrial
democracy. The need for their constitution has been emphasised as early as 1931 by the Royal
Commission on Labour.

It was again emphasised by the Industrial Truce Resolution on 1947, which recommended their
constitution in each industrial undertaking for the settlement of any dispute which may arise in
future.

This recommendation was given effect to in the Industrial Disputes Act of 1947. Section 3 of the Act
provides for these bodies in every undertaking employing 100 or more workmen.

These committees are consultative bodies. Their functions include discussion of conditions of work
like lighting, ventilation, temperature and sanitation etc., and amenities like water supply for
drinking purposes, canteen, medical services, safe working conditions, administration of welfare
funds etc.

The works committee should not deal with matters connected with collective bargaining which are
exclusively reserved for trade unions.

4. Joint Management Councils:

Joint committees for settlement of grievances or specific problems may be set up for promoting
workers’ participation in management. Workers representatives sit with the management across
the table to discuss matters which fall within its purview.

The main object of such councils is to give an opportunity to workers to understand the working of
the industry and satisfy their urge for self-expression.

5. Profit Sharing:

Workers feel involved in the management especially when they are given a share in profits of the
business.

6. Suggestion Scheme:

Suggestion scheme may also be introduced for creating interest in the work by announcing a
suitable reward for original and useful suggestions. Employees can put their suggestions in the
suggestion boxes which are installed in the various departments.

Collective Bargaining – Features, Principles, Forms, Negotiation Process and

Collective Agreements
Definition of Collective Bargaining:
Industrial disputes between the employee and employer can also be settled by discussion and
negotiation between these two parties in order to arrive at a decision.

According to Beach, “Collective Bargaining is concerned with the relations between unions
reporting employees and employers (or their representatives)

Collective Bargaining Involves:

(i) Negotiations
(ii) Drafting
(iii) Administration
(iv) Interpretation of documents written by employers, employees and the union representatives
(v) Organizational Trade Unions with open mind.

Main Features of Collective Bargaining:

Some of the salient features of collective bargaining are:
1. It is a Group Action:
Collective bargaining is a group action as opposed to individual action. Both the parties of
settlement are represented by their groups. Employer is represented by its delegates and, on the
other side; employees are represented by their trade union.

2. It is a Continuous Process:
Collective bargaining is a continuous process and does not end with one agreement. It provides a
mechanism for continuing and organised relationship between management and trade union. It is a
process that goes on for 365 days of the year.

3. It is a Bipartite Process:
Collective bargaining is a two party process. Both the parties—employers and employees—
collectively take some action. There is no intervention of any third party. It is mutual given-and-take
rather than take-it-or-leave-it method of arriving at the settlement of a dispute.

4. It is a Process:
Collective bargaining is a process in the sense that it consists of a number of steps. The starting
point is the presentation of charter of demands by the workers and the last step is the reaching of
an agreement, or a contract which would serve as the basic law governing labour-management
relations over a period of time in an enterprise.

5. It is Flexible and Mobile and not Fixed or Static:

It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for
compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties
is reached.

6. It is Industrial Democracy at Work:

Collective bargaining is based on the principle of industrial democracy where the labour union
represents the workers in negotiations with the employer or employers. Industrial democracy is the
government of labour with the consent of the governed—the workers. The principle of arbitrary
unilateralism has given way to that of self-government in industry. Actually, collective bargaining is
not a mere signing of an agreement granting seniority, vacations and wage increase, by sitting
around a table.

7. It is Dynamic:
It is relatively a new concept, and is growing, expanding and changing. In the past, it used to be
emotional, turbulent and sentimental, but now it is scientific, factual and systematic.

8. It is a Harmonizing and not a Competitive Process:

Collective bargaining is not a competitive process i.e., labour and management do not cooperate
while negotiating for the same object. It is essentially a complementary process i.e., each party
needs something which the other party has, namely, labour can put greater productive effort and
management has the capacity to pay for that effort and to organise and guide it for achieving the
enterprise’s objectives.

The behavioural scientists have made a good distinction between “distributive bargaining” and
“integrative bargaining”. The former is the process of dividing up the cake which represents what
has been produced by the joint efforts of management and labour.

In this process, if one party wins something, the other party, to continue the metaphor of the cake,
has a relatively smaller size of the cake. So it is a win-lose’ relationship. The integrative bargaining,
on the other hand, is the process where both the parties can win—each party contributing
something for the benefit of the other party.

9. It is an Art:
Collective bargaining is an art, an advanced form of human relations.

PRINCIPLES OF COLLECTIVE BARGAINING

For Unions and Management
1. There must be an honest attempt at solving a problem rather than at a compromise. Both the
parties should command the respect of each other and should have enough bargaining power to
enforce the terms of the agreement that may be arrived at.
2. There must be mutual confidence and good faith and a desire to make collective bargaining
effective in practice.
3. There should be an honest, able and responsible leadership, as only this kind of leadership will
make collective bargaining effective and meaningful.
4. The two parties should meticulously observe and abide by all the national and state laws which
are applicable to collective bargaining.

For the Management

1. The management must develop and consistently follow a realistic labour policy, which should be
accepted and carried out by all its representatives.
2. The management must grant recognition to it without any reservations and accept it as a
constructive force in the organization.
3. The management should periodically examine the rules and regulations by which its labour force
is governed.
4. While weighing the economic consequences of collective bargaining, the management should
place greater emphasis on social considerations
For the Trade Union
1. The Trade union members have an obligation to assist the management in the elimination of
waste and in improving the quality and quantity of production, in addition to their demands.
2. Trade union leaders should appreciate the economic implications of collective bargaining, for
their demands are generally met from the income and resources of the organization in which
their members are employed.
3. Trade union leaders should think of society’s interest also.
4. Trade unions should resort to strikes only when all other methods of the settlement of a dispute
have failed

Forms of Collective Bargaining:

The working of collective bargaining assumes various forms. In the first place, bargaining may be
between the single employer and the single union, this is known as single plant bargaining. This
form prevails in the United States as well as in India.

Secondly, the bargaining may be between a single firm having several plants and workers employed
in all those plants. This form is called multiple plants bargaining where workers bargain with the
common employer through different unions.

Thirdly, instead of a separate union bargaining with separate employer, all the unions belonging to
the same industry bargain through their federation with the employer’s federation of that industry.
This is known as multiple employer bargaining which is possible both at the local and regional
levels. Instances in India of this industry-wide bargaining are found in the textile industry.

The common malady of union rivalry, small firms and existence of several political parties has given
rise to a small unit of collective bargaining. It has produced higher labour cost, lack of appreciation,
absence of sympathy and economic inefficiency in the realm of industrial relationships. An industry-
wide bargaining can be favourable to the economic and social interests of both the employers and
employees.

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team
should consist of representatives of both the parties with adequate knowledge and skills
for negotiation. In this phase both the employer’s representatives and the union
examine their own situation in order to develop the issues that they believe will be most
important. The first thing to be done is to determine whether there is actually any
reason to negotiate at all. A correct understanding of the main issues to be covered and
intimate knowledge of operations, working conditions, production norms and other
relevant conditions is required.
2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A
process well begun is half done and this is no less true in case of collective bargaining.
An environment of mutual trust and understanding is also created so that the collective
bargaining agreement would be reached.
 3. Propose: This phase involves the initial opening statements and the possible options
that exist to resolve them. In a word, this phase could be described as ‘brainstorming’.
The exchange of messages takes place and opinion of both the parties is sought.
4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage
comprises the time when ‘what ifs’ and ‘supposes’ are set forth and the drafting of
agreements take place.
5. Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision
regarding the problem or the issue. This stage is described as consisting of effective joint
implementation of the agreement through shared visions, strategic planning and
negotiated change.

COLLECTIVE AGREEMENTS: A CLASSIFICATION Collective agreements are commonly classified under

two headings –

‘procedural’ and ‘substantive’.

(a) Procedure agreements - Procedure agreements spell out the steps by which the industrial
relations processes are carried out. v Procedure agreements are collective agreements which relate
to:

(1) Machinery for consultation, negotiation or arbitration on terms and conditions of employment
or for any other matters which arise between trade unions and employers.

(2) Negotiating rights

(3) Facilities for trade union officials ;and

(4) Disciplinary matters and individual workers’ grievances.

(b) Substantive agreements These contain the ‘substance’ of any agreement on terms and
conditions of the employment.

They cover payments of all kinds, i.e. wage rates, shift allowances, incentive payments also holidays
and fringe benefits such as pensions and sick pay and various other allowances.

(c) Mixed procedural/ substantive agreements The distinction between ‘procedural’ and
‘substantive’ agreements while useful, does not always apply in practice. It is possible to have both
’substantive’ and ‘procedural’ elements in the same agreement.
There is, however, a tendency for procedural agreements to have a separate and long term
existence and consequently they are not subject to a great deal of alteration. On the other hand,
substantive agreements are altered from time to time to take account of on-going negotiations