Workers Participation in Management

Workers Participation in Management Meaning, Features

Table of Contents:-

Meaning of Workers Participation in Management

The concept of workers participation in management or participative management is based on the Human Relations approach to management which brought about a new set of values in management. It is regarded as a mechanism where workers have a say in the decision-making process of a company. Workers participation in management is an important component of industrial democracy.

Participation refers to the involvement of people or groups of people for a common objective. It will be effective only if there is interaction among people or groups.

For workers, participation means sharing decision-making power with management as co-partners. A worker looks upon it as a tool for gaining equal control over the decision-making process within the organization

For management, participation means engaging in joint consultation before making decisions. It looks upon participation as a tool for ensuring better overall performance of the organisation.

What is Workers Participation in Management

Workers participation in management in hrm is an integral part of industrial relations as it offers an enormous potential for raising productivity and promoting industrial peace. It creates a sense of worker involvement in an enterprise by implying joint consultation involving management and workers’ representatives in the decision making process. This concept has been regarded as a tool for improving the overall performance of an enterprise and gained so much importance that, in 1975, the constitution was amended, and article 42A was inserted in Directive Principles of State Policy to encourage and secure workers’ participation in management.

Definition of Workers Participation in Management

According to Davis, “Participation 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”.

As per Sawtell, “Participation is any or all the processes by which employees other than managers contribute positively towards the reaching of managerial decisions which affect their work”.

According to the International Institute for Labour Studies, “WPM is the participation resulting from practices which increase the scope for employees’ share of influence in decision-making at different tiers of organisational hierarchy with the concomitant assumption of responsibility”.

According to Clegg, “Participation implies a situation where workers representatives are, to some extent, involved in the process of management decision-making, but where the ultimate power is in the hands of the management”.

Features of Workers Participation in Management

Features of Workers Participation in Management are given below:

  1. Willing Acceptance of Responsibility
  2. Association of Worker’s Representatives
  3. Employee’s Influence on Decision
  4. Effect on Policy Formulation and Execution
  5. Auto Management

1) Willing Acceptance of Responsibility

When an employee is involved in the management’s decision-making process, it makes him more responsible because he feels it is his own decision. He looks after the successful implementation of that decision and accepts the responsibility willingly. This is possible only if the employees are fully engaged in the decision-making process of the management directly or through their representative in general and especially the decisions that concern them directly or indirectly.

2) Association of Worker’s Representatives

In larger and bigger organisations, the direct participation of each worker is not possible. Hence, participation is conducted through the mechanism of the forum and practices that provide for the association for workers’ representation. It can be in the form of unions, associations or the majority. However, there are different ways, like calling general body meetings to discuss important issues and policy matters.

3) Employee’s Influence on Decision

Participation increases employees’ influence in decision-making at different tiers of the organisational hierarchy with a commitment to an assumption of responsibility. It is felt that the most significant increase in productivity is generated through the employees. It is the human resources that organise and utilise the plant, machinery, and technology effectively. Hence, the influence of the employees on the decisions is necessary and natural.

features of workers participation in management

4) Effect on Policy Formulation and Execution

Participation has to be at various levels of management. Decision-making at multiple levels would assume different patterns regarding policy formulation and execution. In joint consultation, the participation remains till talk; in collective decision-making, it gives power for decision-making and self-management and equal management in every sphere of the organisation. Similarly, the effect on policy-making and its implementation is natural and necessary.

5) Auto Management

Participative management involves the transfer of management functions completely to the employees, which will result in auto management. This will lead to a decline in voluntary absenteeism, sickness, accidents, turnover, and other maladjustments resulting in smoother management. In the modern industry, it is not possible to eliminate management and therefore, self-management in the industry can only exist where a function can be transferred from the management to the employees.

Scope of Workers Participation in Management

Scope of Workers Participation in Management is explained as follows:

1) Information Sharing

According to this view, participation takes place when the management solicits the opinion of workers before making a decision. The management ultimately takes the decision. Workers are given a say or an opportunity to influence decisions, they play a passive role in the process of decision making but have no final say in the matter.

2) Sharing Decision-Making

This school holds that the participation of an individual in something occurs when he actively takes part. Employees work with the representatives of management to make important decisions, particularly on matters affecting the employees. Workers may be members of Works Committees, Joint Management Council, etc., alongwith the representatives of management. The conclusions are made through mutual discussions between the representatives of the workers and those of the management.

3) Self-Control

The important feature of self-control (or management) is that management and workers are not visualised as two separate groups but as active members with equal voting rights. Participation in Yugoslavia is an example of self-control.

Objectives of Workers Participation in Management

Objectives of Workers Participation in Management are given as follows:

1) To Increase Productivity

The area of the most common mutual interest, where labour and management may cooperate consciously to the advantage of both, consists of promoting efficiency and productivity, eliminating waste, reducing cost, and improving the quality of the product.

2) To Promote Industrial Democracy

Workers participation in management is also advocated to promote industrial democracy. It is said that workers should have a voice in the administration of the company to which they belong. Industrial enterprises that furnish the workers’ material needs will also start giving non-material human satisfaction if workers acquire a say in the determination of the conditions under which they work and live. This will lead to the achievement of industrial democracy, which is a logical result of political democracy.

3) To Avoid Conflict and Friction

The success of workers’ participation schemes can lead to eliminating many sources of friction between workers and employers. It may be conducive to the promotion of industrial peace. It is claimed that workers’ participation reduces their resistance to changes in industrial methods, the introduction of new products work re-organisation, and so on. 

4) To Improve Communication

It is seldom possible for managers to have knowledge of all alternatives and all consequences related to the decisions that they must make. Because of the existence of barriers to the upward flow of information in most companies, much valuable information possessed by subordinates never reaches their managers. Participation tends to break down barriers, and make the information alters the decisions; the quality of decisions is improved.

5) To Encourage Workers to Accept Responsibility

Participation increases workers’ sense of responsibility and employees adopt a responsible attitude towards their work, they become emotionally involved.

6) To Provide Psychological Satisfaction

Workers’ participation in management seeks to bring about a change in the attitude of workers. Through participation, they will consider themselves an integral part of the company rather than mere working hands. Participation provides the employees with an opportunity to express themselves thereby satisfying their non-economic needs. It provides them with a sense of belonging, pride and accomplishment.

7) To Improve Quality of Work Life

It also aims at improving the Quality of Working Life (QWL) by allowing the workers greater influence and involvement in work and satisfaction obtained from work.

8) To Secure Mutual Cooperation

It aims to secure the mutual cooperation of employees and employers in achieving industrial peace; greater efficiency and productivity in the interest of the enterprise, the workers, the consumers and the nation.

Types of Workers Participation in Management

WPM can manifest in various Types and degrees, with emphasis placed on six primary types of participation:

  1. Informative participation,
  2. Consultative participation,
  3. Associative participation,
  4. Administrative participation,
  5. Decisive participation, and
  6. Ownership participation.

a) Informative Participation: Involves sharing information about the plant’s balance sheet, production, and general economic situation. While workers may need help scrutinising the news closely, they gain insight into the organisation’s activities.

b) Consultative Participation: This entails a higher degree of involvement, with workers being consulted on welfare programs, work methods, and safety. Workers or their representatives act in an advisory capacity, with the final decision resting with the management.

c) Associative Participation: Differs from consultative participation as workers play a more active role. The management is morally obligated to accept and implement unanimous decisions taken jointly, fostering a climate of partnership.

d) Administrative Participation: Involves a greater degree of sharing authority and responsibility for management functions. Workers enjoy more autonomy in administrative and supervisory powers related to welfare measures, safety works, scheduling working hours, breaks, and holidays.

e) Decisive Participation: Represents complete sharing of decision-making, where authority and responsibility for managerial functions are delegated to the joint forum. Joint decisions are made on economic, financial, and administrative policies.

f) Ownership Participation: Encompasses total control of management by workers through an elected board and workers’ council.

From the preceding description, it is evident that labour can participate in the decision-making process at all levels of management, from the board of directors at the top to various consultative committees and subcommittees at the base. Participation is feasible across the entire spectrum of management activities, with varying areas and degrees at different levels of management.

Prerequisites for Effective Workers Participation in Management

The success of any scheme of participative management relies on specific prerequisites:

1) Strong, Democratic, and Representative Unionism

A robust, democratic, and representative union is essential for the success of participative management.

2) Mutually-Agreed and Clearly-Formulated Objectives:

Clearly defined and mutually agreed-upon objectives are crucial for the success of participation.

3) Emphasis on Participation at All Levels

A culture that fosters participation at all levels is essential. Overemphasis on hierarchical structures and close supervision hinders effective participation.

4) Effective Consultation by Management

Management should actively consult with workers to instil enthusiasm regarding policies that directly affect them.

5) Favorable Attitudes and Outlook

Both management and workers must cultivate favourable attitudes and outlooks, believing in the soundness of the philosophy behind labour participation.

6) Education and Training

Education and training play a significant role in the purposeful functioning of participative management. Areas of education and training may include conceptual and philosophical aspects, aims, scope, roles and responsibilities, changes in managerial and trade union approaches and relationship patterns, communication skills, and technical and managerial knowledge for decision-making.

7) Specific Forums, Areas, and Guidelines

Forums for participation, areas of participation, and guidelines for implementing decisions should be specific. Prompt follow-up action and feedback are crucial for effective implementation.

These prerequisites create a foundation for successful and meaningful workers participation in management.

Types of Workers Participation in Management

Types of workers participation in management are as follows:

  • Collective Bargaining
  • Works Councils
  • Joint Management Councils Model
  • Workers’ Self-management

Collective Bargaining

In theory, collective bargaining represents a distinct form of participation. It grants both management and workers the right, through cooperative agreements, to establish specific rules for the formulation and termination of employment contracts and the conditions of service in an establishment. Collective bargaining serves as a significant method for influencing managerial decisions.

Works Councils

Staff or works councils are exclusive bodies representing the employees. There may be one council for the entire organization or a hierarchical structure of work councils from the shop floor to the staff board. The employees of the relevant sections elect members. They have various functions in the management of an enterprise, ranging from eliciting information on management’s intentions to fully participating in decision-making. Here, at least on critical issues, there is a basic assumption of harmony of interests.

Joint Management Councils Model

These are joint bodies comprising representatives of the management and employees. Their functions range from decision-making on some issues to merely advising the management as consultative bodies. In Britain and India, JMCs are a commonly used form of WPM. Mostly, their role is advisory and consultative, with decision-making left to the top management.

Workers’ Self-management

This institutional type is characterized by a substantial degree of workers’ participation in the central decision-making bodies, coupled with either a system of workers’ ownership or the right to use the enterprise’s assets. The method of self-management in Yugoslavia is based on this concept.

Measures for Effective Workers Participation in Management

To make workers’ participation in management successful, certain conditions should be satisfied, as discussed below.

1. Managerial attitude

There is an urgent need to provide training and education for workers and employees to ensure the success of the participative culture. Employers should be willing to share information and relinquish a portion of their hard-earned authority in favour of workers. Workers are often uninformed and need more experience, so employers must consciously bring them up to a certain level before involving them in decision-making. To earn their respect and trust, management must include workers by:

1. Identifying a clear-cut plan where the roles of participants are clearly defined.

2. Developing guidelines for decision-making by the joint management councils.

3. Defining the roles of office bearers as opposed to trade unions.

4. Keeping employees informed of all decisions, implementation, and outcomes.

5. Evaluating the progress of joint councils periodically.

2. Union cooperation

For the workers’ participation scheme to be effective, it must be built on mutual trust and confidence between unions and management. Unions must believe that participative forums are not intended to undermine their existence. In this regard, management must make efforts to define the boundaries clearly. To ensure fairness, they should adequately represent members from the recognized union without showing favouritism.

This issue becomes even more significant in a multiple union situation because the employer’s influence on the election of representatives to the participative forums can impact the process by aligning with their own ‘yes men’ from the file and ranks. Not all unions currently agree on the election of representatives through a secret ballot (INTUC opposes this; HMS, CITU, and AITUC support the move).

3. Meaning participation

Participation should not be limited to matters such as tea, towels, and toilets, as the Indian experience demonstrates. If participation is confined to such trivial issues, it serves no meaningful purpose. For it to be effective, participation should encompass a broad spectrum of topics, allowing workers to openly present their cases and seek prompt solutions on the spot. Participative forums should not be mere consultative and advisory bodies dealing with peripheral or routine labour welfare matters. Workers must have a genuine ‘say’ in all significant work-related issues, including grievance handling. Only then will they engage in these participative bodies with zeal and enthusiasm.

4. Workers’ attitudes

Workers must have complete faith in the efficiency of the system. To foster a participative culture among workers, seminars, conferences, and workshops must be conducted to highlight the benefits of participation. Workers should feel a sense of job security and freedom from reprisals resulting from their participation. The overall working environment must be friendly enough to inspire workers to give their best to the organization.

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