Workers’ participation is a system where worker and management share important information with each other and participate in decision taking. It is viewed as industrial democracy based on the principles of equity, equality and voluntarism.
It gives right to the worker representatives to criticise and offer constructive suggestions for better management. The word ‘participation’ means sharing the decision-making power with the lower ranks of organisation in an appropriate manner.
Meaning of Workers’ Participation in Management 2. Concept of Workers’ Participation in Management 3. Historical Background 4. Objectives 5. Characteristics
6. Importance 7. Perspectives 8. Forms 9. Methods 10. Theories 11. Issues 12. Failure 13. Advantages 14. Criticisms 15. Measures.
Workers’ Participation in Management: Meaning, Concept, Objectives, Importance, Methods and Theories
Workers’ Participation in Management – Meaning
Workers’ participation is a system where worker and management share important information with each other and participate in decision taking. It is viewed as industrial democracy based on the principles of equity, equality and voluntarism.
It gives right to the worker representatives to criticise and offer constructive suggestions for better management. The word ‘participation’ means sharing the decision-making power with the lower ranks of organisation in an appropriate manner.
Participation has a unique motivational power and a great psychological value. It promotes harmony and peace between workers and management. When workers participate in organisational decisions, they are able to see the big picture clearly i.e. how their actions would contribute to overall growth of company. Since they are involved in the decisions from the beginning, they tend to view the decisions as “their own”. Participation makes them more responsible.
The term ‘Workers’ Participation in Management’ has been given several meanings. However, it is a process in which the authority and responsibility of managerial functions are shared with workers also. It is a device of ensuring effective consultation with workers on the points that are related with them. It is considered as a system of communication and consultation also by which the employees of an organization are kept informed about the problems and progress of their organisations.
Being a human being every worker wants that his opinion and voice should carry some weight in the working and management of the enterprise in which he is working. Prof. F.S. Walpole has very rightly stated that, “It is not a matter of man being accorded the privileges though an employee, of stating a complaint or offering a suggestion but of having a recognised responsibility for doing so because he is investing not money but life.”
Worker-management cooperation is not a new idea. It has been in practice in different countries in different forms. In some countries, the participation was practised as a legislative measure such as Belgium, France and Germany, while in some other countries like U.K. an Sweden it was practised as a voluntary step to set up joint bodies which had only an advisory status having no legal compulsion.
Even in India, the idea was evolved by Mahatma Gandhi on voluntary basis. He put up the concept of industrial democracy through village democracy.
Workers’ Participation in Management – Concept of WPM (With Different Views)
The concept of a Workers’ participation differ from country to country and from industry to industry depending upon the socioeconomic goals of a particular country. For example, in a country where all or most of the means of production are under public ownership, the term is used in quite a different sense than where the means of production are in private hands, it means different things to different people.
For management, “It is joint consultation prior to decision-making.” Management and experts look upon it as a “tool for improving the overall performance of an enterprise.”
For workers, it means that workers are given an opportunity to take part in those decisions which affect their wages, their working conditions, their jobs and this participation paves the way to harmonious industrial relations in an atmosphere which is conducive to increasing productivity and efficiency. For labourers, it is just like co- decision 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 organisations.”
This does not mean that they are concerned with improving organisational 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 decision-making process within an enterprise. It is obvious from the foregoing discussion that the concept of worker’s participation in management means different things to different people. But, the underlying aim for every group remains same i.e., the involvement of workers in decision making process.
According to Dr. Mehtras, “the concept of participation mean sharing of decision-making power by rank and file of an industrial organisation, through proper representatives at all levels of management in the entire range of managerial action.”
Ian Clegg says, “It 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.”
According to Dr. Davis, “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.” Within the orbit of this definition, a continuum of men management relationship can be conceived –
Workers Control → Joint Management → Joint Consultation → Management Supremacy
In this continuum, worker’s control represents one extreme, which suggests concentration of all powers in workers and management supremacy represents the other extreme, which implies a zealous defence of managerial prerogatives.
Thus, the concept of workers participation in management crystalises the concept of industrial democracy and indicates an attempt on the part of an employer to build his employees into a team which work towards the realisation of a common objective.
It is a distribution of a social power in industry so that it tends to be shared out among all who are engaged in the work rather than concentrated in the hands of minority. It is industrial democracy in action based on the principles of equity, equality and voluntarism. It gives to the employees’ representatives the right to criticize, to offer constructive suggestions and to become aware of the pros and cons of the decisions made.
Participation implies the mental and emotional involvement of a person on group situation which encourages him to contribute for achieving objectives of the organization. The participation results from practices which increase the scope for employee’s share of influence in decision-making at different tiers of the organisational hierarchy with concomitant assumption of responsibility.
The participation has to be at different levels of management – (i) at the shop level, (ii) at the department level, and (iii) at the top level. The decision-making at these different levels would assume different patterns in regard to policy formulation and execution.
The participation incorporates the willing acceptance of responsibilities by body of workers. As they become party to the decision-making, the workers have to commit themselves to ensuring their implementation.
The participation is conducted through the mechanism of forums and practices which provide for association of workers representatives. The broad goal of participation is to change basically the organisational aspect of production and transfer the management function entirely to the workers so that management becomes “Auto management”.
Workers participation in management is an important form of non-financial incentives to the workers. It is an important change in the attitude of management as well as in human relation areas. The increasing association of the workers with management offers an enormous potential for higher productivity, improved job satisfaction, satisfying the workers urge for self-expression, industrial peace, better industrial relations and so on.
The term workers participation is variously understood by different parties. Management interprets it as the joint consultation prior to decision making, workers regard it as co-decision and right of co-determination; academicians view it practically as association of labour without the final authority or responsibility in decision making.
It is also considered as a system of communication and consultation by which employees of an organization are kept informed about the affairs of the company and through which they express their opinion as regards to the problems of industry and contribute to management decisions.
Thus, workers participation in management implies that workers take part in the joint discussion of problems of common interest and in the joint development of solutions in an atmosphere of mutual trust and confidence between the workers and the management.
The concept of workers participation in management is based on the premise that as human beings i.e., workers would like to be involved in the decision making process for all those matters or situations which directly or indirectly affect them. The logical implication of this premise is that involvement of workers in all those matters which affect them will boost their morale.
The essence of workers participation in management is essentially recognition of human aspect of the organization and give them (i.e., the workers) the equal right, time, opportunity and platform to discuss and decide over the problem of the industry.
It had been laid down in India’s Five Years Plan that “The success or failure of an undertaking is not the concern of management alone. For the peaceful evolution of the economic system on a democratic basis, it is essential that worker’s participation in management should be accepted as a fundamental principle and an urgent need.”
Workers’ Participation in Management – Historical Background
The origin of this concept can be traced back to the writing of Fabian Socialists headed by the Sydney Webb. This concept gave impetus from the origin of political democracy in many parts of the World. For achieving political democracy, it was felt that the establishment of economic and industrial democracy is necessary. This concept found its first practical application during the First World War when the organisations were facing two major problems, that is maintaining industrial peace and improving productivity.
The Governments of Germany, France and Great Britain convinced management to establish Joint Committees for resolving these problems through consultation. In the United Kingdom the recommendations of the Whitley Committee a well-knit three tier consultative system came into existence. But this idea got a setback in the year 1918 and 1921 due to cessation of hostilities and economic depression respectively.
During the Second World War, the interest in joint consultation was again revived because many countries, such as, Federal Republic of Germany, Yugoslavia, France, Belgium and Bulgaria passed laws to establish consultative bodies for reconstruction of their war ravaged economics. In India this concept can also be traced to Gandhian approach. Gandhi considered that workers and employer are dependent upon one another and they should act as trustees for the society.
Thus Gandhi’s concept of trusteeship is based on the theme of collaboration between employer and employees rather than on conflict. The International Labour Organisation has made some efforts for creating interest in this concept and its recommendations have been adopted in 1952, 1960 and 1976.
Workers’ Participation in Management – 4 Main Objectives
Main object of workers’ participation in management to achieve economic development with stability. According to the draft of second five-year plan, the main object of this scheme is to develop mutual co-operation between labour management at the level of an enterprise so that—(i) The productivity of the enterprise may be increased for the benefit of the employees, society and the enterprise itself (ii) Employees may be properly conveyed their role in the operation of industry, (iii) Desire of employees of self-expression may be satisfied so that they may contributes the best of their ability towards industrial peace and harmony.
Important objects of Workers’ Participation in Management are as under:
1. Social Objectives:
The worker being a human being is a social being also. The purpose of this system is to get the workers a respectable status in society. It is a great achievement for them. It assures the human dignity because they become a partner in the gains of productivity. It can be reflected in terms of maintaining healthy industrial relations by reducing industrial problems and creating positive conditions in which industrial harmony and peace can grow.
Social objectives of workers’ participation in management are—(i) To reduce labour problems to the minimum, (ii) To create healthy atmosphere in the enterprise. (iii) To bring industrial peace, (iv) To develop a spirit of mutual faith and co-operation in place of suspicion and rivalry between labour and management to one another.
2. Establishment of Industrial Democracy:
Workers’ participation in management helps in establishing industrial democracy in an enterprise. Both the workers and management realise their duties and responsibilities. They recognise and honour the achievements of one another.
3. Economic Objectives:
The foremost object of workers’ participation is to increase the production and the productivity of workers by improving the industrial and human relation in industry. The irrational or destructive attitude of worker is replaced by constructive and rational thinking.
The system takes the maximum economic welfare instead of maximum profit as one of the motives of industrial production. The workers contribute substantially to the progress and prosperity of enterprise and hence have a legitimate right to share the gains of higher productivity of enterprise.
Economic objectives of workers’ participation in management are—(i) to increase the production and productivity of the enterprise, (ii) to increase the production and productivity of the workers, (iii) to increase the earnings of workers, (iv) to reduce the rate of absenteeism and labour turnover.
4. Psychological Objective:
The main purpose of this system is to trying about a change in the attitude of workers. Until now, they regard themselves a machine that only works when desired and ask for nothing. If workers are given due participation in management, they will think themselves part and parcel of the unit.
This sense of loyalty can only be promoted through the changing attitude of employer towards labour. Psychologically, workers will accept their responsibility in an activity because they feel themselves the partners in taking the decisions on the matters concerning them. It satisfies their non-economic needs and help in raising the level of motivation.
Workers’ Participation in Management – Characteristics
The word participation is a glamorous term. Workers welcome it because it enhances their status in the company. Employers use it to exhibit how progressive they are. Unions want it because it brings about a new power equation. Irrespective of these interpretations, participation is welcomed at all levels, because it has a ‘tonic effect’ on the psychology of an individual.
1. Mental and Emotional Involvement – Participation means mental and emotional involvement rather than more physical presence. It is more than consent or approval to managerial actions.
2. Collective Participation – Workers participate collectively as a group through their representative rather than participating individually.
3. Formal and Informal – 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. Different from Collective Bargaining – Worker participation is different from collective bargaining collective bargaining is based on power play, pressure tactics and negotiations whereas participation is based on mutual trust, information sharing and mutual problem solving.
5. Four Levels of Participation – There can be four levels of participations – shop floor, plant, department and corporate levels.
6. Based on Theory – WPM is based on the theory that a worker invest his labour and ties his take to his place of work. Therefore, he has a legitimate right to share in the determination of company policy.
7. Degrees of Participation –
There are four degrees of participation:
a. Communication – It involves sharing information about all management decisions with workers.
b. Consultation – Under it, workers express their views on work related issues. Final decisions are taken by management after consultations.
c. Code-termination – Herein managers and workers jointly take decisions.
d. Self-Management – In it, workers enjoy complete autonomy right from decision-making to execution.
Some more characteristics are as follows:
1. WPM increases the scope of employees’ share of influence in decision-making.
2. It is presumed that workers will own responsibility.
3. Participation has to be at different levels so as to influence policy formulation and to help in its execution.
4. There will have to be forums and practices providing for association of workers’ representatives.
5. It increases a worker’s productivity through active cooperation between the worker and the management.
6. It boosts a workers motivation.
7. It increases understanding between the two groups.
8. It recognises a workers personality.
9. It puts industrial democracy into practice and makes the workers conscious of their democratic rights.
10. It makes a worker feel involved in the affairs of his/her organisation.
Some authors have grouped these objectives under the heads such as economic objectives, social objectives and psychological objectives.
Workers’ Participation in Management – Importance
The concept of workers’ participation in management is very important from the workers and management point of view. The scheme is very useful to promote industrial relations and human relation in industry provided the scheme is implemented honestly and without any reservations.
It may help minimising the labour disputes because both labour and management are the partners in the welfare of industry. The importance of this scheme can be judged from the following facts on the basis of which one can agree for the implementation of scheme.
They are as follows:
1. Mutual Understanding:
In capitalistic economy, workers and capitalists are two groups having different interests. Both doubt integrity of each other because both are ignorant of each other’s problems and never try to know them. The worker participation extends the mutual understanding.
The workers and employees come nearer to each other and understand each other’s difficulties and problems. It gives employees a better understanding of their role in the working of industry and of the processes of production. Participation brings the two parties closer and makes them aware of each other’s problems. As a result, better understanding and mutual trust can be created between employer and workers.
2. Higher Productivity:
Co-operation of workers result in increased production and productivity. Better understanding and good relations are the pre-requisites of higher and better production. Production and productivity cannot be increased without effective cooperation of workers and management. Through participation worker learn the problems of industry and better understanding of their role.
Participation improves employee motivation and job satisfaction which in turn help to increase their efficiency. Higher productivity leads to lower cost per unit and greater profits which are beneficial to all.
3. Industrial Harmony:
As the worker become the partners of industry and take part in decision making, they extend full cooperation to the management in carrying out the decision. They have a sense of loyalty and better understanding. Thus the possible of dispute based an irrational grounds is reduced to the minimum. Continuous dialogue between management and worker improves peace in industry. As a result, industrial relation will certainly improve with worker participation in decision making process.
4. Less Resistance to Change:
Change is generally resisted by workers because every change is regarded by workers a threat to stability. They often resist change due to fear and ignorance. When workers participate in the decision-making, they come to understand that change is ultimately in their own interest. As a result, they participate in the decision making bodies and they will adjust themselves to the changed environment.
They become more able and ready to adopt themselves to technological and other changes. It made to improve the competitive position of company. Once the workers are taken into confidence, introduction of change is very smooth.
5. Creativity and Innovation:
Participation offers an opportunity to intelligent employees to demonstrate their knowledge, skill, initiativeness as well as creativity. It also encourage workers to think. Highly capable persons having talent can be easily spotted out and offered due promotion. Thus participation enables the management to capitalise the talent and ability of employees. Participation also offers an opportunity for the advancement of employees and of management executives. This will also increase the growth of workers.
6. Greater Efficiency and Job Satisfaction:
Under the scheme workers are abide by their own decisions and work with their full zeal to carry out the decision. The importance given to workers by consulting them for various decisions will increase their efficiency and job satisfaction. Various organisational goals and set with the consent of workers and they will feel motivated to achieve them in time. There will an atmosphere of mutual help.
The improved performance of workers will give them job satisfaction also. Increase in efficiency and productivity will give benefit both the parties to the labour in shape in increased wages to management in the form of better production.
7. Industrial Democracy:
Industrial democracy means participation of all parties concerned or affected in the management of industries. When workers participate in management true industrial democracy is established. Their ego is satisfied and they contribute something positive in the interest of industry themselves and of the country because they can express themselves put their problems and grievances at the work.
8. Increased Commitment:
When workers are consulted on important policy decisions then they feel as part and parcel of the enterprise. The workers are free to express their views about various matters affecting them. It helps the management to understand the view point of workers. This gives a sense of personal gratification to workers and they feel committed to the work and organisational goals. Thus participation increases the commitment of workers which also help to increase the production and productivity of industry.
9. Satisfy Social and Egoistic Needs:
According to Maslow theory of need, first of all physiological needs are satisfied. When workers have satisfied the need of food, clothing shelters etc., the next step is to satisfy other need. Now they want to satisfy social and egoistic needs because every worker wants to feel important in the organisation.
Importance of workers will increase through participation. Participation of worker will give them a sense of pride and satisfaction. So the desire to satisfy social and egoistic needs will also act as a motivator to workers. They participate in the decision making process in order to satisfy their social and egoistic needs.
Workers’ Participation in Management – 3 Main Perspectives
The workers’ participation in management is inevitable from the economic, psychological and sociological points of view.
1. The Economic Perspective:
Economically, it flows from the assumption that employees can contribute substantially to the progress and prosperity of the enterprise, and that they have, therefore, a legitimate right to share equitably in the gains of higher productivity. The higher productivity is achieved through the fullest co-operation between labour and management, for “poor labour-management relations do not encourage the workers to give more than the minimum necessary to retain the job; and that, in many cases, is all that he gives.”
2. The Psychological Perspective:
Psychologically, it implies recognition of employees’ non- economic needs; the satisfaction of these needs through effective participation can help to raise the level of motivation. “Participation gives the worker a sense of importance, pride and accomplishment; it gives him freedom and opportunity for expression; a feeling of belonging to the place of work, and a sense of workmanship and creativity. It provides for the integration of his interests with those of the management by making the worker a joint partner in the enterprise.”
3. The Sociological Perspective:
Sociologically, the need for participation arises because modern industry is a social institution with the interest of the owner, the employer, the community and the workers equally vested in it. It aims at reducing the number of industrial disputes and creates positive conditions and an atmosphere in which industrial harmony-and peace can develop.
“Participation forges ties of understanding between individuals, leading to better efforts all-round; and its absence leads to stagnation of minds and allows the abilities of producers to remain dormant, introduces sullenness in behaviour which ultimately may flare up into breaches of discipline and a consequent loss in production.”
Workers’ Participation in Management – 5 Important Forms
Workers may participate in management in various forms.
Following are the forms that are more important and common:
Under this scheme of workers’ participation in management, the workers purchase same shares of the company in which they are working. Thus, they became shareholders of their company. Being shareholders, they take parts in the process of decision making and policy framing of their company by taking part in the meetings of the company at various levels.
They may send their representatives to the board of directors and thus, they may participate in the internal matters of the company. In addition to this, they get a share in the profits of camp any as dividend.
2. Appointments of Labour Directors:
Under this form of workers’ participation in management, one or two representatives of workers are nominated or elected as directors. These directors enjoy the same status rights and power as other directors of the company. Such directors may be elected by workers’ or may be nominated either by trade unions or by the management.
This system has been successfully implemented in many countries of the world. In India also, this scheme is applied in nationalised banks. In these banks two representatives of employees are elected on the board of directors. One such director is from clerical staff and another from supervisory staff.
3. Suggestion Scheme:
A very important farm of workers’ participation in management is the suggestions scheme. Under this scheme, suggestions are invited from workers a various problems of the company. This scheme is mare commonly adapted and the problems related with workers. It provides new and valuable suggestions to the management and increases the feeling of integration among workers with their enterprise.
4. Works Committees:
Establishment of works committees in establishment employing 100 or more workers were made compulsory by the Industrial Disputes Act 1947 to introduce the system of labour-management participation through legislation. Such committees consist of equal number of representatives of workers and employer.
State Governments may, by general or special order, require the employer having 100 or more workers to constitute such works committees. The main purpose of such committees is to provide measures for securing and preserving amity and good relations between the employer and employees.
5. Joint Management Councils:
Under this system, joint consultative committees are set up comprising the representatives of the workers and employers to discuss various matters concerning the working conditions of workers in industry. The decisions of such committees are purely of advisory character though management implements the decision because it is the outcome of the deliberations between the representatives of the management and the employees otherwise workers will lose their faith in management.
The matters which are to be settled through collective bargaining such as wages, bonus etc. are excluded-from the scope of the committees. The matters which are generally taken up by these committees are prevention of accidents, management of canteens, water, meals, safety etc., issue and revision of work rules, avoidance of waste of time and materials absenteeism, indiscipline, training etc., Such committees may be formed on plant or shop level.
Workers’ Participation in Management – 3 Main Methods: Collective Bargaining, Quality Circles and Open Door Policy
Some important methods of workers’ participation are as follows:
1. Collective Bargaining:
Collective bargaining is a matter of joint consultation, for which members must be prepared to act collectively and recognize their common interests. The most important learning is that it is a give and take process based on the strength and coordination amongst the members of groups.
It is said that, “Any business arrangement that is not profitable to the other person will in the end prove unprofitable for you. The bargain that yields mutual satisfaction is the only one that is apt to be repeated.”
The term collective bargaining was coined by Sydney and Beatrice Webb of Great Britain, which is said to be the “home of collective bargaining”. The idea of collective bargaining emerged from the industrial conflict and the growth of the trade union movement.
Collective bargaining is the process whereby workers organize together to meet, converse, and compromise upon the work environment with their employers. In various national labor and employment law contexts, collective bargaining takes on a more specific legal meaning.
In a broad sense, however, it is the coming together of workers to negotiate their employment. A collective agreement is a labor contract between an employer and one or more unions.
Collective bargaining consists of the process of negotiation between representatives of a union and employers (represented by management, in some countries by employers’ organization) in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions and grievance- procedures, and about the rights and responsibilities of trade unions.
The parties often refer to the result of the negotiation as a Collective Bargaining Agreement (CBA) or as a Collective Employment Agreement (CEA).
According to International Labor Organization, collective bargaining is defined as “Negotiation about working conditions and terms of employment between an employer, a group of employers or one or more employer’s organization, on the one hand, and one or more representative workers organization on the other hand, with a view to reach an agreement.”
Basic Elements for Effective Bargaining:
I. Collective and representative – voicing the opinions and issues of the masses and having a collective strength as a group or community
II. Bipartite – involves both the parties and is an interface between two parties who should be willing to discuss and reach a solution of compromise
III. Strength and flexibility – in terms of perceptiveness of others perspective and understanding nuances and in terms of being receptive and intelligent in dealings
IV. Voluntary – for a successful bargaining, both the parties should participate on a voluntary basis and there should be no force to participate or indulge in the process of negotiating
V. Continuous & Dynamic – the process of negotiating and compromising with another party
VI. Power Relationship – it is a power relationship in which the management tries to retain its right to manage and union tries to safeguard its interests so as to strength its hold over the workers.
VII. Negotiation base – negotiations form an integral part of the process of collective bargaining since there is immense scope for discussion, compromise and mutual gain. It is deliberations rather than confrontation.
Collective bargaining is based on ‘good faith’ and means a joint consultation where logic is important for constructing convincing grounds.
2. Quality Circles:
The concept of quality circles first originated in the United States of America and was later used by Japanese industries. The start of Quality Circles in Japan is credited to Dr. Kaoru Ishikawa of Tokyo University. It is an important group technique applied to ensure involvement of workers in decision making process.
They are small group of members involved in similar type of work, who voluntarily meet regularly once a week, fortnight or month, depending on the nature, intensity and frequency of the problem. A group of 8-12 members are formed to discuss problems related to quality and productivity. Consequently, recommendations are made and corrections are undertaken.
Quality Circles consist of 6-10 or 8-12 members and the membership is purely voluntary in nature. Every member is a leader and is elected by the members themselves. The nomination and selection of the leader is done by the group and after the completion of the project, another leader may be appointed.
Facilitator is selected by the management and his responsibilities include organizing and coordinating activities, along with his co-coordinator (semi-facilitator). Steering committee comprises of various departmental and divisional heads. They have the responsibility to review the operations of Quality Circles and provide any form of necessary support required by the Quality Circles group.
An Executive Committee (top management committee) consisting of the Chairman and the Managing Director, Directors, Chief Executives, General Manager and other top executives is formed. This is primarily an advisory committee to guide the Steering Committee and the facilitator.
3. Open Door Policy:
It is a general invitation to all the employees to walk inside manager’s room any time and discuss their grievances and problem. It is an informal practice of giving the employees the freedom to discuss routine grievances and work related issues. Inspite of providing democratic benefits and freedom of expression, the system of Open Door Policy has proved ineffective, especially in large organizations.
Workers’ Participation in Management – Human Relations Model and Human Resources Model
One of the main problems confronting a modern manager is how he can become democratic in his dealings with his subordinates and at the same time maintain the necessary authority and control within the organization for which he is responsible. In order to resolve this issue, two basic theories of participation (also known as models of participation) have emerged- human relations model and human resources model.
1. Human Relations Model:
Human relations model suggests that managers should treat their subordinates as a ‘whole man’ and not merely a bundle of skills and aptitudes. Human relations are the integration of people into a work situation that motivates them to work together productively, cooperatively, and with economic, social, and psychological satisfaction.
The key element in the human relations model is its basic objective of making organization’s members feels useful and important part of the overall effort. Participation in this model is a lubricant which oils any resistance to formal authority. In many ways, the human relations model represents only a slight departure from traditional autocratic model of management.
The method of achieving results is different, and employees are viewed in more humanistic terms, but the basic roles of manager and his subordinates remain essentially the same. The ultimate goal sought in both the traditional and human relations models is compliance with the managerial authority.
2. Human Resources Model:
Human resources model represents a significant departure from the previous model in two respects. First, there is a difference regarding assumptions concerning people’s values and abilities. The focus of attention in this respect is on all organizational members as reservoirs of untapped resources.
Such resources are not only in the form of physical skills and energy, but also in terms of creative ability and capacity for responsible, self-directed, and self-controlled behaviour. Under these assumptions, a manager’s task is not only to give direction and receive cooperation, instead his main task is to create an environment in which such resources are fully utilized.
Second, there is a difference regarding objectives of participation to improve decision-making process and the total performance and efficiency of the organization as compared to increasing subordinates’ satisfaction and morale through participation under human relations model.
In human relations model, improvement in subordinates’ satisfaction is viewed as the causal variable that is the ultimate cause of improved performance. In human resources model, improved job performance is the source of employee satisfaction. This model, thus, suggests that subordinates should be given participation not only in routine decisions but in important decisions also so that they feel obligations for self-control.
Through this way the quality of decision and control would improve, and at the same time, satisfaction and morale will also increase.
Workers’ Participation in Management – Issues Revolve Around the 4 Main Factors of WPM
Several research studies have shown that the intensity of participation depends on four factors:
1. The subject-matter of participation
2. The personal characteristics of the individuals who are asked to participate in the decision-making
3. The level of participation, and
4. The extent of participation.
1. Subject-Matter of Participation:
By and large, the workers’ interest in participation varies with the nature of issues involved in participation- Broadly speaking, there can be two types of issues- work related and interest-related. Examples of work-related issues are safety, welfare, such as canteen, sports water-supply, housing, etc., These are the simplest issues. Examples of interest-related issues are wages and sharing of productivity gains. These are the most difficult issues. Workers show greatest interest in the second type of issues.
2. Personal Characteristics:
Workers’ interest in participation is also influenced by certain personal or group characteristics. For example, several research studies have shown that both very low and very high levels of task-relevant maturity discourage participation. Participation by extremely immature workers is like the blind leading the blind. It is pooling of ignorance on the other hand, extremely mature workers rarely participate.
They resist “group think” because they prefer only the expert in an area to make the decisions. Thus, the effectiveness of workers’ participation in management increases as one moves from low to moderate levels of maturity and then begins to plateau and finally to decline as workers become high in task-relevant maturity.
3. Level of Participation:
Level of participation is another factor which determines the interest of workers in participation as such. Participation can take place at 3 levels in an enterprise-floor level, plant level and corporate level. In big enterprises there may be a fourth level also i.e., the departmental level, in between the shop-floor and the plant. Studies have revealed that most workers desire participation at the shop-floor level and-not a higher levels because they feel that with their knowledge of the work place they can contribute best at that level only.
4. Extent of Participation:
There are four degrees of participation.
These are as follows:
i. Communication, i.e., sharing of information with the management about all decisions taken by it.
ii. Consultation, i.e., exchanging the opinion and the views with the management before the decisions are taken.
iii. Self-management, i.e., sharing complete autonomy right from decision-making to on.
iv. Co-determination, i.e., taking joint decisions with the management.
1. Rigid and Inflexible Attitude of Employers:
Employers have rigid attitude towards the employees and remain resistant in sharing information, experience and mutually beneficial roles and responsibilities. The feudalistic concept of master and slave still exists in the Indian industrial scenario.
2. Restricted Role of Trade Unions:
Trade Unions could not play a satisfactory role in the promotion of WPM, in spite of it being a blessing in disguise for them. Limited understanding of industrial laws, restricted outlook towards change and a biased attitude towards their employers led to the overall decline of the WPM movement.
There has been lack of mutual trust and confidence between the Union and Management in creating a contract of Industrial Democracy.
Absence of a strong Trade Union and inter Trade Union rivalry has been the situation even more deplorable.
3. The Issue of Representation:
There is an urgent requirement of skilled, technologically competent and relational representation both from the management and employees side. The participation of unskilled representatives can result in serious industrial malfunctions and unfavorable decisions, which may adversely affect the morale and interest of the workforce.
Although the representatives of central organization supported committee meetings and WPM schemes, their long term interest has been limited. This has severely affected the performance of grievance redressal procedures and consistency of work committees.
Workers’ Participation in Management – Reasons for the Failure of WPM
The object of WPM was to bring labour and management closer and work for the achievement of organisational goals. But the participation has not been successful this is so because participation is a two-way traffic which require mutual understanding between two parties.
It has failed due to following reasons:
1. Workers are Inefficient – Workers are inefficient and uneducated in the eyes of management and are not competent in taking the decisions. It delays the implementation of decision. Sometimes a good decision remains unimplemented as it is not supported by the workers.
2. Right Management Attitude – Employers have by and large resisted worker’s participation in decision making. They did not reconcile to the idea that workers participation in decision making will help in increasing efficiency and productivity. Perhaps the philosophy of the scheme was not understood by managements.
3. Difficulty in Playing the Dual Role – Worker’s representatives who participate in management has to perform the dual role of worker’s spokesmen and co-managers. On one side they were co-managers and on the other hand, they had to lead the workers. The dual role required for workers nominees was difficult for them and created problems for them.
4. Weak Trade Union – Trade union movement is not quite strong. There are multiple trade unions and are dominated mainly by political leaders. While participating in management they give priority to political interests rather than the interest of workers. So the active association of union leaders with political parties was only responsible for the failure of this scheme.
5. Only Few Workers Participate at Top Level – The worker’s participation is mainly emphasised at top level management. Only few workers participate at managerial level. This does not involve every worker in management. A common worker is not enthusiastic about participation. The indifference of common worker is also responsible for the failure of this scheme.
6. Lower Level Need of Worker are Not Satisfied – Lower level needs of workers are not fully satisfied. Therefore, majority of Indian workers are not motivated enough to assume decision-making responsibility either directly or through their representatives.
7. Schemes of WPM Sponsored by Govt. – Schemes of worker’s participation have been initiated and sponsored by the Govt., without any initiative from management. So management took it only as an imposition upon them. There has been lack of initiative on the part of both employers and trade union.
8. No Participation Possible in Complicated Problem – Participation cannot be extended to complicated problems of financing, marketing, production etc. These functions require specialised knowledge. Thus specialised knowledge is not an elective function and therefore cannot be shared with workers.
Workers’ Participation in Management – 5 Main Advantages of WPM Scheme
Most important outcome of great industrial revolution is the change in the approach of management towards workers. The workers no more considered as machines and slaves. Their feelings, ambitions, and emotions have been duly recognised by the management.
The management has realised that the organisational objectives can be achieved only if the workers co-operate with them. Therefore, all the efforts are made to get their co-operation. Workers’ participation in management is an important device to get their co-operation.
The advantages of this scheme can be explained as under:
1. Increase in Production and Productivity:
The scheme of workers’ participation in management helps in increasing the production and productivity of the enterprise. The workers co-operate in the achievement of organisational objectives and work with the best of their efficiency and ability. As a result of such co-operation of workers, the wastages are reduced to minimum and as a result of it, the production and productivity of the enterprise increase.
2. Helpful in Establishing Industrial Peace:
Main cause of all the industrial disputes is the feeling of distrust among workers to their management and the management to the workers. The scheme of workers’ participation in management creates the atmosphere of mutual faith and trust between employees and employers. Thus, the possibility of industrial disputes is reduced to minimum and the atmosphere of mutual co-operation and coordination develops.
3. Mutual Faith, Trust and Understanding:
The scheme of workers’ participation in management established harmonious relations between labour and management. Both the parties try to understand the problems of one another. Both of them try solving all the problems through mutual discussion and negotiation. It gives employees a better understanding of their place, and importance in the industry.
4. Morale of Employees:
The scheme of workers’ participation in management helps in increasing the morale of employees also. They feel that they are an important part of their organisations and their opinions and suggestions are duly recognised by the management. It increases their morale, which in turn increases the production in the enterprise.
5. Establishment of Industrial Democracy:
The scheme of workers’ participation in management helps in establishing industrial democracy in the enterprise. It provides an opportunity to both the parties to come close and to establish direct contact between them. It minimises the possibility of external and political interference in industrial relations. Thus, this scheme is an exercise to bring industrial democracy in the country.
Workers’ Participation in Management – 3 Major Criticisms of WPM
Arguments generally advanced for the scheme of workers’ participation in management. But the employers have not favoured the scheme and the workers are also not enthusiastic in this connection.
The scheme is criticised by the employers on the following grounds:
(1) Weak Trade Unions:
Trade union movement is not quite strong in our country. There are multiple trade unions and they are dominated mainly by political leaders and with political ideologies. Participation in India can succeed only when labour is duly organised so that they can work on equal footings. For successful participation, it is very necessary to have one representative trade union in one unit.
(2) No Participation Possible in Complicated Problems:
Participation cannot be extended to complicated problems of financing, marketing, production, managerial functions, such as planning, directing, coordinating, controlling etc. These functions require specialised knowledge.
Management today has assumed professional character demanding services of exports such as financiers, engineers managers, accountants chemists, statisticians etc. These exports are fully equipped and use the modem methods and techniques to the job they are assigned. The specialised knowledge thus is not an elective function and therefore cannot be shared with workers.
(3) Workers are Inefficient:
Indian workers are inefficient and uneducated in the eyes of the management and are not competent in taking the decision. It will delay the implementation of the decision. Sometimes a good decision cannot be carried out if it is not supported by the workers.
Workers’ Participation in Management – Measures Adopted at Two Levels
Looking at the role of workers’ participation in management for effective performance coupled with the process of democratization of social institutions in the country, suitable measures should be adopted to make workers’ participation in management effective. These measures should be adopted at two levels- setting climate for participation and sorting operational problems.
Various measures at these levels are as follows:
1. Setting Climate for Participation:
Participation is not just a process but it is an approach for effective utilization of human resources. An approach works only when there is conducive organizational climate.
Organizational climate for participation can be set by the following measures:
i. Participation can be initiated by top management from where it may percolate to the lower levels including the operative level. The top management should shed its authoritarian culture because in the new environment, it will not work.
ii. Participation can percolate to lower levels when there is adequate authority delegation and empowerment. When this process is adopted at the higher level, it sends right signal to lower levels. Managers at lower levels start feeling that there is genuine concern for participation in the organization.
iii. For developing the cooperative attitudes among the trade union leaders, there should be continuous dialogue between management, preferably from senior levels, and union representatives. If need be, there may be training programmes for developing competencies in these personnel.
iv. Since setting conducive participative climate is a gradual process, it cannot be done overnight just by orders. It has to be evolved gradually. Therefore, there is need for patience for the results.
2. Sorting Operational Problems:
Many times, workers’ participation does not work because of the operational problems. These problems may emerge in any area of participation — subject matters, degree of participation, level of participation, and methods of participation.
In order to solve these problems, the following measures may be adopted:
i. To begin with, participation should be adopted on direct basis by initial development of empowered teams. From this stage, participation can be extended at the shop-floor level and subsequently to plant and enterprise levels. In the same way, at the initial stage, only few non-controversial matters should be entrusted to committees and councils.
ii. The workers should be trained in the area of interpersonal interaction and problem solving. This will enable them to participate meaningfully.
iii. Various committees and councils created at different levels and their members should be made clear about their jobs, authority, and boundaries so that they know what is expected from them.
iv. There is need for continuous two-way communication so that everyone becomes aware about the decisions taken and implemented. Such a communication system develops faith and trust in the workers. This also provides inputs for decision making through participation.
v. There should be continuous evaluation of functioning of the various committees and councils in order to find out how these are working. Evaluation may be through opinion surveys, personal interaction with committee members, utilization of suggestion scheme, etc. Based on such an evaluation, suitable corrective actions may be taken wherever these are required.