Workers’ participation in management
Workers’ participation in management
DefinitionWorkers participation in management may
be defined as mental and emotional involvement of the
employees, through consultative councils and
committees comprising representatives of employees and employers,
to contribute to group goals and share responsibility for improving the organization.
Illustrating With SatyamStarted a company-wide suggestion scheme, IDEA
JUNCTION, in June, 2001 It is a real time web based application available to
all Satyam associates around the globe.They are able to log in & provide ideas
suggestions & complaint; track progress against them; participate in various forums & surveys.
An CIRCLE IDEA LEADER is appointed at every circle to acknowledge, evaluate, take these to logical conclusion and facilitate in implementation of accepted ones.
Reward points are awarded to people with ‘accepted ideas’.
Simply, PARTICIPATIVE MANAGEMENT OR EMPLOYEE EMPOWERMENT meansinvolving employees in decision making process at all levels of management, so as to
Psychologically involve the employee Motivate the person to contribute to organizational goals
Encourage people to accept
responsibility
Decisions effecting the Employees:Three groups of Managerial decisions have
impact on the employees….Social decisions – Encompasses hours of
work, welfare measures, work rules, issues of health & safety etc….
Personnel decisions – as in recruitment and selection, promotion, demotion, transfers, grevaince settlement etc..
Economic decisions – including financial aspects, methods of manufacturing, shut-down, lay-off, merger etc…
SCOPE AND WAYS OF PARTICIPATION
Two different school of thoughts-Workers or trade unions should sit with
the management as equal partners and make joint managerial decisions .
Workers and only be given an opportunity through their representatives, to influence managerial decisions.
Employees decides
unilaterally
Management joins with
employees in making
decisionsManagement
consults employees before
final decision
Management communicates
decision to employees
Management decides
unilaterally
Degree to which management prerogative is preserved
Degree to which employees are involved
SCALE OF PARTICIPATION
Methods of Participation
Participation at the BoardA representation of workers on the board would,
it is believed usher in industrial democracy, ensure improved employee-employer relations & guarantee better productivity.
The Government of India has taken initiative to implement this in public sector e.g. Hindustan Antibiotics, Hindustan Organic Chemicals, Colaba, Hindustan Machine Tools etc.
Some nationalized banks & some private enterprise like Tata, DCM has also been implementing this strategy
Draw-backs of Participation at the Board
Most of the decision regarding personnel matter is taken at lower management level.
Distance between workers and their representative at board over time.
Inferiority complex of the worker-director hampers productivity
Minority of worker-director in Board.
Participation through Ownership
Workers may become more involved in industry by making them share holder of the company.
The management may promote schemes to induce worker to buy Equity Shares of the Company.
E.g.
61% shares of ‘Otto India, Kolkata’ are held by its employees.
A private firm of Rourkela introduced a scheme known as
‘Employees Share Participation Loan Scheme’.
Hughes Software Systems made a ‘Phantom Stock Option
Scheme’ for its employees
Participation through ownership contd……..
Advantage: Makes worker committed to their job and to
their organization
Disadvantage: Participation is limited because ownership is
different from management in the company.
Participation through Complete Control
The concept of Complete Control was first emanated in Yugoslavia under Communist influence.
This gives complete control and authority to the workers to mange directly all aspects of management through their representatives
Aim: Self managementFull responsibility of work process.Industrial democracy
Participation through Complete Control cont….
Advantage: Ensures identification of workers with their
organisation Workers develop loyalty to the organization.Industrial disputes disappear.Trade unions welcome it.
Disadvantage: Unable to take any stern action due to peer feeling.Representatives tend to get alienated from others.
Participation through Staff or Work Councils• These are bodies on which representation is
entirely of employees• There may be one council for entire organization
or number of councils on hierarchy basis.• The members of the Council are elected by the
employees of the respective section.
FUNCTIONS: Eliciting information on the management’s
intentions to a full share in decision making.DISADVANTAGE: Being mainly worker’s bodies, Staff Council
may erode their power and prestige.
Participation through joint councils & committees:
Joint councils:• Are bodies comprising of representatives of
employees & employer• Their functions may range from decision
making to a mere consultative body.• In real, these are of little importance & just
provide a platform for all to vent their complaints & grievances.
Work Committees
Comprise of representatives of employers and employees.Constituted in Industrial establishments employing 100 or more workers.These are mandatory legal requirement under the provisions of the Industrial Disputes Act, 1947.They discuss a wide range of topics connected with workers’ welfare.
Participation Through Collective Bargaining
What is collective bargaining? Collective Bargaining is the process the
negotiation between the representatives of the employees and employers/management.
Approaches to Collective Bargaining:Peace TreatyIndustrial JurisprudenceProcess of Social Change
Importance of Collective Bargaining
1. Helps increasing the economic strengths at the same time protecting ----- interests.
2. Helps in establishment of uniform conditions of Employment
3. Resolve disputes4. Ushers democratic principles into the
industrial world
Process of collective bargaining:
1) Preparing for Negotiations 2) Bargaining Issues3) Negotiating4) Reading the Agreement5) Ratifying the Agreement6) Administering the Agreement
Disadvantages to Collective Bargaining
Crude concept of Power;Develops Mistrust;Use of strong arm or pressure tactics.
Participation Through JOB ENLARGEMENT and JOB ENRICHMENT
Job Enlargement means expanding the job
content adding task elements horizontally.
Job enrichment means that additional motivators
are added to the job so that it is more rewarding.
These two relative the boredom of the workers.
This form of participation provides only limited
freedom.
Participation through SUGGESTION SCHEMESEmployees views on matters are invited and
reward is given for the best suggestion.
Enables the management to arouse and maintain
the employees’ interest in the problems of their
concern.
Ideas ranges from changes in inspection
procedures to design changes , process
simplification, paper- work reduction and the like.
Participation through QUALITY CIRCLES
A Quality circle consists of group of Seven to Ten employees from the same work area who meet regularly to discuss their quality problems , analyze and investigate causes , recommend solutions and take corrective actions.
Objectives of QUALITY CIRCLES
Improvement in quality of product manufactured by the organization.
Improvement in methods of production. Development of employees participating
in Quality Circles. Promoting morale of employees. Respect humanity and create a happy
workplace worth while to work.
Features of QUALITY CIRCLES
Voluntary GroupSmall sizeRegular MeetingIndependent AgendaQuality Focused
Advantages of QUALITY CIRCLES
Employees are involved in decision making.Saving to cost ratio generally higher than
other productivity improvement programmes.Circle members enhance their chances of
promotion to supervisory positions.
Problems of QUALITY CIRCLES
Negative Attitude
Lack of Ability
Lack of Management Commitment
Phases in the life of a QC ProgrammePhase Activity Destructive Forces
1. Start - Up Publicise, Obtain funds and Volunteers, Train
Low volunteer rate , inadequate funding , inabilty problem-solving skills
2. Initial Problem Solving
Identify and solve Problem
Disagreement on problems
3. Presentation and approval of initial suggestions
Present and have initial suggestions accepted
Resistance by staff groups and middle management , poor presenation , and suggestions because of limited knowledge .
4.Implementation of Solutions
Relevent groups act on suggestions
Prohibitive , resistance by groups that must implement
5. Expansion and continued problem solving
Form new groups , old groups continue.
Raised aspiration , lack of problems, expense of parallel organisation , saving not realised , rewards wanted.
6. Decline Fewer groups meet Cynicism about programmeBurnout
EMPOWERED TEAMS:
Also called ‘ Self – directed teams ’ or ‘
Self – Managing Teams ’.
There are the groups that are given a large
degree of decision making autonomy and
expected to control their own behaviour
and results.
Features of EMPOWERED TEAMS• They are empowered to share various management
and leadership functions.• They plan , control and improve their own work
processes.• They set there own goals and inspect their own work.• They often create their own schedules and review their
performance as a group.• They may prepare their own budgets and coordinate
their work with other departments.• They are free to acquire any training which they feel
necessary.• They take sole responsibility for achieving quality in
their products and services , whatsoever be the case.• They may have their own replacement or assume
responsibility for disciplining their own members.
How to develop EMPOWERED TEAMS
Identification of Responsibility
Methods of Monitoring and Feedback
Specification of Member’s Responsibility
Determination of Training needs
Work plan for Transition
Life Stages of an EMPOWERED TEAMS
Orientation
“ Forming ”
Confrontation
“ Storming ”
Differentiation
“ Norming ”
Couaboration
“ Performing ”
Key Differences between Traditional Organisations and Empowered- team Organizations
Element Traditional Organizations
Self- Directed Teams
1. Organizational Structure
Layered / Individual Flat / Team
2. Job Design Narrow , Single- task Whole Process / Multiple Task
3. Management Role
Direct / Control Coach / Facilitate
4. Leadership Top- Down Shared with Team
5. Information Flow Controlled / Limited Open / Shared
6. Rewards Individual / Seniority Team-based / Skill-based
7. Job Process Managers plan , control , improve
Teams plan , control , Improve
Total Quality Management• Refers to the deep commitment of an
organization to Quality.• TQM is a participative method as every
employee in the organization is involved and is expected to take responsibility for improving quality everyday.
• It involves direct participation of employees.
• TQM replaces traditional beliefs about quality in a new set of principles.
Discarded Traditional Beliefs
High Quality costs moreQuality can be improved by inspectionDefects cannot be eliminated completelyQuality is the job of the Quality Control
Personnel
New Principles of TQMMeet the customer’s requirement on time ,
the time and 100 percent of the time.
Strive to do error-free work.
Manage by prevention not by correction.
Measure the cost of quality.
Financial Participation• General purpose of financial participation
is to enhance employee commitment to the organization by linking the performance of the firm to that of the employee.
• It can be Through ----- Profit link Pay Profit Sharing Management buyouts Pension Fund Participation Workers co-operatives.
PRE-REQUISITES FOR SUCCESSFULPARTICIPATION
Clearly defined and complimentary objectives.
Free flow of information and communication.
Representative of workers must be drawn from the workers themselves.
Strong and effective trade unionism.
PRE-REQUISITES cont…
Workers’ education and training.
Neither party should feel that its position is threatened by participation.
Workers should be associated at all levels of decision making.
PRE-REQUISITES cont…
Suitable participatory structure and legislative action.
Proper distribution of resources.
Proper time management in participation.
Financial cost of participation.
IMPORTANCE OF WORKERS PARTICIPATION IN MANAGEMENT
1.HIGHER PRODUCTIVITY:-The increased productivity is possible only when there exist fullest co-operation between labor and management. Poor labor management relations do not encourage the workers to contribute anything more than minimum desirable to retain their job.
2.GREATER COMMITMENT:-An important prerequisite for forging greater individual commitment is the individual’s involvement and opportunity to express himself. Participation allows individuals to express themselves at the workplace rather than being absorbed into a complex system of rules, procedures and systems.
3.REDUCED INDUSTRIAL UNREST:- Participation tries to remove or at least minimize
the diverse and conflicting interest between the parties, by substituting it with co-operation, homogeneity and common interest.
4.IMPROVED DECISIONS:- Because of the existence of the barriers to the
upward flow of information in most enterprises, much valuable information possessed by subordinates never reaches their managers. participation tends to breakdown the barriers and makes the information available to managers.
5.HUMAN RESOURCE DEVELOPMENT:- Participation provides education to
workers in the management of industry. It fosters initiative and creativity among them. It develops a sense of responsibility.
6.UNIQUE MOTIVATIONAL POWER AND A GREAT PSYCHOLOGICAL VALUE:-
Participation makes them responsible. They become more willing to take initiative and come out with cost saving suggestions.
7.CREATIVITY AND INNOVATION:-Motivation is generally accepted as key to
creative production and the most important motivators are intrinsic passion and interest in the work itself.
8.MUTUAL UNDERSTANDING:-The act of participation in itself establishes
better communication as people mutually discuss work problems. The management tends to provide workers with increase information about the organization finances and operations, and this helps employees to give better quality suggestions.
LIMITATIONS OF PARTICIPATIONComplex technologies & organization- Due to lack of proper training &
education workers are not able to participate effectively.Lack of interest or not willing - This means employees won’t
interested to participate effectively in matters beyond their particular environment. Everybody need not want participation.
Concept of feudalism- Workers have an innate feeling that
they are born to serve & not to rule .participative mgt ,naturally, is of little interest to such workers.
LIMITATIONS OF PARTICIPATION
Roll of trade union-avoiding participative mgt is far from satisfactory
Unwillingness of the employers to share power
with the workers representative- It blocks the way of promotion of
participative mgt.
EVOLUTION OF PARTICIPATIVE MANAGEMENT
INDUSTRIAL DISPUTES ACT , 1947INDUSTRIAL POLICY RESOLUTION , 1956ARTICLE 43-A OF THE CONSTITUTION (42ND
AMENDMENT) : The State shall take steps, by suitable
legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry.
THE PARTICIPATION OF WORKERS IN THE MANAGEMENT BILL, MAY 30, 1990. SHOP-FLOOR COUNCILS ESTABLISHMENT COUNCILS
A worker is a worker, a manager a manager, never the twain shall
meet.
Manager and worker are partners in the progress of business.
Conclusion….
Employee participation in management is nothing new
Participative management involves associating employees at every level in decision making.
Employee participation results in better performance & increased motivation. It has certain limitations too.
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