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Workers’ participation in management
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Page 1: HR Worker's Participation

Workers’ participation in management

Page 2: HR Worker's Participation

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.

Page 3: HR Worker's Participation

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’.

Page 4: HR Worker's Participation

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

Page 5: HR Worker's Participation

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…

Page 6: HR Worker's Participation

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.

Page 7: HR Worker's Participation

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

Page 8: HR Worker's Participation

Methods of Participation

Page 9: HR Worker's 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

Page 10: HR Worker's Participation

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.

Page 11: HR Worker's Participation

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

Page 12: HR Worker's Participation

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.

Page 13: HR Worker's Participation

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

Page 14: HR Worker's Participation

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.

Page 15: HR Worker's Participation

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.

Page 16: HR Worker's Participation

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.

Page 17: HR Worker's Participation

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.

Page 18: HR Worker's Participation

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

Page 19: HR Worker's Participation

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

Page 20: HR Worker's Participation

Process of collective bargaining:

1) Preparing for Negotiations 2) Bargaining Issues3) Negotiating4) Reading the Agreement5) Ratifying the Agreement6) Administering the Agreement

Page 21: HR Worker's Participation

Disadvantages to Collective Bargaining

Crude concept of Power;Develops Mistrust;Use of strong arm or pressure tactics.

Page 22: HR Worker's Participation

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.

Page 23: HR Worker's Participation

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.

Page 24: HR Worker's Participation

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.

Page 25: HR Worker's Participation

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.

Page 26: HR Worker's Participation

Features of QUALITY CIRCLES

Voluntary GroupSmall sizeRegular MeetingIndependent AgendaQuality Focused

Page 27: HR Worker's Participation

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.

Page 28: HR Worker's Participation

Problems of QUALITY CIRCLES

Negative Attitude

Lack of Ability

Lack of Management Commitment

Page 29: HR Worker's Participation

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

Page 30: HR Worker's Participation

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.

Page 31: HR Worker's Participation

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.

Page 32: HR Worker's Participation

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

Page 33: HR Worker's Participation

Life Stages of an EMPOWERED TEAMS

Orientation

“ Forming ”

Confrontation

“ Storming ”

Differentiation

“ Norming ”

Couaboration

“ Performing ”

Page 34: HR Worker's Participation

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

Page 35: HR Worker's Participation

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.

Page 36: HR Worker's Participation

Discarded Traditional Beliefs

High Quality costs moreQuality can be improved by inspectionDefects cannot be eliminated completelyQuality is the job of the Quality Control

Personnel

Page 37: HR Worker's Participation

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.

Page 38: HR Worker's Participation

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.

Page 39: HR Worker's Participation

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.

Page 40: HR Worker's Participation

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.

Page 41: HR Worker's Participation

PRE-REQUISITES cont…

Suitable participatory structure and legislative action.

Proper distribution of resources.

Proper time management in participation.

Financial cost of participation.

Page 42: HR Worker's 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.

Page 43: HR Worker's Participation

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.

Page 44: HR Worker's Participation

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.

Page 45: HR Worker's Participation

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.

Page 46: HR Worker's Participation

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.

Page 47: HR Worker's Participation

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.

Page 48: HR Worker's Participation

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.

Page 49: HR Worker's Participation

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.

Page 50: HR Worker's Participation

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.

Page 51: HR Worker's Participation

THANK YOU