By-Sapana Agarwal 08-

702Priyanka Bapat 08-

708Ketaki Bhirdikar 08-

711

Evolution of Participative Management in India

WPM was made with the Industrial Disputes Act, 1947.

A study team was appointed in 1962 to report on the working of joint councils and committees.

The team identified some reasons for their failure –

No concrete steps were taken to remove the difficulties, or change the pattern of participative management.

During the emergency of 1975-77, the interest in these schemes was revived by the then Prime Minister in the government’s 20-point program.

Cont…

Janata Government who came to power in 1977 carried on this initiative.

It was again emphasized by the Congress government who came back in 1979.

Now, Article 43-A reads: 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. Thus, participative management is a constitutional commitment in India.

Cont…

And then, on May 30, 1990, the government introduced the Participation of Workers in Management Bill in the Rajya Sabha.

In spite of all these efforts, only the government and the academicians have been interested in participative management.

“Participation basically means sharing the decision-making power with the lower ranks of the organization in an appropriate manner.”

DEFINITIONS

The concept of WPM is a broad and complex one. Depending on the socio-political environment and cultural conditions, the scope and contents of participation change.

International Institute of Labour Studies: “WPM is the participation resulting from the practices which

increase the scope for employees’ share of influence in decision-making at different tiers of organizational hierarchy with (related) assumption of responsibility.”

Cont...

ILO:

The main implications of workers’ participation in management –

Workers have ideas which can be useful;

Workers may work more intelligently if they are informed about the reasons for and the intention of decisions that are taken in a participative atmosphere.

OBJECTIVES

According to Gosep – An instrument for increasing the efficiency of enterprises and

establishing harmonious relations;

A device for developing social education for promoting solidarity among workers and for tapping human talents;

A means for achieving industrial peace and harmony;

A humanitarian act, elevating the status of a worker in the society;

An ideological way of developing self-management and promoting industrial democracy.

Cont...

To improve the quality of working life (QWL) by allowing the workers greater influence and involvement in work and satisfaction obtained from work.

To secure the mutual co-operation 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.

SIGNIFICANCE

Unique motivational power and a great psychological value.

Peace and harmony between workers and management.

Workers get to see how their actions would contribute to the overall growth of the company.

They tend to view the decisions as `their own’ and are more enthusiastic in their implementation.

They become more willing to take initiative and come out with cost-saving suggestions and growth-oriented ideas.

Essential condition for WPM

The attitude and outlook of the parties should be enlightened and impartial so that a free and frank exchange of thoughts and opinions could be possible.

Both parties should have a genuine faith in the system and in each other and be willing to work together.

There should be a strong trade union, so that they may effectively take part in collective bargaining.

A peaceful atmosphere should be there wherein there are no strikes and lock-outs, for their presence ruins the employees, harms the interest of the society, and puts the employees to financial losses.

Scope and ways of participation

There can be two ways –

Workers or the trade unions should, as equal partners, sit with the management and make joint managerial decisions.

Workers should only be given an opportunity, through their representatives, to influence managerial decisions at various levels.

Methods

1. Board Level Participation2. Ownership Participation3. Complete Control4. Staff or work councils5. Joint Councils and Committees6. Collective Bargaining7. Job Enlargement and Enrichment8. Suggestion Schemes9. TQM10. Financial Participation11. Empowered Teams12. Quality Circles

Cont...

1. Board Level Participation Board of Hindustan Antibiotics (Pune), HMT. TATA & DCM.

2. Ownership Participation Manufacturing and Service Sector.

3. Complete Control Advantages:

Ensures identification of the workers with their organization.

Industrial disputes disappear when workers develop loyalty to the organization.

Cont...

4. Staff or work councils Not much successful.

5. Joint Councils and Committees Not effective in promoting industrial democracy, increasing

productivity.

6. Collective Bargaining It is based on the concept of exercising power for the

benefit of one party. Whereas WPM brings both the parties together.

Cont...

7. Job Enlargement and Enrichment It is very basic as it provides only limited freedom to a

worker concerning the method of performing his job.

8. Suggestion Schemes Employees’ views are invited and reward is given for the

best suggestion.

9. TQM It is a formal programme involving every employee in the

organization; making each one responsible for improving quality everyday.

Cont...

10. Financial Participation Scheme - Profit sharing and ESOP.

11. Empowered Teams Empowerment occurs when authority and responsibility are

passed on to the employees who then experience a sense of ownership.

Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are empowering employees.

Cont...

12. Quality Circles A QC consists of seven to ten people from the same work

area who meet regularly to define, analyze, and solve quality and related problems in their area.

BHEL, Mahindra and Mahindra, Godrej. M&M (jeep division) with 76 QCs. Technical problems got solved. Trade unions look at it as a way of overburdening workers.

Pre-requisites for successful participation

Management and employees must have defined and complementary objectives.

Participation of outside trade union leaders to be avoided.

Workers’ education and training.

Trade unions and government needs to work in this area.

Trust between both the parties and free flow of information.

Workers should be associated at all levels of decision-making.

LIMITATIONS

Technology and organizations today are so complex that specialized work-roles are required.

Everybody need not want participation.

The role of trade unions in promoting participative management has been far from satisfactory.

Employers are unwilling to share power with the workers’ representatives.

Managers consider participative management a fraud.

Reason for Limited Success

There is a basic conflict of interests between the workers and the owners of the business enterprise.

Multiplicity of trade unions and factionalism has been a serious obstacle in the way of workers’ participation in management.

Both managements and trade unions have often complained of a plethora of joint bodies in Indian industries as works committees, joint management councils, shop councils etc. as it creates confusion.

Cont… Lack of specific arrangements for sharing the gains of

participation.

It has also been realized that lack of education and training with regard to the content, process and utility of participation have also proved an impediment to the growth of workers’ participation in the country.

SUGGESTIONS

Serious attention has to be given to the removal of the hurdles.

Efforts should be made to stir up the management and workers at the local or enterprise level to understand the schemes.

The government efforts should be confined to giving guidelines and to remove the obstructions in the way.

Expanding workers’ education program.

Evolving a system of sharing the fruits of participation.