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Executive Summary

This thesis is a result of the study “A Study Of Workers’ Participation in Management In Select
Industrial Units In Uttar Pradesh” undertaken for the partial fulfillment of PhD under the
guidance of Dr. Ritu Narang at Lucknow University. The study was conducted by Ms. Rashmi
Tripathi from 2006 – 2011.

The research was conducted to investigate the existing schemes of Workers Participation in
Management and suggest a effective system/strategy of WPM for the process of decision
making. The data for this study were obtained from two industry segments were selected from
the state of Uttar Pradesh i.e., sugar industry and fertilizer industry respectively. In total six units
were studied, three units from each segment.

CHAPTER I: INTRODUCTION TO INDUSTRIAL RELATIONS

The first chapter reviews the concept of Industrial Relations to understand the range of industrial
relations (IR) challenges that employers and their organizations are likely to face in Indian
context, it is necessary to appreciate the current as well as historical factors which have shaped
and are shaping such relations in the region.

There is an increasingly strategic role for industrial relations (IR) within the enterprise, as much
of what has to be done involves significant changes to traditional practices in this and the related
area of human resource management (HRM). The result has been that the nature of IR is
changing in many enterprises. A new approach is emerging, relying on a broader concept of
employment relations.

In various researches conducted so far, nationally and internationally, Industrial relations is used
to denote the collective relationships between management and the workers. Traditionally, the
term industrial relations is used to cover such aspects of industrial life as trade unionism,
collective bargaining, workers’ participation in management, discipline and grievance handling,
industrial disputes and interpretation of rules and code of conduct.
The main objectives of industrial relations suggested by the study are as follows:

 To safeguard the interest of labor and management.


 To avoid industrial conflict or strike and develop harmonious relations.
 To raise productivity to a higher level in an era of full employment by lessening the
tendency to high turnover and frequency absenteeism.
 To establish and promote the growth of an industrial.
 To improve the economic conditions of workers in the existing state of industrial
managements and political government.
 Socialization of industries by making the state itself a major employer
 Vesting of a proprietary interest of the workers in the industries in which they are
employed.

With the growth of professional management, the industrial relations scene is represented by the
representatives of employers and representatives of the employees. The scope of industrial
relations is a comprehensive and total concept embracing industrial relations. It denotes all types
of inter-group and intra-group relations within industry, both formal and informal.

Industrial relations widens areas of administration, organization supervision and co-ordination,


liaison, the drafting of regulations, rules, laws or orders, and interpretation, job analysis, salary
and wage administration, wage surveys and pay schedules, recruitment and employment,
placement and induction, collective bargaining, employee benefit and social security measures.

CHAPTER II: LITERATURE REVIEW

The concept of workers’ participation at the workplace historically evolved with the emergence
of industrializing capitalist societies as early as the Industrial Revolution, as workers struggled to
gain control of the labor process and to democratize workplace management. Since then, workers
have participated in decisions affecting their working conditions at various times in countries
with capitalist systems, and later, in those with socialist systems. (Bayat, 1991)
Worker participation implies arrangements designed to involve workers in the enterprises
decision making process. This allows for workers’ involvement in the initiation, formulation and
implementation of decisions within the enterprise. The concept can also be understood in terms
of a new approach to industry and society in which people want to be interested with the taking
of decisions which have direct bearing on them.

Although it is also found that there is no clear consensus as to the definition of employee
participation. It is a process that involves employees in the sharing of information and/or making
of decisions. Participation may be direct or indirect. Direct participation involves the employees
themselves, whereas indirect participation takes place through an intermediary of employee
representative bodies, such as works councils or trade unions (EPOC, 1997). Two main forms of
direct participation include consultative participation and delegative participation (Geary and
Sisson, 1994). Consultative participation refers to practices where management encourages
employees to share their opinions regarding work-related concerns, yet retains the right to make
all final decisions. Examples of consultative participation include regular meetings with
supervisors, attitude surveys and employee suggestion plans. Delegative participation, on the
other hand, gives employees increased responsibility and autonomy to organize and perform
their jobs as they see fit. Employees participate directly in work decisions (Cotton, Vollrath,
Froggatt, Lengnick-Hall and Jennings, 1988). Forms of delegative participation include
scheduling of work, improving work processes and attendance and absence control.

A review of the existing literature confirms the extent of interest on participative management in
various countries under different socio-economic systems (Pfeffer 1994; Wagner 1994; and
Verma 1995). However, the research findings on various facets of participation are not
consistent. These are the objectives, scope, processes, extent of involvement, as well as the
outcomes in terms of change in attitude and behavior, motivation, commitment, job satisfaction,
efficiency productivity, turnover and profitability. In the West, formal representative
participation has taken the following forms:

Joint Consultation: Here, the management takes decisions but the workers' representatives are
allowed to be heard. This is the model operating in Sweden, Britain and France.
Joint Decision Making: Here, the representatives of workers and management are jointly
represented in the decision making body. Co-determination in Germany and Joint Management
Plan in Israel are the examples of this model.

Workers Control: Here, the final authority rests with the elected representatives of workers who
formulate policy and employ managers to carry it out. The Yugoslavian system of self-
management offered the best example of this model.

Several research studies have shown that the intensity of participation depends on four factors
(Dackler and Wilpert, 1978; Dickson, 1981; Lansbury and Prideaux, 1981; Rubenowitz et al.,
1983; Cotton et al. 1988; Black and Gregersen, 1997).

 The subject matter of participation


 The level of participation
 The personal characteristics of the individual who are asked to participate in the decision-
making, and
 The extent of participation

Literature Review was done to give a better understanding of the subject and develop the
hypothesis for the study. The statements used to measure the determinants of WPM and
Perceived Benifits of WPM were derived from the review of extensive literature. The theoretical
framework was proposed with the help of the review and was tested during the analysis.

CHAPTER III: WORKERS’ PARTICIPATION IN INDIA

The main aim of the scheme of Workers Participation in Management is to help in increasing
production and productivity and sharing the gains of productivity through more effective
management and better industrial relations. Towards this end, the Government of India has
introduced a number of schemes since independence.

In the year 1975 the Government formulated a scheme of workers’ participation in industry at
shop floor and plant level. The scheme was to be implemented in the first instance in enterprises
in the manufacturing and mining industries, whether these were in the public, private or
cooperative sector or departmentally run units irrespective of whether joint consultative
machineries had been set up and were functioning in them. The scheme was applicable to such
units as were employing 500 or more workers. The scheme provided for setting up of shop
councils at the shop/departmental levels and joint councils at the enterprise levels. Each council
was to consist of an equal number of representatives of employers and workers. The employers’
representatives were required to be nominated by the management from among the persons
employed in the unit concerned and all representatives of workers were required to be from
amongst the workers engaged in the shop or department concerned. The employer was expected
to set up the council in consultation with the recognized union or various registered Trade
Unions or workers as that would be appropriate in the local conditions.

Another scheme was introduced in December 1983. This scheme of workers participation in
management was made applicable to central public sector undertakings (except those which are
exempted from the operation of the scheme by the administrative ministry/department concerned
in consultation with the Ministry of Labor). All undertakings of the central government, which
are departmentally

The Participation of Workers in Management Bill 1990 was introduced in the Rajya Sabha on
May 30, 1990 to provide for specific and meaningful participation of workers in management on
shop/floor level, establishment level and Board of Management level in industrial
establishments. The Bill was referred to Parliamentary Standing Committee on Labour and
Welfare of the Lok Shabha on July 12, 1994 which submitted its report on December 18, 2001.
The Parliamentary Standing Committee in its meeting held in April 2005 said that the
Participation of Workers in Management Bill, 1990 needs to be pursued.

CHAPTER IV: OVERVIEW OF INDUSTRIES

This chapter reviews the present status of the sugar industry and fertilizer industry under study.
The Sugar Industry and The Fertilizer Industry are the biggest Industrial segments of Uttar
Pradesh. Uttar Pradesh is the largest sugarcane producing State in India. During 2002-03, 111
sugar mills1 were in operation and crushed 64.51 million tones of sugarcane which was almost
50 per cent of the total production of the country. The sugar industry consists of private,
cooperative and public sector mills that spread over the western, central and eastern regions of
the State. Over 50 per cent of these mills are in the private sector and the remaining mills are in
the other sectors.

The Indian fertilizer industry has succeeded in meeting almost fully the demand of all chemical
fertilizers except for MOP. The industry had a very humble beginning in 1906, when the first
manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near Chennai with an
annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of India Ltd. (FACT) at
Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri in Bihar were the first
large sized -fertilizer plants set up in the forties and fifties with a view to establish an industrial
base to achieve self-sufficiency in foodgrains. Subsequently, green revolution in the late sixties
gave an impetus to the growth of fertilizer industry in India. The seventies and eighties then
witnessed a significant addition to the fertilizer production capacity.

The installed capacity as on 30.01.2003 has reached a level of 121.10 lakh MT of nitrogen
(inclusive of an installed capacity of 208.42 lakh MT of urea after reassessment of capacity) and
53.60 lakh MT of phosphatic nutrient, making India the 3rd largest fertilizer producer in the
world. The rapid build-up of fertilizer production capacity in the country has been achieved as a
result of a favorable policy environment facilitating large investments in the public, co-operative
and private sectors. Presently, there are 57 large sized fertilizer plants in the country
manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Out of these, 29
unit produce urea, 20 units produce DAP and complex fertilizers 13 plants manufacture
Ammonium Sulphate (AS), Calcium Ammonium Nitrate (CAN) and other low analysis
nitrogenous fertilizers. Besides, there are about 64 medium and small-scale units in operation
producing SSP.

Various studies have concluded that, manpower & energy inputs are grossly underutilized in
most of the sugar mills. He observed that surplus labour is a major problem in the sugar industry.
Average manpower size in an average mill of about 3000 TCD is approximately 900, which in
other sugar producing countries such as Thailand, a sugar mill of 10,000 TCD is managed by 250
employees. Similarly, the fertilizer industry employs sophisticated technologies in production of
fertilizers. The operating conditions are hazardous both in terms the of chemical environment,
high pressure and temperature. The operation and maintenance of fertilizer plants require skills
of the highest order. Therefore, this study will be helpful in understanding how WPM can
increase productivity and how to address the problem of underutilized labor.

CHAPTER V: RESEARCH METHODOLOGY

The reason for conducting this particular research is to fulfill following objectives, which are as
follows:

1. To investigate the existing schemes of Workers’ Participation in Management and its


forms.
2. To suggest a more effective system/strategy of workers’ involvement in the process of
decision-making.
3. To find out the extent to which workers participate in management in their respective
organizations.
4. To investigate the key determinants of WPM.
5. To find out whether there is any difference between the stated organizational policy on
WPM and their actual Practice.

This study is an attempt to explore the salient variables that can improve the effectiveness of
participatory approach and can help in motivating the workers to build a favorable attitude
towards WPM schemes. However, it is a new subject for research in India. Looking towards all
the research studies completed in India, it is observed that there is lack of sufficient research
work on this area which has created a wide gap, and this needs to be filled up by the present and
the near future human resource management research scholars.

Today's knowledge economy demands investments in human capital of the organization and to
create a work environment where employees excel at their jobs but it is strongly perceived that
practices like workers participation are intentionally or unintentionally ignored in India so
research is the last solution to find out the truth, cause and solution.

The aim of this study is to identify impact of workers participation on job satisfaction, employee
productivity and commitment. To achieve these objectives, the research design of this study has
been conducted in two phases. Phase one dealt with an exploratory study and the latter involved
descriptive research. These phases are discussed next.

Phase one: Exploratory research was conducted to develop initial insights and to provide
direction for any further research needed. The outcome of the first phase helped in formulating
three propositions for the study for testing it empirically tested with help of multivariate statistics
in the second phase. It also helped in developing the scales for the survey instrument in the
subsequent descriptive research (phase two).

In this study, a survey was used as the method of primary data collection. The structured survey
involved several steps from designing the questions to field work and assessing the reliability of
the measurement used. The questionnaire were written in hindi language so that it can be easily
understood by the respondents. In relation to question content and wording, the questions were
designed to be short, simple and comprehensible, avoiding ambiguous, vague, estimation,
generalization, and leading, double barrelled and presumptuous questions.

The questionnaire began with less complex and less sensitive questions and progressed to
opinion-sought questions. The questionnaire consisted of three parts. Section A consisted of
questions related to personal profile of workers, job profile of workers, and information
regarding various unions. Section B consisted of questions related to types of participative
schemes, areas of participation according to their importance and section C consisted of
questions related to the measures of effectiveness of Meetings, Committees, Suggestive Schemes
and Workers perception towards WPM effectiveness.

Due to variability of the characteristics among items in the population mixed sampling technique
has been used. In the first phase purposive sampling has been used to select the two major
segments of the industry i.e. sugar industry and fertilizer industry. The two segments were
purposefully selected due the fact that these are the two biggest segments of the industry in Uttar
Pradesh. Out of the two segments random selection was made to select three industries from each
sector.
The units selected included three sugar factories (Roza Sugar Mills, Roza; Balrampur Chini
Mills Ltd, Balrampur, Sarsawa Sugar Mills, Saharanpur and three fertilizer factories
(KRIBHCO, Sultanpur; IFFCO, Bareily and Phoolpur (Allahabad).

CHAPTER VI: FINDINGS AND DATA ANALYSIS

This chapter then reports the results of analyzing that data. Firstly, a preliminary examination of
the data is done which includes steps such as coding the responses, cleaning, screening the data.
In this study, most of the responses were pre-coded except for questions 7-a and 7-b, which
required post-coding. Taken from the list of responses, a number corresponding to a particular
selection was given. This process was applied to every earlier questions that needed this
treatment. Upon completion, the data were then entered to a statistical analysis software package,
SPSS version 15, for the next steps.

Descriptives have been used to obtain information concerning the current status of the Workers
participation related variable to describe “what exists” with respect to variables or conditions in a
situation. Range, Means and standard deviations have been used for the purpose of
investigation.
Workers were asked to rank the various areas of participation (health& safety, working
conditions, welfare amenities, schedule of working, holidays, training needs, shift in technology,
disciplinary procedure) on the basis of their importance. Kruskal Wallis Test is used to find
whether there is a significant difference between the importance of areas of participation or not.

It was also examined whether all the forms of WPM provide equal opportunity of participation
or few areas are more effective. Kruskal Wallis test was used to confirm the hypothesis.

Factor analysis was used to extract the significant variables that make WPM effective in an
organization. 20 variables were reduced to a four factor solution using varimax rotation.

Factor analysis was also used to identify the significance of WPM on 11 variables which were
reduced to three factor solution.
Further to check the statistical significance of descriptive related variables measuring
Perceived Benifits of WPM one sample t – test is used.

One-way analysis of variance (ANOVA) tests has been used to investigate the association
between demographics and degree of involvement in WPM schemes, similarly demographics
and awareness about WPM schemes. It has also been used to compare the effectiveness of
WPM across the six units of study and dependence of determinants of WPM on
demographics. Finally, ANOVA was used to find out the association between significance of
WPM and demographics.

CHAPTER VII: DISCUSSIONS AND CONCLUSIONS


It was found that two to three unions existed at each of the six factories under study and majority of
workers (197/249) were members of at least one union. The Current Study shows that majority of workers
were aware of the concept of WPM and were interested in participation at different levels. The result
of the study reveals that all the forms of WPM provide equal opportunity of participation to the
workers and statistically there is no significant difference between them.

According to this study, most preferred areas of Participative Management are Health and Safety,
Working Conditions, and Welfare Amenities. Whereas, the least preferred areas of Participative
Management are Disciplinary Procedures, Work Shift Allocation and List of Holidays. The areas where
the Participative Management is desirable are Shift in Technology, Working Hours and Training Needs.

The study shows that workers involvement in decisions related to working conditions is considered
important by them and it motivates them work more efficiently

According to the current study, participation in deciding welfare measures was ranked to be third
important area of WPM. According to the results of this study and interviews, involvement in training
need assessment was not found to be of prime importance by the workers.

It was observed that the success of Workers’ Participation in Management is determined by four factors:
Conduction of Meetings, Participative Spirit, Employee Involvement and Suggestion Consideration.

According to the current study, Workers’ Participation in Management also helps in involving workers in
decision making. WPM is considered to be an effective way to communicate between workers and
management. The opinion on having participative forums at workplace was quite positive. Workers also
accepted that WPM helps in developing cordial relations among workers and management. The
importance of WPM in minimizing industrial unrest was not very significant, the results indicates that
workers have a mixed feeling about this. Similarly WPM does not affects the commitment level of
workers, but it definitely reduces the commitment if it is totally absent. WPM develops trust among
workers.

With reference to the current study it can be concluded that Unions are functional at all the units
and play a meaningful role in decision making at enterprise level. Awareness about trade unions
among works is also fairly good and majority of workers are members of such unions.

Workers were found to be aware of various form of participation and understand the relevance of
such WPM schemes in their wellbeing. It was found that workers have a positive attitude
towards implementation of WPM schemes and wants more participation at board level.

The current study also suggests the major determinants for effectiveness of WPM. These factors
can be used for the better execution of WPM schemes as well as making these schemes more
effective.

It can be concluded from the present results that workers participation in sugar industry in Uttar
Pradesh has performed less effectively as compared to the fertilizer industry of Uttar Pradesh.
Overall the performance of WPM can be considered as satisfactory in both the sectors. Hence it
can be concluded that, workers participation is still in its initial phase and a lot more is required
to be done to make worker’s participation more effective to benefit the organization as well as
the workers.

CHAPTER VIII: RECOMMENDATIONS, CONTRIBUTIONS, LIMITATIONS AND


DIRCTIONS FOR FUTURE RESEARCH

Workers’ participation in management has implied great importance these days because it
reduces industrial strife and lends a hand in dispelling employees’ misunderstandings about the
attitude of management in industry. Utmost importance to the workers’ participation in
management is being given by the organizations. Organizations have been seen to practice sound
participative mechanism. Workers’ participation in management may reduce estrangement or
increase individual fulfillment of workers.
The findings of this research is an attempt to suggest the significance of workers’ participation in
an organization and thus providing a means to endeavor towards better Industrial Relations. The
findings of the study contribute to the current scenario of Workers’ Participation in Management
and its determinants. The determinant of WPM is one the significant contribution of this study.

Results from this research present several important directions for future research. Future
research could examine the relationship between Workers’ Participation in Management and
workers productivity, satisfaction and commitment in Indian industry. Future research can also
investigate the relative importance of different dimensions of Workers’ Participation in
Management across a broad range of industrial organizations and among a broad range of
employee groups from the Industry point of view.