A

PROJECT REPORT ON
“WORKERS PARTICIPATION”
SUBMITTED TO
DEPARTMENT OF BUSSINESS ADMINISTRATION
IN THE PARTIAL FULFILLMENT OF
SY.BBA DEGREEE OF
SAVITRIBAI PHULE PUNE UNIVERSITY
SUBMITTED BY
SHUBHAM SURESH CHAURE
ROLL NO:-12
GUIDED BY
PROF:- VINITA KUYATE

K.K WAGH ARTS, COMMERCE, SCIENCE & COMPUTER

SCIENCE COLLEGE NASHIK
2022-2023

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 K.K. Wagh Education Society’s
K.K.Wagh Arts, Commerce, Science & Computer Science College, Nashik.
Saraswati Nagar, Adgaon Road, Panchavati, Nashik-422003, Maharashtra
(Affiliated to Savitirbai Phule Pune University)
Accredited by NAAC: ‘B’ Grade(CGPA 2.50)
SPPU ID : PU/NS/S/71/2002 College Code : 701 A.I.S.H.E. Code : C-41802
+ 91 253- 2303100, 2303373, 2303774 principal-seniornashik@kkwagh.edu.in www.ascn.kkwagh.edu.in

Completion Certificate
Date:

This is to certify that Mr. SHUBHAM SURESH CHAURE

of SYBBA Roll no.12 having specialization in HUMAN RESOURCE MANAGEMENT has

successfully completed his / her project titled WORKERS PARTICIPATION as per the norms of

Savitribai Phule Pune University under the guidance Mrs. VINITA KUYATE for the academic

year 2022-2023.

Internal Guide External Guide HOD Principal

Leena Talreja Mrs. Supriya Daware Dr. S. V. Patil

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 GUIDE CERTIFICATE

This is certify that the project report “workers participation” is submitted in the
partial fulfiillment of the requirement for Bachelor of Business Administration and
has worked under my supervision & guidance and that no part of his report has been
submitted for the reward of any other Degree, Diploma, or any other similar titles or
prizes and that the work has not been published in any journal or magazine.

Signature project Guide

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 DECLARATION

I shubham suresh chaure student of (S.Y) BBA in the K.K.Wagh college, solemnly
declare that the project titled “workers participation” carried out by me in partial
fulfiillment of the BBA program under the university of Pune.

This project was undertaken as part of academic curriculum as per university

rules and by no commercial interest or motive. It is my original work and not
submitted elsewhere for any other purpose earlier.

Date: Signature

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 INDEX

Sr.No Chapter Name Page No.

1 Introduction 6
2 Definitions 7
3 Importance 8-9
4 Characteristics 10
5 Objectives 11
6 Levels 12-13
7 Scope 14-15
8 Limitation 16-17
9 Forms 18-21
11 Advantages 22-24
12 Disadvantages 25
13 Conclusion 26
14 Bibliography 27

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 INTRODUCTION WORKERS PARTICIPATION
MEANING:-

 Workers' participation in management is an essential ingredient of Industrial

democracy.
 The concept of workers' participation in management is based on Human
Relations approach to Management which brought about a new set of values
to labour and management.
 Traditionally the concept of Workers' Participation in Management (WPM)
refers to participation of non-managerial employees in the decision-making
process of the organization.
 In Germany it is known as co-determination while in Yugoslavia it is known
as self-management. The International Labour Organization has been
encouraging member nations to promote the scheme of Workers'
Participation in management.
 Workers participation in management implies mental and emotional
Management Involvement of workers in the management of an enterprise.
 Workers’participation is also known as ‘ labour participation ’ or employee
participation’ in management.
 It is considered as a mechanism where workers have a say in the decision-
making.
 Workers Participation in Management (WPM) is a complex concept.
Traditionally, it refers to the participation of non-managerial employees in
the decision-making process of the organization. Workers get involved
mentally and emotionally in the management process.

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 DEFINITIONS OF WORKERS PARTICIPATION

According to Keith Davis, "Participation refers to the mental and emotional

involvement of a person in a group situation which encourages him to contribute to
group goals and share the responsibility of achievement."

According to Walpole, "Participation in Management gives the worker a sense of

importance, pride and accomplishment; it gives him the freedom of opportunity for
self-expression; a feeling of belongingness with the place of work and a sense of
workmanship and creativity." A clear and more comprehensive definition of WPM
is given by the International Labour Organization (ILO).

According to the ILO:

"Workers' participation may,
broadly be taken to cover all
terms of association of
workers and their
representatives with the
decision- making process,
ranging from exchange of
information, consultations,
decisions and negotiations to
more institutionalized forms such as the presence of workers' members on
management or supervisory boards or even management by workers themselves as
practiced in Yugoslavia".

According Mehtras “Applied to industry, the concept of participation means

sharing the decision-making power by the rank and file of an industrial organisation

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through their representatives, at all the appropriate levels of management in the
entire range of managerial action”.

IMPORTANCE OF WORKERS PARTICIPATION

1) Better Industrial Relations:

Industrial unrest results because of conflict of interests between the
management and the workers. But if decision-making takes the form of a
collective effort where the interests of both the management and employees
are accounted for, then industrial tension can be minimized.
"If the parties cooperate to arrive at the optimum decision, then decisions
based on common interests can be taken.
2) Reduced Misunderstandings:
When there is open two-way communication between the workers and
management both the parties can clarify their doubts and clear any
misunderstandings among them.
3) Higher Productivity:
Mutual understanding between the employer and the employees coupled
with better industrial relations creates a work environment conducive for
growth.
Employees tend to work harder and more sincerely when their views are
respected by the superiors. Thus, their productivity rises.
4) Decentralization of Authority:
When the decision-making process becomes a group effort instead of being
concentrated at the top level, it encourages decentralization of authority.
In WPM, the workers are informed about organizational problems and are
asked to suggest solutions. Their views and opinions are given due
importance while taking the final decision.

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5) Industrial Democracy:
Industrial democracy refers to the involvement of employees in decision-
making and sharing of authority and responsibility related to important
industrial matters.
WPM brings about equality in the organization and provides a degree of
industrial balance.
6) Commitment towards Goals:
When the individual worker is involved in decision-making and gets an
opportunity to express his thoughts and opinions, he feels a deeper sense of
belongingness with the organization. He realises that he has a role to play in
the management of the business, and therefore is more committed towards
the organizational goals.
7) Individual Growth and Development:
Individuals get a chance to develop their skills and capabilities while
participating in the management processes. They are required to be creative,
Innovative and responsive in their interaction with the management and this
helps them to develop more as a human being in the process.
8) Responsiveness to Change:
Normally, workers in any organization are resistant to change. They are
reluctant to adopt the changes that the management forces upon them. But
when they get a chance to participate in the decision-making process, they
can clear their.. doubts and insecurities regarding the proposed changes. If the
workers are made aware of the consequences of the change, then they will be
more responsive towards it.

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CHARACTERISTICS OF WORKERS PARTICIPATION

1. Participation implies practices which increase the scope for employees’

share of influence in decision-making process with the assumption of
responsibility.
2. Participation presupposes willing acceptance of responsibility by workers.
3. Workers participate in management not as individuals but as a group
through their representatives.

4. Worker’s participation in
management differs from
collective bargaining in the
sense that while the former is
based on mutual trust,
information sharing and
mutual problem solving; the
latter is essentially based on
power play, pressure tactics, and negotiations.

5. The basic rationale tor worker’s participation in management is that

workers invest their Iabour and their fates to their place of work. Thus, they
contribute to the outcomes of organization. Hence, they have a legitimate
right to share in decision-making activities of organization

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 OBJECTIVE OF WORKERS PARTICIPATION

 To promote increased productivity for the advantage of the organization.

workers and society at large
 To increase the motivation level of workers.
 To satisfy the workers social and esteem needs.
 To act as a tool for solving industrial relations problems.
 To promote mutual trust and understanding among the company’s
management and worker.
 To promote teamwork which helps in increasing production.
 To provide welfare and social justice facilities to workers.
 To provide a better understanding to employees about their role and place in
the process of attainment of organizational goals.
 To strengthen labour management co-operation and thus maintaining
industrial peace and harmony.
 To develop social education for effective solidarity among the working
community and for tapping latent human resources.
 An ideological point of view to develop self-management in industry.
 An instrument for improving efficiency of the company and establishing
harmonious industrial relations.
 To build the most dyramic human resource.
 To build the nation through entrepreneurship and economic development.

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 LEVELS OF WORKERS PARTICIPATION

Having known the objectives of WPM, the question then is to what extent workers
can participate in decision-making process. In other words, it is important to know
the extents/levels of co-determination in an organisation. Viewed from this angle,
Mehtras has suggested five levels of workers’ participation ranging from the
minimum to the maximum. Since these levels of workers’ influence the process and
quality of decision making in an organisation. We are therefore highlighting here
these levels briefly ranking them from the minimum to the maximum level of
participation.

Informative Participation:

This refers to management’s information sharing with workers on such items those
are concerned with workers. Balance Sheet, production, economic conditions of the
plant etc., are the examples of such items. It is important to note that here workers
have no right of close scrutiny of the information provided and management has its
prerogative to make decisions on issues concerned with workers.

Consultative Participation:

In this type of participation, workers are consulted in those matters which relate to
them. Here, the role of workers is restricted to give their views only. However the
acceptance and nonacceptance of these views depends on management.
Nonetheless, it provides an opportunity to the workers to express their views on
matters involving their interest. The workers are consulted on matters that directly
affect them such as work safety and health.

The workers' role is only advisory, the final decision is always taken by the top
management. They may or may not consider the workers' suggestions.

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 Associative Participation:

Here, the role of the workers’ council is not just advisory unlike consultative
participation. In a way, this is an advanced and improved form of consultative
participation. Now, the management is under a moral obligation to acknowledge,
accept and implement the unanimous decision of the council.

The managers and workers jointy take decisions. The management is obliged to
consider the decisions of the employees and implement them. This is a natural
extension of consultative participation.

Administrative Participation:

In the administrative participation, decisions already taken are implemented by

the workers. Compared to the former three levels of participation, the degree of
sharing authority and responsibility by the workers is definitely more in this
participation.

Decisive Participation:
Here, the decisions are taken jointly by the management and the workers of an
organisation. In fact, this is the ultimate level of workers’ participation in
management.
This is the highest level of participation where the management and the
employees interact on a regular basic , discuss issues related to various aspect of
management and jointly arrive at decision that are beneficial to all the parties
involved .

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 SCOPE OF WORKERS PARTICIPATION

The scope of participative style of management certainly depends on the

organization, its nature, functions and processes. Though associating employees at
every stage of decision-making is not possible still regular exchange of information,
ideas, consultations, thoughts, decisions and negotiations between employer and the
employees definitely is a boon to the organization. Few of the world’s biggest
organizations like Toyota, HSBC, British Airways, Satyam, British Gas and Nokia
Cellular have achieved considerable profits and value creation by implementing the
most amazing ideas of their employees. Their success witnesses the importance of
workers’ participation in the process of decision making.

Social Decision-Making:

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It refers to employee involvement in decision making regarding hours of work,
rules and regulations at workplace, welfare measures, workers’ safety, employee
welfare, health and sanitation. In this category, employees have a say in decisions in
these areas. They may take an advantage of their liberty and sometimes, can
dominate the management.

Economic/Financial Decision-Making:
 It includes involvement of employees on various financial or economic aspects
such as the methods of manufacturing, cost cutting, automation, shut-down,
mergers and acquisition and lay-offs. Inviting ideas from employees on various
issues like how to cut down the operating cost can work wonders.
Personnel Decision-Making:
 The employees’ participation in personnel decision-making refers to their
involvement in various management processes including recruitment and selection,
work distribution, promotions, demotions and transfers, grievance handling,
settlements, voluntary retirement schemes and so on. Participation of employees in
these processes can safeguard their interests and motivate them to work hard for the
betterment of self as well as the organization.

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 LIMITATION OF WORKERS PARTICIPATION

Basic Limitations of Workers Participation in Management.

1. The Complexity of Technology and Organization

Teachnonly and organizations today are so complex that specialized work roles are
required, making it difficult for people to participate successfully if they go very far
beyond their particular environment. This means that low-level workers can
participate successfully in operating matters, but they usually have difficulty in
participating in policy matters.

2. Workers Incompetence
Another difficulty arises when workers make proposals in areas where they are not
competent.
Then, when their idea is rejected, they refuse to support whatever course of action
was adopted and soon become alienated. A related problem is that some workers
expect to be consulted on every issuer, even those to which they cannot contribute.
When they are not consulted, they become resentful and uncooperative.

3. More Emphasis on Procedures than Philosophy

It is seen that practitioners become lost in the procedures of participation while
overlooking its guiding philosophy. In fact, participation philosophy requires a
sense of involvement and self-efficiency in the minds of employees.

4. Means of Manipulation
A serious drawback with worker’s participation is that it can be used to manipulate
employees. This manipulation is not necessarily by management. It may be
manipulation by the union or by experts who are skilled in group dynamics.

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5. Feudalistic Concept
The feudalistic concept of the master and the servant s still prevalent among
industrial workers, especially in India. Workers have an innate feeling that they are
born to serve and not to rule. Participative management, naturally, is of little
interest to such workers.

6. Lack of Initiative
Employees lack initiative, expertise, and self-confidence in participating
in managerial decision-making.

7. Unskilled Representatives
Participation of unskilled representatives of employees may result in arriving at
unfavorable decisions which may adversely affect the interests of employees.

8. Avoidance of Ideas
It leads to frustration among employees if their suggestions are not accepted by the
management.

9. Unwillingness
The unwillingness of the employers to share power with the worker’s
representatives is also a serious problem. Workers also remain disinterested.

10. Indifferent Attitude of Government

The perfunctory attitude of the government towards WPM also acts as a stumbling
block in the promotion of participative management.

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 FORMS OF WORKERS PARTICIPATION

The form of workers participation in management vary from industry to industry

and from country to county the important forms are as follws:

 Co-Ownership:
Workers are made shareholders by allotting those shares in the company.
They are employees as well as owners of the business concern. Thus, their
participation in the management is automatically guaranteed.

 Works Committee:

The Industrial Disputes Act, 1949 provides for the setting-up of works,
committees as a scheme of workers participation in management which consist
of representatives of employers and employees. The Act provides for these
bodies in every undertaking employing 100 or more workmen.

The aim of setting-up of these bodies is to promote measures for maintaining

harmonious relations in the work place and to sort out differences of opinion in
respect of matters of common interest to employers and employees.

The Bombay Industrial Relations Act, 1946 also provides for these bodies. but
under the provisions of this Act they can be set-up only in units which have a
recognized union and they are called joint committees. The workers directly
elect their representatives where there is no union.

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 Joint Management Councils (JMCs):
 The Second Five Year Plan recommended the setting-up of joint councils of
management consisting of representatives of workers and management. The
Government of India deputed a study group (1957) to study the schemes of
workers' participation in management in countries like U.K., France, Belgium
and The report of the study group was considered by the Indian Labour
Conference (ILC) in its 15th session in 1957/and it made certain
recommendations:
 (a) That workers' participation in management schemes should be set-up in
selected undertakings on a voluntary basis.
 (b) A sub-committee consisting of representatives of employers, workers and
government should be set-up for considering the details of workers'
participation in management schemes. This Committee should select the
undertakings where workers' participation in management schemes would be
introduced in the first stage on an experimental basis.

 Joint Councils:

 The joint councils are for the whole unit and its membership remains
confined those who are actually engaged in the organization. The tenure of
the joint councils is for two years. The Chief Executive of the unit becomes
its Chairman. Workers members of the council nominate the Vice Chairman.
The joint council appoints the Secretary The Secretary is responsible for
discharging the functions of the council. The joint councils will meet once in
four months, but the periodicity of the meeting varies from unit to unit, it
may be once in a month, quarter etc.

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 The decisions taken at the joint council meetings are by the process of
consensus and the management shall implement the decisions within one
month. The scheme was implemented by the major units of the central and
State governments.

 The government enlarged the functions of the councils in 1976. In every

industrial unit employing 500 or more workers, there shall be a Joint Council
for the whole unit.

 Shop councils:
 The shop council represents each department or a shop in a unit Each shop
council will consist of an equal number of representatives of employers and
workers.
 The employers' representatives will be nominated by the management and
must consist of persons from within the unit concerned. The workers
representative will be from among the workers of the department or shop
concerned. The number of members of each council may be determined by
the employers in consultation with the recognized union. The total number of
members, however, may not generally exceed twelve. The decisions of the
shop council are to be taken on the basis of consensus but not by voting
Management has to implement the decisions within one month.
 The tenure of the shop council is for a period of two years. Members of the
shop councils meet at least once in a month. Management nominates the
Chairman of the shop council whereas workers' members of the council elect
the Vice-chairman of the council.

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 Unit Councils:

 Encouraged by the success of the scheme in manufacturing and mining units,

a new scheme of workers' participation in management in commercial and
service organization in the public sector, having large-scale public dealings,
was announced on 5th January, 1977. The Scheme envisaged setting of Unit
Councils in units employing at least 100 persons.
 The organizations include hotels, restaurants, hospitals, air, sea, railway and
road transport services, ports and docks, ration shops, schools, research
institutions.
 The scheme provides for unit level councils. These councils are to eliminate
factors which hamper operations and improve methods of operation.
 The main functions of the councils include creation of conditions for
achieving optimum efficiency, better customer service in areas where there is
direct and immediate contact between the workers at the operational level
and the consumer, higher productivity, the elimination of pilferage and all
forms of corruption, and the institutions of rewards to be given to those with
proven ability in these areas.

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 ADVANTAGES OF WORKERS PARTICIPATION

Motivation:
Participation creates a positive work environment. Employees may have the chance
to show creativity and analytical ability. These opportunities make them more
motivated..

Increases Goodwill:
Participation helps to build a good relationship between management and
employees. It increases employee's efficiency and they can produce quality
products and services for the customers. A good working condition is available at
work. All this increases the goodwill of the organization.

Work Enthusiasm:
The manager may accept the employee's idea or not. When their ideas are accepted
they feel proud and become more enthusiastic about their work. When management
does not accept their ideas and shows the logic behind refusal work enthusiasm will
not reduce.
Better operations:
Organizations will run better if staffs are more loyal, feel needed, and wanted.
They feel that they are respected, and their opinions count. If management
proactively seeks their input into decision-making, decisions tend to be better when
they can call on a wider range of knowledge, information, and experience.

Increases creativity and innovation:

Creativity and Motivation are two important benefits of participative management.
By allowing and diverse group of employees to have input into decisions, the
organization benefits from the synergy that comes from a wider choice of options.

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When all employees, instead of just managers or executives, are given the
opportunity to participate, the chances are increased that a valid and unique idea
will be suggested.

Accept of Decision:
Employees accept any kind of decision without showing an argument. Because
management asks their suggestions and proposal while making a decision. As they
participate in the decision process so workers accept the decision and work to
implement it.

Effective decision:
Decision is the process of selecting the best alternative. For a single problem,
different people may give different solutions, even thousands of solutions. So
participation facilitates the decision process.

Increase trust:
Trust is an important factor in leadership. Participatory approaches usually mean
that decision making is more transparent. That, in turn, increases the trust of the
staff, and the leadership of the manager is increased. And transparency itself tins an
added benefit to this approach.

Effective decision:
Decision is the process of selecting the best alternative. For a single problem,
different people may give different solutions, even thousands of solutions. So
participation facilitates the decision process.

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Increase capacity & influence of management:
Participation creates mutual faith, understanding, and cooperation. So, employees
hardly disagree with the manager's decisions. It indicates that the manager can
easily influence the employees to implement various decisions.

Less cost and time:

There are a few costs, however, to obtaining participatory input. A participatory

decision is a group decision. So, less time is required to implement it. And the cost
of participation is less than its benefit in case of successful participation.

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 DISADVANTAGES OF WORKERS PARTICIPATION

Communication Complexity

More lines of communication and the potential for inconsistent decision making are
disadvantages with employee involvement systems. When more employees have
input and decision-making ability, more communication is necessary to make
certain that decisions are consistent across the organization. This consistency is
critical to brand recognition and consistency. Managers may have a hard time
monitoring decisions and activities with employee involvement to protect against
negative consequences and to restrict the potential for chaos.

Manager-Employee Boundary

One potential challenge of encouraging employee involvement is the risk that the
line of distinction between the management level and employee level becomes
blurred. Though managers may value employee involvement, a disciplined structure
with clear reporting lines have long been vital to stability in organizations.
Allowing employees to share ideas and make decisions without having them push
the envelope and try to take on responsibilities that are reserved for management
levels is a real risk.

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 CONCLUSION

The concept of workers’ participation in the management of industry is very

important from the organization and from the individual point of view. Most of the
persons in the organization aim at earning their livelihood but there are some others
who take full interest in the organization, The scheme of participation promotes
industrial and human relations and thus helps minimizing the labor disputes because
they participate in the process of decision-making and become the partners in those
decisions. All the problems concerning the workers are settled amicably. The
employees get an opportunity to share their ideas, suggestions, and feedback
regarding the company's policies and decisions. Also, promote a sense of
importance among workers because they are responsible for the achievement of
organizational goals.

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 BIBLIOGRAPHY

Websites:
www.google.com
www.wekipedia.com
www.edukedar.com
www.theintactone.com
www.managementstudyguide.com

BOOK: AUTHOR
HUMAN RESOURCE MANAGEMENT Dr. Shalaka Parker
FUNCTIONS AND PRACTICES

Workers participation in management. Verma, R.K. &

New Delhi: oxford publication co. P.R. syha (1991).

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