Workers Participation In

Management

BY
Group No. 4

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 Roll No:311628

Workers Participation In Management

• Article 43A of the Constitution of India deals with 'Participation of workers in management

of industries'.

• Workers participation in management is an essential ingredient of Industrial Democracy.

• The concept of workers participation in management is based on human relation approach to

management which brought about a new set of values to labor and management.
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• Traditionally the concept of WPM refers to participation of non-managerial employees in

the decision making process of the organization.

• Workers participation in management implies mental and emotional involvement of

workers in the management of Enterprise.

• It is considered as a mechanism where workers have a say in the decision making.

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WPM: The process of decision making becomes really joint and Bipartite .

Bipartite

Employer Employee
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DEFINITION :

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.
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The concept of workers participation in management encompasses

the following:

• It provides scope for employees in decision-making of the Organization.

• .The participation may be at the shop level, departmental level or at the top level.

• The participation includes the willingness to share the responsibility of the

organization by the workers.
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*WPM is also called as Labor Management co-operations.

• Ian clegg: A co-operation implies a situation where representatives

are , to some extent, involved in decision making.

CO-OPERATION COLLECTIVE BARGAINING

JOINT EFFORTS JOINT EFFORTS

JOINT DECISION MAKING JOINT DECISION MAKING

COMMON GOALS DIVERGENT GOALS

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BACKGROUND :
• During First World War the govt. of U.K suggested to do joint consultation of workers
and management.

• This will help in maintaining industrial peace and will help in smooth functioning of
industry.

• Joint consultation was successful and led the formation of Whitley committee on
permanent basis(Royal commission labor 1929).

• Later on, it led to the formation of works committee(1947).

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Features of WPM:

• Participation means mental and emotional involvement rather than mere physical presence.

• Workers participate in management not as individual but collectively as a group of their

representatives.

• Workers participation in management may be formal or informal. In both cases it is a system of

communication and consultation whereby employees express their opinion and contribute to
Managerial decision.
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LEVELS OF WORKERS’ PARTICIPATION IN THE MANAGEMENT

Workers participation in management is broadly classified into 5 types.

 Information participation

 Consultative importance

 Associative participation

 Administrative participation

 Decisive participation

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INFORMATION PARTICIPATION :

 It enables employees to receive information and express their views in an economic

matter.

CONSULTATIVE IMPORTANCE:

 Workers are consulted on the matters of employee welfare such as work,safety and health.

 The workers views are considered as advise.

 The ultimate decision lie in the hands of management.

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ASSOCIATIVE PARTICIPATION:

 It is an extension or next level of consultative importance.

 Management accept and implement the unanimous decision of employees.

 So, managers and workers jointly take the decisions.

ADMINISTRATIVE PARTICIPATION:

 Employees provided with alternatives for implementation of managerial functions.

 Decisions are already taken by the management come to employees , preferably with alternatives for

administration.
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 Employees have to select the best from those for implementation.
DECISIVE PARTICIPATION:

 Decisive participation is the highest level of workers participation in management,

where employees and management together taking decisions on the matters related

to workers welfare and production related issues.

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Objectives of WPM:

 To establish Industrial Democracy.

 To build the most dynamic Human Resources.

 To satisfy the workers’ social and esteem needs.

 To strengthen labor-management co-operation and thus maintain Industrial peace and

harmony.

 To promote increased productivity for the advantage of the organization, workers and the
society at large.

 Its psychological objective is to secure full recognition of the workers.

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Methods/ schemes/ forms of WPM

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 Roll No: 611666

Suggestion schemes

 Participation of workers can take place through suggestion schemes.

 Under this method workers are invited and encouraged to offer suggestions for improving the
working of the enterprise.

 A suggestion box is installed and any worker can write his suggestions and drop them in the
box.

 periodically all the suggestions are scrutinized by the suggestion committee or suggestion
screening committee.

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 The committee is constituted by equal representation from the management and the workers.

 The committee screens various suggestions received from the workers. Good suggestions are

accepted for implementation and suitable awards are given to the concerned workers.

 Suggestion schemes encourage workers’ interest in the functioning of an enterprise.

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 Management should have more responsive attitude towards workers. It should be liberal
in sharing information.

 The trade union should be strong and fully support the idea of workers participation in
management.

 The scope and function of works committees should be clearly specified.

 The objectives established should be real, practicable and definite.

 The form of participation should be suitable to the working environment.

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WORKS COMMITTEE – Definition and Composition

 A committee composed of both employer and employees convened to discuss matters of

common interest concerning a factory, plant, business policy, etc, not covered by regular
trade union agreements
 A body representing the workers of a plant, factory, etc., elected to negotiate with the
management about working conditions, wages etc.
 It set up under the INDUSTRIAL DISPUTE ACT,1947.
 Under this Act, every establishment employing 100 or more workers is required to
constitute a works committee as a scheme of workers participation in management.
 It consists of equal number of representatives from the employer and the employees.

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WORKS-COMMITTEE : Functions

Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees
are concerned with:
a) Health: Ventilation, Lighting, Temperature and Sanitation facilities.
b) Safety: Accident Prevention, Occupational diseases and Protective equipments.
c) Welfare: Rest rooms, medical and health services, drinking water.
d) Administration of welfare and fine funds.
e) Educational and recreational activities.
f) Adjustments of festivals and national holidays .
g) Promotion of thrift and savings. h. To see that the decisions taken in the works committee are fully
enforced.

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Reasons of failure of works committee

 Employees consider it below their dignity and status to sit alongside blue-collar workers.
 Lack of competence and interest on the part of worker’s representatives.
 Lack of feedback on performance of works committee.
 In many industries, the works committees have been only on papers. They do not function
at all.

National commission on labor suggested the measures for successful functioning of works
committee

 A more responsive attitude on the part of the management.

 Adequate support from the unions.
 Proper appreciation of the scope and functions of the works committees.
 Whole-hearted implementation of the recommendations of the works committees 
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JOINT MANAGEMENT COUNCIL

 The scope of this council is related to administration, retrenchment , closure, production, sales,

welfare, safety, training etc.

 These councils were setup as early as 1958.

 These councils are constituted similar to work committees.

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This council is different from work committees in two aspects:

 It has wider scope than work committee.

 It have administrative responsibility for safety, vocational training and welfare of

workers.

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Objectives:
 Promote cordial industrial relations.

 Improve operational efficiency of workers.

 Provide welfare facilities to workers.

 Educate and prepare workers for meaningful participation in organisational matters.

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Criteria for setting up:

 The unit must have 500 or more workers.

 It should have a well organised trade union.

Evaluation:

 Failed to make much headway due to unenthusiastic response from unions and workers.

 Management , on other hand , was mentally reluctant to share ideas and power with workers in a
meaningful manner.

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WORK DIRECTORS:

 In this form of participation, more than one representative of workers are nominated by workers or

elected to board of directors.

 This is the highest form of Workers participation in management.

 The main aim of this scheme at the top level is to improves industrial democracy, the employee

and employer relationship and protect workers interest in the organization.

 Through the involvement of workers, it can give better results and safeguards the enterprise.

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WORK DIRECTORS:

 The director of workers was elected by all the workers of the company through secret ballot.

 This scheme requires the permission of trade union members of the organization.

 In the scheme a director is appointed from the existing employees of the organization.

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WORK DIRECTORS:

 The Government of India introduced this scheme in several public sector enterprises such as:

1. Hindustan Antibiotics

2. Hindustan Organic Chemicals Ltd

3. National Coal mines Development Corporation

4. BHEL

5. National Textile Mills

6. Newsprint and Paper Mills etc.

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Reasons for failure of work directors:

 In most of the cases, the workers representatives were unable to make any significant contribution

in the committee while taking decisions jointly.

 Secrets might be leaked out.

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Co- Partnership

 In this form of participation employee’s participate in the share capital of a company in which they
are employed.

 In this scheme workers are treated as a share holder of the company and they have the right to
participate in the management of the company.

 The workers of the organization acquired the shares of the company by making cash payment or
by way of stock options scheme.

 The basic objective of stock options is only to provide better financial incentives for industrial
productivity.

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Co- Partnership

 It does not mean to pass the control in the hands of employees

 It is believed that the employees, who are also the shareholders, will focus better on company

performance and growth so that the value of their shares appreciates.

 But in the developed countries, workers participation in management through co-partnership is

limited.

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 Roll No: 211609
JOINT COUNCIL

The joint councils are constituted for the whole unit, in every Industrial Unit employing 500 or more
workers, there should be a Joint Council for the whole unit.
FEATURES:
 The members of the council must be actually engaged in the unit.
 The term of the council will be two years.
 The chief executive of the unit will be the chairman of and vice-chairman will be nominated by
worker members.
 It shall meet at least once in a quarter.
 The decisions of the council will be based on consensus and not on voting.
 The decisions will be binding on both parties and will be implemented within one month.

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FUNCTIONS 
 Optimum production , efficiency and function of productivity norms of man and machine for the
unit as a whole.
 The settlement of matters which remain unresolved by unit level councils and arranging joint
meetings for resolving inter-council problems
 The development of skill of workmen and adequate facilities for training.
 Preparation of schedules of working hours and of holidays.
 Awarding of rewards for valuables and creative suggestions received from workers. Optimum use
of raw materials and quality of finished products.

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 PLANT COUNCIL

 The plant council is formed in pursuance of the recommendations of the second meeting of the group on
Labour at New Delhi on 23rd September 1985. The scheme is applicable to all Central public sector
undertaking, except those which are given specific exemption from the operation of the scheme by the
government.

FEATURES:

 There shall be one plant council for the whole unit;

 Each plant council should consist of not less than six and not more than eighteen members .

 Its tenure shall be for a period of three years.

 The chief executive of the unit shall be chairman of the plant council, the vice chairman shall be elected
from among the employees.
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 The council shall meet atleast once in a quarter.

 Every decision of the plant council shall be on the basis of consensus and not by voting and shall be
binding on both the employees and the employer.

FUNCTIONS 

 Operational Areas

 Economic and Financial Areas

  Personnel Matters

  Welfare Areas

 Environmental areas
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SHOP COUNCILS

 Government of India on the 30th of October 1975 announced a new scheme in WPM. In every
Industrial establishment employing 500 or more workmen, the employer shall constitute a shop
council.

 Shop council represents each department or a shop in a unit. Each shop council consists of an
equal number of representatives from both employer and employees.

 The employers’ representatives will be nominated by the management and must consist of
persons within the establishment.

 The workers’ representatives will be from among the workers of the department or shop
concerned. The total number of employees may not exceed 12.

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Functions of Shop Councils:

 Assist management in achieving monthly production targets.

 Improve production and efficiency, including elimination of wastage of man power.

 Suggest health, safety and welfare measures to be adopted for smooth functioning
of staff.

 Look after physical conditions of working such as lighting, ventilation, noise and
dust.

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Workers Participation in Management in India

  In 1920, the workers and the employers in Ahmedabad Textile Industry agreed to settle their
disputes by joint discussions and consultations.

 Therefore, the Ahmedabad Agreement may be regarded as a mile­stone in the history of joint
consultation i.e. participative management in India.

 Following this, some works committees were also set up in the Government Printing Presses and
Railways.

 During the same period, such committees were also set up in the Tata Iron and Steel Company,
Jamshedpur.

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 Workers’ participation in Management in India was given importance only after Independence.

 The First Five-Year Plan and the successive plans emphasized the need for workers’ participation in

management.

 Industrial Disputes Act,1947 was the first step in this direction, which recommended for the setting

up of works committees.

 The joint management councils were established in 1950 which increased the labour participation in

management.

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 The Government of India set up a ‘Study Group on Workers’ Participation in Management’, in
1956, consisting of representatives of the government, employers, and workers to examine the
system of WPM in the UK, Sweden, France, Belgium, West Germany and Yugoslavia and make
recommendations for the Indian case.

 Since July 1975 the two-tier participation called shop councils at shop level and Joint councils
were introduced.

 Workers' participation in Management Bill, 1990 was introduced in Parliament which provided
scope for upliftment of workers

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REASON FOR FAILURE OF WORKERS PARTICIPATION

MOVEMENT IN INDIA

 employers resist the participation of workers in decision-making. This is because they feel
that workers are not competent enough to take decisions.

 Worker’s representatives who participate in management have to perform the dual roles of
worker’s spokesman and a co-manager.

 Trade union leaders are active members of political parties, so while participating in
management they tend to give priority to political interests rather than worker’s cause

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 Lack of interest and initiative from trade unions and employers.

 Having a feeling that they are born to serve not to rule

 Lower levels are never allowed to participate in decision-making.

 The unwillingness of the employer to share power with the worker representatives.

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How To ensure Effective Participation Of

Workers in Management?

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• In order to ensure an effective participation both the management and the worker have to do their
bit.
• Management should have a more responsive attitude towards workers. It should be liberal in
sharing information.
• Employers should agree and respect the rights of a worker. They should consider the industry as a
team goal in which workers have an equal say.
• The management should value the decision of the worker.
• They should educate the worker about the benefits of participational management.
• Reduce supervision instead empower the workers.

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• The workers should consult the management in the decisions that have a major impact on the
company.

• Long back in 1977 a tripartite labor conference was held. A committee was appointed to study in
detail the question of effective participation of workers in management. The members of this
committee were chosen from organizations of employers, trade unions and professional
institutions. In its report, the members of the committee favored a three tier system of participation
viz., at the corporate level, plant level and shop floor level.

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Thank You

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