WORKER’S PARTICIPATION

IN MANAGEMENT
Industrial Democracy
A form of co-determination between
employer and employee, whereby both are
involved and participate in the making of
some or all of the decisions in an organization.

The exact form of this participation, and the

reasons for doing it, vary widely, but the
characteristic is that of direct involvement by
employees in some aspect of their work life.

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Framework for Industrial Democracy
Any framework needs to include the
following dimensions:
◦ The degree of control over decision making
with regard to the channels of information.
◦ The issues over which control is exercised and
whether it is departmental. Local or company
wide.
◦ The form of participation, whether this be
direct, indirect, disclosure of information,
profit sharing, joint decision making, etc.
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Spectrum of topics Covered
Workers own work Organizational Company Goals

Working Conditions Benefits Division of Profits

Safety Promotions Raising Capital

Pace of work Level of Pay Investment

Job Security

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Spectrum of types of Schemes
Worker Control Joint Cooperation Consultation
Management

Self Management Co determination Employee can Prior notice given

criticise of changes

Worker autonomy 50/50 on board Suggests & adopt Allowing

proposals Comments

Worker superior Bring to Possibly

to manager management reconsider
decisions

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 Advantages & Disadvantages of
Industrial Democracy to Management
Ideological Factor:
◦ Advantage:-
 Employee Integration
 Union weakened or integrated into the enterprise
◦ Disadvantage:-
 Criticism of management authority
 Challenge to management authority

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Economic Factor:
◦ Advantage:-
 Improved employee efficiency
◦ Disadvantage:-
 Cost, time & energy

Sociological Factor:
◦ Advantage:-
 Social Regulation
 Social Peace
◦ Disadvantage:-
 Union Opposition
 Middle management opposition
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Psychological Factor:
◦ Advantage:-
 Improved motivation
 Reduction of stress
◦ Disadvantage:-
 Tensions
 Frustrations
Organization Factor:
◦ Advantage:-
 Reduction in Bureaucracy
 Trained employees & negotiate change
◦ Disadvantage:-
 Slowness
 Disorganization
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Advantages & Disadvantages of
Industrial Democracy to Employees
Ideological Factor:
◦ Advantage:-
 Recognition of achievement
◦ Disadvantage:-
 Manipulation

Psychological Factor:
◦ Advantage:-
 job enrichment
 Lower stress
◦ Disadvantage:-
 Loss of freedom
 Loss of responsibility

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Economic Factor:
◦ Advantage:-
 Profit sharing or Bonus
◦ Disadvantage:-
 Time & energy cost
Organizational Factor:
◦ Advantage:-
 Decentralization
 Delegation
Sociological factor:
◦ Advantage:-
 Integration
◦ Disadvantage:-
 Alienation

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Workers' Participation at TISCO
At TISCO, it began in 1919 and was formalized in
August 1956.
The purpose was to promote increased productivity,
provide a better understanding to the employees of their
role and importance, and to satisfy the urge for self
expression.
The scheme as set up at TISCO consist of a three-tiered
system:
◦ Joint department councils (JDCs) constituted at the
departmental level.
◦ Joint works councils (JWC) for the entire work, and
◦ Joint consultative council of management (JCCM) at the top.

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 Joint Department Councils (JDCs)

 “to study operational results and production problems,

advise on the steps deemed necessary to promote and
rationalize production,
improve productivity and discipline and economize
cost.
Promotion of welfare and safety,
encouragement of suggestions and improvement of
working conditions also fell within their purview.”

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 Joint Works Councils (JWC)

“ to discharge special function of

reviewing every month the working of
JDCs and other committees such as:
◦ Suggestion Box Committee,
◦ Safety Committee,
◦ Canteen Managing Committee, etc.”

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 Joint Consultative Council of
Management (JCCM)

JCCM was given the task of advising

management on productivity and welfare
and also looking at matters referred to by
JDCs and JWCs

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Inorder to ensure that these committees did not overlap the
functions of other committees, separate task groups were formed.

Special courses were offered to prepare both management and

union representatives to effectively utilize the facility.

TISCO's experience with workers' participation has been

satisfactory.

From 1957 to the middle of 1972 JDSs have discussed a total of

14,104 suggestion of which 70.3 per cent have been implemented.

These suggestions have covered a wide range of topics and issues,

but the most important point to remember, perhaps, is that the
councils have been successful in involving workers equally in the
process of production.
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Effectiveness of Workers Participation
1. The degree of effectiveness varies directly
with the degree with which the participation
meets the motives of the participants.
2. The greater the clarity of goals the higher
the effectiveness, provided conformity to
goals is a strong motive among the
participants.  
3. Settlement of relatively difficult issues leads
to greater effectiveness.

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4. The higher the viability of the activity of
participative decision-making the greater the
effectiveness.
5. Effectiveness varies directly with the number of
administrative levels subsumed by the
programme. 
6. Finally, the amount of useful information
influences the  effectiveness of participative
decision-making; the more useful the
information, the greater the effectiveness.

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These variables suggest that without necessary
preconditions for participation there any exist the
danger of false participation. 
People may engage in matters that are either completely
unimportant or above their level of competence. 
Both these dangers are extremely critical. 
 The first any lead people to think that the fact the they
are participating is sufficient to bring about satisfactory
results. 
 The second may lead to the feeling that they really are
not contributing anything; it may, therefore, become
demotivating  and possibly lead to “destructive” 
activities.
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Failure of Workers' Participation
Workers' participation has suffered largely
at the hands of employers who felt, and
probably still feel, that such a move will
take away form them their right to manage.

To some extent this is supported by large-

scale Government interference, issuing
decrees, enticing acts, and formulating
legislative bodies.

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Voluntary implementation of the concept of
participation by employers has been rare, except
may be in Sweden where the concept of
workers' participation has been relatively
successful.

Because of this attitude of employers,

information -sharing has not been liberal.
Workers' representatives have often not been
informed about manpower and production
schedules, creating an attitude of indifference
and even hostility among the representatives.

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Unlike the stated aims of participation, in most
cases, joint boards, councils, etc., find themselves
dealing with personnel and welfare matter rather
than with production and efficiency.

This, to a large extent, has been responsible for the

dissatisfaction of employers whose concerns rests
relatively more with production and efficiency.

Ithas been found that, the level at which workers'

participation is operationalized influences its
Success or failure.
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Workers` Participation:
The Ford way

How did Ford Motors, which had one of the

most centralized administrative structure, shift
to a participative style of management in the
1980s and pull it off with ease?

At a time when it was eliminating 45 per cent

of hourly jobs and many salaried positions,
how did the management elicit cooperation
from employees instead of cynicism and
sabotage?
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The Employees Involvement (EI) programme, one of
Ford’s most ambitious change efforts, almost failed
several times.

Ford’s senior executives, who were back from Japan, had

learnt a clear lesson — if you involve the hourly worker,
he will willingly contribute far more than management
could imagine.

But they had no idea how to execute this in an

organisation like Ford. Predictably, it ran into a wall of
widespread scepticism.

Only four out of 60 plant managers volunteered to try EI.

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Though the experiment succeeded in the four
plants, senior executives began to take it so
seriously that they wanted to manage
everything right from the selection of workers
in participative forums to running the scheme
themselves.

The third near-miss occurred when the finance

department wanted to measure the return on
investment in such schemes by counting the
number of suggestions, the savings realised and
so on.
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But despite these hiccups, Ford managed to stay its course.

The experiment succeeded because of two key drivers:

◦ Crisis, and
◦ Quality.

The company was deep in the red and the crisis heightened
its collective consciousness that something drastically new
needed to be done.

And quality was also a wonderfully positive unifying

objective because it tied everyone from the chairman to the
hourly workers together. These shared values were so
compelling that false starts weren’t fatal.

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An important factor contributing to EI’s success at Ford was
the agreement that the management would not dictate which
projects employees worked on.

The company was generous towards funding an employee

development and training programme. Ford contributed 5
cents to it for each blue-collar hour worked.

These resources, which were subsequently increased, could

be spent only with the union’s concurrence and the company
could not redirect nor reclaim the funds if there was a
stalemate.

Theserestrictions prevented the management from

abandoning the programme if times got tough.

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As the programme got underway and the trickle of ideas
from workers grew into a stream of initiatives, Ford
negotiated a profit-sharing programme with workers.

The programme paid rich dividends. Ford paid $636 million

in profit-sharing the largest payout in US corporate history
at that time — with the average hourly employee receiving
a check for over $3,700.

Thereturns were fabulous. The company produced 400,000

more cars out of plants that were already at rated capacity.

The increase is the equivalent of adding one and a half new

factories.

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The next step in the change effort was to
improve the white collar employee involvement.

A Management Task Force realised that Ford

had swung from a manufacturing-dominated
culture to a financially driven one.

The management’s challenge was to sustain

finance’s strengths and yet upgrade the
weakened domains of engineering,
manufacturing and design.

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. It was addressed through three major thrusts:
◦ maintaining competence in finance but decentralizing
and re-delegating some of its activities to the line
managers;
◦ upgrading the product disciplines through investments in
new tools, and giving these functions a greater voice in
policy matters; and
◦ reducing the number of finance staff and shifting their
role from policemen to a service organization to the line
managers.

 Result:the very absence of an end-of-month

numbers drill permitted the company to devote
more time and energy to day-to-day business.
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That’s all for the day !

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