participation Employee in
management
(Business environment)
Introduction:
Three groups of managerial
decisions affect the workers of
any industry:
Economic decisions methods
of manufacturing, automation,
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
Objectives:
According to Gosep, workers participation
may be viewed as:
An instrument for increasing the efficiency
of enterprises and establishing
harmonious relations;
A device for developing social education
for promoting solidarity among workers
A humanitarian act, elevating the status of
a worker in the society;
An ideological way of developing selfmanagement and promoting industrial
democracy
To improve the quality of working life
(QWL) by allowing the workers greater
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.
Importance:
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.
Essential condition for WPM:
The success of workers portion in
management depends upon the following
conditions.
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. Where a
right kind of attitude exists and proper
atmosphere prevails the process of
participation is greatly stimulated.
Both parties should have a genuine faith in
the system and in each other and be
willing to work together.
Participation must work as complementary
body to help collective bargaining, which
creates conditions of work and also
creates legal relations.
There should be a strong trade union,
which has learnt the virtues of unit and
self-reliance so that they may effectively
take part in collective bargaining or
participation.
Authority should be centralized through
democratic management process. The
participation should be at the two or at the
most three levels.
Programs for training and education
should be developed comprehensively.
For this purpose,
Labor is to be given education not to the
head alone, not to the heart alone, not to
the hand alone, but it is dedicated to the
three; to make the workers think, feel and
Limitations of participation:
Technology and organizations today are
so complex that specialized work-roles are
required.
This means employees will not be able to
participate effectively in matters beyond
their particular environment. Everybody
need not want participation.
Scope and ways of participation
One view is(Forms):
that workers or the
trade unions should, as equal
partners, sit with the management
and
make joint managerial decisions.
The other view is that workers
should only be given an
4. Staff or work councils
5. Joint councils and committees
6. Collective Bargaining
7. Job enlargement and enrichment
8. Suggestion schemes
9. Quality circles
10. Empowered teams
11. TQM
1. Participation at the Board
This would be the highest form of
level:
industrial democracy.
The workers representative on the
Board can play a useful role in
safeguarding the interests of
workers.e or she can serve as a
guide and a control element.
He or she can prevail upon top
management not to take measures
Problems associated with this
method:
Focus of workers representatives is
different from the focus of the remaining
members of the Board.
Communication and subsequently
relations between the workers
representative and the workers suffers
after the former assumes directorship.
Participation through ownership:
This involves making the workers
shareholders of the company by inducing
them to buy equity shares.
In many cases, advances and financial
assistance in the form of easy repayment
options are extended to enable employees
to buy equity shares. Examples of this
method are available in the manufacturing
as well as the service sector.
Participation through complete
Workers acquire ontrol: control of the
c complete
management through elected boards. The
system of self- management in Yugoslavia
is based on this concept. Selfmanagement gives complete control to
workers to manage directly all aspects of
industries through their representatives.
Advantages:
Participation through Staff and
Staff councils or works councils are bodies
Works Councils:
on the which representation is entirely of
the employees. There may be one council
for the entire organization or a hierarchy of
councils. The employees of the respective
sections elect the members of the
councils. The role of council ranges from
seeking information on the managements
intentions to a full share in decisionmaking.
Participation through Joint
Joint councils are bodies comprising
Councils and Committees:
representatives of employers and
employees. This method sees a
very loose form of participation, as these
councils are mostly consultative bodies.
Work committees are a legal requirement
in industrial establishments employing 100
or more workers.
Such committees discuss a wide range of
topics connected to labour welfare.
Examples of such committees are welfare
committee, safety committee, etc. Such
committees have not proven to be too
effective in promoting industrial
democracy, increasing productivity and
Participation through Collective
Bargaining:
Through the process of CB, management
and workers may reach collective
agreement regarding rules for the
formulation and termination of the contract
of employment, as well as conditions of
service in an establishment.
Even though these agreements are not
legally binding, they do have some force.
For CB to work, the workers and the
employers representatives need to
But in practice, while bargaining, each
party tries to take advantage of the other.
This process of CB cannot be called WPM
in its strongest sense as in reality;
CB is based on the crude concept of
exercising power for the benefit of one
party. WPM, on the other hand, brings
both the parties together and develops
appropriate mutual understanding and
brings about a mature responsible
Participation through Job
Enlargement and Job
Enrichment:that is seen
Excessive job specialization
as a by-product of mass production in
industries, leads to
boredom and associated problems in
employees.
Two methods of job designing job
enlargement and job enrichment are
seen as methods of
Job enrichment means adding `motivators
to the job to make it more rewarding. This
is WPM in that it offers freedom and scope
to the workers to use their judgment. But
this form of participation is very basic as it
provides only limited freedom to a worker
concerning the method of performing
his/her job.
The worker has no say in other vital issues
of concern to him issues such as job and
Participation through
Suggestion Schemes:
Employees views are invited and reward
is given for the best suggestion. With this
scheme, the employees interest in the
problems of the organization is aroused
and maintained. Progressive
managements increasingly use the
suggestion schemes.
Participation through Quality
Concept originated in Japan in the early
Circles:
1960s and has now spread all over the
world. 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.
These circles require a lot of time and
commitment on the part of members for
regular meetings, analysis, brainstorming,
The Indian Scenario:
Tried by BHEL, Mahindra and Mahindra,
Godrej and Boyce among others.
Experienced mixed results:
M&M (jeep division) with 76 QCs has
experienced favourable results.
Empowered Teams:
Empowerment occurs when authority and
responsibility are passed on to the
employees who then experience a sense
of ownership and control over their jobs.
Employees may feel more responsible,
may take initiative in their work, may get
more work done, and may enjoy the work
more. For empowerment to occur, the
following approach needs to be followed
as compared to the traditional approach:
Total Quality Management
TQM refers to the deep commitment,
almost obsession, of an organization to
quality.
Every step in companys processes is
subjected to intense and regular scrutiny
for ways to improve it.
Some traditional beliefs are discarded.
High quality costs more.
New principles of TQM are:
Meet the customers requirement on time,
the first time, and 100% of the time.
Strive to do error-free work.
Manage by prevention, not correction.
Measure the cost of quality.
Financial Participation:
This method involves less consultations or
even joint decisions. Performance of the
organization is linked to the performance
of the employee. The logic behind this is
that if an employee has a financial stake in
the organization, he/she is likely to be
more positively motivated and involved.
Some schemes of financial participation:
Profit-linked pay
Profit sharing and Employees Stock
Option schemes.
Pension-fund participation