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Workers Participation in Management

The Genesis

Derived from a Latin word participare participation means sharing/taking part Sharing is a bilateral process and it has A functional aspect, and A motivational aspect Workers Participation in Management highlights both these aspects well The functional aspect is a role in deciding The motivational aspect is the natural involvement after deciding

WPM The Soul of IR

CB vs. WPM : Heart vs. Soul Collective Bargaining is based on Conflict or at least the perception of Conflict Highlights need for synergy A step in the Working Class Movement WPM is based on Cooperation Highlights SYNERGY itself A step in Management Effectiveness

Objectives of WPM
Pie enlarging NOT Pie splitting Gain sharing improving profitability Future sharing improving competitiveness Power sharing Placing Stockholders and Stakeholders on a even keel Self actualisation availing opportunity to contribute meaningfully

Some Models of WPM

British system of Joint Consultation

Yugoslav system of Workers Council German system of Co determination The Japanese system of Quality Circles The American system of QWL (QUALITY OF WORKLIFE)

The Quality of Work life

QWL coined by Louis Davis in 1972 The basic idea: Promote individual learning and development Provide individuals with influence and control over what they do and how they do it Make available to the individuals interesting and meaningful work as a source of personal satisfaction and a means to value personal rewards

Defining WPM
A system of communication and consultation, either formal or informal, by which employees of an organisation are kept informed about the affairs of the undertaking and through which they express their opinion and contribute to the management decisions

How WPM works?

KF Walker Model
Planning Organizing Motivating Controlling Managerial Employee Directors Works Council Suggestion Schemes Area of Collective Bargaining Union


Participative Supervision and Job enlargement



Forms of Participation

Informative Information Sharing Involving Consultative Idea generating Democratic functioning Co deterministic Joint decision making Partnering

Some Key Dimensions in WPM

(David Guest,1995)

Psychological contract Behaviour referent Relations Organisation and design

Industrial Relation
Compliance Norms, customs and practices Low trust, pluralist, Collective Formal roles, hierarchy, Division of labour, Managerial controls


Values / Mission
High trust, unitarist, Individual Flexible roles, Flat structure/teamwork Autonomy, self-control

WPM as a Bridge

Organisational Commitment has 3 aspects: 1. Identification with goals & values 2. A desire to belong to the Organisation 3. A willingness to display effort on behalf of Organisation Union Commitment has the same 3 aspects The key issue is Compatibility of Goals and Values of the Company and the Union in the eyes of the Employee/worker WPM bridges the Gap, while CB shows it

The Commitment Matrix & Behaviour Patterns

Commitment to ORGANISATION t High / High o Common / integrated High / Low U Goals & Values Business Partnership Habitual Resistance N I Low / High Low / Low O Co-operation Indifference N

The Missing Focus

Organisations view HRM and IRM as Either Or options HRM focused on Individual Industrial Relations focused on Collective The new realism : High emphasis on both HR & IR management

Todays Workplace

The Mutual Gains Enterprise

Thomas A. Kochan & Paul Osterman (1994)

Principles guiding the Mutual Gains Enterprise

Strategic level:

Supportive Business Strategies Top Management Commitment Effective voice for Human Resources in Strategy making and Governance

Principles guiding the Mutual Gains Enterprise

Functional level:

Staffing based on employment stabilisation Investment in training and development Contingent compensation that reinforces

cooperation, participation, and contribution

Principles guiding the Mutual Gains Enterprise

Workplace level:

High standards of employee selection Broad task design and teamwork Employee involvement in problem solving Climate of cooperation and trust

A great place to work

The history of partnering Workers

1884(UK): Labour Association for promoting cooperative
production amongst Workforce formed

It was set up as a propagandist committee to arouse working men, and public opinion generally, to the importance of the movement for making workers everywhere partners in their workshops. Renamed later as Industrial Co-partnership Association and again after the Word War-II as the Industrial Participation Association 1989: Renamed again as

Involvement and partnership Association (IPA)

The Post-War Divergence

During the War the Conflict model gained ground and Unions became too powerful, and feasted on Collective Bargaining The post-war IR in UK relied more on CB whereas Germany & most of Europe developed a Social partnership model and relied more on Workers participation in Management

Towards Industrial partnership

The IPA publication in 1992 enunciates new principles of partnership:

Partnership post1990s will not emphasise institutionalised participation, nor a tripartite approach The emphasis will be on Attitudes & Culture It is now a question of building trust, recognising differences, finding common ground, and applying key partnership principles: Commitment to organisational success Respecting legitimacy of stakeholders in business

Employment insecurity A major threat to partnership

Attitudes towards Job security is changing Employers want more flexibility and the Employees want more stability Employment security is a desirable framework for having employee involvement /commitment Concept of Employability as substitute for continued Employment has arrived Employers responsible for building capabilities in employees to survive and sustain after Exit

Information, Consultation & Co-determination

understanding the new dimensions
Information sharing is Direct Participation The Cellnet philosophy (EThOS) explains: 1. Frank & open exchange of ideas, information & knowledge Key to effective Task management 2. Open & Clear communication is Everyones responsibility Key to Business success 3. By taking ownership of issues and problems, making commitments and delivering Key to get greatest contributions from People to Company

Information, Consultation & Co-determination

understanding the new dimensions

Representative consultation mean systems of joint consultation, commonly referred to in India as Joint Councils for WPM For sustaining the highest levels of competitiveness,

ICI philosophy explains the new outlook:


It is essential that all employees cooperate with each other to understand the business, economic & social context in which they are asked to work, and Have appropriate forums to influence decision makers at all relevant management levels so that there is the best chance of a well judged and full hearted contribution from every employee


The great transformation in representative consultation

In many countries, agenda for consultation is driven by Law social security & rights Representatives are nominated / elected During 1970s & 1980s the Joint Councils were ineffectual, bureaucratic tea & toilets talk shops contributing no value to business Since 1990 concept of Partnership council has emerged to debate cutting edges of Business

Information, Consultation & Co-determination

understanding the new dimensions

Co-determination means Representation of the employees voice at the decision making table With the transformation of business ownership from single owner to Stock holders, the employees have become the largest stakeholder Growing recognition of alignment of interests of the Firm and the employee-stakeholders Mutuality of interest among all stakeholders is shifting the bargaining mind-set towards partnership

A novel partnership journey

at Welsh Water and Blue Circle

A common Vision and the Goal A cultural change program starting with the Managers A systematic revision of reward, status and conditions Business-focused consultative arrangements from the shop-floor to the boardroom multiple MOUs An agreed policy to manage employment security A major commitment to employee development and training

WPM the Indian saga

The Works Committee under ID Act, 1947 The Directive Principles of State Policy under Indian Constitution Recommendations of the GOI Study Group & ILC 15th session (1957) Joint Management Councils The 2nd Five Year Plan recommendations for setting up Joint Councils for Organisations employing 500 or more people GOI scheme for Board representation (1971) GOI scheme on WPM in 1975 20 point program 1975: DPSP amended & WPM inserted at S/43a

WPM the Indian saga

1977: The 1975 scheme extended to Service sector employing 100 or more people

1978: Janata Govt. appointed Tripartite Committee, recommended 3-tier structure for participation Board, Plant, Shopfloor 1983: WPM scheme for CPSUs introduced
1985-86: Union Budget opened Stock options for employees (limited to 5%)

The PWM Bill, 1990

An attempt to bring statutory force The Bill proposes participation at all levels In Cold storage due to lack of will to enact It has lost relevance under Globalization PSUs have mostly complied & suffered due to Unions extension of bargaining to WPM Deregulation is the order of the day

Future of workers participation

In 1974 JRD said, It is a thing which will come in due course, in a much bigger way than it is today. It is however, a very difficult and delicate subject which must be developed slowly, systematically and methodically, learning from practical experience and taking lessons from pitfalls of the past

From fist-fight to empowerment

The World has changed since 1990s The ITES sector impact is irreversible Job security can no more be determined by collective pressure but by employability Training, Information & Ability to work flexibly will determine Job security Unions must share these values along with Managements transparent goals Mutual gains Enterprise is the best option

The Partnership Philosophy lives on

Workers participation in Management, as a concept is philosophically sound & rich WPM derives merit from the principle of Trusteeship enunciated by Mahatma Gandhi It is an ideological extension of democratic spirit and principles for the workplace True democracy & free market economy go hand in hand; regulation stifled growth of WPM

The irony of zero Rights for workers in Communist ruled Soviet Union and PRC

WPM / Partnership is likely to flourish under liberalisation, while it could not succeed earlier