Everything you need to know about the different forms of workers participation in management.
Workers participation in management means giving scope for workers to influence the managerial decision-making process at different levels by various forms in the organisation.
There are various forms of workers’ participation operation, among these include works committees, joint management councils, shop councils, joint councils, unit councils, representation on board of directors and a variety of joint committees in the private sector with specialised functions.
Forms of participation vary from industry to industry, country to country and facility to facility within the same industry. Thus, the following are the forms of worker’s participation:-
1. Works Committee 2. Joint Management Council (JMC) 3. Board of Representation 4. Participation through Ownership 5. Participation through Complete Control 6. Collective Bargaining 7. Job Enlargement and Job Enrichment 8. Suggestion Scheme 9. Quality Circle (QC) 10. Empowered Team and Autonomous Teams
11. Total Quality Management (TQM) 12. Financial Participation 13. Consultative Participation 14. Associative Participation 15. Administrative Participation 16. Decisive Participation and 17. Worker Participation Scheme.
Forms of Worker Participation in Management – Works Committee, Joint Management Council, TQM and a Few Other Forms
Forms of Workers Participation in Management – Top 12 Forms: Works Committee, Joint Management Council, Board of Representation and a Few Others
The manager, workers and industrial relations experts interpret the term “workers’ participation management” in different ways. Some managers interpret it as information sharing while others consider it as joint consultation prior to decision making. However this is not all about it! The workers generally think of it as joint decision-making. That means workers treat participation as equivalent to co-decision in the spheres of management of the enterprise after all they want to really participate!
They regard it as an association of labour with management without the final authority or responsibility in the general area of managerial functions. It means that the management shares in an appropriate manner the decision-making power with the lower ranks of the organization.
Thus, workers’ participation in management means giving scope for workers to influence the managerial decision-making process at different levels by various forms in the organisation.
Forms of participation vary from industry to industry, country to country and facility to facility within the same industry.
The following are the forms of participation:
Form # 1. Works Committee:
Enterprises with a workforce of 100 or more workers constitute a works committee with equal number of representatives from employees and the management. This committee has to evolve ways and means for maintaining cordial and harmonious relations between employees and the management.
Form # 2. Joint Management Council (JMC):
JMCs were introduced in 1958. These councils are formed at plant level with equal number of employee and employer representatives. These are mainly consultative and advisory ones. The scope of JMCs encompasses to matters like working conditions, indiscipline, absenteeism, accident prevention, preparation of holiday schemes etc. It is generally alleged that both works committee and JMC are similar in scope and function. Hence multiplicity of bipartite consultative bodies did not serve the purpose.
Form # 3. Board of Representation:
Under this scheme, one or two representatives of workers are nominated or elected to the Board of Directors. The basic idea is to safeguard worker’s interest, and usher in industrial harmony and good relations between workers and management. This is the highest form of participation. Government of India introduced this schemes in public sector enterprises like Hindustan Antibiotics Ltd, BHEL, NTC, National Coal Mines Development Corporation, Hindustan Organic Chemicals, etc.
Public Sector Banks have introduced the scheme from 1970 onwards. The representative unions have to give a panel containing names out of which one will be selected by the Government. The success of the worker director depends in his role in the board and his prior consultation communication with the other workers. He should articulate the worker’s concern very effectively and cogently with facts and figures and enlighten the management of the implications of various proposals at the board.
Workers by becoming shareholders take part in management. Management sell shares at reduced price to its committed and loyal workforce. Such workers are allowed to pay the price in installments or allowed financial accommodation to buy the shares. But participation is distinct from management. But its effect on participation is observed to be limited. In some cases, sick companies are allowed to be taken over by workers. For example, Kamani Tubes, New Central Jute mills, etc., are some of the companies taken over by worker’s cooperatives.
It is called self-management. Yugoslavia is the country practicing this model. This gives a complete control to the workers to directly manage all aspects of industries through their representatives. This method ensures complete identification of workers with their organization. The scope for industrial conflict becomes lesser under the self-management method. But the success of the method depends on the intensity of interest shown by workers in the management.
This mechanism gives the management and the employees to lay down rules relating to working conditions and contract of employment. This type of participation is in practice.
Job enlargement means addition of task elements horizontally. Job enrichment means adding motivators to the existing job. Both are mechanisms to relieve the job holders of the monotony of work. They serve as participative mechanisms as they offer freedom and scope to use their wisdom.
Suggestions are invited from workers on the various aspects of work. Management reviews the suggestions made and put the constructive suggestions into action. Some companies share financial benefits accruing through good suggestions with the workers who contribute the suggestion. This mechanism kindles the creative or innovative urge in the workers. This is a win-win mechanism. The rewards awarded should be commensurate with the benefits derived from the suggestion.
A Quality Circle (QC) consists of 7 to 10 people drawn from the same work area, who meet regularly to define, analyse and solve quality and related problems in their area. Membership is voluntary and meetings are held once a week for an hour. During the meetings, members are trained in problem-solving. This concept originated from Japan. In India, the experience of quality circle is a mixed one.
Empowerment means transferring authority and responsibility to employees. When power is transferred to employees, they experience a sense of ownership and control over their job. At the same time, it engenders in them a sense of accountability.
i. Empowered team sets its own target.
ii. Decides the method of work.
iii. Decides the style of leadership and function.
iv. Creates its own work schedules and reviews its performance.
v. Prepares its own budget and coordinates its work with other departments.
vi. Chooses the source of supply of materials.
vii. Hires own replacement.
viii. Assumes responsibility for the discipline of its members.
ix. Takes responsibility for the quality of the products and services.
Indian companies practising empowered team concept includes TITAN, ABB, TATA Information System, Philips, Wipro Infotech, etc.
TQM denotes deep commitment of an organization to quality. The quality of product/service is the sole focus of an organization. It intends to infuse quality in each and every process of production and delivery of service to the end consumer.
Conventional belief that quality is the preserve of quality control department, quality can be improved through inspection, quality costs high and defects cannot be eliminated totally, have been thrown overboard.
The new TQM philosophy includes the following:
i. Meeting customer’s requirement on time.
ii. Ensuring error-free work.
iii. Managing by pro-action ‘not by correction’.
iv. Measuring the cost of quality.
TQM is viewed as one of the participative methods as every employee is involved and assumes responsibility for quality improvement.
This type of participation has potential to involve the worker in the decision-making process or consultation process intensively. It enhances employees’ commitment to the organization by linking the performance of the firm to that of the employee. Many schemes of financial participation include profit sharing plan, ESOP, management buyout, profit-linked pay, worker’s co-operatives, pension fund participation and wage earner fund.
Forms of Workers Participation in Management – Quality Circles, Total Quality Management and Financial Participation
There are various forms of workers’ participation operation in India, among these include works committees, joint management councils, shop councils, joint councils, unit councils, representation on board of directors and a variety of joint committees in the private sector with specialised functions.
Of late, a number of prosperous companies having global businesses have also adopted certain new forms of participative management such as:
1. Quality Circles,
2. Total Quality Management and
3. Financial Participation.
Basic features of these forms are explained below:
The concept of “quality circles” originated in Japan during early 1960s and has spread in various parts of the world. A “quality circle” usually consists of seven to ten people belonging to the same work area. They meet regularly to define, discuss and solve quality-related problems. Members of the circle are usually imparted training in the technique of problem-solving.
Quality circles are expected to produce two types of effects – one is the enhancement of quality and productivity and the other is to foster the sense of participation in work-related decisions among workers. These lead to increased job satisfaction and better industrial relations. These circles usually serve for a stipulated period and are wound up after they have served their purpose.
Closely related to quality circles is programme of Quality of Working Life or “humanisation of work”. The major emphasis of the programme is on enhancing productivity and competiveness keeping in view the overall interests of the organisation.
It is essentially a formal programme involving every employee in the organisation. Each employee is expected to contribute in the interest of the organisation. Every step in the company’s processes is subjected to intense and regular scrutiny so that the work becomes error-free. It is called participative because it is a formal programme involving every employee in the organisation, and making each one responsible for improving quality every day. The TQM thus promotes “semi-autonomous work groups.”
This form of participation is based on the premise that if an employee has a financial stake in the organisation, he is likely to be more positively motivated and involved. Under it, performance of the organisation is linked to the performance of the employees. Employees may share the gains in the form of profit-liked bonus and stock option benefits.
Forms of Workers Participation in Management – Information-Sharing, Consultative Participation, Associative Participation, Administrative Participation and Other Forms
A study of various schemes of workers’ participation in particular establishments, organisations and different countries will indicate some distinct forms.
Notable among these are explained below:
This is the most rudimentary form of participation under which the management keeps the employees informed about the business conditions of the enterprise, its general prospects and likely changes in the methods of production and technology before they are put into effect. This practice enables the employees and their union to understand the economic aspects of the enterprise and express their reactions to the likely changes and state of business.
Under this type of participation, the management consults the workers on matters of mutual concern and obtains their opinion before taking a decision. The management, however, retains its authority to take a final decision in the matter. “When consulted, the workers and their unions may offer their suggestions and give their viewpoints, but cannot insist that their viewpoints be accepted.”
This form of participation is similar to consultative participation with the difference that under this form, the unanimous decisions of the joint forums are generally accepted and implemented by the management. The employees and their union also extend their co-operation even at the implementation stage. Problem solving is also an example of associative participation. Under it, an employer facing an urgent problem in business requests the union to extend help to which the union often responds positively.
Under this form, certain joint forums such as canteen committee and welfare committee are entrusted with the responsibility of administering the agreed programmes.
This is the highest form of participation under which the management and workers’ representatives jointly take final decision with regard to specified matters. The representation of unions on the board of directors of a firm is an example of such participation.
The forms and levels of workers’ participation would be clearer from the study of the features of particular schemes in operation in different countries.
Forms of Workers Participation in Management – At Different Levels
Workers participation in management can take different forms at different levels, each with varying degrees of participation.
These are described below:
Work committees are consultative bodies which consist of equal number of representatives from the employers and the employee’s side. Frequent meetings are scheduled for discussion over the issues faced by the management and the workers and joint decisions are taken after mutual consideration by both the parties involved.
The Industrial Disputes Act, 1947, provides a statutory provision for the formation of Work Committees. Their functions include discussion over working conditions, worker safety, accident prevention, provision for recreational facilities, fund allocation and for meeting the educational, vocational, and career related matters of the employees.
Recommended by the Second Five Year Plan (1956-1961), these Joint Councils consist of members who are representatives of employers, worker and the management. Matters pertaining to issues of mutual interest are discussed and suggestions are offered. This scheme was initially started in the United Kingdom, as per the recommendations put forward by the Whitely Committee, to settle disputes between the management and the workers.
Mutual consultations are undertaken for the purpose of increasing the association between employers and employees for the achievement of overall increased industrial production and of the factors of production.
Some of the important functions of Joint Management Council include matters relating to standing orders, retrenchment, safety measures, reward mechanisms, training, and issues related to the number of working hours. This system is primarily consultative and advisory in nature. The authority in decision making exists mostly with the higher management.
Industrial units employing 500 or more workers, for every department or shop, have a Shop Council. Equal number of representatives from the employers and employees constitute Shop Councils. The decisions taken by the Shop Council arrive through consensus and not by voting, jointly taken by the employers in consultation with the recognized union.
Shop Councils perform certain functions in relation to matters like productivity, waste management, manpower needs and machine capacity, abseentism issues, safety measures, maintenance of general discipline, technological changes, and working conditions.
Joint councils are establishments for the entire unit and membership is permissible only for members from the management or the workers, the structure includes the Chairman, the Vice Chairman and the Secretary. The unit is operational for a period of two years and meetings are scheduled, at least, once is a quarter.
The Joint Council deals with issues relating to efficiency and productivity of unit, unresolved matters of the Shop Council, training of workmen, reward mechanism, holidays, health, and welfare of the workers.
Unit Councils are a relatively new scheme, introduced as a result of success achieved by other Workers Participation in Management schemes in manufacturing and mining units, the scheme was announced on 5th January, 1977, for large scale public dealings. The scheme envisaged setting of Unit Councils in units employing at least 100 persons.
The main function of Unit Councils includes the creation of effective working conditions to achieve optimal efficiency, better customer service and customer satisfaction, elimination of pilferage and corruption and the establishment of appropriate reward mechanism. Also, to ensure systematic flow of two way communication between the management and workers in fixing targets of production and to ensure the realization of those targets.
Forms of Workers Participation in Management – In India: Works Committee, Joint Management Council, Worker-Director & Worker Participation Scheme
There are different forms of workers’ participation in management. Forms of participation vary from industry to industry.
Some of the forms of workers’ participation in management in our country are discussed herein below:
Form # 1. Works Committee:
This committee is constituted in industrial establishment where 100 or more workers are employed. This is a statutory committee set up under the Industrial Disputes Act 1947, with the equal number of workers’ and employers’ representatives. Though, the setting up of this committee is statutory obligation, recommendations of the committee are not legally binding.
The aim of setting up of such committees, is to promote measures for securing and preserving amity and good relations between the employers and workmen and, to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters.
Form # 2. Joint Management Council:
It is a joint consultative/deliberative body constituted with the equal representatives of workers and management with the objectives of maintaining peace and harmony in industry through disposal of grievances/issues of the workers at the earliest possible time. The Second Five year Plan recommended the setting up of joint management councils at those units having more than 500 or more employees.
Form # 3. Worker-Director:
The Government of India accepted the recommendations of the administration reforms commission to appoint workers’ representatives on the Board of Directors of public sector undertakings.
The Nationalized Bank (Management and Miscellaneous Provisions) Scheme 1970, was also passed which required, each nationalized bank to have employee directors on its Board-one representing employees and the other representing officers having tenure of 3 years. The practice of appointing Worker-Directors to the Boards is in force in Hindustan Antibiotics Ltd., NTC, Public Sector Banks, BHEL and so on.
Form # 4. Worker Participation Scheme:
The Central Government adopted through a resolution a new scheme of workers’ participation in management, on October 30, 1975. This is a voluntary scheme covering all manufacturing and mining industries whether in public, private or co-operative sector which employ 500 or more persons. The scheme provides for the setting up of shop councils at the shop and floor level and joint councils at the plant level.
a. Shop Councils:
The salient features of shop councils are discussed below:
i. There shall be one shop council for each department or shop, or one council for more than one department or shop considering the number of employees in the department or shop.
ii. Each shop council shall consist of an equal number of representatives of employers and workers.
iii. The total number of members may not generally, exceed 12. However, the number of members of each council may be determined by the employer in consultation with the recognized union or registered unions of workers.
iv. The employer’s representatives to be nominated by the management shall be from the unit concerned, and the representatives of workmen shall be from among workers of the department or shop concerned.
v. The chairman of council is nominated by the management and vice-chairman is elected by the worker-members of the council.
vi. The council shall function for a period of 2 years.
vii. The council shall have regular meeting to discuss matters like welfare, social security measures, working conditions, production, and safety measures, smooth functioning of the department/shop, discipline, attendance aspects etc.
viii. The decisions of the council are taken on the basis of consensus.
The worker participation scheme 1975, provides for setting up a joint council for the whole unit where 500 or more persons are employed.
The main features of the joint council are given herein below:
i. The joint council shall function for a period of 2 years.
ii. The chief executive of the unit is its chairman and vice- chairman is nominated by workers’ members of the council.
iii. The members of the joint council shall be from the unit.
iv. The secretary is appointed by the joint council from amongst the members of the council. He is responsible for smooth functioning of the council.
v. The joint council meets once in a quarter to discuss –
a. Matters remaining unresolved by shop council
b. Matters relating to fixation of productivity norms, training and development of employees, preparation of working hours and holiday schedules, optimum utilization of raw materials, quality of products, health, welfare, safety measures for the unit/plant and so on.
In 1977, workers’ participation scheme was extended and commercial and service organizations in the public sector having 100 or more employees were also covered.