CHAPTER 1

INTRODUCTION

Employees at the helm of affairs have better knowledge regarding the various work related

issues. Managers at the top or middle level are well equipped with the decision making skills.

Managers have to get the information from the lower levels to make the decisions. Further,

practical problems in implementation of the decision are better predicted by the employees at

the helm of affairs. Therefore, wise managements prefer the decision to be taken by both the

employees at the helm of affairs and the managers.

Since the beginning of industrialisation there has been constant debate on the status of

workers in industrial society. Social thinkers like Comte and Omen had advocated the

participation of workers in management for achieving social and distributive justice. The

most remarkable contribution in this field is done by Karl Marx who advocated complete

control of enterprise by workers. It was however a distant dream for the workers to have

control over the production and product under capitalism. Later on, Webb and Cole

propagated that participation of workers in management would be sufficient to meet the

needs of social justice and distribution. They believed that if the workers are also given

opportunity to participate in the management process, there would be positive gains for the

enterprise through higher productivity and efficiency. They wanted to bridge the divide

between the management and workers in order to bring harmony in the industrial relations.

Workers participation as a field of study and advocacy for its implementation in the industrial

establishment has a relatively long history in India, since late 1940s and early 1950s. The

importance of a workerhas been felt right since the first plan of independent India. Cherian

Joseph (1987) in his book ‘Workers Participation in Industry’ has mentioned that the worker

is the principal instrument in the fulfillment of the target of the plan and its achievement of

economic progress. Further, labour was advised of the need for a keen realisation of the fact

that in an undeveloped economy, it cannot build for itself and the community a better life

except on fair foundation of a higher level of productivity to which it has itself to make a

substantial contribution (Planning Commission 1952: 571)

The concept of workers' participation in management (WPM) is considered as a mechanism

where workers have a say in the decision-making process of an enterprise formally. The

concept of quality circles (QC) provides informal involvement of employees in the decision-

making and implementation process.

In an enterprise the interface between workmen and management helps to achieve desired

results of production and productivity, which can be achieved through such interactions. The

scheme of works committees, joint management councils and worker-directors are aimed at

institutionalisation of the concept of industrial democracy.

In a broader sense, workers’ participation in management can be defined as follows:

The concept of workers' participation in management crystallises the concept of industrial

democracy, and indicates an attempt on the part of an employer to build his employees into a

team which work towards the realisation of a common objective.

According to Davis (1976), "It is a mental and emotional involvement of a person in a group

situation which encourages him to contribute to goals and share responsibilities in them."

Within the ambit of this definition, a continuum of men-management relationship can be

conceived in various forms such as Workers' Control Joint Management, Joint Consultation,

Workplace Consultation and Management Supremacy.

Objectives of Workers' Participation in Management

The main objectives of Workers' Participation in Management include:

(i) To promote increased productivity for the advantage of the organisation, workers and

society at large

(ii) To provide a better understanding to employees about their role and place in the

process of attainment of organisational goals

(iii) To satisfy the workers' social and esteem needs

(iv) To strengthen labour-management co-operation thereby maintaining industrial peace

and harmony

(v) To develop social education for effective solidarity among the working community

and for tapping latent human resources

(vi) An ideological point of view to develop self-management in industry

(vii) An instrument for improving efficiency of the company and establishing harmonious

industrial relations

(viii) To build the most dynamic human resources

(ix) To build the nation through entrepreneurship and economic development

At times, the interests of workers and management clash and effective dialogue becomes

essential. Groups representing both sides negotiate to derive common ground for finding a

solution for the conflict. Such a common ground can also be prepared through cooperation,

mutual trust and understanding of issues between the management and workers. This can be

possible when both cooperate to jointly manage issues. Such an understanding and a

collaborative approach to find a common ground is called as workers participation in

management.

B.R. Virmani (1978) mentions that ‘Workers participation in management is not a new

concept; it is as old as the institution of owners and workers. Only its importance has

increased and has been brought into sharp focus with the industrial revolution and the advent

of large enterprises.’

In a feudal system before the industrial revolution, the units used to be small and there used

to be a joint decision making through consultation between the owner and worker. The owner

took a paternalistic approach and interest in the employee.

It was during the First World War (WWI) (1914-1918) that a need to study the relationship

between employer and employee was felt. This was because the entire United Kingdom faced

a challenge in terms of having effective control over the situation emerging as a result of the

World War, which had adversely affected the industrial production. The government

appointed a committee to examine the ways and methods for increasing production. This

committee was headed by Lord Whitley. He was then deputed to India to lead Royal

Commission on Labour in India in 1929.

Whitley conducted extensive studies and had discussions with various people connected with

industry and labour. He then recommended that management must consult labour on issues

related to production. This would lead to greater involvement and commitment of labour in

promoting industrial production. He suggested that factories and other workplaces should

form works committees comprising equal representatives from both sides. These committees

would suggest means to increase productivity through workers’ participation.

Whitley’s suggestions were implemented by the government and a works committee was set

up in all the factories. Soon, the country witnessed a rapid increase in production. Workers’

participation in management therefore had scored a strong point. These works committees

continued till the war was over. After the end of the war, production became normal as there

was no need for excessive industrial goods. Managements immediately disbanded the works

committees. They were successful when there was a need to increase the production.

Otherwise management did not think it necessary to consult labour in issues that were defined

as prerogatives of the management. It looked like the workers were used by management in

order to achieve its short term goals.

After disbanding the works committees, industrial unrest increased and the trade union

movement grew stronger. However, there was no talk of consultation with the workers’ nor

was there any move of institutional recognition of workers’ participation.

The next major step towards the realisation of importance of workers around the world was

felt soon after the World War II (WWII) (1939-1944). This war was much more severe than

the First World War. Almost all nations were involved in some way or the other. Though the

war caused havoc in the lives of people, it also led to the questioning of certain traditional

beliefs. For example, when men went to war, production and factories had to be managed by

someone in order to meet the increased needs caused by the war. It was then that women

started manning the factories and exploring for coal and iron ore in the mines. This gave

greater confidence to women that they were competent to work in these industrial areas. One

must remember that the ILO had earlier passed conventions that prevented women from

working in factories at night and in working underground in the mines. Similarly, workers too

became a part of the movement to defend their country against the onslaught of the Nazis.

This in turn made workers feel that they played a positive role in society and were not mere

cogs in the wheels of industry. These factors had important effects on the working class

movement as well as on the women’s movement in the post war period.

Till the world war, democracy in Britain was restricted to granting voting rights to a select

population. Usually these were males who had property rights. Women and those without

property, which included workers, did not have the right to vote. After WWII, there were

movements by women and workers demanding universal adult suffrage, i.e. voting rights for

individuals above a particular age (either 18 or 21). Finally universal adult suffrage was

granted in Britain. This in turn led to movements for democratising the workplace. The

argument put forth was that if workers were competent to elect governments, why could they

not take part in the functioning of their factories? This led to a new phase of movement for

workers’ participation in management. The new move was quantitatively different from that

of the works committees proposed by Whitley. The workers now demanded the right to form

policies along with the management (Gibson, 1922).

Man is a social being; hence he is basically concerned not with himself alone but also with

his fellow beings. By nature, he is essentially a cooperative creature. Man’s urge for

association and being cooperative has always been strong, although his achievement in this

direction may not have been uniformly satisfactory. History records the many type of groups,

societies and associations which have been formed for specific purposes to fulfill. Today’s

era is truly an age of organisation. In the complex organisation of modern industrial

undertaking, division of work and specialisation of tasks are essential for its functioning. But

right from the beginning, workers in the industries were deprived of their basic rights in

participation of industrial functioning and were mere cogs in the hands of management. There

had been discussions since the beginning of industrial revolution on the participation of

workers in management. Several social thinkers had advocated and written at length about the

workers participation in managerial functions.

The concept of participative management originated from the Marxian theory of class

struggle. After a long struggle between labour and management, both the parties have come

closer and realised that participation and cooperation between them would serve to at least

bring down the problems related to labour unrest, productivity, efficiency and the profitability

of enterprise.

Though the concept evolved over a long period of time, it still suffers the main premise of

workers’ right to participate in the managerial prerogative of decision making process. Most

scholars in the field of industrial relations and sociology have treated participation of workers

in management as a panacea to solve the problems of an industry.

Political, social, cultural and economic pressures have created a need as well as a demand for

democratisation of industries through participation of workers in the process of its

management. The participation helps involvement as a cohesive team and therefore, fosters

harmony, productivity and human welfare, social and cultural values and ideologies.

Participation as a mental and emotional involvement of person in a good situation encourages

him to identify himself with the group goals and share responsibility with them.

Workers participation

It is not easy to define participation in its true sense, because scholars throughout industrial

revolution have defined participation in different socio-economic sets in different societies

across the world.

Allport (1945) defined it by saying, "Participation in decision-making is an active

involvement of both the management and workers.”

Viteies (1953) holds that, "employee participation in decision-making in a democratic

atmosphere created by 'permissive' leadership, facilitates the development of 'internalized'

motivation, and saves to raise the levels of the employee production and moral.”

Sawtell (1968) has described the concept as, "any or all of the process by which employees

rather than managers contribute positively towards the reaching of managerial decisions

which affect their work.”

Most of the definitions cited above appear to be less explicit; as they were not able to

mention the central theme of participation i.e. joint decision-making by superiors and

subordinates.

Several research studies support the notion that employee participation can improve

manufacturing performance (Batt and Appelbaum, 1995; Dougouliagos, 1995; Glew et al.,

1995; Kochan et al., 1991; Levine and Tyson, 1990; MacDuffie, 1991; McCaffrey et al.,

1995; Osterman, 1994; Womack et al., 1990). There may, however, be differences in

performance among forms of participative work.

Different relationships, for example, have been found for on-line and off-line participation,

which distinguishes between workers who make suggestions to management (off-line

participation) and workers who make decisions with respect to work tasks or quality control

as part of daily job responsibilities (on-line participation) (Batt and Appelbaum, 1995; Levine

and Tyson, 1990).

These studies not only suggest that there may be differences in performance among forms of

participative work, but also that the organisational context in which worker participation

takes place, is a factor critical to its success (Batt and Appelbaum, 1995; Cotton et al., 1988;

Kochan and McKersie, 1992; Leane and Florkowski, 1992). Several researchers, for example,

argue that the productivity effects of participation are expected to be the greatest when plants

adopt a coherent system of participative management structures in combination with process

organisation and certain human resource programmes (Kelly, 1996; Kochan and Mc Kersie,

1992; Mac Duffie, 1995).

Such is proposed to be the case in lean production, for which it has been argued that higher

performing plants adopt a coherent system of participative management structures in

combination with process organisation and certain human resource programs (Kelly, 1996;

Kochan and McKersie, 1992; MacDuffie, 1995).

In lean production, just in time delivery systems help rapid problems identification

(MacDuffie and Krafcik, 1992). Similarly, information such as the daily production targets,

cars produced, personnel, overtime etc. are displayed on lighted boards that are visible from

every work station (Womack et al., 1990). Human resource policies also support worker

participation programmes. In order to ensure that workers will commit themselves to the

company, there is a lifetime employment guarantee, highly restrictive worker selection, and a

reduction of status barriers between managers and workers, and a system of promotion with a

large number of job titles (MacDuffie and Krafcik, 1992).

There are a number of resources that workers can contribute to improvements, such as time

and attention. One of the basic arguments for worker participation, however, is that it makes

available knowledge held by all workers in an organisation thereby increasing firm

performance (Levine and Tyson, 1990; MacDuffie, 1995). In automobile manufacturing,

much of the debate on worker participation centers on the question of how worker knowledge

is used within the power structure of the organisation: coercively by management, covertly by

workers, or by the joint efforts of workers, management and engineers to produce continuous

improvement without intensifying work beyond workers’ capacities (Adler and Cole, 1993).

While this is an important and worthwhile question, the literature pays little attention to

exactly what knowledge workers possess and how this knowledge relates to types of

production improvements. Yet, this is a critical question, as one of the key conditions for

employee participation to contribute to improved performance is that the employees possess

knowledge and skills that managers lack (MacDuffie, 1995).

Whitley (1919) in his report1 discussed about consultation which must take place whenever

civilian staff is affected. When a study is being carried out, management investigation is in

process or its proposal is being launched, when such study or management investigation has

been completed and its recommendations have been approved in principle and accepted as a

basis of consultation. Further at the time of implementation of final decision that have been

taken by the appropriate authority where such implementation involves consequential staff

matters such as change in conditions of service, relocation for redundancy. Consultations are

essential for major restructuring exercises, internal consultancy studies including manpower

consultancy reviews, public/private partnership initiatives, budgetary matters etc, at the time

of new or upgrading technology, health and safety audits, general conditions of service, pay

and allowances and promotions related matters. When the organisation is doing or

contemplating such changes, participatory arrangement plays a vital role. During WWI when

the productivity was declining, the recommendations of Whitley councils contributed

significantly, implementation of which had yielded positive results and increased

productivity.

Scholars such as Michael T. Hannan, Thomas A. Kochan, William Foote and Whyte attempt

to explain variations in the conditions of work, the degree and nature of workers’

participation in decision making, the role of labor unions and other forms of workers

representations, and the pattern of interaction reacted to the outputs of organisations. These

outputs span the interests and goals of the parties to the employment relationship, ranging

from employees’ job satisfaction and economic security to the efficiency of the organisation

and its impact on community and society.

Douglas McGregor (1960) has challenged many of the prevailing managerial assumptions

about workers’ motivation and behaviour. McGregor and others such as Renasis Likert

(1961) have defined “Participative Management” as a process in which managers consult

with and involve employees at all levels of the organisation in the organisational problem

solving and decision making exercise. It was suggested that Whitley system for consultative

1Whitley Council, MOD Personnel Manual “Report on the Relations of Employers & Employees” Volume 12 Employees Relations team, Headquarters Division, White Hall London SW 1A 2HB.

machinery between workers and employees known as ‘Whitley councils’ have been a

progressive approach for participation and for improving relations between employer and

employees. The councils formed in different parts of the globe during and after the First

World War have paved the way for higher production and productivity results in industrial

houses and better industrial relations (ibid.)

WPM: ILO Experience

Workers’ participation in the enterprises’ decisions has for many years been of interest to the

ILO in the production of regulatory provisions and the analysis of application experiences.

This interest is demonstrated by the various Conventions and Recommendations adopted by

the ILO on the subject of participation, and the numerous studies and reports it has published.

ILO indicates that the increasing globalisation of capital, product and labour markets means

that the various forms of employee participation would need adaptation and changes to the

various challenges. With the assistance of Professor Gianni Arrigo of the University of Bari,

the ILO prepared an overview on the terms and notions related to employee participation. It

provides a comparative overview on the law and practice in the various countries that prove

to be useful when dealing with the subject of information and consultation.

Workers’ participation is a wide and complex category that includes regulatory concepts and

techniques that can be numerous and mutually diverse. Through these, workers– mainly

through their collective representatives– seek to influence certain decisions made by the

enterprises employing them and may also share in some of the economic and financial

consequences of these decisions. Another interpretation, which focuses on more general

social aspects, looks at workers’ participation as concerning the “possibility” and

experiences, as well as the organs and procedures that are intended to “modify or improve

their employment relationship and conditions and, in many cases, also their socio-economic

conditions in the society”. In the latter and much wider meaning, participation also includes

collective bargaining (particularly at the enterprise level), understood as an instrument that

can condition, sometimes decisively, the enterprise’s decisions and functions.

The term “workers’ participation”, as used by the ILO, usually refers to the enterprise level.

On a closer look, formal ILO language prefers the more precise and restrictive wording

“workers’ participation in decisions within undertakings” to “workers’ participation”. For the

ILO, then, the linking of participation to decision-making is important because it excludes,

for example, schemes of workers’ participation (involvement) in the results of the enterprise,

such as the various forms of profit sharing. In other words, the expression “workers’

participation” is understood by the ILO as “workers’ participation in decision-making at the

enterprise level”. It can be seen from the text of the various international standards that

workers’ participation encompasses collective bargaining. Although the term workers’

participation or its equivalent has different meanings in different countries, it is still rarely

used in its widest possible sense in the law and practice of the majority of countries. The

existence of such a range of meanings should encourage scholars and practitioners to further

develop the notion with a view to achieving international consensus on the actual meaning of

the term “workers’ participation”. From all the studies and research carried out so far, one

major conclusion can be drawn: in the majority of countries we see a common trend for

workers and their representatives to become increasingly associated with decision-making at

the enterprise level.

It is the form, the way in which such an association of workers and their representatives is

achieved, which varies substantially from one country to another. The debate is still open;

nevertheless we may advance some hypotheses concerning recent trends in this area. For

example, a form of cultural change on the part of trade unions and workers’ representatives

has been taking place. Indeed, there is a greater awareness of the internationalisation of

company strategies and more information on labour relations and working conditions, as well

as new arrangements across countries. This is creating a new mentality on participation,

which cuts across the ILO countries.

According to various deliberations in ILO, a clearer distinction between bargaining and

participation emerges from an analysis of some national experiences, in which a

“specialisation” of the activities connected with each can be noted. Even when it is set in a

tripartite social dialogue or concertazione framework, or when it generates varying degrees of

cooperation between workers and enterprise which in effect involves a temporary limitation

of the conflict, bargaining does not in principle tolerate a total and a priori abstention from

this instrument. This is true even when it is the bargaining itself (rather than the law) that

envisages limits, in the form of “proceduralization”, to the exercise of collective self-

protection or to freedom of enterprise. Viewed from this perspective, participation and

bargaining appear as open systems that communicate not just with each other but also with

other systems, such as the political-institutional and economic systems, and not only in the

context of the procedures and/or fora of social partner consultation and cooperation.

This distinction is confirmed, at least in the legislative texts, by the German system. Here,

legislative provisions, as described earlier, regulate employee participation, without collective

bargaining playing a part. Workers’ participation in company organs occurs under procedures

and in contexts clearly distinct and different from those of involvement through co-

determination. In co-determination, information and consultation procedures, although

leading in some cases to company-level agreements, have autonomous spheres of application

with respect to those typical of collective bargaining. This fully respects the perfect dualism

that characterises the German system of worker-employer relations, and which is expressed

in the so-called “double-channel” model of worker representation.

While workers’ participation fosters “social consensus” it is also true that, as the Social

Charter recalls, it “helps to strengthen the competitiveness of enterprises and the economy as

a whole, as well as the creation of jobs and from this perspective, is a necessary condition for

lasting economic development.”

To paraphrase the German Constitutional Court, we can state that the characteristics of

participation as a “social relations bond” (Sozialbindung) and as an occupational and

economic resource for the enterprise “serve to strengthen the market economy politically and

serve the good of the community”. One early, and important, application of this approach was

Directive 94/45 and other provisions in the European Company Statute. These represent

progress in European economic and social integration where they make it possible to provide

support at the social level in the irreversible evolution of companies towards

internationalization, through mechanisms for trans-national dialogue by the social, partners.

Workers’ Participation represents progress in European economic and social integration

where they make it possible to provide support at the social level in the irreversible evolution

of companies towards internationalization, through mechanisms for trans-national dialogue

by the social partners.

A second order of observations concerns the relationship between participation and collective

bargaining. As diverse as the forms of participation may be, “evaluations of employee

participation in enterprises’ decision-making processes cannot be separated from those on the

function and scope of collective bargaining. In both cases, workers seek to exert an influence

on the conditions in which they work and produce. Both are born from workers’ awareness of

the particular situation in which they find themselves; both have developed through workers’

conscious intention to reduce the disadvantages connected with their state of dependency”.

For these reasons, the existence and smooth functioning of participation, with its

repercussions, is of considerable importance to collective bargaining by workers’

representatives. Similarly, the concrete objectives and achievements of negotiating policy are

by no means irrelevant to the smooth functioning of participatory mechanisms.

However, participation can in no case replace collective bargaining. As it can be seen from

some national models of industrial relations, certain limitations on collective bargaining can

be overcome with the help of participatory mechanisms. This relationship, which can be

described as symbiotic (i.e., a “close relationship with reciprocal influence”), between

participation and negotiation is also present in various national industrial relations systems.

We know that in some countries workers’ information and consultation procedures on

strategic or economic decisions and on the social consequences of those decisions are not

always adequately safeguarded. We also know that employee involvement often serves to

endorse – while being unable to influence – employers’ decisions. Many observers therefore

feel that there is a need for information and consultation procedures to be put in place which

in effect makes it possible to anticipate companies’ decisions by adopting a true policy of

prior and continuing dialogue and follow-up on strategic decisions. Such a policy should

include decisions concerning employment (training, reconversion, requalification, etc.) as

well as those designed to strengthen employment security. In this regard, an efficient labour

administration system can only be beneficial to both workers and employers when

implementing labour policies at the various levels of the economy.

The ILO has dedicated seminars and conferences of worldwide relevance to the issue of

workers’ participation since the second half of the 1960s, including Geneva (1967) and

Belgrade (1969). It has also published the first comparative study on the subject. Walker

(1975:9) states that “Workers’ participation in management occurs when those below the top

of an enterprise hierarchy take part in the managerial functions of the enterprise”, specifying

that “it follows from the neutral definition of participation as taking part in managerial

functions that workers’ participation in management is not restricted to special institutions

commonly thought of as participative, such as works councils and similar bodies… [it] may

take the form of activities such as restrictive practice, strikes and other unilateral actions by

workers whereby they take part in the exercise of authority and influence the managerial

decisions and functions in the enterprise”.

In the ILO language, the involvement of workers’ organisations with policy making at the

macro level (that is to say, the branches of economic activity that affect the national economy

as a whole) is usually called “consultation and cooperation”, not “workers’ participation”. In

fact, the title of the ILO Recommendation No. 113 on Consultation and Cooperation between

Public Authorities and Employers’ and Workers’ Organisations at the Industrial and National

Levels tells us exactly how the ILO uses this terminology. In addition, tripartite or bipartite

consultation and cooperation in social and economic policy issues are integral elements of the

ILO tripartite philosophy and structure.

Workers’ Participation

According to Cherian Joseph (1987), for a developing country like India the progress of

economy can be achieved by educating workers and an increased level of participation in

working of industry for realising higher level of productivity.

Workers' Participation in Management Scheme of 1975

Government of India on 30th October, 1975, announced the scheme of workers' participation

in management which consisted of establishment of Joint Councils and Shop Councils as part

of its 20 point economic programme. The scheme envisages for the establishment of joint

councils and shop councils in manufacturing and mining industries employing 500 or more

employees in public, private and cooperation sectors.

In India, workers’ participation as it is known in Western countries was limited only to the

peripheral level. The first form of participation can be seen in the Works Committee under

the Industrial Dispute Act, 1947. The Section 3 of this Act states that, central and state

governments have the right to declare the formation of works committee in industrial

establishments that employ 100 or more workers.

The decisions of the shop council are to be taken on the basis of consensus but not by voting.

Management has to implement the decisions within one month. The tenure of the shop

council is for a period of two years. Members of the shop councils meet at least once in a

month. Management nominates the chairman at least once in a month. Management

nominates the Chairman of the shop council whereas workers' members of the council elect

the vice-Chairman of the council.

The number of shop councils to be established in an organisation is determined by the

employer in consultation with the recognised trade unions/workers of the organisation. The

decisions of a shop council which have a bearing on another shop will be referred to the joint

council for consideration and approval.

Though the Works Committees (WC) were formed in some industries, as in TISCO, there

were no clear-cut rules as to what their function were. In fact it was ironic that though the

committee itself was set up by law, its function was never defined. In the 17th Indian Labour

Conference held in 1959, a tripartite committee was formed to examine the working of the

WCs. The suggestions of the committee were endorsed in the 19th Indian labour Conference

in 1961. The list of items covered were, conditions of work such as ventilation, lighting,

hygiene, amenities such as drinking water, canteens, crèches, medical and health facilities,

safety and accident prevention: occupational disease and Personal Protective Equipment

(PPE), festivals and holidays, educational and recreational activities: libraries, reading rooms,

sports, games, community welfare and celebrations, promotion of thrift and savings and

implementations and review of the above decisions.

Some studies reveal that in India a closer association of employees with management was in

practice at TISCO since 1919 informally which was later formalised in August 1956. The

purpose was to promote increased productivity, provide a better understanding to the

employees of their role and responsibilities, and to satisfy the urge for self-expression. The

scheme as set up at TISCO consists of a three-tiered system with joint department councils

(JDCs) constituted at the departmental level, followed by joint works councils (JWC) for the

entire work, and at the top the joint consultative council of management (JCCM).

Performance Evaluation of the Scheme of Workers' Participation in Management

The number of public sector units implementing or initiating the action of implementation of

the Joint Councils increased from 472 in 1976 to 545 in 1978. A Committee on workers'

participation in management and equity was appointed by the Government of India in

September 1977, to study all the issues relating to participative management. The committee

after its in-depth study suggested the outline of a comprehensive scheme and came to

conclusions on matters like the nature, structure, levels of participation and their functions

which may form part of a scheme of participative management.

Though this theme was lauded with great fanfare, it has not been effective in its working

owing to the same malady from which the Joint Management Councils have been suffering,

i.e. absence of commitment of both employer and employees. Further, employees feel that

this scheme is mostly oriented to maximisation of production/productivity, optimum

utilisation of capacity, better utilisation of raw materials etc. without concerning itself much

with the men of the unit/plant.

During the 1950s the discourse on WPM was done between unions and the state but the WCs

were not fully geared to workers’ participation. The Industrial Policy Resolution of 1956 had

stressed the need for labour being a partner in development. It also recommends that labour

should participate in the process and joint consultation should be held by management and

workers to deal with managerial problems. The directive principles of state policy as

enshrined in the constitution of India in its article 43A also made provision as under:

“The State shall take steps, by suitable legislation or in any other way, to secure the

participation of workers in the management of undertakings, establishments or other

organizations engaged in any industry”

During emergency Indira Gandhi in her 20 point programme also took up the issue of

workers participation in management as one of the points.

The Ministry of Labour and Employment held consultation with social partners on the

Participation of Workers in Management Bill, 1990 in the Parliament. A Tripartite

Committee meeting was organised by the Ministry in order to know the views of the social

partners on this issue, in view of new social and economic parameters that were taking place

since 1990.

The Participation of Workers in Management Bill, 1990 was introduced in the Rajya Sabha

on May 30, 1990 to provide a specific and meaningful participation of workers in

management at the shopfloor, establishment and board of management level in the industrial

establishments. The Bill was referred to Parliamentary Standing Committee on Labour and

Welfare to the Lok Sabha on 12th July 1994, which submitted its report on December 18,

2001. The Parliamentary Standing Committee that met in April 2005 said that, the

Participation of Workers in Management Bill, 1990 needs to be pursued.

Participation of workers in management emerged as a need, after which the bill came into

existence in 1990. This bill has since been pending for over two decades in Rajya Sabha. The

Bill is to be applicable to all units covered under the Industrial Disputes (ID) Act, 1947. The

salient features of the Participation of Workers in Management Bill are:

The Bill is applicable to all units covered under the ID Act, 1947 and the definition of

Appropriate Government prevailing in the ID Act is to be made applicable.

The Central Government is responsible for enforcing the law, in all cases where the Central

Government is the appropriate government under the ID Act, 1947, also in enterprises where

the Central Government holds 51% or more of the paid up share. In the remaining cases, the

responsibility for enforcement will be that of the State Government.

The Bill provides for formulation of one or more schemes to be framed by the Central

Government for giving effect to the provisions of the law which includes, among others, the

manner of representation of workmen at all three levels and of other workers at the Board

level, nomination of representatives of employers on the shop floor and establishment level

councils, procedure to be followed in the discharge of the functions of the Councils etc.

The Bill proposes to constitute one or more Councils at the shop floor level and a Council at

the establishment level. These Councils shall consist of equal number of persons to represent

the employers and the workmen. The Appropriate Government shall in consultation with the

employer and taking into account the total number of workmen, the number of levels of

authority, the number of shop floors, determines the number of persons who shall represent

the employer and the workmen in a Council.

The Bill also envisages a Board of Management at the Apex level where representatives of

the workmen as defined under the ID Act, 1947 shall constitute 13% and persons

representing other workers shall constitute 12% of the total strength of such management.

The persons to represent the workmen and other workers in the Board of Management shall

be elected by and from amongst workmen and other workers of the industrial establishment

or by secret ballot.

If any person contravenes any of the provisions of this Act or the Scheme made thereof

under shall be punishable, either with imprisonment which may extend up to 2 years or with

the fine which may extend up to Rs. 20,000/- or with both. It has also been indicated that

Appropriate Government by notification should appoint such persons as it feels deemed to fit

as inspector for the purpose of this Act to implement/ execute.

The Bill further has a provision for appointing a Monitoring Committee comprising of equal

number of members representing the Government, the workers and the employers. This

committee looks into matters and disputes which arise out of the administration of the Act.

The Government can appoint a review committee, to act accordingly in provision set by the

Act, as any scheme or any rules made there under.

A recent development considering the importance of Industrial Disputes Act, 1947 is that it

has been amended as the Industrial Disputes (Amendment) Bill, 2010. It has been passed by

the Rajya Sabha on August 3, 2010. With this amendment, every establishment having 20 or

more workmen will have to constitute Grievance Redressal Mechanism (GRM) within their

organisation. This GRM will help workmen and employers to resolve disputes on an

individual level, at the lowest level itself. In the formation of Grievance Redressal Committee

the number of members should not exceed more than six. As far as practicable, if the

committee has two members out of which one member should be a woman and in case of

increase in number of members, the participation of women members may be increased

appropriately2.

The issue of WPM is important for involving workers in the production process. It would also

empower them to make independent decisions and be more confident about their own

capabilities. The success of the WPM in industrialised countries gave opportunities to the

workers to participate in different aspects of the management besides contributing in the

labour productivity. In fact, many thinkers and authors have commented that the success of

these countries were due to WPM.

The WPMs in India were not much inclusive as their counterparts in the European countries.

Most of the schemes merely helped to boost the productivity and maintain discipline.

Objectively, when unions and workers realised that their contribution only lay in ensuring

industrial harmony, nothing else, they obviously lost interest in these schemes. A study

conducted by Institute of Public Enterprises, Hyderabad revealed that in these participative

bodies, the workers representatives were much better prepared for the meeting, but on the

other hand, the management representatives were causal and appeared not to take these

bodies seriously. The workers saw these fora as a means to have much participation on their

part in the decision making process at the industry level. However, their hopes were soon

belied when they found that neither the government nor the management took these bodies

seriously. The fact that the WPMs were not statutory requirements made matters worse

because it was only obligatory not mandatory for employers to form WPMs. Hence, it is not

surprising that by 1970s, there were less than 100 instances of WPM in the public sector.

These reduced drastically after 1985.

It is generally argued that the public sector is different from the private sector because

everyone from the top to the bottom in the public sector was an employee, not an owner, and

this had been reiterated on many occasions. At the same time management had been of the

opinion that the workers were not educated and not mature enough to understand the concept,

the management continued to believe that there are certain aspects which need to be made

public and some should remain confidential and not to be revealed to the workers. There were

2 Rajya Sabha, Workers’ Participation Bill, 1990, Ministry of Labour and Employment, Government of India

some ideological differences on WPM, between management and workers. Thus, this concept

of WPM did not work in public sector.

In this regard, an interesting study was conducted by Cherain Joseph (1987) for Bharat Heavy

Electricals Limited (BHEL). He found that in a situation characterised by multiple unions in a

public sector, the apex body of workers’ participation was able to make both the management

and unions accountable to the forum, and acquire directive authority as well as participate in

rule-making for the organisation during late 1970s. The author questioned the validity of the

commonly held assumptions about the WPM in the Indian scenario. The findings of the study

revealed that against the common argument that the presence of multiple unions in an

organisation are an obstacle to the formation of a participative forum, the union leaders at

BHEL were successful in bringing all the unions, whether unit unions or central unions like

AITUC and INTUC at a single common platform at the participative forum. Unions

voluntarily participated in the Joint Committee in order to have a greater legitimacy and also

to take part in the managerial-decision making.

The BHEL experiment was able to negate the concept that production is merely a

management prerogative and that workers have no role except to carry out the directives of

the management. This has to be eliminated and must be replaced by the conviction that the

involvement of both the officers and workers at every level of decision making is necessary

for success of the public sector. This can only be achieved by a participative forum in the

form of JC (Joint Committee).

In his study, Joseph (ibid.) found that multiplicity of unions is not necessarily an impediment

to the workers participation in management. The parity of representation was never a

hindrance in the making of JC, as the number of workers’ representatives kept on increasing

with the increased representation of unions in the JC. At the same time, representatives of

management remained constant. Hence, the issue of parity of representation is irrelevant in

working of participative forum.

Further, he also showed that the process of collective bargaining and workers’ participation in

management, though thought to be distinct processes and dealt separately, can be carried out

by the same participative forum. Thus both interest-related and work-related issues were

possible to discuss at the same forum by unions at JC.

According to R. N. Srivastava (N.D.), the effective functioning of a participative forum calls

for union representation and participation. The success of any participative forum cannot be

achieved until unions become a part of it. Workers participation literally means the

participation of workers in management, but unions are now a commonly accepted form of

workers participation in management. The workers and the unions cannot be kept in separate

boxes on the grounds that unions primarily participate in collective bargaining and should not

be a part of JCs. This had, at certain occasions, raised serious doubts about the relevance of

JC and its validity on the issue of workers’ participation, but in the Indian context, unions in

JCs are accepted and lend greater validity. As the main aspect of WPM is to have a decision

based on consensus, the presence of multiple unions in the industry and their representation

in WPM and JC has eventually developed more differences rather than approaching to a

consensus in decision making. This has happened because the members of JC representing

small groups and different unions rarely converge to a common decision and thus the very

purpose of WPM started to lose its ground.

In the initial years of JC, when no unanimous decision could be arrived at, the meeting of the

forum would be adjourned until the next meeting. Eventually the decisions making process

got extended before coming to any consensus. This leads to a stage when participants of the

JC start to lose their faith thereby eroding the ability of the participative forum to reach any

consensus in its meetings. Despite being a bipartite forum the representation of sub-group

identities (in the form of multiple unions) trying to influence the decision making process

hampered the consensus building in the forum. These developments in the WPM in the recent

industrial scenario made WPM lose its ground and thus adversely affected the relational

climate of the organisation (Joseph, 1987).

With this detailed background, this research aims to study two major heavy engineering

industries in the Indian public sector. The study seeks to understand the impact of

involvement of workers through participative forum on the productivity of the heavy

engineering industry. Public sector industries in India are facing competition from private

players. Thus, increase in productivity is the need of the hour for heavy engineering

industries. However, these companies in the heavy engineering industry have not

systematically emphasised workers’ participation as a tool to improve productivity.

Therefore, the purpose of this study is to understand the role of WPM practices followed in

large engineering industries. WPM practice may inter-alia include Shop Councils, Works

Committees, Joint Management Councils, Unit Councils, Plant Councils and Apex Joint

Councils.

Managements, trade unions and the workers should be concerned with these prerequisites for

the successful functioning of the schemes of workers' participation in management:

1) There should be mutual trust and faith among all the parties concerned

2) There should be progressive management in the enterprise and should recognise its

obligations and responsibilities towards workers and trade unions

3) There should be strong, democratic and representative unions which should represent

the cause of workers without neglecting the management's interest

4) There should be closely and mutually formulated objectives for participation by trade

unions and the management

5) All parties concerned towards participative management should feel that they should

participate at all levels

RATIONALE OF THE STUDY

The meaning of the concept 'Participative Management' needs to be understood in the

backdrop of its chronological evolution from the beginning of this century. It has been

developed and improved in different forms in different countries to suit the requirements of

the political system and economic structure of the countries concerned and the development

of industrialisation and open economic system round the world.

Shift in business focus and increasing awareness regarding the significant role of workers’

participation in management as well as the need to increase productivity in the heavy

engineering industries will be studied.

The research seeks to understand the impact of WPM practices on the productivity of large

engineering industries. Comparisons are made through two case studies, focusing on how

WPM practices have impacted productivity in heavy engineering industries in the cases under

consideration. More specifically, it attempts to understand how the WPM practices impact

achieving production targets, improving of working techniques, taking corrective steps to

reduce absenteeism, establishing measures to maintain discipline, improving physical

working conditions, suggesting welfare measures, ensuring two way communication and

briefing systems, suggesting suitable technology and suggesting cost reduction programmes.

Research case studies would be conducted for two major heavy engineering industries with a

view to study impact of WPM practices on the productivity of these industries.

AIMS AND OBJECTIVES

Following are the aims and objectives of the study:

1. To study as to how WPM practices have had different impacts in different

organisations

2. To find how employees’ participation contribute to raising the standards of production

through their suggestions and feedback

3. To find how the involvement of employees in the workplace has impacted the

employees’ satisfaction and organisational culture

4. To identify and suggest the best practices of WPM in large engineering industries

5. To increase the association of employers and employees thereby promoting cordial

industrial relations

6. To improve the operational efficiency of the workers

7. To provide welfare facilities to the workers

8. To educate workers and trade union leaders so that they are well equipped to

participate in these schemes

9. To study employee relations as a concept in the present scenario

HYPOTHESES FOR RESEARCH

Higher level of WPM practice leads to higher level production and productivity in

the heavy engineering industries

Perception of supervisory and non-supervisory employees on the dimension of

conflict tolerance reveals that the latter group has a higher level of conflict

tolerance than the former

Organisational commitment is an intervening variable between organisational

culture and industrial relations

In industrial relations, there is a significant difference in the perception of

different categories of employees

There lies a positive correlation among organisational culture, organisational

commitment and industrial relations

METHODOLOGY

In this study, both the qualitative and quantitative methods have been used. It is an

exploratory study in which interviews were conducted to get the in-depth understanding of

the issues concerned. The detailed study and analysis was carried out by undertaking the

following methodology:

Case study method was used and the unit of analysis was the site in two major heavy

engineering industries

Three tier questionnaire was used to obtain data with regard to the practice of

participative fora and its impact on organisational efficiency

Ethnographic research techniques were used for a longitudinal case study

Standards of measuring WPM practices and standards of measuring productivity were

determined through a review of literature

The data used in this study was collected through the method of primary and

secondary data. The primary data was drawn from interviews, observation and

random interactions with the workers and managers at each site

A scale was developed for studying workers’ participation in management through

literature review

A scale was developed for measurement of productivity standards through literature

survey

Collection of secondary data was done through a study of minutes of meetings of the

participative fora

A study of the impact of training imparted to workmen and trade union leaders

Interviews, discussions with employees taking part in participative fora, trade union

leaders, managers participating in such fora and IR experts.