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

Hierarchy
Union
H
I
E
R
A
R
C
H
Y
Area
of
Colle-
ctive
Barga-
ining
Employee
Directors
Works
Council
Suggestion
Schemes
Doing Workers

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)
Dimension Industrial Relation HRM/HRD
Psychological
contract

Behaviour
referent

Relations

Organisation
and design
Compliance

Norms, customs and
practices

Low trust, pluralist,
Collective

Formal roles, hierarchy,
Division of labour,
Managerial controls
Commitment


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
o
U
N
I
O
N
High / High
Common / integrated
Goals & Values
Business Partnership

High / Low

Habitual Resistance

Low / High
Co-operation

Low / Low
Indifference
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
I nformation, 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
I CI philosophy explains the new outlook:
For sustaining the highest levels of competitiveness,
1. 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
2. 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
15
th
session (1957) Joint Management Councils
The 2
nd
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