Participative management.pptx

PARTICIPATIVE MANAGEMENT &
COLLECTIVE BARGAINING
IV SEMESTER MHRM, NAGARJUNA UNIVERSITY
PARTICIPATIVE MANAGEMENT
Introduction
Meaning
Definition
Degrees of participation
Objectives
Importance of WPM
Theories of worker's participation in management
Industrial Democracy
Methods/Forms of Participative Management
Methods of Participative Management in India
Quality of work life balance
Worker's participation in management has failed in India. give reasons.
By
Dr.M.Rama Satyanarayana,

INTRODUCTION
Participation and involvement of workers in the
management of industry is practiced in most
countries of the world. Workers participation in
management has come to stay in both developed
and developing countries. Worker's participation is
also known as "labour participation or employee
participation in management". In Germany is
known as co-determination, while in Yugoslavia it
is called "self- management. The International
Labour Organisation has been encouraging
member nations to promote the scheme of
worker's participation in management.

MEANING
Participative Management
refers to the process of involving
employees or employee
representatives at all levels of
Decision Making process.

DEFINITION
Keith Davis has defined the term
“Participation” as the mental and emotional
involvement1 of a person in a group situation
which encourages him to contribute to group
goals2 and share responsibilities3.
 This definition envisages three important
elements in Participation.
 Firstly, it means mental and emotional
involvement rather than mere physical activity;

 Secondly, Participation must motivate a person
to contribute to a specific situation to invest his
own resources such as Initiative, Knowledge,
Creativity, Cleverness and skill in the
objectives of the organization; and
 Thirdly, It encourages people to share
responsibility commits people to ensure the
success of the decision or activity.

Degrees of Participation
 There are four degrees of Participation.
1. Communication
It involves sharing information about all
management decisions with workers.
2. Consultation
Under it, workers express their views on
work-related issues. Final decisions are taken
by management after consultations.

Cont…
3. Co-determination
Under it managers and workers jointly take
decisions which are useful to the both parties.
4. Self-management
In it, workers enjoy complete autonomy right
from decision making to execution.

Objectives
 The main objectives of worker's participation in
management include:
1. To promote increased productivity for the advantage of
the organization, workers and society at large.
2. To provide a better understanding to employees about
their
role and place in the process of attainment of
organizational goals.
3. To strengthen labour, management co-operation and
thus maintaining industrial peace and harmony.
4. To build the most dynamic human resource.

5. To develop social education for effective
solidarity among working community and
for tapping latent human resources.
6.To satisfy the worker's social and esteem
needs.
7. To build the nation through entrepreneurship
and economic development.
8. To establish industrial democracy.

All these objectives, if fulfilled by proper
implementation of worker's participation in
management, affect the organization,
workers and the society positively. The
scope, extent and the successful working of
the participative management depends to a
great extent on the objectives and the
employee, the employer and the government.

IMPORTANCE OF WORKER'S
PARTICIPATION IN MANAGEMENT
 Worker's participation in management
provides the following six benefits:
1. Mutual understanding
Generally, employers and employees doubt
the integrity of each other due to ignorance of
each other's problems. Participation brings
the two parties closer and makes them aware
of each other's problems. As a result, a better
understanding and mutual trust can be
created between employer and employees.

2. Higher productivity
Co-operation between management and
workers helps to increase production and
profits of an enterprise. Through participation,
workers learn the problems of enterprise and
better understand their role. Participation
improves employee motivation and job
satisfaction which in turn help to increase
their efficiency. Higher productivity leads to
lower costs per unit and greater profits which
are beneficial to all.

3. Industrial harmony
Worker's participation in management
helps to reduce industrial disputes and to
improve worker's loyalty. Continuous
dialogue between management and
workers improve peace in industry.

4. Industrial democracy
Worker's participation attempts at
establishment of industrial democracy. In a
democratic society, industrial democracy is as
important as political democracy. Industrial
democracy is necessary for political
democracy. Need for outside intervention
between employer and employees is
eliminated and workers are freed from
exploitation.

5. Less resistance to change
Workers often resist change due to fear and
ignorance. When workers participate in the
decision-making, they come to understand that
change is ultimately in their own interest. They
become more able and ready to adopt
themselves to technological and other
changes made to improve the competitive
position of the organization.

6. Creativity and innovation
Participation encourages workers to think and
take initiative. Their talent and ability can be
capitalized. Highly competent employees can
be spotted and given training. Participation is
helpful in training and developing future
executives. Worker's urge for self-expression
is satisfied.

Theories of Worker’s Participation in
Management
Participation in management refers to involving
employees in decision-making processes, sharing
information, and allowing them to have a voice in
problem-solving and innovation. There are several
theories on participation in management. These include:
1. Human Relations Theory
This theory emphasizes the importance of
employees' attitudes and feelings, suggesting that
involvement in decision-making improves job
satisfaction and productivity. Pioneered by
theorists like Elton Mayo and Douglas McGregor,
this approach encourages a participatory
management style to boost morale and
engagement.

2. Democratic Leadership Theory
According to this theory, participatory
management is most effective when it involves
democratic leadership. It proposes that all
members of an organization should be involved in
decision-making processes, contributing to
increased employee motivation, satisfaction, and
commitment.
3. Vroom-Yetton-Jago Decision Model
This model is focused on the level of participation
necessary for effective decision making. It argues
that the degree of employee participation should
be proportional to the complexity and impact of
the decision to be made.

4. Goal-setting Theory
Proposed by Edwin Locke, this theory suggests that
involving employees in setting goals leads to better
performance. It argues that specific and challenging
goals, coupled with appropriate feedback, lead to
higher performance levels.
5. Participative Management Theory
This theory holds that participation improves the
quality of decisions, increases acceptance of
decisions, fosters better relationships between
managers and employees, and improves individual
development. The underlying principle is that the
combined intelligence of many is superior to a single
individual’s judgment.

6. Theory X and Theory Y:
These theories were proposed by Douglas
McGregor. Theory X assumes that people dislike
work, avoid responsibilities, and must be coerced
to perform. Theory Y suggests that employees are
naturally committed to their work, embrace
responsibilities, and are capable of self-direction.
According to McGregor, management styles must
adapt to the predominant employee mindset in an
organization. A Theory Y environment typically
supports a participative management style.

7. Maslow's Hierarchy of Needs
This theory proposes that people are
motivated by different needs in a hierarchy. It
suggests that involving employees in
decision-making processes meets their
higher-level psychological needs, including
esteem and self-actualization.
 These theories underscore the significance of
involving employees in decision-making
processes and highlight different aspects, such
as motivation, job satisfaction, and
organizational effectiveness, stemming from

INDUSTRIAL DEMOCRACY
 Introduction
 Objectives of industrial Democracy
 Principles of Industrial Democracy
 Requirements of industrial Democracy
 Advantages of industrial Democracy

Introduction
Participation of workers in management
ushers in Industrial democracy. In a democratic
society, industrial democracy is as important as
political democracy. Through the political
democracy, citizens of a country express
themselves through their elected representatives.
In the same way, workers should have some kind
of mechanism through which they can express
their voices at least on those issues which affect
their lives, Industrial democracy means that
management in industrial units is by the people, of
the people and for the people. Here, people
means management representatives and
employees. Industrial democracy is necessary for
political democracy.

Objectives of industrial
democracy
1. To create a sense of belongingness of
workers to the organization.
2. To improve a sense of commitment to the
organizational objectives, plans and activities
among employees.
3. To satisfy the psychological needs of the
employees, and
4. To respect the human dignity of employees.

Principles of Industrial
Democracy
 According to Clegg, the three basic Principles of
Industrial democracy are:
1. Trade Unions must be Independent both of the
State and Management.
2. Only the Unions can represent the industrial
interest of the workers.
3. Ownership of the industry is irrelevant to sound
industrial relations.
The leaders of the Trade Unions should be
accountable not only to the Trade Union
members but also to the Top Management for
their acts.

Requirements of industrial
democracy
1. All employees should be treated as human
beings and as equal partners. There should
not be any discrimination based on caste,
colour, sex, religion, etc.
2. Freedom should be provided to all employees
in their daily life and in their contributions.
3. The members should have the freedom to
select their leader or representative

Advantages of industrial
democracy
 There would be full co-operation of
employees for the implementation of
decisions as they participate in decision-
making.
 Industrial harmony can be maintained as
the employees feel sense of
belongingness, and
 Productivity can be increased.

METHODS/ FORMS OF WORKER'S
PARTICIPATION IN MANAGEMENT
 INTRODUCTION
 FORMS/METHODS OF PARTICIPATIVE
MANAGEMENT

INTRODUCTION
The forms or methods of worker's participation in
management vary from industry to industry, and
from country to country, Various methods of
participation may be specified either by law as has
been done in many western countries or may be
evolved voluntarily. Participative management is a
constitution commitment in India. Article 43-A of the
constitution provides "the state shall take steps by
suitable legislation or in any other way, to secure
the participation of workers in the management of
undertakings engaged in any industries. In India,
some of the methods have been prescribed by law
while many others have been suggested through
guidelines formulated by the government.

Some important forms of
participation are as under:
1. Suggestion scheme
2. Works committee
3. Joint management councils
4. Work directors
5. Co-partnership

1.Suggestion scheme
Participation of workers can take place
through suggestion scheme. Under this
method, workers are invited and encouraged
to offer suggestions for improving the working
of the enterprise. A suggestion box is
installed. Any worker can write his
suggestions and put in into the box.
Periodically all the suggestions are
scrutinized by suggestion committee or
suggestion screening committee.

Cont…
This committee is constituted with equal
representation from management and workers.
This committee screens and evaluates various
suggestions received from workers. Good
suggestions are accepted for implementation
and suitable awards are given to the
concerned workers. Suggestion schemes
encourage worker's interest in the functioning
of the enterprise.

2.Works committee
Under the Industrial Disputes Act, 1947, every
establishment employing 100 or more workers is
required to constitute a works committee". Such a
committee consists of equal number of
representatives of employer and workers. The
main purpose of works committee is to
provide measures for securing and preserving
amity and good relations between the
employer and employees. Being a legal
provision, works committees have been
constituted in most of the organizations. But they
have not worked well in most of the cases
because of the general apathy of both
management and workers.

3. Joint management councils
Joint management councils are constituted
at the plant level. These councils consist of
equal number of representatives of
employers and workers. The councils
discuss various matters concerning working
of industry. The decisions of these councils
are advisory in nature. The
recommendations of these councils are not
accepted as a mandatory requirement.
However, most of the organizations
generally accept the unanimous
recommendations.

Cont…
Working conditions, accident prevention,
indiscipline, absenteeism, training and such
other matters are generally the matters
brought before joint management councils.
Personal problems of an individual worker
like grievances fall outside the preview of the
joint management councils. Like works
committees, joint management councils have
also not been very effective except in few
organizations because of the general apathy
of both management and workers.

4.Work directors
Under this method, one or two representatives
of workers are nominated or elected on the
Board of Directors. This is a full-fledged and
highest form of worker's participation in
management. The basic idea behind this
method is that a representation of workers
at the level of Board would usher industrial
democracy, ensure better employer-
employee relations and safeguard the
worker's interests. Government of India,
considering itself as a model employer.

Cont…
introduced this scheme in several public
sector enterprises, such as Hindustan
Antibiotics, Hindustan Organics
chemicals, etc. However, the scheme of
the appointment of such director failed
miserably and subsequently, the scheme
was dropped. The story is similar
throughout the world.

5. Co-Partnership
Co-partnership involves employee's
participation in the share capital of a company
in which they are employed. By virtue of their
being shareholders, they have right to
participate in the management of the company.
Shares of a company can be acquired by
workers making cash payment or by way of
stock option scheme. Many companies have
offered, and more number of companies are
offering this scheme.

Cont..
However, the basic objective of the stock
option is not to pass on control in the
hands of employees but providing better
financial incentives for productivity. There
have been rare cases in which the control of
company has passed to workers by way of
their shareholding. In democratic countries, the
scope of worker's participation in management
through co-partnership is quite limited.

Methods of Participative
Management in India
 Introduction
 Methods in India

Introduction
 Employee participation results in better
performance and increased motivation. The
worker's participation in management has
been introduced in India mainly in three forms,
namely, works committees, joint
management councils, and worker's
representations on the board of directors,
Later, other forms like shop councils, joint
councils and unit councils have also been
introduced. Thus, at present, there are the
following forms of worker's participation in
management prevalent in India:

Methods in India
1. Works committees
2. Joint management
councils
3. Shop councils and
4. Joint councils

1.Works committees:
 The Industrial Disputes Act, 1947, provides for the
setting up of works committees as a scheme of
worker's participation in management, Under this
Act, every establishment employing 100 or more
workers is required to constitute a works
committee. Such a committee consists of equal
number of representatives of employer and
employees. The main purpose of works
committee is to provide measures for securing
and preserving amity and good relations
between the employer and employees. The
work committee is a consultative body.

Functions
 Works committees deal with matters of day-to-day
functioning at the shop floor level. Works committees
are concerned with:
a. Conditions of work such as ventilation, lighting,
temperature and sanitation.
b. Amenities such as drinking water, canteens, dining
rooms, medical and health services,
c. Safety and accident prevention, occupational
diseases and protective equipment.
d. Adjustment of festivals and national holidays.
e. Educational and recreational activities.
f. Implementation and review of decisions arrived in the
meetings of works committees.

2. Joint management
councils
 Joint management councils were set up in 1958.
These are constituted at the plant level. These
councils consist of an equal number of
representatives of employers and workers, not
exceeding twelve. The units should employ at
least 500 workers. The councils discuss various
matters concerning the workings of industry. The
decisions of these councils are advisory in nature.
The recommendations of these councils are not
accepted as a mandatory requirement. However,
most of the organizations generally accept the
unanimous recommendations.

Cont…
 Working conditions, accident prevention,
indiscipline, absenteeism, training, and such
other matters are generally brought before joint
management councils. Personal problems of an
individual worker, like grievances, fall outside
the scope of the joint management councils.
Like work committees, joint management
councils have also not been very effective,
except in a few organizations, because of the
general apathy of both management and
workers.

3. Shop councils
 The Government of India announced on October
30, 1975, a scheme for worker's participation in
management that consisted of the establishment
of joint councils and shop councils as part of the
20-point economic program. In every industrial
establishment employing 500 or more workers,
the employer shall constitute a shop council for
each department or shop. So the shop council
represents each department or shop in a unit.
Each shop council will consist of an equal number
of representatives of employers and workers. The
employer's representative will be nominated by
the management and must consist of people from
within the establishment.

Cont..
 The worker's representatives will be among the workers
of the department or shop concerned. The number of
members of each council may be determined by the
employer in consultation with the recognized union. The
total number of members, however, may not generally
exceed twelve. The decisions of the staff council are to
be taken on the basis of consensus, 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 council meet at least
once a month. Management nominates the chairman to
the shop council. Workers' members of the council elect
the vice chairman of the council. Shop councils are to be
constituted in the manufacturing and mining industries in
the public, private, and cooperative sectors.

Functions of the shop
councils
1. Assist management in achieving monthly or yearly production targets.
2. Improve production, productivity and efficiency including elimination of
wastage, and optimum utilization of machine capacity and man- power.
3. Assist in maintaining general discipline in the shop or department.
4. Indentify areas of low productivity and take necessary steps at shop or
department level so as to eliminate the causes of low productivity.
5. Suggest health, safety and welfare measures to be adopted for smooth
functioning of the shop or department.
6. Study absenteeism in the shop or department and recommend steps to
reduce them.
7. Look after physical conditions of working, such as, lighting. ventilation, noise,
dust etc., and reduction of fatigue.
8. Ensure proper flow of adequate two-way communication between the
management and the workers.

4. Joint councils
 The joint councils are for the whole unit. In
every industrial unit employing 500 or more
workers, there shall be a joint council for the
whole unit. Only such persons who are
actually engaged in the unit shall be members
of the Joint Council. A joint council shall
function for a period of two years. The Joint
Council shall meet at least once a quarter. The
chief executive of the unit shall be the
chairman of the joint council. The vice
chairman of the joint council will be nominated

 The joint council shall appoint one of the
members of the council as its secretary. Every
decision of the joint council shall be made on
the basis of consensus and not by the process
of voting. Such decisions will be binding on
employers and workers. Such decisions shall
be implemented within one month, unless
otherwise stated in the decision itself.

Functions of Joint Councils
 The Joint council should deal with the following matters:
1. Optimum production, efficiency and fixation of
productivity norms of men and machines for the unit as
a whole.
2. Work planning and achieving production targets, more
specifically tasks assigned to a shop council but
relevant to the unit as a whole.
3. Preparing schedules of working hours and of holidays.
4. Developing skill of workmen and adequate facilities for
training.
5. Rewards for valuable and creative suggestions
received from workers.
6. General health, welfare and safety measures for the
unit.

QUALITY OF WORK LIFE
 Introduction
 Meaning
 Definition
 Factors involved in QWL
 Measurement of QWL

Introduction
Quality of work life refers to the overall satisfaction a
person feels regarding their work environment and job
responsibilities. This includes elements such as working
conditions, work-life balance, compensation, recognition, and
opportunities for growth and development. It also involves
employee's feelings towards organizational culture and
leadership.
A high quality of work life often leads to improved job
satisfaction and productivity. Factors such as feeling valued,
safe, and secure in one's job, and being able to achieve a
balance between work and personal life contribute to the
quality of work life. A poor quality of work life, on the other
hand, can lead to stress, burnout, and high employee
turnover.
Organizations often strive to improve the quality of work
life through initiatives like flexible work hours, providing
professional development opportunities, fostering a positive
and inclusive workplace culture, and implementing health and
wellness programs.

Meaning
Quality of work life means the
relationship between employees and their
total working environment. It is concerned
with the overall climate of the work.

Definition
 According to Nadler and Lawler,
“Quality of work life is concerned about the
impact of work on people as well as on
organization effectiveness, and the idea of
participation in organizational problem solving
and decision-making".
According to D.S. Cohan quality of work life as
"a process of joint decision-making, collaboration
and building mutual respect between
management and employees".

 Thus, quality of working life is concerned with
increasing labor-management cooperatives to
solve the problems of improving organizational
performance and employee satisfaction. The
basic purpose of improving QWL is to change
the climate at work so that a human-
technological-organizational interface leads to
a better quality of work life. It aims at creating
a culture of work commitment that leads to
higher productivity and satisfaction.

Factors involved in QWL
 In improving QWL all these factors have to
be taken into account. The various factors
involved in QWL are discussed below:
1. Flexibility in work schedules:
Employees want flexibility in work
schedules. Flexibility provided in the work
system becomes more motivating to the
employees.

2. Autonomous work group
Creation of autonomous work group helps in creating
positive feelings among employees. They may be
given freedom to choose their own teams. There
should be freedom of decision- making regarding the
choice of methods for work, distribution of tasks
among group members, and designing of work
schedules.
3. Job enrichment
Job enrichment is a popular non-monetary
motivational technique. It is an extension of job
enlargement. It attempts to design a job in such a way
that it becomes more interesting and challenging so
that the job holder makes meaning out of that. The
degree of job enrichment determines the degree of
quality of work life.

4.Opportunity for growth:
An employee, particularly the achievement-
oriented one, seeks growth through his work. If
the work provides him opportunity for personal
growth and to develop his personality, he will feel
committed to the job and the organisation.
5.Participation:
Participation in decision-making, particularly on
the matters directly concerned with an individual's
working, has an important bearing on his
satisfaction and performance. Higher degree of
participation increases the QWL, and overall
organisational climate.

6.Communication
To make QWL sound, effective two-way
communication is necessary. Through the
downward communication, employees would
receive information about the various aspects
of the organisation, particularly that which
concern them. Through upward
Communication, employees can share their
views, grievances and to over- come these,
and suggestions for improving the work
performance.

Measurement of QWL
 QWL affects job involvement, sense of competence, job
satisfaction and job performance. A favourable QWL results in
to positive consequences of these factors. The following
indices may be used to judge the quality of work life in an
organisation:
1.Job Involvement
Job involvement indicates the extent of people's
identification with or ego involvement in the job. Job -
involved people spend more time on job and turn out
better performance. Challenging jobs which have skill
variety, influence employees to get involved with their
jobs. Similarly, people with high need for achievement
and high ethic feel involved in jobs. People with high job
involvement are better motivated and more productive.
Research reveals that skill variety, achievement and
challenge help to Improve job involvement.

2. Job satisfaction
Job satisfaction implies the worker's
satisfaction with his job environment,
consisting of nature of work, quality of
supervision, pay, co-workers, opportunities for
promotion etc. Job satisfaction affects job
performance, employee turnover, and
absenteeism. High job satisfaction results into
high work performance, less employee
turnover, and less absenteeism.

4. Sense of competence
Sense of competence denotes the feelings of
competence that one has in one's own
competence. Job design affects the sense of
competence. By engaging in a work that calls for
a variety of skills, abilities and talents, individuals
gain mastery over their work environment. As they
engage themselves more and more in work
activities, they acquire a great sense of
competence and experience and higher level of
job involvement. This job involvement further adds
to sense of competence. Thus, sense of
competence and job involvement mutual reinforce
each other. High sense of competence and job
involvement produces high job satisfaction and

4. Job performance
Job involvement, job satisfaction and sense of
competence affects job performance. When an
individual's job involvement, job satisfaction
and sense of competence increase, there is a
rise in job performance.
5. Productivity
When the level of job performance increases,
the productivity increases. The output per unit
goes up.

worker's participation in management
has
failed in India. Give reasons.
Worker participation in management (WPM) in India
has faced several challenges, and while it hasn't
entirely failed, its widespread implementation has
been limited due to various reasons:
 Lack of Awareness and Education: Many workers,
especially in traditional industries, might not have a
clear understanding of their rights, responsibilities, or
the benefits of participating in management decisions.
This lack of awareness hinders active involvement.
 Resistance from Management: Some management
structures in India may resist sharing power or
decision-making authority with workers due to
concerns about losing control or slowing down
decision-making processes. This resistance can
hamper the implementation of WPM initiatives.

 Unions and Conflicting Interests: In many cases, trade unions
play a significant role in representing workers' interests. However,
conflicting priorities between union agendas and management
objectives can create barriers to effective WPM implementation.
 Hierarchical Organizational Culture: India has a traditionally
hierarchical work culture where decisions are made at the top levels
and trickle down. This culture might not easily accommodate
bottom-up decision-making, creating resistance or disbelief in the
effectiveness of WPM.
 Inadequate Legal Framework: While there are legal provisions
supporting WPM in India, the implementation and enforcement of
these regulations might be lacking. The absence of strict laws or
weak enforcement mechanisms can deter both workers and
management from actively participating.

 Communication and Trust Issues: Lack of
effective communication channels and a trust
deficit between workers and management hinder
the success of WPM. Workers might fear reprisal
for speaking up or providing input, leading to
hesitancy in participating.
 Complex Decision-Making Processes: Some
industries have intricate decision-making
processes that might not easily accommodate
worker input. This complexity can make it
challenging to integrate meaningful participation
from the workers.

 Cultural Factors: Cultural norms and values might
also influence the perception of hierarchy and
authority in the workplace, impacting the acceptance
and success of WPM initiatives.
Despite these challenges, there have been
instances and sectors where successful WPM models
have been implemented in India. Initiatives focusing
on fostering mutual trust, providing education and
training, creating effective communication channels,
and aligning worker interests with organizational goals
could help improve the situation and encourage
worker participation in management decisions.

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