A study of workers participation in management

Writekraft Research & Publications LLP
(All Rights Reserved)
A STUDY OF
WORKERS
PARTICIPATION
IN
MANAGEMENT
(Regd. No. AAI-1261)
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CHAPTER I
1 .I A synoptic view of industrial relations management
perspectives:
Basically, management is a dynamic process, that directs
the people and activities of an organisation t o achieve pre- deter-
mined objectives with the optimum use of available resources,
human and material. The management cycle has five elements
namely i) Planning ii) Organising iii) Staffing iv) Motivating and
1. Controlling I Coordinating. This process is never ending with in - novations and
formulation of fresh objectives requiring replanning, reorganising, redirecting,
providing appropriate motivations and con -
trolling. Human relations management concerns with the integration
of people into a work situation by motivating personnel t o work
as a team cooperatively and productively. With the result, the
work force becomes an instrument of the organisation and the
management provides, motivates and shapes the instrument.
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1. I .1 Classical Management Approach
The classical management approaches were spearheaded by
F. Taylor, 1947 through his principles of 'Sciantific Management'. The scientific manager
primarily makes a scientific analysis of
tasks of the workmen through systematised procedures; selects and
develops workmen, integrates tasks with workmen and perfoms
analytically t o ensure larger output of higher quality per worker,
larger profit for the company and higher wages for the workers.
This approach Is oriented towards surplus value generation without
commensurate benefit accurals t o the workers. The structure of the
work organisation was such that the employer had absolute owner-
ship and/or control. Though basic harmony between employer-
employee was assumed under 'Laissez-Faire', in actual practice
empirical reality pointed t o the conflict between the two. "Thus,
management under the capitalist mode of production has a strong
hold on the working class through the cult of the manager and
almost forces the belief on the working class that it has no ex-
istence apart from its management. The belief spreads that the
"wage labourer, like the slave must have a master who puts him
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t o work and rules over him".
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1.I.2 Socialist conception ofmanagement
Work Organisation under the socialist mode of production is
considered more humane relative t o the capitalist mode. In Marxist-
Leninist perspective society was viewed as self governing system
which is commonly divided into managing and managed sub sys-
tems. Marx (1970) discerned the impact of management o n a so-
cial system i n two ways, one spontaneous and the other
conscious. The spontaneous mechanism of managing action has its
instrument the market in the capitalist system which is the base
of the capitalist economy. The conscious mechanism of management
attempts at generating a purposeful impact on the system Marx
(1970) recapitulates 'Regulation and order are themselves indispen-
sable elements of any mode of production if it is to assume so -
cial stability and independence from more chance and arbitrariness'.
The socialist conception of management has the following strands:
a) Dominant position of the ownership of the .factors of production
by the whole people
4. The goals of management are linked inseparably towards the es-
tablishment of a communist society

c) The principle of democratic centralism wherein
centralized planning and control is the basic principle of socialist
management
9. The management has, therefore, necessarily to work under the
direction and leadership of the communist party Lenin's concern was
democratisation of decision making process in public enterprises
e) While capitalist management focusses on profits of enterprises, the socialist
management concerns much on human profit or Human Resource
Development particularly of the class.
1.1.3 Behavioural approach to Management:
Human relations movement in industry gained momentum
after the Hawthorne experiments. The major attempt was t o devise
ways t o best utilise human resources in industry which consequent-
ly led the neoclassicists t o bring under organisational control,
worker behaviour and worker productivity through humanising, much
as the classical organisation theorists attempted control of
employees through scientific management methods. The major con-

tribution towards understanding the mechanics of human and work motivation, was
made by Maslows (1954) hiearachy of needs, Mc
Gregors (1960) theroy X and theroy Y, Mc Elelland's (1965) achievement motivation,
Herzbergs (1968) Motivation Hygiene Theory, Skinners (1953) theory of behaviour
Modification and Vrooms(1964) Valency theory besides Mayo (1 946) Gardner(l955)
and Moore, Davis (1957), Miller and Form (1951).
Industrial Policy in India:
1.2.1 Policy objectives:
The seeds of industrial development in lndia were sown by
the founding fathers of the Indian Republic whose vision, initiative
and determination have helped lndia t o develop a strong and
diversified industrial base, making lndia as one of the major in-
dustrial nations of the world. Industrial policy and priorities were
set out after independence specially since the beginning of the
planned era, to realise the goals and objectives of the accelerated
pace of the agricultural and industrial development of India, rapid
expansion of opportunities for gainful employment, progressive
reduction of social and economic disparities, removal of self

reliance. The successive industrial policy statements have been in-spired b y
these very concerns and directed towards consolidating the gains of national
reconstruction.
The industrial policy resolution was introduced in 1948 out-
lining the approach t o industrial growth and development. I t em-
phasised the importance t o the economy of securing a continuous
increase in production and ensuring its equitable distribution. After
the adoption of the constitution and the socio-economic goals, the
industrial policy was comprehensively revised and adopted i n 1956.
From time t o time, this was modified t o meet new challenges
during 1973, 1977 and 1980.
1.2.2 Role of the State:
The industrial policy resolution of 1956 had in its objec-
tives highlighted the acceleration of the rate of economic growth
and the spreading of a socialist pattern of society. During that
period capital was scarce and the base of entrepreneurship was
not strong enough, the 1956 Industrial Policy Resolution gave
primacy t o the role of the state t o assume a predominant and
direct responsibility for industrial development. The industrial policy
statement of 1973, inter alia identified high priority industries
where investment from large industrial houses and foreign com-

panies would be permitted. The industrial policy statement of 1977
laid emphasis on decentralization and on the role of smailscale,
and cottage industries. The industrial policy of 1980 focussed at-
tention on the need for promoting competition i n the domestic
market, technological upgradation and modernization. The policy laid
the foundation for an increasingly, competitive export base and for
encouraging foreign investment in high technology areas. These
found expression in the Sixth Plan. It was Smt. lndira Gandhi
who emplasised the need for productivity t o be the central con-
cern in all economic and production activities. Thus, on the eve
of the Seventh plan, a broad-based infrastructure has been built
up; basic industries have been established. A high-degree of self-
reliance in a large number of items, raw materials, intermediates,
finished goods has been achieved. New growth centres of in-
dustrial activity had emerged, as had a new generation of
entrepreneurs. A large number of engineers, technicians, skilled
f
workers had also been trained. A number of policy and procedural changes
introduced in 1985 and 1986, aimed at increasing produc-tivity, reducing costs
and improving quality. The accent was on opening the domestic market t o
increase competition and readying our industry t o stand on Its own In the face of
international com-
petition. The public sector was freed from a number of con-
straints and given a larger measure of autonomy. The technological and
managerial modernization of industry was pursued as the key

instrument for increasing productivity and improving India's compe-tiveness i n the
world.
The net results of these changes was that Indian industry
grew by an impressive average annual growth rate of 8.5% in the
Seventh Plan period. Government continues t o pursue a policy
frame work encompassing encouragement of entrepreneurship,
development of indegenous technology through investment in Re-
search and Development, bringing in new technology, dismantling of
the regulatory system, development of the capital markets and im-
proving the competitiveness. The spread of industrialization t o back-
ward areas of the country is actively being promoted through
appropriative incentives, institutions and infrastructure investments.
Foreign investment and technology collaboration are welcomed to
obtain higher technology, t o increase exports and t o expand the
production base. Government policy endeavours t o abolish the
monoply of any sector or any individual enterprise in any field of
manufacture except on strategic or military considerations and open
all manufacturing activity t o competition. I n the emerging socio-
economic scenario of the country, public sector will have t o run
on business lines and flourish in an environment of economic ef-
ficiency and continuous technological upgradation.

1.2.3 Procedural reforms:
The Industrial Policy Resolution of 1956 identified three
categories of industries those that would be reserved for develop-
ment in the public sector, those that would be permitted for
development through private enterprise with or without state 'par-
ticipation and those in which investment initiatives would .ordinarily
emanate from private entrepreneurs. Over the years keeping in
view the changing industrial scene in the country, industrial licenc-
ing policy and procedures have also been liberalised as a full
realisation of the industrial potential of the country calls for a
continuation of this process of change. In order to achieve the
objectives of the strategy for the industiral sector for the 1990's
and beyond, major policy initiatives and procedural reforms are
called for. The policy package must be t o let the entrepreneurs
make investment decisions on the basis of their own commercial
judgement. The allotment of technological dynamism and internation-
al competiveness requires that enterprises must be enabled t o
swiftly respond t o fast changing external conditions. The July
1991 industrial policy, i n the above context abolished industrial
licensing for all industries except those specified, irrespective of
levels of investment.

While freeing lndian industry from official controls, oppor-
tunities for promoting foreign investments in India would also be
fully exploited. The relationship between domestic and foreign in-
dustry needs t o be much more dynamic than it has been in
the past in terms of both technology and investment. Foreign in-
vestment would bring attendant advantages of technology transfer,
marketing expertise, introduction of modern managerial techniques
and new possibilities for promotion of exports. In order t o invite
foreign investment in high priority industries, it h a s , been decided
to provide approval for direct foreign investment equity in such in-
dustries. This would make lndian policy on foreign investment
transparent. For a suitable exploration of world markets to promote
exports, interaction with some of the worlds largest international
manufacturing and marketing firms has been proposed by appoint-
ing a special board t o negotiate with such firms. Besides, with a
view t o infecting the desired level of technological dynamism in
Indian industry, government will give automatic approval for technol-
ogy agreements related to high priority industries within specified parameters.

1.2.4 Public Sector Policy:
The Industrial Policy Resolution of 1956 gave the public
sector a strategic role in the economy. After the initial ex-
uberance of the public sector entering new areas of industrial and
technical competence,a number of problems have begun t o manifest
themselves i n many of the public enterprises. Serious problems
are observed in the insufficient growth in productivity, ,poor project
management, over manning, l a c k ' of continuous technological
upgradation, inadequate attention to Research and Development and
Human Resource Development. Public enterprises have shown a
very low rate of return on the capital invested. Hence the
government has reviewed the existing portfolio of public invest-
ments with greater realism. Government proposes t o strengthen
these public enterprises which fall in the reserved areas of opera:
tion or are In high priority areas or are generating goods or
reasonable profits. Such enterprises will be provided a much
greater degree of management autonomy through the system of
memoranda of understanding. Competition will also be induced in
these areas by inviting private sector participation in the case of
selected enterprises; part of government holdings i n the equity
share capital of these enterprises will be disinvested i n order to
provide further market discipline t o the performance of public
enterprises. There are a large number of chronically sick public

enterprises incurring heavy losses, operating in a competitive
market and serving little or no public purpose. These need to
be attended to. The Government has recognised that in the new
economic environment there would be a need for the redeployment
and retraining of workers. Annexure 1:l sets forth the list of in-
dustries for automatic approval of foreign technology agreements
and 5 1 % . f o r e i g n equity approvals. Annexure 1:2 and 1:3 present
the list of industries t o be reserved for the public sector and in-
dustries in resepct of which industrial licensing will be compulsory.
Labour Policy
1.3.1 Industrial Relations:
The East lndia Company virtually reduced lndia into an
'Estate' of its own as its unending reserve for raw materials and
a lucrative and captive market for its finished goods. The
managers of various establishments worked solely at mobilizing In-
dian resources t o feed English trade and industry. There was
hardly any scope for sympathy or concern for the labour in such
an environment. During the period 1757-1857, the Indian workers
were in practice slaves of East lndia Company. Employees Rela-
tions was a virgin area till the end of the first half of the
nineteenth century. Though there had been a series of labour

enactments with preambles, they had little i n real contents to
build a familiar industrial climate. To list the important ones in
seriation, there was the Apprentice Act 1850, factories Act 1881,
Workmens Cornpendation Act 1923, Trade Unions Act 192, lndustrial
Employment (standing order) Act 1946 and finally lndustrial Dis-
putes Act 1947, which replaced the Trade Disputes Act 1929.
Some of these Acts attempted a t articulating 'standards and
norms', some dealt with 'welfare and amenities' and some covered
the 'Dispute Processing' and Rights enforcement' areas. After
India became one of the founder memebers of International Labour
Organisation (ILO) in 1919, the stated objectives of all subsequent
industrial legislations have heavily drawn from ILO terminolo'gies.
Even so, the entire gamut of industrial legislations turned the
dividing lines among various interest groups sharper ad sharper.
Alien rulers were ring side spectators even looking for opportunity
to fuel the dividing fires.
Even during the years after independence, content of the
lndustrial Law did not undergo any Qualitative change. lndustrial
law, of course, codifies 'service conduct' and 'business operations'rules.

1.3.2 Participative Management:
I t is sublime work ethics that ensures an industrial climate
where entreprenuers, managers and work force forge complete iden-
tity of interests and together they value and share the social
responsibilites of the enterprise also. Writings of John S t u a r t Mill
on liberty, the socio-political philosphy of the labour party, the
values that sustained French Resolution writings of Ruskin and
Tolstoy, advent of Marxism, had ail begun t o have impact to
evince a degree of sensitivity t o the global shift that confered
primacy on human over material resources. An enlightened
entreprenuer could hold his human resources in high esteem and
work force could be cultivated t o bring about a sense of belong-
ing. All these changing global scenario helped the evolution of
Gandhian principles of Trusteeship. Besides, events in Japan after
World War II have been keenly observed all over the world. The
Japanese sincerely believed in creating familiar industrial climate
pushing aside the American influenced industrial laws which they
believed t o be instruments for procastination and hence counter
productive. After 1947, concern for work force over a period be-
came a part of essential managemenl activities. John Harvey Jones
(1982), former Chairman of Imperial Chemical Industries (ICI) articu-
lates best the needed change in his "Making it Happen" thus . it
is neither helpful nor practicable t o make people dependent o n

you and remove their self- rellance but equally it is apailing busi-
ness t o be even more indifferent t o their needs than you would
be t o a piece of machinery. Machinery would be inspected,. lis-
tened to, oiled and maintained. time is spent on each and every
mechanical part. It is grudge of many people that some degree
of attention t o the individuals who make up the company is not
generally as is given t o inanimate capital goods. Bewailings of en-
lightened entreprenuers like Harvey represent the growing world
view that puts concern for employees atop in the entreprenuerial
and management priorities. In select establishments employer -
employee relations started taking off onto a move away from con -
frontation and close t o understanding. Japsnese obviously are a
step ahead of the West in their emphasis on employees. Akio
Morita (1974) of 'Sonys' while writing on employer - emplsyees
relations In his book 'Made in Japan states the Japanese perspec-
tives best "the emphasis on people must be genuine and some-
times very bold and daring, and It can even . b e quite risky. But
in the long run I emphasis this, no matter how good or suc-
cessfull you are or how clever or crafty, your business and its
future are in the hands of people you hire". Indian ethos place
little reliance on contractual view of employer-employee equations.
Every organised activity is a joint venture sustained and fostered
by shared objectives and internalised values. Entreprenuers and
managers alike are 'Trustees' but employees are also second to

none in being central t o the set up. Gandhian emphaisis on "Trus-teeship" was
an echo of these pristine Indian value only. Employer
- employee relations have become the centre stage of organisation-
al dynamics. It is a 'valued necessity'and sole instrument t o en-
sure sense of belonging and spirit of comradere. This alone could
bridge the chasm between personal and collective growth and har-
monise both with social responsibilites. Even so, in practice all
over, spirit behind benevolence and motivation is 'intelligent' self
interest.
The New Industrial Policy (NIP) 1991 proposes that govern-ment would .
fully protect the interests of labour, enhance their wel-
fare and equip them in all respect t o deal with the inevitability
of technological change. Government believes that no small sec-
tion of society can corner the gains of growth, leaving workers t o
bear its pain. Labour would be made an equal partner in
progress and prosperity. Workers Participation in Management would
be promoted. Workers Cooperatives would be encouraged t o par-
ticipate in packages designed t o turn around sick companies. In -
tensive training, skill development and upgradation programmes
would be launched. The major objectives of the new Industrial
Policy package would be t o build on the gains already made, cor -
rect the distortions or weakness that might have crept in, maintain
a sustained growth in productivity and gainful employment and at -

tain international competiveness. The pursuit of these objectives
would be tempered by the need to preserve the environment and
ensure the efficient use of available resources. Government's policy
would be continuity with change. I n this backdrop the New policy
proposes t o amend the Trade Union Act and the Industrial Dis-
putes Act. The trade Union Act is being amended mainly to
build leadership of workers from among themselves. Hence the
policy proposes t o limit the number of outsiders in the leadership
of the Trade Unions t o two. Bipartite mechanism on the industrial
Disputes Act which is to replace the tripartite mechanism would
help t o usher i n a new labour - management culture leading t o improvement in the
relationship between the management and the workers. Only disputes involving the rights
of workers would be referred for adjudication; disputes involving their interests and
demands would be referred for arbitration. The Government felt that the voluntary scheme
of workers participation has failed and
that participation needs to be legislated. Workers Participation as
an integral part of the Industrial System was recognised in 1984-
85. The Thirtieth session of the standing labour committee i n Sep-
tember 1986, emphasised the need for a total participatory
management as work culture t o achieve socialism i n a democratic framework.

1.4 Concept sf Workers Participation
The concept of workers participation has been evolved t o
achieve multiple objectives under labour management relations, or-
ganisational goals and forms of government. As such, the objec-
tives of the scheme are not very specific and the implementation
not effective. Any meaningful scheme of participation should have
its objectives definite, devoid of vague expectations. The objec-
tives vary with the models adopted.
1.4.1 Models of Participation
Broadly participation has been classified under five models,
each one focussing on different connotation of the concept i n dif-
ferent context, representing a single 'facet of the total reality. As
no one model can be complete by itself, meaningful scheme of
workers participation necessarily has t o make use of a blend o f
different strands of all models. The models in brief are given
below:

1.4.1.1 The Political Model
The evolution of the socialist thought stressed the need t o
change the mode of production and production relations in the
society which were skewed i n favour of the owners of the factors
of production . The Socialist Theory firmly believes that only a
basic change i n the social structure can bring about the freedom
of workers from bondage. The class conflict approach of the
political model of participation made the employers oppose i t as
the that would lead t o ultimate total control b y workers of the
organisations. Karl Marx and Engels were the advocates of this
model inspired by socialist ideology of the working class move-
ment. I n countries with democratic form of government, workers
participation is meant only t o ensure that the management of an
organisation is proper and just without being exploitative abetted
by vested interests. This was expected t o result i n higher efficien-
cy o f the enterprises as well. However the political model led
t o increased politicisation of trade unions and blurred the distinc -
tion between their role as instruments of collective bargainging and
as participants in managerial decisions.

1.4.1.2 Psychological Model:
This model explores some of the psychological process of
man which participation can put t o effective use in achieving the
goals of industrial democracy. It harps primarily o n the power of
psychological gap and the inner urge to fill the gap. Once the
management and workers commit themselves on certain goals or
plans and identify some delays and deviations in the progress and
process, they would agree t o initiate steps, to bridge the gap.
One such instance is the suggestion scheme which provide the
scope for the individual t o think and put ideas t o effective use
t o achieve goals set. However, due recognition should be accorded
t o workers valuable ideas and they should be actively involved in
the implementation.
Chris Argyris (1957), Maturity-Immaturity theory and the
Transactional analysis developed by Erick Berne provide yet another psychological
process in participation. The management believes that
workers have not attained a maturity level where they can help in
the decision making process. Even so, the management practic'es
are such that the workers are deliberately kept aloof from rnatur-
ing. Two factors are chiefly involved i n this concept of maturity;
one is the job maturity which implies that the worker has
developed the ability and technical knowledge t o d o the job

productivety; the second is the psychological maturity which implies
gaining of self-confidence and self respect about oneself as an in -
dividual. The scheme of workers participation, therefore, has a
higher probability of success as the workers move from low t o
moderate and onto higher levels of maturity. They will reach the
plateau in potential effectiveness, as workers attain the peak level
in task relevant maturity which is made possible by intensive
worker education and training programmes in both technical and participative aspects.
1.4.1.3 Behavioural Science Model:
The focus of the behavioural science model is directed
primarily o n individuals and the leadership styles i n contrast t o
the political model where the issue of ownership is at the centre
stage. The accent is on maximising efficiency and productivity of
the human resource by enhancing motivation within the organisa-
Maslow theory explains human needs as primary motivators
and there is a need hierarchy into which human needs are ar-
ranged viz: biological needs, safety needs, social needs, esteem
needs and self actualisation needs. It suggests that the various
levels are interdependent and overlapping, each higher level need

arises after the lower level need has been completely satisfied.
However under the conventional standards of business management,
the worker has to follow blindly the orders in situations over
which he has least control. His ego is very much hurt which is
a condition not conducive to the attainment of satisfaction o f Mas-
lows fourth level of human needs viz. self esteem. The worker
feels that his self esteem is respected if only he is given a
sense of participation in what he is doing. This calls for some
share for workers in the management of the organisation of which
they are a part. This would make them feel that they are more
important than the equipment they, handle. This upward movement
of workers influence from physical needs to self-esteem, largely
depends on the managements leadership styles. An authoritarian
management provides little scope for workers participation in the
operational process and the plans of the organisation. This top
down approach does not help the workers to attain the higher
level needs in Maslow's hierarchy. Only an effective two way com-
muniation would help achieve effective participation and attain
higher level needs. This is amply illustrated by Bareles experiment
with the circle and star patterns of communication in an organisa-
tion. They suggest how the mere structure of communication can
influence the feelings and action of people in terms of inde-
pendence, security and responsibility; the total operational efficiency
of a group in terms of speed, accuracy and adaptability. The

structure of communication in an organisation i s designed in an
autocratic fashion under the star pattern which provides little
scope for effective workers participation. This is structured in a
democratic fashion under the circle pattern which provides more
opportunity t o participate and take responsibilities. The workers will
tend t o have a positive effect on morale and with each ensuing
trial they will feel more important and more satisfied. The work
group will develop involvement and commitment. The alienation
process and tendency towards absenteeism under the star pattern
will b e eliminated under the circle pattern.
Renis Likert of the Institute for Social Research, University
of Michigan implemented organisational change programmes in dif -
ferent industrial settings, considering human and capital resources
as assets requiring proper management. Likert moved from Theory
X t o Theory Y from fostering Immature behaviour t o encouraging
and developing mature behaviour, from emphasising the hygiene fac -
tors of Herzberg t o motivational factors, dominant among them is
the participative leadership styles and personnel policies conducive
t o participation. How the individual or the group behaves is the
concern of success. But, effectiveness on the other hand refers t o
the internal state or predisposition of an individual or a group
which is attitudinal in nature and implies personal power. While
personal power is generated upward from below, position power

tends t o be delegated down through the organisation. I n the long
run productivity and organistion development depends on both suc-
cessful and effective manager. Thus, effectiveness. is a function of
both output variable i.e productivity performance i n the short run
as also the intervening variable viz. the conditions of human
resources in the long run. The concern of the management has
t o be directed against both the short and long term goals. Less
or little attention t o human resource development i n the organisa-
tion would lead t o developing new restraining forces like absen-
teeism, hostility and antagonism resulting in further detoriation of
the internal state of the organisation and declining productivity
after sometime. The vision of the management should help to
build a solid edifice t o achieve both short and long term goals.
1.4.1.4 Conflict Model:
Differences of opinion are inevitable i n a decision making
process where both management and workers are participants and
the decision relates to areas of vital interest t o both. This need
not necessarily be a destructive conflict, for, conflict serves the
purpose of bringing irritations and frictions on issue to the fore,
pointing t o the need for stabilising the relationship of the conflict-
ing parties viz. the manage and the managed by removing dis-
sociating elements in the relationship and establishing unity.

Blake, Sheperd and Mouton (1964) Model identifies three at -
titudinal sets or basic assumptions that people can have towards
group conflict. They are:
i) Conflict is inevitable and agreement is possible
ii) Conflict is not inevitable, yet agreement is immpossible
iii) Although there is conflict; agreement is possible.
Given the attitudinal sets, and the intensity of the stakes involved as
perceived by the contending groups, behaviour could be predicted.
In a win - lose power struggle situation as mostly happens in collective
bargaining where the stakes are high, the contending groups might think
that agreement is impossible. Any interventionist measure should help
to shift their attitude from the impossible t o 'though there is conflict
agreement is possible', by lowering the 'stakes'so that the conflicting
parties will agree t o have provision for mutually acceptable mediation t o
settle differences and disputes. Once such an attitudinal shift is
achieved, further attempts to increased commitments will tend t o move
them into an active problem solving mode, that constitutes the basic
objective of, participative management.
Marz Parker Follet (1963) has developed the group concept
as a new principle of association. However 'group thinking' and
togetherness "are not purported t o eliminate conflict as she saw
conflict as an expression of differences between individuals and

their failure t o make such differences contribute t o the common
cause. Absence of conflict would lead to a state of dormancy
pointing t o eventual disaster". Differences are valuable in as much
as they represent the specific contribution of individuals in a
group t o help mould the group opinion. The differences are in -
tegrated t o form a new whole and there is a real new group
opinion and synergy. She contended h a t authority as an act of
subordination was offensive t o man's emotions and hence could
never form the foundation for participation in an organisation. I n -
stead of personal authority, she proposed an authority o f functions
wherein the individual has the authority over his job area. She
advocated the depersonalisaton of order and authority so that per-
sonal desires and whims would give way t o logic and reasoning.
Thus Follet's exposition was an early approach t o the system con -
cepts of management.
1.4.1.5 The Economic Model:
The primary interest of the employer is to maxirnise profit
and that of the employee is in increased wages, bonus, security
of employment and other economic benefits that the management
considers would eat into the profit. The workers will lose their in-
terest in participative management if it fails t o secure the
economic benefits. On the other hand management would like t o

turn away from participation towards authoritarian way to achieve
the objectives of increased production, productivity and profits.
The fact remains that the size of the 'cake' is the common
denominator. The path t o achieve this may be authoritarian or par-
ticipative. Because of the commitment and involvement ingrained in participative
management in jointly agreed goals, participative style has been perceived to ensure the
urge t o increased .productivity.
1.4.2 Definition of Workers Participation in Management.
The following definitions of participative management are worthwhile t o be
considered to facilitate synthesis at a later stage:
The International Institute of labour studies views participa - tion as any process
whereby workers have a share i n the reach-ing of managerial decisions in the enterprise.
Mhetras (1966) defines participative management as practises which increase
the scope for the employee's share of influence i n decision making at different tiers of
organizational hierarchy with concomitant assumption of responsibility.

Hem C. Jain (1980) defines i t as a process by which employees can
influence managements decision at various hierarchi-cal levels in an enterprise.
Keith Davis (1957),views participation as a mental
and emo-
tional involvement of
courages him t o
a person In a group situation which contribute t o
group goals and
e n -
share
responsibilities in them.
Aziz. A (1980) views it as sharing of management authority.
According t o C.B.Mamoria and Satish Mamoria (1987) "Par-
ticipation is 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 management
decisions".
Dale S . Beach (1965) recognises it as "a process in which people
contribute ideas, towards the solution of problems, effecting the organization and
their jobsu.
Douglas Mc Gregor (1960) puts it as a "formal method providing an
opportunity for every member of the organization t o

contribute his brains and ingenuity as well as his physical efforts for the improvement of
organizational effectiveness".
reality
S K Roy (1973) goes t o the extent of saying that "In participation is a social
psychological concept which essen-
tially denotes power equalization. I t denotes not only the more democratic usage of power eg;
referent power, but also the shar-ing of power per se".
According t o Tannenbaum (1968) it is a "zero sum game" in which sharing of
authority increases the total amount of con-trol.
The definitions outlined by different authors though differ in degrees, .processes and
purposes, yet the thrust given t o them is centered on the growing need t o have workers
influence in management.
1.4.3 Forms, Level and Content of Participation
Direct or individual participation and Indirect or repre-sentative participation are the
basic forms of participation. The major forms level and content of participation falling within
these

categories as summarised by David Guest and Kenneth (1979)
Knight are presented below:
Table 1 The level, content and form of participation
executive terms
Supervisory board
bargaining: joint
consultation, work
councils
shop floor level Breifing groups Problem
solving
groups,
autonomous
groups, job
enrichment

Kenneth F. Walker (1967) has classified participation into
formal, informal, ascending, descending, disjunctive, individual or
collective, direct or indirect. I n ascending participation workers
may be given an opportunity t o influence managerial decisions at
higher levels, through their elected representatives t o works coun-
cils or the boards of enterprise. In descending participation they
may be given more power t o plan and make decisions about thier
own. They may participate through collective bargainging (disjunc-
tive participation). They may also participate informally when, for
example a manager adopts a participative style of supervision or
workers supply unofficial restrictive practises. Based on the
various forms of participation, Kedia (1992) has classified levels
into the following
10. Informative Participation.
11. Consultative Participation.
12. Associative Participation.
d) Administrative Participation.

a) Decisive Participation.
These levels are arranged i n an increasing degree of
workers say i n t h e management the lowest degree moving u p t o
decisive participation representing the highest f o r m of participation .
The inter relationship between form, level, and content are summed
b y David Guest and Kenneth Knight (1979) as under.

Table l a : The forms of participation on a participation continuum.
I II Ill IV v VI VII
Total Unilateral Bilateral Limited Joint Delegated Joint Council Total Worker
Management Communication Comunication decisior~ making control Control
Control and discussions
Representative The Military Information Joint works council Parites worker Worker Co-
forms Meetings consultation; directors; operatives
minority collective
worker bargaining
directors
Individual forms Briefing groups Attitude surveys Problems Autonomous
solving groups work group;
job enrichment

The development of schemes for participation in general is evolu-
tionary in character; adapting to changing circumstances or contextual
factors, which may turn out to be facilitators or constraints. The
recent policy changes in economic and industrial spheres at macro 'level
in lndia signify a total change in policy stance which might warrant in-
troduction of new forms of participation, depending on the perception of parties t
o participative management whether the new policy thrusts are conducive to or
constraining factors of participative culture.
1.5 Participative Management in the Context of the Changing
Economic Secnario
1.5.1 Constitutional Imperative:
Article 43A was inserted as a Directive Principle of State
Policy i n the Constitution of lndia which reads 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 un-
dertakings, establishments or their organizations engaged in any in-
dustry". i n the Indian context, the Government promoted it
because in its view, "the creation of industrial democracy is a
prerequisite for the establishment of a socialist society (Second
Five Year Plan 1956). Mr Gulzarilal Nanda (1958) observed when
workers participation was adopted at the Philadelpia charter of the
ILO in 1944" the scheme of Workers Participation is the culmina-
tion of a series of steps aimed at giving the workers a feeling

of having a place of their own in providing the social base for
the building up of the country's industrial base". The Government
of lndia thus considers participative management as a means of
resolving industrial disputes and of increasing productivity sirnul-
taneously.
1.5.2 New Economic Policy and Participative Management
lndia has been going through a structural adjustment of the
economy since the 1990's opened up a transition to a market -
oriented economy by ending its isolation from competitive forces
both local and foreign. Market friendly growth strategy has come
t o stay. The policy of economic liberalization is dispensing with
the plethora of licensing rules in terms of its stress away from
discretionary controls and on search for encouraging direct foreign
investment and foreign technologies. lndia has got to stand on
its own feet and face the competition. The days of licence
protection is on the decline. Intensification of competition will
link fortunes of the firms with their performance and it would not
be possible any longer t o insulate the workers altogether from the
fortunes of the firms for which they work. Organisation will have
t o be customer-oriented and market-guided and hence will have to

aim at fostering productivity mission and ensuring productive be-
haviour. Productivity in both its technological and human aspects,
lies at the core of the managerial responsibility.
Development calls for productivity. Organisations which
have developed sound HRD policies, attain productive excellence.
What India would be at the turn of the century would depend
not merely on the material resources, but on the ability t o create
a climate where individuals could draw out their full potential and
contribute their best to the quest for a longer role for the
country in the international market and economic growth of the
nation. These call for a stable and healthy industrial relations
climate.
It is against this backdrop the New Industrial Policy (NIP)
1993, envisages i) amendment of the Industrial Disputes Act t o
facilitate forthcoming of direct foreign investment and technology.
ii) t o achieve higher levels of industrial efficency t o enhance ex-
port growth which assumes highest priority. iii) to facilitate fur -
ther liberalisation of the economy through intensification of
competition, linking the fortunes of the firms with their performance
b y privatising the incalcitrant and chronically sick public sector
units, iv) the transition from tripartism t o bipartism envisaged, to
encourage total involvement and commitment t o quality from the

t o p executive to the shop floor supervisor and the worker using
the Total Quality Management (TQM) concept, and v) t o con-
stitute an Industrial Relations Commission (IRC) t o resolve differen-
ces between management and workers, even as tripartism is to
give way t o bipartism.
I n brief, the transition from the paternalistic management to
participative management has t o be reexamined i n the changed
context of economic liberalism. The participation of the labour
movement in the nationalistic drive during the pre and post inde-
pendece era led t o close ties between the national Government
and labour organisations and the adoption of a protective and wel-
fare legislative and voluntary measures directed t o strengthen the
working class movement. Steps were Initiated t o promote a gradual
but definite sharing of powers by labour i n decision making and
t o restrict the unlimited powers the employers were enjoying i n a
free but a labour surplus market economy. I n the liberalised en-
vironment the emphasis has been shifted t o productivity and
quality improvements.
Various studies on the working and effectiveness of the scheme of workers
participation in management prior to the New
Scheme Policy, New Industrial Policy (NIP) have been made. However, research gap exists in
the assessment of the organiza-

tional climate for participation and participatory orientation and
at-
titudes of workers and managers, Trade unions and employers,
in
the changed economic scenario. Systematic research in the
field
of participative management in the changed economic environment
is essential for formulating and imp!ernenting a sound strategy
for
the future. The present study attempts t o fill this research gap.

CHAPTER VI
Summary and Conclusions
Introduction
Workers participation In management as an integral part on the
industrial system was recognised in 1984-85 thoug h the generic
philosophy of workers participation in management was already a part of
the directive principle of state policy in the Constitution Article 43-A.
But workers participation in management had not made much impact in
india. In the meantime government of india began to introduce new
policy initiatives since early 1980's in terms of procedural and structural
reform in the industrial sector culminating in the new industrial policy of
1991 t o make the indian industries attain international competetiveness,
sustained growth in productivity and efficiency. To facilitate the process
of restructuring the industrial sector, concomitant labour policy initiatives
directed towards amending the Trade Union Act and the Industrial
Disputes Act, were taken.

The focus of the research therefore, is on assesing the perception
of the participants whether the environment created by the new policy
packages would be conducive for the growth of
management and the participative culture. This
problem of the study and its objectives, the
workers' participation in
chapter summarises the
methodology and major
findings. The implications for pollcy alternatives that emerge out of the
findings are then discussed as also the suggestions for areas of future
research.
The Concept
Participative management concept has been associated with differing
practices in real world situations, It means different degrees and types
of involvement by workers in management, "mental and emotional
involvement i n the affairs of the organistion" "Psychological concept of
Power-eqalizationu "tool for achieving greater organizational health and
effectiveness". Though different authors define the concept differently i n
degrees, purposes and processes, the central Idea remains the same viz
that workers partlcipaion in management is concerned with increasing
employees' role En decision making or management of the enterprise.

6.1 .I Object of the Study
The objective of the study is t o assess the economic, industrial
labour and organisational climate In the light of the reform policy
packages for participation, as perceived by the workers, management
personnel and trade union representatives, and to formulate a strategy
for effective implementation of the scheme of workers participation in
management.
6.1.2 Methodology
6.1.2.1 Sample
The twenty nine organisations implementing the scheme of workers
participation were stratified into public and private sector companies and
three from each were selected at random; at the first stage, from each
stratum a proportionate sample was randomly drawn. One hundred
workers, ten management personnel and ten trade unions were selected
on random basis. In all 600 workers, 60 management personnel and
60 trade union representatives were selected for primary data.
Information was collected on three basic domains viz policy domain,
structural domain and environmental domain.

With reference t o the following statements the workers in the public and
private sectors differ in their perception as t o whether they facilitate particpatory
management or not.
2. Effective participation can be achieved by legislative compulsion.
2.' Effective participation can be achieved by voluntarism.
3. The Industrial Relations Bill is antilabour.
5. Government reform programmes enhance participation.
6. Privatisation will improve participation culture.
6. Transition from tripartism to bipartism improves participation.
7. Workers and management respect the rights 'and responsibilities
of each other.
8. Workers participate without fear of victimisation.
10. Workers have the propensity and competence t o do fruitful par-
ticipation.

13. Participation through representatives creates communication prob-lem.
14. Limited representation of outsiders in the union will enhance the degree of
role confirmity of the workers.
15. The scheme of workers participation is mere consultation without
commitment.
6.1.2.2 Tools
It is a 26 items Likert type scale technique to score the
perceptionslattitudes of the participants.
6.1.2.3 Data Analysis.
For analysis of data summated ratings statistical were employed:
The following mean and standard deviation, coefficient of variation, chi
square tests.
6.1.2.4 Validity
Content and Construct validity were established.

6.1.2.5 Reliability
Test-retest technique was used to measure the reliability. The
reliability coefficient worked on was 0.92.
6.2 Summary of findings and conclusions:
The major findings of the study are summed up below:-
6.3 A model for development of a strategy for workers
Participation in management,
India is opening itself to the world in terms of trade and
technology as a result of new labour, economic and industrial policy
initiatives. The policy thrust aims at creating an abiding value of
pursuit of excellence to match the world class companies. It aims to
develop a "work climate" in which the individuals find opportunity to be
more creative and t o come up with ideas beneficial to the organisation,
to increase the degree of "we" feeling or cohesiveness; to provide the
workers with an overall organisational point of view; to reduce the
amount of conflict and hostility. A long run and mutual approach to
Competitiveness would warrant labour to accept the need for continued

improvement in the productivity and commitment to quality, expansion of
a sustained commitment to joint labour management activities, such as
training, quality improvement. work design, cost control and cost
effectiveness, and other related activities tailored to the specific needs
and competitive conditions of the enterprise concerned.
Based on the above emerging scenario and the findings of the
present study scenario a model of participative management is suggested
here below.
The following objectives of participative management are considered
in the model:
b) Harmonious and effective industrial relations to accomplish con-structive
relationships
c) Commitment to work and convergence of individual and organisa-tional
goals; abiding values of pursuit of excellence
d) Employees self development in terms of skills and career
d) Perspective of the economy industry and labour

e) A genuine concern for human values that can safeguard technol-
ogy making man a mere instrument of production
f) Work related and interest related issues
g) The inclusion of major subjects such as wages, norms of ef-ficiency etc
within the scope of joint consultative machinery
h) Adequate training of workers representatives.

T h e Mode
l
fo
r
worker
s
participatio
n
in managemen t is
diagramatically represente d a s under

To facilitative operationalising the model, participation is essentially
considered as sharing of power, reflected in information sharing, equity
participation, consuitation, joint control and joint decision making and at
strategic levels representation of workers in the board. But basic to
all forms, level, content and representation is human resource
development through worker education, training and development for
worker, management and trade union representatives. Though the
Central Board for Workers Education (CBWE) is the nodal agency for
worker education, it should be upgraded into a centre for participative
management training and education and its curriculum should be
designed in collaboration with Work Education Departments of universities
and various recognised labour institutes, besides a few selected
industrial houses. This kind of university-industry-institutes interaction has
not been attempted to make HRD more purposeful as a starting point
for effective participation at different levels.
Participative management should provide equal importance to both
interest related issues and work related issues unlike as in the present
traditional industrial relations culture where workers, management and
unions are active in protecting the interests and are passively

participating in work related issues. To deal with the basic
interest-related issues such as wage structure, age differentials fringe
and other benefits, medical health, safety measures, education,
recruitment, and personnel policies, norms of discipline and dispute
resolution there can be three forums at
i) National-level council
ii) Enterprise level council
iii) Unit level council for work related issues.
There is no need for a National level set up. There has to be a
corporate . level council to deal with product mix, sales and export
strategy, expansion schemes, introduction of new technology and new
projects. At this level there will be information sharing, consultation,
joint decision making. The second tier will be the unit-level council
which will deal with:
i) Technical areas like planning, implementation, fulfilment of objec-tives and
review of monthly targets and schedules, material supply, quality, storage
and inventory, house keeping, suggestion

schemes, quality circles,(QC's),capacity utilisation, design, develop-
ment, process development, profit loss statement, balance sheet etc.
ii) Economic areas such as incentives, cost effectiveness, value analysis,
methods improvement, budget, operating results revew, plant
performance in financial terms, labour and management costs, market
analysis, overtime problems of casual and tem-porary labourers, women
workers etc.
iii) Welfare areas such as medical benefits, safety measures, transport
facilities, sports and games, housing, education, training career
development, canteen, absenteeism, soci'al and cultural ac-tivities etc.
Iv) Environmental areas such as pollution control, community development
projects, control of gambling, drinking and social extravagance,
development of ancillary units, sub contracting etc.
Shop Level Council
All matters which are significantly important for running successfully
a production concern or a unit in a commmercial/service organisation
will be included. Some issues will come under joint decision making

while other issues initially may become the subject matter of
consultation and information sharing.
The industrial relations environment in the country is undergoing a
period of major changes with accents chainging towards quality and
productivity improvements and competitive environment. The New
Industrial Relations Bill, Trade Union Act Amendments are awaited to
achieve the above objectives. In the circumstances the presence of a
reasonable degree of mutual understanding, goodwill on all sides
covering workers, management and trade unions becomes imperative.
The model outlined above has been worked out to move in this
direction.
Areas for Future Research
The centre of focus has to turn to education and traning and self
development of workers, management personnel and trade union leaders
and office bearers. The Central Board for workers education and its
regional directorates have been conducting training programmes and
catering t o the educational needs of the workers. At the regional .level
the following courses are being conducted.

i) Workers teacher training course
ii) Leadership development course
iii) Unit level class/functional adult Literacy class
iv) Joint Labour-management programme
v) Participative management programme
vi) Need-based training programme
vii) Role of public sector in national development
viii) Quality of life
ix) Supervisory development
x) Changing role of trade unions
xi) Labour Legislations.
Though various modules have been designed these may have to be
updated in tune with the new economic policy, industrial and labour
policies. Since education, training and self development will form the

fulcrum for future development of the scheme of workers participation,
research may be conducted in redesigning the syllabus of the central
board of workers education to make it an effective instrument of
workers participation in management.
A study of Indian ethos and Indian values for organizational
excellence would help to evolve a positive work culture and work ethic
for effective workers participation in management. The following aspects
relating t o participative management may also be studied
- Future role of trade unions and effective participative rnanage-ment
- Dilution of public sector, employee morale and workers'par-ticipation in
management
- Propersity of employees to resist change
- Right work ethos, work ethic
- Effective organisations and workers participation management

Corporate goverance by censunsus - a decision making tool for
effective participation
Participation for excellence
Should personnel management combine the function of in-
dustrial relations for effective participation
Employees identification and organisations success
Workers and risk management
Role effectiveness through self awareness
Internalisation of organizational culture
Concept of scientific management and workers participation in
management
fostering work culture to improve productivity.
6.5 Conclusion

Studies conducted on workers participation in India have revealed
that most of the mechanism in operation is voluntary in character and
statutory mechanisms are largely dormant. 1Vork related issues are
mainly taken up through suggestion schemes, quality circles (QC) and
small group activities while interest related issues are taken up through
collective bargaining system. Consultative mechanism thrive in areas
where management is willing to share power. Centralised systems do not
nuture workers participation. Top managements commitment is also an
essential ingredient for participative climate. The New Economic Policy
(NEP) and the New Industrial Policy (NIP) were largely perceived by
workers as threats while management personnel perceived them as
being conducive for growth in productivity, excellence and progress and
hence would contribute to the promotion of participative management.
The issues which have got a great bearing, on the success of
workers participation in management, on the basis of the perception of
the participants, needs to be reviewed as labour is likely to resist the
changes- sought to be brought about, will only to worsen the already
troubled industrial relations situation. In order to motivate labour in a
greater effort and nourish the productivity culture, the management-labour

relations must be 'humanistic not paternalistic, communicative not
secretive, and cooperative not conflictual". Commitment
and empowerment
feed on each other. Only committed employees can be aware of what
is happening in the company, its policies, values, philosphy. Only then
can they identify themselves with the organisation. The entire labour
policy needs t o be reviewed on a priority basis as the trade union
might make the labour issue the biggest challenge to the reform
process.

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