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Workers Participation in Management
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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
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WPMThe 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
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Objectives of WPM
Pie enlarging NOT Pie splitting
Gain sharingimproving profitability
Future sharingimproving competitiveness
Power sharingPlacing Stockholders and
Stakeholders on a even keel
Self actualisationavailing opportunity to
contribute meaningfully
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Some Models of WPM
British system ofJoint Consultation
Yugoslav system ofWorkers Council
German system ofCo determination
The Japanese system ofQuality Circles
The American system ofQWL (QUALITY OF WORKLIFE)
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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 andmeaningful work as a source of personal
satisfaction and a means to value personal rewards
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Defining WPM
A system of communication and
consultation, eitherformal or informal, by
which employees of an organisation arekeptinformedabout the affairs of the
undertaking and through which they express
their opinion andcontribute to themanagement decisions
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How WPM works?
KF Walker Model
Planning
OrganizingMotivating
Controlling
Managerial
Hierarchy
UnionH
I
E
R
A
R
C
H
Y
Area
of
Colle-ctive
Barga-
ining
Employee
Directors
WorksCouncil
Suggestion
Schemes
Doing Workers
Participative Supervision
and Job enlargement
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Forms of Participation
Informative
Information Sharing
Involving Consultative
Idea generating
Democratic functioning
Co deterministic
Joint decision making
Partnering
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Some Key Dimensionsin 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
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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 ofOrganisation
Union Commitment has the same 3 aspects
The key issue is Compatibility of Goals and Valuesof the Company and the Union in the eyes of theEmployee/worker
WPM bridges the Gap, while CB shows it
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The Commitment Matrix &
Behaviour Patterns
Commitment to ORGANISATION
t
oU
N
I
O
N
High / High
Common / integratedGoals & Values
Business Partnership
High /Low
Habitual Resistance
Low /High
Co-operation
Low / Low
Indifference
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The Missing Focus
Organisations view HRM and IRM as
EitherOr options
HRM focused on Individual
Industrial Relations focused on Collective
The new realism :
High emphasis on both HR & IR management
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Todays Workplace
The Mutual Gains Enterprise
Thomas A. Kochan & Paul Osterman (1994)
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Principles guiding the Mutual Gains Enterprise
Strategic level:
Supportive Business Strategies
Top Management Commitment
Effective voice for Human Resources in
Strategy making and Governance
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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
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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 trustA great place to work
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The history of partnering Workers
1884(UK): Labour Association for promoting cooperativeproduction amongst Workforce formed
It was set up as a propagandist committee to arouseworking men, and public opinion generally, to theimportance of the movement for making workerseverywhere partners in their workshops.
Renamed later asIndustrial Co-partnershipAssociation and again after the Word War-II as theIndustrial Participation Association
1989: Renamed again as
Involvement and partnership Association (IPA)
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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 modelandrelied more on
Workers participation in Management
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Towards Industrial partnership
The IPA publication in 1992 enunciates newprinciples 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
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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 ofEmployability as substitute for continued
Employmenthas arrived
Employers responsible for building capabilities in
employees to survive and sustain after Exit
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Information, Consultation & Co-determination
understanding the new dimensions
Information sharing isDirect Participation
The Cellnet philosophy (EThOS) explains:
1. Frank & open exchange of ideas, information &
knowledgeKey to effective Task management
2. Open & Clear communication is Everyones
responsibilityKey to Business success
3. By taking ownership of issues and problems,making commitments and deliveringKey to get
greatest contributions from People to Company
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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
ICI 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 contextin which
they are asked to work, and
2. Have appropriate forums to influence decision makers at allrelevant management levels so that there is the best chance of a
well judged and full hearted contribution from every employee
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The great transformation
in representative consultation
In many countries, agenda for consultation is
driven by Lawsocial 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 ofPartnership council has
emerged to debate cutting edges of Business
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Information, Consultation & Co-determination
understanding the new dimensions
Co-determination meansRepresentation of the
employees voice at the decision making table
With the transformation of business ownership from
single owner to Stock holders, the employees havebecome the largest stakeholder
Growing recognition ofalignment of interestsof the
Firm and the employee-stakeholders Mutuality of interest among all stakeholders is
shifting the bargaining mind-set towards partnership
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A novel partnership journeyat 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 boardroommultiple MOUs
An agreed policy to manage employment security A major commitment to employee development and
training
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WPMthe 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
15th session (1957)Joint Management Councils The 2nd Five Year Plan recommendations for setting
upJoint Councils for Organisations employing 500or more people
GOI scheme forBoard representation (1971)
GOI scheme on WPMin 197520 point program
1975: DPSP amended & WPM inserted at S/43a
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WPMthe Indian saga
1977: The 1975 scheme extended to Service sector
employing 100 or more people
1978: Janata Govt. appointed TripartiteCommittee, recommended 3-tier structure for
participationBoard, Plant, Shopfloor
1983: WPM scheme for CPSUs introduced 1985-86: Union Budget opened Stock options for
employees (limited to 5%)
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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
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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 ishowever, a very difficult and delicate
subject which must be developed slowly,
systematically and methodically, learningfrom practical experience and taking
lessons from pitfalls of the past
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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 workflexibly will determine Job security
Unions must share these values along withManagements transparent goals
Mutual gains Enterprise is the best option
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The Partnership Philosophy lives on
Workers participation in Management, as a concept is
philosophically sound & rich
WPM derives merit from theprinciple of Trusteeship enunciated
by Mahatma Gandhi
It is an ideological extension of democratic spiritand 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