Histadrut's Search for a Participation Program

E L I E Z E R R O S E N S T E I N O

Histadrut’s Search for a Participation Program

OVER THE LAST 25 YEARS the leadership of the Histadrut, the General Federation of Labor in Israel, has engaged in extensive discussions about the need to institutionalize workers participation in Histadrut-controlled enterprises.’ Is is generally agreed that the implementation of participation to date has been quite limited and the results by and large discourag- ing. In spite of this, the Histadrut continues its search. This paper describes the major schemes of workers participation in managements of the industrial enterprises of the Histadrut, with special emphasis on the recent program of “joint management.”

The Histadrut: A Multifaceted Organization The Histadi-ut is unique in being both a very powerful trade

union and a major economic entrepreneur. These two activities have been interwoven with a broad network of consumers’ and producers’ cooperatives, welfare services, and cultural-educational activity.

The Histadrut was founded in 1920 and in its early days it had four aims: (1) the formation and development of a working class; (2) a nation-building program of pioneering and land development; (3) a social mission of creating a just and egalitarian society; and (4) the development of a high standard of living for the growing Jewish community. This multifaceted organization played cnicial roles in the development of Palestine and Israel. Observers agree that the Histadrut was the most prominent and successful nonstate organization engaged in the colonization and industrialization efforts which have made Israel the relatively prosperous nation it is today.

Over the years Histadrut has been led by the same political parties that have continuously been in power nationally. It has grown into a mass organization with 700,000 taxable members. The Histadrut economic sector is re-

* Lecturer, Faculty of Industrial and Management Engineering, The Technion, Haifa, IsraeL 1 I wish to thank Peter Feuille for editorial assistance.

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Symposium: Participation in Management 1 171

sponsible at present for about 24 per cent of the national employment, for 23 per cent of the net national product, and for 19 per cent of the country’s export. All economic activities of the Histadrut are controlled (to various degrees) and coordinated by a special organization, Hevrat Ovdim (Com- munity of Workers), an integral part of the Histadrut. Membership in Hevrat Ovdim and in the Histadrut is coextensive. By joining the Histadrut an individual automatically becomes a member of Hevrat Ovdim and thus is an official “co-owner” of its considerable property.

Histadrut’s governing bodies, elected by the membership by means of party lists, have control over the trade union department, which in turn con- trols the activities of nearly 50 national trade unions, organized mostly on an “industrial” basis. One of these unions is a special union designed for the industrial workers who are employed by the Histadrut holding companies. This union included in 1969 nearly 13,000 manual workers employed in various Histadrut establishments.

The participation programs to be examined were originally designed only for the section of the Histadrut industrial enterprises known as the “Adminis- trative Industries.” The term refers to those industrial enterprises which are directly owned and controlled by Hevrat Ovdim. At present this section in- cludes nearly 70 enterprises employing 17,000 persons.2 By American and European standards, these are small. Most employ 50 to 300 persons.

As Histadrut members, employees in these “administrative industries” also “own” them. But, the other hundreds of thousands of Histadrut members who are not employed in the Histadrut economy also “own” these industries. Under such circumstances the “ownership” of the enterprise by its employees has only nominal meaning with no practical relevance. The congruence between the ideological status of the owner-employee and the reality of industrial life has been declining over the years, especially in regard to employee-manager relations. As enterprises grew larger, differences between managers and managed began to emerge. Further, since their union was also their employer, some workers began to feel that there was no institution to represent their interests.

Workers and Managers in a Common Enterprise In the pioneering days of the twenties, the division of labor

between Histadrut managers and managed was not clearly institutionalized, The style of life of workers and administrators was similar, bureaucratic -

2This amounts to about 53 r cent of all industrial workers of the Histadrut sector. The Dther 47 per cent are in the KibEtz industries (28 per cent), production cooperatives (14 per xnt), and “others” (5 per cent). See Workers Economy 1960-1965 (Tel-Aviv: Histadrut Execu- tive, 1967).

172 ,/ ELIEZER ROSENSTEIN

principles were not crystallized, and enterprises were small. Even then there was some tension between those who actually did the work and those who demanded discipline and cost consciousness, despite the official ideology which considered the working units as “self-managed” groups. There are indications that as early as the forties managers and high ranking Histadrut officials found it necessary to seek ways to increase the “identification of the workers with their enterprises” and their commitment to work.

The prevailing ideology-and this has not changed much over the years- consisted of a mixture of national and social elements. The national one fo- cussed on economic development. The social element consisted of a somewhat vague conviction that Histadrut’s industrial enterprises could and should enable its employees to achieve a high standard of living as well as “personal development and mobility.” All parties seem to have shared the popular “hu- man relations” belief that once the worker feels he is an integral part of the enterprise and not a “cog in a machine,” that is, once he realizes his own value as a creative person, his energies will be released and utilized for the benefit of the enterprise as well as for his own good.

The problem has been how to create this feeling of identification. Man- agers by and large sought to increase workers’ commitment to work through preaching nationalist-collectivistic principles. As an organization that pro- claimed nation-building as an ultimate aim, the Histadrut sought to promote efficient economic units based on functional and hierarchical division of labor in which all profits should be reinvested for the purpose of further development. Workers, on the other hand, demanded better wages and working conditions. These issues caused unofficial strikes in Histadrut’s enterprises in the forties. Here and there workers clearly challenged the very legitimacy of the authority relationships in Histadrut enterprises by claiming that those in managerial positions were neither elected nor supported by the workers. Such reservations implied a demand for a direct democracy in the enterprise and for the abolition of the central bureaucracy. There is no evidence, however, that such feelings were widespread among the rank and file. Gradually it has been recognized that plant-level industrial relations in Histadrut- owned enterprises diEer little from those in the private or the public sectors?

Histadrut leaders have become well aware of the fact that there is no more harmony between Histadrut workers and managers than between workers and managers elsewhere. This lack of harmony is reflected by the strikes

8 Although this is a common belief, little systematic research has been conducted to examint it empirically.

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which have taken place in Histadrut enterprises4 For the political leaders and the intellectuals, this state of affairs negated one of the socialist assump- tions that Histadrut’s own enterprises would almost automatically produce authority relationships of a far better quality than in the private enterprises. The fact that this has not happened, and that in some respects employees in Histadrut plants seem even less satisfied than their equals in the private sector, has been a disturbing disappointment.

The participation of workers in the management of the industrial enterprises was conceived by the Histadrut’s leadership - but rather less by workers and operating managers - as a remedy (to some even as a panacea) to heal what they defined as the “troublesome” and “unhealthy” authority relationship in the Histadrut’s enterprises.

Participation Programs There have been four different attempts to introduce partici-

pation into Histadrut enterprise. First came the workers committees, which really are plant bargaining committees. Then, in order, came the Joint Pro- duction Committees, the Plant Councils, and finally the joint management program. These schemes differ considerably from each other, but in each case the major intention was the same: to give employee representatives formal channels through which they could legitimately exert influence on part or all of the managerial decision-making process.

Workers Committees In both Histadrut and non-Histadrut enterprises the blue-

collar daily paid employees and the white-collar monthly paid ones each elect a “workers committee,” the role of which is to represent its constituents vis-his the local management within the terms established by the collective bargaining agreement. The workers committees have no right to interfere with work assignment and technical matters which are prerogatives of the management.

The agreements in Histadrut’s industries normally follow those in private industry, though in Histadrut’s firms fringe benefits are somewhat more gen- erous. There is some evidence that Histadrut workers committees discuss

*Recent data indicates that both in 1965 and 1966 the average number of lost workda s per thousand workers was higher in Histadrut than in non-Histadrut enterprises. In 1965 x e average length of a strike was shorter in the Histadrut sector (3.0 days) than in the non-Hista- drut ones, but in 1966 it was longer (10.0 days). Such strikes are almost never official, i.e., their existence is not admitted by the local labor council (the local branch of the Histadrut) or by the trade union department of the Histadrut executive.

174 / ELIEZER ROSENSTEIN

disciplinary matters and promotion of nonmanagerial personnel more than their counterparts in non-Histadrut (private and state) plant^.^ Ex-members of Histadrut workers committees are likely to hold managerial positions. Nevertheless, many committee members believe that, because the plant is owned by the Histadrut, the trade union of the Histadrut does not support them as it should. Skilled workers often feel that they would have been better off in a private firm since the private employer is freer to pay his employees according to merit. In general the relationship between workers committees and the Histadrut tend to be more tense in Histadrut-owned enterprises than elsewhere.6

The Joint Production Committee The first Joint Production Committees were introduced in

1945. Their original goals were to: (1) provide a formal framework through which workers could participate in the management of the enterprise, and (2) increase productivity. These early committees were not intended to benefit employees economically; for this reason they were only reluctantly accepted by the workers. The initiators of the JPC program, assuming that the workers were altruistically eager to be more productive, sought to satisfy workers self-interest in psychological terms. This erroneous assumption is probably the main reason why the early JPCs failed to solve the basic problems of low productivity and poor work ~Iiscipline.~

JPCs were introduced on a national scale in Israel in the early fifties, and they have gradually spread to all three sectors of the economy. Over the years, their emphasis has been shifted from workers involvement in management to increases in productivity through piece-work. What was originally conceived as a participation scheme has turned into an incentive program from which both the enterprise and its employees could derive financial gains. The immediate conditions for this shift in emphasis were the economic problems caused by the mass immigration into Israel after independence in

SSee A. Friedman, Mehkar Vaadei Ovdim (Investigation of Workers Committees) (Tel- Aviv: Histadrut Executive, 1963) (in Hebrew). This report is based on interviews in 40 enterprises of which 12 were owned by the Histadrut. In rivate enterprises examined by this report

discussion between management and the workers committee, whereas in Histadrut enterprises a dispute which does not involve managerial personnel (as for example a dispute between two workers) is discussed by the workers committee alone without the direct interference of management. There is thus in these enterprises a kind of workers autonomy as far as nonmanagerid discipline is concerned.

6 Histadrut communicates with most workers committees through the trade union department of the local labor council - a local branch of the Histadrut - with whom workers committees in all sectors keep in close contact for the fulfillment of their functions. Ibid., pp. 40-41.

7 See J. Tabb and A. Goldfarb, Workers’ Participation in Management, Expectations and Experiences (Haifa: Technion, 1968, mimeographtd).

every dispute involving managerial or nonmanageria P personnel is automatically subjected to a


1948. The new nation needed to develop a broad-based economy and to increase personal income. The Histadrut, following the government’s economic policy, felt that productivity increases were the major way to accomplish both goals.

The number of JPCs grew from about 100 in 1954 to about 350 in 1967. The committees consist of equal portions of elected worker representatives and appointed management representatives. The councils are advisory, and their decisions are mere recommendations to plant management. Their subject matter is limited to norms and incentive payments, technical and voca- tional training questions, and health and safety problems. They are excluded from dealing with all matters covered by the collective agreement - wages, working conditions, etc. The councils have remained active as long as questions of norms and premium payments were relevant, i.e., as long as the council’s activities had a direct bearing on employees’ earnings. Where incentive schemes are not practical the councils have either withered into dis- use or have never been established.*

The most interesting thing for our discussion is the irrelevance of enterprise ownership - the functioning of the JPCs in the Histadrut enterprises has not differed from that in the private sector. The formal status of the councils in the two sectors is the same, their terms of reference are identical, and they have achieved the same results - increases in employee productivity and personal income.

Of course, JPCs were designed to promote participation only over a narrow range of managerial decisions. Nevertheless, the failure of these committees to reduce worker alienation left many Histadrut intellectuals disappointed and prepared the way for plant councils.

The “Plant Council” Program This phase started in 1956 with the adoption of a formal reso-

lution by the Histadrut convention (the highest body of the organization) and ended for all practical purposes in 1961 when the last councils died quietly. In the opinion of prominent Histadrut leaders, Histadrut enterprises had in essence fulfilled their national mission, but they had failed to accomplish their social mission of establishing a “community of workers” or to create worker “identification” with the enterprise. Plant councils were de- vised as an institutional arrangement that would activate the identifkation- commitment syndrome.

Leaders of the Histadrut often illustrated the “full and satisfying life” of

8 For further elaboration, see M. Derber, “Workers Participation in Israeli Management,” Indusf~kzZ Relations, I11 (October, 1958), 134-136.


the Kibbutznick as a model which managers of the urban industrial plant should follow. A well known trade union leader asks rhetorically:

Does an employee of Vulkan, Phoenicia, Yuvd Gad and other enterprises feel that he works in his own home and guards his own home? Does he feel that together with other employees he has created whatever exists? Is there in the industrial enterprises the same productivity that exists in the Kibbutz where all the members together achieve such results? . . . I cannot answer “yes” to these questions?

This analogy between the urban plant to the Kibbutz has repeatedly been reflected in the speeches of Histadrut leaders by such notions as “social cell” and “home” which the urban plant should constitute for its employees. At times, the zeal revealed by the proponents of the Plant Council program had an apocalyptic tone:

. , . That [participation] is the job to be done; if we succeed in it we shall save the economic establishments of the Histadrut from a social and a moral deterioration; but if, God forbid, we fail the moral and social justification for the workers economy will h o s t disappear.1°

Such were the ideas of the initiators. But before the idea could be put into practice, the political leadership had to win the support of the managers and the workers in the administrative industries. Managers of Histadrut enterprises could not object openly to the idea that the Histadrut economy had both a national and a social mission, since this duality of purpose had been too long an integral part of Histadrut’s 05cial ideology. However, in their managerial ideology they emphasized the national mission element and de- emphasized the social one :

Management fulfills a public mission not the mission of its own personnel. The enterprise has to support itself and pay its biuic investments. It must expand and compete in local and foreign markets. The labor economy has to fulfill the national mission of industrialization and expansion as rapidly as possible. . . The managerial group by and large had little hope that the introduction of plant councils would introduce a fundamental change in the existing pattern of industrial relations. At most they had some hopes that the new body could promote better communication. Although workers in the plants were by and large indifferent toward the Plant Council program, their workers

9 Y. Meshel, Raanana meeting, Duuar, August, 1957. lop. Lavon, “Workers’ Participation and its Im lementation,” pamphlet edited by Hista-

11 M. Bartal (a member of Koor management), Duvar, August, 1957. drut’s central committee for participation, 1959, p. !?A yin Hebrew).


committee representatives and national union officials expressed a positive attitude towards the idea of workers participation and supported the sug- gested plan.

The crystallization of the detailed Plant Council program turned out to be quite a long process in which the major interest groups - the political leadership, the managerial elite, and the trade union functionaries - took part. The program which emerged provided for:

(1) the establishment in each of the administrative industrial enterprises of a council--expected to meet once a month-in which the representatives of workers (5 to 10) and the appointees of management (2 to 5) would have equal voting power

(2) the council's authority included all matters pertaining to the enterprise-production plans and methods, investments, new equipment, development programs, reorganization, marketing, training-xcept wages and working conditions, which would remain under the jurisdiction of the workers m d t t e e and management

(3) within six months of functioning the Joint Production Council was to be integrated into the Plant Council

(4) decisions approved by two-thirds of each side (workers representatives and management representatives) would be binding on management and workers

(5) twice a year a general assembly of the enterprise would be convened where both the management and the council will report about their activities and ex- change opinions with the workforce.

The establishment of the councils was conceived by the proponents of the participation program as a first step which would be followed at an un- specaed date by the establishment in each plant of a joint-management body which would function as a single unit with collective responsibility. This stage - which as we shall see constituted the fourth phase of workers participation programs - was implemented several years later when the Plant Councils no longer existed.

The road from plan to practice was long, tiresome, and caused the advo- cates of the plan much disappointment. In the absence of a common will for joint participation, management and workers were each concerned with pre- serving and advancing their respective self-interests, with the result that they were pulling in different directions.12 Although some Histadrut officials tried to create the impression that the plan was enthusiastically welcomed, the actual success was at best partial, since some of the older councils became inactive while new ones were being established.ls By 1961 all councils

12 See Tabb and Goldfarb, op. cft., p. 90. 1s Between 1958 and 1980, 29 plant councils were established.


had become inactive without any of then1 reaching the joint-management phase. It has become clear that the plan was a complete failure.

There is very little systematic information concerning the attitudinal reaction of managers and workers to the plan. One study‘‘ revealed that even managers who supported the participation program expressed reservations and anxieties about its implementation. They felt that co-management would seriously impair their authority by making the decision-making process cum- bersome and difficult. Many managers expressed the fear that workers would feel that they were “in the saddle” and they would resist changes, make life easier for themselves, and generally take off in a selfish reaction to their newly granted power. On the other hand, workers frequently feared that their representatives could not be relied upon to really keep the workers’ interests in mind.

Some of the councils met once every two months, but most met even less freq~ently.’~ Moreover, the meetings became less and less frequent as time passed. The subjects primarily discussed by the councils included: general information about the enterprise, council organizational problems, and productivity problems (by the subcommittee for production). Plant organization, training, production planning, finances, marketing, or research and development were discussed very infrequently. Most management representatives took a very limited part in the discussions, most likely because of the presence of their boss - the general manager. They could not afford to con- tradict the general manager during the meetings nor did they want to be his “yes-man.” Their solution was to keep silent and not put their integrity to an open test.

The role of the workers representatives was also limited. Although 50 per cent of them said that the information supplied in advance could serve as a sdc ien t basis for discussion and decision-making, the fact was that in many many cases they did not have the time, the educational background, and experience which would enable them to go deeply into a problem and come out with a relevant and reasonable solution. So, instead of looking for solu- tions together with the managers, they sometimes chose to attack management and especially the top officials. Managers were occasionally pushed

14 G. Stoddart, The Histadrut Plan for Workers Partid ation in Managanent (New York: Brooklyn College, 1960, mimeographed). Stoddart’s report is gased on a reliminary investigation conducted during the s ring of 1959. At that time plant councils rangdl from about 10 months

15 In June 1960 the Genera1 Secretary of the Histadrut a pointed a committee to study the situation with regard to the articipation program. A (unpubfished) memorandum submitted in October of that year include1 findings based on (1) interviews with workers and managers who were members of the plant councils, (2) observation and follow-up of the work of the plant councils, and (3) interviews with 64 workers.

to one or two months o P d.

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into defensive positions and reacted aggressively, the result of which was a communication blockage between the two parties. Only rarely were the wills of the two camps integrated to the extent that the council reached meaning- ful decisions.

No single factor could account for the failure of the plant council program. Clearly both workers and managers had little preparation for the changes which the scheme was supposed to introduce in the existing pattern of labor-management relations. Managers in the plants rejected the idea of sharing responsibility, authority, and prestige with newly elected workers whom they perceived as uneducated in technical-production matters, misin- formed, and unable to make useful contributions. Despite their ideological acceptance of the concepts of “participation” and “democratic management” they feared that the councils would consume much time and energy without bringing tangible results. On the other side, the ordinary workers remained inmerent towards the scheme, ostensibly because it provided them with no tangible benefits.

No official decision was made to abandon the program. The councils sim- ply ceased to function and for all practical purposes were soon dead. How- ever, the idea of workers participation in management remained alive among the Histadrut leaders. The road was soon paved for the fourth (and present) phase of workers participation.

The “Joint-Management,’ Phase In 1961 it became clear that the spark of plant councils had

failed to start a fire. In the original 1958 program, joint managements were conceived as a higher level of participation to be introduced when future conditions warranted them. When the plant councils failed, the leadership of the Histadrut was faced with the dilemma of whether or not to proceed to the higher stage. The decision was eventually made to take this step.

In the preparatory meetings of Histadrut officials with workers and managers, no new goals were revealed. The same old arguments for participation were again voiced by those who wished to promote the new scheme: the establishment of a more efficient and a more satisfied work force and the need to achieve a congruence between ideology and the reality of the enterprises.

In April 1964 a special meeting of the Histadrut Council (the second highest body, next to the National Convention) was held to discuss the subject of workers participation in management. It endorsed in principle a joint management program. Similarly the Tenth National Convention of the His- tadrut in 1966 urged the introduction of joint managements. However, not


until March 1968 was the General Secretary of the Histadrut officially able to inform the central managements of Histadrut concerns and the respective trade unions about the Rules and Regulations of the new phase of participation. During the intervening four years, an internal struggle between the managerial elite and the political leadership took place regarding the trans- lation of the official resolutions into an institutional form. The final product constituted a compromise with which the parties thought they could live.

The program provides for the participation of workers representatives at two levels: (1) The “central management” _- the managements of the several holding companies which operate the individual enterprises, and (2) the managements of the individual plants.

Workers Participation in the Central Management The new Rules and Regulations state that workers represen-

tatives should constitute a third of the members of each central management. They should be elected and appointed by Hevrat Ovdim from a list of candidates submitted to it by the respective councils of the various national trade unions which represent the work force.

The rules also state that at least one of these workers representatives should serve in the smaller managing group that directs the day-to-day activities of the company and with whom the respective unions negotiate. Workers representatives should have rights equal to other directors. They should not discontinue their regular employment and instead will receive time to carry out their duties as directors. The Rules do not specify how often workers representatives should be elected nor do they limit the number of times that an individual can be re-elected.

By now three workers representatives have joined each of the six major central managements.16 All 18 representatives were recommended by the respective trade unions and were officially appointed by Hevrat Ovdim. There is evidence of some persistent problems regarding workers participation at the central management level. They could be grouped under the headings of effectiveness and representativeness. Regarding the first cate- gory, the representatives themselves have often expressed dissatisfaction, complaining that: (1) The boards have convened irregularly, in some cases once every few months, in others every few weeks. The long breaks pre- vented the representatives from being properly informed on much of the subject matter. (2) When the boards were in session, the workers representa-

16 These were “Solel Boneh - construction division,” “Solel Boneh - division of work in foreign countries,” “Koor,” “Even Vassid,” “Hamoshbir Hamerazi - Industrial Section,” and “Herut.” See Y. Yajol, Industrial Democracy in Israel (Tel-Aviv: Tarbut Vechinuch, 1966), p. 113 (in Hebrew).


tives could not react effectively for lack of technical or economic competence. “If workers’ representatives are invited to participate in the board meetings once every two weeks,” claimed one of these representatives, “each of them must have an unusual talent in order to encompass within two or three hours all the problems of a nationwide company which operates dozens of plant^."^'

The extent to which the representatives at the central management level really represent the rank and file -in the sense of conducting an activity which is on their behalf - is highly questionable. They have been appointed by, and are accountable to, the trade unions’ leadership and not to the rank and file. The rank and file in the plants know little about the work of the representatives and expect little from them. Often the representatives demanded for themselves or for their colleagues an appointment to the small managing group, e.g., a full-time position as director. Two of them have suc- ceeded in getting such appointments. Many persons have objected to the idea of letting workers representatives become full-time directors, fearing that they would be unable to properly represent the interests of the workers. Being close to management and knowing more than the ordinary workers about the economic conditions of the plants, workers representatives could hardly avoid taking positions which contradicted the short-run interests of of the rank and file; at the same time they are supposed to represent these rank and file,

The professional managers of the Histadrut have not objected to the idea of workers participation in the central management. They have even welcomed the scheme, probably because they expected it to make the authority relationship in the plants more effective, and because they hoped to strength- en their own legitimacy to manage enterprises belonging to the labor move- ment. As a matter of fact, the high-level participation brought representatives of the trade unions - the “other side” with whom the central managements negotiate - closer to the center of managerial decision-making. The pros- pects of co-opting the representatives into management while at the same time limiting their influence undoubtedly caused many managers to welcome such a plan.

There is evidence that from time to time the workers representatives have taken an active part in the discussions of the central managements. By and large, however, the activities of the worker-directors have failed to promote a feeling of satisfaction among the rank and file. The hope that a program would cause an improvement in the work atmosphere in the enterprises, or

17 ma., p. 134.


that it would cause workers to identify more with their work place, has not materialized.

Joint Management at the Plant Level The Rules and Regulations at the plant level are more daring

than those concerning the central managements. The Rules and Regulations which were adopted in 1968 provide for the establishment and functioning of joint managements in every Histadrut-owned enterprise. They also specify the division of labor between the new joint management body and the trade union organization in the plant and endorse in principle the sharing of profits among employees in the enterprises.

The plant management. Each industrial enterprise will constitute an in- dependent unit in which a local management board, operating within the policy framework of the central management, will be established. A number of points should be highlighted: (a) The management board consists of the general manager of the enterprise and equal numbers of appointees of the appropriate central management and the representatives of the plant work force. (b) The workers representatives are to be elected by all employees in the plant. Workers representatives will not be allowed to serve more than three consecutive years on the board. (c) The Rules provide for the alloca- tion of time to the worker-directors to fulfill their managerial duties, includ- ing preparatory work. (d) In order to avoid the possibility of having the joint management board exist only on paper, the Rules provide for once-a-week meetings and for the regular keeping of the minutes of all its decisions. (e) The area of responsibility of the joint management was defined as follows:

The local management is responsible for the economic existence of the enterprise, for its profitability, production, its financial condition and its balance. It discusses and decides on all matters and problems of the plant: (1) The organization and utilization of manpower and the work of the managerial personnel. (2) Annual and seasonal production plans. (3) The findings of the annual balance. (4) The development of the enterprise and the establishment of new departments.l*

(f) In order to prevent the development of split managements, and in order to encourage internal communication in the plant, the Rules state that the general manager and the members of the management should report together to the work force about the condition of the enterprise and its problems. It

18 “Rdes of Joint Managements,” Dapei ShLhf, No. 5 (Tel-Aviv: Histadrut Executive, Ldy, 1Q68), p. 12. The subcommittee of Hevrat Haovdim preferred to leave the subject matter c use vague and not to spec^ the boards’ areas of responsibility. On the other hand, the Histadrut Participation Department preferred to be somewhat specific and thus to avoid improper interpretations.

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also provides for the incorporation of the joint production committees into the joint management and for the extension of participation to the various departments.

The joint management and the workers committee. The Histadrut was very clear in its insistence on separating trade union representation from the joint management program. This is reflected in the plan by: (a) An explicit statement that the workers committee and workers representatives on the joint management board constitute two separate elected arms of the work force with distinct roles and authority. (b) A statement that the collective bargaining on subjects with which the trade union had dealt in the past, as well as the handling of grievances, would continue to be done by the workers committee and the director. In this way, the plan is supposed to prevent a confrontation of the workers self-interests (to be handled by the trade union body), and the workers and managers common interests (to be handled by joint management). (c) The plan forbids the secretary of the workers committee from being a member of the joint management board; however, there is no limitation on other members of the workers committee being elected to the board. (d) In order to limit the possibility of a conflict between the two arms of workers representation, the plan provides for periodic infonnation- sharing meetings of the joint management board with the workers committee.

Profit sharing. This issue was continuously discussed in Histadrut circles for many years. Managements, as a rule, tried to limit the proportion of shared profits and to condition them on a rise in productivity. Workers, on the other hand, usually wanted unconditional profit-sharing. The various pressure groups in the Histadrut leadership could not resolve the issue, and therefore the 1968 provisions state merely that up to 40 per cent of the profits which would “result from the participation in management” would be shared among the employees. Realizing that nothing explicit and binding has been decided and hoping for the clarification of the matter in the future, the His- tadrut executive stated in the Rules that after a year or two of actual experience with the joint management program the issue of profit-sharing will be discussed again. For the time being, the matter remains unclear, especially the question of when profits are a “result” of participation. Similarly de- batable is the phrase “up to 40 per cent,” with no minimal percentage in- dicated.” -___

19 Managements have often responded, however, that there are no profits anyway and that the whole issue is not relevant for the time being. Recently when some plants have shown profits, the director of the holding corn ny to which these plants belonged argued that the holding corn any as such must be profita 7 le before any of its individual plants can share profits with its ernp f oyees.


In principle, the scheme obliges managers and employee representatives to discuss matters outside the traditional realm of collective bargaining. It thus provides a framework for a process of mutual influence, without chang- ing the bargaining relationship between the two parties. In this manner, the range of matters about which workers could exert influence has been widened considerably. However, it should be noted that the scheme provides merely for consultation. Although the line managers have to abide by the decisions of the joint management body, such decisions could be adopted even if all workers representatives vote against them. Moreover, individual plant management is often severely restricted by the policies and daily inspection of the central management.

Employee Expectations Regarding Participation In the enterprises themselves the subject of participation,

though hardly a burning issue, continues to attract attention. A 1966 survey which examined the opinions of 567 managers and workers in 16 enterprises of KooP revealed that: (1) About three-quarters of all interviewees under- stood by “participation” that workers representatives participate in the management of the plant and in its decisions without cutting themselves from the general work force.21 (2) A much higher percentage among the workers than among the managers expected participation to bring about positive results in the areas of economic conditions of the plant, labor relations, and morale and discipline. Managers by and large did not expect participation to improve the workers material rewards. Most workers on the other hand did expect such a result. (3) Nine out of ten secretaries of workers committees favored participation, while 55 per cent of the managers opposed it. Among the work force 54 per cent favored participation, 16 per cent opposed it, and 11 per cent thought that it was impracticaLB Enterprises with a low percentage of supporters were those that had the most unsatisfactory experience with previous forms of participation. By contrast, the highest - ~ -

See Tabb and Goldfarb, op. cit. 21 Ibid., p. 125. This three-quarters consisted of 68 per cent of the manual workers, 81 per

cent of the foremen, 84 per cent of office employees, 89 per cent of the technicians, and 84 cent of the managers. See Ibld., pp. 125-127. Internstin ly, although official Histadrut b o E i have never endorsed the idea of employees s h a h losses i u t 9 per cent of the manual workers, 13 per cent of the office employees, 17 er cent ofthe en h e r s and technicians, 17 per cent of the mana ers, and 26 per cent of the Foremen combine d joint management with sharing both

22 Ibid., Tables 27 and 28. The data also seems to indicate that among people with more formal education there were more who considered participation to be impractical (30 than among those with less formal education (13 per cent). There is, however, the p o s s i ~ ~ ~ ! ~ the association between formal education and unpracticability of participation is a spurious one and could be “explained away” or at least specified by controlling for such variables as position in the enterprise or ideoIogical commitment.

profits an 9 losses.


percentage of support came from enterprises that either had no experience with participation or where there was relatively little management opposi- tion. (4) To most respondents the failure of participation programs was due neither to reasons intrinsic to the idea of participation nor to the numerous practical problems, but rather to the Histadrut’s method of handling such programs. This suggests the existence of a participation credibility gap between the leadership of the Histadrut and employees in the plants.

Implementation of Joint Management As of November 1969 joint management has been introduced

into nine plans. So far our only evidence as to how the plan has been working comes from a pilot study, conducted by Histadrut’s Department of Worker Participation, of two plants in which the plan was set up in 1967.

The program was introduced from on top, in both cases, despite limited interest on the part of those who were supposed to participate. Nevertheless, both workers and managers shared the hope that the new scheme would have positive economic and social effects. Several months after implementation of the program none of the interviewees expressed the opinion that any improvements had occurred. Neither communications nor superior-subor- dinate relations had changed. Nevertheless, there was general agreement that the experiment should continue. Most workers expected that joint management would eventually mean more humane treatment by management and profit-sharing.

In one plant top management successfully co-opted the workers representatives in the joint management. Here the representatives felt themselves as part-time managers interested in the plant’s long-run goals. Management in the other plant merely went through the motions of implementing the scheme. Here the workers representatives looked upon their role as that of protecting their constituents’ interests.

Conclusion The history of workers participation in Histadrut-owned en-

terprises reflects not only a strong motivation by the political leadership of the labor organization to change the status quo, but also the lack of success in achieving that desired change. This lack of success can be explained by: (1) the official ideology of the Histadrut; (2) the power of the Histadrut managerial elite; and (3) the reactions of both managers and workers to the various participation programs.

Because of the emphasis on nation building in its ideology, Histadrut- owned enterprises were expected first and foremost to serve as instruments


for economic development and to provide employment to newcomers. How- ever, large and efficient enterprises capable of fulfilling the national mission are not synonymous with nonalienating work.

The Histadrut leadership proved unable of imposing its formal policy regarding participation on its own growing managerial group. The latter was powerful enough to interpret the policy and to put it into practice - if at all - in such a way that it suited their needs. In a sense, the leadership of the Histadrut has gradually become a captive of its own hired administrators. There is no reason to believe that the fate of the present joint-management program will differ from its predecessors unless it will first be modified so as to become more acceptable to the managerid elite.

In the enterprises themselves, the parties directly involved in the implementation of the participation programs have never revealed sincere readiness to put the “imposed” schemes into effective practice. Managers have seen these programs as a threat to their authority. Workers have felt that these programs were marginal issues since they could not see in them immediate advantages for themselves. There is much evidence to support the conclusion that as long as material rewards are not an integral part of a participation program, it will not be effectively implemented.

Documents

Histadrut's Search for a Participation Program