Workers’ Participation in Management

The Genesis Derived from a Latin word Derived from a Latin word participareparticipare

participation means participation means sharing/taking partsharing/taking part Sharing is a Sharing is a bilateral processbilateral process and it has and it has

A A functionalfunctional aspect, aspect, andand A A motivationalmotivational aspect aspect

Worker’s Participation in Management highlights Worker’s Participation in Management highlights both these aspects wellboth these aspects well The functional aspect is a The functional aspect is a role in decidingrole in deciding The motivational aspect is the The motivational aspect is the natural natural

involvement after decidinginvolvement after deciding

WPM – The Soul of IR

CB vs. WPM : Heart vs. SoulCB vs. WPM : Heart vs. Soul Collective Bargaining is based on Conflict or at Collective Bargaining is based on Conflict or at

least the perception of Conflictleast the perception of Conflict Highlights need for synergyHighlights need for synergy A step in the Working Class MovementA step in the Working Class Movement

WPM is based on CooperationWPM is based on Cooperation Highlights SYNERGY itselfHighlights SYNERGY itself A step in Management Effectiveness A step in Management Effectiveness

Objectives of WPM Pie enlargingPie enlarging NOT NOT Pie splittingPie splitting Gain sharingGain sharing – – improving profitabilityimproving profitability Future sharingFuture sharing – – improving competitivenessimproving competitiveness Power sharingPower sharing – – Placing Stockholders and Placing Stockholders and

Stakeholders on a even keelStakeholders on a even keel Self actualisationSelf actualisation – – availing opportunity to availing opportunity to

contribute meaningfullycontribute meaningfully

Some Models of WPM

British system of British system of Joint ConsultationJoint Consultation

Yugoslav system of Yugoslav system of Workers CouncilWorkers Council

German system of German system of Co determinationCo determination

The Japanese system of The Japanese system of Quality CirclesQuality Circles

The American system of The American system of QWL QWL (QUALITY OF WORKLIFE)(QUALITY OF WORKLIFE)

The Quality of Work life QWL coined by Louis Davis in 1972QWL coined by Louis Davis in 1972 The basic idea:The basic idea:

Promote individual learning and developmentPromote individual learning and development Provide individuals with influence and control Provide individuals with influence and control

over what they do and how they do itover what they do and how they do it Make available to the individuals interesting and Make available to the individuals interesting and

meaningful work as a source of personal meaningful work as a source of personal satisfaction and a means to value personal rewardssatisfaction and a means to value personal rewards

Defining WPM

A system of communicationA system of communication and and consultationconsultation, either , either formal or informalformal or informal, by , by which employees of an organisation are which employees of an organisation are kept kept informed informed about the affairs of the about the affairs of the undertaking and through which they undertaking and through which they express their opinionexpress their opinion and and contribute tocontribute to the the management decisionsmanagement decisions

How WPM works?

KF Walker ModelKF Walker Model

PlanningOrganizingMotivatingControlling

Managerial

Hierarchy

UnionHIERARCHY

Areaof

Colle-ctive

Barga-ining

EmployeeDirectors

WorksCouncil

SuggestionSchemes

Doing Workers

Participative Supervision and Job enlargement

Forms of Participation

InformativeInformative Information Sharing Information Sharing InvolvingInvolving

ConsultativeConsultative Idea generatingIdea generating Democratic functioningDemocratic functioning

Co deterministicCo deterministic Joint decision makingJoint decision making PartneringPartnering

Some Key Dimensions in WPM (David Guest,1995)

DimensionDimension Industrial RelationIndustrial Relation HRM/HRDHRM/HRD

Psychologicalcontract

Behaviourreferent

Relations

Organisationand design

Compliance

Norms, customs andpractices

Low trust, pluralist,Collective

Formal roles, hierarchy,Division of labour,

Managerial controls

Commitment

Values / Mission

High trust, unitarist,Individual

Flexible roles, Flat structure/teamworkAutonomy, self-control

WPM as a Bridge

Organisational Commitment has 3 aspectsOrganisational Commitment has 3 aspects::1.1. Identification with goals & valuesIdentification with goals & values2.2. A desire to belong to the OrganisationA desire to belong to the Organisation3.3. A willingness to display effort on behalf of A willingness to display effort on behalf of

OrganisationOrganisation Union Commitment has the same 3 aspectsUnion Commitment has the same 3 aspects The key issue is CompatibilityThe key issue is Compatibility of Goals and Values of Goals and Values

of the Company and the Union in the eyes of the of the Company and the Union in the eyes of the Employee/workerEmployee/worker

WPM bridges the Gap, while CB shows itWPM bridges the Gap, while CB shows it

The Commitment Matrix & Behaviour Patterns

Commitment toCommitment to ORGANISATIONORGANISATION

tt

oo

UU

NN

II

OO

NN

High / HighHigh / HighCommon / integratedCommon / integrated

Goals & ValuesGoals & Values

Business PartnershipBusiness Partnership

HighHigh / / LowLow

Habitual ResistanceHabitual Resistance

LowLow / / HighHigh

Co-operationCo-operation

Low / LowLow / Low

IndifferenceIndifference

The Missing Focus

Organisations view HRM and IRM as Organisations view HRM and IRM as Either – Or optionsEither – Or options

HRM focused on Individual HRM focused on Individual Industrial Relations focused on CollectiveIndustrial Relations focused on Collective The new realism :The new realism :

High emphasis on both HR & IR managementHigh emphasis on both HR & IR management

Today’s Workplace

The Mutual Gains EnterpriseThe Mutual Gains Enterprise

Thomas A. Kochan & Paul Osterman (1994)Thomas A. Kochan & Paul Osterman (1994)

Principles guiding the Mutual Gains Enterprise

Strategic levelStrategic level::

Supportive Business StrategiesSupportive Business Strategies

Top Management CommitmentTop Management Commitment

Effective voice for Human Resources in Effective voice for Human Resources in

Strategy making and GovernanceStrategy making and Governance

Principles guiding the Mutual Gains Enterprise

Functional level:Functional level:

Staffing based on employment stabilisationStaffing based on employment stabilisation

Investment in training and developmentInvestment in training and development

Contingent compensation that reinforces Contingent compensation that reinforces

cooperation, participation, and contributioncooperation, participation, and contribution

Principles guiding the Mutual Gains Enterprise

Workplace level:Workplace level:

High standards of employee selectionHigh standards of employee selection

Broad task design and teamworkBroad task design and teamwork

Employee involvement in problem solvingEmployee involvement in problem solving

Climate of cooperation and trustClimate of cooperation and trust

A great place to workA great place to work

The history of partnering Workers

1884(UK): 1884(UK): Labour Association for promoting cooperative Labour Association for promoting cooperative production amongst Workforceproduction amongst Workforce formed formed It was set up as a propagandist committee to arouse It was set up as a propagandist committee to arouse

working men, and public opinion generally, to the working men, and public opinion generally, to the importance of the movement for making workers importance of the movement for making workers everywhere partners in their workshops.everywhere partners in their workshops.

Renamed later as Renamed later as Industrial Co-partnershipIndustrial Co-partnership AssociationAssociation and again after the Word War-II as the and again after the Word War-II as the Industrial Participation AssociationIndustrial Participation Association

19891989:: Renamed again asRenamed again as

Involvement and partnership Association Involvement and partnership Association (IPA)(IPA)

The Post-War Divergence

During the War the During the War the Conflict modelConflict model gained gained ground and Unions became too powerful, ground and Unions became too powerful, and feasted on and feasted on Collective BargainingCollective Bargaining

The post-war IR in UK relied more on CB The post-war IR in UK relied more on CB whereas Germany & most of Europe whereas Germany & most of Europe developed a developed a Social partnership modelSocial partnership model and and relied more on relied more on Workers Workers participation in Managementparticipation in Management

Towards Industrial partnership

The IPA publication in 1992 enunciates new The IPA publication in 1992 enunciates new principles of partnershipprinciples of partnership::

Partnership post1990s will not emphasise institutionalised Partnership post1990s will not emphasise institutionalised participation, nor a tripartite approachparticipation, nor a tripartite approach

The emphasis will be on Attitudes & CultureThe emphasis will be on Attitudes & Culture It is now a question of building trust, recognising differences, It is now a question of building trust, recognising differences,

finding common ground, and applying key partnership finding common ground, and applying key partnership principles:principles:

• Commitment to organisational successCommitment to organisational success

• Respecting legitimacy of stakeholders in businessRespecting legitimacy of stakeholders in business

Employment insecurityA major threat to partnership

Attitudes towards Job security is changingAttitudes towards Job security is changing Employers want more flexibility and the Employees Employers want more flexibility and the Employees

want more stabilitywant more stability Employment security is a desirable framework for Employment security is a desirable framework for

having employee involvement /commitmenthaving employee involvement /commitment Concept of Concept of EmployabilityEmployability as substitute for continued as substitute for continued

Employment Employment has arrivedhas arrived Employer’s responsible for building capabilities in Employer’s responsible for building capabilities in

employees to survive and sustain after Exitemployees to survive and sustain after Exit

Information, Consultation & Co-determinationunderstanding the new dimensions

Information sharingInformation sharing is is Direct ParticipationDirect Participation

The Cellnet philosophyThe Cellnet philosophy (EThOS) explains: (EThOS) explains:

1.1. Frank & open exchange of ideas, information & Frank & open exchange of ideas, information & knowledgeknowledge – Key to effective Task management – Key to effective Task management

2.2. Open & Clear communication is Everyone’s Open & Clear communication is Everyone’s responsibilityresponsibility – Key to Business success – Key to Business success

3.3. By By taking ownership of issues and problems, taking ownership of issues and problems, making commitments and deliveringmaking commitments and delivering – Key to get – Key to get greatest contributions from People to Companygreatest contributions from People to Company

Information, Consultation & Co-determinationunderstanding the new dimensions

Representative consultationRepresentative consultation mean systems of joint consultation, mean systems of joint consultation, commonly referred to in India as Joint Councils for WPMcommonly referred to in India as Joint Councils for WPM

ICI philosophyICI philosophy explains the new outlook explains the new outlook::

For sustaining the highest levels of competitiveness,For sustaining the highest levels of competitiveness,

1.1. It is essential that all employees cooperate with each other to It is essential that all employees cooperate with each other to understand the understand the business, economic & social contextbusiness, economic & social context in which in which they are asked to work, andthey are asked to work, and

2.2. Have appropriate forums to influence decision makers at all Have appropriate forums to influence decision makers at all relevant management levels so that there is the best chance of a relevant management levels so that there is the best chance of a well judged and full hearted contribution from every employeewell judged and full hearted contribution from every employee

The great transformationin representative consultation

In many countries, agenda for consultation is In many countries, agenda for consultation is driven by Law – driven by Law – social security & rightssocial security & rights

Representatives are nominated / electedRepresentatives are nominated / elected During 1970s & 1980s the Joint Councils were During 1970s & 1980s the Joint Councils were

ineffectual, bureaucratic ‘tea & toilets’ talk ineffectual, bureaucratic ‘tea & toilets’ talk shops contributing no value to businessshops contributing no value to business

Since 1990 concept of Since 1990 concept of Partnership councilPartnership council has has emerged to debate cutting edges of Businessemerged to debate cutting edges of Business

Information, Consultation & Co-determinationunderstanding the new dimensions

Co-determinationCo-determination means means Representation of the Representation of the employees voiceemployees voice at the decision making table at the decision making table

With the transformation of business ownership from With the transformation of business ownership from single owner to Stock holders, the single owner to Stock holders, the employees have employees have become the largest become the largest stakeholderstakeholder

Growing recognition of Growing recognition of alignment of interestsalignment of interests of the of the Firm and the employee-stakeholdersFirm and the employee-stakeholders

Mutuality of interest among all stakeholders is Mutuality of interest among all stakeholders is shifting the bargaining mind-set towards partnershipshifting the bargaining mind-set towards partnership

A novel partnership journey at Welsh Water and Blue Circle

A common Vision and the GoalA common Vision and the Goal A cultural change program starting with the ManagersA cultural change program starting with the Managers A systematic revision of reward, status and conditionsA systematic revision of reward, status and conditions Business-focused consultative arrangements from the Business-focused consultative arrangements from the

shop-floor to the boardroom – shop-floor to the boardroom – multiple MOUsmultiple MOUs An agreed policy to manage employment securityAn agreed policy to manage employment security A major commitment to employee development and A major commitment to employee development and

training training

WPM – the Indian saga The Works Committee under ID Act, 1947The Works Committee under ID Act, 1947 The Directive Principles of State Policy under The Directive Principles of State Policy under

Indian ConstitutionIndian Constitution Recommendations of the GOI Study Group & ILC Recommendations of the GOI Study Group & ILC

1515thth session (1957) – session (1957) – Joint Management CouncilsJoint Management Councils The 2The 2ndnd Five Year Plan recommendations for setting Five Year Plan recommendations for setting

up up Joint CouncilsJoint Councils for Organisations employing 500 for Organisations employing 500 or more peopleor more people

GOI scheme for GOI scheme for Board representationBoard representation (1971) (1971) GOI scheme on GOI scheme on WPMWPM in 1975 – 20 point program in 1975 – 20 point program 1975: DPSP amended & WPM inserted at S/43a1975: DPSP amended & WPM inserted at S/43a

WPM – the Indian saga

1977: The 1975 scheme extended to Service sector 1977: The 1975 scheme extended to Service sector employing 100 or more peopleemploying 100 or more people

1978: Janata Govt. appointed Tripartite 1978: Janata Govt. appointed Tripartite Committee, recommended 3-tier structure for Committee, recommended 3-tier structure for participation – Board, Plant, Shopfloorparticipation – Board, Plant, Shopfloor

1983: WPM scheme for CPSUs introduced1983: WPM scheme for CPSUs introduced 1985-86: Union Budget opened Stock options for 1985-86: Union Budget opened Stock options for

employees (limited to 5%)employees (limited to 5%)

The PWM Bill, 1990

An attempt to bring statutory force An attempt to bring statutory force The Bill proposes participation at all levelsThe Bill proposes participation at all levels In Cold storage due to lack of will to enact In Cold storage due to lack of will to enact It has lost relevance under GlobalizationIt has lost relevance under Globalization PSUs have mostly complied & suffered due PSUs have mostly complied & suffered due

to Unions’ extension of bargaining to WPMto Unions’ extension of bargaining to WPM Deregulation is the order of the dayDeregulation is the order of the day

Future of workers participation

In 1974 JRD said,In 1974 JRD said,

““It is a thing which will come in due course, It is a thing which will come in due course, in a much bigger way than it is today. It is in a much bigger way than it is today. It is however, a very difficult and delicate however, a very difficult and delicate subject which must be developed slowly, subject which must be developed slowly, systematically and methodically, learning systematically and methodically, learning from practical experience and taking from practical experience and taking lessons from pitfalls of the past”lessons from pitfalls of the past”

From fist-fight to empowerment

The World has changed since 1990sThe World has changed since 1990s The ITES sector impact is irreversibleThe ITES sector impact is irreversible Job security can no more be determined by Job security can no more be determined by

collective pressure but by collective pressure but by employabilityemployability Training, Information & Ability to work Training, Information & Ability to work

flexibly flexibly will determine Job securitywill determine Job security Unions must share these values along with Unions must share these values along with

Management’s transparent goalsManagement’s transparent goals Mutual gains EnterpriseMutual gains Enterprise is the best option is the best option

The Partnership Philosophy lives on…

Workers participation in Management, as a Workers participation in Management, as a concept is concept is philosophically sound & richphilosophically sound & rich

WPM derives merit from the WPM derives merit from the principle of Trusteeshipprinciple of Trusteeship enunciated enunciated by Mahatma Gandhi by Mahatma Gandhi

It is an It is an ideological extension of democratic spiritideological extension of democratic spirit and principles and principles for the workplacefor the workplace

True democracy & free market economy go hand in hand; True democracy & free market economy go hand in hand; regulation stifled growth of WPMregulation stifled growth of WPM The irony of zero Rights for workers in Communist ruled The irony of zero Rights for workers in Communist ruled

Soviet Union and PRCSoviet Union and PRC WPM / WPM / Partnership is likely to flourish under liberalisationPartnership is likely to flourish under liberalisation, ,

while it could not succeed earlierwhile it could not succeed earlier