Unit 6: Workers' Participation in Management T.H.

9 Concept, purpose and significance of participation; Forms of participation: information sharing, consultation, association of workers, joint decision- making and Board of Directors. Scenario of worker's participation in management in Nepal: problems, prospects, legal provisions and present status. Concept: The concept of workers participation in management is considered as a mechanism where workers have a say in the decision making process of an enterprise. Participation basically means sharing the decisionmaking power with the lower ranks of the organization in an appropriate manner. It is depending on the socio-political environment and cultural conditions, the scope and contents of participation change. It encourage for achieving social justice. From the point of view of social scientists, participative management is one of the tools of management where the emphasis is on the utility of a one of the tools of human approach. The experiments of Blake, Mayo, Lewin and Likert popularized the belief that if workers are given opportunities to participate in the management process there could be positive gains to the organizations effectiveness and morale. Definition: According to International Institute of Labour Studies: Worker's Participation in Management (WPM) is the participation resulting from the practices which increase the scope for employees share of influence in decision-making at different tiers of organizational hierarch with concomitant/associated assumption of responsibility. Similarly, International Labour Organization (ILO) define that, Workers participation may broadly be taken to cover all terms of association of workers and their representatives with the decision-making process, ranging from exchange of information, consultations, decisions and negotiations, to more institutionalized forms such as the presence of workers member on management or supervisory boards or even management by workers themselves. Basically, there are three groups of managerial decisions affecting the workers of any industrial establishment. They are; A. Economic decisions: Methods of manufacturing, automation, shutdown, lay-offs, and mergers. B. Personnel decisions: Recruitment and selection, promotions, demotions, transfers, grievance settlement, work distribution C. Social decisions: Hours of work, welfare measures, questions affecting work rules and conduct of individual workers safety, health, and sanitation and noise control. Objectives and Important: Following of the fundamental objectives and important of WPM; Objectives An instrument for increasing the efficiency of enterprises and establishing harmonious relations; A device for developing social education for promoting solidarity among workers and for tapping human talents; A means for achieving industrial peace and harmony which leads to higher productivity and increased production; A humanitarian act, elevating the status of a worker in the society; An ideological way of developing self-management and promoting industrial democracy, To improve the quality of working life by allowing the workers greater influence and involvement in work and satisfaction obtained from work; To secure the mutual co-operation of employees and employers in achieving industrial peace; greater efficiency and productivity in the interest of the enterprise, the workers, the consumers and the nation. Important Unique motivational power and a great psychological value.

Peace and harmony between workers and management. Workers get to see how their actions would contribute to the overall growth of the company. They tend to view the decisions as `their own and are more enthusiastic in their implementation. Participation makes them more responsible. They become more willing to take initiative and come out with cost-saving suggestions and growth-oriented ideas.

Significance of Workers Participation: 1. Higher Productivity: The increased productivity is possible only when there will fullest cooperation between labour and management. It has been found that poor labour management relations do not encourage the workers to contribute anything more than the minimum desirable to retain their jobs. 2. Greater Commitment: An important prerequisite for forge greater individual commitment is the individuals involvement and opportunity to express him. Participation allows individuals to express themselves at the work place rather than being absorbed into a complex system of rules, procedures and systems. If an individual knows that he can express his opinion and ideas, a personal sense of gratification and involvement takes place within him. 3. Reduced Industrial Unrest. Industrial conflict is a struggle between two organized groups, which are motivated by the belief that their respective interests are rare by the self-interested behaviour of the other. Participation cuts at the very root of industrial conflict. It tries to remove or at least minimize the diverse and conflicting interests between the parties, by substituting it with cooperation, homogeneity and common interests. Both sides are integrated and decision arrived at are mutual rather than individual. 4. Improved Decisions. Communication is never a one way process. Participation tends to break down the barriers, and makes the information available to managers. To the extent such information changes the decisions; the quality of decisions is improved. 5. Human Resource Development. Participation provides education to workers in the management of industry. It fosters initiative and creativity among them. It develops a sense of responsibility. Informal leaders get an opportunity to reinforce their position and status by playing an active role in decision-making and by inducing the members of the group to abide by them. 6. Reduced Resistance to Change. Generally, changes are arbitrarily introduced from above without explanation. Subordinates tend to feel insecure and take counter measures aimed at disruption of changes. But when they have participated in the decision making process, they have had an opportunity to be heard. They know what to expect and why. Their resistance to change is reduced. Form of participation: Workers participation in management falls into several categories. It depend on the various socio-legal, political, economic environment. There is some form of participation. They are; A. Informative: Participation there is a sharing of information- for instance the information regarding production figures, the balance sheet of the company, economic condition etc. B. Consultative: Participation of workers representatives is consulted on matter relating to wale fare facilities by the management. C. Associative: Participation management accepts the suggestion of the council for solving a problem on hand.

D. Administrative: Participation management the decision is already taken and councils have the

right to choose the method of implementing it. E. Decisive participation. Finally decisive participation is the highest form of participation where all matters, economic, financial and administrative are brought under the security of the council and the decision are taken jointly. Beside the above mentioned form of participation, following are the practice in the field of industrial relation to participation. A. B. C. D. E. F. G. H. I. J. Board level participation Ownership participation Complete control Staff or work councils Joint councils and committees Collective Bargaining Job enlargement and enrichment Suggestion schemes Quality circles Financial participation

Board level Participation: This is highest form of industrial democracy. The workers representative on the Board can play a useful role in safeguarding the interests of workers. He or she can serve as a guide and a control element. He or she can prevail upon top management not to take measures that would be unpopular with the employees. He or she can guide the Board members on matters of investment in employee benefit schemes like housing, and so forth. Ownership Participation: This involves making the workers shareholders of the company by inducing them to buy equity shares. In many cases, advances and financial assistance in the form of easy repayment options are extended to enable employees to buy equity shares. Participation through complete control: Workers acquire complete control of the management through elected boards. It is a system of self-management. Self-management gives complete control to workers to manage directly all aspects of industries through their representatives. Participation through Staff and Works Councils: Staff councils or works councils are bodies on which the representation is entirely of the employees. There may be one council for the entire organization or a hierarchy of councils. The employees of the respective sections elect the members of the councils. Such councils play a varied role. Their role ranges from seeking information on the managements intentions to a full share in decision-making. Such councils have not enjoyed too much of success because trade union leaders fear the wearing down of their power and prestige if such workers bodies were to prevail. Participation through Joint Councils and Committees: Joint councils are bodies comprising representatives of employers and employees. This method sees a very loose form of participation, as these councils are mostly consultative bodies. Work committees are a legal requirement in industrial establishments. Such committees discuss a wide range of topics connected to labour welfare. Participation through Collective Bargaining: Through the process of CB, management and workers may reach collective agreement regarding rules for the formulation and termination of the contract of employment, as well as conditions of service in an establishment. Even though these agreements are not legally binding, they do have some force. But in practice, while bargaining, each party tries to take advantage of the other. Participation through Job Enlargement and Job Enrichment: Excessive job specialization that is seen as a by-product of mass production in industries, leads to associated problems in employees. Two

methods of job designing job enlargement and job enrichment are seen as methods of addressing the problems. Job enlargement means expanding the job content adding task elements horizontally. Job enrichment means adding `motivators to the job to make it more rewarding. This is WPM in that it offers freedom and scope to the workers to use their judgment. But this form of participation is very basic as it provides only limited freedom to a worker concerning the method of performing his/her job. The worker has no say in other vital issues of concern to him issues such as job and income security, welfare schemes and other policy decisions. Participation through Suggestion Schemes: Employees views are invited and reward is given for the best suggestion. With this scheme, the employees interest in the problems of the organization is aroused and maintained. The ideas could range from changes in inspection procedures to design changes, process simplification, paper-work reduction and the like. Participation through Quality Circles: Concept originated in Japan in the early 1960s and has now spread all over the world. A QC consists of seven to ten people from the same work area who meet regularly to define, analyze, and solve quality and related problems in their area. Training in problemsolving techniques is provided to the members. QCs are said to provide quick, concrete, and impressive results when correctly implemented. Financial Participation: This method involves less consultations or even joint decisions. Performance of the organization is linked to the performance of the employee. The logic behind this is that if an employee has a financial stake in the organization, he/she is likely to be more positively motivated and involved. Some schemes of financial participation are as follows; Profit-linked pay Profit sharing and Employees Stock Option schemes Pension-fund participation Scenario of worker's participation in management in Nepal: problems, prospects, legal provisions and present status

Industrial development and economic prosperity of the country is essential to secure harmonious relationship between worker and management. Workers participation in management is the fundamental things for sustainability of industrial sector. The philosophy of workers participation is based on the social justice and as such attempts to symbolize collectively feeling, aspiration, emotion, imagination, own feeling, etc. workers participation in management (WPM) permitting to workers to keep their views in the various managerial aspects prior to making decision. In our context, industries were gradually begun to establish from 1936 but there were not single statutory provision. Our industrial environment was operated by the Indian Factory Act. Still we are facing various problems regarding industrial relation among the management and workers due to lack of proper statutory measures. First of all we have to know that Nepalese attitude and development of industrial environment in Nepal. Fundamentally, lack of statutory provision, role of labour organization, management and workers attitude regarding WPM, worker ability, management interest, socio economic, geographical and political system of the country are the responsible for the WPM. Socio economic background of the worker and ability of the worker plays vital role to participate in management. Previously we had three large industries namely Biratnagar Jute Mills, Sugar Mills and Cotton Mills. After analysis the situation of these industries we can find out some points which were the obstacle for WPM. The points were as follows; Most of the workers were rural migrants No previous work experience and most of the agricultural worker Highly Illiterate Majority of the worker was male Large number of worker was non Nepalese

Skilled and highly skilled human resource was non Nepalese Large of segment of management were non Nepalese

Above mentioned reality shows the scenario of the WPM in our context. In Nepal, Factory and Factory Workers Act, 1959 make obligations to form works committee. It called joint committee. It fails to fulfil the present demand of Nepalese industrial community. Lack of specific objectives, limited scope, advisory nature of participatory forum, role conflict between works committee and trade union etc. were responsible factors which can hardly be eradicated in the present structure of joint consultation. Still so many unnecessary things need to be changed. Now a days we have labour law, trade union act but these are not perfect. Lack of plant level labour union, absence of legislative measures for collective bargaining, imperfect implementation of labour legislation, poor institutional framework of works committee, non participative attitude of management, non consideration of workers etc. are key problems of WPM in Nepalese industries. Illiteracy, lack of education and training, absence of knowledge, unrecognized labour force and negative attitude towards management etc. are poor characteristics of Nepalese workers, which are the root causes of small performance of statutory participative forum. At the present perspective to drive industrial ventures in right direction it is necessary to offer a comprehensive labour law considering the political, economical and socio cultural realities of the nation. The scheme of workers participation developed on these realities of the country will make fullest contribution towards developing harmonious relation between the management and the workers.