Workers’ Participation in Management

1. Workers’ Participation in Management

2. 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 • Worker’s 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

3. WPM – The 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

4. Objectives of WPM • Pie enlarging NOT Pie splitting • Gain sharing – improving profitability • Future sharing – improving competitiveness • Power sharing – Placing Stockholders and Stakeholders on a even keel • Self actualisation – availing opportunity to contribute meaningfully

5. Some Models of WPM • British system of Joint Consultation • Yugoslav system of Workers Council • German system of Co determination • The Japanese system of Quality Circles • The American system of QWL (QUALITY OF WORKLIFE)

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

7. Defining WPM A system of communication and consultation, either formal or informal, by which employees of an organisation are kept informed about the affairs of the undertaking and through which they express their opinion and contribute to the management decisions

8. How WPM works? KF Walker Model Planning Organizing Motivating Controlling Managerial Hierarchy Area of Colle- ctive Barga- ining Union H I E R A R C H Y Employee Directors Works Council Suggestion Schemes Participative Supervision and Job enlargement Doing Workers

9. Forms of Participation • Informative • Information Sharing • Involving • Consultative • Idea generating • Democratic functioning • Co deterministic • Joint decision making • Partnering

10. Some Key Dimensionsin WPM (David Guest,1995) DimensionIndustrial RelationHRM/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

11. WPM as a Bridge • Organisational Commitment has 3 aspects: • Identification with goals & values • A desire to belong to the Organisation • A willingness to display effort on behalf of Organisation • Union Commitment has the same 3 aspects • The key issue is Compatibility of Goals and Values of the Company and the Union in the eyes of the Employee/worker • WPM bridges the Gap, while CB shows it

12. The Commitment Matrix & Behaviour Patterns Commitment toORGANISATION t o U N I O N

13. The Missing Focus • Organisations view HRM and IRM as Either – Or options • HRM focused on Individual • Industrial Relations focused on Collective • The new realism : High emphasis on both HR & IR management

14. Today’s Workplace The Mutual Gains Enterprise Thomas A. Kochan & Paul Osterman (1994)

15. Principles guiding the Mutual Gains Enterprise • Strategic level: • Supportive Business Strategies • Top Management Commitment • Effective voice for Human Resources in Strategy making and Governance

16. 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

17. 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 trust • A great place to work

18. The history of partnering Workers 1884(UK): Labour Association for promoting cooperative production amongst Workforce formed • It was set up as a propagandist committee to arouse working men, and public opinion generally, to the importance of the movement for making workers everywhere partners in their workshops. • Renamed later as Industrial Co-partnershipAssociation and again after the Word War-II as the Industrial Participation Association 1989: Renamed again as Involvement and partnership Association (IPA)

19. 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 modeland relied more on Workers participation in Management

20. Towards Industrial partnership The IPA publication in 1992 enunciates new principles 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

21. Employment insecurityA 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 of Employability as substitute for continued Employment has arrived • Employer’s responsible for building capabilities in employees to survive and sustain after Exit

22. Information, Consultation & Co-determinationunderstanding the new dimensions • Information sharing is Direct Participation The Cellnet philosophy (EThOS) explains: • Frank & open exchange of ideas, information & knowledge – Key to effective Task management • Open & Clear communication is Everyone’s responsibility – Key to Business success • By taking ownership of issues and problems, making commitments and delivering – Key to get greatest contributions from People to Company

23. Information, Consultation & Co-determinationunderstanding 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, • It is essential that all employees cooperate with each other to understand the business, economic & social context in which they are asked to work, and • Have appropriate forums to influence decision makers at all relevant management levels so that there is the best chance of a well judged and full hearted contribution from every employee

24. The great transformationin representative consultation • In many countries, agenda for consultation is driven by Law – social 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 of Partnership council has emerged to debate cutting edges of Business

25. Information, Consultation & Co-determinationunderstanding the new dimensions • Co-determination means Representation of the employees voice at the decision making table • With the transformation of business ownership from single owner to Stock holders, the employees have become the largest stakeholder • Growing recognition of alignment of interestsof the Firm and the employee-stakeholders • Mutuality of interest among all stakeholders is shifting the bargaining mind-set towards partnership

26. 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 boardroom – multiple MOUs • An agreed policy to manage employment security • A major commitment to employee development and training

27. WPM – the 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 up Joint Councils for Organisations employing 500 or more people • GOI scheme for Board representation (1971) • GOI scheme on WPM in 1975 – 20 point program • 1975: DPSP amended & WPM inserted at S/43a

28. WPM – the Indian saga • 1977: The 1975 scheme extended to Service sector employing 100 or more people • 1978: Janata Govt. appointed Tripartite Committee, recommended 3-tier structure for participation – Board, Plant, Shopfloor • 1983: WPM scheme for CPSUs introduced • 1985-86: Union Budget opened Stock options for employees (limited to 5%)

29. 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

30. 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 is however, a very difficult and delicate subject which must be developed slowly, systematically and methodically, learning from practical experience and taking lessons from pitfalls of the past”

31. 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 work flexibly will determine Job security • Unions must share these values along with Management’s transparent goals • Mutual gains Enterprise is the best option

32. The Partnership Philosophy lives on… • Workers participation in Management, as a concept is philosophically sound & rich • WPM derives merit from the principle of Trusteeship enunciated by Mahatma Gandhi • It is an ideological extension of democratic spirit and 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