Participative management.pptx

MHRM 4th semester paper: Participative Management and Collective Bargaining.
Here are the complete notes on participative management.

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Prepared by: Dr. Rama Satyanarayana Mullapudi,
Faculty of HRM, Acharya Nagarjuna University.

1. Participative Management & Collective bargaining iv semester MHRM, Nagarjuna university PARTICIPATIVE MANAGEMENT Introduction Meaning Definition Degrees of participation Objectives Importance of WPM Theories of worker's participation in management Industrial Democracy Methods/Forms of Participative Management Methods of Participative Management in India Quality of work life balance Worker's participation in management has failed in India. give reasons. By Dr.M.Rama Satyanarayana ,

2. INTRODUCTION Participation and involvement of workers in the management of industry is practiced in most countries of the world. Workers participation in management has come to stay in both developed and developing countries. Worker's participation is also known as " labour participation or employee participation in management". In Germany is known as co-determination , while in Yugoslavia it is called "self- management. The International Labour Organisation has been encouraging member nations to promote the scheme of worker's participation in management.

3. MEANING Participative Management refers to the process of involving employees or employee representatives at all levels of Decision Making process.

4. DEFINITION Keith Davis has defined the term “Participation” as the mental and emotional involvement 1 of a person in a group situation which encourages him to contribute to group goals 2 and share responsibilities 3 . This definition envisages three important elements in Participation. Firstly , it means mental and emotional involvement rather than mere physical activity;

5. Secondly, Participation must motivate a person to contribute to a specific situation to invest his own resources such as Initiative, Knowledge, Creativity, Cleverness and skill in the objectives of the organization; and Thirdly, It encourages people to share responsibility commits people to ensure the success of the decision or activity.

6. Degrees of Participation There are four degrees of Participation. 1. Communication It involves sharing information about all management decisions with workers. 2 . Consultation Under it, workers express their views on work-related issues. Final decisions are taken by management after consultations.

7. Cont… 3. Co-determination Under it managers and workers jointly take decisions which are useful to the both parties. 4. Self-management In it, workers enjoy complete autonomy right from decision making to execution.

8. Objectives The main objectives of worker's participation in management include: 1. To promote increased productivity for the advantage of the organization, workers and society at large. 2. To provide a better understanding to employees about their role and place in the process of attainment of organizational goals. 3. To strengthen labour , management co-operation and thus maintaining industrial peace and harmony. 4. To build the most dynamic human resource.

9. 5 . To develop social education for effective solidarity among working community and for tapping latent human resources. 6.To satisfy the worker's social and esteem needs. 7. To build the nation through entrepreneurship and economic development. 8. To establish industrial democracy.

10. All these objectives, if fulfilled by proper implementation of worker's participation in management, affect the organization, workers and the society positively. The scope, extent and the successful working of the participative management depends to a great extent on the objectives and the employee, the employer and the government.

11. IMPORTANCE OF WORKER'S PARTICIPATION IN MANAGEMENT Worker's participation in management provides the following six benefits: 1. Mutual understanding Generally, employers and employees doubt the integrity of each other due to ignorance of each other's problems. Participation brings the two parties closer and makes them aware of each other's problems. As a result, a better understanding and mutual trust can be created between employer and employees.

12. 2. Higher productivity Co-operation between management and workers helps to increase production and profits of an enterprise. Through participation, workers learn the problems of enterprise and better understand their role. Participation improves employee motivation and job satisfaction which in turn help to increase their efficiency. Higher productivity leads to lower costs per unit and greater profits which are beneficial to all.

13. 3. Industrial harmony Worker's participation in management helps to reduce industrial disputes and to improve worker's loyalty. Continuous dialogue between management and workers improve peace in industry.

14. 4. Industrial democracy Worker's participation attempts at establishment of industrial democracy. In a democratic society, industrial democracy is as important as political democracy. Industrial democracy is necessary for political democracy. Need for outside intervention between employer and employees is eliminated and workers are freed from exploitation.

15. 5. Less resistance to change Workers often resist change due to fear and ignorance. When workers participate in the decision-making, they come to understand that change is ultimately in their own interest. They become more able and ready to adopt themselves to technological and other changes made to improve the competitive position of the organization.

16. 6. Creativity and innovation Participation encourages workers to think and take initiative. Their talent and ability can be capitalized. Highly competent employees can be spotted and given training. Participation is helpful in training and developing future executives. Worker's urge for self-expression is satisfied.

17. Theories of Worker’s Participation in Management Participation in management refers to involving employees in decision-making processes, sharing information, and allowing them to have a voice in problem-solving and innovation. There are several theories on participation in management. These include: 1. Human Relations Theory This theory emphasizes the importance of employees' attitudes and feelings, suggesting that involvement in decision-making improves job satisfaction and productivity. Pioneered by theorists like Elton Mayo and Douglas McGregor, this approach encourages a participatory management style to boost morale and engagement.

18.   2. Democratic Leadership Theory According to this theory, participatory management is most effective when it involves democratic leadership. It proposes that all members of an organization should be involved in decision-making processes, contributing to increased employee motivation, satisfaction, and commitment.   3. Vroom- Yetton - Jago Decision Model This model is focused on the level of participation necessary for effective decision making. It argues that the degree of employee participation should be proportional to the complexity and impact of the decision to be made.

19. 4. Goal-setting Theory Proposed by Edwin Locke, this theory suggests that involving employees in setting goals leads to better performance. It argues that specific and challenging goals, coupled with appropriate feedback, lead to higher performance levels. 5. Participative Management Theory This theory holds that participation improves the quality of decisions, increases acceptance of decisions, fosters better relationships between managers and employees, and improves individual development. The underlying principle is that the combined intelligence of many is superior to a single individual’s judgment.

20. 6. Theory X and Theory Y: These theories were proposed by Douglas McGregor. Theory X assumes that people dislike work, avoid responsibilities, and must be coerced to perform. Theory Y suggests that employees are naturally committed to their work, embrace responsibilities, and are capable of self-direction. According to McGregor, management styles must adapt to the predominant employee mindset in an organization. A Theory Y environment typically supports a participative management style.

21. 7. Maslow's Hierarchy of Needs This theory proposes that people are motivated by different needs in a hierarchy. It suggests that involving employees in decision-making processes meets their higher-level psychological needs, including esteem and self-actualization. These theories underscore the significance of involving employees in decision-making processes and highlight different aspects, such as motivation, job satisfaction, and organizational effectiveness, stemming from increased participation.

22. INDUSTRIAL DEMOCRACY Introduction Objectives of industrial Democracy Principles of Industrial Democracy Requirements of industrial Democracy Advantages of industrial Democracy

23. Introduction Participation of workers in management ushers in Industrial democracy. In a democratic society, industrial democracy is as important as political democracy. Through the political democracy, citizens of a country express themselves through their elected representatives. In the same way, workers should have some kind of mechanism through which they can express their voices at least on those issues which affect their lives, Industrial democracy means that management in industrial units is by the people, of the people and for the people. Here, people means management representatives and employees. Industrial democracy is necessary for political democracy.

24. Objectives of industrial democracy 1. To create a sense of belongingness of workers to the organization. 2. To improve a sense of commitment to the organizational objectives, plans and activities among employees. 3. To satisfy the psychological needs of the employees, and 4. To respect the human dignity of employees.

25. Principles of Industrial Democracy According to Clegg, the three basic Principles of Industrial democracy are: Trade Unions must be Independent both of the State and Management. Only the Unions can represent the industrial interest of the workers. Ownership of the industry is irrelevant to sound industrial relations. The leaders of the Trade Unions should be accountable not only to the Trade Union members but also to the Top Management for their acts.

26. Requirements of industrial democracy All employees should be treated as human beings and as equal partners. There should not be any discrimination based on caste, colour , sex, religion, etc. Freedom should be provided to all employees in their daily life and in their contributions. The members should have the freedom to select their leader or representative

27. Advantages of industrial democracy There would be full co-operation of employees for the implementation of decisions as they participate in decision-making. Industrial harmony can be maintained as the employees feel sense of belongingness, and Productivity can be increased.

28. METHODS/ FORMS OF WORKER'S PARTICIPATION IN MANAGEMENT INTRODUCTION FORMS/METHODS OF PARTICIPATIVE MANAGEMENT

29. INTRODUCTION The forms or methods of worker's participation in management vary from industry to industry, and from country to country, Various methods of participation may be specified either by law as has been done in many western countries or may be evolved voluntarily. Participative management is a constitution commitment in India. Article 43-A of the constitution provides "the state shall take steps by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings engaged in any industries. In India, some of the methods have been prescribed by law while many others have been suggested through guidelines formulated by the government.

30. Some important forms of participation are as under: Suggestion scheme Works committee Joint management councils Work directors Co-partnership

31. 1.Suggestion scheme Participation of workers can take place through suggestion scheme. Under this method, workers are invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion box is installed. Any worker can write his suggestions and put in into the box. Periodically all the suggestions are scrutinized by suggestion committee or suggestion screening committee.

32. Cont… This committee is constituted with equal representation from management and workers. This committee screens and evaluates various suggestions received from workers. Good suggestions are accepted for implementation and suitable awards are given to the concerned workers. Suggestion schemes encourage worker's interest in the functioning of the enterprise.

33. 2.Works committee Under the Industrial Disputes Act, 1947, every establishment employing 100 or more workers is required to constitute a works committee". Such a committee consists of equal number of representatives of employer and workers. The main purpose of works committee is to provide measures for securing and preserving amity and good relations between the employer and employees. Being a legal provision, works committees have been constituted in most of the organizations. But they have not worked well in most of the cases because of the general apathy of both management and workers.

34. 3. Joint management councils Joint management councils are constituted at the plant level. These councils consist of equal number of representatives of employers and workers. The councils discuss various matters concerning working of industry. The decisions of these councils are advisory in nature. The recommendations of these councils are not accepted as a mandatory requirement. However, most of the organizations generally accept the unanimous recommendations.

35. Cont… Working conditions, accident prevention, indiscipline, absenteeism, training and such other matters are generally the matters brought before joint management councils. Personal problems of an individual worker like grievances fall outside the preview of the joint management councils. Like works committees, joint management councils have also not been very effective except in few organizations because of the general apathy of both management and workers.

36. 4.Work directors Under this method, one or two representatives of workers are nominated or elected on the Board of Directors. This is a full-fledged and highest form of worker's participation in management. The basic idea behind this method is that a representation of workers at the level of Board would usher industrial democracy, ensure better employer-employee relations and safeguard the worker's interests. Government of India, considering itself as a model employer.

37. Cont… introduced this scheme in several public sector enterprises, such as Hindustan Antibiotics, Hindustan Organics chemicals, etc. However, the scheme of the appointment of such director failed miserably and subsequently, the scheme was dropped. The story is similar throughout the world.

38. 5. Co-Partnership Co-partnership involves employee's participation in the share capital of a company in which they are employed. By virtue of their being shareholders, they have right to participate in the management of the company. Shares of a company can be acquired by workers making cash payment or by way of stock option scheme. Many companies have offered, and more number of companies are offering this scheme.

39. Cont.. However, the basic objective of the stock option is not to pass on control in the hands of employees but providing better financial incentives for productivity. There have been rare cases in which the control of company has passed to workers by way of their shareholding. In democratic countries, the scope of worker's participation in management through co-partnership is quite limited.

40. Methods of Participative Management in India Introduction Methods in India

41. Introduction Employee participation results in better performance and increased motivation. The worker's participation in management has been introduced in India mainly in three forms, namely, works committees, joint management councils, and worker's representations on the board of directors, Later, other forms like shop councils, joint councils and unit councils have also been introduced . Thus, at present, there are the following forms of worker's participation in management prevalent in India:

42. Methods in India 1. Works committees 2. Joint management councils 3. Shop councils and 4. Joint councils

43. 1.Works committees: The Industrial Disputes Act, 1947, provides for the setting up of works committees as a scheme of worker's participation in management, Under this Act, every establishment employing 100 or more workers is required to constitute a works committee. Such a committee consists of equal number of representatives of employer and employees. The main purpose of works committee is to provide measures for securing and preserving amity and good relations between the employer and employees. The work committee is a consultative body.

44. Functions Works committees deal with matters of day-to-day functioning at the shop floor level. Works committees are concerned with: a . Conditions of work such as ventilation, lighting, temperature and sanitation. b. Amenities such as drinking water, canteens, dining rooms, medical and health services, c. Safety and accident prevention, occupational diseases and protective equipment. d. Adjustment of festivals and national holidays. e. Educational and recreational activities. f. Implementation and review of decisions arrived in the meetings of works committees.

45. 2. Joint management councils Joint management councils were set up in 1958. These are constituted at the plant level. These councils consist of an equal number of representatives of employers and workers, not exceeding twelve. The units should employ at least 500 workers. The councils discuss various matters concerning the workings of industry. The decisions of these councils are advisory in nature. The recommendations of these councils are not accepted as a mandatory requirement. However, most of the organizations generally accept the unanimous recommendations.

46. Cont… Working conditions, accident prevention, indiscipline, absenteeism, training, and such other matters are generally brought before joint management councils. Personal problems of an individual worker, like grievances, fall outside the scope of the joint management councils. Like work committees, joint management councils have also not been very effective, except in a few organizations, because of the general apathy of both management and workers.

47. 3. Shop councils The Government of India announced on October 30, 1975, a scheme for worker's participation in management that consisted of the establishment of joint councils and shop councils as part of the 20-point economic program. In every industrial establishment employing 500 or more workers, the employer shall constitute a shop council for each department or shop. So the shop council represents each department or shop in a unit. Each shop council will consist of an equal number of representatives of employers and workers. The employer's representative will be nominated by the management and must consist of people from within the establishment.

48. Cont.. The worker's representatives will be among the workers of the department or shop concerned. The number of members of each council may be determined by the employer in consultation with the recognized union. The total number of members, however, may not generally exceed twelve. The decisions of the staff council are to be taken on the basis of consensus, not by voting. Management has to implement the decisions within one month. The tenure of the shop council is for a period of two years. Members of the shop council meet at least once a month. Management nominates the chairman to the shop council. Workers' members of the council elect the vice chairman of the council. Shop councils are to be constituted in the manufacturing and mining industries in the public, private, and cooperative sectors.

49. Functions of the shop councils 1. Assist management in achieving monthly or yearly production targets. 2. Improve production, productivity and efficiency including elimination of wastage, and optimum utilization of machine capacity and man- power. 3. Assist in maintaining general discipline in the shop or department. 4. Indentify areas of low productivity and take necessary steps at shop or department level so as to eliminate the causes of low productivity. 5. Suggest health, safety and welfare measures to be adopted for smooth functioning of the shop or department. 6. Study absenteeism in the shop or department and recommend steps to reduce them. 7. Look after physical conditions of working, such as, lighting. ventilation, noise, dust etc., and reduction of fatigue. 8. Ensure proper flow of adequate two-way communication between the management and the workers.

50. 4. Joint councils The joint councils are for the whole unit. In every industrial unit employing 500 or more workers, there shall be a joint council for the whole unit. Only such persons who are actually engaged in the unit shall be members of the Joint Council. A joint council shall function for a period of two years. The Joint Council shall meet at least once a quarter. The chief executive of the unit shall be the chairman of the joint council. The vice chairman of the joint council will be nominated by workers on the council.

51. The joint council shall appoint one of the members of the council as its secretary. Every decision of the joint council shall be made on the basis of consensus and not by the process of voting. Such decisions will be binding on employers and workers. Such decisions shall be implemented within one month, unless otherwise stated in the decision itself.

52. Functions of Joint Councils The Joint council should deal with the following matters: Optimum production, efficiency and fixation of productivity norms of men and machines for the unit as a whole. Work planning and achieving production targets, more specifically tasks assigned to a shop council but relevant to the unit as a whole. Preparing schedules of working hours and of holidays. Developing skill of workmen and adequate facilities for training. Rewards for valuable and creative suggestions received from workers. General health, welfare and safety measures for the unit.

53. QUALITY OF WORK LIFE Introduction Meaning Definition Factors involved in QWL Measurement of QWL

54. Introduction Quality of work life refers to the overall satisfaction a person feels regarding their work environment and job responsibilities. This includes elements such as working conditions, work-life balance, compensation, recognition, and opportunities for growth and development. It also involves employee's feelings towards organizational culture and leadership. A high quality of work life often leads to improved job satisfaction and productivity. Factors such as feeling valued, safe, and secure in one's job, and being able to achieve a balance between work and personal life contribute to the quality of work life. A poor quality of work life, on the other hand, can lead to stress, burnout, and high employee turnover. Organizations often strive to improve the quality of work life through initiatives like flexible work hours, providing professional development opportunities, fostering a positive and inclusive workplace culture, and implementing health and wellness programs.

55. Meaning Quality of work life means the relationship between employees and their total working environment. It is concerned with the overall climate of the work.

56. Definition According to Nadler and Lawler, “Quality of work life is concerned about the impact of work on people as well as on organization effectiveness, and the idea of participation in organizational problem solving and decision-making". According to D.S. Cohan quality of work life as "a process of joint decision-making, collaboration and building mutual respect between management and employees".

57. Thus, quality of working life is concerned with increasing labor-management cooperatives to solve the problems of improving organizational performance and employee satisfaction. The basic purpose of improving QWL is to change the climate at work so that a human-technological-organizational interface leads to a better quality of work life. It aims at creating a culture of work commitment that leads to higher productivity and satisfaction.

58. Factors involved in QWL In improving QWL all these factors have to be taken into account. The various factors involved in QWL are discussed below: 1. Flexibility in work schedules: Employees want flexibility in work schedules. Flexibility provided in the work system becomes more motivating to the employees.

59. 2. Autonomous work group Creation of autonomous work group helps in creating positive feelings among employees. They may be given freedom to choose their own teams. There should be freedom of decision- making regarding the choice of methods for work, distribution of tasks among group members, and designing of work schedules. 3. Job enrichment Job enrichment is a popular non-monetary motivational technique. It is an extension of job enlargement. It attempts to design a job in such a way that it becomes more interesting and challenging so that the job holder makes meaning out of that. The degree of job enrichment determines the degree of quality of work life.

60. 4.Opportunity for growth: An employee, particularly the achievement-oriented one, seeks growth through his work. If the work provides him opportunity for personal growth and to develop his personality, he will feel committed to the job and the organisation . 5.Participation: Participation in decision-making, particularly on the matters directly concerned with an individual's working, has an important bearing on his satisfaction and performance. Higher degree of participation increases the QWL, and overall organisational climate.

61. 6.Communication To make QWL sound, effective two-way communication is necessary. Through the downward communication, employees would receive information about the various aspects of the organisation , particularly that which concern them. Through upward Communication, employees can share their views, grievances and to over- come these, and suggestions for improving the work performance.

62. Measurement of QWL QWL affects job involvement, sense of competence, job satisfaction and job performance. A favourable QWL results in to positive consequences of these factors. The following indices may be used to judge the quality of work life in an organisation : 1.Job Involvement Job involvement indicates the extent of people's identification with or ego involvement in the job. Job - involved people spend more time on job and turn out better performance. Challenging jobs which have skill variety, influence employees to get involved with their jobs. Similarly, people with high need for achievement and high ethic feel involved in jobs. People with high job involvement are better motivated and more productive. Research reveals that skill variety, achievement and challenge help to Improve job involvement.

63. 2. Job satisfaction Job satisfaction implies the worker's satisfaction with his job environment, consisting of nature of work, quality of supervision, pay, co-workers, opportunities for promotion etc. Job satisfaction affects job performance, employee turnover, and absenteeism. High job satisfaction results into high work performance, less employee turnover, and less absenteeism.

64. 4. Sense of competence Sense of competence denotes the feelings of competence that one has in one's own competence. Job design affects the sense of competence. By engaging in a work that calls for a variety of skills, abilities and talents, individuals gain mastery over their work environment. As they engage themselves more and more in work activities, they acquire a great sense of competence and experience and higher level of job involvement. This job involvement further adds to sense of competence. Thus, sense of competence and job involvement mutual reinforce each other. High sense of competence and job involvement produces high job satisfaction and productivity.

65. 4. Job performance Job involvement, job satisfaction and sense of competence affects job performance. When an individual's job involvement, job satisfaction and sense of competence increase, there is a rise in job performance. 5. Productivity When the level of job performance increases, the productivity increases. The output per unit goes up.

66. worker's participation in management has failed in India. Give reasons. Worker participation in management (WPM) in India has faced several challenges, and while it hasn't entirely failed, its widespread implementation has been limited due to various reasons: Lack of Awareness and Education: Many workers, especially in traditional industries, might not have a clear understanding of their rights, responsibilities, or the benefits of participating in management decisions. This lack of awareness hinders active involvement. Resistance from Management: Some management structures in India may resist sharing power or decision-making authority with workers due to concerns about losing control or slowing down decision-making processes. This resistance can hamper the implementation of WPM initiatives.

67. Unions and Conflicting Interests: In many cases, trade unions play a significant role in representing workers' interests. However, conflicting priorities between union agendas and management objectives can create barriers to effective WPM implementation. Hierarchical Organizational Culture: India has a traditionally hierarchical work culture where decisions are made at the top levels and trickle down. This culture might not easily accommodate bottom-up decision-making, creating resistance or disbelief in the effectiveness of WPM. Inadequate Legal Framework: While there are legal provisions supporting WPM in India, the implementation and enforcement of these regulations might be lacking. The absence of strict laws or weak enforcement mechanisms can deter both workers and management from actively participating.

68. Communication and Trust Issues: Lack of effective communication channels and a trust deficit between workers and management hinder the success of WPM. Workers might fear reprisal for speaking up or providing input, leading to hesitancy in participating. Complex Decision-Making Processes: Some industries have intricate decision-making processes that might not easily accommodate worker input. This complexity can make it challenging to integrate meaningful participation from the workers.

69. Cultural Factors: Cultural norms and values might also influence the perception of hierarchy and authority in the workplace, impacting the acceptance and success of WPM initiatives. Despite these challenges, there have been instances and sectors where successful WPM models have been implemented in India. Initiatives focusing on fostering mutual trust, providing education and training, creating effective communication channels, and aligning worker interests with organizational goals could help improve the situation and encourage worker participation in management decisions.

70. T h a n k y o u