Benefits of Workers Participation in Management

21st October 2020 0 By indiafreenotes

Workers’ participation is aimed at the following objectives:

  1. Economic:

Workers’ participation in industry improves relationship between workers and management and establishes better human relations. This leads to increased workers’ efficiency thereby increasing productivity and output of the manufacturing unit. Workers’ participation in management enthuse high morale which can be utilized for increasing production. High industrial productivity helps in attaining the economic objectives of the country.

  1. Social:

Workers’ participation in management increases the worker’s status in society. He is considered as a respectable member of the society. He is the co-partner in the gains from production. It is reflected through industrial harmony and peace reducing industrial disputes.

  1. Psychological:

Workers’ participation in management has a positive impact on the behaviour of the workers. It installs sense of belonging to the organisation in the minds of the workers. It gives them self-respect. They feel dignified and they behave in a responsible manner because they are the partners in decision making process. There are all psychological objectives to be attained by the organisation. The positive behaviour such as high morale, self-motivation, increased efficiency is all exploited in increasing the productivity of the organisations.

Methods of Workers’ Participation in Management:

There are many methods used for workers’ participation in management.

Some of them are the following:

  1. Suggestion Method:

Under this method the suggestions from the workers are invited as regards improvement in working, how to avoid accidents, cleanliness etc. The best suggestion from the worker is rewarded and a certificate to that effect is given to the worker so that others can make better suggestions in future. Management receives novel suggestions from the workers. This increases the importance of the workers with the management. This is a method of encouraging workers’ interest in the industrial establishment. This method is adopted in many organizations in India.

  1. Co-partnership:

It is a means of workers’ participation in management and is viewed as leading to industrial democracy. Co-partnership allows workers to participate in decision making. Under this method the employees get shares of the company and establish their ownership. This is made possible because the share of profit is not paid in cash but company shares are allotted to the workers.

Being shareholders of the company, they are entailed to participate in management. This increases the status of workers and leads to improvement in their attitude as they realize their responsibility and relations between workers and management become smooth. They also receive dividend on their shares.

Co-partnership suffers from limitations. Employees are not interested in co-partnership and want their share of profit in cash and refuse to accept shares of the company. They prefer to remain wage earners rather than to become partners in the business.

  1. Representation on Board of Directors:

Under this method one or two representatives of the workers are nominated on the Board of Directors of a company. They enjoy same privileges and have the same authority as other directors have. They participate in the decision making process as regards policies and procedures. This is one of the most effective methods of ensuring workers’ participation in management. Here the representatives of the employees to be nominated are elected or suggested by the unions of the employees.

  1. Works Committees:

The Industrial Disputes Act 1947 provides for establishing works committees in every establishment employing hundred or more workers. This is made compulsory to ensure workers’ participation through legislation. The work committee consists of equal number of members of workers and employer. The object of establishing works committees is to promote healthy industrial relations. However these committees so far failed to achieve the objects as both workers and employers could not change their outlook.

  1. Joint Management Councils:

Industrial Policy 1956 of government of India has stressed on joint consultation between management and workers to maintain industrial peace and to promote better industrial relations in the prime sector of industries. The joint management councils received recognition during second five year plan. Under this system consultative committees are set up consisting of representatives of employees and employers both. They are advisory in nature.

These committees discuss the matters relating to workers and the working conditions. The representatives of workers and employers discuss these problems. The managements consider their decisions sympathetically and implement them though not mandatory.

The committees discuss matters relating to canteen facilities, prevention of accidents, general precautions and safety measures, drinking water facilities, rules and regulations, absenteeism, training, discipline etc. After taking decisions regarding the above matter, recommendations are made to the management.

It is not mandatory on the part of the industries to establish joint management councils. These committees are set up with the consultation of recognized union of the establishment. These committees are usually formed at plant level. The members of management are nominated by the top management and the representatives of workers are elected or nominated by the recognized trade union of the undertaking.

Though a good venture of setting up of joint management councils, they could not come up to the expectations. Earlier it received a positive response and one hundred joint management councils were set up. The joint management councils failed to promote mutual understanding between employees and employers. Only union leaders get the opportunity to participate in the council meetings a common employee is far away from the deliberations.

Many a times union leaders use this opportunity to bargain by pushing up their various demands defeating the sole purpose of the joint management councils. In 1975 the government looking at the ineffectiveness of joint management council, introduced shop councils.

Shop Councils:

Under this system the industrial units having employees 500 or more have to set up shop councils in all shops and departments. The members of management and of workers have equal representation. The total number of members should not be more than twelve.

The decision of the shop council is to be implemented within a month’s time. The tenure of the council is for two years. The council should meet at least once in a month. The shop council must make efforts to increase the productivity, to avoid wastages and to make maximum use of machines and manpower and recommend the steps to remove absenteeism.

Joint Councils:

In order to ensure effective workers’ participation, joint councils were introduced. Every undertaking employing 500 or more employees should set up a joint council at the unit level. Organisation of the joint council was the same as of shop council. The joint council should meet at least once in three months. It has a chairman, Vice Chairman and secretaries who receive all the facilities required to perform their functions.

It deals with optimum production, fixation of productivity norms, matters unresolved by the shop councils. Some of the state governments extended this scheme to the undertaking having less than 200 employees. The scheme was implemented in about 1500 undertakings of public and private sectors. Shop councils and joint councils were the schemes implemented during emergency in 1975 but after the lifting of emergency the schemes have lost their effect.

Merits of Worker’s Participation:

Workers’ participation in management is a tool which promotes better industrial relations and establishes industrial peace. It is important concept for both management and workers. The need is to implement it honestly to reap its merits in the form of mutual understanding, increased efficiency of workers, increased production etc. Workers’ participation in management has several advantages.

  1. Mutual Understanding:

The employees and employers nurture two different conflicting interests. Surprisingly both lack the knowledge of the problems faced by them. Workers’ participation in management brings both the parties together. This togetherness enables them to understand each other’s problem. This minimizes conflicts and promotes mutual understanding.

  1. Efficiency of Workers Increase:

The workers become the partner in decision making process. Whatever decisions are taken, they are their own and hence they have to abide by them. They become enthusiastic and put lot of hard work while working. This helps in increasing the overall efficiency of workers.

  1. Increase in Production:

Increase in efficiency of workers, better understanding between workers and employers lead to mutual cooperation which results in increased productivity and increase in total production of the enterprise.

  1. Establishes Industrial Peace:

Workers participate in decision making process. Whatever decisions good are bad taken workers are the party to it and hence they cannot evade the responsibility. Employers and workers understand each other better and conflicts are minimized. Each dispute is solved with mutual understanding. In this way disputes are eliminated and industrial peace is restored.

  1. Promotion of Industrial democracy:

Participation of all the parties’ employees and employers in the management of the industries which works to safeguard the interests and betterment of all is industrial democracy. Workers’ participation in management helps in promoting industrial democracy.

  1. Welcomes Changes:

Some if not all the changes are resisted by the workers. But workers’ participation in management helps in arriving at a unanimous decision whether to accept or reject any change. The changes which bring more benefits than the costs incurred on them, are accepted. Hence the changes are welcomed by the employees.

  1. Personal Development:

Participation helps workers to express their creative instinct and they respond favourably to the challenges at the workplace as regards performance of the job. They feel free in doing so. It is possible as participation brings industrial democracy.

  1. Reduces Misunderstanding:

Participation reduces misunderstanding regarding the managements’ outlook. This increases the organisational balance.

  1. No Outside Help to Sort-out Disputes:

Employees themselves are participating in the decision making with the employers. They therefore realize workers as well as managements’ problem better hence disputes are resolved by understanding the difficulties of each other. So, in case of industrial dispute no outside help is taken they are sorted out within the plant itself by the employees and employers themselves.

Demerits of Workers’ Participation:

In spite of above advantages of workers’ participation there are certain disadvantages.

Following are the demerits of workers’ participation:

  1. Workers are not Enthusiastic:

The workers are not enthusiastic about the scheme and employers believe that they being incompetent cause delay in decisions. Some of the good decisions cannot be implemented for lack of support from the workers.

  1. Weak Trade Unions:

In India trade unions are not strong enough. There are multiplicities of trade unions and they are dominated and led by political leaders. This makes trade unions weak. They cannot show solidarity of workers. There should be one strong union so that they can elect competent representatives for participation. Moreover, there are certain problems require specialized knowledge which workers do not possess hence such problems cannot be solved through participation. They cannot even understand the gravity of situation.