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Workers Participation in Management. The Genesis Derived from a Latin word participare participation means sharing/taking part Derived from a Latin word.

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Presentation on theme: "Workers Participation in Management. The Genesis Derived from a Latin word participare participation means sharing/taking part Derived from a Latin word."— Presentation transcript:

1 Workers Participation in Management

2 The Genesis Derived from a Latin word participare participation means sharing/taking part Derived from a Latin word participare participation means sharing/taking part Sharing is a bilateral process and it has Sharing is a bilateral process and it has A functional aspect,and A functional aspect,and A motivational aspect A motivational aspect Workers Participation in Management highlights both these aspects well Workers Participation in Management highlights both these aspects well The functional aspect is a role in deciding The functional aspect is a role in deciding The motivational aspect is the natural involvement after deciding The motivational aspect is the natural involvement after deciding

3 WPM – The Soul of IR CB vs. WPM : Heart vs. Soul CB vs. WPM : Heart vs. Soul Collective Bargaining is based on Conflict or at least the perception of Conflict Collective Bargaining is based on Conflict or at least the perception of Conflict Highlights need for synergy Highlights need for synergy A step in the Working Class Movement A step in the Working Class Movement WPM is based on Cooperation WPM is based on Cooperation Highlights SYNERGY itself Highlights SYNERGY itself A step in Management Effectiveness A step in Management Effectiveness

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

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

6 The Quality of Work life QWL coined by Louis Davis in 1972 QWL coined by Louis Davis in 1972 The basic idea: The basic idea: Promote individual learning and development Promote individual learning and development Provide individuals with influence and control over what they do and how they do it 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 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 Union H I E R A R C H Y Area of Colle- ctive Barga- ining Employee Directors Works Council Suggestion Schemes DoingWorkers Participative Supervision and Job enlargement

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

10 Some Key Dimensions in WPM (David Guest,1995) Dimension Industrial Relation HRM/HRD Dimension Industrial Relation HRM/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: Organisational Commitment has 3 aspects: 1. Identification with goals & values 2. A desire to belong to the Organisation 3. A willingness to display effort on behalf of Organisation Union Commitment has the same 3 aspects 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 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 WPM bridges the Gap, while CB shows it

12 The Commitment Matrix & Behaviour Patterns Commitment to ORGANISATION toUNION High / High High / High Common / integrated Goals & Values Goals & Values Business Partnership Business Partnership High / Low High / Low Habitual Resistance Low / High Low / High Co-operation Co-operation Low / Low Low / Low Indifference Indifference

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

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

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

16 Principles guiding the Mutual Gains Enterprise Functional level: Functional level: Staffing based on employment stabilisation Staffing based on employment stabilisation Investment in training and development Investment in training and development Contingent compensation that reinforces cooperation, participation, and contribution Contingent compensation that reinforces cooperation, participation, and contribution

17 Principles guiding the Mutual Gains Enterprise Workplace level: Workplace level: High standards of employee selection High standards of employee selection Broad task design and teamwork Broad task design and teamwork Employee involvement in problem solving Employee involvement in problem solving Climate of cooperation and trust Climate of cooperation and trust A great place to work 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. 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-partnership Association and again after the Word War-II as the Industrial Participation Association Renamed later as Industrial Co-partnership Association and again after the Word War-II as the Industrial Participation Association 1989: Renamed again as Involvement and partnership Association (IPA) 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 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 model and relied more on Workers participation in Management The post-war IR in UK relied more on CB whereas Germany & most of Europe developed a Social partnership model and relied more on Workers participation in Management

20 Towards Industrial partnership The IPA publication in 1992 enunciates new principles of partnership: The IPA publication in 1992 enunciates new principles of partnership: Partnership post1990s will not emphasise institutionalised participation, nor a tripartite approach Partnership post1990s will not emphasise institutionalised participation, nor a tripartite approach The emphasis will be on Attitudes & Culture 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: It is now a question of building trust, recognising differences, finding common ground, and applying key partnership principles: Commitment to organisational successCommitment to organisational success Respecting legitimacy of stakeholders in businessRespecting legitimacy of stakeholders in business

21 Employment insecurity A major threat to partnership Attitudes towards Job security is changing Attitudes towards Job security is changing Employers want more flexibility and the Employees want more stability Employers want more flexibility and the Employees want more stability Employment security is a desirable framework for having employee involvement /commitment Employment security is a desirable framework for having employee involvement /commitment Concept of Employability as substitute for continued Employment has arrived Concept of Employability as substitute for continued Employment has arrived Employers responsible for building capabilities in employees to survive and sustain after Exit Employers responsible for building capabilities in employees to survive and sustain after Exit

22 Information, Consultation & Co-determination understanding the new dimensions Information sharing is Direct Participation Information sharing is Direct Participation The Cellnet philosophy (EThOS) explains: 1. Frank & open exchange of ideas, information & knowledge – Key to effective Task management 2. Open & Clear communication is Everyones responsibility – Key to Business success 3. By taking ownership of issues and problems, making commitments and delivering – Key to get greatest contributions from People to Company

23 Information, Consultation & Co-determination understanding the new dimensions Representative consultation mean systems of joint consultation, commonly referred to in India as Joint Councils for WPM 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, 1. 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 2. 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 transformation in representative consultation In many countries, agenda for consultation is driven by Law – social security & rights In many countries, agenda for consultation is driven by Law – social security & rights Representatives are nominated / elected Representatives are nominated / elected During 1970s & 1980s the Joint Councils were ineffectual, bureaucratic tea & toilets talk shops contributing no value to business 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 Since 1990 concept of Partnership council has emerged to debate cutting edges of Business

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

26 A novel partnership journey at Welsh Water and Blue Circle A common Vision and the Goal A common Vision and the Goal A cultural change program starting with the Managers A cultural change program starting with the Managers A systematic revision of reward, status and conditions A systematic revision of reward, status and conditions Business-focused consultative arrangements from the shop-floor to the boardroom – multiple MOUs Business-focused consultative arrangements from the shop-floor to the boardroom – multiple MOUs An agreed policy to manage employment security An agreed policy to manage employment security A major commitment to employee development and training A major commitment to employee development and training

27 WPM – the Indian saga The Works Committee under ID Act, 1947 The Works Committee under ID Act, 1947 The Directive Principles of State Policy under Indian Constitution The Directive Principles of State Policy under Indian Constitution Recommendations of the GOI Study Group & ILC 15 th session (1957) – Joint Management Councils Recommendations of the GOI Study Group & ILC 15 th session (1957) – Joint Management Councils The 2 nd Five Year Plan recommendations for setting up Joint Councils for Organisations employing 500 or more people The 2 nd Five Year Plan recommendations for setting up Joint Councils for Organisations employing 500 or more people GOI scheme for Board representation (1971) GOI scheme for Board representation (1971) GOI scheme on WPM in 1975 – 20 point program GOI scheme on WPM in 1975 – 20 point program 1975: DPSP amended & WPM inserted at S/43a 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 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 1978: Janata Govt. appointed Tripartite Committee, recommended 3-tier structure for participation – Board, Plant, Shopfloor 1983: WPM scheme for CPSUs introduced 1983: WPM scheme for CPSUs introduced 1985-86: Union Budget opened Stock options for employees (limited to 5%) 1985-86: Union Budget opened Stock options for employees (limited to 5%)

29 The PWM Bill, 1990 An attempt to bring statutory force An attempt to bring statutory force The Bill proposes participation at all levels The 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 Globalization It has lost relevance under Globalization PSUs have mostly complied & suffered due to Unions extension of bargaining to WPM PSUs have mostly complied & suffered due to Unions extension of bargaining to WPM Deregulation is the order of the day 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 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 World has changed since 1990s The ITES sector impact is irreversible The ITES sector impact is irreversible Job security can no more be determined by collective pressure but by employability Job security can no more be determined by collective pressure but by employability Training, Information & Ability to work flexibly will determine Job security Training, Information & Ability to work flexibly will determine Job security Unions must share these values along with Managements transparent goals Unions must share these values along with Managements transparent goals Mutual gains Enterprise is the best option Mutual gains Enterprise is the best option

32 The Partnership Philosophy lives on… Workers participation in Management, as a concept is philosophically sound & rich Workers participation in Management, as a concept is philosophically sound & rich WPM derives merit from the principle of Trusteeship enunciated by Mahatma Gandhi 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 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 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 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 WPM / Partnership is likely to flourish under liberalisation, while it could not succeed earlier


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