PARTICIPATIVE

MANAGEMENT &
EMPOWERMENT
WORKERS PARTICIPATION
 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 MANAGEMENT
DECISIONS
 CONCEPT
 Envisages management decision making power with
lower ranks in an organisation in an appropriate
manner
 Participation viewed by management is joint
consultation prior to decision making
 Participation viewed by workers involves
‘codetermination’
 Govt sees it as an association of labour with
management without any final authority or
responsibility in decision making.
 EVOLUTION OF CONCEPT
 social thinkers advocated and pleaded for equal status
as managers to protect against capitalist & managerial
exploitation.Marx advocated complete control of
enterprise.
 Demand for continuous uninterrupted industrial
activity for economic revival
 Differentiation between management & entrepreneurs
accelerated pace of professionalism in industrial
management.
 EVOLUTION OF CONCEPT
 Mayo’s concept of human factor in
organisations
 Increased use of technology necessitated
growing cooperation of workers in view of
complex operations in production
 Growth of trade unions
 Growing interest of govt in development of
industries
 BASIC CONCEPT OF WP
PLANNING
MANAGERIAL Employee
ORGANISING Directors

MOTIVATING HIERARCHY Area

Works Of Union
Council Collective hierarchy
CONTROLLING
Bargaining

Suggestion
Schemes
AREA BOF
PARTICIPATIVE
SUPERVISION & JOB
ENLARGEMENT

DOING WORKERS
OBJECTIVES OF PARTICIPATION

 Democratization of management
 Eliciting workers’ cooperation in attainment of
corporate goals
 Personalisation and humanisation of
management process
 Behavioral approach to management of
workers-management relations
ECONOMICAL PSYCHOLOGICAL
SOCIOLOGICAL
 FORMS OF PARTICIPATION

 VARIES with
 Management
 Issues or areas of participation
 Pattern of labour management relations
 FORMAL MECHANISMS OR INFORMAL
PROCEDURES
 ASCENDING (Integrated) OR DESCENDING
PARTICIPATION (Delegation & Job Enrichment
or Disjunctive )
 FORMS OF PARTICIPATION
 COLLECTIVE BARGAINING issues are competitive, such as
employment conditions, wage rates, working hours & holidays
 JOINT ADMINISTRATION, DECISION MAKING OR
CONSULTATION management of PF, welfare issues like
canteen, recreation etc. In administration workers & mngt share
responsibility & power of execution.In decision making even
though workers participate in deciding policies, execution effected
by mngt. In consultation, mngt only consults workers on
opinions, ideas, suggestions, but retains authority & responsibility
of making decisions & executing
 CONSULTATION
 INVOLVEMENT-SUGGESTION SCHEMES
 INFORMATION SHARING
 FORMS OF PARTICIPATION

DIFFER
 IN RANGE OF SUBJECTS HANDLED BY PARTICIPATIVE
MACHINERY
 DEGREE OF AUTHORITY EXERCISED
 METHOD OF SELECTION OF WORKERS’
REPRESENTATIVES
JOINT CONSULTATION MODEL in W Germany, France, UK,
Israel, Poland
JOINT DECISION MAKING/CO DETERMINATION in W
Germany & Israel’s coal and steel industry
COLLECTIVE BARGAINING-USA
WORKERS’ CONTROL-Yugoslavia
 LEVELS OF PARTICIPATION

 DEPENDS ON
 Nature of functions
 Strength of workers
 Attitude of trade unions & management
 Nature of problems/issues
 Development of human relations in general
 Where exercise of authority is complete,
participation is negligible, while where it is exercise
of authority is small, participation will be high-
participation on the Board or at lower levels leading to
job enlargement, delegation, job enrichment
 STAGES OF PARTICIPATION

 INFORMATION SHARING or ASSOCIATIVE

PARTICIPATION
 PROBLEM SHARING or CONSULTATIVE
PARTICIPATION
 IDEA SHARING or ADMINISTRATIVE
PARTICIPATION
 JOINT DETERMINATION or DECISION
PARTICIPATION
WORKER’S PARTICIPATION IN INDIA

 Study group constituted in 1956 which advised

 Some permissive legislation to set up Joint management
councils in selected undertakings
 Identified specific functions of JMC’S
 To Reduce danger of apathy entrust some administrative
responsibilities
 Need to have strong TU
 COOPERATION to be sought
 SINGLE council for an undertaking as a whole if not made of
several units at different places, if not separate councils at
local, regional or national levels
 SACHAR COMMITTEE ON WORKER’S
PARTICIPATION

 To consider provisions of the Companies Act

and MRTP act
 To suggest measures by which workers’
participation in share capital and management
of companies can be brought about
 PARTICIPATION OF WORKERS IN
MANAGEMENT BILL 1990

 LEGISLATIVE BACKING PROVIDED

 SOUGHT TO PROVIDE MEANINGFUL
AND SPECIFIC PARTICIPATION IN
MANAGEMNT FROM SHOP FLOOR TO
BOARD LEVEL IN ALL INDUSTRIAL
ESTABLISHMENTS DEFINED UNDER ID
ACT, 1947.
 FORMS OF WORKERS PARTICIPATION

 WORKS COMMITTEE ( set up under ID Act)

 JMC ( SET UP CONSEQUENT TO Labour Cooperation
Seminar 1958)
 Scheme of Worker representative on Board
 Joint Councils
 Unit Councils
 Shop councils
 Plant Councils
 Shop Councils
 Workers Representative on Board
 Workers participation in shar capital
 WORKS COMMITTEES
 REP OF EMPLOYERS & EMPLOYEES
 IN EVERY UNDERTAKING EMPLOYING MORE THAN
100 OR MORE WORKMEN
 PROMOTE HARMONIOUS RELATIONS AT WORKPLACE
 CONSULTATTIVE BODIES
 DISCUSSIONS OF CONDITIONS OF WORK-LIGHTING,
SAFETY, CANTEEN, MEDICAL & OTHER WELFARE
AMENITIES
 President, VP, Secy, Jt Secy
 Strength not to exceed 20
 Workers Representative on
Board of Management
 Should be working in enterprise
 To start with, Limited to those employing 1000 or more
persons
 Definition of workmen as per ID Act
 51% vote of workers by secret ballot in favour of
participation
 Worker Director elected through secret ballot by workers
 Prerequisite training
 No breach in confidentiality of information
WORKERS PARTICIPATION IN SHARE
CAPITAL
 10-15 % WORKER SHARES
 FIRST OFFER TO WORKERS FAILING WHICH ….
 EMPLOYEES MAY BE GIVEN LOAN FOR
PURCHASE UPTO 12 MONTHS SALARY OR
WAGES , NOT EXCEEDING Rs 12,000
 FACTORS LEADING TO FAILURE OF
SCHEME

 Ideological differences between employees &

employees regarding level /degree of participation
 Failure to imbibe spirit of participation
 Multiplicity of Participative Forms
 Lack of strong trade union
 IR
 Illiteracy of workers
 Non cooperative attitude of workers
 Delays in implementation of decisions
CONDITIONS NECESSARY
 Work environment
 Identity of approach
 Mutual faith & trust by both parties
 Publicity
 Address real issues
 Complementary to bargaining process
 Evolutionary in nature
 Training & education
 Information flow
 Questions for Discussion
 Define the term Employee participation
 Explain objectives of Workers Participation
 What are the conditions essential for employee participation
 What are Joint Councils? Explain their objectives & functions
 What are the causes of limited success of EP. Suggest measures to
improve their performance.
 The methods of participation differ in terms of the degree of
influence that the Employee are allowed , the form of involvement
and the subject matter covered. Elucidate.
 EMPLOYEE
EMPOWERMENT
 PEOPLE POWER

 People most important asset. Your technologies,

products and structures can be copied by competitors.
No one, however, can match your highly charged,
motivated people who care.
 People are your firm's repository of knowledge and
they are central to your company's competitive
advantage- critical to the development and execution of
strategies, especially in today's faster-paced, more
perplexing world, where top management alone can no
longer assure your firm's competitiveness.

 WHY EMPLOYEE
EMPOWERMENT?
 People most underutilized resource.
 knowledge economy- INTRAPRENEURSHIP
 New knowledge-based enterprises
characterized by flat hierarchical structures and
multi-skilled workforce. Managers have to be
facilitators. In brief, managers work for their
staff, and not the reverse.
 Talented and empowered human capital is
becoming the prime ingredient of organizational
success.
 WHY EMPLOYEE EMPOWERMENT?
Successful teams, especially in knowledge-based enterprises,
are invested with a significant degree decision-making
authority.
 Employee empowerment changes the managers' mind-set
and leaves them with more time to engage in broad-based
thinking, visioning, and nurturing. This intelligent and
productive division of duties between visionary leaders,
focusing on emerging opportunities, and empowered
employees, running the business unit day to day provides
for a well-managed enterprise with strong growth potential.
 To foster Employee Empowerment

Trust & Communicate with employees

Evidence will not come across the board
with wide spread acceptance. A small
number will accept the invitation to
become more involved, say 3-5 per cent.
The rest will be watching every move to
see what happens
 To foster Employee Empowerment

 Leadership must diligently work to create the work

environment where it is obvious to all that employee
empowerment is desired, wanted and cultivated.
 It is the large middle group that must be convinced
to practice employee empowerment.
 Give Signals that employees are valued- training ,
opportunities for personal growth, the solicitation
and implementation of ideas, the recognition and
reward system, promotion and advancement
 EI PM & EE
Employee involvement and participative
management are often used to mean
empowerment. They are not really
interchangeable.
 EI PM & EE -Example
 The manager of the Human Resources department
added weeks to the process of hiring new employees
by requiring his supposedly "empowered" staff
members to obtain his signature on every document
related to the hiring of a new employee.
 John empowered himself to discuss the career
objectives he wished to pursue with his supervisor. He
told his supervisor, frankly, that if the opportunities
were not available in his current company, he would
move on to another company
 Case in Point: General Electric
 Some years ago, in locations throughout GE, local managers were
operating in an insulated environment with Chinese walls separating
them, both horizontally and vertically, from other departments and
their workforce. Employee questions, initiatives, and feedback were
discouraged.
 In the new knowledge-driven economy, Jack Welch, CEO, General
Electric, "viewed this as anathema. He believed in creating an open
collaborative workplace where everyone's opinion was welcome." He
wrote in a letter to shareholders: "If you want to get the benefit of
everything employees have, you've got to free them - make everybody a
participant. Everybody has to know everything, so they can make the
right decisions by themselves"...
 Employee empowerment is a two sided
coin.
 For employees to be empowered the management leadership must
want and believe that employee empowerment makes good
business sense and employees must act.
 Employee empowerment does not mean that management no
longer has the responsibility to lead the organization and is not
responsible for performance. If anything the opposite is true.
Stronger leadership and accountability is demanded in an
organization that seeks to empower employees. This starts with the
executive leadership, through all management levels and includes
front line supervisors. It is only when the entire organization is
willing to work as a team that the real benefits of employee
empowerment are realized.
 PARADIGM SHIFT
Employees not only strive for
physiological and self esteem needs but
also derive satisfaction from belonging to
groups
Motivate groups rather than individual as
Stress on security, participation,
involvement and collaboration
 Why Employee Empowerment Fails

 pay lip service to empowerment, but do not really

believe in its power
 Managers don’t really understand what
empowerment means-philosophy or strategy that
enables people to make decisions about their job.
 fail to establish boundaries for empowerment
 undermine their faith in their personal
competence and in your trust, support
 failure to provide information and access.
Six Practices Used to Help Empower and
Involve Employees
 Demonstrating top leadership commitment
 Engaging employee unions
 Training employee s to enhance their knowledge, skills,
and abilities.
 Using employee teams to help accomplish agency
missions.
 Training employees to enhance their knowledge, skills,
and abilities
 Involving employees in planning and sharing
performance information
 Delegating authorities to front-line employees
 EMPLOYEE EMPOWERMENT: A CRUCIAL
INGREDIENT IN A TOTAL QUALITY
MANAGEMENT STRATEGY.

 Quality starts with People.

 Participative management- more than a
management buzzword.
 We are all in it together
 Empower from the "bottom up".
 Employees- The most important asset in
organizations
 Treat Your employees the way you want your
customers to be treated.
 TQM
CREATING AN ORGANISATIONAL
CULTURE COMMITTED TO THE
CONTINUOS IMPROVEMENT OF
SKILLS, TEAMWORK, PROCESSES,
PRODUCT , SERVICE QUALITY AND
CUSTOMER SATISFACTION
 OBJECTIVES OF TQM
 CUSTOMER REQUIREMENTS KEY TO ORG
SURVIVAL & GROWTH

 CONTINUOS IMPROVEMENT IN QUALITY

 DEVELOPING RELATIONSHIP IF
OPENNESS & TRUST
 COMPONENTS OF TQM
CUSTOMER ORIENTATION

CONTINUOS IMPROVEMENT

EMPLOYEE INVOLVEMENT
 REQUIREMENTS FOR SUCCESS OF
TQM
 OBJECTIVES & POLICIES TO REFLECT
COMMITMENT TO QUALITY AS A PHILOSOPHY
 EFFECTIVE COMMUICATION TO ALL
 TQM PROGRAM PROPERLY DESIGNED
 ENCOURAGE PARTICIPATION
 TRAINING FOR EFFECTIVE IMPLEMENTATION
 INVOLVE PRODUCT DESIGN & IMPROVEMENT,
ADOPTION OF NEW TECHNOLOGY, SYSTEMS &
PROCEDURES
 A CONTINUOS PROGRAM
 TQM IN INDIA
 1980’s
KAIZEN –view quality as an endless journey not
destination-experimenting, measuring, adjusting &
improving
JUST IN TIME PRODUCTION & KANBAN SYSTEMS
( Smoothening production, providing process flexibility,
standardization of jobs, utilization & ordering /delivery
systems)
EMPOWERMENT
BENCHMARKING
LEARNING ORGANISATIONS