WORKERS’ PARTICIPATION IN MANAGEMENT
(I) (i) Introduction: Worker’s participation is a system where and management share important information with each other and participate in decision taking. It is distribution of social power in industry so that it tends to be shared among all who are engaged in the work rather than concentrated in the hands of minority. Thinkers like Comte and Owen advocated the participation of workers in management for achieving distributive social justice. Karl Marx proposed complete control of the enterprise by workers and socialization of the means of the production. Marx wanted trade unions to be developed as an alternative for self-government. Thinkers favored guilds of all classes of workers should be controlled under a charter from the state. With the outbreak of the First World War, an acute industrial unrest was experienced. Labour was largely regarded as a “Commodity of Commerce” and exploited to the maximum in England, West Germany, France and USA. The main concern of ideologists in advocating workers participation in Management was the sharing of a part of managerial power with workers. Various researches conducted at the Tavistock Institute, London revealed that autonomous and cohesive work groups were more efficient and healthier. Increased use of technology in industry necessitated the growing co-operation of workers because of the complex operations of production. The essence of labour participation in management lies on the belief that workers are capable of taking part in decision making. The workers will have the capacity to grow & learn and contribute significantly to the enterprise both with hands and heart. Three groups of managerial decisions affect the workers of any industrial establishment and hence the workers must have a say in it. • Economic decisions – methods of manufacturing, automation, shutdown, lay-offs, and mergers. • Personnel decisions – recruitment and selection, promotions, demotions, transfers, grievance settlement, work distribution. • Social decisions – hours of work, welfare measures, questions affecting work rules and conduct of individual worker’s safety, health, and sanitation and noise control. Participation basically means sharing the decision-making power with the lower ranks of the organization in an appropriate manner. Definitions: The concept of WPM is a broad and complex one. Depending on the socio-political environment and cultural conditions, the scope and contents of participation change. International Institute of Labour Studies: WPM is the participation resulting from the practices which increase the scope for employees’ share of influence in decision-making at different tiers of organizational hierarchy with concomitant (related) assumption of responsibility. John Leitch: In the words of the John Leitch “the organization of any factory or other business institution inti a little democratic state with the representative government which shall have both the legislative and executive phases. ILO: Workers’ participation, may broadly be taken to cover all terms of association of workers and their representatives with the decision-making process, ranging from exchange of information, consultations, decisions and negotiations, to more institutionalized forms such as the presence of workers’ member on management or supervisory boards or even management by workers themselves (as practiced in Yugoslavia). The main implications of workers’ participation in management as summarized by ILO: • Workers have ideas which can be useful; Page 1
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Workers may work more intelligently if they are informed about the reasons for and the intention of decisions that are taken in a participative atmosphere.
(I) (ii) Objectives: According to Gosep, workers’ participation may be viewed as: • An instrument for increasing the efficiency of enterprises and establishing harmonious relations; • A device for developing social education for promoting solidarity among workers and for tapping human talents; • A means for achieving industrial peace and harmony which leads to higher productivity and increased production; • A humanitarian act, elevating the status of a worker in the society; • An ideological way of developing self-management and promoting industrial democracy. Other objectives of WPM can be cited as: • To improve the quality of working life (QWL) by allowing the workers greater influence and involvement in work and satisfaction obtained from work; and • To secure the mutual co-operation of employees and employers in achieving industrial peace; greater efficiency and productivity in the interest of the enterprise, the workers, the consumers and the nation.
Importance: 1. Higher Productivity: The increased productivity is possible only when there exists fullest cooperation between labour and management. It has been found that poor labour management relations do not encourage the workers to contribute anything more than the minimum desirable to retain their jobs. Thus participation of workers in management is essential to increase industrial productivity. 2. Greater Commitment: An important prerequisite for forging greater individual commitment is the individual’s involvement and opportunity to express himself. Participation allows individuals to express themselves at the work place rather than being absorbed into a complex system of rules, procedures and systems. If an individual knows that he can express his opinion and ideas, a personal sense of individual knows that he can express his opinion and ideas, a personal sense of gratification and involvement takes place within him. I am sure you will agree that participation increases the level of commitment and the employees start relating to the organisation. 3. Reduced Industrial Unrest. Industrial conflict is a struggle between two organised groups, which are motivated by the belief that their respective interests are endangered by the self-interested behaviour of the other. Participation cuts at the very root of industrial conflict. It tries to remove or at least minimise the diverse and conflicting interests between the parties, by substituting it with cooperation, homogeneity and common interests. Both sides are integrated and decision arrived at are mutual rather than individual. 4. Improved Decisions. I am sure that you will agree that communication is never a one way process, Also note that it is seldom, if ever, possible for managers to have knowledge of all alternatives and all consequences related to the decisions which they must make. Because of the existence of barriers to the upward flow of information in most enterprises, much valuable information possessed by subordinates never reaches their managers. Participation tends to break down the barriers, and makes the information available to managers. To the extent such information alters the decisions, the quality of decisions is improved. Page 2
5. Human Resource Development. Participation provides education to workers in the management of industry. It fosters initiative and creativity among them. It develops a sense of responsibility. Informal leaders get an opportunity to reinforce their position and status by playing an active role in decisionmaking and by inducing the members of the group to abide by them. 6. Reduced Resistance to Change. Last but not the least, it should be noted that changes are arbitrarily introduced from above without explanation. Subordinates tend to feel insecure and take counter measures aimed at sabotage of changes. But when they have participated in the decision making process, they have had an opportunity to be heard. They know what to expect and why. Their resistance to change is reduced.
(I) (iii) Essential condition for WPM: The success of workers portion in management depends upon the following conditions. • The attitude and outlook of the parties should be enlightened and impartial so that a free and frank exchange of thoughts and opinions could be possible. Where a right kind of attitude exists and proper atmosphere prevails the process of participation is greatly stimulated.
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Both parties should have a genuine faith in the system and in each other and be willing to work together. The management must give the participating institution its right place in the managerial organization of the undertaking and implementing the policies of the undertaking. The labor, on the other hand, must also whole heartedly co-operate with the management through its trade unions. The foremen and supervisory cadre must also lend their full support so that the accepted policies could be implemented without any resentment on either side.
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Participation should be real. The issues related to increase in production and productivity, evaluation of costs, development of personnel, and expansion of markets should also be brought under the jurisdiction of the participating bodies. These bodies should meet frequently and their decisions should be timely implemented and strictly adhered to. Further, o Participation must work as complementary body to help collective bargaining, which creates conditions of work and also creates legal relations. o There should be a strong trade union, which has learnt the virtues of unit and selfreliance so that they may effectively take part in collective bargaining or participation. o A peaceful atmosphere should be there wherein there are no strikes and lock-outs, for their presence ruins the employees, harms the interest of the society, and puts the employees to financial losses. o Authority should be centralized through democratic management process. The participation should be at the two or at the most three levels. o Programs for training and education should be developed comprehensively. For this purpose, Labor is to be given education not to the head alone, not to the heart alone, not to the hands alone, but it is dedicated to the three; to make the workers think, feel and act. Labor is to be educated to enable him to think clearly, rationally and logically; to enable him to feel deeply and emotionally; and to enable him to act in a responsible way.
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(I) (iv) Scope and ways of participation (Forms): One view is that workers or the trade unions should, as equal partners, sit with the management and make joint managerial decisions. The other view is that workers should only be given an opportunity, through their representatives, to influence managerial decisions at various levels. In practice, the participation of workers can take place by one or all the methods listed below: 1. Board level participation 2. Ownership participation 3. Complete control 4. Staff or work councils 5. Joint councils and committees 6. Collective Bargaining 7. Job enlargement and enrichment 8. Suggestion schemes 9. Quality circles 10. Empowered teams 11. TQM 12. Financial participation 1. Participation at the Board level: This would be the highest form of industrial democracy. The workers’ representative on the Board can play a useful role in safeguarding the interests of workers. He or she can serve as a guide and a control element. • He or she can prevail upon top management not to take measures that would be unpopular with the employees. • He or she can guide the Board members on matters of investment in employee benefit schemes like housing, and so forth. The Government of India took the initiative and appointed workers’ representatives on the Board of Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized banks. The Tatas, DCM, and a few others have adopted this practice. Problems associated with this method: • Focus of workers’ representatives is different from the focus of the remaining members of the Board. • Communication and subsequently relations between the workers’ representative and the workers suffers after the former assumes directorship. • He or she tends to become alienated from the workers. • As a result, he or she may be less effective with the other members of the Board in dealing with employee matters. • Because of the differences in the cultural and educational backgrounds, and differences in behaviour and manners, such an employees’ representative may feel inferior to the other members, and he or she may feel suffocated. Hence, his or her role as a director may not be satisfying for either the workers or the management. • Such representatives of workers’ on the Board, places them in a minority. And the decisions of the Board are arrived at on the basis of the majority vote. 2. Participation through ownership: Page 4
This involves making the workers’ shareholders of the company by inducing them to buy equity shares. • In many cases, advances and financial assistance in the form of easy repayment options are extended to enable employees to buy equity shares. Examples of this method are available in the manufacturing as well as the service sector. • Advantage: Makes the workers committed to the job and to the organization. • Drawback: Effect on participation is limited because ownership and management are two different things. 3. Participation through complete control: Workers acquire complete control of the management through elected boards. The system of selfmanagement in Yugoslavia is based on this concept. Self-management gives complete control to workers to manage directly all aspects of industries through their representatives. Advantages: • Ensures identification of the workers with their organization. • Industrial disputes disappear when workers develop loyalty to the organization. • Trade unions welcome this type of participation. Conclusion: Complete control by workers is not an answer to the problem of participation because the workers do not evince interest in management decisions. 4. Participation through Staff and Works Councils: Staff councils or works councils are bodies on which the representation is entirely of the employees. There may be one council for the entire organization or a hierarchy of councils. The employees of the respective sections elect the members of the councils. Such councils play a varied role. • Their role ranges from seeking information on the management’s intentions to a full share in decision-making. Such councils have not enjoyed too much of success because trade union leaders fear the erosion of their power and prestige if such workers’ bodies were to prevail. 5. Participation through Joint Councils and Committees: Joint councils are bodies comprising representatives of employers and employees. This method sees a very loose form of participation, as these councils are mostly consultative bodies. Work committees are a legal requirement in industrial establishments employing 100 or more workers. Such committees discuss a wide range of topics connected to labour welfare. Examples of such committees are welfare committee, safety committee, etc. Such committees have not proven to be too effective in promoting industrial democracy, increasing productivity and reducing labour unrest. 6. Participation through Collective Bargaining: Through the process of CB, management and workers may reach collective agreement regarding rules for the formulation and termination of the contract of employment, as well as conditions of service in an establishment. Even though these agreements are not legally binding, they do have some force. For CB to work, the workers’ and the employers’ representatives need to bargain in the right spirit. But in practice, while bargaining, each party tries to take advantage of the other. This process of CB cannot be called WPM in its strongest sense as in reality; CB is based on the crude concept of exercising power for the benefit of one party. WPM, on the other hand, brings both the parties together and develops appropriate mutual understanding and brings about a mature responsible relationship. 7. Participation through Job Enlargement and Job Enrichment: Page 5
Excessive job specialization that is seen as a by-product of mass production in industries, leads to boredom and associated problems in employees. Two methods of job designing – job enlargement and job enrichment – are seen as methods of addressing the problems. • Job enlargement means expanding the job content – adding task elements horizontally. • Job enrichment means adding `motivators’ to the job to make it more rewarding. This is WPM in that it offers freedom and scope to the workers to use their judgment. But this form of participation is very basic as it provides only limited freedom to a worker concerning the method of performing his/her job. The worker has no say in other vital issues of concern to him – issues such as job and income security, welfare schemes and other policy decisions. 8. Participation through Suggestion Schemes: Employees’ views are invited and reward is given for the best suggestion. With this scheme, the employees’ interest in the problems of the organization is aroused and maintained. Progressive managements increasingly use the suggestion schemes. Suggestions can come from various levels. The ideas could range from changes in inspection procedures to design changes, process simplification, paper-work reduction and the like. Out of various suggestions, those accepted could provide marginal to substantial benefits to the company. The rewards given to the employees are in line with the benefits derived from the suggestions. 9. Participation through Quality Circles: Concept originated in Japan in the early 1960s and has now spread all over the world. A QC consists of seven to ten people from the same work area who meet regularly to define, analyze, and solve quality and related problems in their area. These circles require a lot of time and commitment on the part of members for regular meetings, analysis, brainstorming, etc. Most QCs have a definite life cycle – one to three years. Few circles survive beyond this limit either because they loose steam or they face simple problems. QCs can be an excellent bridge between participative and non-participative approaches. For QCs to succeed in the long run, the management needs to show its commitment by implementing some of the suggestions of the groups and providing feedback on the disposition of all suggestions. Training in problem-solving techniques is provided to the members. QCs are said to provide quick, concrete, and impressive results when correctly implemented. Advantages: • Employees become involved in decision-making, acquire communication and analytical skills and improve efficiency of the work place. • Organization gets to enjoy higher savings-to-cost ratios. • Chances of QC members to get promotions are enhanced. The Indian Scenario: • Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others. • Experienced mixed results: o M&M (jeep division) with 76 QCs has experienced favourable results. Technical problems got solved. Workers got to get out of their daily routine and do something challenging. • Trade unions look at it as: A way of overburdening workers, and An attempt to undermine their role. Page 6
10. Empowered Teams: Empowerment occurs when authority and responsibility are passed on to the employees who then experience a sense of ownership and control over their jobs. Employees may feel more responsible, may take initiative in their work, may get more work done, and may enjoy the work more. For empowerment to occur, the following approach needs to be followed as compared to the traditional approach: Element Organizational structure Job design Management role Leadership Information flow Rewards Job process
Traditional Organization Layered, individual Narrow, single task Direct, control Top-down Controlled, limited Individual, seniority based Managers plan, control, improve
Empowered Teams Flat, team Whole process, multiple tasks Coach, facilitate Shared with the team Open, shared Team-based, skill-based Teams plan, control, and improve
Features of empowered or self-directed teams: • Empowered to share various management and leadership functions. • Plan, control and improve their work. • Often create their schedules and review their performance as a group. • May prepare their own budgets and co-ordinate their work with other departments. o Usually order materials, keep inventories and deal with suppliers. o Frequently responsible for acquiring any new training they might need. o May hire their own replacement to assume responsibility for the quality of their products or services Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are empowering employees – both frontline as well as production staff, and are enjoying positive results. 11. Total Quality Management: TQM refers to the deep commitment, almost obsession, of an organization to quality. Every step in company’s processes is subjected to intense and regular scrutiny for ways to improve it. Some traditional beliefs are discarded. • High quality costs more. • Quality can be improved by inspection. • Defects cannot be completely eliminated. • Quality in the job of the QC personnel. New principles of TQM are: • Meet the customer’s requirement on time, the first time, and 100% of the time. • Strive to do error-free work. • Manage by prevention, not correction. • Measure the cost of quality. • TQM is called participative because it is a formal programme involving every employee in the organization; making each one responsible for improving quality everyday.
12. Financial Participation: Page 7
This method involves less consultations or even joint decisions. Performance of the organization is linked to the performance of the employee. The logic behind this is that if an employee has a financial stake in the organization, he/she is likely to be more positively motivated and involved.
Some schemes of financial participation: • • •
Profit-linked pay Profit sharing and Employees’ Stock Option schemes. Pension-fund participation.
Pre-requisites for successful participation: I. The overall climate in the organisation should be favourable to workers’ participation. There should be an attitude of mutual co-operation, confidence, and respect for each other. Management, in particular, should be genuinely receptive to the labour’s ideas so that the latter can perceive that their ideas are useful. II. There must be sufficient time to participate before action is required; because participation in emergent situations is hardly advisable. III. The subject of participation must be relevant to the enterprise; it must concern something in which both the parties are interested, otherwise the parties are likely to become indifferent to the process of participation. IV. The workers’ representatives should have the ability such as intelligence and knowledge, to participate. It is not appropriate to ask workers to participate in technical aspects of the machinery; but they can participate successfully in problems relating to their work. The contributions made by the workers should be worthwhile and should benefit the workers in the long run. It should be in the interest of the management as well! Now maintaining that balance is not that easy but that is what experience is all about!! V There must be effective system of communication. Both labour’s representatives and management’s representatives must be able to understand each other and express themselves without any inhibitions. The whole idea after all is to be able to speak out one’s mind and listen to the counterpart’s point of view! VI. Participation should not adversely affect the status or authority of the participants. Managers will not participate, if their authority is threatened. Workers will hesitate in participating if they think that their status is being adversely affected. In fact for worker’s participation to be effective, both the management and the labour should get rid of their ego problems and share their ideas. I am sure that you will agree that no get rid of their ego probl that you will agree that relationship can continue for long if there are ego clashes. Both the parties should make efforts to come closer rather than moving away. VII. The financial cost of participation should always be lesser than the benefits-both economic and non-economic-of participation. We all can understand the economic aspect but as far as the noneconomic part is concerned, it will depend on the organisations. What I can tell you at this point of time is that the pains and pleasures should be matched! The pleasures should be much more as compared to the pains. VIII. Participation should be within the framework of overall policy of the enterprise in question .I am sure you will agree that every decision has to be in line with the Vision and Mission statements of the organisation. Limitations of participation: Technology and organizations today are so complex that specialized work-roles are required. Page 8
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This means employees will not be able to participate effectively in matters beyond their particular environment. Everybody need not want participation. The role of trade unions in promoting participative management has been far from satisfactory. Employers are unwilling to share power with the workers’ representatives. Managers consider participative management a fraud.
(I) (v) Reason for Limited Success : 1. Firstly, the fundamental difficulties in the way lie in the concept itself. There is a basic conflict of interests between the workers and the owners of the business enterprise. Participation involves parting with power. Managements have been reluctant to part with their authority and prerogative to manage the enterprises. Similarly trade unions have not been prepared to divest themselves of their power manifested in bargaining and pressure. 2. Secondly, multiplicity of trade unions and factionalism has been a serious obstacle in the way of workers’ participation in management. In view of the claims and counter claims, apathy and willingness, hostility and cooperation displayed by rival unions or their factions, designation of workers’ representatives on the participative forums often becomes a very difficult task. 3. The government with its anxiety of maintaining cordial relations between labour and management, increasing production and productivity, achieving planned targets and accelerating the pace of economic and industrial development, came forward with different schemes of workers’ participation in management. Many employers and trade unions still considers them as imposition from outside. Its enforcement by law or compulsion would thwart the very purpose of scheme and would act as serious constraint on its successful implementation. 4. Fourthly, both managements and trade unions have often complained of a plethora of joint bodies in Indian industries for example, works committees, joint management councils, shop councils, unit councils, plant councils, establishment councils, canteen committees, production committees, safety committees, welfare committees, grievance committees , and so on. Thus, it is natural for them to become bewildered by this multiplicity of joint bodies. 5. Another hurdle has been lack of specific arrangements for sharing the gains of participation. Workers are assured in a vague manner, that they would gain if production increases and quality of products improves as a result of participation, but vague and remote expectations cannot be expected to enthuse the workers. A prior arrangement for sharing the fruits of participation is a necessary condition for the success of the scheme on a lasting basis. 6. It is the government in India which is more anxious for the establishment of the schemes of participation than the parties which have to work them out. However, displaying an attitude of cooperation with the government in maintaining industrial harmony, most national organizations of employers and trade unions supported the schemes at the national forums, but they have generally failed to enthuse their affiliates about the usefulness of the schemes. 7. Lastly, it has also been realized that lack of education and training with regard to the content, process, utility and other relevant aspects of participation have also proved an impediment to the growth of workers’ participation in the country.
(I) (vi) Suggestions for Improvement: For the successful initiation and functioning of the institutions of workers’ participation in management, serious attention has to be given to the removal of the hurdles (as above). Efforts should be made to stir up the management and workers at the local or enterprise level to understand the schemes and to derive concrete benefits from them. Page 9
The government efforts should be confined to giving guidelines and to remove the impediments in the way, for example, reducing trade union rivalry by amending trade union laws, regulating procedural aspects of collective bargaining, expanding workers’ education programme and evolving a system of sharing the fruits of participation.
(I) (vii) Evolution of participative management in India: The beginning towards WPM was made with the Industrial Disputes Act, 1947, which made Works Committees mandatory in industrial establishments employing 100 or more workers. The Industrial Policy Resolution adopted by the government in 1956 stated that there should be some joint consultation to ensure industrial peace, and improve employer-employee relations. The functions of both these joint bodies were to be consultative and were not binding on the management. The response to these schemes was encouraging to begin with, but gradually waned. • A study team was appointed in 1962 to report on the working of joint councils and committees. The team identified some reasons for their failure. o No concrete steps were taken to remove the difficulties, or change the pattern of participative management. • During the emergency of 1975-77, the interest in these schemes was revived by the then Prime Minister by including Workers’ Participation in industry in the government’s 20-point programme (refer for detail Page 246 of Industrial Relations, Trade Unions and Labour Legislation by P.R.N.Sinha, Indubala Sinha, Seema Priyadarshini Shekhar). • The government started persuading large enterprises to set up joint consultative committees and councils at different levels. • The Janata Government who came to power in 1977 carried on this initiative. It was again emphasized by the Congress government who came back in 1979. This continued in a “nonstatutory vein” till the late 1980s, and the response from the employers and employees stayed Luke-warm. Then, the 42nd Amendment to the Constitution was made. • Now, Article 43-A reads: The State shall take steps, by suitable legislation, or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry. Thus, participative management is a constitutional commitment in India. • And then, on May 30, 1990, the government introduced the Participation of Workers in Management Bill in the Rajya Sabha. o The bill requires every industrial enterprise to constitute one or more `Shop-Floor Councils’ at the shop floor level, and `Establishment Council’ at the establishment level. These councils will have equal representation of employers and employees. Shop-Floor councils enjoy powers over a wide range of functions from production, wastage control to safety hazards. The Establishment Council enjoys similar powers. The bill provides for the constitution of a Board of Management of every corporate body owning an industrial establishment. o The bill also provides for penalties on individuals who contravene any provision of the bill. In spite of all these efforts, only the government and the academicians have been interested in participative management. But participative management is staging a comeback. The compulsions of emerging competitive environment have made employee involvement more relevant than ever before. Managers and the managed are forced to forget their known stands, break barriers, and work in unison. Managers and workers are partners in the progress of business. Page 10
Conclusion Management should be prepared to give all information connected with the working of the industry and labor should handle that information with full confidence and responsibility. The workers should become aware of their responsibilities. The leaders should initiate this in them. Similarly, the top management should make the lower echelons to show a new attitude in the light of the new relationship.
CASE STUDIES Workers' Participation at TISCO Since Tata Iron and Steel Company are the pioneers in establishing joint consultation in India, it is worthwhile to look at workers' participation at TISCO. Closer association of employees with management at TISCO began in 1919 and was formalized in August 1956. The purpose was to promote increased productivity, provide a better understanding to the employees of their role and importance, and to satisfy the urge for self expression. The scheme as set up at TISCO consist f a three-tiered system with joint department councils (JDCs) constituted at the departmental level. Next, joint works councils (JWC) for the entire work, and at the top the joint consultative council of management (JCCM). The specific functions of these three bodies were as follows: JDCs were “to study operational results and production problems, advice on the steps deemed necessary to promote and rationalize production, improve productivity and discipline and economize cost. Promotion of welfare and safety, encouragement of suggestions and improvement of working conditions also fell within their purview.” JWCs were “to discharge special function of reviewing every month the working of JDCs and other committees such as Suggestion Box Committee, Safety Committee, Canteen Managing Committee, etc.” JCCM was given the task of advising management on production and welfare and also looking at matters referred to by JDCs and JWCs In order to ensure that these committees did not overlap the functions of other committees, separate task groups were formed. Special courses were offered to prepare both management and union representatives to effectively utilize the facility. TISCO's experience with workers' participation has been satisfactory. From 1957 to the middle of 1972 JDCs have discussed a total of 14,104 suggestions of which 70.3 per cent have been implemented. These suggestions have covered a wide range of topics and issues, but the most important point to remember, perhaps, is that the councils have been successful in involving workers equally in the process of production.
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WORKER PARTICIPATION Review of Judy Mailer (1992) – Conflict & Co-operation; case studies in worker participation (Johannesburg: Ravan Press). Bill Freund If there is a distinctive call within the socialist project in South Africa that comes out of South African experience, it is the call for worker participation. Few, if any, demands for nationalization or any sort of restructuring of the firm, lack such a call. This stems to a large extent from the experience of the trade union movement in the 1980s, from the emphasis that it has laid on worker democracy and on the challenge to management prerogative on the shop floor. To some degree, this pressure has been met by a reformist response from South African management, which this book attempts to assess. As Judy Mailer explains in this useful study, sensitivity to the issue of worker participation is not due to the force of South African politics alone as to a more basic contradiction in industrial capitalism generally, one that is becoming rapidly more salient as the industrial character of production shifts in the late-twentieth century. Capital 'needs to organize the forces and relations of production in a way that develops the social productivity of labour as much as it alienates it' (p5). Just as the slave system came up against the impossibility of the whip getting workers to produce with any efficiency or involvement so capitalism is now coming up against the limits of what the Taytorist regime can extract in terms of its own needs for extended accumulation. For capital, the challenge lies in finding a means of involving workers in their own exploitation in such a way as to create a co-operative structure where authority is diffused and involvement maximised without giving away real power. For labour, the challenge is increasingly one to find ways of using the openings in new techniques and structures that will benefit workers and genuinely democratise power. Mailer feels there can be no rejection of this challenge: 'labour needs to take advantage of capital's contradictory needs in the workplace so as to benefit workers' (pl4). Most of this book consists of three case studies, well-enough known in the business literature but all of which the author has researched herself, which tend to demonstrate the limited possibilities thus far of worker participation in the South African context. Jabula Foods, an unprofitable and probably overmanned producer of basic dried foodstuffs on the east Rand, is the most negative example of the three. Worker participation here is artificial and superficial. Management interest in participation is reduced by the nature of the plant and labour process which offers little scope for empowerment of workers through enskilling. Worker views of management are extremely harsh and best expressed in terms of knock-out struggle. A strongly supported union is constantly engaged in challenges over the basic content of work, not unmarked by violence. Management are very anxious to destroy 100 TRANSFORMATION 20 (1992) union power and continue to rely significantly on white skilled and supervisory labour which is deeply antagonistic to union militancy. In this context, head office plans for worker involvement in production can have little purchase even though ownership links Jabula to the generally more liberal Premier group. Volkswagen S A benefits from the sophistication of a very successful international operation. Some aspects of consultation and involvement have been enacted effectively at the Uitenhage plant while acceptance of trade unionism as a permanent feature of society is more widespread amongst management However, conflictual relations are still heavily dominant and attempts to imitate the smooth flow of goods and people which has given the Japanese car industry such an international edge have not amounted to much. Although pay is good by local standards and there is a tendency for workers to stay on the job for many years, workers have to support a wide number of dependents, diffusing their prosperity enormously and the character of NUMS A democracy tends to empower the most politically militant and active who know how to make a meeting work in their interests. Page 12
Management in the end see the union as the chief 'stumbling block' to creating a rational production system and there is some co-operation but little love lost between what clearly remain two antagonists. It makes a superb case study of the very contradictions that Mailer highlights and would repay a much longer investigation. Finally, Mailer discusses the unusual case of Cashbuild where worker participation has been quite successful. Cashbuild is a network of autonomous shops that sell building materials to a mainly township clientele outside the main urban centres. Its workforce is small and very differentiated between sales and labouring staff; trade union involvement is of little or no importance. High language of participation in Cashbuild has a distinctively South African and paternalist ring but it has achieved some acceptance amongst workers for a variety of participatory structures. Perhaps most crucially, workers seem to accept the idea of the pay packet being related to the success of the branch they work in. Mailer is reluctant to celebrate Cashbuild's success, given her strong union commitment and the reality that management power is not seriously affected by the participatory structures in Cashbuild, but is probably on strong ground in pointing to the limited applicability of such a model to the industrial forum. Nonetheless, the Cashbuild way probably is as close a model to a South African prototype of Far Eastern production culture as one could find. Mailer has done a valuable service in looking at industry in a way that statistical analyses of economic trends would never succeed in doing. She exposes the shallowness and contradictions in management participation strategies on the one hand and the deep, even violent gulf that exists between capital and labour in many contexts. She suggests that the way forward is a slow and rocky one, although she necessarily has to factor out the question of political change at the top. But it is a way that has to be forged if South Africa's uncompetitive industries, operating with far too little diffusion of managerial and technical skills, not geared to mass market consumption and at first sight textbook examples of the stark class conflict envisioned in The Communist Manifesto, will learn to operate more effectively in the sphere of world competition. TRANSFORMATION 20(1992) 101
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COLLECTIVE BARGAINING (II) (i) Meaning: Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firm’s and workers’ representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation. ILO has defined collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another. Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment. It is called ‘collective’ because both the employer and the employee act as a group rather than as individuals. It is known as ‘bargaining’ because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations. Thus collective bargaining: • is a collective process in which representatives of both the management and employees participate. • is a continuous process which aims at establishing stable relationships between the parties involved. • not only involves the bargaining agreement, but also involves the implementation of such an agreement. • attempts in achieving discipline in the industry • is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.
Importance: Collective bargaining includes not only negotiations between the employers and unions but also includes the process of resolving labor-management conflicts. Thus, collective bargaining is, essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method of introducing civil rights in the industry, that is, the management should be conducted by rules rather than arbitrary decision making. It establishes rules which define and restrict the traditional authority exercised by the management. Importance to employees • Collective bargaining develops a sense of self respect and responsibility among the employees. • It increases the strength of the workforce, thereby, increasing their bargaining capacity as a group. • Collective bargaining increases the morale and productivity of employees. • It restricts management’s freedom for arbitrary action against the employees. Moreover, unilateral actions by the employer are also discouraged. • Effective collective bargaining machinery strengthens the trade unions movement. Page 14
The workers feel motivated as they can approach the management on various matters and bargain for higher benefits. • It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the chances for conflicts are reduced. Importance to employers • It becomes easier for the management to resolve issues at the bargaining level rather than taking up complaints of individual workers. • Collective bargaining tends to promote a sense of job security among employees and thereby tends to reduce the cost of labor turnover to management. • Collective bargaining opens up the channel of communication between the workers and the management and increases worker participation in decision making. • Collective bargaining plays a vital role in settling and preventing industrial disputes. •
Importance to society • Collective bargaining leads to industrial peace in the country • It results in establishment of a harmonious industrial climate which supports which helps the pace of a nation’s efforts towards economic and social development since the obstacles to such a development can be reduced considerably. • The discrimination and exploitation of workers is constantly being checked. • It provides a method or the regulation of the conditions of employment of those who are directly concerned about them. (II) (ii) Functions or Type of Activities: A collective bargaining process generally consists of four types of activities- distributive bargaining, integrative bargaining, attitudinal restructuring and intra-organizational bargaining. Distributive bargaining: It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries and bonus are discussed. In distributive bargaining, one party’s gain is another party’s loss. This is most commonly explained in terms of a pie. Disputants can work together to make the pie bigger, so there is enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to get as much as they can for themselves. In general, distributive bargaining tends to be more competitive. This type of bargaining is also known as conjunctive bargaining. Integrative bargaining: This involves negotiation of an issue on which both the parties may gain, or at least neither party loses. For example, representatives of employer and employee sides may bargain over the better training programme or a better job evaluation method. Here, both the parties are trying to make more of something. In general, it tends to be more cooperative than distributive bargaining. This type of bargaining is also known as cooperative bargaining. Attitudinal restructuring: This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management. When there is a backlog of bitterness between both the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops a bargaining environment and creates trust and cooperation among the parties. Intra-organizational bargaining: Page 15
It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups. For example, skilled workers may feel that they are neglected or women workers may feel that their interests are not looked after properly. Within the management also, there may be differences. Trade unions maneuver to achieve consensus among the conflicting groups. (II) (iii) Process of Collective Bargaining: The collective bargaining process comprises of five core steps: 1. Prepare: This phase involves composition of a negotiation team. The negotiation team should
consist of representatives of both the parties with adequate knowledge and skills for negotiation. In this phase both the employer’s representatives and the union examine their own situation in order to develop the issues that they believe will be most important. The first thing to be done is to determine whether there is actually any reason to negotiate at all. A correct understanding of the main issues to be covered and intimate knowledge of operations, working conditions, production norms and other relevant conditions is required. 2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process
well begun is half done and this is no less true in case of collective bargaining. An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached. 3. Propose: This phase involves the initial opening statements and the possible options that exist to
resolve them. In a word, this phase could be described as ‘brainstorming’. The exchange of messages takes place and opinion of both the parties is sought. 4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the
time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of agreements take place. 5. Settlement: Once the parties are through with the bargaining process, a consensual agreement is
reached upon wherein both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.
Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment. Often employees are represented in the bargaining by a union or other labor organization. The result of collective bargaining procedure is called the collective Page 16
bargaining agreement (CBA). Collective agreements may be in the form of procedural agreements or substantive agreements. Procedural agreements deal with the relationship between workers and management and the procedures to be adopted for resolving individual or group disputes. (II) (iv) Pre-requisites for Collective Bargaining: • •
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Employer’s recognition of the trade union. Bargaining must precede other measures: o Neither party should take any unilateral action. o Results of bargaining should be awaited. Employers’ and employees’ attitude calls for a change: o The workers and the employers should be quite clear that they are not looking for third party intervention in the form of litigation and adjudication. o They want to sort out their differences in a peaceful way. Top priority to plant level bargaining: o The representatives of the employees must have a firm resolution to have an agreed solution to their individual matters. Negotiations on differences: o Both the parties should negotiate on their points of differences or demands with the sole purpose of making an agreement. Reliance on facts and figures: o In order to make the negotiations result into success, the workers and the management agents must rely on facts and figures to substantiate their claims. Giving up unfair labour practices. Written agreement: o The final decisions should be incorporated in a written agreement. o The agreement should include the validity of the agreed matters as also the frequency of its review. Progress review: o Agreements should not be signed and forgotten. o During their implementation, regular meetings should be held between the representatives of both the parties to watch the progress of the implementation. This way any changes, adjustments and amendments can be effected. Respect of agreement: o Both the parties must respect the agreement and see that it is implemented in a fair and justifiable manner. Arbitration provision: o The agreement must include an arbitration clause. o Whenever the parties have any differences pertaining to the interpretation of the terms and conditions, the arbitration clause can be resorted to.
The Indian Scenario on CB: • In India, trade unions gained prominence much later – only after 1900. • In 1918, Gandhiji - as the leader of the Ahmedabad textile workers – advocated the resolution of conflict through CB agreements. But the idea gathered interest only after the Second World War. The Government of that time took steps like setting up of machinery for negotiations, conciliation and arbitration.
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The trade union movement and also CB agreements became popular after Indian independence. Moving from agreements at the plant level, such agreements spread to industries such as chemicals, petroleum, tea, coal, oil and aluminum. In ports and docks, banking and insurance, collective agreements were arrived at, right at the national level.
Assessment of Collective Bargaining in India: Other than in Ahmedabad and Mumbai, so far, collective agreements have not made much headway in India. Reasons: o Lack of statutory recognition of unions by the country as a whole. o Lack of provisions requiring employers and workers to bargain in ‘good faith’. o The historical problem of ‘lack of trust’ between the parties Causes of limited success of CB in India: • Problems with unions: o CB mainly depends on the strength of unions. o Weak trade unions cannot initiate strong arguments during negotiations. o Not many strong unions in India. o Indian unions are bogged down by the problems of: multiplicity, inter and intra-union rivalry, weak financial position and non-recognition. So, unanimous decision is unlikely to be presented at the negotiating table. • Problems from Government: o The Government has not been making any strong efforts for the development of CB. Imposition of many restrictions regarding strikes and lockouts has removed the `edge` of the CB process. • Political interference: o Interference of political leaders in all aspects of union matters has increased over the years. Almost all unions are associating themselves with some political party or the other. • Legal problems: o Now that adjudication is easily accessible, the CB process is losing its importance. • Management attitude: o In India, managements have a negative attitude towards unions. o They do not appreciate their workers joining unions. Suggestions for better functioning of CB: The Indian Institute of Personnel Management has offered the following suggestions: A progressive and strong management that is conscious of its obligations and responsibilities to the various stakeholders. A truly representative – enlightened and strong – trade union should come into being and should function on strictly constitutional lines. There should be unanimity between labour and management on the basic objectives of the organization and a mutual recognition of their rights and obligations. When there are several units of the company, there should be a delegation of authority to the local management. A fact-finding approach and a willingness to use new tools should be adopted for the solution of industrial problems.
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