Workers' participation in management: a conduit between present & past.

AuthorMohan Johri, Pramod


"Workers participation in management is not a new concept; it is as old as the institution of owners and workers. Only its importance has increased and has been brought into sharp focus with the industrial revolution and the advent of large enterprises" (Virmani, 1978). In the feudal system before the Industrial Revolution, the units were small and there used to be a joint decision making through consultation between the owner and worker. The owner took a paternalistic approach and interest in the employee.

At times interests of workers and of management clash with each other and effective discussion becomes essential. Groups representing both sides negotiate to derive common ground for finding solutions for the conflict. Such a common ground can also be prepared through cooperation, mutual trust and understanding of issues between the management and workers. This can be possible when both cooperate jointly to manage issues. Such an understanding and a collaborative approach to find a common understanding is called as workers participation in management.

Some Stylized Facts

The roots of modem cry for participation are deep in history. We have come a long way from master- servant relationship to the present stage of participation. Social thinkers like Comte and Omen had advocated the participation of workers in management for achieving social and distributive justice. The most remarkable contribution in this field is done by Karl Marx who advocated complete control of enterprise by workers. It was however a distant dream for the workers to have control over the production and product under capitalism. Later on Webb and Cole propagated that participation of worker in management would be sufficient to meet the needs of social justice and distribution. They believed that if the workers are also given opportunity to participate in the management process, there would be positive gains for the enterprise through higher productivity and efficiency. They want to bridge the divide between the management and workers in order to bring harmony in industrial relations.

F. W. Taylor was the first to champion the recognition of the importance of human beings in managing an organization. Taylor's work on scientific management was the first explicit attempt at using in an organization the knowledge that for increased productivity the employers need to make efforts to satisfy workers needs (Taylor, 1911). The importance of making fuller use of potential of workers through management methods was elaborated in the researches carried out by behavioral scientist like Likert (1961) and McGregor (1960). Their analysis was based on the assumption that the average worker is willing to accept the responsibility and will respond to the opportunity of using his intellectual faculties in larger measure. The introduction of a more participative management style and the improvement of job design are reported in several cases to have given good results in terms of workers attitudes and productivity (ILO, 1976).

In spite of the controversies and conflicts, Workers Participation in Management, is being increasingly adopted both in capitalist and socialist countries particularly in Europe and in the third world as an ideal form of industrial democracy Since the conclusion of World War II more appropriately in the fifties and sixties, various European countries have been experimenting in what may be called participative management. Wertheim (1976) stated that in Europe, there appears as a complement to traditional patterns, an attempt to decentralize influence. Efforts towards worker control are likely to have limited appeal in place such as the United States and Britain where labor perceives industrial relation as already fairly decentralized. Jecchinis (1979) explained the experiences of certain successful West European practice in employee's participation. He pointed out the establishment of complementary intuitional arrangements in the existing system of labor-management relations in Canada for its success which, at the present, is based only on the institution of collective bargaining.

Alas (2007) made an attempt to study, "The impact of employee participation on job satisfaction during change process". He mentioned that "Estonia has succeeded in replacing a planned economy with a free market economy. Still, a lot has to be done to achieve a quality level comparable with developed countries in the European Union. The main problem is: how to change Estonian business organizations even faster than organizations change in developed countries. To meet this challenge, we must rely on both the theories and the experiences of developed countries". More recently Kuyea and Sulaimonb (2011) examine the relationship between employee involvement in decision making and firms' performance in the manufacturing sector in Nigeria. The results indicate a statistically significant relationship between employee involvement in decision making and firms' performance. The study also reveals a significant difference between the performances of firms whose employee involvement in decision making is deep and of firms whose employee involvement in decision making is shallow. The findings also reveal the involvement of participating firms in employee involvement in decision making.

World War Era

It was during the First World War that a need to study the relationship between employer and employee was felt as the entire United Kingdom faced a challenge for having effective control over the situation as emerged due to the World War, which has adversely affected the industrial production. The government appointed a committee to examine the ways and methods for increasing production. This committee was headed by Lord Whitley who was then deputed to India to lead Royal Commission on Labor in India in 1929. Whitley conducted extensive studies and had discussions with various people connected with industry and labor. He then recommended that management must consult labor on issues related to production. This would lead to greater involvement and commitment of labor in promoting industrial production. He suggested that factories and other workplaces should form works committees comprising equal representatives from both sides. This committee would suggest means to increase productivity through workers' participation.

Whitley's suggestions were implemented by the government and works committees were set up in all the factories. Soon, the country witnessed a rapid increase in production. Workers' participation in management therefore had scored a strong point. These works committees continued till the War was over when production became normal as there was no need for excessive industrial goods. Managements immediately disbanded the works committees. They were successful when there was a need to increase the production or otherwise management did not think it necessary to consult labor in issues that were defined as prerogatives of the management. It looked like the workers were used by management in order to achieve its short term goals. After disbanding the works committees, industrial unrest increased and the trade union movement grew stronger. However, there was no talk of consultation with the workers' nor was there any move of institutional recognition of workers' participation.

The next major step towards the realization of importance of the workers was felt soon after World War II. Though the War caused havoc in the lives of people, it also led to the questioning of certain traditional beliefs. For example, when men went to war, production and factories had to be managed by someone in order to meet the increased needs caused by the War. It was then that women started...

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