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Purpose and Objectives of Project
The purpose and objective of this study can be summarized as follows:
• Discuss history of workers participation in Management • Objectives of workers Participation
• Damage of unhappy labour management-labour relations. • Benefits of Cape Gemeni: Involve Everyone, Learn Together • Collective Bargaining
• Indian Scenario
• Worker Participation in Management in Different Countries with New Trends. • When workers turn owners -
• Success stories on successful management
Collective Bargaining and Workers Participation in Management
Integration of collective bargaining and formal worker participation processes: Boon or barrier to worker rights?
Many employers are extending workplace rights by allowing for more employee voice in decision making. Numerous unionized organizations have established formal worker participation processes to help achieve this end and to improve organizational performance. Based largely on theory, such processes are normally designed to operate independently from the bargaining process. The purpose of this study was to examine the relationship between participation and bargaining
processes, and the effect of this relationship on workplace satisfaction. From the employees surveyed the results indicate that the processes tend to become
integrated in the workplace. Further, employee' workplace satisfaction was greater where formal worker participation is institutionalized within the bargaining process.
Contents
Workers Participation in Management
History of Workers Participation in Management 8 Objectives / Features of Participation 12
Damage of unhappy management-labour relations 18 Cape Gemini: Involve Everyone, Learn Together 22 Scope and Ways of Participation 25
Limitations of Participation 33
Evolution of Worker Participation in India 33 Collective Bargaining
Hamal Panchayat 36
Features / Importance / Type of CB 39 Indian Scenerio 46
In Germany 64 In Japan 67 In Yugoslavia 69 In India 73
Workers Participation in management in TISCO 77 Case Study
Convenience Corporation 80 Another Union, Oh No! 81 KDHP – Success Story 82
Worker-turned-Owners Revive Failing Tea Estates 85 Tata Tea turns a new chapter 89
Conclusion 92
If whole populations are told that they cannot control or even discuss key elements in their lives - wages and work - it will inevitably give rise to a whole range of
dysfunctionalities. New forms of social control of capital are essential in order to fulfill the promise of democracy.
Norman Birnbaum, in "Die Zeit" 44/1997
If management must participate in decisions for determining the share of the worker from the results of the co-operative use of labour and capital, then the worker is equally entitled to participate in the decisions relating to share of capital, namely, profit and indeed all decisions hitherto arrogated to itself by the employer or management relating to the whole organization and operation of the enterprise; determining objectives and policies, the relative share of the co-operating factors of production.
Yesufu, 1992: 142
“The management in this company does not consider it as its duty to contact junior employees on how decisions are made”
“I am always busy in the factory, may be this is why I don’t know about decision making”.
“I am in this company to work and earn my salary. I have no business with decision making. I am not paid for such job.”
An opinion like this reflects the instrumental orientation of some of the workers. Being mostly junior workers, these respondents tend to demonstrate more interest in earning a living from work rather than to satisfy the higher order needs of self expression through participation.
“Management in this company does not hesitate to involve some of us in the decision making process whenever it is necessary”
“As a senior staff, I and other Foreman in the various units are made to contribute to the decisions in matter relevant to our department”
Views like the one above shows that respondents have some measures of involvement in the decision making process of their organization.
The human being has been on this earth for over 30,000 years. However, civilization started with his acquiring two technologies: farming and keeping animals. Both the technologies required manual work. Initially, he did the work himself. As the assets increased, the work available from the family was not adequate. So he had to get ‘human resources’ to supplement the efforts of himself and his family members.
Initially, the help was obtained by acquiring slaves and creating master-slave relationship. This relationship became economically untenable so he modified it to master-servant relationship. In both these relationships, the supremacy of the master was fundamental – the slave or the servant working according to the
instructions from the master. Thus, slaves position was obviously a survile one and it continues the same way in feudal organizations. The technology was by and large passed on by the master to the servant and the servant was totally dependent on the master. The children of the servants normally looked forward to becoming servants in the master’s organization. Over a period, the servants also acquired some technologies and became craftsmen. Thereafter, the relationship became contractual. The craftsman’s products became available to others besides his masters.
A sea-change came with the industrial revolution and establishment of factories. The master-servant relationship now became a distant one – the master being
concerned with the servants only for the servant’s period in the factory. The master’s approach now was to get the maximum production from the worker
irrespective of what happened to him when he left the factory. This created a wave of resentment regarding “exploitation”. With the French Revolution, advent of Communism and the labour union movement, there was a struggle for a greater equality from the human resources i.e. the workers. The struggle continues all through the 19th and 20th centuries.
The 20th century started with increasing conflict between the employer and the employee. This adversary relationship created a lot of hostility. The employer was accused of exploitation and the employee was accused of resistance to productivity. By this time, it was obvious that the prospects of an organization depended on productivity, quality and innovation. The employers tried to bring in the productivity by supervision with industrial engineering techniques like time and motion study. These increased the conflict between the employer and the employee and the employee used all his intellect to resist productivity. Quality also became a
problem. Department had to be created to check and ensure quality and here again adversary relationship increased. The innovation of the employees was largely used against the employer. Experiments were carried out through suggestion schemes to utilize the innovation of workers. However, by and large these were not successful.
While the industrial engineers were concentrating on techniques to improve
productivity, they were shaken by the “Hawthorne” experiment. In this experiment, the effect of intensity of light on productivity was being studied. As the intensity of light increased, the productivity went up and it went further up when the intensity of light went down. It was then discovered that discipline regarding time, task and methods do not decide productivity by themselves. The motivation of workers is also an important factor. It is not only the skill, but also the will that determines productivity. Thereafter, the employers tried to create motivation among the workers through “Workers Participation in Management”.
This project represents an attempt to find whether there should exist a system of labour-management consultation or worker participation that supplements or replaces collective bargaining. It discusses worker participation in management at corporate, establishment and shop-floor level, especially at large firms in the private sector. Worker participation in management here means that workers have a say in managerial decision making individually or collectively through their
representatives, and that they regulate it or in some cases play a role in helping to execute the decisions. Although there are various forms of worker participation in management such as worker director schemes, profit-sharing schemes, joint
consultation, collective bargaining, quality circles and so on, the following issues are analyzed using a three-tiered model:
Participationstrategicdecisionmakingtoptierjointconsultation♣ Negotiationstaffingtransferfunctionaltierand/orjointconsultation♣ job-centeredindividualparticipationworkplaceleavetier.♣
First of all, the practices of the above-mentioned worker participation are described using a body of case studies and questionnaire surveys. In each section, the
characteristics of the practices are pointed out. Then some theoretical explanations are systematically developed in order to understand worker participation in
management.
Workers Participation in Management
Worker participation in management is a concept shrouded with so much
vagueness that for different people it has different meanings. For management it is joint consultation prior to decision making; for workers it is co-decision making or co-determination; for trade union leaders it is the ushering in of a new era of social relationship and for administrators it is merely the association of workers with management without assigning them any authority or responsibility.
Notwithstanding these different views on worker participation, all agree that it is an essential step involving redistribution of power between the management and workers in the direction of industrial democracy.
It should be remembered that the worker participation in management is not the same thing as participative management. While workers' participation in
management refers to institutional and formal arrangements resulting into the creation of various participative forms to associate worker representatives with management, participative management refers to a manager's specific style in which he interacts with his people. It is his leadership pattern.
Similarly, worker participation in management is not the same thing as collective bargaining. What distinguishes worker participation from collective bargaining is the element of mutual trust and information sharing. Collective bargaining is typically based on power dynamics, pressure tactics and to some extent on non-sharing of information whereas worker participation in management is based on trust, information-sharing and mutual problem-solving.
However, if collective bargaining refers to productivity bargaining and productivity agreements, one may regard it as a form of worker participation in management.
Objectives of Participation
The economic objective of workers participation in management is the increased workers' productivity. Workers participation results in cooperation between labour and management and enhances productivity of labour. Poor labour management relations may demotivate a worker and he may land up in minimum possible
production. Workers participation helps management in maintaining sound labour-management relations and hence contributes to higher productivity.
One of the psychological objectives of workers participation is to increase the workers' level of motivation. Participation provides satisfaction of non-economic needs of workers. Through participation scheme, a worker feels that his importance is felt by the management; he feels proud of working in the organization; he would have a sense of belonging to the organization. Thus, participation provides the employees with a sense of importance, pride and accomplishment, freedom and opportunity for expression, a feeling of a belonging to the place of work and send of workmanship and creativity, and a total devotion to the work. The ultimate result would be the enhanced motivation and higher productivity.
Workers participation ensures a respectable status for the employees in the society. It assures the human dignity because the workers become a partner in the gains of productivity.
One of the ethical objectives of workers participation is to change and mould the employee behaviour. For instance, if employees resist some important changes in organization, participative approach would be fruitful in introducing change and reduce the resistance to change. The ethical objective of participation is to develop workers' free personality, dignity, and belonging to the enterprise.
Workers participation should be distinguished from collective bargaining. Collective bargaining is essentially based on power-play, pressure tactics and to a certain extent non-sharing of information whereas participative management is based on mutual trust, information, and mutual problem-solving.
Factors Influencing Participation
Several research studies have shown that the intensity of participation depends on four factors:
i. the extent of participation ii. the level of participation
iii. the subject-matter of participation
iv. the personal characteristics of the individuals who are asked to participate in the decision-making
(i) Extent of Participation: There are four degrees of participation. These are as follows:
taken by it.
b) Consultation: exchanging the opinion and the views with the management before the decisions are taken.
c) Co-determination: taking joint decisions with the management.
d) Self-management: enjoying complete autonomy right from decision-making to execution.
(ii) Level of participation: Level of participation is another factor which determines the interest of workers in participation as such. Participation can take place at three levels in an enterprise - floor level, plant level and corporate level. In big enterprises there may be a fourth level also, i.e. the departmental level, in between the shop-floor and the plant. Studies have revealed that most workers desire participation at the shop-floor level and not at higher levels because they feel that with their
knowledge of the work place they can contribute best at that level only.
(iii) Subject-matter of participation: By and large, the workers' interest in participation varies with the nature of issues involved in participation.
Broadly speaking, there can be two types of issues: work-related and interest-related. Examples of work-related issues are safety, welfare, such as canteen, sports, water-supply, housing, etc. These are the simplest issues. Examples of interest related issues are wages and sharing of productivity gains. These are the most difficult issues. Workers show greatest interest in the second type of the issues.
(iv) Personal characteristics: Workers' interest in participation is also influenced by certain personal or group characteristics. For example, several research studies have shown that both very low and very high levels of task-relevant maturity discourage participation. Participation by extremely immature workers is like the blind leading the blind. It is pooling of ignorance. On the other hand, extremely mature workers rarely participate. They resist "group think" because they prefer only the expert in an area to make the decisions. Thus, the effectiveness of workers' participation in management increases as one moves from low to moderate levels of maturity and then begins to plateau and finally to decline as workers become high in task-relevant maturity.
Participation in Strategic Decision Making
How much say workers have in each issue, formally or in a written agreement, is shown in Table 2. A first glance reveals that the extent of their influence varies among firms and that in general it is limited, at least formally. It varies also with the issue and the firm size. As for larger firms with 5,000 workers or more, 30 to 40 per cent of them no only explain about business issues (with the exception of the
introduction of new equipment) but also listen to workers' opinions. Moreover, around 20 percent of these particular firms try to reach consensus between labour and management.
Table 2. Establishments which discuss business issues at joint consultation committees, by the extent of workers' influence (per cent)
Business Issues Size of Firm Dealt with by JCCs Of which
Report & explain to workers (%) Listen to workers' opinions (%) Consult with workers (%) Need consensus of workers (%)
Basic business policy 5000- 100 69.1 12.1 16.1 2.7 1000-4999 100 76.7 11.6 6.6 5.1
Basic plan on production and sales 5000- 100 61.7 12.1 21.3 5 1000-4999 100 77.5 9.9 7.1 5.5
Changes in organisational structure 5000- 100 58.2 12.3 25.8 3.8 1000-4999 100 75 9.2 11.8 4
Introduction of new equipment 5000- 100 42.8 12.4 38 6.9 1000-4999 100 55.7 21.4 21.6 1.3
Source: Ministry of Labour (1994)
Note: To consult with workers means that both labour and management exchange their opinions to each consensus; failing that, the final decision is made by
management.
Business policies based on the opinions of the shop-floor, and occasionally they ask management to revise its policies. For that purpose, the unions have a special department or committee which analyses and monitors business policies. According to the union officers, management takes these suggestions seriously and makes every effort to implement them. In few firms, the collective agreements do not specify the extent of the workers' influence at the top tier and only require that union and management talk or exchange opinions about business issues. But in reality, the unions are involved in strategic decision making just as seriously as in the above three cases. The union may offer its members business analysis training. Matsushita is renowned for having the most advanced worker participation system. A branch of the Matsushita union gathers complaints and requests regarding
business issues from the rank and file in order to put forward proposals. Regardless of formal written agreements, many unions in private large-sized firms actively participate in strategic decision making.
Collective bargaining is the process of negotiation between the management and the worker representatives for resolving differences related to wages, bonus and other benefits, employee working conditions, grievance redressal procedure, collective bargaining procedure etc. The process of collective bargaining has three steps - preparation for negotiation, negotiation and contract administration.
If collective bargaining fails, the other stages in conflict settlement are conciliation, arbitration and adjudication, in that order. Worker participation in management is an effective tool for prevention of industrial disputes. The level of workers’
participation can vary from organization to organization. The basic objective of worker participation is to provide an opportunity to the workers to participate in the organizational decision-making.
By virtue of their participation, employees are bound to abide by all the decisions taken. This also helps in boosting the employee morale and enhancing their
commitment to the organization. Some of the common forms of worker participation in management in India are works committees, joint management councils, joint councils, plant councils, shop councils etc.
Worker participation in India has achieved only partial success due to factors like lack of proper education among workers, lack of understanding between the management and the workers and multi-unionism. A good organizational
environment built on mutual trust and confidence between the management and the workers would help in effective and successful worker participation in
management.
'Industrial relations' is a major force which influences the social, political and
economic development of a country. In the changing industrial environment and in the context of the fast technological development in India, employers and trade unions have to face the challenge of finding new ways to stimulate greater productivity and job satisfaction among the workers. Worker is no longer to be treated as having a commodity value only but he should be treated essentially, as a partner in the organization and is entitled to dignity and fair treatment. It is a
comprehensive work which has been brought out with the main object of clarifying the important concepts underlying modern participative management. It will
undoubtedly prove immensely useful not only for workers and employers but also for Govt. Departments and Undertakings in facing many issues which they often find themselves confronted with.
Workers' participation in Management of Companies ensures better industrial relations and increased productivity.
India experimented with this for the past fifty years. There are many models: some succeeded while others failed.
Japanese as a cohesive society adopted the "Zero Defect" as a national goal and succeeded beyond dreams.
Organization : Hyundai Motor Co. Industry : Automobile
Countries : India
Hyundai Motor Co., formed in 1967, was a part of the large South Korean Chaebol - the Hyundai Group - until the group split in September 2000. In the last four
decades, Hyundai managed to establish itself all over the world as a company producing reliable, technically sound and stylish automobiles.
In the 90s, the company started aggressive overseas expansion programs. By the late 90s, when Southeast Asian crisis struck, the company like all the other
chaebols, faced serious financial problems. To survive, it had to cut its labor force. The company offered various retirement schemes, unpaid leave for two years, etc. to workers, and expressed its inability to support its entire workforce in the slack period.
The unions refused to compromise and the management too held its ground. Finally, the government intervened to force a negotiated settlement between the union and the management.
"If the company refuses to accept our demands, we have no choice but to go on a full-fledged strike. As the union leader, I cannot control the anger of the union." -Hyundai union leader Kim Kwang-shik, July 1998.
"Laws and principles, along with dialogue and compromise, should be adhered to in dealing with labor issues."
-Choi Kil-seon, president and CEO of Ulsan-based Hyundai Heavy Industries in an interview to The Washington Times, June 2003.
The Hyundai Motor Co. (Hyundai), South Korea's largest automobile manufacturer was in the midst of acute labor problems in the late 1990s and early 2000s. Until the mid 1990s, Hyundai had been successful in handling South Korea's traditionally disruptive labor unions. It had kept strikes at bay with nearly double-digit pay hikes and other benefits. But the Southeast Asian crisis3 and the general slump in the automobile industry in the late 1990s forced the company to restructure and cut down jobs. However, the Hyundai labor union and workers rebelled against the management's efforts to restructure the organization and the company faced strikes and worker unrest repeatedly from late 1990s to early 2000s.
Members of the Hyundai group4 such as the Hyundai Construction and Engineering and Hynix Semiconductor were also facing financial troubles at the time, and were on the brink of insolvency.
Founder chairman of the Hyundai Group, Chung Ju-yung commented, "We are losing our international competitiveness."5 Regretting the continuous labor unrest, he said, "Wages have doubled in three years and productivity has gone down."6
The labor problems Hyundai faced were not an isolated case in South Korea. By the late 1990s, the chaebols had grown into large mismanaged structures with many having several unprofitable units. During the economic slump of the late 1990s, most of these chaebols felt the need to downsize.
There was also mounting pressure from the IMF on the South Korean government to undertake strict economic reforms and restructuring measures. The labor unions, which have traditionally been very strong and influential in South Korea, felt threatened.
Since jobs were being cut, social unrest and a feeling of insecurity among the labor class was rising. The unions resorted to extreme measures in an effort to establish their authority. Although, all over South Korea, companies were facing labor unrest, Hyundai was among those that were hit the most.
An Overview of the South Korean EconomyUntil 1960, South Korea focused on agricultural development. But a series of five-year plans, the first of which was implemented in 1962, greatly altered the economic structure of South Korea. Starting from 1962, economic policies were geared towards industrial growth. Export promotion and import substitution were the key elements in South Korea's growth plans. The industries of electronics, telecommunication, automobile
production, chemicals, ship building and steel were the major thrust areas.
Business in South Korea was predominantly controlled by a few large
conglomerates or chaebols. Chaebols were industrial groups that were established after the Korean War in early 1950s. They differed from other corporate
organizations in the sense that they were still largely controlled by their founding families and were not managed by professional corporate managers.
All decisions, expansion plans and company policies were made by the members of the founding families, who occupied the top positions in the chaebols. In 1995, the top 30 chaebols alone accounted for nearly 16% of South Korea's GDP.
The top four chaebols at that time - Samsung, Hyundai, Daewoo and LG contributed 9% of GDP. South Korea has shown an incredible growth pattern. Between mid 1960s and mid 1990s, the annual GDP expanded by more than nine percent annually.
From being at par with some of the poorer countries of Asia and Africa in 1960, its GDP per capita in 2003 was seven times that of India7, eighteen times that of North
Korea8 and at par with some of the less prosperous economies of the European Union.
This remarkable success has been a result of close cooperation between the government and the chaebols. Government policies were framed keeping the industrialists' demands - availability of credit, import restriction, sponsorship of specific industries, import of raw material and technology, encouragement of savings and investment over consumption - in mind. To encourage domestic industry, the markets were heavily protected by quotas and tariffs...
Labour Problems in the Late 1990sThe slump in the South Korean economy in late 1990s was bound to have an effect on Hyundai also. The automobile segment was among the first to be hit by the downslide in the economy. The domestic automobile sector had negative growth of almost 55% in 1998 compared to the previous year.
Hyundai was responsible for almost 50% of total automobile production in South Korea and was therefore badly hit. The domestic sales of the company fell by 55% in the year 1998 and its exports crashed by 74 percent to only 15,056 units . Hyundai recorded a 200 billion won loss in 1998.
According to company officials, Hyundai's six assembly plants with a yearly production capacity of 1.65 million vehicles, were operating at only 40 percent of their capacity. In May, 1998, Hyundai reacted to this grim situation by announcing plans to lay off 27 percent of its 46,000 workforce in South Korea and to cut pay bonuses and benefits in a bid to save 230 billion won.
Unfortunately for the management of the company, Hyundai had one of the most powerful and militant unions. The decision of the company to lay off workers sparked off agitations not only in Hyundai but in other companies too. The unions were particularly offended at the government's approval of Hyundai's decision.
In a demonstration in Ulsan, where Hyundai has its biggest automobile plant, 32,000 employees participated in rallies. All across South Korea almost 1,20,000 employees from about 125 companies participated in demonstrations against Hyundai and the government's decision. The government had to deploy nearly 20,000 riot police to control the demonstrators...
Labour Problems in the Early 2000sOn September 1, 2000, Hyundai officially cut ties with the Hyundai Group and had relocated its head office to Yangjae-dong, Seoul, Korea - a move that was seen as symbolic of its rebirth as an independent automotive business group . In December 2001, Hyundai forecasted its highest profits ever - $900 million for the year.
improvement in net income. Most importantly, Hyundai vehicles were being accepted as a technologically advanced, stylish and reliable in overseas markets like the US and Europe. In the United States, the world's largest auto market, Hyundai recorded a 42 percent sales increase in 2001.
This was an era of growth, reorganization and new market exploration. But the success story was marred by another strike threat in Hyundai.
Workers at the Ulsan plant went on a two-day strike in December 2001, demanding higher wages and higher bonuses. They also demanded a 30% share in the profits that year as a performance bonus.
The management clarified, that though the company had done well that year, it could not afford performance bonuses to the tune of 30% of profit. The reasons given were: firstly, the increased influx of imported cars into South Korea was bound to hurt Hyundai's market share and margins in South Korea.
Secondly, General Motors' purchase of Daewoo was a threat that could not be ignored or taken lightly, and the company had to gear itself up to be able to
compete with General Motors, and lastly, the most important reason stated was that due to the appreciation of the Korean won, Hyundai cars were becoming less
competitive in international markets and profitability consequently would be hurt...
How Cape Gemeni Adapted the Toyota Production System to IT Work
How Cape Gemeni Took a Leaf out of Toyota’s Book: Cape Gemeni has successfully implemented the Toyota Production System in an IT business.
Cape Gemeni is an Indian firm providing back office operations handling medical claims and human resource policies for customers around the world. Their approach is as the use of an assembly line method for transactional office work.
Cape Gemeni had previously implemented Six Sigma and CMMI, and then found TPS from the local Toyota Kirloskar factory in Bangalore. Cape Gemeni has implemented 330 kaizen projects over 1,100 processes, involving nearly 7,000 employees.
What success tips can we take away from Cape Gemeni’s adaptation of TPS to IT? Involveeveryone♣
Sambuddha Deb, Cape Gemeni’s Chief Quality Officer is quoted:
“We adopted the lean manufacturing practice of Toyota for the IT industry. We chose it because the Japanese were successful in making it participatory even to the last level” This implies total participation, if we presume that by “last level” he
means front-liner workers.
Gain a sufficiently deep understanding of what you are trying to do, then do it. Cape Gemeni took one and a half years to learn the Toyota Production System techniques and how to adapt them to the IT industry. This is in stark contrast to many U.S. firms are restless for short term results, and some consultants who promise a
transformation in “weeks not months” don’t help the situation. As Taiichi Ohno said, “Understanding means doing” but doing does not necessarily mean understanding. Learntogether♣
“There has been no resistance from employees as we have taken them along, improving on their suggestions and learning as we expanded,” says Sambuddha Deb of Cape Gemeni.
Three groups of managerial decisions affect the workers of any industrial establishment and hence the workers must have a say in it.
1. Economic decisions – methods of manufacturing, automation, shutdown, lay-offs, mergers.
2. Personnel decisions – recruitment and selection, promotions, demotions, transfers, grievance settlement, work distribution.
3. Social decisions – hours of work, welfare measures, questions affecting work rules and conduct of individual worker’s safety, health, sanitation and noise control.
Participation basically means sharing the decision-making power with the lower ranks of the organization in an appropriate manner.
conceptWPMbroadcomplexone.♣ Dependingsocio-politicalculturalconditions,scopecontentsparticipationchange.♣ ♣ InstituteStudies:WPMisparticipationresultingpracticesincreasescopeshareinfluenced ecision-makingdifferenttiersorganizationalhierarchconcomitantassumptionresponsibility. ♣ ILO:Workers’participationmaybroadlytakencovertermsassociationtheirdecision-makingprocess,rangingexchangeinformation,consultations,decisionsinstitutionalized formspresencemembermanagementorboardsorevenmanagementthemselvespractic edYugoslavia.
According to Gosep, workers’ participation may be viewed as:
Aninstrumentincreasingefficiencyenterprisesestablishingharmoniousrelations;♣ Adevicedevelopingsolidarityamongtappinghumantalents;♣
Ameansachievingpeaceharmonyleadshigherproductivityincreased production;♣ Ahumanitarianact,elevatingstatusworkersociety;♣
Other objectives of WPM can be cited as: ♣ Toimprovequalitylife(QWL)allowinggreaterinfluenceinvolvementsatisfactionobtained fromwork; Tosecuremutualco-operationemployees♣ employersachievingpeace;greaterefficiencyproductivityenterprise,workers,consume rsnation.
The main implications of workers’ participation in management as summarized by ILO: ideaswhichcanuseful;♣ ♣ Workersmayworkmoreintelligentlyinformedaboutreasonsintentiondecisionstakenpar ticipativeatmosphere. Importance: Uniquemotivationalpowergreatpsychologicalvalue.♣ Peaceharmonymanagement.♣ Workersgetseehowtheiractionswouldcontributeoverallgrowthcompany.♣ Theytendviewdecisions`theirown’aremoreenthusiastictheirimplementation.♣ Participationmakesthemmoreresponsible.♣
- They become more willing to take initiative and come out with cost-saving suggestions and growth-oriented ideas.
Scope and ways of participation:
♣ Oneviewisworkersorshould,partners,sitmanagementandjointmanagerialdecisions. ♣
viewisworkersshouldopportunity,throughtheirrepresentatives,influencemanagerialde cisionsatvariouslevels.
practice,participationworkerscanplaceorallmethodslistedbelow:♣ - Board level participation
- Ownership participation - Complete control
- Staff or work councils
- Joint councils and committees - Collective Bargaining
- Suggestion schemes - Quality circles
- Empowered teams - TQM
- Financial participation
Participation at the Board level: Thiswouldformdemocracy.♣
workers’representativeBoardcanplayausefulroleinsafeguardingworkers.♣ Heorshecanserveasaguideandacontrolelement.♣
- 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.
♣
Indiaandappointedworkers’representativesBoardofHindustanAntibiotics(Pune),HMT( Bangalore),andevennationalizedbanks.
TheTatas,DCM,andafewothersadoptedthispractice.♣ Problemsassociatedthismethod:♣
- 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.
Heorshetendsbecomealienatedfromworkers.♣
- 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.
Participation through ownership:
Thisinvolvesmakingworkers’shareholdersofbyinducingthembuyequityshares.♣ - In many cases, advances and financial assistance in the form of easy repayment options are extended to enable employees to buy equity shares.
Examplesofthismethodareavailableinmanufacturingaswellassector.♣ 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.
Participation through complete control: Workersacquirecompletecontrolofmanagementthroughelectedboards.♣ Thesystemofself-managementinisbasedthisconcept.♣ Self-managementgivescompletecontrolworkersmanagedirectlyallaspectsofthroughtheir♣ 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:Completecontrolbyworkersisnot an answer the problem of
participation because the workers do not evince interest in management decisions.
Participation through Staff and Works Councils:
Staff councils or councils are bodies which the is entirely of the employees.♣ There may be one 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 not enjoyed too of because leaders fear the erosion of their power and prestige if workers’ bodies prevail.
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.
Participation through Collective Bargaining:
♣ Through the of management and workers may reach agreement regarding rules for the formulation and termination of the contract of employment, as well as of service in an establishment.
Even though these are not legally binding, they do some force.♣
spirit.♣
in practice, while bargaining, each party tries to take advantage of the other.♣ ♣ This process of be called WPM in strongest sense as in reality; 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.
Participation through Job Enlargement and Job Enrichment:
♣ Excessive job specialization that is seen as a by-product of mass 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 offers freedom and scope to the workers to use their
judgment.♣
♣ But this form of participation is very basic as provides 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 as job and income security, welfare schemes and other decisions.
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 the benefits derived from the suggestions.♣
Participation through Quality Circles:
Concept originated in Japan in the 1960s and has now 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.
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 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 of their daily routine and do something challenging.♣ unions look at it as:♣
- A way of overburdening workers, and - An attempt to undermine their role.
These circles require a lot of and commitment on the of members for regular meetings, analysis, brainstorming, etc.♣
Most QCs 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 commitment by implementing some of the suggestions of the groups and providing feedback on the disposition of all suggestions.
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 Traditional Org. Empowered Teams
- Organizational structure Layered, individual Flat, team - Job design Narrow, single task Whole process, multiple tasks - Management role Direct, control Coach, facilitate
- Leadership Top-down Shared with the team - Information flow Controlled, limited Open, shared
- Rewards Individual, seniority Team-based, skill-based
- Job process Managers plan, control, improve Teams plan, control, improve
Features of empowered or self-directed teams:
Empowered to share various management and functions.♣ Plan, control and improve their work.♣
Often create their schedules and review their performance as a group.♣ prepare their budgets and co-ordinate their work with other departments.♣ Usually order materials, keep inventories and deal with suppliers.♣
Frequently responsible for acquiring new training they might need.♣
May hire their own replacement to assume responsibility for the quality of their products or services.♣
- Titan, Reliance, ABB, GE Plastics (India) and Cape Gemeni InfoTech are
empowering employees – both frontline as well as production staff, and are enjoying positive results.
Total Quality Management:
TQM refers to the deep commitment, almost obsession, of an organization to quality.♣
Every step in 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 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.
♣ involving¬TQM is called participative because it is a formal programme every employee in the organization; making each one responsible for improving quality everyday.
Financial Participation:
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:
♣ Management and operatives/employees should not work at cross-purposes i.e. they have clearly defined and complementary objectives.
Free flow of communication and information.♣ Participation of outside leaders to be avoided.♣ Strong and effective unionism.♣
Workers’ education and training. Trade unions and government needs to work in this area.♣
Trust between both the parties.♣
Workers should be associated at all levels of decision-making.♣
Employees cannot spend all their time in participation to the exclusion of all other work.♣
Limitations of participation:
Technology and today are so complex that specialized work-roles are required.♣ - This means employees will not be able to participate effectively in matters beyond their particular environment.
Everybody need not want participation.♣
The role of 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.♣
Evolution of participative management in India:
♣ The beginning WPM was made with the 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 industrial peace, and improve employer-employee relations.
The functions of both these joint bodies to be consultative and were not binding on the management.♣
The 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.
No concrete 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 in the government’s 20-point programme.
- 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 on this initiative.♣
It was again emphasized by the Congress government who came back n 1979.♣ ♣ This continued in a “non-statutory 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. 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.
♣ The bill requires every industrial enterprise to constitute one or more ‘Shop-Floor Councils’ at the shop floor and ‘Establishment Council’ at the establishment
These councils have equal representation of employers and employees.♣
Shop-Floor councils enjoy over a wide range of functions from production, wastage control to 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.♣
The bill provides for penalties on individuals who contravene any provision of the bill.♣
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.
COLLECTIVE BARGAINING
“Collective Bargaining is a mode of fixing the terms of employment by means of bargaining between an organized body of employees and an employer, or an association of employers usually acting through organized agents. The essence of collective bargaining is a bargain between interested parties, and not a decree from
outside parties”. - Hoxie.
“Collective Bargaining takes place when a number of work-people enter into a negotiation as bargaining unit with an employer or group of employers with the object of reaching an agreement on the conditions of employment of the work-people”.
- Richardson.
Hamal Panchayat
It was the year 1956, when the hamals (head loaders) of Pune first struck work for 8 days to demand a raise in wages. “kata band kara” (boycott the weighing scale) was the unifying slogan and “kata band dukan band”(no weighing scale no shop/business) was the outcome. Excluded from the purview of the Shops and Establishments Act, 1948 hamals were not assured minimum wages; their hours of work were not regulated and they had no legal recourse under the Act. The shops, the warehouses, the markets could not function without them and all commercial activity ground to a halt. The hamals were collectively invited to the negotiating table and a settlement was reached- higher piece rate service charges for different commodities to be reviewed every three years. The hamals demanded a written agreement, signed by both parties and the traders refused to sign on the dotted line. The stalemate continued till the then Collector (Administrative head of the district) intervened. He wrote down the substance of the settlement in the presence of both parties and affixed his signature to it, in his capacity as the administrative head of the district. Neither of the parties signed the document but a record was created and a new practice established as precedent. From then on it was business as usual with a difference. The employer-employee relationship is often visualised in terms of polarities, positing the employer and employee in adversarial roles. In this case both parties recognised the strength of the other and sought to define their ongoing relationships as mutually interdependent and beneficial long term
partnerships that needed to be maintained and nurtured and that they had common interests in maintaining and enhancing business growth.
They could have chosen otherwise. The hamals based on their capacity to paralyse commerce could have chosen to invoke the Industrial Disputes Act to demand “employee” status and prolong the imbroglio, just as the traders could have used their greater financial muscle to “break” the collectivisation of labour. Both
bargained with a view to reaching an agreement keeping aside the ambiguous and contentious issue of determining “employer-employee” status.
Although hamals operate from within the trading establishments, they are not paid by the shop owners and are therefore not their employees. They load and unload, fetch and carry for various consumers and vendors and are paid for the sale of their
labour. The relationship between the establishment owner and the hamal is in the nature of “permission” to operate from the establishment. The hamals did not seek to define their relationship with the traders. On the contrary they asserted “We own our backs. No one owns us. We cannot be compelled to work”.
The unionisation of hamals also brought in another change, that of the union assigning hamals to the establishments. Violation of this tenet by the employers was rare because of the threat of “kata band”.
The working conditions at the time were horrific……….. At the goods yard at the railway station………
Hamals had to work in the closed, dark railway containers, jostling each other in the limited space, inhaling cement dust and chemical fumes and choking on on them; and tripping on the uneven floors. There was no rest room, no toilets and not even drinking water. They paid a “handewali bai” (water women) to supply drinking water to them through the working day. At the grocery market………… enormous loads of jaggery had to be carried on their backs. There being few sugar processing factories at the time all the jaggery was brought to the city. Often the jaggery was hot and dripping, and burnt their backs through the sacks that were meant to protect them. The vegetable and fruit markets operated at night and the average weight carried was 100 kg. and still is for the most part, despite the ILO Convention that requires it to be less than 40 kg. The condition of the women workers was even more
abysmal………mostly Dalits, they were not paid wages by anyone. They swept the establishment and collected the spilled grain which they had rights to and
constituted their “wages”.
The modes of communication between union members were the information boards outside the larger warehouses around which the members could congregate.
Typically hamals worked in tolis or gangs cemented by kinship or natal village ties. This enabled the strengthening of the network.
There were similar struggles afoot in Bombay as well, P. D’Mello had organised the dock workers and porters while Alvarez tried to organise the loaders at the railway station. The demand for legislative protection became more strident and in
response to the pressure the Maharashtra government set up a committee to study the conditions of work of hamals.
What followed was the enactment of the Hamal Mathadi and Other Unprotected Manual Workers (Regulation of Employment and Welfare) Act, 1969, a historic and radical piece of legislation that was specifically intended to protect the thousands of labouring manual workers in insecure employments across the state.
Collective:♣
- Workers collectively bargain for their common interests and benefits. - Workers and management jointly arrive at an amicable solution through negotiations.
Strength:♣
- With industrial democracy at work, both the parties bargain from the position of equal strength.
Flexible:♣
- CB cannot be rigid or inflexible as its’ aim is to arrive at a consensus. Voluntary:♣
- Both the parties negotiate voluntarily in order to have a meaningful dialogue. - Through negotiations, they try to probe each other’s views thoroughly before arriving at an acceptable solution.
- The implementation of the agreement resulting from such a bargaining process is also voluntary.
Continuous:♣
- This process begins with negotiations but does not end with an agreement.
- Implementation of such an agreement, which is an on-going process, is also a part of CB.
Dynamic:♣
- The whole process of CB is influenced by the mental make-up of the parties involved.
- As a result, the concept of CB changes, grows, and expands over time. Power relationship:♣
- Each party wants to extract the maximum from the other.
- To reach a consensus, both have to retreat from their original positions and accept less than what is asked for and give more than what is on offer.
- While doing so, the management tries to retain its control on workplace matters and unions attempt to strengthen their hold over workers without any serious dilution of their powers.
Representation:♣
- The participants in CB do not act for themselves.
- They represent the claims of labour and management while trying to reach an agreement.
- Each participant is an authorized representative of workers and employers. Bi-partite process:♣
- This process does not have third party intervention.
Importance of CB:
It helps increase the economic of both the parties at the same time protecting their interests.♣
industrial disputes.♣
It helps resolve disputes when they occur.♣ It lays down rules and for dealing with labour.♣
It helps usher in democratic principles into the industrial world.♣
Bargainable Issues:
Any issue relevant to management and workers.♣ Traditionally:♣
- Management not too keen on negotiating work methods arguing that is their exclusive right to decide how the work is to be done.
- Unions do not want negotiations on production norms and disciplinary matters. They believe that an agreement in this regard would put limits on their freedom to demand at a later stage.
- Wages and working conditions have been the primary focus areas of CB. recent times, has extended to a lot many areas.♣
- Examples:
» Wages and working conditions; » Work norms;
» Incentive payments; » Job security;
» Changes in technology;
» Work tools, techniques and practices; » Staff transfers and promotions;
» Grievances;
» Disciplinary matters; » Health and safety; » Insurance and benefits; » Union recognition;
» Union activities/responsibilities; » Management rights.
Types of Bargaining:
Conjunctive/Distributive Bargaining: Here, the parties try to maximize their respective gains.♣
- In this method, the parties try to settle economic issues through a zero-sum game. - Zero-sum game is where ‘my gain is your loss and your gain is my loss’.
- Neither party is willing to yield an inch. Co-operative Bargaining:♣
- Both parties are more open to coming down from their high horses and co-operating.
- This willingness is because of recession and the need to be able to survive in such difficult times.
- This would not be possible without each other’s support and hence co-operative bargaining.
- TELCO and Ashok Leyland resorted to co-operative bargaining when the automobile sector was going through a period of recession.
- Employees may now be willing to accept a cut in wages in return for job security. - Management may also agree to modernize and bring in new technology and invest in marketing efforts in a phased manner.
Productivity Bargaining:♣
- In this method, workers’ wages and benefits are linked to productivity. - Initially, a standard productivity index is finalized through negotiations. - This index is not fixed at an exceptionally high level.
- Workers crossing the standard productivity norms will get substantial benefits. - This method of bargaining helps in making the workers realizes the importance of raising productivity for organizational survival and growth.
Composite Bargaining:♣
- Workers tend to argue that productivity bargaining increases their workload. - Rationalization, introduction of high technology, tight productivity norms hit the unions and workers below the belt.
- As a result, workers tend to favour composite bargaining? - In this method, labour bargains for wages as usual.
- In addition, they also bargain for such issues that, if permitted, may result in lower employment in some other plant, diluting the bargaining powers of unions.
- Eg. Workers demand further equity in matters relating to work norms, employment levels, manning standards, environmental hazards, sub-contracting clauses, etc. - We see that workers are no longer solely interested in the monetary aspects to the exclusion of work related matters.
- Through composite bargaining, unions are able to prevent the dilution of their powers and ensure justice to workers by putting certain limits on the freedom of employers.
- For the employer, this is the lesser evil when compared to strikes and lockouts.
The Collective Bargaining Process: Identification of the problem:♣
- Nature of the problem influences the CB process. the problem very important?♣
- Yes; to be discussed immediately.
- No; can be postponed for some other convenient time. Is the problem minor?♣
- No; involves the long process of CB.
♣ Nature of the problem influences the selection of representatives, their size, period of negotiations, and duration of the agreement that is ultimately reached. Preparation for negotiation:♣
- This means that the problem can be solved only through CB. - Representatives have to be selected.
» Qualities of representatives: patience, composure while carrying out negotiations, and the ability to present views effectively.
» Selected representatives have to be educated about the complete problem and its’ pros and cons.
» Powers and authority of the negotiating representatives should be clarified. » Fix up the time for negotiations, duration of negotiations, etc.
But once the begin, the actual period may vary depending upon circumstances.♣ Negotiation of Agreement:♣
- These are the people most likely to be found at the negotiating table: » Chief negotiator – generally from the side of management.
» Representatives of both the parties.
• Chief negotiator presents the problem, its’ intensity and nature, and the views of both the parties.
• Then, the representatives of both the parties are invited to present their views. • Principle to be followed by both the parties at the time of negotiations `being attentive to the other party’
- While negotiating, each party, instead of paying attention to the point of view of the other party, tends to think more about their counter arguments and how to say `no’ to their offer.
- Both the parties need to maintain a positive attitude and should `think’ rather than `feel’ their way through the problem under consideration.
- Both parties should try to reach an amicable solution.
- When a solution is reached at, it is put on paper, taking into consideration the concerned legislations.
- Thereafter, both the parties sign the agreement, which, in turn becomes a binding contract for both the parties.
- On the other hand, if no amicable solution is reached, both parties may consider arbitration.
Implementation:♣
- The agreement resulting from CB may be temporary.
» In this case, before its expiry, both parties consult each other and can terminate or renew the agreement depending upon the circumstances.
- Depending on the attractiveness of the agreement for either of the parties, one may want a renewal while the other may want a termination.
- This leads to further negotiations.
Collective Bargaining vs. Negotiation Skills:
♣ is a process by which the terms and condition of employment of workers are regulated by between their bargaining agent and their employers.
Negotiation, on the other hand, is a process of resolving conflicts between two or more parties wherein both or all modify their demands to reach a workable
compromise.
The process of CB also uses negotiations to reach a mutual consensus.♣
♣ While negotiating issues, parties their stand from an ideal position to a settlement point, which is mutually agreed upon. The position of the settlement point depends on the relative bargaining strength and skill of the negotiator.
The sacrifices to be♣ made and the concessions to be yielded, depend to a large extent on the negotiating skills of the bargaining agent.
- If he is powerful, he will have his way. If this power is challenged on justifiable grounds where other people see reason, he may have to yield his ground.
EvolutiCB and with the of CB in it in response to the by the Industrial with trade the of bargaining strength in the part of the the negotiations were carried out at early industry and The to and through the process of CB, organizations have to with industrial trade unions much – only as the of the workers – the of through CB But the interest only the The Government of that time took steps of for negotiations, and The trade and also CB Indian from at the level, such spread to industries such as and In and and were right at the level. of in all in the way of collective
agreements towards industrial have to be for the success of CB for promoting industrial to and trade for union by of in which collective agreements have a to of the trade must other and employees’ for a to on on and of the to and shift the to the conditions to workers’ education for union leadership and make workers more con itions any which cannot be production to an ensure that work is and are given industrial and in with the service as between workers and the Is on and May on its own initiative take a and safety on working environment policy the of Trade the of the Worker Participation in Management in Different CountriesYugoslaviaWorkers have equal representation on the of the In in line with a of representatives the interests of workers from a of on the company’s highest its supervisory be one of the representatives.have a The powers of the works council by Thus, it will also be to workers in if they are a and In that the company to social at the and norms such as the International Labour the principles the and the for and for
on of Collective Bargaining:
Roots of CB lie in Great Britain where it developed in response to the conditions created by the Industrial Revolution.♣
Along with trade unions, the idea of bargaining collectively gained strength in the early part of the 18th Century.♣
Initially, the negotiations were carried out at plant level.♣
By early 1900, industry and national level agreements became quite common.♣ The idea spread across to France, Germany, and USA.♣
And today, through the process of CB, organizations have learnt to cope with industrial conflict.♣
The Indian Scenario:
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.♣
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:
» Lack of statutory recognition of unions by the country as a whole.
» Lack of provisions requiring employers and workers to bargain in ‘good faith’. » The historical problem of ‘lack of trust’ between the parties
Have all stood in the way of collective agreements contributing towards industrial harmony.♣
Proper conditions have to be created for the success of CB for promoting industrial peace.♣
Encouragement to strong and powerful trade unions.♣
Satisfactory arrangements for union recognition by statute.♣
Creation of conditions in which collective agreements have a chance to succeed.♣
- Problems with unions:
» CB mainly depends on the strength of unions.
» Weak trade unions cannot initiate strong arguments during negotiations. » Not many strong unions in India.
» 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:
» 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:
» 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:
» Now that adjudication is easily accessible, the CB process is losing its importance. Management attitude:
In India, managements have a negative attitude towards unions. » 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.
Pre-requisites of successful bargaining: Employer’s recognition of the trade union.♣
