Traditional management system is based upon “span of control” and “chain of command” and “direction and supervision”. Such a system leads to dehumanised workplaces repetitive, boring, frustrating and alienated employees. Larger organisations block individual growth, their self-development and self-identity. Such a situation leads to apathy and waste of human activities and dysfunctional practices like; restrictive, wasteful and destructive functioning. In the words of Clearance Francis, Chairman of General Food Corporation – “You can buy a man’s time, you can buy a man’s physical presence at a given place, you can even buy a measured number of skilled muscular motion per day or per hour. But you cannot buy enthusiasm, initiative, loyalty; you cannot buy devotion of hearts, minds and souls, you have to earn all these things.”

Industrial DemocracyNew crop of employees, young, intelligent, enthusiastic and ambitious is not in a position to tolerate such suffocating atmosphere. They are knowledgeable workers, they need information, they need participation, and they need autonomy, challenge and want to contribute. It will be difficult to hold such employees in traditional organisations. Organisation’s greatest asset is its human resources which are least used. An empowering organisation is required to meet these requirements by adopting the elements Industrial Democracy. Elements of industrial democracy which are discussed in this unit are empowerment, quality circle and worker’s participation in management.


According to Maslow, after satisfaction of physiological and safety needs, a person needs social/affiliation, ego needs satisfaction and self-actualisation. Douglas McGregor’s theory “Y” stipulates that a person needs positive atmosphere, conducive work-culture and encouraging work-ethos to unfold his potential. Herzberg’s two factor theory clearly states that hygiene factors do not motivate. For motivation another set of factors like autonomy, challenge, variety, etc. are required. Adam’s Equity theory talks of parity and non-discrimination as factors of motivation. The “relatedness” in Alderger’s ERG theory clearly says that workers want to relate themselves socially to get motivated. McClelland’s need theory has “power”, “achievement” and “affiliation” as dominant factors for motivation.

Participative management is focussed more on achieving commitment by providing for all the above mentioned motivational needs than simply extending decision making power to the employees. It requires a change in culture, which may include a series of items ranging from access to information, involvement in decision-making, sharing ownership and redistribution of rewards, etc. In other words, it amounts to devolution of power to work place. Power should be used to get work done than to stand over others. It has a motivational constituent and it has to be used as a managerial strategy to strengthen employees’ feeling of self-determination or self-efficacy. In fact, participation is a process of enhancing the feeling of self-efficacy among employees through identification of conditions that overcome powerlessness and foster empowerment.

To enable the best in a man to come out, it is necessary for him to know why he is going certain things and not others and participation is a quest towards that end. He seeks meaning in his work and place in the organisation and that he finds in participation and not in traditional management.


Empowerment is the process of passing authority and responsibility to individuals at lower levels in the organisational hierarchy (Well ins et al., 1991). To achieve empowerment, managers must be sure that employees at the lowest hierarchi levels have the right mix of information (about process, quality, customer feedback and events), knowledge (of the work, the business and the total work system), power (to act and make decisions about the aspects of work) and rewards (tied to business result and growth in the capability and contribution), to work autonomously or independently of management control and direction (Lawler, 1992; Lawler, 1994; and Lawler et al., 1989). The advantages of an empowerment or involvement are said to include higher quality products and services, less absenteeism, lower turnover, better decision-making and better problem solving which, in turn, result in greater organisational effectiveness (Dennison, 1984). However, the question of how much will be empowerment, remains a paradox to be addressed by managerial judgement (Carnall, 1982).


Companies with a high level of job autonomy usually have the following characteristics (Finegan, 1993):

  • They invest a lot of time and effort in hiring, to make sure new recruits can handle workplace freedom.
  • Their organisational hierarchy is flat.
  • They set loose guidelines, so workers know their decision-making parameters.
  • Accountability is paramount-results matter more than process.
  • High quality performance is always expected.
  • Openness and strong communication encouraged.
  • Employee satisfaction is the core value. 


  • Understanding why the organisation is making the change and what it wants to achieve.
  • Selecting strong leaders to head the change.
  • Involving people in planning how to introduce empowerment.
  • Creating transition project teams to test and coordinate efforts and communicate results.
  • Providing training in new skills and behaviours.
  • Establishing symbols of change.
  • Acknowledging and rewarding achievements.


Empowerment benefits the organisation itself by creating an environment which encourages proactively problem-solving, accepting challenge, innovation, continuous improvement, optimum utilisation of employees, a high degree of employee motivation and enhancement of business performance.

For employees, empowerment provides a sense of high self-esteem, high degree of involvement and participation, a learning environment opportunity for personal growth and development and a greater sense of achievement. Replacing the ‘fear and greed’ hierarchy with network of empowered workers creates benefits like; faster responses, loyal customers, high quality-lower costs, greater productivity and employee orientation (Carter, 2000).

Empowerment is an important process in the organisation to foster the decision making issues and to motivate the employees who get immense job satisfaction. In the contemporary business environment, empowerment is essential to be more competitive and productive. In most of the organisations, empowerment is not practised in true spirit because of the absence of a positive organisational culture that believes in trust, transparency and employee development. In spite of a lot of discussion and approval on empowering employees, in reality it has not been implemented in the true sense in Indian Corporations. In most of the organisations, the senior management have preached the relevance of empowerment, but unfortunately very few of them have actually empowered people. The HR professionals need to initiate work culture in influencing the organisation to make the step-down method a success.

Empowerment is catching on among Indian managers. Companies as diverse as Titan, Reliance, ABB, Tata Information Systems (TISL), GE Plastics India and Philips are empowering employees-both frontline, as well as production staff. Wipro Corporation has 29 such teams and their number is expected to go upto 130. Wipro Infotech, on the other hand, has 10 such teams and the plan is to hike them to around 45 to 50. At Reliance, divisional heads run their divisions like; managing directors run their companies.


There are various forms and styles of participative management. One of them which is widely applied and practised is ‘Quality circles’. The ‘quality circle’ concept first originated in USA which was very successfully applied in Japan afterwards. This technique boosted the Japanese firms to endeavour for high quality products at low costs.

Let us look at the organization of Quality Circle technique. Basically it consists of a group organization of eight to ten employees who meet each other during a meeting which is held one in a week, fortnight or month depending upon the problems and their frequency of generation. These members discuss various problems related to quality. They recommend alternative solutions to solve the problems by investigating the causes. Depending upon the recommendations, corrections are made. Corrections are checked and then accepted as a norm if the solution works. They generally hold their meeting in the organisation premises. They are generally given a room where they can meet and think and come out with solution to problems. These employees basically have a shared area of responsibilities. This leads to a good participative environment and greater acceptability of decisions. Since the employees are not very good at analysing and decision making, the part of quality making, the part of quality circle includes teaching employees group communication skills, quality strategies and measurement and problem analysis techniques.


Workers’ participation in management is a highly complex concept. The notion that workers should participate in the management of enterprises which employ them is not a new concept. It has apparently existed since the beginning of the industrial revolution. However, its importance increased gradually over a period of years due to the growth of large-scale enterprises, increase in work-force, paternalistic philosophy and practice of informal consultation. Moreover, the growth of professionalism in industry, advent of democracy, and development of the principle of social justice, transformation of traditional labour management relations have added new dimensions to the concept of participative management. The philosophy underlying workers’ participation stresses: (i) democratic participation in decision-making; (ii) maximum employer-employee collaboration; (iii) minimum state intervention; (iv) realisation of a greater measure of social justice; (v) greater industrial efficiency; and (vi) higher level of organisational health and effectiveness.

It has been varyingly understood and practised as a system of joint consultation in industry; as a form of labour management cooperation; as a recognition of the principle of co-partnership, and as an instrument of industrial democracy. Consequently, participation has assumed different forms, varying from mere voluntary sharing of information by management with the workers to formal participation by the latter in actual decision-making process of management.

Workers’ participation in management is mental and emotional involvement in group situation which encourages workers to contribute to group goals and share responsibility. Participation has three ideas:

i) First, participation means mental and emotional involvement, rather than mere muscular activity. A person’s self is involved rather than his body. It is more psychological than physical.

ii) Second idea in participation is that it motivates persons to contribute to achievement of organisational goals by creative suggestions and initiatives.

iii) Third area is that it encourages people to accept responsibility. They are ready to work with the manager, instead of against him.

To put it briefly, it is team working together for a common purpose, it is a notion of industrial democracy. Workers have greater say over their work situation. 


The objectives of workers’ participation in management are as follows:

i) To raise level of motivation of workers by closer involvement.

ii) To provide opportunity for expression and to provide a sense of importance to workers.

iii) To develop ties of understanding leading to better effort and harmony.

iv) To act on a device to counter-balance powers of managers.

v) To act on a panacea for solving industrial relation problems. 


The term “participation” has different meanings for different purposes in different situations. McGregor is of the view that participation is one of the most misunderstood idea that has emerged from the field of human relations. Keith Davis has defined the term “participation” as the mental and emotional involvement of a person in a group situation which encourages him to contribute to group goals and share responsibilities in them. This definition envisages three important elements in participation. Firstly, it means mental and emotional involvement rather than mere physical activity; secondly, participation must motivate a person to contribute to a specific situation to invest his own resources, such as initiative, knowledge, creativity and ingenuity in the objectives of the organisation; and thirdly, it encourages people to share responsibility for a decision or activity. Sharing of responsibility commits people to ensure the success of the decision or activity. 


Different forms of participation are discussed below:

Collective Bargaining: Collective bargaining results in collective agreements which lay down certain rules and conditions of service in an establishment. Such agreements are normally binding on the parties. Theoretically, collective bargaining is based on the principle of balance of power, but, in actual practice, each party tries to outbid the other and get maximum advantage by using, if necessary, threats and counter threats like; strikes, lockouts and other direct actions. Joint consultation, on the other hand, is a particular technique which is intended to achieve a greater degree of harmony and cooperation by emphasising matters of common interest. Workers prefer to use the instrument of collective bargaining rather than ask for a share in management. Workers’ participation in the U.S.A has been ensured almost exclusively by means of collective agreements and their application and interpretation rather than by way of labour representation in management. 

Works Councils: These are exclusive bodies of employees, assigned with different functions in the management of an enterprise. In West Germany, the works councils have various decision-making functions. In some countries, their role is limited only to receiving information about the enterprise. In Yugoslavia, these councils have wider decision-making powers in an enterprise like; appointment, promotion, salary fixation and also major investment decisions. 

Joint Management Councils and Committees: Mainly these bodies are consultative and advisory, with decision-making being left to the top management. This system of participation is prevalent in many countries, including Britain and India. As they are consultative and advisory, neither the managements nor the workers take them seriously. 

Board Representation: The role of a worker representative in the board of directors is essentially one of negotiating the worker’s interest with the other members of the board. At times, this may result in tension and friction inside the board room. The effectiveness of workers’ representative at the board depend upon his ability to participate in decision-making, his knowledge of the company affairs, his educational background, his level of understanding and also on the number of worker representatives in the Board. 

Workers Ownership of Enterprise: Social self-management in Yugoslavia is an example of complete control of management by workers through an elected board and workers council. Even in such a system, there exist two distinct managerial and operative functions with different sets of persons to perform them. Though workers have the option to influence all the decisions taken at the top level, in actual practice, the board and the top management team assume a fairly independent role in taking major policy decisions for the enterprises, especially in economic matters.

Pre-requisites for Effective Participation

The pre-requisites for the success of any scheme of participative management are the following:

  • Firstly, there should be a strong, democratic and representative unionism for the success of participative management.
  • Secondly, there should be mutually-agreed and clearly-formulated objectives for participation to succeed.
  • Thirdly, there should be a feeling of participation at all levels.
  • Fourthly, there should be effective consultation of the workers by the management.
  • Fifthly, both the management and the workers must have full faith in the soundness of the philosophy underlying the concept of labour participation.
  • Sixthly, till the participative structure is fully accepted by the parties, legislative support is necessary to ensure that rights of each other are recognised and protected.
  • Seventhly, education and training make a significant contribution to the purposeful working of participative management.
  • Lastly, forums of participation, areas of participation and guidelines for implementation of decisions should be specific and there should be prompt follow-up action and feedback.

Following Figure 1 traces the mechanisms through which participative decision making affects employee behaviour and attitudes and, in turn, organisational results. The Figure 1 suggests that participation improves both employee ability and motivation. Ability is improved primarily through communication and information sharing, which results in more informed employees who are better able to contribute creative ideas to the success of the enterprise. Motivation is improved in part because employees tend to set higher goals participatively than management does unilaterally and in past because the process causes individuals to become ego involved, and committed and to exert pressure on themselves and their co-workers to ensure that their decisions are sound and their goals are met. The act of participating can also increase employees’ sense of trust and control, which may lower their resistance to new ways of doing things. On the attitudinal side, some find that participation (like job enrichment) meets their needs for challenge and accomplishment (growth), causing satisfaction.

Mechanism of Participative Decision Makining 


The various schemes of workers’ participation in management have failed to live up to the expectations of employers and employees. After reviewing the literature in the field Zakeer (1980) has provided the reasons for the failure of the concept in India thus; (i) lack of understanding of the concepts, (ii) rigid attitude of the employees, (iii) vagueness of the legal definitions, scope and functions of these bipartite forums, (iv) half-hearted implementation of decisions arrived at these forums, and (v) the suspicion in the minds of trade union leaders, that industrial democracy would fragment their authority and weaken their hold over union members.


In order to make workers’ participation in management a success, certain conditions should be satisfied, which are discussed below. 

Managerial attitude: There is an urgent need to offer training and education to workers and employees to make the participative culture a success. The employers should be willing to share information and shed a portion of their hard-earned authority in favour of workers. Workers are uninformed and lack experience. The employers therefore must make conscious efforts to bring them up to a certain level before drawing them to the negotiating table. To earn their respect and trust, management must involve workers by: (1) identifying a clear cut agenda where the roles of participants are clearly defined, (2) developing guidelines for decision-making by the joint management councils, (3) defining the roles of office bearers as against trade unions, (4) Keeping employees informed of all decisions arrived at, their implementation and the outcomes, and (5) evaluating the progress of joint councils from time to time. 

Union co-operation: The workers participation scheme, to be effective, must be based on mutual trust and confidence between unions and management. Unions must believe that participative forums are not meant to cut their roots. To this end, management must try to define the boundaries clearly. To be fair, they must give due representation to members from the recognised union without playing favourites. In a multiple union situation, this issue assumes added significance in that the employer can influence the election of representatives to the participative forums by aligning with their own ‘yes men’ from the ranks and file Not all unions agree now to the election of representatives through secret ballot (INTUC opposes this; HMS, CITU, AITUC support the move).

Meaning participation: If participation relates to only tea, towels and toilets as the Indian experience clearly shows – it does not serve any purpose. To be useful, participation should cover a wide range of issues where workers can openly represent their cases and seek quick solutions on the spot. Further, the participative forums should not be mere consultative and advisory bodies, dealing with peripheral, insignificant, routine issues relating to labour welfare. Workers must have a real ‘say’ in all important work-related matters including grievance handling and then only they begin to participate in these participative bodies with zeal and enthusiasm.

Workers’ attitudes: Workers must have complete faith in the efficiency of the system. To encourage a participative culture among workers, seminars, conferences, workshops must be held highlighting the usefulness of participation. Workers must have a sense of job security and freedom from reprisals resulting from their participation. The overall working environment must be congenial enough to inspire the workers to give their best to the organisation.

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