Executive Summary

This thesis is a result of the study “A Study Of Workers’ Participation in Management In Select Industrial Units In Uttar Pradesh” undertaken for the partial fulfillment of PhD under the guidance of Dr.Ritu Narang at Lucknow University. The study was conducted by Ms. RashmiTripathi from 2006 – 2011.

The research was conducted to investigate the existing schemes of Workers Participation in Management and suggest a effective system/strategy of WPM for the process of decision making. The data for this study were obtained from two industry segments were selected from the state of Uttar Pradesh i.e., sugar industry and fertilizer industry respectively. In total six units were studied, three units from each segment.

CHAPTER I: INTRODUCTION TO INDUSTRIAL RELATIONS

The first chapter reviews the concept of Industrial Relations to understand the range of industrial relations (IR) challenges that employers and their organizations are likely to face in Indian context, it is necessary to appreciate the current as well as historical factors which have shaped and are shaping such relations in the region.

There is an increasingly strategic role for industrial relations (IR) within the enterprise, as much of what has to be done involves significant changes to traditional practices in this and the related area of human resource management (HRM). The result has been that the nature of IR is changing in many enterprises. A new approach is emerging, relying on a broader concept of employment relations.

In various researches conducted so far, nationally and internationally, Industrial relations is used to denote the collective relationships between management and the workers. Traditionally, the term industrial relations is used to cover such aspects of industrial life as trade unionism, collective bargaining, workers’ participation in management, discipline and grievance handling, industrial disputes and interpretation of rules and code of conduct.

The main objectives of industrial relations suggested by the study are as follows:

  • To safeguard the interest of labor and management.
  • To avoid industrial conflict or strike and develop harmonious relations.
  • To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism.
  • To establish and promote the growth of an industrial.
  • To improve the economic conditions of workers in the existing state of industrial managements and political government.
  • Socialization of industries by making the state itself a major employer
  • Vesting of a proprietary interest of the workers in the industries in which they are employed.

With the growth of professional management, the industrial relations scene is represented by the representatives of employers and representatives of the employees. The scope of industrial relations is a comprehensive and total concept embracing industrial relations. It denotes all types of inter-group and intra-group relations within industry, both formal and informal.

Industrial relations widens areas of administration, organization supervision and co-ordination, liaison, the drafting of regulations, rules, laws or orders, and interpretation, job analysis, salary and wage administration, wage surveys and pay schedules, recruitment and employment, placement and induction, collective bargaining, employee benefit and social security measures.

CHAPTER II: LITERATURE REVIEW

The concept of workers’ participation at the workplace historically evolved with the emergence of industrializing capitalist societies as early as the Industrial Revolution, as workers struggled to gain control of the labor process and to democratize workplace management. Since then, workers have participated in decisions affecting their working conditions at various times in countries with capitalist systems, and later, in those with socialist systems. (Bayat, 1991)

Worker participation implies arrangements designed to involve workers in the enterprises decision making process. This allows for workers’ involvement in the initiation, formulation and implementation of decisions within the enterprise. The concept can also be understood in terms of a new approach to industry and society in which people want to be interested with the taking of decisions which have direct bearing on them.

Although it is also found that there is no clear consensus as to the definition of employee participation. It is a process that involves employees in the sharing of information and/or making of decisions. Participation may be direct or indirect. Direct participation involves the employees themselves, whereas indirect participation takes place through an intermediary of employee representative bodies, such as works councils or trade unions (EPOC, 1997). Two main forms of direct participation include consultative participation and delegative participation (Geary and Sisson, 1994). Consultative participation refers to practices where management encourages employees to share their opinions regarding work-related concerns, yet retains the right to make all final decisions. Examples of consultative participation include regular meetings with supervisors, attitude surveys and employee suggestion plans. Delegative participation, on the other hand, gives employees increased responsibility and autonomy to organize and perform their jobs as they see fit. Employees participate directly in work decisions (Cotton, Vollrath, Froggatt, Lengnick-Hall and Jennings, 1988). Forms of delegative participation include scheduling of work, improving work processes and attendance and absence control.

A review of the existing literature confirms the extent of interest on participative management in various countries under different socio-economic systems (Pfeffer 1994; Wagner 1994; and Verma 1995). However, the research findings on various facets of participation are not consistent. These are the objectives, scope, processes, extent of involvement, as well as the outcomes in terms of change in attitude and behavior, motivation, commitment, job satisfaction, efficiency productivity, turnover and profitability. In the West, formal representative participation has taken the following forms:

Joint Consultation: Here, the management takes decisions but the workers' representatives are allowed to be heard. This is the model operating in Sweden, Britain and France.

Joint Decision Making: Here, the representatives of workers and management are jointly represented in the decision making body. Co-determination in Germany and Joint Management Plan in Israel are the examples of this model.

Workers Control: Here, the final authority rests with the elected representatives of workers who formulate policy and employ managers to carry it out. The Yugoslavian system of self-management offered the best example of this model.

Several research studies have shown that the intensity of participation depends on four factors (Dackler and Wilpert, 1978; Dickson, 1981; Lansbury and Prideaux, 1981; Rubenowitz et al., 1983; Cotton et al. 1988; Black and Gregersen, 1997).

  • The subject matter of participation
  • The level of participation
  • The personal characteristics of the individual who are asked to participate in the decision-making, and
  • The extent of participation

Literature Review was done to give a better understanding of the subject and develop the hypothesis for the study. The statements used to measure the determinants of WPM and Perceived Benifits of WPM were derived from the review of extensive literature. The theoretical framework was proposed with the help of the review and was tested during the analysis.

CHAPTER III: WORKERS’ PARTICIPATION IN INDIA

The main aim of the scheme of Workers Participation in Management is to help in increasing production and productivity and sharing the gains of productivity through more effective management and better industrial relations. Towards this end, the Government of India has introduced a number of schemes since independence.

In the year 1975 the Government formulated a scheme of workers’ participation in industry at shop floor and plant level. The scheme was to be implemented in the first instance in enterprises in the manufacturing and mining industries, whether these were in the public, private or cooperative sector or departmentally run units irrespective of whether joint consultative machineries had been set up and were functioning in them. The scheme was applicable to such units as were employing 500 or more workers. The scheme provided for setting up of shop councils at the shop/departmental levels and joint councils at the enterprise levels. Each council was to consist of an equal number of representatives of employers and workers. The employers’ representatives were required to be nominated by the management from among the persons employed in the unit concerned and all representatives of workers were required to be from amongst the workers engaged in the shop or department concerned. The employer was expected to set up the council in consultation with the recognized union or various registered Trade Unions or workers as that would be appropriate in the local conditions.

Another scheme was introduced in December 1983. This scheme of workers participation in management was made applicable to central public sector undertakings (except those which are exempted from the operation of the scheme by the administrative ministry/department concerned in consultation with the Ministry of Labor). All undertakings of the central government, which are departmentally

The Participation of Workers in Management Bill 1990 was introduced in the RajyaSabha on May 30, 1990 to provide for specific and meaningful participation of workers in management on shop/floor level, establishment level and Board of Management level in industrial establishments. The Bill was referred to Parliamentary Standing Committee on Labour and Welfare of the LokShabha on July 12, 1994 which submitted its report on December 18, 2001. The Parliamentary Standing Committee in its meeting held in April 2005 said that the Participation of Workers in Management Bill, 1990 needs to be pursued.

CHAPTER IV: OVERVIEW OF INDUSTRIES

This chapter reviews the present status of the sugar industry and fertilizer industry under study. The Sugar Industry and The Fertilizer Industry are the biggest Industrial segments of Uttar Pradesh. Uttar Pradesh is the largest sugarcane producing State in India. During2002-03, 111 sugar mills1 were in operation and crushed 64.51 million tonesof sugarcane which was almost 50 per cent of the total production of the country.The sugar industry consists of private, cooperative and public sector mills thatspread over the western, central and eastern regions of the State. Over 50 percent of these mills are in the private sector and the remaining mills are in theother sectors.

The Indian fertilizer industry has succeeded in meeting almost fully the demand of all chemical fertilizers except for MOP. The industry had a very humble beginning in 1906, when the first manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near Chennai with an annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri in Bihar were the first large sized -fertilizer plants set up in the forties and fifties with a view to establish an industrial base to achieve self-sufficiency in foodgrains. Subsequently, green revolution in the late sixties gave an impetus to the growth of fertilizer industry in India. The seventies and eighties then witnessed a significant addition to the fertilizer production capacity.

The installed capacity as on 30.01.2003 has reached a level of 121.10 lakh MT of nitrogen (inclusive of an installed capacity of 208.42 lakh MT of urea after reassessment of capacity) and 53.60 lakh MT of phosphatic nutrient, making India the 3rd largest fertilizer producer in the world. The rapid build-up of fertilizer production capacity in the country has been achieved as a result of a favorable policy environment facilitating large investments in the public, co-operative and private sectors. Presently, there are 57 large sized fertilizer plants in the country manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Out of these, 29 unit produce urea, 20 units produce DAP and complex fertilizers 13 plants manufacture Ammonium Sulphate (AS), Calcium Ammonium Nitrate (CAN) and other low analysis nitrogenous fertilizers. Besides, there are about 64 medium and small-scale units in operation producing SSP.

Various studies have concluded that, manpower & energy inputs are grossly underutilized in most of the sugar mills. He observed that surplus labour is a major problem in the sugar industry. Average manpower size in an average mill of about 3000 TCD is approximately 900, which in other sugar producing countries such as Thailand, a sugar mill of 10,000 TCD is managed by 250 employees. Similarly, the fertilizer industry employs sophisticated technologies in production of fertilizers. The operating conditions are hazardous both in termsthe of chemical environment, high pressure and temperature. The operation and maintenance of fertilizer plants require skills of the highest order. Therefore, this study will be helpful in understanding how WPM can increase productivity and how to address the problem of underutilized labor.

CHAPTER V: RESEARCH METHODOLOGY

The reason for conducting this particular research is to fulfill following objectives, which are as follows:

  1. To investigate the existing schemes of Workers’ Participation in Management and its forms.
  2. To suggest a more effective system/strategy of workers’ involvement in the process of decision-making.
  3. To find out the extent to which workers participate in management in their respective organizations.
  4. To investigate the key determinants of WPM.
  5. To find out whether there is any difference between the stated organizational policy on WPM and their actual Practice.

This study is an attempt to explore the salient variables that can improve the effectiveness of participatory approach and can help in motivating the workers to build a favorable attitude towards WPM schemes. However, it is a new subject for research in India. Looking towards all the research studies completed in India, it is observed that there is lack of sufficient research work on this area which has created a wide gap, and this needs to be filled up by the present and the near future human resource management research scholars.

Today's knowledge economy demands investments in human capital of the organization and to create a work environment where employees excel at their jobs but it is strongly perceived that practices like workers participation are intentionally or unintentionally ignored in India so research is the last solution to find out the truth, cause and solution.

The aim of this study is to identify impact of workers participation on job satisfaction, employee productivity and commitment. To achieve these objectives, the research design of this study has been conducted in two phases. Phase one dealt with an exploratory study and the latter involved descriptive research. These phases are discussed next.

Phase one: Exploratory research was conducted to develop initial insights and to provide direction for any further research needed. The outcome of the first phase helped in formulating three propositions for the study for testing it empirically tested with help of multivariate statistics in the second phase. It also helped in developing the scales for the survey instrument in the subsequent descriptive research (phase two).

In this study, a survey was used as the method of primary data collection. The structured survey involved several steps from designing the questions to field work and assessing the reliability of the measurement used.The questionnaire werewritten in hindilanguage so that it can be easily understood by the respondents. In relation to question content and wording, the questions were designed to be short, simple and comprehensible, avoiding ambiguous, vague, estimation, generalization, and leading, double barrelled and presumptuous questions.

The questionnaire began with less complex and less sensitive questions and progressed to opinion-sought questions. The questionnaire consisted of three parts. Section A consisted of questions related to personal profile of workers, job profile of workers, and information regarding various unions. Section B consisted of questions related to types of participative schemes, areas of participation according to their importance and section C consisted of questions related to the measures of effectiveness of Meetings, Committees, Suggestive Schemes and Workers perception towards WPM effectiveness.

Due to variability of the characteristics among items in the population mixed sampling technique has been used. In the first phase purposive sampling has been used to select the two major segments of the industry i.e. sugar industry and fertilizer industry. The two segments were purposefully selected due the fact that these are the two biggest segments of the industry in Uttar Pradesh. Out of the two segments random selection was made to select three industries from each sector.

The units selected included three sugar factories (Roza Sugar Mills, Roza; BalrampurChini Mills Ltd, Balrampur, Sarsawa Sugar Mills, Saharanpur and three fertilizer factories (KRIBHCO, Sultanpur; IFFCO, Bareily and Phoolpur (Allahabad).

CHAPTER VI: FINDINGS AND DATA ANALYSIS

This chapter then reports the results of analyzing that data. Firstly, a preliminary examination of the data is done which includes steps such as coding the responses, cleaning, screening the data. In this study, most of the responses were pre-coded except for questions 7-a and 7-b, which required post-coding. Taken from the list of responses, a number corresponding to a particular selection was given. This process was applied to every earlier questions that needed this treatment. Upon completion, the data were then entered to a statistical analysis software package, SPSS version 15, for the next steps.

Descriptiveshave been used to obtain information concerning the current status of the Workers participation related variable to describe “what exists” with respect to variables or conditions in a situation.Range, Means and standard deviations have been used for the purpose of investigation.

Workers were asked to rank the various areas of participation (health& safety, working conditions, welfare amenities, schedule of working, holidays, training needs, shift in technology, disciplinary procedure) on the basis of their importance. Kruskal Wallis Test is used to find whether there is a significant difference between the importance of areas of participation or not.

It was also examined whether all the forms of WPM provide equal opportunity of participation or few areas are more effective. Kruskal Wallis test was used to confirm the hypothesis.

Factor analysis was used to extract the significant variables that make WPM effective in an organization. 20 variables were reduced to a four factor solution using varimax rotation.