Concept & Forms of Industrial Democracy
Industrial Democracy is an economic arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. Although industrial democracy generally refers to the organization model in which workplaces are run directly by the people who work in them in place of private or state ownership of the means of production, there are also representative forms of industrial democracy. Representative industrial democracy includes decision making structures such as the formation of committees and consultative bodies to facilitate communication between management, unions, and staff.
Benefits of Industrial Democracy
• Less industrial disputes resulting from better communication between management and staff.
• Improved decision making processes resulting in higher quality decisions.
• Increased creativity, enthusiasm and commitment to Corporate objectives.
• Lowered stress and increased wellbeing.
• Better use of time and resources.
• Improved productivity including service delivery.
• Increased job satisfaction resulting in reduced absenteeism.
• Improved personal fulfillment and self-esteem.
Question for Concept & Forms of Industrial Democracy - Industrial Relations, Human Resource Management
Try yourself:
What is the main benefit of industrial democracy in the workplace?Explanation
- Industrial democracy involves workers making decisions and sharing responsibility and authority in the workplace.
- This arrangement leads to improved decision making processes.
- When workers are involved in decision making, they bring different perspectives and ideas to the table, resulting in higher quality decisions.
- By having a say in the decisions that affect them, workers are more likely to be committed and enthusiastic about achieving corporate objectives.
- The benefits of industrial democracy also include reduced stress and increased wellbeing, increased job satisfaction resulting in reduced absenteeism, and improved personal fulfillment and self-esteem.
- However, the main benefit highlighted in the question is the improvement in decision making processes, making option B the correct answer.
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Scope and ways of participation: - There are three groups of managerial decision which have a direct impact on the worker's of any industrial establishment. They are social, personnel and economic decisions. Economic decision include financial aspects- manufacturing, automation, lay off etc.
Personnel decision refers to recruitment, selection, promotion, transfer, grievance handling & so on. Social decision refers to hours of work, welfare measure, work rule and conduct of individual. Participate in social, personal, & economic. On school of thought is of the opinion that the workers at various levels. The first view could lead to the workers actual participation in the decision making safety, health, sanitation and noise level. The workers must have a say in the decision on the issues mentioned above. But there is difference of opinion about the scope and the extent to which workers or the trade unions should on parity basis, sit with the management as equal partner, and make joint managerial decisions on all matters. The other school propound the view that the workers should only be given an opportunity through their representations, to influence managerial decision making process of the management, while the second aspect will work out to be consultation of workers in managerial decisions.
In practice, the factors affecting the workers participation can be shown as:
(I). Participation at the Board Level: - The board of directors is the apex body in the administration of a corporate establishment. A representation of workers on the board would, it is believed, usher in industrial democracy, ensure improved employer-employee relationship and guarantee better productivity. The workers participation at board of directors can safe guard workers interest, serve as a control system, guide to management, guidance on matter of investment. The participation of workers are top-level management is not without problems. The board of any enterprise is primarily concerned with problems like fund raising, utilization of resource etc. personal matters do not receive equal attention at the board level but taken at the lower levels of management.
In these circumstances, the appointment of workers representative at the board does not substantially enhance the role of workers in the management of an industry. Secondly due to workers alienation and board's unacceptability the worker director may not be able to play constructive role. Thirdly the power, status and privileges enjoyed by the workers director are not acceptable to RO.D. Fourth the nomination of one or two women representative put them feel in minority, Where as the decision at RO.D are arrived on the basis of majority vote.
Question for Concept & Forms of Industrial Democracy - Industrial Relations, Human Resource Management
Try yourself:
What are the three groups of managerial decisions that have a direct impact on the workers in any industrial establishment?Explanation
- The three groups of managerial decisions that have a direct impact on the workers in any industrial establishment are social, personnel, and economic decisions.
- Social decisions refer to factors such as hours of work, welfare measures, work rules, and the conduct of individuals in the workplace.
- Personnel decisions involve recruitment, selection, promotion, transfer, and grievance handling.
- Economic decisions include financial aspects such as manufacturing, automation, and lay off.
- Workers should have the opportunity to participate in social, personnel, and economic decisions to ensure their interests are considered and to promote a better employer-employee relationship.
- However, there is a difference of opinion on the extent to which workers or trade unions should participate in decision making, with some advocating for equal partnership and joint decision making, while others suggest consultation and representation.
- Overall, the scope of worker participation in managerial decisions varies, but it is important to involve workers in matters that directly affect them.
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(2) Participation through ownership: Workers may be more involved in industries by making them share holders of the company. This is done by inducing them to buy equity shares. The management may promote the scheme by allowing the workers to make payments in installments, For example 60% share of Otto India, Calcutta are held by it's employees. Under share scheme, the shares are revalued and priced every year. Participation through ownership has the distinct advantage of making the workers committed to the job and to the organisation.
(3) Participation through complete control: Workers acquire the complete control of the management through elected boards. It gives complete control to workers to manage directly all aspects of industries through their representation. The system of' complete control ensures the identification of the workers with their organisation. Industrial dispute disappears when workers develop loyalty to an organisation.
(4) Participation through staff or works councils: Staff or works council's are bodies on which the representation is entirely of the employees. There can be one council or hierarchy of the council at shop floor or board level. The members of the councils are elected by the employees of the respective sections. This is a right step in the direction of industrial democracy.
(5) Participation through joint councils and committees: Joint councils are bodies comprising representative of employers and employees. The function of these bodies may range from decision making on some issues and advising the management as consultative bodies but it's suggestions are not binding on, the management. These councils serve no useful purpose. These councils provide a plate form to vent both employers-employee complaints and grievances.
(6) Participation through collective bargaining: The principle of collective bargaining confers on the management and the workers the right, through collective agreement, to lay down certain rules for the formulation and termination of the control of employment as well as service conditions. These agreements are binding in right spirit without taking undue advantages.
(7) Participation through JOB enlargement and Job enrichment: Job enlargement means expanding the job content - adding task elements. Job enrichment means addition of motivations to job so that it is more rewarding. The purpose of job enlargement and job enrichment to relieve the boredom of the worker. These contribute to workers participation by providing freedom and scope to them to uses their judgement.
(8) Participation through suggestion schemes: Employees view on such matters as machine utilization, waste management, energy conservation and safety measures are invited and reward is given for the best suggestion. This procedure enables the management to arouse and maintain the employees interest in the problems of their concern and it's management.
(9) Participation through quality circles: A quality circles (QC) consists of 7-10 people from the same work area who meet regularly to define, analyze and solve quality and related problems in their: area. Membership is strictly voluntary, and meetings are usually held once a week for an hour. During the groups initial meetings, members are trained in problem solving techniques, quality control etc. Quality circles are credited with producing quick concrete and impressive results when correctly implemented.
(10) Empowered Teams: - Empowering refers to passing on authority and responsibility. Empowerment occurs when power goes to employees, who can experience a sense of ownership and control over their jobs. Empowered individuals know that their jobs belong to them, Given a say on how things are done, employees feel more responsible, Empowerment is facilitated by a combination of factors like values, leadership actions, job structure and rewards system.
(11) Financial Participation: - Financial participation differs from, other forms of employee involvement in that it is less likely to involve employees in consultation or decision processes. The general purpose of financial participation is to enhance the organizational performance through workers commitment. There are various financial participation schemes like profit-linked pay, profit sharing and ESOP, workers cooperation, pension fund participation and wage earner profits etc.
