Workers ’ Participation Management in State Road Transport Undertakings- A Case Study

Reg No 177/2008-2009 ISSN: 2322–0317

VOL 2, NO 2

December 2014

Biannual

Editor

Assistant Professor Economics Department

Madan Mohan Malviya PG College Deoria (UP)

Publisher

Varanasi (India)

2 P S S H Online ISSN: 2322–0325 Print ISSN: 2322–0317

Workers’ Participation Management in State Road Transport Undertakings- A Case Study

Suman Devi1

Introduction

The facility of mobilization is provided by different modes

of transport. Well known major means of transport are airways,

railways, roadways and waterways. The extent of availability and

accessibility of road transport reflects the level of actual and

potential mobility of people, goods and information. Road

transport is the basic and fundamental necessity of mankind. It

can function in an unexceptionally flexible and diversified

manner in relation to other means of transport.

Moreover, the road transport has been playing a significant

role in social, economical and political development. Its

importance can be judged from the table given below-

*Services incidental to transport. Source: Road Transport Year

Book (2007-09 and 2011-12).www.morth.nic.in

The table given above revealed the contribution of different

modes of transport in the Gross Domestic Production (GDP) of

the country. It is clear from the table that the road transport has

the major share in the economic development. Road transport has

been contributing the highest share in GDP beside other modes of

transport.

State Road Transport Undertaking-

In India, The passenger road transport services are provided

1 Research Scholar, Faculty of Commerce, B.H.U., Varanasi-221005

3 P S S H December 2014 www.pssh.in

by both Public and Private Operators. A Private operator normally,

focused on maximising of profitability, in spite of following

social obligation. To meet the social responsibility and to provide

effective and convenient transport facility, Central and State

Government introduce Public Road Transport. Public sector

participation in road transport was formally begins with the

enactment of the Road Transport Corporation (RTC) Act, 1950.

Through this act the State and Central Government can establish

the State Road Transport Corporations (SRTCs). The

Undertakings was formed with an objective to provide efficient,

adequate, economic and properly co-ordinated transport services

to the passengers. Its main goal was to facilitate social and

economic development rather than profit maximisation.

As on March 31, 2012 there were 56 SRTUs operating in

India. The fleet strength of the SRTUs was 1, 31,824 during 2011-

12 as compared to 1, 30,563 during the previous year, which

shows a marginal increase of 0.96 percent. It carried 2,912.64

crore passengers in the same year. The SRTUs has provided

employment to 7.28 lakh people during the year 2011-12, which

was an increase of 0.19 per cent over the previous year.1

On the financial front, the Corporation earned total revenue

of Rs. 35,928.73 crore in 2011-12. However, for the same period,

total cost incurred was Rs. 42,626.33 crore, which lead to a net

loss of Rs 6,588.15 crore during the year. The SRTUs shows a

trend of increasing losses in past decade. However, there were

some Corporations which showed higher level of performances,

but lacked continuity.

Uttar Pradesh State Road Transport Corporation-

Present study is focused on the Uttar Pradesh State Road

Transport Corporation (UPSRTC) because, it is one of the largest

units among other SRTCs. UPSRTC is a corporation form of

state-run transport unit. Under Section-03 of the RTC Act, 1950

the UPSRTC came into existence on June 1, 1972. It was formed

to provide a public sector passenger road transport services in the

states of Uttar Pradesh (U.P.) and other adjoining states of North

India. During the period of 2012-13, its total fleet strength was

7259 with 96% fleet Utilisation, providing employment to 27171

1 Various issues of “STUs- Profile & Performance” CIRT, Pune.


employees with 5.29 bus staff ratio. It earned total revenue of Rs.

2529.36 crores against total cost of Rs. 2611.96 crores. It incurred

losses of Rs. 82.60 crores.1

Workers’ Participation Management-

Workers' participation in management means involvement

of workers in the managerial affairs that affect them. The Fifth

Five Year Plan document states that, "Participation by the workers

in the management process is highly desirable"2. The Second Five

Year Plan introduced the idea of joint management council, ‘while

the Industrial Policy Resolution 1956 emphasised the need for

workers’ participation in management. It stated, “In a socialistic

democracy Labour is a partner in common task of development

and should participate in it with enthusiasm. There should be joint

consultation and workers and technicians should, wherever

possible, be associated progressively in management. Enterprises

in the public sector have to set an example in this regard.”3

In India, workers' participation is a far cry from what it

encompasses in the Five Year Plans of the country. There have

been schemes for including workers but these are mainly at the

peripheral levels. The present study is an attempted to study the

meaning and various forms of workers’ participation in

management, its present situation in SRTUs with special

reference to the UPSRTC and numerous problem faced by the

management in implementing such schemes.

Statement of the Problem-

SRTUs play a major role in the nation's economic progress.

As one among 67 SRTUs in India, UPSRTC also plays a vital role

in the national economy. As a public sector unit, UPSRTC is

supposed to be a model employer in terms of human resources

management practices. But when it came to Workers’

Participation in Management, it is a pre- requisite for the success

of SRTUs including UPSRTC. It provides a more rewarding work

life and satisfies the legitimate expectation of employees. Hence

present study is undertaken to know the different aspects of

1 Annual Report, UPSRTC, 2012-13, (www.upsrtc.com). 2 Government of India, Planning Commission, Draft Fifth Five Year Plan, Vol.I, 1974-79, p.20. 3 The Industrial Policy Resolution, 1956.


workers’ participation in management in UPSRTC.

Objective of the Study-

In light of the above, the current study makes an attempted

to go through the various forms of workers’ Participation in

Management inside the Corporation and to judge the working of

the scheme. To achieve this objective two sub-objectives are

formed, which are as under-

1. To study the different types of workers’ participation in

management.

2. To study the current position of Workers’ participation

in UPSRTC.

Collection of Data-

The data required for the study is gathered from the

secondary sources of information such as Annual Report of

UPSRTC, various issues of STUs- Profile and Performance by

CIRT, Working Group Report on Road Transport for the 11th Five

Year Plan, research papers, books, thesis and other published

material. Further, for analysing the data collected important

statistical tools like, percentage, index and averages are used in

this study.

Period of Study-

The present study cover the period of ten years from 2003-

04 to 2012-13.

What do you mean by Workers’ Participation in Management?

Workers’ participation in management is an essential

ingredient of Industrial democracy. The concept of workers’

participation in management is based on Human Relations

approach to Management which brought about a new set of values

to labour and management. Traditionally the concept of Workers’

Participation in Management (WPM) refers to participation of

non-managerial employees in the decision-making process of the

organization. Workers’ participation is also known as ‘labour

participation’ or ‘employee participation’ in management.

Workers’ participation in management implies mental and

emotional involvement of workers in the management of

Enterprise. In the words of V.G. Mehtras, “The concept of


participation as a principle of democratic administration in an

industry implies a share by the rank and file in the decision-

making process of an industrial organisation through their

representatives at all the appropriate levels of management in the

entire range of managerial action.” Thus it can be concluded that

the workers’ participation in management means giving scope for

the workers to influence the managerial decision-making process

at different levels by various forms in the organisation.

Forms of Workers Participation-

The forms in which workers can participate in decision

making process, varies from organisation to organisation. This

variation may be due to patter of labour –management relations,

level of workers involvement, different levels of management, etc.

The following are the some famous form of participative

management in India –

1. Suggestion Scheme-

Under this scheme the employees are motivated to make

suggestions for improvement, because they work on grounds

which are involved in their daily work life. They can suggest

some new method of production or some new ways for particular

work. Workers submit their ideas/suggestions in writing to the

management which are scrutinised in their absence. Management

may give some monetary or/ and non-monetary reward for their

suggestions.

2. Works Committee-

A works committee have an equal number of representatives of

both employers and workers. It meets frequently for discussion

on common problems of workers and management, after

discussion, joint decision is made. Matters like, wage payment,

bonus, training, discipline, etc. are normally discussed in such

meetings. Works committees are extremely popular and effective

in France and also in England. In India, The Industrial Disputes

Act, 1947 provides for the setting up of bipartite works

committees in industrial establishments employing 100 or more

workmen to promote good relations between the employers and

workmen. However, the works committees have not proved to be

effective in India.


3. Joint Management Councils-

The Joint management council was a voluntary body. These

councils will consist of equal number of representatives of

workers and management but number of workers representatives

will not exceed twelve. The problems related to labour welfare,

safety measures, grievances redressal, training, working hours,

etc. are discussed in such meetings. The government of India take

another step for encouraging workers participation in

management. The Industrial Policy Resolution of 1956 and the

Second Plan recommendations, a Scheme of Joint Management

Councils (JMC) was introduced in 1958. The JMCs were intended

to promote cordial relations between managements and workers

and build up trust and understanding between them. The criterion

for establishing JCMs in any industrial establishment is the unit

must employ at least 500 workers.

4. Workers Directors-

A scheme of inducting representatives of workers as directors on

the boards of management of public enterprises was introduced in

1971. Under this scheme, a workers’ representative become the

active member of the board of directors. But due the lack of

managerial qualities, less uniformity in union members and high

infancies on the monetary issues, the decisions of the workers

director considered as biased towards management. This scheme

is very famous in the countries like- Britain and USA, were the

trade union are very strong.

5. Co-Partnership-

Under co-partnership form of participation, workers may

purchase the share of the company, they working for. Hence they

get voting rights and right of participation the general meetings

conducted for shareholders. They can also participate in the

management through their elected representatives in the Board of

Directors.

6. Quality cycle-

Quality cycle is a voluntarily formed group, working for

improvement activities at the work place. It is group of about 10

workers led by the supervisor or the senior worker. They meet

about an hour every week to identify, analyse and resolve work


related problems. It is comparatively new compact in India and

spreading with a fast speed with positive results.

Figure: Forms of Workers’ Participation in Management

Difference between Workers’ Participation and Collective

Bargaining-

Collective bargaining is a process of negotiations between

employers and a group of employees aimed at reaching

agreements to regulate working conditions. The interests of the

employees are commonly presented by representatives of a trade

union to which the employees belong. According to Dale Yoder,

“Collective Bargaining is the term used to describe a situation in

which the essential conditions of employment are determined by

a bargaining process undertaken by representatives of a group of

workers on the one hand and of one or more employers on the

other.” So it can be concluded that the collective bargaining

involves negotiations, drafting, administration and interpretation

of documents written by the employers and the union representing

their employees setting forth their joint understanding as to wages,

hours of work and other terms and conditions of employment.

Collective bargaining is related with the sharing of gains of

business. But on the other hand in participative management, the

management and labour involve to seek common solutions to the

problems related to productivity. The basis for collective


bargaining is conflict between labour and management. But,

participative management is based on mutual co-operation

between labour and management.

Workers’ Participation in UPSRTC-

In all the SRTUs in the country, shop and joint councils have

been set up on the depot and regional levels. Generally, at every

depot there is one shop council having representation of all

categories of employees, while in every region there is more than

one shop councils generally separate for each category of

employees. It is because of the fact that in every region of SRTUs,

employment is too much and a shop council is set up each 500

employees. The councils have the equal representation of both the

sides and are totally free from outside interference. They take

decision on mutual understanding and, therefore, the unsettled

issues are referred to JMCs. These shop councils of SRTUs meet

at least once in a month to consider the matters of production,

productivity and efficiency, while the JMCs meet at least once in

each three months to discuss the issues relating to the higher

efficiency and fixing norms for productivity.

According to the policy of the corporation worker's can

participate in management particularly at the shop floor level and

the corporation has constituted production cum grievances

committee at all depots, regional workshops and printing press

with equal representatives of labour and management. At

production management level bipartite committee, P.F. trust,

educational assistance fund, state level sports and cultural

committee are constituted for smooth and effective functioning.

Problems faced by the UPSRTC-

It can be concluded from the above study that the formation

on these councils and other committees in the SRTUs have been

most purposeful in brining the harmony and efficiency in the

working of the organisation in the country as they being free from

politics bring the workers and management under one roof.

However, there are a number of short-coming and problems in

their working. Some of these problems have been discussed, in

brief, as under –

1. The multiplicity of unions in SRTUs creates acute and

uncontrollable problems at the time of election of


representatives. Besides, the members of each union

always oppose the other, thereby creating tussle among

themselves.

2. The management had not showed great enthusiasm for

making participation effective, because they think that

the workers had not competent to take decisions. Sethi

(1973)1 observed that “managers … do not think that

participation will unleash the creative talents of their

subordinates. On the contrary, they seem to have a

rather low opinion about their subordinates’ ability to

understand and participate in organizational decision-

making.”

3. In fact, the working of such councils and committees in

the Corporation is mostly irregular. Their meeting are

not held in standard schedule time table made for them.

4. In Indian road transport corporations, more emphases

are given to the compensation related issues. This lead

to the conflict between the basic and esteem needs of

the workers. Further this adds a point in ineffective

management of the scheme.

5. It is experienced that unwanted delay is caused in

implementation of the decisions taken by the council. It

affects the confidence and faith of the workers in the

current management of such councils and committees

operating inside the Organisation.

6. The workers’ representative faced the problem of role

conflict. On the one hand, he is required to share the

managerial responsibility. However, on the other hand

he has to behave as the leader for workers. This creates

difficulties in effective participation. Another point to

mention here is that the representatives of the workers

have been enjoying the undue advantages by the

management. It creates frustration among the general

members of the corporation.

Suggestion-

To make this scheme a success in the UPSRTC in the long

run, following suggestions are worth mentioning-

1 Rao,V. S. P. (2011), Human Resource Management –Text and Case. Third Edition, Excel Books, New Delhi.


1. There is need for an integrated policy and effective

follow up measures by the central as well as the state

government regarding implementation of this scheme

in the management in SRTUs.

2. It requires a change in the attitude of top personnel.

They should know that the government has not only

accepted the democratic principles in the political field,

but is also determined to democratise the management

of all sorts of commercial undertakings.

3. It is felled from workers side that the cooperation part

of management is poor so it should be improved by free

flow of communication and information with the

workers. Management should evolve a system of

sharing the fruits of participation.

4. Workers consider this scheme like an extra burden apart

from their jobs. Management should develop a

favourable attitude of workers towards the schemes of

participative management.

5. Emphases should be given on building the trust

between the two parties i.e., Labour and Management.

Conclusion-

Workers’ Participation in Management has assumed great

importance these days because it reduces industrial unrest and

helps in dispelling employees misunderstanding about the

outlook of management in industry. It also influences efficiency

in various direct and indirect ways. The management with the

help of workers ensures that they are capable of taking fruitful

decisions regarding policy making, service conditions,

productivity, manufacturing and administration and supervision.

Workers' participation provided a channel for communication

between workers and management, which in turn had led to the

improvement of worker-management relations in the whole

enterprise. Better worker-management relations had led to higher

productivity. For any scheme of workers' participation to succeed,

there must be an effective two-way communication and exchange

of information between the management and the workmen.

References-


Bhagoliwal, T.N. (1960), “Economics of Labour and Industrial

Relation” Sahitya Bhawan Publications. Agra.

Gupta, S.K. & Joshi, R. (2010), “Human Resource Management”

Kalyani Publishers, New Delhi.

Various Issues of “State Road Transport Undertakings- Profile

and Performance” CIRT, Pune.

Compendium of Transport Terms, CIRT, Pune.

Mishra, A.K., “Performance Appraisal of State Enterprises” New

Royal Book Co., Lucknow, 2006.

‘Annual Report 2012-13’ Uttar Pradesh State Road Transport,

Lucknow,

(http://www.upsrtc.com/pdf/annual_report_25july2014.pdf).

Kulshrestra, D.K., “Management of State Road Transports in India.”

Mittal Publications, New Delhi, 1989.

‘The Road Transport Corporation Act 1950’ Gazette of India,

Government of India, May 1, 1950.

Workers ’ Participation Management in State Road Transport Undertakings- A Case Study

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