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What is Industrial Democracy? What are its benefits?

What is Industrial Democracy? What are its benefits?

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Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace in company law, the term generally used is co-determination, following the German word Mitbestimmung. In Germany half of the supervisory board of directors (which elects management) is elected by the shareholders, and the other half by the workers. 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. Industrial democracy is the involvement of staff in making decisions (through structures and processes) which involve the sharing of authority and responsibility in the workplace.

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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 well being.
  • Better use of time and resources.
  • Improved productivity including service delivery.
  • Increased job satisfaction resulting in reduced absenteeism.
  • Improved personal fulfillment and self esteem.

There are two forms of Industrial Democracy: Representative and Participative.

Some Examples of Participative Activities.

  • Regular meetings with: An agenda collected from staff. A rotating chairperson, and discussion about sectional work allocation, maintenance and administration.
  • Group discussion before decision is made.
  • Active promotion of an involved team environment.
  • Participative redesign of jobs or work systems.

Some Examples of Representative Activities.

  • The formation of committees and consultative forums consisting of staff and/or union representatives.
  • The formation of working groups of staff and or union representatives to analyze and make recommendations about specific issues. These can be ‘occasional’ agency bargaining groups or ‘standing’ such as the OH&S committee.
  • Setting up channels for continuous communication between management, unions and staff.

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April 14, 2019
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