Transcript Current IR Philosophy and Practices

IR challenges & practices in India
Presented By:
P. Dwarakanath
Advisor – Human Capital
12th November 2013
IR in India: Content
• Context Setting
– Threats & Opportunities
– India at a Glance
• Evolution of IR
• Current Landscape
• Key Stakeholders
• IR Challenges
• Changing Expectations
• Current IR Philosophy and Practices
• Paradigms
• Acknowledgements:
IR News: Headlines
Sep 2008
CEO of Graziano Transmission India, an Italian auto component maker was clubbed to
death by group of 200 workmen.
Sep 2009
VP HR of Pricol was beaten to death by agitating workmen.
Nov 2010
Asst. General Manager of Allied Nippon, an auto part maker was stoned to death by
angry workmen.
Mar 2011
DGM – operations of Powmex steel, a unit of Graphite India Ltd., was killed after setting
his vehicle on fire.
Jul 2012
Most recent is Maruti Suzuki India Ltd – GM (HR) was killed and left other 100 officials
land up in hospital
Mar 2013
Hero MotoCorp workers at the Gurgaon unit go on hunger strike demanding higher
wages.
April 2013
Domestic auto major M&M suffered a production loss of around 3,000 engines due to
the "tools down" protest by workers .
June 2013
The workers’ at Shasun Pharmaceuticals’ Puducherry plant began strike with workers in
the casual payroll demanding they be made permanent employees.
July 2013
Bajaj Auto approached the Pune industrial court to declare the on-going workers’ strike
at its Chakan plant as illegal.
India : Land of Opportunity
Industrial Disputes in India
India at a Glance
1. Largest Democracy – 1.2 billion people, Growing Middle Class
2. 4th largest GDP (PPP) and 10th largest GDP (Nominal, USD 1.8 trillion)
3. One of the fastest growing economies in the world
India’s average GDP growth rate: 7.3% over past 10 years
4. 3rd Largest Investor base in the World
5. Robust Legal and Banking Infrastructure
6. Demographics Advantage – Youth driven economy
7. Suburbanization & Rural to Urban Migration (140 million by 2020; 700
million by 2050)
8. 2nd largest pool of Certified Professionals and highest number of qualified
Engineers in the world
9. Increasing investment in infrastructure to help growth going forward
10. Robust and active judicial review
Labor Relations to Employee Relations
Mid-90s to
2010
Till Mid-90s
Ideology based Trade
Unions ‘Vs.’ Approach
between Management
& Unions
Parent-Child, I am OK –
You are not OK
Approach
Struggle to balance
‘Productivity’ &
‘Security’
Professional language
dominated by HR/HRD
Growing economy and
‘Good’ Wages
The Present and the
Future
MNCs looking at
standardization ; not
adapting to local culture
More educated
workforce; more valueadding nature of work
Thrust on service sector
Work contracts becoming
more ‘commercial’
Job security less of a
concern (Gen Y)
Focus on ‘policies’
instead of ‘principles’
Bargaining power of
workers reduced
Focus on compliance and
governance
Management preferred
to ‘avoid’ unions
Bipolar political set up
Emergence of linkages
with international unions
Growing influence of
media / social activism
Do you know?
GHERAO
Current Landscape…
• Environment
• Dynamic
• Business
• Fiercely Competitive
• Organization Structure
• Fluid
• Market
• Fluctuating
• Industry
• Apprehensive
• Future
• Unpredictable
• People
• Bewildered
Key Stakeholders
•Seek decision making
powers of management
•Complete autonomy
in operations
•Economic Growth
•Industrial Harmony
•Revenue Generation
Government
Management
•Flexibility in Operations
•Low Conversion Cost
•High Productivity
Trade Unions
Workmen
•Job Security
• Living Wage
•Welfare Amenities
•Voice grievances
IR Challenges
Management
Government
Time consuming & cost prohibitive
adjudication
Outdated Labor Legislation
Highly regulated, low governance
Sons of Soil - philosophy
Unions
Unions
Political Interference
Emergence of radicals in few
pockets
Role of international federations
Formation of unions of white
collars in service sectors
(Doctors, Pilots, IT /ITes etc.)
Role of NGOs and Social activists
Government
Challenges
Employee
Not seen as strategic
No participation of board / Top Mgmt.
Reactive rather than proactive
approach
Lack of exp professionals
Improper hiring policies
Management
Employee
Contract labor
Wage differentiation
Lack of articulated exit policy
Managing Gen Y expectations
Booming Social media
Changing Expectations : Management
Shift in perception
8 hours work
Effective time utilization
Manpower
Optimum Utilization
Not just output
Speed of work
Single product
Multiple product
Good quality product
Zero defect…first time right
Not just labour
Low cost labour
Employee
resource
Changing Expectations : Workforce
Shift in perception
Basic Hygiene
Cleanliness/ambience
Food
Dietary
Transport
Self mode or better luxury mode
Exploitation
Norms / laws / Respect
Safety standards
Behavioral safety, extensive use of
standard PPEs
Medical-not mere Health check
Mediclaim , better equipped Hosp.
Workers’ Right
Respect / Recognition
Not just Monetary increase
in wage
Now even looking for share in Co.
by demanding shares (Bajaj Aut0,
Pune)
Current IR Philosophy and Practices
 Unions can be partners, they are not a burden
 Few Organizations manage employee relations without unions through robust
communication, grievance handling missionary and speedy conflict resolution
 Appeasement comes with a long-term price and hence not the best way
 Sometimes the cause of a dispute, is at management end itself, due to style,
implementation issues, etc.
 Communication on a continuous basis is a must, be willing to ‘listen’ and provide ‘
psychological air’ especially to the younger workforce
 Union should not become the sole vehicle of communication with employees.
They can facilitate but not be responsible
 Escalating matters to third party is not the best approach. It should be only by
exception
 Linkages with external environment is very critical
Current IR Philosophy and Practices
 Collective bargaining is through “Give and Take” approach
 ‘Action – Reaction’ principle works - The more unfair, unjust, unethical, dominating
and suppressive you are, the more violent can be the reaction
 Unfair labor practices including engagement of Contract labor can be a ticking
time bomb if misused
 ‘ Community of Interest’ perspective rather than ‘ Conflict of Interest’
 ‘ Culture of Conscience’
 TRUST, CREDIBILITY AND TRANSPARENCY are three key requisites for
successful employee relations
“ Culture Eats Strategy for Breakfast”
Practices in Collective Bargaining
From
To
Short Term
Long Term (10 years)
Centralized
Decentralized
Proposals
Counter Proposals
Cost/ Burden
Gain Sharing
Collective contracts
Individual Contracts
Parity across sectors
Increasing disparity across sectors
Honeymoon clauses
Specific Commitments
Management bargains, union collects
Give and take from both sides
Something for nothing
Something for something, nothing for
nothing
Welfare
Farewell
Proactive IR : In Action
Robust Selection Process
Inclusion & Diversity
Source
Interview
Antecedent
Verification
Affirmative Action
DEPLOYMENT
Test to Select
Pre-Employment &
Test to Shortlist
ONBOARDING
Screen
Trade-wise Training
Recruitment
Medical
Pre-employment & Dexterity Training
Creating Culture of values..learning
Paradigms
•
Organized Vs. Unorganized
•
Employability Vs. Employment
•
Permanent Vs. Contract labor
•
Internal Vs. External Union
•
Local Vs. Non-Local workforce
•
White collar Vs. Blue collar
•
Gen X Vs. Gen Y
•
Innovation & Productivity Vs. Cost Arbitrage
•
Low Vs. High Wages
•
Global Vs. Glocal
“Survival of the fittest” Vs.“Welfare of the Weakest”
Acknowledgements:
Few slides in ppt. were contributed by my professional
colleagues namely Mr. L Prabhakar of ITC, Mr. Prince
Augustin and Mr. Vijay Nair of Mahindra’s