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IR challenges & practices in India. Presented By: P. Dwarakanath Advisor – Human Capital. 12 th 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 - PowerPoint PPT Presentation
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Presented By:
P. Dwarakanath Advisor – Human Capital
12th November 2013
IR challenges & practices in India
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:
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.
IR News: Headlines
India : Land of Opportunity
Industrial Disputes in India
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
India at a Glance
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
Thrust on service sector
Job security less of a concern (Gen Y)
Bargaining power of workers reduced
Management preferred to ‘avoid’ unions
Bipolar political set up
MNCs looking at standardization ; not adapting to local culture
More educated workforce; more value-adding nature of work
Work contracts becoming more ‘commercial’
Focus on ‘policies’ instead of ‘principles’
Focus on compliance and governance
Emergence of linkages with international unions
Growing influence of media / social activism
Mid-90s to 2010
The Present and the Future
Till Mid-90s
Labor Relations to Employee Relations
Do you know?
GHERAO
Current Landscape…
• Environment
• Business
• Organization Structure
• Market
• Industry
• Future
• People
• Dynamic
• Fiercely Competitive
• Fluid
• Fluctuating
• Apprehensive
• Unpredictable
• Bewildered
•Economic Growth•Industrial Harmony•Revenue Generation
•Flexibility in Operations•Low Conversion Cost•High Productivity
•Seek decision making powers of management•Complete autonomy in operations
•Job Security• Living Wage•Welfare Amenities•Voice grievances
Key Stakeholders
Government Time consuming & cost prohibitive adjudicationOutdated Labor Legislation Highly regulated, low governanceSons of Soil - philosophy
ManagementNot seen as strategicNo participation of board / Top Mgmt.Reactive rather than proactive approachLack of exp professionalsImproper hiring policies
EmployeeContract laborWage differentiationLack of articulated exit policyManaging Gen Y expectationsBooming Social media
UnionsPolitical InterferenceEmergence of radicals in few pocketsRole of international federationsFormation of unions of white collars in service sectors (Doctors, Pilots, IT /ITes etc.)Role of NGOs and Social activists
IR Challenges
Changing Expectations : Management
8 hours work Manpower
Not just output
Single product
Good quality product
Not just labour
Employee
Effective time utilization
Optimum Utilization
Speed of work
Multiple product
Zero defect…first time right
Low cost labour
resource
Shift in perception
Changing Expectations : Workforce
Basic Hygiene Food
Transport
Exploitation
Safety standards
Medical-not mere Health check
Workers’ Right
Not just Monetary increase in wage
Cleanliness/ambience
Dietary
Self mode or better luxury mode
Norms / laws / Respect
Behavioral safety, extensive use of standard PPEs
Mediclaim , better equipped Hosp.
Respect / Recognition
Now even looking for share in Co. by demanding shares (Bajaj Aut0, Pune)
Shift in perception
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
FromFrom ToTo
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
RecruitmentRecruitment
Affirmative ActionAffirmative ActionO
NB
OA
RD
ING
ON
BO
AR
DIN
G
DEP
LO
YM
EN
TD
EP
LO
YM
EN
T
Pre
-Em
plo
ym
en
t &
Tra
de-w
ise T
rain
ingScreen
Test to Shortlist
Test to Select
Interview
Antecedent Verification
Medical
Source
Pre-employment & Dexterity Training
Inclusion & Diversity
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