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BW Businessworld

Labour Pains

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A senior HR executive was recently asked about the shortage of  industrial relations, or IR professionals. His instant response: “You mean investor relations?” That may sound like a joke, but could also be a left-handed reference to corporate priorities in this country.
 
Recent episodes of industrial unrest certainly make you wonder; workers at the Maruti Suzuki plant at Manesar in Haryana resorted to violence that led to the brutal killing of a human resources (HR) general manager, Ashwani Kumar Dev. And, this is not the first time that labour unrest has claimed  a life. In September 2008, Lalit Kishore Choudhary, the CEO of Italian auto parts company, Graziano Transmissioni, was killed by agitated workers. A year later, Roy George, HR vice-president at Pricol Industries in Coimbatore, Tamil Nadu, was brutally beaten by workers, and succumbed to his injuries. In March 2011, a deputy general manager at Powmex Steels in Titlagarh in Orissa was attacked by workers on his way to the office, and killed. In January 2012, the president of Puducherry-based Regency Ceramics, K.C. Chandrashekar, was attacked and killed by militant workers.
 
More recently, at a Pepsico plant in Maharashtra, an HR manager was abducted in mid-September this year. Around the same time, violence also marked a strike at roofing company Everest Industries at Nashik. Simply put, the degree and intensity of  violence witnessed during strikes is going up dramatically.
 
Government data — from the labour ministry — recorded 108 cases of industrial disputes leading to strikes and lockouts in the first five months of 2012. 
 
Maruti Suzuki was also hit by three strikes and go-slows that led to a loss of 60 days of production at Manesar last year, in disputes over pay and the use of contract workers (the cause of the violence in July). The financial impact: over Rs 2,000 crore in lost production. In Tamil Nadu, Hyundai Motors was beset by labour woes too.
 
"People use pressure tactics which makes the IR work environment a bit unpleasant"
SANTRUPT MISRA
director, global HR, and CEO of the carbon black business at Aditya Birla Group
Which begs the question: have companies in India lost sight of the need to manage industrial relations? And if —— as many experts and the labour ministry seem to believe — industrial unrest is likely to increase in the years to come, do companies have the organisational capacity to manage labour disruptions?
 
IR, HR: Not Synonyms 
Senior industry executives claim that they are not facing a crunch of IR professionals — as distinct from HR professionals. “To be honest, the dearth of industrial relations managers is not an issue that I am facing,” says HUL’s executive director, human resources, Leena Nair.
 
Santrupt Misra, director, global HR, and CEO of the carbon black business at Aditya Birla Group agrees: “There are still a fair number of good quality IR people in the country,” he says. But he acknowledges that “if suddenly IR issues start showing up everywhere, then that number of IR people will not be adequate”. 
 
Others disagree. “There is a dearth of  IR specialists because over the last two decades, IR was not seen as a priority,” says D.K. Srivastava, dean, School of Management and Labour Studies, Tata Institute of Social Sciences (TISS), Mumbai. “Industrial relations is a true mirror of HR policies,” he adds.
 
Despite there being more than a fine line of distinction between HR and IR, more often than not, companies get it wrong. For instance, over a period of time, the larger trend in human resources management (HRM) has been the individualisation of the employee-employer relationship. HRM follows this almost as a thumb rule even though it is completely against the grain of IR. After all, the inherent nature of industrial relations is pluralistic. Apart from employee-employer relationships, the IR manager has to also look at relationships between the company management and union representatives, interact with government bodies and so on.
 
TAILORED TO FIT Institutes have remodelled their courses to meet the demand for HR professionals
An HR policy follows from the overall company strategy, focusing on recruitment, talent acquisition and personal development within the organisation. Industrial relations, on the other hand, is about collective bargaining, fairness in treatment, including in salaries and perks and labour laws relating to freedom of association (unions, in other words).
 


Take the case of rewards and remuneration. In HRM, the rewards and remuneration are driven by individual performance, while IR deals with a more collective performance — how a certain region or plant performs. Most IR managers have to deal with three, if not four partners (in some cases there are both internal independent unions and external unions in the same company), compared to an HR manager who has to deal with only one touch point, that is the employee.
 
“While trained HR professionals can help in defusing tense situations, IR people are needed not merely to defuse tensions between management and labour but in creating a proper industrial climate where grievances are handled with fairness, workers are offered skill development opportunities, and there is lack of suspicion over motives by both  managers and workers,” says Sharit K. Bhowmik, chairperson of the Centre for Labour Studies at TISS.
 
"Violence at Manesar was not an IR issue, it was a criminal act; a law and order issue"
S.Y. SIDDIQUI COO,
Administration-HR, Finance, IT, Company Law and Legal, Maruti Suzuki
Did Maruti’s Manesar plant go out of control because of a lack of timely intervention by seasoned IR hands? Maruti executives categorically state that the Manesar incident was not an IR issue “but purely a criminal act of violence and hence, primarily, a law and order issue”. A Question Of Colour?
 
S.Y. Siddiqui, COO, Administration-HR, Finance, IT,  Company Law and Legal, Maruti Suzuki India, asserts: “The recent incidents of labour unrest cannot really be attributed to a dearth of HR professionals with IR capability and experience.”
 
But Siddiqui admits that while the opportunities and demand in the HR profession have increased manifold, the supply lines of “the right talent” in the HR profession are still too short. “That certainly is a cause for concern,” he says. This underscores the apparent shortcomings in business management schools and education.
 
Academics lament that specialised courses in industrial relations in premier institutions like the Xavier Labour Relations Institute (XLRI) or TISS don’t attract enough takers. Others say — off the record — that they have to even resort to gimmicks like renaming courses and altering course content to fill up seats.
 
So why do people prefer to manage a white-collar workforce instead of going into industrial relations? Over the past decade, the degree of labour force unionisation has declined; globalisation has also helped. Second, the rapid growth in service sector jobs, with a high mobility potential, has outstripped growth in manufacturing and shop-floor jobs (where unionisation is greatest).
 
Another reason why HR trumps IR could be cultural. “It’s all cerebral and intellectual. Intellectually, HR folk feel they are doing some esoteric yet important work,” says Misra. Most HR managers deal with employees who belong to economic and educational backgrounds that they themselves come from, and are familiar with. But an IR manager interacts with people who are, in most cases, less educated then himself. Their collective issues are difficult and complex; the IR manager finds himself dealing with a large number of people, as opposed to addressing individual issues, and often in less than hospitable conditions. As a result, industrial relations is a second or third preference for most people.
 
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Post the boom in the services sector, a large number of women have started enrolling for human resources programmes. In the last decade and a half, especially in the wake of the IT boom,  women constitute almost 50 per cent of the candidates in HR courses, according to industry experts. That further reduces the pool of talent available for industrial relations (which is viewed as a  male preserve).
 
Not that every woman professional shies away from a career in industrial relations. Some like HUL’s Nair or Anupama Mohan, programme director at Aditya Birla Management Corporation, started their career on the shop floor, managing a blue-collar workforce. While Nair started out with a stint at an HUL factory in South India, Mohan started her career on the Godrej & Boyce shop floor. But people like Nair and Mohan are more likely the exception, than the rule.
 
An IR job involves dealing with employees or employee representatives who can be less than  polite, even abusive — with or without justification. “People use these tactics to apply pressure or put a point of view across. That makes the natural environment of working in IR a bit unpleasant,” says Misra. Especially when the answer to most requests of an IR manager starts with a firm ‘No’.
 
Rs 2000 cr Loss at Maruti’s Manesar plant because of strikes last year
Changing course content at schools that teach HR is also to blame. “Even when I was in B-school, IR was being discussed in the past tense,” says a senior HR professional who is now in her mid-30s. The emphasis on classical industrial relations, discipline, grievance redressal, negotiations, industrial laws and employment laws has reduced. Temperamentally, it prepares fewer people with the skills and necessary attitude needed to deal with IR issues.
 
 

 
Because of demand for new- age HR professionals, educational institutions are shifting the orientation of their programmes. “It’s not that they are doing an illogical thing. They are doing the right things to meet market needs,” says one academic. Not everyone agrees though.
 
“It’s a myth that one needs IR only for blue-collar workers in factories. The principles of IR can also come in handy in service sector businesses like IT, BPOs and so on,” says Pranabesh Ray, dean of academics at XLRI. His institution is trying to correct a number of ‘myths’ that give IR a bad name among students. Last year, XLRI held a seminar on IR to encourage students to specialise in the subject. But he adds that it is too early to talk about the results.
 
HUL’s Leena Nair feels that taking a common approach towards all employees — a human being is a human being, be they white-collar or blue-collar — will help in setting up best practices in IR. HUL has had its fair share of labour unrest in the past. “However, we have learnt from these experiences and progressed. Our manpower strength across manufacturing locations has increased,” she points out.
 
At HUL, the task going forward is to develop the shop-floor workman, up-skill him and give him the opportunity to grow within the organisation. “We now have similar principles for talent management and capability-building across workmen and managers. We have a structured programme in place which helps onboard workmen to take up supervisory white-collar jobs,” says Nair.
 
The basic principle seems to be: people are the same with similar motivations and inspirations — they want good jobs, a better future for their children, aspire for growth, want to be fairly remunerated, be in a company that makes them proud about the work they are doing. So, nothing is really different.
 
“Each process of ours is for all levels of employees. If you have progressive employee relations practices, then there will be no difference between ER (employee relations, which is the new label for IR) and HR,” Nair goes on to add. “You are an HR partner for employees who happen to work on the shop floor as you are for employees who sit in an office.”

Worker union representatives, however, disagree with Nair. “The Unilever management is arrogant and discriminates against unions that truly represent worker interests,” says Franklyn D’Souza who has represented the interests of Hindustan Unilever workers (then Hindustan Lever) in the past.
 
Maruti Suzuki’s Siddiqui points out that the working of white-collar unions or associations — compared with blue-collar unions — has always been different due to factors like educational background, socialisation, better economic status, a better understanding of business variables and business environment and, perhaps, greater maturity of the leadership.
 
“Regional factors driven by social structure and social norms would also have some impact on the mindset, behaviour patterns, needs and aspirations of the workforce. Thus there will be relative variations in the workforce of north compared to south,” he says.
 
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Building Bridges
So how do companies make IR work? Experts say that managements have to be more transparent and open in their conversations with employees and unions. Misra points to overseas companies that discuss their financial positions with employees during wage negotiations or in the course of business. “Sometimes, it requires convincing the local management about being transparent with workers,” he says. 
 
Experts point out that even in companies that have a battery of IR managers, the entry of 
contract labour in large numbers means that IR executives are at a loss on how to deal with them. “Most industrial relations managers, although well versed in the prominent labour laws for permanent workers such as Factories Act,  Industrial Disputes Act, Wages Act, Bonus  Act and so on, are not well equipped  and prepared for the management of contract workers,” says TISS’s Srivastava. 
 
POOR SKILLS Even in companies with dedicated IR managers, dealing with contract labour is a problem
N. Vasudevan, convenor, Trade Union Solidarity Committee, an umbrella organisation for independent unions, feels companies that do not want external unions should invest in training the workers’ representatives in their internal union. “That will go a long way in resolving disputes without resorting to violence,” he says. And when you have informed union representatives, they will naturally take the conversation concerning workers’ welfare beyond wage discussions. 
 
 

Can external trade unions help improve industrial relations in practice? Not everyone is sure, but Maruti’s  Siddiqui is positive. He says  the perception that ‘external unions are negative and independent internal unions are the best alternative’ needs to be revisited with an open mind in view of the critical need to have mature, capable and responsible union leaders in the first place, whether through external unions or an independent internal union.
 
“External unions, with very mature and capable leadership, guided by progressive ideology,  have played an effective labour union leadership role over the years, while there have been major failures of independent internal unions,” says Siddiqui.
 
In all likelihood, at least for the next few years, HR departments will continue to grapple with the challenges of handling IR in a non-disruptive and effective way. Some studies have suggested that unions have a small positive effect on productivity. The strategic orientation of HR, however, is geared to the objective of profitability — there is little evidence to suggest that unions have a positive effect on this too.
 
For now, the gap between HR and IR (or ER) perspectives is large enough for a bridge to appear too far. But companies will have to start thinking about building that bridge, and soon.
 
prasad(dot)sangameshwaran(at)abp(dot)in
 
(This story was published in Businessworld Issue Dated 08-10-2012)