Published by MBA Skool Team, Published on September 11, 2012
Isn’t it amazing how one incident makes such a huge impact that suddenly you can see everything around you boiling down to the same discussion? The recent heat about the very unfortunate Maruti incident has left every person, especially in the corporate sector, totally clueless. It has certainly left many questions unanswered with the management of companies. What is there for a common citizen like us? Are we looking to blame any party here? Or take a side and throw evil accusations on the other? Are we missing out a very fundamental point that can answer all our questions?
It is totally upon us to let this fire die out with our very old approach of a blame game, heated discussions in front of media, diplomatic solutions etc. etc. Suddenly, Human Resource Management (HRM) is getting a lot of limelight, mainly negative light. But before coming to any conclusions, let us look at its present structure and relevance. HRM in corporate world in India developed in collaboration with the industrial and economic development. The practise of managing human resource has seen many phases starting with India being an under-develop economy, moving to a developing economy and more recently an emerging nation. The cultural shocks experienced in generations have had the greatest impact on HR among other functions.
What is wrong?
A change generally receives two extreme reactions – support and resistance. For the labour force of our country, one segment of managers/ supervisors had grown used to suppressing them for work and on the other hand, there are managers who have believed in inclusive growth of everyone in the company, for instance, Tata being acknowledged for its employee-friendly business model. Coming back to the current turmoil, will it be right to blame HR or there is something else deep inside that we need to find out? It can never be an easy answer but we need to choose a path, without being diplomatic. Blaming HR is certainly not the solution. With this option being rules out, we are left with the other one.
We Indians have a game that most of us have grown very used to. No money for right guesses, it is called ‘Blame game’. It is actually running in our blood that we can play it so comfortably – all we need to do is pick up a side for any current boiling topic and give all sorts of weird and false arguments to prove it right. Then we reach the point where we all forget everything about the ‘heated discussion’ because there is another round of the game coming up with a whole new issue! We are never short of such stories ever. But this has to change someday and it should be NOW.
Let us try a new game which involves more of analysis and less of talking. Only a slight change in rules will be required, instead of asking the question “Who made this happen” we can change it to “Why Did it happen”? Then we start moving deeper and deeper into the issue and see if we can get our answers. If not, then the option of moving back to our old game will anyways be open.
Impact on our Economy
Let us look at the broader picture to find out the impact this incident will have on our economy. The fact that the recent Manesar-Maruti incident will have enormous repercussions on our economy needs no re-iteration. India is currently going through a transformation phase wherein such incidents are totally unwelcome. In such cases of violence, the jitters are initially felt at the company level, followed by region and ultimately at macro-economic level. It will help to know that India already ranks 132 in terms of ease of doing business (Doing business database, 2012) and now with current disorder making headlines in international news channels; it will drive off many prospective investments.
The divide in the organizations reminds one of the divide between the rich and poor in our country. Both the sides will find their arguments as equally strong against the other. But from a broader point of view, they need to stay together if the country is to progress in any field. There is no developed nation that had existed or exists by keeping only a small section of its people happy and satisfied. The same logic applies to any organization. If the owners ignore the fact that they can progress even by ignoring the workers and sustain it in the long run, then who can help them? Also, it will never hurt to make the workers a part of your growth story.
Indian Labour market – where is the problem?
There is one thing to which most people would agree to – the Indian Labour market needs reforms that are long due. One of the highlights of the current rules is that it is illegal to fire regular workers of a company. This does not make much sense in the industries today. This is why companies look to hire contract labour so that they have flexibility in hiring, lay-offs, payment of wages etc. Also, please note that lay-off is not always bad; it is a necessity for companies having seasonal products or changing market conditions of demand and supply. Now, can you see where is this discussion heading?
The management hires contract labour instead of unionized labour, which may be justified (owing to our rigid labour laws). But then they commit a huge mistake of paying these workers extremely low wages. You can certainly not allow any sort of comparison of a worker’s pay with that of a manager but youcan’t (and you shouldn’t)ignore a comparison of wages between two workers doing the same work.
At Gurgaon plant, as quoted by the General Secretary of Maruti Kamgar Union, a permanent employee was getting Rs. 15,000-18,000 a month and a contract worker was getting less than Rs. 7500. This is totally unacceptable. Even without applying any of the HR concepts, one can say that payment should be mainly based on performance.
Let us look at some other factors that add fuel to workers’ discontent and frustration towards management. How would you feel when you practically have to beg for a leave, or you would be growled at for coming a minute late to the office (no matter how genuine the reason may be), or you are not even allowed to have a peaceful meal in the middle of the work that was so rightfully told to you as a “Lunch Break”? All these factors play a major part in drifting the workers and managers apart.
What can be the remedy, if any?
A very simple reason of this disconnect of managers with workers is the disregard for labour class. Even if they find that workers’ demand is justified, managers would not want to give more power to them. They just fear that the powerful workers will demand for wage raise, more paid day-offs and other amenities. They may not be 100% wrong even. How about making them realize that there is another side to the coin?
Giving more money to people will increase their purchasing power and that will ultimately raise demand in the economy. It is a potential market for companies. It will be so perfect to try and explore the amount of mutual benefits that both companies and workers can get if they can agree to work on the principle of working together and with a little support of the Government.
Training and development, 360 degree evaluations are performance management are some of the current trends in HRM. These concepts also take us to the same path – treat the employees with care as they are the biggest assets in an organization. HR has shown us the potential benefits of good HR practices but with this incident, we are able to gauge the magnitude of problems that we can face in their absence. The labour laws find a remote linkage to the HR policies as workers are also as important resources as high level managers.
Some of us would remember how the workers and management clash in Colorado’s coal mine left hundreds dead in 1914. It led to some great reforms like establishing a legal identity of unions and laws for protection of workers. It will not be a long shot to expect something happening in the industrial world after this ill-fated Maruti incident in Haryana. We may have a HISTORY IN THE MAKING!
This article has been authored by Smriti Jain from IIM Shillong.
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
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