Sunday, May 10, 2015
Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine May 2015 edition.
Karunya Fertilizers and Chemicals Ltd is a medium-sized company engaged in the production and distribution of chemicals. The company caters to the requirements of several large and medium-sized industrial customer companies. Its core policies are uncompromising quality, consistent efficiency and speedy delivery. It has a largely unionized workforce of 3500 employees. At present, its HR department is headed by the Director (HR), Mr Ashok Verma. In fact, the young and vibrant Mr. Verma took up the HR responsibility of the company just a few months back.
After assuming office, Mr. Verma conducted several rounds of discussion with the trade unions and found a major grievance among all the three unions of the organization. All the unions in the company felt unanimously that they were not given, adequate representation in the management and the concept of WPM (workers participation in management) was hardly practised in the organization. Mr. Verma also learnt reliably from different sources that the unions resorted to several agitation tactics in the past to get their demand regarding participative management accepted by the management. However, their tactics like go-slow-in-production, non-cooperation, sit-in strikes and other forms of protests did not yield the desired results. This is because the management was never convinced of the benefits of WPM. They never had any real need to consult the employees in decision making or share any information with the workers.
However, Mr. Verma differed from the overall perception of the management and greatly felt the need to establish necessary committees or councils at different levels of the organization with due representation for the trade unions. Personally, he also favoured the nomination of worker-directors on the board of the organization. Mr. Verma brought this matter repeatedly to the notice of the top management and enlightened them constantly about the mutual benefits of participative management. With the help of his knowledgeable presentation and convincing arguments, Mr Verma finally managed to convince the board of directors about the necessity of WPM and made them provide due representation to the workers and their representatives. In the subsequent management—union meeting, the management agreed to establish councils at three levels of the organization: a council at corporate level, one at the plant level and a necessary number of councils at various shop-floor levels. It also agreed to include an elected worker-director at the board level.
During the initial phase of the establishment of the councils, the unions cooperated with the organization. Council meetings were also progressing well and bonhomie was evident in the attitude and behaviour of the workers' representatives on the board and in the councils. However, things began to change for the management and took a turn for worse after some time as the workers' representatives began to resist and even stall all the important and justifiable decisions of the management. After investigating the matter, the worried management found out that the workers' representatives began to oppose the decisions after they were accused of conniving with the management for pecuniary benefits and bartering away the future and rights of the employees. These charges were made by the rival unions, which had lost the elections for these memberships. Consequently, the union leaders instructed their representatives in the committees to adopt tough postures in the meetings and exhibit a negative attitude towards the management proposals just to retain the credibility of the union and to preserve the membership of the organization.
The management was simply stunned by the developments and began to worry about the undue delay in the decisions of the organization and also about the need and future role of these councils in the organization. It now looked toward the HR director to provide solutions to this vexatious issue and its settlement at the earliest.
Questions for discussions and solutions:
1) How do you assess the entire situation at Karunya Fertilizers and Chemicals Ltd?
It seems that based on past experiences, the management at Karunya Fertilizers and Chemicals believed that they seemed best to take decisions for the organization and need not involve the workers in the decision - making process lest they complicate the issues further by indulging in petty matters. The management deemed it fit for the workers to simply follow the instructions as given to them by their superiors. The management did not believe in the philosophy of participative management / consultative participation. It is to be noted that the organization had a largely unionized workforce with 3500 employees. However, this scenarion changed when a young & vibrant Mr. Ashok Verma took charge as the HR Director.
He observed that all the 3 unions of the organization needed to be given adequate representation in management decision - making. He obsrved that this was a growing requirement at the organization that needed to be addressed. Efforts had been made in the past but it did not materialise. Mr. Verma came from a different school of thought and thus felt the need to establish necessary committees / councils at different levels of the organization with due representation for the trade unions. Mr. Verma also favored nomination of worker - directors on the board of the organization. Mr. Verma was able to do this successfully by repeatedly bringing it to the notice of top management, through his knowledge-driven presentations and convincing skills. The management of Karunya Fertilizers and Chemicals Ltd taking a hint from his positive intentions agreed.
The going was smooth initially wherein the unions cooperated with the organization in decision - making and there was an air of bonhomie between the workers and the management. However this did not last long as some worker representatives resisted management decisions and even stalled their justifiable decisions. Upon investigation, it was found that this was due to instigation by rival unions who had lost elections for representation with management and wished to stay relevant. Hence they had instructed their representatives to adopt tough postures and delay decision making. These turn of events was not foreseen by the management who began to ponder about the need and future role of these representatives / councils in the organization. They now simply looked to HR Director, Mr. Verma for solution to this issue because it was at his behest that the management had agreed to ensure workers representation in decision making and policy through various councils. However what is to be done (preventive measure) incase of turn of events such as this blind spot was not foreseen by the management nor by Mr. Verma.
Hence it's a case of coming back to the same scenario once again, whether to disown all the councils and come back to earlier style of functioning or work out a solution that was acceptable to all. If all the councils were to be disowned, then it would be a huge setback for Mr. Verma who had just taken charge and this was one of his initiatives.
2) Do you agree with the view of Mr. Verma towards worker's participation in management (WPM) in Indian Business Environment and Trade Unions Perception?
Yes, I agree with Mr. Verma's viewpoint of worker's participation in management. Worker's participation is nothing but 'employee participation'. Workers may have ideas which can be useful since they are the ground level / shop floor people who actually do the execution part. By involving the workers a participative atmosphere is created, encourages them to contribute to group goals and share the responsibility of achievement. By involving the workers, a sense of importance, pride and accomplishment is instilled in them, a feeling of belongingness with the place of work. Hence the intention of Mr. Verma was right.
However organizations in India are mostly family owned & family managed as was the case of Karunya Fertilizers and Chemicals. They are promoter driven. Even though there is a professional organizational hierarchy in place, at times important decisions come from the direction of the promoter's. How much thought or rationale has gone in a particular decision or whether everyone's needs are taken into consideration is a huge question mark. Also for WPM schemes to be successful in Indian Business Environment Context, lot of investment has to be made in training about WPM, awareness has to be generated, it's benefits, how one can participate, etc...Lack of awareness due to absence of training initiatives is one of the major reasons for WPM to be unsuccessful. Another issue is free flow of communication and information and system of sharing.
It is also to be noted that the Management at Karunya earlier did not have a favorable attitude towards WPM due to whatsoever reasons. For WPM to be successful, there has to be trust between the two parties. Hence even though the intentions of Mr. Verma were good, he wanted to bring about change for the betterment of the organization, he should have analyzed as to whether the WPM Model will work in Indian Business Environment Context and more specifically at Karunya where he had just taken charge as HR Director. Past data, facts, it's history should have been taken into consideration before proposing the way forward. The form of participation should be suitable to the work environment in which it is going to operate.
3) If you were the HR director, how would you have handled the issue of WPM and solve the present crisis of the organization?
The following are my suggestions for resolving the present crisis of the organization:
1) Conduct sufficient number of training programmes on WPM - what is it all about, how does it affect you & how you stand to benefit from it. Each & every employee to be trained. If training is done properly and understood by all and there is buy in on WPM concept from the participants, then everyone will be enthused and motivated to participate. It is also to be noted that the level of education of Indian worker's is low. Hence training & awareness plays a very important role.
2) The scope and functions of works committees should be clearly specified. This could probably be one of the reasons for the unrest between management and workers cropping up again and the issue becoming vexatious.
3) Management at Karunya should have a more responsive attitude towards workers. Let go of the past. Management and workers should develop an attitude of co-operation and adjustment. Both should have genuine faith in the system.
4) Make all the stakeholders understand that participation must work as complementary body to help the unions in collective bargaining. It should not be construed as an alternative to collective bargaining.