Article (July-2018)


case Study - Dream Merchant & Ideal HR

Editorial Team

Designation : -   Editorial

Organization : -  Business Manager HR Magazine


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It was dawn hours of that fateful day, when armed police had to evacuate about 800 workers forcibly from the factory premises of the Pratibha Auto Ltd. in NCR, where they were occupying the whole premises since last 15 days in the name of stay in strike. At that time in the premises, there were only two officers of the company namely Mr. Gupta and Mr. Saxena. Gupta was Administrative head and Saxena was HR head. They both were in close liaison with the State Govt. Since Gupta was old timer having close connections and reach with the promoters, HR was made to report to him. Mr. Gupta was capable of turning down any initiative of HR which he did not like.. When workers were forcefully expelled from the premises, they after coming out resorted to violence, indulged in stone pelting, broken glass pans of the adm. Building, put the police and officers vehicles on fire. After about two hours of operation and combating, Police handed over the possession of the premises to Mr. Gupta. Actually police acted in compliance of a court order which the management obtained when all efforts failed to persuade workers to leave the premises.
For Saxena, who was XLRI alumini and worked in very reputed organizations, joined this company three years back only, this incident and last one year working compelled him to unlearn certain things, relearn past practices and make confirmations in beliefs. The chain of happenings from start gave rise to certain affirmations that labour and its psychology will remain same be it in any time and any environment. Union and its thought process will remain unchanged what come may. Unions will never raise above their century old convictions that management and workers are enemies to each other and cannot learn to understand and co-exist. The time may change but unions will not change. This was the conclusion Saxena drew from incident.
It was Saxena, who after listening to other severe IR crises in neighbouring states and reaching to academicians’ conclusion that the problem was due to engagement of contract labour and difference of wages, he was able to influence Mr. Gupta and top management about not recruiting contract labour. So, as a recruitment policy, it was decided not to keep any contract labour in any production process. Consequently Co. employed about 1800 workers directly on Co. rolls, which raised eye brows of many HR professionals of the area. Three year old company has about 30% permanent, 20% probationers and about 50% on fix term employment for three years. This segment was to address the business fluctuations and flexibility.
Co. provided all facilities with state of the art technology in respect of canteen, uniforms, transportation, rewards and recognition practices, old time trusted practices like annual function, Holi Milan, Diwali Mela and different Poojas at plant viewing as engagement activities.
Things were moving in right direction. In spite of best efforts of Saxena to work with collaborative mindset and developing good network and influence on workers, somehow bureaucratic mindset started emerging between different departments. Confirmations of workers were delayed. Appointment letters were not given even after joining of six months. Too much legalistic approach started causing concerns to Saxena as it overpowered HR approach and his idealistic initiatives. He felt losing grip among workers because his team was not able to resolve grievances. Appointments and confirmation documentations were in the hands of Admin department because unless they clear the vigilance reference check of each worker, letters were not to be issued. In spite of having good team at top to think, strategize and decide, things did not go down well as collaborative approach at second and third line started missing. Sense of belonging at HOD level started disappearing as they were not actively involved in participative decision making at plant level. Saxena was perceived as influential and trustworthy person among workers, so he was slowly sidelined by Admin Department and other HODs. His many proposals were either turned down or kept pending by Admin Dept. Internal office politics of leg pulling between different HODs overpowered actual issues making workers disturbed and insecured.
Though Saxena was getting feelers that workers were getting influenced with that kind of unionism which believe in arm twisting, aggression, poisoning against management and even violence if needed to get high salary jump through negotiations, but was not convinced keeping in view of his fair and transparent dealing and HR practices he put in place with workers. He shared this feedback to top management through admin dept but did not get much attention. Slowly workers developed mind frame that 20k salary to workers was only possible if union was formed. Presently average salary of workers was around 10K. This idea got acceptance broadly among workers.
On the other side Saxena acted very transparently, proactively and having believed in open communication, put works committee in place to resolve the workers issues in spite of strong objections  and non confirmation from Mr. Gupta  and other manufacturing heads. Works committee representatives who were seen as future potential leaders were targeted by influential lobby of Mr. Gupta who was in no mood to spare any occasion to let down Saxena and his team who was having influence over such potential leaders. On one side workers started feeling unsecured and on the other, humiliated Saxena felt sidelined, lost grip over workers and could not make efforts to remove feeling of insecurity among workers. During last one year about 20 workers (probationers, trainees and FTCs) were discharged mainly on the basis of the performance, the process of which was not very transparent. Saxena felt that few of the discharged workers were not bad as were projected. They were also a part of effective intelligence network, Saxena was somehow able to develop in plant. The action of discharge of workers slowly broke the intelligence fabric of Saxena.
Some workers got in touch with other company union leaders who passed them to one politically affiliated union leaders of neighbouring state, paid them good money for union registration but could not succeed due to some technical reasons.
Few workers who had worked in some trouble some companies of nearby area earlier were recruited somehow without much antecedent verification because of pressure of making available required manpower in short time, got in touch with their union leaders. Outside Union Leaders increased their aspirations and motivated to form union. Outside leaders asked workers to collect money for the purpose and about 7-8 lakhs were collected. Neighbouring state leaders motive was only to earn money in the matter and make fool of workers. It was their business model. They directed the workers movement on same lines on which other companies faced acute labour violence and unrest.
Again papers were filed for union registration, but fractured, demotivated front line officers could not regain the confidence of workers and stop them in spite of having no substantial grievances. Main supporters of union were FTCs whose three year contract was coming to an end. Production and Admin managerial persons having conflicting interest did not allow front line officers/supervisors to function effectively and on the other side tried to prove them as failure in the eyes of top management. Since they were not trusted, upward information flow dried up.
Inaction and belated decisions and communication gap caused chaos at all operations and functional level. Whatever planned to counter union move, could not be materialized in time.
Since proposed union president was also suspended long back and was put to disciplinary proceedings, he provoked workers to resort to stay in strike and demanded for immediate call back of all discharged workers during last one year for duty. Their purpose was only for union president but to show solidarity, they made common cause. On persuation, Saxena made Gupta agree for taking take two pre emptive actions. One - he obtained 500 meters injunction order against workers from court and second - few workers filed suit against union registration and got stay on union registration process. Felt frustrated by this move, workers then without waiting for registration of union, presented demand charter with support of about 1000 workers to management. Workers started building pressure to reinstate union president which management did not concede. One day tactfully workers resorted to stay in strike. They were in about 800 in count. A + B + G shift workers remained inside. Management were caught unaware. They restrained the management from doing logistics of finished product. Management obtained court order for evacuation. But police expressed helplessness due to state elections approaching near. Staying for about 15 days inside the plant, workers could not anticipate the other side of action as they were kept engaged in discussions for leaving the plant peacefully or start working. And on that late night they were evacuated... It was again frustration and retaliation of workers who were made simply tools in the hand of other outsiders whose motto was only to bring back their leader inside. This frustration and retaliation was against police and administration.
Now there is leadership vacuum. Management has refused to talk to outside union leaders as well as suspended union leader. Others who were representing workers were now arrested  and in jail on the charges of arson, looting, rioting, stone pelting, property damaging, police assault, vehicle burning etc. Tactically management did not declare lock out. Workers are on strike. They only say, take back all earlier discharged persons, settle demand charter, have judicial probe in police action, withdraw cases against all arrested workers and release them. Public rally in the area and procession has sensitized the issue. Sleeping industrial area workers have again started talking of union and seeing a ray of hope for better unrealized unrealistic dreams. What these outsider union leaders have been successful in selling unrealistic dreams to workers and took money from them. Management could not counter that effort, Saxena realized. Defusing unrealistic financial expectations which started growing among workers mind was going to be the new and next challenge before every industry HR in coming times. Saxena concluded this in his mind.
Next day Saxena decided to move to corporate office to submit his factual report and observations to Chairman, as Chairman wanted to brief the board about the incident and future prospects of business as the company was the listed one in stock market.
Questions for Discussion :
1. What went wrong, where and why?
2. Discuss the ideology, thought process and beliefs of Saxena which he felt shattered and was he correct in reaching to his conclusion?
3. Who was responsible for such crisis and how it could have been avoided?
4. What should be the future course of action to bring back business and employee relations on track?