Article (May-2018)


Prepare workforce for the change and invest in building relationship

Emmanuel David

Designation : -   Director

Organization : -  Tata Management Training Centre, Pune


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How do you see and define new age labour relations? How it differs from old age industrial relations dynamics, thought process and action approach?
ED Industrial/labour relations is increasingly being referred as employment relations or employee relations because of the importance of non-industrial employment relationships; with the evolution of the Info Tech revolution in India in the early eighties, there has been a substantial change in new age labour relations. In recent times, industrial relations have been in decline as a field, in correlation with the decline in importance of trade unions. This is being seen as further broadening of the human resource management trend unlike in the past.
The contexts have changed quite definitively. The farming and manufacturing sectors were the major contributors to the GDP till the advent of Information Technology as a key new sector. The manufacturing sector's contribution of about 17% to the GDP out of 28% of the industry sector is a case in point. The contribution of the IT sector and services now stands at 59% of the GDP. It has also absorbed more female labour force which has far reaching ramifications.
Quality manpower has been weaned away from the manufacturing sector to the Information Technology and the IT Services sector, Financial services, Start-ups (entrepreneurism), and new age industries also taking away the younger generation from manufacturing. Perhaps another factor is also the country's education system that has entrance exam conduits to certain kinds of engineering that caters to services sector.
The average salaries in this sector is around 5.5 Lacs to 8.5 Lacs pa whereas in manufacturing sector the average salary of employees stands at about 3.5 lacs to 4.5 lacs pa. Also the contribution of manufacturing is a mere 12% to the GDP of the country. This has brought about a change in economic balance.
The change in the power balance can be brought about by shifting the sectoral importance by effective policy interventions.
Earlier workmen took pride in telling their father's or grandfathers worked in that company but it is interesting to note that the children of unionised workers were now employed in the IT sector or pursuing higher education. The remuneration, perks and work culture have brought about change in the dialogue in those families.
Trade unionism, collective bargaining and labor-management relations, and the national labor policy and labor laws therefore lost their relevance in the changing employment. The Information Technology sector did away with the archaic rules/regulations which were more applicable in the manufacturing sector and moved on to the more employee friendly "employee engagement practices".
Furthermore, in order to be globally competitive, the regulations also have been amended in various laws thereby reducing the bargaining power of unions.
Increased awareness and aspirations of the workforce are other factors which has put more pressure on the Union leadership to stay abreast and satisfy their constituency. For example in recent times in my negotiations/interactions with various unions, I have found that every workman wanted a logic why a decision or clause was added in a settlement - a departure from when workmen did not question legendary union leaders.
Do you think that Trade unions are slowly becoming irrelevant in this age of knowledge and digital economy, and if so, and what corrections they should make in their approach and perspective to stay relevant?
ED As early as in 2003 Mr. P V Indiresan, Educationist and Former Director IIT Madras said, "By their own commissions and omissions, trade unions have become unimportant. For a fresh lease of life, they must change track, by promoting productivity and not seeking free lunches. Instead of wage increases, they must seek better amenities."
While this message is quite clear and relevant now only a few have been able to make the transition.
However, as an article in Business Line on June 16, 2003 indicates, “the trade union story is similar to that of Henry Ford's Model T car. For years, the Model T was the bestselling car in the US. After some years, customers became more prosperous, and wanted something better. Though the market changed, Henry Ford would not, and drove his company almost to the verge of bankruptcy by not allowing a model change for almost 20 years. Likewise, although capitalists have changed, trade unions have not. They still cling to the same philosophy and strategy that they first devised to challenge primitive capitalists.”
Some of the unions, who have been effective, have made good use of the available legislation and constitution and have espoused their causes effectively. A few have realised that social media is a more powerful tool than the gate meetings in voicing their points. In fact campaigns made on social media than noisy meetings of the yore have proven to be tellingly effective and with far reaching implications.
I have also found that they have made serious efforts to read and understand balance sheets and ask very uncomfortable and sometimes very pertinent questions in the annual general meetings of companies as shareholders. In a couple of instances, they have used the RTI Act to elicit information which was not made available to them.
Unions also have a role to play in protecting women in the workforce especially with the new Sexual Harassment Prevention Act, 2013. Very rarely do unions espouse these causes for better safety equipment and working hand in hand with management for safety awareness, training and using the equipment. In short, if they are able to focus on issues of social justice, productivity and sustainability, there can be a win-win contribution.
Is Labour Day representing origin of collectivism losing its shine and if yes, why?
ED Labour Day, represented a day to honour not just the individual worker, but what workers accomplish together through activism and organizing. Indeed, Labour Day in the 1880s, its first decade, was in many cities more like a general strike - often symbolized with waving the red flag of socialism and radical speakers critiquing capitalism. The symbolic significance was the same around the world.
Today that has only become a tokenism and many business leaders/HR managers think it is something that only the workers' unions do.
It is possible as enlightened HR managers to participate in such functions and use it to recognise performance and behaviour which will enhance the overall culture of the organisation and relationship with the workforce. Perhaps this year the Labour Day could be an occasion for recognition and rewards on aspects like : Excellence in Skill, Safety, Innovation, Contribution to Team work, Productivity, Art and Culture, Sport and so on.
I have noticed that when we involve the family members, which is not normally followed in most companies, the commitment levels just increase. It is, however, important that there is excellence in execution in such events or else it can misfire.
In manufacturing sector, will robotics going to impact blue collar jobs negatively and if yes, what Proactive steps HR should take in advance to maintain a fine balance in job opportunities and technology advancements?
ED It is not an either or question but rather the moot question is "How soon will the manufacturing sector be impacted negatively if it does not embrace the required technology to stay competitive". For example, a recent Times of India article tells us that India has only 3 Robot's per 10000 workers, against a global average of 74 and the leader is South Korea with 631 per 10000. Today an average Indian consumer has a mobile, car or consumer durable from South Korea due to their high level of automation.
We all wish to be competitive. Therefore, it is important to embrace and prepare ourselves to coexist with robots. Human Resources need to plan on preparing the work force for the change and up skill them. This requires a careful preparation and choosing courses/learning modules which employees are interested to do and would be useful for the organisation as well. It is easier said than done but if we look at the cost of inaction then perhaps the motivation of the Human Resources executive would be to prepare their workforce for the future. It is easy to give a VRS or downsize but that is just transferring the problem from an organisation to the society at large. This may turn out to be a larger malaise on the economy and the nation as a whole.
How do you evaluate the objectivity and impact of labour reforms undertaken by Govt. on labour relations?
ED I remember requesting the Labour Commissioners to extend the working hours beyond 8 pm for women in 1992. While they liked the idea in private it took about 8 years for that to actually come in to force through High Court judgments and later legislation.
In the recent Union Budget, the Government has extended the facility of hiring workers on fixed-term employment to all sectors to improve the ease of doing business. It has also given a security cover to the trade unions that no permanent employee be moved to fixed term employment.
I have been fortunate to sign settlements with Unions by introducing new terms and conditions for fresh appointees while retaining some of the benefits for the existing employees.
With the advent of IT, the various labour enforcement authorities have embraced IT and enabled single window online services, including submission of forms and returns, which ensured simplification and transparency. Furthermore, the various investment summits in different states have ensured that the promises of the executive are carried out. Global investors were looking for such simplification of Indian Labour Laws.
There is also a need that other ministries of the Government bring some changes in line with the Labour dept., for example the Income Tax exemption of Rs. 5.00 Lacs for a VRS was fixed in 2001. The least the Income Tax exemption could be enhanced to is Rs. 13.5 Lacs to protect against inflation from 2001.
Gender pay gap is another issue which needs to be addressed with a road map of the reforms and plans to be implemented. This is better done proactively than with strictures from International Labour bodies or the press.
The labour reforms also have to take a futuristic view in tandem with the sectoral shifts, and the technology impact as well. Businesses should have conducive policies in place to aid the labour improvements and management.
How dignity of job and respect for labour is enhanced in the industry?
ED On the issues of dignity and respect no one is going to disagree or proclaim otherwise but somehow when it has to be demonstrated at a leadership level or corporate level there seems to be a definite vacuum.
Perhaps we are wired to respect a certain kind of work and shun a certain occupation and both overtly and covertly. We are communicating disrespect for some and appreciation for the other.
The foundation for dignity and respect is fairness and willingness to take a stand. A respectful workplace is one where each employee is treated fairly, regardless of work experience, time with the company, gender, cultural background or any other distinguishing factor. This type of environment promotes healthy and positive working relationships between all employees, customers and other stakeholders.
It must be kept in mind that most workplaces also have become akin to 'reality shows' with ubiquitous CCTVs in workspaces. Most employees are not conscious of this and behave rudely and with disrespect to their co-workers. When this becomes public the organization is in a damage control mode. Therefore, training of leaders and employees is critical to ensure there is camaraderie and respect.
Today, with a workforce that is more distributed and more mobile than ever before, managers do face communication barriers. To understand what constitutes as respectful and what is not respectful, managers could crowd source the thoughts of the followers and capture the output on the matrix below. Since this is from the employees and for the employees this would result in shared accountability and it will become a code of conduct for that team.
2011© Emmanuel David
In my view this would mitigate the company from workplace violence.
How do you evaluate the emerging scenario of labour management relationship in India?
ED Anomie, in societies or individuals, is a condition of instability resulting from a breakdown of standards and values or from a lack of purpose or ideals. This term was introduced by the French sociologist Émile Durkheim in his study of suicide. When a social system is in a state of anomie, common values and common meanings are no longer understood or accepted, and new values and meanings have not developed.
In my view, we are perhaps in such a situation. The connect with the leader and the workman is missing. We grew up in an era where to interact with unions or workmen was business as usual and we attended each other's social events. I find that missing now. Add to the lack of connect the increased aspirations and awareness of the workforce creates a heady cocktail of all that which should not be in a workplace.
Furthermore, with the perceived lack of power all it requires is a little provocation for something to snap and create a flood of emotions. We have seen that in recent years. Therefore, it is important to learn from our history as we move into the era of AI and Digital. As union leaders it is critical to understand their business, competitive landscape, their constituency and have a vision with values of social justice and sustainability.
As industry leaders it is imperative that a meaningful and respectful workplace is created to help the workforce realise their aspirations while contributing. As Human Resource professionals the task is the right judgment on the people and social issues balanced with business imperatives and having the courage and tact to influence the Union, Business Heads and Workforce.
What qualities would you expect to see in modern HR managers that embrace ER skills and any message from you to the younger HR generation?
ED Let me illustrate on the different aspects for a Union Leader and Manager.
In this aspect the enlightened HR/IR Manager should understand the flow of power and what qualities I think will work are :
  • Communication
  • Managing constructive relationships
  • Critical thinking and conceptual skills
  • Innovative solutions
  • Understanding the source of Power
  • Maintain a bond, even with your 'adversary'
  • Have relevant conversations
  • Positive energy
  • Seek Support, be humble and firm
It is important to understand that the union is an Institution and the enlightened manager needs to respect it. My message to the younger HR professionals is that Logic sells but emotion binds! While expertise can be bought, relationships have to be built. Therefore, invest in building relationships.