The work culture of this manufacturing organisation can be described as one where the employee relations in spite of having union is quite smooth, trust worthy and harmonious. The absence rate is minimum; grievances are resolved quickly with sensitivity. The HR policies of the company are regarded as quite progressive, liberal and employees friendly. This might be the reason that the attrition rate was very low. Moreover, company promoters also believe in lifelong employment unless there is some integrity or moral issue involved. People who left were only for their career growth or starting their own business and there was always happing departure of employees and managers.
Since the organisation was on growth track and wanted to retain the market leader position, it was decided to expand the capacity visualising the future market demands. To add one more production line, company executed the contract with a foreign Machines manufacturer company. It was agreed that the supplier company will depute his technical experts' team to successfully install the line and for that the local project management team will work closely with supplier team and fully coordinate. It was also agreed by the supplier company that they will arrange a 15 days on the site training to workers who will be responsible for production on the line at one of their customer's factory in china to experience the live demonstration and learn the hands on production operations and maintenance skills. Machines to be installed were much advanced and automated compared to the plant machinery presently installed. Production capacity of the line was also two times more than the present one setup.
HR Head Tejweer was given the project plan, asked to recruit the technically qualified workers capable of at least understanding and reading English language with enough computer knowledge so that on their training abroad they do not find themselves in a trouble and uncomfortable. During the meeting Tejweer proposed that since company would be spending huge amount on training of technical associates and some executives by sending them abroad, management must get a bond executed with each such person selected to serve the company for a fixed period after coming from training.
Finance Head proposed that it was time to introduce contractual labour in production lines to replace the permanent workers who would be selected to operate the new line, which will be a huge cost saving exercise. Tejweer showed reluctance on this move as he was apprehensive of disturbing the employee relations scenario, because till now there were no contractual labours deployed on production line to operate independently. But he was advised to come out of comfort zone, take bold moves, understand business needs and act as strategic business partner. Since CEO also supported the Finance head proposal, he quietly nodded his head.
Tejweer would visualise the problems in near future at IR front. He wanted to sail smoothly. He knew that building a work culture of trust and mutual understanding takes years but can be damaged by one single action. To dilute the possible negative impact of introducing contractual labours in production line as independent operators instead of recruiting them directly on company rolls, he thought of an idea. Tejweer enjoyed very strong bonding with union president Ramadhar Singh. Ramadhar also holds the control over workers and since many years he was unanimously elected president. No one opposed him, though his executive kept on changing. He was excellent in communication, disciplined with high moral ground and capable of saying NO to workers if things go wrong. Equally he was assertive enough to put his point of view before the management. He used to say in meetings with management "galat nahi karenge, galat nahi karne denge."
Not only Tejweer but also the top management had respect for him because of his simple living and balanced approach. Tejweer called Ramadhar Singh and shared his plan that for the proposed new production line, he wanted to give chance to existing workers provided they clear technical test. Interested workers may give their names including all union leaders who would be interested for going abroad training and executing a time bound bond because management would be investing huge amount on their trainings. Tejweer also shared that management feel that first priority should be given to the existing trained workers instead of appointing new from outside. Selected workers after getting training would be placed in new production line and in their place contractual workers would be engaged to whom existing workers will train.
Ramadhar Singh replied that he would come back after discussing with workers. Workers readily agreed rather felt happy that management would be providing them an opportunity to send abroad for advanced training along with few executives. On getting nod from Ramadhar Singh, Tejweer discussed the matter with technical heads and asked them to prepare a question paper for test. Test was conducted and after oral interviews of interested workers who appeared for test, result was declared. All exercise was done by in-house team. After result, there was discontentment among union leaders because only president of the union was declared selected and remaining union office bearers were declared fail. Secretary of the union though appeared close to Ramadhar Singh, comparatively young and bit aggressive and vocal called workers meeting and pressurised Ramadhar Singh to reject result declared by the management unless all union office bearers are not declared selected. Ramadhar Singh categorically denied the proposal. He said that if union and workers were doubtful about his selection and view it as a favour extended to him by the management, he would withdraw his name and will not go but will not derail the whole process being quite fair and transparent. He would also not request the management to manipulate the result to adjust union office bearers at the cost of other deserving workers who have come out as competent and capable for imparting training.
The meeting ended inconclusive. Next day union office bearers under the leadership of union secretary met Tejweer and demanded cancellation of results and select workers only on union's recommendations as there would be no point to organise exam and interview for experienced workers who were already working on the same production line. Union office bearers also rejected the proposal that workers will execute a time bound serving bond with the company after getting training from abroad and no contractual manpower will be placed on production line in place of existing workers to be deputed in new line in future. Such vacancies will be filled only by permanent on roll regular workers. Tejweer was not mentally prepared to respond to the hard stand taken by union. Absence of Ramadhar Singh with union delegation was enough signal for him understand and gauge the coming weather.
Tejweer rejected the demands of the union and stood by the result declared by the management and declared the last date for selected workers to submit their papers so that pass port and visa obtaining process is kicked off by management otherwise management will outsource the new line operations completely to a third party agency and existing workers will lose the life time opportunity to go abroad for their skill enhancement training.
After few days Tejweer started getting following reports from the plant :
Frequent absence of workers from work stations, causing production loss, increased short leave gate passes, leaving work stations at the end of the shift without handing over charge to worker coming in next shift, refusing to do overtime, increased lunch and tea breaks, increased unplanned absence from duty and not co-operating with the foreign team already working for installation of new line. Within next month whole work culture of discipline, mutual trust and cooperation which was developed and nurtured seemed cracking. On knowing that management has executed a contract with service provider to manage and take over the operations of new line through his skilled operators, union secretary staged a protest in canteen during lunch hours by declaring boycott of lunch. Impact was that nobody came forward to take the lunch. Ramadhar was on leave on that day. Tejweer also got to know that union secretary is planning to call an emergency meeting of the workers to remove Ramadghar Singh from president post because he was having hands in gloves with the management and not working in the interest of workers and push his candidature in place of Ramadhar. The declining work culture and increasing disturbance became more alarming for management when foreign team also expressed their inability to complete the project in time because of non cooperation of local team and wished to leave in between for their country till situation turns to normal.
Questions for discussion :
1. What went wrong and why? Did Tejweer handled the situation rightly?
2. Was Tejweer Strategy proper in depending too much on Ramadhar Singh?
3. Was management decision correct to introduce contract labour segment for the first time on production line?
4. What options Tejweer has now to put the things right on track?