The Return of Industral Relations

The Return of Industrial Relations

By V.K.Talithaya

If there is one important thing that the terrible events in Maruti’s Manesar unit did, it is the return of Industrial Relations to centre stage. The heinous actions of the union leaders and the employees, the brutal killings of a manager, the lawlessness and criminality let loose in the factory are all reminders of the state of employee-employer relations of the pre-nineteen-ninety era. Collective bargaining, pressure tactics, some times verging on intimidation of managers, even violence were all part of what passed for employer-employee relations those days. Yet, since the early nineties the scenario began changing. With the gradual entry and expansion of Information Technology industry, Industrial Relations as then known retreated. The new mantra amongst HR Managers transformed to talent acquisition (translation: recruitment of good people), capacity building (translation: training), retention (translation: keeping employees’ loyalty) and the like. Relations with employees, to whatever kind they belonged took the back-seat. Or, some times, relations with employees meant gimmicks like gyms, saunas, parties, birthday cakes and the like in the office.

Even manufacturing industry began thinking of their HRM in the same way as IT industry. The old litany gave way to the likes of talent acquisition, capacity building etc. Industrial Relations was not even relegated to the back seat, but was soon a forgotten subject. As one of HRM’s good friend, and an authority on Industrial Relations, and now mostly forgotten E.A.Ramaswamy, quipped in one of our friendly conversations in the early nineties, “IR is dead and HRM and HRD are still-born”.

What really went wrong? What landed us in such horrific situation as Maruti’s Manesar factory? And is this a one off event or is it a pointer to the events to come?

Before we answer these questions it is useful to look at why employees unionise. There can be three important reasons why employees unionise. They are:

• To improve their lot in the company. By creating a forum where they can vent their aspirations and grievances they try to be heard by the employers.
• To overcome a sense of alienation from which many organization suffer.
• Political and ideological reasons such as class war and destroying the capitalist class etc.

The sudden outburst of debate on Industrial Relations in the post Maruti tragedy focused on many reasons which could be behind the events such as deprivation in our society, inequality, the visibility of high lifestyle in the media which is beyond reach of many workers, ideological reasons such as Naxlism and so on. Most of these discussions end up with dispensing advice to IR managers on how to manage IR. Many even reflected how IR managers need to relearn the forgotten art of IR or retool themselves to face the reappearance of an old challenge. Even the most fashionable management institutes like a couple of IIMs  seem to be suddenly realizing that IR is not really ante-deluvian. They want to include IR in HR curriculum. But, are there faculty who remember what IR is?

Back to retooling by IR managers. What tools or are we talking about? Let us look at the three reasons why employees unionise. The last one first – political and ideological reasons. Frankly IR managers never had any tool nor did they master any art for managing political ideologies. Luddite actions of destruction of property, maiming personnel etc. were never an IR manager’s forte. If all those destructive unionism of West Bengal of the sixties and seventies, or of Kerala till up to the recent past throw any light, it is that unions are an important political outfit for purposes beyond industry; industry only provides the platform for organizing an outfit for purposes beyond its prescincts. Class wars and fighting Luddite actions are not areas in which IR managers can retool themselves. The state needs to decide what it wants to do about it. Why such actions in Maruti caught the attention of the country is because we believed that such ideology or actions were the baggage of the eighties and are far behind us. 

Should then the IR professionals raise their hands in helpless desperation? Or should they take all the generous advices rushing from all over on how to retool themselves to face the new challenges? For the beginners, let me be clear: there is no need to raise their hands in helpless desperation, nor need they bother to waste their time in understanding what this word ‘retooling’ means and then attend seminars and training programmes on retooling. What is most important is they need to relax and see what really had gone wrong from the IR professional point of view, not what had gone wrong on the larger socio-political scenario. That larger field can be left for other specialists to ponder.  And these concern the first two reasons for unionizing we mentioned above.

So, what had gone wrong in the last twenty years?

Firstly, the emergence and growth of IT industry had changed the way HR managers and IR managers look at managing people. A few years ago there was a debate in the Economic Times – should employees in IT industry be allowed to unionise? One of the leading lights of the industry wrote that IT was not like the sweatshops in the manufacturing sector, the employees were looked after so well, there was no need for unions. Unfortunately, he missed two important points. First, if everything was honey and milk employees would not simply feel the need to unionise. So there is no need to prevent them from uninoising. Second, unionisation is a fundamental right of every citizen. Right of association is a fundamental right enshrined in the constitution. Hence, irrespective of what you feel, if the employees wanted they could unionise. The question that begs is why then IT industry employees were not unionized? The answer is clear. It being a fast growing industry the opportunities for growth was so much, employees had very short term view of their organizations. As we mentioned above one of the reasons employees unionise is to improve their lot. Since employees in IT industry always looked at other opportunities, they never took pains to worry about improving their lot in the present organization. Secondly, since they were always on the move, creating a bad track record by unionizing would go against them in their search for new opportunities. These factors were missed by HR professionals in understanding the emerging HR scenario.

Secondly, most IR managers in the last twenty years had one career destination - joining IT industry. Many have joined. The compensation was attractive, progress was fast and on top of these there were no irksome unions. This focus on IT industry career meant many things. The career emphasis was on talent search and building, repackaging compensation to outdo the competition, team and leadership building and the like. IT industry was not expected to have blue collar employees. As a result IR as an area of specialization took the far back seat.

Third, the large MNC organizations which set up units in India wanted to manage their Indian units in the same way as they manage them in their home country. The lack of understanding of the Indian ethos is one of the most likely reasons for Maruti’s fiasco, despite the fact that Maruti is around in India for more than two decades. The fact that some of the worst such events took place in organizations like Maruti and Honda is a reflection of this cultural hiatus.

Fourthly, the Indian workers’ profile has undergone a sea-change in the last twenty years. Irrespective of the type of industry, today’s worker is more educated, his aspirations are guided by the tremendous changes taking place in our economy. Notwithstanding all the talk about workers being partners and the like, we have not done much to change our managerial style to cope with this fast changing profile of the worker.

Fifthly, there is a lot of double talk in organizational management. One cannot help feeling that all the talk about corporate governance, transparency etc. need to be taken with much more than a pinch of salt. On one side they talk of skill and capacity building which by its very definition means preparing the employees for the long term. On the other, they have huge part of their employees on contract. The new phenomenon is to engage even white collar employees through contractors. In this approach of kid gloves and hide and seek, the IR manager is an innocent pawn. He has no role in formulation of the policy. It is cost reduction, profitability and quick turn around which matters. Yet, the IR manager is expected to sell to employees the most unsaleable policies of the management which any intelligent employee of today knows is against his interest.

Sixthly, all that is said above also is a pointer to the future-shock we are in for. IR issues may not confine themselves to the manufacturing sector in times to come. There is a serious challenge of attitudes in some corner. Recently, in one of the national daily’s digital edition there has been a raging debate on the Karnataka Government’s decision to implement the Industrial Employment Standing Orders Act in IT industry. Some of the management representatives responded that this was a nineteenth century law irrelevant for today’s needs. Any ordinarily intelligent person can see that the age of the law is not relevant; what is, indeed, relevant is the spirit of the law which lays down that the conditions of employment of the employees should be transparent. It only provides a model employment conditions; the ‘progressive’ IT companies can always give better conditions. The only requirement is that the conditions should be displayed prominently. So, what is the problem? The age of the law or the need to be transparent? The Karnataka Government has given the wake up call to the industry. They can ignore it only to their peril.    

Where do we take IR from here?

Top managements of organizations, instead of asking IR managers to retool and relearn their old trade should take IR managers on board in formulation of policies. This is not to deny that HR managers need to give a hard look at where they want to position IR.

HR managers cannot opt for the softer side of HRM. The hard realities of IR will visit them some time or other. The more they ignore it the more menacingly it will visit.

IR managers need to stand up to the top management, tell them that kid glove approach to employees will only hurt in the long term. At the same time they have to equip themselves to understand and appreciate employee aspirations and plan responses. Employee cost, profitability of the organization, long term trends of wage cost cannot be subjects for hushed discussions in the dark corners of the organizations. More open exchange of information may have to evolve over a period of time.

The silver lining is that people are becoming more and more utilitarian, so are employees. Maruti may be one off. Ideology is less important today. HR managers have an important role in creating the appreciation amongst employees of the futility of ideology; what can improve their lives is their contribution in making their organizations profitable, competitive and a leader in their business. But such efforts will lead no where unless the pious words are matched by deeds of sharing the fruits of everyone’s efforts.