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If India Inc wants to avoid situations such as the one Bajaj Auto is going through and Maruti Suzuki went through last year at its Manesar plant, it has to listen to its workforce.
Human resource (HR) heads of companies and experts on labour issues, gathered at the Confederation of Indian Industry's industrial relations (IR) conference here on Saturday, said labour discord was among the top issues dogging the corporate sector.
"So far, the focus has been on wage negotiations. But it should be on productivity and innovation of labour, rather than cost arbitrage. We need to recognise that industrial relations has become a strategic business process," said Rajeev Dubey, president-group HR and aftermarket sector, Mahindra & Mahindra.
Lack of an adequate dialogue process between the management and labour unions have also proved a major hindrance to a progressive.
Work environment.
Bajaj Auto, India's second largest motorcycle producer, has been facing a partial strike at its most advanced plant, at Chakan, near Pune, for 19 days. The company has so far suffered a production loss of about 20,000 units.
B Muthuraman, vice-chairman of Tata Steel, said: "Most of the problem in IR is due to the management and not the workers. We have not reached out to them. We consider them robots and reach out to them only when we want to."
Muthuraman addded the rate of payment to executives has far exceeded what we pay unionised labour. For instance return on capital employed for Bajaj Auto is 72 per cent, while the labour cost is only Rs 300 per worker and 22 paise a worker per Pulsar motorcycle sold by the company, said Arvind Shrouti, trade union consultant at Option Positive. Bajaj, though, has given an average of nine per cent rise in annual pay in the past three years.
Shrouti added the basic principles of a positive organisation — culture, trust and attitude — are missing today. Most workers are underpaid and with inflation rising, there is large wage disparity between management and workforce, he added.
To avoid a repeat of the labour crisis, Maruti Suzuki announced a pay rise of Rs 18,000 a month, spread over three years with retrospective effect from April 2012.
HR experts said companies in India still follow archaic laws, especially on the shopfloor. Besides, the companies have limited expertise in dealing with the new generation of workers (“GenY”), which comprise the majority of the workforce today. "We need to change the practises which are decades old, be transparent and involve GenY in the process," said Anil Verma, executive director, Godrej & Boyce Manufacturing Company.
Arun Maira, member, Planning Commission, said: "We do not need labour reforms but improvement in company practices. It is not a cost issue but an attitude issue and companies should realise that their personnel are not a nuisance."
HR heads said the problem also lies with the way B-schools treat HR education. "HR education in the management schools is not in the right direction. HR is not about seeding people but about development. Modern HR is about the elite. It’s not about behavioural patterns," said Muthuraman.
