Individual Livelihoods Are At Risk
abour unrest has erupted at some companies. Earlier there was a massive labour problem at Maruti’s plant in Noida, but after much wrangling, it was resolved. Why do workers agitate, sometimes violently, for their rights? Are they always in the right and the management always in the wrong? It is not so. The problem is compounded when both parties view the problem from an opposite lense. Then the issue is conflated with ego problems; both the workers, and their union leaders see the issue in terms of a class struggle. The workers mainly decry that their wages have not risen compared to the company’s profits. They gripe
43 EASTERN CRESCENT | MAY 2014
Some experts have blamed the lack of knowledge of industrial relations by HR managers has compounded the problem. Nevertheless, this is sidestepping the real issue. The real issue is whether top management wants to share a part of the profits of the company with the workers or not? By Ahmed Kamal Khusro that the company bosses do not want to share some of the profits with them by increasing their wages manifold. This is not always true. Sometimes in times of economic evisceration and the sputtering of the nation’s economy, companies suffer losses, their market share drops or they face stiffer competition. At other times, sales grow sluggish and inventory builds up or there is an export crunch. All these factors must be taken into account when the questions of workers’ entitlements are raised. It is a fact that prices of every thing such as food, education and health are rising; but the wages sometimes do not keep pace with the rising inflation. The yawning gap between paltry wages and rising prices builds up resentment among the workers. From a communication point of view when both sides are adamant and do not want to change their stances— workers and management—the solution is that each should try to stand, for some time at least, in the others’ shoes and view the problems from their perspective. However, when it comes to bargaining for their rights, the workers are at a disadvantage. Their labour is perishable, intangible and cannot be stored. Although the labour’s share in the manufacturing or production of a company’s assets is of considerable significance, it cannot be quantified easily, because it is intangible. This puts them at a disadvantage when wage increases are being discussed with the management. Some companies
STAIRWAYS are generous with wages and offer other fringe benefits for workers, but there is a large group of companies for whom profits—which includes both the top line and the bottom line—are the be-all-and-end-all of existence. They do not entertain the idea that the labour put in by the workers has made them what they are. (Top line refers to net profits while bottom line refers to the total sales of a company). They lack a sense of justice and fair play. Even if they have a moral compass, it is clouded by overweening pride and greed for profits at any cost. Recently, four companies were in the news for labour unrest at their plants. These were Maruti, Hyundai, Toyota and Ford. According to the view of one report “While economic reasons have their role, HR experts believe that lack of communication, transparency and skill in industrial relations have made matters worse.” According to an HR manager: “Individual livelihoods are at risk. You have to appeal to emotion and intellect of the employees. Organizations are treating employees in a more transactional manner now. These incidents are more a result of fractured communication, exaggerated by economic and social conditions.” Some economic savants said that multinational firms, especially in times of distress, take decisions at their central headquarters, which impact operations globally, and local considerations matter little. There has to be communication and logic. Labour issues typically arise when there is no
Organizations are treating employees in a more transactional manner now.
logic, another HR expert commented in TOI. The view of some was that one “cannot have job security along with increasing pay.” Workers’ representatives are of the view that many a time salary cuts are unexplained. Mentioning the example of one company, they said “…production last year was better than the year before. When they were doing well, they didn’t give extra. Now, they are trying to cut incentives in 44 EASTERN CRESCENT | MAY 2014
the name of various things”. Another trade union leader At other times, sales grow bemoaned, “Lower sluggish and inventory builds up production doesn’t or there is an export crunch. All necessarily warrant these factors must be taken into a cut in workers’ account when the questions of salaries.” workers’ entitlements are raised. Some experts have blamed the lack of knowledge of industrial relations by HR managers has compounded the problem. Nevertheless, this is sidestepping the real issue. The real issue is whether top management wants to share a part of the profits of the company with the workers or not? The next question is whether they treat their employees fairly and with justice? A third question is whether, apart from a few outstanding organizations, do the HR managers empathize with their workers’ problems? If the answers to these questions are in the negative, then something is definitely wrong within the core group that runs the company. It means that that the top management does not have a heart that beats for the workers who have contributed so much for the growth of the company. If the organization shares a part of its profits by the workers and increases their salaries and incentives when the going is good, then in times of economic distress, the workers can be urged to tighten their belts. Management cannot have the cake and eat it too. If prosperity does not bring benefits for the workers, it is unfair during a downturn to ask them to a cut in their wages. An HR profession at a leading company said that an increasingly younger workforce is more expressive about their needs. The average age of employees is coming down. All of them are better networked than their predecessors. Labour conflicts might not have happened 10 to 15 years ago. They are more expressive and want a better standard of living. The definition of a blue collar worker has changed. They are no longer the uneducated labour from rural areas. They come with exposure and education, at least a majority of them. “In such a scenario, how an organization practices fairness becomes paramount”, one HR manager remarked.