05 May 2020 16:57 IST

New workers’ productivity will be low; reinstating is best option

Recruiting altogether new workers would be a time consuming and costly process

Correlating the situation of contract workers with the drive theory of motivation shows the workers identifying with each other. Their willingness to preserve this identity made 2,000 contract workers to go on a tools down strike. It was an instinct of life for employees as this job would have been the only source of income for their families. Workers started cooperating among themselves and started viewing the management as their competing party.

As said above, given the sudden economic downturn which led to a drastic fall in the sale of HMSI, the layoff of workers was inevitable. However, the layoffs could have been structured in a way to avoid the labour unrest and subsequent stalemate

Instead of finding a common ground with workers by informing them about the condition of the company and explaining the rationale of the retrenching decision in a convincing manner, the management took the aggressive stance of sending the workers back from the gates.

Ending the stalemate

Some of our suggestions to avoid the subsequent stalemate are:-

* Counselling and discussion sessions to inform workers about the economic downturn and the need for layoffs

* If re-employment in HMSI is difficult, arrangement of alternative employment by management

(i) in friendly companies/ subsidiaries for those workers whose contract is still left

(ii) through contractors for those whose contract is over

* Compensation for some time so that workers can manage until they find a new job

It is also evident that their promise to take them back worked the wrong way by belying the workers’ expectations.

Suggestions to HMSI to ensure smooth production

HMSI should reinstate some of the contract workers due to the following reasons-

* The production can’t be continued solely with the existing permanent workers and HMSI would need contract workers to ensure smooth production.

* Recruiting altogether new workers would be a time consuming and costly process. Further, the productivity of new workers will be lower than the contract workers who had been working for years at Honda and hence reinstating is the best possible option.

HMSI should also reinstate union leaders if:

* The deal can be done on a quid pro quo basis whereby the union leader can be reinstated if he can convince the contract workers and get the production on track. The act of reinstating the union leader will bring greater legitimacy of the company in the eyes of workers.

* The network and influence of union leaders across various automobile units in the Gurugram belt can help in calming the industry-wide tensions by dissociating workers from other automobile units from the protests.

Measures to reinstate necessary contract workers-

Those workers whose contract period was left uncompleted while laying off should be reinstated first so as to resolve the associated legal issue. Company should also conduct a “Welcome back” programme to make them feel included.

Strategies to manage the irate workers

· Firstly, the reinstated union leader should be entrusted with the job of calming down the workers protesting at the gates.

* Once, the workers calm down and the situation appears safe, the management can reach out to the workers openly to clarify their situation and position.

* The management can start with an emotional appeal to workers while describing their situation. They can be implicitly apologetic and, from the day of protest (5th Nov) till the date (26th Nov), they can give some percentage of salaries to all the workers.

* Management should reinstate few of the contract workers to ensure smooth production, their plan of action to calm the situation and make things in their favour can be as follows:

1. Optimising the demand of workers in the company

2. Checking the required number of contract workers required

3. Arranging the workers on the basis of their day of employment in the company (keeping in mind the workers whose contracts are yet not over to avoid legal issues and workers who were promised employment in August)

4. Looking for alternative opportunities for remaining workers at friendly companies in industry, its raw material or component companies or through contractors

5. Reinstating the required workers, promising two months salaries for remaining workers and discussing the employment initiatives taken by company


Ways to persuade the union members

The very fact that union members were protesting despite the threat of job loss reveals that the job and economic incentive in itself would not be enough to convince them. The management needs to call a separate meeting with the union members to discuss their issues and listen to their grievances. Union members should be made to feel that they are not here for just following the orders of the management but as representatives of workers, and their inputs are important for the company.

If union members start feeling included, it will not only help in convincing them but the union leaders can also play a critical role in persuading the workers to rejoin and bring production back on track.

Measures to improve the morale of workers at the plant

Instead of getting a good conduct bond signed, the company can create a better environment for good conduct

* Open and offsite discussion, inclusion programmes as part of HR policies to understand the grievances of workers regarding production and also to develop a feeling of inclusivity among workers. In these discussions and programmes, the management can also introduce its plans to improve workers involvement and skills. The programmes by management can be:

* Face the management plan- A monthly meeting for management, union leaders and workers followed by employee lunch

Tanya Yadav


Sourabh Agarwal

* Skill band system- A continuous programme where the operations management department will train the workers in ways to do their jobs more effectively. Three types of bands will be introduced for workers – green (expert level), yellow (intermediate level) and orange (basic level). Quarterly workers will be upgraded from one level to another based on their understanding of their work and green band workers will support the training of the lower-level workers.

(The Second Runners-Up are PGP-1 students at IIM Kozhikode.)