People Management Problems Essay Example

production goals that were regularly met before union negotiations were seldom achieved thereafter. This highlights the need for implementing a commitment-based HRM strategy and effectively managing worker power within India's unique context.

The case study examines the HR issues encountered by Honda Motor Cycle ; Scooters India (HMSI), discussing the factors that caused a conflict between the management and employees. It elaborates on the specific incidents that resulted in a strike, ultimately leading to significant production losses for the company.

The case showcases the increasing occurrences of employee-management conflicts in India, often influenced by external entities like trade unions and political parties.

The focus of the case study is the state power in Indian industrial relations and its beneficiaries in various contexts.

The text demonstrates how multinational companies often make mistakes when it comes to understanding cross-cultural issues and the business environments of foreign countries. The study illustrates the importance of being efficient in producing goods, as well as having good relationships within the industry. Even though Honda implemented best practices at their Gurgaon Plant, they failed to recognize the cultural differences.

The breakdown of industrial relations at HMSI can be attributed to various factors, despite the company's apparent concern for employee needs. Several issues emerged, starting in November 2004 when union leaders expressed dissatisfaction with workers' inadequate annual Diwali gift. This made them feel undervalued given the company's global stature. Moreover, workers were unhappy about having to sign a "movement sheet" for bathroom or water breaks and rarely being allowed shift changes. The company frequently used threats of termination and managers showed favoritism towards certain employees. Workers also felt

they lacked opportunities to voice grievances to top management.

Workers expressed dissatisfaction with the vice-president of manufacturing's disciplinary behavior, which involved physically assaulting an employee. This incident caused unrest within the company as the workers were unhappy with the lenient penalty imposed on the VP.

In March 2005, the workers submitted a list of 50 demands to management. In response, management created a compensation package for the workers, but they declined it. Instead, the workers decided to join a union. The formation of the union was opposed by HMSI, who tried to delay it. However, on 20 May 2005, the union was successfully formed. There were intense debates and arguments between management and union officials regarding key issues. Negotiations were attempted but ultimately failed. Subsequently, the workers were terminated and temporary workers were hired to slow down production. HMSI sought protection from the police due to tensions with the union workers, which eventually resulted in violence on 25 July 2005. The failure of the union and HMSI to collaborate and improve the working environment led to the breakdown.

The management was surprised by the workers' unexpected choice to create a union with the help of the AITUC, fueled by their accumulated grievances. It is important to mention that the AITUC is associated with a political party called the United Progressive Alliance (UPA), which has power at the central level as part of the ruling coalition. Typically, in India, when unions form, managements often use state government agencies and legal strategies to dismantle workers' unity. However, this did not happen in this specific case.

Panipat, a town in Haryana, is currently facing

a situation where medium-sized firms with around 500 workers are ignoring labor laws without any consequences. In the handlooms exports sector of Panipat, attempts by union leaders to organize workers have been unsuccessful. Similarly, at HMSI, a conflict between labor and management turned violent as workers clashed with the police, causing significant financial losses for the company. However, media coverage and pressure from the CPI led the central government to intervene and support the working class. As a result of this intervention, the company suffered a loss of Rs. 1.3 billion but also witnessed the rise of a strong union.

The human resource (HR) policies of HMSI are in line with the philosophy of its parent company, HMCL. This philosophy is based on two fundamental beliefs: 1) respecting individual differences; and 2) embracing the three joys: the joy of buying, the joy of selling, and the joy of manufacturing. One of the HR policies implemented by HMSI is the formation of committees by the management, which include both workers and management representatives. In addition, the company's quarterly newsletter focuses on targets, safety, achievements related to quality, safety, and training programs on defensive and safe driving of two-wheelers. Through these newsletters, management aims to highlight their concerns rather than addressing the issues that workers consider important.

The level of discipline imposed on workers was extremely stringent. They frequently received lectures on their work conduct that they did not appreciate. Meanwhile, Japanese upper management had a misinterpretation of Indian workers' mindset in terms of cross-cultural understanding, whereas Indian managers displayed favoritism and enforced hierarchical authoritarianism towards them.

The text emphasizes that discrimination by those

in power will inevitably occur if not controlled. This is demonstrated in the analysis of the HMSI (Honda) case, where individuals refuse to accept such discrimination and unite against powerful management. As a result, unions are formed. There are two types of unions depending on the nature of the business: trade and labor. Unions play a crucial role in ensuring economic growth by influencing management strategies that prioritize worker satisfaction and well-being. Without unions, desired outcomes may be hindered if workers are unhappy or stressed. Unions ensure that no injustices are inflicted upon the labor force.

Both sides of the same coin are evident in labor union dynamics. While unions initially work for the labor class and its welfare, their growing power sometimes leads to dictating irrelevant terms to management instead of negotiating for the benefit of both parties. In certain cases, unions align themselves with influential political parties, which can ultimately result in company closures and the loss of thousands of jobs. Furthermore, the closure of a major company also negatively impacts smaller businesses that rely on it.

It is crucial to regulate both management and unions as they play a significant role in the company's wellbeing. Therefore, it is essential to establish harmonious relations with trade/labor unions, ensuring their viewpoint is acknowledged. Tata Group is a prime example of a company that has successfully built such relationships with unions.

The HMSI case is interesting because the company wanted to pursue a nonunion model without implementing its planned HRM strategy. The company believed that by paying slightly higher wages than the industry average in the Gurgaon region, providing identical uniforms for

all employees, and offering appealing welfare benefits, it would be able to ensure employee commitment. The responsibility of handling HR issues was given to senior Indian managers who were primarily experts in production, not IR issues. Additionally, the Indian managers, who were hierarchical in nature, were indifferent towards problems faced by ordinary workers.

The company's HR policies did not align with its actual practices, resulting in a significant disparity. Managers acted as autocrats and abused their authority by imposing unfair restrictions on employees, such as denying legitimate leave requests and threatening termination. Employees were not treated respectfully or as individuals. In the era of globalization, labor is often considered disposable, leading to the widespread use of contract and casual labor. These workers played a crucial role in supporting the core workers' fight against management's repression. The workers called for a strike that halted operations and emphasized the important contribution of contract and casual workers in shaping this conflict.

To effectively address industrial relationships and cross-cultural issues, it is essential to implement an efficient Strategic Human Resource Management (SHRM) system.

Advancements in technology and society have brought significant changes to the corporate environment, impacting company culture, ethics, and organization. Traditional human resource management is no longer suitable for the global market's demands. As a result, strategic human resource management has emerged as an effective solution integrated into strategic management. It highlights the significance of prioritizing human resources by implementing policies that align with competitive strategies.

Strategic human resource management (SHRM) aims to align high-level management strategy with the changing needs of human resource management, such as adapting to competitive strategy, staff requirements,

and cultural shifts. Senior executives develop formal plans that outline the organization's goals and desired outcomes, guiding its direction and enabling rapid growth.

To be successful, an organization needs open communication, effective general meetings, a candid yet collegial atmosphere, and a productive relationship between management and workers.