Industrial Relations: Barking Up The Wrong Tree!

This has been the subject matter of many a discussions. And all who are IR watchers knew that it was coming. You guessed it right; I am referring to the issue of lack of IR skills and expertise.

Businessworld has covered the issue of lack of IR skills and expertise in its latest issue of Oct 8, 2012. In a long report [Link], they have covered the full ground and explored this issue. I feel however that some aspects have escaped attention. 

Who is responsible for IR policies?
It is the CEO who spells out the real IR policies by his actions and deeds. For example let us see what is happening in Maruti Suzuki. Mr Siddiqui, the head of HR of Maruti Suzuki takes a cautious and politically correct stance: [quote, from BW report Labour Pains]

“Can external trade unions help improve industrial relations in practice? Not everyone is sure, but Maruti’s Siddiqui is positive. He says  the perception that ‘external unions are negative and independent internal unions are the best alternative’ needs to be revisited with an open mind in view of the critical need to have mature, capable and responsible union leaders in the first place, whether through external unions or an independent internal union.
“External unions, with very mature and capable leadership, guided by progressive ideology,  have played an effective labour union leadership role over the years, while there have been major failures of independent internal unions,” says Siddiqui.” [Unquote]

And this is what his MD said in January this year [TOI Jan7, 2012, quote] after emerging victor in his battle with union:
“I hope the workers in Manesar understand that an internal union better represents their interests,” said Maruti MD Shinzo Nakanishi.” [Unquote]

Can you make any meaning of this? Quite obviously, IR policies, in ultimate analysis, are determined by the CEOs. If they take stances which do not serve to lay down foundation of mature conflict resolution then what can the poor IR manager will do?

The CEO sets traditions by the way he resolves the conflicts
We must remember that the way conflicts are resolved by the CEO creates a tradition, it ‘programs’ minds of many junior managers. The stories of conflicts find their way in the ‘folklore’ at the organisation. This is where leadership plays a very impactful role. To focus on lack of skills of IR managers for resolution of conflicts is to hit the issue at a tangent!

We have to remember that a junior manager has many experts available for solving IR problems. And there are plenty of them still available. Many labour advocates are able to give, and they do give, not just legal but very practical advice for handling difficult situations. The IR manager, however, will find it difficult to cross the boundaries set by the CEO. Siddiqui’s statement which run in stark contrast to his MD’s serve as glaring evidence in support of this fact.

The real issue therefore is whether the CEO is paying attention to the organisational culture by creating processes for interacting with individual employees as well as interacting with unions. There is a wide gap in competencies here! [It does not make business sense for a business magazine to talk about it!] This is one of the most neglected areas in fast growing organisations, particularly manufacturing organisations. [There is widely held belief among the HR and IR professionals that unions are ‘bought out’ in service industries like hotels and hospitals.] Added to this is the fact that many CEOs of the manufacturing organisations are old timers with hardened [read adversarial] attitude towards unions and industrial relations. There are some enlightened organisations like ITC who revisit their actions, and get managers to collectively introspect on the relations they are creating, and attempt at spreading commonality of understanding on developing relations, but they are very, very few.

Generally speaking, IT/ ITES industry seems to be paying much more attention to culture [or at least that is what reports seem to suggest]. This is an obvious business necessity because the manpower cost is so high. Moreover retention is a big issue. In the case of manufacturing industries such a pressure is felt less acutely. Moreover, the approach to industrial relations is one of ‘acting out of fear’ rather than ‘acting out of hope.’

What happened at Pricol? There is a lesson to learn.
There was so much noise about the death of VP-HR of Pricol. Rightly so, nobody should be killed. But when you read the elaborate statement of facts on CPI-ML’s website [Link] on how the management flouted promises and you wonder who the real culprit of the killing of their VP-HR was. Was it the mob of people who were enraged or was it the management whose unfair practices provided provocations?

The Pricol story would only go to show that the CEO’s role in building good industrial relations cannot be under-emphasised. Maruti Suzuki management may have a lesson to learn here. In spite of their excellent press coverage the public opinion remained against them. Not without justification as we have seen. And that may provide a point for reflection to Maruti Suzuki too!!

Does the Press cover the positives in IR?
There are organisations like ITC, Marico which often have created innovative experiments in developing employee relations. Unfortunately those have gone unnoticed. [And unsung too! Understandably so, violence in IR makes a very juicy story in the Press, not creative and constructive work.] Such work has been done clearly with the encouragement of their CEOs. They have realized, in my opinion, that there is no point in just talking about values when those are put to test in full public view in IR strife; such CEOs have shown acute awareness of their role in translating the values for sound relations.

It is time to focus on CEO’s accountability to develop harmonious IR.
While there is a ‘wave’ about defining values, do we realize that the ultimate champion of values is not IR manager on the shop-floor, and not even the HR manager, much as he would like to believe, but the CEO! If you do not focus on CEO’s accountability to developing the harmonious Industrial Relations you are barking up the wrong tree!