Innovative Practices in Industrial Relations Part 1

[This write up was prepared for my speech on Nov 4, 2014 at the HR Meet of Hindalco. It is in four parts. Read the next part tomorrow: Nov 5, 2014. The fourth part carries summing up. ]
Part one: Is our idea of relationship moored in avoidance of dispute?
Now let us go back and reflect on our motives. When we discuss Industrial relations, we hear very often HR Managers say that ‘we have a very good relationship with our union – we have not had a strike for last so many years.’ Some go further and say ‘we solve our issues across the table – we do not have a single case in the labour court.’ So our idea of relationship is rooted in avoidance of dispute.
But not exactly. When we get married we create a relationship. And it is not based on avoidance of disputes. It is based on acceptance of the other party. When we accept friendship, it is not based on avoidance of disputes. It is based on acceptance of the other party.
So my understanding is that we must declare inclusion first, right at the beginning of the relationship. That is the game changer.
Here are two stories.
After we set up a factory near Hyderabad in eighties, sometime passed when we came to know that our employees have met one Mr. Basi Reddy who was considered a naxalite and who was usually underground. But he was leading unions in many companies and was known to be a union leader who did not hesitate to resort to violence. We then took an unusual step. We invited Basi Reddy to our factory. This unusual step actually surprised him. He was expecting resistance from us. We explained our people management policies to him and also told him that we practised productivity bargaining. The result was creation of an atmosphere of trust and confidence.
A workman in our factory remarked that at least two workers lose their jobs when a union is formed in an establishment for the first time. He noted that such was not the case because of the inclusive approach. Now the second story:

At ITC’s Ranjangaon factory they started all practices with the intention of keeping a close interaction with employees. But a union was formed. ITC then decided that if a union was formed they must do everything to foster good relations with the union. So a series of workshops were organised. This approach has resulted in essentially a healthy relationship. If you go to this factory you will see two boards or standees like you see those at the petrol pumps. One tells you that you are at the gate of ITC Factory. The other was also built by ITC in identical way – it tells you that ITC Kamgar Sanghatana leads employees. The signboard tells you of the inclusive approach of ITC without saying so.
It is not as if in both the cases there are no differences. What distinguishes these situations is that in spite of differences the trust is not shaken.
The next question which comes to our mind is what happens to the old factories which may not have practised such inclusive approach? Can’t they repair the situation?
I would like to tell you the story of Sandvik Asia.
Sandvik Asia was known for very disturbed industrial relations. The situation continued till about 1995 and there was a talk of closing down the factory. This factory was rated among the worst in the Sandvik stable. The new CEO arrived who was a Mexican. He put the consequences on table and asked the union to list all issues they wished to resolve. The union gave a list of 78 issues! It was later increased to 120 issues. The new CEO cleared all one by one. The issues were recorded and as the CEO cleared one he struck it off the list in the meeting.

[pic shows Sandvik Asia Union President and Gen Sec explaining their journey]
There was initial scepticism but gradually industrial relations changed for better. The productivity and pay both increased. The Sandvik Pune factory is now rated to be one of the best and managers from other factories of Sandvik visit to study the operations. You can see a general sense of pride and prosperity – many workers own cars today. The union says without hesitation that after initial skirmishes with the CEO, they developed a strong faith in his way of working and trust. Today the Sandvik Asia employees talk of that transformation. I have interviewed the President and Gen Sec of the Union.
So we know that ‘inclusion’ can be practiced anytime, healthy employee relations can be built, although it will be undoubtedly an uphill task.
But I am not talking about inclusion. It is about how inclusion can be practiced spontaneously, properly and innovatively.

Relationship is a mirror, it mirrors our persona. It tells people what we stand for and what we do not stand for. It tells people whether we are timid or strong. It tells people whether we are men of conviction and beliefs. And it tells people whether we are sincere in building relationship – with groups and with individuals.

Vivek S Patwardhan
“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others.”

Read the next part tomorrow: Nov 5, 2014