Insights on Maruti Story_Kushagra Jhalani_HRLP035

The tragic Maruti incident has left the entire Business and specifically HR community shell-shocked. Before I move on to present my analysis of the root cause of the issue, let me highlight some of the most important contextual points relating to ‘before the strike’ situation:

·         There was clear lack of satisfaction of basic needs for workers – no proper rest breaks, drinking facilities far away from the manufacturing facilities etc.

·         The policies were not communicated to the workers effectively

·         There was too much of micro management by the senior management

·         There was extreme focus only on productivity and efficiency

·         The workforce, including the supervisors, was much younger as compared to that of Gurgaon plant

·         Decision making was highly centralized

So what could be the root cause of such an outburst? Here is my point of view:

The senior management focused enough on efficiency, but lost the ground when it came to effectiveness; efficiency is about doing things right – the management tried their best to ensure high productivity by putting tremendous pressure on workers to do more and more in order to get the numbers. But effectiveness, which according to me is more important than efficiency, is about doing the right things – and that is where the management failed big time. The best that Maruti should have done is to ensure ‘Effecticiency’ – i.e. doing right things in the right way! Let me explain:

The Maruti incident has reminded the business and HR community of the tremendous importance of maintaining cordial industrial relations. This subject was getting buried under the earth since quite long, and the HR community to a great extent kept losing its focus on maintaining the right ‘human touch’ in order to connect effectively with the workforce and therefore maintain peace, harmony, and happiness to a great extent. The Maruti HR department must ensure ethical and legally complaint decision making, as it is unjust to employ contract workers for the same job done by permanent workers, just in order to save some cost. When you try to save cost injudiciously, it costs you more in future.

It seems that the HR head was seriously lacking the ability to play a proactive and balanced role of true facilitator and collaborative decision maker, and had no knowledge or network to gauge the distress and dissatisfaction among contract/permanent workers. The HR head has to act as a fair middleman – who takes into account the expectations of both the senior management and the bottom of the pyramid. HR department must be armed with the arrows of ‘clear, complete, and effective communication’ in the quiver, to ensure engagement of all stakeholders.

The outcome of the negligence by senior management and the HR head is as follows:

·         Loss of a highly diligent and professional HR general manager Avanish Dev

·         Tremendous financial loss

·         Loss of brand image

·         Loss of trust between management and workers

·         Loss of market share

Also, the expectations in terms of level of autonomy, acceptability and suitability of micro management etc. are different in different countries. So outsourcing same ideology and practices to a different country without deep understanding of the different workforce and work dynamics is not the way to go.

In addition, the management hired very young people probably with the prime motive of saving some cost in the beginning. They did not consider various demographic related nuances while hiring – different people have to be managed differently.

The Maruti fiasco indeed reminds us of the fact that small nuances matter big time, and ensuring effective communication and strategizing towards benefiting all stakeholders fairly is at the deepest layer of the iceberg which should not be forgotten in order to maintain peace, happiness, and respect in the long term. I hope Industrial Relations as a subject gets the required attention and emphasis that it deserves, in times to come.

In the past, the need for labor unions came up due to unwarranted exploitation of workers by the management, which unfortunately in a few decades because of politicization and criminalization of trade unions seems to have turned vice versa as well. Many organizations encourage labor unions to promote so called ‘collective bargaining’ – atleast that’s what they say. But there are many organizations where there are no labor unions, because such organizations care deeply for its people and ensure the protection of their interests as a result of fair policies and practices. Such organizations ensure happiness of all their stakeholders including their junior most hierarchy of workers, and therefore happy people ensure happy numbers, automatically!

The problems shall cease if the unions exist for constructive purposes, and the same goes as well for the management. This will ensure peace, harmony, and happiness of the organization, its people, and the community at large; as long as the ‘human touch’ prevails.