This document is authorized for use only in IIM Rohtak's PG; HRM course by Prof.

Rama Shankar Yadav, Prof. Shanket S. Dash, Prof. Munmun Gosawami and Prof. Arindam Bhattacharjee from Dec 14,
2023 to Jun 12, 2024.

Indian Institute of Management

Ahmedabad IIMA/P&IR0195

‘Managers: We are katti with you’:

A narrative about union – management conflict at
Precision Parts Limited`
Precision Parts Limited (PPL) was founded in May 1985 as a joint venture company between
a highly diversified Indian business group and a state government. In 1984, the state’s Chief
Minister (CM) led a governmental delegation to different Indian cities for attracting
investments to the state. During his visit to the financial capital of India, he personally
invited the group chairman to consider investing in the state.

The group was particularly known for it’s patriotic roots and social commitments, and was
unarguably one among the leading Indian business houses. Under the new industrial policy
of the state aimed at the manufacturing sector, investors were offered an attractive basket of
benefits that included land at nominal rates, single window clearance and superior quality
investor escort services so that the approval and setting up process was free from
bureaucratic and legal hassles, un-interrupted power and water supply, exemption from
sales tax for ten years etc. Another powerful selling point was the comfortable labour
relations in the state and quality of human resource. In return, the investor had to set up the
facility in a place identified as industrially backward by the state government. Generally the
place would be politically important for the ruling party, hence non-negotiable. Most
places lacked adequate physical and social infrastructure, which the government promised
to put in place at the earliest. Though such incentives were not new (other states too offered
similar incentives), the group chose to invest in the state considering the general industrial
climate, growing political significance of the state in national affairs and quality of life.

The group chairman’s decision was to establish the much talked about auto components
business in the state and the decision had full backing from the group board. Key mangers
and inside opinion leaders always looked up to the chairman with reverence and this
decision too was readily accepted. The news was welcomed by the political and industrial
community in the state, and it got printed in the front pages of local language dailies. The
national financial press too hailed it as an important announcement.

With the group chairman’s blessings, a veteran manager from the group, who was
experienced in manufacturing was identified as the CEO of the yet to be incorporated
company. He was shifted to the group headquarters as special duty officer and attached to
the group chairman’s office. Shortly thereafter, a crack team of young, qualified managers
with enviable performance record (most of them were from sales/marketing) were
handpicked from different companies of the group, to help start the company. It was not
surprising, since that was the group chairman’s style and in that process many promising
young managers obtained high visibility assignments.

Seeing the team composition, some old timers quipped `these guys will sell ice to Eskimos’,
not a charitable remark considering the manufacturing/engineering tradition of the group.
Prepared by Professor Biju Varkkey, Personnel and Industrial Relations Area, Indian Institute of
Management, Ahmedabad.
Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for classroom
discussion. They are not designed to present illustrations of either correct or incorrect handling of
administrative problems.
© 2005 by the Indian Institute of Management, Ahmedabad.
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Incidentally, in the group’s informal set up sales and marketing activities were considered as
a soft function where failed engineers roosted.

Soon thereafter, in one of the formal gathering of top managers of the group (called Durbars
by the cynical ones) at the HO, the chairman challenged the auto components CEO to build
one of India’s best companies and in the same breath expressed confidence in the
capabilities of the startup team. He expressed desire that the group looks at both OEM and
retail business equally, adding that in future one cannot expect margins from OEM.
Alongside he did not forget to remind the gathering about the core values of the group that
included valuing the customer and employees as well as giving back to the society. On the
way to parking, some one was heard remarking `The old man is wise and still in full
control’.

The Enabling Environment

During early 80’s, forces of the first round of economic reforms opened the till then closed
Indian market to foreign investment and technology. The automobile sector too was getting
its share of attention as a sector to watch. Analysts predicted that India was poised to
become a future powerhouse in automobile and component manufacturing, thanks to the
untapped domestic market and the evolving business model of international auto majors
towards developing sourcing relationships with countries having low manufacturing cost.
The group was very new to automobile component manufacturing, except that it ran a
profitable national sales and service chain for a popular brand of trucks and buses. The
groups foray into the new line was speculated as the first step into a future line of business
i.e. automobile manufacturing.

Diversification necessitated that the group acquires required competencies in auto

component manufacturing business. Soon, technology transfer negotiations were initiated
with few big names. Around that time, the meeting with the CM happened and the group
chairman made the announcement. Internal talk was that there were extensive discussions
in the chairman’s office and one of the senior executives had visited the state for first hand
inspection.

The state government had pre-identified three growth areas for industries. As one of the
earliest acceptors of the CM’s invitation; the group had the luxury of choosing the best
location. The selected place was approximately 90 kms from the state capital alongside the
inter-state highway. The state government had made much progress in acquiring land for
the growth area. From start itself, the local community whose land was acquired had been
agitating for better compensation for their land and reservation in future jobs, and their
struggle had some political support. Since, the group had always given preference for
employing local community members; the news was welcomed by the agitators also. Slowly
the demand for better compensation also faded into the background. Same time, an Indian
electronic appliances company had also zeroed on to the same growth area, hence the state
government set up a joint escort facility to expedite both cases. The track record of the latter
in labour matters was different, rather known as tough employers.

Other than few tile factories, rice mills, a not-so-preferred government engineering college, a
privately run Industrial Training Institute (ITI) and a missionary school cum junior college,
the place did not have many large institutions to talk about. Many local youngsters who
had gained technical qualifications from the ITI (the engineering college admitted students
state wide, so majority students came from other parts of the state) had migrated to the state
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capital or even outside the state/country in search of employment. On hearing the

investment news, many of them hoped to return back to their homes by taking jobs in the
new companies. The group’s HR office was surprised by the sudden inflow of unsolicited
applications from all parts of India, many of them indicating that their prime motivation
was to get back home.

The ground breaking ceremony for Precision was a memorable event for the entire locality.
The CM announced that the inter-state highway passing through the locality would be
upgraded with help from multi-lateral lenders and the group chairman announced that the
company will not just make profits, but invest in upgrading the quality of life in the locality.

The next two years was very hectic for the PPL project team. The CEO and team shifted to
the state capital where a temporary office was set up. The start-up team included an
experienced HR Manager drawn from one of the group companies. The HR managers brief
included drawing up a post project organization structure, setting up HR systems and
readying the initial workgroup of around 300 non-managerial employees (shop floor
workers) for production. The planned start up strength in middle and junior managerial
levels were 52. All management staff would be graduates/professionally qualified
(engineers, accountants, HR, marketing/sales, logistics and administration) and the non-
managerial employees would be diploma holders or ITI trained. The broad classification of
employees was, the graduates/professionals would be the junior /middle management
levels of the company. ITI/Diploma holders were the shop floor workers, who were eligible
for protection under labour laws. Though lower qualified employees could have been
recruited at lower wages, the company decided against it. According to the HR manager, the
sophisticated production philosophy of the company required employees who were skilled
and capable of learning.

By end of year one, the senior management team of PPL had grown to 18 members, ¾ th
drawn from various group companies and rest recruited directly. The minimum work
experience of a senior management member was 14 years. The CEO directly liaisoned with
the HR to built the senior management team.

Recruitment for junior/middle management was done in a phased manner. It took around
18 months to build the team of 50, whose work experience ranged between 0 to 8 years, with
median experience of 3 years and average age 25. Twenty two of them were recruited for
sales/commercial and marketing functions.

All the new management level recruits were send for training (in three batches two for
technical and one larger group for non technical ) to one of the group companies, where they
were introduced to working with sophisticated machinery, advanced production practices
and Japanese quality tools. For technical types the training was for 12 weeks and others had
eight weeks training plus two months attachment in a selected group company. The
technical group was also trained in team work, communication skills, leadership and self
development.

Upon completion of the training, the technical groups were shifted to the site where they
worked alongside the project team or took up special projects. The sales and marketing
group was stationed at the PPL’s city office, which later became the Head Office. Rest were
distributed between the site and the city office depending on their function. The sales and
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marketing groups’ task was to develop the blue print for a national and international sales
network.

A high priority task before PPL’s HR department was to set up a training school for the shop
floor employees, who were yet to be recruited. A project team of six worked on it and
developed a report and implementation plan. All offices at the site operated from make-
shift structures and most of the employees stayed in rented houses (often shared) near the
plant. PPL management never favored their employees commuting daily from the city –
and on weekends company cars were available to visit the city for shopping etc.

The HR manager built an HR team of three, including a female HR executive. Services of a

reputed consultant were hired to help set up suitable systems and assist in recruitment of
the shop floor team. By end of the second year, the total strength of PPL had reached 274.

Considering the lack of housing facilities in the area, the group management had sanctioned
a self contained township near the plant. Parallelly, the township construction was
progressing and by the end of the 2nd year it was also ready. One of the last official
engagements of the chief minister was to inaugurate the township, which got soon filled up
with employees and few families. Results of the next general elections were not favourable
to the CM and his party.

For recruiting shop floor workers, the company conducted a nation wide campaign. The
focus was to recruit maximum numbers from campuses (ITIs and polytechnics). The
consultant was helpful in identifying campuses and the group’s national image helped to
attract good candidates. The compensation and other benefits promised were also good.
Close to 70% the initial workforce came from other parts of the state and outside. The best
benefactor was the local ITI, from where around 60 candidates were picked by PPL.
Approximately 20% of the workforce had prior work experience, selected from those who
responded to a national advertisement released in the consultant’s name. Six master
employees, with more than ten years experience were recruited from a competitor. To
accommodate them, HR created a special grade called floor supervisors. It was debated at
the senior management level and the final decision was that they will be helpful to the
company.

Precision management lived up to the image of being a model employer. The township had
rows of houses, a market place, an entertainment center and club houses. Houses were of
three categories, one single bungalow for the Plant Head, Officer/Manager housing and
non-managerial housing. In addition, two field hostels for single employees and three
separate club houses for Junior/Middle management, senior management and non
management employees were set up. Though the HR manager attempted to pool some
resources with the neighboring company, they had different ideas. Thanks to the projects,
the local market place also developed with few shops and eateries coming up. However,
most of the senior management and few middle managers preferred to live in the capital city
and commute daily. Many had grown up children, working spouses and hence living in the
state capital was better.

The city office also grew in numbers and it shifted to one of the most popular addresses in
the city. Sensing the growth opportunities in automobile component business and the
emergence of manufacturing bases in different cities, PPL decided to open regional (RO) and
state offices (SO). Regional offices were opened in six states where automobile
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manufacturers were based. RO’s kept track of OEM relationships and SO’s were responsible
for retail sales.

After five years of starting production, Precision employed around 1100 employees (all
inclusive) directly and provided indirect employment to half the number. Next to
production, sales and marketing employed 215, with 70% of them being managerial
employees. The sales and marketing department had its own HR manager seconded from
the plant and in many aspects like recruitment, training, work amenities and compensation
were different from the rest. The function was headed by a Vice President, who came from
FMCG background and he used to claim that `we have the best performing team in the
country’. In five years PPL was being talked as the Kohinoor of the Group – some jokingly
quipped that `Kohinoor is a lost treasure’.

PPL was among the highest paid manufacturing companies in the region and had attained
enviable record for per employee productivity. It’s performance in aspects like safety,
quality and HR practices were recognized locally and nationally. Even though the political
colours of the state government changed, PPL was always showcased as a model company.
The state government often took visiting dignitaries to the company and senior mangers
were frequently invited for talks and presentations.

Labour Relations at PPL

Never was the intention of PPL management to create a union free workplace. Most group
companies had powerful trade unions led by internal leaders. Many line managers from the
engineering stream were convinced that a strong union was necessary at the workplace. The
stress was on encouraging internal leadership, since the belief was external political relations
do more harm than good.

Thus after one year of starting production, when an informal group got together to form a
collective of shop floor employees, management actually welcomed it. In fact HR even
invited a reputed academic from Delhi and an independent lawyer for a three day training
program on worker leadership and rights, to a group of 28 shop floor workers. HR along
with line mangers and in consultation with the informal group of workers had finalized the
participants. None of the six master workmen or anyone from the sales and marketing were
nominated, which created some discontent.

Around that time, the group HR initiated a group wide employee satisfaction survey (ESS)
to gauge employees’ opinion on different counts. Though the overall scores of PPL were
high in factors like pay satisfaction, work environment etc. – scores were lower than group
average in worker participation, communication and representation.

In the internal management meeting called to discuss ESS, the CEO reportedly stated:

` We need to take a re-look at whether existing systems and activities that connect us with
our workforce are adequate. Some of the employees have been with us for last three years
and their life needs are also changing. It’s time to think of other alternatives’.

Within six months, PPL Employees Union (PPEU) was registered under the Trade Unions
Act 1926. Afterwards, the union applied to PPL management for recognition as the sole
bargaining agent for workforce, and it was accorded. Meanwhile a powerful union from one
of the group companies approached PPEU for collaboration; but it was not welcomed. The
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first union president was selected unanimously by workers, while for general secretary and
treasurer positions elections were held. The union president was a very active student leader
at the local ITI and had held state level leadership positions in student unions. His political
affiliations were also known to everyone. He was instrumental in seeding the idea about a
union and boldly interfaced with the management on union formation issues.

Post recognition, the CEO took initiative to call a joint meeting of all union office bearers,
where the companies’ financial and market position and future plans were discussed. The
managers were surprised by the number of questions asked by the union leaders. An
understanding was reached that such management-union meeting will be held twice a year
and union leadership will meet with HR department officials every month. Management
also intended to bring out a monthly newsletter and the union was allowed to keep a
separate notice board near the canteen. Though the CEO offered to get the notice board
done at company cost, the union refused.

Soon PPEU also came to be known as a model union and the president continued to be
always unanimously elected. Union elections were conducted bi-annually and the tradition
was to close work for half day with full pay (post lunch) for union elections followed by the
elected leaders meeting the plant management. Later in the evening they would travel by
the company car to meet the CEO and other managers at the city office.

Twenty years later

By March 31, 2004 Precision had grown to an INR 820 crore company with more than 1500
full time unionisable employees, and 250 + managers. In addition, the sales and marketing
team had strength of 281. At the plant and other offices, sub-contracted employees were
around 1000. The entire top management team had changed; some had retired while some
left. The current plant head was an insider, who was among the initially recruited group of
50. The CEO came from a group company and the VP sales and marketing was also from
outside.

The sales and marketing eam experienced high employee turnover and had lost its old
glory. At the plant average age had become 40, and they were the highest earning workers
among engineering companies in the locality.

PPL had much influence on the prosperity of the locality. As the early entrant who charted a
success story, it became the catalyst for local growth. Though there were other companies
also, none had the impact as PPL. The sleepy place had evolved to become an energetic
industrial town. Ten years after PPL was established, the state government upgraded the
local government to a municipal town and there were talks about further developing it as a
twin to the capital city. The town square was named after the group chairman (who was no
more) and a public hospital funded by PPL came up. PPL had also helped upgrading the
local ITI and convent school.

Early conflicts

The union and PPL management entered into collective agreements every five years. The
first one was signed after six months of PPEU obtaining recognition. Though there were
occasional skirmishes between PPEU and management none of them was significant
enough. The union was very co-operative to managerial challenges and management
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appreciative of the union demands. Some years before, the president had faced a difficult
time due to internal conflict; but was able to survive that.

The matter was trivial, but got blown out of proportion. Under the union – management
agreement; workers who had to go to the city on work were eligible to claim an allowance
for lunch. Few employees working in the offices or desks, who had to do so frequently,
used to take lunch at 11.00 AM (to manage the rush and shift timings lunch used to be
served from 11 AM) and then leave for the city. They used to claim lunch allowance also.
Management had issued a general warning, since it amounted to double benefit but the
practice continued. Subsequently, five employees were identified and disciplinary action
was initiated against them. A section of employees wanted the management to drop the
charges but the union president justified the management’s action. Though it was suspected
that in the next elections, he might loose, the fears were unfounded. However, few of the
union officer bearers who won elections were those who opposed the president’s stand.
General impression was that the charge sheeted employees were just silly; PPL paid enough
to keep a good life style.

One year later, the process of negotiating the next settlement was initiated by PPL
management. Unlike the earlier instances, the business situation was tough. Union leaders
had to work through conflicting internal demands, with a section putting pressure to act
tough. On the other hand, PPL management wanted to introduce a scheme for voluntary
separation and wanted the union to agree in principle to a scheme. Both sides were
inflexible and the consequences started becoming visible in the shop floor. For the first time,
production levels and per worker productivity came down consistently and PPL found
difficulty in meeting the requirements of its clients. Close to 180 employees were issued
charge sheets for violating production standards and four employees were placed under
suspension for instigating other employees. The union had given notice for indefinite strike
and management threatened lock out. After 12 days from issuing notice for strike, all
workers stayed out of work for one day and were in national news. For many managers that
came as a surprise – they never believed that union would strike work.

The same day, the state labour commissioner and industries secretary intervened in the
conflict and ensured that the workers entered back. In return, the management agreed not to
take any penal action against employees for one day strike, and both parties agreed to meet
at the negotiating table. Finally the settlement was reached, with unions managing higher
raises and the management was able to push through a VRS scheme. The performance
bar/work norms were also revised upwards. All charge sheets, except of those four who
were charged for instigating others were withdrawn, though union was able to get an
informal promise that no career damage would happen.

Post settlement, a liberal VRS scheme was introduced for employees with more than 15
years experience. The union president was among those who took VRS. Soon, management
withdrew the suspension orders issued against the four members, and within a week two of
them took VRS. One got a transfer to another group company outside the state, on the
grounds that his daughter had got admission to a technical school there. The fourth was
transferred from the shop floor to the premises department. The post strike developments
surprised many.

Two Years Since – blowing hot and cold

As each day passed, competition in the auto component business was increasing and so
were the opportunities. Low cost and high quality were the distinguishing factors, which
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would decide the future of PPL. China has evolved as a low cost manufacturing base and
few Indian companies had moved manufacturing to China. At the group HQ level, a
division exclusively focusing on opportunities in China was created and there was
speculation that future expansion of the group and PPL will be in China.

In the union elections conducted following resignation of the founder president, the
leadership underwent total change. Many office bearers were new faces at the union
leadership and most of them had got prominence during the period when the first conflict
was at its peak. The HR department also underwent a change, with the retirement of head
of HR and an entirely new team in place. Post strike, there were a spate of three resignations
in HR department, including that of a senior HR manager, who moved to head the HR
function in a nearby company. The new Head of HR was educated from a prominent
business school and had experience in multiple industries. The CEO was also just three and
half years in the company, so were few of the critical department heads. Though there was
an opinion to request the retired head of HR to stay back as advisor for one more year, the
CEO did not favour that. His view was that, irrespective of the circumstances such a move
would create unwanted precedence that many group companies were facing. He was
quoted as saying `new times give new challenges and require new solutions’.

At the union front, it was the newly elected general secretary of PPEU who was more
powerful. The President was not a prominent face nor considered assertive. The General
Secretary was considered as a very good worker, but at times was unable to keep his temper
in check. That election also witnessed break in a decade old tradition, though company
gave half day off – the ride to corporate office and meeting with CEO did not happen. There
was a cursory meeting with plant head and other managers that lasted few minutes. None
seemed to have thought about the city visit. Instead, workers took a victory procession
through the road and it ended with a public meeting at the township gate. Children of
workers sang songs and danced during the meeting – everything was unplanned, but went
on smoothly.

Union – Management (monthly meeting with HR and meetings with CEO) meetings with
the new team were very stormy and different from the earlier. Discussions were not focused
and often there were debates even about the wordings of the minutes. At the initiative of
the current Head of HR, all line managers were exposed to a one day training session on
employee service rules, relevant labour laws and handling indiscipline.

The training system was definitely one of the strength areas of PPL. It provided a steady
flow of trained hands (specifically ITI trained) into the company each year. That flow
ensured that PPL was not hit by shop floor employee attrition, which at 8% was slightly
above the regional average for manufacturing sector. Experienced workers mostly left PPL
either to join a newly started company or to go abroad. Even the trainees were in demand
elsewhere, and few regularly left for better offers. Though only top students from ITI’s were
picked from select campuses each year for the training program, each batch had a fall out
rate of 25%, due to the stringent training requirements. Thus each year approximately 40
trainees would join PPL as regular workers, after 12 months of training and evaluation.
Confirmation followed after one year of joining as regulars.

Since inception, the union had kept out of the trainee program and union membership was
given only after confirmation. In fact there were times, when union leaders had requested
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management not to confirm non-performers, a sign of unions ownership of PPLs work

culture.

Post VRS, union had at different times indicated to the management the need for fresh
employees in the company, against vacant posts. However, management was not keen to
induct more fresh hands and instead indicated that henceforth they will be offering trainees
contract appointments for three years. The union was also informed that the training center
was to be spun off as a profit center and the program may henceforth be on chargeable basis,
open to market forces. Management expressed inability to absorb successful trainees to fill
positions left vacant by VRS (on legal grounds) or positions that may come in future.
Immediately, the union advised all trainees not to accept the contract appointment and
promised they will fight for the cause of the trainees.

On July 1, 2004 three trainees who had opted for contact job were allotted to the machine
shop and had to report for duty. The duty manger was ready to assign them jobs. While, the
mandatory first day induction when new employees joined was not scheduled for them, the
HR-Head had agreed to meet them during his next visit to the plant. The union leadership
was present at the company gate when the contract trainees arrived, and requested them not
to enter the company. But they got passes from the security (attendance punching starts
after two days of joining) and walked towards the machine shop, with the crowd following.
In front of the machine shop, the union general secretary stood across the shop door and
requested them to go back. All three were silent and according to a manager who witnessed
it “looked terrified and one almost had tears”.

The duty manager came out of his cabin, adjoining the shop door and requested the union
general secretary to move out of the way. Duty managers’ cabin had two doors, one opening
into the shop and the other to the outside. The latter was next to the shop door, from where
workers entered and exited. The refusal by GS to move, made loudly, was greeted with
cheers from the crowd. One of the three trainees even started crying. By that time, other
managers including the senior HR manager posted at the plant reached the problem site.
Head of HR and other top managers were informed over telephone, and the Head HR
offered to reach the plant soon. The CEO was traveling, hence could not be contacted.

Unexpectedly, the duty manager called out to the three, `come with me’ and attempted to
take them through the cabin door into the shop. Stunned by the act, the general secretary
sprang behind the duty manager and pulled him back. Unbalanced by the sudden jolt, both
tripped and fell down. Immediately some of the workers pulled up both of them and in the
fall GS suffered a small bruise on his hand. Soon all workers returned to their workstations
and work went on as usual. Three contract workers joined for duty and were allotted some
jobs.

An emergency meeting of all managers was immediately called by the plant head. The
decision taken in the meeting was to suspend the GS and showcause all the workers who
had not reported to their workstations on time. (Instead of reporting straight to their work
places, many workers remained near the machine shop door.) In the afternoon, one of the
older workers and a former active trade unionist who had worked with the duty manager
during the initial years came and apologized on behalf of the workers. He requested the
manager not to press any police charge against the GS, since it will hurt the GS’s family. He
insisted that the GS did not have any intention of hurting, but in the whole act had suffered
from some bruises in his hand.
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The suspension order, detailing the nature of offence and quoting relevant points from the
standing orders was made ready and when the general secretary exited at the end of general
shift, the letter was handed over. Around 130 employees received notice to explain their
unauthorized absence, which was an offence warranting half day loss of pay according to
the company Standing Orders. Soon a crowd formed outside the gate and as mark of
protest, the GS who usually took the company bus, (unless he had to stay back in the union
office for some work – then he and other office bearers hitch a ride with any of the managers
who left office late) did not board. A good number of regulars in the buses, including few
women, stayed back and most buses went empty. As night approached, most of the crowd
dispersed. Though many managers passed by in their cars – few thumbed up for lifts.

All accused were asked to submit their reply to the charges within 48 hours. Though such
stipulation was a routine statement in the communication related to disciplinary issues
under the certified standing orders of PPL, the management was always lenient and allowed
more time to submit reply. Often, workers who received the charge sheet would approach
the union office and along with union leaders, they meet the HR Manager and request for
more time, which was always given. Nothing about extending time was there in writing –
but it happened in practice. Senior management was never against extending such
concessions, since the culture of the group was more about trust, direct communication and
giving space to employees.

In this case the GS or any worker never requested for time extension. In his reply, the GS
wrote that he had gone to the machine shop for trade union work and while turning he
slipped and tripped, and fell on the duty manager. He had received minor bruises in the
accident while the duty manger did not have any cut or bruises.

After pursuing the report, the company decided to dismiss the GS from services
immediately. Many managers were of the opinion that PPL should abandon the soft
approach and give the union a jolt. They had instances to quote, where workers were
becoming difficult to handle and often showed signs of insubordination. Many felt that
under the new union leadership some workers were becoming bolder, since the unions send
out signals to that effect. In addition, half day salary was to be deducted from the salary of
all 130 employees who had failed to report in time for work. The order about salary
deduction was to be delivered by special messenger to houses of each worker that evening
itself. The dismissal order was given next morning, handed over to GS in person around 8.00
AM by the security personnel at the gate and simultaneously posted on the company notice
board.

To quote the Senior Manager HR (Plant), who had coordinated the efforts: `We know that
the union may go to labour court and the case will not stay and the courts may ask us to take
him back. But that will take time, say 5 to 10 years would have passed and let’s see then.
Our intention is to send a signal to the employees that we can be tough even if it’s the
general secretary. The decision has full support of all the line mangers in the plant, because
after that things are going to be easy for them’.

One week later, the same manager remarked `Look at the impact – employees are now
coming on time, no extended tea, lunch breaks and unnecessary moving around or talking
in the plant.’
This document is authorized for use only in IIM Rohtak's PG; HRM course by Prof. Rama Shankar Yadav, Prof. Shanket S. Dash, Prof. Munmun Gosawami and Prof. Arindam Bhattacharjee from Dec 14,
2023 to Jun 12, 2024.

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One of the front line managers in the shop floor summarized the events as: `Once the news
that dismissal order had been issued spread, employees who were arriving for the general
shift, assembled in front of the gate. Many night shift workers, who were exiting, also
waited outside the gates. But when managers came in, including the plant HR manager and
plant head, they let them in without creating any hindrance.

Immediately an internal meeting of the plant management was convined. The plant head
and Head HR briefly conferred with the CEO, who was on tour. At 11.30 AM another notice
was put up asking the employees to get in and start working after lunch, otherwise the
company would take stringent action. The notice also stated that all those who had not
punched in (except for those who were on leave that day with prior intimation) will loose
half days salary.

That did the trick. Workers moved in (except few who decided to stay with the dismissed
general secretary) and started work. Those who did not were issued charge sheet the same
evening itself and it was posted on the company notice board. Never our board seemed so
small – some notices were pasted to the walls also.’

The aftermath:

To quote the Head HR `Have we won the battle – not yet. That afternoon, many workers did
not take lunch (the subsidized employee canteen had gone ahead with normal days lunch
preparation). Those in the shop floor noticed one thing – the floor was silent. No body talked
and even chatted up with the officers. Most questions were answered in monosyllables.
Remember we had a very friendly workplace, where we talked openly, shared emotions and
joked. That was what kept us going – it was fun to be working in the shop floor which was
so full of energy. Otherwise the whole thing of precision engineering can drive you mad.’

`As if there was some sort of barrier erected, production plummeted to the base minimum
requirement level where workers will not have to suffer wage cut. Otherwise, there was a
competition to break the earlier records and normal production used to be around 125% - a
sort of stretch target achieved.’

`The next day was more interesting. One of our maintenance engineers casually mentioned
that all employees have taken a wow or so, referring to a black band on both hands of both
male and female employees. The floor continued to be silent and cold.”

An assistant manager from maintenance added `My job involves attending to any
breakdowns that happen during the shift. Once there is a breakdown, the procedure is that
the concerned employee has to notify the maintenance and we rush to attend the same. But
they rarely called us to attend the minor defects, since they were capable of making amends
themselves.

We have a system that adjusts shop floor output against breakdown time on a pro-rata basis
for purpose of bonus calculation. I don’t remember many instances where we had to apply
that formula in the past, unless the fault was major. For small faults like a blown out fuse or
power tripping – they themselves handled it and often by the time we reach the spot, work
would have resumed. They took the initiative without anyone telling.’

‘Look at want happened yesterday – entire line had to be shut down since one of the
machines had an oil leak. A worker called us and just mentioned that the machine has a
This document is authorized for use only in IIM Rohtak's PG; HRM course by Prof. Rama Shankar Yadav, Prof. Shanket S. Dash, Prof. Munmun Gosawami and Prof. Arindam Bhattacharjee from Dec 14,
2023 to Jun 12, 2024.

12 of 12 IIMA/P&IR0195

problem. We rushed to the spot only to find that the entire team had taken seat in the bench.
None spoke till we asked what was wrong and when we finished they came back and
started working. Earlier, they were always there to lend a helping hand. Seems like a work
to rule’.

HR head concluded his interview by saying: `I definitely know that things are not bright.
Our group office is worried that we are sacrificing some core values of the company.’