for Sept-13 - Business Manager :: HR Magazine

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Questions by readers on variety ofproblems they face at work andanswered by Anil Kaushik ChiefEditor. Look at it. These may also be ofsome help to you.

Latest from theCourtsLatest verdicts from different High Courts and SupremeCourt effecting employer employee relations.4642

20-35

Government Notifications 44

Being tough pays sometimes 06Special Report Bajaj Auto Strike Case

Anil Kaushik

Organisation Culture

TheCornerstone ofBusinessSuccess

NADEEM KAZIM

For BusinessEndurance,Fortitude andSuccess...

DR. MANODIP RAY CHAUDHURI

Entailing aCulture toReckon with

SARITA DAS

To win, Createincubativeenvironment

DR. SUJAYA BANERJEE

We are whatwe repeatedlydo!

BIJU SEBASTIAN

DefiningPatterns...

DR. TANAYA MISHRA

All is possibleby setting

examples attop...

POONAM SHARMA

Building aculture of

repute

VIRESH MATHUR

CONVERSATION

How close are ourrelationships?

- Dr. PVR Murthy

19

GenerationalDiversity

BY SIMRAN OBEROI

41

ChangingemployeebehaviourOrganizations have to focuson changing behavior, notmotivating employees.

An article by NEESHU TOMAR37

Employeeempowerment:Don't let it failIn recent years, the term'empowerment' has become part ofeveryday management language. Inthe organizational context,empowerment is regarded asproviding a solution to the age-oldproblem of bureaucratic workplaces.An article byDR. YELLANKI NAGENDRA KUMAR 38

Diversity & InclusionUnleashing Human Potential

Unleashing human potential is about crafting situations that will helpleaders to recognize their inherent power to direct and strengthen thelives of their employees.This unleashing involves developing humanpotential of the individual, organizational and inter-organizationalcapacity.

An article by DR. ANADI PANDE 07Making CEOs succession work effective

One of the most critical roles CEOs play in succession planning involvesmentoring internal candidates and preparing them for leadership.

An article by K.S. AHLUWALIA 10

Why we're still failing with'change'!The truth is; various fields of expertise and disciplines are allnecessary for any change, big or small. The success of thechange will need the disciplines to work in harmony andalignment.

An article by NIMALAN NADESALINGAM 17

Making competition at workCompetition in the workplace is aninevitable part of worklife. It is usuallya good thing but at times may takean adverse turn when the employeesresort to unethical tactics to surpassothers.

An article by DR. ASHU SINGH & DR. REEMA CHAUDHURY 14

From Consultingto buildingorganisation

Business Manager September 201303

Chief Editor ANIL KAUSHIK

Associate Editor Anjana Anil

Hon'y Editorial Board Dr. T.V. RaoDr. Rajen MehrotraDr. V.P. SinghH. L. Kumar

Hon’y Research LeadIndranil [email protected]

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64

Need to protect employersfrom labour violenceIndustrial workers are, by and large, peace-loving andlaw abiding but their leadership, mostly controlled byfull time politicians, goads them to violence. Employershave to devise ways and means to combat the menaceof militancy by alienating the politicians and taking theworkers into confidence.

An article by H.L. KUMAR5456

58Need tounderstand eachother’s workingstyle BY MIHIR GOSALIA.-

Industrial Relations in IndiaAuthor : E.I. RAVINDRANATH

Human ResourceManagement volution and the Challenges Ahead

Author : V.K. SHARMA 60

62

JKLU Conference

PRIDE 2013- TheEntrepreneurs' Meet

DR. UDAY KUMAR HALDAR

TRENDNew idea to tackle strife

Shop floors withoutsupervisor? 63

IT hiring drops as industry prefersautomationTUs no to do away with EPSNational floor level minimum wage to raiseshortlyMove for policy on flexitime for women inTamilnaduStrikers of 108 Ambulance services inKarnataka dismissedTata Motors workforce rationalisedUnions leader sentenced life term for killingRamco DGM-HRLeft TUs threaten strike in Coal India

Business Manager September 201304Readers are invited to comment on articles published in BM through email at : [email protected], [email protected]

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RichThe cover story on workplace of next decade isfull of rich thoughts and an emerging reality asPraveen Sinha has said. Every contributor be itRajeev Dubey, V.P. Singh, Smita Sahoo,Githanjali, Raghavendra, Deepa or Nalin, haspresented the various dimensions of possiblemap of future workplace. From knowledgeeconomy to leadership to women empowermentto carrier progression to insight to I.Q. tounderstanding human being in its originalityhave been discussed in detail by theseluminaries. Every page of BM gives full value ofthe money. I have seen only this magazine whichcarry no advertisement and all pages are devotedto readers.-Prachi Kanodia

TimelyYour issue on workforce of next decade is verytimely. Both the existing managers and newentrants to the job market should understandthese trends. It is true that era of command andcontrol kind of management is fast eroding intothe oblivion. Hierarchy will no longer commandrespect nor authority. Even knowledge isbecoming commodity and is just a few clicksaway. So knowledge and experience (plainseniority) will also not command respect a leadershould have. Future leaders will be coaches andmentors and their primary job will be to developpeople and let them work to their potential. Thiswill become a highly desirable skill. No one willbe paid just to come to the office and be therefrom 9 to 6. People will be paid for their servicesand output, value of which will be decided by themarket forces of demand and supply.-Pankaj dixit

Need moreVery interesting to read on Work place of nextdecade. More emphasis has to be given tomanufacturing industry involving blue collaroperations e.g. Steel plant jobs , power plantoperations, manufacturing activities inorganisations like BHEL ONGC , HAL etc.-Raman kumar

Much betterI would like to congratulate the editor and theediting team. Due to various commitments at thesame time, I couldn't quite make it look cleanand trimmed. You all have made it look so muchbetter.-Smita Dash Sahoo

Effective visualsReally nice of you to incorporate the article ofMs. Ritu Mehrotra in your esteemed publication.The visuals placed in the article are reallyeffective and makes the article more impactful.Thanks for all the cooperation. Keenly awaitingthe hard copy of the magazine soon.-Mudrika Mishra

Not CSRVery much true Simron, Diversity is not a CSRactivity. It is only some companies do it for somesort of glorification. Which of the company canforego/compromise the quality and customercare to take care diversity. Diversity is just a partof overall strategic HR activities, not the otherway round.-Om Sitoula

Why blackThis month BM is yet another piece ofexhaustive digest for HR personnel.

Yet I want to ask you the reason you chose for theBlack colour in the front page. with the captionfor the next decade. I was told in China theWhite indicates sadness and grief. While blackindicates the happiness. Is it that you wantedthat India will excel China in the next decade. Iwish for it and also wish BM to be the top journalof the world . I hope you will explain thereasons for the black colour.-K.soundarraj

Must alignRajeev Dubey’s views on cover feature areexcellent. HR people must align to businessneeds on real time basis which will ensure themstatus of business partner.-Sanjay Panse

HelpfulRaghavendra K. aticle is Indeed helpful. Like it.-Sachin Patel

Well writtenI enjoyed reading the article of SudeeptoMukherjee which is very well written. It is oftendifficult to explain what coaching is and what acoach does - he has done a great job of explainingin a simple and clear manner. Congratulations.-T.V.Srinivasan


Anil Kaushik

Organization culture is one of those important areas of business that is neither fullyunderstood nor utilized to get success. It is difficult to define it in absolute terms becausethere is no culture absolute. It is relative. It is not feely component. It is not intangible. It isnot vibe. It is one of the most important drivers that if not evolved, set and nurtured over aperiod of time consciously, will not bring long term sustainable success. Culture of theorganization is the shadow of the leader. It cannot be manufactured. It has to be genuinelynurtured by everyone from the leader top down.

Now it comes to understanding what drives the culture of an organization? Is it power or ego of theleader? Is it encouragement or empowerment at all levels? Leadership fuels culture andculture fuels actions that consistently reflect values and beliefs. Having values and beliefson papers in board room is one thing but making them alive and modeled throughout isanother thing.Bringing the values of the organization to the life of the employees is the roleof HR people. To create value driven culture, you have to hire persons using values as filter.Authenticity and value have long life.

Vibrant work culture requires openness, cross department collaboration, encouragement,empowerment, team work, trust, transparency and high EI (emotional intelligence) ofpeople. It requires environment to flourish. Environment is built up by managers throughstrategic clear communication to behave, act and decide in a way that make values andbeliefs alive. High EI of managers helps building environment that energize people.

HR professionals have the opportunity to act as culture builder because HR practices havesignificant, positive and meaningful relationship with organization culture. Such practicesbecome the means whereby work culture is created, developed and maintained.HR canbecome powerful lever for shaping the culture.They are key internal catalysts for supportingand enabling the organization values. HR has to move from subject expert givingoperational excellence to culture builder of the organization.

While the values of the organization are set by top leaders, it is HR that needs to act as mirror ofthose values and facilitate leaders in taking decisions that support and nurture those valuesset by them. It can also be a challenge for HR to influence the thought process of businessleaders in this respect.

This month's cover theme is about organization culture. Management thinkers, professionals andexperts from different industries and business organizations have captured the subject,discussed different dimensions, raised possibilities and posed many questions too for all ofus to ponder.

If you like it let us know. If not, well, let us know that too.

Happy Reading!

A leader’s shadow




Special Report

The fifty day long workers strikeat Chakan plant (Pune) of BajajAuto ended on 13 August 2013 withthe workers union unconditionallycalling it off and deciding to go towork from 14 August 2013. Around80% workers reported for worknext day. Workers union called forstrike on 25 June 2013.

It can be termed as a case where toresolve the industrial relationsstalemate created by workers union oncertain unrealistic issues far fromeconomic reality, if you take a toughstand; it is bound to bring results dueto conviction to the cause.

In management-labour stand off,resolving the issues may be easy, butselling the solution to workers is byand large difficult. This has happenedin Bajaj Auto case where union leaderspushed themselves to a wall fromwhere there was no exit, but tosurrender by withdrawing the 50 daylong strike unconditionally.

Strike has never brought win-winsituation in labour managementrelations. This should be properlyunderstood by workers and theirunion leaders. Union leaders in thiscase made mistakes one after anotherand the consequences are catastrophicfor workers, because they did not getanything and have lost 50 days wages.22 workers are subjected todisciplinary proceedings. It is not lossof salary but also a loss of self respectand pride for workers. Union leadershave made the workers laughingstock. On the other hand managementalso lost sale of around 20,000 units inJune alone.

This is the first strike at theChakan plant of Bajaj Auto in its 16years of operations.

Management and workers unionexecuted an agreement in March 2010for 9 years which lasts till 2019 with aclause that provides wage revision inthree years. This wage revision was

due in March-13. But unionarbitrarily terminated the ageementand raised demands on themanagement. According to labourdepartment workers demanded anannual hike of Rs. 10,000/- with anadditional correction of Rs. 5,000/-apart from benefits of variabledearness allowance. The union hadthen submitted separate list of 37demands which also seek clarity on thecompany’s promotion policy, eligibilityfor a housing loan of Rs. 5 lakh,education loan of Rs. 2 lakh andmarriage loan of Rs. 50,000/-. Unionalso separately demanded a workstudy at the site to measure how muchproduction is possible in 480 minutes.

Over and above union madeaudacious demand of allotting 500shares of the company to each workerat Rs. 1/- only. The point here is toanalyse what inspired workers unionto raise such a absurd demand.Probably due to leading perceptionamongst workers that automation andimprovement in productivity hasresulted in a significant growth inprofitability of the company and thebenefits are not being shared equitablyby the management, union withoutgiving a serious thought raised thedemand and gave workers a false hope.

Management moved to IndustrialLabour Court against the workersunion by filing unfair labour practicecomplaint and declaring the strikeillegal. Union had no moral courage toface the court and avoided to take thenotice. In the mean time managementshifted the production to Aurangabadand Waluj plant and also kept Chakanplant running through trainees tosome extent. From the very beginningmanagement strategy was to be toughon the issue of discipline and sharedemand and make workers hiring.Further Bajaj Auto M.D. statementthat the company will not agree to thedemand to allot shares to employeeseven if the strike goes to for 500 days as

even the top management has not beenallotted shares, built further pressureon workers and union leaders.

Actually employees stock optionshave never been offered to blue collaremployees’ in Indian manufacturingindustry. This practice has only beenwith few IT Organisations. TataMotors and Mahindra & Mahindraallotted shares only to topmanagement in the R&D division andnot to workers. In manufacturingculture loyalty of the employees cannotbe bought by giving shares to them.Moreover, the ESOP has never been apart of union negoiations in Indianindustry. It can be said that Mr. Bajajhas done a good job by rejecting thisdemand firmly from the day one. Hisstand has insulated the entiremanufacturing sector of the countryfrom such absurd demand of unions.In future workers unions will thinktwice before raising such demand.

Side by side management alsosuspended 22 workers who were foundinvolved in various issues ofindiscipline and go-slow.

At the end, workers union could notget even a face saving medium.Suspended workers have not beentaken back and management onlyassured that suspension cases wouldbe considered “objectively andsympathetically”. The cause as well astiming of the strike was wrong. Theyhad to call off strike without any oftheir demands-including substitutingnew wage agreement-met.

The lessons from Bajaj Auto case areclear-management should nevercompromise with their basic businessvalues and principles. In labourmanagement conflicts, opting for shortterm peace will surely breed long termproblems that develop in to morecomplex relationship and lastly workersunions should demonstrate enoughmaturity while raising demands. Beingtough in IR is not bad always.

Bajaj Auto Strike Case

BEINGTOUGH PAYSSOMETIMES

Anil Kaushik

BM

Most nations across theworld have embraced freemarkets to maximize onsocial welfare.Concomitant with this

embrace gives rise to risks for survivalalong with opportunities for growth andperformance. And, thus enters therationale for strategic management.Strategies are theories1 that firms use tocreate success in competing against theirrivals in these markets. Strategicmanagement is the process to form andimplement these strategies.

Capabilities are known to be moreimportant than external context indetermining performance! Strategicmanagement literature acknowledgesthat destiny of companies is shaped by:

a) The external environment thatcomprises the larger generalenvironment and the competitiveenvironment; and

b) The internal strategies, resources andcapabilities of the firm.

The latter perspective is popularlyreferred to as Resource Based View(RBV) of the firm. Having establishedthis fact, researchers2 undertookempirical studies to assess which of the

two is more important. Thesestatistically validated studies haveconcluded that that it is the RBVperspective that dominates. It is morethan twice more important than theexternal environment in shapingperformance of firms. It emphasizes onthe fact that a key role of leaders ofbusiness enterprises is to embedcapabilities, competencies andknowledge in the enterprises to ensuretheir competitiveness. It would besimplistic to interpret this as stating thatleaders can take their eyes off theexternal environment. On the contrary,this is to reinforce that as theenvironment changes, the role of leadersis to continually reshape peopleprocesses and capabilities such that theycontinue to compete successfully.

Therefore, it is not the firms thatcompete; it is the organizations thatcompete! To emphasize the latter is toreinforce the human perspective as thebasis for success of all enterprises. Thethree fundamental resources available toorganizations in strategyimplementation are – capital,information, and people. People are theleast fungible resource and thereforemost strategic and hence the only one


Unleashing HumanPotential

DR. ANADI PANDE

Vice President (HRM, Corp. Planning & Strategy), Hero MotoCorp Ltd

Unleashing human potential is aboutcrafting situations that will help leaders torecognize their inherent power to directand strengthen the lives of theiremployees. This unleashing involvesdeveloping human potential of theindividual, organizational and inter-organizational capacity.


that can be the basis of competitive advantage3.People capabilities, competencies and knowledgeare inimitable by virtue of being not completelyexplicit and inherently tacit and implicit. Hencethese cannot be imitated easily.

The role of organizations is to create anenvironment that invigorates all! From the above itbecomes apparent that if organizations have tosucceed in the changing environment, the need is tocreate an atmosphere where organizationallearning abounds; where individuals feel passionateand invigorated. The context of such anenvironment is beautifully exemplified bySumantra Ghoshal in the book titled "The RadicalChange"4 it goes like this: let us say that you visitBara Bazaar in Kolkata in mid-summer. Now forthose who have not been to Bara Bazaar, let usdescribe the place. It can be quite a chaotic place,where one can buy everything from a pin to a plane(please ignore the exaggeration). There is haggling,shouting, soliciting. In mid-summer, there can bedin and dust, where crowds jostle and maybe if youare not so lucky, maybe, your toes may be steppedover and your ribs elbowed into. What do you doafter completing your errand at Bara Bazaar? Yourun back to the air-conditioned comfort of yourroom and feel enervated. You want to rest toreinvigorate yourself.

Now imagine you are on a trip to the foothills ofHimalayas adjoining the Rajaji National Park. Asyou throw open the window of your room, thegreenness of foliage and the chirping of the birdsbeckon you. As you step out, the fresh and crisp airof the woods reinvigorates you. As you break into ajog, jump up and catch a branch, pick up a twig andhurl it into the air, you suddenly realize that you arehumming a melody.

The interesting realization is that it is the sameyou, who was enervated and fatigued in the BaraBazaar, while it is the same you who is invigoratedand revitalized, and full of energy. What haschanged? - Certainly the environment. Environment

can change people behaviour and the mostimportant role of leadership is to create such anenvironment where all feel energized, happy and fullof vitality, ready to unleash their energies.

Unleashing and directing humanpotential requires leveragingstructure, system and leadership!5

Organizing work is about structures! PeterDrucker6 tells us that in the 1850s, by the time KarlMarx was beginning to write Das Kapital, thelargest manufacturing company was ManchesterCotton mill which employed fewer than 300 workers.Now 16 decades later, it is not uncommon to comeacross organizations that could employ upward of1000 times more people than then. As people ofmultiple disciplines join organizations to contributetheir skills and knowledge in the furtherance ofenterprise interest and goals, organizing workbecomes a complex task. Greater the diversity ofskills and knowledge, greater is the complexity thatneeds to be dealt with. Putting these people to workas teams, align them to the overarching enterprisegoals becomes the most important singular task ofmanagement.

This is achieved through organizationaldifferentiation (separation of those carryingspecific skills and therefore roles into separatedepartments). This separation brings dysfunctionsof conflicts, non-alignment and what one has heardsenior executives lament – ‘Why cannot stupidpeople like you learn to work in teams?’Interestingly, the same executive found it difficult tounderstand that maybe it is his/her inability toorganize work that is causing the dissonance!

As organizations confront increasingly complexexternal environment, brought about by theirexpansion into new markets and geographies, I amconvinced that such adaption plays out bygenerating equally complex internal organization.

In short, response to management ofexternal complexity is through designand adoption of equally complexinternal organization of work orsimply more sophisticatedorganizational structures. Matrixstructures are one such response,which is inherently more complex

than as simple functional structure.

There may be many more forms anddesigns of organizations. The question

arises, what can organizations do to createand make the complex structures work? My

belief is that higher competencies allow themanagement the ability to manage such

structures better and efficiently. To explain thethought, “Do you have managers in your

organizations who can negotiate across nebulousauthority structures, who can build consensus indiverse group of people and need not necessarilydepend on ‘command and control’ style?” If theanswer is No! Then you might as well forget aboutorganizing your work around matrices!


Unleashing Human Potential

Systems must alignindividual aspirationswith organizationalgoals! Systems areprocesses for supplyingcommensurateresources to theorganization whileensuring that theresources are put totheir intended andeffective use.

Therefore, the tussle between external adaptionand slow adoption of optimal structures can resultin significant conflicts and disorientation within theorganization, thereby inhibiting the proverbialinvigoration and revitalization – the theme of thisessay. Is it surprising then that Leaders are expectedto be organizational architects?7 Structures aretools to implement strategies that leaders mustutilize skillfully. These shape the environment andtherefore behavior of people. Structures that arealigned to strategy minimize dissonance and allowpotential of all to be unleashed to the advantage ofenterprise.

Systems must align individual aspirations withorganizational goals! Systems are processes forsupplying commensurate resources to theorganization while ensuring that the resources areput to their intended and effective use. They are likethe organs and physiology of human body whichmakes the body deliver its intent whereas structuresare like the skeleton of the body.

Recognize and alignOne fundamental principle that I believe can

really unleash and direct human potential is to firstrecognize and then align individual rationality ofself-interest maximization to organizational goalsand interests. This shrewd insight is eloquentlystated by Adam Smith8 , when he states that thebaker maximizes social welfare while serving hisself interest of converting wheat into bread. Toexemplify, let us say that you are trying to create SelfDirected Teams (SDT) for your organization withthe hope that it would make your organizationleaner, and therefore more cost effective, moreresponsive. The issue arises, are you willing topartake the benefits of saved salaries with the team?If not, forget the SDT! Another example is that let ussay your organization is in pursuit of innovationmanagement. Let us also say that as part of this,

your organization wants to encourage patent filing.Now if you design a reward system that linksindividuals’ patent filing success/steps withrecognition and you top it up with monetaryrewards for all them, you bet, your patent filingwould explode favourably. In my experience, theseare simple truths which we refuse to recognize dueto our absence of empathy or simply arrogance.

Smart goodness!Leadership is about practicing ‘Smart Goodness’!

This brings me to the last but the most importantlever of all to unleash and direct human potential.When leadership fails in human society, it can betermed as the failure of this principle. It is epitomizedby a video that I recollect having watched almost adecade ago, which has left an indelible impression onmy mind. In this video, a Harvard professorinterviewed the legendary Jack Welch and asked,“What do you believe is the role of leadership?”Chronologically, those were possibly the closing yearsof Welch in GE. Welch was by this time credited withleading major transformation in the company whichis the largest conglomerate of the world.

He had successful steered it through the choppydecades of 80s and 90s. He responded by stating thatthe perspective of a leader should be to look at anorganization as a garden of plants; and the role ofthe leader is to hold a can of fertilizers in one handand a can of water in the other hand and to keeppouring. Some plants would grow and flower, otherswould not. The ones that do not, would need to weedout. Yet the leader must keep pouring the water andfertilizer in the garden.

There is no doubt that it is leaders such as Welchthat can really unleash true human potential. Theyare equally empathetic to their shareholders by notfrittering resources on weeds, yet they have thesmartness to realize that it is the organizations thatcompete and not dehumanized companies!



Unleashing Human Potential

1. Barney Jay B., "Gaining And Sustaining Competitive Advantage", Second Edition, Pub: Prentice Hall of India Pvt. Ltd., 2002 2. Rumelt Richard P., "How Much Does Industry Matter?" Strategic Management Journal,Volume 12, Issue 3 (March 1991); McGahan Anita M, Porter M.E.,

"How Much Does Industry Matter, Really?" Strategic Management Journal, Volume 18.3. Op.cit., ref 1.Barney has created a VRIO Framework to assess the competitiveness of resources that provide sustainable competitive advantage.He has

concluded that those resources that are rare and cannot be imitated become the basis of sustainable competitive advantage.4. Ghoshal Sumantra,Piramal G.,Bartlette C.A.,"The Radical Change - What Indian Companies Must Do To Become World Class",Pub:Penguin Books India,20005. Miller, Alex, "Strategic Management",Third Edition, Pub: Irwin McGraw-Hill, 1998.6. Drucker, Peter F., 'The Essential Drucker, The pre-eminent management thinker of our times', Pub: Butterworth Heinemann, Printed by Replika Press

Pvt. Ltd., New Delhi, 20017. Op cit ref 58. Smith, Adam, "Wealth of Nations" Pub; 1776

One fundamental principle that I believe canreally unleash and direct human potential isto first recognize and then align individualrationality of self-interest maximization toorganizational goals and interests.

BM

While CEO succession ismuch in the news, it isoften discussed from thepoint of view of boardmembers, consultants and

search firms. To understand theperspectives of today's CEOs onsuccession planning, a survey involving18 sitting CEOs, one recently retired CEOand one sitting chairman was conducted.

To gain varied perspectives on thisimportant topic, this interaction hadmeaningful insights with CEOs from avariety of industries and differentcompany sizes, with our sample groupadmittedly weighted towards largerpublic companies. Nine of the CEOsinterviewed had been internal candidatespromoted to the CEO role, six wereoutside hires and three were boardmembers who stepped into the CEO rolein unanticipated circumstances. Theyshared practical suggestions on how tomake CEO succession work moreeffectively for the company, the board,potential candidates and the CEO.

The New Role of the CEOin Succession Planning

All agree that the days of CEOs

controlling the succession process arelargely gone. "I still see sitting CEOs thatwant to control the process of bothdeveloping and selecting their successor,but those days are coming to an end," saysEd Kangas, retired CEO of DeloitteTouche Tohmatsu.

"I think the days of the imperial CEOare long gone but while they lasted,succession planning was a subject that aCEO could defer," noted James Cornelius,CEO of Bristol-Myers Squibb. "In today'sworld of governance, it's impossible todefer what is probably the mostimportant decision, namely who will bethe next CEO."

Most describe an effective CEOsuccession process today as a partnershipbetween the board and the CEO. While theultimate decision rests with the board,the CEO nonetheless plays a critical rolein the succession process. "The board isthe ultimate decision maker about whothe next CEO should be," explains DonShippar, CEO of Allete. "The CEO,however, needs to weigh in on issuesabout what's important in the CEO job,and the criteria for someone to besuccessful in that job, and should help theboard to come to agreement on thesethings."


Making CEOs successionwork effective

K.S. AHLUWALIAExecutive Coach and Mentor -Excalibre

One of the most critical roles CEOs play in successionplanning involves mentoring internal candidates andpreparing them for leadership.

Formal executiveassessments areincreasinglybecoming animportant featureof the CEOsuccession planningprocess.

A similar view is expressed by Bill Mitchell, CEOof Arrow Electronics: "I see the role of the CEOworking with the board on succession planning asbeing essentially a 'first among equals.' The boardshould give guiding direction on CEO successionplanning, but it's the CEO who has to drive thesuccession planning process forward.

After all, the CEO knows the job - he/she is inthat job. He/she also works with the executivesevery day."

Andrew McKenna, chairman of McDonald's,echoes the importance of the board/CEO jointworking relationship on succession planning."Succession planning involves a combination of theboard and the CEO working together," he says. "Theyhave to be aligned: The CEO needs to know how theboard is thinking and the board needs to know howthe CEO is thinking about this important issue."

Mentoring CEO CandidatesMany pointed out that one of the most critical

roles CEOs play in succession planning involvesmentoring internal candidates and preparing themfor leadership. "I think one of the key duties of aCEO is to ready candidates to succeed as his/hersuccessor," asserts Steve Odland, CEO of OfficeDepot.

"The CEO really leads the candidate developmentprocess," agrees Alan Wilson, CEO of McCormick."And that takes a lot more than just sitting in youroffice. You need to actively work at this, which couldinvolve making global trips, doing some thingssocially and really taking people under your wing toexpose them to the intricacies of the job."

Planning requires the CEO to find appropriate"stretch assignments" for the candidates to helpthem round out their leadership capabilities, as BillJohnson recounts doing as CEO of H.J. Heinz. "Icreated an Office of the Chairman so the top four tofive candidates can see the inner workings of thiscompany," he says. "I send them out with just ourhead of investor relations to the street.

They'll make presentations, they'll meet withshareholders. When I'm not there, they represent theorganization. I want to understand how far I canstretch them. And I know the investors well enoughthat I hear back not only from I.R. but frominvestors, too, about how they did. Four of thecandidates are running each of the four major cross-company task forces, which allows me to assess howgood they are at coalescing people that don't reportto them directly, building teamwork andmomentum." Formal executive assessments areincreasingly becoming an important feature of theCEO succession planning process. "We do 360[reviews] with all of the executives, including me,"

reports Carlos Cardoso, CEO of Kennametal. "As aresult of those 360s, there's coaching and feedback."

Peter Sodini, CEO of The Pantry, finds value in"using an external consultant to test all of oursenior people," while Graham Edwards, CEO ofMidwest ISO, describes the use of "templates and amatrix to identify the leadership skills we want, howlong it will take people to get there and the gaps."

Board ExposureThe CEO also needs to find opportunities to give

the board meaningful exposure to internalsuccession candidates. Phil Urban, CEO of GrangeInsurance, underscores the challenge that boardsface in making a CEO decision from the limitedexposure most get to prospective candidates: "Theboard just sees snippets of potential future CEOcandidates in their roles and yet they have to make adecision about which of them is the best futureleader based on this narrow window. That's like ayoung man taking a young woman to the prom, tohomecoming and to dinner at his parents' house andthen having to decide if she's the woman he wants tomarry."

Joe Herring, CEO of Covance, offers someinsights on how he's addressed this challenge. "Fromvery early in my tenure as CEO, I have been lookingfor ways to give the top candidates, who might oneday be my successor, exposure to the board," he says."I've had them attend board meetings and dinners.I've also had board members make site visits to seethem and their teams where they work."

At Becton, Dickinson and Company the top threecandidates spend one-on-one time with boardmembers. "They present at board meetings but alsohave informal time with board members, where they



Making CEOs sucession work effective

Working with the board is probably oneof the most essential components of anyCEO's job. Yet most internal candidateshave relatively little board experience.

spend an hour or two and have lunch so the boardmembers get to know the candidates on a morepersonal level," says CEO Ed Ludwig. "Boardmeetings are important but they tend to be verystructured and business driven. Getting to knowmanagement members better through one-on-oneinformal interactions is an important step that boththe board members and candidates find valuable."

Board ExperienceWorking with the board is probably one of the

most essential components of any CEO's job. Yetmost internal candidates have relatively little boardexperience. As such, building a successioncandidate's capabilities in working with a board wasviewed as a critical area that CEOs need to focus onin preparing their successors. "I had 23 years ofexperience when I became CEO and was prepared inmany ways, but I wish I had more experience withpublic boards before I became CEO," says AndrewLiveris, CEO of Dow Chemical.

The majority of CEOs interviewed stronglyendorsed the idea of having succession candidatessit on another board. "I found the experience ofsitting on another board extremely valuable,"explains Wilson. "It allowed me to see how differentCEOs work with the board, how different boardswork together. It exposed me to differentconsultants, different audit firms, different ways ofdoing strategy and succession planning - and all thethings that a board is responsible for. I think it is akey development exercise for my successor to getexposure on another board."

Bill Mitchell discovered that if he wanted to givehis top candidates board experience he had to play arole in helping them find boards to sit on: "You can'tjust hope the phone will ring from the search firm,"he says. "I think that's something very importantthat CEOs can do as part of mentoring theirsuccessors - actively helping them find a position onanother board that will give them the valuableexperience of sitting on the other side of the boardtable."

However, Herring expressed reservations abouthaving succession candidates serve on outsideboards. "I'm not a fan of having your top candidatesit on another board," he says. "I know of twoinstances where this happened and within sixmonths, the candidates were offered jobs by thecompanies on whose boards they were serving." Togive internal candidates exposure to board issues,he recommends sending them for director trainingand having them sit with the corporate secretary togo through the by-laws, committee charters, etc.,which, dry as it sounds, provides context for how theboard operates.

How Soon to PlanInterviewees emphasize the importance of an

early start. Liveris, who studied 22 CEOs early in histenure of becoming a CEO himself, says, "One of thethings I noticed immediately was that the very bestCEOs set in motion a succession process on DayOne."

"Three or four years is actually a really shortperiod of time when you're talking about groomingexecutives to become CEO," notes Mitchell. "Westarted this process six years ago, shortly after Ibecame CEO. I would urge most CEOs to startworking with their boards on CEO successionplanning five years before they expect to be doing aCEO transition."

That said, Cardoso asserts that having CEO-readycandidates within the organization well before anopportunity might be available for them to ascend tothe CEO role can create flight risk. "If the candidatesare ready for the CEO position prior to that positionbeing available, you run the risk of losing thosecandidates," he says. "They go on to otheropportunities because they're ready to be a CEO.

I think you have to create a challengingenvironment internally to keep these kinds ofpeople engaged so that their jobs continue to beexciting for them. Even then, you may see them go ifthe right offer comes their way."

Internal vs. ExternalNearly all feel it is incumbent on the CEO to

ensure that there is an internal candidate pooldeveloped for the board to consider, so as not to beforced to go outside. "When it comes to the CEO job,I don't care what company it is or what the cultureis, if you haven't developed someone to take yourplace - and done so effectively - you've failed in yourjob as CEO," says Jim Skinner, CEO of McDonalds."You've failed the board and you've failed theshareholders."

However, some express concern about the boardbecoming too doctrinaire in the need to have a setnumber of internal candidates as a best practice."Many boards now judge their effectiveness bywhether they have a pool of two internal CEOcandidates," explains Urban. "My concern is thatthis can lead to a'box-ticking' approach rather than asubstantive approach. For example, just having twonames of internal candidates would meet this test.


Today's CEOs feeltheir role in

succession is moreimportant than

ever - in partneringwith the board on

succession,developing a pool of

candidates andmentoring

candidates to thepoint that they can

successfully stepinto the CEO's

shoes.


But the real test should be choosing a future CEOwith the right capabilities to be a successful leaderof the organization."

The vast majority of the CEOs expressed apreference for an internal candidate as a successor."I believe succession should come from within forabout 80 percent of the cases," says Odland. "I likenit to merging on a freeway. It's really helpful ifsomebody can merge on a freeway at speed and notbe disruptive to the flow of traffic. Often, peoplefrom the outside have trouble doing that simplybecause they don't know the history of the company,they don't understand the culture and they don'tknow the people. There's a big learning curve forthat individual that inevitably slows things downand can take the company off track. So I think thebias of boards should typically be to develop peopleinternally and ready them for the CEO position."

However, several CEOs pointed out that anexternal candidate can be preferable in certaincircumstances. "When you have a high growthcompany, it can be preferable - in some cases eveninevitable - that you will have to find someone fromthe outside who has broader experience in a largerorganization in order to take the company to thenext level," says Peyton Patterson, CEO ofNewAlliance Bank, who was hired to the CEO roleas an outside candidate.

"I think we, as CEOs, have an obligation todevelop inside candidates," says Miles White, CEO ofAbbott Laboratories. "But a company may choose togo outside for any number of reasons. Maybe thecompany has an insular culture and they want tobreak that. Maybe they want to bring a differentperspective in for any number of reasons. Maybethe business model is changing and they needsomeone who understands the new model to comein. If you went outside because you had no internalcandidates, then I think that's a failure. But if youwent outside for any of the reasons I outlined, it isnot. You should at least have the choice."

Some CEOs noted that madcap or smallercompanies have particular challenges in developinginternal candidate pools. "It can be a real challengeto get people ready to become CEO in smallercompanies because there are simply not enoughleadership opportunities that can be provided tosenior managers," says Ron Naples, CEO of QuakerChemical. Shippar pointed out that "in a small ormid-size organization, you're typically working witha small pool of potential candidates. That can beparticularly challenging because if someone isn'tdoing well, there are fewer Plan Bs."

Horse RacesWhen asked what worries them most about CEO

succession, CEOs typically express fears aboutcreating a "horse race" dynamic and losing valuableexecutives who were ultimately unsuccessful insecuring the top job or who choose to leave becausethey feel they are "out of the race." Ludwigexperienced horse race dynamics during the processby which he was chosen for the top job and islooking to avoid it: "When it comes to my own

succession, I'm concerned because the executiveteam is having such great success; you don't want tobreak up the team that's getting stuff done," he says.

"I don't want to set up a beauty contest or a bake-off like I went through because it creates a win/losescenario. The key is to do it professionally, make adecision and then move on. This is the approach wetook in determining my successor as president,effective in January 2009. I'm very pleased that othermembers of the top team are staying on to help runthe company."

Some CEOs experienced the downsides of a horserace firsthand. "There was a day when three of uswere called into the CEO's office and told there wasgoing to be a horse race for his job," says White. "It wasof undefined duration. People who had collaboratedin the past immediately started to line up behind theircandidate. And I would say that real decision makingstopped because nobody knew who was ultimatelygoing to own the results of any decisions. Bigstrategic issues and other major decisions weredeferred. I think it creates a lot of unnecessarydistraction, speculation and politics in a company."

The fallout of a horse race can also presentsignificant difficulties for the people involved tocontinue to work together once the race is over. RonNaples notes that one of the challenges for anyinternal candidate who becomes CEO is "to developa whole new relationship with people who wereformerly your peers." He points out that this can beeven tougher if there is "baggage with these otherpeople."

"It is always a difficult situation when you werepeers and now you are a direct report," agreesLiveris. "I have formed a very strong opinion frommy own experience that a failed CEO candidate in acompetition really can be disruptive when that shiftoccurs. The new CEO should really do his/her bestto put in a new team without the legacy candidatesas part of it."

While the role of the CEO in succession planningmay have changed, today's CEOs feel their role insuccession is more important than ever - inpartnering with the board on succession, developinga pool of candidates and mentoring candidates tothe point that they can successfully step into theCEO's shoes.

They emphasize the importance of starting early,incorporating formal assessment tools into thesuccession process and avoiding public horse racesalong the path. They recognize the CEO's role ingiving the board meaningful exposure to successioncandidates and in giving candidates experience inlearning how to work with a board. Most of all, theyunderscore how important this decision is for thecompanies they lead - and urge all CEOs to makesure this item is getting onto the board agenda.

As Graham Edwards, CEO of Midwest ISO,stresses, "I would expect the board to address theissue of succession planning with the CEO. But ifthey don't do it, it's incumbent on the CEO to bringit up with the board, start the conversation and getthe succession process moving."




BM

Each passing day, we areencountered with news andinstances of firms seeking toincrease the profits byexploiting their workers, or

lawyers using loopholes and tactics thatforces the law to let the guilty go free andpunish the innocent, athletes making useof undetectable drugs that enhancestheir performance, parties winningelections by use of lies and force, cases ofplagiarism in academia and stealing ofcredit in entertainment and corporateworld, match fixing in sports and riggingof awards for best performers infunctions.

The people resorting to these tacticsare impelled to do so due to the presenceof high and intense competition anddeliberately arisen competitivesituations. These situations are presentin almost all important institutions andsectors of the modern world, whether itis business, entertainment, sports,academia, the criminal-justice system orothers.

Each individual is bent upon outdoingthe other and prove his or her mettle inthe outside world. The competitionforces them to go beyond the ethicalnorms and against the rules which are

most arguably called business ethics,professionalism, sportsmanship orstatesmanship.

The presence of competition hasmade us to believe that it is aninescapable part of life. It may drive aperson towards success or failure.

Competition in the workplace is aninevitable part of worklife. It is usually agood thing but at times may take anadverse turn when the employees resortto unethical tactics to surpass others, inorder to achieve their goals, which theycannot achieve otherwise. This may leadto destructive competition.

Competition at workplace is of twotypes- Direct and Cooperativecompetition. Direct competition is a one-to-one experience. It can be destructivesince there is only one winner, and aloser. Too much competition within theworkplace results in low productivity,hard feelings, and a loss of focus awayfrom the target. Extreme situation maygive rise to anger and hostility to a pointwhere it becomes impossible to acceptothers' ideas.

Cooperative competition occurs whena team works together to achieve a goalfor the good of the group. The group or


Making competition at work

DR. REEMA CHAUDHURYAssistant Professor (BC/ Soft Skills) AsiaPacific Institute of ManagementNew Delhi

DR. ASHU SINGHAssistant Professor (HR/OB)

Asia Pacific Institute of Management New Delhi

Competition in the workplace is an inevitable part of worklife. It is usually a good thing but at times may take an adverse turn when the employees resort to

unethical tactics to surpass others.

The combination ofcooperation andcompetition canbring in greatersatisfaction andhigher scores forthe employees.

team sets a goal and pursues it together. Differentpeople perceive competition in the workplacedifferently. For some people competition is a threatand for others it is an opportunity. It all depends onthe way they want to go to the top.

Benefits of Competition Competition ultimately benefits everyone. It is a

basis of creativity in business. Microsoft, Apple,Ford, Rolls Royce and all the other competitorswould not have developed if it wasn't forcompetition. And each one strives to be bettercontinually. Competition is the critical driver ofperformance and innovation. When new productscome to the market, the consumers' are presentedwith a variety of choices at affordable prices. It alsoencourages innovation and companies evolve newideas of making the products user friendly.

Competition is needed to bring out the best in aperson. It should create an urgency that will leadpeople to identify and grab opportunities. It shouldencourage innovation and exploration and result inwinning the race.

Competition brings out the best in people byforcing them to be brave under pressure. People tryto perform and whether their team wins or loses,they learn how to deal with pressure and the fear offailure.Creating a sense of urgency may often giverise to unhealthy competition. The result of theunhealthy competition may force some people topull others down. These people have a misguidedbelief that if they can eliminate their perceivedopponents or enemies, they will be left to win andshine and effortlessly glide to the top.

Competition may result into theworst situations

The worst thing about competition is that insteadof competing with the opponent people start hatingthe opponent. This happens due to a bad desire towin and leads to all sorts of unethical andobnoxious conduct. Competition emphasizes howimportant it is to personally succeed. As a result,people who are unable to achieve are pressurized toengage in cheating and fraud. It also provides anincentive to strategically misrepresent informationto others.

People in conditions of intense competition evenresort to cheating and having their way. In a studyby Schwieren, C., & Weichselbaumer, D. (2010), itwas found that the female students in the highlycompetitive condition cheated more, although therewas no overall difference between men and womenin the amount they cheated; only women respondedto the competition intensity by cheating more.Schwieren and Weichselbaumer looked deeper into

the results and found that cheating among womenwas not due to gender issues but due to competition.The research showed that most of the poorperformers resorted to cheating. It was a matter ofsheer chance that the poorer performers werefemales. It can be easily concluded that as thebenefits of competition increase, it increases thechances of cheating.

Individuals who are less able to fulfill theassigned task have a higher probability to cheat.They cheat many ways. The poor performers areforced to cheat in a system that does not give themany legitimate opportunities to succeed. At timesthey cheat to avoid embarrassment for their poorperformance.

At times behavioral/psychological motives mayalso lead towards increased cheating undercompetitive pressure. Competition emphasizes theimportance of personal success. As such people whocannot succeed pretend to be successful.Competition places an individual away from thegroup and lessens the social cohesion within a group.As a result individuals are less bonded to adhere tostandards of fairness. They find it legitimate to gaintheir personal share by cheating. The increasednumber of the cases of fraud due to competition mayalso provide an incentive to strategicallymisrepresent information to others. Hollingshead,Wittenbaum, & Jacobsohn (2005) have found thatindividuals with competitive incentives engaged in acooperative task share distorted information. Theydo so to promote their preferred task solution andhave considerable impact on group decisions.

Competition may also force the most insecurepeople to create a negative working environment forothers, who are supposedly their best competitors.They refrain from giving challenging tasks andassignments to others due to the fear of beingsurpassed by them and facing failure. At times thisfear goes so far that the good performers areengulfed in the traps of dirty politics played by themare even at the risk of losing their job.

If the right environment of competition prevailsin the company, it highlights the strongestperformers and helps the company. But for someworkers, competition may not serve as the rightmotivator. They may become more aggressive or lessproductive when confronted with competition. Thisusually reflects that the employee is not in the rightplace or work environment. In such circumstances,the employers need to find out whether it iscompetition or the employee himself that isresponsible for demonstrating bad behavior. Whencompetition goes too far, it also reflects that themanager has neglected his or her team-buildingresponsibilities. In such a situation the co-workers



When competition goes too far, it also reflects that the manager has neglected his orher team-building responsibilities. In such a situation the co-workers must reassess

their goals and values strategically and get the remuneration realigned.


must reassess their goals and values strategicallyand get the remuneration realigned. Roughcompetition is a fact of modern life. It promotesanxiety, damages self-esteem and performance, andleads to disengagement.

The emotional effects of competition thatworkers don't show to their colleagues are mostdangerous. This starts impacting the personal lifeas well and the worker begins to crunch under theinsecurity of work life. The after-effects maydemotivate him further and make him a 'good fornothing' human being.

To avoid the competition from getting too far anemployee should use the co-workers' successes asmotivation to improve his/her performance fortheir own benefit. Frank and Cook (1995) haveargued that in most of the field people at the top arenot proportionally rewarded. This intensifies thecompetition and generates a viewpoint "winner-take-all society" where many people compete forpositions without a realistic chance of obtainingthem. According to Kohn (1992), the incentive tocheat, or to ''play dirty" is actually built into such acompetitive reward structure.

Creating Healthy CompetitionMany scholars have opined that competition in

work-life is very necessary. It should be ingrainedand treated as an essential component ofperformance and happiness. People can becomebetter employees when they are trying to win. Theyshould change their approach from trying not to loseand be confident of their win. The motivationshould not be just to win, but to achieve mastery.Competitive institutions will deliver better resultsfor society in the long run.

The combination of cooperation and competitioncan bring in greater satisfaction and higher scoresfor the employees. The creativity, innovation and thequality of product all goes up as talents arenurtured and performance is improved.

Healthy Competition is aroused when people areexcited about their jobs, have some sense of urgencyand not fighting to surpass others. People shouldbelieve in working with others in a team, to achieveresults by bringing their efforts together and tolearn from each other. People from differentdepartments and divisions should be broughttogether to help them realize their goals. Theyshould be inquisitive in a very positive manner andbe ready to learn from the experience of others.

A clear sense of purpose is required by settingclear objectives and targets. An individual is madeto focus on the individual targets which drawhim/her away from interpersonal distractions asopposed to other individuals. Achievement ofpersonal targets becomes more important than thefeeling of beating others. If a constant and

supportive review is provided to the employee itmay help to reduce the stress levels. Periodicreviews help to assess levels of achievement and toidentify bottlenecks and generate solutions. Thesereviews help in regenerating an employee and tokeep him focused.

Competition often gives rise to conflicts whichneed immediate resolution in order to keep theenergies channeled in the right direction. It isimportant to anticipate conflict at the earliest andresorting to their immediate solution. If theconflicts are left unresolved, they can disturb theentire organization and affect everything andeveryone.

Unhealthy competition is resolved by having asystem of fair rewards and recognition. This systemis well understood and universally accepted &respected by all. Whenever undue recognition isgiven to a particular employee, it generatesresentment and apathy giving rise to destructivecompetition. Every employee should be encouragedand given due recognition and rewards which arebased on verifiable accomplishments. In adequateinformation is not supplemented with the decisions,there will always be a reason for suspicion and backstabbing.

When the competition goes too far itovershadows everything including personalenrichment. It no longer remains means to attain agoal rather become ends for existence. When it doesnot generate any tangible benefit for the company, itshould come to an end. Competition should yieldsomething positive for the company and for theemployees.

It is the responsibility of the management tocarefully oversee competitive situations. Whenextrinsic rewards are presented, the role of theleader becomes even more important. Theserewards may be in the form of monetarycompensation, extra perks or more prestigiousposition. A leader has to see that rewards are fairlydistributed and do not create a feeling ofdissatisfaction and jealousy among the employees.

Intrinsic rewards like feeling of accomplishmentof a goal is a big motivator in itself.Acknowledgment and appreciation from themanagement and fellow workers also motivates anemployee to work harder and contribute more to thecompany. The intrinsic reward is in winning orbeing the best. A leader can motivate an employee tothink positively about the competition and performthe best.

So work-life competition, though can never beruled out completely, can be made more constructiveand help in developing the employees' potential inthe positive direction. It will be well accepted if theorganization gives ample opportunities to all ratherthan favoring only few.


ReferencesHollingshead, A., Wittenbaum, G. M., Jacobsohn, G. C., & Fraidin, S. N. (2005).The impact of competitive members.Working paper

Schwieren, C., & Weichselbaumer, D. (2010).Does competition enhance performance or cheating? A laboratory experiment Journal of Economic Psychology,31 (3), 241-253 DOI: 10.1016/j.joep.2009.02.005


BM

'That guys knows nothing about ChangeManagement'.

This was the comment from a socalled 'change management consultant'in reference to a highly experienced andsuccessful executive who had justmoments earlier claimed to have spent 30years of his life doing changemanagement. The comment was beingmade in the context that the 'changemanagement consultant' was referringto change management as the dealing of'people' when they are impacted by achange. From this perspective, the'change manager' was quite right as theexecutive in question knew nothingabout the 'concepts' of changemanagement put forward by the likes ofpioneers such as Kotter, and had nograsp of the basic fact that the purposeof change management methodologies isto specifically minimise the resistance ofpeople towards change.

So, arguably, the change managerconsultant was right. But this iscertainly a case where it's wrong to beright. Because the executive, with 30years spent introducing into hisorganisation new applications, processesand operational procedures, mostcertainly had delivered more actual

change, more actual organisationtransformation! So, to dismiss theexecutive as knowing nothing aboutchange management seems bothignorant and arrogant.

Of course, many executives andmanagers do have a grasp of changemanagement and its important purpose.But many also assume it to be a role forspecialist in the field, one that onlypeople with a particular set of skills areallowed to do. Meanwhile 'qualitymanagers', 'project managers','communication experts' and so on arealso all continuously developing andattaining ever more specialist methodsof working. This is itself is not an issue,indeed, continuing advancements andinnovation in these fields of expertiseshould be welcomed as they can havemuch to offer organisations.

But, when these concepts operate inever more insular worlds, the purpose oftheir continuing development cansometimes undermine their verypurpose. Perhaps this is why, even today,some studies suggest that 70% of allchange initiates still fail. The truth is;various fields of expertise anddisciplines are all necessary for anychange, big or small. The level and



Why we're stillfailing with 'change'!

NIMALAN NADESALINGAMAssociate Director, DPDHL CorporateCentre, First Choice and ChangeManagement (OTS), Germany

The truth is; various fields of expertise and disciplines are all necessary for anychange, big or small. The success of the change will need the disciplines to work inharmony and alignment.

Many executivesand managers dohave a grasp ofchangemanagement andits importantpurpose. But manyalso assume it to bea role for specialistin the field, one thatonly people with aparticular set ofskills are allowed todo.

amount of expertise may vary from one change tothe next, and the manager of the change initiativemay well have to bring in additional specialistexperts during different stages of the change but,the success of the change will need the disciplines towork in harmony and alignment.

But do we have this alignment betweendisciplines?

Through both successes and failures and opendiscussions with respected colleagues and privateself reflection; it occurred to me that organisationtransformations are still failing in organisationsacross the world because the benefits of everinnovative development in various disciplines ofbusiness management are rarely aligned in the realworld. In the real world, the leaders and managers ofchange initiatives frequently bring in the so calledexperts to run the specialist work-streams but oftendo not have these work-streams support each other.For example, I have heard one 'change managementconsultant' refer to 'project management' as the"enemy" - and he was not joking! On the other hand,I have seen 'process designers' develop new processeswithout any wish to engage with those who wouldhave to own the process for the simple reason that"discussions simply slow things down"!

With attitudes like this existing in the real world,the value add of continuing innovation in variousbusiness disciplines is seriously undermined. Nowonder change initiatives still suffer such a highfailure rate with changes of all sorts going overbudget, being delivered late or not fully meetingexpected requirements. Either working on their own

or with a team of specialist resources, the task ofany leader or manager of a transformation must beto align various management disciplines andconcepts so they compliment and support eachother. But why is this not happening?

Could it be that Managers of change initiativeshave accepted the need for work-streams toaccommodate the various and 'necessary'disciplines to support the change but have done sowithout the necessary insight into each discipline?If so, how can any manager of a change initiative beexpected to manage the transformation effectively?

And what is it that stops such managers orleaders from gaining further insight into thesevarious disciplines if it has been established thatthat they are so crucial for success? A belief,perhaps a fear, that the 'new' disciplines of recenttimes are for 'experts' only?

Such fears are unfounded and ultimatelyundermining. Whilst not necessary to be an expertin all fields, it is the role of any manager or leader ofany change initiative to know and understand allthe disciplines necessary to drive the change and tocross manage and align the various dedicateddisciplines effectively.

Perhaps, in order to achieve this, a different typeof management approach is needed, one that showsno fear in aligning existing concepts andmethodologies to harness the value add of each fieldof specialist expertise. The specialist may not likethis, but it may well be what organisations aroundthe world need to help them deliver their very realchange need in this ever changing world.


Why we're still failing with 'change'!

successes and failures and open discussions with respected colleagues and private selfreflection; it occurred to me that organisation transformations are still failing in

organisations across the world because the benefits of ever innovative development invarious disciplines of business management are rarely aligned in the real world.

BM

The other day I received a resumewhere the applicant claimed he/shehas excellent inter-personal skills ashe/she has got more than 1000connections in Face Book. Almostaround the same time, a very seniorprofessional who led a very busyworking life now retired called. Weused to be dreaded to get a phonecall from him as he speaks for longtime and used to pass on his call toeach other. On becoming aware of thisprocess, one day he lamented that hehas nobody to talk to him now afterretirement, while people used toqueue up to talk to him when he wasin service. His lament triggered a chainof thoughts in me. Do majority of theso called social networking friends inthe first case are all friends? Or allacquaintances? Here is an attempt toclassify relations in to three circles asfollows:

First circle of relations areAcquaintances:

We are just aware of acquaintancesand they aware of us.We know theirname and nothing beyond and vice-versa.They fall in two categoriesbased on the nature of relationshipwe have namely professional orpersonal.

Professional acquaintances arethose whom we get in touch by virtueof our Job.They are people like ourcolleagues from other departments orpersons we say, "hello" in elevators orparking lots.We may know nothingabout them beyond their identity.Personal acquaintances are likedistant relatives, our neighbours withwhom we have very limitedinteraction. Acquaintances will beuseful in one's life for time pass ortime-killing or meeting on anyoccasion like marriages etc..

A discussion with the retiredexecutive cited earlier reveals thatwhile in service, he had a large groupof professional acquaintances byvirtue of his Job and a limited number

of personal acquaintances. He furtherstated that he did not nurturerelationship with personalacquaintances out of fear that theymay seek favors. In his case both thegroups vanished in the air themoment he retired from hisprofession.

In contrast to acquaintances,second circle of relationshipsnamely friends are those whounderstand us and we understandthem.They are with us through thickand thin. A true friend will not desertus when we are in trouble but willprovide us a hope. He / She will notleave out of jealousy when wesucceed, but genuinely derivespleasure out of our success.

He / She has similar likes anddislikes and even if they are differentrespects the differences. Friendshipprovides a feeling of being wanted.True friends provide an intellectualand emotional stimulation. He/Sheunderstands us with empathy anddoes not question our intentions andactions. Even if he/she questions,he/she will do it with an open mind.They only share resources of whatever they can and will be honest inaccepting limitations in sharing.Theycommunicate with openness and arewilling to listen to with an open mind.They compromise personal interestsfor long-term mutually beneficialrelationship rather than short-terminterests.They believe in growingtogether rather than at the expense ofothers.They have realisticexpectations of each other and sharethe expectations openly rather thanbottling.True friends will be our brandambassadors speaking about ourachievements and accomplishments.

Third circle of close relations: Aselect few close friends, bloodrelationships, and family membersconstitute this category.While all thecharacteristics of true friends will bevalid in case of close circle, they are

more close .They provideunconditional love and affection foryou.They make sacrifices for yourgrowth and benefit.We can take themat face value as they don't play gameswith us..

The current generation, Gen Yboth at home and work situation,want to be treated as Friends and notas children or employees as per theearlier practice. Hence can we re-learnand re-build relationships. It may notbe out of context , to quote a sayingthat "when we are born we cry asbabies, while others all around rejoiceour birth celebrating that so and sohas a baby born. In contrast, when wedie, we should die peacefully andhappily,while our true friends andfamily members feel sad that they willbe missing us". Performance appraisalof our life is how many persons feelsad to miss us when we die.

While acquaintances may comeand go in our lives, true friends remainall through our life and even thereafter with our families. Sine truefriends cannot be plucked from treethey need to be nurtured withgenuineness, empathy, and give andtake in relationships. Just as someadolescents have a problem todistinguish between infatuation andlove, we may some times find itdifficult to separate acquaintancesand friends.

The following quote in a recentarticle by Satya Sudhir (TheHindu,Chennai Aug 11th) makessense to me, "we don't need a 5000number guest list of whom 4999 willattend the function only to eat , makemerry, comment on the bride and thegroom. I wish the guest list has 100people who would truly bless thecouple."

Thus, Fellow HR Professionals,irrespective of your age andhierarchical position, isn't time tointrospect, re-evaluates, redefine andre-build relationships?



HOW CLOSE ARE OURRELATIONSHIPS?

Dr. PVR MurthyFounder Director,

Exclusive Search Recruitment Consultants

Do majority of the so called social networking friends in thefirst case are all friends? Or all acquaintances?

BM

Organization culture isa combination of ahealthy culture andengagedemployees that is

most critical to improving anorganization’s effectivenessand experiences of thepeople in it.Therefore, it isparamount fororganizations to build aculture which unites theemployees and connectsthem to the organization todeliver the best.Thoughevery organization hastheir own written set ofguidelines that they expecttheir employee to abide by,however what employeesexperience is different fromthe prescribed policy.Organization culture is anintrinsic value system whichhas to be willingly, consistentlyand effortlessly exhibited byeach employee, at all levels acrossthe organization.Therefore, when itcomes to business culture of anorganization, one needs to harp uponthe fact that organizational culture iscreated consciously by the members ofthe social unit within.


Organisation



TheCornerstoneof BusinessSuccess

One of the many responsibilities that havebeen confronting leaders since timeimmemorial is the creation and sustenance oforganizational characteristics that inspire,reward and encourage collective efforts.

Organizational culture stands out as one of the criticalenablers in enhancing performance and competitiveadvantage. An organization is an establishment where

NADEEM KAZIM,Director - HR & Personnel,Exide Industries, Kolkata

Culture


individuals from diverse backgrounds andqualifications, varied mindsets and assortedtemperaments join hands to work towards acommon goal. It is the culture of the workplacewhich unites the employees and connects them tothe organization to deliver their level best.

What constitutes a culture?The beliefs, ideologies, principles and values of

an organization that determines the way employeesbehave amongst themselves, as well as with peopleoutside the organization form the basis for culture.Each culture is unique, comprising of elements thatpropagate a differentiated proposition and a lastingorganization. A great culture starts with a Vision ormission statement, which guides a company's valuesand provides it with a purpose. When these aredeeply authentic and prominently displayed, itforms the foundational element of culture. Acompany's Values are the core of its culture,offering a set of guidelines on the behaviours andmindsets needed to achieve the vision. Values are oflittle importance unless they are enshrined in acompany's Practices. No company can build acoherent culture without People, who either shareits core values or possess the willingness andability to embrace those values. Culturerepresents the cornerstone, the anchor thatholds an organization in good stead inturbulent times. A culture that does notalign with business strategy to servethe needs of key stakeholders willstruggle to achieve fullest potential,attaining mediocre performanceand business results at best.

It is the culture of anorganization which makes itdistinct from others. The keydifferentiator between a good andgreat company, it goes a long wayin establishing the brand imageof the organization as the'Employer of Choice'. It is thework culture which gives anidentity to theorganization, not itsproducts, services,infrastructure or anyother tangible element.The organization culturebrings all the employeeson a common platform,uniting them to deliver totheir optimum potential. Itplays an important role in

employee retention, where people strive to deliverresults above and beyond the call of duty, to fulfillthe expectations that the culture instilled in theirhearts. Then again, we must realize that since it isthis culture that makes the organization so unique,we cannot simply treat it as a 'one size fits all'. Theculture must be relevant to the business set up,embrace its goals and reflect its core values.

Creating a distinctionToday, we come across two distinct

organizational cultures in existence. Manufacturingconcerns continue to propagate the traditional, old-school system with tall hierarchical structures andformal work environments. In direct contrast totheir conservative and bureaucratic make-up, newage sectors such as IT/ITeS, financial services,telecom, etc., believe in flatter structures and fewerhierarchies, operating in a more permissiveenvironment. We witness boundaries betweenmanagerial levels and age groups continuouslycrumbling to form a more open and receptiveculture, which to my mind, will be the future that allorganizations must accept and strive towards inorder to survive. In a time where globalization will

Manufacturing concerns continue to propagate the traditional, old-school system withtall hierarchical structures and formal work environments. New age sectors such as

IT/ITeS, financial services, telecom, etc., believe in flatter structures and fewerhierarchies, operating in a more permissive environment.

determine the pace of change in a businessenvironment, organizations will be more globallyintegrated, with geographical borders visiblyblurring. There is no doubt that the workforce of thefuture will be made up of a diverse, complexcollection of employees, all with differentaspirations, needs and experiences, stemming fromdifferent nationalities, gender, colour, race orreligion. In such a scenario, there is the need toeffectively manage the demographic andpsychographic characteristics of this evolvingworkforce to achieve cross-culturalintegration. It will require a whole newlevel of tolerance and openness tochange in re-moulding theorganizational culture to effectivelyembrace and leverage the potentialbenefits of this diversity.

Prepare for challengesAs globalization continues to take

the world by storm, organizations mustprepare themselves to face the criticalculture-related challenges. In thediverse and globally-integrated workenvironment that all organizations willbe compelled to operate in, it becomesimperative to integrate various cultureseffectively to achieve a global mindsetwhile retaining local values. Knowledgeof foreign languages has assumedundue importance in such anenvironment, and organizations mustdesign people interventions toincorporate this need. At the same time,the younger workforce, or Gen Y, willhave higher expectations for a work-lifebalance; believe in a less formal approach tosuperiors, along with nurturing career aspirationswhich differ starkly from those of the former Gen X.This disparity must be bridged to reach commonground; a convergence must be achieved in theirvalues, beliefs and convictions to create thefoundations for a new and sustainable culture.Traditional organizations must learn to unlearn,accept newer trends in technology, social media,systems, processes and procedures that are morecontemporary to our times, and those to come.

Effective communication is key

Strong organizational culture is the result ofinnumerable factors, one of which is effectivecommunication. Transparency in communication is

mandatory at all levels for better understanding ofwork, and better bonding among individuals to buildgood relations. Communication between the topmanagement and employees is of paramountimportance.

Employees must have utmost clarity of their keyresponsibility areas and enjoy the liberty of sharingtheir ideas and concepts to arrive at an innovativesolution benefitting the organization as a whole. Thetop management must be accessible to all, and bewilling to listen to queries and grievances by means

of an open door policy. Team membersshould have the prerogative to walk upto their team leaders and discuss issueswith them in an open forum.Organizations that support clear andopen communications - and practice anopen door policy - breed healthy workcultures. It enables employees toapproach their superiors, clear theirdoubts and look forward towards along-term association with theorganization.

At the end of the day, it is anorganization's value system whichbrings about the results they mostdesire: improved performance andoverall effectiveness. The best way toaccomplish this is by gaining anunderstanding of the organizationalcontext and culture the employeeswork within.

If we look at employee engagementwithout considering the culture thatemployees work in, we potentiallyleave ourselves blind to the strategicstrengths and weaknesses in the

organization that impact employee andorganizational performance. All studies andinternal surveys today invariably focus onorganizational culture that befits the talent pool,with the objective of making it contemporary to thechanging aspirations of its people.

A positive and open culture creates trust andloyalty among employees, engenders passion for thejob and unquestioning dedication to the company. Itis more likely to inspire enthusiasm andproductivity than simply offering monetarybenefits. A culture that bestows opportunities forgrowth, development and recognition fosters highlevels of engagement, which is the key to sustainedcompetitive advantage and accelerated businessperformance today.



Strong organizational culture is the result of innumerable factors, one of which is effective communication.Transparency in communication is mandatory at all

levels for better understanding of work, and better bonding among individuals tobuild good relations.

The beliefs,ideologies,

principles andvalues of anorganization

thatdetermines theway employees

behaveamongst

themselves, aswell as with

people outsidethe

organizationform the basis

for culture.

BM

Organization culture is the sum total ofwhat an organization represents anddemonstrates in all its actions eitherverbal or non verbal to all itsstakeholders. Organization culture is

the behaviour of individuals who are part of anorganization and the meanings that people attach totheir actions. Culture includes the organizationalvalues, vision, norms, working language, systems,symbols, beliefs and habits. It is also the pattern ofsuch collective behaviours and assumptions that aretaught to new organizational members as a way ofperceiving and even thinking and feeling.Organizational culture affects the way people andgroups interact with each other, with clients andother stakeholders. For multinationals that haveglobal presence, culture provides the uniformthread that creates a unifying bond and a sense ofshared purpose.

Edgar Schein (1992) defines culture as a patternof shared basic assumptions that a group learnsover a period of time as it solves its problems ofexternal adaptation and internal integration thathas worked well enough to be considered valid andtherefore, to be taught to new members as thecorrect way to perceive, think and feel in relation tothose problems. It includes the organizationsbehaviours and artefacts, espoused values andassumptions and beliefs.

Every organization has to invest time, effort andenergy in building a culture that reflects itsbusiness strategy and what it stands for.Organization culture is consciously built. Seniormanagement of the company spend a lot of time indefining what the organization stands for. Businessgoals which are the reason the etré are defined andthe way they are to be achieved are also laid out. An

organization's vision, mission, values lays out abasic framework that defines the culture of thecompany and the way the organization has tofunction. It defines the way the employees that workfor it behave. For example, how much time does theCEO spend with internal and external customers?How many innovations have taken place andpatented in the company's name? What kind ofrewards and recognition and celebration that isattached to it. These fundamentals then over aperiod of time define the organizsation culture.

The leader's roleLeaders play a crucial role in developing and

maintaining culture, and are the living examples ofwhat the organization stands for. They need to adapt,adopt, actively manage and reinforce regularly. Thepersonality of senior leaders and they way theyfunction has a big impact on the way business isconducted. It is extremely important for CEOs to walkthe talk and demonstrate live examples. Seniormanagement has a major role to play in influencingemployees and the way employees experience thecompany. This is how great places to work and greatinstitutions are built. The organization culturedetermines the quality of employees who will work inthe organization as well as who can join the companyas well as the tenure of employees in the organizationThe culture, defines whether to provide growth jobrotation, enlargement, secondment innovation to itsemployees, for example, Proctor and Gamble, Google,American Express to name a few. The laid out normsthat sanction/ discourage member behaviour in thecontext of decision making and patterns ofbehaviour/ interaction amongst members is welldefined. They also play a key role in shaping theculture and in harnessing the same for the company's


Culture in any organizationshould provide a uniformthread which will create aunifying bond and a senseof shared purposebetween the company andits employees. However, toachieve the larger purpose,leaders will have to play akey role in developing,maintaining, enforcing andmodifying anorganization's culture.

Defining Patterns...DR. TANAYA MISHRA

Sr.Vice President- Group HR, JSW Steel, Mumbai

strategy (Meehan et al, 2006). Leadership styles arestrong predictors of both competitive and innovativecultures (which in turn are strong predictors ofperformance) (Ogbonna & Harris, 2000).

Measuring the impactOrganization culture is built in a way that it

provides competitive advantage and is futuristic. Itmust be supportive of the current and future goalsof the company. The kind of business theorganization is in, should be imbibed and becomethe DNA of all the employees (and sometimes otherstakeholders such as suppliers, shareholders, etc.,)and imperfectly imitable and imitated. For example,an organization in the technology space typicallyneeds to have a culture that supports innovation andagility to define new technologies and quickly bringthem to the market. Similarly, an organization in thefoods or pharmaceutical industry needs to have aculture that promotes strong quality consciousnessand quality processes. In the same breath in thehotel industry needs to have staff who are highlycustomer service oriented, who put duty before self,

for example the staff at the Taj in Mumbai whosacrificed their lives delivering that service duringthe terrorist attack. A high-performance culture,which enables high performance, is as unique as afingerprint-it's the one thing about a business thatrivals can't copy (Meehan et al, 2006).

Setting clear communicationprocesses

Communication channels play a crucial role indefining the organization culture of a company sothat it is cascaded down with the same intent anddrive across levels, locations, businesses to mean thesame thing. Also for initiating any kind of culturalchange, communication processes need to be wellestablished across the organization. For example,during a down turns or when the company is facingcompetition the way forward, and the gamechanging plans that will help the organization tosurge forward is often the outcome of theorganisation culture. Many organizations have notbeen able to cope with changing times because of theculture that they have promoted and have thereforesuccumbed to Darwin's survival of the fittest theory.

Every organization has a certain distinct qualityto its culture, be it innate, acquired or ascribed forinstance. For example, the organization culture ofShoppers Stop is to promote customer service. Thevisiting cards of all employees have the mandatorydesignation of "Customer Care Associate followed bythe actual designation. This is because good customerservice is their core value. Similarly, Holcim across

the world follows the same values in every countrywhich are Strength. Performance. Passion.

Organization culture versusorganization climate

Organization culture as one understands is therelationship between an organization and theculture it wants to promote. It also means thealignment of the culture with the business goals andthe overall strategy that the organization wants toundertake to deliver on its targets to the customers Itis also the role of leaders in developing that culturewhich is unique To align to and shape the strategy ofthe organization, culture comprises of variouscharacteristics or values some of these values arecore and some others are contextual and situational

Organization climate is more the perception ofemployees towards the practices, policies that theorganisation promotes. The organization climatealso determines how happy employees are workingfor that particular company. It also reflects thefairness and the transparency of practices that the

organization undertakes. There are thus engagedemployees who contribute and make theorganization culture what it is, while there areemployees who are disengaged and will try to makenoises to ensure fairness or they will take action byvoting with their feet, and there will be passiveemployees who are waiting to change sidesdepending on the organizational environment.

To conclude…Culture is what creates the glue that binds the

organization together by defining what it stands forto its employees, customers and other stakeholdersand how the organization interacts with each ofthese stakeholders. Culture has to be the way of lifefor employees in that particular organisation. It hasto be flexible to welcome change and adapt to thechanging dynamics in the market place and theenvironment. Organization culture also defines thebusiness strategy and competitive advantage that anorganization will undertake to distinguish itself inthe marketplace. This is why leaders have a key roleto play in developing, maintaining, enforcing andmodifying an organization's culture. Also, whileshaping a firm's culture the core cultural values andcontextual cultural values must be defined andingrained in the behaviours of employees. Differentcore cultural values like innovation and risk-taking,flexibility, ethics, trust and simplicity act as acompetitive advantage for the organization byempowering and engaging employees and impactingthe organization's growth and performance inseveral ways.



Leaders play a crucial role in developing and maintaining culture, and are theliving examples of what the organization stands for. They need to adapt, adopt,

actively manage and reinforce regularly. The personality of senior leaders and theway they function has a big impact on the way business is conducted.

BM

Culture can be explained as consistent andobservable behaviour patterns of agroup, which is formed by its members'underlying values, beliefs and code ofconduct. Organization culture can be

defined as a collaborative process of creating aunique identity for an organization, which ischaracterized by shared awareness andunderstanding, based on its members perspectivesand varied interests. Culture is unique for anorganization due to its customs, practices, self-image of its members, leadership characteristics,vision and consistent practices. Organizationculture is something employees experience everyday.

There is strong correlation between organizationvalues and its culture. Organization cultureexplains "how things are done" in an organization.It is created over a period of time based on itsvalues, beliefs and assumptions that determineunique ways for organizations to conduct theirbusiness. Hence formed by an organization's normsand values, organizational culture stronglyinfluences those who are attached with the place ofwork. The culture of an organization is what isexpected from employees and what they value. Theorganization culture encompasses value systemsand unwritten rituals of organizations whichintegrate members of the organization.

Organization culture reinforces employees'behaviour at work. It is a social control system thathelps the organization to promote and reinforce"right" thinking and behaviour, and weed outwhatever is wrong. It ensures not only behavioral"norms" that must be practiced but also socialsanctions that are imposed on those who don't "staywithin the lines." Organization culture immunizesthe company by preventing "wrong thinking" and"wrong people" from entering and protects theorganization from different situational pressures.

Organization culture is dynamic and realignsincrementally and constantly, in response toexternal and internal changes. Normally change inorganization culture is a slow process; hence it isdifficult to understand organization culturecompletely. Since organization culture is dynamicand changing, it should not aim to have a picture-perfect culture to ensure its success. On thecontrary, the dynamic nature of the organizationculture also opens opportunities for organizationsto shape up the same through a systematic andcontinuous process rather than major shake ups.

It also has a strong influence on a company'seconomic performance. In order to improveperformance, there is a need for a culture that notonly inspires employees to learn, grow and givetheir very best but also creates a conducive climatefor employees to work. Organization cultureensures a specific climate that shapes employees'work environment, work relationships, and workprocess. It is something that employees cannotactually see, except through its physicalmanifestations at the workplace. Hence it is one ofthe major key determinants of how employeesperform or behave in their job. An organizationalculture that derives strength from both external andinternal environment will derive better financialresults compared to organizations that are notcompatible with the environment.

Since organization culture is dynamic and has apredominant influence on its economic performance,organizations are keen to consciously create acongenial culture through systematic processes.Organizations which consistently perform betterthan others and are part of "great place to work"possess a unique and vibrant culture whereemployees are committed to achieve the organizationvision. The value set of an organization shouldtranslate in strong observable behaviors andmindsets needed to achieve organizational vision.


We are what werepeatedly do!

Organization culture not just influences a company'sperformance but also shapes the way it functions. Hence a

conscious effort should be made to improve and ensure thatthe organization culture is well disseminated inspiring

employees to learn, grow and give their very best.BIJU SEBASTIAN

Head - HR (Indian Operations), Apollo Tyres, Gurgaon

In great organizations, values are further broken down to behavior indicatorswhich helps the employee see whether they are practicing and living that value.Today, organizations try to see that values are not only painted on the walls, butare discussed in all forums and disseminate the same among employees throughstory telling. Values need to be explained through observable behavior indicators.Great organizations even specify dos and don'ts of behavior so that employees canlive consistently in values. The values along with behavior indicators needs to becommunicated and understood by employees and success stories needs to becelebrated across the organization. Organizations identify value champions whoare role models and trainings are imparted so that they can spread values amongemployees. Consistent practice of values creates traditions and culture which canbe captured through inspiring stories and symbols. The behaviour change is slowand difficult, hence organizations constitute different levels of committees tomonitor and navigate their cultural journey.

Organization culture is a top driven process and is largely shaped by themanagement. The leadership team should therefore not just walk the talk tocreate a desired culture but ensure that it is imbibed in the main fabric of theorganization. Organization culture not just influences performance but alsoshapes the way the company functions. Hence a conscious attempt should bemade to improve and build a desired organization culture.



Organization culturereinforces employees'behaviour at work. Itis a social controlsystem that helps theorganization topromote andreinforce "right"thinking andbehaviour, and weedout whatever iswrong.

Positive

Employees ask questions and share views about successes,failures, and what they have learned.

Everyone creates, keeps, and propagates stories ofindividuals who have improved their own processes.

Employees take at least some time to reflect on what hashappened and what may happen.

Employees are treated as complex individuals.

Managers encourage continuous experimentation.

Employees are hired and promoted on the basis of theircapacity for learning and adapting to new situations.

Performance reviews include and pay attention to whatemployees have learned.

Senior managers participate in training programsdesigned for new or high-potential employees.

Senior managers are willing to explore their underlyingvalues, assumptions, beliefs, and expectations.

Conversations in management meetings constantly explorethe values, assumptions, beliefs, and expectationsunderlying proposals and problems.

Managers presume that energy comes in large part fromlearning and growing.

Managers think about their learning quotient, that is, theirinterest in and capacity for learning new things, and thelearning quotient of their employees.

Negative

Managers share information on a need-to-know basis.Employees keep secrets and don't describe how thingsreally happened.

Everyone believes they know what to do, and they proceedon this assumption.

Little time or attention is given to understanding lessonslearned from assignments.

Employees are treated like objects or resources withoutattention to their individuality.

Employees proceed with work only when they feel certainof the outcome.

Employees are hired and promoted on the basis of theirtechnical expertise as demonstrated by credentials.

Performance reviews focus almost exclusively on whatemployees have done.

Senior managers appear only to "kick off" managementtraining programs.

Senior managers are defensive and unwilling to exploretheir underlying values, assumptions, beliefs, andexpectations.

Conversations tend to move quickly to blame and scapegoatwith little attention to the process that led to a problem orhow to avoid it in the future.

Managers presume that energy comes from "corporatesuccess," meaning profits and senior management bonuses.

Managers think that they know all they need to know andthat their employees do not have the capacity to learnmuch.

Learning Culture Indicators

BM

BM: How would you define organization culture?

PS: The organization culture is the binding force that forms bydeliberation or by default, based on the espoused values, behaviours,underlying beliefs that contribute to the unique social and psychologicalfabric of an organization.

Organizational culture is visible in the way the organization deals withits external and internal environment, its customers, employees andother stakeholders, and the way it conducts its business. If anorganization is human, one can say that the culture is the character ofthat being and manifests in the way of its self-image, relationships,shared attitudes, beliefs, customs, and written and unwritten rules thathave been developed over a period of time.As any individual imbibes itscharacter from its influencers, parents, peers and elders, so does andorganization develop its culture from the leaders and members of itsentity.

BM: How can an organization develop a culture that speaks volumesabout it? Please elaborate on what organizations should do to builda compelling corporate culture.

PS: Organizations can take measures to define the corporate culture . Infact, in absence of a concerted effort, it will develop anyway and one maybe able to identify several subcultures depending on the power centers,geographic locations or the way an organization is formed, e.g., in casesof mergers/ acquisitions etc.

Organizational culture is formed from the interaction of the employeesand is defined on the basis of experiences, strengths, weaknesses,education, backgrounds,etc., of the employees.While leaders play a largerole in defining organizational culture through their actions andleadership skills, yet all employees make a contribution to theorganizational culture.

One may have an organization structure to build a hierarchy or flattenthe organization for putting in control or for reaching out quicker to themarket by cutting down on decision-making layers based on whatexactly is the need of the hour. I recall, during the formative years of anorganization I worked for, a lot of rules and regulations were introducedin expense outflow to control the overheads, however, as theorganization grew and centralized controls started adversely impactingthe speed of the decision making, a lot of loosening of such structureshappened.

I also recall how a small typographical error in the order placed, once, ledto wrong sized metal sheets landing in the plant, which cost thecompany a few crores of rupees in form of dead inventory. Did theorganization fire the employee? No it didn't. So the underlying culturespelt tolerance for unintended mistakes and failures. At the same time,there were several employees fired for fraud of a few hundred rupees.Clearly the message was that compromise on ethics was not on the anvil.

Such examples, stories and actions normally help define theorganization culture that people pass on to new employees across andup and down the organization. How the management decides to dealwith risk takers and encourage innovation is also a way to define how


Business Manager in conversation with Poonam Sharma, Director-HR, Heidelberg Cement India Ltd on what makes a great organizationculture, how a positive or negative organization culture influencesemployee morale, and its role in harping employee behavior.Conversation

All ispossible bysettingexamplesat top...

POONAM SHARMA

Director- HR, Heidelberg Cement India Ltd., Gurgaon

employees behave. Do you shoot the messenger ordiscuss the news? Do you hide information, ignore itor seek it out? Do your employees shirkresponsibilities, take them on or share them? Are newideas crushed, seen as problems, ridiculed at orwelcomed in your Organization? Do you discourage,allow or reward individual excellence or team work?Well whatever decision you make willcreate stories around it that will beshared either by you formally or throughgrapevine and behaviours will bemoulded accordingly. People whomerge in will perpetrate the culture andslowly the misfits will be evicted fromthe system.

The formal ways of formulatingattitudes, behaviours and the resultantculture include the design ofperformance management system andthe reward and recognition system thatthe company has.Whatever behaviour isrewarded gets followed, voluntarily orinvoluntarily.

BM: How does organization culturereflect on employee morale andbehaviour?

PS: When an employee decides to joinan organization, his decision may havebeen taken based on the impression hegets from those inside the organizationor from the external world throughstories or images he gathers from themedia or people. Once he becomes anemployee, his morale will stay high onlyif the organization has a culture alignedto his personal and professional goals.Otherwise, he may be in for a rudeshock, if his own goals are at aloggerhead with the organization'svalues and philosophy.For example, if the employee isambitious and is on the lookout for fast growth andthe organization's policies have predefined age ornumber of years of experience as growth criteria, hewill clearly get demotivated and either quit or becomedespondent.

BM: How does organization culture shape thebehaviour of employees?

PS: Well as I mentioned earlier. If speed is what getsrewarded in an organization, it may result in asituation where an employee may neglect importantaspects of quality, procedures, rules, etc., to meet theset criteria for a coveted position or role. If they seethat shouting at a colleague while in the corridor isregarded as fine, chances are that they will not botherabout bringing a change in their behaviour and if theleaders walk in late for meetings, punctuality willcease to be a cultural artefact for the company.Employee behaviour is definitely a factor towardsachieving a desired culture.

BM: Share your experiences of organizationculture at Heidelberg Cement India Ltd?

PS: Culture is ever changing. The senior leaders/influencers change the culture continuously throughtheir behaviours.The way they address each other, the

way they dress up in the organization andthe business needs at any particular time inthe organization may differ from oneleader to another and from one phase ofthe company life cycle to another, therebyshaping the culture accordingly. A sharplydressed CEO may inspire his team to dressup sharply on a day to day basis. Whetheryou prefer profitability over volumes orvice versa, will determine whether cost is apriority or volume is.

Our organization values safety as itstopmost priority, which is hammered in atevery perceivable occasion. If you walkinto the organization, you will noticepunctuality, yet family orientation rulesthe roost. We place high value oncommitment, team work, high level ofethics and integrity. In line with its beliefthat the place of real action is our plantsand sales offices, we place high focus onthe people there. Employee developmenthas become an integral part of ourorganization culture, so much so that allleaders in the organization contribute to iteither directly through coaching andmentoring or through participating inthese programs for their teams.The employee engagement throughfamily orientation is clearly visiblethrough various initiatives in theorganization. Our CEO and all leadersfollow an open door policy, where in anyemployee can approach them directlywhen need be.

BM: One key differentiator between organizationculture and organization climate.

PS: Corporate culture is essentially how anorganization is perceived overall, whereasorganization climate is the internal environment thatdetermines the motivation level of the employees.

BM: What are the components of an excellentorganization culture?

PS: First, the organization needs to be transparent,growth oriented, a place that attracts employees byvirtue of its values, beliefs, openness. Second, it mustallow freedom of expressions, healthy interactionsamongst employees, policies that are oriented to themarket and are dynamic as per changingenvironment. All this is possible by making efforts andsetting examples at the top.



The formalways of

formulatingattitudes,

behavioursand the

resultantculture

include thedesign of

performancemanagementsystem andthe reward

andrecognitionsystem that

the companyhas. Whateverbehaviour is

rewarded getsfollowed,

voluntarily orinvoluntarily.

Conversation

BM

DR. SUJAYA BANERJEE

Chief Talent Officer & Sr.VP-HR, Essar Group, Mumbai

Culture is the most commonlyused word to express thecollective lens and world viewof a group of people defined bySymbols,Rituals, Stories,

Shared Values that influence 'the way' thisGroup interacts with each other. Countriesand people have macro cultures whichinfluence cultures with organizations thatexist within these macro cultures.

Within organizations culture woulddefine'the way in which people get workdone' within organizations. Needless tosay macro economy compulsions,organizational capabilities, type ofindustry or business and the history ofhow the organization has evolved orgrown would influence itsculture.Organizational processes,systems, philosophies governing these, theTop leadership behaviours and the livedorganizational values can significantlyimpact organizational culture.

Employee morale and behaviors areboth an outcome of organizationalculture. If an organization is competitiveand encourages employees to fight forscarce resources, employees respond andbehave in a particular way. Whereas if theculture is nurturant, mistake tolerant andencouraging improvement, employees willbehave in a different way.

Organization climate defines the leversof culture which if impacted positivelycan create a conducive culture thatenables performance effectiveness whileenabling a happy organization withmeaningful relationships and businessresults. Openness, Confrontation, Trust,Authenticity, Proactivity, Autonomy,Collaboration and Experimentation areingredients of a conducive organizationalclimate. Sustained efforts to enable anincubating environment for performanceconstitutes a positive and desirableculture.

Ideally employees are attracted toOrganizations that have a culture that isperformance oriented, a meritocracy,rewarding, nurturing and engaging. Withmost organizations now employing over50% Gen Y employees irrespective ofIndustry type, employees are increasinglyseeking an employer where the culturedoes not reiterate power distances, has aculture of openness which encouragesemployees to speak their mind, engagingleaders who create an environment ofperformance, accountability with thepsychological safety to experiment, makemistakes and learn. Organizations thatare nurturing and can create anincubating environment for their talent,will finally win the War for Talent!


To win,CreateincubativeenvironmentOpenness, Confrontation, Trust,Authenticity, Proactivity, Autonomy,Collaboration and Experimentation areingredients of a conduciveorganizational climate.

Ideally employeesare attracted toOrganizations thathave a culture that isperformanceoriented, ameritocracy,rewarding, nurturingand engaging. BM

building the OC.Factually, culture doesn't establishes this way. It involveshuman relations who look for a work environment of "being cared andvalued", which results into a heavy dependence on emotion andsentiment of each member of the organization. The interplay of thesetwo factors builds an OC over a period of time.

BM: What impacts the organization culture?

VM : The leadership styles of the decision makers impact the OC. Howthe line managers decide to adapt to makes a big impact. Based on theOCTAPAC model, leadership styles can be handled to build a positive andmotivating work culture irrespective of the impact of the leadershipstyles. This is one of the most crucial factors which provide long-termstability to the organization and its success. How managers verballycommunicate is another critical factor in creating the OC.Managers haveto "walk their talk" or they would stand to lose the respect of theircolleagues, peers and subordinates.

BM: How does OC affect employee morale and behaviour? What roledoes OC play in shaping employee behaviour?

VM: Employee morale is guided by the time tested tools of motivation.While needs may vary according to different levels, behaviour is a naturalconsequence of the motivation meter.The current day Generation Y andZ look for fun in their jobs followed by an attractive compensationstructure.They also look for a charismatic and selfless mentor (Boss) whowould teach them and lead them towards a long-term career path. Theother category of employees would look for stability, respect and self-actualization of needs. Broadly, the composite behaviour of these twogroups of employees would characterize the culture of the organization.

BM: Tell us something about the organization culture at BKT Tyres.

VM: The OC in my organization is motivating and promotes immensecreativity and innovation. Employees are empowered and engaged andbelieve that this is the place where they would like to give their bestperformance.The leadership style of the decision makers is collaborativeand based on team work. The senior management is conscious of thefact that irrespective of the JD/ KRAs, the decision makers have to exhibitconsistently acceptable behaviour as enshrined in the unwritten culturepolicy of the company.

BM: What is the difference between organization culture andorganization climate?

VM: Organizational culture creates the climate. While climate is aphenomenon which is apparent in a work environment and culturesignifies the good intent of each member of the organization while atwork. Culture is created with heartfelt feelings whereas climate is morematerialistic in nature, emerging out of the individual roles andresponsibilities in the organization.

BM: What should be the components of an excellent organization culture?

VM: In my opinion, an excellent organization culture should be anamalgamation of all these factors. It should have an open and fearlesswork culture, a participative and appreciative work environment,multiple opportunities to independently deal with" live" issues, companysupport at personal front whenever needed, equitable and fair rewardsystem, clarity and transparency in the decision making process, teamwork and mutual functional appreciation, flexible work hours, marketdriven compensation structures, clear career path and growthopportunities and congruence of personal aspirations andorganizational mission.



Building aculture ofrepute

Conversation Business Manager chats with Viresh Mathur, Vice President-HR, BKTTyres on what it takes to build a strong organization culture and howa strong organization culture contribute to the unique social andpsychological environment of an organization.

BM: How would you define organizational culture(OC)?VM: Organization culture is a value system which ispracticed by all employees of an organization. Thesevalues are visible through their action, attitude andbehaviour. Though every organization will have theirown written set of guidelines that they expect theiremployee to abide by, however it is observed thatwhat employees experience is different from theprescribed policy.OC is an intrinsic value system whichhas to be willingly, consistently and effortlesslyexhibited by each employee, at all levels across theorganization.

BM: Do organizations have to consciously takesteps to build an OC or does it take shape on itsown over a period of time?VM: Many organizations by design, very consciouslydefine policies, practices and processes in the guise of

VIRESH MATHUR

Vice President-HR, BKT Tyres, Mumbai

BM

Ask me to define organization culture and diverse definitionsflash before me, however, I would say 'culture' is howorganizations 'do things'. Culture consists of norms ofbehaviour and the underlying shared values that help keepthose norms in place. The ability of companies to be culturally

innovative is related to the leadership, and the top management must beresponsible for building strong cultures. Leaders construct the socialreality of the organization; they shape values and attend to the vision ofthe organization.

Where does culture comes from?Culture is dynamic since it has internal and external factors impacting

and forcing to change so it's not static. It usually comes from the foundersof the group or leadership team. For whatever reason, they value certainthings and behave in ways that seem to help the group succeed and that


Entailinga Cultureto Reckon

with

Culture is often describedas the foundation uponwhich any organization isbuilt. A strong corporateculture that is compatiblewith the environment willhelp to achieve overallbetter financial results.However, cultures arehardly planned orpredictable; they are thenatural products of socialinteraction and evolve andemerge over time.

SARITA DAS

Director - HR,Elekta Medical Systems, Gurgaon

influences the behavior of other team members andeventually becomes DNA of the organization.

Types of culturesThere are different kinds of cultures, i.e., role, task

and power culture. A role culture has a typicalpyramid structure. A task culture has flexible matrixstructures. A power culture has web-likecommunications structure. Research indicates that acompany outperforms its counterparts when 1) itsculture emphasizes customers, investors, andemployees; and 2) its culture fits its businessenvironment and adapts to changes. Corporateculture has a strong influence on a company'seconomic performance; it can have a polarizing effect.A strong corporate culture that is compatible with theenvironment will drive better financial resultscompared with a weaker corporate culture. But astrong corporate culture that is not in tune with theenvironment will hinder the company more than aweak corporate culture ever could. There is a directlink between productivity level and organizationculture. Strong corporate cultures indicate thatemployees are like-minded and hold similar beliefsand ethical values. When these beliefs and ethicalvalues align with business objectives, they can proveto be effective in building teams because rapport andtrust quickly ensues. The bonds that the teams buildhelp them avoid conflicts and focus on taskcompletion. Strong corporate cultures easecommunication of roles and responsibilities to allindividuals. Employees know what is expected ofthem, how management assesses their performanceand what forms of rewards are available.

Effect on performanceOrganizational culture can have varying impacts

on employee performance and motivation levels.Oftentimes, employees work harder to achieveorganizational goals if they consider themselves to bepart of the corporate culture. Different culturesoperating in one company can also impact employeeperformance. For example, if the organizationmaintains a reserved "talk when necessary" culture,employees may work accordingly; however, if theorganization allows one area, say the sales team, to beoutspoken and socially active, the organization mayexperience rivalries among areas. Thus, allowing anarea to set up their own culture can affect theperformance of the employees deployed elsewhere inthe company.

Culture at ElektaElekta acquired another company recently and

therefore, a new culture is being evolved. Employees inboth organizations were familiar with certainprocesses/culture and now we as team are adapting tochanges. At times, it's quite tough because naturallythere is a change resistant. The leadership's role/management role in making this a success/failure iscrucial. A leader put in conscious efforts to ensure thatfeeling of inclusiveness is created rather than just usingelectronic communication modes. Rapport building andconnecting at fundamental level is key to success.

The differentiatorCulture might be described as the foundation upon

which any organization is built. It develops over thelonger term and consists of the values - stated andimplicit- beliefs, norms and traditions which guidehow the organization does its business and in turnhow people behave. In simple terms, culture could bedescribed as the personality of the organization.Although, it is somewhat intangible, culture has asignificant role in influencing all aspects of lifewithin the organization and indeed how it interactswith the outside world.

Climate, on the other hand, could be described assomething more surface level. It is about what it feelslike to work in the organization. If the culture is thepersonality, then climate has more to do with themood or prevailing atmosphere within the business.The climate is prone to more short-term fluctuationsand is determined by many factors which includeleadership, structure, rewards and recognition.Understanding the basic differences between cultureand climate is practically helpful for you as a leader asit should help you to recognize that changing culture

is a significant challenge, and may be out of yourhands, depending upon your position/seniority, butyou can greatly influence the climate within yourteam by how you lead them. This has to do specificallywith your overall leadership style but also in how youdesign or improve work practices, recognize andreward performance and conflict management.

Components of an excellentorganization culture

Vision: - A great culture starts with a vision ormission statement since it provides purpose.Values: - A shared belief would guide everydaydecision-making and how employees refer to it. Itcan be an essential guideposts when developed,communicated, and executed in a consistentmannerRecognition & reward: - It is important for peopleto hear the adulation from the CEO; it also feelsgreat for them to hear from their peers.Communication: Connect with the people at alllevels of your company. Get out of your comfortzoneLearning & development: - Show your employeesyou're committed to their professional growthConnect: - It's about getting to know yourcolleagues not just as colleagues, but what they'relike outside the office.



Research indicates that a companyoutperforms its counterparts when 1)its culture emphasizes customers,investors, and employees; and 2) itsculture fits its business environmentand adapts to changes.

BM

Turning on a business in its true spiritstowards vivaciousness and exuberanceimplies a lot of care and caution by way ofcreating and nurturing the right kind ofbusiness culture within its premises.

Organizational culture harps upon the basic patternof shared values and an assumption governing theway employees within an organization thinks aboutand acts on problems and opportunities. Culture, soto say, in an organization refers to all the visible andinvisible expressions, lingos and details that bring abusiness house towards crafting an entity of its own.Organizational culture holds within itself all theartifacts, shared values and shared assumptionsthat consciously and unconsciously define anorganization's moves embedded in its values, beliefs,rituals and mental models.

Social and business researchers have identifiedcertain typical pan-Indian cultural preferences thatoften find expression in Indian business houses.They are collectivist orientation, respect for statusand power, primacy of personalized relationships,desire to be entrenched within an in-group,emphasizing on situational behavioral modes,generally cynical about others, megalomania andoverbearingness, etc. A deep understanding of theunderlying philosophies of different culturalorientations spawns eternal debate on the matter asto which cultural configuration may be consideredsuperior and more apt compared to otheralignments in specific contexts and milieus.Cultural patterns that reveal individualism, powerdistance, uncertainty avoidance, masculinity anddominance are often considered as primarydimensions of organizational culture in mostmanagement literature of the day.

What research saysGoing by scientific research on organizational

culture and cultural studies in business, severalcultural categories emerge at length viz., attention


For BusinessEndurance, Fortitudeand Success...

It is vital to alignorganizational cultureswith business climates todelineate a prospectivepath of harmonious andsymphonic well-beingwithin organizationalpremises for survival,fortitude and endurancein this eon of unendinguncertainties, qualms,doubts and hesitations.

DR. MANODIP RAY CHAUDHURI

Professor and Dean, Future Business School , Kolkata

When it comes to business culture of anorganization, one needs to harp upon thefact that organizational culture iscreated consciously by the members ofthe social unit within.

to detail, outcome orientation, people orientation,team orientation, aggressiveness, stability, andinnovation and risk-taking. Certain culturalconsiderations appear to oppose other contradictoryconformations. A rule-oriented culture is oftenoppose to innovative culture, an internally focusedculture is oppose to outbound learning culture, acontrolling culture is flexible culture, a goal-oriented culture is sometimes oppose to supportiveculture and so on and so forth.

When it comes to business culture of anorganization, one needs to harp upon the fact that

organizational culture is created consciously by themembers of the social unit within. Culture at workessentially refers to the dominant culture in theworkplace, i.e., the themes shared most widely byorganizational members.

Businesses, however, also comprise ofsubcultures located throughout various regions,sections, divisions and occupational groups in anorganization. Some subcultures uphold thedominant culture by accentuating and heighteningparallel assumptions, values and beliefs, whilesome subcultures appear to oppose the core valuesof a business and are referred to as counter-cultures.

Elements of business cultureThere are various elements that speak of a

business culture in practice in an organization.Organizational language is quite a significantelement in this context. The way employees dress,keep up with emotional quotient, interact with co-workers, describe customers, transact with the

outer environment of business, express anger, greetstakeholders, all appear to be visible expressions ofan organization's culture. Culture is also anoutcome of the organizational stories and legends.Tales around heroic deeds of employees, pastpractices of merit within an organization, rituals inthe forms of programmed routines oforganizational life, ceremonies conducted forbenefit of the business in the past, etc., go a long wayin creating organizational culture in the true senseof the term. Yet another element that createscultural expressions is the set of physical structuresand symbols that an organization boasts of. As

Winston Churchill puts it, 'We shape our buildings;thereafter, they shape us'.

The moot point hovers around cultural re-creation during times of mergers and acquisitions.Speaking on strategies for merging differentcultural orientations, the elemental set ofapproaches appear as assimilation, deculturation,integration and separation, each of which standsupright with their own set of notions, values andfunctional beliefs.

Culture binds people, alters and fixes differences,disparities and dissimilarities; it carefullyinterlaces a path of harmony, congruence,coherence and concord within an organization witha spirit of optimism and sanguinity towards successin the real sense of the term. What an organizationneed to look into is maintaining culturalconsistency over time and imbibing significantelements of business culture in the business climatethat prevails in the day-to-day practices at work.Culture is what we profess, while climate is what wepractice every-time in reality.



Culture binds people, alters and fixes differences, disparities and dissimilarities; it carefully interlaces a path of harmony, congruence, coherence

and concord within an organization with a spirit of optimism and sanguinitytowards success in the real sense of the term.

BM

Research shows approximately 70% of changeinitiatives fail - an average that holds up incountless analyses across different industries,

time frames and geographies. Failure typically meansone of three things: the results of the initiative landsignificantly below expectations; the organizationreverts back to its original starting point; or, theinitiative never garners support and fails to launch.What differentiates the 30% of initiatives that succeed?There are several characteristics, but the ability tochange individual employee behavior is the greatestchallenge.

Major Categories of EmployeeBehavior:1. Individual performance is multidimensional

2. Most HRD focuses on "Task Performance"Behaviors central to doing one's job

3. Organizational citizenship behaviors Critical to organizational effectiveness

Not Specific to any one task

What types of behaviors are wereally talking about?

Essentially, we need to direct motivated employees toexhibit behaviors that achieve organizational goals. Andowners are inherently directed toward those goals whenthey understand what they are and how to achieve them.We're talking about any behavior the organization needsto succeed. May be the behavior we want them to exhibitis leaving. If we need to eliminate 10 percent of staff butwe don't want to downsize, can we just get the mostunproductive 10 percent to leave? Short term, you can'tdo that with a compensation program or a benefit plan.AN English philosopher, Jeremy Bentham said, "Naturehas place mankind under the governments of twosovereign masters, pain and pleasure." As compensationand benefits practitioners, we assume if we keepthrowing pleasure opportunities at employees behaviorwill change. But we have very few mechanisms tointroduce pain into the formula. When painful types ofactions are discussed, they are very quickly discountedin many cases. Real ownership involves both pain &

pleasure. Yet we keep relying on the same old tools.

How can we define tools?Tool box contains four different pays to workers-cash,

securities, goods and services and time and place. Whatmotivates and demotivates employees? Why is employeeownership a solution to this issue of Motivation anddemotivation There's ongoing research in this area,particularly now because companies are asking thequestion: We've been down the incentive compensationpath, we've been down the merit pay path, and we've beendown the performance management path, now you wantto take us down the ownership path. Does it work? Thereis lot of evidences that says, "Yes, Ownership behaviors inwork organization improve business results." But there'salso evidence that stock based compensation is necessarybut incomplete strategy, just giving people stock does notchange behavior. Just walking up to a person or saying,"Here's some stock, now act like a owner," doesn't alwayswork. In fact it is very seldom works.

To Summarize Organizations have to focus on changing behavior, not

motivating employees. Unfortunately, durable andsignificant behavior change can't be achieved throughcentrally administered programs. When we talk aboutemployee ownership and performance models, the issuesare many systems broader than our role as HRpractitioners. It means getting involved, not just as anHR advisor, but rethinking how mangers actuallymanage. This is a major opportunity for HRpractitioners.

Restoring the inherent and available productivitylevels in a smart, motivated workforce takes more than asurface redesign of compensation plans. Allorganization have tremendously powerful and effectiveincentive systems that continuously reinforce andextinguish behavior - hour by hour, minute by minute -outside the purview of HR.

But they don't always reinforce the desirablebehaviors or extinguish the wrong ones. We need to back up and really revisit what we want people to do andthen use a combination of effective performancemanagement and ownership-oriented strategies to getthem to do it.



Changing employee behaviour

NEESHU TOMARHR Professional,Supreme Industries Limited

Organizations have to focuson changing behavior, notmotivating employees.

BM

"Empowerment can bedefined as the processof enabling orauthorizing anindividual to think,

behave, act and control work anddecision-making in autonomous ways".Empowerment is the process ofenabling or authorizing an individual tothink, behave, take action and controlwork and decision making inautonomous ways. It is the state offeeling self-empowered in humanrelations terms. Employeeempowerment is a term used to expressthe ways in which non managerial staffcan make autonomous decisionswithout consulting a boss/manager.These self-willed decisions can be smallor large depending upon the degree ofpower with which the company wishesto invest employees. Employeeempowerment can begin with trainingand converting a whole company toempowerment model. Conversely, it maymerely mean giving employees ability tomake some decisions on the own.

Two sides of a coinEmployee empowerment is a two sided

coin. For employees to be empowered, the

management leadership must desire andbelieve that employee empowermentmakes good business sense and employeesmust act. Employee empowerment doesnot mean that management no longer hasthe responsibility to lead the organizationand is not responsible for performance.Stronger leadership and accountability isdemanded in an organization that seeks toempower employees. This starts withexecutive leadership, through allmanagement levels and includes front linesupervisors. It is only when the entireorganization is willing to work as a teamthat the real benefits of employeeempowerment are realized. Employeeinvolvement and participativemanagement are often used to meanempowerment. They are not reallyinterchangeable.

Employee empowermentas management style

A quality leader or manager hastremendous amount of power. Inaddition to the overt powers of hiring,firing performance appraisals and thelike, more subtle powers are availablethat you might not be aware of thepowers to listen, ask question andempowers employees.


Employee empowerment:

Don't let it fail

DR. YELLANKI NAGENDRA KUMARDGM (HR & Admn) Aker Solutions, Kakinada

In recent years, the term 'empowerment' has become part of everyday managementlanguage. In the organizational context, empowerment is regarded as providing asolution to the age-old problem of bureaucratic workplaces where creativity is stifledand workers become alienated, showing disconnect through individual or collectivemeans. Let’s explore…

Employee empowermentis a two sided coin. Foremployees to beempowered, themanagement leadershipmust desire and believethat employeeempowerment makesgood business sense andemployees must act.

Ask and listenInstead of providing your thoughts, ask the

employee four business altering words: 'What wouldyou do? When you do ask this question, the employeehas the opportunity to express ideas, dreams andpassions. You may already have answer, but if theanswer comes from the employee you now have.

Delegating this opportunity to some onepassionate about the issueChampion with in the business to lead theimplementation and changeEmployee who is making a difference to thebusiness

A win-win-win situation can be reached byasking one question and then practicing your activelistening skills. You win by delegating, the businesswins by improving processes and, most importantly,the employee feels like the primary winners becausethey have the opportunity to implement their ownideas to an issue and bring about resolution.

CommunicationFor an organization to practice and foster

employee empowerment, the management musttrust and communicate clearly with employees.Employee communication is one of the strongestsigns of employee empowerment. Honest andrepeated communication from elements of thestrategic plan, key performance indicators, financialperformance, down to daily decision-making. If anorganization is not actively cultivating employeeempowerment, it may take considering time andeffort before employees start to respond. Whenconsidering employee understanding andacceptance of decision consider how long it takes forthe management team to discuss and them make adecision. Allow several multiples of this time foremployees to think about the issue. For managementwanting employee empowerment, the evidence willnot come across the board with wide spreadacceptance. A small number will accept the

invitation to become more involved, say 3-5 per cent.The rest will be watching every move to see whathappens. Every communication, decision and actionby management will be viewed as either supporting amove to employee empowerment or not. Probablynothing demonstrated the commitment or lack ofcommitment to employee empowerment more thanpromotions and selection for leadership positions.Employee knows those that attempt to "shine upwhile dumping down".

An organization to enjoy the returns fromemployee empowerment the leadership mustdiligently work to create the work environmentwhere it is obvious to all that employeeempowerment is desired, wanted and cultivated.Management's responsibility is to create theenvironment for employee empowerment. Whenorganization leadership has started to take actionencourage employee empowerment it is then up tothe employees to decide if they wish to takeadvantage of the opportunity or not. It is not usuallyfor only a small minority to accept the challengeinitially. Also it is very likely that some fraction willnever respond. It is the large middle group that mustbe convinced to practice employee empowerment. Itis our conviction that most organizations haveexactly the level of employee empowerment themanagement wants. This demonstrates by theamount of communications, level of trainingprovides employees, opportunities for personalgrowth, the solicitation and implementation ofideas, the recognition and reward system,promotion and advancement criteria, anduncountable little signals from management thatdemonstrate whether employee are value or not.

Corporate / industrial trendsIn most cases of business, employee

"empowerment" is one of the most frequently usedbuzzwords within the workforce. Yet not only arepeople the most important asset in all forms ofbusiness they are often the most utilized resource.



For an organizationto practice and fosteremployeeempowerment, themanagement musttrust andcommunicate clearlywith employees.Employeecommunication isone of the strongestsigns of employeeempowerment.

Employee empowerment: Don't let it fail

This is especially true if discussing motivated people.We are all of us aware of disconnects betweenmanagement and staff. This separation creates asituation in which two divisions of a company arepolarized. Obviously, creating such a divide inorganizational structure does not foster a sense ofteamwork. Often heard from readers is the "us versusthem" environment rather than "all of us together".

When encouraged with care, empowerment is apanacea for many organizations ills. All managersand employees say they want empowerment, as it isconsidered a strategy to develop employees andserve customers, which in turn will serve thecompany. Simply put, empowered employees growtheir skills, and the organization benefits.

If it is so great then, why is empowerment notregularly fostered effectively? Employeeempowerment comes from the individual. That isnot to say that management ceases to have theresponsibility to lead the group and is notresponsible for performance. In fact, companies thatseek to empower employees demand strongerleadership and accountability. This begins withexecutive leadership, through all managementlevels and includes frontline supervisors. Onlywhen the entire organization is willing to work as ateam are the real benefits of employeeempowerment realized. When done right, employeeempowerment can be a morale booster. Of course,empowerment can work against the company ordivision of a company too. Staff members bay beempowered without direction. "Failure to provide astrategic framework, in which decision have acompass and success measurements, imperils theopportunity for empowered behaviour," writesSusan Heath field, a management and organizationdevelopment consultant. "Employees need directionto know how to practice empowerment," she adds.

Making employee empowerment succeed

For employee empowerment to succeed, themanagement team must be truly committed toallowing employees to make decisions. They maywish to define the scope of decisions made. Buildingdecision-making teams is often one of the modelsused in employee empowerment, because it allows formanagers and workers to contribute ideas towardsdirecting the company. Autocratic managers, who aremicromanagers, fail to utilize employeeempowerment. These types of managers tend tooversee all aspects of others work, and usually willnot give up control. A manager dedicated toemployee's empowerment must be willing to give upcontrol of some aspects of work production.

One easy way to begin employee empowermentin the workplace is to install a suggestion box, whereworkers can make suggestion without fear ofpunishment or retribution. However, simply placinga suggestion box somewhere is only the first step.Managers must then be willing to read and considersuggestions. They might provide a forum wherequestion or suggestions receive a response, likeweekly or monthly newsletter. In addition,

managers can hold a once monthly meeting open toemployees where all suggestions are addressed.

At least, some suggestions have to be approved inorder for employees to feel that they are makingsome impact to the company. Failure to approve orimplement any suggestions reinforces that all thepower belongs to the managers and not the workers.Employee empowerment of any form can only workwhen managers are willing to be open to new ideasand strategies. If no such willingness exists,employee empowerment is likely to be non-existent.Organizations that are committed towards theiremployees, organize employee empowerment as oneof their most important strategic methods tomotivate employees. Employee empowerment is alsokey strategy to enable people who have the need, theanswer, and the knowledge, to make decisions abouthow to best serve customers. If employeeempowerment is such a great tool and strategy foraccomplishing work, customer service, andemployee motivation, how come employeeempowerment is so rarely implemented effectively?Here are my top ten reasons why employeeempowerment fails.

Why employee empowerment fails? Managers pay lip service to employeeempowerment, but do not really believe in its power.Managers don't really understand what employeeempowerment means.Managers fail to establish boundaries foremployee empowerment.Managers have defined the decision makingauthorities and boundaries with staff, but thenmicromanage the work of employees.Failure to provide a strategic framework, inwhich decision have a compass and succeedmeasurements, imperils the opportunity forempowered behaviour.Managers fail to provide the information andaccess to information, training, and learningopportunities needed for staff to make gooddecisions, don't complain employeeempowerment efforts fall short.Managers abdicate all responsibilities andaccountabilities for decision making. Allowbarriers to impede the ability of staff membersto practice empowered behaviour.Employees feel under-compensated, under-titledfor the responsibilities they take on, under-noticed, under-praised, and under-appreciated,don't expect results from employee empowerment.

Think about employee empowerment, not assomething a manager bestows on employees, butrather as a philosophy and a strategy to help peopledevelop talents, skills and decision makingcompetency. This growth helps employees feelcompetent, capable, and successful. Competent,capable, successful people best serve yourorganization. Avoid these ten employeeempowerment traps. Don't let employeeempowerment fail in your organization.


Employee empowerment: Don't let it fail

BM

If we were to ask HR professionalswhat was the core reason for somesignificant conflicts that have arisen

amongst teams or individual employees ,it will definitely be a conflict arising outof disparate work values, which usuallystem from belonging to different agegroups or what we refer to asgenerations.

Arising from the difference in workvalues, are two elements which furthercompound the problem in a workenvironment - attitude and behaviour.Therefore, it is hardly surprising that HRprofessionals are increasinglyevaluating ways to manage these twogenerations and enable them to work inalignment.

SHRM India has spearheadedextensive research in multigenerationaldiversity in collaboration with IIMBangalore and this study identifies thatthe generations in India are shaped by aset of social, economic, cultural andpolitical systems. This in turn impliesthat the demographic variables like age,gender, income, place of residence and soon, play a critical role in understandinghow generations manifest in the Indianworkplace.Organizations are constantlyunder pressure to increase collaborationand productivity despite thesedifferences. SHRM poll onIntergenerational conflict in theworkplace, 2011 recorded that more than50 percent of the workers mentionedworkplace conflict between generationswas an issue. But what is concerning isthat 44 percent of organizations did notdo anything to sort out these issues.

Therefore, here is an insight intowhat organizations can do to improveand foster intergenerationalawareness and collaboration -

Trust building: There is usually a lackof inherent trust about the motives

and the capabilities of the otheremployee segment and this then leadsto lack of communication as well asavoidance. Therefore the crux of anyinitiative should be to build trustamong different employeegenerations.Leveraging strengths - Theorganization needs to leverage thestrengths of the groups and harnesstheir differences to enable them toperform as per their optimalpotential.Regular audit - There should be aregular and structured process ofdata collection on the employee agebrackets to know the spread of peoplein different age groups. Even theoverall organizational surveys suchas an engagement or satisfactionsurvey should have a data cut for whatproblems are raised by the differentemployee segments, by age groups, sothat solutions can be createdaccordingly. This data should alsocapture number of years ofexperience ( total and within theorganization) and average age ofemployees, at various managementlevels.

Assessment of needs & benefits- Sincethe needs of different generationsmight vary, it is important fororganizations to understand whichaspects can they streamline and whichones will need to remain differential.For example, flexi timings of workassignmentsare something that theyounger workforce might prefer.Conducting focus groups - To keep linesof communication and feedback alwaysopen, from time to time, organizationsshould have mixed focus groupdiscussions so that issues can come outand solutions developed collaboratively.Coaching & Mentoring Interventions -Due to the age related differences onecan have a mentoring relationshipprocess which allows the olderemployees to share their expertiseand company knowledge. Reversementoring should also beexploredsince the younger employeeswho are at times more technology andsocial media savvy, can sharethisknowhow with older employees.Training programs - Inductiontraining as well as specializedtrainings should be led by the HRteam to create awareness among allemployees about the rationale of thedifferences that exist between thedifferent groups. This will help toopen up people's minds especially ifexperts come and conduct the same.

Finally, the most important aspect isresolvingconflict - Organizations shouldput down mechanisms which allow forpositive ways to manage conflictsthrough counseling, awareness,knowledge sharing and a clearly setdown process of grievance redressal, ifrequired.


Diversity & Inclusion

GenerationalDiversity

SIMRAN OBEROI, Knowledge Advisor, SHRM India

BM

Arising from the difference in work values, are twoelements which further compound the problem in awork environment - attitude and behaviour.

What organisations should do ?

Trust buildingLeveraging strengthsRegular auditAssessment of needs & benefitsConducting focus groupsCoaching & Mentoring InterventionsTraining programs



Anil Kaushik Management Expert -HR & IR

Q. When ESI inspector visited our factory, a truck wasbeing unloaded by some persons known as palledars.Driver and cleaner were also present there. He countedthem all for the purpose of coverage of the factory underESI Act. What is the legal position on this point. Can suchpersons be counted for the purpose of coverage?

Ans. NO! In this regard the phrase used under section2(9) and 2(13) of E.S.I. Act, 1948 are relevant which says'working in the premises of the establishment'. Acritical analysis reveals that the presence of the personshould be for execution of the principal activity of theestablishment. It needs to be borne in mind that theterm "working on the premises of the establishment "can not take in its fold the situations of the casual oroccasional presence of the persons in the factory. It istrue that for the purpose of loading and unloading theraw material from the truck, the driver, cleaner andpalledars have to enter the premises. So is the case withvarious persons who are required to transport theworkers to the premises of the factory. If mere entry forsuch purposes alone is to be treated as the yardstick,every person who enters the factory for whateverpurpose deserves to be covered under the definition ofthe employee.. The words "person who has undertakenexecution on the premises of the factory" employed inthe definition, indicate the presence of the persons forexecution of the principal activity of the industrialestablishment and not a casual entry. The A.P. highCourt in the case of 'B.O.C. India Ltd., Calcutta vs Asstt.Regional Director, E.S.I. Corporation, Hyderabad andothers, 2004 (103) FLR 593' also held in the samedirection declaring that casual persons can not betreated as employee for the purpose of coverage underthe ESI act.

Q. We have transport business. Our buses are engaged forcarrying office and factory employees. Recently weengaged a substitute driver for one day only as ourpermanent driver got sick and could not come on duty.Unfortunately, bus met with an accident and thatsubstitute driver died. Are we liable to pay compensationin this case when driver was substitute for a day only?

Ans. Yes! You are legally liable to pay compensation tothe dependents of the deceased driver as the death ofthe driver occured during the course of hisemployment, no matters even if the bus driver wasengaged as substitute even for one day. His employmentfor a day only will qualify him as workman underEmployees Compensation Act.

The relationship of employer and employee emerges assoon as the person is engaged by the employer even fora day. His claim can’t be negated simply becasue he wasengaged as substitute. Orissa HC in the case of NewIndia Assurance Company Ltd. vs. Mohan KumarSahoo, 2004 LLR 71 has also held in the same directionby declaring that a substitute can be a workman if he isengaged for the service of the principal employer andhe is occupied in the performance of duties for theprincipal employer or if he is retained for the service ofthe principal employer.

Q. I am Labour Law practitioner. I was going through theprovisions of EPF Act and Pension Scheme. Goingthrough the provisions of Sec. 6A and 6B of the Actthrough which share of 8.33% of EPF fund share isdiverted to pension scheme. Don’t you think that theseprovisions are ultra-vires and unconstitutional? What isyour expert opinion?

Ans. No! These provisions are neither ultra-vires norunconstitutional. These amendments when carried outin the EPF Act to make pension scheme functionablewere challenged by many workers’ unions andorganizations on the ground that the changes wereunreasonable, arbitrary and discrininatory and had theeffect of depletion of the then existing benefits from thePF. Supreme Court in the case of Otis ElevatorEmployees Union vs. Union of India, 2004 LLR 63 hasheld that the pension scheme 1995 as introduced byGovt. was reasonable. The difficulties pointed out in thematter did not constitute a legal challeng to the validityof the scheme. Court held that it is for the welfare of theemployees and can’t be held violative of constitutionbeing no discrimination or arbitrariness.

Q. We deduct the 12% PF contribution on maximum limitof Rs. 6500 from employees salary and equally add ourshare. Some of the employees want to contirbute their partof share even up to 20/40% of their salary. My question- isthe employer equally liable to pay the same amount of thecontribution of PF beyond Rs. 6500? And to what extentemployee can deposit his share of PF contribution?

Ans. No! Employer is not legally responsible or underobligation to match their contribution of PF with theemployee contribution beyond salary of Rs. 6500. Para26 with para 2(f) of EPF scheme casts compulsoryobligation on the employer and the employee tocontribute at prescribed rate on salary upto Rs. 6500 permonth. There is no restriction on contributing PF shareon actual salary beyond salary of Rs. 6500 per month.

Solutions provided here are in context to narrated facts & not in general.

Guj. H.C. in the case of Jamnagar Rajkot Gramin BankOfficers Association case 2013 LLR 806 has also held inthe same direction. Like wise sub para 6 of para 26 ofthe scheme permits employee to contribute additionalcontibution over and above the prescribed rate atoptional basis. At the same time the management willhave no obligation to pay matching contribution in suchadditional contribution. In respect of the limit ofpaying more contribution than prescribed, there is norestriction prescribed in the Act / Scheme. It meansthat employee is free to deposit his share of PF to anyextent which is known as voluntory provident fund.

Q. We dismissed an employee after he was held guilty inenquiry but some how we could not pay his suspensionallowance during the enquiry. Will this non payment ofsuspension allowance makes the disciplinary proceedingsinvalid?

Ans. It depends on facts and circumstances of eachcase. While Bombay HC in the case Western IndiaTanneries Ltd. case 1991, LLR 505 and A.P. HC in thecase of Smudrapu Somlappadu case 1996 LLR 405 haveheld that non payment of suspension allowance to asuspended employee by the employer during pendencyof enquiry will vitiate the enquiry, Allahabad HC in theMunicipal Board Amroha, 2001 LLR 1004 and Mad. HCin the case of M. Guruswamy 2001 LLR 520 (Sum.): 20011 LLJ 1521 have held that enquiry will not be vitiated fornon payment of suspension allowance unless prejudiceis established.

SC in the case of Uttar Pradesh State Textile Corp., 2005LLR 1197 has held that unless prejudice is established,non payment of subsistence allowance can’t ipso-factobe a ground to vitiate an enquiry. In another case SCheld that non payment of subpence allowance duringpendency of enquiry will not vitiate the proceedingswhen the employee neither asked the concernedauthorities nor did plead before the court besides thathe failed to establish than any prejudice was caused.(Indra Bhanu Gaur vs. Committee, Management of MMDegree College, 2004 LLR 228)

So you can apply these principles to your case since youhave not narrated the enough facts for me to givespecific opinion.

Q. We have a NGO running a family counselling centrewhere we try to resolve the family disputes betweenhusband and wife to save their matrimonial life. We havealso appointed few male and female employees who arecalled social worker to take up these assignments. One ofthe female social worker, since discharged, has filed a caseagainst us for reinstatement. I seek your expert advicewhether she is a workman under labour laws?

Ans. The facts which you have put forth, make me tosuggest that such a female worker can’t be termed as aworkman under ID Act and her case for reinstatementcan’t stand. I presume that your social worker must bedoing counselling of husband and wife which involvesthe detailed dialogue spread over in different sessionsat different times, some time collectively and sometimeindividually. She must also be collecting information

about the reasons of family disputes- personresponsible for marital dispute, social and educationalback ground of both husband - wife, individual likesand dislikes, friends, relations, habits etc. So yourcounseller is basically a social worker who takes theparties into confidence and makes them believe that heis their friend who is willing to act as a catalyst and helpthem in setting the matrimonial dispute. Such a personcan’t be said to be a workman under ID Act because heis not engaged either in manual, clerical, skilled ortechnical job. Bom. HC in the case of ChandrakantDevu Shinde, 2005 LLR 1206 has also held in the samedirection.

Q. We have well defined performance management systemin the company. Every employee has to go through theappraisal and on that assessment, he is awarded annualincrement. One employee who was not awarded incrementthis year due to his consistent poor performance hasthreatened the management by writing a letter to go onhunger strike in front of the office. He also keepdisplaying a play card on his shirt declaring about hishunger strike and making management responsible forhis victimisation. Management wants him to dismissimmediately. Will it be legal and sound? What is youropinion?

Ans. I view your case from a different angle. Makingemployee reach to a level where he decides to resort tohunger strike because he was not awarded incrementreflects on the accuracy / genuineness of yourperformance management system. When the employeehas been identified as consistent poor performer forlong time, I am unable to understand why he is kept inemployment. So please also have a re-look at your PMS.Now coming to disciplinary action on threating of hisresoring to hunger strike, I don’t think your actionwould be held legal and reasonable. Rather, you musttry to measure or assess his mental agony as to why theperson in the present environment has not resorted toother action instead of going for hunger strike. It maybe his frustration, helplessness or positivity not tobehave in a non voilent way. Mad. HC in the case ofManagement, Dharmapuri District Co-operativeSpinning Mills Ltd., 2005 LLR 441 has held thatdismissal of a workman for going on hunger strike fordenial of increment can’t be said to be justified. Courthas taken the punishment of dismissal in such a case istoo harsh and shockingly disproportionate to thecharge.

Court further held that in a democracy, people must beallowed to let out steam which may be in form ofhunger strike, peaceful demonstrations, etc., andparticularly in the industrial atmosphere, themanagements must realise that if the workmen are notallowed to let out their steam in such a non-violentmanner, it is very likely that the pressure of the steamwill mount-up and the work force will let out theirsteam in a violent manner, which is not congenial forindustrial peace hence showing protest and resentmentthrough non-violence is always is always better than byviolence.

Business Manager September 201343Readers are invited to ask for Solutions of their Labour Problems through e-mail - [email protected]

BM


Government Notifications


TRANSFER CLAIM FORM CLAIM ID____________________FORM 13 (REVISED) (For EPFO Use Only)

Employees’ Provident Fund Scheme, 1952(Para 57)

[APPLICATION FOR THE TRANSFER OF EPF ACCOUNT FROM UNEXEMPTED ESTABLISHMENT TO EXEMPTED ORUNEXEMPTED ESTABLISMENT]

To, To,The Regional PF Commissioner, Trust Name :______________________________________Office Name :________________________________ Trust Address :____________________________________Office Address :______________________________ ________________________________________________________________________________________________ ___________________________________________________(Please see instruction 3) in case the PF A/C is with Exempted)

Establishment)Sir,I request that my provident fund balance along with my pension service details may please be transfeerred to my present accountunder intimation to me. My details are as under :

PART A : PERSONAL INFORMATION1. * Name :____________________________________________________________________________________________________________________2. * Father;s /Husband’s name :________________________________________________________________________________________________3. Mobile number:___________________________________________4. E-mail id :______________________________________________________5. Bank A/C number :_______________________________________6. IFSC code of Bank branch :______________________________________

PART B : DETAILS OF PREVIOUS ACCOUNT (WHICH IS TO BE TRANSFERRED)1. * PF Account No. :___________________________________________________________________________________________________________In case the previous establishment is exempted under Employees’ Prvident Fund Scheme, 1952Pension Fund Account No. :___________________________________________________________________________________________________2. *Name and Address of the Previous establishment :__________________________________________________________________________________________________________________________________________________________________________________________________________3. *PF Account is held by : (Name of EPF Office/PF Trust)_______________________________________________________________________4. *Date of Birth :______________________________(dd/mm/yyyy) 5. *Date of joining :________________________________(dd/mm/yyyy)6. *Date of leaving:_________________________________(dd/mm/yyyy)

PART C : DETAILS OF PRESENT ACCOUNT1. * PF Account No. :___________________________________________________________________________________________________________In case the previous establishment is exempted under Employees’ Prvident Fund Scheme, 1952Pension Fund Account No. :____________________________________________________________________________________________________2. *Name and Address of the present establishment :__________________________________________________________________________________________________________________________________________________________________________________________________________3. *Account is held by : (Name of EPF Office/PF Trust)__________________________________________________________________________4. *Date of joining :_______________________(dd/mm/yyyy)5. #Name of Trust (to whom fnds are to be paid in case of present establishment being exempted under EPF Scheme,1952) :________________________________________________________________________________________________________________________6. # Employee code under the Trust :___________________________________________________________________________________________(*indicated mandatory fields) (#Strike off if not applicalbe)I, Certify that all the information given above is true to the best of my knowledge and I have ensured the correctness ofmy present and previous account numbers.

Signature of the MemberDate :____________________

IMPORTANT : Member has the option to get the claim from attested by present or prevous employer. In case of attestation bythe previous employer, time taken in settlement will be relatively less.Certified that I have verified the date in Part B in respect of the member mentioned in Part A of this form and the signature of the member.

Signature of Previous EmployerSeal of the Establishment Date :____________________________

ORCertified that I have verified the date in Part C in respect of the member mentioned in Part A of this form.

Signature of Present EmployerSeal of the Establishment Date :____________________________



Employees' Provident Fund OrganisationBhavishya Nidhi Bhawan, 14-Bhikaji Cama Place, New Delhi-110 066

No. Pen/5/21/2010/Dependent Parent Pension/ROC/6442 Dated: 20.6.2013

ToAll Addl. Central P.F. CommissionerAll Regional Provident FundCommissionerOfficers-in-ChargeROs/SROs

Sub : Modification in Para 16(5)(b) of EPS, 1995 under the EPF & MP Act, 1952

Sir,

Certain instances have been referred to Headquarter where the nominee or dependent father/mother of a deceased member, whohad not rendered pensionable service on the date of exit from the employment but had opted to retain the membership of the scheme,have claimed Return of Capital under clause (b) of sub-para 5 of Paragraph 16 of EPS, 1995.

Although Para 13 as been deleted vide GSR 688(E) dated 26-9-2008 but the provision of Para 16(5)(b) referred to the deletedParagraph 13 of EPS, 1995 and consequently no benefit could be given creating an impasse.

Paragraph 16(5)(b) of EPS, 1995 has since been amended vide GSR No. 80(E) dated 14-2-2013 w.e.f. 26-9-2008 (EPF website Sr.No.641of 2012-13) whereby nominee or dependent father or dependent mother in such cases is entitled for withdrawal benefit as providedin Para 14 of EPS, 1995.

You are requested to regulate the cases accordingly.

Yours faithfully,(C. Chakraborty), Regional P.F. Commissioner-I(P)

Revised Minimum Wagesin Hayana

w.e.f. 1.7.13

Category Minimum Wages Daily Wages

Un skilled 5341.51 205.44

Semi skilled (A) 5471.51 210.44

Semi skilled (B) 5601.51 215.44

Skilled (A) 5731.51 220.44

Skilled (B) 5861.51 225.44

Highly Skilled 5991.51 230.44

Government Notifications

Employees' Provident FundOrganisation

Bhavishya Nidhi Bhawan, 14 Bhikaji Cama Place,New Delhi-110066

No.C/MISC/Ex-Return/2013/1885 Dated: 1.5.2013To

The Addl. CPFCs (Zones)Sub.: Proper codification of the establishments exempted

under the EPF Scheme 1952, Employees' Pension Scheme, 1995and EDLI Scheme, 1976 - reg.Sir,

Instructions have been issued vide this office letterNo.C/MISC/Ex-Return/2013/615 dated 9.4.2013 (posted at Sl.No.21 of the circulars segment for the year 2013-2014 on theofficial website) to all the Regional PF Commissioners, In-Charge of Regional and Sub-Regional offices for propercodification of the establishments exempted under the EPFScheme, 1952, Employees' Pension Scheme, 1995 and EDLIScheme, 1976 so as to update the establishment master.

2. A deadline was given to all Regional PF Commissioners,In-charge of Regional and Sub-regional offices to complete theexercise by 30.4.2013 without fail. It is regretted to inform thatthe required information has been received only from 2-3offices and that too not in the complete shape.

3. The Central PF Commissioner has stressed on the onlinemonitoring of the functioning of the exempted establishmentsand as per direction the committee constituted for the purposehas already submitted its report to IS Division for writing theprogramme. For the purpose of online monitoring, theupdated data on exempted establishments are requiredurgently at this end.

In view of above, you are requested to pull all the RPFCsholding offices under your jurisdiction and direct them tocomplete the updation latest by 10.5.2013 unfailingly. If therequired data is not received by this cut-off date from all theoffices, the matter will be placed before Central PFCommissioner for further action.

Yours faithfully(P.K. Udgata) Addl. Central PF Commissioner

(Compliance)

In case of nonreceipt of the copy,

Please inform in thesame month to get the

free replacement.

Attention Subscribers

E-mail : [email protected] Mob.: 09785585134

Ph : 91-144 - 2372022


Recent Important JudgmentsLatest Judgments

AwardThere is no infirmity in the award drawing

adverse inference against management when failedto produce required documents as sought for.

When the Management failed to produceattendance register for two months before theLabour Court, the Court has rightly drawn adverseinference in terms of section 114 of the EvidenceAct. Rupees fifty thousand towards compensationwould be appropriate in lieu of reinstatement asawarded by the Labour Court.

DCM Sriram Industries Ltd. vs. Presiding Officer,Labour Court II, Meerut and Another. 2013 LLR 858

(All. H.C.)

Back WagesEmployee cannot claim back wages in

respect of contingent rights. Volition of acontingent right in the form of damages wouldbe in the realm of uncertainty and speculation.

An employee is not entitled to claim back-wages forthe contingent period because volition of a contingentright in the form of damages would be in the realm ofuncertainty and speculation, for the reason whatwould have happened when the contingencyenvisaged came into being would not be know.

Jeet Singh vs. Delhi Transport Corporation. 2013LLR 793 (Delhi H.C.)

BonusThe definition of an employee under the

Payment of Bonus Act does not either expresslyor impliedly include a contract labourer.

Magistrate would not have proceeded to takecognizance for the aforesaid offence since thecontract labourer are not included in the definitionof the employee under section 2(13) of the Act.

The claim of the Labour Department that thecontract labourer are also entitled for payment ofbonus at par with the regular employee, ascontended in the complaint has no legal basis and itdoes not amount to violation of section 11 of the Actattracting punishment under section 28 of the said

Act. Even according to the allegation made in thecomplaint, the petitioners have paid minimumbonus at 8.33% to the contract labourers also. Theclaim is only for higher rate of bonus at par with theregular employees of the management. When thecontract labourers are not 'employees' as definedunder Payment or Bonus Act, there is no obligationon the part of the employer to pay bonus at par withregular employees, therefore, it does not constituteviolation as contemplated by section 11 punishableunder section 28 of Payment of Bonus Act.

Shachindra Kumar, Factory Manager, HindustanUnilever Ltd. vs. State of Karnataka. 2013 (138) FLR

193 (Kar. H.C.)

ConfirmationA probationer does not automatically

becomes confirmed unless confirmation is donein writing.

A probationer is not automatically confirmedeven after expiry of the specified period ofprobation. Hence even on his termination withoutholding of enquiry, he will not be entitled toreinstatement. Labour Court, like civil court, is alsoempowered to grant relief on the basis of theprinciple that no relief is demanded by an employee.

Food Corporation of India, New Delhi vs. J.S.Sirohi. 2013 LLR 856 (All. H.C.)

Continuous ServiceFor the purpose of calculation of 240 days,

sundays and other holidays where a workman isnot paid wages, cannot be included.

While rejecting the claim of the appellant-workman, the Labour Court came to the conclusionthat since the workman had failed to establish that hehad continuously worked for 240 days in a calendaryear, the termination of his services could not be saidto be in violation of S.25-F of the I.D. Act. It was heldthat the appellant-workman had worked for 222 daysin 12 calender months prior to the termination of hisservices. The contention of the appellant was,however, that while calculating challenged the awardof the Labour Court. But the Single Judge dismissedthe petition. Hence this Letters Patent Appeal by the

appellant. Since there were two divergent decisions ofthe same High Court i.e. Punjab and Haryana HighCourt on the issue involved in the case, the DivisionBench referred the issue to the Full Bench. The FullBench opined that the law laid down in ExecutiveEngineer, Public Health Division, Narnaul v. RajbirSingh on 24. 8. 2005 in W.P. in 6183 of 2004 that dailywager shall be entitled to paid holidays is not a goodlaw. The full Bench held that while counting theperiod of 240 days of continuous service of a dailywager, Sunday and other holidays have to beexcluded. The appellant also being a daily wager, theDivision Bench, being bound by the Full Benchdecision held against the appellant and rejected hiscontention Appeal dismissed.

Ram Gopal vs. Presiding Officer, Labour Court.LLN (1) 2013 P. 557 (P&H H.C.)

Contract LabourCentral administrative tribunal will have

jurisdiction to decide the dispute ofregularisation/absorption of contract labours.Direct writ not maintainable.

In view of section 28 of the Contract Labour (Regulation& Abolition) Act, the Central Administrative Tribunalbesides Industrial Tribunal/Labour Court, as per choice ofthe workman,will have jurisdiction to decide the industrialdisputes in respect of regularisation/absorption and/orreinstatement/continuance as sought in service matters.High Court will have no jurisdiction to entertaindirectly filed writ petitions seekingregularisation/absorption by the contractors' labourers.

Awadhesh Singh & Others vs. Union of India &Others. 2013-II LLN 599 (Cal. H.C.)

Court PowersIf workman withdrew his dispute by mistake

and wanted to revive, labour court would not bepowerless to set aside the earlier order ofwithdrawl of industrial dispute by workman.

Industrial Tribunal/Labour Court is endowedwith ancillary or incidental powers as are necessaryto discharge its functions effectively for doingjustice, including setting aside its ex-parte Award ifit is satisfied that the aggrieved party was preventedfrom appearing at the hearing due to sufficientcause. Due to mistake of plaintiff/workman if hehad withdrawn the suit, the IndustrialTribunal/Labour Court would not be powerless toset aside or revive its withdrawal order in exercise ofits inherent power under section 151 CPC. JudicialAuthorities should always be quite receptive andsympathetic when litigants appear in person havingno understanding about the niceties of law.K.L.J.A. Kiran Babu, Bangalore vs. Management of

the Hewlett-Packard Global Soft Pvt. Ltd.,Bangalore. 2013 LLR 819 (Kar. H.C.)

It is prudent for the Labour Court to decideall the points together and not on the basis ofadmission of pleadings and case laws.

The Industrial Tribunal was justified in rejectingthe application for deciding the preliminary issue by

observing that each case was required to be decidedon its own merits.

Ircon International Ltd. vs. Presiding Officer, CentralGovernment Industrial Tribunal-cum-labour court,Kanpur (U.P.) and Others. 2013 LLR 820 (All. H.C.)

So long as the award is not published, theLabour Court can review its order.

The respondent was working as a Fitter in the U.P.State Road Transport Corporation. He was charge-sheeted for certain misconduct on 10 counts. In theinquiry all except two points were proved on the basisof the enquiry report, the services of the respondentcame to be terminated. He raised an industrialdispute and the Labour Court, on reference beingmade to it, allowed the respondent's claim by passingan award on 12.9.2003 which was published on16.4.2009. It is necessary to point out that the LabourCourt initially gave its award on 1.2.2008 anddismissed the respondent's claim. But subsequentlywithout there being an application for review, theLabour Court gave its award on 12.9.2008 which waspublished on 16.4.2009. It the writ petition filed onbehalf of the petitioner Corporation, one of thegrounds was that it was not legal for the Labour Courtto review its own order in the absence of any reviewapplication. The High Court rejected this contentionand observed that the Labour Court had not becomefunctus offcio as the award was not till then published,and it was open to the Labour Court to pass a freshaward. It was emphasized that there was no allegationof mala fides or extraneous consideration. On meritsthe petition was partly allowed.

Regional Manager, U.P.S.R.T.C. Etawah vs. State ofU.P. & Ors. LLJ II 2013 P. 801 (All. HC.)

Disciplinary ProceedingsDisciplinary proceedings are not criminal

trial despite it being quasi judicial and quasicriminal. Doctrine of proof beyond reasonabledoubt is not applicable to it. Principle ofpreponderance of probabilities applies indisciplinary proceedings.

Nirmala J. Jhala vs. State of Gujarat. 2013 (138)FLR 227 (S.C.)

There is no bar if criminal case anddepartmental proceedings proceedsimultaneously though separatrely. Forgery is aserious and grave misconduct. Continuation ofsuch a person in the employment may causeirreparable loss to the employer.

Untill any serious prejudice to be caused to theemployee/petitioner is shown by the petitioner dueto continuation of criminal case and departmentalproceedings simultaneously, there is no reason todefer the departmental enquiry. Validity ofappointment of Enquiry Officer cannot beconsidered in the absence of complete certifiedstandings orders which have not been produced.

Staying the departmental enquiry not justified asthe allegation of forging signature of Dy. GeneralManager (Personnel) constitutes a serious and gravemisconduct. The purpose of disciplinary enquiry




and criminal prosecution is distinct. There is no barby law for simultaneous proceeding in disciplinaryenquiry and criminal prosecution as the standard ofproof in criminal proceeding is 'beyond reasonabledoubt' whereas in departmental proceedings, it is amatter of probabilities.

Deepak Narayan Joshi, Raigad vs. Hindustan OrganicChemicals Limited, Central Government Undertaking,

Rasayani, Raigad & Ors. 2013 LLR 795 (Bom. H.C.)

When plea of vagueness of charges not takenat initial stage and workman participated in theenquiry, it is not open for him to raise this pleaat later stage.

Labour Court has erred that the charges, aslevied against the workman, are vague since theworkman has participated in the enquiry withouttaking such objection besides that, the Labour Courthas also erred that the three charges stood waivedby the employees perverse.

Kshetriya Sri Gandhi Ashram vs. Presiding Officer,Labour Court and Another. 2013 LLR 877 (All. H.C.)

In domestic enquiry fair play is the basis. Allthe strict rules of Evidence Act will not apply.

In a domestic enquiry all the strict andsophisticated rules of the Evidence Act may not apply.All materials which are logically probative for aprudent mind are permissible. The Supreme Courtheld that the departmental authorities andadministrative Tribunals must be careful in evaluatingsuch material and should not glibly swallow that is,strictly speaking, not relevant under the Evidence Act.The essence of judicial approach is objectivity,exclusion of extraneous materials fromconsiderations, and observance of rules of naturaljustice. Fair play is the basis, and if perversity orarbitrariness, bias or surrender of independence ofjudgment vitiate the conclusion reached, such afinding even of a domestic Tribunal cannot be held tobe good. Misconduct of charge of having sold ticketswith intention to resell the same. Is in violation para 19(c)(b)(f) and (h) of Standing Orders of Corporation.Mere possession of used ticket is sufficient toconstitute misconduct. Breach of these instructionsshall render the conductor liable to disciplinary action.

D.T.C. vs. Rameshwar and another.2013 (138) FLR 265 (Delhi H.C.)

DismissalWhen bank employee found guilty of

removing BPO, dismissal justified and courtdeclined to interfere with the order ofmanagement.

The Industrial Tribunal-Cum-Labour Court hasrightly declined to exercise the powers as given insection 11A of the Industrial Disputes Act in settingaside the punishment upon a bank employee who hasbeen guilty of misconduct which has been proved inthe enquiry. Learned Single Judge erred in settingaside the Award of the Labour Court upholding thepunishment imposed by the Management of the bankand directing reinstatement whereas the DivisionBench, in a writ appeal, restored the order of

punishment as imposed by the Management of thebank. The standard of evidence in criminal trial andthe disciplinary proceedings is entirely differentsince in the latter case the rigid rules of evidence arenot applicable hence where acquittal of the bankemployee in the criminal trial will have no bearingupon the punishment as imposed by the disciplinaryauthority. When a bank employee loses confidence ofthe Management, the punishment, as imposed by thedisciplinary authority, could not be set aside.

The Dy. Gen. Manager, Indian Bank, Head Office, 66Rajaji Salai, Chennai vs. The Presiding Officer,

Central Govt. Indl. Tribunal-cum-Labour Court,Chennai & Anr. 2013 LLR 843 (Mad. H.C.)

Dismissal justified for the misconduct of notissuing ticket to passenger after pocketing themoney.

The bus conductor enjoys the faith reposed inhim. If he is dishonest in the performance of hisduties, he is guilty of serious misconduct and thegravity of the misconduct cannot be minimised bythe fact the he was not earlier caught indulging insuch dishonest conduct. There is no merit in theplea of the petitioner that the punishment ofremoval from service is disproportionate to thepetitioner's misconduct, and the same is rejected.

A dishonest conductor could be cheating theCorporation of a substantial amount on daily basis.The first act of cheating for which a conductor iscaught is not necessarily his first act of cheating. It ishigh time the respondent raises the levels of moralityand the benchmark of honesty and insists that itexpects its staff, including conductors, to maintainthat level. The respondent cannot show such latitudeto its workman in matters involving dishonesty-which is leading to a financial drain on the resourcesof the respondent. A dishonest conductor could becheating the Corporation of a substantial amount ondaily basis. The first act of cheating for which aconductor is caught is not necessarily his first act ofcheating. It is high time the respondent raises thelevels of morality and the benchmark of honesty andinsists that it expects its staff, including conductors,to maintain that level. The respondent cannot showsuch latitude to its workmen in matters involvingdishonesty-which is leading to a financial drain onthe resources of the respondent.

The petitioner never challenged the correctnessof the copies which were produced before theLabour Court. Even before this Court, the petitionerhas not sought to raise any challenge or doubt aboutthe record that was produced by the respondent-employer before the Labour Court. It has not beenpleaded or shown as to how the petitioner wasprejudiced by the production of copies when thepetitioner does not dispute their correctness.

Subhash Chander vs. Presiding Officer, LabourCourt. 2013 (138) FLR 281 (Delhi H.C.)

Employees’ Compensation ActIn the absence of any such term and

condition of the contract between principalemployer and contractor, liability to pay



compensation to the contractor employee restswith principal employer.

Principal employer is liable to pay compensationto the employee of contractor under, the provisionsof the Employees' Compensation Act, 1923 if noterm of contract between the principal employerand the contractor proves that liability towardsemployee's compensation under the Act is to beborne by the contractor.

United India Assurance Co. Ltd. vs. SureshkumarParasnath Singh & Ors. 2013 LLR 799 (Bom. H.C.)

An Insurance Company, receiving premiumfor a package policy for the tractor cannotescape the liability of compensation of a loaderengaged by the owner who while travelling inthe trailer has died in an accident.Oriental Insurance Co. Ltd. vs. Mallikethi Basappa

and Others. 2013 LLR 832 (Kar. H.C.)Section 114 of the Civil Procedure Code,

providing for review of order by decidingauthority/court, is not applicable to theCommissioner under the workmen's/Employees' Compensation Act.

Mohammad Ikram and Another vs. LabourCommissioner, U.P./Commissioner, Workmen's

Compensation and Another. 2013 LLR 872 (All. H.C.)Restoration of an ex-parte order by the

Compensation Commissioner will be allowed sinceits rejection by the learned Commissioner has notbeen proper, as such, the impugned order is set aside.

Taras Pal vs. Workmen CompensationCommissioner/A.L.C., Muzaffarnagar, and Others.

2013 LLR 876 (All. H.C.)

Employees’ Provident FundEmployee may be allowed to contribute on

more than Rs. 6,500/- per month salary.Employer obligation is only to payadministrative charges. Employer is notprohibited for reduction of contribution onamount exceeding Rs. 6,500/-.

An employee may be allowed to contribute on morethan the statutory limit of Rs. 6,500 per month subjectto employer's obligation only to pay administrativecharges. Employer is not prohibited for reduction ofcontribution on the amount exceeding Rs. 6,500 permonth to mandatory stipulation of Rs. 6,500 permonth as decided by the Supreme Court in the case ofCommittee for Protection of Rights of ONGCEmployees & Others v. Oil and Natural GasCommission, Dehradun & Others, 1990 (2) SCC 472.Until the action taken by the Management is notviolative of any statutory provision, settlement oragreement, any change in service condition by theemployer, cannot be considered under Article 226 ofthe Constitution of India. Reduction of contributionon the amount exceeding Rs. 6,500 per month tomandatory stipulation of Rs. 6,500 per month by theemployer is not violative of section 9A of theIndustrial Disputes Act, 1947.

Jamnagar Rajkot Gramin Bank Officers' Association(Now Saurash & 1) vs. Saurashtra Gramin Bankthrough Chairman & 1. 2013 LLR 806 (Guj. H.C.)

Financial crisis coupled with otherconditions could result in waiver or reductionof damages as the law does not mandatedamages in all cases.

Damage levied under section 14B of the Employees'Provident Funds and Miscellaneous Provisions Act,1952 is to be recovered under para 32-A of the Schemefor deliberate non-payment of contributions or ifemployer's actions are contumacious or dishonest.Levy of damage is not mandatory in all cases ofdelayed payment of contributions. Levy of damagesdepends upon discretion of the officer by makingreasoned order justifying deliberate default on thepart of the employer.

Employees' Provident Fund Organisation vs. M/s.Sreekamakshy Agency (P) Ltd. 2013 LLR 833 (Ker. H.C.)

When the apprentices are found to doregular nature of work, they will be deemed asemployees under section 2(f) of the EPF Act andtheir PF contribution will be payalbe.

When the apprentices are put to perform regularwork for the company of the employer, they wouldbe considered as the 'Employees' coverable undersection 2 (f) of the Employees' Provident Funds &Miscellaneous Provisions Act, 1952 irrespective oftheir being engaged under the Apprentices Act asper provisions in the Standing Orders, excludingthem from the purview of section 2 (f) of theEmployees' Provident Funds & MiscellaneousProvisions Act, 1952.

Sri Ramnarayan Mills Ltd., Periyanaickenpalayam,Coimbatore-641 020, Rep. by its Ravishankar, Personnel

Officer vs. The Employees' Provident Fund AppellateTribunal, Ministry of Labour & Employment, Scope

Minar, 4th Floor, Core-2, Laxmi Nagar, New Delhi-110092 and another. 2013 LLR 849 (Mad. H.C.)

Employer-Employee RelationshipWhen the working of the employee in the

premises with permission of the employer isproved, employer-employee relationship exists.Moreover, except regular workers no outsider ispermitted to enter in government press.

When a document is duly proved in evidenceindicating that the employee/workman wasperforming his duties inside the premises of theemployer with the permission of the employer,under the guidance of the employer and forperforming the work of the employer for aconsiderable span of time and the Managementmiserable fails to contradict such evidence producedby the workman, there will exist relationship ofemployer and employee. Photocopy of original assecondary evidence is permissible provided theoriginal is lost or not available that too with thepermission of the Court. Rejection of photocopies tobe permitted in evidence by the Labour Court isjustified when no explanation is there as to why theemployer has not produced the same before theLabour Court.

State of U.P. vs. Gulrej Ahmad and Another.2013 LLR 852 (All. H.C.)




E.S.I.Employees' Insurance Court has exclusively

limited jurisdiction in respect of mattersenumerated in section 75 of the Employees'State Insurance Act, 1948 only and not inrespect of other matters.

Employees' Insurance Court does not havejurisdiction to entertain a dispute or question relatingto criminal prosecution. Jurisdiction to try offences isvested with Metropolitan Magistrate or JudicialMagistrate of the First Class. Prosecution for non-payment of ESI contributions is maintainable againstevery person who, at the time of commission ofoffence, was in-charge of and responsible to thecompany for business of the company. To deal withthe application, seeking declaration that the proposalfor criminal prosecution as per show cause noticeunder challenge, is unsustainable.

Employees' State Insurance Corporation vs.Seenulal. 2013 LLR 885 (Ker. H.C.)

Fixed Term EmploymentAn employee employed temporarily for a fix

period, completion of 240 days of service has norelevance. Termination falls under section2(oo)(bb) of I.D. Act. and it is not retrenchment.

Termination of a Retainer Crew Conductor, whowas appointed purely on temporary basis as perExecutive Instructions, has rightly been held to belegal and no relief of either reinstatement ofregularisation was awarded by the Labour Courtsince the services of the Conductor were dispensedwith as per para IV of the Executive Instructionsinter alia providing that if such an employee isarrested for more than 8 days for which noinformation is given besides that mere completionof 240 days' service in preceding one year would notamount to retrenchment. Moreso, when theappointment is purely on temporary basis.Rakesh Muni Tyagi vs. D. T. C. 2013 LLR 835 (Delhi H.C.)

GratuityLumpsum compensation in lieu of

reinstatement awarded by the labour courtwould not debar the employee to get hisgratuity as per Act. Wages include travellingallowance for calculation of gratuity.

An employee is entitled to gratuity with interestsince the date of his retirement. Lumpsumcompensation, in lieu of reinstatement awarded bythe Labour Court, would not debar the employee toget gratuity as per the provisions of the Payment ofGratuity Act, 1972. The term 'wages' as perprovisions of section 2(s) of the Payment ofGratuity Act, 1972, includes travelling allowance forcalculation of gratuity. The liability to pay interestas per provisions of the Payment of Gratuity Act,1972, on the amount of gratuity, delayed by theemployer, accrues from the date when the employeeis made to retire and not from the date of lumpsumcompensation awarded by the Labour Court.

R.M. Engineering Works vs. Khushalbhai ManilalChavda & 2 Ors. 2013 LLR 803 (Guj. H.C.)

Red cross society being an establishment isliable to pay gratuity as per the Payment ofGratuity Act. Statutory entitlement ofemployee cannot be curtailed by framing ownrules against the law.

The Payment of Gratuity Act, 1972 is notrestricted to only commercial establishments but toevery shop and establishment within the meaning ofany law for the time being in force in relation toestablishments in a State if the same is notexempted under the provisions of the Act. No rulecan be framed by the employer and made applicableto the employees which is less favourable incomparison to what an employee gets under thePayment of Gratuity Act, 1972. Statutoryentitlement to the employee cannot be curtailed byframing Rules against the provisions of laws.

Indian Red Cross Society, Orissa State, representedthrough its Honorary Secretary vs. Bankanidhi

Mishra. 2013 LLR 810 (Orissa H.C.)Pausity of funds is no justification of delay

in payment of gratuity.Stringency of fund would not absolve the

employer from its liability to delay the payment ofgratuity legally due to the employee. Delay inpayment of gratuity, on the part of employer, wouldattract penal interest as provided under section 7(3A) of the payment of Gratuity Act, 1972.

Babul Ranjan Singha S/o Late Rash MohanSingha, Tripura vs. Tripura Road TransportCorporation & Ors. 2013 LLR 817 (Gau. H.C.)

Claim of interest on delayed payment ofgratuity is justified.

Even inordinate delay in raising claim of interestin respect of period from the date of entitlement ofgratuity to the actual date of payment is no ground forrejection of claim of the employee towards interest.

Parbati Maiti vs. The State of West Bengal & Ors.2013 LLR 891 (Cal. H.C.)

Employees of religious institutions areentitled to the benefit of Gratutiy under thePayment of Gratuity Act, 1972.

The Supreme Court of India has considered the"law" in section 1(3) of the Payment of Gratuity Act,1972 concluding that this section can even apply tonon-commercial establishments, covering temple orother religious or charitable institutions.

When there is inconsistency between Central Actand State Rules, Central Act will prevail over Rulesframed by State Government if lesser beneficial tothe employees. Rules framed by State are repugnantto Central Act. The employees cannot claim benefitsunder both the Acts i.e. Central and Statesimultaneously i.e. double benefits.

E. Gopal vs. Arulmigu DhandayuthapaniswamyTemple etc. 2013-II LLN 709 (Mad. H.C.)

Industrial Disputes ActWhen the tribunal held that the employer

has proved the misconduct, employee will not



be entitled to get relief under Section 33A ofI.D. Act. The employer-employee relationshipbetween the parties will be deemed to haveended from the date of dismissal.

When a daily-wager (bus conductor) with lessthan 240 days' services has been dismissed fromservices after holding of enquiry (he did notparticipate) wherein the misconduct was proved, hewill not be entitled to any relief since the complaintas filed under section 33A of the Industrial DisputesAct would justify the violation on the part of theManagement in not applying for approval ofdismissal during pendency of the industrial disputemoreso when the same findings were returned bythe Industrial Tribunal for the misconduct of therespondent (bus conductor) stood proved and suchfindings will relate back and the employer andemployee relationship between the parties willdeem to have ended on the date of dismissal orderpassed by the appellant-Management.

Rajasthan State Road Transport Corporation andAnother vs. Satya Prakash. 2013 LLR 787 (S.C.)When lay off was declared contrary to

provisions of I.D. Act and without permissionfrom government, workers will be entitled todifference to pay through application undersection 33C(1) of I.D. Act.

Labour Court has rightly granted the differenceof pay to 535 workers under section 33C (1) of theIndustrial Disputes Act since the petitioner-Management did not seek prior permission forlaying-off the workers as required under section25M of the Industrial Disputes Act.

Mohan Jute Mills Ltd. and Another vs. Dy. LabourCommissioner and Others. 2013 LLR 826

(Chht. garh. H.C.)Being I.D. Act applicable on rice mill run by

co-operative society, workers will be entitled toregularisation when they were found workingfor more than 12 years continuously on regularand continuous nature of work.

Applicability of the Industrial Disputes Act cannotbe ruled out merely that a factory pertaining to RiceBran Oil Mill was being run by a Cooperative Societyhence the services of the members who have workedfor more than 240 days had been rightly regularised.

Mahaprabandhak, Rice Bran Oil Mill vs. State of Madhya Pradesh and Others. 2013 LLR 827

(Chht. garh. H.C.)Finality attached to the determination of

labour court with regard to the entitlement ofworkers remain undisturbed.

The finality attached to the determination of theLabour Court with regard to the entitlement of therespondent-workers remained undisturbed andcannot be unsettled by the Court despite thesubsequent change in law as to the meaning andcontent of the "equal pay for equal work" principle.This Court consequently finds no reason to interferewith the impugned judgment and order of thelearned Single Judge. The principle of finality hasbeen described in several judgments as one wherebyeven the overruling of a decision would only revisethe underlying law in a previous decision, and

modify its precedential value but cannot disturb thefinality attached to the determination vis-a-vis thelitigants before the Court or the parties in the lis.

Director-General of Works vs. Regional LabourCommissioner and others. 2013 (138) FLR 134 (Delhi H.C.)

Application under section 33C(2) forcontentious amount would not lie.

The application made under section 33C (2) of theAct raised contentious issue as to the age ofsuperannuation. Such an issue could have beenresolved in exercise of power conferred by section33C (2) of the Act. Unless there were an adjudicationin respect of age of superannuation and theancillary monetary benefits, the application undersection 33C (2) of the Act would not lie. The appealneeds to be allowed on a short issue that theapplication under section 33C (2) for recovery of thecontentious amount would not lie.

M/s. Pradip Lamp Works vs. State of Bihar andOthers. 2013 (138) FLR 81 (Pat. H.C.)

When modernisation does not result inreduction of workers, section 9-A of I.D. Act isnot attracted.

The contention of Trade Union that section 33 ofAct is attracted does not stand. There is noallegation that the modernisation is going to resultin reduction of number of workers. In which alone,the question of section 9-A of Act gets attracted. Asfar as the Management seeks for Police protection isconcerned, such direction to give police protectionis not an automatic one. Only in cases where aComplaint is given to the Police Authorities, whichdiscloses a cognizable offence and yet, there was noaction on the part of the Police Authorities, thequestion of issuing a mandamus will arise.

C. P. C. (P) Ltd. vs. District Collector, DistrictCollectorate, Coimbatore and others. 2013 (138) FLR

286 (Mad. HC.)Decision to place an employee on put off duty

and deny him wages for the said period cannotbe questioned in application under S. 33-C(2) ofthe Act and it can be questioned in anapplication u/s. 10 of the Act.

Respondent No. 2 was working as a conductor inthe petitioner- Andhra Pradesh State Road TransportCorporation on daily wages. He was served with acharge memo and was placed under put-off duty from15.11.1988. After an enquiry the said order was liftedand he was taken on duty on 8.11.1989. RespondentNo.2 thereafter filed an application u/s.33-C(2) of theI.D. Act claiming employer-employee relationshipbetween the petitioner-Corporation and himselfsubsisting during the period form 15.11.1988 to7.11.1989 and further claiming wages for the saidperiod. Since his claim was denied by the petitioner-Corporation, respondent claimed wages and ex gratiawages for the period during which he was on 'put-off'duty. The Labour Court allowed that application ofrecovery. Hence the aggrieved petitioner carried thematter to the High Court by means of a writ petition.The High Court while allowing the petition, upheldthe petitioner's contention that where the right toclaim the amount is disputed, the claim can only besettled u/s. 10 of the Act and that an application u/s.




33-C(2) therefor would not lie. It was further held thatrespondent No.2 never challenged the order placinghim on 'put-off' duty from 15.11.1988 to 7.11.1989 and aslong as this order stands, he is not entitled to claimthe wages and ex-gratia. It was pointed out that, apartfrom this, the application was hopelessly barred bytime since it was not filed within one year on whichmoney became due but it was filed after more thannine years. For these reasons, the petition wasdismissed.

APSRT Corporation vs. Labour Court & One Anr.LLN (3) 2013 P. 313 ( A.P. H.C.)

Industrial Disputes (C) RulesScope of Rule 28 of Industrial Disputes

(Central) Rules, 1957 is limited to the extent ofrectification of clerical or arithmeticerrors/omission/mistake on the part of TrialCourt and not to make a fresh judicial order.

Rule 28 of Industrial Disputes (Central) Rules,1957, is pari materia to section 152 of Code of CivilProcedure. Modifying or altering the terms oforiginal Award are not within the scope of rule 28 ofIndustrial Disputes (Central) Rules 1957. An orderpassed by the Trial Court would not be termed as apreliminary Award if the same has been made onthe statement of parties with a condition "withoutprejudice to the right of any of the party".

Bhagwati Printers Pvt. Ltd. vs. Ram Chander Singh.2013-II LLN 629 (Delhi H.C.)

Interim ReliefSection 17B of I.D. Act comes into play

automatically when employer files writ againstthe award of labour court. And the provisionsof this section get superseded when High Courtpasses interim order on wages.

Section 17B of the Industrial Disputes Act,providing for payment of last drawn wages to areinstated workman whose reinstatement has beenchallenged by the employer in the higher court,becomes automatically applicable but if the HighCourt passes an interim order directing theworkman to be reinstated, then no wages will bepayable but instead of last drawn or minimumwages, he will be entitled to current wages and, assuch, the Authority under the Minimum Wages Acterred in awarding penalty.

M/s. Luxmi Palace (Cinema) vs. PrescribedAuthority. Addl. Labour Commissioner, U.P.,

Varanasi and Another. 2013 LLR 874 (All. H.C.)Under section 17B of the Industrial Disputes

Act, providing for payment of last drawn wagesto a reinstated workman would be equivalent towages as received while in service i.e., prior tohis dismissal, removal/termination.

M. Kasi vs. Indian Bank and Another.2013 LLR 882 (Mad. H.C.)

Workmen cannot be denied benefit undersection 17B of the Industrial Disputes Act, 1947.

Workmen cannot be denied benefit under section17B of the Industrial Disputes Act, 1947 in view of

the law settled by the Supreme Court in the case of'Dena Bank v. Kirtikumar T. Patel, 1998 (1) LLN 375(SC). Section 17B of the Industrial Disputes Act, 1947cannot be regarded as a restriction on the powers ofthe High Court or the Supreme Court under Articles226 and 136 of the Constitution of India.

State of Jharkhand and Another vs. Sanjay Kumar& Others. 2013-II LLN 671 (Jhar. H.C.)

Police ProtectionDespite the employer did not take back

employees in terms of agreement forreinstatement, when workers resort to violentagitation with physical force and deadly weapons,police protection will be given to employer.

Girish Kurup vs. State of Kerala and others. 2013(138) FLR 299 (Ker. H.C.)

ProbationerProbationary services can be terminated on

or before expiry of initial or extended period ofprobation.

A probationer does not become a regularemployee till his services are confirmed in writingby the Management. Termination of probationaryservices before confirmnation would not amount toretrenchment or illegal termination.A probationer,even if he has completed more than 240 days service,has no right to have automatic permanency. If acandidate is allowed to continue beyond the periodof probation, he would not have right toconfirmation automatically.Raju Kapoor vs. Management of M/s. Janata Coop.

Bank. 2013 LLR 839 (Delhi H.C.)

PromotionQualification (s) for promotion to next

higher cadre cannot be introduced as a freshrequirement, if already not prescribed inrelevant rules, statute, regulations orresolution passed by the Management.

Bihar State Text Book Workers' Union vs. State ofBihar & Anr. 2013 LLR 854 (S.C.)

ReferenceReference of Industrial Disputes after 22

years will be illegal and liable to be quashed.Making reference for adjudcation for a dispute

raised after 22 years is liable to be quashed sincesuch a dispute would not be tenable notwithstandingthat no limitation is prescribed for raising ofdispute by a workman.Dr. Jawahar Lal Rohatgi Memorial Eye Hospital vs.

State of U.P. and Others. 2013 LLR 864 (All. H.C.)

ReinstatementOn illegal termination of an employee who

worked for almost 9 years, reinstatement with20% back wages would be proper instead oflumpsum compensation of 3 lakh.



The Award of the Labour Court directing payment ofcompensation of Rs. 3 lacs in lieu of reinstatement was notcorrect, and consequently, to that extent, the Award of theLabour Court cannot be sustained and is modified and theworkman-petitioner would be reinstated in service with20% back-wages.

Santram Singh vs. Workshop Manager, M/s HindalcoIndustries Ltd. & Anr. 2013 LLR 829 (All. H.C.)

RetrenchmentCasual worker for ten years working on daily

basis will be entitled to reinstatement with 50% backwages when his retrenchment was made contrary toSection 25-F of I.D. Act.

Reinstatement with 50% back-wages would beappropriate while terminating the services of casualworker (continuously working from 1989 to 1998) on day today basis and no retrenchment compensation was paidbesides that fresh appointment was given to otherworkers after the termination of the concerned workman.

Regional Manager (Now Zonal Manager), Bank of India,Kanpur vs. Central Government, Industrial Tribunal-cum-

Labour Court, Kanpur and Another. 2013 LLR 824 (All. H.C.)

Trade UnionsWhen the registration of the union is obtained by

fraud, registrar is empowered to cancle theregistration under Section 10 after making enquiryupon a complaint being made.

The Registrar of Trade Unions is empowered to cancelthe registration of a Trade Union which has fraudulentlyheld election of the office-bearers whereas majority ofthe 65 employees who have given the affidavit aboutplaying the fraud have supported their contention.

Ferolite Highlight Kamgar Union vs. Registrar, TradeUnion, Evam Labour Commissioner, U. P., Kanpur and

Others. 2013 LLR 823 (All. H.C.)

U.P. Industrial Disputes ActClaim of workman of difference of wages payable

under award of the labour court will not bemaintainable when subsequently workman took VRSand agreed to withdraw all claims under compromise.

The findings of the Labour Court that the workmanunder VRS, has received nothing has been utterly erroneouswhereas the workman has categorically agreed that afterreceipt of the amount, he will not make any claim in anycourt hence the petition, as filed, is liable to be dismissed.

Ghayas Ahmad Khan vs. Presiding Officer, Labour Court (3),U.P. Kanpur and Another. 2013 LLR 870 (All. H.C.)

V.R.S.Employee cannot claim V.R.S. benifit as of right.

Whether an employee should be allowed to retire interms of the voluntary Retirement Scheme is a decisionwhich can only be taken by the employer-company byconveying its acceptance, except in cases where theScheme itself provides for retirement to take effect whenthe notice period comes to an end. A voluntaryRetirement Scheme introduced by a company isessentially a part of the company's desire to weed out the

deadwood beside that it is well-settled that a voluntaryRetirement Scheme introduced by a company, does notentitle an employee as a matter of right.

C.V. Francis vs. Union of India & Ors. 2013 LLR 785 (S.C.)

WorkmanDesignated as tainee operator but working as

assistant chemist will not bring him outside thedefinition of workman.

Nature of duties and not designation of employees is thecriterion to determine whether he is a 'workman' or not underthe Industrial Disputes Act. An Assistant of the Chemist shopnot exercising the powers of supervisory nature would be aworkman under the Industrial Disputes Act.

M/s. The Dhampur Sugar Mills Ltd. vs. State of U.P. andOthers. 2013 LLR 879 (All. H.C.)

The functions and duties discharged by aworkman have to be taken into considerationcumulatively and not in isolation in order to decidewhether he is a 'workman' or not.

The respondent-management is engaged in the businessof manufacturing weighing scales. The weighing scales aremanufactured according to the requirements of thecustomers who give orders for the same. Therefore themanagement is required to design the weighing scales asper the specifications given by different customers. Sincethe specifications vary, it becomes necessary to design foreach of the machines. The appellant is working asAssistant Engineer (Design) and his main job was to makedesigns of the machines and to remove the bottleneck inthe machines. While undertaking this work, if any of theworkers would feel difficulty, the same would be referred tothe appellant who would take care of those difficulties.This is the assigned to the appellant. Apart from this, thereare certain jobs assigned to the appellant. It appears thatthe appellant. It appears that the appellant raised anindustrial dispute which was referred to the Labour Courtfor adjudication. The Labour Court held that the appellantis a 'workman' within the meaning of S.2 (s) of the I.D. Act.The respondent-management challenged the award byfilling a writ petition. The Single Judge allowed thepetition by accepting the contention of the respondent-management that the appellant was not a workman.Consequently the Labour Court's award was set aside.Feeling aggrieved thereby the appellant filed the presentLetters Patent appeal. The Division Bench referred to thedefinition of the term 'workman' as given in S.2(s) of theI.D. Act and observed that technicality of the post which aperson is occupying would be immaterial and it is theduties which are performed by such a person which have tobe taken into consideration while deciding the issue. Themain job or predominant duties of an employee should bein focus and if along with main duties, an employee isdischarging certain incidental duties that may not becomedeterminative factor. This aspect would be more relevantin deciding as to whether a person is dischargingsupervisory duties or not. It was held that the appellant isnot discharging supervisory work and since his salary wasmore than Rs. 1600/- p.m., he was rightly held by the SingleJudge not be a workman. Hence the appeal was dismissed.

Ashwani Kumar Kamboj vs. Presiding Officer, LabourCourt & Ors. CLR II 2013 P. 375 (P&H H.C.)



Courtsey - Labour Law Reporter,FLR, CLR , LLJ & APS Labour Digest


Indian workers have been fed andled to falsely believe that militancyis the sign of good and glorioustrade unionism. This theory hasbeen basically expounded and

propagated by the outfits of the CPI (M)and the CPI namely; CITU and AITUCrespectively.

Sriperumbudur in Tamil Nadu is bestknown as the home of multinationalslike Hyundai and Nokia which employthousands of Indian workers. However,this small town has been in the news forthe last many years for all the wrongreasons. There have been bouts of manystrikes .Firstly; there was the demand forthe recognition of Foxconn union,affiliated to the Centre of Indian TradeUnions (CITU), for all labour-relateddiscussions. Then there was a series ofstrikes by workers at Hyundai Motorsthat prompted the company to partiallyshift production of its i20 car to Europe.Sriperumbudur is, however, no isolatedpocket of labour unrest: these rumblingsare only two flashpoints in a series oflabour agitations sweeping the country.In 2010, an industrial dispute at the Indo-

Japanese company Allied Nippon, whichmanufactures power brakes for cars atGhaziabad, turned tragic with theworkers beating assistant generalmanager Yogendra Choudhary to death.Choudhary had allegedly tried tointimidate the workers by brandishing aweapon. The past three years haveregistered a steady increase in thenumber of labour disputes and flashstrikes. Take the 15-day strike at theMahindra & Mahindra utility vehiclesplant at Nashik, the 18-day strike byworkers from 59 jute mills in WestBengal, the 17-day lockout at Bosch'sBangalore plant, and strike by 4,300workers in Pantnagar factory of Nestlewhich has no previous history of strikes.Similarly, the workers at Satyam Autoand Rockman Industries, two leadingauto parts suppliers to India's largest twowheeler company, Hero Motororp havewitnessed the long periods of strikes atpeaceful place like Haridwar.

At auto parts supplier Pricol, amanager was killed in September 2009after an attack by workers over hiring ofcontract workers. In September 2008,


Need to protectemployers fromlabour violence

H.L. KUMAR,Advocate, Supreme Court

Industrial workers are, by and large, peace-loving and law abiding but their leadership,mostly controlled by full time politicians, goads them to violence. Employers have todevise ways and means to combat the menace of militancy by alienating the politiciansand taking the workers into confidence.

Sometimesmishandling by themanagerial bossesalso leads toavoidable violence.

Lalit Kishore Chaudhary, CEO of Italian autocomponent maker Graziano Transmissioni India,was clubbed to death by a group of 200 factoryworkers, one of a series of events in a long-runningdispute over better pay and permanent contracts.India has seen militant trade unionism in the 1970sand 1980s, the high point being the 1974 railwaystrike led by George Fernandes and the DattaSamant-led Mumbai textile workers' strike in 1981.Liberalisation since 1991, however, has brought incompetition, and refusal to pander to uniondemands. This is also attributed to growingmilitancy among the trade unions.

So, is labour militancy back in India? That maybe too strong a term to use, but there is obviously agreater and growing discontent among workerstoday. Though the outbursts are shortlived, the listof labour disputes has been getting longer, pushedby stagnant pay, management refusal to recogniseunions, and fear of losing jobs. Obviously, the issuesthat resonate with the unions today areemployability, certification, assessment, funding,training, apprenticeship and paths to formalemployment. Post-slowdown, however, the demandfor concrete measures for employment protection inrecession-stricken sectors and againstretrenchment, contractorisation and outsourcinghas become a rallying force.

Very recently, in the serene enclave of Puducherry,Andhra Pradesh, a mob of workers lynched thepresident of Regency Ceramics K C Chandrashekharafter their union leader died following a police lathicharge. Chandrashekhar was killed in most brutalmanner by iron rods. This betrays the hollowness ofthe law and order machinery on the one hand and thegrowing frustration among workers as egged on bythe trade unions on the other. It cannot be gainsaidthat the unions have lost their relevance in thepresent circumstance and, therefore, in order toregain their lost grounds, they have started takingrecourse to violence.

Biscuit and confectionary maker Parle Products,Bangalore after witnessing a prolonged dispute withstriking workers over several issues, has receivedthe Karnataka government's approval to close thefactory. The labour department issued an officialorder permitting the company to close its factory.The order has been passed under section 25-O(2) ofthe Industrial Disputes Act, 1947. The governmentof Karnataka has conveyed appropriate message tothe workmen and the trade unions that governmentwill not tolerate violence or workmen taking lawinto their hands to press the employers forconceding their illegal and unjustified demands andresorting to violence in any form.

In a communication to the Labour Law Reporter,the Preident of the Karnataka EmployersAssociation B.C. Prabhakar has informed that whenthe HR Manager of M/s. Sachneir Electric ITBusiness Pvt. Ltd was attacked by the union leadersand others in the office of the Labour Commissioner,it sent shock-waves among employers. The LLR hascondemned this dastardly attack and joined the KEAin demanding the adequate protection to employers.

As a matter of fact, the attacks on managers in theoffice of the Labour Commissioner must be viewedvery seriously. It is still fresh in memories of manythat a few years ago a Deputy Labour Commissionerin Delhi was targeted by the unruly trade unionleaders and their cohorts. But then, the governmentof Delhi acted very swiftly, a police post was set upoutside the office, which was then situated at RajpurRoad, and the entry to the office of the LabourCommissioner was restricted through passes. Onlysuch persons were given entry pass to the premiseswho had some valid cause or work in the office. Atleast the similar arrangements or some moreadvance techniques including CCTV footage shouldbe adopted to curb and control the growing menaceof the socalled militancy of the misguided workersand their leaders.

Needless to mention here that sometimesmishandling by the managerial bosses also leads toavoidable violence. Take the case of Maruti UdyogLimited, where the immature Management wassolely responsible for creating the monster ofFrankenstein. The Manesar (Gurgaon) crisis couldhave been never allowed to crop up resulting intolynching of HR Manager Avanish Kumar Dev if theManagement had not adopted the discriminatoryattitude towards a worker namely; Jia Lal as againsttwo union leaders - Ram Mehar Singh and Ram Bilas- having their loyalty to two different unions. Wherethe Managements should have acted tough there ityielded and resiled ; and where it should have shownthe leniency and magnanimity it unnecessarilyadopted the tough postures, which ultimatelyrecoiled on it. Nobody knows how long it will take tomaintain the atmosphere of congeniality in MarutiUdyog Limited , which was once upon a proud placeof work for workers and industry which was,without doubt, a feat of the country.

Militancy is nothing but extremism. It has neverbeen part of the ethos or culture of India. However,if it is gaining ground in the industrial arena of thecountry, it needs to be properly analysed, addressedand remedied. The unfortunate part of the saga isthat neither the governments take it withseriousness that it deserves nor employers pooltheir resources and expertise in dealing with thisburning issue. One can hardly expect any sobrietyfrom the trade unions, which do not have anyindependent status apart from their politicalmasters. India is perhaps only such country wheretrade unions have no say of their own, they do nothave any stake in shaping the industry and theindustrial relations as they are only required todance at the tune of political parties. Whereas inmany other countries the trade unions play thepivotal role in framing the industrial policies oftheir respective countries.

Now is the time when the employers andconscientious section of the employees and thesmug government will have to rise to the occasionand make a concerted efforts to root out even thetrace of violence so as to provide the prime place tonegotiations and amicable relationship in the veryfabric of industrial relationship.



Need to protect employers from labour violence

BM


BM’s fictionalized case study presents dilemma faced byleaders in real organisations. Experts are invited to sendsolutions. Best will be published.

From Consulting to building organisation

DR. UDAY KUMAR HALDAR

Agrawal was a non-residentIndian (NRI) based in Canada. Agraduate in engineering. He also

held a post-graduate degree inproduction engineering from aninstitute of international repute.Although he received several lucrativeoffers from various organizations inhis campus interviews, he rejectedthem as he had a strong drive to be hisown boss and function independently.He decided to launch his ownconsultancy firm, AgrawalConsultants. Within a short span oftime, he became famous and reaped thebenefits of a thriving practice in NewJersey. However, despite the success ofhis operations, Agrawal harbouredthoughts of returning to India.

During the period 1981-82, theGovernment of India appealed to NRIsto invest in various business in theirhome country. Many NRIs responded tothe request and Agrawal foresaw anopportunity in this idea. He found ithard to resist and invested asubstantial sum in a few businessesthat offered high rates of return oninvestment at that point of time. Afterconducting lengthy discussions with anIndian businessman, he passed on hisdecision of returning to India to hisclients in New Jersey. Despiteconsistent persuasion from his clientsto continue in New Jersey with hiswell-established practice, Agrawalreturned to India after a 15-year stint inthe US.

After his return of India, heestablished contacts with thecompanies in which he had invested,and studied all the related financialdocuments carefully. Earlier, in NewJersey, many firms had benefited fromhis consultancy services. A majority ofthose clients were producing special-purpose hydraulic and pneumaticpumps. He had advised them withregard to design and manufacture ofcomponents. He also assisted themwith assembly and quality controlparameters. He lived up to theexpectations of consumers and theclients never received any complaints.

In due course of time, he wanted tostart his own venture. Having gainedconfidence in his field of expertise,Agrawal decided to start anorganization that aimed to design,manufacture, and sell hydraulic andpneumatic pumps. Accordingly, hechose the location in an industrial arealocated in his native state. He appliedfor a trade license, registered his firm,and appointed technical andadministrative personnel. During thenext six months, he procured themachines, and spent four months inerecting and commissioning them. Heappointed an expert mechanicalengineer to look after the qualitycontrol department. Meanwhile, hesecured orders for the pumps. Once allthe necessary equipment was in place,he began producing and selling theproducts in the domestic market.

To take his initiative forward,Agrawal recruited salespersons, whowere fresh diploma holders in salesmanagement from a local managementinstitute. They were assigned the job ofdelivering the pumps directly tocustomers without the intervention ofdistributors or dealers. Gradually,pressure began building up, andcustomers wanted him to expeditedelivery. Agrawal, in turn, advised histeam to act upon the orders withimmediate effect. His team strived hardto cope with the demands.

In order to meet the urgent need forincreasing production, Agrawalappointed a production manager (PM).PM was a qualified, disciplinedmanager, and a hard taskmaster.Towards the end of each day, he wouldcollect the production figures. Whilemost operators strived hard to meettheir targets, some operators tried toexpress their difficulties andgrievances. However, PM did not payattention to their grievances.

There was one noteworthy incidentthat occurred, when a team to threeofficials visited Agrawal's firm forcapacity assessment. Duringinspection, they enquired with a linesupervisor about his duties andresponsibilities. The supervisor couldnot give a clear answer as theemployees were not clear about theirroles in the firm. Soon after theinspection, the officials met Agrawal inhis office, where PM was already



present. Agrawal very politelypostponed the discussion with PMuntil the next day. When PM left theoffice, Agrawal began the discussionwith the team. He did not introducePM to the team members, who laterlearnt about PM's position. The teamdiscussed issues pertaining to theproduct being manufactured in thefirm. However, despite being aware ofAgrawal's technical expertise frominterviews in a leading periodicalthat highlighted several of hissuccess stories in New Jersey, theteam did not place the order.

On another occasion, a customerhad complained about themalfunctioning of some pumps andsome others has expresseddissatisfaction. Agrawal replaced thedefective pumps with an equalnumber of new pumps from theassembly line. However, customerscontinued to complain about theproduct and the situation wasbecoming serious, with one customerthreatening to file a lawsuit.

Despite being a renownedconsultant and entrepreneur,Agrawal was utterly confused. Inorder to solve the impending issues,he discussed the situation with hisfriend, a successful organizationalleader and stalwart in a multinationalcompany. His friend underlined thedifference between the businessscenarios in India and the US, andadvised Agrawal to take assistancefrom an Indian human resources (HR)expert. Eventually, Agrawal selectedMr. M.S. Menon, an HR expert, toadvise him.

Mr. Menon studied the situationand decided to execute organizationaldiagnostics. However, he advisedAgrawal to arrange for a trust-building workshop for hissupervisory employees immediately.

DevelopingOrganizationalResources

Mr. M. S. Menon, the appointed HRexpert, adopted the management bywalking around (MBWA) style. Whileon the rounds, he stopped to talk anddiscuss issues with personnel ofvarious levels engaged in differentfunctional areas. He studied theanatomy of the organization. Hediscovered the managerial style ofthe production manager and recordedthe same. Menon also requested

Agrawal to arrange separatemeetings with the suppliers andcustomers. Agrawal questioned thepurpose and usefulness of themeeting, and was reluctant toconvene such meetings initially.However, he agreed to the proposalafter repeated persuasion by Menon.

Following this, there were repeatedrequests from Menon. However,Agrawal did not want any otherofficial of his company to attend themeeting. In the meetings, Menon wasnot very vocal; he meticulouslyscribbled notes in his diary. Of course,he did ask a few questions, Heobtained the consent of Agrawal toaccess the contract details of some ofthe suppliers and customers andpresumably contacted some of them.After a week, he submitted an interimreport to Agrawal recommendingaction programmes. Menon explainedas 'Interpersonal relationships involvesocial associations, connections, oraffiliations between two or morepeople. These people may interactovertly, covertly, face-to-face, or mayremain effectively unknown to eachother, such as those in a virtualcommunity who maintain ambiguityand do not socialize together outside achat room. Communication is bestachieved through simple planning andcontrol. Performance appraisal isessential for performance monitoring.'

Menon also emphasized the needfor potential appraisal anddevelopment for the progress of theorganization. Furthermore, hestressed upon the need for 'customersatisfaction measurement' in order toanalyse, and improvement as meansfor sustenance and growth in theacute competitive environment. Healso opined that as an organizationalleader, a manager must be aware ofthe appropriate leadership style withrespect to specific situations andtarget persons. He furtheremphasized the need for developing agood organizational culture.

Agrawal was convinced anddirected Menon to proceed in aphased manner. He also sanctionedsome initial funds associatedexpenditure. Menon correctedAgrawal by saying that he must treatthe amount sanctioned as aninvestment and not as expenditure.Menon took it as a challenge, wascommitted to rejuvenating theenterprise, and began his course ofaction.

DISCUSSIONQUESTIONS1. Agrawal was always

trying to avoidinvolving others inmeetings. Is thisapproach correct forleadership in anorganization? Whatmight be theconsequences?

2. In his interim report,Menon mentionedabout customersatisfactionmeasurement. Whatis the importanceand necessity of thismeasurement? Doyou feel there is aneed to measurecustomer satisfactionin order to enhanceemployeesatisfaction?

3. In the interim report,Menon mentionedfour actionprogrammes.Narrate the possiblereasons behind theselection of theprogrammes. Yourdiscussions shouldbe programme-wise.

4. Had you been the HRexpert and advisor toAgrawal, how youwould have goneabout developing theenterprise and itspeople?

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1. Problems of cross-culturalcommunication observed inthe case & underlying causesof these problems:

The first problem of cross-culturalcommunication observed in this case iswhether the team of TechnoSwiftSystems has got accustomed to theworking style, work culture, systems to befollowed of the company by which it wastaken over i.e. Exelmore Services.Usually when a takeover happensbetween two companies across twocountries with different working styles, ittakes time for the employees of both thecompanies to adjust the way they do theirwork and deliver results.

Exelmore Services after it hadacquired TechnoSwift Systems shouldhave had one-to-one meetings with theteam wherein there could have beenformal introduction with each other,understand each other's roles andresponsibilities. Exelmore Services couldhave made its vision - the road aheadclear to the team at TechnoSwift Systemsand the performance deliverables that itexpects out of the team to achieve thevision. A formal meeting could havehelped to understand the ways in thatwould set forth the agenda in how boththe companies would now be workingtogether as one.

Another problem observed is thatJayant's team at TechnoSwift Systems isnot aware or rather not trained how tohandle client meetings especially whenthey are from different countries. Thiscould be observed by the way of

preparedness of various team membersfrom offshore multinationalprogramming team in meeting with theirpotential clients from France & Japan. Itseems that the people involved are notaware of the potential for such problemsand the burden of stress that it creates ontheir manager and that which the team iseven more likely to fall victim to theseproblems. The team may be technicallyvery adapt in its daily work but when itcomes to client interface, attendingmeetings & presentations, negotiationskills, the team is found to be wanting forlack of desired skills as warranted bysuch situations. Training or a briefingsession by Exelmore Services to the teamat TechnoSwift Systems on how to handleclient meetings as desired by it couldhave helped.

Lastly, another problem seems to bethat of CEO Jack and Jayanth gettingalong together comfortably on workingterms. Apart from the problems thatJayanth's offshore multinationalprogramming team is facing from the USHeadquarters, Jayanth is himselfpersonally facing problems with respectto his bi-annual performance appraisal.Jayanth is attached to his work and he

has given 100% commitment to hisprojects, but his appraising authorityJack has informed to HR that he does notthink highly of Jayanth as a highperformer. One can see that the situationis becoming demoralizing for Jayanth inthe workplace. He is uncertain of hisfuture in the company. Even his team isnot supporting him because of thepressure put by him in achieving targets.This situation normally arises whenthere is a change of Management orLeadership in the company. TechnoSwiftSytems, Jayanth and his team areundergoing a difficult transition phasewherein they have to get accustomed tonew work culture, new boss, his demands,etc…The sooner they are able to adjust tothe new demands, working style, it willaugur well for both Jayanth and his team.Or else, one problem will lead to anotherand so on till it becomes uncontrollableand the situation goes out of hand. Itwould have helped if Jayanth had ameeting with CEO Jack, spoken to himvia virtual conference system, confrontedhim with the problems or rather thechallenges faced by him with suggestedsolutions and thus iron out thedifferences. An amicable relationshipwould have developed thus between the

MIHIR GOSALIA

Assistant Manager - ISO &OHSAS, Kesari Tours Pvt Ltd.,Mumbai

This Case Analysis refers to Case Study‘Jayanth Gets the Blues’ published in August13 Issue

Need to understand each other’s working style

This situation normally arises when there is a changeof Management or Leadership in the company.TechnoSwift Sytems, Jayanth and his team are

undergoing a difficult transition phase wherein theyhave to get accustomed to new work culture, new

boss, his demands, etc…

two and the going would have been smooth thereonwards.

2. What should Deepa say to Jack andHow so that Jack has a positiveresponse to her account ofTechnoswift's Problems?

CEO Jack seemed to appreciate the directspeaking style of Deepa and was willing to listen toher. Deepa volunteered to help Jayanth by speakingto Jack about the problems and to look at it from anIndian Working Style Perspective. Deepa should startby speaking about her association with Jayanth, howshe has known him over the years. She shouldapprise to Jack about the good traits of Jayanth, histeam management skills, about his loyalty andcommitment to the company. She should stress on theimportance of having Jayanth in the team and as theappropriate secondary level person to Jack whowould help in achieving the business targets. Movingon, Deepa should then highlight the current set ofchallenges being faced by Jayanth and how they canhelp him overcome them so that the company doesnot lose out on an important team member. Jayanthis an experienced person at TechnoSwift Systems andit would be difficult to replace him by a new person.Hence it is in best interests of everyone that effortsbe made to assist Jayanth in overcoming the currentset of challenges that he is facing.

Deepa should also apprise to Jack in general aboutthe work style of Indian employees, theirfriendliness and caring nature, how hardworkingthey are, how they like to get along well with othermembers in the team, etc…The Indian employeework style is more about friendliness and caring innature rather than just about work and performance.Deepa should try hard to make CEO Jack understandIndian work culture.

Deepa should also highlight the fact that thisexample will send a positive message to all othermembers in the team and how they would thenwelcome any future client work deadlines with anassurance that it can be done. They will work withoutfear. The message will be that of positive assurance.

3. Would the results have been betterif Exelemore Systems and the FrenchTeam have had face to face meetingsrather than over a videoconference?Similarly, if Exelmore had met theJapanese team face to face, would themeeting outcome have been different.Advantages and disadvantages offace-to-face versus videoconferencemeetings in intercultural encounters.

Unless the root cause is not addressed as to whythe client meetings over video conference with themulticultural offshore programming team is notgoing as expected, why it is not productive and whythe meetings are not being converted into business for

Exelmore Services, the same problem will keep oncropping up again. It seems that by way of these twomeetings that there happens to be a disconnectbetween the CEO, Team Leader and the programmingteam since they are all situated in different locations.This is natural given the circumstances that the CEOis in USA, programming team is in differentcountries, different cities including the team leader.Video conferencing etiquette is not observed such asbeing prepared, listening to the client and payingattention.Video conferencing can't replace thebenefits of face-to-face contact. When meeting withsomeone over video, one cannot shake hands, makeproper eye contact or fully observe body language.This can be a turn-off for people who are used to morepersonal forms of communication. This was observedin case of the meeting with the Japanese who seemedto have lost interest midway in the meeting and hadtheir eyes half closed. Exelmore services needs torelook as to whether Video conferencing really suitsits business needs.

4. Shoelace Consulting's advice to Jack:

The role of Shoelace Consulting will be that of amediator or intermediary who is familiar with boththe cultures and who can help in cross-culturalcommunication situations, and diffuse any conflictsbefore they arise. Shoelace Consulting will assistJayant in understanding that the strong statementsby CEO Jack are considered appropriate in hiscountry's working culture style but not in another. Incase of takeover of TechnoSwift Systems byExelmore Services, their different work cultureshave moved quickly to the point wherein rather thantalking about other things like establishing rapportor a relationship with the other person, discussion onthe primary topic of work performance & deliverresults began too soon for everyone's comfort.Shoelace Consulting will advise Jack on this problemand assist him in making appropriate proceduraladjustments like engaging in extra discussions aboutthe process and the manner of carrying out thediscussions is appropriate, as is extra time forconfirming and re-confirming understandings atevery step in the dialogue.

The role of Shoelace Consulting will be to helpestablish rapport, relationship and trust firstlybetween Jack & Jayanth and then reinforcing thesame message to Jayanth's team. TechnoSwiftSystems is undergoing a transition phase after beingtaken over by Exelmore Services and ShoelaceConsulting will act as an intermediary, a facilitator toensure that this transition phase is smooth.



Deepa should also apprise to Jack ingeneral about the work style of Indianemployees, their friendliness and caringnature, how hardworking they are, howthey like to get along well with othermembers in the team.

BM


Industrial relations focus on collectivityof human relations and constitute oneof the most delicate and complexproblems of the modern industrialsociety which is characterised by rapidchange, industrial unrest andconflicting ideologies in the country.

We have witnessed several strikes,lockouts, Industrial disputes and conficts.Some of these conflicts have culminated inbrutal and deadly violence, shattering thepeace and harmony in the industrialisedparts of India during last few years.

When it comes to industrial relations,there seems to be a void. Even amongstprofessionals who do know how to deal withworkers and unions, there is often a lack ofinterest to do so. So long as people are neededin industry and business, industrial relationswill remain an area of concern as well asinfluence in affecting the performance oforganisations.

When the literature on this subject haslong been neglected, such a book with basicsof IR should be welcomed.

The book explores core concepts ofindustrial relations through managerialapplications. The readers would find thisbook useful for its application-orientedapproach to industrial relations, explainedthrough illustrative examples.

Good Industrial Relations climate is notan option anymore for any organisation. It isa compulsive necessity for survival andgrowth. HR professionals cannot becomecomplete without knowledge of IR.

Much damage is done by insensitivehandling of day-to-day issues at theworkplace. Lack of sensitivity and thedemonstration of prejudices on the part ofsupervisory and managerial personnelshould be contained by proper training,orientation, counselling and course-corrections. In the manufacturing sector, the

need for industrial harmony is acutely feltmore in its absence than during times whenthings seem placid.

This work is undoubtedly an authoritativework, on which every manager, expatriate,academician, student, and practitioner ofman-management can confidently rely. Everymanager should read this book if he wants tounderstand the complexities of employeerelations and legal implications.

The full implications of IR are lost in themaze of other management priorities. Recenthappenings in the Industry throughout Indiabring to the fore the importance of IndustrialRelations. A book that retraces the majorincidents and events of recent times andexamines the root-cause of the problems,helps decision-makers to review their peopleprocesses and bestow greater attention tocreating and sustaining best practices inemployer-employee relations.

This book primarily is a reference pointfor IR principles and best practices that areprevalent in the manufacturing sector inIndia. As this purports to be a practicalhandbook, it systematically sets outguidelines for effective running of day-to-dayaspects and highlights ways to handle majoractivities like ensuring discipline, conflictresolution, wage negotiations, grievancehandling and culture-building. At theextreme end of the spectrum, direct actionslike strike, sit-in, go-slow and gheraosponsored by trade unions, lockouts, layoff,retrenchment or closure ordered by themanagements are also examined and thelegal positions on all of these are clarifiedthrough case-studies and case laws. It wouldhave been better if the citations of casejudgments are also given.

This is also a book for academicians andstudents who would like to explore IR as animportant step in shaping managers fortomorrow.

IndustrialRelationsin IndiaAuthor :E.I. RavindranathPublisher : McGraw HillEducation (India) PrivateLimited,P-24, Green ParkExtentsion,New Delhi-110 016

Learning IR

HR professionals cannot become complete without knowledge of IR

BM



This book starts with a flash of thepractice of the people management overthe last half a century in our country.

The purpose of this book is to derive someimportant lessons from the past which are ofgeneric nature and would always remainrelevant- no matter what the current fad invogue is - and then go on to build guide linesfor the future which Indian organizationsmay choose to follow to perform and deliver.

The book focuses primarily on the needsof our traditional organizations, whether inthe private sector or the public sector, whohave a big challenge before them to adapt tothe winds of change and learn fast. Thislearning process for them is not proving to beeasy. Learn they must.

The book is not a text book and does notaim to be a comprehensive treatise on thesubject of Human Resource Management,but touches on some important areas ofpeople management, where the author hassomething to say, something to contributebased on the insights born out of experiencespanning over more than four decades and onsome research work. The range ofexperience covers important segments ofindustry in India; the Public sector, theMultinational, and the Family run publiclimited companies, with more than a dozenyears in each, and includes working as anengineer, as HRD professional as well asnegotiating settlements with unions as headof the management team.

Though the examples given in the bookare anchored in the industrialestablishments operated on commercialbasis for profit; the issues, the concepts, theinsights, the conclusions drawn should beapplicable in large measure to anyorganization where people work together andthat includes non-profit organizations.

The longest chapter, nearly one-third of

the book, is devoted to the issues ofcompetency and its management. The authorrecognizes the wisdom of working on thestrengths that people have, rather thantrying to change them too much. Sharmaproposes an equation in which competence isthe sum of four factors - knowledge, skill,attitude and talent. The last is almostdetermind before the person joins theorganization. So it has to be tested duringselection. People could be trained in theother three areas. One method for judgingpotential is the assessment centre. Someprefer now to call it the development centre.Through his personal experience, Sharma isfamiliar with the problems of training, jobrotation, release, movement, acceptance,learning and utilization. He cites examples,at different levels - operators, supervisorsand executives. Without perhaps using theword 'alienation', Sharma traces its evolutiondue to technology, size, specialization,authority, etc. From a survey of the literature, hecites three principles for employee involvement -engagement, explanation and clarity ofexpectations. The enunciation of vision, missionand strategy helps in this process.

The author lists some of the commonweaknesses in the culture of Indianorganizations such as lack of openness;taking even professional remarks as personalcriticism; and hierarchy. Culture is builtthrough values and practices. Ethics in allbusiness practices is one such value. It isconsidered very important by employees oflarge US firms, according to a Fortunearticle, quoted by Sharma.

The book should be of interest to thestudents of the art & practice ofManagement, ready to enter the professionin the near future, since it is they who aregoing to play a pivotal role in the next fewdecades in helping our organizationsbecoming more effective.

HumanResourceManagementEvolution and theChallenges Ahead

Author : V.K. SharmaPublisher : Viva BooksPvt. Ltd., 4737/23, AnsariRoad, Daryaganj, NewDelhi-110 002Price : Rs. 295/-Website :www.vivagroupindia.com

The author lists some of the common weaknesses in theculture of Indian organizations such as lack of openness;

taking even professional remarks as personal criticism; andhierarchy.

A galaxy of ground experience

BM

Management/Labour Law Books Publishers & Authors are welcome to send their books for review publication.

JK Lakshmipat University organizedits first doctoral conference titled"SHODH 2013" on July 6, 2013.

The conference was inaugurated bychief guest Dr. Kanta Ahuja, Ex-ViceChancellor, Rajasthan University, Jaipurand MDS University Ajmer. In herinaugural address, Dr. Ahuja highlighted

the need for conducting quality research.She suggested that research is not a time-bound activity and research scholarsshould not resort to short-cuts. Shefurther added that ethics in research isvery important. Dr. Upinder Dhar, ViceChancellor, JKLU in his welcomeaddress, highlighted the hallmarks ofscientific research as Purposiveness,Rigor, Testability, Replicability, Precision,Confidence, Objectivity, Generalizabilityand Parsimony. Dr. Santosh Dhar, Dean,Doctoral Studies & Research andConference Chair, in her openingremarks introduced the conference to thegathering and highlighted the need forproviding such platforms to the doctoralstudents. Inaugural address was followedby release of Souvenir, SARANSH-2013 by

the chief guest. The inaugural ceremonywas concluded with Dr. Sonal Jain,Faculty, IET, JKLU, proposing the vote ofthanks.The inaugural session wasanchored by Ms. TannuVerma, ResearchScholar, JKLU. The concurrent sessionson Management were chaired by Dr.Santosh Ranganekar, Head, DMS,IITRoorkee.


"PRIDE 2013"- TheEntrepreneurs' Meet wasorganized at BharatiVidyapeeth's"Institute of Management andEntrepreneurship Development"(IMED) in association withNational School of Leadership(NSL), Pune on 29th July 2013 atAbhijeet Dada Kadam Auditoriumon the auspicious day of the Birthanniversary of late Shri J R D

Tata and as part of the GoldenJubilee celebrations of BharatiVidyapeeth.

Dr. Chinmoy Sarkar, Author ofAXELL (a model promoted byTata Consultancy Services) wasthe Chief Guest on the occasion. Inhis inaugural address, heencouraged the students by givingmantras of self confidence, honesty,visionary and dedication.

JKLU Conference

"SHODH 013"

PRIDE 2013- TheEntrepreneurs' Meet

Dr. Vishwajit Kadam (Secretary Bharati Vidyapeeth) felicitating Dr. ChimmoySarkar as Chief Guest at PRIDE 2013 as Dr. SachinVernekar (Dean, Faculty of

Management Studies & Director IMED) looks on.

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In the last few years, corporate India has been witness to some ofthe ugliest sides of worker unrest. A concept called self-managedteams (SMTs) is now finding acceptance among manufacturers.With Dr. Reddy's Laboratories and PepsiCo India being some ofthe early adopters of SMT, a few large corporates like the RPGGroup are now readying to work on it.

An SMT obviates the need for a supervisor and it largelyconsists of people managing the facility by themselves. Around500 people are working on this principle at RPG Group companyCeat's tyre factory at Baroda. How it works: The work schedule isdefined by the planning department based on a fixed product mix.The schedule is forwarded to individual workers. Besides, there isa maintenance engineering department which swoops inwhenever there is a machine breakdown of any kind. So theworker deals with the planning and maintenance departmentsdirectly, thus eliminating the need of a supervisor. Thisessentially brings down costs as well. Workers are trained on howto hold meetings and plan their work accordingly. There arecharts on the machines which tell them about the goals and theactuals . If the actual is lower than the goal, then a gap analysisis done to find out the root cause, followed up with correctiveaction. Disciplinary rules are also self-managed here, whileappraisals are based on deliverables. So there is no room forambiguity.

"Even some of the best run companies are facing huge labourproblems. SMTs are an innovative way of dealing with the issue,"said Arvind Agrawal, president (HR), RPG Enterprises. He furtheradded, "The workers are young people who have passed out of class12. We pay for their educational upgradation also. We don't wantthem to spend their life on the shop floor. So during weekends andevening hours, they attend classes to become diploma holders. Wepush some of those who are diploma holders to get engineeringdegrees. Our idea is that these young workers explore arenasbeyond the shop floor. That way, there is a constant churn on theshop floor." Since there is no supervisory cadre, there isempowerment. "We tell them you are not merely a cog in the wheel.This brings about a lot of responsibility among individualworkers," said Agrawal, whose belief is that in the long run allhuman beings need careers and want to grow. Ceat, which haspumped Rs 100 crore into this plant, found that productivity levelshad shown an improvement. "Initially, there were hiccups and thetop management had to equally have the confidence. But now, it hasbeen stabilised. Encouraged by Ceat's success, the group wants tomake this a norm in any new establishment," said Agrawal.

PepsiCo India had in 2005 started the initiative of SMTs atPalakkad with the intent of empowering teams at the shop floor,driving ownership within workmen and establishing a workmen-led line management. A clear benefit of this practice is that itensures participative management with one ownership of aspectrum of issues- ranging from day-to-day and ongoing tocomplex ones- resting entirely with the shop floor teams. Dr.Reddy's Laboratories, on the other hand, was the pioneer of thisconcept when it started SMT in Yanam (Pondicherry) in 2002. Theconcept of SMT is based on the inherent belief that 'People aregood and capable. A self-managed team is a group of empowered,self-managed and committed individuals who plan, organize andmanage all the day-to-day activities in a manufacturing facility.Their areas of operations include managing the entire gamut -manufacturing, packaging, quality control and assurance,warehouse management, and engineering. Experts believe itwould do companies good if SMT is implemented at theworkplace as well- a radical thought, but not entirely impossible incertain sections where supervisory levels have limited scope.

Trend



TUs no to do away with EPSThe labour ministry and trade unions have turned down ideaof closing Employees' Pension Scheme under EPFO. Thescheme runs an unsustainable deficit of over Rs. 50,000 crore.

While finance minister had proposed ‘closing’ EPS scheme andswitching over to the new pension scheme (NPS) regulated byPFRDA, the labour ministry has expressed reservations as it willrequire an approval from the central board of trustees of theEPFO and then an amendment to the EPF Act. In a letter to formerlabour minister Mallikarjun Kharge last year, Chidambaramwrote, 'In view of the persistent deficit in EPS, it has beensuggested repeatedly by the department of financial services thatit would be better to cap the financial liability of the government byclosing EPS at the earliest and switching over to NPS.' The labourministry officials sought to play down the proposal saying it maynot be easy to wind up the defined benefit scheme which is theonly safety net for the organised sector workers after retirement.Trade unions were unhappy at the proposal. 'We will oppose anysuch move. EPS in the only defined benefit scheme left andmoving to a defined contribution scheme like NPS is not desired.Moreover, why should the government expose the workers to thevagaries of the market,' said DL Sachdey, the national secretaryof All India Trade Union Congress.

New idea to tackle strife

Shop floors withoutsupervisor?

IT hiring drops as industryprefers automation

Indian software services exporters have started focusingon delinking sales growth from headcount growth, andclear pattern is emerging of expending revenuesaccompanied by a shrinking employee base. This non-linearity points to the acceleration of the trend whereservice providers are using templates, results code andother measures to increase automation and reduce theneed to deploy grater numbers of people on projects.

The slowdown in hiring by the technology services industryhas major economic and societal implications for India. For thetens of thousands of young people who graduate from India'suniversities every year, the lucrative job opportunities providedby IT companies will no longer be available in the samenumbers. If other sectors do not pick up the slack in a dulleconomy, the government will have to contend with largenumbers of frustrated and educated youth. HCL, 'Technologiesemployed 800 fewer staff at the end of March compared to threemonths previous to that. During the same time, revenue grow by3.2%. Even second-ranked Infosys shrank slightly measure bythe number of employee - only the business process outsourcingunit and Swiss buy Lodestone added staff.

The Noida based HCL Technologies also saw a shift towardsan outcome based model where payment is linked to the outcomerather than to the number of people deployed on a project. Morethat half the company's sales are now from fixed price projectsand not those where earns money for every employee it deploys.

As the business model of IT companies change and supply ofengineering graduates continues to rise, analysis expect it tohave depressing effect on wages in the industry. This is already inevidence. TCS, the only IT company to have announce wageincrements for the year so far, said offshore employeeincrements would be at an average of 7%. Such levels of wagehikes may be here to stay even after IT companies climb out ofthe slowdown.


National floor levelminimum wage to

raise shortlyThe labour ministry is expected to seekCabinet nod for raising the national floorlevel minimum wage (NFLMW) to Rs. 135a day from the current Rs. 115, a moveaimed at providing some relief to factoryworkers ahead of elections even though itmay raise costs for small and medium-sized enterprises struggling to protecttheir margins amid the economicslowdown.

The government also plans to link thevariable dearness allowance to consumerprice index for industrial workers (CPI-IW),labour secretary M Sarangi said. Theproposals on minimum wage hike has beenvetted by the law ministry and we are trying totake it up at the Cabinet soon. The plan to hikeminimum wages for factory workers by 17.4%within two years may not affect big corporateswho already offer salaries much higher thanthe NFLMW, but could raise costs and slowhiring in small and medium-sized companiesat a time when the growth in industrial outputand exports is crawling. However, it will helpbridge labour shortages in India Inc byincreasing labour migration to the industryfrom agriculture where wages have risenfaster after the launch of the MGNREGAscheme where wages are linked to inflation. Unions leader sentenced life term

for killing Ramco DGM-HRThe Additional District and Sessions Court sentenced a RamcoGroup employee, who had murdered the company's Deputy GeneralManager (Personnel) last year, to undergo life imprisonment andslapped a fine of Rs. 20,000.

K. G. Rajarajeshwaran (52), the DGM and a native of Salem district, hadissued a memo to S. Ganesan (50), a trade union leader and a crusheroperator at the company's Pandalgudi mines, for dereliction of duty. AsGanesan, a native of Tirunelveli district, did not reply to the memo, he wassuspended from service. In a fit of rage, Ganesan went to the quarters of theDGM at R. R. Nagar near here on April 12, 2012 and stabbed him to death.

Move for policy onflexitime for women in

TamilnaduA group of civil society leaders, cuttingacross academia, law, HR and Psychiatry, inTamil Nadu is pushing for the enactment ofa formal legislation in regard to flexitimefor women, which has among the highestparticipation rates of women at workplacein the country.

The thrust is that a woman's access to flexiblework hours amounted to a Constitutional rightgiven her dual role as homemaker with addedparenting responsibilities. In fact, the benefits ofa career-enabling intervention that couldsignificantly prolong the working woman'sprofessional stint extend to the family, theorganisation, society and the nation as a whole,the report stated.

The right essentially provides women theability to integrate work and life be seeking fromher employer flexible work hours against prorata pay

Strikers of 108 Ambulance services in Karnataka dismissed

GVK-EMRI, the private agency that runs the emergency 108 ArogyaKavacha services in Karnataka, terminated 197 employees, whoresorted to strike.

The State government had, in an order on August 2, prohibited andreferred the dispute for adjudication at the first Labour Court under theIndustrial Disputes Act. Workers were informed of this by the local police.While the Karnataka Rajya Arogya Kavacha Sangha has insisted that theywill remain on strike until the matter of wages and regularisation is settled,the company has said it is not open to negotiation anymore as "all optionshave been exhausted".

A labour official said that the strike has been prohibited as conciliationefforts by the government failed. "Now the matter is in court and both theworkers and the company should respect that. The State cannot intervene inthe matter anymore," the official said.

Tata Motors workforce rationalisedTata Motors has rationalised the workforce at its Pantnagar plant byalmost 21 % in the first quarter of 2013-14.

But between April and June this year, Tata Motors has cut its payroll with staffstrength at the Pantnagar plant, going down sharply from 5,838 to 4,630, reflecting1,208 job losses, according to Provident Fund (PF) contribution records for TataMotors' Pantnagar unit. Other locations such as Sanand in Gujarat and Hubli inKarnataka have also witnessed a decline in their headcount, albeit on a muchlower scale of around 2%.

Left TUs threaten strike in Coal IndiaLeft-trade unions have warned of a three day strike in September toprotest the government's plan to sell 5% of its stake in Coal India (CIL), amove that could hurt the economy by choking coal supplies to powerplants and raising the country's import bill.

While coal minister Sriprakash Jaiswal last month lowered the pitch andreduced the disinvestment target in CIL, to 5% from the earlier 10%, the Left-unions are opposing even that and have given a strike call. The government is ina dilemma already as reducing the disinvestment target in CIL, to 5% will fetch Rs.10,000 crore instead of the earlier target of Rs. 20,000 crore, which may lead to ashortfall in the disinvestment target. This can be averted if the Maharatna PSUagrees to buy back 5% shares from the government.

for Sept-13 - Business Manager :: HR Magazine

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