Releasing resistances for new conclusions

Editor’s Note

Hiring Regains But.....

Whether business sentiment is up or low, rupee slides or regains, austerity measures need to be taken or not, one factor remains challenging for business and that is hiring quality of people. All people related problems arise in business due to this factor, specifically when hiring regains and everybody starts taking firefighting measures to bring headcounts at par with requirement in the organization diluting quality in hiring processes.

This may happen again, because there are signs of upward hiring in all important sectors in coming FY. 2012-13 BM-Genius survey conducted to gauge the mood of corporates for hiring, pay hikes , retention and attrition ratify this mood. There are also many other surveys’ findings suggesting low pay hikes, and increase in attrition. It is natural. Whenever, hiring regains, attrition also shoots up. Attrition and retention works together as one group is pushed out through attrition just as the organization attempts to retain another. All these indicators pose an everlasting challenge for HR professionals sitting at helm of affairs to ensure good hiring practices, bringing attrition down with low pay hikes comparing to last year.

BM talked to dozens of HR people, experts, and thinkers and all have put one common pre-requisite to meet out these challenges-the quality hiring practice.

HR people have their own perspective. In most of the organizations, hiring is always done under pressure from technical departments to meet the people requirements immediately. Technical people don't appreciate necessity of enough time for quality hiring. Under pressure head count hiring always results in to first year attrition casualties. First year attrition is really an organization silent killer. The first year attrition damage can be disastrous at worst. It resonates across the organization far more quickly.

Understanding that hiring practices and retention policies go hand in hand can result in formulating and implementing better people management policies. Attrition levels can be lowered to a large extent if the recruitment and retention functions are intelligently integrated. It should be a part of long range plan and not of meeting short term goals.

Organizations need to become more aware of the strategic importance of recruiting high quality employees at a matching cost, but it is also important that every recruitment channel is aligned to the quality of sourcing and selection standards which reduces attrition. If you are going to use the recruiting agency, make sure they are fully engaged, understand your business, the role and ultimately what you are looking for. Close engagement of agency with the organization will increase the chances of finding the right person -and how good the agencies work so closely with the organizations to make a quality hiring is open to debate.

As earlier said, this issue of BM is an attempt to present comprehensive picture on current hiring practices, retention techniques and reducing attrition through articles, discussion sum up and experts' views.

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

Happy Reading!

Anil Kaushik

Readers’ Response

Major Challenge May story on employee engagement is apt.

Most organizations today are struggling with this problem as to how employees at all levels should be kept engaged. Contents of the cover feature are relevant, rich and sufficient for providing guidance to practicing managers.You have again brought this issue in lime light.

I think that employee's leaving the organization is directly linked with his disengagement .If you deeply analyse the exit interviews, you will find the small print. There are always early signs of disengagement in employee which we sometime conveniently ignore. Bad hiring also leads to disengagement. Employee and employer both are responsible for this.

Employee looks for fat pay packet and employer engage him in a desperate move without explaining him the job responsibilities and assuring the cultural fit and the result is producing one more disengaged employee and increasing attrition with going back to square one.

Dr. P. Swamy, Chennai

Disengaged employees I am in full agreement with your cover feature. After long time read through such a good material on this highly sensitive topic.

What you have said is correct about Indian employees attitude. Recent Gallup survey has also indicated that Indian employees in comparison to global employees are less engaged. According to survey findings, only 8% employees are engaged, 32% are actively disengaged, 62% are not engaged at workplace. Whereas Global employees are more engaged and less disengaged.

This is the real challenge for HR managers to turn this percentage in to positive at workplace. With only 8% of engaged employees workforce, how an organization can compete in this open market, is a big question for all of us.

Pratibha, New Delhi

Resurfacing problem I saw the flash news scrolling of the contract employees union's strike at Neyveli coal field that entered the third week. I searched an old article for reference that appeared in BM sometime in March-2011. The words of the author Mr.Chandrasekar rightly proved that such strikes resurface frequently over the ever

known demands and the recurring problem is highly irritating to hear every year. With the P/L sheet of Mar 2012 showing a profit-aftertax of Rs.1298 crore, I don't see any need for the NLC to reject their demands for quite long.

Instead the management recently gave a notification in newspapers about the usual welfare schemes offered to them. The loss incurred during the strike days would be a good part of the projection cost of demands denied. I understand some 10,000 contract employees are working and it's time to grant permanent status yearly to every one-fourth gradually. International companies will 'poohpooh' on our acute inability to handle labour administration and resolve grievances.

Meenakshi Yadav, Bangalore

Whistle Blowing The article on manual cleaners created waves and has blown a whistle to reiterate the demands of the often forgotten class among the workers. In many a place, I have seen men inside the cesspool and inserting the hose of a suction lorry standing nearby.

It's time that a firm solution has to be worked out to spare this pitiable job and provide them a healthy alternative. It is ridiculously similar to simultaneously work on firewood stove and microwave oven while opposing the axing of trees for a green planet. I appreciate the author for not writing on white or blue collar but about the men in kaupeenam.

K.P. Selvaraj, Kodumudi

Relentless Efforts My compliments to BM team for un-relenting efforts. Every month with each issue you increase our expectations. Looking forward for many more wonderful cover futures.

Raman Lal Dave, Ahemdabad

Laurels I congratulate you and say laurels for your ceaseless and relentless efforts in improving the all round quality of your Journal. I am well aware of the tireless jouney of this publication because I have closely watched its evolution. A DNA Test of the present status of BM may not match its earliest position when it was a different child struggling for existence.

S.M. Jain, Bhawani Mandi

Readers are invited to comment on articles published in BM through email at : bmalwar@yahoo.com, bmalwar@gmail.com 2

Business Manager

June 2012

Inside

June 2012 Vol. 14 No. 12

Chief Editor ANIL KAUSHIK Associate Editor Anjana Anil Hon'y Editorial Board Dr. T.V. Rao, Dr. Rajen Mehrotra, Dr. V.P. Singh, H. L. Kumar DELHI : F- 482,Vikaspuri, New Delhi-18 GHAZIABAD : A - 39, Lohia Nagar, Naya Ghaziabad (UP) Hon'y Co-ordinators A.S. Sharma - Gurgaon assharma@jurishr.com

Hiring up, pay hikes down, attrition up...

When overall business sentiment is not so high, specially manufacturing sector, surveys conducted during these days reveal that while hiring is up ,pay hikes are expected to low which ultimately makes attrition at high.

Experts feel that hiring practices are definitely going under tremendous change. Social media has come up as an effective tool for hiring. BM teamed up with genius consultants to bring you the trends in hiring, retention and attrition.

Data collected during survey was analyzed by Genius team to understand the broad sectoral, geographical and other trends.

Hiring Practices Linkage With Retention

People AssetsParadigm Change

By A.S.Sharma

By Ganesh Vaidhyanathan,

Pankaj Pradeep- Pune Pankaj.Pradeep@fiapl.com

Mihir Gosalia- Mumbai mihir@mihirgosalia.com

Indranil Banerjee- Kolkata indranil.hr@gmail.com

Owned, Published and Printed by Anil Kaushik at Sun Prints, Ganpati Tower, Nangli Circle, Alwar - 301001 and Published From B138, Ambedkar Nagar, Alwar - 301001 ( Raj.) India Editor : Anil Kaushik The views expressed in the articles published in Business Manager are those of the authors only and not of the Publisher/Editor necessarily. 達 Business Manager While every effort is made to have no mistake in the magazine, errors do occur.

Publishers do not own any responsibility for the losses or damages caused to any one due to such ommissions or errors.

Annual Subscription 900/- through DD (by ordinary Book-Post) (by Courier 1140/-) favouring Business Manager ( Please add 40/- to outstation Cheques) may be sent to: B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India, Ph : 91-144 - 2372022 Mob.: 09785585134 www.businessmanager.co.in E-mail : bmalwar@yahoo.com, bmalwar@gmail.com Published on 1st of Every Month

R.P.Yadav

Hiring scenario is taking tremendous change - R.P. Yadav Practice these behaviours to increase retention! -Neeraj Zutshi Culture of respect & openness helps retaining employees -Dr. Vinnie Jauhari

Neeraj Zutshi

Dr. Vinnie Jauhari

Iyer Subramanian

L.K.Gupta

Approach In terms of nurturing employees makes difference... -Iyer Subramanian Good hiring is basis of retention... -L.K.Gupta & DISCUSSION pg.

16-33

Inside

Why Violence in Industrial Relations?

When workers realize that lawful collective action is not effective in dealing with the management, they attack key management people like HR managers and CEOs. Recent instances of industrial unrest suggests that collective measures are generally well intended and peaceful and individualized measures are vindictive or violent. Generally it is the management which initiates individualized action followed by the workers. An article by Dr. K. Janardhanam & Dr. G. P. Naik.

pg. 05

CASE STUDY Strategic handling of Union President’s greed pg. 59

By Anil malik

Surrogate HR

HR Challenges in Small & Medium Size Organizations HR practices in SMBs have to be designed using innovative thoughts and cost effective mechanisms. Overall, a well designed HR system and innovative people practices can benefit any organization in today's competitive global environment especially if one is a small.

An article by Barsha Chakraborty.

pg. 10

Employees- Types and Measures Various behavioral analysis systems have been developed to analyze these which interpret the behavioral patterns. An article by Rohit Minton.

pg. 13

pg. 43 Govt.

Notifications

pg. 44

Helpline

pg. 45

Labour Problems & Solutions Questions by readers on variety of problems they face at work and answers by Anil Kaushik Chief Editor. Look at it. These may also be of some help to you.

Trust in the Workplace Whether the organization is developing leaders, managers or customer service personnel, the foundation block is laid in building& maintaining trustworthy relationships with everyone around. An article by Mihir Gosalia.

pg. 35

Leadership Practices in Enterprises Fortune magazine recently released its global list of "top companies for leaders" and Indian Companis like HUL, ICICI, Aditya Birla, Bharti & Wipro were listed in five out of 25 top companies. An article by Ajay Tanwar

pg. 37

Outplacement Outplacement is standard business practice globally. But it is a new trend in India. Companies are also getting into outplacement as lay-offs negatively impact their existing workforce. An article by Abhishek Gupta.

pg. 40

Specific Employment legislation for IT/ITES sector : Need of Hour No one ever imagined at that time when the above Acts were enacted that a new type of industries like IT or ITES will ever come into being and have majority of such industries in Karnataka, particularly in Bangalore.

An article by A. Surendranath

pg. 55

Book Review 4

Business Manager

June 2012

pg. 62

Judgments pg. 47 Latest from the Courts Latest verdicts from different High Courts and Supreme Court effecting employer employee relations.

Readers Connect Initiative National Conference on 'Creating Global Managers' pg. 63

& HR News

pg. 64

MTNL to offer VRS to 20,000 employees India’s Best Companies For Rewards & Recognition2012 Announced Keep International employees out of PF by using SSA

Dr. K. Janardhanam Director at Canara Bank School of Management Studies, Bangalore University

Dr. G. P. Naik Director at Talent Avenues Corporation,Bangalore

Why Violence in Industrial Relations?

When workers realize that lawful collective action is not effective in dealing with the management, they attack key management people like HR managers and CEOs. Recent instances of industrial unrest suggests that collective measures are generally well intended and peaceful and individualized measures are vindictive or violent.

V

seen by management as covert enemies. In many instances exercising the lawful right of workers as simple as lawfully registering a trade union has provoked the management to dismiss the workers and the Maruti Suzuki unrest in the year 2011-12 is a good example in the matter.

The history of labour movement all over the world has duly acknowledged the role of union leaders in ameliorating the conditions of humble workers. Organizing the humble workers against the mighty employers for the just and legitimate cause involves lot of hard work and personal sacrifices on the part of union leaders. Most often exploitation of workers by the management drives them towards unionization. But the union leaders who provide solace to the helpless workers are

Industrial relation involves the strategic use of power, especially in strike situations.

Management will generally attempt to divide the workforce whilst the union will attempt to establish and maintain collective solidarity amongst its members. In many such cases,

iolent industrial relation dates back to early 20th century but it has undergone refinement in 21st century.

In the olden days the proletariat classes were turning violent often unintentionally on account of mob mentality and the managements were using money and muscle power to contain such violence. But now, workers seem to be planning well in advance to attack the key management people after realizing that covert industrial relation agenda of the management cannot be understood by overt means.

Managements on their part are also becoming quite professional in dealing with violent industrial unrest. Instead of using anti social elements, they are taking the assistance of government machinery like, police department, judiciary and the executive.

Industrial Relation is a collective effort which should be handled jointly by all the parties involved. When management believes that collective efforts are not yielding the intended results, they individualize the issue by selectively suspending or dismissing just a few leading workers. Similarly when workers realize that lawful collective action is not effective in dealing with the management, they attack key management people like HR managers and CEOs. Recent instances of industrial unrest suggests that collective measures are generally well intended and peaceful and individualized measures are vindictive or violent. Generally it is the management which initiates individualized action followed by the workers.

Business Manager

June 2012

5

Why Violence in Industrial Relations?

Lessons to be learnt...

1) There are no winners in industrial conflicts.

2) Workers found guilty of indulging in violent activities end up becoming convicts.

3) The company loses reputation with the customers.

4) Industrial violence adversely affects many segments.

5) There should be little more tolerance to the voice of workers.

6) Workers need not go to the desperate act of killing managerial employees.

psychological evidence has been used to explain why certain individuals resorted to violence through the use of the notion of 'deindividuation'.

This notion has usually been invoked to explain violence in a crowd situation characterized by heightened levels of arousal, anonymity, a consequent loss of self-awareness and breakdown of self-control. The result, it is argued, is disinhibition and the resort to uncharacteristic or 'irrational' forms of behaviour, such as the perpetration of violence (Diener, 1979). By contrast, sociological explanations of violence in industrial conflict has often focused on the high levels of frustration experiences, the lack of channels for the expression of these frustrations and failure to institutionalize conflict resolution mechanism resulting in its escalation and the increased likelihood of violence. (Webster E. & Simpson G., 1990).

While the strategies of violence in industrial relation have undergone drastic changes the magnitude of brutality has remained the same.

The traditional belief that only certain states of India like West Bengal and Kerala are known for violent industrial relation is not true anymore since the incidents of fatal violence resulting out of failed industrial relation have been reported from across several other states. Owing to the intense fear of the law, workers in industrial disputes have resorted to other tactics of a more covert nature in order to reinforce the strike.

These tactics may include industrial sabotage, consumer boycotts and intimidation. By resorting to these tactics, the workers cannot very easily be pinned down and charged for crime.

Workers sometimes think that violence can make a strike stronger. They want to make nonstrikers understand that a strike is a battle between management and workers. No worker can be neutral. Strikes are an educational process and create unity among workers. There are cases where the threat of violence has forced nonstrikers to come to a workers' meeting and explain their position on the strike. What has come out of such workers is their fear to lose jobs, their understanding of management as a powerful force which cannot be shaken by workers. However, after discussions on the experience of other workers, some workers begin to understand that their fears are also shared by strikers, and it is a question of battle. Strikes are not personal problems. But it is widely known that management always tells workers they are individuals and must take their own decision. It is 6

Business Manager

June 2012

sometimes difficult to get rid of this perception.

Some workers will resort to violence to fight individualism.

The following incidents of violent industrial relation in India during the past four years has shaken the faith of investors and public in believing this country as a place of industrial peace.

Mr. K.G. Raja Rajeswaran, deputy general manager (HR), Madras Cements Ltd in Virudhunagar of Tamil Nadu, was hacked to death by a suspended employee, on 12th April 2012.

The official's wife, Mrs.Ananthi, who attempted to protect her husband, also sustained cut injuries when he attacked them with a sickle. It was around 8.30 pm in the evening the suspended employee went to the house of Rajeswaran, to ascertain the reasons for his suspension.

Mr.Rajeswaran is said to have taken objection to the worker coming home and disturbing him late in the evening and advised him to meet in the office the next day. But the worker seems to have gone fully prepared for the act of murder which he has carried out.

In January 2012, large-scale violence broke out in Regency Ceramics Factory at Yanam, an enclave of Pondicherry, adjoining Kakinada town of Andhra Pradesh, following the death of M.S.Murali Mohan, the founder of the workers' union. On the previous day he was picked up by the police, based on a complaint lodged by the management and was released later. The workers had been agitating for over a month demanding wage hike and regularization of service of contract workers. There are about 1200 workers in the factory of which 800 are on contract. The trade union had been demanding the regularization of at least to those who have put in 15 years of service.

On the day of his death Mr.Murali, went to the factory entrance and tried to obstruct the workers who were going to work for the morning shift. The police personnel deployed at the factory gate have beaten him and then taken to the hospital where he breathed his last. As news of his death spread, the violence by workers became multi dimensional. A group of factory workers torched nearly 50 vehicles owned by the company; the second group entered the factory; the third group rushed to a college run by the management; the fourth group staged a demonstration in the centre of the town and the fifth group entered the house of Mr. K. C. Chandrasekhar, Vice PresidentOperations and beaten him to death.

Why Violence in Industrial Relations?

Local residents joined hands with the workers and began ransacking the factory and the college premises. They took away computers, ceramic tiles and furniture. The confrontation between the police and the agitating workers turned violent with the police opening fire and six persons were injured in the firing. This incident clearly shows how the management has used the police department to weaken the workers' movement on the one hand and on the other hand how the management has lost the sympathy among general public in the locality.

In March 2011, Mr.R S Roy, deputy general manager of Graphite India Ltd, a steel manufacturing company located in Tilagarh town of Bolangir district in Orissa, was killed by its workers. The workers stopped the jeep in which

Workers sometimes think that violence can make a strike stronger. They want to make non-strikers understand that a strike is a battle between management and workers. No worker can be neutral.

Mr.Roy was travelling and set it on fire. A week prior to this incident the factory administration had suspended 25 workers for seeking wage hike and regularization of service and rumours were doing rounds about the possible retrenchment of large number of workers.

In fact the steel market was doing well in 2011, there seems to not valid grounds for the management to plan render economic death to the workers by suggesting retrenchment from service.

While Orissa state is known for peace loving people it has also made name for large scale exploitation of working classes by the employers in collaboration with state government agencies.

In November 2010, Mr.Joginder Singh, the human resources manager of Allied Nippon an Indo-Japanese auto component firm was killed at Ghaziabad town of Uttar Pradesh, near New Delhi, by a group of agitating workers who were sacked earlier by the management. The clash took place when the employees of the company, were protesting the management's decision of

dismissing many workers. The employees were also demanding a shift change and threatened to go on strike. Six members of the management and six employees were injured in the stand-off and were admitted to a nearby hospital. The workers alleged that some officials of the company "threatened them and opened fire at them".

Infuriated, by such acts of the officials, the workers said to have beaten the officials. They have also pelted the factory with stones and damaged the property.

In this incident there seems to be no valid reason for the management to sack workers on minor issues like demand for change in shift or call for a lawful strike. Management seems to have provoked the workers by first sacking them and then firing at them.

In September 2009 the labour unrest at Pricol, an automotive instruments manufacturing company based out of Coimbatore city of Tamil Nadu state in South India took an ugly turn with the company's vice-president (human resources) Roy J George succumbing to injuries he sustained after he was assaulted by a section of agitating workers. The workers were agitating for hike in salary and regularization of contract workers.

Roy had suffered multiple head injuries after the workers attacked him with iron rods at the company's Periyanaickanpalayam unit. Pricol had in the past dismissed 42 workers at its Kuniamuthur unit for indiscipline. The company said that capacity utilization slipped to 10% as a group of workers were not allowing others to work. Roy, an alumnus of IIM-Calcutta, was spearheading efforts to bring operations back on track by initiating a dialogue with the agitating labourers.

This case shows that workers are not interested to link the demand for salary hike with productivity and market conditions. While the management tries to weaken the power of hiring more contract workers and less regular workers the union of regular workers is espousing the cause of contract workers to gain their support.

In September 2008, Mr. L K Choudhary, CEO of Graziano Trasmissioni India, an Italian auto parts company was killed by a group of workers in its factory located in Greater Noida town of Uttar Pradesh, near New Delhi. Around two months before this incident nearly 300 workers at Graziano Trasmissioni were dismissed by the management after they demanded pay rise and regularization of service of contract workers. On the day of this killing, the management had invited the sacked employees for a meeting to explore the possibility of reinstating some of them back to service. However the workers turned violent during the meeting and attacked Mr.Choudhary with iron rods.

Even though the intention of Contract Labour (regulation and abolition) Act 1970, is meant to engage temporary workers for short duration quite often employers are using it as means to hire cheap labour which is causing conflicts. Further the valid weapon in the hands of management to Business Manager

June 2012

7

Why Violence in Industrial Relations?

deal with workers' strike is the lockout under industrial disputes act. Management can refuse work to any number of workers by declaring a lockout, but this valid weapon of management is rarely used for containing a strike. Unfortunately there appears to be zero tolerance to workers point of view and employers are turning to dismissal and suspension for silencing the workers which is ultimately resulting in violent reactions from the workers.

Characteristics Detailed analysis of these live cases of industrial relation violence helps us understand some of the important dimensions in the phenomenon which are stated below.

1) The practice of violent industrial relation is most often practiced only in manufacturing industries.

2) Generally such violent activities in industry are carried out by males rather than females.

3) In some cases management seem to have taken vindictive action against workers disproportionately harsher than required.

4) The root cause of most of the of industrial relation related violence just one or two like regularization of contract workers and increase in salary.

5) Managements seem to be using government machinery for seeking protection and the action of some government departments seem to be inappropriate similar to the police action at Yanam which led to the death of a union leader.

6) Generally it is the managerial employees of top management (and not the employers) are beaten by angry workers.

7) Outsiders are not found to be directly participating in industrial relation induced violence.

8) Rumours can fuel industrial relation violence when the facts are not communicated correctly.

9) While the agitating workers face the action the outside trade union leaders who may be guiding the workers to agitate remain by and large unaffected.

10) Employers in many instances are using intimidating tactics like suspension and dismissals when the employees go on lawful strike.

11) When workers believe that employer is strong enough to curb their lawful strike by unlawful means, they indulge in violence against management representatives.

Lessons to be learnt 1) There are no winners in industrial conflicts.

Cordial relations nurtured over years can be vitiated by a single incidence of violence. The level of trust between management and workers will deteriorate drastically if there is an incident of violence.

8

Business Manager

June 2012

2) Workers found guilty of indulging in violent activities end up becoming convicts to serve imprisonment by deserting their dependent family members.

3) The company loses reputation with the customers, bankers, shareholders and society at large for its dubious human resource management policies.

4) Industrial violence adversely affects many segments of the society who have no role in inciting it. The family members of the guilty workers often face starvation and economic hardships. Sometimes public property may be damaged, free and fearless movement of people in the locality may be sabotaged, and the public who depend solely on the goods or service produced by the company will find hard to get the supplies.

5) There should be little more tolerance to the voice of workers in the organizations.

6) Workers need not go to the desperate act of killing managerial employees and end up in jail for many years. After all every sacked worker can find a better job since most of the industries are having labour shortage. Those who cannot get job can also lead a happy life by changing the mental makeup. After all for every person the right to life and right to freedom is more important than livelihood opportunity.

Action points One of the first steps in preventing industrial relation violence is recognizing it. It is not just a murderous shooting rampage. Behind this act of violence hides lot of motives, political connotations, loss of faith and hidden agenda with ulterior motives. Industrial relation managers and the union leaders of workers should be skilled enough to understand these dynamics and initiative proactive measures to prevent the occurrence of violence.

Supervisors and managers should receive training on how to identify these early warning signs and how to deal with individuals who exhibit signs of violent tendencies. Additionally, supervisors should have sufficient training to simply be good supervisors. This includes the skills to be reasonable and evenhanded in managing employees. Supervisors and managers need to understand the importance of addressing performance and disciplinary problems promptly and consistently. They also need to be trained to handle terminations, layoffs and demotions with sensitively.

Violence in industrial unrest has significantly come down in Europe and America mainly because these countries have sincerely accepted the right to workers to go on strike. The right to strike, along with political enfranchisement, played a crucial role in the decline of violence in industrial disputes in the United Kingdom.

Indeed, in the last decade of the 19th century, of the key features which gave rise to the formation of the British Labour Party was the demand for

Why Violence in Industrial Relations?

Professional education in industrial relation is not meant just to face an explosive situation. Rather the IR managers need to learn and practice the ways and means of not creating a violent industrial relation scenario.

the right to strike (Pelling, 1976). Geary (1985) argues that the "… constitutionalisation of the working class …" through the development of a strong trade union movement associated in large part with the Labour Party has, on the whole, served to restrict industrial violence.

Since strike became an established practice in the 1890s in the United Kingdom, only one nonstriker has been killed. It would be an exaggeration to attribute the peaceful resolution of conflicts solely to the fact that the right to strike exists. The close association of the trade union movement with a political party committed to democratic reform rather than revolutionary change, has had a restraining effect on the behaviour of strikers. Union officials and strike leaders have been anxious to avoid violence during industrial disputes on the assumption that such action would have a detrimental effect on the Labour Party's fortunes.

Professional education in industrial relation is not meant just to face an explosive situation.

Rather the IR managers need to learn and practice the ways and means of not creating a violent industrial relation scenario. For example dismissing workers for demanding wage hike or hiring contract workers for carrying out the work of regular nature does not represent either professionalism of industrial relation nor greatest vision and mission statements of employers. Ralf Dahrendorf (1959) concludes his classic study on industrial conflict by arguing that "… industrial conflict has become less violent because its existence has been accepted and its manifestations have been socially regulated". In the United States, where large-scale stoppages often accompany the negotiation of companywide agreements, these have been ritualistic engagements: with unions co-operating in an orderly shutdown of production and companies often providing shelter and refreshments for strikes. Possibly the best recent example is that of the Hextex strike in 1989 which lasted 59 days, and which was preceded by an agreement between management and the South African Clothing and Textile Workers' Union (SACTWU) allowing for on-site strike facilities for strikers. There was no

violence in the course of the strike (Patel, 1990).

Ralf Dahrendorf (1959) concludes his classic study on industrial conflict by arguing that "… industrial conflict has become less violent because its existence has been accepted and its manifestations have been socially regulated". In the United States, where large-scale stoppages often accompany the negotiation of companywide agreements, these have been ritualistic engagements: with unions co-operating in an orderly shutdown of production and companies often providing shelter and refreshments for striking workers. Even the British General Strike of 1926 - symbolically the apogee of union militancy - is today, at times, remembered primarily as the occasion for football matches between police and strikers.

Right to peaceful strike is a statutory right in India as per Industrial Disputes Act 1947. It has for several decades been considered a legitimate device in the industrial environments of the United States, the United Kingdom and other Western countries to reinforce the strike by workers as a weapon against employer. The legality of strike was established over a fairly long period in the United States, beginning with the passing of the Labour Management Relations (Taft-Harley) Act of 1947. Stirke in Britain is regulated and protected by Section 15 of the Trade and Labour Relations Act of 1947, as amended by the Employments Act of 1980 and 1982 and also established within common law.

As a result of the negative effects of strike violence, unions are beginning to confront the problem of intimidation and have begun to experiment with strike rules where intimidation or violence is expressly forbidden. For example, the National Union of Mineworkers (NUM) is has negotiated"a code of conduct" with the Anglo American Corporation to promote acceptable norms of behaviour during an industrial dispute (Metall IG, 1988). The most far reaching of these agreements are those that have been entered into by a number of German companies. These agreements provide both for the right of union access to company premises during the strike and for the right to strike in the company premises. BM

References Dahrendorf, R (1959) Class and Conflict in Industrial Society, London: Routledge & Kegan Paul.

Diener, E. (1979) Deindividuation, self-awareness and disinhibition, Journal of Personality and Social Psychology, Vol. 37(7), 1160-71.

Geary, R. (1985) Policing Industrial Disputes, 1893-1985. London: Metheun.

Metall IG (1988) Minimum Standards for Labour Relations and Labour Conflicts for South African subsidiaries of German Companies. Joint demands of the Industriegewerkschaft Metall of the Federal Republic of Germany and the South African Council of the International Metalworkers Federation, Johannesburg and Frankfurt.

Patel, I. (1990) Negotiating strike rules and rights: The Hextex strike South African Labour Bulletin, Vol. 14(8), 75-6.

Pelling, H. (1976) A Short History of the Labour Party. London: Macmillan.

Webster E. & Simpson G., 1990. Crossing the Picket Line: Violence in industrial conflict, Industrial Relations Journal of South Africa, Vol. 11, No. 4, pp. 1532, 1990.

Business Manager

June 2012

9

Barsha Chakraborty Head HR G-Cube Solutions, Noida

HR Challenges

in Small & Medium Size Organizations HR practices in SMBs have to be designed using innovative thoughts and cost effective mechanisms.

Overall, a well designed HR system and innovative people practices can benefit any organization in today's competitive global environment especially if one is a small.

H

R activities in SMB become the prerogative of a few operation managers who concentrate only on the transactional & administrative requirements to ensure smooth operations. Hiring senior HR professionals is not a viable option as far as cost is concerned, in most cases.

Hiring of a senior level HR professional, if not well thought of as a strategy, can end up being a complete disaster in an SMB environment where there are & can seldom be any specialists. Also, HR in SMBs, by virtue of their sheer size, is usually a very lean team.

However, people are the same and so are their individual concerns. Complex HR related people issues cannot be dealt by a general manager who does not have the expertise in the field to take decisions which may require an expert human resource professional's experience. On top of that, it can also lead to loss of the operations manager's productive time. This leads to their gradual lack of interest in HR and eventually, SMBs end up concentrating only on the absolutely necessary personnel activities.

Hence in SMBs, mostly, HR ends up being a personnel function that manages leave register, sends payroll inputs to Finance, recruits talent and does some basic coordination work. Since HR is not a revenue generator, it is never given

10

Business Manager

June 2012

its due importance and hence people practices and innovative HR practices take a back seat.

For an SMB to grow and sustain that growth, it is imperative that it has healthy HR practices.

It is only till a certain period that an organization can sustain without effective HR. Experienced HR professionals can bring huge strategic and cultural changes that are eventually required to keep pace with the rapid growth of the company and sustain its growth rate year on year. Beyond a point, it is impossible to retain high performing and high quality employees without sound HR practices.

Cost is a major deterrent in introducing quite a few HR practices that can hugely benefit the organization and its employees. Most SMBs shun away from the thought of spending on HR initiatives. However, there are some amazing ways which, at minimal cost, one can still act as catalysts to bring about a cultural and strategic change. Some of them can be practices by even very lean HR teams and can reap considerable benefits for the employees & the organization.

Hiring is a major challenge because of the huge demand of skilled resources and the competitive compensation packages offered in the industry. Some innovative models to attract talent could be introduced such as partial work from home to attract homemakers, people pursuing higher education and retired people.

HR Challenges in Small & Medium Size Organizations

Bringing such diversity in the workforce and targeting the non standard talent pool, can add a new dimension in terms of experience and knowledge and because such people may not be interested in pursuing a full time career, one would be able to attract them too. Another way to attract talent could be through social and/or professional networking sites. Branding one's company and its people friendly policies on Facebook by launching a company page as well as advertising for open positions in related groups on LinkedIn can help one attract a lot of talent & also brand the company's image in a larger forum, all free of cost.

Employee referral is another great way of attracting potential talent and brand the organization through one's own employees.

While looking for references, your existing employee will act as your brand ambassador and say positive things about the organization in their social circle. Instead of searching through job sites and finding candidates who one would not really know firsthand, a well designed employee referral could do wonders and at a considerably lower cost. One such instance is of 'Mitr', an employee referral scheme based on point system used in G-Cube.

Mitr does not give monetary awards. Instead it gives the employees a chance to choose from a range of exciting gifts at each level. Levels are attained based on the number of points

received by the employee. Even referring a candidate can earn the employee 5 points. Such lucrative referral schemes can motivate existing employees to participate who can in turn pass on the positive image of the company in their friend circle & create a talent pool for you at minimal cost.

Learning & Development is usually not the hot topic amongst the top management because of non tangible ROIs. For this reason, it is seen as a sheer waste of resources and money and most SMBs do not focus on L&D activities.

However, they do not realise that L&D is a huge motivator for employees who associate their individual growth with such programs. Hiring trainers from the market has a cost attached to it and may not be feasible. Because of such challenges, training is normally swept under the carpet and forgotten. However, if you are an HR person in an SMB, one way to tackle this would be to identify internal subject matter experts and groom them to take internal trainings. Train the trainer could be facilitated for these SMEs and few other potential trainers for soft skills and technical training and once certified, they could be imparting the training in house. This way your company could even give a Steven Covey or Edward De Bono certified leadership training through its certified in house experts.

Normally in SMBs, employee's vertical

What Happens in small enterprises...

1. HR ends up being a personnel function 2. Cost is a major deterrent in introducing quite a few HR practices 3. Hiring is a major challenge because of the huge demand of skilled resources 4. Learning & Development is usually not the hot topic amongst the top management because of non tangible ROIs 5. Employee's vertical growth is either extremely fast or it's highly staggered

Business Manager

June 2012

11

HR Challenges in Small & Medium Size Organizations

It is important to show to employees that the organization thinks about their growth and that can be achieved to a large extent through Internal Job Postings. By giving the internal employees a preference over external hiring, you would not only be helping them achieve their goals but also gain their trust and commitment. growth is either extremely fast or it's highly staggered depending on the growth rate of the company. Both scenarios are not very favourable for the employee who may be sitting in positions with little or no coaching and may be very confused. It is not a very favourable situation for the organization as well where most mid managers have little or no expertise to handle the roles being performed by them. It is important to show a steady career path to the employees and handhold and coach them to ensure that they are suitable and fit well into the next role and its responsibilities before pushing them there.

One of the ways to do this is through Leadership development and Individual Development Plans.

Plans can be created and discussed with each employee and their supervisors and senior management must guide and counsel as well as support them to reach their goals gradually supported with training and mentoring. All first time managers should be given mentors who can support them to settle them into their new found people management roles before they start independently handling these roles. G-Cube's mentoring program 'Paramarsh' is one such program that has led to employee coaching & has shown tangible results.

It is important to show to employees that the organization thinks about their growth and that can be achieved to a large extent through Internal Job Postings. By giving the internal employees a preference over external hiring, you would not only be helping them achieve their goals but also gain their trust and commitment.

Apart from these, HR should keep innovating to create a culture of camaraderie and teamwork.

Something as simple as a Thanks giving week where employees write to each other 12

Business Manager

June 2012

making them feel appreciated and liked by one another could go a long way in adding positivity in the environment. G-Cube has come up with Thank You cards which are distributed to employees by HR when they want to thank someone. While one part of the card is a note for someone they'd like to thank, the other part is perforated and given to HR with the name of the person who has been thanked. HR does a lucky draw of all these slips once a quarter and awards the winner. Apart from this, these Thank You cards adorn each workstation and make each employee feel proud of the good deeds he'd done for a colleague at work.

As soon as you enter G-Cube office, you see multitude of these bright green post card size cards on everyone's desk which makes one smile. Apart from this, a huge gong is also placed on all floors of G-Cube & any manager who wants to instantly recognize a team member bangs the gong & relates the associate's achievement to everyone on the floor.

Another way of creating culture in the organization could be by creating screensavers and wallpapers of the organization's values.

Since the desktop/laptop is on everyone's seat, same messages running on all of them just unify the entire workforce and soon it becomes a part of them. Motivational films or talks or skits can be held on organizational values where culture could be communicated to employees in a fun and interesting way.

To summarize, SMBs need to realise that their internal customers are as important as their external customers. HR practices in SMBs have to be designed using innovative thoughts and cost effective mechanisms. Overall, a well designed HR system and innovative people practices can benefit any organization in today's competitive global environment especially if one is a small or medium sized company and needs to be known amogst competitors and talent as a good place to work. BM

Rohit Minton Associate Manager-HR, Siemens, Bengaluru

EMPLOYEES- Types and Measures Various behavioral analysis systems have been developed to analyze these which interpret the behavioral patterns

W

e in the HR are the ones who interact with the human capital on a daily basis and come across a varied range of personalities. I have been working in the HR Domain for quite some time now and had interacted with quite a few of different types of employees who were different from each other in many aspects but at the same time shared some similarities as well. As we are with the human beings, what else can we expect? Each one of them will be having same challenges but in a different way. Various behavioral analysis systems have been developed to analyze these which interpret the behavioral patterns.

We need to maintain a good relationship with our employees as this is factor which contributes towards the better productivity, motivation and morale lifting. This is concerned with preventing and resolving problems involving individuals who arise out of or affect or work situations.

We also tried listing some of the common characters which the above four type of employees showed.

Susta These people are not very focused on their work but will be someone who will normally twiddling their thumbs. Such people will take frequent breaks; be it lunch or snacks or smoke or nature calls. These people may appear to be glued to their computers but doing everything else other than doing their work. These guys will be surfing the web for waste without any definite motive in the mind. Every now and then these guys will callin for sick leave and will love to sit back. And to top all these things, they will be complaining continuously about the work-load.

Based on my experience and discussing with some of the veterans of this HR Domain, we bucketed employees in the below categories.

01. Susta(Lazy - Doing Nothing) 02. Trasta(Frustrated - Worried for Everything) 03. Vyasta(Busy - Doing Everything) 04. Masta(Happy - Enjoying Work)

Trasta Such category of people will be very low on the motivational levels. They may feel very uncomfortable in the office. Such people will not like mingling with team members but would prefer to live in self-seclusion. These guys will feel quite uncomfortable in the office.This class of people is good at finding problems in anything and everything but when asked about the solution, they will not have an answer. Such people arise on the spur of the moment spontaneously.

Business Manager

June 2012

13

Employees- Types and Measures

Variety of Employees SUSTA (Lazy - Doing Nothing) TRASTA (Frustrated - Worried for Everything) VYASTA (Busy - Doing Everything) MASTA (Happy - Enjoying Work) Masta This is the class of people with whom you would love to work and will cherish the memories.

These people not only do their work but they enjoy it truly. Such people exhibit great self-control never get carried away. Such people are Grateful to their fellow colleagues. Such people have good social life and share good relationship with their team mates and other people in the organization.

This class is the real CLASS which devises a very positive philosophy that provides meaning to their lives and work.

Vyasta This is a peculiar class of people who can see a mountain in a mole. Be how much so ever easy task it may but these people will see that as a marathon exercise. Such people will be very busy and will be in rash always. They will say yes to everyone and everything without even analyzing the pros and cons, or any other analysis. But this should not imply that they will not meet the deadlines rather they will meet the deadlines but with a last minute rush. For them, everything will be pending till the last minute. Such people will be stressed with some unwanted occupations.

After having talked about the characteristics of the major categories of employees, let's get some measures those will actually be needed to address the behavioral patterns.

Susta For this category of employees, we need to build a proper report to make them understand their drawbacks and how to work upon the same.

All the breaks taken by them should be kept under record. With the proper evidences in palace, employee should be confronted. Suggest and prepare a time-line based work plan for them and make them understand the objective and meaning of the same. Make them aware of the consequences of any deviations in the devised plan. Facilitate them with required and relevant tools and trainings. If required, put them on a Performance Improvement Plan (PIP). If they show some good improvement on being under PIP, they can be taken out of PIP and can be subjected for normal Performance Review.

Trasta For such people counseling is the must and should be arranged without any delay. The causes for their behavior should be mapped and they should be counseled at the personal level as well as 14

Business Manager

June 2012

Employees- Types and Measures

Now the obvious question that comes to our mind is if this class is already enjoying, what can we do? All of us know that any state of mind is a resultant of the external as well as internal factors. External is the environmental aspect and internal is the personal aspect. We should support such people in good as well as the bad times.

at the job related front. All required and genuine support should be extended.

Such people can be subjected to some Time Management Trainings as well which will make them understand and redefine the priorities and make them aware of time allocation skills. Such people should be motivated to work as a team. A Masta buddy shall be assigned to such people who will be interacting with them on a regular basis and understand their concerns. We should make them feel accountable and important to make them come out of that Trasta zone and become Masta.

Vyasta This class of people also needs a Time Management Training and should be coached on the prioritizing skills. Such people should be made aware of the importance of the team work. They should be coached on the delegation skills. Such people shall be trained on Risk, Time and Project

analysis skills. Also, if some project management training of any level is provided to them; they can certainly improve upon their behavioral part and can partner the growth.

Masta Now the obvious question that comes to our mind is if this class is already enjoying, what can we do? All of us know that any state of mind is a resultant of the external as well as internal factors. External is the environmental aspect and internal is the personal aspect. We should support such people in good as well as the bad times. We should appreciate them on their good works and should guide them in case of any misses. A regular interaction should be maintained with such people as these can be the internal branding agents who will make the environment of the organization much more congenial and a better place to work. If in case they need some adjustments, help them with that. BM

Business Manager

June 2012

15

Hiring up, down, attr hen overall business sentiment is not so high, specially manufacturing sector, surveys conducted during these days reveal that while hiring is up ,pay hikes are expected to be low which ultimately makes attrition at high.

Experts feel that hiring practices are definitely going under tremendous change. Social media has come up as an effective tool for hiring. BM teamed up with genius consultants to bring you the trends in hiring, retention and attrition. Data collected during survey was analyzed by Genius team to understand the broad sectoral, geographical and other trends.

Hires are now more informed in terms of cost, productivity and profitability. Companies are extremely careful about who they hire. When talking of hiring and pay hikes, how attrition can be far behind?

Because as per research findings of Right Step consulting on compensation, the hikes are not going to high & attrition is bound to shoot up.

Performers are not going to be contended with average hike. While talent crunch may be a bad news for organizations, certainly is good for talented employees.

Organizations are also exploring different working arrangements in terms of contractual and full time staff to fight the lag between demand and supply of performers. Skills and capabilities is still a major issue in India.

Through surveys' findings, articles, discussions and experts' views, BM presents comprehensive view on current Hiring practices, retention and attrition‌‌‌

W

16

Business Manager

June 2012

pay hikes ition up...

Logistics & Supply Chain, Telecom. The major cities considered were Kolkata, Chennai, Mumbai, Bangalore, New Delhi, Hyderabad, Ahmedabad and Pune.

The results of the survey revealed an interesting hiring scenario for the year 2012-13. (Ref. Figure No. 1) This year 52% companies have said that new jobs will be created in the FY 2012-13. About 3% companies have said that there will be layoffs this year and another 5 % said that there will be no hiring. About 23% said new vacancies will be created (Opportunities apart from the current head count).

18% said Replenishment hiring against attrition will take place only.

Industries & Locations where both new vacancy & replacement hiring will take place (Upward Trend): Auto/ Auto Ancillary Construction/ Engineering IT/ITES/BPO Pharma/Medical

Kolkata, Mumbai, New Delhi, Bangalore

Power/Energy Retail ( Refer Figure No. 2)

A

n online survey was conducted by BM & Genius Consultants with 353 companies across India to understand the hiring scenario for the FY: of 2012-13.

The major industries covered were Auto / Auto ancillary, Banking / Finance, Construction / Engineering, IT/ITES/BPO, Oil & Gas, Pharma / Medical, Power / Energy,

The majority of the companies' i.e 53% said that increment in manpower strength will be in between 5-15%. 18% said that it would be in between 16-24%.10% said in between 2530%. 8% said that increment would be above 30% and 11% said that there will be no increment in manpower.

Industries & Locations where there will be increase in manpower strength (Upward trend) Auto/ Auto Ancillary Construction/ Engineering Pharma/Medical

Kolkata, Mumbai, Chennai

Power/Energy Business Manager

June 2012

17

Construction/ Engineering

Hiring scenario is taking tremendous change

Pharma/Medical Power/Energy Retail

Mumbai, Bangalore, New Delhi, Ahmedabad

Telecom (Refer Figure 5) 34% say that the attrition rate was in the range of 15-20%. 25% said in between 10-15%.10% said in between 5-10%.23% said above 20% and 8% said less than 5 %.

Industries & Locations where maximum attrition took place Aviation IT/ITES/ BPO Telecom

Mumbai, Bangalore, New Delhi, Ahmedabad

(Refer Figure 6)

R.P. Yadav, CMD, Genius Consultants, Kolkata The hiring scenario is taking a tremendous change in India.

There is an increased tendency towards recruitment in Temp Staffing. Search & Selection is shifting towards RPO.Senior recruitment will be done more through social networking.

Social networking will be an important tool for senior level recruitment. LinkedIn, Facebook, Twitter and other sites are going to be an effective tool. Social networking sites are fast and informative.

Head hunting will continue for senior level recruitment.

Networked society will help in head hunting. Sources of recruitment is almost equivalent in most of the large cities.

However the approach & means varies from city to city.

(Refer Figure 3) When companies were questioned on which experience levels they will witness for hiring, 46% of them said 4-8 years and 35% of them said that it would be within 1-3 years.9% opted for 8-15 years and 7% said that jobs would be created for fresher's.Only a mere 3% said that 15 years and above.

Industries & Locations where the experience levels will have the most opportunities (Upward Trend) Auto/ Auto Ancillary Construction/ Engineering Real Estate Power/Energy

Kolkata, Mumbai, Bangalore, Hyderabad

(Refer: Figure 4) The survey also revealed that organisations plan to give increments to their employees in 201213.

36% companies said that the range of increments will be between 10-15%. 35% expected it to be in the range of 5-10%.21 % expected it to be in the range of 15-20%.However it is interesting to note that only 5% expected it to be less than 5%.

Industries & Locations where maximum increment will take place (Upward Trend) 18

Business Manager

June 2012

The widening gap for demand and supply for talented workers has become a major cause of worry. Among the companies surveyed 35% said that the maximum talent crunch was witnessed in the 4-8 experience bands.19% said in between 8-15 years.15 % said in between 1-3 years.6% said among fresher's.17% said they did not face any talent crunch.

Industries & Locations which faced difficulties in Recruiting (Upward Trend) Construction/ Engineering Education Power/Energy

Chennai, Mumbai, Ahmedabad

Hospitality

IT Hiring Regains Recrutiment aggression has reached prerecession levels at least in IT sector. But ITeS/BPO sector is relatively low in hiring. Recruting agencies feel that though the IT, hardwafe and software sector continued to increase its recrutiment at least at the rate of 10% year-onyear, the BPO sector hiring was negative for last two years. The reason being slow recovery and more BPO jobs in other countries, becasue most of the jobs are going to Chaina, Malaysia and Philippines.

According to Naukri.com IT hiring in April 2012 is the highest since July 2008 and hiring activity is 18% higher when compared to March 12. It is because a lot of recycling happnes during this period in this year including renewals and inventory changes. This is a period of appraisals and companies expect attrition. During first quarter of 2012 with demand for professionals in sales and IT has been upbeat being 19% and 27% higher than April 2011. All the metros have witnessed a double digit percentage hike in their hiring numbers in April 2012.

Salary hikes decline Indian employers are predicting lower in salary hikes for 2012 as compared to what were given in the previous year 2011. The expected average salary hikes in year 2012 is 11.54% as against 11.89% for 2011. Suggests a compensation

BM-Genius Survey Hiring Scenario for Companies in 2012 - 13 (Refer: Figure 1)

Increments (Refer: Figure 4)

Increment in manpower strength (Refer: Figure 2)

Overall Attrition Level (Refer: Figure 5)

Experience Levels Vis a Vis jobs (Refer: Figure 3)

Talent Crunch (Refer: Figure 6)

Business Manager

June 2012

19

survey conducted by HR Consulting firm Right Step Consulting P Ltd..

The survey is based on a representative sample of 2326 Indian Companies across sectors; the post union budget survey collected the responses during the 2nd fortnight of March and asked the participants in detail their expectations for compensation changes in their respective organizations for 2012.

“After having grown at the rate of 8.4% over the last 2 years the Indian Economy slowed down considerably in the year ended March 2012 and the lower than expected growth in economy at only 6.9% is reflecting in the Indian Corporate sector’s lower outlook for compensation hikes for its employees” said Vishal Bhargava, Director Right Step Consulting.

The drop in salary hikes are expected across both services and manufacturing sectors. While manufacturing sector is expecting a salary hike of 11.58% as against 11.91% in 2011; the service sector is expecting a salary hike of 11.49% as against 11.87% in 2011.

“Drop in salary hikes in manufacturing sector was expected given that sector’s estimated growth rate in 2011-12 at 3.9% is a drop of almost 50% as compared to 7.6% in the previous year. Prominent core sectors of Power, Steel, Mining & Construction are all expecting a lower salary hike.

The drop in expected salary hikes in services is on account of sharp drop in Telecommunications and drops in sectors like Retail, IT Software, BFSI and Travel/Hospitality. Which are figuring amongst the major sectors where significantly lower salary hikes are expected” adds Vishal Bhargava. (Refer Figure 7) The drop in salary hikes are expected across both Foreign MNCs and Indian Companies. Drop in foreign MNCs is marginally higher from 12.17% in 2011 to 11.73% in 2012 a drop of 44 basis points as compared to Indian companies which are expecting a drop from 11.71% to 11.41% a drop of 30 basis points. Reflecting economic uncertainties and slow down in the home markets of foreign MNCs which is an additional concern for their India operations. Bucking the general trend, prominent sectors where salary hikes in 2012 are expected to be higher as compared to 2011 are – Healthcare, Automotive and Pharmaceuticals. (Refer Figure 8)

Manufacturing may see highest pay hikes According to the compensation trends survey conducted by Deloitte Touche Tomatsu India, increments in the manufacturing sector are amongst the highest for 2012-13. Slowdown in the knowledge-intensive industries have made

Right step consulting survey Figure 7

Figure 8

20

Business Manager

June 2012

manufacturing, infrastructure and retail industries to emerge as the top sectors so far as annual increment percentages are concerned.

These segments are also the ones that are upbeat about hiring this year.

At the median, annual increment is at 15 per cent. Variable pay median is at 20 per cent and it has increased from 12.5 per cent last year.

Infrastructure and real estate have also given 15 per cent increments with median variable pay of 15 per cent.Overall median salary increase across sectors is 12 per cent. Financial services sector has been most conservative in increment projection for 2012-13 at 10 per cent. Though manufacturing has only marginally increased increments this year, it has emerged as the top sector only because the traditional paymasters are slowing down.

The knowledge-intensive industries traditionally known for offering very high average increase earlier have slowed down, considering increased wage cost and reduction in margins, said E Balaji, MD and CEO of Randstad India.

Increments Slide....

Deloitte India, Human Capital Advisory Services (HCAS) recently concluded a cross-

industry compensation trends survey that provided key insights on salary increments and variable pay trends. A total of 142 companies participated in the survey and the key highlights include sectoral analysis on compensation trends.

Some highlights : Overall median salary increase across sectors is 12 per cent; Manufacturing and infrastructure & real estate sectors have reported highest increment figures for 2012-2013 at 15 per cent; The financial services sector has been most conservative in increment projection for 20122013 at 10 per cent; Overall variable pay (as a per cent of CTC) across sectors is 16 per cent.

The frequency of payout is annual for a majority of companies. However, for sales staff, the payout is observed to be monthly or quarterly, depending on organisational compensation policy; Pharmaceutical, healthcare and life sciences faces highest overall attrition at 22 per cent.

This is followed by ITeS and media & advertising at 16 per cent;

Business Manager

June 2012

21

Culture of respect & openness helps retaining employees People are the most important which play a key role for employee Dr. Vinnie Jauhari, Director, IIMT, Gurgaon asset for an organisation specially engagement. Career opportunities in a knowledge driven economy. is the critical engagement driver for As the services and the employees. manufacturing sector is growing, Clarity in HR policies plays a level there is a growing need for playing field for the employees. A attracting bright talent to the manager plays a critical role in the organisations. It is an interesting execution and implementation of question to address whether it is career practices. Cross functional the recruitment practices or the assignments also help the overall work environment that firms to develop richer career paths helps a person stick to an for their employees.The other organisation. A talented factors which play a role in employee is a sought after employee engagement are quality person in a competitive of leadership, rewards, company and business environment. work practices.Transformational As technology enables to leadership style which looks at weave networks among people, collaborative and facilitative the recruitment practices have relationships is much more seen a sea change in their form as engaging for employees. Mercer well. Networks like linked in play report for 2011 which looks at a big role in connecting what's working for India looks at the people and also generating following aspects: references. Employee referrals Career advancement; Base pay; play a very effective role as the Training opportunities; Type of work; potential employees get Working for respectable influenced by the feedback from organisation, Bonus or other the existing employees.The incentives; Retirement savings plan; referrals also help in getting Flexible work schedules. An background checks and there is a environment of integrity bonds higher likelihood of a cultural fit the employees and builds trust of a new recruit with the respect for the organisation. Fairness organisation.As per the Aon and transparency in decisions also Hewitt Report 2011, best builds up a sentiment of loyalty. In employer organisations have my association with IIMT, Gurgaon higher employee advocacy.The for about twelve years, I have best employers also display the Employee engagement witnessed a strong sense of loyalty following characteristics as per in employees.

Career opportunities Aon Hewitt Report: One of the key distinguishing factors Strong Organisational has been a culture of respect, trust Clear HR policies Alignment and openness. Creating Better growth and Cross functional Assignments opportunities for career development opportunities achievements, professional Environment of integrity Address needs by employee development, learning through segments excellence and student engagement Strong belief in importance of HR function has played a key role. Extraordinary things can be Culture of reward and recognition accomplished through achievement driven individuals.

However, for retention in an organisation, there are lot of Investments in employees pays off richly to organisations factors which play a key role. For retention, employee and provides them a competitive edge which is hard to engagement is a key mantra.There are number of factors replicate.

Key Factors for Retention

22

Business Manager

June 2012

Sectors, which have registered lowest attrition rates, are the manufacturing and energy and resources; The overall attrition across industries is 13 per cent. Better pay and personal reason have been rates as key reasons for attrition industrywide; Hiring and retaining skilled talent continue to remain key challenges in the market.

Attrition up India Inc is likely to see attrition rates as high as 31 per cent as employees unsatisfied with annual salary hikes would look out for better prospects, say experts.

HR consultants are of the view that employers needs to take various steps in order to retain talent like providing career opportunities and suitable work environment as high attrition impact the company's resource negatively.

According to human resource experts, the average attrition rate is projected to grow at 31 per cent in Indian firms in the April-June quarter, a rise of 9-10 per cent from the preceding quarter (January-March).

In the April-June quarter of 2011-12, the average attrition rate was 27 per cent.

Generally, employees would have received their annual appraisals during the April-June period and those not happy with their performance review or salary hikes seek better opportunities.

Consequently, attrition rates are seen going up in these three months, experts opined.

Salary and designation are the major factors for higher attrition outlook in Q1, FY'13. One more concern is having in employees mind if they'll change their job in this quarter they are entitled to enter into appraisal cycle with their new employer also. So they are not going to loose anything with job change.

A good performer did not expect 10-15 per cent of hike, their expectation is not less then 20 per cent.

Experts said that attrition would be in double digits in all the sector. It would be highest in the IT /ITeS sector at 31 per cent, followed by telecom (26 per cent), banking and financial services (23 per cent), aviation and hospitality (22 per cent ), real estate (15 per cent), FMCG (21 per cent), automobile and manufacturing (19 per cent).

Changing Hiring Practices Hiring practices at Indian organisations have undergone dramatic changes over the last few years. Employers are now willing to go beyond traditional channels in order to get things right.

India's fourth largest IT services company, HCL Technologies got on board almost 60% of its seniorlevel executives (general managers and above) last year through professional online networking platforms, primarily LinkedIn. ING Vysya Bank, on the other hand, introduced something called 'fone-acareer' in 2011, similar to a customer services cell, to cater to prospective employees by counselling them over the phone about their careers. About 7% of its overall hiring was done through this platform last year.

Innovative Hiring HCL Technologies hired almost 60% of tis senior-level executives last year through professional online networking platforms like LinkedIn ING Vysya Bank brought on board about 7% of total hires in '11 through 'fone-a-career', a customer services cell Mahindra Satyam recently hired only women through a Facebook campaign called 'Career Divas' Though not new, hiring using social media is gaining scale in India Employers say they are seeking these alternative routes to not only sift out the best talent but to also make their workforce diverse. So, it wasn't surprising when IT major Mahindra Satyam recently launched a campaign called 'Career Divas' on social networking website facebook and successfully hired only women. Last month, PepsiCo India introduced an application tracking system Kenexa, already being used globally, within the company to help it leverage the relevance of social media in recruitment.

"We have a dedicated team which looks into hiring through social media. As early adopters, we are at a stage where the numbers are much higher in terms of percentage of workforce hired from these new channels compared to any of our peers," says Ravi Shankar, senior VP, HR, at HCL Technologies.

Shankar says HCL started using portals such as LinkedIn way back in 2007 and, other than hiring a huge chunk of its senior executives, it also employs 20% of its junior and 40% of its mid-level staff through it. HR heads at companies say for senior positions candidates who are not actively looking our for a job change can also be tapped through such platforms and at much lesser costs whilst a consultant at an executive search firm charges a huge fee.

While the numbers are stagering for HCL, another IT services firm, Mahindra Satyam, says it hires 10% of its workforce, largely at the 2-6 years experience level, from social media platforms and plans to increase its focus further. Having conducted the 'Career Divas', Mahindra Satyam's chief people officer Hari T says the idea is to explore more such avenues which are not traditional in nature.

Besides tasting success with 'fone-a-career', the ING Vysya bank hired 20% of tis senior executives from LinkedIn and other social media platforms along with 50% of its mid-rung staff and 30% junior staff. BM Business Manager

June 2012

23

Hiring Practices Linkage With Retention -A.S.Sharma, CEO, Juris HR, Gurgaon

To succeed in the "present and future" highly competitive market, focus on Internal and External hiring is indispensable. A well structured hiring process irrespective of the size of an organization is the need if competition is to be taken head-on. A carefully drawn sequence of job design, manpower planning, effective interview, induction process and a careful balance between internal talent up-gradation vs external hiring will not only boost the morale of the employees and their satisfaction levels but also result in higher Productivity and Quality at a much lower cost.

piles up, we invite CVs through the selected placement agencies. Human Resources Division Shortlists the CVs and calls for interview. In interview we associate an officer from the respective function.

“You can take my business, burn up my building, but give me my people and I’ll build the business right back again”

O

-Henry Ford

nce I was sitting with a friend of mine who is Heading Human Resources in a Medium size auto component manufacturing company. During our conversation, he got a call from some placement agency probably asking for the details of the recruitment plans which he might have earlier conveyed to them. Sitting there I could hear only his side of the communication which briefly was as under:

24

Ques: So HOD from the function concerned attends the selection.

Ans : NO. HODs do not have time for such things.

They normally depute somebody from their department.

Ques: Is this the process for all selections and all levels?

Ans:

Yes, upto below DGM level.

" Please send hard copies of CVs you have for the positions of …………………. The salary will be commensurate with the experience of the person coupled with his performance in the interview. I can't disclose the details at this stage but we shall be offering the best prevailing in the Industry, in this region. And no written test. For all these positions (around 11 in number) I need the CVs positively by tomorrow evening."

Ques: And what for DGM and above levels?

I could not withhold my inquisitiveness to get the selection details and I asked him a few questions.

Ans:

Ans:

There are no vacancies. All of them are MDs close associates who have been in the Company for more than twenty years.

Ques: What was the attrition rate last year?

Answer: 35.6% .

Ques: Is it not high?

Yes it is. But what can be done? If somebody decides to call it a day, how can we stop him.

You know, people at times don't even resign and care to get their balance dues.

Ques: How do you decide your manpower requirements?

Ques: And attrition is more at which levels?

Ans:

Ans.

Business Manager

We consolidate the requirements after a few separations and when adequate number June 2012

It is highest among the new recruits, between 5th month and a year.

This is the sad story in most of the Organisations where Human Resources function is doing routine administrative jobs and does not possess competency to identify and take corrective measures. Same will be the situation where the top management considers Human Resources function as a cost function.

Ques: Do you conduct an exit interview?

Ans:

Yes. We do. We ask the employee to fill up the questionnaire and hand over to Human Resource.

Ques: Have you analyzed the reasons? Do you discuss with them?

Ans:

Yes, but it is always "Personal Reasons".

There is no need to discuss.

Ques: Does your MD not say anything?

Ans:

Yes. He is worried. HODs tell him that the generation today is very frustrated. They get quickly bored from the routine and also demand salary rise every six months besides quick promotions. How can the Industry sustain high cost? And ultimately HR function is at the firing end for not making proper selections and also timely placements because of which Production and Quality suffers and for the intervening period we have to get work through Contractor's manpower or entrust it to the existing employee if the separation is from Supervisory category.

This is the sad story in most of the Organisations where Human Resources function is doing routine administrative jobs and does not possess competency to identify and take corrective measures. Same will be the situation where the top management considers Human Resources function as a cost function. Since Attrition entails latent costs which apparently is not visible or reflected in the Balance Sheet, it is often ignored.

Many analysis conducted over a period of time have consistently revealed the cost of bad hiring anywhere between two to 2.5 times the salary for the concerned position.

Besides Organisations do not understand that even outgoing employees are their Brand Ambassadors. With the strong social media we have, the words travel with unimaginable speed which can tarnish or improve Organisation's Brand.

I strongly believe that most of the attrition and the consequent fall out is totally manageable through an efficient and effective "Exit Interview".

I do not intend to take up the underlying worsening Industrial Relations undercurrents

Business Manager

June 2012

25

Practice these behaviours to increase retention

1.

2.

3.

4.

5.

6.

-Neeraj Zutshi, Head HR, BKT, Bhiwadi Seeking opportunities to reward employees who are creative, who take initiative without being told and who demonstrate teamwork.

Making an employee feel wanted and appreciated goes a long way towards increasing company loyalty and reducing employee retention.

Establish routine team meetings and encourage employees to rely upon each other and not attempt to solve problems alone. Establish both team and individual goals and openly acknowledge members who display good teamwork.

It is not always necessary to appoint a team leader. Usually the team will find its own leadership. People will work hard not to let the team down.

Establish a routine meeting schedule for a one-on-one meeting with your employees. This should be at least quarterly.

This meeting should be a two way dialog with both parties giving feedback. Employees really appreciate it when the boss asks "How can I improve to help to your job better?" that may be going on in such Organisations as another consequence.

Many studies have revealed common Attrition grounds as: The Boss, Lack of Transparency in dealings and formulation and implementation of Human Resources related policies, Decision Making process,

26

Business Manager

June 2012

Lack of operational Freedom, Lack of Learning Opportunities, No differentiation on the basis of Performance etc. etc. (The list goes on‌) There is no doubt that every candidate selected for placement joins an Organisation on a very enthusiastic and committed note. What happens after wards largely depends on the working climate and other associated matters. Exit interview is a very effective tool for such diagnostics. But diagnosing only will not help unless followed by specific corrective measures.

And this requires a passionate action on the part of HR Function. A well designed Induction Process goes a long way to contain Attrition.

During the course of this process a close study of the participants behavior and the questions asked by them can reveal a lot about their future planning.

Let's also see the revenue loss when an Organisation picks up a candidate from top business school to design and implement Policies to raise the satisfaction level of the employees and thus contain Attrition, without giving him enough Operational freedom. I know of an Organisation which did the same thing. The poor fellow deserted the Organisation within seven months of joining leaving behind a lot of turmoil. Readers would correctly guess out as to what would have happened. One can hear the top management often saying that in our type of Organisation even an MBA recruited from top management Institute is of no use or labeling all MBAs as useless.

There is no doubt that the time invested by the top management on strategies related to talent retention has a very high positive impact on Productivity, Quality, Cost, Delivery and employee satisfaction factors. One can even calculate ROI on such investment. We only need to see the practices prevailing in Organisations included in "The Great Places to Work" study. A clear pattern is apparent in the behavioral and communication pattern of Managers and Supervisors in such work places.

To succeed in the "present and future" highly competitive market, focus on Internal and External hiring is indispensable. A well structured hiring process irrespective of the size of an organization is the need if competition is to be taken head-on.

A carefully drawn sequence of job design, manpower planning, effective interview, induction process and a careful balance between internal talent up-gradation vs external hiring will not only boost the morale of the employees and their satisfaction levels but also result in higher Productivity and Quality at a much lower cost. It is only through Human Capital that Organisations can be in a wining situation under all market conditions whether Recession, Inflation or a Developed/ Under Developed or Growing economy.

And the onus of this is on only Human Resources Function of Organisations. Only then they will move from being labeled as a "Cost Centre" to a "Business Strategic Partner". BM

Just as the economic vagaries impact the financial assets, the people-asset is subjected to a potentially damaging but extremely subtle phenomenon.....

Thought Inflation (TI)

People AssetsParadigm Change -Ganesh Vaidhyanathan, Chennai

W

e all know how assets are defined in Business Organizations.

Decisions made in the Board Room revolve around assets to help them grow both in the here-&-now context as also through a predicted future economic trajectory, such that the stakeholders enjoy sustained returns. Stakeholders include not only the investors, employees and the supplies/distribution chain, they also include distant individual customers who have trusted the products/services and chosen to build their own

TI is the perceptional corruption in allowing ornamental requirements to overwhelm our essential survival needs. Its misleading dimensions usually generate skewed thoughts leading to specious positioning of individuals. future around these. Inflation and currency relationships in a global economy, among several other factors, are the two major threats to the financial assets.

However, a larger, fuller definition of the asset includes the intellectual resources of the organization i.e. People, who fundamentally contributed in creating the financial assets. With People in the picture, the risk/opportunity perception of the organization is redrawn afresh with a new imagery. Just as the economic vagaries impact the financial assets, the people-asset is subjected to a potentially damaging but extremely subtle phenomenon..... Thought Inflation (TI)

What is TI? If we were to uninhibitedly position our core personality strengths upfront in any transaction, it would be wonderful. Few of us habitually do it.

But in most cases, we expend much of the psychic energies in suppressing our weaknesses while trying to showcase the strengths.

Thus the transactional positioning is fraught with inhibitions. TI results from a negative net balance between our core strengths and weaknesses, at all times. A high TI would create tall defenses around us comprised of suspicion, defiance, hardheadedness, stealth and scores of other negative attributes. Collectively these result into a sense of insecurity inundating our conscience. Simply put, TI is the perceptional corruption in allowing ornamental requirements to overwhelm our essential survival needs. Its misleading dimensions usually generate skewed thoughts leading to specious positioning of individuals. Thus our give-&-take in an existing relationship frequently craves for review due to our own insecurity. New relationships often start with a rigid disposition that impedes free and fair exchange. Satiating insecurities overtakes contributing to collective progress. Identity crisis takes deeper roots.

The Three-level Identity: Our identity has a three-level construction, namely, (1) The core level: this defines our inherent personality attributes that together identify WHO we are. The core personality has ingredients like our core belief and value systems etc.

Business Manager

June 2012

27

DISCUSSION Do hiring practices have direct impact on retention?

I would suggest that not only do the hiring practices of an organization have a direct impact on retention and attrition, but they have a significant impact on the entire organizational culture. If a company views the potential candidates as interchangeable parts that can be substituted like new nuts and bolts, the employees in that organization will be able to tell by the way the organization interacts with them.This becomes an issue because when a new hire first starts a job, they are immersed into the values and norms of that organization.They learn what is acceptable and what is not acceptable not through procedure or policy, but by the actions and attitudes of their peers, as rooted by social learning processing theory.The actions and attitudes they see will manifest themselves as part of that new hire's understanding of the organizational culture, and will create a duality of structure when an additional new hire starts and see's the original new hire reinforcing the behaviors and attitudes they first experienced when they started.

By taking the time to pick candidates that best fit the parameters of your organizations mission and vision, you can help keep the health and quality of your organization at maximum capacity.

Trevor Chase Bosley A good hiring practice creates a branding for the organization, it is ever the first perception, impression or sight to a prospect employee. In the era of "Talent Choose employer" a good hiring practice successfully contributes to count amongst the employer by choice but last only for 6 months to 9 months. A good hiring practice coupled with effective Induction plan, detail Job description with clear targets and growth plan, Enabling training program, affiliative environment and strong Value system makes the employee to stay long as well as contributing outstanding performance.

-Arunima Mohanty 28

Business Manager

June 2012

TI affects the core identity of people, destabilizes the organization's alignment with its core objectives, creates undesirable illusion and finally inexplicably high attrition. Immediate solution coming in our mind is Training.

(2) The survival level: this represents attributes and tendencies always seeking to fulfill the bare minimum economic essentials. Irrespective of our core beliefs, survival tendencies take precedence under compelling conditions. This evolves into WHAT we are.

The Who and What produce together a modified compound that exclusively interacts with selective outside agencies perceived as crucial to our survival.

(3) The ornamental level: This is the third and outer-most sheath of our identity. This reflects a wishful imagery of HOW we wish to be seen and accepted in the larger environment surrounding us; this is the how-we-should-be element but usually presented in a how-we-are platform to the environment.

Both (2) and (3) levels thrive on a give-&-take yardstick.

A desirable situation is to replace the ornamental level with the actualization level, a futuristic element realizable with time and effort.

The actualization obviously has strong connect with our core strengths, the inner identity.

But there are problems. The What and How elements are separated by an extremely thin line. As time unfolds, the perception of survival essentials modifies and expands itself continuously. Soon the borders are breached. The level (3) illusions inundate the level (2). Thus people create an ever growing list of must-haves, demolishing the line between the (2) and (3). Soon it becomes hard to tell between critical and non-critical, essential and non-essential, must-have and let-go items. This blurred vision rapidly inflates people's sense of insecurity in a competitive environment. Habitually defensive postures become inevitable, extreme irrationality seems very normal and justified, unabashed greed gets justified as a rightful need. This changes the way we think, imperceptibly first but visibly later.

Suddenly excellent people seem unexplainably moron; talented people suddenly become unwieldy, contributive members suddenly become alienated from the rest of their group. It is TI at work indeed. TI serves to isolate individuals, fragment their psychic muscles and creates a position of One-versus-The Rest. If this happens to each individual in a group (which is often true) one can imagine the stress-dimensions in the group.

In the collective context TI silently corrodes the team-cohesion and by extension the entire people-asset earlier said. A healthy people-asset, free of TI, is therefore the only imperative for ensuring a robust, positively forward-looking corporate personality.

The Corporate Personality The Corporate Personality also has a 3-level construction, classified in exactly the same way as described before. Only exception is that in the corporate context the level (3) is better identified as the Corporate Vision.

Approach In terms of nurturing employees makes difference...

-Iyer Subramanian, General Manager-HR & Admn., Vijay Tanks and Vessels, Baroda The biggest challenge faced by any organization is that of attrition i.e. when employees leave the organization.Every organization has two types of employees content and discontent. Ignoring the employees who seem content and happy is a very poor HR strategy. Every employee without any exception comes to the office and works for his salary, perquisites, status etc. Just because he is happy and content does not mean that he really is. Such people are always on the look out for a better offer, position & they will be gone like a wind. Hence, if you see a content employee, favor him with additional wealth, awards, and increments depending upon the competence which he possesses. You will ultimately find that the said employee will be happy and content and will accordingly put his heart and mind into his job as he and his feelings / needs are being understood by the Management before they were expressed. In so far as the employees, who feel restless and discontent, speak to them, understand from them the reasons for being unhappy in their Every organization has place of work. two types of The HR department has to play a pivotal role in not only handling attrition but every attempt has employees - content to be made to reduce if not stop it. For that to and discontent. happen, the Management needs to have faith in Ignoring the the department of HR. However, to tackle attrition employees who seem every organization needs to have a certain content and happy is a strategies in place so that the business continues. very poor HR strategy.

In every organization work is totally dependent If you see a content and revolves around key people. Yet, there is no employee, favor him with additional wealth, guarantee that these people who occupy key positions will continue to be with the company awards, and forever. Now, how can one ensure that the required increments. In so far as work is done despite attrition? the employees, who If you consider having more than 1 head in feel restless and crucial departments instead of one, the work discontent, speak to continues without a break & the other person can them, understand from take over if there is any likelihood of departmental them the reasons for head leaving the company for better prospects. For being unhappy in their that to happen, prepare the others with equal place of work. training, & trust. This talk a lot about the culture of the organization & the people discharge their functions with a lot more positivity & responsibility. No one is permanent in this world, including the founder himself.

What remains permanent is the vision, mission, goodwill created because of the work one has done in their respective fields. Hence, with people do not expect any kind of permanency. When one works and discharges his duties with this kind of attitude and approach, you will give your best at all times. The best way to make yourself permanent is to make more people like you in terms of work ethics, responsibilities so that they can take over from where you have stopped. The one more way of ensuring non-dependency on people is continuous training and development. Now this is not just a formal process, rather, it's the very 'lifeline' of any organization the very breath that keeps its live. Excellent organizations have also got employees on their payrolls like any other organizations but what makes them different is the approach in terms of nurturing / training / developing / helping them to become great & build the organization. If we study and go through organizations which have lasted for generations, we will find that they have put in place great systems / methodologies / processes along with people who have been given adequate training & development in their fields.

DISCUSSION Yes, as long as the hiring practice is good enough, where the practice itself has considered all of the aspect (cultural, behaviour, competency, interest) it shouldnt be a problem. Most of the case, culturaly unfit is the biggest caused of attrition.

-Edwar Edo Although hiring practices affect both the retention and attrition rates, it is how you manage the new joinee that largely determines the retention/attrition rates.

With social media (and groups therein), an organisational work/cultural environment can be known earlier than joining time.

-Sudhanshu Singh Act in haste & repent at leisure......, far too many times have seen this happen whilst recruiting people.

-Rohit Bhatnagar Yes. Hiring practices in these times seemed to be based on quanity not quality,friendships and family ties not business.A HR person person or group should always be neutral to embrace quality to make sound decisions.

-Linson Franklin It's said hiring the right candidate at the right time & at the right place gives fruitful results to the company. A good hire can bring a cheer to the HR manager / line manager who is hiring and a bad hire can cost the company in monetary as well as non-monetary terms. Hiring has an overall impact on the growth of the organization for e.g. in insurance industry all sales staff hiring is stop in the month of January as we need to have employees onboard before Jan, As Jan, Feb & March are peak season in terms of business generation.

The Recuritment team needs to understands the business how it's done, the attributes that the candidates must posses for the desired post and then take a decision whether to hire him/her. Once the candidate is onboard how HR department Welcomes the employee in the organization & how good & flexible is your HR Policies, How good is your induction programme also pinpoints or tells you about the culture in the organization which is automatically lead to rentention strategy. First impression plays a vital role in retaining or attrtion of an employee.

-Derek D Gomes Business Manager

June 2012

29

DISCUSSION The styles of the practices and the experience of the recruitment process will be embedded in a candidate's mind that can influence his or her stay with the organization. My focus particularly is on the expectations that can get created during the recruitment process in the candidate's mind, which are related therefore to the communication of specifics with the candidate.

If certain promises are made or if expectations get created during the recruitment process that for any reason do not materialize on time or at all for the candidate once he/she has joined the company, there is a significant probability that gap develops into a grouse leading to employee disengagement if not addressed quickly. I have often experienced that promises made during the recruitment stage sometimes are difficult to implement later, and the burden of this difficulty often falls on the HR generalist who may or may not have been part of communicating the promise to the candidate.

In my experience, communication gaps usually arise in the areas of scope of work and authority in decision-making, grading, compensation break-up details (gross versus net take-home), career progression promises and occasionally with designation, resulting in heartburns for the candidate-turned-employee. A clear understanding and sign-off between the recruiter and the HR generalist on such specifics before initiating the recruitment process for each and every position should help to alleviate this problem.

-Mukund Hiring practices do impact retention and attrition. We have done some interesting wok in this area. Few challenges are 1. Move away from "Collection and Get into Selection" 2. Are we good in Coaching or Poaching- mostly the latter 3. Buying Talents to Building Talents These three aspects get less importance . We have designed a very unique process called "Retentrition" which is a business win of Retention and Attrition and Individual also benefits in this process - and the society at large.

-S. Deendayalan 30

Business Manager

June 2012

Development initiatives, in a blurred corporate TI, appear as another wasteful Training that does not guarantee increased numbers in the here-&-now context. It is great pity. The number-obsessive minds at the corporate level must be helped by HR to undertake an unpretentious re-look at their own identity with their corporate vision.

A company's corporate vision emanates from its corporate personality and enables a premeditated protocol for alignment of its people-assets. Its defined values provide clear co-ordinates for its resources to be pluggedin such that a long-term collective growth becomes the team focus. In this process the efficacy of the corporate-people protocol is extensively dependent on judiciously matching the Corporate and the Individual personalities.

A most desirable situation would be to marry the Individual (2) with the Corporate (2). For the corporate vision to be fully manifested throughout its sphere of business up till the outer touch-point, the people within that system must be in an absolute fusion with the corporate personality level (2). This would enhance mutual dependence to selfactualize into a common concentric level-3 personality that is far from being ornamental. Thus the imagined insecurities recede rapidly to make space for passion to excel.

The Merger Unlike the financial assets, people have an organic relationship with their corporate parent. People bring in wisdom and sane thinking into the company environment. So, while harnessing this vast resource of wisdom, people need to be constantly hand-held to recognize the criticality of their roles within the corporate personality. This demands a deliberately designed 'naturalization process' which, unlike usually understood as a one-time initial procedure, must be a strategic and repetitive process adding solemnity in the people (2)-corporate-(2) wedlock. In simpler terms this is the development process. There ought to be a fusion of vision with collective wisdom. HR strategies must address this with resolute determination. TI in the environment opposes this.

Good hiring is basis of retention...

-L.K.Gupta, Head H.R.(Anmol Group), Greater Noida Hiring employees is just a start to creating a strong work force. Next, you have to keep them. High employee turnover costs business owners in time and productivity.Try these to retain your employees.

Offer a competitive benefits package that fits your employees' needs. Providing health insurance, life insurance and a retirementsavings plan is essential in retaining employees. But other perks, such as flextime and the option of telecommuting, go a long way to show employees you are willing to accommodate their outside lives.

Provide some small perks. Free bagels on Fridays and dry-cleaning pickup and delivery may seem insignificant to you, but if they help employees better manage their lives, they'll appreciate it and may be more likely to stick around.

Use contests and incentives to help keep workers motivated and feeling rewarded.

Done right, these kinds of programs can keep employees focused and excited about their jobs.

Conduct "stay" interviews. In addition to performing exit interviews to learn why employees are leaving, consider asking longer-tenured employees why they stay. Ask questions such as: Why did you come to work here? Why have you stayed? What would make you leave? And what are your nonnegotiable issues? What about your managers? What would you change or improve? Then use that information to strengthen your employeeretention strategies.

Promote from within whenever possible. And give employees a clear path of advancement. Employees will become frustrated and may stop trying if they see no clear future for themselves at your company.

Foster employee development.This could be training to learn a new job skill or tuition reimbursement to help further your employee's education.

Get managers involved. Require your managers to spend time coaching employees, helping good performers move to new positions and minimizing poor performance.

Make sure employees know what you expect of them. It may seem basic, but often in small companies, employees have a wide breadth of responsibilities.

If they don't know exactly what their jobs entail and what you need from them, they can't perform up to standard, and morale can begin to dip.

Hire a human-resources professional. If your company is nearing 100 employees, consider hiring a human-resource professional to oversee and streamline your employee structure and processes. Putting one person in charge of managing employee benefits, perks, reviews and related tasks takes a huge load off of you and makes sure employees are treated fairly. HR managers are also more up to date on employment laws and trends.They can set up various programs and perks you may not have known existed.

Example- Zero Attrition at ITC as Workforce : Wedded for Life. Only big Indian co where no one in the top echelons has quit for ages.

DISCUSSION It is not only the hiring practices but the subsequent handholding practices certainly put dent on the ultimate status of retention & attrition. Commonly people are placed on the job and handholding gets affected when induction process becomes the formality and through presentation such rituals are performed.

Beside this non clarity of compensation and perks & in comparison of existing employee give the reasonable impact on both new and old employees. People are sensitive on such issue and we need to support in settling new person.

Further new joinee should also be advised by HR to keep patience and try to mix with old people and the culture of the organization. An example can be given like a sapling when it is done from one place to another we find that even earth does not accept and takes its own time and we find that the sapling turns towards dry from green but when the roots of the sapling mix with the soil (Culture) then we find that new leaves and buds are generated that the kind of patience is required for the new inductee. Ultimately one should understand that the vintage always have weightage in industry due to their long association.This is how we need to understand the mind-set of the people weather existing or new a balanced approach is required before initiating the hiring process otherwise it will definitely give impact on overall attrition & retention status.

-Anil Malik Hiring practices definitely have bearing on retention. Normally during interviews a good picture of the organiztion is presented and nitty gritty issues are not visible. Many organiations do not reval all the issues concering notice period and other related issues during interview. Most of the canidates also do not ask for and get the information they want during the interview.

The problematic areas include: notice period, depositing oriiginal certificates, non availablity of uniform guidliens regarding salary and increments, culture mismatching, generation gaps, norms regarding hgher edcuation and promotions etc.

- N Sekar Business Manager

June 2012

31

DISCUSSION Yes it has a direct impact. if new hires are offered high package (compensation benefits) and the variations betweeen the new hires and the existing employees are high then there will be possible attrition.

-Bhavya Reddy

I believe that, yes, hiring practices and the entire recruitment experience certainly have a direct impact on retention and attrition.The entire recruitment process sets the tone for the new employee, and when he or she accepts the job offer, it is usually when he or she is feeling the most positive and optimistic about the organization.

You can actually measure your recruitment process (and hiring practices) with a new hire survey.You could do an expectation survey, which measures if the new hire's initial expectations match up with the actual job.These are usually administered immediately after the new hire orientation or a few days after the employee's start date.You could also do a recruitment auditing survey, which focuses on the entire recruitment experience, from the interview to the job offer.This is usually conducted between 30 and 45 days after the employee's start date. Below are some tips on conducting these types of surveys: - Use between 20-35 questions - Use a combination of quantitative (numerically-rated) and qualitative (open-ended) questions. Quantitative questions should be positioned for the employee to agree or disagree with a statement on a 5-point scale. Qualitative questions are used to "flesh out" the data and give HR professionals perspective and meaning to the data.

Depending on the size of your organization, you could use a pen and pencil survey, an Intranet form survey, an email survey or a new hire technology product.The latter allows HR managers to send out specific surveys at a particular time, which can alleviate scheduling confusion. It also allows users to analyze the survey data easily and efficiently to see if there are any issues around any particular recruitment process.

-Kerrie Wade Main 32

Business Manager

June 2012

Attrition, in my view, is to do with identity-gap present within the system rather than being limited to quantity of resignations. Attrition is the effect of self-pity arising from one's helplessness in enduring personality frictions.

The Solutions TI affects the core identity of people, destabilizes the organization's alignment with its core objectives, creates undesirable illusion and finally inexplicably high attrition.

Immediate solution coming in our mind is Training. But there is a problem. Thought Inflation, over the years, has affected the way we define & understand Training. Training is as welcome as adding salt to your morning tea. Training continues to be seen as a waste of executive time at the cost of productivity, at all levels most of the time OR at most levels all the time. Both situations being true, most of the HR fraternity will agree that talking about training to the operational heads always produces wry faces.

Invariably, training is expected to guarantee higher numbers. Even at the corporate level, training has progressively been devalued since it always seemed to defeat their expectation in guaranteeing increased numbers. The number-thinking minds hardly have space for peoplecentric creativities.

Training & Development First and foremost, Training must be ruthlessly divorced from Development. Training cannot represent Development. Training is an appropriate synonym to Skill-upgrade. Undoubtedly, the Skill-upgrades must help people to deliver increased numbers, better quality and both at lower costs. Skill-upgrades nourish the people asset at their level-2 (mostly). It is entirely an operational necessity exclusively dealing with processes and systems, technology and research, plant and machinery.

Period. Responsibility of designing, initiating and monitoring skillupgrades must logically then rest with respective functional experts whose KRA usually includes specific numbers. The synonym stops here.

Flip side of the skill-upgrade programs is that they also serve to expand the ornamental level identity. Training does not address fusion of the people-asset with the corporate personality. Development does.

Development programs nurture the core personality of people with a clear handle at their self-actualization with reference to corporate growth milestones. Development helps people express their core strengths in the work environment. People must be helped to discover where they are now (in terms of core strengths) and where they would be in the future (actualization). Development programs enable operational heads in developing expertise to fighting TI within their teams. Development

DISCUSSION

A related fall out of this discussion is the issue of 'Attrition'. Attrition has been so badly packaged these days that it is frequently quantified with a percentage, as if to say, lower percentage implies corporate smartness.

To me it points to a high self-aggrandizement, simply put, a high corporate TI. programs are focused on collective and individual career paths. Hence their success may manifest over a significantly long period unlike a here-&-now orientation of the Training/skill-upgrade programs. While Thought Inflation affects people's thinkingintegrity, its larger negative influence is to suppress people's ability to visualize their own stations at the projected corporate growth plan. This disability makes their identity increasingly porous. Hence a Development program must steadfastly address identification, calibration, conversion, catalysis and transformation of people.

Development initiatives, in a blurred corporate TI, appear as another wasteful Training that does not guarantee increased numbers in the here-&-now context. It is great pity. The number-obsessive minds at the corporate level must be helped by HR to undertake an unpretentious re-look at their own identity with their corporate vision. HR has a great accountability in ensuring this.

A related fall out of this discussion is the issue of 'Attrition'. Attrition has been so badly packaged these days that it is frequently quantified with a percentage, as if to say, lower percentage implies corporate smartness. To me it points to a high selfaggrandizement, simply put, a high corporate TI. Attrition, in my view, is to do with identity-gap present within the system rather than being limited to quantity of resignations. Attrition is the effect of self-pity arising from one's helplessness in enduring personality frictions. Attrition within a corporate system will actually start showing in terms of unexplained breach in systems, in processes, in team-alignments and a host of other critical systemic protocols on day to day actions. Typically one may find a lone individual grappling with a crisis while his team enjoys the spectacle from a distance instead of chipping in. Conversely sometimes a group unnecessarily masticates a problem, deliberately keeping out an expert member who could innovate a quick solution. Unattended, such situations push a potential individual towards a no-comeback lane where he is all alone by himself. Resignation soon follows. Everyone silently laments the loss, but in privacy. Their own TI and insecurity prevents a bolder appraisal and corrective actions. Remember that each resigning-employee leaves behind a damaged-identity footprint most certainly pointing to a high TI. Exit interviews may just reveal the tip; but a methodical diagnosis of systemic attrition growing within contributes greatly to designing development programs and controlling TI. While Training programs are calendar-driven, the Development programs must be made to breach and transcend all calendars. Operational priorities would always enliven the environment; numbers should always drive our businesses. However HR must transcend itself into a Board Room presence so that the all-pervading numberobsession allows adequate space for people-centric wisdom to co-exist. Unless this happens, the people-asset will just be a fancy tale. BM

Find it interesting that a lot of organisations hire based on cultural/organisational fit not just what the person's CV is; "Are you a {INSERT} type of person?" etc.This goes at all levels; "we pride ourselves on excellent customer service" requires that new recruits think and act the same.

Good HR departments now use this to design the whole employee life cycle around the type of people they want in their business...and ultimately running their business. So it is not just hiring, but induction, performance management, reward, OD...and at times removing people who are decent performers if they are a bad fit in terms of culture (e.g. a footballer who is sold on because they were a "disruptive influence in the dressing room".

-Michael Cope Hiring is one of the most important function within an organisation which would have a huge impact in terms of attrition, retention and productivity.

It is very important for an employee to culturally fit into the organisation, This has to be ascertained by the interviewer at the initial stages of the process.

A candidate might not be considered for employment if he fulfills all the requisites in terms of experience and cost, but not a cultural fit in top tier organisations like Google, Microsoft and Amazon.That kind of sums up how with their robust hiring practices they face very little attrition and are able to keep their staff happy and remain to be dream companies for a lot of candidates. Hence effective interviewing skills are necessary to keep the hiring top notch, and keep the organisation's success chart upwards by reducing attrition.

-Buvanesh Kumar B Business Manager

June 2012

33

Mihir Gosalia Mumbai

Whether the organization is developing leaders, managers or customer service personnel, the foundation block is laid in building& maintaining trustworthy relationships with everyone around.

Trust in the Workplace

A

high level of trust is the fundamental piece in all of the work that we do, be it with our customers, employees, suppliers, peers, teams, etc.

Developing&maintainingtrustworthy relationships is as important as having sound business practices and systems. Whether the organization is developing leaders, managers or customer service personnel, the foundation block is laid in building& maintaining trustworthy relationships with everyone around. Trust is the most important element of a harmonious, synergistic and efficient work environment. Organizations that have trust among employees are usually successful, those that don't frequently are not.

Trust is one of the most important & essential attribute to get work accomplished especially in large scaleorganizations and where the employee's work profile requires to be constantly interacting with manyother people at different levels of hierarchy, in different departments and in different

locations. Gaining trust in ability to accomplish the work from the opposite person can be procuredby one's own past work performance record and current performance levels. Having the knowledge that it has been done earlier and can be done again is essential in seeking trust from other colleagues in the workplace.

Also the employees must feel that everyone is working together to accomplish a shared vision, rather than a series of personal agendas. This will result in a trustworthy bond which is the essence of teamwork. When a team really works, the employees trust one another. However as important it is in building trust, it also has to be maintained.

And that can only happen over a period of time, it may take months or years. Maintaining trust has also to be backed up by consistent work performance results and in delivering what has been communicated or said.Trust is the root of better performance.

Developing & Gaining Trust and building a Business Manager

June 2012

35

Trust in the Workplace

As difficult it is to build & maintain trust, it can be destroyed easily too. Trust, between companies and their customers, leaders and their employees, organizations and their unions can quickly evaporate into a mountain of blame, hurt feelings, financial and moral losses and thus a lasting vapor of distrust fills the air.

rapport with colleagues and peers is essential to moving ahead in the workplace in the hierarchical levels especially when given that the environment is competitive.

Sometimes people carry a lot of past bad experiences or memories, like if they have been misled or mistreated in the past, they feel the same in the present scenario also which is not so the case. One of the first essential things in building trust & developing rapport is to know and to accept that what has happened in the past does not necessarily mean that it will happen again. There are no failures or mistakes, only lessons to be learn't.

If one has learn't his or her lessons from the past incident and ensured precautions for the future that it will not happen again, then there should be no reason as to why it will happen again. This is where a having a high level of trust plays a crucial role. One has to have a positive mind set for the same. Once the human brain acknowledges it, then the trust building process will start.

As difficult it is to build & maintain trust, it can be destroyed easily too. Trust, between companies and their customers, leaders and their employees, organizations and their unions can quickly evaporate into a mountain of blame, hurt feelings, financial and moral losses and thus a lasting vapor of distrust fills the air. The examples are many: the dotcom bubble of the 90's, corporate scandals like the 36

Business Manager

June 2012

Enron & Satyam, Harshad Mehta and the stock market collapse.

These events create a long mind set of mistrust. Hence leaders face a constant challenge to ensure the climate they create is one of high trust or else performance results will be affected. When people are distracted by events and symptoms that dampen morale, the business will be limited in growth and profit potential.

Sound business practices, set processes and stable leadership go a long way in creating an atmosphere of goodwill, trust &ultimately a high performing organization. They all go hand in hand together. If the business practices of the organization are sound & ethical, systems are set and left unchanged, they are given sufficient time to set themselves and deliver performance - oriented results and leadership has led from the front, shown direction in ensuring the same, then the organization would be a high performing organization and having an environment of relationship, trust and satisfaction in the workplace.

The Employees would feel proud to work in such an organization. Employees believe they work for great organizations when they consistently trust the people they work with, are proud of the work that they are doing and enjoy working with the people within the workplace. BM

Ajay Tanwar Unit Manager, HR Roop Polymers Limited, Mewat

Leadership Practices in Enterprises Fortune magazine recently released its global list of "top companies for leaders" and Indian Companis like HUL, ICICI, Aditya Birla, Bharti & Wipro were listed in five out of 25 top companies.

I

ndian Automotive sector is witnessing a landmark developmental change wherein not only they started their own manufacturing units, but also plunged the major market share compare with foreign established brands. The origin of these units although started with the joint venturing with foreign MNC's but because of their dedication and the innovations, they managed to run on its own and are now dominating the Automotive sector to the large extent.

The big Indian brands like HERO MOTOCORP, BAJAJ AUTO, SWARAJ, TVS, and ESCORTS all started with setting up OEM in collaboration with foreign partners but as time passed these brands started their own independent manufacturing units and today give a stiff competition to the foreign players.

If we go through the history, we can find that not only the foreign collaboration was done in automotive sector, but also in other sectors like telecom, IT and FMCG. Versatile brains addressing to the IT sector has also given prominent appearance in the global market like HCL, TCS, Satyam & Wipro, thus tuning out to be big names in their sectors.

Today Indian Telecom Players are turning out to be big entities which the foreign players are

looking into and following. The likes of BhartiAirtel, Tata-Teleservices, Idea Cellular have become the Indigenous brands in telecom sector.

Likewise the exploration in the FMCG sector have given rise to the world trusted brands like Dabur India, Cavinkare, ITC, DS Group and MDH. These companies are today turning the market value and came out as strong competitors to the much established foreign brands like HUL, Colgate Palmolive, Nestle and Coty Inc. (Adidas). Same is the case with the Desi fashion apparel brands like Ruff N Tuff, Duke, Arvind Mill, and Mufti. These brands not only are turning out as the easy names for the fashion industry, but they are also snatching big market shares from their foreign competitors like Van Heusen, Reebok, Adidas & Polo.

The Indian brands today we can say, are totally set to compete their foreign competitors in domestic as well as in International market arena.

Despite so much advancement with the use of our own technology and the setting up the business standards round the world, the Indian auto component and parts manufacturing industry is still looking for foreign collaborations / joint ventures to expand their business. Instead of coming out independent brands, they still look for foreign investment and collaboration.

Business Manager

June 2012

37

Leadership Practices in Enterprises

There is a dire need to thoroughly understand the domains of this sector, which has enough potential to come up as the independent and trusted sector. But despite such advancement in the Automotive sector we are still collaborating with the outside players to come up on manufacturing table. On a simple analysis we can find that auto component and parts manufacturing enterprise have to re-look in to their internal system /set-up and find out the reasons as to why they are unable to grab maximum market share independently without any foreign alliance? And let me tell you frankly that we have to check out the reasons that are motivating industrialists from this sector for such alliances.

The foreign companies are speeding up the process of collaboration with the Indian brands raising a simple question that if our technology in this sector is not be such advanced then what forces them to hit the collaboration with our local manufacturers?

Let take a dig into the system which allows the joint venturing and the collaboration and understand the factors that led to this process.

FINANCIAL: The finances can't be a constrain for Indian Entrepreneurs, but they cannot be doubted for their capital investment capacities. They are more capable than their foreign competitors to invest and are also backed by various Government & Non Government financial institutions.

38

Business Manager

June 2012

HUMAN RESOURCE: Availability of Human resource also cannot be a valid reason behind increase in foreign alliance as human resource is easily available everywhere in India on comparative much cheaper rates than in other parts of the world. World knows that; Indian talent is in high demand everywhere.

TECHINICAL: Technical reason seams valid up to some extent as Indian entrepreneurs do not take R&D initiatives much seriously.

That's why foreigners always get advantage of new technology invented by them. Indian Companies are slow in Innovation & Creativity initiatives. This is somewhat related to our culture as we the Indians, feel hesitate in taking risk to implement new ideas.

MARKETING: Marketing is an important part of any organization to actually make it big. Indians Companies have no strong and effective international marketing strategy to compete with the foreign players, that's why they look for international partners to make their products easily reachable at the Global level. The Indian companies rarely think of developing their own Marketing Managers and Business Leaders at par with their foreign counterparts, and in Lack of this they are forced to enter into the foreign alliances.

LEADERSHIP: This is the valid reason as most of Indian AutoComponent manufacturers in India just look at the cheaper human capital and most of the time they

In many mid size Indian companies, HODs instead of grooming the newcomers start acting as a competitor. This attitude of existing leaders is dangerous for any organization.

Leadership Practices in Enterprises

The Indian auto sector will have to transform its traditional ideologies by ensuring that Existing Leaders act as Transformers and not as as Barriers.

compromise with skills & competencies. In our sphere and system of working we lack grooming up the leadership qualities among ourselves and forgot that there's a correlation between Leadership practices and Business results. The Indian Companies rarely think of hiring the talent from IITs or IIMs or from other premier institutions. They rarely send their leaders (Plant Heads/GMs/ Managers/Executives) for the leadership development programs offered by premiere institutes because high cost is involved in it. The Indian Companies do not allot adequate budgets and liberty to take independent decisions therefore Training & Development department is not functioning much effectively in such organizations. In some cases it has also been observed that business related mostly decisions are being taken by promoters, owners without even consulting with their second line business leaders.

Considering above analysis, we understand the main reason for Indian entrepreneurs to enter into joint venture with International players is lack of risk taking ability, lack of technical & leadership development culture.

Pertinent to mention, that Fortune magazine recently released its global list of "top companies for leaders" and Indian Companis like HUL, ICICI, Aditya Birla, Bharti & Wipro were listed in five out of 25 top companies. It may be interesting to note that the recent study on "top companies for leaders" by strategic HR & leadership advisory firms Aon Hewitt and RBL group to examine how these organizations choose and develop leaders, and determine if there is a correlation between leadership practices and business results, have come up with following results; that They all have a deep alignment of business strategy and the people strategy. PepsiCo creates 10-year growth plan for individuals who are thought to have leadership potentials.

They all have a deep faith in grooming talent from within. Every Single CEO of P&G started at the entry level in P&G itself.

If someone is two-thirds ready, Wipro will take a chance on an internal candidate before looking outside.

They are giving their leaders an experience to deal with changing socio-economic global landscape e,g at Wipro employees learn how to deal with ambiguity with their leaders. Wipro chairman Azim Premji personally mentors 2530 leaders at various levels.

Apart from above one factor that is "the role of existing leaders (CEOs & Presidents/VPs) in leadership development process" also needs to be analyzed. Whether these top level leaders are playing a role of conductor in organization's talent & leadership transformation process or just playing as a role of insulator and creating hurdles for potential leaders so that they themselves can remain always in power & importance. The analysis on such level leads to us to know that, in many mid size Indian companies, HODs instead of grooming the newcomers start acting as a competitor. This attitude of existing leaders is dangerous for any organization. The role of Existing Leaders (HODs) is to add values and groom the budding and new talent so as to cater to the organization's future need, but unfortunately we see some existing leaders acting as barrier between source of leadership development & potential leaders.

According to Jeffery Immelt (Chairman, CEOGE), "Chief executives of highly successful companies devote 40% of their time to leadership development". They take a view of talent that goes beyond the boundaries of the corporations.

Successful Indian companies tend to stress their leadership role in society, which explains why rising leaders at HUL & Wipro devote significant resources to build hospitals and schools in Indian Communities. Aditya Birla honours employees who teach skills like composting and pump repair to the villagers. Following India's growing openness, and the growth in economy , the automobiles are of great demand particularly in the arena when one can get easy and low interest finances from the different financial institutions of the country.

This high demand could lead to the successful growth of the Auto sector in the near future. But we have to cash it on by imparting new innovations and plans to the customers. This thing can be possible when Indian entrepreneurs increase their independency which in turn can be achieved through Leadership development at different stages of the system. The Indian auto sector will have to transform its traditional ideologies by ensuring that Existing Leaders act as Transformers and not as as Barriers. BM Business Manager

June 2012

39

Abhishek Gupta, Asst. Professor, SRMS CET, Bareilly

Outplacement Outplacement is standard business practice globally. But it is a new trend in India. Companies are also getting into outplacement as lay-offs negatively impact their existing workforce.

B

usiness houses, right from the inception of human race, have been regarded as constructive partners in the communities in which they operate. Though they have been instrumental in creating employment, wealth, products and services, yet the increasing pressure on business houses not only to survive in today's turbulent economic & competitive environment but also being a profitable organization is one of the major cause that organizations need to lay-off their employees in order to control their cost structure.

Above mentioned news are sufficient to support the statement that Lay-offs are becoming inevitable and many companies are involved in downsizing their manpower by identifying the non-performers.

In these difficult times for the corporate sector when job cuts have become commonplace, employers are not leaving their fired staff in the cold. Rather, many are providing what are called outplacement services to find suitable new openings for their erstwhile employees.

Companies are adopting a cautious approach as they realize that right-sizing, cost structure and alignment are on the cards. Firms are helping to outplace those who are not required as per thin structure of the organization so that there are smooth exits and employees get to explore opportunities available in the market with mindset to work harder and to sustain their jobs.

Outplacement is standard business practice globally. But it is a new trend in India. As said by 40

Business Manager

June 2012

Mr. Sunil Goel, Director Global Hunt, "The concept of outplacements is taken up by most of the large global organizations as this is a smoother way of lay-offs. This is generally done when companies do not want to get into mass layoff numbers or they do not want to be tagged for sacking. Companies are also getting into outplacement as lay-offs negatively impact their existing workforce. " In the words of Mr. Goel, "The concept of outplacement fizzled out with the sudden fall in the market towards the end of 2008 and beginning of 2009. In Q1 and Q2 of 2009, almost every company was in the process of alignment and right-sizing the structure. Many of the companies, even with outplacement policy, were not able to implement it and help the people because the economy was gloomy in India."

Outplacements help companies in creating a positive brand image and in future helps them in attracting talent pool.

What is Outplacement?

"Outplacement is a term used to describe efforts made by a downsizing company to help former employees through the transition to new jobs and help them re-orientate to the job market."

Outplacement is a consulting service designed to assist companies through some difficult processes, ranging from performance-based terminations of individual employees to mass layoffs and downsizings based on the company's long-term strategic needs. Typically, an outplacement consultant will first assist the company in planning and executing a

Outplacement

termination, and will then provide guidance and resources for the displaced employee as he or she seeks new employment.

Why do companies use outplacement?

There are many reasons why companies provide outplacement to their displaced employees. The decision is usually based on some combination of the following: To ensure a smooth transition and minimize the chance of litigation and other negative actions: Outplacement focuses the candidate toward the future and away from the past. It replaces recrimination with optimism and channels the terminated employee's energy towards positive action. An ex-employee who is excited about the future is less likely to sue, disparage, or sabotage his or her former employer.

To help maintain the morale of remaining employees: "Survivor syndrome" can be a very negative force inside an organization. Too many companies came through the massive downsizings of the late 1980s and early 1990s with their surviving employees guilty, paranoid, demoralized, overworked, underproductive, and waiting for the other shoe to drop. Using outplacement demonstrates to your employees that layoffs are not capricious bloodbaths undertaken on a whim, but, rather, a necessary part of the company's strategy for change and growth. Outplacement also demonstrates that compassion, fairness and consistency remain a part of the corporate culture, even after a lay-off.

To preserve the company's reputation as a good corporate citizen: Large layoffs can have an immense impact on the community. Outplacement services can mitigate that impact by shortening the time your ex-employees are unemployed.

To reduce the stress-level of managers involved in layoffs: All too often, the manager who "does the deed" in a termination or layoff is the most stressedout of all the parties involved. The assistance of outplacement consultants in planning and executing a layoff can make the process significantly less painful. In addition, access to outplacement services makes managers more willing to terminate marginal employees and lay off excess employees.

As a critical component of the company's change management strategy: Correct use of outplacement helps a company plan for long-term growth and change. It encourages consistency and confidence in decision-making and minimizes precipitous action. In many companies, outplacement is seen as a standard corporate benefit akin to dental or health coverage.

Out of a genuine desire to "do the right thing": Most companies are run by compassionate human beings who want to do all they can to help their laid-off employees.

What are the typical elements of outplacement programs?

Pre-Termination Consulting: Representatives of the outplacement firm meet with company human resources staff

Outplacement focuses the candidate toward the future and away from the past. It replaces recrimination with optimism and channels the terminated employee's energy towards positive action. An ex-employee who is excited about the future is less likely to sue, disparage, or sabotage his or her former employer.

Business Manager

June 2012

41

Outplacement

and operating managers to help plan layoffs and terminations in advance. The scope of this consulting can include designing severance packages and outplacement programs, training and counseling the terminating managers, developing responses for managers to issues ranging from reference checks to media inquiries, writing internal announcements and press releases, planning termination logistics, and advising on legal issues such as W.A.R.N. notices.

Termination Assistance: Representatives of the outplacement firm are present on the day of the termination to assist in the process. An outplacement consultant meets with the terminated employee immediately after the news is delivered. The consultant's aim is to help the terminated employee cope with his or her emotions and not burn any bridges.

The consultant may also help the employee plan how to communicate the news to family, friends and others. If needed, the consultant may help the employee gather his or her belongings and make a gracious exit from the

A lot of time companies don't know how to cope with layoffs. That is why they have sought professional help from outplacement agencies. Companies are paying handsomely for these training and services. However, companies were willing to spend on outplacement only for good employees and their senior staff and not for freshers and non-performers. building. This first meeting begins building the trust that will be such an essential part of the employee's relationship with the outplacement firm.

Assessment and Packaging: In the beginning stages of the job-search campaign, the outplacement firm works with the exemployee (now usually referred to as a "candidate") to assess skills and strengths, examine his or her career in detail to identify possible target markets, and assess values and preferences that may influence the shape of the job-search. Some firms may administer psychological or skills tests at th is time; others may use structured interviews.

The candidate may have other needs, such as financial planning and special spouse and family issues. Once assessment is completed, the outplacement firm develops one or more resumes for the candidate, or the candidate is guided though the process of writing his or her own resume. Most firms also assist the 42

Business Manager

June 2012

candidate in developing some form of "jobsearch strategy" or a "self-marketing plan."

Job-Search Skills Training: The outplacement firm trains the candidate in skills needed to conduct a successful jobsearch. This may be provided in one-on-one or group training sessions. Topics include interviewing, networking, working with recruiters, job-market research, and negotiating job offers. The firm may use video as part of the interview training, and may also include basic computer training if they are particularly technology-driven.

Support and Resources: Executive candidates may receive administrative support including office space, access to computers, mailing privileges, reception/voice mail services, and access to reference materials and publications.

Ongoing Campaign Management: In most cases, candidates receive follow-up support for a period of time, or for the duration of the job-search. This can include strategic and tactical advice on the job-search campaign, emotional support, motivational counseling, marketing of the candidate to potential employers, introductions to recruiters and networking contacts, and help with decisionmaking and negotiations. If the candidate wants to start or buy a company, the outplacement firm may help with advice on setting up a business.

Conclusion Though outplacements happen in every industry, it is more visible in banking, financial services and insurance (BFSI), telecom, engineering and information technology (IT) sectors. Industry officials said Tata Consultancy Services, IBM, Motorola, Yahoo and Microsoft are some of the companies that have retained the services of outplacement agencies to train the retrenched staff and find them new openings.

A lot of time companies don't know how to cope with layoffs. That is why they have sought professional help from outplacement agencies.

Companies are paying handsomely for these training and services. However, companies were willing to spend on outplacement only for good employees and their senior staff and not for freshers and non-performers.

No company wants a senior manager who has sensitive information to walk out with bitterness, lest he or she share the market intelligence with competitors. Outplacement leaves room open to hire them back when the situation improves.

According to human resource managers, it has not been easy firing staff, especially in service-oriented firms, where the past growth has been led by the "human factor". But outplacement saves them from the pricking of conscience. BM

Releasing resistances for New Conclusions

E

mpowerment is a multi-facet practice that facilitates individuals to garner power they define as desired in life. Empowerment is an organizational style that provides reliance to employees to act in accordance with own values and capabilities. It enables them to make decisions and expand their horizon of choices.

Conventional HR exercises power of control to empower employees but Surrogate HR believes that the change can be brought about in human only with the power of free will; it stresses on values that offer capacity and meaning to life to feel the change in the present.

(X) I am suffering from pain; (Y) Why do you like to remain there? do something about it now; (X) How can I? I am in a state of 'cannot do anything'; (Y) Then come out of the state as early as you can; (X) I am trying but it does not fetch any result; (Y) You cannot try new things while being in that state of pain; (X) What do I do then? (Y) Do not try; (X) How can I 'execute something' without trying? (Y) Observe your pain without feeling bad about it; (X) It pains, how can I feel good now? (Y) Travel towards good feeling, bring new thoughts; (X) I am thinking about NEW ME in painless state; (Y) Great going, you are moving out of bad feeling; (X) Yes, now I can see many options ; (Y) Are you trying? (X) No, I am not, I am naturally being driven; (Y) Wonderful, keep going from one emotion to other; (X) I am entering into the zone of positive emotions; (Y) Now, you will travel faster; (X) Yes, my pain is subsiding; (Y) That's great..........

I have been asked by one of my friends working as a HR professional to choose three powerful English words for HR manual; my choices are natural and obvious: empowerment, partnership and inspiration. He is quite excited, 'organizations in the present format have already learnt to value the feelings and emotions associated with these words. They give discretion and share power to those who deserve it for creating an environment in which everyone is encouraged to contribute naturally'. 'Why do they do it anyway?' I ask him. 'Committed and spirited employees genuinely take up their job more important than the money they are paid for the job and they try new things in their work space', his eyes are brightened a bit.

'Empowerment on a personal level means strengthening emotional maturity to enjoy freedom. It helps to reach a state where one can make choices with complete awareness of the surrounding situations'. For nine months, I have lived inside a university campus which is located by the side of an expressway. In the campus, there is an auditorium which I visited several times for lectures and cultural programs. Human power structure can also be understood with the concepts of expressway, campus and auditorium. An expressway represents a space of absolute freedom with unlimited abundance in the nonmaterial world. Material life begins in a preferred campus which depicts physical world in the mix and contrasts of abundance and scarcity, do's and don'ts; a campus provides diverse choices during the journey period. An auditorium works as a confined environment where stories of life get repeated every day. Individuals stay inside to build required awareness that the stories can provide for a life inside the campus. 'Wonderful', I exclaim, 'I have offered

three words and now you are elaborating them with your words: freedom, choices, and awareness.

CHINMOY SARKAR Author, AXELL New-age organizations are very much interested in recognizing and executing the promises offered by the economic arena. Words used in daily organization life rarely find their purpose and meaning but feelings and emotions associated with them can. At present, organizations are curious to know more of the sentiments, values and traits that have the ability to impact the mind-sets of employees. An organization has to deal more with the commanding fusion of freedom, awareness and choices; without them, the quality of organization life may be out of sync with the expectations of the natural world. Competition and winning is now benchmarked by excellence defined by virtues, character and role. 'I am effective' does not mean 'I am excellent'. Benchmarks are not set by the space where outcome is judged. Excellence is universal in nature and has its foundation at the core of human existence. Excellence relates to value whereas effectiveness connects to profit. Profit comes from whatis but value is derived from what-is-not. Choice plays a major role in the excellence journey. What I pick up as my choices need utmost attention. Life moves on silently without direct knowledge of this whole exercise. Some passionate individuals try to absorb every bit of newness while making their choices, 'Yes, I can see the point now, but my understanding from the misplaced knowledge, my baggage of the past does not allow me to execute it; I need to overcome them for organizational prosperity', the leader in any organizational setting often throws up in desperation.

Mind does play its cruel joke again as the quest for intelligence seeks its redressal from the experiences in the past. Organizations waste energy in its persuasion and search where the leading edge stances and joycentered search put people in the frontline of life. The source appreciates every desire that originates from positive thinking and alignment. The dissimilarities which desires are surrounded with compel a space to accept things without any force and humans get rid all the disparities to move towards a new conclusion. This gap of what I like and what I do not helps me to expand to make any negative into positive. If I compare them instead and put my effort to change the environment where only good things happen, I tend to go against the true flow of life. We are born in the world with all capabilities to limit out thoughts based on our desires; we can use our focusing instruments to see the whole range of choices to get a feel of the things that are being offered. We have the taste of progress when we appreciate varieties and guide our thoughts only towards those things we like. The very fact of liking creates a stance which aligns us to our source energy‌then we are named as passionate humans.

Business Manager

June 2012

43

GOVERNMENT NOTIFICATIONS No. 1/6(3)/2012-LS-II

Government of India Ministry of Labour & Employment Office of the Chief Labour Commissioner (C) New Delhi

Dated : 16th March, 2012

Order In exercise of the powers conferred by Central Government vide Notification 1285(E) dated 20-5-2009 of the Ministry of Labour and Employment the undersigned, hereby revise the rates of Variable Dearness Allowance on the basis of the average consumer price index number for the preceding period of six months ending on 31.12.2011 reaching 196.33 from 186.67 (base 2001=100) and thereby resulting in an increase of 9.66 points for Industrial Workers as under. This order shall come into force w.e.f. 1.4.2012.

The rates of Variable Dearness Allowance for workers employed in construction or maintenance of roads or runways or in building operations including laying down underground electric, wireless, radio, television, telephone, telegraph and overseas communication cables and similar other underground cabling work, electric lines water supply line and sewerage pipe lines would be as under : Category of worker

Rates of V.D.A. Area wise per day (In Rupees) A

B

C

Unskilled

90.00

73.00

60.00

Semi-Skilled/Unskilled Supervisory

98.00

83.00

70.00

Skilled/Clerical

108.00

98.00

83.00

Highly Skilled

117.00

108.00

98.00

Therefore the minimum rates of wages showing the basic rates and Variable Dearness Allowance payable w.e.f. 1.4.2012 will be as under :

Revised Minimum Wages in PUNJAB w.e.f. 1.3.2012 Category Unskilled Semi-Skilled Upper Semi-Skilled Lower Skilled Upper Skilled Lower Highly Skilled Upper Highly Skilled Lower Clerk, Time Keeper, Salesman, Conductor, Storekeeper, etc.

Accountant/Graduate Clerk, Asstt.

Supervisor, Car Driver, Cashier, Muneem, Stenotypist, Ugrahia Truck/Tempo/Bus Driver/ Supervisor/Stenographer

Monthly

Daily

4268.00 4613.00 4454.00 4997.00 4710.00 5443.00 5253.00 4772.00

164.06 177.34 171.18 192.06 181.02 209.18 201.90 183.42

4966.00 5443.00

190.86 209.18

Proposed Rajasthan Minimum Wages w.e.f. 1.5.2012 Category Unskilled Semi-Skilled Skilled Highly Skilled

Per Day

Monthly

147.00 157.00 167.00 217.00

3822.00 4082.00 4342.00 5642.00

Revised Minimum Wages in DELHI w.e.f. 1.4.2012 Category Unskilled Semi-Skilled Skilled Matric Graduate

Monthly

Per Day

7020.00 7748.00 8528.00 8528.00 9282.00

270.00 298.00 328.00 328.00 357.00

Category of worker

Rates of wages including V.D.A. per day (In Rupees) A Area

B Area

C Area

Unskilled

180.00+90.00 270.00

150.00+73.00 223.00

120.00+60.00 180.00

No. S.O.6/C.A.11/1948/S.5/2012

200.00+98.00 298.00

170.00+83.00 253.00

140.00+70.00 210.00

Skilled/Clerical 220.00+108.00 328.00

200.00+98.00 298.00

170.00+83.00 253.00

Highly Skilled

220.00+108.00 200.00+98.00 328.00 298.00

With reference to the Government of Punjab, Department of Labour, Notification No. S.O.65/C.A.11/1948/S.5/2011, dated the 14th July, 2011 and in exercise of the powers conferred by section 5 of the Minimum Wages Act, 1948 (Central Act XI of 1948), and all other powers enabling him in this behalf, the Governor of Punjab after consulting the Punjab Minimum Wages Advisory Board, is pleased to amend the notification No. S.O.2/C.A.11/1948/S.5/2009, dated the 6th January, 2009, namely:-

Semi-Skilled/ Unskilled Supervisory

240.00+117.00 357.00

The VDA has been rounded off to the next higher rupee as per the decision of the Minimum Wages Advisory board meeting held of 26.8.2008.

The Classification of workers under different categories and the classification of cities under different areas will be same as in the notification referred to in para I as amended from time to time. The present classification of cities into areas A, B & C is enclosed at Annexure I for ready reference.

(N.K. Prasad) Chief Labour Commissioner (C) 44

Business Manager

June 2012

Minimum Wages Act, 1948 Government of Punjab

Dated : 17.2.2012

Notification

AMENDMENT In the said notification, in the Notes, after Note No. 1 0, the following shall be inserted, namely :"10-A. The minimum rates of wages so fixed by the Government of Punjab shall be the basic rates of wages."

R.C. Nayyar, Principal Secretary to Government of Punjab, Department of Labour

Labour Problems & Solutions

Anil Kaushik, Management Expert -HR & IR

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

Q. On the basis of a complaint, We came to know that one employee has obtained the employment on fake documents. He has forged his ITI certificate. We enquired from the institute and got a written certificate from institute principal that they have never issued such certificate and that boy was never admitted to their institute. I seek your expert advice, as to even now do we need to issue him charge sheet and conduct enquiry before dismissal or should terminate him summarily?

Ans. As the facts you have narrated , it appears that person was appointed on the basis of ITI certificate for some technical work which has now revealed as fake. On the basis of this fake certificate, and written evidence , you got from institute principal, you can terminate him directly without conducting inquiry because such appointment obtained on the basis of fake documents was void ab initio. No relationship of employer - employee existed between you and him. Consequently, you are not obliged to conduct any inquiry. Delhi HC in the case of Usha Vs. Municipal Corporation Delhi, 2012 LLR,460 has also held that when the employee obtained appointment fraudulently, His appointment would be illegal and the employer would not be under obligation to conduct inquiry before termination.

Q. What are the consequences of the termination without inquiry or with an inquiry which has been declared as defective in the court?

We are confronted with such a situation in a case.

Ans: Supreme court in the famous case of Firestone tyre and Rubber company 1973(3) SCR 587 has examined the consequences of an employer holding defective enquiry or not conducting any enquiry at all before terminating the services of workman as also the powers of Industrial adjudicator in the matter of grant of appropriate relief in the event of illegal termination. After various judgments on the point, the legal position (Principles) broadly emerge as under: 1- The right to take disciplinary action and to decide upon the quantum of punishment are mainly managerial functions, but if a dispute is referred to a tribunal, the latter has power to see if the action of the employer is justified.

2- Befoe imposing punishment, an employer is expected to conduct a proper enquiry in accordance with the provisions of the standing orders, if applicable, and principles of natural justice. The enquiry should not be an empty formality.

3- When a proper enquiry has been held by employer,

and the finding of misconduct is plausible conclusion flowing from the evidence, adduced at the said enquiry, the tribunal has no jurisdiction to sit in judgment over the decision of the employer as an appellate body. The interference with decision of the employer will be justified only when the findings arrived at in the enquiry are perverse or the management is guilty of victimization, unfair labour practice or malafide.

4- Even if no enquiry has been held by employer or if the enquiry held by him is found to be defective, the tribunal in order to satisfy itself about the legality and the validity of the order, has to give an opportunity to the employer and employee to adduce evidence for the first time justifying his action;and it is open to the employee to adduce evidence contra.

5- The effect of an employer not holding an enquiry is that the tribunal would not have to consider only whether there was a prima facie case. On the other hand, the issue about the merits of the impugned order of dismissal is at large before the tribunal and the latter, on the evidence adduced before it, has to decide for itself whether the misconduct alleged is proved. In such cases, the point about the exercise of managerial functions does not arise at all. A case of defective enquiry stands on same footing as no enquiry.

6- The tribunal gets jurisdiction to consider the evidence placed before it for the first time in justification of the action taken only, if no enquiry has been held or after the enquiry conducted by an employer is found to be defective.

7- It has never been recognized that the tribunal should straightway, without anything more, direct reinstatement of a dismissed employee, once it is found that no domestic enquiry has been held or the said enquiry is found to be defective.

Q. we have not recognized our workers union but they themselves affiliated their union to neighbouring industry where union is there. On 1st May 2012 our employees along with other union leaders of different industries of the region, celebrated May Day in front of our celebrating May day, they did not remove the flag at all. On questioning our employees, they said that they have not mounted the flag but their leaders of other industry mounted the flag.But those leaders also refused to take away. What is next? Still flag is there before our factory. We do not want that flag there since we do loose our business from the important clients and customers. Can we give police complaint and ask them to remove ?

Business Manager

June 2012

45

Labour Problems & Solutions Ans. As the facts you have narrated, I presume that you have a union in your factory but have not recognised so far. Your state has no law on union recognition.So your recognition has only a mutual understanding and not recognising them by you does not affect their rights. If workers are with them, you have no option but to talk to them and when you talk to them it is implied recognition. As far as hoisting of flag is concerned, I am afraid that you will get any relief from court or police. it can be removed by mutual consent because it is not hoisted in your premises but outside the gate.It should have been resisted by you at that time only.

However, you can ask your union people in writing to clarify whether they have hoisted the flag or not? if they say no, you can very well persuade them to remove or make a plea to court that some unauthorised persons have put a flag outside our factory and it does belong to their workers. Hoisting a flag is very sensitive issue and should be handled with caution. It may blast IR crisis.

Q. During enquiry, workman has asked to provide him the copy of proceedings of enquiry at the end of each hearing but management is not interested in giving him the copy of the proccedings. Will it be illegal in not giving him the copy of proceedings?

Ans. First of all, remember, that once the enquiry is decided to be conducted and enquiry officer is appointed, it is he who will decide what is to be done in the enquiry and not the management. In enquiry management and workmen are two equal parties, so you as management will not decide whether the copy of the proceedings of the enquiry should be given to workmen or not. It is enquiry officer who will decide the question. Now lets come to the legal part. Madras High Court in the case of S. Muthuraman vs. P..O. Labour Court, Madurai 2003 LLR 790 has held that non -providing of proceedings of enquiry at the end of each day will not witiate an enquiry when there is no such stipulation in the certified standing orders. I suggest you to please not to be adament on this point and enquiry officer should give the copy of the proceedings to the workmen after end of the day. It is not going to harm management, rather will enhance the credibility and transparency in the enquiry proceedings. It will also add to neutral and independent image of the enquiry officer.

Q. Can you please explain about “sympathy strike”? Is it legal if resoted to by workers of other orgnasations in favour of particular indutry workers?

Ans. "Sympathetic strike" is also a kind of strike in which the striking workmen have no demands or grievances of their own but they strike work for the purpose of indirectly aiding others. In such kind of strike, the workers have no direct relation to the advancement of the interest of the strikers. So, a sympathetic strike is one called for the purpose of indirectly aiding others, the striking employees having no demand or grievance of their own and the strike having no direct relation to the advancement of the strikers. In other words, "sympathetic strike" is a strike which is resorted to in sympathy with some other workers. Even if an employee resorts to a strike

Anil Kaushik, Management Expert -HR & IR in sympathy with a particular employee that is nothing but a formal protest lodged against the conduct of an officer. The protest itself may take various forms and although the protest is in sympathy with a particular employee none the less when a concerted action is taken as a resentment against the conduct of an officer, it can only be with a view to express disapproval of such a conduct and it will amount to strike. Supreme Court in the case of Raja Ram Maize Products vs. Industrial Court of Madhya Pradesh 2001 LLR 503 has also held that a sympathy strike resorted to by the workers will be illigal.

Q. I seek more information about Fixed Term Contract/Employment of workmen for Specific projects/ period.

Ans. Fixed term contract is a service condition of employee employed by any organization. Period of fixed term contract varies and law doesn’t provide any term. It depends upon the mutual agreement of employer & employee. All related labour laws are applicable on fixed term contract employee except retrenchment as it is excluded by Sec . 2(oo) (bb) of industrial disputes Act 1947.

Employer is liable for the fixed term contract employee equally as for other regular employee e.g.

He will get bonus, gratuity, leaves etc.

If automatic termination on the expiry of the contract is mentioned in the appointment letter, he will not be entitled to raise any industrial dispute under the Act. Q. Is the employer liable to pay the VDA to workers, more particularly when the wages being paid are more than the minimum rates of wages?

Ans. No! The Supreme Court in the case of Airfreight Ltd. vs. State of Karnataka, 1999 LLR 1008 has clarified that when an employer is paying wages higher than the minimum rates of wages as fixed under the Minimum Wages Act; he is not required to pay Variable Dearness Allowance separately to the employees. In Allahabad High Court in the case of The Indure (P) Ltd. vs. State of Uttar Pradesh, 2007 LLR 1038 has also held that when wages of the workers are more than the minimum rates of the wages, no separate VDA as declared by the Government will be applicable since the total pay is more than the amount declared by the Government.

Q. When workers resort to go-slow tactics, can we deduct the wages for such slowing down of work?

Ans. You cannot straightway deduct the wages from the employees on account of go-slow. First you need to hold an enquiry and provide them an opportunity to defend themselves and if the charges of go-slow are proved you can very well deduct the wages. But the unilateral reduction of pro-rata wages from the monthly wages of the employees is not permissible as it would amount to violation of principles of natural jusitice. Karnataka High Court in the case of Workmen of Bata India Ltd., 2007 LLR 443 has also held in the same direction. Such workers whose wages were deducted unilaterly, held to be entitled to recover such amount from the employer under section 33C(1) of the I.D. Act. BM

Readers are invited to ask for Solutions of their Labour Problems through e-mail - bmalwar@yahoo.com

46

Business Manager

June 2012

From The Court Room

Latest Judgments

Recent Important

Judgments Abandonment An employee working under a lien for a fixed period of service is deemed to have resigned from the service if he does not join duty after expiration of the lien period.

The petitioner joined the services of organization on 6-6-1972 as a fitter. He was working as a Job Recorder in the year 1994. On 23-8-1994, the petitioner sought for lien for a period of four years on the ground that he wanted to start his own industrial venture. Accordingly the petitioner was granted lien for a period of four years which expired on 23-8-1998. Before that the petitioner sought further lien for a period of three years but was granted lien period upto 25-8-1999. Before the expiry of the extended period of lien, the petitioner was advised to join duty but the petitioner did not join the duty on medical ground. The respondent waited for more than a month after the expiration of the extended period of lien and after finding that the petitioner was not joining the service, an order was passed on 309-1999 terminating the petitioner's services by invoking clause 6 of the terms and conditions of the lien and holding that the petitioner is deemed to have left the service. It is this order which the petitioner challenged in High Court by filing a writ petition pointing out that he had put in nearly 22 years of service which could not be terminated without holding domestic inquiry against him on the charge of misconduct.

regarded as being terminated and he cannot turn around and challenge the said condition. The High Court observed that the fundamental principle envisaged in the case of Dr. Anil Bajaj holds good that when an employee who takes lien does not report for duty, his services certainly can be terminated. It was held that under the circumstances the petitioner should be deemed to have relinquished his office.

G. Sudhakar Rao vs. Bharat Heavy Plate & Vessels Ltd. & Anr. LLN (1) 2012 P. 436 (A.P. H.C.) Employer cannot draw presumption of abandonment of service by workman simply becasue he remained absent from duties.

Calling employee to resume duty, conducting the domestic enquiry, giving proper opportunity to explain are some necessary steps to justify abandonent.

Reinstatement with 40% back-wages has been rightly awarded by the Labour Court since the employer has failed to reply to the demand notice sent by the employee stating his termination is because of denial in resumption of duties. Merely that the employee was working as agriculturist, during the intervening period from the date of his termination to the date of his reinstatement, will not deprive his from the benefit of back-wages. An employer cannot draw a presumption that by merely remaining continuously absent, the workman has abandoned the job since the 'abandonment of service' by a workman is voluntarily relinquishment with an intention not to resume his duty.

The management on the other hand relied upon clause 6 of the terms and conditions of the lien which was to the effect " In case the employee does not join back to duty or resign on expiry of lien period, he shall be deemed to have left the services of the company on his volition."

M/s. Fateh Chand vs. Presiding Officer, Labour Court & Anr. 2012 LLR 468 (Delhi H.C.)

The High Court followed the decision of the Supreme Court in the case of Dr. Anil Bajaj, 2002 (2), LLN 889 (SC) wherein the Supreme Court observed that if a person who gets an advantage of a sanction to go abroad on service, on condition that he will come back within two years and if he does not come back, his lien will automatically be

Grant of back-wages on reinstatement of a workman is not a natural corollary consequent upon quashing illegal termination.

Back Wages

Himachal Road Transport Corporation and Another vs. Raghubir Singh. 2012 (132) FLR 1045 (H.P. H.C.) Business Manager

June 2012

47

From The Court Room

Contract Labour The workman, engaged prior to 2.11.2006, cannot claim benefit under the Contract Labour (Regulation & Abolition) Act after its prohibition.

Merely because a temporary or casual worker has been engaged beyond the period of his employment, he would not be absorbed in regular service or made permanent if the original appointment was not in terms of the process envisaged by the relevant rules.

Commissioner, Mysore City Corporation vs. State of Karnataka and Others. 2012 (132) FLR 1005 (Kar. H.C.)

Court Powers Labour Court becomes functus officio after 30 days of publication of the award hence has no jurisdiction to recall the award.

Application, filed by the employer, for setting aside an ex parte Award, after 30 days from the date of its publication is liable to be quashed as the Labour Court becomes functus officio after 30 days from the date of publication of the Award as per provisions of the Industrial Disputes Act. Shiv Naresh Sharma vs. Presiding Officer, Labour Court & Anr. 2012 LLR 480 (M.P. H.C.) Labour Court has duty under the I.D. Act to decide justifiability of the punishment imposed by the Disciplinary Authority by going into merits of the case.

Labour Court is empowered, under section 11A of the Industrial Disputes Act, to modify the punishment of dismissal, as imposed by the Disciplinary Authority, if found disproportionate.

D. Vetrithingal vs. Management of Tiruvarur Consumer Cooperative Wholesale Stores Ltd. 2012 LLR 500 (Mad. H.C.) Labour Court is empowered to grant interim relief even before adjudication of issue of fairness of enquiry, if it is not proved that workman is gainfully employed.

Labour Court is empowered to grant interim relief under section 10(4) of the Industrial Disputes Act during pendency of the proceedings even before adjudication of issue pertaining to fairness of the enquiry conducted by the Management if it is not proved that the workman is gainfully employed.

Burden to prove the workman being gainfully employed is upon the Management.

Powercell Battery India Ltd. vs. R. Servesh. 2012 LLR 510 (Kar. H.C.)

Disciplinary Proceedings Principles of natural justice obviate that reasonable opportunity to the delinquent, is to be understood in its objective sense, namely to ensure that the delinquent employee is 48

Business Manager

June 2012

Latest Judgments

given fair opportunity to defend himself and it is not the compliance, which can be termed as an empty formality of holding the domestic enquiry.

Tribunal has rightly concluded that domestic enquiry was vitiated on account of non-payment of subsistence allowance to the workman (i) empty formality which was extended to workman, while conducting the enquiry, cannot be construed as satisfactory compliance of principles of natural justice; (ii) Evidence on behalf of management, is here say evidence; (iii) Best witness available for management i.e. Branch Manager was not examined in the enquiry, for the reasons best known to the management; (iv) a cloud is created over the mode and manager in which, said confession statement of the workman came into existence; (v) no infirmity in the conclusion of the Tribunal that charges levelled against workman, have not been proved by the management; (vi) In view of the principle "no work no pay" ends of justice would be met, if the workman is denied benefit of back wages from the date of dismissal till date of his reinstatement.

Syndicate Bank, Zonal Office, Udupi vs. M.B. Gunaga, Karwar. 2012 I CLR 974 (Kar. H.C.) Non issuance of show-cause notice against proposed penalty will cause prejudice to employee hence enquiry liable to be set aside.

Reinstatement with 50% back wages proper.

When non-issuance of show-cause notice against proposed penalty after receipt of findings of the Enquiry Officer causes prejudice to the delinquent employee, findings of the Enquiry Officer will be vitiated and order passed by the Disciplinary Authority will be unsustainable.

Furnishing of Enquiry Report to the delinquent employee is necessary when its nonfurnishing would cause any prejudice to the delinquent employee. Appellate Authority is not bound by the findings of the Enquiry Officer and Disciplinary Authority, as it is to look into contentions raised by the delinquent and decide validity of charges.

Municipal Corporation of Delhi vs. B.B. Bajaj.

2012 LLR 484 (Delhi H.C.) When the enquiry was held illegal, termination for disobedience is liable to be set aside.

Termination of a workman for disobedience is liable to be set aside since the enquiry, as held against him was illegal for want of appropriate opportunity, hence the Labour Court has rightly granted reinstatement with 50% back-wages.

M.P. Road Transport Corporation and Another vs.

Mohammed Rafiq Khan and Another. 2012 LLR 540 (M.P. H.C.) A departmental enquiry could be conducted only against an employee who is in service unless there is a provision under the Rules permitting an enquiry against a retired or an ex-employee.

Lal Bahadur Singh vs. U.P. State Roadways Transport Corporation and Others. 2012 (132) FLR 1082 (All. H.C.)

From The Court Room

Dismissal Dismissal of Bus driver justified for not allowing an old lady to board the Bus and manhandling and abusing ATI. High Court will not interfere tin the punishment of dismissal as imposed upon a driver who did not allow an old lady to board the bus from front door, did not stop the bus enabling the old lady to board the bus from rear door, manhandled and abused ATI when confronted on complaint of the old lady and her daughter.

Inder Sain vs. Delhi Transport Corporation. 2012 LLR 457 (Delhi H.C.) Reputation of the complainant borrower cannot be a ground to prove the charges against employee. Dismissal not jusitified.

Dismissal of a bank officer, merely on the basis of a complaint which was not proved, is liable to be set aside since reputation of the complainant could not be a ground to prove the charges against the said officer.

Gursharan Singh Duggal vs. Punjab and Sind Bank and Others. 2012 LLR 529 (All. H.C.) Denial of benefits to the Labour Enforcement Officer, whose dismissal has been set aside by the Tribunal, not proper hence the High Court issued directions to promote him notionally from the date when his juniors were promoted and to comply with the direction.

Union of India and Others vs. Kailash Chandra Beherwal and Another. 2012 (132) FLR 819 (All. H.C.) When once fraud is detected, the appointment order itself becomes tainted and liable to be recalled and voidable. Dismissal justified.

Fraudulently obtained employment cannot create any equity or estoppel in favour of the employee. Benefits extended to some person in an illegal or irregular manner cannot be claimed by others on the plea of equality.

Discretion under section 11A of the Act to the Labour Court is available only when punishment is disproportionate to the gravity of misconduct so as to disturb the conscience of the Court or there are any mitigating circumstances requiring reduction of sentence or the past conduct of workman which may persuade the Labour Court to reduce the punishment.

Latest Judgments When the workman had confessed the forging of documents, withdrawl of money and depositing back that money before the Enquiry Officer and did not oppose his confessional statement before the Tribunal, he cannot take plea later on before the High Court in writ petition without proper explanation that his confessional statement was recorded under duress and coercion.

Kishan Swaroop Sharma vs. Presiding Officer, Central Government Industrial Tribunal-cumLabour Court II, Chandigarh and Others. 2012 LLR 496 (P&H H.C.)

Employees’ Compensation Act In case where accident happened after the insurance policy expired, insurance company will not be liable to pay any compensation.

Insurance Company will not be liable to pay compensation to the employee suffering injuries on 3rd April, 1998 since the insurance policy was effective from 3rd March, 1997 to 2nd March, 1998, as such the High Court has rightly quashed order of the Employees' Compensation Commissioner.

S.M. Sharmila vs. National Insurance Co. Ltd. and Others. 2012 LLR 449 (S.C.) Commissioner can make an Award in excess of the amount claimed by the workman if the workman is entitled to the higher amount in case of injury.

Limit of earning of Rs. 4000 as fixed in Explanation II to section 1(a) and (b) is not applicable in the case of the respondent as the same falls under section 4(1)(c).

Loss of earning capacity and the 'occupational disability' to be expressed by the medical practitioners are of same meaning for awarding compensation to the workman/injured/deceased's dependant (s).

In the absence of substantial question of law, appeal is liable to be returned as dismissed.

United India Insurance Co. Ltd. vs. Abdul Razak.

2012 LLR 501 (Ker. H.C.)

Employees’ Provident Fund

Sri Prabhulingappa H.M. vs. The Divisional Controller, K.S.R.T.C. ILR 2011 Kar 4757 (Kar. H.C.); 2012 LLR 559

It would be illegal for PF Authority to reopen the already determined case under 7C without giving sound reasons.

Domestic Enquiry

Reopening of already determined money pertaining to provident fund contribution will not be legal when no reason to this effect given by Asstt. Provident Fund Commissioner hence Division Bench of the High Court quashed the order under section 7C of the Employees' provident Funds & Miscellaneous Provisions Act.

Confession of employee before enquiry officer about forging of documents and withdrawl of money and depositing back cannot be termed as a statement recorded under duress and coercion, specially when employee did not take this plea before tribunal also.

Choithram Hospital & Research Centre, Indore vs.

Asstt. Provident Fund Commissioner, Indore and Another. 2012 LLR 479 (M.P. H.C.) Business Manager

June 2012

49

From The Court Room

Latest Judgments

PF Authority order of clubbing two units only on the basis of common telephone will not be justified hence liable to be set aside.

proper when the principal amount and interest has not been determined as stipulated by section 45A of the Act.

No single test can be applied for clubbing two or more establishments as in one case integrality of ownership, control & management could be decisive tests, while in another functional integrality or general unity or unity of employment may be the decisive tests.

M/s. Security Printers of India Pvt. Ltd., Kanpur vs. Employees' State Insurance Corporation, Kanpur and Another. 2012 (132) FLR 860 (All. H.C.)

While passing a judicial order when reasons are given without discussing the objections raised by the effective party, rebutting the allegations made, the order would be a non-speaking order and liable to be quashed.

M/s. Kapeela Rubbers and Anr. vs. Employees' Provident Fund Organisation.

2012 LLR 482 (Kar. H.C.) Hospital and industrial training center having separate nature of work and distinct units without functional integrality cannot be clubbed together for coverage under EPF Act. Determining and demanding a sum of Rs. 98,56,115.45P after holding the proceedings under section 7A of the P.F. Authority is liable to be quashed since the P.F. Authority has erroneously clubbed the hospital with Industrial Training Centre and the State.

Attukal Bhagavathy Temple Trust, Attukal, Thiruvananthapuram, Rep. by its Secy., K.P. Ramachandran Nair vs. Regional Provident Fund Commissioner Employees' Provident Fund Organisation & Anr. 2012 LLR 541 (Ker. H.C.) When there is a conflict between the Bank and the provident Fund Authority for recovery of provident fund contributions, the Provident Fund Act has to be given overriding effect upon the other enactments including the SARFAESI Act. Indian Overseas Bank, Dindigul vs. Employees' Provdient Fund Organisation, Chokkikulam and Others. 2012 (132) FLR 1017 (Mad. H.C.)

E.S.I. When delay in deposit of E.S.I. contribution is not intentional, levy of damages not justified. It is not mandantory but only discretionary.

Existence of mens rea or actus reus to contravene a statutory provision must also be there for levy of damages for delay deposit of ESI contributions and/or the quantum thereof and delay in payment of contributions, if not intentional, the damages may be reduced to any extent.

If damages are imposed without giving proper opportunity of hearing, that would be violation of principles of natural justice.

Employees' State Insurance Corporation vs. M/s.

Hafeez Motor Transport. 2012 LLR 471 (Mad. H.C.) Initiating recovery of ESI contributions under section 45C(B) of the ESI Act not 50

Business Manager

June 2012

A company, purchasing the Unit in auction, will not be liable for the ESI arrears as payable by the Company which owned the establishment prior to auction.

Doshi Industries, Rep. By Its Managing Partner, Hyderabad vs. Employees' State Insurance Corporation, Rep. By Its Director, Hyderabad and Others. 2012 (132) FLR 985 (A.P. H.C.) If the court waives or reduces the amount of mandatory deposit of 50%, then it is required to record its reason.

The petitioner which is a voluntary social organisation had filed an application under sec.75 and 76 of the Act for setting aside the order passed by the Dy. Director, ESI Corporation as per which the petitioner was held to be covered under sec.

1(5) of the Act and directions were issued to the petitioner for payment of contribution amounting to Rs.82,536/- for the period from October 2007 to March 2008. Feeling aggrieved by the said order, the petitioner filed a revision application to challenge the same.

Alongwith the revision application the petitioner also filed an application under sec 75(2)(B) of the ESI Act praying for waiving of deposit of 50% of the disputed amount by ESI Court. However the ESI Court declined to waive the requirement of depositing 50% amount.

Various contentions were raised on behalf of the petitioner stating that it is a voluntary social service organisation of philanthropic nature working on no profit no loss basis and that it is not an establishment nor an employer and as such the provisions of various labour laws including the ESI Act are not applicable to the petitioner. It was also submitted that the persons working with the petitioner organisation are not employees or workers but they are volunteers.

The High Court referred to the provisions of sec 75(2-B) of the ESI Act which is in dispute between the principal employer and the ESI Corporation is respect of any contribution or other dues shall be raised by the principal employer in the ESI Court unless he has deposited with the court 50% of the amount due from him as claimed by the corporation. The High Court also emphasized the proviso which states that the court may for reasons to be recorded in writing waive or reduce the amount to be deposited under the said section. It was pointed out that in the instant case the ESI Court was not required to record any reason because it neither waived nor reduced the amount of 50% to be deposited by the petitioner. Therefore there is no illegality in the said order. The High Court therefore declined to interfere with the impugned order and dismissed the revisions petition.

Sulabh International Social Service Organisation vs. ESI Corpn & Anr. LLN (1) 2012 P.311 (P&H H.C.)

From The Court Room

Latest Judgments

Ex-parte Award Ex parte award can be set aside by High Court on cost when it was justified that employer was prevented from participating in proceedings.

High Court can set aside an ex-parte Award in the absence of sufficient cause by imposing reasonable cost upon the Management to meet the ends of justice, but subject to cost of Rs. 25,000 to be paid to the workman.

Filling of an additional affidavit by the Management, if so desired by the Court, showing that it was prevented from participating in the proceedings before the Labour Court, that could be termed to be a sufficient cause for setting aside an ex-parte Award.

Amity International School vs. Presiding Officer, Industrial Tribunal-cum-Labour Court-I Gurgaon and Another. 2012 LLR 489 (P&H H.C.) Setting aside of an ex-parte Award subject to cost of Rs. 30,000 is justified.

M/s. A.K. Enterprises vs. Presiding Officer, Industrial Tribunal-cum-Labour Court-II, Faridabad and Another. 2012 LLR 490 (P&H H.C.)

Gratuity Gratuity cannot be paid for the period of break in service.

An order by the Controlling Authority, as upheld by the Appellate Tribunal under the Payment of Gratuity Act, is liable to be modified when no notice has been taken by the Authority pertaining to break of service for six years seven months and twenty-five days.

Bangalore Metropolitan Transport Corporation vs. Dy. Labour Commissioner and Others. 2012 (132) FLR 1041 (Kar. H.C.)

Industrial Disputes Act When the employee was not allowed by the employer to work despite court order, he will be entitled to claim his wages of such period under section 33C(2) of I.D. Act. When the Respondent-workman was not allowed to work by the petitioner-Corporation despite order of the High Court, the Labour Court has rightly allowed his claim under section 33C(2) of the Industrial Disputes Act, 1947.

U.P. State Road Transport Corporation, Meerut vs. Shouraj Singh and Others. 2012 LLR 478 (All. H.C.) In compliance of labour court order of reinstatement if worker is put under suspension after allowing him to join duty would not mean non implementation of award.

Suspension of workman after reinstatement and payment of back-wages without allowing him to work does not suggest in any way that the workman was not taken in service as the term suspension would allude to a necessary inference as an acceptance of relationship of master and servant.

There is no violation of terms of Award of reinstatement with continuity of service and payment of back-wages when after reinstatement the payment of back-wages are paid but the workman is not permitted to work and as placed under suspension hence in such circumstances proceedings under section 29 of the Industrial Disputes Act are not invited.

Dr. Reddy's Laboratories Ltd. and Others vs. State of Haryana & Others. 2012 LLR 492 (P&H H.C.) Labour court award will be liable to be set aside when it was decided against workman on the ground that he could not prove his 240 days working, specifically when workman moved an application requesting court to direct employer to produce his attendance record, but court did not do so.

An Award, passed by the Industrial Tribunalcum-Labour Court, is liable to be set aside if it has failed to consider and dispose of an application filed by the workman for summoning the attendance and payment of wages records for a specific period to prove his continuous service of 240 working days during the preceding 12 calendar months.

Nawal Singh vs. Presiding officer, Industrial-cumLabour Court, Panipat and Another. 2012 LLR 498 (P&H H.C.) Before approval of application under section 33(2)(b), competent authority has to see that neither there was victimisation nor unfair labour practice.

While considering an application under section 33(2)(b) of the Act, the competent authority has to examine as to whether the order of dismissal or discharge is bona fide and whether there was victimisation or unfair labour practice.

Approval under section 33(2)(b) of the Industrial Disputes Act should not be turned down only on the ground of 12 days delay or that the dismissal order did not accompany 30 days wages.

Colgate Palmolive (India) Ltd. vs. The Asstt.

Commissioner of Labour and Conciliation Officer & Anr. 2012 LLR 559 (Bom. H.C.)

Industry Rajghat Samadhi Committee will not be industry under I.D. Act. Where the activity of an establishment, in its essence, is religious or spiritual for instance a temple or chruch, it could not be considered as an 'industry' as defined by Industrial Disputes Act. Aseem Abbas vs. Rajghat Samadhi Committee & Anr. 2012 LLR 520 (Delhi H.C.) Business Manager

June 2012

51

From The Court Room

Maternity Benefit Act The casual labour was unjustly denied maternity leave and employment, when she reported to duty, after delivery of a child. The action of the employer is totally illegal and violative of Articles 14 and 21 of the Constitution of India.

L. Kannaki vs. Secretary to Govt. Animal Husbandry and Fisheries Department, Chennai and Others. 2012 (133) FLR 48 (Mad. H.C.)

Probation Even if the employee has completed the initial probation period of three years, but not confirmed in writing, there cannot be deemed confirmation. Such employee’s termination without enquiry will not be illegal.

Termination of a teacher, without holding of an enquiry by the Management of the School after expiry of the initial period of three years' probation, will not be illegal since an express order of confirmation in service is imperative as per the rules providing that after confirmation, the teacher will continue till he age of superannuation i.e., 55 years. Merely that an employee is allowed to continue in the post even after expiry of the period of probation, there will not be any deemed confirmation in the absence of express order of confirmation.

Head Master, Lawrence School, Lovedale vs.

Jayanthi Raghu & Anr. 2012 LLR 514 (S.C.) Termination of services of a probationer during his/her extended period will not be stigmatic.

Extension of probation period it self is an indicator that performance of the probationer was not upto the mark and such an indication to the probationer would amount to a caution to the probationer for improving her performance.

National Board of Examinations vs. Ms. Rajni Bajaj and Anr. 2012 LLR 450 (Delhi H.C.)

Reference Government cannot decline to refer a dispute on the ground that workman failed to establish a valid dispute.

Declining to refer a dispute, that the workman has failed to establish a valid dispute, is not appropriate on the part of government but it is for the Labour Court to adjudicate the existence of a dispute and also the delay in raising the dispute hence the Authorities are directed to refer the dispute for adjudication.

Manoj Kumar Sahu vs. Union of India and Others. 2012 LLR 528 (All. H.C.) 52

Business Manager

June 2012

Latest Judgments

When the employee was posted in Bhopal and his termination order was served there, having H.O. at Mumbai, Madhya Pradesh State Govt. would have jurisdiction to refer the dispute.

For determining the territorial jurisdiction, it is to be seen where the order of termination operates and what is the nexus to the industrial dispute by termination and territory of the State referring the matter for adjudication, as such, merely because the office of the respondent was at Mumbai, that could not be a bar for the State of Madhya Pradesh to refer the dispute at Bhopal.

M.P. Medical & Sales Representative Association and Another vs. Senior General Manager, Camlin Ltd. 2012 LLR 534 (M.P. H.C.)

Reinstatement Court not to grant reinstatement to employee, who absented from work due to illness and expressed unability to discharge work and did not attend enquiry despite various memos. Employee has no right to ask for light work.

Management had given a long rope to the petitioner by giving memos and warnings to attend the enquiry being held against him (ii) in view of admission of petitioner that he was unable to discharge the work done by him earlier due to accident he had met, he has no right to ask for some light work at the work place; (iii) respondent being a private industry, provisions of persons with Disabilities (Equal Opportunities Protection of Rights and Full Participation) Act, 1995 are not applicable in this case; (iv) No case made out by the petitioner to exercise the power u/s. 11-A of the I.D. Act in his favour.

P. Venkatesan vs. Management, Samco Metals and Alloys Limited, Vellore & Anr. 2012 I CLR 1047 (Mad. H.C.)

Retrenchment Workman after completing 240 days in last twelve calender months if terminated without complying 25F of I.D. Act, would be entitled to reinstatement with complete back wages.

When a workman, who has worked for more than 240 days during preceding 12 calendar months, is terminated without complying with section 25F of the Industrial Disputes Act, would be entitled to reinstatement with complete backwages. To grant protection under section 25H of the Industrial Disputes Act, the only condition is that the workman would have completed 240 days during preceding 12 calendar months from the date of his termination irrespective of the nature of employer being of public sector or private sector. A plea of fact not taken at the very initial stage of making reply to the demand notice, if received, from the workman, cannot be taken later on either before the Labour Court or High Court.

Rajbir Kumar vs. Presiding Officer, Labour Court, Ambala and Another. 2012 LLR 491 (P&H H.C.)

From The Court Room Even the daily wager would be entitled to reinstatement without back wages if completed 240 days and terminated without complying 25F of I.D. Act. When a workman, though appointed on daily wages, is terminated from service without making compliance of section 25F of the Industrial Disputes Act, if succeeds to prove before the Tribunal-cum-Labour court that he has worked with the Management for more than 240 working days in the 12 calendar months preceding the date of his termination, he would be entitled for reinstatement with continuity of service but without back-wages.

Municipal Council Raman, District Bathinda vs.

Presiding Officer, Labour Court-cum-Industrial Tribunal, Bathinda and Another. 2012 LLR 497 (P&H H.C.) Termination of service before completing 240 days will not be retrenchment.

When the services of a temporary workman after working for 80 days came to an automatic end, such termination will not mean retrenchment since the workman has worked only for 80 days and, as such, neither section 25-F providing for payment of retrenchment compensation, notice or notice pay nor section 25-H providing for re-employment would be attracted. When the reference for adjudication has been made about violation of section 25-H of the Industrial Disputes Act, it is not open to the Industrial Tribunal to "fly off at a tangent" and conclude that the termination of service of the workman was illegal because of violation of section 25-G laying down principle of 'last come, first go' for retrenchment of the workman will not be applicable. Adoption of unfair labour practice by the Management of the bank cannot be construed when the workman has worked only for 80 days that too, within a span of three calendar months whereas for unfair labour practice, as stipulated in Vth Schedule of the Industrial Disputes Act, there has to be a motive of the employer to deprive such a workman to attain permanency by giving repeated breaks. For filling a writ petition by a bank, impleading of Central Government is not necessary.

General Manager (Operations), State Bank of Bikaner and Jaipur vs. Rajeev Sharma & Another. 2012 LLR 503 (All. H.C.) Compensation of 2 lakh instead of reinstatement justified in case of termination without complying section 25F of I.D. Act. High Court will not interfere with Award of the Labour Court granting Rs. 2 lakhs towards compensation in lieu of reinstatement and back-wages when the employer has terminated services of a workman without complying with section 25F of the Industrial Disputes Act. M.D. Industries vs. Government of NCT of Delhi and Another. 2012 (132) FLR 1030 (Delhi H.C.) Daily wage driver, once completes 240 days in a year, his termination would be illegal if not covered by exclusion of section 2(oo), and without compliance of section 25-F of I.D. Act. Reinstatement without back wage proper.

Once the driver employee has been in continuous employment for one continuous year as per the provisions of section 25-B of the industrial Disputes Act and if the termination does not fall in any of the exempted clause as contemplated in section 2 (oo) (bb), the termination would amount to retrenchment and in

Latest Judgments present case as the termination is not covered by any of the exempted clause , the termination was retrenchment and as the same was brought about without complying with the provisions of section 25-F it is illegal. Accordingly, in holding the termination to be retrenchment and the same to be illegal, the Labour Court has not committed any error. As far as denial of back wages to the employee is concerned, the employee is only a daily wages employee and, therefore, the employee cannot be granted back wages even if his retrenchment is found to be illegal.

M.P. Police Housing Corporation vs. Sher Singh and Another. 2012 (133) FLR 66 (M.P. H.C.)

Settelement Service conditions sought to be changed by the employer without permission, during pendency of reference pertaining to general demands, will be violative of section 33(1) of the Industrial Disputes Act. N.R.C. Employees' Union and Others vs. Government of Maharashtra, Department of Industries Energy and Labour and Others. 2012 (132) FLR 875 (Bom. H.C.) A settlement between a Union and the Management will be binding upon the members of the Union.

Platform of BEL Ex-Employees, Bangalore and Others vs. Chairman and Managing Director, M/s. Bharat Electronics Ltd., Bangalore and Others. 2012 (132) FLR 1009 (Kar. H.C.)

Termination No enquiry required to terminate an employee who obtained the appointment fraudulently on the basis of forged documents.

When the petitioner obtained employment fraudulently by forging the documents, his appointment would be illegal; and the employer will not be under an obligation to conduct an enquiry before terminating services of the petitioner since nor relationship of employer and employee would exist in the absence of valid employment.

Usha vs. Municipal Corpn. of Delhi.

2012 LLR 460 (Delhi H.C.)

Trade Unions Act Period spent earlier before a wrong forum should be excluded from the period of limitation when an appeal has been filed by a Trade Union challenging cancellation of its registration.

Mysore Paper Mills Workers Association, Bhadravathi vs. Assistant Labour Commissioner, Mangalore. 2012 (132) FLR 866 (Kar. H.C.) There is no provision to file appeal against the order of Industrial Court.

The respondent who is Registrar of Trade Union appointed under sec.3 of the Trade Unions Act derecognized and cancelled the registration of the appellant trade union. The industrial Court However dismissed that appeal. Hence the appellant union filed Business Manager

June 2012

53

From The Court Room

Latest Judgments

further appeal in the High Court challenging the dismissal of their appeal. The High Court dismissed the appeal as not maintainable on the ground that there is no provision to file second appeal. Section 11 of the said Act provides only one appeal against the order of the Registrar regarding de-recognition and cancellation of registration of a trade union. It was pointed out the M.P. State amendment was made applicable with effect from 31.12.1960 which would mean that on the date of passing of the order by the Registrar, it was in force and therefore the first appeal filed with the tribunal was maintainable. But against the order of the industrial court it was not permissible to file second appeal in the High Court.

Hence the appeal was dismissed.

Rastriya Soot Mill Mazdoor Sangh vs. Registrar, Vayavsayik Sangh. LLN (1) 2012 P. 263 (M.P. H.C.)

Unauthorised Absence In case of wilful unauthorised absence, the fact of willingness is to be proved in enquiry. In the absence of such finding, absence will not amount to misconduct.

For termination of an employee for his unauthorised absence, it is imperative that the absence is wilful be proved to be in conformity with Regulation 113 of the Gujarat Electricity Board.

petitioner had worked for 293 days but he did fulfill the condition precedent for the application of the provisions of section 6-N of the act inasmuch as he had not put in continuous service as defined in section 2 (g) of the Act in 12 calendar months. The labour Courts also noted the fact that the factory was closed in the year 1985-86. Hence there could not have been continuous service of the petitioner.

The High court observed that the reasoning given by the Labour Court is fallacious in view of the Supreme Court decision in Mohanlal Vs. Bharat Electronics - 1981 (42) FLR 389 wherein it was held that continuous work 240 days is to be calculated by counting the number of days actually worked by the workman counting them backward from the date of termination. If 240 days are calculated from the date of termination of the petitioner's services keeping in mind the ration of the decision in Mohanlal's case, the reasoning of the Labour Court is rendered illegal as the petitioner had put in 240 days of service in 12 calendar months counting backward from the date of termination of his service. The High Court however declined to grant the relief of reinstatement to the petitioner on the ground that a daily wager has no right to service. Therefore direction was given for payment of lump sum compensation with interest.

Ramji Pandey (dead) by Lrs. vs. Presiding Officer, Labour Court. LLN (1) 2012 P.75 (All. H.C.)

Workman

Krushnakant B. Parmar vs. Union of India and Another. 2012 (132) FLR 1023 (S.C.) Dismissal justified for habitual absenteeism of workman who remained absent on 16 occasions and earlier punished 124 times.

Labour Court should not have set aside dismissal of a workman remaining absent without justification on 16 occasions and also punishment was inflicted on 124 occasions hence the dismissal as imposed by disciplinary authority stands confirmed. Absenteeism burdens the system and disturbs the public service run by public body hence for habitual absenteeism, dismissal from service would be justified.

Ahmedabad Municipal Transport Service vs.

Vinubhai J. Ghanchi. 2012 (132) FLR 912 (Guj. H.C.)

U.P.I.D. Act If a workman has rendered services for a period of 240 days within a period of 12 calendar months counting backwards from the date of retrenchment, then he should be deemed to be in continuous serivce in the preceding one year.

The petitioner was engaged on daily wage at the rate of Rs.12/- per day as a clerk in the establishment of the respondents with effect from 76-1984. He worked for 293 days in a period of 12 months till termination of his services on 29-3-1985.

The case of the respondents was however that the petitioner was engaged on need basis temporarily and he did not put in continuous service of 240 days in a year. Therefore the provisions of section 6-N of the Act were not applicable requiring the employer to pay notice and retrenchment compensation. The Labour Court on appreciation of evidence found that the employer had engaged the workman on the post of clerk on daily wage of Rs.12/- and that the

Scientist carrying out research work will not be workman under I.D. Act. An engineering graduate, working as a Scientist carrying out research in the process engineering field related to cement industry, has been rightly held by the Labour Court not to be a workman under section 2(s) of the Industrial Disputes Act which has been upheld by the learned Single Judge in dismissing the writ petition hence the Division Bench will not interfere in the LPA filed by the appellant since the evidence, as produced by the Management, runs counter to being a manual, unskilled, skilled, technical, operational or clerical worker within the meaning of definition of the workman under section 2(s) of the Industrial Disputes Act .

Divyash Pandit vs. The Management of National Council for Cement and Building Materials. 2012 LLR 463 (Delhi H.C.) Doctor is not a workman under I.D. Act. A doctor, employed in a charitable eye hospital as a Resident Surgeon, has been erroneously held by the Labour Court to be a workman' whereas a distinction has to be made between an employee, rendering or doing work of technical nature and a professional who has technical or educational degree. A doctor has to use his professional skill and knowledge for diagnosing the disease and treating the patients and hence he will not be a 'workman' under section 2(s) of the Industrial Disputes Act, as such the Labour Court erred by holding him a workman and setting aside his termination wrongly and awarding reinstatement with full back-wages.

Management of Multan Sewa Samiti Charitable Eye Hospital vs. P.O., Labour Court-II & Ors. 2012 LLR 523 (Delhi H.C.)

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

54

Business Manager

June 2012

A. Surendranath CEO & Director NulineHR Consulting, Bangalore

Specific Employment legislation for IT/ITES sector: Need of Hour No one ever imagined at that time when the Labour Acts were enacted that a new type of industries like IT or ITES will ever come into being and have majority of such industries in Karnataka, particularly in Bangalore.

T

he working and service conditions are totally different in IT/ITES sector and none of the present legislations are suitable to monitor the working or service conditions in IT and ITES industries. At present, they are governed by Shops and Establishments Act of the respective Sate Governments. In the absence of a Central legislation of this nature, the provisions differ when compared to one another.

Same IT and ITES industries have work places spread in different parts of the country requiring a uniform law with respect to working conditions and also service conditions.

Recently, in Bangalore IT and ITES industries represented by the Karnataka Employers' Association asked for the exemption from the provisions of Industrial Employment (Standing Orders) Act, 1946 whereby IT and ITES industries need not get their standing orders certified. But responding to the of Karnataka Employers' Association letter 25-11-2011/14-08-2011 addressed to Secretary to Government of Karnataka Labour Department, Government of Karnataka communicated to the said association vide letter No. KE/249/LET/2011 dated 21-01-2012 saying that blanket exemption to these industries will cause more misuse as government has recognized that employees will be subjected to mental, physical and social stress causing problems to them. After ascertaining the prevailing suitable service

conditions protecting the interests of employees, exemption will be given to such industries.

A news item in "The Hindu" Bangalore edition was also published on 10th Mar 2012 which said that The Labour Department of Government of Karnataka has decided not to renew exemption from the Act, which the IT and ITES industries had sought.

Labour Commissioner of Government of Karnataka said that from now on there would be no blanket exemption to the entire industry (IT & ITES) and exemption may be given only on a case-to-case basis. He further said that the industries have six months time to adopt standing orders, which have to be certified by a deputy labour commissioner. It further said that exemption granted under the provisions of Industrial Employment (Standing orders) Act, 1946 was last renewed in 2009 for a period of two years. It expired on August 25, 2011. The industry has had 11 straight years of exemption on the ground that it does not fit the requirements of a knowledge-based industry. The ITEC (IT and ITeS Employees Centre), a support group for IT professionals, and ITHI, a forum of women employees in IT and ITeS, had been campaigning against exemption from the Act. It is not understood how the Industrial Employment (Standing orders) Act, 1946 is made applicable to the establishments registered under the provisions of The Karnataka Shops and Establishments Act since they are not 'industrial Business Manager

June 2012

55

Specific Employment legislation for IT/ITES sector: Need of Hour

establishments' as defined under the provisions of Industrial Employment (Standing orders) Act, 1946. No specific provision is made in the Karnataka Shops and Establishments Act making Industrial Employment (Standing orders) Act, 1956 applicable to establishments like that of Bombay Shops and Establishments Act. In all probability, it appears that definition of 'industrial establishment' under the provisions of Industrial Employment (Standing orders) Act, 1946 is not interpreted in the right perspective both by Karnataka Government and IT and ITES industries represented by their employers' association with reference to the phrase 'industrial establishment' which is imported from the Payment of Wages Act, 1936.

Industrial establishment is defined under the provisions of Employment (Standing Orders) Act, 1946 as: Section 2. (e) " Industrial establishment" means.

The need of the hour of the Government is to enact a separate legislation may be called as Information Technology and Information Technology Enabled Industries Employment (Service and Working) Conditions Act with major provisions for the following apart from registration, inspection and violations etc.

(i) An industrial establishment as defined in Cl. (ii) of Sec. 2 of the Payment of Wages Act, 1936 (4 of 1936), or (ii) A factory as defined in Cl. (m) of Sec. 2 of the Factories Act, 1948 (63 of 1948), or (iii) A railway as defined in Cl. (4) of Sec. 2 of the Indian Railways Act, 1890 (9 of 1890), or (iv) The establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen.

The 'establishment' under the Shops and Establishment Act means a 'commercial establishment' the definition of which is given below: Section 2 (e) "commercial establishment" means a commercial or trading or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a cafĂŠ or any other refreshment house, a theatre or any other place pf public amusement or entertainment and includes such establishments as the State Governments may by notification declare to be a commercial establishment for the purposes of this Act".

On a plain reading of the above it is very clear that an establishment defined under Karnataka Shops and Establishment Act will not fall under the above definition of 'industrial establishment'.

The 'establishment' under the Shops and Establishment Act means a 'commercial 56

Business Manager

June 2012

establishment' the definition of which is given below: Since IT and ITES industries are commercial establishments with the motive of making profit they do fall under the Shops and Establishments Act. When the Payment of Wages Act was enacted in the year 1936, law makers used the word "industrial establishment" under Section 2 (ii) of the said Act instead of defining the term "industrial establishment", which is known as legislation by incorporation. It stipulates that the position as it was available at the time of particular enactment, would prevail, and later expansion and coverage should not be taken into consideration.

In the year 1982, by an amendment to the Payment of Wages Act, 1936 the phrase "industrial establishment" has been substituted w.e.f.

15.10.1982 as the "industrial or other establishment". Based on this amendment which includes the phrase "other establishment", it might have interpreted by both Karnataka Government and the IT and ITES industries that Industrial Employment (Standing Orders) Act, 1946 is applicable the said industries. But at the time of enacting Industrial Employment

Specific Employment legislation for IT/ITES sector: Need of Hour

(Standing Orders) Act, 1946 the legislature were concerned with only those establishments those "industrial establishments" which were at that time defined under Section 2 (ii) of the Payment of wages Act, 1936.

Hon'ble Supreme Court in the case of Ram Swaroop v. Munshi ( AIR 1963 SC 553) held that the repeal of the Punjab Alienation of Land Act, 1900, 'had no effect on the continued operation of the Punjab Pre-emption Act, 1913, and that the expression "agricultural land" in the later Act had to be read as if the definition of the Alienation of Land Act had been bodily transposed into it. Thus the incorporated definition would prevail in the same words, irrespective of the fact that the said act from which the definition was bodily lifted or incorporated, has been repealed or the incorporated definition is amended later on. H'ble Supreme Court in a similar case under Motor Vehicles Act and Orissa Motor Vehicle Taxation Act when a controversy arose on the word "motor vehicle" in the case of Bolani Ores Ltd v. State of Orissa ( AIR 1975 SC 17) held that the definition of "motor vehicle" as contained in Motor Vehicles Act, 1939 shall apply and any subsequent amendment in Motor Vehicles Act , 1939 will have no effect whatsoever.

Relying on the above principle of incorporation, H'ble Division Bench of Gujarat High Court held that M/S Valsad Jilla Sahakari Bank Ltd is not the "industrial establishment" under Section 2 (ii) of Payment of wages Act, 1936 at that time when the Industrial Employment (Standing orders) Act, 1946 was passed, thus the provisions of the Industrial Employment (Standing orders) Act, 1946 would not apply to the bank vide Valsad Jilla Sahakari Bank Ltd v. D.K. Patil and others (1995-III LLJ (Supply 665 (Guj) (9DB) and 1991 (63) FLR 459).

because, IT and ITES industries fall under the definition of 'industry' under ID Act, it cannot be said that they fall under the definition of "industrial establishment" of Industrial Employment (Standing Orders) Act as the words "industry" and "industrial establishments" are distinctly defined separately.

In view of the foregoing where there is no specific provision in the Shops and Establishments Act making the Industrial Employment (Standing Orders) Act applicable to establishments OR incorporated definition of "industrial establishment" barrowed from the Payment of Wages Act is again amended in the provisions of Industrial Employment (Standing Orders) Act vis-Ă -vis the amendment made in the Payment of wages Act, 1936 by legislature, the provisions of Industrial Employment (Standing Orders) Act will not apply to Shops and establishment Act including in the case of Karnataka Shops and Establishments Act. It appears there is no meaning in employers of IT and ITES industries asking for exemption by representing through their employers' association or Karnataka Government denying a blanket exemption quoting mental, physical and social stress of employees leading to problems when the

Now that Government of Karnataka is keen on health and safety of employees in the IT and ITES industries, a time has come to look at enacting a new comprehensive legislation governing IT and ITES industries on service and work conditions as well as health and safety of employees.

Therefore, the subsequent amendment to The Payment of wages Act in 1982 including the term "industrial or other establishment" in the Section 2 (ii) will have no effect in making Industrial Employment (Standing orders) Act applicable to the "commercial establishments" covered under The Karnataka Shops and Establishments Act. Only Bombay Shops and Establishments Act, 1948 has a specific provision making Industrial Employment (Standing orders) Act applicable to Shops and Establishments vide Sceion 38B which reads, "38-B. Application of Industrial Employment (Standing Orders) Act to establishments.-The provisions of the Industrial Employment (Standing Orders) Act, 1946, in its application to the State of Maharashtra (hereinafter in this section referred to as "the said Act"), and the rules and standing orders (including model standing orders) made there under from time to time, shall, mutatis mutandis, apply to all establishments wherein fifty or more employees are employed and to which this Act applies, as if they were industrial establishment within the meaning of the said Act".

Another aspect is that the definition of 'industry' under the provisions of Industrial Disputes Act cover IT and ITES industries. Merely

said Act is not at all applicable. Even if the said act is made applicable through suitable amendments as mentioned above, it will not address the problems of mental, physical and social stress of the employees.

The coverage of these industries under Shops and Establishments Act and/or brining them under the fold of Industrial Employment (Standing Orders) Act will not address the problems faced by these industries due to their specialized nature of activity employing the intellectual faculties of knowledge employees most of them working in different time zones to meet the business needs.

Even though provisions of Industrial Disputes Act, 1947 is applicable, most of the employees who are knowledge employees employed by these industries may not fall under the definition of 'workman' since their work centres around creativity in developing software with a component of intuition rather than merely technical skills. It is a debatable issue.

No one ever imagined at that time when the above Acts were enacted that a new type of industries like IT or ITES will ever come into being and have majority of such industries in Karnataka, particularly in Bangalore. Now that Government of Karnataka is keen on health and Business Manager

June 2012

57

Specific Employment legislation for IT/ITES sector: Need of Hour

safety of employees in the IT and ITES industries, a time has come to look at enacting a new comprehensive legislation governing IT and ITES industries on service and work conditions as well as health and safety of employees. But many IT and ITES industries have their branches in different States also. Therefore, a Central legislation with powers given to State Governments to implement would be ideal to have a uniform service and working conditions through out the country. Since Karnataka has the majority of the IT and ITES industries it has to take the lead in this aspect.

The present Karnataka Shops and Establishments Act does not address 'health and safety' at all while Andhra Pradesh, Bombay, Punjab and Tamil Nadu Shops and Establishments Acts do have separate Chapter for Health and Safety". All Shops and Establishments Acts in different States stipulate the issue of notice in case of dismissal since the employees of shops and establishments are not covered under Industrial Disputes Act, 1947.

The infra structure provided by IT and ITES industries are complex for the inspecting authorities under Shops and Establishments Act who do not have enough competencies and capabilities to examine their technicalities and their bearing on the health and safety of employee working there. They cannot make any suggestion or recommendation to employers any improvements since no specification on the infra structure to be provided is stipulated in the provisions of Shops and establishments Act unlike Factories Act which has elaborate specifications for the health, safety and welfare of employees.

But merely asking IT and ITES industries to frame standing orders will not address the concern which Karnataka Government has towards health issues of employees involved and the provisions of Industrial Employment (Standing Orders) Act, 1946 do not apply at all as on date. Service conditions are different from working conditions.

Moreover, to maintain the current levels of growth

by IT and ITES industries in future they have to increase work force and manage such a huge workforce. Application of Industrial Employment (Standing Orders) Act may be counter productive since it addresses 'industrial establishment" where the nature of work is entirely different.

It is therefore the need of the hour of the Government is to enact a separate legislation may be called as Information Technology and Information Technology Enabled Industries Employment (Service and Working) Conditions Act with major provisions for the following apart from registration, inspection and violations etc: 1. Defining IT and ITES Industries.

2. Employee to whom the provisions will be applicable.

3. Working Conditions.

4. Special provisions for Working of Women including their security while commuting from office at odd hours.

5. Prohibiting Employment of Children.

6. Provision for annual leave with salary.

7. Provision for Holidays - National, Festivals 58

Business Manager

June 2012

and Other Holidays for general elections etc.

8. Provision for payment of salaries and deductions.

9. Health & Safety.

10. Welfare fund contributions.

11. Service Conditions similar to Standing Orders but not to have their own standing orders requiring certification to maintain uniformity.

12. Grievance Procedure.

13. Provision for Sexual Harassment in line with the H'ble Supreme Court Judgment.

14. Provision for employee councils to discuss on issues pertaining to service or working conditions.

15. Provision for providing compulsory counselling services for employees to tackle stress which they under go by them mentally and socially.

16. Provision of mandatory employment of Professional Social Workers with minimum qualification of a full time post graduate course to help employees.

17. Procedure for disciplinary action.

18. Compensation in case of lay off or retrenchment when lack of orders.

19. Safeguarding the interests of conditions of work of employees.

20. Provision for getting legitimate unpaid wages if any.

21. Prohibiting outsiders representing employee grievances or present in employee councils.

22. Application of all welfare legislation specifically-Minimum Wages Act, Maternity Benefit Act, Employee Compensation Act where ESI Act is not applicable , EPF Act, Gratuity Act, Payment of Bonus Act etc.

Specifically naming them under a separate Chapter will make them applicable without any criteria of applicability.

The essence of the following enactments has to be integrated into the new legislation conforming to the endorsements of ILO regulations made by India and covered comprehensively in the suggested new legislation: 1. Shops and Establishments Act 2. Factories Act 3. Industrial Employment (Standing orders) Act 4. Payment of Wages Act 5. Industrial Disputes Act Consequently the above enactments will not be applicable specifically to IT and ITES industries.

It will not be an easy task for the Government. If it has to really address the concerns of IT and ITES industries, a special committee has to be constituted headed by a retired or sitting Supreme Court Judge as its chairman having experts which include operational professionals from IT and ITES industries, HR Professionals, Psychologists, Engineers, Doctors, and those of relevant areas apart from representatives of government departments like information technology, labour, factories and employment etc as members to study and suggest a draft comprehensive bill for the consideration of the Government. BM

CASE

study

Strategic handling of Union President’s greed - Anil malik, AVP-HRMC, Kirloskar Brothers Ltd., Dewas

Mr. Kapil (changed name) was heading HR Deptt. of a large engineering company having its factory operations at Dewas (Madhya Pradesh).

As a Human Resource initiative the company provides outhouse training to all of its employees (workmen and staff) for developing their knowledge and skill. For building positive attitude of employees, company provides moral training to them at Moral Rearmament Center Panchgani. This centre is pioneer in making positive change in the attitude and mindset of people through a five days residential training programme.

In the year 2006, Mr. Kapil planned a training program of Union Representatives who were also company's employees to Moral Rearmament Centre, Panchgani. The President of existing union (not Company's employee) who was also President of National Level Union Organization also requested as to allow him for the training with rest of the Union Representatives. On 12th March 2006, the group of ten people, started journey from Dewas to Panchgani (by train and road) and Mr. Kapil was the group leader. On 13th afternoon, group arrived at Panchgani.

After completing registration formalities the group had lunch and participated in inaugural session of training programme for the whole day.

This case study throws light upon various important aspects of Industrial Relations. It is aptly clear that1. External union leaders can be extremely selfcentered and can misguide the workmen for twisting the arm of Management.

2. It is important for modern day Management to understand to what extent Union Representatives can be unpredictable.

Incident: After finishing dinner at about 10:00 PM Union President felt uneasy and made complaint of chest pain. Mr. Kapil immediately informed to authorities of moral rearmament centre Panchgani and took him to nearby primary health centre. From there he was referred to a hospital situated at Waigram three kilometers down hill.

There the doctors declared that he had a severe heart attack. Mr. Kapil immediately took him to Pune in an ambulance with life saving drugs. This journey of 100 kilometers from Panchgani to Pune was completed in 45 minutes at midnight. At 2:30 AM, they reached to Ruby Hospital, Pune which is renowned as one of the best super specialty hospital. They have been informed by the doctor on duty that the patient's condition is critical and it was difficult for him to survive for more than 24 hours.

Mr. Kapil managed to start the treatment immediately and also informed to the patient's relatives and arranged transportation for them for coming to Pune. A letter was also provided to the hospital from the company to provide the best medical treatment to the patient. After 15 days of rigorous treatment and angioplasty, the patient survived and recovered. The Union President was then taken back to Dewas by an ambulance with the post operative medicines for next 2 months.

3. It is also vital to observe and control the response of workmen towards the whole situation.

Intricacies: The Union President was employee of other company & was covered under ESIC, hence expenses for his treatment were claimed from ESIC by him. Mr. Kapil put in his all efforts for getting the reimbursement of genuine claim from the ESIC. Finally after 8 months of continuous and rigorous efforts, ESIC reimbursed the claim and sent the cheque in favour of the claimant. Total amount spent on him, was roughly around Rs. 4 Lakhs and ESIC reimbursed the claim as Rs. 2.8 Lakhs. Ethically, it was

Business Manager

June 2012

59

CASE

study

his moral responsibility that the amount which was reimbursed by ESIC should have been handed over to the paying company. As per the moral attitude, it was expected that the reimbursed amount from ESIC shall be handed over to the paying company but it was never done. When Mr. Kapil reminded about the ethical gesture, he blatantly denied for returning that money to the company. He also started to show his nail to Mr. Kapil and began to instigate the workmen for petty issues.

With the new grown teeth of the Union President, it was very difficult for the management to maintain the peaceful environment without affecting the productivity and keep the manpower 100% engaged.

Also he initiated steps against the management and filled false police complaints against the company. At this juncture his behavior was totally against the company.

The Parallel side: The company had signed the performance linked wage agreement with the workers and simultaneously was going through a transformation phase from conventional to professional working. The targets and wages were directly linked to the productivity based on MOST and the multi skill career progression scheme was to be introduced. The phase of Industrial Relations was very critical and could have easily affected the harmony of the company.

With the new grown teeth of the Union President, it was very difficult for the management to maintain the peaceful environment without affecting the productivity and keep the manpower 100% engaged which is resulting into 250% rise in productivity.

In this environment, one wrong step could have disturbed the industrial scenario and therefore, Mr. Kapil took the workmen in confidence and explained them about the entire facts. However, general opinion among workmen was that union president should have returned the money to the company.

The Management's Strategy: Management sensed the self centered attitude of the Union President, his motives of creating differences between the Management and the workers and his efforts of exploiting the interest workers and decided that to protect the interest of its employees it was necessary to educate the workmen about the same. To do this, a customized training module was developed and interactions with workmen started and almost all the workmen were given training in interactive sessions and a seed of concept of democratic internal union was sown.

Introduction of the Internal Union: An independent election committee of senior but effective workmen was formed and decided to organize internal election to help workmen for the formation of their own union. Workmen participation in the election was 100%. New body of eleven representatives emerged as a fresh leadership.

In this election, the son of the said union president was also a contestant for the position of union president. Interestingly his son who is the employee of the company won the election.

The Management welcomed the new democratically elected union body.

Process of recovery:

60

Business Manager

June 2012

Simultaneously, to teach him a moral lesson the Management filed a civil suit against Ex-Union President for the recovery of above fund. On receiving notice from the court, and for his defense Ex-Union President arranged false documents from his nearby relatives and submitted in the court claiming payment done to the hospital by him. His submission was that for the treatment in the hospital he received money from his relatives. Management challenged his stand and also investigated the case and got substantial proof regarding forgery done by Ex-Union President. When ExUnion President came to know about the ongoing investigations, he realized risk of facing dire consequences of his forged act. He approached to the management through his son (the new president of the internal union) asking for depositing the money. Eventually he deposited the money in presence of court and also submitted a joint agreement signed by the factory manager and himself. In the manner the management was able to secure the funds of company.

CASE

study Points to ponder: 1. Should union representatives be abided by ethical values, management vision and mission or not?

2. What should be behavior of union in age of transformation from conventional management to professional management?

3. Why external union is invited and gets recognized by the worker and management if an internal union can be more successful in today's scenario?

It could be established well by the management that it has not been the question of recovery of cost of treatment which could have been waived off in case of non reimbursement from the ESIC but it is the matter of ethics and values which as an individual or organization one should possess.

Inference: This case study throws light upon various important aspects of Industrial Relations. It is aptly clear that- 1. External union leaders can be extremely selfcentered and can misguide the workmen for twisting the arm of Management.2. It is important for modern day Management to understand to what extent Union Representatives can be unpredictable.3. It is also vital to observe and control the response of workmen towards the whole situation.

The Management took the entire workforce into confidence strategically and convinced them to form internal union with effective communication and transparent attitude, was turning point to defeat the unpredictable behavior of external union leader then gradually created pressure through law of land by filing recovery suit against him. Such management leader always triumphs over the odd situation by strategic approach.

Moreover, during the transformation of culture, linkage of work with business result and success of leadership in maintaining the ethics and value of the company, there was not a single man hour loss in whole process. It prepared a platform of sustainable growth of the company and workmen together which was result of arriving settlement 2010 Wage Agreement with further enhancement of productivity level and second phase of union election peacefully. BM

4. Which type of strategic leadership could help to make business along with unethical and unpredictable behavior of union?

5. How do you enumerate the leadership style of Mr. Kapil and what could be better strategy to handle the situation?

Business Manager

June 2012

61

BOOK LEARNING Want to become a

Labour Problem & Remedies

Complete HR Manager ?

A Ready Referencer to Handle Day-to-Day Labour Problems Based on Decided Cases

Subscribe Today

By H.L. Kumar Publisher : Universal Law Publishing Co. Pvt. Ltd., C-FF-1A, Dilkhush Industrial Estate, (Near Azadpur Metro Station) G.T. Karnal Road, Delhi-110 033 Price : Rs. 450/Website : www.unilawbooks.com If and when any problem arises in day-to-day working, this book, serving as a companion for ready reference, may succeed in bringing calm to the troubled waters and help in avoiding impending crisis of any kind and dimension. Such problems, as usually arise under labour laws, have been methodically arranged topic-wise. The judicial pronouncements with direct bearing on the relevant problems have been carefully analysed so as to help better understanding of their import as well as to know their applicability.

It would not only be a great time saver but cost saver also for the professionals and will work as a referencer. It is hoped that the book will prove to be an indispensable companion for all those who are concerned with labour, particularly Industrialists, Factory Owners, Corporate Bodies, Leaders and all others who are, in any way, interested in the subject matter of the book.

You should not use this handbook as a detailed work of reference but as a source of basic questions and guidance to help you avoid some of the more obvious problems at work.

India’s Best HR Magazine

Legal Drafting

By H.L. Kumar Publisher : Universal Law Publishing Co. Pvt. Ltd., C-FF-1A, Dilkhush Industrial Estate, (Near Azadpur Metro Station) G.T. Karnal Road, Delhi-110 033 Price : Rs. 450/Website : www.unilawbooks.com Drafting of any legal document like legal notice, agreement, plaint, written statement etc. is not like a simple letter since it requires in-depth imagination, relevant facts, legal implications, hence utmost precaution is required to be taken lest it should be mis-representated leading to unavoidable litigation. It requires sound and up-to-date knowledge. Due care has to be taken of various laws of unprecedented expansion of commercial activities.

Although the legal drafting and writing has been practised for as long as there have been laws and lawyers, yet only recently the subject has assumed the desired seriousness.

This book is a further improvement on earlier editions for those who are concerned with legal drafting and the precautions to be taken. The index of the book will tell the readers at a glance that the new edition covers wide range topics pertaining to the subject.

This edition of the book is thoroughly revised in conformity with the latest judicial pronouncements also.

62

Business Manager

June 2012

For subscription details, Contact: E-mail : bmalwar@yahoo.com, bmalwar@gmail.com www.businessmanager.co.in

B-138, Ambedkar Nagar, Alwar - 301001 (Raj.) India, Ph : 91-144 - 2372022

National Conference on 'Creating Global Managers'

It's a flat world. Mergers and acquisitions are the mantra of the day. Move aside business managers. Global managers are here to stay. According to Rosabeth Moss Canter of Harvard University, "In the future, success will come to those companies, large and small, that can meet global standards and tap into global networks."

When a leading Indian business house forays into foreign shore and acquires an overseas company, does it get a local person to head it or depute someone from India to spearhead the show? How do MNCs identify managers for global positions? Do you need national specialists or global generalists?

The Managers Club presents the National Conference on "Creating Global Managers" on June 23, 2012 at The Lalit, Mumbai. "It's an golden opportunity to network with CEOs, Vice Presidents, Directors, Business Heads, HR Heads and Entrepreneurs from leading Indian Business Groups and global MNCs. Our objective is to learn best practices, business models, strategies & techniques that work from companies who have been there and done that" says Krithikha Srinivasan, Core Committee Member, The Managers Club.

About 85 companies participated in the National Conference on Talent Management Strategies last year at JW Mariott, Mumbai. "It's an excellent platform to network, learn from each other & grow in life" says Mr.Asit Mahopatra, Director-HR (Textiles), Raymonds who attended the last conference. Ms.Chetna, VP HR, Eldelwiss Capital adds, "Most conferences has students so I have stopped attending them. This is one of the better ones.

It's a great opportunity to meet fellow professionals & learn solutions to our problems".

Among the industry stalwarts who would be addressing the National Conference on "Creating Global Managers" on June 23 is Mr.Anand Pillai, Chief Learning Officer, Reliance Industries Ltd, Mr.A V Suresh, President - International Operations, Eureka Forbes Limited & CEO - Forbes Professional would also be addressing the elite audience.

He would be sharing the best practices of Eureka Forbes on the theme 'Global Managers -

What it takes to succeed?' Cultural sensitivity, local challenges, letting go of head quarter's mindsets, leading in a matrix structure are some of the challenges that global managers need to overcome. Mr.T.Padmanabhan, Sr. Vice President-HR, Sodexo would be sharing his experiences on mergers and acquisitions and creating a global foot print.

"There will be a dedicated 60 minute structured Power Networking session", says Krithikha. Power Networking would present a golden opportunity for the participating Entrepreneurs, CEOs, HR Heads and Business Heads to know each other better. "I liked the unique concept of power networking. It's a novel idea." says Mr.Harsh Bhosle, VP-HR, Saint Gobain sharing his experience of his last National Conference.

Ms.Ranjanmala Hedge, Vice President - HR, EssDee Infrastructure Pvt. Ltd and formerly Head-Learning & Development, Internal Communication, Diversity & Employee Engagement, Sodexo sums up what you can expect at the National Conference on Creating Global Managers, "Lovely, outstanding, fantastic, fantabulous & incredible.

Quite a learning actually" To register for the National conference, you can get in touch with Ms. Krithikha Srinivasan, Core Committee Member, The Managers Club. You can reach her on krithikha@mpowerlimited.com or call her on 9892597905. Interested delegates could also refer the brochure of the conference at the following link: http://www.mpowerlimited.com/EventDetails/109/1/Creating-GlobalManagers.html The Managers Club has over 40,000 plus managers as members. The Entrepreneurs Network India and The HR Club are e-group partners for the National Conference. Business Manager, 'India's Best HR Magazine' is the official Magazine Partner for the National Conference on Creating Global Managers.

HR News

MTNL to offer VRS to 20,000 employees Government-owned MTNL, which provides telecom services in Delhi and Mumbai region, will offer voluntary retirement scheme (VRS) to about 20,000 employees, as part of its efforts to turn profitable. The telecom PSU has also approached the government for surrendering its broad-band wireless access (BWA) licence for which it paid Rs. 4,600 crore, MTNL chairman and managing director AK Garg said.

"Turnaround takes slightly longer time

but we have some items on our mind and working on those items. Number one is improving our revenue services... We have already written a letter to the government asking for surrendering of BWA license, we want that money back," Garg said.

"For BWA licence, we have paid Rs. 4,600 crore. Even if we don't get interest, at least that much we can expect. We have planned VRS to 19,000-20,000 people. The outgo should be some Rs. 2,000-3,000

crore. There are many issues like staff pension issues. But issues are known and few," he said.

The company plans to restructure its loan book through funding, which it will get through sale of assets.

"Whatever amount we get the entire amount will be utilised to repay the loan.

Interest wise we will become positive.

Now we pay almost Rs. 100 crore a month.

We want to be a debt free company, like we were earlier," Garg said, but did not divulge the debt size in the books. MTNL had suffered a loss of Rs. 929.7 crore for the quarter ended December 2011.

Business Manager

June 2012

63

HR News Edenred & Great Place to Work® joint initiative

India’s Best Companies For Rewards & Recognition-2012 Announced

India’s 1st Ever List of Top 10 Companies recognized for their Rewards and Recognition Practices Edenred, International leaders and India’s foremost organization in work-life benefits, rewards and loyalty solutions and Great Place To Work® Institute announced its first ever list of 'India’s Best Companies for Rewards and Recognition 'at a gala awards ceremony held in Mumbai. Edenred partnered with Great Place To Work® Institute for 'India’s Best Companies for Rewards and Recognition' study with an aim to applaud corporate organizations in India for their outstanding rewards and recognition practices. This study is India's first-ever study recognizing best practices in rewards and recognition.

TPG Software topped the list of India’s Best companies for Rewards and Recognition this year, followed by Intuit Technologies Services and American Express were ranked as the top three winners. In addition to the top three winners, Intel Technology, Qualcomm, Music Broadcast, Reliance Commercial Finance, SAP Labs, JM Financial Services and Aditi Technologies took the honours in the top 10 list of 'India's Best Companies for Rewards and Recognition - 2012'. Speaking on this occasion, Mr.Sandeep Banerjee, Managing Director & CEO Edenred – India said, “Companies have realized that increased compensation or monetary incentives are no longer the critical differentiator. Organizations are engaging and retaining their key talent with their innovative and structured Rewards & Recognition programs. The companies featured as ‘India’s Best Companies for Rewards and Recognition’ are committed and have succeeded in their rewards and recognition practices. They have gone beyond the HR process and have considered this as a key business strategy to motivate, retain and engage their talent. We would like to congratulate all the companies featuring on this list of Top 10 Companies for Rewards & Recognition for this accomplishment and establishing a benchmark in this field.”

Mr. Prasenjit Bhattacharya, CEO, Great Place to Work® Institute said that “This study is an attempt to study what the best workplaces in this area do differently and to encourage more organizations to improve their rewards and recognition practices. The study has brought focused insights in this important area for organizations who want to use the power of appropriate rewards and recognition to create high performing organizations.” Participating companies went through a rigorous assessment that includes administering the Great Place to Work® Trust Index© employee survey and completing an audit of the company's culture through a detailed questionnaire on their rewards and recognition practices. Based on the survey data taken from more than 13000 employees and HR managers from more than 70 companies across 11 industries like IT/ITES, BFSI, FMCG, Pharma, Manufacturing, etc. these rankings form the largest annual study on rewards and recognition excellence. A white paper on the insights and findings on the best practices for rewards and recognition was unveiled at the event by Chief Guest of the evening, Mr. Anil Sardana- Managing Director, Tata Power Limited, Mr. Sandeep Banerjee, Managing Director & CEO, Edenred – India and Mr. Prasenjit Bhattacharya, CEO, Great Place to Work® Institute India.

64

Business Manager

June 2012

Keep International employees out of PF by using SSA India has till date signed 11 agreements.

Agreements with eight countries are effective, which include Belgium, Germany, France, Switzerland, Luxembourg, Denmark, Korea and the Netherlands. The agreements with Hungary, Czech Republic and Norway are singed but are not yet effective. SSA generally provides for the benefits if a detachment certificate, also known as certificate of coverage (COC), is obtained. A social security agreement (SSA) is a bilateral treaty designed for protection of workers' interest in the host country and provides for avoidance of double social security coverage on same earnings. In simple words, a SSA helps in avoiding contribution in the host country. Expatriates working in India are required to contribute to Indian social security

BENEFITS OF SSA SSA provides for avoidance of double social security coverage on the same earning To avoid boule coverage an employee can obtain a certificate of coverage from the home country SSAs with eight countries are effective and agreements with Hungary, Czech Republic and Norway are singed but not yet effective The period of service rendered in home and host country will be considered for determining eligibility for the payment of benefits system and similarly Indians going abroad are required to contribute overseas. These contributions are in addition to the contribution in the home country. As contributions are made in both the countries, it impacts business and creates a challenge in managing employee costs. For avoidance of double coverage, an employee can obtain a COC from the home country social security agency and avail an exemption from contributing social security in the host country. For example, if an individual is employed in India and sent to Germany, the individual/employer will make an application to the Indian regional provident fund officer and obtain a COC. This COC will help the individual/employer in not paying social security in Germany. Similar example will apply for a German coming to India.

Exportability of benefits : It means that any benefit in one country will be transferred to the other country. For example, earlier the benefits under Belgium social security system were not payable even after somebody had left Belgium. An Indian who had worked in Belgium was at a loss for not being able to get the due benefits on his relocation back to India. Now, under the IndiaBelgium SSA, the benefit will be paid irrespective of whether the individual lives in Belgium or India.

Totalisation of contribution : The period of service rendered by an employee in the home country as well host country will be considered for determining eligibility for payment of benefits. For example, an employee may have contributed to the social security system in both India and France but may not be eligible for the benefit if both service periods are not added. The SSA makes it easier by allowing totalisation of contributory periods in both countries. India is gradually signing agreements with other counties.

-Vineet Agarwal, Director Tax & Regulatoy Services, KPMG