Managing people in India is a real challenge. An example of the worst case: strike, work stoppage:
In the following real case study you can see how quickly supposedly small mistakes can escalate in India and grow into crises that are difficult to control. We want to sensitize you to their subtle triggers and show you ways of acting in order to preventively avoid more serious problems with the workforce.
Initial situation: continuity and change of leadership
A manufacturing company in India has maintained a problem-free relationship with the parent company in Germany and its management for years. The Indian subsidiary was producing consistently according to specifications and with the appropriate quality - to the satisfaction of all concerned. Then there was a routine appointment of a new (Indian) managing director. The parent company decided - to the best of its knowledge and belief - in favour of an ambitious candidate from the industry with apparently good references. He convinced the German management with his ambitious goals. He wants to mobilize productivity reserves at the Indian location and optimize processes.
The volcanic eruption: strike!
The new manager starts work. Three months later, there is a rude awakening. The first work stoppages occur in the Indian company. The employees complain to the German management about poor treatment and below-average pay. At the same time, they join a local Indian industrial union, which from now on is to represent the interests of the management as the only "mouthpiece". The production capacity at the Indian site drops to 50 percent of the original capacity. There is a risk of losing orders.
Attempts to reach a solution through direct talks between the German parent company and the employees (without a union) fail. There is a falling out with the newly appointed Indian managing director. He leaves the company voluntarily. But the problems remain. The union - now the only mandate holder - makes considerable demands. The company feels it is being blackmailed.
Diagnosis: What happened?
The change of management in India has also resulted in a change of management culture. The new managing director obviously had neither the will to deal with the current situation in the company nor the willingness to fulfil confirmed agreements. In implementing his goals, he proceeded with too little tact and did not take into account local conditions at the site and (possibly) unwritten laws. In other words, he "drove over" the workforce. Supposedly small mistakes and impetuous actions by the new manager ultimately destabilized the company in the long term within a matter of weeks.
Situations like this can escalate quickly in India. Strikes are on the agenda. According to the Labour Bureau, 2.7 million man-days were lost as a result last year, and in 2012 the figure was as high as 11.7 million man-days. In addition, labor unrest broke out several times over differences in working conditions between permanent and temporary workers. In 2012, riots broke out at a plant owned by carmaker Maruti Suzuki, killing a management representative and injuring many others.
Prophylaxis: How can such developments be avoided?
In order to avoid conflicts with the workforce, you have to deal intensively with the framework conditions on site. The willingness to go into detail and to see through complex dependencies is essential in India. Get to grips with the labour market in general and your employees in particular.
It is necessary to regularly review the salary structure of employees and their working conditions - also in comparison to the competition. As a company, take your social responsibility seriously and actively shape the working environment of your employees. In India - due to the lack of a social system - you take much more responsibility for your employees and their families. Your employees expect a certain level of support in terms of education, health benefits and provision for the future.
Check the feasibility of your projects together with all stakeholders in advance. Define the powers of attorney, responsibilities, interfaces and feedback processes in advance. Always communicate openly and involve your employees in change processes at an early stage. Do not give self-appointed "revolutionary leaders" within the workforce any ammunition to rebel against the company management.
To prevent crises and motivate employees in the long term, you need a holistic, proactive HR policy. And you need managers who take this responsibility seriously. Therefore, the selection of suitable managers must be made with special care. Don't just check professional qualifications, be sure to get references to confirm that your candidate also has the necessary social and organizational qualities. Put your candidates through their paces. Because wrong personnel decisions can have fatal consequences in India and sometimes require years to correct the mistakes again.
Overcoming crises and avoiding wrong personnel decisions
Dr. Wamser + Batra is specialized in solving the aforementioned problems and crisis situations in India. The experts of our departments "Human Resources" & "Turnaround Management" can conduct appropriate negotiations with the trade union for you and agree on solutions with your Indian workforce.
Our division manager for WB Human Resouces Werner Heesen, has successfully managed escalations and disputes with Indian trade unions in his 14 years as Managing Director of Lufthansa India.
Our HR consulting services also focus on protecting you from making the wrong decisions in the search and selection of personnel in India. We can implement your recruitment process on site, but also conduct an assessment centre for your existing candidates in India. In doing so, the professional, social, human and organisational suitability of your candidates will be checked.