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 seemingly small mistakes in India can escalate and grow into crises that are difficult to control. We want to make you aware of their subtle triggers and show you courses of action to prevent major problems with the workforce.
Initial situation: continuity and change in leadership
A manufacturing company in India has had a problem-free relationship with the parent company in Germany and its management for years. The Indian branch produces consistently and in accordance with the specifications - to the satisfaction of everyone involved. Then there was a routine appointment of a new (Indian) managing director. The parent company chose – to the best of its knowledge and belief – 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 and optimize processes at the Indian location.
The volcanic eruption: strike!
The new manager starts work. Three months later there was a rude awakening. The first work stoppages take place in the Indian company. The employees complain to the German company management about poor treatment and below-average pay. At the same time, they join a local Indian industrial union, which from now on will be the sole “mouthpiece” for company management to represent their interests. The production capacity at the Indian location drops to 50 percent of the original capacity. There is a risk of losing orders.
Attempts to reach a solution through direct discussions between the German parent company and the employees (without a union) fail. There is a rift with the newly appointed Indian managing director. He leaves the company voluntarily. But the problems remain. The union – now the only elected official – is making considerable demands. The company feels like it's being blackmailed.
Diagnosis: What happened?
The change in leadership in India has also led to a change in leadership culture. The new managing director obviously had neither the will to deal with the current situation in the company nor the willingness to fulfill confirmed agreements. When implementing his goals, he proceeded with too little tact and did not take into account the local conditions of the location and (possibly) unwritten laws. In plain English: He “drove over” the workforce. Supposedly small mistakes and impetuous actions by the new manager ultimately destabilized the company within weeks.
Situations like this can escalate quickly in India. Strikes are on the agenda. According to the Labor Bureau, 2,7 million man-days were lost last year and 2012 million man-days were lost in 11,7. In addition, labor unrest broke out several times because of different working conditions for permanent and temporary workers. In 2012 there were riots at a car manufacturer Maruti Suzuki factory in which a management representative was killed and numerous other people were injured.
Prophylaxis: How can such developments be avoided?
In order to avoid conflicts with the workforce, you must deal intensively with the general conditions on site. The willingness to go into detail and understand complex dependencies is essential in India. Deal with the job market in general and your employees in particular.
It is necessary to regularly check 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 on significantly more responsibility for your workforce and their families. Your employees expect a certain level of support with education, health benefits and future planning.
Check the feasibility of your projects together with all stakeholders in advance. Define the authorities, 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 ammunition to rebel against management.
In order to prevent crises and sustainably motivate employees, you need a holistic, proactive human resources policy. And you need managers who take this responsibility seriously and take it seriously. Therefore, the selection of suitable managers must be carried out with particular care. Don't just check the professional qualifications, but be sure to obtain references that confirm that your candidate also has the necessary social and organizational qualities. Put your candidates through their paces. Wrong personnel decisions can have fatal consequences in India and sometimes take years to correct the mistakes.
Overcome crises and avoid poor personnel decisions
Dr. Wamser + Batra specializes in solving the aforementioned problems and crisis situations in India. The experts in our Human Resources & Turnaround Management departments can negotiate negotiations with the union on your behalf and agree solutions with your Indian workforce.
Our division manager for WB Human Resources Werner Heesen, has successfully mastered escalations and disputes with Indian unions in his 14 years as Managing Director of Lufthansa India.
The focus of our personnel consulting is also to protect you from wrong decisions when searching for and selecting personnel in India. We can implement your personnel search process on site, but we can also carry out an assessment center for your existing candidates in India. The professional, social, human and organizational suitability of your candidates will be checked.
