Honda Motorcycles and Scooters India Ltd (HMSI
Presented by: Group A
Kaushik Mohapatra (U109071) Anand Bardhan (U109105) Biswajit Mahapatra (U109111) Saurabh Kumar (U109156)
History of Honda
Honda is headquartered in Minato, Tokyo, Japan.
It is the world's largest manufacturer of motorcycles. It has more than 120 manufacturing units in across 30 countries for two- wheelers production. It¶s the world's largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda spends about 5% of its revenues into R&D
Also involved in F1 racing and other segments of the automobile industry.
Established in 20th October 1999 in Manesar (Haryana).
It is a wholly owned subsidiary of HMCL Japan. The company aims to manufacture world class scooters and motorcycles from this plant. The plant had a initial capacity of 0.1 million which was to be raised to 0.6 million by 2005. The company in India wants to become the vehicle of change. Apart from a focus on good quality the company also wanted to keep a reasonable price.
Workforce in HMSI
Workforce in HMSI
1000 Workers Employees
HMSI Workforce Breakup
300 700 700 1300
Confirmed Workers Contract Workers Trainees Apprentice
The company was believed to be a good paymaster.
All trainees were generally taken by the company.
In October 2005 salaries of workers ranged from Rs 8150 for unskilled to Rs 11200 for skilled workers including Rs 2000 for house allowance. Also apart from these the workers were entitled for bonuses in the Diwali season.
15% of apprentice use to get the job after the apprenticeship period was over.Workforce & Salary
The trainees generally had a certificate from some or the other (ITI).
chess matches organized against employees of other companies
2 sets of uniforms. carom .Employee Welfare:
Subsidized canteen facilities
Transport facilities to and from workers¶ residences at subsidized rates
Sports club for employees µ use at Sukhrali village in Gurgaon with indoor games facilities Football. 1 pair of shoes provided to employees every year. same uniform for all including managers
. 1 company cap.TT. volleyball.
000 each.000 to family on employee¶s death. 5.50. 1948 as salary had crossed maximum salary limit for coverage Such employees covered by Paramount Health care facility . 3.000 each.Employee Welfare:
Most HMSI workers not covered by Employees State Insurance (ESI) scheme under the ESI Act. 75. Rs. 2 children) Rs. 3. Invited workers¶ families for celebrating foundation day.100 at birth of a child (max. 1.000 on death of spouse/children/parent. 2.
Support through cash payments on happy and sad occasions: Rs. reimbursement of hospitalization expenses Worker.000 on worker¶s marriage Rs. his/her spouse & up to 2 children covered for RS. later stopped with increase in workforce size.
. workers¶ parents covered for Rs.
: Perseverance to ensure safety & quality in all aspects
. joy of selling . E.g. Induction programme involved acclimatizing employees to the Honda philosophy HR department expected to The Honda Way: human behaviour or way of thinking based on Honda philosophy. joy of manufacturing Employees were called associates ± association promoted among all employees through similar uniforms and same canteen facilities for all.Human Resource Policies
Aligned with philosophy of parent company: HMCL though considered itself unique with some distinct employment & production practices. equality & trust The Three joys ± joy of buying. HMSI¶s philosophy had 2 fundamental beliefs: Respect for individual differences.initiative.
Training dept. ISO 9000 training. Supposed to be headed by an assistant manager.
. position lying vacant for a long time.Human Resource Policies
Organize training programs for:
Internalization of culture building and Honda philosophy Training for building team leaders TQM training.
m. 1961 because of high salaries: Company gave an ex gratia of one month¶s gross pay as incentive around Diwali No scope for workers¶ expression through any letter to the editor. PA done on a rating scale. 1400 p. workers divided into 5 grades Increment Rs. 400 to Rs. depending on worker¶s grade All PA results and salary hikes announced immediately at the end of financial year Promotion opportunity for worker: Worker -> sub-leader -> assistant executive -> executive No one covered by Payment of Bonus Act.Human Resource Policies
Performance Appraisal System for all employees including workers: Interview by section head and shift in-charge.
transport committee. recognitions.
. quality certifications. and sports committee. 1947 on 1st April. 2004 consisting of 15 workers and 5 managerial representatives Other committees: Canteen committee. list of new dealers and kaizen activities Very few employee related matters covered like sports competition results and news about marriages and childbirth related to employees No scope for workers¶ expression through any letter to the editor.Human Resource Policies
Works Committee (WC) constituted under Industrial Disputes Act (IDA). quarterly newsletter: Dream Team Focussed on covering company¶s achievements in terms of awards. contracts. health committee.
6-paged. Management nominated workers for the communities based on perceived interest.
leave policy Fear of Management¶s Authority Idiosyncratic attitude of VP-Manufacturing (Japanese) Charter consisting of more than 50 demands Help from local union leaders
.:. Gherao of Mgmt.Case : Timeline
Apr 1 : Increment in Compensatio n Package.movement sheet.g. Go-Slow
July 19 : DLC sends the Conciliation Report July 25 : Another Jallianwala sort of brute treatment of the Honda Workmen
Aug 1 : Back to Work
1st sight for need of Unionization : Stringent Company rules e.May : Efforts for forming Union. No Union Formation May 26 : Conciliation ± DLC Intervention June ± July : 6 Conciliation Meetings July 30 : Truce between Mgmt & Workmen July 27 : Enquiry ordered by Haryana CM
Diwali Gift Issue
Dec¶04 ± Mar¶05: Negotiations between Workmen & Management
Police beating HONDA Workers ± Dt. 25th July 2005
Clash between Police & HONDA Workers ± Dt.The Clash (in Pictures)
The Whole Issue was covered by Media and the atrocities by the Police was highlighted and the incident was termed as Another Jallianwala Bagh. 25th July 2005
. The act of Police was compared to that of General Dyer¶s.
The Clash (in Pictures)
Workers meet Sonia Gandhi against alleged highhandedness of Honda management and the police
Wor ers resu in dut fro o ne de u .
Proper test to decide on t e bsorption of t e tr inees To be considered s Fin l Concili tion
. e r
nds durin t e ne t
Tr de Union ould continue to oper te Reinst te ent of Ri suspended or ers & 4 Union le ders
t to conduct n enquir into t e c se of 4 ter in ted e plo ees
Ter in tion of n convicted e plo ee (in court) o Wor oP Principle to be i ple ented fro June 7.
concessions allowed on various fronts Freedom of not working on shop floor for union leaders to take care of pending IR issues A small room allotted to union leaders with a promise of a union office in future Invitation to all 7 union office-bearers to discuss workers-related problems or issues Overtime working issues: lure of extra money.Management Dynamics in Post-Violence Scenario
Change in management attitude felt by union leaders.Union. workers not fresh overtime working was scraped in most cases
. medical problems.
Management Dynamics in Post-Violence Scenario
Practice of inviting workersµ family on founders' day revived family members invited to factory on company expenses in batches Diwali gift: Rs.Productions came to shop floor & commended achievement of workers. sweet distributed to all workers next day.
. 4000 as incentive bonus for all including managerial staff 09/09/2010: 'A shift' in assembly achieved its target of 1000 scooters for the first time after union formation. 2000 & credit in bank account of Rs.Manufacturing. GM.Union. VP.
10. 100.175. 01. w.e. one or more or all the family members could utilize it.contact different people to make sound defence Got all the trainees absorbed in regular work Ensured no domestic enquiry proceedings or transfer for the 4 dismissed workers Union leaders monitored worker-supervisor relations to ensure workers were treated better than before: number of memos to workers negligible far more positive managers' response towards leave applications 4 days' leave for Diwali => 4 days factory closed .2010
. Rs.Management Dynamics in Post-Violence Scenario
Union: Police case against 63 workers including all 7 union leaders .f.000 if further expenses occur change in management policy.000.Union. 3 day's compensatory work on Sundays/holidays hike in coverage of workers & their family members under medical insurance scheme : family floater coverage scheme of Rs.
compensated loss by working on Sunday
.Management Dynamics in Post-Violence Scenario
Union: Joined the nation-wide industrial strike against Central Govt's economic policies on 29/09.Union.
Union.Management Dynamics in Post-Violence Scenario
On the Flip side: 02/09/2005: Authoritative and provocative behaviour of 2 supervisors and a senior manager A Union office bearer's views: company claims of respect for individuals & the 3 joys : merely bookish concepts Some senior managers creating distance between top management & workers HR manager prevents the union from meeting Japanese top management fearing exposure of their ulterior designs and motives Only 20% managers treat union leaders as members of the company. rest have ego issues No one bothered about analyzing the causes and possible solutions of shop floor problems in a practical & acceptable manner
¶s approach to practicing a non-union model made them blind to reality DID NOT LISTEN TO WORKERS Workers viewed Mgmt activity as coercive and repressive
Incompetent people mgt.Key Issues & Problems
Mgmt. by Indian Middle managers²Indifference
Indian mgmt. blocking direct access to top company executive
The 3 joys of HONDA were used as a means of control
Issues in cross-cultural management
Key Issues & Problems
Failure of mgt. about labour power
. to realize importance of Diwali in Indian IR
Tokenism of conciliation in resolving collective issues
Complacency on the part of Indian mgrs.
etc.) and managerial relations (direction. and commitment
Management distinguished between market relations (wages. and discipline) and advocate a say for employees and trade unions in the former but not the latter (Fox 1966)
. consensus. service conditions.Key Causes of HONDA s Difficulty
The most effective functioning of the organization was achieved through the traditional principles of direction and control
The traditional managerial beliefs and practices concerning HRM resulted in structural contradictions between the hierarchical nature of managerial direction and control and the need for integration. surveillance.
Sharma. upsetting the existing equilibrium per se had far-reaching consequences that were not easy to predict
. and Appropriate accountability for HRM-related matters in the role of all managers
While Honda moved to restore balance in the relative power position between the Employees & the Management. Clear definition of corporate philosophy and objectives.Key Causes of HONDA s Difficulty
Honda lacked participation and grievance redressal which are the most critical determinants of organizational climate in India (B.R. 1986)
Honda should have integrated HRM into the organization¶s mainstream with
Proper representation on all major decision-making forums/bodies. Strategic linkage between the goals of HRM and the organization.
Theoretical Perspectives : Honda¶s stand
Approaches to IR Input
Institutions & processes
Systems HRM Labour market
Control over labour process
The Big Three
The three parties to Dispute
functional and operational interests of the Firm
.Role of Management (Ideal v Actual)
Evolve policies and systems
To control workers and the unions
To elicit commitment from the workers and their unions in order to facilitate the strategic.
Role of Management (Ideal v Actual)
Loopholes in implementing the policies was observed
They could not check the growth of unionism
Lack of farsightedness
Role of Union (Ideal v Actual)
Protect and promote workers¶ interests
Protect and promote interests of workers¶ organizations & affiliates through cooperation strategies where feasible
Role of Union (Ideal v Actual)
It was not able to highlight the problems of the workers through the proper channel It was unable to check the actions of its union members resulting to major trouble
It had a rigid stance and was nonnegotiable
Role of State (Ideal v Actual)
Evolve policies and instruments to regulate the employer-employee relationship
Manage the contradiction which arise in this relationship
Strive for goal congruence between the employer. employees and Society
Role of Union (Ideal v Actual)
It was late in realizing the gravity of the problem
Its role as a negotiator was in doubt
Delay in getting both parties to negotiate
Expand job opportunities? Social change .comparability & differentials.establish a joint-rule making system to protect members from arbitrary management action . Inflation & unemployment (cost-push & demand pull).protect/support through strength in association . pressure group. Economic regulation .assist individuals to develop outside their job domain & participate in wider decision-making processes
. Win bigger slice of national income.express social cohesion. political ideology & develop a society which reflects this? Institutionalize ³class´ & ³conflict´? Dilemma of participating in government.Trade Union Functions
Power . aspirations.a countervailing force.maximize member returns within wage-work framework. Note: bargaining leverage & member willingness to act together. Note: political nature of TU wage policy . Enable participation in decisions affecting their employment. Job regulation .provide benefits/services to members Self-fulfillment . Member services .
Changing IR Scene at Global & National levels : New Thinking HONDA Manufacturing
India is governed by a Constitution that foresaw a welfare state and espouses the values of trade unionism and social justice
The Role is Changing
Welfare state: Efficient
Government as facilitator
Export-oriented production (SEZs)
Changed labour policies of states
Global Trends ± India Trends
Multilateral IR: consumer/public/gender issues New issues: ±±Customer Creation/sustenance ±±Protecting environment ±±Gender issues ±±Safety promotion ±±Child labour abolition Media¶s role in new issues
Building Cooperation with Unions
Source: The Conference Board of Canada.
.Emp asis on Performance ± related Pay
Flat organization --Flexible pay
Cost saving: a big concern
no ledge pay i
ig -tec .
Changed Thinking of tate
Changed Govt. thinking --July 1991 Economic Policy --2nd NCL: July 2002 Rationalize Labour Law ocial ju tice to market --Vigorous attack on trickle do n
elfare tate ideology
New Trends in India : IR Practices r in HR Strategy
I tif f r behavi r
Striv f r C mpetitive advantage
new i t rv
IR m rg
HR strategy is th single m st imp rtant C nsultancy Area
reward and recognition.Lessons Learnt : A Guide for Business Success
Leadership matters Competent HR department is key Well crafted and communicated Mission and Vision Maintain channels of communication HR Strategy must align with and support business Listen to Employee concerns and issues for Organizational Justice Use HR Interventions (BOTH HARD AND SOFT) as tools for success
(welfare plans. etc.)
right person In right job at the right time
Be clear about performance and results ± let them drive success
reate short term wins (reward and recognition)
.cultural issues in view
Establish a sense of urgency
Recruit and Retain Talent .Lessons Learnt : A Guide for Business Success
Keep cross .
fairness. transparency. & equity Institutionalizing openness in subordinate-superior relationships Dealing with employee grievances promptly & e plaining the logic & rationale of decisions to convince the aggrieved Providing e posure & understanding to line managers on HRM aspects to handle the day-to-day HRM activities & issues/problems Sharing information & consulting for shared understanding & co-operation Reviewing HR/IR policies & practices from time to time
The HRM-IR-HRD interface integration should be such that it should move away from the principle of direction and control to a system based on the philosophy of consent and commitment Being sensitive to human needs & human problems at work & beyond work Evolving a value system based on trust.