A POPULAR HR CHIEF BURNED TO DEATH:

People Management Dynamics at MSIL

A Case Analysis

GROUP 2
Garima Dhama 20PGHR29
Ishita Gupta 20PGHR11
Niyati Jain 20PGHR20
Pulkit Agrawal 20PGHR60
Sparsh Agarwal 20PGHR37
Tushar Sharma 20PGHR38
 Background

1981 1983-1987 1991 2007 2012 2015

Inception Of MUL
➔ India’s largest passenger
car manufacturer
➔ Maruti Udyog Limited
Joint Venture Globalization Formation of Problems at the Protests by Temporary
MSIL Manesar Plant Workers
➔ MUL & Suzuki JV, ➔ Reduced ➔ Became subsidiary ➔ Activist Manesar ➔ Temporary workers
Suzuki 26% 1983 restrictions and of Japan-based – workers formed MSWU protested at the gate
holding protectionism Suzuki ➔ Tragic incident at the ➔ They were unhappy
➔ Launched first car, ➔ Privatization of ➔ Inaugrated a plant Manesar Plant with the wages being
Maruti 800 MUL in 1992 in Manesar after ➔ Worst in history of IR paid
➔ Suzuki’s holding an existing one in
rose to 40% in 1987 Gurgaon
 Problem Statement
➔ Ever since its inception, the Gurgaon plant faced problems related to the Industrial Relations
➔ The MUEU lost the struggle to MUL and a new HR strategy was coined, as soon as things came back to
normal
➔ With a focus on promoting work-life balance and enhancing employee loyalty, this strategy kickstarted
in 2003 and lead to peaceful time with the IR
➔ Then the Manesar plant was established, with a much younger workforce as compared to the Gurgaon
plant
➔ The workers displayed their grief over not being paid similar wages as their senior counterparts at the
Gurgaon plant
➔ The machines too were advanced and automated at the Manesar plant which the workers perceived as
an issue
➔ Marginal breaks available to the employees along with a bunch of other IR issues, the workers had
been living on the edge
➔ In July 2012, their emotions were stirred the wrong way due to an internal incident, and they retaliated
with violence
➔ It led to one of the worst tragedies in the history of IR at MSIL and shifted the focus towards
implementing employee-centric strategies
 What were the failures of HR processes at MSIL?
➔ Discrepancy between the salaries of employees and contract workers
➔ Tense and hostile IR environment prevailed leading up to the incident
➔ Inefficiency of HR to mediate between the workers and the management led to company suffering
losses of about Rs 20 billion on two separate occasions
➔ Lack of communication between the HR personnel and workers
➔ After the 2001 incident, new HR strategy was more focussed on managers and their competency
development rather than the plant workers
➔ MSIL continued the same HR policies even after it became a subsidiary of Suzuki in 2007 and witnessed
a labour strike in 2011
➔ Secret payments of nearly Rs. 1.6 million each to 12 union leaders enraged the others
➔ Delayed HR tactics escalated the Jiyalal case
➔ Honda Motorcycles in the same region provided two breaks for 10 minutes unlike 7.5 mins at MSIL
➔ Unable to fix the negative attitude of the managers towards the workers
Should MSIL adopt an empowerment or a fit strategy?
Empowerment strategy : Give more power to workers to exercise control over their work and responsibility for the results.
It is a long-term resource-intensive strategy.

Fit Strategy: Employees are treated as any other business resource and more dependent on mechanical form of
organizational decision making.
Fit Strategy Empowerment Strategy MSIL
Top down approach Recognizes different stakeholders’ Manesar workers were subjected to a
interests greater degree of managerial control
Instrumental and Utilitarian Development and Humanism 7.5 minutes break, workers not
concept based allowed to talk during working as well
as lunch hours
Obtain cheaply, use sparingly Employees are valued and  Difference in salaries of contract and
and exploit motivated permanent workers doing the same
job
HR strategy becomes HR strategy guides all managers in Management changed the work line
subservient to business their relations with employees of the workers drastically

 Softer strategies led to longer

Hard Model Soft Model duration of peaceful IR

An empowerment strategy is more suited to MSIL given the past incidents

 Why didn’t GEN Y want to join the Union?
➔ Differences in wage structure and age group of employees at Gurgaon and Manesar plant
➔ Wanted to form a separate union as they felt the MUKU was more “management-controlled”
➔ After the 2001 thumping, Gurgaon workers didn’t feel the need to protest for issues raised by Gen Y
➔ There were no relief workers at Manesar plant unlike the Gurgaon plant
➔ Gen Y were yet to be hired permanently and still being tested
➔ Being young and new, Manesar workers felt that they might be overpowered by the senior Gurgaon
workers in the Union
➔ Inactive Union activists and almost non-existent Union movement of Gurgaon workers
➔ Most workers in the Manesar plant belonged to nearby regions and hence maintained a camaraderie
amongst themselves
 Way Forward
➔ The HR manager should realise that the relation between the company and the employee is more than just an
exchange of worker’s labour and wages
➔ Hiring process assess whether or not the employee is the fit for the company
➔ The Manesar plant has a different scenario than the Gurgaon plant and simply implementing the same policies
might not result in the desired results
➔ Employees should have an emotional connect and a sense of ownership and belongingness for the company
➔ The interaction between the employees and the management should be more and the employees must feel
‘included’
➔ The structure of the organisation should be flatter to ensure that the communication is easier
➔ Local work community should be formulated while formulating HR policies
➔ The execution of HR policies should be unbiased
➔ Proper evaluations should be provided to the employees
➔ Regular communication and issue solving in the early stages might help deter potential unrest of this nature
THANK YOU!