The Hindu Business Line : The growing threat to our employee relations climate

Employee relations (ER) may be defined as those policies and practices, laws and rules which are concerned with promoting and maintaining employer-employee relationships that contribute to productivity and employee motivation in a sustainable manner.

ER risks — the changing context

Thanks to economic liberalisation, a strong economy and a buoyant labour market, India has enjoyed several years of industrial peace and a productive ER climate. The dramatic fall in unionisation rates and a reduction in the man-days lost due to strikes and lockouts are impressive.

Things have, however, begun to deteriorate in recent years.

While labour market mobility was the greatest insurance against ER risk, organisations have lost many of these drivers of mobility over the years.

While skilled workers were considered mobile and insulated from ER risk, years of deskilling efforts to reduce costs have resulted in a new breed of frontline employees who are not as mobile as their predecessors.

The hunt for talent in large numbers has led to the entry of a large number of first generation white-collar employees from small towns and villages with little socialisation to organisational life, a lot more collectivist and a lot less individualist in orientation and with far less desire for mobility and a far greater desire for stability.

Opportunistic staffing strategies in the form of large-scale outsourcing, temping and leasing have ended up creating large-scale conflicts between permanent employees, contractual employees and employers.

The impact of these changes was not evident when the economy was strong. As the pace of growth has reduced, these risks are becoming visible.

In addition to making these changes in employment arrangements, organisations have also unleashed market-based HR practices on a workforce ill-equipped to deal with them. Most importantly, in the name of embracing an HR-oriented culture and adopting so-called talent management practices, we have completely neglected the precious competence of employee relations.

The current state of denial

Like the parable of the boiled frog, most HR professionals and business leaders have failed to take note of the gradual deterioration of the ER climate and continue to believe that there is little danger to our employee relations climate.

The gruesome killing of Lalit Choudhary, Chief Executive Officer and Managing Director of Graziano Transmissioni India Pvt Ltd, in September 2008 allegedly by dismissed employees and the more recent murder of the VP – HR of Pricol, Joy George, under similar circumstances in September 2009 and a spate of other ER incidents in many of the manufacturing belts across the country, including Haryana in the North and Sriperumbudur in the South, the sporadic work stoppages and protests by BPO workers, store-level protests by retail workers, the on-line protests by young engineers not hired as they were promised and the spate of protests by some of the airline employees are all not being viewed as telling symptoms of a looming employee relations crisis.

Those who dismiss these as one-off occurrences, present three arguments in favour of this state of denial:

They argue that the HR-oriented practices and people philosophies of today’s organisations have ensured a sound climate of engagement and that, as a result, there are no real ER risks.

My argument is that many of these practices are market place-driven and were mostly meant to “position” the organisation as a good employer and seldom born out of a genuine intent to build a relationship based on trust and reciprocity.

Also, it is fallacious to believe that HR is a substitute for ER. The goals of human resources management, the priorities that HR professionals focus on and the issues they grapple with cannot and should not be confused with and mistaken for employee relations management. In any case, most of today’s HR professionals are so caught up with “driving processes and transactions” that they have lost touch with real employees and real relationships.

The second argument is that today’s employees are better off, less ideologically driven, capable of taking care of themselves, career minded and even egocentric.

While many of these descriptors are indeed true, they are true for the small segment of highly employable, professionally or technically qualified employees, who have been brought up with modern work values.

What many do not realise is that our national workforce is a lot more diverse than that. We have diverse industries ranging from manufacturing, retail, insurance, IT and BPO to infrastructure.

We have permanent employees, temp staff, contract staff, casual labour and trainees and apprentices, each with a certain value proposition. Our workforce is also diverse from a caste, community and cultural orientation perspective.

Therefore, it is too simplistic to ascribe high maturity and homogeneity to our workforce when it does not exist.

The last argument is that conditions are not conducive for collective action and that our young employees have a stigma attached to unionisation.

The recent use of the media to mobilise public support for reinstatement by an extremely suave group of young employees, or the use of social networking by a group of engineering graduates to get their offer letters honoured should tell us that when the need for mobilisation is high, new and creative means will automatically emerge.

In any case, many fail to recognise that the debate is not about predicting the return of unions. It is about acknowledging that there are indeed symptoms of simmering discontent and unrest, which, if not heeded, can make the relationship seriously dysfunctional.

(In the second part of this two-part article, the writer will present a model to help understand the drivers of employee relations — good and bad.)

(The writer is the founder and CEO of totus consulting, a strategic HR consulting firm. He is also the co-founder of the Executive & Business Coaching Foundation India Ltd. He can be reached at ganesh@totusconsulting.com)

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The growing threat to our employee relations climate