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German Pharmaceuticals

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Agenda

The Background

A view of Employee Involvement

Programme

A battle between Proactive workers vs.

Reactive managers

The denial of Board membership to unions

The demise of New HRM Experiment

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German Pharmaceuticals The Background

A multinational firm engaged in the drugs and pharmaceuticals business.

A plant on the outskirts of Bombay and regional and zonal offices throughout India

The Workers were organized and had an independent, company-based union; the

union was in the drivers seat, controlling output and leveraging this control to press

its demands

The Managing director (MD) decided to experiment with small group activity for

better productivity and improved relations

The MD Launched an employee involvement programme for shop-floor issues

To improve productivity, the MD wanted small groups made up of empoweredworkers, supervisors, and middle managers so that work-related decisions get

taken by these groups.

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Top Management - was not against this experiment.

Viewed it as a distant shop-floor process, which neither made a demand on them nor

posed a threat to their powers.

Middle Management - was not in favor of empoweringworkers.

Viewed that empowering workers would not be of any benefit for the organization.

However, not being an organized group they could not stall the process

Employee Involvement Programme

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Workers - were neutral.

Had no reason not to be supportive.

Were at the receiving end of orders, whether from the managers or from their own

union So, they were for the first time getting an opportunity to speak out.

Union - no interest at all in shop-floor empowerment.

Agreed that poor productivity could result into losses and put jobs in jeopardy,

However, attributed every problem to bad management

Wanted no responsibility either for themselves or for their members in improving

productivity, but expected their pronouncements on distant managerial issues to be

taken seriously.

Later agreed and saw in work groups the opportunity to put shop-floor managers on

the mat.

Employee Involvement Programme

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So the middle managers stone-walled the discussions on quality and productivity

as raised by workers.

Workers Wanted to be on workstations, as they were getting an opportunity to speak.

The programme enabled them to bring many topics on table such as poor or

wasteful manufacturing practices, quality problems, wasted materials, machine

breakdowns, and the like.

Middle managers

Were rarely enthusiastic about shop- floor empowerment

Were unsure about their powers; did not quite know how far they could go in

supporting a decision

So the middle managers stone-walled the discussions on quality and productivity

as raised by workers.

PROACTIVE Workers v/s REACTIVE Managers

After initial small decisions, problems began to surface in workstations between Managers and Workers

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The union demanded board membership while the MD was not willing to offer

the same to the union representatives.

Historically:

The union used to believe that continuous struggle is the fountain-head of

employee well-being The union leaders attributed every problem to bad management

Currently:

The union just wanted to scuttle the proceedings for setting up workstations and

shop councils

Technically:

A board of directors is a body of elected or appointed members who jointly

oversee the activities of a company or organization

Board Membership

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The union demanded board membership while the MD was not willing to offer

the same to the union representatives.

Duties of Board:

Governing the organization by establishing broad policies and objectives

Selecting, appointing, supporting and reviewing the performance of the chief

executive

Ensuring the availability of adequate financial resources

Approving annual budgets

Accounting to the stakeholders for the organization's performance

Setting their own salaries and compensation

Law:

Directors exercise control and management over the organization

Organizations are run for the benefit of the shareholders

The law imposes restrictions on selection of directors

Board Membership (contd.)

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Issues in the NewExperiment

The new experiment of management of human resources (HRM) at thecompany came to an end.

Perception:

Middle managers did not think that empowered workers would be up to

any good

The union secretary thought the objective of the entire scheme was to

sideline him and wanted no restriction on union freedom to nominate

anyone to shop councils

Motivation:

The union had no interest at all in shop-floor empowerment

The union leaders wanted no responsibility either for themselves or for

their members in improving productivity, but expected that their

pronouncements on distant managerial issues be taken seriously

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Issues in the NewExperiment (contd.)

The new experiment of management of

human resources (HRM) at t

hecompany came to an end.

Problems:

Middle managers used to stonewall discussion related to quality and

productivity - their disinterest showing in the lack of preparation for

workstation meetings

Most middle managers were unsure of their powers and did not quite

know how far they could go in supporting a decision taken by senior

managers

Middle and senior managers were safely ensconced in enclaves of

privilege, leaving those lower down to battle it out in workstations

The union saw workstations as a channel of cooperation, which weakened

labours resolve and diminished its ability to fight industrial relations

battles

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The new experiment of management of human resources (HRM) at the

company came to an end.

Examples:

A section chief blocked the suggestion for a hydraulic lift because his vice-

president thought it absurd for a labour surplus company to invest in a

labour-saving device

Departmental heads were supposed to be on shop councils, discussing with

union nominees the issues of quality, safety, and productivity, but not a

single council met in six months although workstations referred plenty of

unresolved issues to them

While managers took no initiative, the union did not even name itsrepresentatives to the councils

Senior managers expected workstations and shop councils to enhance

productivity and contribute to trust relations without themselves making

any contribution to the process

Issues in the NewExperiment (contd.)

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Thank youThank you