In a recent visit to Pune I learnt some interesting
details of the Bajaj Auto’s industrial relations at their plant in Pantnagar.
It accounts for 25% of production of Bajaj Auto.
Bajaj Auto established a plant at Pantnagar in 2007.
It employs about 1200 persons. There
was a strike in June 2012 as the workmen
demanded a hike of Rs 8,000 while the management proposed to increase their
wages by about Rs 1500.
Bajaj Auto signed a settlement with representatives of
workmen before the Conciliation Officer. This means it will be binding to all
workmen, present and future. [We have a copy in hand].
But the union of workmen at Pune, Vishwa Kalyan Kamgar
Sangthan has different view. It says it is practically impossible to register a
trade union in Uttarakhand, though there is no legal bar. This is attributed to
the State Government’s apathy towards unions. So the Vishwa Kalyan Kamgar Sangthan
asked what was wrong in it representing the workmen at Pantnagar. Bajaj Auto
submitted that unions registered outside State cannot represent their workers. The
matter went to the High Court. Legal Pundits feel that there is no bar to
Pantnagar employees being represented by the Vishwa Kalyan Kamgar Sangthan or the
Pune Union as the constitution of Pune union of Bajaj Auto workmen permits
This introduces a twist in the tale as the Company
would like to avoid exactly this situation! The Pune Union is also challenging
the conciliation settlement. In their eyes it is a sham settlement. There are
some very interesting [!] clauses in the settlement. It is not my intention to
cover all but one clause 'takes the cake.'
The settlement gives a ‘Performance based’ increase.
In a nutshell this works as follows:
[a] All workmen get uniform increase in allowances.
[b] But they get differing increases in Basic
salary. Those rated A will get 100% of the agreed increase, B rated will get
80% and C rated will get 50%.
Since the allowances are increased without any
differentiation, the effective rate of increase will be 100% for A rated, 90%
for B rated, and 75% for C rated workmen.
This surely raises some issues:
[a] Is it a
viable policy to keep out unions out of the negotiations room, particularly
since the fundamental right allows their legal existence?
[b] Would differentiation work in the case of auto
industry where the workers work on an assembly line?
[c] Would differentiation in wages work in the case of
workers where appraisal of performance may not be believed in? [All HR Managers
have faced innumerable issues with appraisal ratings of managers who are more
inclined to accept differentiation in compensation.]
[d] Should such a differentiation be made in Basic
wage or in Variable component?
We must remember Alfie Kohn’s words “Punishments and
rewards are not really opposites. They are two sides of the same coin, and
the coin does not buy very much. Researchers believe that you should
pay people well, and do everything to take their eyes off money! The real issue
is what kind of culture is promoted at workplace. Sometimes intentions are
laudable, but the effect can be the opposite!
A new factory allows scope for experimentation. Those
who seize it will take the organization forward. The real issue is how we build
employment relationship at our workplace. What are our beliefs and principles
on which we will build it?
See also: http://hresonance.blogspot.in/2012/03/bajaj-auto-union-first-steps-on-road.html
Labels: Bajaj Auto, Building workplace relationship, Differentiation in pay, Variable pay, Vishwa Kalyan Kamgar Sangthan