Retrenchment - Do's & Dont's using a Sample Transcript...

Scenario 1

Narrator: Now we will see the interaction between the HR manager Mr. Ritesh Sharan and the worker Mr. Shivshankar.

HR: Shiv!

Worker: Ji…

HR: Sit… Sit

Worker: The company has actually decided ki, all this manual process has to be done away with. Aaj kal market mein, iska koi value nahin hai. So the company has said that we will do total automation.

Worker: Hamara Kaam saab??

HR: See… I tried my level best to save all your jobs. But I was able to save only 100 jobs. 50 jobs are now going to be redundant.

Worker: Aap bol rahe ho ki hamara kaam chale jayegi?

HR: Listen to me first. Unfortunately looking at your old age, you are going to be one of the persons who have to go.

Worker: Ji… Mera beti hai ji… Marriage karvana hai uska.

HR: Company policy hai bhai. Hum kuch nahin kar saktha.

Worker: Yeh umar mein mein kya karoon.

HR: Thoda paisa dhenge thumko. Thu kuch kar le na us se. Problem kya hai usme.

Worker: Log mujhe kya kahenge…

HR: Mein kya karoon. Try kiya meine… 100 naukri bacha liya meine.

Worker: Ji... Mein apka pair pakadke pooch raha hoon

HR: Mera pair pakadke kya phaidha hai. Kuch kar nahin sakthe abhi. Abhi mujhe upar se thumare pass bol ne keliye bola, meine bol dhiya katham baath.

Worker: Hum bhooka bhaitenge ji... Yeh kya kar rahe ho aap.

Narrator: This scenario shows how retrenchment should not be done.

Scenario 2

HR: Hello Mr. Shiv

Worker: Hello Sir

HR: How are you?

Worker: Haan. I am fine.

HR: Please sit down.

Worker: No, its ok sir

HR: No no. I request you.

HR: See… I have something bad to tell you. I don’t have words to say this, but…. The company has finally decided, and you must have also known about this ki…. We are finally getting automated machinery into the company. And because of that, currently only 100 people are required.

Worker: Sir…

HR: Listen, Listen… I tried to save the jobs of everybody, but I have to do something about this as the machinery is also very costly. But I will make sure that no hurt comes to you.

Worker: Sir… Meri beti hai sir, shadi karne keliye. Mein kya karoon sir. Hamare pet mein kyun lath mar rahe ho sir aap. Mera family kya karega sir. Mein bhuka bhaitoon kya?

HR: Please sit down. I am not saying that this is not going to hurt you. But, jitna thumhe bura lag raha hai utna mujhe bhi bura lag raha hai. But I will promise you this much that the organization will do everything in its power to keep you well forever. Mathlab financially hum thume secure kar dhenge. Relax… Relax.

Worker: Mera family mar jayega. Kahan Jayenge hum. Ky Karenge. Humare baare mein soj lijeye sir.

HR: I will finally tell you now... see what we have decided that we are going to do is that, we will make sure that financially aap secure ho jayenge. There is not going to be a severance of relationship between you and us. You might not come to work, but you are always going to be there. You are a part of the organization. We will make sure that you get a good severance package. Agar aap kahin aur kaam karma chaahthe the… then we can give a few references for you. You can actually go to these places and if they have a requirement they will definitely take you. Because they know that you are a capable worker. We will not shirk our responsibility. We will definitely give you a reference, agar aap kaam karma chaahthe the tho. If you want to start something new, we will give you a short term loan so that if you want to start a shop or if you want to go back to your village and do farming. You must understand that the organization is doing everything in its power to help you. You also have to show strength now and fight it out. We will be there with you side by side. Aap shop start kar sakthe hai, farming kar sakthe hai ya kisi aur company mein jaake kaam kar sakthe hai and we will make sure that financial problems will not be there with a good severance package. Aapko training bhi dhe dhethein.

Worker: I can understand that, the organization also does not need so many people now. Some people have to go. Lekin humko madhath chahiye. Hum akele isko face nahin kar paenge.

HR: Mein aapko pura madhath karoonga. Aapka bread winner ki status bhi rahega. Aap apna dhukhan shuru kijiye mein aapko help karoonga. Aap apna sar ooncha kar ke ji sakthe hai.

Worker: Theek hai sir. Theek hai.

HR: You will always be in our hearts. We know that you have worked very long and very hard in this organization. And we will make sure that you always get the benefits of the organization.

Worker: Thank you sir.

Narrator: This scenario shows how retrenchment might be done.

Organizational Culture, Sexual Harassment, Performance Appraisal & Top Management...

Organizational Culture has to be emphasized by the Top Management

Work ethics which includes sexual harassment practices encompass a set of behavioral norms expected from all employees in an organisation. It is also the embodiment of the core values on which the organisation has evolved. What is needed is to make work ethics an integral part of the culture and core values in an organisation.

It is necessary for the top level to set the precedent. If the top brass falters, it reflects on the morale of the employees. The top management largely contributes to the work ethics of an organisation. They are the trendsetters and guide the organisation in times of crisis. If the ‘saviours’ or the leaders of the organisation by any means become the destroyers of its own practices and indulges in these activities, then the situation becomes magnified. Work ethics are drawn from core values. When you say you are going to be honest, it has to extend to your employees, your vendors and your customers. Everyone in the company must know it and practice it. And an example has to be created from the top.

A single mistake by the top management can have a disastrous impact on the morale of the employees. It casts aspersions on the top management of the company. The employees feel bad when someone from the senior or top management is involved in these incidences. They start asking themselves what type of company are they working for and whether it is the right place for them to stay? This, in turn, has a considerable impact on their productivity, commitment and also the retention of employees. Also if the company is preaching something but the top management is doing just the opposite, no employee will take the rules and guidelines seriously and the work ethics of the company would be severely compromised. It is critical that the senior management set the highest standards of integrity, honesty, transparency and respect for the individual.

Appraisal Procedure has to more transparent

The appraisal system should be such that it is not unfair to the employee and should not be a weapon in the hands of the appraiser such that it is only based on his whims and fancies. A better approach would be to involve a larger number of people in the process or to take into account a larger time frame when conducting appraisals so that it becomes impartial. Some of the things that can be done here are:

1. 180, 270 or 360 degree appraisal programs so that the appraisal is not in the hands of a single person.

2. The organization looks at the performance of the employee over the last 3 yrs preceding the appraisal and if the employee has not been for so long then the total time frame is taken into account.

3. If an employee is not satisfied with the appraisal given then there should be grievance resolution mechanisms to sort out the concerns.

4. The appraiser can be asked to list out specific details of performance appraisal with examples relating to why such a rating was given.

Only when such steps are implemented to safeguard employees against the vindictive agenda of the superiors will the performance appraisal become a meaningful tool in the hands of the employer to ensure productivity and commitment from the employees.

What drives businesses to adopt Corporate Social Responsibility (CSR)? Does it really matter what the secret agenda (of the firms involved in CSR) is?

Let’s first have a look at what the various definitions of CSR are in the context in which we are talking about it. These are the two definitions I would refer to in this paper.

1. Corporate social responsibility(CSR) is an expression used to describe what some see as a company’s obligation to be sensitive to the needs of all of the stakeholders in its business operations. A company’s stakeholders are all those who are influenced by, or can influence, a company’s decisions and actions. These can include employees, customers, suppliers, community organizations, subsidiaries and affiliates, joint venture partners, local neighborhoods, investors, and shareholders

2. CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner acceptable in civilized societies. Social includes economic responsibility. Stakeholders exist both within a firm and outside. The natural environment is a stakeholder. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for peoples both within and outside the corporation.

What is the first thing that strikes us here? In both these definitions we are looking at stakeholders. Not any particular stakeholder. Both these and numerous other definitions focus on the entire gamut of stakeholders in the entire environment. Now the important question here is how a company does decide which stakeholder has to be given the maximum value. Or is it that all stakeholders will be given equal importance. And if only some are being given critical importance what happens to the CSR philosophy. Does it become defunct for the organization or it still stands on its nimble feet. We will have a look at some answers as we go along.

Now let’s look at the question of why the companies are even talking of adopting CSR if they already have not yet. Some firms believe in CSR. And they have doing so even before the terms were coined. When we look at what the Tata’s have done in the city of Jamshedpur we can very well appreciate the fact that for some firms this entire discussion about CSR is utterly useless. They just do not how firms can ignore CSR. It is in their blood and they really do not know how to work without this. Hats off to them first.

Then there are some Companies that are making profits and also contribute to some, although obviously not all, aspects of social development. They believe that surely every company should not be expected to be involved in every aspect of social development. That would be ludicrous and unnecessarily restrictive. They believe that for a firm to be involved in some aspects; will make its products and services more attractive to consumers as a whole, therefore making the company more profitable. There will be increased costs to implement CSR, but the benefits are likely to far outweigh the costs.

Then there are the third types of companies which do not care and which do not intend to care about CSR. We are not really concerned about these kinds of companies since we know from very live and vivid examples of Enron, Tyco and WorldCom about how companies just disappear from the horizons when they do not do what is required of them. Let’s wish them the best of luck and continue.

We are interested in the second category of companies and to a lesser extent the first ones because they are into CSR and we want to know what makes them do what they are doing.

Some critics of CSR, such as the economist Milton Friedman, argue that a corporation's principal purpose is to maximize returns to its shareholders, while obeying the laws of the countries within which it works. Others argue that the only reason corporations put in place social projects is utilitarian; that they see a commercial benefit in raising their reputation with the public or with government. The key challenge here is the rule of corporate law3 that says that the organization should not do anything that decreases its profits. Because of this, it has become clear that a CSR activity generally can only be effective at achieving social or environmental outcomes to the extent that it maximizes profits. This requires that the resources applied to CSR activities must have a higher return than those resources could obtain if applied anywhere else. This means that the possible scope of CSR is drastically narrowed.

This means that the stakeholders are primarily shareholders and the employees and to a certain extent the market and the rest have to deal with the remaining few scraps. But is this a problem? Definitely not. When we look at the various advantages accrued by the initiatives to the organization and to the stakeholders we see that it is definitely a win-win situation, even if the firm gains more than the others. When we take the example of ITC e-Choupal and look at the advantages it has given to the Indian farmers, we can really overlook the issue that in essence ITC is only trying to gain the suppliers market and strengthen its own distribution network for getting raw materials smoothly. Proponents of pure CSR might argue that the purpose behind the initiative should be development and not profit. But I would argue that it is better that the companies are doing something and getting returns in exchange while making a important contribution than just keeping to their own and just sticking to the laws of the land while doing business.They are the ones with the best of talent at their disposal which can be used effectively for such purposes and if they are making profits in a socially responsible manner they should be lauded and made examples of. Let’s be happy that at least there is something that is making these firms do the work they are doing here.

Tata’s are a dream but these companies are also not exactly nightmares. Let’s at least support them in their endeavors.

Warren Buffet's Comment on Ethical Values & Organizational Reputation

Copying this from a Yahoo Report on Warren Buffet (Link) as i feel this story and following comments needs to be remembered by all working men and women, particularly in light of what is happening today in the financial world with Wall Street under the scanner for starting the financial crisis in 2008:

In 1987, Berkshire bought $700 million of convertible preferred stock in Salomon Inc. Four years later, Buffett became interim chairman to restore order after a Treasury auction bidding scandal. On Sept. 4, 1991, Buffett testified before a subcommittee of the House Committee on Energy and Commerce about Salomon. Excerpts got into a movie created by Buffett's daughter Susie and shown to Berkshire shareholders at each annual meeting.

In part, Buffett said the following:

"In the end, the spirit about compliance is as important, or more so, than words about compliance. I want the right words and I want the full range of internal controls. But I also have asked every Salomon employee to be his or her own compliance officer.

"After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper, to be read by their spouses, children and friends, with the reporting done by an informed and critical reporter.

"If they follow this test, they need not fear my other message to them: Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless."

Lets remember the great man's words for our own good...

The most important issue for Business Leaders in India today...Look at the 'Not-So-Shining' India

The core issue in any Developing or Undeveloped nation is sustainable and inclusive development. The same is the case with India today. With a population of 1.2 Billion individuals, and an economy which is growing at an annual rate of 8% and more, we have set the stage for a very prosperous India in the coming decades. However, something that has been missing has been the equality of this growth across all sections of the society. There are suddenly 2 very different Indias today; a prosperous one with 400 middle class people and a very poor one with 400 million who do not have the access to most goods and services. The latter is the India that needs to be targeted by the business leaders of the country today.

It is not as if this is something radical that is being proposed. Progressive leaders have looked at this population and made profitable models to target them. We have awe inspiring organizations like ITC which has started its ‘E-Choupal’ initiative for farmer’s supply chain management, Unilever which has a ‘Shakti Amma’ concept of selling products in rural areas and hospitals like Aravind Eye & Narayana Hrudayalaya which provide healthcare to all sections of the society at a fraction of the cost. These ventures have to be seen not as CSR projects but as viable business projects which bring value to both the organization and the people of India.

Concepts like the bottom of the pyramid have a place in economics. The target for all entities, be it the government or the industries, should be all levels of this pyramid. Obviously, there might be some inconsistency in the targeting but no one should be forgotten completely. Theories which were popular earlier like the trickledown effect which talked about the money flowing from the top to the bottom of the pyramid will have to be discarded or heavily modified. Else, the economic inequalities will keep becoming larger with rich becoming richer and poor becoming poorer.

Business leaders need to remember that we are a huge market that had largely been untapped till 1991 when the reforms process was initiated by the government under the World Bank guidance. The challenge is in getting the right product and at the right price to a person which makes a person’s life better in even a small way. Since such poor households are mostly in rural areas, it also helps in creating employment opportunities there and helps communities better their livelihoods, creating a cycle of positive change where rising incomes and livelihoods demand better products and hence better profits.

This is a huge opportunity for progressive business leaders and organizations today which if tapped into can lead to huge value creation for all stakeholders.

Problem: Improper usage of Contractual Staff instead of Permanent ones

Companies hire Contractual workers instead of full time employees and then pay them minimum wages while the Profits of the organizations grow rapidly. How do we rectify this?

Solutions:
• There should be a contract workers law in place in the country to safeguard against such practices.
• There should be continuous checks by law enforcement agencies to make sure that the rules are being followed in letter.
• The media should actually keep tabs on organizations which do not follow the rules or follow them only in letter and not in spirit so that the general public can know about these organizations and they can be shamed into accepting the verdicts
• Education is highly important in these matters as only if people are educated will they be able to know whether the organizations are cheating them or not

Best Solution:
Again Education is the most important issue here. If the people are educated then they will definitely know the difference between right and wrong and will be in a better position to safeguard themselves against unscrupulous practices.

Problem: Stop organizations from harming consumers

How do we stop the Selling of bad products to Consumers even though it is scientifically proven that it causes harm to the individual? Ex: Tobacco Products.

One and only One Solution
The governments of all countries should make it a commitment that such products will not be sold irrespective of the profit that the governments make as the long term monetary loss is much more. Some things have to be forced by governments to make them effective for the society.

Problem: Managing Organizations that spread Mis-information

There are problems of organizations spreading misinformation about their products to the consumers using advertising? Ex: Using a particular brand of soap can make a person a film-star etc.

Solutions:
• The government can make rules more stringent on what is to be shown as real and what cannot be shown to the general public in advertisements as they overemphasize the use of the product
• People should initiate legal action against the firms for spreading misinformation in the general public. This can also be done by the Trade bodies like CII and FICCI who can initiate action against the organizations to make sure that it does not happen
• Education of the masses necessary to make sure that they do not fall for such traps. Only if they are educated will they be able to understand the difference between utility and fantasy.

Best Solution:
Education of the masses is the key here. Only if we do that will we be able to increase the awareness of the public regarding these issues. Rest of the solutions are short term ones.