Hi Friends,
                                              Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.
                                                  There is just no time to look back, no time to wonder,"Will anyone read these pages?"
                                       With regards,
                                       Hemen Parekh
                                       27 June 2013

Friday, 28 November 1986

SUN RISES IN THE WEST (PART II )

Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

28 Nov 1986

To:
Dear Friends

SUN RISES  IN THE WEST        
(PART II )
In  Part  I  of  this  circular,  I had  mentioned  that  the European-unions  used   their  muscle-power   (of  collective bargaining   -  or  blackmailing?)  to  obtain   annual  wage increases which were higher than the inflation rate.
                 
This means there was more than 100% neutralization.

Which means, in  real terms, the purchasing power of Pound  or DeutcheMark  or Franc  or Lira  (like  our "rupee"  these  are European currencies)  actually went up as  far as the  workers were concerned.

This Fact (No.1) can be easily seen from the following graph:
 

Since L&T  is an enlightened  company, it  has been "copying" Europe sincerely  in  this matter!   If you  are  not already aware, take a look at the following graph:


In fact this  is one item  in which we are  ahead of Europe  & America:



And this is  not all :  What about the  INDIRECT labour cost? - Such as
-    Provident Fund
-    Gratuity
-    Welfare -(Transport/Medical/Canteen, etc.)
-  Leave    ? ?

In  this case  let us  compare ourselves  with the  British I After-all they ruled  over India for 150 years and  made sure that we got some of their worst habits!




And all  this time Unions  kept pressing  the managements for higher  and  higher wages  -  especially  in  the "unskilled" category;  These  "school-kids" were twisting the tail of the Unions:
And to see "how", look at the following graph:

To understand let us take the example of  L&T.


1975
1985
1. 2.
Highly-Skilled Wages Unskilled Wages
Rs. 690.00 Rs. 296.00
Rs. 2,307.00 Rs. 1,407.00

1/2 Ratio HS/Us
2.33
1.64

This  means US  Wages rose  at a  much  faster rate,  but the wages  of  HS category  rose  comparatively  slower.   So the "gap" reduced.  Will this gap someday disappear altogether?

Anyway what happened ?

The "US" workers  priced themselves out of the  market .'  No one  wanted  them  and   more  and  more  became   "unemployed (Job-less)",   In my next  circular  I will show  to you,  how the employment  situation  got worse,  due  to rapidly  rising wages.

H.C. PAREKH

Monday, 24 November 1986

I DO

Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave).

24 Nov 1986

To:
Dear Friends

                                  " I       DO "

On the  8th of this month,  the Bombay Chamber  of commerce & Industry  had  organised  a Workshop.   As  Chairman  of  the Industrial  Relations Sub-Committee  of  the  Chamber,  I was responsible  for giving  the  Workshop, a  very  intimidating title

"Industrial Relations -  The Brighter Side"     
- Success stories in Productivity        
thru' employee participation.

Three companies presented their "stories".

1.   L&T -      presented by Mr. Nakhate and myself
2.   B.A.S.F.  presented  by  Mr.D'Cunha  (Gen.Secy.of  their Union) & Mr. Shirali (Manager).
3.   Philips   presented  by  Mr.  Guha  -  Manager  -   Corp. Industrial Relations

L&T story  (almost entirely Powai  Story) was  presented with the help of about  50 slides.  In case you  wish to hear this story from me(since  it is unlikely that you will  read it in a newspaper!), do let me  know.  If I receive 15/20 requests, I would be happy to organise a presentation.

But what  I want  to  tell you  is about  the question-answer session.  There  were many questions  regarding "productivity clauses"    and    "productivity-linked"agreements.    Almost everyone present  seemed to  believe that  incorporating such "clauses" and  "formula" in the agreements  (with the Unions) was a  must.  There was no  other way of  getting improvement in productivity.   For each  worker  (or a class  of workers) the agreement must stipulate
-    What he will do
-    When he will do
-    How  he will do

Apparently  the participants felt  that the  worker behaviour must be  defined as  accurately as  possible,  In  return for wages, the  agreement should provide  what  the workers shall do.  The  contract  should enable  the supervisors  to remind the worker what precisely is expected of him.

I could not disagree more, so I said,

At a  Christian marriage,  the  girl is  asked,  "Do you  take this man as  your husband?" and  the girl says  'I do'.   Then the man is  asked "Do you take  this woman as your wife?" and the man says  'I do'.  At  that the priest  says "I pronounce you Man and Wife".
That is all !

No  need  to  affix  your  signatures  (in  the  presence  of witnesses)   to  long,   legally   worded   statement  on   a stamp-paper which reads -

WHEREBY
WHEREBY
the party of the first part (that is the wife) shall
the party of the second part (that is the husband) shall
-    maintain the house in good condition by undertaking operations such as cleaning arranging things, etc. if required by doing such lower category jobs (in the absence of the maid-servant) as dusting, mopping, washing (with or without soap)etc.
-    arrange for such income (earned or unearned) as deemed necessary and sufficient by the members of the family from time to time.
-    look-after the family by purchasing or arranging to be purchased all items of household requirements, such as vegetables, provisions, cereals, text-books for the children, mops/ dusters for the operations described in the preceding paragraphs, etc. etc.
-    manage admission in the Govt Engg. College for a son who got 65% marks in the 12th std.at second attempt.
-    in the temporary absence of the husband act (without demanding an acting allowance) in such higher category jobs as may be deemed necessary by the children, such as
-    handling cash
-    doing children's homework
-    paying electricity bills -
-    filling-in "share application forms", etc. etc.
-    act as one-man grievance-commision and give a patient hearing (with or without listening) to the grievances (real or imaginary) of the members of the family (not excluding the part-time maid-servant) and appear to be sympathising with the complainant not-withstanding the logic of the issue involved.
-    entertain guests(with or without a smiling face)

-    nurse husband's aged parents (with or without words of appreciation).
-    represent the family at all the social get-togethers which no other member of the family is willing to attend.
-    Do any of the  considered part  Job responsibility by any other member of the family whether explicitly expressed or otherwise.
-    to signify concurrence with the white-lies being dished-out by the wife to all and sundry regarding the alleged artistic accomplishment of child-prodigy daughter, not-with-stand-ing the fact that her only accomplishment is to sign the canvas painted by her art-teacher for a measly Rs.500/- p.m.
None of these:

All that the priest says,     

"I pronounce you Man and Wife".

All that is needed to make  the relationship work, - 24 hours a day, 365 days of the  year, for may be  30, 40 or 50 years! No  Contract,   nothing   in  writing   in   an  everchanging relationship.  Only one simple implied understanding.

"Together we  shall grow  and be  happy -  and for  that, the individual members 'will make all the sacrifices necessary to keep the family together.

But then I read an article by Mr. Ramaswamy

"What Managements Bargain  for?"  (Business India  - November 3 - 16, 1986).

Ramaswamy writes,

"Aggressive bargaining - particulary  by the multinationals -has  helped many  managements to  push back  labour's demands and extract impressive gains from their Unions".

I am not so sure!

May be we are not yet  ready to abolish job-classificat- ions (our own 1984 agreement  has 82 pages of it !) but it is time NOW for  the employees of  Powai ( and  their  leaders) to do some serious soul-searching and ask of themselves,

-    Of all  the things, do I  need a "book" to  tell me what is my job?

-    No matter  how honest  and dignified,  shall I  refuse a task  simply  because  it is  not  described against  my "trade" in the yellow-book?

-    Through such  refusals shall  I force the  Management to write-dwon 500 pages of Job-classification?


Through such  refusals shall  I make the  company "sick" and still myself remain healthy?

-    Today, have  I earned every  minute of  my salary/wages? or  that  I  have been  a  thief,  stealing  time  which belongs to the Company for doing any productive work?

And it  is time NOW for  the supervisors of  the employees to ask of themselves,

-    Where  have  I  failed  in my  leadership  qualities   to motivate my  sub-ordinates to do any work  given to them without bothering to look at the yellow-book?

-    How come  I don't need a  yellow-book at home  to get my wife and  children to  do things-  which they  are doing naturally?

-    Do  I presonally go  out and  help when  my subordinates need it? - even if it means dirtying my hands and clothes?

-    Do  I  genuinely believe in  "Dignity-of-Labour" or is it meant only for my subordinates?

I am  told we have, in  our country, nearly  50 labour-laws -perhaps highest anywhere  in the world.  But when it comes to the Industrial Relation  health of our country,  it seems the "Law of inverse Proportions", operates!

No wonder we have turned  our country into a paradise for the vested interests of

-    Labour Legislators
-    Labour Lawyers
-    Labour Leaders
-    Labour Managers

H.C. PAREKH

Wednesday, 19 November 1986

RESURRECTION AT GENERAL MOTORS


Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers / Union Leaders, following a period of strike / Go slow / Murders (1979 - 1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open / honest communication led to a remarkable atmosphere of trust between Workers and Management, which, in turn, increased productivity at 3% per year (ave)

19 Nov 1986

To:

Dear Colleague                

RESURRECTION AT GENERAL MOTORS

The Holy Bible  tells us that Christ returned  from the Dead. No eye-witnesses are  left but to millions of faithful around the world, the legend is true.  They believe it to be true.

Resurrection is return of the Life.

More than six  years ago (Mar.1980), I had  an opportunity to present to  a meeting of  Policy Review  Committee (PRC), our own

"Project Resurrection".

Briefly, it comprised :            

-    A lean, trim fighting force (Recruitment Freeze)

-    Getting rid of the Dead-wood

-    Inculcating a  high-degree of  discipline at all  levels of organisation

-    Bringing  back  the  dynamism  and  the  entrepreneurial spirit.

We did  introduce 'a recruitment freeze in 1981  for a period of 18  months and once  again we  have imposed a  freeze from July this year.  But  in the  intervening period, manpower at Powai did go  up substantially - mostly  in the Supervisory-cadre!

As far as     

-    Deadwood      

-    Discipline and    
 
-    Dynamism

is concerned, there  may be a lot to  learn from the enclosed article regarding General Motors (FORTUNE - 10.11.86)

"G.M. is tougher than you think".

If there  are similarities in  the situations  facing our own L&T and  G.M.  - then  these are  not mere  coincidences,  In their own countries, all relatively  large companies face the same malise of

-    paper-pushing bureaucrats

-    customer-hating technocrats

-    "Master" - minded autocrats.

So I am  not surprised that  last year G.M. announced  a plan to trim the managerial work-force by one-fourth before 1990 !

Next in line are 1,30,000 white-collar workers.

And when  it comes  to shedding excess  fat, G.M.  is in good company - with the  United Nations (U.N.) - which is planning to make  a 15% reduction  in its  staff of  11,423 and reduce the number of assistant and  under-secretary generals from 80 to 60!

Nearer  home, Gujarat  Govt. nationalised  12  "sick" textile mills - and promptly  decided to let 6 of these die a natural death  ! Of the 21,000 workers rendered  surplus, 11,000  got jobs  in  the  "surviving"  6  mills  and  10,000  opted   for "Voluntary Retirement".   Not to  be left out.  Central Govt. has dispensed  with 36,521  workers (till Sept.  1986) of  the N.T.C.  (out of  2,30,000) under  the "labour  rationalization scheme" in 120-odd textile mills.

But the lesson that G.M.  is learning - the hard way, perhaps - is  that "surviving" is not  enough ! A company  has got to revive - get resurrected.

In the  20th century  however, 'must a company wait  till its competitors  hang  it from  the  cross  before it  thinks  of "resurrecting" itself ?

And if  there are. any happy-go-lucky complacent amongst  us, I  request  them  to  study  the  following  picture   of  our slackening productivity-drive :


Hemen Parekh