2. Maintaining good industrial relations have always been a problem for Bata. Why?

How
do you think Bata can maintain sound industrial relation practices?
Ans:
Bata has not been able to maintain good industrial relations practices for the following reasons:
Employees always felt that the management was consistently ignoring new recruitment,
downsizing its workforce, and rendering more workers jobless.
a) Phasing out the welfare schemes by the management.
b) Management was highly suspicious of workers and their intentions. Assault on Weston
added fuel to the fire. Management became more severe with the workers. Bata
management had taken a tough stand by dismissing erring employees in the assault case
against the chief welfare officer in 1996 and against Weston in 1998. On the other hand,
trade unions were demanding reinstatement of these employees thus creating a deadlock
between the management and the unions.
In order to maintain good industrial relation practices, Bata can take the following steps:
a) Make efforts to maintain good industrial relations by introducing a participative style of
management.
b) Strengthen its grievance settlement mechanism (machinery).
c) Maintain good relations with local government and send signals that govt. intervention is
all right but not party2 intervention.
d) Collective bargaining (a process through which employee issues are settled through
mutual discussions and negotiations) should be practiced.
4. In 1999, the Bata management in a bid to further cut costs, announced phasing out
several
welfare schemes at its Batanagar unit. Do you think it right to phase out welfare schemes to
cut costs? Give reasons for your answer.
Ans:
Welfare schemes are meant to achieve organizational, employee and societal objectives:
a) Organization provides certain welfare schemes to its workers in order to support
recruitment and to retain workers in the organization.
b) They are aimed at discouraging labor unrest and reducing the level of employee turnover
in an organization.
c) Employees expect sharing of benefits that come from productivity as they produce
products at a lower cost and are conveniently available.
d) Life insurance, health-care, disability and retirement schemes, and the like reduce the
burden on the society and provide security to the employees against social risks.
Phasing out of welfare schemes is not a right step taken by Bata. This would further worsen the
relationship with its employees. Rather than phasing out all the welfare schemes, Bata can follow
the “cafeteria approach” in providing benefits to its employees. This approach lets the employees
choose benefits from a variety of benefits made available to them. Each employee chooses the
benefits that he or she prefers. Factors such as an employee’s age, financial and family position,
attitudes and lifestyle influence choice of employee benefits. Younger employees favor benefits
like vacations, holidays, flexible working hours while older employees may prefer life insurance
and retirement related benefits. Another step, which Bata can take, is to link all its welfare
schemes with productivity. This will motivate employees to improve productivity and hence both
the organization as well as the employee will reap the benefit.