A case of an IR Approach

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The organization was a large-scale automobile manufacturing unit which was located in the
Southern part of India. The plant management team was constantly involved in various research
studies as an effort taken towards capacity augmentation to increase productivity. In one of its
plants, the team from the "Industrial Engineering Department" with the help of "Facility and
Process Planning" and "Production and Quality departments" conducted a study to revise the
machine capacity. The objective of the study was to explore the possibility of enhancing the
production of cam shaft per shift. During the study period, workmen were meeting a
productivity target of 60 units per shift. However, when the team completed the study, it
identified that a revised process, which on implementation, would result in an increase of
productivity to 80 units per shift. The study team forecasted that a minimum of 30%
productivity can be increased on implementation of the proposed revision. It further stated that
productivity can be achieved without any addition to the existing infrastructure and manpower.
The study also revealed that the revision will totally eliminate manual loading of components.
In addition to above, the study stated that proposed change will result in eliminating workmen’s
fatigue.

The study concluded revision not only to increase the machine capacity but also increase in
human productivity. However, it was obvious that the proposed revision cannot be
implemented without line workmen’s agreement to produce as per the revised norms.

In that plant, whenever any new machine tools or new technology were introduced, it was
observed that workmen had a practice to display resistance to accept any revised production
target. However, in the context of the above study, the plant management team started their
ground work by meeting workmen to discuss the findings. The team explained to them the
importance of the proposed change and its positive impact on productivity. As a result of these
efforts, the union and workmen agreed for a minimum of 30% productivity increase in all other
areas of production and were willing to sign the wage – cum – productivity agreement.

When the plant management were happy to find the workers agreeing with revision;
unexpectedly, a small group of about 80 workmen out of 1200 displayed resistance in not

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complying with the requirements. They felt that they managed a critical component in the
production line and that they had already been working at a higher rate of productivity.
Consequently, those workers did not yield to any discussion and refused to sign the revised
productivity norms with the negotiating team. The settlement was inordinately delayed because
of this small group’s resistance. The resistance eventually manifested into a strike which
influenced the remaining majority, who also joined the strikers. The strike lasted for a little
more than two months.

The workmen refused to get back to work even after repeated appeals from the management
during these two months. Due to the strike, the company faced a huge financial loss in the
quarter. The company usually reported huge profits during this period each year as it was a
festive season. However the management did not bow down to the pressure and maintained its
stand about revised productivity norms.

During that period, the management handled the issue patiently and took a decision to
demonstrate the revised productivity norms to the trade union and the line representatives of
the resisting employees. The plant management introduced young engineers into the production
line to apply the revised productivity norms in manufacturing camshaft. These graduates were
fresh out of college and were comparably less skilled as compared to the workmen who had
worked for over 15-20 years. The engineers proved that the recommended change process can
enhance the machine capacity and result in an increase in human productivity too. The entire
intervention was done in an objective and transparent manner to prove to the resisting workers
that revision benefits the organization as well as workmen involved.

More importantly, the intervention was found to be effective, as it was handled by identifying
and engaging various stakeholders. The plant management engaged the families of workmen
and the local community to weaken the resistance. The action taken by the plant management
enabled to build authenticity and created a scenario which facilitated the stakeholders to
understand the reality. It helped to gain their support towards the plant management itself.

Finally, the strike was called off, the resisting workmen accepted the productivity increase as
recommended by the management and a settlement was signed with the Union for enhanced
productivity and increased wages.

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Discussion questions:
i) What is your view about the IR approach and engagement in this case study? How will you
go about to solve this issue?

ii) Post settlement repercussions of the move and how you will contain that?

iii) Should the company have alone handled it or should the government be involved in the
issue? How would that help?