TATA: an icon of industrial harmony

The Indian conglomerate Tata has set a record of 77 years of industrial harmony as none of its 87
concerns faced any strike since 1928.
The group’s various welfare programmes for the workers and employees refrained them from calling
strike or work stoppage programmes even during the turbulent period of socialistic movement throughout
India, Tata officials told visiting Bangladesh Journalists recently.
They said Tata Steel first introduced an eight-hour working hour in a day in the first quarter of the last
century, much earlier than the western countries adopted it.

It was the Tata workers union who also foiled government’s attempts to nationalize the industries during
50’s, when the coalmines in India were nationalized except Tata coalmine at West Bokaro.
The last strike in 1928 continued for around five months and nationalist leader Netaji Subhas Chandra
Bose was the chief negotiator for resolving the dispute. He was the president of Tata workers union then.
The strike was called off following an agreement singed between the company management and the
workers union. A powerful three-tier consultation committee was formed and it was decided that all the
workers -related disputes would be resolved through discussion at the committee meetings.

The company has been following this agreement strictly for the last 77 years saving the conglomerate
from Labour unrest and production disruption. The consultations committees at every level hold regular
meetings for resolving any disputes.
“A positive attitude towards the workers is the main reason behind the industrial harmony in the group,”-
said RBB Singh, president of Tata workers union. Although there are four workers unions in the group,
Singh represents the support of 98 percent workers.
The managing director of the group and the president of the workers union alternatively head the highest
tier of the consultation committee for one year.

Besides many other facilities such as free housing, healthcare and various allowances, a worker gets
handsome amount every year as profit bonus. Last year, the average amount of profit sharing bonus was
Rs 19000. A Worker even got Rs 61000 in profit sharing bonus for a single year, Sing told the journalists.
The minimum salary of an unskilled worker is Rs 6500 per month. They also get Rs 700 to 1000 as
transport allowance per month.

The company bears the treatment cost of an employee, his or her spouse, children, parents and
grandparents. The 1000-bed main hospital at Jamshedpur run by Tata provides all types of treatment
except cardiac operation and kidney transplantation, said Dr. Monoj Prosad, head of Tata main hospital.
He told the reporters that Tata spends around Rs 45 crore annually only to run this hospital. Treatment as
well as medicine is completely free here for Tata workers and their relatives, he said.
According to the company regulations, if a worker dies while on duty, the family will get
Four lack rupees in compensation and his or her son or daughter will get a job in the group. If the
son/daughter is not aged enough for the job or not interested in the work, he will get the basic salary of
his parent for 40 years. The group has over 2.20 lakh workforce in its 87 concerns covering sectors like
steel, cement, motors, tea, chemicals, coal mines, information technology and services.

Source: Rafiq Hasan, back from Jamshedpur, Published in the daily Star-17-10-2005

1. Fostering a Positive Worker Attitude:

The statement highlighting worker attitude as the main reason resonates deeply. Strong
relationships built on trust, respect, and open communication form the bedrock of industrial
harmony. Effective HR practices likely play a pivotal role in cultivating this positive mindset
through:
 Transparency and Communication: Regular dialogues, transparent decision-
making, and clear grievance redressal mechanisms foster trust and understanding.
 Employee Engagement: Initiatives that encourage participation, feedback, and a sense
of ownership can generate positive employee sentiment.
 Recognition and Appreciation: Recognizing individual and team contributions
enhances motivation and reinforces desired behaviors.
2. The Power of Consultation Committees:
The three-tier committee structure serves as a powerful tool for conflict resolution and
collaborative problem-solving. While its effectiveness might vary depending on organizational
size and culture, some key considerations emerge:
 Measurability: Smaller organizations can adapt the concept with fewer tiers or simpler
structures.
 Cultural Fit: Adapting the committee structure to align with existing communication
styles and cultural norms is crucial.
 Functional Benefits: Trained facilitators can ensure balanced discussions, active
participation, and clear outcomes.
3. Supporting Workers Beyond Employment:
The policy offering financial support and job opportunities to bereaved families showcases a
commendable level of employee care. However, considering potential ethical and financial
implications is crucial:
Arguments in favor of the policy:
 Financial security: The generous compensation and guaranteed job offer provide
immediate financial security and long-term support to the bereaved family, mitigating the
economic hardship arising from the loss of a breadwinner.
 Employee well-being: The knowledge of this policy could potentially boost employee
morale and sense of security, knowing their families are cared for in unforeseen
circumstances.
 Loyalty and retention: This policy could foster a sense of loyalty and commitment
among employees, recognizing their dedication and potentially lowering turnover rates.
 Social responsibility: It demonstrates the company's commitment to the well-being of its
employees beyond their professional role, fulfilling a broader social responsibility.
Arguments against the policy:
 Financial sustainability: The long-term costs of such a policy can be
significant, requiring careful financial planning and potential impact on other employee
benefits.
 Dependency and ethical concerns: Guaranteeing employment to family
members, regardless of qualifications and market demand, might create dependency and
raise ethical questions about nepotism and fairness.
 Moral hazard: The high compensation could inadvertently create a moral
hazard, potentially lowering safety standards as employees might engage in riskier
behavior.
 Limited applicability: Restricting the benefit to deaths on duty excludes other
unfortunate losses faced by employees, potentially creating a sense of unfairness.
4. Quantifying the Impact of Fringe Benefits:
The diverse fringe benefits offered by Tata Group go beyond basic compensation, impacting
employee well-being and potentially influencing performance. However, the extent of this
impact requires deeper analysis:
 Measuring Performance: Linking specific benefits to metrics like
productivity, engagement, and turnover can provide valuable insights into their
effectiveness.
 Tailoring Benefits: Aligning benefits with evolving employee needs and preferences can
maximize their impact.
 Equity and Accessibility: Ensuring equal access to benefits for all employee groups is
crucial for fairness and inclusivity.
 Increased motivation and morale: Comprehensive benefits can lead to higher
satisfaction, loyalty, and a sense of well-being, potentially translating into improved
performance.
 Reduced stress and absenteeism: Addressing financial concerns and healthcare needs
can minimize stress and absenteeism, leading to higher productivity and efficiency.
 Attracting and retaining talent: Competitive benefits packages can attract and retain
high-performing individuals, strengthening the workforce.
 Improved employer branding: Positive employee experiences can create a strong
employer brand, attracting top talent and enhancing competitiveness.

Fringe benefits offered by Tata Group:

Free housing: Eliminates housing-related costs and expenses, improving financial
stability and well-being.
Healthcare: Coverage for employees and families offers peace of mind and reduces
financial burden in case of medical needs.
Profit-sharing bonus: Provides a sense of ownership and incentivizes performance,
potentially boosting motivation and productivity.
Minimum wage and transport allowance: Ensures adequate compensation and caters to
transportation needs, contributing to basic needs fulfillment.
Death-in-duty compensation and job opportunities: Offers financial security and
employment for families, fostering loyalty and potentially reducing turnover.
Additional benefits: These might include pension plans, educational opportunities, and
recreational facilities, further enhancing employee well-being and engagement.

5. My impressions of the HR practices at Tata Group are largely positive, but it's important to
approach them with a nuanced perspective:

Strengths:
 Focus on employee well-being: The extensive welfare programs, including profit
sharing, healthcare, and family support, indicate a commitment to employee well-being
beyond basic compensation.
 Collaborative conflict resolution: The three-tier consultation committee fosters open
communication and empowers workers to participate in problem-solving.
 Progressive labor practices: Early adoption of an eight-hour workday and worker
representation in leadership positions demonstrates progressive thinking.
 Respectful labor relations: The long-standing record of no strikes suggests a healthy
relationship between management and workers.