Flaxo Exports : Managing People in a Small- to Medium Sized Enterprise

Local Business Environment

y 1500 Units out of which 200 were SMEs and 1300 units y y y y y y

were small 1,25,000 employees Annual T/O INR 150 billion Labour intensive industry (30-40% of total cost) Large number of migrant population(mostly from lower social economic class or schedule class) Culturally diversive workforce and industrial harmony Distinctive feature Product was unique to Panipat

Flaxo Background
y Started in 1982 Anil Sharma y Father - Son run SME y 100% Export oriented handloom SME y Top 5 - Panipat Handloom Industry y 1 Head office and 2 Factories y 488 employees y Piece rate system

People Management System Current Scene

y No HR department ; No HR practices y No performance appraisal y No retirement system y No appointment letter to any labourer y No gratuity y No system for handling employee issues y No rules of conduct for disciplining

Management Style
ANIL - Founder
y Gentle and kind person y Focus on :  Customer satisfaction,  Respect for time  Creating a community feeling for all employees y Non abusive behaviour ; No usage of

Abhishek - Partner

y Aggressive personality y Focus on :

   

foul language needs

y Personal attention to employees y Appreciation for good work done

Flaxo - Brand New product line Inclusion in India ranking Incorporating changes in present systems, processes & people minsets

publicly

y Reprimanding done in isolation y Direct involvement in the work of

supervision and management

Key challenges: Employees Issues

y Bringing a change in the attitude & mindset y Finding ways to avoid unionisation (50 workers were already members in 2007) y False image of bonded labour y No tolerance to imperfection preferred y Perfection in operations y Factors for further talent search were loyalty,

professionalism, right attitude to work

Q 1 Factors to determine HR model

y Size of the organisation (Value) y Employee strength y Span of control y Projected growth of business y Talent management

Q 2 Role of Paternalistic style

Interpersonal interaction

Employee satisfaction

Increased productivity

Employee retention

Open encouragement Closed reprimanding Leads to Increased Effectiveness of Organisation

Q 3 Adoption of western techniques ?

y No, western people management techniques should

not be adopted except for in certain exceptional situations like:

  

To retain employees Incase of abusive behaviour Implementation of Labour laws Gratuity, Performance appraisal Industrial disputes Act

Q 4 Approach & Restructuring People management systems

Approach
y Continue to impart values of

Restructuring
y HR dept with HR manager. y Retirement benefits y Performance Appraisals and

the caring style followed by Anil.

y Risk of loss of Personal Touch

with the growth in business, but the solution is to hire people oriented managers.
y Continue with the Piece-rate

bonus packages.
y Gratuity y Issues or Mindsets.

system.