PEOPLE MANAGEMENT FIASCO

IN

HONDA MOTORCYCLES AND

SCOOTERS INDIA LTD

PREPARED BY:

UNNI KRISHNAN

BIDISHA SARMA

RUTVIZ DHANANI

SAHIL JAIN

MANAS RANJAN TRIPATHY

ARUN VERMA

Honda Motorcycles and Scooters

India ltd.

Honda is World’s largest manufacturer of Motorcycles.

Headquartered in Minato, Tokyo, Japan.

HMSI is established in 20th October 1999 in Manesar

(Haryana).

HMSI is a wholly owned subsidiary of HMCL Japan.

Total 3000 employees : Out of that 2000 in worker category:

(1300 confirmed workers, 700 contract workers)

Apart from this 700 were Trainees & 300 were apprentices.

HR Policies:

HMSI followed the same policies as HMCL.

• Two fundamental beliefs:

• Respect for individual differences- initiative, equality & trust

• The Three joys – joy of buying, joy of selling , joy of manufacturing.

Association promoted among all employees through similar uniforms and same canteen facilities for all.

Mainly focused on developing individual’s capacity to think, to reason, and to dream.

Joy of Creating was also an important value for the company.

Providing work environment free from discrimination, indiscipline and violence.

HR Policies:Appraisal was performed by the section head and the shift in charge.

Workers were divided into five categories with increments ranging

from 400 to 1400 per month.

Opportunities for workers ranged from workers to sub-leaders to

assistant executives to executives.

No one covered by Payment of Bonus Act, 1961 & most of employees

were not covered by Employees state insurance act because of high

salaries:

• Company gave an ex gratia of one month’s gross pay as incentive

around Diwali

No scope for workers’ expression through any letter to the editor.

Issues Created in HMSI:

The first labor unrest voiced in November 2004 regarding the

Diwali gifts.

Movement Sheet for Washroom Breaks.

Managers showed partiality in matters related to job posting.

Strict attitude of the Japanese vice president.

Too much of workload in the form of handling multiple

machine at the same time.

Strict in granting leaves.

Reasons for Unrest:

The company failed to understand the needs and demands of

the employees.

Workers viewed Management activity as coercive and

repressive.

HR policies adopted by the company was not in the context of

Indian work environment.

Top management were inaccessible to workers.

Hindrance by management towards formation of employee

union.

Role of external parties in escalating the situation.

Case Timeline:

Nov

2004

Dec

2004

Jan

2005

Feb

2005Mar

2005

Apr

2005

May

2005

June

2005July

2005

Aug

2005

Nov’04- Diwali

Gift Issue

Apr 1 :

Compensation

Package

offered;

No Union

Formation

Apr - May :

Efforts for

forming Union;

Gherao of

Mgmt;

Go-Slow

May 26 :

Conciliation –

DLC

Intervention

Dec’04 –

Mar’05: Seeds

of

Unionisation

June – July :

6 Conciliation

Meetings

July 19 :

DLC sends the

Conciliation

Report

July 25 :

Brute

treatment of

the Honda

Workmen after

clash with

police

July 27 :

Enquiry

ordered by

Haryana CM

July 30 :

Truce

arbitrated by

Haryana CM

Aug 1 :

Back to Work

March 2005:

Workers came

out with 50

demands

Consequences:

Slowdown of work

Output was affected

Widespread discontent among the workers.

Workers demanded creation of union.

Employees gheraoed the management resulting in violence.

Shutting down of production.

The incident of 25th July 2005- workers got beaten up by the

police.

After-Effects:

Registration of employee union

Change in management attitude felt by union leaders; concessions allowed on various fronts

Freedom of not working on shop floor for union leaders to take care of pending IR issues

A small room allotted to union leaders with a promise of a union office in future

Invitation to all 7 union office-bearers to discuss workers-related problems or issues

Overtime working issues: lure of extra money; medical problems, workers not fresh

Overtime working was scraped in most cases.

After-Effects:

Diwali gift: Rs. 2000 & credit in bank account of Rs. 4000 as

incentive bonus for all including managerial staff

Foundation day was again extended to family members

On Sep 9th, 2005 'A shift' in assembly achieved its target of

1000 scooters for the first time after union formation.

VP- Manufacturing, GM- Productions came to shop floor &

commended achievement of workers; sweet distributed to all

workers next day.

Conclusions• HR Plan should be made keeping in mind the

mentality and culture of the people

• There should be proper implementation of HR Plan

without favoritism

• There should be proper appraisals given to the

employees

• Third party intervention could have been avoided by

both Management & Employees.