Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers /
Union Leaders, following a period of strike / Go slow / Murders (1979 -
1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open /
honest communication led to a remarkable atmosphere of trust between
Workers and Management, which, in turn, increased productivity at 3% per year
(ave).
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8 Nov 1983
To:
Dear Shri,
MANAGEMENT'S
CHARTER OF DEMAND
I take this
opportunity of wishing you personally, the Bharatiya Kamgar Sena and workmen of
L&T Group of companies, a Happy and Prosperous New Year (Vikram Samvat
2040).
I am sure
you will recall my letter of January 25, 1983.
In that
letter I had expressed the hope that the negotiations on the Charter of Demands
would be concluded amicably to the benefit of both employees and the Company. I
had pointed out that the Agreement,
while improving the quality of life of the Company's employees by
increasing their remuneration, benefit?
and facilities, should also improve the financial and business health of the
Company.
Every new
Agreement imposes an additional financial burden on the Company and adds
directly to the cost of the Company's products and services. The company has,
till date, prospered despite these increasing costs, largely due to technological
innovations, good strategic planning, rational financial management, and
correct make/buy decisions. Unfortunately, increased productivity, particularly
labour productivity, has not been a factor in helping the Company to prosper.
In the 1979
Settlement, the Union had agreed to raise the levels of labour productivity.
However, this clause has remained largely unimplemented despite the best
efforts of Management. Labour productivity levels since 1979, have remained
dismally stagnant at Powai. The enclosed charts show productivity levels for
some Units in Powai. It is not difficult to see, that in almost all cases, the
productivity levels over this 4-year period, are far below the levels agreed to
in the 1979 Settlement and unfortunately show no appreciable upward trend.
Before expecting any additional emoluments through a new wage agreement, it is
only fair that the employees deliver what the Union promised on their behalf in
1979, in return for the enhanced wages granted to them then.
The Indian
economy today is plagued by recession. The competitive pressures in a number of
the company's product-lines has always been high. Today, with the shrinking
market, these are even more acute. We are being forced out of some
product-lines and are losing ground in others because of non-competitive
prices.
The
Management now considers it vital that the financial cost of the new Settlement
is neutralised through labour productivity improvements. The organisation can
thrive only if employees agree to contribute something more for the additional
emoluments / benefits they receive through a new wage agreement, and the bulk
of these additional emoluments should be paid only after the company has
realised the benefits of increased productivity. A company can go on absorbing
higher costs without increased productivity only at the expense of its
financial health. Therefore, it is essential that the Union accepts the
principle that the financial burden of the new Settlement be neutralised"
through labour productivity as the sole and just basis for all negotiations on
the Charter of Demands.
In my letter
of January 25, 1983, I had requested you to give a call to all employees of
L&T to immediately participate in a drive to increase productivity at least
to the level which was agreed to in the 1979 Agreement. I once more urge you,
in the interest of this Company, to make this call to the employees.
Increased
efforts on the part of the workmen is only one way of improving productivity.
The Management is also seeking in these negotiations that productivity be
increased through-
i.
use of
better machines, equipment and methods;
ii.
enlarging
jobs by adding duties, combining trades, increasing skill versatility and job
flexibility.
iii.
eliminating
wasteful practices, such as reporting late for duty, leaving the workplace
early, tardy resumption of work after breaks, frequent visits to dispensery,
Credit Society, Labour Department, etc., during working hours.
Our
classification proposals and the 'Management Requirements' submitted to you,
are aimed at achieving these objectives.
I urge you
and your team of Unit leaders to accept these proposals and cooperate with the
Management in implementing them.
I thank you
for the constructive role the Bharatiya Kamgar Sena has always played towards
the Company and its employees, and I am hopeful of receiving your cooperation
on this occasion also.
I close with
warm regards and best wishes.
Yours
sincerely,
H.C. PAREKH