INDIAN- METHOD

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).

15 Apr 1987

To:

Dear Friends

In the last 2 circulars I told you about the novel methods being adopted by some American companies when It comes to "Sharing-Prosperity".

Now, Financial Express of April 3, 1987, has reported an INDIAN-METHOD, which I thought I should share with you (this is the right time!).

The Company              

ALLWYN LIMITED - HYDERABAD

Products:- 

Refrigerators

Buses                                                    

Wrist watches

Steel furniture

Production August 1986 - March 1987 (8 months)

	Number	Rs. Crores	% Increase over previous year
Refrigerators Buses Wrist Watches Steel Furniture	56,711 737 5,00,000	22.27 3.30 16.72 1.78	+ 36 % + 73 % + 9.5 %
Total Production		44.07	+ 41 %
Total Sa1es		43.49	+ 53%

No. of Employees               ......           7500

Despite such FANTASTIC Increase in "employee-productivity", why is the company worried?

In fact what can be the problem when Mr.R.P.Agarwal - Managing Director has the following to say?

"The Company has had the distinction of forty-five years of  strikeless productive days - a rich heritage".

Well, the customer does not care!  He cannot be bothered with how good (or bad) Industrial-relations you have!

At I that he CARES for is your selling-price, and of course,

the quality of your .products                             

-  the after-sales service                                     

-  the easy availability of spare-parts                      

-  the speedy delivery                                                           

etc., etc.                         

And if he is not happy with one or more of these, he can (and will) create problems for you - big problem!

ALLWYN's  PROBLEM   NO. 2      

                            .              ... 

1985-86 Sale    .......... Rs. 86.820 crores                 

1985-86 Net profit .......   Rs.  0.296 

Ratio           Net Profit        =     0.3       =       0.34% !!             Sales                    86.8

THE SOLUTION    ?

Recently, the company entered Into a 3-year agreement with-the union. In this agreement. It has offered to pay each employee,

Rs.300 as  L.T.A.

If, and when ther net-profit earned by the company touches Rs.5 crores!

THE POINT?

The Prosperity  (the good-days)

and

The Adversity   (the bad -days)

of a company depends upon the combined performance of all of its employees.

And If employees are eager to share the prosperity, they must also be equally prepared to share the adversity!  People who are unwilling to make a sacrifice during the bad-days, do not deserve a share In happiness during the good-days!                              

H. C. PAREKH