OFFICE PRODUCTIVITY

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).

8 Mar 1987

To:

Corporate Management

General Managers

Joint General Managers

Regional Managers

Chief Executives/General Managers of S&A Cos.

LMJ   CH   SB   CD   NNT   AGT

SUB : OFFICE PRODUCTIVITY

The issues Involved in office productivity are closely Interlinked with the trends in office manpower strength.  It Is also Important to analyse the trends In Dearness Allowance/Consumer Price Index, which In turn affect personnel compensation.  In the following note, I have charted some of the trends in manpower, and related costs for our operations In Powai, Bombay.  I consider the points - highlighted In these charts -relevant to my presentation to the forthcoming PRC meeting on March 23, 1987.

An appropriate Interpretation of the trends can be undertaken only by the Group General Managers concerned, since they alone know what changes their Group operations have undergone In the past few years In terms of :

-      Changes in Markets/Marketing strategies.

-      Changes in products & technologies

-      Changes in manufacturing processes

-      Impact of computerisation in office productivity.

-      Organisation structure/levels of hierarchy.      

-      Re-distribution of functions.

-      Catalystic role with regard to 'out of town' projects.

-      Decreasing collaborations (from abroad) and Increasing local R&D.

-      Structural changes in compensation (as between bargainable and Sup.staff - narrowing gaps).

-      Rapidly rising wages
-      Limitations Imposed by rigid classifications.

-      Restrictions Imposed by BMC/State Government.

-      Liberalisation (or otherwise) of Industrial licensing policy. Imports policy, etc.

-      Competitive climate DomestIc & foreign etc., etc.

    An analysis along these lines will reveal the changes that have happened and why they have happened.  More lmpor+an.t, however, will be to project what wll I happen - or ought to happen In the next 5 to 10 years. Ever Increasing automation/mechanisation  of manufacturing processes will, in all likelihood, shift the requirement of skills of manpower from shop related to office related.

the rapidly rising wages is a factor common to both shop and office scenario.  A projection of maximum and minimum Dearness Allowance -based on the actual movement of Consumer Price Index (CPI) for the past 97 months Is as given below :

The minimum D.A. in 2000 A.D. will be 2.1 times that in 1986 and the maximum will be 2.3 times the 1986 D.A.!   This projection cannot be brushed aside; the actual movement of D.A.  In the past four years has been fairly close to that projected four  years back, as can be observed from the following :     

      

The Increase in D.A. due to rise In CPI has significantly Increased the personnel compensation.  As a rough yardstick, the following chart on number of Bombay based unionised employees drawing more than Rs.36,000 per annum (as compared to total Bombay-based employees drawing above this limit). is revealing :

The percentage of Bombay-abased unionised employees drawing more than Rs.36,000/- (to the total Bombay-based unionised employees) has also gone up, as follows :

The subject of office productivity assumes special significance in view of the changing manpower mix.  The scenario for the past 10 Years is amply illustrated in the - Groupwise & overall - trend graphs and tables (for Powai only), attached (Annexure I to VI). It Is clearly evident that :

-      The growth In population of Sup. & above - the major white collar constituency shows the sharpest trend (base year 1976) for all Groups without exception.

-      For most Groups, the trend in manpower growth in clerical cadre comes next. 

Undoubtedly, this Is another block directly concerned with office productivity.

-      With the exception of Group III - where the strength of Dally rated

   employees has grown  as compared to 1976, there is no significant  Increase in

   the manpower growth in the Daily rated category.

The analysis of manpower should settle one point - that is the increasing need to focus on office productivity.

Some ratios which will reflect the changing manpower mix and/or also serve as possible indicators of office productivity are given  in Annexure VII .

The trends/figures illustrated In this note are relevant because it is Important to aggregate the costs associated with office and analyse the trends before evolving appropriate productivity measures.  This analysis may be considered as the background against which I would like to present the subject to PRC when we meet on March 23, 1987.

         

           ANNEXURE  I

POPULATION GROWTH AT POWAI - GROUP  II

CADRE	1976	1977	1978	1979	1980	1981	1982	1985	1984	1985	1986
Sup. & above	252	301	318	319	351	359	375	322	528	543	579
Clerical	59	61	62	65	72	72	72	74	72	86	92
Technical	198	209	207	229	247	267	258	157	163	186	188
Daily Rated	1119	1159	1129	1088	1073	1110	1124	1117	1153	1145	1131
Total	1628	1730	1716	1701	1743	1808	1827	1870	1916	1960	1990

ANNEXURE II

POPULATION GROWTH AT POWAI - GROUP  III

CADRE	1976	1977	1978	1979	1980	1981	1982	1983	1984	1985	1986
Sup. & above	175	196	211	248	297	337	345	559	541	577	601
Clerical	76	30	81	87	95	104	107	109	109	128	126
Technical	267	255	269	314	272	289	279	172	191	214	208
Daily Rated	1215	1750	1389	1943	1966	1914	1940	1926	1867	1832	1836
Total	1735	2281	1950	2592	2630	2644	2671	2766	2708	2751	2771

      

ANNEXURE  III

POPULATION GROWTH AT POWAI - GROUP IV

CADRE	1976	1977	1978	1979	1900	1901	1982	1983	1984	1985	1986
Sup. & above	10	22	25	26	28	32	45	58	51	53	53
Clerical	14	14	14	16	17	18	17	16	16	16	17
Technical	40	40	37	39	40	42	33	27	25	23	26
Daily Rated	339	466	320	335	325	331	351	350	352	400	346
Total	441	542	396.	416	410	423	446	451	444	498	442

ANNEXURE IV

POPULATION GROWTH AT POWAI - PGM GROUP

CADRE	1976	1977	1978	1979	1980	1981	1982	1985	1984	1985	1986
Sup. & above	107	107	113	123	130	124	165	165	171	154	153
Clerical	138	127	132	137	142	145	145	141	144	114	112
Technical	145	132	139	216	208	208	207	214	218	201	205
Dally Rated	406	392	372	304	309	300	291	300	291	239	228
Total	796	758	756	780	789	777	808	820	824	708	698

ANNEXURE IV

POPULATION GROWTH AT POWAI - GM (FINANCE )'s OFFICE

CADRE	1976	1977	1978	1979	1980	1981	1982	1983	1984	1985	1986
Sup. & Above	29	27	29	29	29	26	26	34	39	36	38
Clerical	81	70	73	76	82	79	83	89	91	92	94
Technical	1	1	1	3	2	2	1	2	2	2	2
Daily Rated	6	6	6	4	7	7	6	7	6	6	6
Total	117	104	109	112	120	114	116	132	138	136	140

ANNEXURE VI

L&T  POPULATION GROWTH AT POWAI  - OVERALL

CADRE	1976	1977	1978	1979	1980	1981	1982	1983	1984	1985	1986
Sup.& Above	610	688	733	786	876	915	1003	1391	1389	1414	1475
Clerical	447	416	427	452	467	474	487	498	499	491	489
Technical	681	668	676	827	784	816	794	590	617	643	2607
Daily Rated	3133	3857	3261	3727	3723	3705	3773	3763	3734	3690	3614
Total	4871	5629	5097	5792	5850	5910	6057	6242	6239	6238	6221

P.S.  -  Trainees are not included

ANNEXURE VII

OFFICE PRODUCTIVITY TRENDS

POSSIBLE INDICATORS  

1.  Output (at constant price)

Office employee (Sup. + MR Unionised)

2.   Value Added      

Rupee of office Employee Wages/Salary + Perks

3.   Unionised Employers     

   Sup. and above Employees

4.   MR Employees     

   Sup. & above employees

5.   Clerk +Steno + Typist      

   Sup. & above employees

6.   Inspectors     

   Production workers

7.   Stores Workers     

   Production workers

8.   Maintenance Workers     

   Production workers.

9.   Increase in Office Assets

(a)      Office Assets* (value)      

Office employee

(b)      Computing Power   

Office employee (*) 

(c) Office Assets

-          Blue Printing machine 
-           Microfilming equipment               

-          Xerox           

-          PCs & Printers'               

-          Calculators               

-          Typewriters + Word Processors               

-          Dictaphone            

-          CAD Systems           

-          E-PABX                

-          Magnetic Card Attendance System

Hemen parekh