Share your Thoughts & Practical Experience on Employee Relations / Industrial Relations?

Kindly share your thoughts & practical experience on Employee Relations / Industrial Relations? 

A large corporate house with manufacturing operations in numerous locations with multiple unions, some with external connections and some with internal unions/works committees.

1. What would you consider about a centralized or decentralized employee relations team?
2. Why should it be centralized or decentralized? What are the benefits and drawbacks? How would it benefit the company and management in both cases?
3. How will technology play a significant role, and what aspects should be centralized and which should not?

What should be the ideal organizational structure in Employee relations?

1 & 2. Both the centralized and unit-limited ER/IR have their advantages and disadvantages. If the constituent units are separately incorporated, then there is no need for centralization as it is very difficult to have uniform service conditions across the units. For example, the Tatas, Birlas, or ITC groups have only individual unit-based structures. However, in the case of multi-location operation of a single enterprise like banks, insurance companies such as SAIL, BHEL, NTPC, etc., they have centralized ER teams with the Corporate Group dealing with major/policy/long-term issues, and the unit-level structures handling local issues. This will help in standardizing employee practices across the organization and prevent the formation of differing practices within the organization. This would help in containing local-level discontent and assist in developing rationalized rules, which bring in better morale and motivation across the organization.

3. The question of how technology will play a significant role, take communication for instance; modern technology has rendered distances meaningless even across continents, and the response time stands vastly reduced. In these pandemic days, we have seen how online means of communication have helped organizations deal with work issues and cater to business needs. The aspects to be centralized and decentralized would depend on the nature of the operations of the enterprise and would vary from one to another. However, it can be stated that all aspects needing uniformity in approach and working across the units in an enterprise should be centralized, and unit-specific matters shall be decentralized.

Dear member,

Is your query on "Employee Relations" or "Industrial Relations"? The reply would depend on your focus on either of the two. Anyway, the replies to your queries are as below:

1. What would you consider about a centralized or decentralized employee relations team?

Reply: The centralization or decentralization is not an issue as such. The reply depends on the activities done under the head of employee relations and of course the budget allocated. The focus of employee relations is on the employee wellbeing then the organization needs to create a mechanism of that across the organization.

Secondly, to improve the relations with the employees, it is important to understand what they think about the company. To improve their perceptions, the company can do the following:

a) Promulgate the values of the company and ensure that the managers and the top leadership live with the values.

b) Create a culture of rewards and recognition.

c) Create a culture of justice and fairness.

d) Conduct the Employee Satisfaction Survey and other organizational surveys.

e) Create a culture of communication. There should be a free flow of communication - upward, downward, and sideways.

f) All relations, whether employee relations or otherwise, depend on interpersonal skills. Therefore, the organization must take the strong initiative to promote a healthy interpersonal environment.

g) Identify whether the employees are stressed and if yes, then identify the stressors.

2. Why should it be centralized or decentralized? What are the benefits and drawbacks? How would it benefit the company and management in both cases?

Reply: The employee relations initiatives have to be across the organization. Therefore, it needs a central authority who executes single-handedly all the initiatives. If the decentralization is done, then there may not be uniformity in the execution and the organization could go into disarray. Secondly, ER initiatives cannot be executed only in one of the business units in isolation. That does not create the right impact.

3. How will technology play a significant role, and what aspects should be centralized and which should not?

Reply: Yes, technology plays a vital role in improving employee relations. For example, conducting organizational surveys like ESS becomes much easier if these are assisted by modern IT software. The modern IT systems develop understandable dashboards and the graphs and charts give insight to the authorities concerned. Secondly, it becomes easy to identify the similarities and the differences amongst the various business units of the organization. Lastly, the technology makes easier communication with the employees.

4. What should be the ideal organizational structure in Employee relations?

Reply: The ER depends more on the organization's culture than the structure. The ER is a byproduct of the culture. Therefore, the focus should be on building a suitable culture that promotes healthy employee relations. Secondly, whatever the organization's structure may be, the organization needs to have a dedicated team that is sufficiently empowered to take corrective actions. If the empowerment is missing, then the following challenges remain:

a) Notwithstanding the ER initiatives by the organization, employee attrition remains high.

b) Notwithstanding the ER initiatives by the organization, employees do not come forward to give suggestions for the process improvement.

Final Comments: There are a large number of US MNCs that operate in hundreds of countries. These global companies have a uniform way of working across the globe. Information is shared globally on who stands where and on which factor of employee relations.

Thanks,

Dinesh Divekar

Dear KK & Dinesh,

Thank you for your profound expertise. It was really informative and clear.

Dear colleague,

Your query is of vital practical importance for the setup of your organization - Corporate office, with multi-location manufacturing units having multi-union external and internal presence.

Mr. KK!HR has brought to bear practical and workable insight on some of the broader policy issues raised.

Since ER/IR Relations are dynamic in nature, there cannot be a one-size-fits-all centralized or decentralized approach to emerging and evolving relationship issues. A sound blend of centralized and decentralized approach seems to have worked well. What approach has successfully worked in several large multi-location, multi-union manufacturing units is issues of wage settlements/service conditions applicable to bargainable employees and employee engagement activities are left to the respective local HR teams to deal with, with centralized expert IR/ER resources who monitor the situation and ensure that harmonious and productive mutual relations are maintained. The Service Conditions of other non-workmen - VPs, Sr. Managers, Executives, and supervisors are dealt with by the Central HR resources, and they are largely uniform across all locations to enable smooth transfer of any resource to other locations.

As regards org structure, at the Central level HR/ER team will work on policy issues, monitoring its effective implementation at all unit levels, supported by able, experienced local teams to add a local flavor.

Many multinational companies like Unilever, ITC, Tata, Birla, Reliance seem to have used this approach to mutual advantage. Of course, no approach is foolproof for all situations and all the time, and one has to adapt it to the changing scenario and governmental initiatives in labor laws governing ER scene in the country.

Regards,

Vinayak Nagarkar

HR and Employee Relations Consultant

Dear Colleague,

Employee Relations/Industrial Relations is a subject matter that is a vital success factor for any multi-locational organization. A strong Industrial Relations Mechanism is important for sustained business growth. Nowadays, the focus on IR is missing compared to two decades ago when a lot of emphasis was placed on IR. Due to various socio-economic factors and Industrial Policies, the recent focus on IR has not been significant. However, in some sectors/regions, it remains strong.

Coming to the specifics:

1. What would you consider about a centralized or decentralized employee relations team? In the case of ER/IR, a strong Local IR Team is required as each organization will have unique features in IR. The Trade Union, the Location Stakeholders, and the Community around are all important and can be sensibly handled by a Location-based IR Team. On Policy Matters on IR, there should be Central IR Expertise in Policy guidelines and a Monitoring mechanism to ensure that IR aligns with Corporate expectations. Local decisions on IR should be taken at the local level for a more realistic approach.

2. Why should it be centralized or decentralized? What are the benefits and drawbacks? How would it benefit the company and management in both cases? The Local IR Team can respond immediately to dynamic IR decisions. They should follow Central IR Team guidelines and be monitored/consulted when necessary. Empowering the Local IR Team in non-policy matters is crucial. In a totally centralized system, understanding ground realities and making timely decisions may be challenging. Having a local IR Team under Central IR Governing Expert Team monitoring is advantageous.

3. How will technology play a significant role, and what aspects should be centralized and which should not? An IR Portal should be established to track IR challenges faced by the Local IR Team, solutions, financial impacts, settlements, pending disputes, legal cases, contingent liabilities, and potential future challenges. Central IR Team approval can be given as an Apex Control mechanism.

4. What should be the ideal organizational structure in Employee relations? Each location should have an IR Lead reporting to the HR Head or Unit Head with matrix reporting to the Central HR & IR Head. Sufficient staffing for the Location IR Head should be based on unit size, number of employees, and number of Unions.

One valuable practice is the MAGCOM - Management Committee, where top Union Office Bearers and Management Members collectively make critical decisions monthly. In case of escalation, it goes to IR Head and Unit Head for resolution. Involving Labour Department Authorities in meetings as observers for suggestions can be beneficial.

IR is a significant subject, and a strong IR mechanism and strategy contribute to industrial growth. A Central IR Manual called IR Blueprint can help frame policy matters comprehensively in a digital form for better understanding across locations. These insights are shared from 30 years of past IR experiences in multi-location/union setups, proving effective in handling IR productively.

All the best.

Hi,

Very good topic and good discussion and presentations.

Dr. Sivakumar, can you share your email id?

Thanks and best wishes,

Ram K Navaratna
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Dear Colleagues,

My email address is drsivaglobalhr@gmail.com.

God bless and a very happy new year 2022.

Dear Vinayak ji and Dr. P. Sivakumar ji,

Thank you both very much. Your information is very informative, easy to understand, and provides great ideas.

Regards

If i talked about the employee relation /engagement

the point is that we should engage each and every time with employee, like their sorrows , thier little hapines , for their welfare activiteis , organise their event like birthday or wedding annivery, their giriviacnes solving problems and • Tracking of Good Work, attendance Reward on monthly and quarterly basis.