Honda established a manufacturing plant in Manesar, India in 1999. Initially, the workforce consisted of 1000 confirmed workers and 700 contract workers. Tensions rose between management and workers regarding stringent rules and the authority of managers. This led workers to push for unionization in 2004. Negotiations were unsuccessful, resulting in worker protests and police violence against workers in July 2005. After government intervention, workers resumed work in August 2005 with some concessions achieved. However, underlying issues around communication, managerial practices, and the treatment of workers persisted.

1. Presented by: Group
Ameet Kr. Sinha(12PT-005)
Prem Kumar(12PT-026)
Maneesh D Singh(12PT-021)
Gaurav Kr. Singh(12PT-018)

2. Honda is headquartered in Minato, Tokyo, Japan.
It is the world's largest manufacturer of motorcycles.
It has more than 120 manufacturing units in across 30 countries for two-
wheelers production.
It‘s the world's largest manufacturer of internal combustion engines
measured by volume, producing more than 14 million internal combustion
engines each year.
Honda spends about 5% of its revenues into R&D
Also involved in F1 racing and other segments of the automobile industry.

3. Established in 20th October 1999 in Manesar (Haryana).
It is a wholly owned subsidiary of HMCL Japan.
The company aims to manufacture world class scooters and
motorcycles from this plant.
The plant had a initial capacity of 0.1 million which was to be raised to
0.6 million by 2005.
The company in India wants to become the vehicle of change.
Apart from a focus on good quality the company also wanted to keep a
reasonable price.

4. 2000
1000
Workforce in HMSI
Workers

5. 1300
700
700
300
Workforce Breakup
Confirmed
Workers
Contract
Workers
Trainees
Apprentice

6. The trainees generally had a certificate from some or the other (ITI).
All trainees were generally taken by the company.
15% of apprentice use to get the job after the apprenticeship period was
over.
The company was believed to be a good paymaster.
In October 2005 salaries of workers ranged from Rs 8150 for
unskilled to Rs 11200 for skilled workers including Rs 2000 for house
allowance.
Also apart from these the workers were entitled for bonuses in the
Diwali season.

7. Subsidized canteen facilities
Transport facilities to and from workers‘ residences at subsidized rates
Sports club for employees ‗ use at Sukhrali village in Gurgaon with indoor
games facilities
• Football, volleyball,TT, carom ,chess matches organized against
employees of other companies
2 sets of uniforms, 1 company cap, 1 pair of shoes provided to employees
every year; same uniform for all including managers

8. Most HMSI workers not covered by Employees State Insurance (ESI) scheme
under the ESI Act, 1948 as salary had crossed maximum salary limit for
coverage
• Such employees covered by Paramount Health care facility ; reimbursement
of hospitalization expenses
• Worker, his/her spouse & up to 2 children covered for RS. 75,000 each;
workers‘ parents covered for Rs. 1,50,000 each.
Invited workers‘ families for celebrating foundation day; later stopped with
increase in workforce size.
Support through cash payments on happy and sad occasions:
• Rs. 2,100 at birth of a child (max. 2 children)
• Rs. 3,000 on worker‘s marriage
• Rs. 5,000 to family on employee‘s death; Rs. 3,000 on death of
spouse/children/parent.

9. Aligned with philosophy of parent company: HMCL
• though considered itself unique with some distinct employment &
production practices.
HMSI‘s philosophy had 2 fundamental beliefs:
• Respect for individual differences- initiative, equality & trust
• The Three joys – joy of buying, joy of selling , joy of manufacturing
Employees were called associates – association promoted among all
employees through similar uniforms and same canteen facilities for all.
Induction programme involved acclimatizing employees to the Honda
philosophy HR department expected to
The Honda Way: human behaviour or way of thinking based on Honda
philosophy.
• E.g.: Perseverance to ensure safety & quality in all aspects

10. Organize training programs for:
• Internalization of culture building and Honda philosophy
• Training for building team leaders
• TQM training; ISO 9000 training; 5S training
Training dept. Supposed to be headed by an assistant manager;
position lying vacant for a long time.

11. Performance Appraisal System for all employees including workers:
• Interview by section head and shift in-charge;
• PA done on a rating scale; workers divided into 5 grades
• Increment Rs. 400 to Rs. 1400 p.m. depending on worker‘s grade
• All PA results and salary hikes announced immediately at the end of
financial year
• Promotion opportunity for worker:
• Worker -> sub-leader -> assistant executive -> executive
• No one covered by Payment of Bonus Act, 1961 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.

12. Works Committee (WC) constituted under Industrial Disputes Act
(IDA), 1947 on 1st April, 2004 consisting of 15 workers and 5 managerial
representatives
• Other committees: Canteen committee, transport committee, health
committee, and sports committee.
• Management nominated workers for the communities based on
perceived interest.
6-paged, quarterly newsletter: Dream Team
• Focussed on covering company‘s achievements in terms of
awards, contracts, recognitions, quality certifications, list of new dealers
and kaizen activities
• Very few employee related matters covered like sports competition
results and news about marriages and childbirth related to employees
• No scope for workers‘ expression through any letter to the editor.

13. Nov
2004
Dec
2004
Jan
2005
Feb
2005
Mar
2005
Apr
2005
May
2005
June
2005
July
2005
Aug
2005
Diwali Gift
Issue
Apr 1 :
Increment in
Compensatio
n Package;
No Union
Formation
Apr - May :
Efforts for
forming
Union;
Gherao of
Mgmt;
Go-Slow
May 26 :
Conciliation –
DLC
Intervention
Dec‘04 –
Mar‘05:
Negotiations
between
Workmen &
Management
June – July :
6 Conciliation
Meetings
July 19 :
DLC sends
the
Conciliation
Report
July 25 :
Another
Jallianwala
sort of brute
treatment of
the Honda
Workmen
July 27 :
Enquiry
ordered by
Haryana CM
July 30 :
Truce
between
Mgmt &
Workmen
Aug 1 :
Back to Work
1st sight for need of Unionization :
• Stringent Company rules e.g.:- movement
sheet, leave policy
• Fear of Management‘s Authority
• Idiosyncratic attitude of VP-Manufacturing
(Japanese)
• Charter consisting of more than 50 demands
• Help from local union leaders

14. Police beating HONDA Workers –
Dt. 25th July 2005
Clash between Police & HONDA
Workers –
Dt. 25th July 2005
The Whole Issue was covered by
Media and the atrocities by the Police
was highlighted and the incident was
termed as Another Jallianwala Bagh.
The act of Police was compared to
that of General Dyer‘s.

15. Workers
meet Sonia
Gandhi against
alleged
highhandedness
of Honda
management
and the police

16. Workers resuming duty from Aug 1, 2005
No new demands during the next 1 year
Trade Union would continue to operate
Reinstatement of 50 suspended workers & 4 Union leaders
Right to conduct an enquiry into the case of 4 terminated
employees
Termination of any convicted employee (in court)
No Work No Pay Principle to be implemented from June 27, 2005
Proper test to decide on the absorption of the trainees
To be considered as Final Conciliation

17. Management:
•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

18. Management:
•Practice of inviting workers‗ family on founders' day revived
•family members invited to factory on company expenses in batches
•Diwali gift: Rs. 2000 & credit in bank account of Rs. 4000 as incentive
bonus for all including managerial staff
•09/09/2010: '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.

19. Union:
• Police case against 63 workers including all 7 union leaders - contact
different people to make sound defence
• Got all the trainees absorbed in regular work
• Ensured no domestic enquiry proceedings or transfer for the 4
dismissed workers
• Union leaders monitored worker-supervisor relations to ensure
workers were treated better than before:
• number of memos to workers negligible
• far more positive managers' response towards leave applications
• 4 days' leave for Diwali => 4 days factory closed ; 3 day's
compensatory work on Sundays/holidays
• hike in coverage of workers & their family members under medical
insurance scheme :
• family floater coverage scheme of Rs.175,000; one or more or all

20. Union:
• Joined the nation-wide industrial strike against Central Govt's
economic policies on 29/09; compensated loss by working on
Sunday

21. On the Flip side:
• 02/09/2005: Authoritative and provocative behaviour of 2
supervisors and a senior manager
• A Union office bearer's views:
• company claims of respect for individuals & the 3 joys : merely
bookish concepts
• Some senior managers creating distance between top management
& workers
• HR manager prevents the union from meeting Japanese top
management fearing exposure of their ulterior designs and motives
• Only 20% managers treat union leaders as members of the
company; rest have ego issues
• No one bothered about analyzing the causes and possible solutions
of shop floor problems in a practical & acceptable manner

22. Mgmt.‘s approach to practicing a non-union model made them blind to
reality DID NOT LISTEN TO WORKERS
Workers viewed Mgmt activity as coercive and repressive
Incompetent people mgt. by Indian Middle managers—Indifference
Indian mgmt. blocking direct access to top company executive
The 3 joys of HONDA were used as a means of control
Issues in cross-cultural management

23. Failure of mgt. to realize importance of Diwali in Indian IR
Tokenism of conciliation in resolving collective issues
Complacency on the part of Indian mgrs. about labour power

24. The most effective functioning of the organization was achieved
through the traditional principles of direction and control
The traditional managerial beliefs and practices concerning HRM
resulted in structural contradictions between the hierarchical
nature of managerial direction and control and the need for
integration, consensus, and commitment
Management distinguished between market relations
(wages, service conditions, etc.) and managerial relations
(direction, surveillance, and discipline) and advocate a say for
employees and trade unions in the former but not the latter (Fox
1966)

25. Honda lacked participation and grievance redressal which are the
most critical determinants of organizational climate in India (B.R.
Sharma, 1986)
Honda should have integrated HRM into the organization‘s
mainstream with
•Proper representation on all major decision-making forums/bodies;
•Clear definition of corporate philosophy and objectives;
•Strategic linkage between the goals of HRM and the organization; and
•Appropriate accountability for HRM-related matters in the role of all
managersWhile Honda moved to restore balance in the relative power position
between the Employees & the Management, upsetting the existing
equilibrium per se had far-reaching consequences that were not easy
to predict

26. Comparative
HRM
Unitary MarxistPluralistic
Labour
market
Social
action
Systems
Control over
labour process
Input Conversion Output
Conflict
differences
Institutions
& processes
Regulation
(rules)
Approaches to IR
Wider approaches
Evolution
Revolution
Cooperation
Conflict
Authoritarian
Paternalism
HONDA HONDAHONDA

27. The three parties to Dispute
Government
Management Union

28. Evolve policies and systems
To control workers and the unions
To elicit commitment from the workers and their unions in order
to facilitate the strategic, functional and operational interests of
the Firm
Ideal Role

29. Loopholes in implementing the policies was observed
They could not check the growth of unionism
Lack of farsightedness
Actual Role

30. Protect and promote workers‘ interests
Protect and promote interests of workers‘ organizations &
affiliates through cooperation strategies where feasible
Ideal Role

31. It was not able to highlight the problems of the workers through
the proper channel
It was unable to check the actions of its union members resulting
to major trouble
It had a rigid stance and was nonnegotiable
Actual Role

32. Evolve policies and instruments to regulate the employer-
employee relationship
Manage the contradiction which arise in this relationship
Strive for goal congruence between the employer, employees and
Society
Ideal Role

33. It was late in realizing the gravity of the problem
Its role as a negotiator was in doubt
Delay in getting both parties to negotiate
Actual Role

34. Power - protect/support through strength in association - a countervailing
force, pressure group. Note: bargaining leverage & member willingness to act
together.
Economic regulation - maximize member returns within wage-work
framework. Note: political nature of TU wage policy - comparability &
differentials. Inflation & unemployment (cost-push & demand pull). Win bigger
slice of national income.
Job regulation - establish a joint-rule making system to protect members
from arbitrary management action . Enable participation in decisions affecting
their employment. Expand job opportunities?
Social change - express social cohesion, aspirations, political ideology &
develop a society which reflects this? Institutionalize ―class‖ & ―conflict‖?
Dilemma of participating in government.
Member services - provide benefits/services to members
Self-fulfillment - assist individuals to develop outside their job domain &
participate in wider decision-making processes

35. India is
governed
by a Constitution
that foresaw a
welfare state
and espouses
the values of
trade
unionism
and
social justice
HONDA Manufacturing
Plant, Manesar

36. Welfare state: Efficient
Government as facilitator
Export-oriented production (SEZs)
Changed labour policies of states

37. Multilateral IR: consumer/public/gender issues
New issues:
––Customer Creation/sustenance
––Protecting environment
––Gender issues
––Safety promotion
––Child labour abolition
Media‘s role in new issues

38. Figure 16.6Source: The Conference Board of Canada.

39. Flat organization --Flexible pay
Cost saving: a big concern
Competencies development
Knowledge pay in high-tech. industries
Emphasis on Performance – related Pay

40. Changed Govt. thinking
--July 1991 Economic Policy
--2nd NCL: July 2002
Rationalize Labour Law
Social justice to market & trickle down
--Vigorous attack on welfare state ideology
Changed Thinking of State

41. Identify & enforce behavior
Strive for Competitive advantage
Focus on new interventions
HRM & IR merged to produce positive energy
HR strategy is the single most important Consultancy Area
New Trends in India : IR Practices rooted
in HR Strategy

42. Leadership matters
Competent HR department is key
Well crafted and communicated Mission and Vision
Maintain channels of communication
HR Strategy must align with and support business
Listen to Employee concerns and issues for Organizational Justice
Use HR Interventions (BOTH HARD AND SOFT) as tools for success
•(welfare plans, empowerment, reward and recognition, etc.)

43. Keep cross - cultural issues in view
Establish a sense of urgency
Recruit and Retain Talent - right person In right job at the right
time
Be clear about performance and results – let them drive success
Create short term wins (reward and recognition)

44. The HRM-IR-HRD interface integration should be such that it should move
away from the principle of direction and control to a system based on the
philosophy of consent and commitment
Being sensitive to human needs & human problems at work & beyond work
Evolving a value system based on trust, transparency, fairness, & equity
Institutionalizing openness in subordinate-superior relationships
Dealing with employee grievances promptly & explaining the logic & rationale
of decisions to convince the aggrieved
Providing exposure & understanding to line managers on HRM aspects to
handle the day-to-day HRM activities & issues/problems
Sharing information & consulting for shared understanding & co-operation
Reviewing HR/IR policies & practices from time to time

45. THANK YOU!!!