Human Relations in Industry
In 1943, five years after he assumed Chairmanship of Tata Steel, J.R.D. Tata circulated among his co-Directors a proposal for the creation of a Personnel Department at Jamshedpur.
lthough we have had only three labour strikes at Jamshedpur, namely, in 1920, 1922, 1928, and have had none during the last fifteen years (I exclude the political strike of 1942), we have little cause for self-congratulation or for feeling complacent about the history of our labour relations. The fact is that in the intervals between the three strikes, and from 1928 up to the present War, our labour has been in a recurrent state of ferment, with numerous periods of crises when a strike seemed imminent. That we have managed to scrape through without a shut down during these last ten years or so, is mainly because we were riding on a wave of increasing prosperity, which brought increasing employment, security, pay, bonuses, etc., to the men and which made it possible for us and worth our while, to give in to their demands from time to time.
What are the main causes of our difficulties with our workmen? In many respects we have treated our employees exceptionally well. Our rates of pay and bonuses, our hours of work and conditions of service, the accommodation, amenities and medical care we have provided for them and their families, etc., exceeded what any other company in India had done for its employees. Normally, therefore, it would be reasonable to expect that our employees would be appreciative of the liberal treatment and generous terms of employment they get at Jamshedpur. If, instead, they are frequently discontented and mistrustful, and hostile towards us, I think we must assume that the fault lies with us and not with them. It is, therefore, up to us to find out where we have been at fault and then formulate the necessary corrective.
One of the inherent drawbacks of modern industry, with its large and concentrated labour forces, is the difficulty of maintaining personal touch between management and employees. As a result, many petty grievances, negligible individually but substantial in the aggregate, which might have been eliminated by a friendly word or timely action, are allowed to build up a sense of discontent and frustration among the workers.
Apart from any genuine complaint or grievance that he may occasionally have, each man tends to feel that instead of being a valued member of a friendly and human organisation, he is a mere cog in a soulless machine. His attitude towards the management and the Company becomes one of indifference, mistrust and coldness often tinged with hostility. He is easily led to feeling himself the victim of callous and unfair treatment and little is needed to make him look upon his employers as his enemies and break out into open conflict with them at the first opportunity.
I believe that this is one of the principal directions which we have up to now been at fault in our labour relations at Jamshedpur. There is very little, if any, of the personal touch in our management of labour, and, speaking generally, because I have no doubt there are some exceptions, the lack of mutual trust and friendly understanding in the relations between our men and the management is apparent to anyone who takes the trouble to look around and who has had any contact with the labour situation at Jamshedpur.
It is obvious that this state of affairs is not due to any deliberate policy on the part of the Company or of its officers. The fault is more one of omission than commission and lies, I believe, mainly in the lack of a consistent and planned labour policy, and particularly in the absence of an organisation set up specially to deal with labour relations. The latter is, in fact, one of the most surprising features of the Steel Company's organisation.
Of the three main problems of industrial management, named the provision handling maintenance and replacement of machines; the control of the flow of materials and of manufacturing processes, and the handling of men; the last one is certainly the most complex and difficult of the three. And yet, while we have expended enormous amounts of money, energy and thought in coping with the first two problems, we have done practically nothing to equip ourselves properly for the highly complex and at least equally important task of dealing with 30,000 to 40,000 men.
If our operations required the employment of, say, 30,000 machine tools, we would undoubtedly have a special staff or department to look after them, to keep them in repair, replace them when necessary, maintain their efficiency, protect them from damage, etc. But when employing 30,000 human beings each with a mind and soul of his own, we seem to have assumed that they would look after themselves and that there was no need for a separate organisation to deal with the human problems involved.
Neither in recruiting and managing our labour, nor in looking after their welfare, have we employed specialists in the sense that we employ trained experts to look after our machines. The thousand and one problems and difficulties which crop up daily in dealing with men are handled piecemeal, often after prolonged delays, or, what is worse, are not handled at all. We do not seem to have realised that every individual decision, every step taken, however small in itself, concerning any aspect of a worker's employment, is a definite piece of labour relations work. Individually, such decisions or steps may appear negligible. Cumulatively they are immensely important. If so, is it fair or reasonable that they should be treated as a side issue to be handled in an officer's or a foreman's spare time?
If the day to day problems of labour management are to be given the importance they deserve, and if they are to be fitted, as they should, into a general, co-ordinated labour relations policy, it is essential that a special organisation, staffed with full time personnel, be formed and entrusted with at least the supervision of their disposal.
Factors of Discontent
While the importance of dealing promptly and fairly with the ordinary run of minor grievances and complaints cannot be exaggerated, there are many other factors, often of a less tangible nature, which create discontent in a labour force. I mention a few which come to my mind:
Corruption on the part of subordinate staff, which compels workers to pay bribes, in order to secure employment, leave, promotion, etc. Haphazard methods of recruitment and allocation of jobs, resulting in a man being in constant trouble for doing badly a job for which he is not suited, when a little more care and the use of scientific methods in recruiting him might have made him a good and contented worker in a different job.
Generally unsympathetic treatment by supervising staff, often due, merely to carelessness or ignorance of modern labour management methods.
Personal difficulties due, perhaps, to causes within the Company's power to correct – for instance, unsuitable or wrongly located quarters, ill-health due to overexertion, wrong diet, worry, indebtedness, etc.
Discouragement caused by lack of promotion for years due mainly, perhaps, to the absence of a systematic check on individual careers. Fatigue, due to bad working conditions such as insufficient lighting, avoidably excessive heat, etc.
It is clear that if our labour relations programme is to be really effective, it should embrace every subject and every activity bearing upon a worker's employment, or affecting his physical and mental well-being and that of his family. It should carry out not merely the negative task of removing causes of discontent, but also the positive one of creating contentment.
I believe that one of the surest ways of achieving the last object would be in finding means of associating in some way labour with the tasks of management. As far as I am aware, nothing of this sort has been attempted at Jamshedpur, and our men would be justified in feeling that only members of the supervisory staff are expected or allowed to think for themselves while they are permitted to contribute only muscular effort or manual skill. Even in matters in which they are primarily interested, such as welfare, safety, etc., the common workman has no say.
I firmly believe that greater efficiency and cooperation can be got from men who are allowed to use their intelligence and initiative and who are made to feel that the Company appreciates the value of their brain as well as of their brawn, than from men whose sole motive is fear of punishment. A sympathetic supervisory staff alive to this aspect of labour psychology, should be able to devise means of creating such an atmosphere without detracting from the discipline and smooth working of the plant. It might be possible, for instance, in most of the operating departments, to hold regular meetings at which the aims and production targets for the ensuing period, the difficulties encountered, means of increasing efficiency, etc., could be discussed between the departmental head and some of his men, and suggestions for the improvement of current methods be invited, discussed and adopted, if useful.
Steps should be taken to ensure not merely that good suggestions are welcomed, but also that they are put into effect at the earliest opportunity and the authors given recognition and rewards. Individual employees would thus be encouraged to take an intelligent interest in their department as a whole, and to develop a sense of personal responsibility for the success of its operations.
Again, in the matters of safety and welfare, I believe that the measures taken by the Company in the interests of men would be better understood and appreciated if in some way or another the ordinary workmen were represented on the management side of these activities.
A dynamic labour relations programme, as I conceive it, should include the consideration of such and many others ideas and should coordinate them, along with questions of recruitment and promotions, grades and bonuses, safety, health, welfare, and housing, etc., into a well-conceived long-range policy. For this purpose, it is essential to have an ad hoc organisation, whose whole time and energy is devoted to the task of improving the Company's relations with its entire staff and of increasing its well-being and productivity.
Tata spelt out the organisational details of a Personnel Department and concluded:
The most difficult problem in the establishment of the Personnel Department will be the selection of its Director. The ideal man should have wide administrative experience, first-hand acquaintance with, and grasp of, large-scale industrial problems as well as those human qualities which would win him the confidence of the men, namely sincerity, a liberal and sympathetic outlook combined with strength of character and imagination. As he should preferably be an Indian, communal, provincial and political considerations will further complicate the task of selection. Every effort must, however, be made to obtain the very best man available.
In conclusion, ! may say that this subject has been increasingly in my mind for the last year or more. After giving it much thought and consideration, I have come to the first conclusion that we should take immediate action on the general lines indicated in this memorandum. Thus only can we continue to justify our claim to being the most progressive and enlightened employers in India; fulfil our moral duties and responsibilities towards our employees; achieve that high standard of efficiency in our operations, which we may sorely need to retain our competitive power in the years to come, and finally, be in a position to control the recrudescence of labour unrest, which must be expected as soon as wartime regulations and prosperity disappear and which may gravely jeopardise the continued progress of the Company.
To Produce and to Share
The Tata Iron and Steel Co. Ltd., Chairman's Statement, August 26, 1947.
An epoch has ended in the long history of India and another, and a more glorious one has begun. The achievement of Independence by four hundred million people, without armed conflict is an event which is without parallel in the history of the world. But it is not enough to achieve freedom; we must prove ourselves worthy of it and maintain and enlarge it, not only in the political but also in the economic sphere. The first and the most crying need of the country today is for production and more production, and yet on every hand, we are met with the spectacle of falling production and rising costs.
The War will have been fought in vain if the lot of the common man is not improved. While it cannot be disputed that labour must get a fair deal and gradually reach as high a standard of living as circumstances justify, what is often forgotten is that wealth must be first produced before it is distributed.
Should Workers Manage Industries?
The Tata Iron and Steel Co. Ltd, Chairman's Statement, August 30, 1956.
I, for one, do not believe in the concept prevalent in some labour circles that factories, whether owned by the State or by shareholders, should ultimately be handed over to workers who would provide both the labour and management of the enterprise. In my opinion, such a view is impractical, and its pursuit can only lead to barren disagreements and ultimate disillusion.
The management of mechanised industries is becoming more and more complex and requires increasingly high standards of technical, administrative and marketing experience and competence. Any worker, however humble his beginnings, should have the opportunity of rising in the organisation, his progress being determined by merit and his ability to discharge his allotted responsibilities. But this obviously implies that at a certain stage such a worker leaves the ranks of labour and becomes part of the management. This is a very different proposition from that of handing over the management of a factory to the workers collectively.
I hope, therefore, that time and energy will not be wasted in a fruitless pursuit of the concept of workers' management which is unworkable, except possibly in very small-scale industries run on cooperative lines.
The Tata Engineering and Locomotive Co. Ltd., Chairman's Statement, July 6, Ml.
There is a tendency in our country to believe that the establishment of new industries requires little more than the provision of the necessary buildings, plant and equipment, and to criticise the lack of immediate results. We have ourselves had our share of such criticism. Enterprises such as ours are not, however, made up merely of buildings and machines. These are the mere bones of industry; the flesh, muscles, blood and nerves essential to productive effort, which in industry are represented by materials and money, management and staff, take nearly as long to build up as it takes for a child to develop into a grown and productive human being.
Productivity and efficiency can be achieved only step by step with sustained hard work, relentless attention to details and insistence on the highest standards of quality and performance. I trust that this important aspect of industrial growth will not be ignored in the implementation of the great plans of industrial development on which the country has embarked.
'Industry in the Second Development Decade'. Golden Jubilee Conference, Associated Chambers of Commerce and Industry of India, Delhi, December 8, 1969.
We all realise that the highly complex problem of industrial relations, including that of indiscipline, is not peculiar to India alone. Industrial strife of one kind or another exists throughout the world. It is not surprising that after a century and more of exploitation by the majority of employers, emancipated labour has itself exploited its new bargaining strength to put maximum pressure on management to improve what were all too often grossly inadequate wages and miserable conditions of work. Even today, in India, allowing for all the progress already made and for all the difficulties on the way, more can and must be done on our side in the next decade to improve industrial relations, to remove causes of legitimate grievance, and to instil in employees a feeling of confidence in the management's fairness and of genuine partnership between the two.
Unfortunately, the problem in our country, as we all know, is rarely of a wholly industrial character, that is, concerning wages, fringe benefits, working conditions, etc. It is also a political one, for each of the three main trade union movements in the country is controlled by three political parties, which do not hesitate to use them for political purposes.
There is no easy or simple solution to this problem. Ideally, it would require either the dissociation of the trade union movement from its parent political parties, or, if that is not possible, a realisation on the part of such parties of the imperative need for production as a matter of sheer survival and, therefore, the declaration of a moratorium in the use of labour as an agitational tool for political purposes. As neither of these voluntary solutions is likely to occur, bearing in mind the temper existing in the country, the only solution to the problem or at least its mitigation, must lie in firm and prompt government action against disruptive activities in industry, while remaining always conscious of, and dedicated to, the workers' real interests.
Wages of Agitation
The Tata Engineering and Locomotive Co. Ltd., Chairman's Statement, July 7, 1971.
It is one of the major tragedies of India that while her need for maximum production and utilisation of installed equipment is probably greater than that of any other country, the loss of production owing to labour unrest is amongst the highest in the world. With a total employment in organised manufacturing industry of about seven million workers, nearly nineteen million man-days are lost annually, while West Germany, with an industrial labour force of eleven million, lost only a quarter million man-days last year.
Organised labour in India has achieved tremendous progress since Independence, not only in wages but also in conditions of work, retirement benefits, etc., thanks to the combination of strong trade union action, government and parliamentary support in the form of various legislative enactments and awards of tribunals, wage boards and other government sponsored bodies, and the cooperation of management.
This is as it should be for, in the years gone by, and with rare exceptions amongst which, I am glad to say, Tatas were prominent, Indian labour was often unfairly exploited and denied the security and other benefits which they should have had. This is certainly no longer the case and taking productivity and other factors into account, organised labour in both the public and the private sectors now receives fair wages and enjoys reasonable working conditions. In fact, by comparison with agricultural and unorganised industrial labour, which form the great majority of the country's work force, organised labour has now become a privileged class and the loss of production which they cause hits hardest the poorer elements of the nation. There is, therefore, no justification for the continuing agitation prevailing in industry, which has resulted every year in such a grievous loss of production to the country. Such loss to the nation can no longer be accepted as an unavoidable price we have to pay for democracy.
Our own experience shows that most labour disputes can be settled amicably by direct negotiations between management and labour when given a chance to do so, without the injection into their discussions of politics or inter-trade union rivalries based on political affiliations. Both of these are at the root of most of the labour troubles that plague Indian industry and hamper the sound development of the trade union movement. It is high time that peace and a minimum degree of discipline are re-established in the whole field of employment in both sectors.
In the last few years, a number of laws and ordinances have been passed by Parliament and Government governing labour relations, the violation of which are criminal offences under the law. These laws are being regularly flouted and yet, with one solitary exception, the Government has never had the courage to take action against those breaking the law or instigating others to break it, although the action it took in that one exceptional case produced dramatic results.
To enact laws, which those whose actions they are meant to control can flout with impunity, is worse than having no laws at all.
The time has come for firm government action, be it against management or labour or their unions, and I sincerely hope that the Government will no longer hesitate to demonstrate its determination to restore order and discipline in industry without which a high rate of production cannot be achieved in the country.
Viability Prime Consideration
The Tata Oil Mills Co. Ltd., Chairman's Statement, August 6, 1974.
It is time that labour unions realised that for historical and other reasons, most of the older companies in India, such as ours, carry excess labour. The extra burden was acceptable many years ago, when both wages and equipment productivity were relatively low but the situation is very different now, labour costs are immeasurably higher and modern equipment much more productive. One of the hardest tasks facing management today is to maintain the existing level of employment. Unreasonable demands and agitation can only discourage companies in their effort to maintain the employment potential of the Company at a higher level than strictly necessary. I would therefore earnestly plead with the employees and their unions to understand and appreciate that their best interests lie in the continued viability of their Company's operations.
Corrective Action on Employers
The Tata Oil Mills Co. Ltd., Chairman's Statement, July 6, 1978.
The time, I submit, has come when the Government at both the Centre and in the States, should make it clear that the sense and substance of freedom it has brought back to the country will not be allowed to be used to cause loss of production and of wages – without just cause – through indiscipline and disruptive action particularly of the violent character too often seen these days. Employers themselves are often guilty of poor management and, therefore, at least partly responsible for their unhappy relations with their workers and unions. The remedy lies clearly in their own hands.
Working and Growing Together
First Michael John Memorial Lecture, Jamshedpur, March 2, 1985.
My involvement with labour matters in Tata Steel had, however, begun much earlier, in fact nearly sixty years ago, when I first joined Tatas. At that time, labour relations at Jamshedpur were far from being what they are today, despite benefits and facilities for its employees such as the eight-hour working day, free medical aid, retiring benefits, leave with pay, and many other amenities, which the Steel Company pioneered long before they were introduced in Europe and America.
I am probably the only person in this hall this evening who witnessed the stirring events which preceded the present era of peace and cooperation, and to have personal knowledge of the guiding and healing role played by Mahatma Gandhi who came to Jamshedpur in 1925 and by C.R. Das, C.F. Andrews, Rajendra Prasad and Subhas Chandra Bose.
It was not, however, until 1938 when Professor Abdul Bari first came to Jamshedpur and the Tata Workers' Union was established, that the lasting foundations were laid for the present era of close cooperation between the Company and the Union, which found its fulfilment in the historic agreement of 1956 under which the elaborate consultative machinery and procedures, which have been so largely responsible for that cooperation, took their final shape. What has happened since then is relatively recent history with which, I am sure, most of you here are familiar and do not need any elaboration from me.
I could, therefore, end my talk right here, no doubt, to your relief, but being an old man, with an old man's propensity to reminisce or philosophise whenever given a chance to do so, I propose, to take a few minutes of your time in doing both. When in 1938 I became Chairman of Tatas, I had not, until then, been actively involved in labour problems though I had, from the start, sensed the vital importance of good relations in industry and I was therefore dismayed by the prevalence in India, as in other countries, of discord, strife and conflict not only in industry but in all walks of life.
Of all the creatures God, in His wisdom, placed upon the earth, to walk, crawl, fly or swim, it seems that only members of the human race find it difficult to live in peace and amity with each other. As a result, human history through the ages has been, and continues to be, marked by hostility and conflict at the cost of untold suffering to millions of people of each succeeding generation. Why suspicion and hostility should be so prevalent a character of human nature was something I was unable to understand, perhaps because I had myself always found it so easy to get along with people.
Pondering over this phenomenon which has brought so much unhappiness and suffering in its wake, I came long ago to the conclusion that the three most important requirements for getting along with people were the following:
The first lies in communication. The importance of frank and sometimes continuous discussion between people or groups is clearly seen in the very example of the splendid relationship established and maintained, year after year, between the Steel Company and the Union at Jamshedpur. Its success and effectiveness is due largely to the continuous dialogue between the Company, its workers and their Union, which ensures that all matters and decisions of consequence are fully discussed and understood by both sides.
The second is the need for total honesty and sincerity in dealing with people, which is all the more important where disputes or disagreements, actual or potential, have to be prevented or resolved. Human history is replete with examples of the disastrous consequences of mistrust and suspicion amongst people and nations, so alarmingly exemplified today by the hostile relations between so many countries including the two main powers.
The third is to trust and, if possible, to like the people with whom one deals and to inspire a similar response in them. I remember a striking example of this when I first came in contact with Professor Abdul Bari after he addressed a large meeting of the workers at Jamshedpur.
As those of you who may have known Professor Bari will remember, he was a man of violent emotions, and liable to explode into equally violent anger. As I listened to his angry and, quite unjustified onslaught on our management, I was somewhat upset, to put it mildly. Yet, when the next morning I first met him face to face, I found to my surprise that I could not help admiring and even liking this extraordinary man, uncontrolled, but totally honest. As I greeted him with a friendly smile and shook hands with him, I saw a change take place in his face which I interpreted rightly, as I found out later, as astonishment at finding not only that I felt no resentment for his violent attack on us the previous night, but was genuinely friendly towards him. We laughed together and when I gently asked him whether we really deserved his lambasting of the previous evening, he replied: Tata Saheb, I am sorry, but when I get on to a platform I get excited and can't control myself!' Mutual esteem blossomed between us at that moment, that lasted for the rest of our relationship, unfortunately cut short, when he died in tragic circumstances in 1947. That friendship and mutual like extended to Michael John, who was then Professor Bari's deputy in the Tata Worker's Union and succeeded him in its leadership.
I have told you of this little episode merely to illustrate my conviction that there is really no difficulty in establishing good relations with people in general and between management and workers and their union in particular if one cultivates a liking for, and trust in, those one deals with. I claim no personal credit for the outstandingly good and cooperative relations which have prevailed within the Company since those early days. If credit is due to any one person in the Company for what has been achieved by these very means, it would be to your present Chairman, Mr. Russi Mody, whose human qualities and extraordinary ability to arouse love and friendship in others have been a source of inspiration to all, including myself. Cooperation is never a one way traffic. From the Union, we have in Mr. Gopal, a worthy successor to the traditions of Abdul Bari and Michael John, and we all admire the manner in which he is carrying the torch.
So much for the past and the present. What about the future? There is little or no scope for additional or new employment in the Company's operations at Jamshedpur. Yet, means must be found to give this new, young generation opportunities to work and earn their living. I believe that, as in many other countries where old, over-manned industries such as ours have faced, or are facing, the same problem, employment opportunities must be sought in the creation, here and in the neighbourhood of Jamshedpur, of new, small or medium-scale industries and services, including self-employment. The workers of Jamshedpur and the Tata Workers' Union have done a magnificent job in establishing the best traditions of sound trade unionism in the country. I wish them continued success and prosperity.
Michael John was President of the Tata Workers' Union from 1947 to 1977.