1. Employee benefits and Long Term Settlement
Although initially positive about the move, the ICU workers had begun to demand more money to compensate for the increased travel costs and the more expensive food at the TF. (case study p.5) The issue was escalated to the corporate head offices who decided that ICU employees would be granted a cafeteria premium of Rs.25 per day but not a conveyance allowance. (case study p.7)
The three units had different policies for:
ICU – seven days in three shifts
TF – six days in two shifts
TIU – five days in a single shift
The LTS also covers machine speeds, productivity, medical T&Cs, prayer times for religious groups. (case study p.8)
Factory unions present their charter of demands to the factory management. Factory management negotiate with the Central Industrial Relations Committee for an overall package that the committee would sanction as a pay out. Local management then negotiate with the unions and it is signed off once the majority of unions agree. (case study p.8)
Each day after 28th of February that the LTS is not agreed the employees lose out on whatever salary increment the agreement contained. (case study p.8)
Older workers are more concerned with pensions, newer workers want to increase take home pay. (case study p.9)
(case study p.9) The current LTS is for the Tea Factory, the LTS for the TIU expires in 2010 and for the ICU in 2011. Any agreements in the TF LTS will set precedent for future settlements.
There will be uncertainty and unrest amongst the employees until the issues are resolved. Need to improve employee engagement.
Precedents will be set for future settlements. So considerations should be given to how working conditions can be best standardised.
LTS negotiations have in the past become violent resulting in the breakdown of communication and adverse effects on the business. (case study p.8)
Employees are losing out on benefits while waiting for this to be sorted so it is in everyone's best interest to resolve it quickly.
A good package will be an effective tool for recruitment and retention of colleagues and help to sustain staff motivation and engagement. According to Bratton and Gold (2007, p. 364) “the reward system is an important consideration when the organisation is trying to attract suitable employees, and once workers are members of the organisation, their task behaviour and levels of performance are influenced by the reward system.”
A recent article by Manisha Chada of the people matters from India has noted the concept of rewards is gaining increasing popularity, particularly due to the diverse needs of an evolved workforce. Other factors that should also be considered are competitive salaries, comfortable lifestyle, job security, career enhancement options, and work-life balance Effective communication with employees plays a vital role during the restructuring period of any organisation as it helps to properly inform the employees about the changes. This helps to remove the uncertainty and allay fears amongst employees and therefore may overcome any resistance that may result thereof. Casio (2002:96) believes that “open and ongoing communication is critical to a successful restructuring effort”. Paton and James (2000:45) believe that “effective communication that is designed to inform, consult and promote action will help in overcoming both resistance and ignorance amongst employees”.
Owning shares will provide employees with financial incentives that will make them more committed to the organisation and more motivated at work. If the company is more profitable, employees will gain financially through dividend payments and an increased share price.
Many companies in India such as … have employee contribution pension schemes so employees can...
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