PRESENTED BY:GROUP NUMBER :-2 SECTION :-C

MITHUN KUMAR MOHANTY ABHENDU CHANDRA SAHA SURANJAN MAZUMDAR SOMNATH BAHTTACHARYA ADNAN AHMAD

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Briefing on case study Issues involved Theoretical inputs Alternatives available Advantages & Disadvantages of Alternatives Recommendation

HR problems faced by Bata India Ltd. - End of the 1990s. Loss of 420 million in 1995. 1995-Bata Shoe Organization Restructured entire board William Keith Weston-MD Mike Middleton- Deputy managing Director R Senonner headed Marketing division. The profit went down in 2000 after a consecutive increase in the profit margin for four years since 1995 1996- BATA signed Bipartite agreement. 1993-99 cut down the staff - to 6700 and welfare measures.

ASSAULT CASE

1996- Chief welfare officer was assaulted in Batanagar. 1998-Weston was assaulted by four workers at Batanagar Management dismissed three employees Batanagar employees went on strike after two days. BSO withdrew investment plans In 14 Jan 1999,BMU submitted demand list to the management. Economic and non economic issues(reinstatement of four dismissed employees) Demanded worker participation in management. Wage hike - Rs 90/ week. Increase of plan bonus & introduction of attendance bonus for migrant workers.

INDUSTRIAL RELATIONS

1995& 1998 Signed 3 years bipartite agreement with BMU and WB govt. Feb 1999- Lockout in BATAs Faridabad unit-manufacturing Hawai Chappal & canvas. Oct 1999- Unit resumed production-3yrs wage agreement signed. March 8, 2000- Lockout in Peenyas. July-2000 BATA lifted lockout. Demanded Revocation of 20 fellow employees, maintaining normal production schedule, confirmation to standing orders not to be insisted upon. September-2000 Downsizing resulted Labor dispute as management increased outsourcing from china and perceived declining importance of Batanagar unit.

Financial Breakdown: The Bata company experienced a loss of 420 million in 1995 for the first time in the companys history. They were leading the Market single handedly for 60 years and made the market almost a monopoly. Labor Problem: The Trade Union had conflicts with the management intentionally. Strike was a regular phenomena for this company also labor class employees assaulted their own MD, Mr. William Keith Weston in 1998.

Labor Surplus: The company had surplus labor since a long time. The data shows, they had 15000 employees in India whereas their next competitor the Liberty Shoes had only 5000 employees in 1995.

High-cost structure: This was another consequence and important concern of the organization. They were incurring a lot of employee wages, employee welfare wages. The data shows 22% of their sales were distributed among the employees as salary in 1999 whereas only 5% was the employee salary wages for Liberty Shoes.
Change in Management: The entire Board of Directors were replaced with a new group in 1995. They laid off more than 250 managers and stopped recruitment. Cost Cutting: They took several steps to cut the huge cost structure by phasing out several welfare wages, they employed forced retirement by asking juniors to quit.

Outsourcing: Earlier outsourcing was limited to assembly & sewing line job now company outsourced fully manufactured shoes from China. Selection and recruitment issues: Bata offered its staff employment policy linked to sales growth performance. Employees were resistant of such changes. Compensation (a) Basic remuneration issues: The basic remuneration was poor and there were no set standardized norms for increase in the pay. (b) Productivity Linked Incentives: Productivity linked incentives was utilized effectively. In 1997, Bata workers achieved 93% of their production targets. The management rewarded the workers with a 17% bonus, up from the 15% given in 1996. (c) Employee Benefits and services: The company nearly withdrew management subsidies, canteen facilities, electricity and health care schemes for the employees' families which included the plan of dismantling the public health unit

TRANING DEVELOPMENT & CARRER MANAGEMENT

when the people were retrenched and others handled the same job no training or development issues were visible. The carrier development aspect of the employees was also missing which contributed to the low morale of the people.

ENVIRONMENTAL CHANGE

Due to post economic liberalization the percentage of cost towards employers was a massive 22% compared to its competitors 5%. as their profits were declining.

MANAGEMENT OF TRADE UNIONS.

Trade unions had influence of the various political parties. These elements were scrupulous in nature and so used negative tactics like militant force and assault on the management.

JOB DESIGN

Job design at Bata was identified and refined from time to time and so they were able to remove excess manpower as well as cut down unnecessary expenditure.

SURPLUS MANPOWER

Heavily overstaffed and had a huge expenditure towards employees compared to their competitors.

SELECTION AND RECRUITMENT ISSUES Employees were resistant of such changes but the perception of corruption associated with Bata the change was a right step as these managers were indulging in large scale corruption.

MANAGING SEPARATIONS AND RIGHTSIZING Retrenchment was carried out but no sensitization paid to these issues which had an adverse effect on the employees morale. Overstaffing issues were handled with a strong hand and people asked to leave.
MOTIVATION As the company sold its Calcutta office the employee's morale was low due to the issue of honor associated with it. The motivation levels of the people who had to shift from a metro to a small town also would have taken a severe dip.

Individual rewards & recognition along with a revamped HR strategy with respect to hiring & compensating employees. Employees should had been given proper bonuses along with other perquisites,ie, Bata should have kept the promises it had previously made to its employees. This should have been the best alternative. The budget of employees welfare could have been omitted completely & salary should have been increased in place of that. There should have been a proper middle management who could bridge the gap between the BMU & The top Management. Recruitment policy should have been restructured prior to 1995 itself when it decided to stop recruitment.

Motivation level of the present employees would have been increased individually. Employees would do their work in more effective & efficient manner. The team work could have been more efficient in order to get more bonus. Companies fund would have been increased in better manner & employees would also become happy due to the increase of salary.

This procedure would not enhance the motivation level much for some of the less efficient employees. The top level management would have been dissatisfied with this decision. This could bring some additional profit in the company overall. However, this could also bring more conflict between the top level management and the Union.

From the above case we can understand that having the right HR practices is very important for over-all profits & reputation of the company. Here the main thing is lack of people who would have acted as a mediator between the top management & the labor unions.