By: Ashit K Sarkar - A PRESENTATION made at the NIPM Seminar at Bangalore on Oct 25th, 1999

While the topic of the day is a discussion on Best HR Practices, I venture to suggest that there is no specific competition to determine any ranking of the HR practices presentation! The objective is to share information from organisations willing to enlighten the participants and other interested professionals, about effective HR methodologies used by them which have generated desired results, and which may help others in developing their own good practices that generate or achieve similar improvements.

I take this opportunity to briefly describe one of our highly significant result generating and successful HR interventions that have made a sea change in the worker and union attitudes at our Delhi factory (easily stated, but it was an undaunting task!). This makes a most interesting case study, where the integration of the HR practices with the business plans, along with organisational development activities, made a turn round of a potential loss making Bread factory unit of Britannia Industries Limited to a successful and profitable biscuit manufacturing plant. This demanded first a sea-change in the management attitudes related to the work force, and a total support from the entire Delhi Management team - to get away from the "We-They" concept that is generally prevalent all over the industry. I was happy that I (coming from the Corporate HQ heading the IR/Personnel/HR function) could convince the Branch General Manager, Mr Pavan Malik, and specially his HR team headed by Mr. B Harikrishna, during my several visits and extensive discussions to develop a changed management attitude and long term strategy - which at that time was considered unique and a novel, but a doubtful way! It succeeded because of the entire Delhi team getting fully convinced, and only then they could all work with the workforce and union to convince them - that took almost ten years from about mid eighties to be accepted slowly but steadily, which was done entirely by the Delhi Branch management - to their entire credit.

The background: Delhi factory produced Bread - being the largest bread factory in India (and possibly in Asia), which on account of price control in the eighties had become quite unprofitable. After the price control had been lifted in 1991, from two major bread factories, about 30 local small scale bread factories had mushroomed in Delhi during the nineties, who were not highly quality or standards oriented. They were able to underprice or give larger margins to the distributors, resulting in a shrinking contribution to the Company - which was on the verge of becoming negative. This demanded a business plan for us to go for manufacturing high value added products like biscuits at Delhi instead of bread - a major and an almost impossibly difficult change to achieve, since while both bread and biscuits may both be bakery products, the plant layout, process, ovens, equipment and packaging machinery etc are totally different, and so are the manpower needs and competencies for manufacturing the changed product. The general IR environment in Delhi area (or for that matter, in most of India) was most daunting, and unions were generally against any machinery removal, or changes or even modernization, and the past IR history of our Delhi factory certainly was very discouraging for even thinking of making such changes!

However, we had started to take on the challenge on a long term basis not through confrontation, but through building trust and understanding of the likely future bleak scenario with the workers and employees. We had also been able to identify the alternative of outsourcing our established quality brand of bread and cake production from other local or nearby units to meet the market needs, should the plans to make the change be successful.

The IR scenario: (1) during the eighties & nineties - till 1994, & (2) from around 1998:

  1. Pre 1995: The Unions strongly believed that the Management was weak and their threats were not credible! They were unable to withstand agitational and negative approach, and the Union resisted any changes with regular work disruptions in the earlier decades prior to 1994 very successfully. Most long-term settlements were only achieved after long periods of unrest, and needed considerable extent of fruitless governmental intervention, and seldom ended up as a "win-win" situation.

    Intervention strategies and processes (as explained below), which were started and stressed from mid eighties gradually started bearing results around 1994, and were continued by the HR team consistently and vigorously over the years. The first challenge therefore, was to establish management credibility through firm, but fair, positive actions and communication in a consistent and steady manner.

  2. Post 1995: By 1998, the Union & workers psyche had changed diametrically with a trusting environment to a positive and co-operative one. With bilateral discussions in a mature and responsible manner, major changes in not only technology, machinery and work methods could be introduced, but a large extent of the changes could be carried out in a phased manner even before the Settlement was signed! It must be re-stressed that the Bread plants bear no resemblance to the Biscuit ovens and packaging machines that had to be installed and operated for the first time. The Unions even accepted the work norms based on the management stated best standards at our other factories, and the Bread plants could be moved out of the factory one by one without any difficulty, and ovens installed, and biscuit production commenced - most of them well before signing the agreement - an unimaginable concession in general IR scene in India!


The above change was as a result of a very long term and constructive HR intervention activities started long before the needed changes, and continued throughout as identified HR action plans.

Highlights of the interventions:

Strengthening and building trust was the major thrust continuously.
This involved:

  1. Information sharing in a systematic manner with the Union and key-workers.
  2. Direct dialogue with all employees explaining the business scene, challenges and the needed business strategy.
  3. Constant communication exercise at all levels.
  4. Accepting the Union as a PARTNER for the success of the Branch.
  5. Mutual respect for each others goals and objectives.
  6. Working together to solve common problems.
  7. Inculcating high sense of involvement at all levels of employees.
  8. All changes through mutual discussions, including technology changes.
  9. Thrust on discipline was not relaxed, and stern actions continued against defaulters after proper enquiry - e.g. 9 workers including union office bearers were dismissed on valid grounds.
  10. Emphasis on Safety at workplace (resulted in winning 3 safety awards)
  11. Emphasis on worker training in batches well before the changes - so that competency build up to operate totally new equipment & technology is accelerated & be available on time.
  12. Train and develop all operating management staff and/or position experienced staff from other units in ensuring competent management of the changed technology.
The strategy adopted was to carry out the dialogue mostly through a series of worker training programmes (all workers were covered) in an open and frank manner. This had to be preceded with discussions with union leaders, senior workers and opinion leaders, so that they did not feel being bypassed. Outside leaders & Government authorities were also briefed regularly.

The structural change had to be supplemented with a major cultural change and positive approach from the work force for the turnaround to this trust building exercise with patience and perseverance. This was and is an ongoing and steady activity done with openness, sincerity and participation by large number of management staff, with the HR managers being the primary change agents - who also needed to be themselves first convinced of the business strategy for the survival!

Results achieved: In 1994 with 672 factory employees the PBIT was only Rs 10 million at Delhi Branch, dropping to a loss of Rs 9 million next year, which was turned around to Rs 91 million profit in 1998 with 570 employees.

Ashit K. Sarkar,
Retired Sr VP-HR, Britannia Industries Ltd.,
Management Advisor & Consultant, Ph: (080) 2554-0393 & 4112-8153
3E, Palmtree Place, 23 Palmgrove Road, Bangalore - 560 047
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