PEOPLE MANAGEMENT FIASCO IN HONDA MOTORCYCLES AND SCOOTERS INDIA LTD

1. PEOPLE MANAGEMENT FIASCO
IN
HONDA MOTORCYCLES AND
SCOOTERS INDIA LTD
PREPARED BY:
UNNI KRISHNAN
BIDISHA SARMA
RUTVIZ DHANANI
SAHIL JAIN
MANAS RANJAN TRIPATHY
ARUN VERMA

2. Honda Motorcycles and Scooters
India ltd.
Honda is World’s largest manufacturer of Motorcycles.
Headquartered in Minato, Tokyo, Japan.
HMSI is established in 20th October 1999 in Manesar
(Haryana).
HMSI is a wholly owned subsidiary of HMCL Japan.
Total 3000 employees : Out of that 2000 in worker category:
(1300 confirmed workers, 700 contract workers)
Apart from this 700 were Trainees & 300 were apprentices.

3. HR Policies:
HMSI followed the same policies as HMCL.
• Two fundamental beliefs:
• Respect for individual differences- initiative, equality & trust
• The Three joys – joy of buying, joy of selling , joy of manufacturing.
Association promoted among all employees through similar
uniforms and same canteen facilities for all.
Mainly focused on developing individual’s capacity to think, to
reason, and to dream.
Joy of Creating was also an important value for the company.
Providing work environment free from discrimination, indiscipline
and violence.

4. HR Policies:
Appraisal was performed by the section head and the shift in charge.
Workers were divided into five categories with increments ranging
from 400 to 1400 per month.
Opportunities for workers ranged from workers to sub-leaders to
assistant executives to executives.
No one covered by Payment of Bonus Act, 1961 & most of employees
were not covered by Employees state insurance act 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.

5. Issues Created in HMSI:
The first labor unrest voiced in November 2004 regarding the
Diwali gifts.
Movement Sheet for Washroom Breaks.
Managers showed partiality in matters related to job posting.
Strict attitude of the Japanese vice president.
Too much of workload in the form of handling multiple
machine at the same time.
Strict in granting leaves.

6. Reasons for Unrest:
The company failed to understand the needs and demands of
the employees.
Workers viewed Management activity as coercive and
repressive.
HR policies adopted by the company was not in the context of
Indian work environment.
Top management were inaccessible to workers.
Hindrance by management towards formation of employee
union.
Role of external parties in escalating the situation.

7. Case Timeline:
Nov
2004
Dec
2004
Jan
2005
Feb
2005
Mar
2005
Apr
2005
May
2005
June
2005
July
2005
Aug
2005
Nov’04- Diwali
Gift Issue
Apr 1 :
Compensation
Package
offered;
No Union
Formation
Apr - May :
Efforts for
forming Union;
Gherao of
Mgmt;
Go-Slow
May 26 :
Conciliation –
DLC
Intervention
Dec’04 –
Mar’05: Seeds
of
Unionisation
June – July :
6 Conciliation
Meetings
July 19 :
DLC sends the
Conciliation
Report
July 25 :
Brute
treatment of
the Honda
Workmen after
clash with
police
July 27 :
Enquiry
ordered by
Haryana CM
July 30 :
Truce
arbitrated by
Haryana CM
Aug 1 :
Back to Work
March 2005:
Workers came
out with 50
demands

8. Consequences:
Slowdown of work
Output was affected
Widespread discontent among the workers.
Workers demanded creation of union.
Employees gheraoed the management resulting in violence.
Shutting down of production.
The incident of 25th July 2005- workers got beaten up by the
police.

9. After-Effects:
Registration of employee union
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.

10. After-Effects:
Diwali gift: Rs. 2000 & credit in bank account of Rs. 4000 as
incentive bonus for all including managerial staff
Foundation day was again extended to family members
On Sep 9th, 2005 '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.

11. Conclusions
• HR Plan should be made keeping in mind the
mentality and culture of the people
• There should be proper implementation of HR Plan
without favoritism
• There should be proper appraisals given to the
employees
• Third party intervention could have been avoided by
both Management & Employees.