The Voltas case: human resource planning and making the joint venture succeed

The problems in the Voltas case

The case gives four facts that shape the answer. Voltas, a long-standing maker and marketer of air conditioners in India, has formed a joint venture with a well-known British multinational, chiefly to upgrade its technology and raise productivity. The company is heavily over-manned and suffers from several other inefficiencies. It has more than 2,000 unionised employees. Most union leaders oppose any change in technology. The joint venture therefore cannot deliver its two objectives unless the company deals with surplus staff, skill gaps and union resistance together.

Should the General Manager suggest human resource planning?

Yes. Human resource (manpower) planning estimates how many people, and of which type, the organisation needs, so that recruitment, development and the rest of staffing can follow from it. At Voltas the new technology will change both the number of workers needed and the skills they must have. Knowing the requirement is not only a matter of numbers but of the kind of people needed, and where the plan shows overstaffing, the remedy is removal or transfer of employees. A plan lets the General Manager show the union, with facts, how many jobs are affected and what will be done for each worker, so that a fight over job losses becomes a discussion about transfer and retraining.

Human resource planning is not enough on its own. People tend to resist change because it moves them from a familiar, secure position to a more demanding one, and management has to help them adapt. The plan must therefore be joined to an effort that answers the union's fear about job security.

How human resource planning would be carried out at Voltas

1. Assess the work the new technology creates. A workload analysis, done with the British partner, estimates the number and types of people each plant will need once the technology is installed.
2. Take stock of the 2,000-plus employees. A workforce analysis of the present staff, by department and skill, shows where the over-manning lies.
3. Compare the two. The gap shows surplus in some jobs and a shortage of new skills in others.
4. Act on the gap. Transfer surplus workers to other jobs, retrain those who are willing, and offer a fair separation package to the rest; these are the measures used elsewhere to deal with surplus labour when units are restructured. Recruit from outside only for skills that cannot be built in-house.
5. Train before the change. Employees need training to upgrade their knowledge and skills while on the job; workers who can run the new technology have less reason to resist it.

Steps to make the joint venture succeed

• Bring the union in early. Good communication builds harmonious relations with trade unions, and two-way communication promotes co-operation and mutual understanding between management and workers. A joint committee of management and union representatives can discuss the plan before it is carried out.
• Lead the change. At Voltas the union will judge the new technology by the way it is brought in. The General Manager should take charge of it personally: meet the shop-floor representatives himself, keep every department informed at each stage, and link the new productivity targets to rewards the workers value. Directing is the function through which management turns employees' reluctance to change into willing support; the General Manager should persuade and clarify rather than impose.
• Use incentives and protect jobs where possible. Financial and non-financial incentives, and efforts to avoid retrenchment in hard times, build loyalty to the enterprise.
• Agree terms clearly with the partner. The joint venture agreement should state each party's requirements clearly to avoid later conflict, and its terms should take account of the cultural and legal background of both parties. Since the partners pool capital, technology and human resources, the plan for transferring technology and training Voltas's staff should be part of that agreement.
• Control the progress. Set standards for productivity and cost, measure actual results, compare them and take corrective action.

Conclusion

As General Manager, I would recommend human resource planning now, because over-manning and union resistance are the main threats to the joint venture. Combined with open communication, retraining and a clear agreement with the partner, it can win the union's co-operation and let the collaboration meet its objectives.