Compensation and benefits

According to the case study:

Toyota Kirloskar motor employee’s union(TKMEU) was demanding a wage revision with Rs. 4000
increase per worker. While the company willing to pay Rs. 3050, the failure of negotiations
resulted in one day strike TKMEU and a retaliatory measure TKM management declared one week
lockout in the plant. Later by intervention of government, the workers joined back with out any
conditional bond as earlier demanded by TKM Management.

Basic purposes of the compensation are in compliance with wages paid, yet the labour demand
for increase in wages, this maybe due to

1. Rise in prices of essential goods in market.

2. More indirect expenses to the company.

3. Un bearable working capital requirements of company, due to depreciation of automobiles

sales.

4. Stringent pollution norms that increase the price of cars, eventually decrease the sales.

5. More money paid at the competitor company.

6. More work load than before like extra working hours.

#answer1:

Company can provide compensation to labour in proportionate to the profit margin returned
sustaining the minimum wage requirement according to government. It is not possible to increase
in wages for the same return of income, hence certain financial measures like loans shall be
provided to meet the requirement on conditional basis.

If i were the management representative of TKM, i would ensure following ways for negotiation:

1. Internal equity has been maintained throughout the organisation and wages are paid exactly
on time.

2. Compensation has been more than their competitor firms.

3. Compensation well above the market value considering inflation in the economy.

4. Based on the job evaluation, wage-pay policy well determined to support the worker welfare.

5. According to government laws, all fringe benefits are applicable like pf, gratuity fund, social
security schemes.

6. Incentives like festival bonus are provided twice a year.

7. Paid leaves were extended for all labour.

8. There has been performance appraisals like best employee of the month.

9. Brand value of company can able to get new labour force.

#answer2:

If I were the union representative, I would ensure the following ways of negotiation:

1. Rise in the price of goods and services in the market.

2. More work has been allocated than earlier, but wages are same.

3. No benefits for extra time work had been provided yet.

4. No promotions for the senior employees.

5. There is no proper food canteen facilities.

6. Most of the wage money has been deducted for gratuity and provident fund. We can get the
required money back home to meet the daily needs.

7. Company works mainly because of our work, we deny the works can cause huge loss.

#answer3:

Successful wage negotiation strategies are:

Successful wage negotiation can be established when the needs and wants of both the parties
are balanced. There must be some compromises among themselves to attain equilibrium.

Strategy is a plan of action to attain overall aim like better negotiation objectives that satisfy the
other party. Therefore actions proposed from negotiation should be futuristic, believable, assured.

From the case study certain actions like the following objectives can assure the good
negotiations.

1. Performance pay and positive job security.

2. Need for much loyalty and commitment to success. Retention of employees.

3. Skilled employees can get better compensation, hence up-skilling is an asset to the
employees.

4. Work experience is an undeniable factor for more wage to employees.

Strategy is not to override the superior party with the inferior party in the negotiation, rather
proper establishment of understandings with both parties is necessary. Only then the common
objectives like organisational goals can be achieved.