Does Wellington Associates need a Union?

Nikesh Agarwal Rajat Katiyar Rishiraj Singh Sathiyasundaram Suchishmita Roy Tejit Mithal
Indian Institute Of Management Raipur 1

(12PGP030) (12PGP034) (12PGP035) (12PGP038) (12PGP044) (12PGP046)

3/18/2013

Agenda
Summary/ Key Players

Issues (problematic scenarios)

Possible alternative solutions SW analysis for each alternative Proposed solution

Indian Institute Of Management Raipur

3/18/2013

Summary/Key Players
Organization under consideration: Wellington Associates (Analyzes high-tech industry) Jane Wellington, Founder and CEO, presiding over the weekly senior management meeting. Elvin Cusack, Head of HR, speaks about the possible union formation due to unhappy support staff. A number of very unhappy clerical staff invited union

Neil Whetson, Head of IS, suggestion of firing them was not tenable due to legal and PR issues.
Indian Institute Of Management Raipur 3 3/18/2013

Summary/Key Players Contd ..

Whetson argues that they pay top dollar, provide flexitime, medical/dental plans, and day care center.

Cusack presented the view points of support staff:

WA is a 2 tier company, differential treatment between professional and support staff Initial pay good, but stagnant raise policy Flexitime not for support staff, depends on managers Medical insurance and day care are costly/unaffordable Support staff seen as easily replacable.No internal promotion policy for support staff. Limited opportunities for furthering education.
Indian Institute Of Management Raipur 4 3/18/2013

Summary/Key Players Contd ..

At the bottom is the matter of Respect.

An example might be made out of WA by regional union leaders.

Wellington proposes to meet certain support staff, while others opine that they should meet attorney. Wellington feels that this will add more friction, and that Support staff should have solved issues internally, willing to listen and compromise. WA is not a kind of company that should have union.
Indian Institute Of Management Raipur 5 3/18/2013

Issues
How should Wellington and her colleagues react to the potential formation of the union. An example might be made out of Wellington Associates by regional union leaders and hence they might put in a lot of efforts and money into it. Wellington at a loss, regrets the distance between management and employees, wants to talk directly to support staff, but management opines that an attorney must be involved.
Indian Institute Of Management Raipur

3/18/2013

Alternatives
Hire an attorney, do a legal analysis and then talk to SS, inform them about cons of Union (since they are well paid, union (which cites industry standards) might not be of much help) and come to a compromise without forming union Talk to people internally, listen to their problems and reach a compromise

Identify the repercussions of firing influential employees of support staff, and take bold steps.
Let the union be formed for the satisfaction of Support Staff.

Indian Institute Of Management Raipur

3/18/2013

SW Analysis
(Hire an attorney)
Strength Whole process will go in a legal and systematic way. Proper guidance to solve the issue by the attorney Change in Policy would take place which would benefit SS Weakness Situation can ruin more Staff may feel more isolated and separated from the company More cost & time involved Issue can become more public and can involve media and can hamper the image of company

Indian Institute Of Management Raipur

3/18/2013

SW Analysis
(Talk to people internally, listen to their problems and reach a compromise)

Strength Supporting staff will get back their self esteem. Their problems of day care cost, medical insurances can be subsidized. Management can give little flexible working conditions by few fresh hiring.

Weakness Some of the staff members may take authoritative move. Can take undue advantages of flexi timing work model. All the bargains given to supporting staff can cost very high to management.

The relationships between management Management may loosen the grip they and supporting staff will get had earlier over supporting staff and strengthened. there can be more ego clashes. Make the SS believe the cons of joining an Union
Indian Institute Of Management Raipur

3/18/2013

SW Analysis
(Take bold steps: firing)
Strength Weakness Will give a strong signal against voices of Firing their leaders may even make the dissent situation worse.

May provide an easy solution

Keeps the employers bargaining power high It is easy to replace fired support staff

May find it difficult to justify the action if summoned by court

It is very difficult to identify all influential employees. People cannot be suppressed for long. This will only increase the dissent among them May hamper the company image in public

Indian Institute Of Management Raipur

10

3/18/2013

SW Analysis
(Let the union be formed for the satisfaction of Support Staff) Strength All the support staff will regain their faith on Wellington Associates . They can fight for their right reasons, mainly earn more respect. Weakness Union can function as labour cartels which restricts the number of workers , drive up the remaining workers wages. The average union member generally earns more than the average non-union worker.

Can bring out serious matters (medical insurance, further opp.)in front of management in a very effective way.
They will work as per the rights and duties of staff under a union.
Indian Institute Of Management Raipur 11

Union can effectively tax these investments by negotiating higher wages for their members, thus lowering profits.
Unions can redistribute wealth between workers.
3/18/2013

Best Alternative
(Talk to people internally, listen to their problems & reach a compromise)

Enhance Mutual Trust between SS and Management Make SS believe that there is no additional benefit by joining Union Image of the company is not hampered WIN-WIN situation for all Will reduce attrition level further Will result to more effective policy in the company More employee engagement
Indian Institute Of Management Raipur 12 3/18/2013

Thank You

Indian Institute Of Management Raipur

3/18/2013