THE URGENT ORDER

A Case Analysis

Adit Aggarwal
H11004
Harpreet Singh
H11019
Nidhi Sand
H11034
Priyanka Ahuja
H11040

Contents
EXECUTIVE SUMMARY............................................................................................................ 1
SITUATIONAL ANALYSIS.......................................................................................................... 1
PROBLEM AREAS.................................................................................................................... 1
DECISION CRITERIA................................................................................................................ 2
OPTIONS AND EVALUATION.................................................................................................... 2
RECCOMENDATION................................................................................................................ 3
CONTINGENCY PLAN.............................................................................................................. 3

EXECUTIVE SUMMARY
This report aims at analyzing the current state of Heavy-Mover Corporation and suggesting the best
alternative for the future of the company. Some of the key problems the corporation is currently facing
include a flawed performance appraisal system, inter-departmental conflicts, bureaucracy and poor
communication amongst various levels. We recommend modifying the current PAS to incorporate quality
as a key performance metric in employee appraisal. Further, Mr. Kurien and Mr. Rabindra given their
experience should be retained and the matter solved internally. A grievance redressal unit needs to be set
up to meet such situations internally.

SITUATIONAL ANALYSIS
Heavy-Mover Corporation was among the leading Indian companies manufacturing equipment for
transporting materials. It was established in 1970. It was among the leading players in the business of
design, manufacture, installation and commissioning of the raw materials. The equipment was subjected
to extremely arduous working conditions by the buyers and hence the concern for quality often
outweighed the price considerations. The critical success factors of the organization were:
-

Costing
Timely deliveries
Customer satisfaction
Quality of the equipment produced

Since 1990s, the company had been engaged in cost cutting and rationalization of process to become
more oriented towards customer requirements. The need to be competitive had intensified after the entry
of Chinese players. Orders depended on successful bids for tenders floated by different clients.
While the history of union-management relationship was cordial, it was not quite free from occasional
tensions. The current situation was not quite favourable. The orders that the company procured were
declining. The workers and the employees were not satisfied with the current performance appraisal
system. And the tiff between the Section Head and the assistant general secretary of the union had further
worsened the situation. The CMD had ordered for the dismissal of both of them.

PROBLEM AREAS
1. Flaws in performance management and appraisal system. The flaws observed are:
a. Work measurement inaccurate: Standard hours were derived from decade-old studies
b. Resistance to change to newer tasks by workers non-standard activities not accepted by
workers as this was reduce their Performance Index (PI)
c. Employees were entitled to incentive schemes on basis of groups they fell into depending
on their grade no individual rating per se
d. Further, their performance was benchmarked against a single/best employee which could
vary across years and also across sections; hence not reliable
e. Apex committee was not taking technical potential into consideration at the time of
deciding final grade
f. Quality did not feature concretely in PAS even though preliminary discussions on this
topic were carried out earlier between the Union and the management
g. Dissatisfaction among supervisory staff greater than workers. High attrition observed
because of low morale
2. Organizational Dynamics
a. Strong labour union that opposed changes and interfered in work
b. Inter-departmental conflict between the engineering and manufacturing departments
regarding the standard time for various activities
3. Structure: HMC had two manufacturing sections operating independently leading to duplication
of efforts and sometimes no proper use of resources. There was always a possibility that what was
required in one section was lying with the other. Lack of proper planning/inventory management
led to this dispute. Also, potential economies of scale were being comprised upon by operating
two sections independently
4. Bureaucracy: Favouritism worked
a. VRS imposed on workers, some exempted due to good relations with union leader
b. Mr. Kurien secured The Urgent Order by requesting Mr. Ramachandran rather on a
proper assessment of which section was better suited to handle the project.
5. Communication poor between management, union and workers: The workers were not aware
of the decision agreed upon by Section 1 and 2 heads, Planning Department and Mr.
Ramachandran. Infact, even the Union General Secretary was informed about the decision, yet the
information did not percolate to the concerned workers.

DECISION CRITERIA
1. All the measures taken should be aligned with the critical success factor of the organization i.e.
good quality, timely delivery, customer satisfaction and reducing cost.
2. Communication channels
3. Rationale behind two separate sections
4. Evaluating the performance of the workers and the employees based on the CSFs
5. Fate of Mr. Kurien and Rabindra

OPTIONS AND EVALUATION

Performance appraisal to be linked with critical success factor of the organization

1) Include quality and timely delivery as components in the performance appraisal system. Currently
it is based only on the standard hours required to complete the job
2) Continue with old system with minor modifications
Improvement of communication channels
1) Improve communication amongst departments while setting goals. Also, improve communication
between labor and management.
2) Do not make any changes
Rationale behind two separate sections
3) Continue operations with two independent sections
4) Merge the two sections for economies of scale
Fate of Mr. Kurien and Rabindra
1) Ask both of them to leave on grounds of indiscipline
2) Retain both and work on better internal grievance redressal mechanism

RECCOMENDATION
Performance appraisal to be linked with critical success factors of the organization
The current PAS needs to include quality as a performance indicator and hence modify incentive plan
accordingly. For increments, more weightage should be given to performance meeting targets whereas for
promotion cases, managerial potential should also be factored in.
Improvement of communication channels
Improve communication at two levels:
1) Inter-department at the time of goal/target setting and deciding on performance standards.
2) Between labor and management Management should communicate all decisions made at the top
to the union and the workers through regular interactions.
Fate of Mr. Kurien and Rabindra
The dispute should be solved with the help of an internal inquiry committee that will mediate between
the two parties. Also the inquiry committee should focus on building a strong grievance redressal
mechanism within the organization for any future discord.
Rationale behind two separate sections
HMC should in the near future try to integrate its two manufacturing sections to achieve economies of
scale and avoid issues of inventory management.

CONTINGENCY PLAN

Let go of Mr. Kurien and Rabindra in the short run. Mr. Kurien should be properly counselled to remove
his frustration and upgrade his morale. HMC should continue with two manufacturing sections. An
analysis of the PAS should be started.