Nokia HR Challenges and Recommendations

Keywords: nokia ethics, nokia hrm

Nokia is a mobile telecommunications enterprise which not only offers mobile phones but also provides people with every day solutions. They assist businesses by providing network solutions which helps them to communicate and establish a good connection.

Nokia is the one of the oldest mobile brand. Initially it was a paper mill company in South West Finland. They also manufactured car tyres, electricity and televisions, boots, some other rubber products. It then transformed in to a leading global telecommunications company connecting more than 1.3 billion people. They also manufactured electricity and televisions.

Recently Nokia underwent some changes in its organizational restructure. This has lead to the changes in its Mission, strategies, revising of its goals and setting up of clear objectives. Official website of Nokia states “Our goal is to be a good corporate citizen where ever we operate, as a responsible and contributing member of society”. Nokia aids youngsters in setting long term projects which would help them achieve their goals. Nokia aims to fulfill its goals and mission by bringing in different strategies like “Expand mobile voice, drive consumer multimedia and bring extended mobility to enterprises”.

In this project, we have discussed the history of Nokia. We have explained the various employee related issues that took place at different units of Nokia in India. Finally we have recommended what they could have followed to solve these issues.

The structure of the project is as follows:

1. Introduction

2. History of Nokia

3. Problems faced by Nokia

4. Recommendations to Nokia

5. Conclusion

INTRODUCTION

Nokia Corporation the Finnish mobile giant has employees from over 120 countries and its products are sold in over 150 countries. Nokia has employed over 60 million people. Nokia has retained its position as market leader in the mobile phone industry from 1998 to 2007. After 2007 over the past five years Nokia had a critical decline of market share in the global market. It has been shutting down many of its manufacturing units all over the world. After Steven Elope took charge as CEO of Nokia in 2011 almost 40 million employees have lost their jobs over the past one year.

HR POLICIES OF NOKIA

HR PEOPLE POLICY- NOKIA has more than 50,000 human resources at 16 factories in nine countries, and has research as well as growth and facilities in 11 countries. A Finnish-based Nokia is the major manufacturer of the mobile telephones in the planet. Nokia’s people policies has played a important function in serving the company to arrive at its 40 percent share of the worldwide phone market also manufacturing-leading revenue margins of 20 to 25 percent, this policy also helped at the moment of technical modify and powerful rivalry from Asian manufacturers.(Emerald, 2002).

NOKIA WAY AND VALUES POLICIES- Nokia is networked industry which aims to achieve the speed as well as flexibility in the decision making process for the better development of the organization which also help in introduction of the new products. Company’s hr policy focus on three things they are-

Customer satisfaction- In this hr sees what customer want and need and try to give them more good quality goods this will help organization to build up good relation with their customers.

Respect- In this hr treat employees to respect their colleagues and at workplace all should get the respect customers should also get respect, business partners, community etc.

Achievement- In achievement hr recognize the work of employees and give them reward according to their work because of that they get motivated.(deepdyve, 2013)

NOKIA RECRUITING POLICIES- NOKIA has played a very good role in hr policies. The company has very good extensive interview process and good compensation methods. This policy helps in recruiting and it motivates employees to work hard. ( venturenavigator. 2010).

PROBLEMS IN NOKIA

LABOUR STRIKE

Labour strike in Chennai: 1st Strike (August 2009)

The strike that recently took place at Nokia which is the Finnish mobile Phone Giant and has its plant situated at Sriperumbudur. Nokia has around 8000 workers and this workforce includes women who are estimated to be around 5500.The employees of Nokia had been asking for a hike in their salary from 11thAugust.The administration after having a talk with the employees provided a gradual hike of 800INR(17USD/12EUR) for employees having 1 year experience with them. An increase of 950 INR (20USD/I4EUR) for employees having 2 years experience and hike of 1200INR (25USD/18EUR) for employees with 3 years work experience. Employees were urging for a hike of 1500INR (31USD/21EUR) for every person. This demand was flatly refused by the management. This was the main reason for workers going on strike since August 13 2011.The Strike was organized by employees who completed their 2nd shift and the employees who had arrived for their 3rd shift joined them.

2nd Strike (January 2010):

Nokia lately has been facing many problems and most important of all is the labour strike which has occurred thrice. The reason for the second strike is that workers were asked to change production line and they protested saying that they weren’t trained to work in that line and also they were not informed previously and they approached the 12 member worker council set up by the management. When the council enquired about the incident to the managers, all the members of the work council were fired and it caused unrest among workers which lead to labour strike, with the intervention of labour union the strike was called off and workers started work by end of January but management suspended 63 members including 12 workers from worker’s council.

3rd Strike (July 2010)

In July again workers went on a strike for the third time asking the management to reinstate the 63 members who were suspended and demanded a revision in wage settlement signed upon their first strike.

Recommendations for the above problems (labour strikes)

In the first case HR manager must have prevented active functioning of the labour union by applying various models of consultations such as non-union, adjunct, marginalistic etc. At least after the first strike the HR manager should have taken the initiative to establish good relationship between the management and the workforce through the line managers so that during the second strike they could have negotiated with the 12 member council. HR could have asked the management to give general pardon to 63 members and the council members

The HR should ask the management to announce its willingness to end the strike publicly in such a way that the union reciprocates to end the strike and negotiation should be carried out in three ways one in such a way that the company persuades the employees to agree to their terms and the other is that they agree to the unions term and third is that both come to common agreement. If the company is not in a good financial position to meet the demands signed by them previously they could negotiate with the workers and ask them to accept other incentives such as training or they can stop hiring new employees and use the money spent in recruitment process and training and development to pay incentives to the employees.

Challenges which the HR may endure during implementations of above Recommendation

The top management may not agree to give in to the needs of the employees and there may be resistance from the management’s side to give general pardon to those employees who were behind the strike. This is an acid test to HR. It is up to the HR to convince management that it is a strength to give pardon and giving in only increases the strength of the firm and it prevent losses to the firm

Health related problems in Nokia

In labours perspective, Nokia has failed to provide job security and a healthy environment. Workers in the firm are worried due to high employee turnover which puts their job at stake. Most of the workers in production unit are suffering from skin ailments, eye irritation and boils. Even though they are offered temporary medical remedies workers are worried due to the long term effects that may be caused from the toxics they work with. Nokia has failed to monitor the health of employees on regular basis.

Negligence of health of Female employees in Nokia

Pregnant women find it hard to work in the factory due to heavy workloads which includes high stress and achieving very high targets, usually women are not welcomed back after maternity leave which is insensitive on companies side when it has around 80% women employees

Finally the employees are not sure whether all of Nokia’s employees are registered with the Employee State Insurance which is compulsory and basic health service to all the workers.

Recommendation to the above problems (Health & Safety)

As HR one should not forget the human in HR and they should be treated as assets and it is important that you safeguard the firm’s asset. The employees must be provided with proper medical treatment so that it doesn’t result in low morale and de-motivation which directly affects the productivity of the firm. As far as pregnant women are concerned they can adapt job rotation, which ensures that pregnant women are re-assigned jobs which have low workloads and less work stress.

Challenges which the HR may endure during implementations of above Recommendation

While redeploying pregnant women from one field to another it may affect the productivity and they may require additional training, it may require a bit of an investment so when this kind of redeployment is done HR should take care such that they are redeployed in similar fields which won’t affect the productivity.

IS A MACHINE VALUABLE THAN HUMAN LIFE?

Ambika’s Death:

A disastrous incident took place at Nokia telecom SEZ, Sriperumbadur on 31st of October 2010 at around 6. 50 PM. Ambika, a loader and unloader machine worker in ENO final assembly section met with an accident and passed away that night. She was a permanent staff aged 22 years and has been working with Nokia for the past 4.5 years.

Ambika was working for the assembling department where her work was to load panels into a magazine rack which was connected to a conveyor. This conveyor then moves towards a blade made of metal. The rack now engages with the blade and moves towards the second level of conveyor. Here the mobiles are unloaded from the panels attached to the conveyors. It is a closed system and automated with the help of sensors. The rack has 25 panels. Each panel can carry 4 mobiles. Sp totally 100 mobiles are produced during each cycle. Since it is sensor assisted, the conveyor starts to move from top level to lower level conveyor when the sensor recognizes the presence of a product. It has the provision for human intervene when the conveyor gets stuck. But it can be done only by a trained technician.

The machine also has a small door to access the blade which has to be closed during the time of working. This machine also has an “emergency stop” button to bring the machine to halt position at the time of malfunctioning. The problem here is , accessing of this button becomes a difficult process when the small door (blade door) is opened.

On the day when this incident took place, Ambika was working on this machine. The conveyor got stuck and sensors failed to work. This problem was not uncommon. Around 8 machines were malfunctioning at least 20 times during a shift. This was a regular issue and even the employees took this problem to the line managers and technicians, but it was not taken into consideration.

Normally when the machine stops due to malfunctioning, the workers pull the conveyor manually by putting their head inside the machine. Employees prefer to rectify the problem by themselves because they tend to lose 10 to 15 minutes by waiting for the technician to come.

When days pass by, employees started to rectify this problem on their own. They left the door open to rectify the problem which is supposed to be closed at the time of operation.

Ambika encountered a similar problem where she entered her head into the machine to move the conveyor. The conveyor got unstuck and started to function. As soon as the machine started to work, ambika tried to pull her head outside. Unfortunately her head got stuck in between the metal box and machine came to halt again. She desperately tried to reach the emergency stop which was hard to reach. Her fellow workers tried to stop the machine but the halt position of the conveyor was the place where head was stuck. The only way to save her was to cut the power supply to the machine, but it was inaccessible.

Employees around her then called the line managers and technicians. Even these had no idea of saving her from the machine. After 25 minutes, Ambika started to bleed and lost her consciousness. Her neck bone was crushed by the metal box. The only way to save her was to break the machine and take her head outside. But the line managers disagreed to this because the machine was very valuable. “Is a machine more valuable than a human life???”. Finally after along contradict; a technician came out with a solution. He brought some tools from elsewhere and removed the outer cover of the machine. Her head was almost crushed when she was removed from the machine. She was given some first aid and then taken to a nearby hospital (Jaya Hospital at 7. 30 pm) in the company ambulance. From there she was transferred to Apollo hospitals near Kilpauk at around 8. 30 pm. Finally she was declared to be dead at around 12. 45 am.

On the other side, the line mangers ordered the technicians to clean Ambika’s place and ordered all the employees to return back to their machines. Co workers of Ambika raised a voice against the line managers and they refused to start the process again. Managers tried to convince the workers by explaining them the consequences of incurring losses.

The workers said that they had encountered some minor injuries and accidents because of the malfunctioning of the machines. They even moved the complaint to senior managers but still the problem was not rectified. Finally it ended up in the death of an employee. Even though there was a huge risk in working with those machines, employees had to work because of the work pressure for the managers.

Ambika is from a village in Vellore district of Tamil Nadu. She is the daughter of a peasant and she has two siblings pursuing their polytechnic. She was the only bread winner of the family. On 1st November, HR manager visited her family and offered some compensation which was rejected (Chris Davies, 15th November 2010).

Recommendations to the above problem

The HR must make sure that line managers are provided with authority to make decisions in case of emergencies. Each unit must be provided with a technician. Compensation could have been given to Ambika’s family instead of showing gratitude for her death.

In future to prevent this kind of situation the HR can insist the firm to provide life insurance to all its employees.

Challenges which the HR may endure during implementations of above Recommendation

While insisting the firm to insure employees the HR may have a situation where he may have to convince his boss/CEO to allot a budget for this purpose. For this purpose he must be able to influence the CEO. And secondly if line managers are given the authority they may misuse it and it may even turn out to be loss for the company. Hence, while empowering them HR should be sure that they don’t misuse it and they should be provided with limited powers as such they are able to make decision only in case of emergencies. Top of Form

LEGAL VIOLATIONS:

WORKERS COMPENSATION ACT 1923:

Workers compensation act 1923 is an act in which relief is provided to workers in case of an hazardous event or activity that happened during the course of employment in which the employees or workers suffer permanent disablement or in certain cases even death.

In such a case the particular company provides compensation to the workers in case of disablement and compensation to the workers family in case of death.

How Nokia violated Workers Compensation Act 1923?

As already mentioned in the case of Ambika, her death was a result of the negligence of the factory management. Nokia clearly violates this law as it did not provide any compensation in the form of money to Ambika’s family as she was the only bread winner. Nokia’s HR manager only tried to provide gratuity, which shows their level of professionalism was far below expectation.

After interviewing the workers it was found out that the accident was much awaited to occur due to the carelessness of management and extreme work pressure on the employees.Finally it was clear that HR manager of Nokia strongly violated the Act.

FACTORIES ACT 1948

It plays an important role in improving the fitness, security and wellbeing of the workers. Proper regulation of time i.e. the hours of work required to be fulfilled by the employees which includes relaxation and leave availability. Strict rules and regulations regarding employment of women and immature people and their period of exertion is made.

How Nokia violated Factories Act 1948? (Case 1)

As mentioned in the very 1st problem workers in the production unit of Nokia complained that they suffered from crust ailments, eye exasperation and boils. In spite of these problems Nokia only provided temporary relief to the workers rather than providing them with permanent relief. If this continues the toxics may affect the workers health on a permanent basis. Therefore, it shows that in this case Nokia strictly violated the Factories Act 1948.

How Nokia violated Factories Act 1948? (Case 2)

In this case Nokia seems to appoint Pregnant women in factories and bombard them with heavy workloads without giving them proper duration in which they are forced to achieve high targets within a short span of time due to which they are stressed. At the same time women are not at all welcomed when they return after maturity leave which is unprofessional on the company’s side whereas 80% of the employees working are women.

How Nokia violated Factories Act 1948? (Case 3)

This refers to the problem mentioned in the beginning about the 2nd strike in which the workers in the factory were asked to change their production line and move to another line without the necessary training wherein training must be given to the workers while changing them from one line to another. Apart from this they were not given proper notice about their line change. As a result by doing this Nokia strictly violates Factories Act 1948.

Industrial Disputes Act 1947

Industrial Dispute means any dispute or difference between the following groups of people:

i. Employers and Employers

ii. Employers and Workforce

iii. Workforce and Workforce

How Nokia violated Industrial Disputes Act 1947?

As mentioned in the very first problem about the second strike which took place in (January 2010) that 63 workers were suspended due to the agitation caused by them over line change. Normally as per the Industrial Disputes Act 1947, 21 days prior notice must be given to the employees before suspension. In this case no such thing was done and the suspended employees were not called back for work for about 6 months due to which the agitated workers went for a 3rd strike which took place in (July2010).The company indirectly terminated the employees by suspension. As a result by doing this Nokia strictly violates Industrial Disputes Act 1947

Recommendations

Nokia being an multinational company must respect the rules and laws of the country they are in. It is essential for them to be ethical and legal .The HR of Nokia has failed to act legally and ethically .In future Nokia should take care where ever they go they must respect the laws of that country only then they would be able to gain the trust of their employees in that particular country. In order to overcome the above mentioned violations Nokia must re-consider its actions and pay compensation to Ambikas’ family and reinstate the employees who have been fired

Challenges which the HR may endure during implementations of above Recommendation

HR may face resistance from the management to ignore such things as HR he must be ethical and in future if the firm wants to expand its premises in India the Government of India may not permit the expansion of Nokia stating that they have violated the laws of that country. So the HR must act as strategic partner and mention the disadvantages of these violations. It may include quite a huge investment and it requires heavy risk on HR’s part to persuade the management to invest. Only then Nokia can rebuild its image and in future it would be helpful for the firm in expanding and it will also help to rebuild morale of the workers.

7. CONCLUSION:

As far as Nokia is concerned it is a company belonging to the Mobile Industry. It is a known fact to everyone that the mobile industry is growing at a rapid pace. In order to withstand the cut throat competition in the mobile industry the HR manager of Nokia should not be afraid to make legal and ethical decisions.

He must try and understand the marketing dynamics of the mobile industry, the potential competitors and their marketing tactics in order to emerge as a winner in the war. We found that Nokia in Tamil Nadu has turned bad to worse due to the poor and ineffective strategies undertaken by the management and HR manager. The HR manager has failed to implement models of consultation which can clearly be seen through the consecutive strikes that took place in Nokia.

The HR has failed to monitor the line managers that led to the death of a worker. This in all aspects shows the ineffective HRM of HR manager. So it can be finally concluded saying that effective HRM is a must for a Multinational Company like Nokia