HR as Transformation partner in Maruti Suzuki

This case has clearly depicted the changes that Maruti Suzuki adopted during the time when Maruti Suzuki was itself undergoing change. From Maruti Udyog Limited(MUL) to Maruti Suzuki India Ltd. (MSIL) the time when government disinvested and SMC acquired its 54.2 per cent stake in MUL and thus MSIL a subsidiary of Suzuki Motor Corporation (SMC), Japan was born. Because of this whole top management underwent a transformation, due to this Japanese employee were put in charge of strategy and Indian employee in charge of execution. But with the changes in the automobile industry new market players were evolving and to keep up with that Maruti had to devise new strategy not only with respect to operations, but also with regards to the HR aspects also and during this phase in the year 2003-08, the time when HR was all about recruiting and promotion and less to do with people during this time Siddiqui was appointed, and he was given a huge task to develop HR as a function that was professional and people friendly and focus on developing employee who could face upcoming challenges. And they were doing it very successfully with the first step by offering employees the option of VRS to the employee and also bringing in several training initiative such as Chunauti, were undertaken and aimed at instilling pride in being an MSIL employee, self development programme, outbound training session was conducted. An Employee Relation Development Committee was set up to bring both union and management onto the same platform. With all this activities there was increase in the credibility of the HR when in the survey all the department rated HR 4on a scale of 5. And also because of this HR has become part of many decision making strategies, they also formed a Human Resource Initiative Development Committee (HRIDC) a forum for Divisional Heads to meet at least once in a month for the new joinee HR formulated some plans for them so that they dont feel out of place, the new employee was taken around in the first half and then a cake cutting ceremony takes place with the top level manager, HR also created a flat structure with only three levels of responsibilities: the director, the divisional head and departmental head, with this there was openness and sharing but greater sense of involvement, Performance management system was introduced to bring about shift in the organisation where employee were appraised on the basis of performance rather than the time spent by them. They also made a provision for low and medium performer to improve and move ahead

Despite all this there were certain challenges faced by the company, which was generally related to the culture many of the employee were not happy that Japanese people are in a strategic role whereas Indian Middle and low level management felt that they are more aware about the Indian market and are better suited than their Japanese counterpart, and also some manager stated discomfort with some aspect of the rules, MSIL started facing major problem of attrition due to compensation package issue.