Three Bosses at Ram Lal Knitwear
Ram Lal Knitwear in Ludhiana runs three knitting machines with 60 workers and turns out 900 pieces a day. Ram Lal handles sales and the bank; his son Vikram looks after dispatch; a single supervisor, Mohan, oversees knitting, stitching and packing, buys yarn and keeps wage records. Workers take orders from all three, and the orders often clash. Last month a time study was done without informing the workers, and a differential piece-rate scheme was announced with rates fixed at the fastest time observed. Twenty-two of the sixty workers left within three weeks, daily output fell to 760 pieces and absenteeism reached 18%. Wages are paid nine days late, and the two workers who complained about the delay were moved to the night shift. There are no written job descriptions and no grievance route. Ram Lal blames the workers and wants biometric attendance with fines for lateness.
1. Identify the management principles being violated and match each to specific evidence in the case.
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- Unity of command: workers receive clashing instructions from Ram Lal, Vikram and Mohan, so no one is accountable for output. This is the clearest cause of the fall from 900 to 760 pieces.
- Division of work and specialisation: Mohan supervises three departments, purchases yarn and maintains wage records simultaneously; no task gets undivided attention.
- Remuneration and equity: wages are nine days late and the two workers who complained were punished with night shift - inequitable treatment that destroys trust and plausibly drives the 18% absenteeism.
- Scalar chain and grievance procedure: there is no appeal route, so the only channel open to a worker is exit; 22 workers used it.
- Initiative: the time study was conducted secretly, so workers read it as a threat rather than a shared exercise.
- Stability of tenure and order: no written job descriptions, rapid exits, shifting instructions.
Ram Lal's diagnosis (lazy workers) is wrong. The structure and the pay delay are producing the behaviour, not the reverse.
2. Advise Ram Lal on how to introduce Taylor's differential piece rate so that it is accepted rather than resisted.
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A piece rate works only if the standard is believed to be fair. A workable sequence:
- Restore equity first - fix a wage date, clear the arrears and bring back the transferred workers. No scheme will be trusted until this happens.
- Narrow the span - write simple job descriptions and either appoint a second supervisor or strip purchasing and payroll from Mohan, so instructions come from one person. This is unity of command in practice.
- Redo the time study openly - several workers observed, Mohan present, an allowance for fatigue and machine stoppages, and the standard time published on the notice board. Standardising at the fastest observed time guarantees rejection.
- Protect existing earnings - guarantee the day wage for two months, then pay a lower rate below standard and a higher rate above it, so a worker who reaches standard always earns more than before.
- Pilot in one section (say stitching), compare output and earnings with the other sections, then extend.
- Explain the arithmetic in the workers' own numbers and open a grievance channel.
The test is whether a worker can calculate his own payout and see that extra effort pays him, not only the owner.
3. Evaluate the proposal of biometric attendance with fines for latecomers as a remedy for absenteeism.
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The proposal treats a symptom as the disease. Absenteeism rose at the same time as the secret time study, the new piece rates and the nine-day wage delay; 22 workers quitting signals a supply-side problem, not shirking.
Fines have predictable effects here: they raise exits further, and replacing trained knitters costs recruitment and training time on machines that are already the bottleneck. A worker owed nine days' wages is being fined for lateness by an employer who is himself late - the fairness problem gets worse, not better.
Better sequence: pay on time, restore a single supervisor, publish leave rules, and add a small attendance bonus linked to a realistic standard. Attendance records may still be kept, but as data for managers to act on, not as a penalty machine.
Judgement: fines may produce a short-term dip in recorded lateness while raising turnover and damaging the willingness to cooperate that any piece-rate scheme needs.