However, their basic salaries ($3000) are unchanged during the inflation and the commission rate of the arrangement of five delivery assistants on a truck is unreasonable, comparing to the commission of the truck in four. When there are five delivery assistants per truck, they need to share the commission by a smaller proportion. Actually, their total income would decreases by $1000 to $2000. With the basic salary plus the lower commission, they may not have enough income to cope with the daily needs due to the high inflation rate.
As a successful company, it should have a good image and become socially responsible. Social responsibility is a business firm’s obligation, beyond that required by the law and economics, to pursue long-term goals that are good for society. The company should consider different types of stakeholders when they designing the policy of five delivery assistants per truck.
Watsons Water
____________________Extent of the Balance Sheet____________________
As we find that in the web site of Watson Group Ltd, the net profit before the interest and tax was 4.374 billion HK dollars. The sales and the net profit before the interest and tax in the first half year in 2009 were 53.444 billion dollars and 1.873 billion dollars. This can be reflected that although the financial tsunami happened, the company still has stable and impressive revenue this year. When earning a stable profit, the company should pay close attention to their workers and should not cut the commission in order to reduce the expenditure
Recommendation:
1. Improve communication between Watsons Water and staff
A lack of communication between Watsons Water and the delivery assistants is the main cause of the strike. An effective communication is needed in all organization. In an organization, communication is the passing on ideas and information to employees by upper level. To be successful, Watsons Water needs to communicate with the delivery assistant effectively which helps Watsons Water to solve the conflict, to keep staff being informed, etc. In the strike, it reflects that the massages from Watsons Water cannot be transferred to the delivery assistants effectively.
On the delivery assistant’s aspect, we may think that the delivery assistants are poor. Watsons Water does not act as a responsible employer since that she pay unsuitable amount of salaries to employees even Watsons Water had $18.73 trillion dollars profit before tax on the first half year of 2009. However, we should also consider the Watsons Water’s aspect. On Watsons Water aspect, due to the economic downturn in 2009, Watsons Water’s profit of the first half year in 2009 is lower than in 2008. Moreover, the changing of policy is because there is a cut of trucks amount within organization. After considering both aspect, the strike happened due to Watsons Water does not have an effective communication with the workers.
There are more than 300 delivery assistants employed by Watsons Water. To enhance communication effectiveness, Watsons Water should facilitate the communicate system and overcome the barriers which is any factor that disturb, confuses with communication. However, it is difficult for us to overcoming the barriers during communication.
Firstly, it should set up a two-way communication channel between Watsons Water and the delivery assistants. Two-ways communication means Watsons Water can receive feedback from the worker after making a suggestion. Not only Watsons Water can have a say but also the employees. Also, it encourages open discussion and debates. The employees’ participation is very important in decision making. It provides opportunities for Watsons Water to make a better decision and review the existing policy. At the same time, employees can reflect their opinion to the senior managers. Getting effective feedback is one of the most important functions of two-ways communication. An effective feedback should be goal-oriented and impersonal. During the two-ways communication, feedbacks may result a better understanding on both Watsons Water and employees so that conflicts can be minimized. Since feedback may change easily, Watsons Water should collect it regularly to keep communication with employees. For example, Watsons Water can organize regular meeting in quarterly in order to provide immediate feedbacks. Besides, Watsons Water can make use of the information technology to communicate with the employees such as set up an online forum for employees to express their opinion. The main point is the company should take the employees’ opinion under consideration after it get. Otherwise, the employees will find that the company is not willing to listen to them. When conflicts occur, the employees tend to solve the problem in a more aggressive ways such as strike instead of communication.
Secondly, to ensure messages are correctly transferred, we should avoid the noise which is the most common barrier. Although it is difficult to avoid noise, Watsons Water still has some methods to overcoming noise in order to have a better communication with employees. The first method is showing the employee some information about the industry average pay as a supporting to let them know that they are not underpaid. When providing this information, we suggest using the verbal form since it can minimize the misunderstanding between the employee and the company which non-verbal form may cause easily. Furthermore, the verbal form information can be kept for references easily. For example, sending an e-mail to the employees and give out leaflet to explain how the salary is set.
Thirdly, the emotional reactions such as defensiveness and anger for both employees and Watsons Water may influence how they understand others’ messages. When the employees are angry, it may lead Watsons Water more difficult to communicate with them. The best approach to solve it is to seek to understand. If employees are behaving aggressively, get them to talk about their concerns and pay careful attention to what they say. Once Watsons Water understands employees’ reactions, it may be able to improve the atmosphere by changing its own behaviour to avoid continuous conflict.
To conclude, an effective communication helps to prevent industrial disputes. Although it is effective in preventing disputes, it takes time to work.
2. Solution of the inequity
Once of the causes of this strike is because the employees feel that they are underpaid in the new system than other colleagues who are in four delivery assistants per truck. According to this situation, we analyzed it by equity theory on the top.
The referent that employees choose to compare with is an important variable in equity theory. For example, employees can compare their pay with others within the company or they can compare with others in the same industry. When employees perceive an inequity, they may have several behaviours such as strike, change their workforce or quit their job. Those may lower employees’ performance and increase labour turnover.
In the strike, it reflects that employees are comparing their pay with the employees in the same company. Therefore, they find out that their pay is underpaid. There is a conflict between Watsons Water and employees on salary. To solve the conflict and avoid strike occur again, Watsons Water should avoid employees compare with others within the same company continuously.
Watsons Water can make employees to compare their paid with other companies in the same industry such as Vita, Coca Cola. Using the other way of comparison, employees may find out that their paid are in average level actually and they are paid equity. Then, employees’ dissatisfactions on underpaid can be solved and avoid the strike happen.
3. Use an effective leadership
To avoid strike happened again, a good leadership style should be used. There are many types of leadership theories such as situational leadership and path- goal theory. Moreover, using a good leadership can help Watsons Water to manage effectively.
Delivery is a business activity that highly reliance on employees. Therefore, Watsons Water set agreement with those delivery assistants within a few days. It is a heavy cost for Watsons Water if the strike last for a long period. To solve the problem, Watsons Water’s leadership should have a change. Path-goal leadership theory is one of the theories suggested to Watsons Water.
In Path-goal leadership theory, leader should assist employees in attaining their goals and provide direction and support. Actually, there are four types of leadership behaviours under the theory which are directive leader, supportive leader, participative leader and the achievement-oriented leader. Leader behaviours will influence employees’ moods and behaviours.
To avoid having strike again, the directive leader can let employees know what is expected of them, schedules work to be done, and gives specific guidance to accomplish tasks by giving them a concrete direction. The supportive leader is friendly and shows concern about the needs of employees. In theory, Watsons Water can still gain employees’ support even it really needs to cut the salary one day. This is because it maintains a good relationship with employees by supportive leader. The new policy which Watsons Water implements can be understood by employees and strike can be avoided. And for the participation leaders, they consult with employees and use their suggestions before making a decision. Then, this can let employees feel that Watsons Water respects them. Then, the dissatisfactions of employees come from cutting salaries can also be minimized..
Here is a real example; Boeing CEO James McNerney adopts the path- goal approach by helping employees attain their goals and providing the necessary direction and support. McNerney believes that a company’s performance begins with the growth and development of its staff rather than its products. Actually, Boeing is the largest aeroplanes producer in the world.
The example shows that if Watsons Water can apply the leadership in an effective way, it will be benefited in the long term. This also helps to motivate the employees and hence increase their job satisfaction. Moreover, it helps to avoid the conflict between Watsons Water and employees.
4) Satisfy the physiological needs
Maslow’s Hierarchy of Needs Theory was whereby people are motivated to fulfill higher needs as a lower one becomes gratified. Staffs at different levels of the hierarchy are motivated by different things. The 1st level is physiological needs such as money, food; the 2nd is safety needs such as work safety; the 3rd is social needs such as sense of belonging to company. The first three are what we call basic need. Then the 4th is self- esteem such as glorious job title and the 5th is self- actualization such as opportunities for achievement.
The income of the delivery assistants cannot cope with their daily needs, which means physiological needs cannot be satisfied. Being socially responsible enterprises, Watsons Water should not only responsible to shareholders, public, etc, but also to employees. Watsons Water should satisfy the physiological needs.
Actually, the Watsons Water is a largest retailer of pure distilled water and monopolizes 70% of the market shares in Hong Kong. This type of the industry relies on delivery assistants heavily. If the delivery assistants have low morale, this may affect the revenue of the company directly. However, the motivation of the employees is low due to their basic needs cannot be satisfied.
Firstly, Watson Water should adjust the reward system regularly with the variance of the external environment such as the inflation or economic downturn. During an inflationary period, the prices level of goods such as necessities would increase, so employees’ salaries should also be raised in response to the inflation. It must be done as a socially responsible enterprise.
Secondly, in order to enhance the motivation of the delivery assistants, Watsons Water can change it reward policy such as giving bonus. It is a method that paying employees a several percent of bonus when there is profit in company. The delivery assistants would also be motivated to increase the profit of the company. But, if there is a loss in the company, this reward method would not influence on employees’ salaries.
Conclusion
To sum up, a strike would destroy the reputation of the company and the relationship between the company and the employees. So, company should do something in order to avoid the disputes to happen. In this case, the disputes of Watsons Water were happened since they received unfair salaries and the basic salaries plus commission are not enough for employees to cope with the daily necessity. In order to avoid the strike occur again in the future, the company can improve the communication channel by two-way communication; to solve the inequity by giving the market salary rates and telling them that they are not underpaid comparing with other companies; to use an effective leadership style to influence employees’ moods and behaviours; to satisfy the physiological need by giving bonus and motivate them to work hard. Enterprises should always bear in mind that employees are their great assets. Nothing but respect should be paid more attention to the employees. Hence, industrial disputes can be minimized or even avoided.
Reference
A) Book
-
Robbins, S.P. and DeCenzo, D.A., (2008) Fundamentals of Management - Essential Concepts and Applications, 6th ed., Pearson Education Inc., New Jersey.
B) News and website
Appendix 1-9
News and website
Appendix 1
HK EDITION > Hong Kong
Meanwhile, delivery assistants of Watsons Water will continue a strike today after the company failed to meet demands for increased commissions.
Over 80 delivery workers staged a protest outside Watsons Water headquarters in Tai Po from 8 am to 5pm yesterday. The protestors comprised a fifth of the company's delivery staff.
"The company promised to improve our working conditions last year but it failed to honor the promise,"said Leung Wai-yum, spokesperson of Hong Kong A.S. Watson & Company Limited Employees Union.
The staff demanded an increase in commissions on water deliveries to 48 cents per bottle.
The company said prevailing conditions have made it difficult to raise commissions that high. It expressed regret and disappointment, saying the employees' demand amounts to a 12.5 percent commission increase.
"The industrial action will go on until the company gives us a reasonable response," Leung said.
(HK Edition 08/06/2009 page1)
Copyright By chinadaily.com.cn. All rights reserved
Appendix 2
HK EDITION > Hong Kong
Two labor disputes closer to accord
HONG KONG: The labor dispute between New World First Bus (NWFB) and its drivers has moved a step
closer to resolution with the union backing off a major sticking point over salary demands. The union said
it likely will abandon plans for a partial withdrawal of services next Friday, if management agrees to
improve working conditions for contract staff.
The Hong Kong Confederation of Trade Unions affiliate NWFB Trade Union had demanded a 1.8 percent
increase in employees' salaries. The company had refused to go higher than a 1.6 percent increase and a
one-off bonus of HK$250 to each worker.
Negotiations between the two parties broke down on Wednesday. That was followed by a declaration by
the union that 800 drivers and garage workers would stop work in protest on August 14th.
Union chairperson Chung Chung-fai said the union has agreed to set aside its salary demand but insisted
the company must improve working conditions of contract employees, which comprise about 10 percent
of the company's 2,000 employees.
"Contract employees are suppressed (by the company). Their service condition is much worse than the
full-time," Chung said.
Contract staff are paid about HK$8,000 monthly, about HK$3,000 below what full-time salaried workers
receive. Contract staff are not entitled to double pay, nor are they entitled to textbook grants for their
children.
"We are waiting for a new proposal from the company. If it is sincere and suggests terms which we find
acceptable, we will not insist on the 1.8-percent pay rise and will maintain normal work next Friday,"
Chung said.
The NWFB has made no new proposal, reiterating that its earlier offer is reasonable. A spokesperson said
the company will improve benefits of employees according to conditions in the human resources market.
It will meet the union again next week.
Meanwhile, the Watsons Water labor dispute was resolved Friday after the company accepted the views
of its workers about the assignment of deliverymen on company trucks.
About 60 staff continued to picket outside the Tai Po headquarters for a third consecutive day Friday as
discussions continued. The picket line was lifted once the agreement was reached.
Watsons agreed to scrap the practice of assigning five delivery workers per vehicle, which, the union said,
cut workers' pay by HK$1,000 to HK$2,000 a month. Staff, in accepting the company proposal, withdrew
an earlier demand for a commission increase to a standard 48 cents per bottle of water.
(HK Edition 08/08/2009 page4)
Copyright By chinadaily.com.cn. All rights reserved
Appendix 3
屈臣氏蒸溜水廠再次爆發工潮,數十名跟車工人早上在大埔廠房外發起罷工,要求改善薪酬待遇。工人預計,會有大約200名工人參與罷工,佔跟車工人的總數三分之二。
屈臣氏蒸餾水公司約80名跟車工人,早上在大埔工業村的廠房外聚集,聲言罷工,抗議公司計劃增加每架運輸車的跟車工人數目,變相攤薄佣金,每人每月收入減少約1,500元,要求公司將每架車跟車人數,由5至6人,減至4人。不過,仍然有員工如常出車送水。
資方表示,已準備支援運輸隊,維持有限度的送水服務,減低對顧客造成的不便。
Appendix 4
屈臣氏蒸餾水廠的工潮仍未解決,送貨工人連績第二日工業行動。勞資雙方下午在勞工處代表陪同下,展開談判。
數十名工人早上在大埔工業的廠房外聚集,要求公司取消5人跟車制及將運送蒸餾水的佣金,劃一為每支0.48元。勞工處派人到場跟進,資方表示,已安排後備車隊以及外判公司運送蒸餾水,服務未受大影響。
另外,公司今天在報章刊登廣告招聘人手運送蒸餾水,強調只是請暑期工,配合短期業務發展。
Appendix 6
Appendix 7
Appendix 8
Appendix 9