Workplace culture: Regulation is unavoidable

Like so many others, I was shocked by the demise of Anna Sebastian, a young chartered accountant who worked for a Big Four accounting firm, repotedly because she could not cope with the pressures at work. I wrote up an article and sent it in to the Hindu late September. They carried it a few days ago. I reproduce it below:

We need to address India’s workplace culture

 

If we are to address the worst excesses of India’s corporate culture, some form of regulation seems unavoidable

 

T.T. Ram Mohan

 

In September, the mother of Anna Sebastian, the young chartered accountant who passed away in July allegedly due to work stress, said, “They say we have received freedom in 1947, but our children are still working like slaves.” Her anguished cry goes to the heart of the issue of workplace culture in India’s corporate world.

The inquiry report of the Ministry of Labour, promised within 10 days, is still awaited. The corporate world has chosen to remain largely silent on the tragedy. What corporate leader would dare to point fingers at others when the position at his own firm is not very different?  

Toxic work culture

The issue is not just long hours or having to put in extra effort to meet a deadline. Employees will gladly slog it out if they are shown respect, appreciated, and feel they are treated fairly.   From all accounts, much of corporate India fails on every count. Toxic work culture is pervasive in India’s private sector.

 

Long hours flow directly from a focus on the bottom line that comes at the expense of employees’ well-being. The management employs two people where four are required. It seeks to motivate the two employees by giving them the wages of three, thus saving on one employee. Impressive jargon hasbeen created to justify exploitation of employees and inhuman work hours. Meeting stiff targets against heavy odds is ‘organisational stretch’. There is ‘variable pay’ to promote a ‘performance culture’ that translates into a higher stock price — great for top management that corners most of the stock options. There is a ‘bell curve’ that identifies super-performers as well as under-performers. There are ‘stress management’ workshops to deal with the burn-out that ensues.  Management does not stop to ask itself why it is creating so much stress in the first place.

 

Long hours and employee burnout are typical of the corporate culture of the U.S. but not of Europe. France has a 35-hour work week. In the rest of Europe, the norm is about 40 hours. European firms lack competitiveness, did you say? Well, European standards of living are nothing to scoff at.

 

It is unrealistic to try to import the American culture into a setting that could not be more different. The per capita income in the U.S. is $85,000. In India, it is $2,700. The typical U.S. employee operates at a level of comfort — in terms of housing, commuting, health, diet, and leisure — that is way above that of the Indian employee. In India’s big cities, simply going to office and getting back can be an ordeal. So are getting school admissions for children (and then getting them into coaching classes), looking after an elderly parent, and generally ensuring that the household is ticking along.

 

Long hours are only part of the problem. Bosses often use language that can range from being unprofessional to abusive. During the tenure of Prime Minister Rishi Sunak, his deputy, Dominic Raab, faced charges of ‘bullying’ from officials he had worked with in his previous stints as minister. An enquiry found that he had been “aggressive” and “intimidating” but not “abusive”. Mr. Raab, nevertheless, had to resign. Such was the fate of the U.K. Deputy Prime Minister, no less, for having breached norms of civilised behaviour.

 

One wonders what would happen if these standards were applied to India’s corporate world. In the U.S. and in Europe, employees can sue the firm for a range of objectionable behaviours including those that cause them mental stress. They often win huge settlements. No such recourse is available in India.

 

Employees also feel they are not treated fairly. The performance evaluation system is often suspect and the ruthlessness with which so-called under-performance is dealt with will make one squirm.  Top management will talk of “weeding out dead wood”, an expression that shows  scant regard for the worth of human beings. Variable pay is heavily skewed in favour of a handful of individuals at the top. When those below seethe with resentment at what they perceive as unfair, a toxic culture is inevitable.

 

Many public sector firms have a much better work culture. Employees may not get huge rewards but they have job security. Unions act as a check on the arbitrary ways of top management. Inequality in pay is nowhere as glaring as in the private sector. Officers at the middle and senior levels put in long hours. People have their grievances. But complaints about a toxic work culture are rarer.

 

Time to remedy matters

How do we remedy matters? Corporates can be expected to be respond along predictable lines: there will be affirmations of “core values”, a new “code of conduct” for management, programmes to address the “work-life balance”, more “town hall meetings” with employees. If these could make a difference, we shouldn’t be having a problem in the first instance. The board of directors should be paying attention to the company’s work culture, providing recourse and initiating corrective measures. Alas, boards  tend to be even more disconnected from reality than the management. Moreover, they lack the incentives or the motivation to challenge   management.

 

If we are to address the worst excesses of India’s corporate culture, some form of regulation seems unavoidable. Regulation may get boards to assume responsibility for the work culture, engage with employees at lower levels, and get a sense of what’s going on.  The Nirbhaya episode caused a paradigm shift on the issue of women’s safety. One hopes that Sebastian’s untimely demise will likewise turn out to be a defining moment for India’s workplace culture.