Rashtriya Ispat Nigam Limited
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A STUDY ON INDUSTRIAL RELATIONS
IN
RASTRIYA ISPAT NIGAM LIMITEDVISAKHAPATNAM STEEL PLANT
VISAKHAPATNAMIn partial fulfillment for the award of the degree of
“MASTER OF BUSINESS ADMINISTRATION”IN
HUMAN RESOURCE MANAGEMENTA Project Report submitted by
P.MARY(Reg.No. 10MU1E0022)
Under the guidance of Sri K SANJEEVA RAO
(Assistant General Manager)-WELFARE.
DEPARTMENT OF MANAGEMENT STUDIES
SRI VENKATESWARA INSTITUTE OF SCIENCE & INFORMATION TECHNOLOGY
TADEPALLI GUDEM.
1
CERTIFICATE OF PROJECT GUIDE
This is to certify that the project report entitled “A STUDY ON
INDUSTRIAL RELATIONS IN RASHTRIYA ISPAT NIGAM LIMITED”
is a bonafide work done and submitted in partial fulfillment of the
requirement for the award of Degree and by P.MARY under my
guidance & supervision.
Station: Visakhapatnam K SANJEEVA RAO
Date: AGM(Per)-WELFARE
2
DECLARATION
I, Ms. MARY, hereby declare that the project work titled
“INDUSTRIAL RELATIONS” with regard to “RASTRIYA ISPAT
NIGAM LIMITED” is the original work done by me and submitted to
Sri Venkateswara Institute of Science and IT
College in partial fulfillment of the requirements for the award of
degree MBA in (HR) is a record of original work done by me under the
supervision of
Mr. K. SANJEEVA RAO AGM(Per)-WELFARE Visakhapatnam Steel
Plant, Visakhapatnam.
Date: Signature of the student
P.MARY
3
ACKNOWLEDGEMENT
I express my gratitude to all of them, who gave full support to me
in preparing this project, especially my sincere thanks to my college
“Sri Venkateswara Institute of Science and IT
College” for their support and also to all departments of
Visakhapatnam Steel Plant.
I am grateful to all my professors in my college for giving me
their valuable suggestions on the project and for their co-operation.
My special thanks to Mr. K. SANJEEVA RAO Assistant General
Manager-welfare, for extending their valuable support. I am glad to say
that this project would not have been successful without their support.
4
SYNOPSIS
In this project I have tried to relate “Management Development
Programmes” conducted by HRD department with “Industrial
Relations” in Visakhaptnam Steel Plant or how can “Industrial
Relations” be improved by “Management Development Programmes”.
So in my project there are two chapters first chapter is regarding
industrial relations in Vizag Steel Plant and the second chapter is on
training and development programmes (Management Development
Programmes).
Information in this project is both primary and secondary data.
At the beginning I have given a brief description of company’s
profile which includes an overview of Vizag Steel Plant, Manpower,
resources, raw materials, mines, performance of the company over the
years HR policies, achievements and awards and final products
produced through company.
In the first chapter I have collected information regarding
industrial relations and various programmes that are undertaken to
maintain harmonious industrial relations in the organization. This
chapter gives an overview of the industrial relations in the
Visakhapatnam Steel plant. This chapter gives a brief of various types
of laws relating to industrial relations, welfare measures in Vizag Steel
5
Plant which helps in maintaining the employees in the VSP satisfied,
Central employees relation role, Trade union scenario, Election
scenario, Disciplinary procedures followed, Workers participation in
management, Emergence of Joint Consultative Machinery, Grievance
management, Participative committees, Samalochana and Quality
circles in the Visakhapatnam Steel Plant. Information regarding the
major industrial disputes has been kept in this chapter.
In the second chapter, I have applied six sigma to the feedbacks
provided on management development programmes conducted in the
organization. I have collected information regarding the approach of
VSP in conducting management development programmes and
methods they adopt in conducting these programmes. In programmes
have been exclusively conducted for personnel and IR department and
the trade union members to maintain a good IR environment in the
organization.
At last there are suggestions and observation regarding how the
programmes can be implemented to maintain good IR.
6
TABLE OF CONTENTS
TITLE
INTRODUCTION
Overview of the Company
CHAPTER – 1
1. INTRODUCTION
2. NEED FOR THE STUDY
3. OBJECTIVE
4. SCOPE OF THE STUDY
5. METHODOLOGY
6. LAWS RELATED TO INDUSTRIAL RELATIONS
7. DISCIPLINARY PROCEDURES
8. INDUSTRIAL DISPUTES
9. WORKERS PARTICIPATION IN MANAGEMENT
10. GRIEVANCE MANAGEMENT
11. QUESTIONNAIRE
12. ANALYSIS AND INTERPRETATION
13. SUMMARY
14. CONCLUSION
15. SUGGESTIONS FOR FURTHER STUDY
7
CHAPTER –2
1. SUGGESTIONS REGARDING IMPROVING IR
BIBLIOGRAPHY
APPENDIX
8
INTRODUCTION TO STEEL INDUSTRY
What’s in the name? Nothing, one might say. For steel – a century
old metal – there additionally seems no reason for any possible non-unanimity of
thought. But here precisely are the chances for out going wrong. True, like most
industries, the Indian Steel Industry has experienced the highs and lows of the
business cycle, has been impacted by the globalization and has been subjected to
the vagaries of market forces in a liberalized set up. But at the end of it all, what
we have today is a highly evolved, resilient and an ever – vigilant industry, which
through adoption of State-of-the-art technologies has kept pace with changing
times, producing an out put that has not only stood the test of time but has globally
transformed the way men think and do business in steel.
India got into the steel making in the early 20 th century when JRD Tata set
up the first steel mill in the country in 1907 in Jamshedpur. Since then, the steel
industry has undergone a lot of changes but the Tata Iron and Steel Company
continues to be the largest private steel maker in the country. The steel industry in
the 70s and 80s was dominated by TISCO & SAIL. With the price control regime
in place, the steel companies could turn in a profit without any major effort.
9
In the initial economic reforms, industrialists saw the economic growing at
7% per annum and since steel consumption is directly linked to the growth in
economy, it was assumed that demand for steel in the country would explode. This
led to huge flow of investments into the steel industry and many EAF based steel
units were set up. The 1st phase (1914-1947) of its evolution can be traced to the
beginning of the 20th century when the steel industry made a beginning as an icon
of active patriotism, thanks to the pioneering spirit of “Swadeshi” entrepreneurs in
the private sector. This period saw a small but viable steel capacity of about 1
million tones.
Although the initial years justified these assumptions and steel consumption
really took off, this scenario was not to continue for long. The political instability
and the resultant slow down in reforms saw the economic growth slowing down.
During the second phase (1947-1992), in the hands of the early planners this
industry became an important instrument for attaining rapid economic growth
because of two inherent advantage enjoyed by it. Firstly, India’s fast reserves of
the basic raw materials conferred a certain competitive advance to this industry.
Secondly the wide-ranging linkages, both forward & backward sector has with the
rest of the economy made it an ideal catalyst for generating and sustaining
economic development.
10
INDIA’S STEEL SCENARIO
Indian Steel industry has always remained isolated and protected by
Government, where the steel industry was never expected to generate profit from
business, but was expected to provide employment to the unemployed. Presently
India is operating with open-hearth furnaces. The existing equipment, energy and
layout in Indian Steel industry are much low than the developed countries.
Indian Steel industry generates a significant amount of waste materials,
which can cause environmental problems. The four aspects of “Waste
Management” namely – residue reprocess, recycle and recovery do not hold much
ground in the Indian Steel Industry. The Indian companies cannot spend more for
pollution control. The energy consumption per tone is 50-100% higher than that of
the International norms.
The country’s aim is to sell quality steel. The government is also helping
the steel industries in this basis.
11
PROBLEMS OF STEEL INDUSTRIES: -
Non-availability of good quality raw material is another problems faced by
iron and steel industry. The modern giant blast furnace needs high-grade iron ore
and good metallurgical coal. Further, the industry is unable to get good quality
coke and manganese is which the principal raw materials next to iron ore are
unfortunately most of our resources of good manganese ore are of poor quality
besides the non availability of good quality raw material, regular supplies of raw
materials are very much handicapped due to the absence of good transport
facilities. Another problem faced by the steel industry related to the difficulty in
getting Zinc supplies for the continuous galvanizing line.
Lack of technical problems
Bhilai had to execute orders for shipment of rails to Iran, South Korea and
Malaysia. Because of technical limitations, Rourkela plant is unable substitute
aluminum of Zinc for the production of galvanized sheet apart from source internal
technical problems; our technology in the field of steel production is not a
developed one when compared to other advanced countries. For instance, Japan is
production quality steel in spite of importing raw material and additional material
from other country.
TABLE2-1: Steel Plants with Foreign Collaborations
12
S No Plant Collaboration Capacity of Finished Steel Products
1. Rourkela Steel Plant West Germany2. Bhilai Steel Plant Erstwhile USSR3. Durgapur Steel Plant Britan4. Bokaro Steel Plant Erst USSR
13
TABLE2-2: Annual Productions at Various Steel Plants
S No Plant
Collaboration Capacity of Finished Steel
Products
Annual Production
1. Rourkela Steel Plant West Germany 7,20,000 tonnes
2. Bhilai Steel Plant USSR 7,70,000 tones
3. Durgapur Steel Plant Britan 8,00,000 tons
TABLE2-3: Annual Production at Various Steel Plants
S No PlantORIGINAL
MT/YearEXPANDED
MT/Year
1. Rourkela Steel Plant 1.0 1.8
2. Bhilai Steel Plant 1.1 2.5
3. Durgapur Steel Plant 1.0 1.6
4. TISCO 1.0 2.0
a) RASRIYA ISPATH NIGAM LIMITED
Steel occupies the foremost place among the materials in use to day and
pervades all walks of life. All the key discoveries of the human genius- for in
stance, stream engine, railway, means of communication and connection,
automobile, aero plane and computers are in one way or other, fastened together
with steel and with its sagacious and multifarious application. Steel is a versatile
material with multitude of useful properties making it indispensable for furthering
and achieving continual growth of the economy – be it construction,
14
manufacturing, infrastructure or consumables. The level of steel consumption has
long been regarded as an index of industrialization and economic maturity attained
by a country. Keeping in view the importance of steel, the fallowing integrated
steel plants with foreign collaboration were set up in the public sector in the post –
independence era:
Table2-4
SI.NO. STEEL PLANTS COLLABORATED BY 1. Durgapur steel plant Britain
2. Bhilai steel plant Erstwhile USSR
3. Bokaro steel plant Erstwhile USSR
4. Rourkela steel plant Germany
5. Visakhapatnam steel plant
Erstwhile USSR
BACKGROUND:
To meet the growing domestic needs of steel, Govt. of India decided to set
up an integrated steel plant at Visakhapatnam. An agreement was signed with
erstwhile USSR in 1979 for cooperation in setting up 3.4 Mt integrated steel plant
at Visakhapatnam. The foundation stone for the plant was laid by the then prime
minister on 20th January 1971.
The project was estimated to cost Rs. 8397.28 Based on process as on 4th
quarter of 1981. However, on completion of construction and commissioning of
the whole plant in 1992, the cost escalated to around Rs.8,500 Cr. unlike other
integrated steel plant in India, Visakhapatnam steel plant (VSP) is one of the most
15
modern steel plant in the country. The plant was dedicated to the nation on 1st
August 1992 by the then prime minister, shri PV Narsimharao.
New technology, large – scale computerization and automation etc., are
incorporated in the plant. To operated the plant at international levels and attain
such labour productivity, organizational manpower has been rationalized. The
plant has a capacity of producing 3.0Mt of liquid steel and 2.656 Mt of saleable
steel.
VISAKHA STEEL PLANT A MISSION : STATE- OF-THE-ART:
Operating at Over 120% rated capacity at.
3.6 Mt. Liquid Steel
To double Capacity by 2008-09
Mission – To produce 16 Mt by 2020
Most Energy Efficient plant in the Country.
7 meter tall coke ovens batteries with coke dry quenching.
Biggest blast furnaces in the country.
Bell – less top charging system in blast Furnace.
100% slag granulation at the BF cast House.
Suppressed combination – LD gas recovery system.
100% continuous casting of liquid steel.
“Tempcore” and “stemor” cooling process in LMMM & WRM respectively.
Extensive waste heat recovery systems.
Comprehensive pollution control measures.
16
WATER SUPPLY:
Operational water requirement of 36 mgt is being met from the yeleru water supply scheme.
POWER SUPPLY:
Operational water requirement of 180 to 200 MW is being met through
captive power plant. The capacity of the power plant is 286.5 MW. VSP is
Exporting around 60 MW power to AP
17
MAJOR SOUCES OF RAW MATERIALS: Table2-5
RAW MATERIAL SOURCE
Iron Ore Lumps & Fines Bailadilla, AP
BF Lime Stone Jaggayyapeta, AP
SMS Lime Stone UAE
BF Dolomite Madharam, AP
SMS Dolomite Madharam, AP
Manganese Ore Chipurupalli, AP
Boiler Coal Talcher, Orissa
Coking Coal Australia
Medium Cocking Coal (MCC) Gidi/Swang/Rajarappa/Kargali
MAJOR UNITS: Table2-6
DEPARTMENT ANNUAL CAPACITY
(‘000 T)
UNITS(3.0 MT Stage)
Coke Ovens 2,261 3 Batteries of 67 Ovens & 7 Mtrs. Height
Sinter Plant 5,256 2 Sinter Machines of 312 Sq. Mtr. Grate area each
Blast Furnace 3,400 2 Furnaces of 3200 Cu. Mtr. Volume each
Steel Melt Shop 3,000 3 LD Converters each of 133 Cu. Mtr. Volume and six 4 Strand bloom casters
LMM 710 4 Stand finishing Mill
WRM 850 2*10 Stand finishing Mill
18
CHAPTER – 1
(INDUSTRIAL RELATIONS)
19
VISAKHAPATNAM STEEL PLANT
- AN OVERVIEW
Steel occupies the foremost place among the materials in use to
day and pervades all walks of life. All the key discoveries of the human
genius- for in stance, stream engine, railway, means of communication
and connection, automobile, aeroplane and computers are in one way
or other, fastened together with steel and with its sagacious and
multifarious application. Steel is a versatile material with multitude of
useful properties making it indispensable for furthering and achieving
continual growth of the economy - be it construction, manufacturing,
infrastructure or consumables. The level of steel consumption has long
been regarded as an index of industrialization and economic maturity
attained by a country. Keeping in view the importance of steel, the
following integrated steel plants with foreign collaboration were set up
in the public sector in the post - independence era:
20
Sl.No. Steel Plants Collaborated By
1. Durgapur Steel Plant Britain
2. Bhilai Steel Plant Erstwhile USSR
3. Bokaro Steel Plant Erstwhile USSR
4. Rourkela Steel Plant Germany
5. Visakhapatnam
Steel Plant
Erstwhile USSR
BACKGROUND:
To meet the growing domestic needs of steel, Govt. of India
decided to set up an integrated steel plant at Visakhapatnam. An
agreement was signed with Erstwhile USSR in 1979 for cooperation in
setting up 3.4 Mt integrated steel plant at Visakhapatnam. The
foundation stone for the plant was laid by the then Prime minister on
20th January 1971.
The project was estimated to cost Rs 8397.28 Based on process
as on 4th quarter of 1981. However, on completion of construction and
commissioning of the whole plant in 1992, the cost escalated to around
Rs8500 Cr. unlike other integrated steel plant in India, Visakhapatnam
steel plant (VSP) is one of the most modern steel plants in the country.
The plant was dedicated to the nation on 1St August 1992 by the then
prime minister, Shri P.V Narsimha Rao.
21
In the plant new technology, large-scale computerization and
automation were incorporated. To operate the plant at international
level and attain such labour productivity, organizational manpower has
been rationalized. The plant has a capacity of producing 3 Mt of liquid
steel and 2.656 Mt of saleable steel.
Operating at Over 120% rated capacity at.3.6 Mt. Liquid Steel
To double Capacity by 2008-09
Mission - To produce 16 Mt by 2018-19.
Most Energy Efficient plant in the Country.
7 meter tall coke ovens batteries with coke dry quenching.
Biggest blast furnaces in the country.
Bell - less top charging system in blast Furnace.
100% slag granulation at the BF cast House.
Suppressed combination - LD gas recovery system.
100% continuous casting of liquid steel.
"Tempcore" and "Stemor" cooling process in LMMM & WRM
respectively.
Extensive waste heat recovery systems.
Comprehensive pollution control measures.
WATER SUPPLY:
22
Operational water requirement of 36 mgt is being met from the
Yeleru water supply scheme.
POWER SUPPLY:
Operational water requirement of 180 to 200 MW is being met
through captive power plant. The capacity of the power plant is 286.5
MW. VSP is Exporting around 60 MW power to APSEB.
MAJOR SOURCES OF RAW MATERIALS:
RAW MATERIAL SOURCE
Iron Ore Lumps & Fines Bailadilla, AP
BF Lime Stone Jaggayyapeta, AP
SMS Lime Stone UAE
BF Dolomite Madharam, AP
SMS Dolomite Madharam, AP
Manganese Ore Chipurupalli, AP
Boiler Coal Talcher, Orissa
Coking Coal Australia
Medium Cocking Coal (MCC) Gidi/Swang/Rajarappa/Kargali
23
MAJOR UNITS
Department Annual Capacity
(000 T)
Units (3.0 MT
Stage)
Coke Ovens 2,261 3 Batteries of 67
Ovens & 7 Mtrs.
Height
Sinter Plant 5,256 2 Sinter Machines of
312 Sq. Mtr. Grate
area each
Blast Furnace 3,400 2 Furnaces of 3200
Cu. Mtr. Volume
each
Steel Melt Shop 3,000 3 LD Converters
each of 133 Cu. Mtr.
Volume and six 4
Strand bloom
casters
LMM 710 4 Stand finishing Mill
WRM 850 2*10 Stand finishing
Mill
MMSM 850 6 Stand finishing Mill
24
MAIN PRODUCTS OF VSP:
STEEL PRODUCTS BY – PRODUCTS
Angles Nut Coke Granulated Slag
Billets Coke Dust Lime Fines
Channels Coal Tar Ammonium Sulphate
Beams Anthracene Oil
Squares HP Napthalene
Flats Benzene
Rounds Toluene
Re- Bars Zylene
Wire Rods Wash Oil
Total EMP : 17225 as on 29-02-2009
No. of Executives: 5025
No. of Non – Executives : 12200
Attrition Rate in Executives : 1.2%
Attrition Rate in Non – Executives: 0.42%
25
VISION, MISSION & OBJECTIVES:
Vision:
To be a continuously growing world - class company we shall
Harness our growth potential and sustain profitable growth.
Deliver high quality and cost competitive products and be the
first choice of customer.
Create an inspiring work environment to unleash the creative
energy of people.
Achieve excellence in enterprise management.
Be a respected corporate citizen, ensure clean and green
environment and develop vibrant communities around us.
Mission:
To attain 16 million ton liquid steel capacity through
technological up - graduation, operational efficiency and expansion; to
produce steel at international standards of cost and quality; and to
meet the aspirations of the stakeholders.
26
OBJECTIVES:
Expand plant capacity of 6.3 millions ton by 2008 - 2009 with the
mission to expand further in subsequent phases as per the
corporate plan.
Sustain gross margin to turnover ratio >25%
Be amongst the top five lowest cost steel producers in the world
by 2009-10.
Achieve higher levels of customer satisfaction than the
competitors.
Be recognized as the excellent organization by 2008- 09.
Instill right attitude amongst employees and facilitate - them to
excel in their professional, personal and social life.
Be proactive in conserving environment, maintaining high levels
of safety and addressing social concerns.
27
Core Values:
Commitment
Customer Satisfaction
Continuous Improvement
Concern for Environment
Creativity & Innovation
VSP takes all necessary actions for the fulfillment of regulatory
requirements. It has dedicated departments for this purpose. Energy
conservation, environmental preservation, safety in work place, and
occupational health gets highest priority in the company. Some of the
policies in this regard are reproduced below.
HR POLICY:
We, at Visakhapatnam steel plant, believe that our employees
are the most important resources. To realize the full potential of
employees, the company is committed to:
Provide work environment that makes the employees committed
and motivated for maximizing productivity.
Establishing systems for maintaining transparency, fairness and
equality in dealing with employees.
28
Empower employees for enhancing commitment, responsibility
and accountability.
Encourage teamwork, creativity, innovativeness and high
achievement orientation.
Provide growth and opportunities for developing skills and
Knowledge.
Ensure functioning of effective communication channels with
employees.
HRD GROUP - KEY INITIATIVE:
In - house training progress
Nominations to external training programs
Organization research, employees' satisfaction surveys & voice of
employees' index
Organization development
Membership with professional bodies
Performance appraisal for executives
Human resource information system
In - plant training for management students
Lectures by eminent personalities
Corporate presentations
Interaction with professionals, academicians and consultants
29
Knowledge management
Initiatives on "six sigma"
Emancipation of women through WIPS, women development
programs (spring board)
Thrust on "samalochana"
Pursuit of business excellence model (BEM)
Dil ki baat
Chairman tho maata
HUMAN RESOURCE MANAGEMENT:
Human resource initiatives at VSP are closely linked to the
corporate strategy of the organization. VSP has harmonious industrial
relations where the entire workforce works as a well - knit team for the
progress of the company. The productive environment prevailing in the
company fosters an atmosphere of growth - both for the employees
and for the company. VSP has introduced multi-skilling concept since
interpretation and the employees are trained to imbibe this. VSP has
adopted a system of overlapping shifts - the first of its kind, in the
industry. This system ensures smooth change over of the shifts and
uninterrupted pace of operation of the plant during the shift change
over. Another unique feature followed at VSP is the uniform working
hours for the ministerial and non - ministerial employees. The labor
30
productivity is currently 282tonnes/man/year - unparalleled in the
public sector steel industry.
WELFARE AMENITIES:
Welfare has been given the utmost emphasis in the overall policy
of Human Resource Management of the company. Pursuant to this
policy, VSP has taken several initiatives for introducing and
implementing Non - statutory welfare which impart and propagate the
feeling that the "company cares for its employees".
Some of the non - statutory welfare and social security schemes
for the benefit of the employees and their family members are detailed
below:
ACHIEVEMENTS & AWARDS
The efforts of Visakhapatnam Steel Plant have been recognized in
various for a. Some of the major awards received by Visakhapatnam
Steel Plant are in the area of energy conservation, environment
protection, safety, Quality, Quality Circles, Rajbhasha, MOU, Sports
related awards and a number of awards at the individual level.
SOME OF THE IMPORTANT AWARDS RECEIVED BY VSP ARE
INDICATED BELOW:
31
ISO 9002 for SMS and all the downstream units-a distinction in
the Indian Steel Industry.
Indira Priyadarshini Vrikskha Mitra Award: 1992-93.
Nehru Memorial National Award for Pollution Control: 1992-93 &
1993-94.
EEPC Export Excellence Award: 1994-95.
CII (Southern Region) Energy Conservation Award: 1995-96.
Golden Peacock (1St Prize) “National Quality Award-96” IIM in the
National Quality Competition 1996.
Steel Minister's Trophy for "Best Safety Performance-1996".
Selected for "World Quality Commitment Award-1997" of J*Ban,
Spain.
Gold Star Award for Excellent performance in Productivity. Udyog
Excellence Gold Medal Award for Excellence in Steel Industry.
Excellence Award for outstanding performance in Productivity
management, Quality & Innovation.
Ispat Suraksha Puraskar (First Prize) for longest Accident free
period, 1991-94.
Best Labour Management Award for the Govt of A.P.
SCOPE Award for best turnaround for 2001.
32
Environment Excellence Award from Greentech Foundation for
energy conservation in 2002.
Best Enterprise award from Scope, WIPS for 2001-02.
Best enterprise award from SCOPE for surpassing MOU-targets -
2003-04.
ISTD Award for "Best HR Practices" - 2002.
Prime ministers trophy for "Best Integrated steel plant" - 200203.
"World quality commitment international star Award" in the gold
category conferred by business initiative Directions, Paris.
"organizational Excellence Award" for 2003-2004 conferred by
INSAAN
RINI, has been bestowed with several national accolades in the
year 2005-2006 significant among them being:
National Energy Conservation Award for the 6t' time in
succession.
National Award for Excellence in Cost management.
Viswakharma Rashtriya puraskar Awards (6 out of 32 at the
national level).
FAPCCI Best industries productivity Award.
INSAAN National Award for Organizational Excellence. Best CEO
Award.
33
The above Awards are besides a number of at the local, regional
& national level competition in the area of Quality Circles, Suggestion
Schemes etc.
HALLMARK OF VIZAG STEEL AS AN ORGANIZATION:
Today, VSP is moving forward with an aura of confidence and
with pride amongst its employees who are determined to give their
best for the company to enable to reach new heights in organizational
excellence.
At the same time, no single advantage accruing from a
knowledge society is found wanting by the neighborhood community
with the growth & development of a phenomenon called VIZAG STEEL
existing so close to its proximity, futuristic enterprises, academic
activity, planned & progressive residential localities are but few of the
plentiful ripple effects of this transformation and each one of us take
immense pride to uphold the philosophy of mutual i.e, individual and
societal) progress.
The remarkable performance on production front coupled with I'
prudent financial management has not only resulted in achieving I
significant net profits but also helped RINL emerge as a `NET POSITIVE
COMPANY' in January, 2006 by wiping out all its accumulated losses
during 2005- 06.
34
STATISTICAL INFORMATION:
I. Production Performance (‘000 Tones)
Year Hot Metal
Liquid Steel
Saleable Steel
Labour Productivity (Tones / Man /Year)
2001-
2002
3,485 3,083 2,757 228
2002-
2003
3,941 3,356 3,056 253
2003-
2004
4,055 3,508 3,169 262
2004-
2005
3,920 3,560 3,173 265
2005-
2006
4,153 3,603 3,237 282
2006-
2007
4,046 3,606 3,290 413
2007-
2008
3,913 3,322 3,074 389
II. Commercial Performance (Rs Crores)
Year Sales
Turnover
Domestic
Sales
Exports
2001-2002 4,081 3,710 371
2002-2003 5,059 4,433 626
2003-2004 6,174 5,406 768
2004-2005 8,181 7,933 248
2005-2006 8,469 8,026 443
2006-2007 9,131 8,487 424
35
2007-2008 10,433 9,878 555
III. Financial Performance (Rs Crores)
Year Gross Margin Cash Profit Net Profit
2001-2002 690 400 (-) 75
2002-2003 1,049 915 521
2003-2004 2,073 2,024 1,547
2004-2005 3,271 3,260 2,008
2005-2006 2,383 2,355 1,251
2006-2007 2,633 2,584 1,363
2007-2008 3,515 3,483 1,943
EXPANSION PLAN
The envisaged expansion of the plant capacity by 2008-09 is as below
1. Hot metal - 6.50 Mtpa
2. Liquid steel - 6.30 Mtpa
3. Saleable steel - 5.72 Mtpa
The following major facilities are proposed to be added under
expansion stage
1. Blast furnace -3800 M3 -1 No.
2. Sinter plant
a. Sinter machine No. 3 -400 M2 - 1No.
3. Steel melt shop No.2:
a. LD converters 150 M3Cap - 2No.s
36
b. 6 strand billet casters - 2 No.s
c. 6 strand round caster - 1 No
d. Secondary Steel Making Facilities
4. Rolling Mills:
a. Wire rod mill no. 2 - 600000 TPY
b. Special bar mill - 750000 TPY
c. Structure mill - 700000 TPY
d. Seamless tube plant - 300000 TPY
VSP will enhance the volume of production in long products
segment in view of brand image. In order to deliver the product mix
and help reduce the dependence on import of pipes in oil and gas
sector, seamless pipe mill is envisaged.
1. Wire rod (plain) - 5.5 mm to 20 mm in coils
2. Special bars (plain) - 16 mm to 40 mm - in coils and straight
lengths.
3. Structurals
4. Seamless pipe - 139 mm to 3.65 mm
5. Semis - blooms, billets
The project is estimated to cost Rs 8259 Crores.
37
CHAPTER-1
(INDUSTRIAL RELATIONS)
INTRODUCTION
Industrial relations are the relationships between employees and
employers within the organizational settings. The field of industrial
relations looks at the relationship between management and workers,
particularly groups of workers represented by a union. Industrial
relations are basically the interactions between employers, employees
and the government, and the institutions and associations through
which such interactions are mediated.
Industrial relations has become one of the most delicate and
complex problems of modern industrial society. Industrial progress is
impossible without cooperation of labors and harmonious relationships.
Therefore, it is in the interest of all to create and maintain good
relations between employees (labour) and employers (management).
38
NEED FOR THE STUDY:
The healthy industrial relations are key to the progress and
success. Their significance may be discussed as under:
To continue uninterrupted production.
To reduce industrial disputes.
To maintain high morale in employees and workers.
To reduce wastage.
To increase the overall performance of the organization.
Thus, it is evident that good Industrial Relation is the basis of
higher production with minimum cost and higher profits. It also results
in increased efficiency of workers. New and new projects may be
introduced for the welfare of the workers and to promote the morale of
the people at work. An economy organized for planned production and
distribution, aiming at the realization of social justice and welfare of
the massage can function effectively only in t an atmosphere of
industrial peace. If the twin objectives of rapid national development
and increased social justice are to be achieved, there must be
harmonious relationship between management and labor.
39
OBJECTIVES:
The following are the specific objective of the present study:
To know various programmes, those are helpful in maintaining
good industrial relations
To study the Industrial Relation system and their activities in VS
P.
To study the IR system and effectiveness.
To know various laws, machineries (joint consultative
machineries), and management techniques through which
organization achieves industrial peace.
To study industrial disputes and causes and affects of arising of
such disputes.
To study, identify and suggest measures to improve effectiveness
specifically from quality perspective.
SCOPE OF THE STUDY:
To know the function of the organization how they are really
functioning how the policies are made and implemented and conveyed
to the employees, to know these things visited several departments of
VSP. Those departments are:
Human resource development department
40
Personnel Management Department
Interacting with unions
Marketing department
Legal department etc.
METHODOLOGY
It discusses the methods that have been employed for data
collection (both primary and secondary data) and also justifies the
method followed. It then details the sample size and the type and gives
justifications for both. It also discusses the problem of the study, the
objectives, the scope and its limitations.
Data collection:
Adequate and relevant information is essential for any
meaningful research. It forms the basis of the study by supporting the
analysis. For any research two types of data are required.
1. Primary data - the data that is collected for the first time and
2. Secondary data - the data that is gathered from second hand
sources.
Primary data:
41
The primary data for this research study has been collected using
a questionnaire. The questionnaire method has the following
advantages
Advantages:
The responses are less biased as the person collecting data is not
present at the time of the respondent filling in the form
It provides a good and permanent record of data, which is not
possible in an interview.
This method might also have a few demerits:
The questions have to be clearly understood by the respondent.
Respondents will not have a second chance, if he requires
clarifications on the entries.
Care has been taken to explain the items in the questionnaire to
the respondents to avoid the demerits discussed above.
Secondary data:
The secondary data for the study consisted of details on
Performance Appraisal system being implemented in the organization
and details about the organization, its origin, growth, development and
other issues. All this data has been collected from the company's
42
records. Some data about the company has been collected from VSP
magazine.
43
Type:
Stratified Random sampling technique is selected. This is the only
technique that provide with a representative sample. Since employees
from all levels (strata) namely the top level, the middle level, and the
low level managers are included. At the strata level employees have
been chosen at random.
Limitations:
The time is a major limitation. The whole study was conducted
within a period of two months.
The study does not cover non-executive some executive cadre
and chairman and managing director. The study conifers itself
only to assistant managers to general managers.
Study is quality perspective. The information gathered in, this
regard is mostly through information discussion.
Only the existing system is studies and no attempt has been
made to identify and complete new and dynamic performance
system due to this constraints.
To get information about satisfaction level of employees from
Industrial Relations and its effectiveness, a stratified sample survey
was conducted. For the present study of the data has collected by way
from the following ways.
44
QUESTIONNAIRE:
The questionnaire was personally administered with respondent
in VSP. 50 questionnaires were distributed. Questionnaires were
distributed as such:
20 - Executives.
20 - Non- Executives.
10 - Union members.
It took nearly 10 minutes for each respondent to fill the
questionnaire. The responses given by the respondents were tabulated
and a score sheet is prepared.
MANAGEMENT OF INDUSTRIAL RELATIONS IN VIZAG STEEL
PLANT
Presently, 20 registered Trade unions are functioning at VSP. Out
of these, 2 unions viz., Visakha Steel Employees Congress (INTUC) &
Visakha Steel Workers Union have the support of more than 95% of the
total votes. There are 17 unions operating for espousing the cause of
contract labour. In addition, two unions each are also separately
registered at our captive mines located at Jaggayyapeta and
Madharam. By and large, smooth and cordial IR climate prevails at
VSP.
45
The "Mandays Lost" were brought to `NIL' since 2003 which
indicates the peaceful and harmonious industrial relation scenario in
Visakhapatnam Steel Plant.
The Code of discipline adopted in the state of Andhra Pradesh has
envisaged determination of majority union by way of secret ballot
elections at an interval of every 2 years. So far 9 elections have been
held at VSP since November, 1985. In the 9th elections held in the year
2008, Visakha Steel Workers Union (Steel Progressive Front consisting
of 9 registered unions has emerged as the majority union and was
conferred the status of recognition for a period of 2 years. Integration
of various activities close monitoring and review enabled conduct of
trade unions elections without much disturbance to the production
activities. Despite intense electioneering, - labour productivity was still
kept at a high peak.
Till date around 75 nos. of Memorandum of Understandings
(MOU), Memorandum of Settlements (MOS) were arrived at by duly
following proper collective bargaining process. These notable features
are getting union(s) commitment for realization of Mission and
Objectives, increase of Production and Productivity, improving
discipline etc.
46
The practice of resolving any issue with the recognized union
though mutual discussions was being followed in VSP cordial
atmosphere. However, his resulted in the intense inter-union rivalries
and implementation of issues settled with Recognized Union was found
to be difficult for both the Unions and Management. To overcome such
a situation, an institutional framework has been evolved for Joint
Consultation with representatives of the management providing scope
for consultations in all major areas like production, productivity,
quality, safety etc., vide settlement dated 12/061996. However, this
spirit of joint consultative Machinery has been discounted due to
various reasons including withdrawal by some of the Unions.
Around 110 nos. Of Participative Fora are functioning at VSP
which have diminished inter-union rivalries and ushered in a peaceful
IR climate. A large number of employees are given an opportunity of
participation in various fora at VSP including Quality Circles and
Suggestion Schemes.
Unique informal and formal Grievance Redressal System has
been successfully implemented in the organization providing for an
active employee Participation/involvement. A separate section "Central
Employees Relations " coordinates with respect to all IR related issues
47
including holding discussions, coordinating with meetings and
negotiations etc., ;
48
LAWS RELATED TO INDUSTRIAL RELATIONS
1) THE TRADE UNION ACT, 1926
OBJECTS
This act has been enacted with the object of providing for the
registration of trade unions and verification of the membership of trade
unions registered so that they may acquire a legal and cooperative
status. As soon as a trade union is registered, it is treated as an
artificial person.
The amendments of the act in 1982 have been made with a view
to achieve the following objectives:
To reduce the multiplicity of unions, the existing provision states
that a trade union of workmen shall at all times continue to have
not less than 10% or 100 of the workmen, which ever is less,
subject to a minimum of 7 persons engaged or employed in the
establishment or industry with which it is concerned as its
members.
A provision has been made for a period of 60 days for the
registration of trade unions by the registrar, after all the
formalities have been completed by the trade unions.
49
75% of the office bearers in the executive of a registered trade
union shall be persons actually engaged or employed in an
industry with which the trade union is connected.
To empower the registrar of trade unions to verify the
membership of registered trade unions and connected matters
and report, the matter to the State and the Central Government.
APPLICABILITY OF THE ACT
The act extends to whole of India. The word "except the State of
Jammu &Kashmir" has been omitted by the amended act of 1970 with
effect from 1 st September 1971.
The act applies not only to the unions of workers but also to the
associations of employers.
Certain acts do not apply to a registered trade union, namely, (i)
the societies registration act, 1860; (ii) the cooperative societies act,
1912; and (iii) the companies act, 1956. The registration of any such
act is null and void.
The act is Central legislation, but it is administered and enforced
mostly by the State Governments. For the purpose of this act, the
central government handles the cases of those unions whose objective
are not confined to one state. All other types unions are the concern of
State Governments. They can also appoint additional or Deputy
50
Registrars, who may exercise the powers and functions of the
registrars, as it thinks fit, so as to obviate delays in the disposal of
applications for registration of trade unions.
FUNCTIONS OF TRADE UNIONS IN INDIA
As per the Indian Trade Union Act, 1926, the primary function of a
trade union is to protect and promote the interests of the workers and
the conditions of their employment. They can also have other
objectives, which are not inconsistent with this primary purpose of
opposed to any law. In India, trade unions generally undertake the
following functions:
i. To achieve higher wages and better living conditions for the
members.
ii. To acquire control over running of the industry by workers
iii. To minimize the helplessness of the individual workers by making
them stand-up unitedly and increasing their resistance power
through collective bargaining, protecting the members against
victimization and injustice by employers.
iv. To raise the status of the workers as partners in industry and
citizens of society by demanding an increasing share for them in
the management of industrial enterprises.
v. To generate self-confidence among the workers.
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vi. To take up welfare measures for improving the moral of the
workers.
FEATURES OF THE ACT
All the principal terms and conditions of employment, except
matters pertaining to wages and other forms of remuneration, are
settled clearly under the Standing Orders.
Most of the mutual rights and duties of workers and management
are clearly defined.
The procedures to be followed whenever there is any dispute
over theses mutual rights and duties are also specified. The procedure
which the management is to follow in disciplining the worker, and the
procedure which the worker has to follow when he has a grievance are
both given in clear language.
52
3) FACTORIES ACT 1946
A social legislation which has been enacted for occupational
safety, health and welfare of workers at work places.
Being enforced by technical officers i.e. Inspectors of Factories,
Dy. Chief Inspectors of Factories who work under the control of
the Chief Inspector of Factories and overall control of the Labour
Commissioner, Government of National Capital Territory of Delhi
APPLICABILITY
The industries in which ten (10) or more than ten workers are
employed on any day of the preceding twelve months - engaged in
manufacturing process being carried out with the aid of power or
twenty or more than twenty workers employed in manufacturing
process being carried out without the aid of power.
SALIENT FEATURES
1. Approval of Factory Building Plans before construction/extension,
under the Delhi Factories Rules, 1950
2. Grant of Licenses under the Delhi Factories Rules, 1950, and to
take action against factories running without obtaining License.
3. Renewal of Licenses granted under the Delhi Factories Rules,
1950, by the Dy. Chief Inspectors of Factories
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4. Inspections of factories by District Inspectors of Factories, for
investigation of complaints, serious/fatal accidents as well as suo
moto inspections to check compliance of provisions of this Act
relating to :
Health, Safety, Welfare facilities, Working hours, Employment of
young persons and annual Leave with wages etc.
4) ESI ACT
Provides certain benefits to employees in case of sickness,
maternity and employment injury.
It applies to all factories (including Government factories but
excluding seasonal factories) employing ten or more persons and
carrying on a manufacturing process with the aid of power or
employing 20 or more persons and carrying on a manufacturing
process without the aid of power.
ACTS DOES NOT APPLY
Factories working with the aid of power wherein less than 10
persons are employed;
Factories working without the aid of power wherein less than 20
persons are employed;
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Seasonal factories engaged exclusively in any of the following
activities viz. Cotton ginning, cotton or jute pressing,
decortication of groundnuts, the manufacture of coffee, indigo,
lac, rubber, sugar (including gur) or tea
BENEFITS
*Medical benefits FULL MEDICAL CARE consists of hospitalization
facilities -includes specialist services, drugs and dressings and
diets as required for in-patients.
Sickness benefit is roughly 50% of the average daily wages and is
payable for 91 days during 2 consecutive benefit periods.
Maternity Benefit is payable to an Insured Woman in the following
cases subject to contributory conditions:
Confinement-payable for a period of 12 weeks (84 days) - anti-
natal 6 weeks & post - natal 6 weeks restricted to 2 children
Dependents benefit
Accident Benefit
Funeral expenses
COVERAGE AND CONTRIBUTION
The existing wage-limit for coverage under the Act, is
Rs.10,000/- per month (with effect from 1.10.2006).
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Currently, the employee's contribution rate (w.e.f. 1.1.97) is
1.75% of the wages and that of employer's is 4.75% of the wages
paid/payable in respect of the employees in every wage period
5) WORKMEN COMPENSATION ACT
The Workmen's Compensation Act, aims to provide workmen
and/or their dependents some relief in case of accidents arising
out of and in the course of employment and causing either death
or disablement of workmen.
It provides for payment by certain classes of employers to their
workmen compensation for injury by accident.
EMPLOYERS LIABILITY
The employer of any establishment covered under this Act, is
required to compensate an employee:
Who has suffered an accident arising out of and in the course of
his employment, resulting into (i) death, (ii) permanent total
disablement, (iii) permanent partial disablement, or (iv)
temporary disablement whether total or partial, or Who has
contracted an occupational disease
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THE EMPLOYER SHALL NOT BE LIABLE
In respect of any injury which does not result in the total or
partial disablement of the workmen for a period exceeding three
days;
In respect of any injury not resulting in death, caused by an
accident which is directly attributable to
the workmen having been at the time thereof under the influence
or drugs, or
the willful disobedience of the workman to an order expressly
given, or to a rule expressly framed, for the purpose of securing
the safety of workmen
6) INDUSTRIAL DISPUTES ACT
"Industry" means any systematic activity carried on by co-
operation between an employer and his workmen (whether such
workmen are employed by such employer directly or by or
through any agency, including a contractor) for the production,
supply or distribution of goods or services with a view to satisfy
human wants or wishes (not being wants or wishes which are
merely spiritual or religious in nature)
7) BONUS ACT 1965
57
APPLICABILITY
"Industry" means any systematic activity carried on by co-
operation between an employer and his workmen (whether such
workmen are employed by such employer directly or by or
through any agency, including a contractor) for the production,
supply or distribution of goods or services with a view to satisfy
human wants or wishes (not being wants or wishes which are
merely spiritual or religious in nature)
ELIGIBILITY
i) Every person (other than an apprentice) drawing salary up to Rs
3,500 per month.
ii) Every person drawing salary between Rs 2,501/- and Rs 3,500/-
per month. The bonus payable to him is to be calculated as if his
salary were Rs 2,500/- p.m. - salary means basic pay + DA only
58
BENEFITS
i. Subject to other provisions: - Minimum bonus shall be 8.33% of
salary/wages earned or Rs 100 whichever is higher.
ii. If allocable surplus exceeds the amount of minimum bonus, then
bonus shall be payable at higher rate subject to a maximum 20%
of salary/wages.
iii. Computation of bonus is to be worked out as per Schedule I to IV
of the Act.
8) GRATUITY ACT 1965
The Act provides for the payment of gratuity to workers
employed in every factory, shop & establishments or educational
institution employing 10 or more persons on any day of the
proceeding 12 months. A shop or establishment to which the Act
has become applicable shall continue to be governed by the Act
even if the number of persons employed falls bellow 10 at any
subsequent stage.
All the employees irrespective of status or salary are entitled to
the payment of gratuity on completion of 5 years of service. In
case of death or disablement there is no minimum eligibility
period. The amount of gratuity payable shall be at the rate of 17
days wages based on the rate of wages last drawn, for every
59
completed year of service. The maximum amount of gratuity
payable is Rs. 3,50,000/-.
Formula is - Last Wages *15*No. of services/26
9) EMPLOYEE PROVIDENT ACT
APPLICABILITY
i. Every establishment which is a factory engaged in any industry
specified in Schedule 1 and in which 20 or more persons are
employed and
ii. Any other establishment employing 20 or more persons which
central Government may, by notification, specify in this behalf.
(Infancy period of 3 years has been withdrawn by ordinance
w.e.f.22-9-97)
iii. Any establishment employing even less than 20 persons can be
covered voluntarily u/s 1(4) of the Act.
ELIGIBILITY
Any person who is employed for work of an establishment or
employed through contractor in or in connection with the work of
an establishment.
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BENEFITS
Employees covered enjoy a benefit of Social Security in the form
of an unattachable, unwithdrawable (except employees and
employers contribute equally throughout the covered persons
employment. This sum is payable normally on retirement or
death. Other Benefits include Employees' Pension Scheme and
Employee's Deposit Linked insurance Fund.
10) PAYMENT OF WAGES ACT 1936
OBJECTIVES
To ensure regular and prompt payment of wages and to prevent
the exploitation of a wage earner by prohibiting arbitrary fines
and deductions from his wages.
SCOPE AND COVERAGE
Application for payment of wages to persons employed in any
factory.
Not applicable to wages which average Rs 1600/- per month or
more.
Wages include all remuneration, bonus, or 'sums payable for
termination of service, but do not include house rent
reimbursement, light vehicle charges, medical expenses, TA, etc.
61
11) MINIMUM WAGES ACT, 1948
A tripartite Committee viz., "The Committee on Fair Wage" was
set up in 1948 to provide guidelines for wage structures in the
country. The report of this Committee was a major landmark in
the history of formulation of wage policy in India. Its
recommendations set out the key concepts of the 'living wage',
"minimum wages" and "fair wage" besides setting out guidelines
for wage fixation.
Article 391- The State shall, in particular, direct its policy towards
securing (a) that the citizen, men and women equally shall have
the right to an adequate livelihood and (b) that there is equal pay
for equal work for both men and women.
Article 43 ~- The State shall endeavor, by suitable legislation or
economic organization or in any other way, to give all workers,
agricultural, industrial or otherwise, work, a living wage,
conditions of work ensuring a decent standard of life and full
enjoyment of leisure, and social and cultural opportunities.
OTHER BENEFITS:
Act also provides provisions for leave for miscarriage, leave for
illness arising out of pregnancy or delivery, premature birth of child or
62
miscarriage and nursing breaks for nursing the child until the child
attained the age of 15 months (section-9, 10 & 11)
DISMISSAL, DEDUCTION WAGES, ETC:
No employer shall discharge or dismiss a woman for her absence
form work in accordance with the provisions of this Act and no
deduction shall be made from the normal; and usual daily wages of a
women entitled to maternity benefits. (Section -12&13).
12) THE MINES ACT, 1952
This act extends to the whole of India and prescribes the safety
and satisfactory conditions of work in the mines. This act applies to all
types of mines, including mines of atomic minerals and oil _fields. It
was amended in 1983.
According to this act, hours of work all adult workers, both
surface and underground should not exceed 48 hours a week.
That means if a person is working on surface he is not allowed to
work more than 9 hrs and if the person is working underground
then he is not allowed to work not more than 8 hrs. The person
should be given rest for every 5 hrs for atleast half an hour.
The act does not allow overtime until there is a emergency.
During overtime a person is not allowed to work more than 10
63
hrs/day (inclusive of overtime). Such person is paid wages at
double the normal rate.
Women are not allowed to work underground.
Adolescent can work if he fulfills some conditions such as:
He should be more, than 16 yrs old.
He should be medically fit.
He has 1/2 hour of rest for every 4 and 1/2 hour of
continuous work.
13) THE CONTRACT LABOUR ACT, 1970
This act extends to whole of India and applies to every
establishment in which 20 or more workmen are or were, employed on
any day during the preceding 12 months as contract labour.
This act does not apply to establishments where work is of-
irregular or occasional or intermittent nature. The work
performed in an establishment is not considered to be of an
intermittent nature:
DISCIPLINARY PROCEDURE
Discipline is a code of conduct in an Enterprise in which the
members of the enterprise conduct themselves within the standards of
acceptable behavior which means that the stipulations of the code of
64
conduct laid down by the enterprise are properly understood and
observed by one and all.
The state of IR in a country/ factory is also reflected in the
discipline and the morale of the labor force. Discipline is very essential
for a healthy industrial atmosphere and the achievement of
organizational goals.
In any organization maintenance of discipline among personnel at
all levels is required to create the conductive work environment so as
to facilitate increased productivity and organizational effectiveness. So
management of an organization can adopt two approaches for the
discipline maintenance.
Adopting preventive measures `prevention is better than cure'
principle is based on the assumption that employees perform better
through rewards than punishments. So the problems of indiscipline do
not emerge.
Curative measures (disciplinary actions) are taken against people
involved in indiscipline.
The disciplinary action should be taken after going through
specific process because the punishment may be laid invalid if there is
any deviation from the procedure laid down. The procedure for taking
disciplinary action is defined by the Standing orders by the
65
organization. While taking an action, all the relevant facts leading to
indiscipline must be ascertained so that the need for disciplinary action
is determined. The facts must be collected as soon as possible to take
the action promptly.
DISCIPLINARY PROCEDURE AT VSP
When an act of misconduct is alleged against a workman for
whom a punishment as provided under Standing Orders of the
Company. The workman shall be given an opportunity to show cause
before punishment is imposed.
DISCIPLINARY AUTHORITY
Any Executive/ officer to whom powers are delegated to take
disciplinary action against a workman shall be the disciplinary
authority competent to initiate disciplinary authority competent to
initiate disciplinary action and to impose punishment on a workman.
The disciplinary authority shall frame definite charges on the basis of
the allegations against him. The charges together with a statement of
allegations on which they are based shall be communicated in writing
to the workman who shall be required to submit a written statement of
his defense with such time as may be specified but not exceeding 3
66
days by the discipline authority. If it is necessary the disciplinary
authority shall hold an enquiry and take necessary actions.
APPELLATE AUTHORITY
The workman shall have the right of appeal to Appellate
Authority. The appeal shall be submitted within 15 days of receipt of
the order of the disciplinary authority and the appellate authority shall
dispose of the appeal with in 30 days of the receipt of the appeal.
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INDUSTRIAL DISPUTES
Dispute in general sense is the expression of differences over
some issues of interest between 2 or more parties. Industrial disputes
like problems of indiscipline and their effective management are on the
major issues in maintaining good industrial relations in the
country/organization.
According to industrial disputes act 1947 "Industrial disputes
means any dispute or difference between employers and employers or
between employers and workers or between workmen and workmen,
which is connected with the employment or with the conditions of
labour of any person"
An individual dispute between an employer and one of his
workmen is by itself not an industrial dispute, which can be referred to
under section 10 of the act. But such a dispute may become an
industrial dispute provided a majority of workmen or union of workmen
takes up the cause of particular workman, in the particular industrial
establishment. The causes of industrial disputes are many and varied
and sometimes even trivial. In India, various causes, of industrial
disputes may be grouped into 4 categories: economic factors,
68
management factors, trade union practices and political and legal
factors.
Preventive form such industrial disputes management can take
catenations which are grouped into two categories:
(1) Prevention of Industrial Disputes
This can be done by taking following measures
Workers participation
Collective bargaining
Grievance procedure
Tripartite bodies code of discipline
Standing orders
(2) Settlement of Industrial Disputes
If preventive measures fail then the industrial dispute settlement
machinery should be activated by the government under industrial
disputes act 1947 because no settlement of dispute will prove to be
very costly to the workers, management and the society as a whole.
This machinery consists of
Conciliation
Court of enquiry
Voluntary arbitration
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Adjudication (Compulsory arbitration)
WORKERS PARTICIPATION IN MANAGEMENT
Workers participation, also known as labour participation or
Employee participation, in management is a concept shrouded with so
vagueness that for different meanings. The basic reason for this
perceptual difference is due to different pattern of practices and
programmes adopted by various countries for implementing workers
participation in management. Many industrial relations experts regard
it as an essential step involving redistribution of power between
management and workers in the direction of industrial democracy
though there are differences of views over the content and level of
participation. The principal forms through which workers participate
are information sharing, joint consultation and suggestion schemes.
The various forms of workers participation in management have
assumed great importance these days because it serves the following
purposes
Reduced industrial unrest
Maintaining good industrial relations
Higher productivity
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Workers participation in VSP
Management of VSP also facilitates workers participation which
secures a right for the recognized union in representing their views and
opinions regarding production, safety, canteen and township
development etc., through the formation of different committees at
shop floor and plant level, but these committees constitute the
representatives of recognized union, leaving behind the opinions of the
other unions that constitute to around 60% of employees.
This lead to the inter-union rivalry as the non-recognized unions
were set aside without being consulted regarding the policy matters,
creating difficulties in implementation of issues that was settled -
through negotiations.
Sl.No.
Name of the forum
Scope of function Periodicity of the meeting
No. of Committe
es 1 Central safety
committee
To maintain proper
safety and health at
work and to review
periodically the
measures taken on
that behalf and to
work in line with the
provisions laid down in
the factories act, 1948
Once in
43
months
One for
plants and
one pit
safety
committee
for each
mine
2 Canteen Closely monitor Once in a One for
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management
committee
functioning of the
different canteens in
the company
month plant and
one pit
safety
committee
for each
mine
3 Shop floor
cooperation
committee
To discuss and sort
out day to day shop
level issues
Once in a
month
(25+2)
including
mines
4 Shop floor
safety
committees
To discuss shop floor
issues related to
safety, fire and
occupational health
and to take decisions
for ensuring safe
working conditions
and safe practices
Once in a
month
(25+2)
including
mines
5 Provident
fund trust
To supervise and
administer the
functioning of
provident fund of VSP
Once in a
month
One
6 VSP sports
council
To lay down policies
on sports activities in
the company
Once in
two
months
One
7 Town
development
committee
For development of
company township in
the areas of housing
maintenance,
Once in
month
One
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shopping
infrastructure facilities
etc.
8 Superannuati
on benefit
fund trust
To provide provision
for social security
needs of the
employees and
administering
superannuation
benefits fund scheme
Once in a
month
One
GRIEVANCE MANAGEMENT
Grievance management is a state of dissatisfaction over some
issues related to employment. Generally, expression of this
dissatisfaction in oral form is known as complaint while on written form
it is known as grievance. In the organizational settings, employees may
have some grievances against employers, in the same way employers
may have grievances against employees.
Grievance management is very essential to maintain good
industrial relations because this increases productivity and
effectiveness of an organization. Grievance should be redressed by
73
adopting proactive approach rather than waiting for the grievance to
be brought to the notice of management. In many cases even the
proactive approach of the management for removing the causes of
grievances may leave some scope for the emergence of grievances.
For handling such grievances, a grievance handling machinery known
as grievance procedure is required.
The grievance procedure is problem solving, dispute settling
machinery which has been set up following an agreement to that effect
between labour and management. It is the means by which a trade
union or an employee makes and processes his claims that there has
been a violation of the labour agreement by the company. Grievance
procedure is a device through which grievances are settled, generally
to the satisfaction of employees/trade union and management.
GRIEVANCE REDRESSAL PROCEDURE AT VSP
The objective of grievance redressal is to provide easily
accessible machinery for settlement of grievances of executives and to
adopt measures as would ensure expeditious settlements of
grievances leading to increased satisfaction on the job and resulting in
improved productivity and efficiency of the organization. In VSP the
grievance procedure consists of three stages they are:
74
Stage-1
An aggrieved employee shall send his grievance to his HOD
within a period of 3 months of its occurrence. The head of the
department will give a personal hearing and try to resolve the
grievance at the level and intimate his decision to the aggrieved
employee in writing within a week
Stage-2
If the aggrieved employee is not satisfied with the reply of stage -
1 authority or has not got a reply within the stipulated time, he may
submit his grievance to the divisional head. The divisional head
concerned shall go through the grievance and settle the same at his
level. The decision taken shall be communicated in writing to the
aggrieved employee within 15 days of receipt of the grievance
Stage - 3
If the aggrieved employee is not satisfied with the reply of stage -
2 or has not got reply within the stipulated time, he may address his
grievance to the grievance council shall examine the grievance in
detail and give their recommendations before the end of the month
following the month in which the grievance council receives the
representation. The aggrieved shall have the right to represent his
75
grievance before chairman-cum-director direct if his grievance is not
settled to his satisfaction at Stage-3 or within the tome as prescribed
under the company's grievance procedure
Some of the matters that come under the Grievance Redressal are:
Payment of wages and incentive
Increments
Deduction/recovery of dues
Allowances and advances
Seniority and promotion
Attendance and leave
QUESTIONNAIRE
This questionnaire is regarding “Industrial Relations in Rashtriya
Ispat Nigam Limited”. Kindly provide your opinion to the given
questions below. Tick ( ) mark in the given boxes.
S.No.
Statements Strongly
Agree
Agree
Cannot
Say
Disagree
Strongly
Disagree
1 Employees
satisfaction is the
key factor to
maintain good IR.
2 The Incentive
76
Schemes ional
welfare to the and
motivate them for
sufficient discharge
of
3 Management
Development
programmes help in
understanding the
industrial relations
and maintain
harmonious
relations.
4 The present
Grievance Redressal
system is sufficient
to resolve the
individual
grievances of
employees.
5 The participation
Committees help in
maintaining
harmonious
relationship
between employees
and the
management.
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6 The Disciplinary
Procedure and its
implementation by
the management
are very
satisfactory.
7 The Dispute
settlement
procedures
(Collective
bargaining) followed
by the management
is able to resolve
industrial disputes
satisfactory.
8 When compared to
other organization,
in VSP the trade
unions have got a
9 Management must
acquire more
knowledge and
information prior
discussing issues
with trade union.
10 The present
opportunities are
enough to associate
78
in decision making
at different stages
to improve all round
performance at VSP.
11 Workers extend full
support to the calls
of trade union on all
occasions.
12 Employees repose
confidence and
trust on the leaders
of different trade
unions with respect
to up keep of their
interest.
13 The management is
always industrial
relations issues and
maintains Cordial
relationship with the
unions.
14 Harmonious
relationship
between trade
unions and
management is
affected by political
interferences.
79
15 Government plays a
major role in
maintaining good IR
environment in the
organization.
Thank you for taking out time and filling up this questionnaire.
ANALYSIS AND INTERPRETATION
Statement No:
1Employees satisfaction is the key factor to maintain
good IR. Tabulation Format
Sl.No. Ratings Respondent Percentage
80
s
1 Strongly Agree 18 36%
2 Agree 24 48%
3 Cannot Say 8 16%
4 Disagree 0 0%
5 Strongly Disagree 0 0%
Total 50 100
Strongly Agree
Agree Cannot Say
Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
Majority of them have agreed (agree 48% and strongly agree 36%) that healthy industrial relations can be maintained through employee satisfaction.
81
Statement No: 2The Incentive Scheme are additional welfare to the employees
and motivate them for more efficient discharge of duties. Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 15 30%
2 Agree 28 56%
3 Cannot Say 4 8%
4 Disagree 3 6%
5 Strongly Disagree 0 0%
Total 50 100
82
83
Strongly Agree
Agree Cannot Say
Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
Welfare measures and incentive measures help employees to be
motivated and discharge their duties efficiently. These measures help
maintain employee satisfaction during the work.
84
Statement No: 3
Management Development Programmes help in understanding
the industrial relations and maintain harmonious relations.
Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 14 28%
2 Agree 32 64%
3 Cannot Say 4 8%
4 Disagree 0 0%
5 Strongly Disagree 0 0%
Total 50 100
85
Strongly Agree
Agree Cannot Say Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
Management development programmes conducted in centre for
HRD help in understanding the industrial relations in the organization.
People disagreeing with the statement are nil.
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Statement No: 4The present Grievance Redressal system is sufficient to resolve
the individual grievances of employees.
Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 6 12%
2 Agree 20 40%
3 Cannot Say 10 20%
4 Disagree 11 22%
5 Strongly Disagree 3 6%
Total 50 100
87
Strongly Agree
Agree Cannot Say
Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
There is much information needed to interpret this statement as
20% of people have opted for cannot say and 28% disagree with the
statement. There should be some more improvements in the
Grievance Redressal system in VSP. Awareness has to be created
regarding the functions of grievances redressal system to cover the
20% of respondents who have opted for cannot say.
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Statement No: 5
The participation Committees help in maintaining harmonious
relationship between employees and the management.
Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 9 18%
2 Agree 31 62%
3 Cannot Say 5 10%
4 Disagree 4 8%
5 Strongly Disagree 1 2%
Total 50 100
89
Strongly Agree
Agree Cannot Say
Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
Majority of the respondents feel participation committees helps in
conveying their problems and issues and solve them effectively. Which
helps maintains good harmonious between employees and
management.
90
Statement No: 6
The Disciplinary Procedure and its implementation by the
management are very satisfactory.
Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 4 8%
2 Agree 23 46%
3 Cannot Say 8 16%
4 Disagree 13 26%
5 Strongly Disagree 2 4%
Total 50 100
91
Strongly Agree
Agree Cannot Say Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
Majority of them are very satisfied with the disciplinary procedure
of the organization.
92
Statement No: 7
The Dispute settlement procedure (collective bargaining)
followed by the management is able to resolve industrial disputes
satisfactorily.
Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 11 22%
2 Agree 33 66%
3 Cannot Say 4 8%
4 Disagree 2 4%
5 Strongly Disagree 0 0%
Total 50 100
93
Strongly Agree
Agree Cannot Say Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
Majority of the respondents are very satisfied with the dispute
settlement procedure and they feel it resolves the disputes
satisfactorily.
94
Statement No: 8
When compared to other organization, in VSP the trade unions
have got a little role in achieving demands, since management itself
extends many benefits.
Tabulation Format
Sl.No. Ratings Respondents Percentage
1 Strongly Agree 4 8%
2 Agree 18 36%
3 Cannot Say 12 24%
4 Disagree 12 24%
5 Strongly Disagree 4 8%
Total 50 100
95
Strongly Agree
Agree Cannot Say
Disagree Strongly Disagree
Respondents
Percentage
Interpretation:
As 24% have opted cannot say and people who disagree with the
opinion are 24% we can interpret many of them do not accept this
statement. This may be because though there are many benefits they
all become outdated and new demands rise as and when there are
requirement.
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SUMMARY
Visakhapatnam steel plant has very peaceful IR. There are many
s programmes that keep watch on IR environment in the organization.
A Programmes such as "Samalochana" are very helpful in knowing the
problems of employees and solving them in time, so that there are no
grievances from employees in work life and can improve their
productivity year by year. Participative committees, Grievance a
management, Joint consultative machinery, Disciplinary procedures
help in solving the issues. These aspects make the management of
RINL proactive in resolving the issues of employees and workers.
The overall IR scenario in RINL/VSP is peaceful, cordial and
healthy. A host of proactive IR measures which inter-alias include
confidence building measures between union and management,
extensive communications, continuous interaction with unions and
partnership in management in various participation forums have
helped in developing a congenial IR climate propitious for high
production and connectivity. With collective dedication and
commitment of VSP, the organization has surmounted all odds and
achieved best ever records by crossing its rated capacities, continuous
97
efforts to improve the employees moral have resulted in improving the
technological and operational discipline which ultimately helped in
heightening the motivation of the employees. This has envisaged from
the labour productivity during 2007-08 which stood at 389
tons/man/yr.
One of the most important factors is the productive work culture
which is being considered as crucial importance in VSP. As such
several initiatives have been taken to adopt a multi-skill and multi-
trade pattern of working and emphasis on flexibility in job deployment
thus ensured the optimum utilization of its HR. VSP has bagged
runners-up award in the year 1994 in recognition of excellence in
management which has facilitated harmonious IR in the organization.
VSP has also bagged the best management award for the year 2000-01
form the - state government of A.P for outstanding contribution in
maintenance of IR, labour welfare and productivity.
98
CONCLUSION
Industrial relations is one of the important aspects to be
considered in the organization, as it deals with employers, employees
and the government. It is an aspect which each and every organization
considers it in the first place for uninterrupted production and
development of the organization. An industrial dispute such as strikes,
lockouts etc. not only affects the employers of the organization but
also affects the workers and the general public. So one has to think of
ways to achieving industrial peace in the organization, political parties,
the community and society should also play a decisive role in
improving the existing industrial relations situation in the country.
Some of the basic causes of industrial conflict can be prevented
or at least reduced to great extent by effective management and union
action. The employee communication, grievances procedure and
speedy settlement of grievances, joint consultation at different levels
of the plants. Workers education programmes, healthy and stable
trade unions and their due recognition as barging agents, sincere
observations of the code of discipline, labour-management, including
facilities for transport, education, housing and health services for the
workers and their families- all these would go .a long way in achieving
industrial peace.
99
SUGGESTIONS FOR FURTHER STUDY
1. There are many opportunities in VSP which helps detecting
grievances in the organization and maintain industrial peace.
2. Quality circle in VSP has been used to improve only technical
aspects of the organization uptil now, but it can also be used to
improve IR by redesigning the programme in some aspects. In
this way quality circles can also be used to improve IR and
tracking the grievances of employees in more efficient way.
3. A combination of both "Samalochana" and "Quality Circles" can
be used to improve the overall conditions of the organizat.
100
HOW MANAGEMENT DEVELOPMENT PROGRAMMES
IMPROVE IR?
Management development programmes not only improves soft
skills of employees but it is also used as a platform where a
person can communicate with employees or workers who are a
part of union.
It helps employees to understand organization and also
organization to understand employees better than what they
already know.
It helps them adapt to the change when they are told about the
various changing scenarios around them.
It motivates the employees and increases their morale.
It helps to increase understanding and cooperativeness between
organization, employees and workers. This creates harmonious
relations and environment in the organization.
It helps them to share ideas and suggestions.
It shows organization's care towards their employees in
educating and motivating them.
101
SOME INDIRECT USES OF FROM THESE PROGRAMMES
As the working conditions in the plant are harsh such as high
temperatures, dust, noise, intensity and complexity of the work.
It helps them to deviate from their original work for a little while.
It helps them relax in the pleasant conditions (central A/C, good
snacks and ambience) of the CHRD.
It keeps them cool-minded until their next session of these
programmes.
It makes them feel privileged to attend such programmes which
enhances their personality and males them confident in their life.
As the programmes are conducted for either executives or non-
executives at same level. It helps them to interact with each
other and have a good time during their snacks.
This also shows concern of management towards their
employees. Employees recognize this concern while conducting
these programmes.
102
SUGGESTIONS FOR FURTHER STUDY
For acquiring good results in the project (on how. IR can be
improved through management development programmes) following
things should be taken into consideration.
This study has to be conducted for atleast 8 months. So that
person conducting this study can experience of how are the
programmes conducted in the Centre for HRD and post
evaluation of those programmes (which are conducted after six
months of programme.
Feedback on the programmes should be kept until final
evaluation of programmes is completed.
One can also conduct interview with some of the participants
regarding the aspects in the programme.
To know whether there is an improvement in the IR of VSP;
person has to be adopt some method to measure IR improvement
in the organization.
Person conducting the study has to know both past and the
present performance of IR. He has to have knowledge on IR
environment in the organization. He has to be an employee of the
organization to spend enough time on the project.
103
104
BIBLIOGRAPHY
WWW.VIZAGSTEEL.COM.
A PROFILE OF VIZAG STEEL PLANT.
SIX SIGMA CONCEPTS FROM WIKIPEDIA
ESSENTIALS OF HUMAN RESOURCE MANAGEMENT AND
INDUSTRIAL RELATIONS - P. SUBBA RAO.
DYNAMICS OF INDUSTRIAL RELATIONS - MANOHAR, MAMORIA
AND GANKAR.
105
APPENDICES
ABBREVIATION FULL FORMS
IR Industrial Relations
HRD Human Resource Development
VSP Visakhapatnam Steel Plant
RINL Rashtriya Ispat Nigam Limited
JCM Joint Consultative Machinery
MDP Management Development Programmes
CHRD Centre for HRD
T.E.I Training Effectiveness Index
L.M.M.M Light and Medium Merchant Mill
W.R.M Wire Rod Mills
M.M.S.M Medium Merchant and Structured Mill
S.M.S Steel Melt Shop
BY Blast Furnace
T.P.P Thermal Power Plant
S.P Sniter Plant
R.M.H.P Raw Material Handling Plant
C.R.M.P Calcining and Refractory Material Plant
106
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