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.

51

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

53

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;

54

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).

55

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

56

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.

60

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.

67

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

69

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

70

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

71

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

72

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:

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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.

88

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.

96

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