2 Strategic Human Resource Management

2Strategic Human Resource Management .Strategic HumanResource Management(A New Perspective for Steel Industry)Dr. P.K. MohantyMUMBAI NEW DELHI NAGPUR BENGALURU HYDERABAD CHENNAI PUNE LUCKNOW AHMEDABAD ERNAKULAM BHUBANESWAR INDORE KOLKATA GUWAHATI

Role of Strategic Human Resource Management (SHRM): Key to . 3AuthorNo part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic, mechanical, photocopying,recording and/or otherwise without the prior written permission of the publishers.First Edition : 2014Published by:Mrs. Meena Pandey for Himalaya Publishing House Pvt. Ltd.,“Ramdoot”, Dr. Bhalerao Marg, Girgaon, Mumbai - 400 004.Phone: 022-23860170/23863863, Fax: 022-23877178E-mail: himpub@vsnl.com; Website: www.himpub.comBranch Offices:New Delhi:Nagpur:Kundanlal Chandak Industrial Estate, Ghat Road, Nagpur 440 018. Phone: 0712-2738731, 3296733; Telefax: 0712-2721216Bengaluru:No. 16/1 (Old 12/1), 1st Floor, Next to Hotel Highlands,Madhava Nagar, Race Course Road, Bengaluru - 560 001.Phone: 080-22286611, 22385461, 4113 8821, 22281541Hyderabad:No. 3-4-184, Lingampally, Besides Raghavendra SwamyMatham, Kachiguda, Hyderabad - 500 027.Chennai:8/2 Madley 2nd street, T. Nagar, Chennai - 600 017.Mobile: 09320490962Pune:First Floor, "Laksha" Apartment, No. 527, Mehunpura,Shaniwarpeth (Near Prabhat Theatre), Pune - 411 030.Phone: 020-24496323/24496333; Mobile: 09370579333Lucknow:House No 731, Shekhupura Colony, Near B.D. ConventSchool, Aliganj, Lucknow - 226 022.Ahmedabad:Ernakulam:“Pooja Apartments”, 4-B, Murari Lal Street, Ansari Road,Darya Ganj, New Delhi - 110 002.Phone: 011-23270392, 23278631; Fax: 011-23256286Phone: 040-27560041, 27550139Phone: 0522-4012353; Mobile: 09307501549114, “SHAIL”, 1st Floor, Opp. Madhu Sudan House, C.G.Road, Navrang Pura, Ahmedabad - 380 009.Phone: 079-26560126; Mobile: 0937708884739/104 A, Lakshmi Apartment, Karikkamuri Cross Rd.,Ernakulam, Cochin - 622011, Kerala.Phone: 0484-2378012, 2378016; Mobile: 09387122121Bhubaneswar :5 Station Square, Bhubaneswar - 751 001 (Odisha).Phone: 0674-2532129, Mobile: 09338746007Indore:Kesardeep Avenue Extension, 73, Narayan Bagh, Flat No. 302,IIIrd Floor, Near Humpty Dumpty School, Indore - 452007 (M.P.).Mobile: 09303399304Kolkata:108/4, Beliaghata Main Road, Near ID Hospital, Opp. SBI Bank,Kolkata - 700 010, Phone: 033-32449649, Mobile: 7439040301Guwahati:House No. 15, Behind Pragjyotish College, Near SharmaPrinting Press, P.O. Bharalumukh, Guwahati - 781009, (Assam).Mobile: 09883055590, 08486355289, 7439040301DTP by:AshaPrinted at:M/s. Aditya Offset Process (I) Pvt. Ltd., Hyderabad. On behalf of HPH.

4Strategic Human Resource Management .Dedicated toSRI SRI SHIRDI SAI BABA

Role of Strategic Human Resource Management (SHRM): Key to .5FOREWORDGlobalization of business has changed the scenario of managementin the country. The times are changing and there is an increasing need tocope with the ever changing forces of competition, the technologicalonslaught and the growing realization of knowledge management. Thenew economic environment has compelled the leaders and managers oforganizations to look forward – to understand the rules of survival intheir business and beyond mere survival to set their organizations on thepath of prosperity and growth. Today, the HR function has a morestrategic role. A changing business environment can influence theoutcome of current operations, stakeholders and corporate strategy as awhole. Since 1990, there has been an increased focus on strategic role ofHuman Resource Management (HRM) and now HRM has becomestrategic in nature. Strategic Human Resource Management (SHRM) isconcerned with the relationship between HRM and StrategicManagement in an organization.This book brings to light the strategic human resource approaches,which are needed to cope with the changing business environment. Italso helps to bring overhauling organizational excellence by identifyingpitfalls and timely attributing corrective measures through need-basedHR strategy. This book emphasizes on post-liberalization effects andperformance of SAIL and TATA STEEL from 1991 till date with focuson HR initiatives and other turnaround strategies to make organizationas profitable and competitive as possible. The true insights of free andfrank opinions of more than two hundred employees of SAIL and TATASTEEL, captured by the author about the implementation of variousturnaround business alignment strategies in this book is foundinteresting and praiseworthy.I believe that this book “SHRM – A New Perspective for SteelIndustry” will serve as professional companion to management students,researchers and HR managers.Dr. K.K. RayProfessor,IIM, Raipur

6Strategic Human Resource Management .PREFACELiberalization and Globalization has changed the scenario ofmanagement in the country. Today, we look forward to competition atglobal market. It is not enough to just manage an organization but needof the hour is to manage any organization with effectiveness andefficiency. Today, Human Resource Management should be viewed asstrategic function not as routine function. It can facilitate achievementsof goals of the organization as HR strategy is linked with businessobjectives of the organization.Every business organization must adopt a corporate strategy tooperate in a global business environment if it wants to survive. Nocompany, either big or small, will be able to continue its successfuloperation with a secluded business philosophy in the years to come.Hence, only way to go ahead is to adopt a strategic managementphilosophy for a global market.The liberalization of 1991 has exposed the Indian companies,which were under protection for over four decades, to a process ofglobalization. Now, global companies are very much here in Indiaputting forward a strong competition. Evidently, Indian companies haveno option but to change their outlook, philosophy, programmes,priorities, perspectives and their business strategies. They have to acceptthe new challenges and improve their efficiency and quality to suit theglobal standard and extend their operational canvas to other nations.The book “Strategic HRM – A New Perspective for Steel Industry”is exclusively focusing post-liberalization effect on India’s steel industry,with special emphasis on SAIL and TATA STEEL as well as their HRstrategies, business policies and strategic planning perspective.This book is organized into eight chapters. Chapter I, focuses onstrategic role of Human Resource Management (HRM) and how HRMhas become strategic in nature after globalization of business.Chapter II introduces the global scenario of steel business andIndian steel industry after liberalization.Chapter III emphasises on TATA Steel and SAIL’s endeavorduring post-liberalization period.Chapter IV focuses on the scope and methodology of the study.

Role of Strategic Human Resource Management (SHRM): Key to .7Chapter V describes performance of Indian Steel Industry duringpre-liberalization period from 1985 to 1990 with specific study onperformance of SAIL & TATA STEEL.Chapter VI emphasizes on post-liberalization effects andperformance of SAIL & TATA STEEL from 1991 till date. Executivestudy is being done on modernization process, performancemanagement, HR initiatives, other turnaround strategies with referenceto literature survey, analysis of corporate plans, in-house journals andmanuals, etc. This Chapter also includes a case study of turnaroundstory of Rourkela Steel Plant (RSP). The study is based on majorturnaround and implementation strategies adopted by the CEOs to makethe organization as profitable and competitive.Chapter VII is the main theme of the book, where the opinions ofexecutives and workmen of SAIL & TATA STEEL are analyzed withquestionnaire form and statistical analysis are being made to know theaccuracy of study. Major focus is given on global HR and IR issues,global business policies, new HR policies, restructuring of manpower,HR strategies linked with business philosophy, vision and mission,strategic human resource perspectives, Knowledge Management,Compensation, Recognition system, Training and Development,Recruitment and Promotion policies, and impact on IR issues. Further,the hypotheses are tested through statistical methods to establish theeffectiveness of the statement adopted for the above study purpose.Chapter VIII deals with findings of the study and conclusion,focused on process of liberalization changes in SAIL & TATA STEELthat constitutes useful learning for managing their respective futures.Based on results of analysis, the conclusions show the direction ofchange process initiatives adopted by SAIL & TATA STEEL arepositive and growth-oriented. At last, some suggestions andrecommendations are given to accelerate the change initiatives of boththe organizations (SAIL & TATA STEEL) and make them consistentresult-oriented.This book is intended for all HR Professionals, ManagementStudents and Researchers and Steel Industry Personnel. I believe, it canserve as an effective guide and reference to them for implementation ofHR strategies aligned with business goals of respective organizations.Dr. P. K. Mohanty

8Strategic Human Resource Management .ACKNOWLEDGEMENTSI express my gratitude to Dr. P.K. Mohanty, Professor, Departmentof Business Administration, Utkal University and Dr. K.M. Sahoo,Ex-Professor, Department of Personnel Management & IndustrialRelations, Utkal University for their guidance and support.My sincere thanks to Mr. Avinas Prasad, Ex-VP (IR), Mr. NadeemKazim, Head (Management Development), Mr. R.N. Mishra, Head(IR – Legal), TATA STEEL, Mr. S.N. Patnaik, DGM (IndustrialEngineering), Mr. Rehaman Khan, DGM (Town Admn.), Mr. P.K.Mohanty, Mr. A.K. Bose of Rourkela Steel Plant for their valuablesupport and help during my visits for data collection. My sincere thanksto SAIL Management (RSP, BSP, Bokaro Steel Plant, DSP, Salem SteelPlant, CMO and Corporate Office) and TATA STEEL Management fortheir constant support and help provided me during my frequent visit totheir respective organizations. I thank all the respondents whoparticipated in this study. Without their cooperation, this study could nothave been completed.I appreciate my friend, Dr. P.K. Das, Reader in Chemistry, GMCollege, who has contributed some suggestions to improve my qualityof work.I am particularly thankful to Mr. Ghanashyam Parida, Senior Asst.,OPTCL for his personal interest in rendering service of typing andcomputer graphics for this book.Special thanks are due to Mr. Rabindra K. Maharana, Mr. TrinathDas, Mr. Bireswar Pati, Mr. Gaurav Das, Dr. Himansu Sekhar Nanda,Mr. Himansu Patnaik and Mr. Joga Jeeban Sahoo for their continuoussupport and suggestions while editing the book. I am grateful toMr. Anil Sehgal, Director, Amtek Group of Companies for hisunstinting support, encouragement and inspiration throughout thepreparation of this book.I am thankful to Mr. P.C. Panigrahi, Director (Personnel),Mahanadi Coalfields Ltd (MCL) for his valuable guidance whilepreparation of this book.

Role of Strategic Human Resource Management (SHRM): Key to .9I am grateful to Mr, Niraj Pandey. Director and Mr. Bijoy K. Ojha,Manager and Staff of Himalaya Publishing House Pvt. Ltd. for theirkeen interest in publishing this book.I am indebted to my parents, who have been providing mecontinued love and inspiration to achieve success in life. At last but notleast, I express my heartfelt gratitude to my wife, Dr. Banalata Mohanty,Reader in Zoology, Dhabaleswar College of Science and Technology,Odisha who has been the driving force and inspiration behind thecompletion of this book.Dr. Prabodh Kumar Mohanty