MBA PROGRAMME

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

December 2020

MBA 231: Managing Human Resources

CIA-3: Case Study Analysis of Durgapur Steel Plant

By

2027904 Anmol Chaudhary

2027908 Mohitesh Mishra
2027911 Venkatraddi M
2027936 Dhanak Langeh
2027945 Neha Basavaraj Tandur
2027946 Bhagyashree Anvekar
1.1 INTRODUCTION

The Durgapur Steel Plant is one of the integrated steel plants of the Steel Authority of India
Limited (SAIL). The plant is located in Durgapur of West Bengal, India. It has played a historically
significant role in the industrial growth of India. The plant is famous as the nation’s leading
producer of long steel products and is also considered as the sole producer of Forged Railway
Wheels & Axles.

In 1959, the plant began production with an initial crude steel capacity of 1 MTPA (Million Tonnes
Per Annum) which was gradually increased to 1.8 MTPA during the 1990s modernization. The
production subsequently led to 2.2 MTPA during the recently concluded Modernization &
Expansion Program (MEP).

The steel plant was developed in the late 1950s with an initial annual capacity of one metric tonne
of crude steel per year. DSP's capacity was later increased in the 1970s to 1.6 metric tonnes. In the
early 1990s, a major modernization programme was initiated in the plant. The programme brought
about major technical advances in the plant which as a result, expanded the capabilities of the plant
as well.

1.1.2 LOCATION

The Durgapur Steel Plant is located about 158 km from Kolkata (Capital of West Bengal). The
geographical location can be defined as 23° 27' North and 88° 29' East. It flourishes on the banks
of the river, Damodar. It has brilliant connectivity with different parts of the country as NH-19
(National Highway) and main Kolkata-Delhi railway line pass through DSP. Air connectivity has
also been established recently.

1.1.3 TOWNSHIP

The Township of Durgapur Steel Plant is spread across a sprawling 40 sq. Kms. It has more than
25,000 units of dwelling. It also has accommodation facilities for the Durgapur Steel Plant (DSP),
Alloys Steel Plant (ASP) and other business associates' staff. The other amenities include primary
and secondary schools, a 640-bed hospital with modern medical services, a picturesque park, a
variety of cultural centers etc.

1.1.4 CONTRIBUTION TO THE REGIONAL DEVELOPMENT

Over the years, the steel plant has made significant efforts to maintain a clean and healthy
environment. It has committed to the societies around and strives to provide social, environmental
and economic benefits. Corporate Social Responsibility (CSR) projects are constantly carried out
in the steel township and other nearby places. The plant provides access to the educational,
medical, health care and water facilities in addition to the village and infrastructure development,
women empowerment and environmental protection. It gives assistance to people with disabilities
and helps in the sustainable generation of income for families along with the promotion of sports
and arts.

The Durgapur Steel Plant plays a pivotal role for the promotion and growth of small-scale
industries in the region. Following the commissioning of modernized units, DSP has been well
prepared to produce the following annually:

 2,088 metric tonnes of hot metal,

 1.8 metric tonnes of crude steel and
 1,586 metric tons of saleable steel

The currently modernized DSP has state-of-the-art quality steel producing technology. These
modernized units have paved the way for an improved efficiency, exuberant increase in energy
management and clearly, higher quality goods. The image below depicts the production of steel at
DSP.
1.2 TRADE UNION

Under Steel Authority of India Limited (SAIL), DSP forms one of the public sector organizations.
So, it is funded completely by the Central Government of India. Therefore, all SAIL plants have
the same wage, but bonus incentives depend on plant production in each plant.

When we compare the salaries of steel workers; Wages of Managerial steel workers are in line
with those of other companies in the public sector but are definitely smaller than those in the
private sector.

1.3 INDUSTRIAL RELATIONS

The Durgapur Steel Plant has 29,224 staff, of which 26,724 are found to be employees and 2500
are managers. While the supervisory and managerial staff belong to different parts of the country,
the lower-level employees are local.

From the beginning of the factory, the labor-management relationship was unpleasant.
DSP has had three unions and the majority membership was with the union affiliated with the
CPM found to be with the union. The union was furthermore affiliated with then ruling party, CPM
which came to power in the year, 1967. There existed a continuous difference of opinions between
the union and the management.

1.3.1 PRE-MODERNIZATON

 The unions have shown "militancy" in the DSP. In general, administrators were hesitant to
negotiate with the staff and chose to disregard the problems. It further demoralized the
supervisory and the administrative staff. They have not been able to exert control over their
subordinates.
 Union departmental officials were biased towards the workers. They persuaded the managers
to give certain workload or overtime to particular workers which resulted in discrimination
amongst the workers.
 When some of the workers were temporarily moved to another department where needed and
when the parent department had no jobs, the workers went on strike.
 Inter-union competition between unions was also present in the DSP. If a union refused to
protect a worker, even if he had committed illegal actions, another union would take up his
case on his behalf and battle the management.

1.3.2 POST-MODERNIZATION

 The union forum that was founded in the early 1970s was very useful.
 The management could speak to all the three unions together via the platform.
 The unions were dissatisfied with the shift in management strategy, but the workshop and the
definitive decision-making action entered the seminars, meetings, etc., helped ease the union's
fears.
 DSP has entered into a pay and service standards agreement with the unions, including
Voluntary Retirement Service and surplus workers.
 In order to focus on topics that had historically led to lengthy disagreements, multiple
management and union committees were set up such as a Joint Management Union Committee.
 The basic information was presented by industrial engineers and the members of the committee
examined the reasoning for deciding labor requirements and arrived at the figure. Furthermore,
the negotiations were based on rational criteria.
 Inter-departmental changes have now become feasible and the management has strongly
treated cases of indiscipline.
 DSP Management encouraged managers to communicate face-to-face with staff and exchange
information on a regular basis;

1.3.3 TRAINING AND DEVELOPMENT

 In order to recognize job activities that hampered efficiency and those activities that need
improvement, SAIL coordinated workshops. For all levels of personnel, classrooms were
organized.
 A document called "Priorities of Action" captured the feelings and thoughts and this paper
was circulated among the employees.
 A sense of ownership" of ideas among employees was generated by the workshop.
 In consultation with the operating departments, the personnel department separately assessed
the training requirements of each employee and planned for their training.
 Training agreements have been made with suppliers of equipment abroad and in India.

1.3.4 HR INNITIATIVE

Technological and special studies were carried out at the DSP to increase its competitiveness, but
the results were not as anticipated. A holistic view of this dynamic topic has been taken up and
more time has been dedicated to engaging in a systematic way with the cross-section of workers
rather than going just around the technical aspects.

In order to boost the level of motivation of workers associated with the DSP, Human Resources
was implemented to re-design the current reward scheme and its incorporation. Accordingly, after
due consideration with shop floor management and staff involving trade unions, a new
motivational reward programme was planned and introduced. They appreciated the initiative and
happily welcomed the solution.
Steel Plant collectives' motivation level has risen at all times and their participation in work has
grown at a level like never before and their attitude has shifted dramatically in a positive direction.
The desired turnaround was brought about by this initiative.

The Durgapur Steel Plant is now the company's Center of Excellence. This could occur only after
the launch of the new Wheel and Axel Plant Reward Scheme (W&A) and thus raised the morale
and enthusiasm of groups. Although the output of W&A Plant is entirely dependent on railway
orders, after introduction of the new Incentive Scheme, the production trend was still noticed
upwards.

THE MANGERIAL CLIMATE

 The supervisory as well as the managerial personnel were demoralized.

 Not given power to exercise authority
 They felt helpless and had immense pressure from the top management for more and more
production.

FINANCIAL PROBLEMS

 Production started to fall drastically

 There were under utilization of plant capacity
 Profits started to decrease
 Production cost was also increasing.

OTHER PROBEMS BEING FACED

 Poor quality of product

 High consumption of energy
 High pollution levels

RECCOMENDATION FOR THE ABOVE MENTIONED PROBLEMS

 Changing the employee attitudes present at all the levels of the management in an
organization
IMPLEMENTATION OF TECHNOLOGICAL CHANGES

 Adding of capacity
 Replacement of machinery, plants and various other equipment’s
 Replacing old technological methods with new technological methods.

RELATIONS WITH UNIONS

 Formation of forum of unions. Under this:

 The management should work hard towards becoming transparent
 Formulation of joint committees to assess the required manpower for each department,
preparation, combination of such activities.
 Agreement on compensation and service terms between DSP and unions and VRS for
surplus workers.

EMPLOYEE WORKSHOPS

 Identifying the work practices which have hindered the working of employees and
changing them.
 Taking actions on spot
 Development of a sense of ownership of ideas at all levels among employees.

Also on part of managers, they should be sympathetic but yet firm, should enable one to one
interaction between superiors and employees working under them. Also in order to make the
employees feel as an important asset of the company the managers should share data about
productions, products, future plans. This will enable the employees to feel more like that its
their own organization.

REPONSE FROM TRADE UNIONS

 Fear of being unemployed

 Problems related to retraining because of using new and updated technology.
 Changes in the new working culture.
WAYS TO REDUCE THESE RESISTANCE TO CHANGES

 Appropriate training and knowledge should be given to the workers

 Negotiated changes
 There should also be supportive management practices

BENEFITS FROM TECHNOLOGICAL CHANGES IN DURGASTEEL PLANT

 Improvement in the profitability

 Higher level of production
 Huge improvement in the quality of finished products
 Conversations of energy
 Reduction in air and noise pollution

1.5 CONCLUSION

The strategy of management to address the problems linked to the decline in production and to
establish a constructive relationship with trade unions was found to be remarkable. The
management collectively took a decision in the early 1980s that DSP modernization was
imperative and a report was prepared by MECON Ltd (Metallurgical and Engineering
Consultants). Three areas were addressed in the DSP modernization approach namely:

 Adding capacity
 Substitution of machinery, plants and equipment
 The development and replacement of obsolete technology with new technology

Subsequently, SAIL management set up a task force of five senior executives to bring
improvements to the management structure. The task force believed that the human and
administrative aspects should be carefully prepared alongside the introduction of technological
changes. Several initiatives were introduced by the task force to introduce improvements into the
management practices and employee attitudes. They also initiated seminars to identify
organizational issues and management took action to incorporate employee proposals as well.
REFRENCES

https://sail.co.in/plants/about-durgapur-steel-plant
durgapur steel plant ir - Bing images

https://en.wikipedia.org/wiki/Durgapur_Steel_Plant