ABC Steels

Major steel manufacturing in Indian eastern

region
Amicable relationship between union and
management- only 3 strikes and that 75
years ago
Employee satisfaction is on a decline
however without affecting the production
increase

Skills

Unions are pushing for the profit-sharing

Exceeding targets
Reduction in salary in the PMS revision

Almost 36% reduction in the reward per head

as a result of the new PMS
Critica
l
Succe
ss
Factor
s

Capacity
Utilizatio
n

EmployeeSatisfaction

Low
Productio
n Cost

Workers have started the agitating in form of goslow

Bloating may be causing worker level 1

employees to get paid lower than HMS
workers, in spite of higher qualifications
PMA | GROUP
2

 Comparison between two dissimilar units: HSM & Sheet Mill

Flat vs. Tall Hierarchy

Skilled vs. Mixed(Skilled & Unskilled) Labour
Stable vs. relatively
unstable business units
Critical
Successproduced are different
Value of the products

Faulty PMS

Factors

Highly subjective
Self Appraisal- not an ideal PMS for workers

High Individual biases

Lack of supervision at Sheet Mill

Lack of transparency
No specific KRAs/targets defined for workers
Evaluation and revision of PMS being done on a comparison between dissimilar units & hence faulty

Sequential interdependency PMS & Rewards Management System should be as per unit
output and not individual
Bloating occurring at Worker Level 2 causing the average pay to be high, due to
Freezing of promotions to Jr. Mgr.
Time scaled promotions of Worker Level 1
PMA | GROUP 2

Employee
Satisfaction

Organization
al
Effectiveness

Cost

Time
taken

Low

Low

Medium

High

Low

4-5
weeks

High

High

Medium

4-5
weeks

Make rewards system based on

organizational outputs

Medium

High

Medium

4-5
weeks

Promotions to be based on individual

performance and not time scaled

Medium

High

Low

4-5
weeks

Options
Maintain Status Quo
PMS should be done by MBO in
consultation with employees
Performance appraisal to be based
on objective KRAs

PMA | GROUP 2

PMA | GROUP 2