BEST HR PRACTICES IN

Pradnia Bhalerao C-03

Anandita Singh C-34

Jayashree Prabhu C-43

Sanchi Gaikwad P- 07

Abstract

This case examines :

Unique HR practices.The change and performance management

practices.Some of the retention strategies adopted by

the company.

WE ASPIRE TO BE THE GLOBAL STEEL INDUSTRY BENCHMARK FOR VALUE

CREATION AND CORPORATE CITIZENSHIP.

TISCO – UNDER THE CHANGE

• In the early 1990s, TISCO appointed McKinsey and Booz-Allen & Hamilton to study its operations and suggest ways to cut costs.

• To focus on various components affecting the cost of steel.

• Included cost of raw materials, cost of conversion, fuel rate in the blast furnace and mining of coal.

• Advised to use the most modern technologies to cut costs further.

• In the second half of 1998, in association with McKinsey, TISCO implemented TOP program at its G blast furnace .

• TOP - Maximum positive impact to the bottom-line, with minimum investment, required in minimum time.

• Aimed achieving large improvements in throughput, quality and cost in the short term.

• In the long run, TOP was expected to enable the TISCO to achieve high rates of performance improvement.

• Helped TISCO to shift its focus from just producing volumes to costs and quality.

• Enabled TISCO to improve customer satisfaction and loyalty.

• TISCO also took steps to reduce its manpower costs.

• Between 1996 and 2000, TISCO reduced its workforce from 78,000 to 40,000 employees.

• Cutting its workforce by 38,000 employees was not an easy job.

• Company was able to do it with a lot of communication with employees.

• TISCO had adopted Performance Ethic Programme (PEP).

• It planned to promote hardworking young people to higher positions depending on their performance, rather than following the convention of seniority.

• This exercise was expected to cut the management staff from 4000 to 3000.

pep

Two core elements -

• Proposed a new organizational structure: expected to foster growth businesses, introduce more decision-making flexibility, clear accountability, and encourage teamwork among the managers and the workforce.

• Proposed to introduce a Performance Management System (PMS).

Objectives of pep

• It would identify and reward strong performers, and also offer development opportunities for each employee.

• PMS would also ensure that every employee's job profile was clearly defined.

• By introducing PMS, TISCO wanted to make performance appraisals transparent and fair and reward the good performers.

• The company also planned to introduce a new compensation package based on performance from November 2001.

BENEFITS OF PEP

• Youngsters are getting higher salary than some of the seniors, and after the restructuring, the average age of the managers has fallen by 10 years.

• Through PEP, TISCO also reduced the hierarchical levels from 13 to 5.

• In a bid to reduce costs further, TISCO used IT as a strategic tool.

• After SAP solutions were introduced in TISCO, the business processes became more efficient.

• It also improved customer service and productivity, and reduced costs.

• The introduction of SAP also decreased manpower cost from more than US $ 200 per ton in 1998 to about US $ 140 per ton in 2000.

Component 1: Conventional

Appraisal

Coincides with FY

Preceded by Annual Business Plan

Three components

Three components

The THREE components

Self-appraisal

• The work done

• Difficulties

• Major achievments

• Developmental needs

Objective assessment

• Assesment of KRA’s fulfilment

• Done against concrete goals

Subjective assessment

• In what manner the work is done?

• Decision making

• Managerial capabilities/traits

• Transparent & open

• Rewards, annual increment for promotion, postings, job rotation are linked with appraisals

• Feedback but tool for administrative decision making

Component ii: MANAGERIAL

STYLE FEEDBACK

How it started ?

• Subordinate must get chance to assess their bosses.

• Started with critical group – divisional managers and higher.

Procedure• HR dept. selects who will give the

feedback.• Random sampling.• Managerial Style feedback

Questionnaire.• Identity of people giving feedback is kept

confidential.• All data is collected, analyzed.

Managerial style feedback ??

• Subordinates – did not have expertise or wisdom

• Confidentiality• Perception

Advantages

• Johari Window - Blind• the boss get a reflection of what his

employees think about him• Management Style

Component iii: INTERNAL

CUSTOMERS ASSESSMENT

Internal Customer Assessment

• TISCO extended their feedback system.

• Evaluate to what extent one meets the expectations of internal customers

• Provide peers with third set of data

Sample of appraisers

Procedure:• List of 15- 20 from a wide set of functions• The HR dept.• Work on appraisers & merge the list• Again pick random sample each year of 10-

12 names

Contd…

• Separate questionnaire is developed

• 10 questions

• Space for writing open ended responses

• Anonymous feedback

• Summarizing of report

• Report goes back to an individual in detailed form

Contd..

Observations :• Assessment by subordinate is tougher than

the assessment by peers & colleagues• Some bosses are assessed very stringently

by subordinates but far more positively by their peers & colleagues

• This process goes up to CEO level & he too goes through entire process

Observation & LearningTISCO chose to do three components separatelySequenceTime gapsAnonymity is practiced Counseling people

Contd..

• Problems in dropout rate

• Feedback is taken seriously

CONCLUSION

bibliography

• Performance Management & Appraisal System – HR Tools for Global Competitiveness – By T.V. Rao.

• www.icmrindia.com

• www.tisco.com

THANK YOU