Case study report on Durgapur Steel PlantAyodhya Paikaray

Durgapur Steel Plant (DSP)

Durgapur Steel Plant is one of the integrated steel plants of Steel Authority of India
Limited (SAIL), located in Durgapur, in the eastern Indian state of West Bengal. It
has played a historically important part in the industrial development of India.

It was set up in the late 1950s with an initial annual capacity of one metric tonnes of
crude steel per year, the capacity of DSP was later expanded to 1.6 metric tonnes in
the 1970s. A massive modernization programme was undertaken in the plant in
early '90s, which, while bringing numerous technological developments in the plant,
enhanced the capacity of the plant.

After the commissioning of the modernized units, DSP is all set to produce 2.088
metric tonnes of hot metal, 1.8 metric tonnes of crude steel and 1.586 metric
tonnes of saleable steel annually.

The modernized Durgapur Steel Plant now has state-of-the-art technology for
quality steel making. The modernized units have brought about improved
productivity, substantial improvement in energy conservation and better quality
products. The entire plant is covered under ISO 9001: 2000 quality management
system.

Wage structure

DSP was one of the public sector companies under SAIL. So it was entirely financed
by the central government. Therefore all the plants under SAIL have the same wage
but incentive payments in each plant were based on plant output.

The wages of steel workers compared favourably with those of other industries. The
salaries of the managerial staff were in line with those of other public sector
organizations but were lower than those in private sector.

Industrial Relation

DSP had 29,224 employees out of which 26,724 were workers and 2500 were
executives. The lower level workers were local while the supervisory and
managerial personnel were different parts of the country.
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The labour–management relation was not good from the inception of the plant. DSP
had three unions, the majority membership was with the union affiliated with the
ruling party CPM (came to power in 1967). There had been a history of differences
between the management and unions.

Before modernization

• The unions were showing “militancy” in DSP. Managers were generally

reluctant to deal with the employees and preferred to ignore the situation or
suppress misconducts. The supervisory and managerial personnel were
demoralized. They were unable to exercise authority to their subordinates.
The departmental representatives of the unions often told the mangers who
should be given over time and who should be given what kind of job.

• The workers were went on strike when some among them were temporarily
transferred to another department where additional persons were needed
and the parent department had no work.

• There was also inter-union rivalry among unions in DSP. If a union failed to
support a worker even if he had indulged in unauthorized behavior, another
union would pick up his case and fight the management on his behalf.

After modernization

• The forum of unions that that was forged in early 1970s became very useful.
Through the forum the management could talk to all the three unions
together.

• The unions were uncomfortable with the change in approach of the

management but the workshop and the decisive action to implement the
decisions reached the workshops, meetings, etc. helped allay the fears of the
union.

Collective Barraging and Workers participation in Management

• DSP also entered into an agreement with the unions on wages and service
conditions, including VRS and surplus employees.
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Case study report on Durgapur Steel PlantAyodhya Paikaray

• Several management and union committees were set up to work on problems

that had earlier led to prolonged disputes.

• A joint-management-union committee created to discuss the issue in detail.

Industrial engineers provided the basic data and the committee members
examined the rationale for determining manpower requirements and arrived
at figure.

• The discussions were based on rational criteria rather that bargaining.

• Now inter-departmental transfers become possible and cases of indiscipline

were firmly handled by the management. Reporting late for work and
absenteeism were handled as suggested in workshops.

• DSP Management encouraged supervisors to have face to face interaction

with employees and share data on regular basis; sharing data about
production, quality, demand, future plans etc. would make employees feel
like they were part of the organization.

• Besides written communication, the need for personal interaction was

emphasized.

Training and Development

• SAIL organized workshops to identify to work practices that hindered the

performance and those that need to be changed. Workshops were arranged
for all levels of employees.

• The feelings and opinions were captured in a document called “Priorities of

Action” and this paper was circulated among the employees.

• The workshop created a sense of “ownership” of ideas among employees

• Training was emphasized. The personnel department in consultation with the

operating departments analyzed the training needs of each employee
individually and arranged for his/her training.
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Case study report on Durgapur Steel PlantAyodhya Paikaray

• Arrangements for training were made with equipment suppliers abroad and in
India.

• Training was also arranged in other plants of SAIL and in the expanded
facilities of DSP training centre.

Conclusion

Management’s strategy to resolve the issues related to decline in production, to

develop a positive relation with trade unions were remarkable. They were able to
identify the major reasons for low industrial growth and these are:

i) the “militancy’ of unions and

ii) inadequate development of infrastructure,

In early 1980s, the management decided that modernization of DSP was necessary
and MECON prepared a report for this. The approach to modernization in DSP
covered three aspects:

i) Adding capacity

ii) Replacing some machinery, plants and equipment

iii) Introducing and replacing old technology with totally new technology

After technical decisions about modernization were taken, the management of SAIL
set up a task group of five senior managers to plan changes in the management
system. The task group believed that along with the implementation of technical
changes the human and managerial aspects should be carefully planned.

The task force initiated several measures to bring about changes in management
practices and attitudes of employees. They initiated workshops to identify operation
problems and steps were taken by the management to implement the suggestions
of employees.
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Case study report on Durgapur Steel PlantAyodhya Paikaray

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