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Steel in India
SAIL's integrated plants

By C.S. Venkata Ratnam

Part b

Technological change

* The major deficiencies in steel production like poor productivity, obsolete technologies and lack of quality consciousness.

* The major problems facing the Indian industry in two categories viz., technological and infrastructural sector. The technological problems identified were poor quality, low yields, high energy intake and obsolete and outdated technologies. The infrastructural problems had been identified as unavailability of adequate and timely investment.

* The following areas of research and development require a major thrust:

-- upgrading of quality of raw materials and other key inputs;

-- appropriate technologies to improve production and quality of iron and steel and ferro alloys;

-- development of relevant technologies for steel making;

-- development of relevant steel casting and finishing technologies;

-- development of new and special steel products.

Technological change has resulted in a significant shift in the steel production process. As seen from Table 1 over three-quarters of the increase in crude steel production between 1990-91 and 1994-95 came from the LD process and another 17.5% from EAFs. New or modern facilities no longer use the OH process. The share of OH steel in total crude steel production fell from 31% to about 24% during the five year period, while the share of LD steel increased from 42% to 51%, but that of EAFs came down by 2% from 26.8% to 24.6%.

As the discussion of technological change in both the private sector (TISCO, Jamshedpur) and the public sector (Durgapur Steel Plant, Durgapur) steel plants in this paper reveals, there has been considerable emphasis on dealing with social and labour issues in modernization.

Human resource management

Recruitment policy

-- recruit mainly local people for non-supervisory, clerical, manual (machine-tending) production and other semi-skilled or unskilled jobs;

-- comply with the caste-based affirmation policies for Scheduled Castes (SC) and Scheduled Tribes (ST) and in recent years for Other Backward Classes (OBC) as well; and

-- guarantee at least one job for each of the families displaced due to acquiring of land by the company to locate the plant(s).

Additionally, due to collective agreements with trade unions, the company is also obliged to give jobs to the spouse or one of the dependants of employees who die in harness and give substantial weight to seniority in promotions in non-supervisory cadres.

Changes in technology, modernization and rationalization of manpower mean that the value of equipment handled by each employee is increasing, leading to greater emphasis on recruiting people with the relevant knowledge, skills and attitudes; more efforts in terms of value addition; superior responsibility in terms of higher stakes; and high-tech working conditions. Recruitment policy is based on higher expectations, higher skills and a greater say and stake for employees. Accordingly, job structures are being reviewed, job specifications upgraded/tightened and the recruitment process streamlined and made more systematic.

Personnel profile

Table 2. Workforce profile in SAIL

SAIL employs technically qualified expatriates to provide support in technology transfer and adaptation. The number of expatriates increased from 210 in 1990 to 354 in 1995. Though the expatriates are drawn from about 20 countries, two-thirds of them come from the former USSR. Another 20% come from Germany and Japan.

Since the company is downsizing it has cut down on its recruitment of management trainees in recent years, particularly in administration and in the corporate office. A healthy level of recruitment of technical management trainees is largely due to technological change and modernization and, to a limited extent, product diversification.

Training

Low literacy

The most recent and most modern integrated steel plant in the public sector, Rashtriya Ispat Nigam Limited (RINL) at Visakhapatnam, also had to contend with recruiting a disproportionately larger number (over 25%) of illiterate and unskilled persons to accommodate the interests of those who were displaced from the land where the plant was located in order to honour the commitment made by the Government to provide jobs for one dependant from each of the displaced families. The project was delayed for a variety of reasons and during this period the definition of a displaced household was changed so that every major, male, married member constitutes a separate household and can claim a separate job. Consequently, before the plant went on stream the number of displaced families had swelled from a little over 3,000 to over 13,000. During the delay the plant size and the recruitment plan were rationalized to make the operation viable. Although barely 100 of the 13,000 families have any technical skills or have had over ten years of schooling, over 4,000 of them have already been recruited in phases and the plant's management is under pressure to absorb the rest -- in a plant with a total employment of about 15,000.

Literacy levels are also low in the large and integrated steel mills in the private sector, largely because of the age of the workforce and because of pressure for employing even the unemployable on compassionate grounds, such as people who were displaced from their land to set up the modern steel mills, children of employees who die while in service, giving preference to employees' children and community pressures to absorb the local unemployed. As a result of a combination of these factors, even the private sector steel plant, Tata Iron and Steel Company Limited (TISCO) had regularized the services of about 1,700 unskilled persons who had been engaged as loaders on contract/casual basis for several years. Ironically this increase in unskilled workers on the full-time permanent payroll of the company occurred at a time when it was pursuing an ambitious modernization programme.

The link between low literacy and low labour productivity

Training of new entrants

* Unskilled (salary grades L1-L3) trade apprentices.

* Skilled (salary grades L4-L6) operators (production) and technicians (maintenance).

* Highly skilled (salary grades L7-L9) master operators/technicians.

Many production and maintenance workers eventually graduate into the first line supervisory cadre. Promoted supervisors are put in a salary grade (E0) where they are entitled to overtime and other benefits as if they were non-executives.

New recruits with higher literacy and technical qualifications (at least ten years of schooling and two years technical training leading to a diploma) are put in the salary grade (E1) which is the starting point for executive cadres. Supervisors in E1, whose position, duties and responsibilities overlap to an extent with those in E0, are not eligible for, say, overtime benefits. In several large non-steel organizations such duplication in supervisory levels was the result of the short-sighted management desire to have supervisors without any union history or affiliation.

Non-executive production workers are given three-tier training which reflects the three levels of lateral induction: trade apprentices, artisan trainees and senior operative/technician trainees. Shop floor skill development programmes vary depending upon the purpose:

-- unit training (functional training in relevant job skills);

-- refresher and redeployment training (in case the current job/skill becomes redundant);

-- training in basic maintenance skills (whether the person is engaged in maintenance or not); and

-- developmental training (based on performance review, potential for career growth and also the general need for individual development).

Besides induction training, much of the post-recruitment training for technical people in non-executive categories is in-plant and OJT under the guidance of respective senior workers (in grades L7 and L8) and supervisors. Up to the 1980s such training was ad hoc and was at the discretion of the trainers, who vary substantially in their knowledge, skills and aptitude for training. Often it is enough for a trainer to certify that a person is trained. Trade tests are conducted departmentally, but this is more of a formality. With promotions at this level being substantially weighted in favour of seniority, movement up the skill ladder is based more on seniority than on the acquisition of skills.

Realizing this vital gap, management began unit-based functional training where training inputs are predetermined for each trade/category/level, training materials prepared and potential trainers duly trained and assessed before they were made responsible for training.

The training manuals for each critical position in production departments can be and have been prepared with the help of suppliers' manuals regarding equipment design, operation and maintenance, as well as standard and actual operating procedures as advised by the suppliers/experts/trainers, adapted as necessary in the light of experience.

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