profile of sample units & hrm practice in selected public sector units ...

4

PPRROOFFIILLEE OOFF SSAAMMPPLLEE UUNNIITTSS && HHRRMM PPRRAACCTTIICCEE IINN SSEELLEECCTTEEDD PPUUBBLLIICC SSEECCTTOORR UUNNIITTSS IINN KKEERRAALLAA

4.1 Introduction

4.2 Kerala Automobiles Limited

4.3 The Kerala Ceramics Limited

4.4 Autokast Limited

4.5 Kerala State Drugs and Pharmaceuticals Limited

4.6 Traco Cable Company Limited

4.7 Kerala Electrical and Allied Engineering Company Limited

4.8 Steel Industrials Kerala Limited

Co

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en

ts

Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala

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4.1 Introduction

Since the adoption of the new Industrial Policy on July 24, 1991, there

have been consistent and concerted (and largely successful) moves to

liberalize privatize and globalize the hitherto insulated Indian economy. As a

corollary, public enterprises have had to face several challenges and effect

innovations in terms of productivity, efficiency and competitiveness without

the budgetary support in the form of subsidies and other protective measures.

An analysis of the working of PEs in India with focus on Kerala reveals that

their failures far overshadow their achievements. This makes one ponder the

complex and manifold managerial problems which our PEs are facing today.

In Kerala, out of the eighty-four working PEs (Feb. 2010 Review),

thirty units are making heavy losses. In the Industrial sector, fourteen out of

thirty nine units are running on heavy accumulated losses and ergo

considered sick. This sickness is a result of ineffectual managerial strategies

and unrealistic policies coupled with the financial crunch. Even though the

government has substantially invested in these firms, no step has been

initiated with a view to improving the managerial efficiency and thus the

overall competency and competitive output. In this context an attempt is

made here to locate the areas of inefficiencies in the personnel management

policy of PEs. Out of the fourteen sick industrial PEs, seven were selected as

sample units from the different zones of Kerala. They were:

1) Kerala Automobile Industries Limited (KAL)

2) Kerala Ceramics Limited

3) Autokast Limited

4) Kerala State Drugs and Pharmaceuticals Limited (KSDP)

5) Traco Cable Company Limited

6) Kerala Electrical & Allied Engineering Co. Limited (KEL)

7) Steel Industries Kerala Limited (SILK)


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A brief history of each of these sample units and the actual HR

activities followed in these units are provided below.

4.2 Kerala Automobiles Limited (KAL)

Kerala Automobiles Limited (KAL), incorporated in 1978 as a Govt. of

Kerala undertaking, is located in the picturesque backdrop sixteen kilometers

south of a tiny village called Aralumoodu in Neyyattinkara taluk in

Thiruvananthapuram. The company manufactures diesel, petrol and CNG three

wheelers suitable for passengers and goods traffic under the brand name of

Kerala. They are considered eco-friendly vehicles with minimal emission levels.

KAL started production with 164 employees where capacity of production was

52 vehicles per year. Initial technology of production was in collaboration with

API Mumbai and from 1987 it had developed its own technology of production.

KAL is the first company to introduce diesel engine three wheelers in the

country. KAL was accredited with ISO 9001-2000 certification for Total Quality

Management (TQM). The vision of the company is “To become top three

wheeler manufacturer in 10 years” and the mission is “To provide value added

service and product to the customers and to earn reasonable profit.”

Products

1) Kerala GL 400 V2 electric start chassis; price ` 76, 000

2) Kerala GL 400 V2 rope starts chassis; price ` 74,000

3) Kerala GL 400 V2 MX 400 electric start chassis; price Rs-83,000

4) Kerala GL 400 V2 rope start; price ` 77, 000

New products

1) Self start (340cc) petrol engine

2) Self start (340 cc) gas engine.

The ancillary units developed by the company around the factory

complex provide livelihood for hundred of families. The company also

exports a number of three wheelers to Bangladesh, Sri Lanka, Nepal, Sudan,


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Botswana, Nigeria, South Africa, Egypt and Guatemala (Central America).

KAL is also manufacturing sophisticated components to be used in space

programs of VSSC/ISRO. The company has the capacity to produce nearly

7,500 vehicles per year.

KAL is considered a sick unit as the net worth of the company for the

last four years is less than that of its accumulated losses. The accumulated

loss of the company has generally registered increase. From 2005-06

onwards the company has experienced cash loss except the last two years.

Table 4.1: Net Worth and Accumulated Losses of KAL from 2004-‘05 to 2010-’11

Year Accumulated

loss ( ` in lakhs)

Net worth ( ` in lakhs)

Cash loss ( ` in lakhs)

Net profit/loss ( ` in lakhs)

2004-2005 Nil 975.11 - 21.71 2005-2006 245.36 734.07 245.66 -209.77 2006-2007 377.69 621.22 114.18 -75.37 2007-2008 758.51 85.56 361.33 -380.82 2008-2009 1108.84 -230.99 394.67 -410.86 2009-2010 1167.19 -228.81 - 2.17 2010-2011 1368.15 -363.74 - -112.80

Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March

Table 4.1 reveals the performance of KAL for seven years from 2004-

05 to 2010-11. The table shows the gloomy state of affairs of the enterprise

with a net loss for 5 years of the selected 7 years. The net worth of the KAL

is showing a negative trend during the three years from 2008-09 to 2010-11.

The accumulated loss of the Co. has been raised from ` 245.36 lakhs in

2005-06 to ` 1368.15 lakhs in 2010-11. The enterprise has registered an all

time record net loss of ` 410.86 lakhs in 2008-09.

HRM Practices in KAL


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There are approximately 20 departments in KAL, the HRM being one.

The size of the department depends on its importance and complexity.

Following is the structure of HRM in KAL:

Source: Company Records

Fig.4.1: Structure of Personnel Department of KAL

The HRM department is working under an HR manager. The main

objectives of the department are to reduce absenteeism, improve employee

satisfaction, streamline production and to enhance efficiency. The employee

position and their average earnings per month in KAL as on 31/3/2009 are

given in Table 4.2

Table 4.2: Employee Position in KAL as on 31/3/2009

Sl.No: Category Strength Average emoluments per person per month

1 Managerial staff 14 25615


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2 Supervisory staff 39 16308 3 Workers 222 10931 Total 275

Source: Company records

As per Table 4.2, there are 14 managerial staffs at KAL to manage a

total staff of 275. There are also 39 supervisor staffs to manage 222 workers.

Recruitment and Selection

The company mainly follows three methods of recruitment viz.

1) Direct recruitment carried out through newspaper advertisements.

2) Employment exchange for workers, etc.

3) Public Service Commission for the post of helper, typist, office

assistant, clerical staff, driver, etc.

Training and Development

Every employee is given training for one year. Training can be inside

or outside the organisation. During the period of training the basic pay alone

is given. The working time in KAL is eight hours per day and attendance is

recorded through punching system. Table 4.3 clearly shows the details about

employee development of KAL.

Table 4.3: Employee Development of KAL from 2004-05 to 2010-11

Particulars

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

(1) Training (Rs in lakh) a)Budget provision 0.60 0.43 0.60 2.00 - - -

b)Amount spent 0.20 0.27 0.50 0.27 Nil 0.24 0.57 (2) No. of persons sent for

external training 39 2 2 2 10 19

(3) No. of in-house programmes organized 2 2 1 1 Nil - 6

(4) No. of persons covered in in-house programmes 108 78 40 40 -

132 Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March


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It is interesting to note from Table 4.3 that the enterprise has spent only

` 57, 000 in 2010-11 to train 151 personnel. The table as a whole exposes that

the initiative of the enterprise to train the Human Resource is very poor. The

amount spent for training the personnel is less than that of the budget

allocation. It is important to note that during the financial years from 2008-09

to 2010-’11, no budgetary allocation was made for training activities and

employee development.

Salary and other Benefits

Remuneration is fixed on the basis of basic pay and Dearness

Allowance (DA). For managers and office staff a fixed DA sanctioned by the

government is given while workers are given variable DA on the basis of cost

of living index/ consumer price index.

House Rent Allowance

HRA is decided by the management in understanding of labour unions

and is subject to revision every five years.

Gratuity

The employees of KAL will get 15 days salary as gratuity for one

year’s work. An employee is eligible for gratuity on completion of five years

of continuous service.

Provident Fund

Contributory Provident Fund (CPF) is in operation where an employee

contributes twelve per cent of the basic pay to the PF and the organization

also contributes the same amount.

Allowances

Following allowances are also provided by the company in addition to

the above stated remuneration and benefits.

a) Washing allowance - Rs 30 per month per worker.


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b) Stitching allowance - ` 250 per year for workers having uniform.

c) Risk allowance - ` 50 per month for workers doing certain risky jobs.

d) Ad hoc pay- This is given to those employees who are eligible for

promotion and not promoted yet even after the time bound within

which they have to be promoted.

4.3 The Kerala Ceramics Limited

The history of The Kerala Ceramics dates back to 1937 when the

Maharaja of the then princely State of Travancore set up one unit for

mining and refining of china clay and another unit for manufacture of

porcelain wares. The company was set up in 1963 as a fully owned Govt.

of Kerala undertaking with its registered office at Kundara, Kollam. The

company is the pioneer in India in the field of mining and refining of

china clay.

The company has been supplying their products to almost all the

leading paper mills and Hawai chapel manufactures in India. The primary

objective of the company is to a) carry out the business of mining, b)

processing, refining and selling china clay, c) manufacturing, processing

and selling porcelain goods of all description, earth wares, China

terracotta and ceramics wares, stone wares etc and to d) promote and

establish clay-based industries in the State and create wealth and

employment and to ensure sustained growth of the unit with reasonable

profit. The company was referred to BIFR in 2002, but the performance of

the company even after the implementation of rehabilitation scheme bas

not been satisfactory.

Table 4.4 shows the profitability analysis, net worth and accumulated

losses of the company from 2004-‘05 to 2010-‘11. The table reveals that for

all the seven years under consideration the company has registered a negative

net worth except for the last two years. It is also important to note that every


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year the accumulated loss of the company is higher than that of its net worth.

So it is clear that the Kerala Ceramics Ltd. is also a sick unit. It is evident

from the table that in the first three years (from 2004-‘05 to 2006-’07) the

company was running on heavy operating losses and cash losses. Thereafter

the operating result and cash loss showed a positive result except for the last

year.

Table 4.4: Net Worth and Accumulated Losses of Kerala Ceramic Limited from 2004-‘05 to 2010-‘11

Year Accumulated

loss ( ` in lakh)

Net worth ( ` in lakh)

Cash loss ( ` in lakh)

Net profit/loss ( ` in lakh)

2004-2005 2490.62 -1269.74 151.30 -157.66

2005-2006 2562.55 -1341.67 67.88 -71.93

2006-2007 2580.56 -1359.68 12.61 -18.01

2007-2008 2540.53 -1319.65 - 40.03

2008-2009 2521.80 -1300.92 - 18.73

2009-2010 2515.67 1294.79 - 6.13

2010-2011 2572.19 1351.31 43.44 -56.52


Table 4.4 also shows that the net loss accumulated in 2004-05 was `

2490.62 lakh and it increased to ` 2572.19 lakh in 2010-11. There is a ray of

hope that the Co. could able to make profit. During 2010-11, the Co. incurred

a loss of ` 56.52 lakhs.

HRM Practices in Kerala Ceramics Limited

The company has no formal personnel department. The personnel

department is working as a part of administration department. Figure 4.2

depicts the structure of personnel and administration department of the

company. For the last few years the company has faced the problem of

working capital shortage and huge operating losses.


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Fig. 4.2: Structure of HRM in Kerala Ceramics Limited

The company has a plan for HRM which is prepared by the Manager

(Personnel) with the help of Chief –Personnel and Administration. The

company’s total manpower at present in different categories is 174. Details of

employee position with their earnings as on 31-3-2009 are shown in Table (4.5).

Table 4.5: Employee Position in Kerala Ceramics Ltd. as on 31/3/2009


1 Managerial staff 8 14,000

2 Supervisory staff 24 7,500

3 Workers 142 7,000

Total 174


Chief Personnel and Administration

Assistant. Manager (Personnel)

Superintendent

Time keeper

Vigilance Officer

Clerical Staffs

Security


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As per table 4.5, there are 8 managerial staffs at Kerala CeramicsLtd. to

manage a total staff of 174. There are also 24 supervisor staffs to manage 174

workers.

HR manager is responsible for helping the preparation of HR policy,

identification of manpower needs of the company, recruitment, selection and

placement of personnel, training and development of employees, promotion

and transfers and maintaining good industrial relations.

Recruitment

The recruitment of office staff such as junior assistant, junior typist,

peon, etc. is carried out through PSC and that of working category through

professional employment exchange. Temporary vacancies are also filled

through employment exchange. The government norms regarding the

reservation for SC/ST, ex-servicemen and physically handicapped persons

etc. are strictly followed by the company.

Training

The company has neither plan nor budgetary allocation for equipping

the employees with appropriate training programme. Initial training is given

to all fresh employees by their immediate supervisor. Basically the company

follows on the job training programme. In deciding promotion, ‘seniority’ is

the main criteria.

Industrial Relations

The Kerala Ceramics continues to maintain good relations with the

employees. By a system of participative management and a problem solving

approach, the management endeavors to solve the issues it has to face. Three

major trade unions are working in the company.

Labour Welfare A number of schemes are introduced by the company to improve the

employees living and working conditions. They are:


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a) Canteen facilities- Lunch is provided at a subsidized rate of ` 3.75

to each employee.

b) PF- 10% of (Basic Pay+DA) is contributed both by the employer

and employee.

c) DA- For managers and office staff as per State Govt. declaration

and for workers as per consumer price index.

d) ESI- ESI coverage is applicable to employees whose salary is ≤

` 15, 000. For others medical allowance to a maximum of one

month salary will be provided.

e) HRA- ` 100 per month for managers and office staff and for

workers ` 50 per month.

f) Gratuity- As per the Gratuity Act.

g) Shift allowance.

h) Uniform allowance.

i) Washing allowance.

In addition to the above allowances, annual festival advance up to ` 5, 000

will also be provided to the needed employees.

4.4 Autokast Limited

Autokast Limited was established in 1982 as a subsidiary of Steel

Industries Kerala Limited (SILK), a government of Kerala undertaking. The

company is fully equipped to manufacture all kinds of ferrous castings, steel,

grey iron and spheroidal graphite iron castings. Subsequently the

Government of Kerala de-linked Autokast from the holding company SILK

from June 2008 onwards. Now the company is a modern industrial casting

unit with ISO 9001-2008 certification. The unit is situated at S.L. Puram near


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Cherthala. The company has an optimum capacity of 18,000 tones per annum

and covers an area of 21,500 sq. meters.

The plant comprises two distinct production lines, viz. the conventional

moulding line and high pressure moulding line. The company can

manufacture ferrous castings of all grades and sizes ranging from 5kg to

8,000 kg. The conventional moulding line is a semi-automatic system in

which large castings are manufactured whereas high pressure moulding line

is a fully automated system in which smaller castings are manufactured in

large quantities.

The plant manufactures intricate high precision items of mass

production like cylinder block and cylinder heads for the entire range of

automotive engines. The company also has separate lines to cover the entire

automotive castings from the smallest to the largest, such as shaft housings,

flywheels, pulleys, manifolds, break drums, etc., apart from serving the

diversified needs of automobiles industry. Autokast manufactures pump

castings, machine tools, etc., in addition to automotive castings.

Shortage of working capital is the most severe problem that the

company has faced since 2008-2009. The Government of Kerala provided a

sum of ` 100 lakh towards working capital and the company is holding on its

operations with the same and supported the company by settling its

outstanding amount for ` 4929.52 lakh by ` 1252.46 lakh and the same was

paid in three installments.

Vision

“A leader in the Indian casting industry and a significant global player

providing customer’s delight and enhancing shareholders value”.

For the period under consideration (from 2004-05 to 2010-’11) the

financial performance of the company is very poor. For all the years under

study, the net worth of the company appears to be negative and the

accumulated loss for every year is more than that of its net worth. Hence


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Autokast is also considered a sick unit. For all the years the company

experienced cash loss except in 2006-07 and was registering negative Return

On Investment (ROI) except in 2006-’07 (Table 4.6 ) During 2010-11 , the

Co. incurred a loss of ` 186.54 lakhs.

Table 4.6: Net Worth and Accumulated Losses of Autokast Limited from 2004-’05 to 2010-‘11

Year Accumulated loss

( ` in lakh) Net worth ( ` in lakh)



2004-2005 12733.27 -10821.27 291.56 -325.42

2005-2006 12974.52 -10962.52 211.98 -241.26

2006-2007 9256.12 -7244.12 - 19.84

2007-2008 9652.35 -7640.35 367.14 -396.23

2008-2009 10138.96 -8126.96 457.23 -486.62

2009-2010 10025.52 -8013.52 158.73 -223.32

2010-2011 10215.07 -8203.07 202.58 -189.54


HRM Practices in Autokast Limited.

There exists no formal personnel department in the company. HRM

department is working as a part of administration department with an HR

Manager. He is assisted by two officers and five clerical staff. Figure 4.3

elucidate the structure of HRM in Autokast limited.


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Source: Company Records Fig. 4.3: Structure of HRM in Autokast Limited

The company’s total manpower at present is 295 spread across three

categories (Table 4.7)

Table 4.7: Employee Position in Autokast Limited as on 31/3/2009



2 Supervisory staff 28 17895

3 Workers 246 10402

Total 295


As per Table 4.7 there are 295 personnel in Autokast limited with 21

Managerial and 28 Supervisory staffs.

The Personnel Manager prepares human resources planning for short

term as well as long term needs. The following duties are under the purview

and responsibility of the HR manager:

a) Recruitment, Selection and Placement

b) Training

c) Job Description and Evaluation

d) Merit Rating

e) Industrial Relations

f) Maintaining Personnel Records.

Recruitment

Recruitment of all office staff is through the PSC. For some technical

posts, service of Technical Employment Exchange is sought. Recruitment of

top level executive posts is made through newspaper advertisement. All the

selected employees will be placed for a probation period of one year.


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Training

An initial training of six months to one year is given to all the fresh

employees. Both internal and external training methods are followed by the

company. The Company rolls out a calendar for annual training programme.

The employees who need training are identified on the basis of Annual

Training Plan which is based on performance evaluation done by various

department heads. The details about actual employee development of the

Company from 2004-‘05 to 2010-‘11 are given in Table 4.8. The Company

follows separate performance evaluation techniques for workers and

managers. Promotion of employees to higher posts is executed on the basis of

seniority. An employee who gets promotion will be put on probation for a

period of six months which can be further extended if found necessary.

Table 4.8: Employee Development of Autokast Limited

Particulars

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

(1) Training (Rs in lakh) a)Budget provision

0.18 0.50 0.05 2.00 2.50 2.05 2.05

b)Amount spent 0.009 0.16 0.01 0.17 0.26 0.70 0.45

(2) No. of persons sent for external training

15 5 6 7 11 52 16

(3) No. of in-house programmes organized

15 13 16 10 16 17 15

(4) No. of persons covered in in-house programmes

123 156 130 123 180 162 196


As per Table 4.8 the percentage of amount spent for employee

development for all the years under consideration is much less than that of

the budgetary provision. It shows the negligence of management towards the

employee development. During 2010-11 the company spent only ` 45,000 for

Employee Development.


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Remuneration

Remuneration of employees is fixed by the Government after taking the

views and demands of trade unions into consideration. Over and above the

basic pay, following benefits and allowances are provided by the company to

its employees:

a) Provident fund-12% each by the employer and employee

b) ESI-As per the ESI Act, both employer and employee contribute

c) DA – For workers DA is calculated as per Price Index and for

executives as per State Govt. regulations.

d) House Rent Allowance- Rs 100 for managerial and clerical staff

and ` 50 for workers.

e) Subsidized canteen

f) Conveyance allowance

g) Shift allowance

h) Cloth allowance

i) Washing allowance

j) Education allowance

k) Recreational club

l) Dependent employment

4.5 Kerala State Drugs and Pharmaceuticals Limited.

Kerala State Drugs and Pharmaceuticals limited (KSDP), a Public

Sector Undertaking, has been manufacturing and supplying essential and life

saving medicines since its inception in 1974. The company caters to the need

of the common patients who depend on Government Hospitals in the State of

Kerala. As Kerala is a leading state in public health services, the company

has been under constant pressure to achieve the best of quality standards. The

slogan of the Company is “Quality that Cures”. The complete shares of the


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company are owned by the Government. Now the Company is a major supplier

of quality drugs to Kerala Medical Service Corporation, Thiruvananthapuram.

Without any compromise in quality, KSDP Ltd. is shielding itself from the

globalization threats and venturing into commercial trade operations. With a

mission to achieve “CURE FOR ALL”, KSDP is looking forward to a

healthy generation and nation.

The abbreviation of the word KSDP represents;

‘K’ – Stands for Kwality

‘S’ – Stands for Stability

‘D’ – Stands for Dependability

‘P’ - Stands for Purity.

Vision

“To manufacture and market ‘quality drugs’ at economical rates to the

common man and to extend social justice to suit the needs of the common

man, more over to formulate new products through research and

development.”

KSDP is considered a sick unit as the net worth of the company for the

last few years remains negative and has also accumulated huge losses. During

these years the company was maintaining cash losses and experiencing

negative return except for the last two years. Accumulated losses of the

company were increasing year after year. Table 4.9 shows the details of net

worth, accumulated losses etc. of the company from 2004 –‘05 to 2010-’11.

Table 4.9: Net Worth and Accumulated Losses of KSDP Limited from 2004-‘05 to 2010-‘11

Year Accumulated

loss ( ` in lakh)




2004-2005 7057.14 -6588.84 644.84 -662.92 2005-2006 7721.37 -7173.24 648.54 -664.23 2006-2007 8332.40 -7704.44 552.94 -596.99


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2007-2008 8738.46 -8030.68 394.19 -406.62 2008-2009 9133.50 -8196.44 383.05 -395.04 2009-2010 8823.20 -7900.68 - 295.12 2010-2011 8524.31 -7601.79 - 299.07

Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March Table 4.9 reveals the performance of KSDP for seven years from 2004-

05 to 2010-11. The Co. suffered net loss for first five years of the selected 7

years and thereafter started to earn profit. The accumulated loss of the Co.

has been raised from ` 7057.14 lakhs in 2005-06 to ` 8524.31 lakhs in

2010-11.

HRM Practices in KSDP Limited

The company has no formal personnel department. The personnel

department is working as a part of administration department. The main

function of this department is to manage and redress the grievances of

personnel employed in the company. There is only one manager and a

superintendent to manage the whole activities of HR. Fig 4.4 depicts the

structure of HRM in KSDP.


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Fig. 4.4: Structure of HRM in KSDP

KSDP ranks 43rd among enterprises in terms of employment by SLPEs.

The company’s total manpower at present in different categories is

hundred and ninety one. Details of Employee position of the company as on

31-3-2009 is shown in Table (4.10).

Table 4.10: Employee Position in KSDP Ltd. as on 31/3/2009


1 Managerial staff 27 15,000 2 Supervisory staff 34 7,000 3 Workers 130 8,500 Total 191


Recruitment and Training

The company mainly follows three modes of recruitment viz:


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a) Supervisory/managerial staffs are employed through professional

employment exchange and through advertisement in the leading

dailies.

b) Workers are employed through district employment exchange.

c) Helpers, typists, office assistants, clerical staff, drivers, etc., are

selected through the Public Service Commission.

Basically, the company follows on the job training programme. Initial

training is given to all fresh employees by their immediate supervisor.

Currently, due to lack of adequate working capital and financial assistance

from the government, no development process is being carried out by the

Company. There has been no budgetary provision for training and

development for the last six consecutive years. During the last year under

review (2010-2011) the company spent 0.10 lakh of rupees for employee

development and seven persons were sent for external training programme.

The section head of each department prepares performance appraisal report

of their employees and then forwards it to the personnel manager.

Wages and Allowances

Wages are paid to employees as per the amount shown in Table 4.10

above to each of the categories. In addition to wages, the following perks and

incentives are also provided by the company to its employees.

a) Gratuity- Gratuity is given to the employees with the help of LIC

schemes.

b) ESI- Both the management and employees need to contribute a

specified percentage to this scheme. Accident benefits are also

given to employees.

c) Provident Fund (PF)-Both the management and the employee

need to contribute 10% each.

d) Canteen facility


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e) Recreation club- Newspapers and other books are available to the

employees.

4.6 Traco Cable Company Limited

Traco Cable Company Limited, incorporated in 1960 as a public

enterprise, manufactures high quality electric cables and wires in technical

collaboration with M/S. Kelsey Engineering Co. Ltd, Canada. Traco cable has

been in the forefront of meeting the needs of public sector undertakings in India

such as the Railways, Electricity Boards of various states in the country. With

the progress in cable technology, paper insulated cables gave way to the much

more sophisticated jelly filled telephone cables which are superbly suited for

communications. Traco was one among those who first perceived the potential

of this new development. It soon went into Technical collaboration with M/s.

General Cables, U.S.A., world leaders in the communication cable field, and

manufactured them in India to exacting standards.

Traco enjoys an enviable position in the field of cables in India; being

the only cable manufactures of its kind, with the capacity to produce both

power cables and telephone communication cables in the entire South India

according to both India and international standards, it always plays a silent

but crucial role in the process of nation building. The ranges of products are:

a) Telephone Cables

b) Dry Core Cables

c) Arial Cables and PCM Cables

d) AAC, ACSR

e) Power/Control Cables

f) Weather –Proof Cables etc.

Table 4.11 shows the present financial position of the company. For

the last seven years (from 2004-05 to 2010-’11), the net worth of the


131

company has been negative with huge accumulated losses. So the company

is considered sick unit. The result also reveals that the situation

deteriorating as the negative net worth is increasing year after year except

for the last two years. Even though the company incurred losses from 2004-

05 to 2006-07, the situation changed thereafter and the company started to

earn profit.

Table 4.11: Net Worth and Accumulated Losses of Traco Cable Company Limited from 2004-‘05 to 2010-‘11

Year Accumulated

loss ( ` in lakh)




2004-2005 2896.17 -511.49 651.68 -717.68

2005-2006 3554.33 -1169.65 357.48 -658.16

2006-2007 3773.10 -1088.42 - -218.77

2007-2008 3514.55 -829.87 - 24.83

2008-2009 3754.40 -1069.72 - 44.43

2009-2010 3463.46 159.00 - 594.01

2010-2011 3054.00 968.48 - 409.46


HRM Practices in Traco Cable Company Limited

A formal personnel department is existing in the company. The

Chief Personnel Manager looks after the personnel affairs of the company

with the help of two assistant managers and two officers supported by

sufficient clerical staff. The structure of personnel department is given in

the Fig.4.5


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Fig. 4.5: Structure of HRM in Traco Cable Company Limited.

Traco Cable Company limited occupies 24th position in ranking of

enterprises in terms of employment by SLPEs. The company’s total

manpower at present in different categories is five hundred and seventy eight.

Details of Employee position of the company as on 31-3-2009 is shown in

Table (4.12).


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Table 4.12: Employee Position in Traco Cable Company Limited as on 31/3/2009


1 Managerial staff 39 23,620 2 Supervisory staff 3 11,550 3 Workers 536 10,622 Total 578

Source: Company records.

The main function of the Personnel Department is to recruit workers,

train them and place them to suitable jobs. It is also responsible for proper

training, performance appraisal and motivation of employees.

Sources of Recruitment

The company uses mainly four sources for its recruitment viz.

a) Public Service Commission

b) Employment Exchange

c) Advertisement in News papers

d) Notification in the Notice board.

In the case of office staff category, selection is based on the norms of

the Public Service Commission. Other vacancies are filled through

employment exchange. Every person on first appointment is required to

submit a certificate of fitness in the prescribed form duly signed by a medical

officer not below the rank of a civil surgeon. All persons recruited shall be on

probation for one year.

Training

An initial training is provided to all employees at the time of their

appointment. Further training is provided as per requirements. Every year a

certain amount is set aside by the company for employee development at the

time of preparing the budget. But the actual amount spent by the company for

employee development for all the years seems to be less than that of the

budgeted amount (Table 4.13).


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Table 4.13: Employee Development of Traco Cable Company Limited

Particulars

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

(1) Training (Rs in lakh) a)Budget provision 0.18 0.08 0.07 0.10 0.50 0.50 0.50

b)Amount spent 0.17 0.007 0.03 0.06 0.12 0.30 0.18 (2) No. of persons sent for external training

- - 5 10 18 9 19

(3) No. of in-house programmes organized

1 1 2 4 6 2 -

(4) No. of persons covered in in-house programmes

32 40 60 50 88 87 -


The scale of pay and other benefits to employees of the company are fixed

and revised by the government as per the provisions of Kerala Service Rules

followed by the government from time to time. The company has a promotion

policy entirely based on seniority. For the welfare of employees, the company

follows the Factories Act 1948. A number of schemes are introduced by the

company to improve living and working conditions of the employees. They are:

a) Dearness allowance

b) House rent allowance

c) Provident fund

d) Medical reimbursement.

e) Canteen facilities

f) Uniform allowance

g) Gratuity

h) Recreational facilities

i) Dependent employment etc.

4.7 Kerala Electrical and Allied Engineering Company Limited (KEL) Kerala Electrical and Allied Engineering Company Ltd. was set up in

1964 at Kundara in Kollam District incorporating the then Electrical and


135

Allied Industries Ltd., a private sector undertaking. The head office of the

company is situated in KSHB Office Complex, Panampilly Nagar, Kochi.

The company is engaged in the manufacture of distribution transformers,

steel structures, rail coach bogies, iron castings, alternators (train lighting),

electrical and wiring accessories, LT switchgear, alternators (general

purpose) and DG sets. Other than the Kundara unit, the company has three

more production centres at Mamala in Ernakulam district, Mogral Puthur in

Kasargode district and at Olavakkod in Palakkad district. Department of

Industries is responsible for the administration of KEL.

With a manpower base of about 1000 employees, the company is

considered one of the biggest public sector enterprises in Kerala. KEL is a

major supplier to various State Electricity Boards, Defence Departments

/Establishments and Indian Railways. The Company complies with ISO

9001:2000 standards and has regional offices in all metro cities. KEL is

considered a sick unit as the net worth of the company for the last seven

years except 2010-‘11 shows a negative result. The accumulated losses of the

company for all the years exceed that of its net worth. During the last year the

Company incurred losses to the tune of ` 349.01 lakhs as against a profit of `

139.68 lakhs during the previous year. Table 4.14 shows the net worth and

accumulated losses of KEL from 2004-’05 to 2010-’11.

Table 4.14: Net Worth and Accumulated Losses of KEL from 2004-‘05 to 2010-‘11

Year Accumulated loss

( ` in lakh) Net worth ( ` in lakh)


Net Profit/Loss ( ` In lakh)

2004-2005 7496.41 -965.54 248.16 -380.45 2005-2006 7608.96 -808.23 - -112.55 2006-2007 7486.59 -1629.12 - 122.37 2007-2008 8505.36 -1089.98 - 450.04 2008-2009 8253.62 -750.13 - 251.74 2009-2010 8493.72 -1345.23 - 139.68 2010-2011 8027.73 697.76 309.70 -349.01



136

Human Resource Management Practices in KEL

KEL has a plan for HRM which follows the corporate plan. The

company occupies 14th position in terms of employment. Employee position

in KEL as on 31/3/2009 is shown in Table 4.15 below:

Table 4.15: Employee Position in KEL as on 31/3/2009



2 Supervisory staff 42 13100

3 Workers 804 8900

Total 978


A formal Personnel Department is existing in the company. The structure

of personal department of the unit is shown in the following figure (4.5).


Fig. 4.6: Structure of HR Department in KEL


137

The following activities are under the control of the personnel

department:

a) Recruitment

b) Training

c) Employee welfare

d) Performance evaluation and

e) Industrial relations

The company follows external sources for its recruitment like:

a) Recruitment at factory gate

b) Employment exchange

c) Advertisement

d) Casual interview

e) Recommendations

The Company provides on the job and off the job training facilities to

its employees. Every year a certain amount is set aside by the company for

employee development at the time of preparing the budget. But the actual

amount spent by the company for employee development for all the years

appears to be much less than that of the budgeted amount (Table 4.16).

Training needs of the employees are identified on the basis of a regular

performance evaluation process. Performance of workers is rated by their

immediate supervisors and the same is reported to the Personnel Manager.

Managers’ performance is assessed first by the General Manager and the

same is reported to the Managing Director.


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Table 4.16: Employee Development of KEL

Particulars

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

(1) Training ( ` in lakh) a) Budget provision

1.70 1.10 1.83 5.30 5.30 1.50 2.05

b) Amount spent 0.20 0.21 0.16 0.50 0.54 0.11 1.30

(2) No. of persons sent for external training 1 1 9 20 14 11 20

(3) No. of in-house programmes organized - - - - 1 - -

(4) No. of persons covered in in-house programmes - - - - 22 - -


Benefits (allowances) provided by KEL to its Employees

Following benefits are provided by the company to its employees.

a) House Rent Allowance (HRA)

b) Canteen facilities

c) Medical reimbursement facility

d) Conveyance to officers

e) Shift allowance to workers

f) Attendance bonus

g) Uniform allowance to workers

The pay and perks to employees are fixed on the basis of an agreement

between trade unions and the management. In addition to the basic pay, perks

and the above allowances the below mentioned statutory facilities are also

provided by the company to its employees.

a) Provident Fund- Employer and employee contribute 12% of basic

pay to PF.

b) Gratuity – On relieving from service eligible employees are paid

gratuity in terms of the payment of Gratuity Act.


139

c) Dependent Employment- If an employee dies while in service,

dependent ie, spouse or one of the children is given employment

in KEL.

d) Employee State Insurance –Benefits are given for sickness,

funeral, disablement, rehabilitation etc.

e) Dearness allowance- DA is provided as per the Price Index

scheme of Govt. of India.

4.8 Steel Industrials Kerala Limited

Steel Industrials Kerala Limited (SILK) was established in 1975 by the

Govt. of Kerala to develop steel based industries and services in the State.

The main activities of the company are manufacturing of steel forgings, cast

iron, S.G. iron and steel casing, steel and structural fabrication, ship breaking,

and building of small ocean going vessels and barges. SILK today is a

multimillion asset base organization, servicing core sectors like heavy

engineering and transmission in and outside Kerala. SILK is now on the path

of a quantum leap establishing its own technology in steel and power

engineering, trade and commercial activities.

SILK is the largest steel company in Kerala, developing steel based

industries and services with a turnover of above ` 20 crores. SILK has four

integrated steel plants in different parts of the State. The company has always

had significant impact on the economic development of Kerala and now

contributes to the blueprint of the future and is truly committed to the state

development objectives.

Apart from manufacturing iron/steel castings and forgings, SILK

undertakes design, engineering, manufacture, erection and commission of:

a) steel structures

b) steel bridges

c) power transmission towers, switch yard structures


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d) pressure vessels

e) microwave towers

f) small/mini hydro generating plants from 5 KW to 10,000KW on

turn-key basis

g) water turbines, penstocks, water conducting systems for hydro

power stations

h) draft tube gates, radial and vertical gates

i) small ocean going vessels up to 400MT, speed boats, pilot launches

j) steel scaffolding for ship building and construction industry

k) assembly, service and sale of turn-key projects and EPC contractor

l) airport hangers

m) metro water effluent treatment plants

n) solid municipal waste processing

o) coir processing machinery

The financial performance of the company is very poor for the period

under consideration from 2004-05 to 2010-‘11. For the years from 2004-05 to

2008-09 the net worth of the company is negative and the accumulated losses

for all these years are more than that of its net worth. So SILK is considered a

sick unit. After 2008-’09 the working result of the company shows a positive

trend. The details of financial performance of the company from 2004-05 to

2010-11 are given in Table 4.17.

Table 4.17: Net Worth and Accumulated Losses of SILK from 2004-‘05 to 2010-‘11

Year Accumulated

loss ( ` in lakh)




2004-2005 4673.99 -963.56 611.48 -628.43 2005-2006 5099.56 -1488.20 366.65 -383.27 2006-2007 5366.97 -1654.68 151.77 -167.41 2007-2008 5184.25 -1471.02 - 4.21 2008-2009 3734.97 -21.63 - 20.91 2009-2010 3126.51 586.83 - 222.05 2010-2011 3006.29 707.05 - 120.22


141


HRM Practices in SILK

No formal personnel department is working in SILK for managing its

workforce. The general administration department is managing the personnel

affairs of the company with the help of a HR manager and three personnel

officers. Personnel officers handle welfare matters, industrial relations and

HR policy making procedures. Figure 4.7 shows the structure of HRM in

SILK.


Fig. 4.7: Structure of HRM in SILK

The company’s total manpower at present is 144 in various categories

(Table 4.18).

Table 4.18: Employee Position in SILK as on 31/3/2009


1 Managerial staff 22 22,000

2 Supervisory staff 22 15,000

3 Workers 100 10,500

Total 144


Recruitment and Selection


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The responsibility of the personnel department begins with the

formulation of a suitable personnel policy covering recruitment and selection,

training and development, performance appraisal, compensation and

industrial relations. The vacancies arising for lower category are reported to

the nearby employment exchange and then selected by the HR manager

according to the list furnished by the employment exchange. Office staffs of

the company are appointed through the Public Service Commission. For

selecting managerial and professional posts, the vacancies are notified in

three recognized newspapers. The selected employee has to undergo a

probationary training for a period of one year.

Training and Development

During the years from 2004-05 to 2010-‘11 the company had budgetary

provision of lakhs of rupees for the development of the employees. But not in

a single year the company fully utilized the allocated amount for the

development of its employees. In the last two years the company has used no

amount for employee development which is clearly shown in Table 4.19

Table 4.19: Employee Development of SILK

Particulars

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

(1) Training (Rs in lakh) a) Budget provision

3.20 2.00 1.50 1.50 1.50 1.50 1.50

b) Amount spent 3.00 1.50 1.25 1.00 0.80 - - (2) No. of persons sent for

external training 100 50 30 25 20 - -

(3) No. of in-house programmes organized - - - - - - -

(4) No. of persons covered in in-house programmes - - - - - - -


Compensation


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The pay and perks to employees are fixed on the basis of a bilateral

agreement reached between trade unions and the management. The details of

the total remuneration of the different categories of employees have already

been given in Table 4.18. In addition to the compensation, the following

welfare facilities are provided by the company to its employees.

1) Provident Fund- Employer and employee contribute 12% of basic

pay to PF.

2) Gratuity-Maximum amount of gratuity is limited to ` 3, 50,000.

3) Dearness Allowance-As per the changes in All India Consumer

Price Index.

4) ESI- Employer contributes 4.75% and employee contributes

1.75% of basic pay.

Following are some of the general facilities provided by the company

to its employees over and above the basic pay and welfare facilities.

a) Canteen facility

b) Medical facility

c) Conveyance allowance

d) Shift allowance

e) Uniform allowance

f) Stitching allowance.

….. …..

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