SAIL's Voluntary Retirement Scheme

            
 
Case Studies | Case Study in Business, Management, Operations, Strategy, Case Study

ICMR HOME | Case Studies Collection

Case Details:

Case Code : HROB002
Case Length : 07 Pages
Period : 1999-2001
Organization : SAIL
Pub Date : 2001
Teaching Note : Available
Countries : India
Industry : Metals & Mining

To download SAIL's Voluntary Retirement Scheme case study (Case Code: HROB002) click on the button below, and select the case from the list of available cases:

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Price:
For delivery in electronic format: Rs. 200;
For delivery through courier (within India): Rs. 200 + Shipping & Handling Charges extra

» Human Resource and Organization Behavior Case Studies
» HRM Short Case Studies
» View Detailed Pricing Info
» How To Order This Case
» Business Case Studies
» Area Specific Case Studies
» Industry Wise Case Studies
» Company Wise Case Studies

Custom Search


Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



Chat with us

Strategic Management Formulation, Implementation, & Control, 12e

Please leave your feedback

Leave Your Feedback

ICMR India ICMR India ICMR India ICMR India RSS Feed

<< Previous

Excerpts

The Jolt

In February 2000, the SAIL management received a financial and business-restructuring plan proposed by McKinsey & Co, a leading global management-consulting firm, and approved by the government of India (held 85.82% equity stake)...

The Dilemma

The major worry for SAIL's CEO Arvind Pande was the company's 160,000-strong workforce. Manpower costs alone accounted for 16.69% of the company's gross sales in 1999-2000. This was the largest percentage, as compared with other steel producers such as Essar Steel (1.47%) and Ispat Industries (1.34%).

An analysis of manpower costs as a percentage of the turnover for various units of SAIL showed that its raw materials division (RMD), central marketing organisation (CMO), Research & Development Centre at Ranchi and the SAIL corporate office in Delhi were the weak spots. There was considerable excess manpower in the non-plant departments...

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

The Voluntary Retirement Scheme

As a part of the restructuring plan, McKinsey had advised Pande that SAIL needed to cut the 160,000-strong labor force to 100,000 by the end of 2003, through a voluntary retirement scheme. Pande was banking on natural attrition to reduce the number by 45,000 within two years, but GOI's decision to increase the retirement age to 60 further delayed the reduction. Subsequently, SAIL had requested GOI to bail it out with a one-time assistance of Rs 15 billion and another subsidized loan of the same size for a VRS, to achieve the McKinsey targets...

The Persuasion

In mid 1998, in a bid to convince its employees to accept VRS, SAIL highlighted six 'plus' points of VRS, in its internal communique, Varta. They were as follows:
• During the next 4-5 years, SAIL has to reduce its workforce by 60,000 for its own survival. Employees with chronic ailments, and habitual absentees, who add to low productivity, have to go first - maybe, with the help of administrative actions...

The Reaction

The trade unions were on a warpath against the recommendations of McKinsey. Posters put up by the Centre of Indian Trade Unions (CITU) at SAIL's central marketing office said that the McKinsey report was meant, not for the revival or survival of SAIL, but for its burial. A senior TU leader said: "SAIL TUs so far have been extremely tolerant and exercised utmost restraint. Even in the face of scanty communication by the management of SAIL, they have not lost patience in these trying times."...

 

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Workbooks, Case Study Volumes.