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SAIL'S VOLUNTARY RETIREMENT SCHEME

Case Code-HROB002

Published-2003

INTRODUCTION

At a meeting of the board of directors in June 1999, the CEOs of Steel Authority of Indias !SAI"#four $lants - %& 'u(ral !)hilai#, S& )& Singh !*urga$ur#, )&+& Singh !)oaro#, and A&+& Singh!ourela# made their usual $resentations on their $erformance $ro(ections& One after the other,they got u$ to describe ho. these units .ere going to $ost huge losses, once again, in the first/uarter01of 1999-2333& After incurring a huge loss of s 14&56 billion in the financial year 1997-99!the first in the last 12 years#, the morale in the com$any .as e8tremely lo.& he (oe at SAI"shead/uarters in *elhi .as that the com$anys fortunes .ould change only if a %S .as offered to itsCEOs - not (ust the .orers&

BACKGROUND NOTE

SAI" .as the .orlds 13th largest and Indias largest steel manufacturer .ith a ::; share in thedomestic maret& In the financial year 1999-2333, the com$any generated reet, as on ?ebruary 2:, 2331, SAI" had a maret

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Salem Steel Plant !SSP#, Salem&

Alloy Steel Plant !ASP#, *urga$ur&

%is

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non-e8ecuti

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After the ourela Steel Plant in Orissa absorbed contractors .orers on Su$reme Court orders,fresh contractors had been a$$ointed to fill u$ the

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1997&6& Sarar an(u, Can SAI" ra$idly !e#Steel its futureM, )usiness oday, July 22, 1999&

5. Pannu SPS, *ebate on AI contract labour case reo$ened, he industan imes, August

14, 1999&=& 'hosh Indranil, In cho$$y .aters, )usiness India, August 9, 1999&

7. @aFumdar ahi, he AO of to$, )usiness oday, Se$tember 22, 1999&

8.Chandrashehar & he case of the

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BACKGROUND NOTE

Bith net re

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re$ortedly got into a

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In July 2333, )ata lifted the locout at the Peenya factory& o.e

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*oubts .ere soon raised regarding .hether +amath had gone too fast too soon, and moreim$ortantly, .hether he .ould be able to steer the em$loyees and the organiFation through thechanges he had initiated&

BACKGROUND NOTE

ICICI .as established by the 'o

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em$loyees feared that their $ositions .ould come in for a closer scrutiny& hey .ere not sure.hether the rural branches .ould continue or not as ICICIs business .as largely urban-oriented&

he a$$rehensions of the )o@ em$loyees seemed to be (ustified as the .oring culture atICICI and )o@ .ere /uite different and the em$hasis of the res$ecti

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EMPLOYEE DONSI3ING

Case Code- HROB016

Publication 'ate -2002

De8t to the death of a relati

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1997 Chase @anhattan )an )aning 2,243

1997 +ellogs ?@C' 1,33

1997 )? 'oodrich yres 1,233

1997 *eere Com$any ?arm E/ui$ment 2,633

1997 A elecommunications 17,333

1997 Com$a/ I =,433

1997 Intel I :,333

1997 Seagate I 13,333

1999 Chase @anhattan )an )aning 2,243

1999 )oeing Aeros$ace 27,333

1999 E88on-@obil Petroleum 9,333

2333 "ucent echnologies I =7,333

2333 Charles Sch.ab I 2,333

2331 ero8 Co$iers 6,333

2331 e.lett Pacard I :,333

2331 AO" ime Barner Entertainment 2,633

THE FIRST PHASE

ill the late-1973s, the number of firms that ado$ted do.nsiFing .as rather limited, but thesituation changed in the early-1993s& Com$anies such as 'eneral Electric !'E# and 'eneral @otors!'@# do.nsiFed to increase $roducti

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o.e

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A fre/uently rehired former em$loyees until it absorbed the shoc of do.nsiFing& It .as alsore$orted that in some cases, A e

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o.e

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for em$loyees& Since it may be necessary to ac/uire other sills in the future, the $lan alsoaddressed the issue of recruitment $lanning&

Communication .as found to be a $rimary success factor of effecti

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union contract changes, cuts in $ay, furloughs, shortened .or.ees, and (ob sharing& All thesea$$roaches .ere a $art of the shared $ain a$$roach of em$loyees, .ho $referred to share the $ainof their co-.orers rather than see them be laid-off& raining $ro

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15& *uffy om, *o.nsiFing .ith *ignity, ...&n.fusion&com, 2331&17& 'lobal Slo.do.n )ites I&& 'aints, ...&asiafeatures&com, July 2331&19& )o.es )arbara, *o.nsiFing *ignity, ...&.inni$egfree$ress2&com, October 2331&23& ?reeFe E8ecuti

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Doted @assachusetts Institute of echnology !@I# scholar, @ichael *ertouFosremared that India could boost its '*P by a trillion dollars through the I-enabled ser

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TABLE IBENEFITS OF A CALL-CENTER

Enhances the customer base and business $ros$ects

Offers an economical means of reaching di

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Cor$oration, American E8$ress, )an of America, Citiban, A)D A@O, 'lobal rust, *eutsche)an, Airtel, and )harati ) .ere the other ma(or $layers in the call-center business&

After the $ro(ections of the DASSCO@-@c+insey re$ort .ere made $ublic, many $eo$le beganthining of entering the call center business& !efer able III#& *uring this rush to mae money fromthe call center .a

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clients e8$ected to be sho.n detailed Ser

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satisfaction& his .as because a ne. agent normally too a fe. months before becoming as$roficient as an e8$erienced one& his meant that o$$ortunities for $ro

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the business& Bhether the dream of call centers contributing to substantial economic gro.th forIndia .ould turn into reality .as something only time .ould re

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ADDITIONAL READINGS & REFERENCES

1& @uer(ea *&D& *ha.an adha, ele.oring - he hottest business o$$ortunityfor India, )usiness Borld, January 5, 1999&2& Chandrashehar S& "ahiri Jaidee$, Connecting to customers through callcenters, )usiness oday, June 22, 1999&:& Jayaram Anu$, Can I hel$ you sirM, )usiness oday, Do

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he IA story sho.s ho. $oor management, es$ecially in the human resources area, could s$elldoom e

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?or each strie there .as a different reason, but e

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In the late 1993s, in yet another effort to a$$ease its em$loyees, IA introducedthe $roducti15/ 56$)>$/($19 /1/#16$)/!1#$6$"!/8)$

E99$>/!%$9#$$/ 5!;$

199:-96

2&74 22172 3&1: 23&54 14; 46

1996-94

:&56!:1&17;#W

22=7: 3&1= 22&49 19; 47

1994-9=

4&51!42&49;#

22472 3&24 2= 24; 44

199=-95

5&13!26&:4;#

2214: 3&:2 29&29 2=; 63

1995-97

7&15!14&3:;#

21993 3&:5 :2&21 25; 63

1997-99

7&54!5&12;#

21922 3&:9 :6&:1 27; 61

$ource% I/)/-World /ir )ransport $tatistics

2 3iures in brac#ets indicate increase over the previous year&4 56cludes 7 aircra*t rounded *rom 99:-97 to 99;-9< as ell as 1 aircra*t leased to /irline

/llied $ervices =td& *rom 99 to 998-99&

In 1997, IA tried to $ersuade em$loyees to cut do.n on P"I and o

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O

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commercially

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the PS)s, .hich .as a$$ro

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*?C 3&55; 3&9=

GI )AD+ 6&51; 3&=9

ICICI )AD+ 1&4:; 3&57

') 3&75; 1&2

I*)I )AD+ 1&94; 1&14

$ource% &ban#ersindia&com

Analysts remared that the

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basis# .ould not be taen .hile calculating the ser

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*e$artments lie internal audit, concurrent audit, monitoring, ins$ection of borro.als had hardlyany staff, according to re$orts& It .as re$orted that em$loyees .oring in branches that had a high.orload .ent on .or-to-rule agitation, blaming the %S for their $roblems& Analysts felt that S)I.ould ha

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1:& S)I do.n$laying %S numbers U Gnions, ?ebruary 4, 2331, Indian E8$ress&

16& ay Chaudhuri Sumanta, S)I brass gets circular mania o

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transaction& Bith this ac/uisition, AO" got control o

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standards in the .eb bro.ser maret&

Dumerous Detsca$e ser

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Em$loyees .ere offered a .ide range of training o$tions and an annual tuition reimbursement of GSQ=,333& his o$$ortunity to e8$and their sills on the (ob .as

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EHIBIT INETSCAPE = CHRONOLOGY OF EVENTS

DATE EVENT

1-@ar-96Jim Clar and @arc Andreessen begin tals on forming a ne.com$any

A$r-96he com$any !first named Electric @edia# is founded by Clar andAndreessen&

@ay-96 Electric @edia changes its name to @osaic Communications

Do

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27-Se$-97According to a study by a maret researcher, Detsca$e cedesbro.ser-share lead to @icrosofts Internet E8$lorer&

19-Oct-97Detsca$e releases Communicator 6&4, the latest

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death benefits u$ to Q933,3333 to em$loyees .hile tra

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Ser/

+

R$%$8$5

Product :::5 55679 29117: :7:943 2=1645

Ser

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ADDITIONAL READINGS AND REFERENCES

1& )irchard )ill, ire 'reat Peo$le ?ast, ...&fastcom$any&com, Doou Bor at Detsca$e imeM, ...&fastcom$any&com, Do

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lo.er and their $ercei

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P!#!65 I"! - L1) P)1#$5 / S#/ L7$

()hey EunionsF should reali@e that they are ust one o* the sta#eholders in the company and have toaccept the tyranny o* the mar#et place&

; an+har a:id, ir"ct+r, IL in 1996.

SELLING BLUES

he 1=th day of @arch 1999 brought .ith it a shoc for the management of Phili$s India "imited!PI"#& A (udgement of the +olata01igh Court restrained the com$any from gi

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huge losses for the com$any&

In @ay 1997, PI" announced its decision to sto$ o$erations at Salt "ae and $roduction .as haltedin June 1997& At that $oint, PBG members agreed to the s 1157 .age hie offered by themanagement& his .as a climbdo.n from its earlier stance .hen the union, along .ith the PEGdemanded a hie of s 2333 $er .orer and other fringe benefits& PEG, ho.e

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SELLING TROUBLES >1/"...

It is close to +olata $ort, maing shi$$ing of com$onents from ?ar Eastern countries easier& Itconsistently gets ISO 9333 certification and has silled labor& Also, PI"Ts ma(or maret is in theeastern region&K

he unions challenged PI"Ts $lan of selling the C% unit at such a lo. $rice of s9 croreT as against a

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In @arch 1999, the +olata igh Court $assed an order restraining any further deals on the sale ofthe factory& Justice S&+&Sinha held that the transfer $rice .as too lo. and PI" had to