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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
nt
en
ts
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
110
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)
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
111
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,
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
112
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
113
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
114
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
115
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.
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
116
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
117
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
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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.
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
118
Source: Company Records
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
Sl.No: Category Strength Average emoluments per person per month
1 Managerial staff 8 14,000
2 Supervisory staff 24 7,500
3 Workers 142 7,000
Total 174
Source: Company records
Chief Personnel and Administration
Assistant. Manager (Personnel)
Superintendent
Time keeper
Vigilance Officer
Clerical Staffs
Security
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
119
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:
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
120
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
121
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
122
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)
Cash loss ( ` in lakh)
Net profit/loss ( ` 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
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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.
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
123
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
Sl.No: Category Strength Average emoluments per person per month
1 Managerial staff 21 22566
2 Supervisory staff 28 17895
3 Workers 246 10402
Total 295
Source: Company records
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.
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
124
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
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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.
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
125
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
126
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)
Net worth ( ` in lakh)
Cash loss ( ` in lakh)
Net profit/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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
127
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.
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
128
Source: Company Records
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
Sl.No: Category Strength Average emoluments per person per month
1 Managerial staff 27 15,000 2 Supervisory staff 34 7,000 3 Workers 130 8,500 Total 191
Source: Company records
Recruitment and Training
The company mainly follows three modes of recruitment viz:
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
129
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
130
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
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)
Net worth ( ` in lakh)
Cash loss ( ` in lakh)
Net profit/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
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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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Source: Company Records
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
Sl.No: Category Strength Average emoluments per person per month
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).
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
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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 -
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
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)
Cash loss ( ` 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
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
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
Sl.No: Category Strength Average emoluments per person per month
1 Managerial staff 132 23450
2 Supervisory staff 42 13100
3 Workers 804 8900
Total 978
Source: Company records
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).
Source: Company Records
Fig. 4.6: Structure of HR Department in KEL
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
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 - -
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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.
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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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
140
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)
Net worth ( ` in lakh)
Cash loss ( ` in lakh)
Net profit/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
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
141
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
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.
Source: Company Records
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
Sl.No: Category Strength Average emoluments per person per month
1 Managerial staff 22 22,000
2 Supervisory staff 22 15,000
3 Workers 100 10,500
Total 144
Source: Company records
Recruitment and Selection
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142
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 - - - - - - -
Source: Review of Public Enterprises in Kerala from 2006 March to 2012 March
Compensation
Profile of Sample Units & HIRM Practice in Selected Public Sector Units in Kerala
143
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.
….. …..