BEST HR PRACTICES

IN
Pradnia Bhalerao C-03
Anandita Singh C-34
Jayashree Prabhu C-43
Sanchi Gaikwad P- 07
 Abstract
This case examines :

Unique HR practices.
The change and performance management
practices.
Some of the retention strategies adopted by the
company.
 WE ASPIRE TO BE THE
GLOBAL STEEL INDUSTRY
BENCHMARK FOR VALUE
CREATION AND CORPORATE
CITIZENSHIP.
 TISCO – UNDER THE
CHANGE
• In the early 1990s, TISCO appointed McKinsey and
Booz-Allen & Hamilton to study its operations and
suggest ways to cut costs.
• To focus on various components affecting the cost
of steel.
• Included cost of raw materials, cost of conversion,
fuel rate in the blast furnace and mining of coal.
• Advised to use the most modern technologies to cut
costs further.
• In the second half of 1998, in association with
McKinsey, TISCO implemented TOP program at
its G blast furnace .
• TOP - Maximum positive impact to the bottom-
line, with minimum investment, required in
minimum time.
• Aimed achieving large improvements in
throughput, quality and cost in the short term.
• In the long run, TOP was expected to enable the
TISCO to achieve high rates of performance
improvement.
• Helped TISCO to shift its focus from just producing
volumes to costs and quality.
• Enabled TISCO to improve customer satisfaction
and loyalty.
• TISCO also took steps to reduce its manpower costs.
• Between 1996 and 2000, TISCO reduced its
workforce from 78,000 to 40,000 employees.
• Cutting its workforce by 38,000 employees was
not an easy job.
• Company was able to do it with a lot of
communication with employees.
• TISCO had adopted Performance Ethic
Programme (PEP).
• It planned to promote hardworking young
people to higher positions depending on their
performance, rather than following the
convention of seniority.
• This exercise was expected to cut the
management staff from 4000 to 3000.
 pep
Two core elements -
• Proposed a new organizational structure:
expected to foster growth businesses,
introduce more decision-making flexibility,
clear accountability, and encourage
teamwork among the managers and the
workforce.
• Proposed to introduce a Performance
Management System (PMS).
 Objectives of pep
• It would identify and reward strong performers,
and also offer development opportunities for
each employee.
• PMS would also ensure that every employee's
job profile was clearly defined.
• By introducing PMS, TISCO wanted to make
performance appraisals transparent and fair and
reward the good performers.
• The company also planned to introduce a new
compensation package based on performance
from November 2001.
 BENEFITS OF PEP
• Youngsters are getting higher salary than
some of the seniors, and after the
restructuring, the average age of the
managers has fallen by 10 years.
• Through PEP, TISCO also reduced the
hierarchical levels from 13 to 5.
• In a bid to reduce costs further, TISCO used
IT as a strategic tool.
• After SAP solutions were introduced in
TISCO, the business processes became
more efficient.
• It also improved customer service and
productivity, and reduced costs.
• The introduction of SAP also decreased
manpower cost from more than US $ 200
per ton in 1998 to about US $ 140 per ton in
2000.
Component 1:
Conventional
Appraisal
Coincides with FY

Preceded by Annual Business Plan

Three components

Three components
 The THREE components

Self-appraisal
• The work done
• Difficulties
• Major achievments
• Developmental needs
 Objective assessment
• Assesment of KRA’s fulfilment
• Done against concrete goals

Subjective assessment
• In what manner the work is done?
• Decision making
• Managerial capabilities/traits
• Transparent & open

• Rewards, annual increment for promotion,

postings, job rotation are linked with appraisals

• Feedback but tool for administrative decision

making
 Component ii:
MANAGERIAL
STYLE FEEDBACK
 How it started ?
• Subordinate must get chance to
assess their bosses.
• Started with critical group –
divisional managers and higher.
 Procedure
• HR dept. selects who will give the
feedback.
• Random sampling.
• Managerial Style feedback Questionnaire.
• Identity of people giving feedback is kept
confidential.
• All data is collected, analyzed.
 Managerial style
feedback ??
• Subordinates – did not have
expertise or wisdom
• Confidentiality
• Perception
 Advantages
• Johari Window - Blind
• the boss get a reflection of what his
employees think about him
• Management Style
Component iii:
INTERNAL
CUSTOMERS
ASSESSMENT
 Internal Customer Assessment

• TISCO extended their feedback system.

• Evaluate to what extent one meets the
expectations of internal customers
• Provide peers with third set of data
 Sample of appraisers
Procedure:
• List of 15- 20 from a wide set of
functions
• The HR dept.
• Work on appraisers & merge the list
• Again pick random sample each year of
10- 12 names
 Contd…
• Separate questionnaire is developed
• 10 questions
• Space for writing open ended responses
• Anonymous feedback
• Summarizing of report
• Report goes back to an individual in
detailed form
 Contd..
Observations :
• Assessment by subordinate is tougher than
the assessment by peers & colleagues
• Some bosses are assessed very stringently
by subordinates but far more positively by
their peers & colleagues
• This process goes up to CEO level & he too
goes through entire process
Observation & Learning
TISCO chose to do three components
separately
Sequence
Time gaps
Anonymity is practiced
Counseling people
 Contd..
• Problems in dropout rate
• Feedback is taken seriously
CONCLUSION
 bibliography
• Performance Management & Appraisal
System – HR Tools for Global
Competitiveness – By T.V. Rao.
• www.icmrindia.com
• www.tisco.com
THANK YOU