I
IMPACT OF REWARDS AND RECOGNITION ON LABOUR
PRODUCTIVITY
A STUDY OF SELECTED STEEL INDUSTRIES IN INDIA
DISSERTATION SUBMITTED
TO
D. Y. PATIL UNIVERSITY, NAVI MUMBAI,
DEPARTMENT OF BUSINESS MANAGEMENT
IN
PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR AWARD OF DEGREE OF
MASTER OF PHILOSOPHY
IN
BUSINESS MANAGEMENT
SUBMITTED
BY
ANIKET. M. KAMBLE
(ENROLLMENT NO: DYP-M.Phil-11008)
RESEARCH GUIDE
DR. R. GOPAL
DIRECTOR, DEAN & HEAD OF THE DEPARTMENT
D.Y. PATIL UNIVERSITY, NAVI MUMBAI
DEPARTMENT OF BUSINESS MANAGEMENT,
SECTOR 4, PLOT NO. 10,
CBD BELAPUR, NAVI MUMBAI – 400 614
JUNE 2014
II
IMPACT OF REWARDS AND RECOGNITION ON LABOUR
PRODUCTIVITY
A STUDY OF SELECTED STEEL INDUSTRIES IN INDIA
SUBMITTED
BY
ANIKET. M. KAMBLE
(ENROLLMENT NO: DYP-M.Phil-11008)
III
DECLARATION
I hereby declare that the thesis titled ―Impact of rewards and recognition on labour
productivity- A Study of selected steel industries in India.‖ Submitted for the Award of
Master of Philosophy (M. Phil) in Business Management at D. Y. Patil UniversityNavi
Mumbai, Department of Business Management is my original work and the Dissertation has
not formed the basis for the award of any degree, associateship, fellowship or any other
similar titles. The material borrowed from other sources and incorporated in the thesis has
been duly acknowledge. I understand that I myself could be held responsible and accountable
for plagiarism, if any, detected later on
The research papers published based on the research conducted out of an in the course of the
study are also based on the study and not borrowed from other sources.
Date:
Signature of the student
ENROLLMENT NO: DYP-M.Phil-11008)
IV
CERTIFICATE
This is to certify that the dissertation entitled “IMPACT OF REWARDS AND
RECOGNITION ON LABOUR PRODUCTIVITY- A STUDY OF SELECTED STEEL
INDUSTRIES IN INDIA" is a bonafide research work carried out by Mr. Aniket Kamble
student of Master of Philosophy, at D. Y. Patil University's Department of Business
Management, Navi Mumbai, in partial fulfillment of the requirements for the award of the
Degree of Master of Philosophy in Business Management and that the dissertation has not
formed the basis for the award previously of any degree, diploma, associate ship, fellowship
or any other similar title of any University or Institution.
Place: Navi Mumbai
Date:
Dr. R. Gopal Dr. R. Gopal
(Head of the department) (Research Guide)
V
ACKNOWLEDGEMENT
In the first place, I am indebted to the D.Y. Patil University Department of Business
Management, which has accepted me for the program and provided me with an excellent
opportunity to carry out the present research project. I would like to thank all persons who
have been instrumental in making this dissertation see the light of the day directly or
indirectly. I owe my deepest gratitude to my mentor and guide, Dr. R. Gopal without whose
insights and guidance, my work would never have been completed. He helped me retain my
focus during the course of this study and guided me in prioritizing the different phases of this
research.
I would like to acknowledge the help of Mr. NitinTekade (VP-HR–JSW Tarapur) for detailed
discussions on Labour productivity, Dr. DhanrajUchil Director - Investment Banking &
Compliance, YES Bank Ltd.; Mr. Surendrapawar Deputy Director at Industrial Safety And
Health (Govt. of India); Dr. Shanti Suresh (Professor– SIES college) and Ms. K.S. Usha and
my friend Amarjeet Kumar for the their advice and support throughout research process.
I thank my sister and parents for their perseverance and patience while I was busy completing
this research.
Place: Navi Mumbai
Date: Mr. Aniket M Kamble
VI
TABLE OF CONTENTS
Chapter No. Title Page No.
Cover Page I
Title II
Declaration III
Certificate IV
Acknowledgement V
Table of Content VI
List of tables VII
List of Figures X
List of Abbreviations XII
Executive Summary XIII
1 Introduction to Labour productivity 1
2 Literature Review 16
3 Objective and Research Methodology 27
4 The Indian Steel Industry 41
5 Data Analysis and Interpretation 59
6 Conclusion 110
7 Suggestion and Recommendation 112
8 Limitation of the study 115
Annexure 1 Bibliography 2 Articles 3 Wibliography 4 Questionnaire
116
VII
LIST OF TABLES
Serial
No.
Table
no.
Table Name Page No.
1 3.1 Classification as per 11th
five year plan 37
2 3.2 Determination of sample 38
3 4.1 Indian steel industry production 43
4 4.2 Indian steel industry imports 44
5 4.3 Indian steel industry exports 45
6 4.4 Trends in production and consumption of finished steel (plan
wise)
53
7 4.5 The company wise performance during plan period 55
8 4.6 Import & Export of finished steel during 11th
plan (2007-12) 57
9 5.1 Labour productivity for designing rewards and recognition
programmes
59
10 5.2 Adequacy of rewards and recognition programmes to
increase labour productivity
60
11 5.3 Rewards and recognition programmes to evaluate labour
productivity
61
12 5.4 Rewards and recognition spending to increase labour
productivity
62
13 5.5 Recognition of creativity and innovation to enhance labour
productivity
63
14 5.6 Changing environment leads to changing rewards and
recognition schemes
64
15 5.7 Periodic evaluation of rewards and recognition schemes to
increase labour productivity
65
16 5.8 Revision in rewards and recognition to increase labour
productivity
66
17 5.9 Monetary and nonmonetary rewards for increasing labour 67
VIII
productivity
18 5.10 Impact Of monetary incentives in increasing labour
productivity
68
19 5.11 Analysis of labour productivity in SAIL 70
20 5.12 Calculation of chi square value for SAIL 70
21 5.13 Analysis of labour productivity in RINL 72
22 5.14 Calculation of chi square value for RINL 73
23 5.15 Analysis of labour productivity in TATA Steel 74
24 5.16 Calculation of chi square value for TATA Steel 75
25 5.17 Analysis of labour productivity in JSW Steel 76
26 5.18 Calculation of chi square value for JSW Steel 77
27 5.19 Analysis of labour productivity in JSW Ispat 79
28 5.20 Calculation of chi square value for JSW Ispat 79
29 5.21 Analysis of labour productivity in ESSAR Steel 81
30 5.22 Calculation of chi square value for ESSAR Steel 81
31 5.23 Analysis of labour productivity in JSPL 83
32 5.24 Calculation of chi square value for JSPL 83
33 5.25 Analysis of labour productivity in BHUSHAN Steel 85
34 5.26 Calculation of chi square value for BHUSHAN Steel 86
35 5.27 Analysis of labour productivity in UTTAM Steel 87
36 5.28 Calculation of chi square value for UTTAM Steel 87
37 5.29 Analysis of labour productivity in MUKUND Steel 89
38 5.30 Calculation of chi square value for MUKUND Steel 90
39 5.31 Impact of rewards and recognition on labour productivity in
SAIL
92
40 5.32 Impact of rewards and recognition on labour productivity in
VIZAG
94
41 5.33 Impact of rewards and recognition on labour productivity in
TATA Steel
96
42 5.34 Impact of rewards and recognition on labour productivity in
JSW Steel
98
43 5.35 Impact of rewards and recognition on labour productivity in
JSW ISPAT
99
IX
44 5.36 Impact of rewards and recognition on labour productivity in
ESSAR Steel
101
45 5.37 Impact of rewards and recognition on labour productivity in
JSPL
102
46 5.38 Impact of rewards and recognition on labour productivity in
BHUSHAN Steel
104
47 5.39 Impact of rewards and recognition on labour productivity in
UTTAM Steel
105
48 5.40 Impact of rewards and recognition on labour productivity in
MUKAND Steel
107
X
LIST OF FIGURES
Serial
no.
Figure
no.
Figure Name Page no
1 5.1 Labour productivity for designing rewards and recognition
programmes
59
2 5.2 Adequacy of rewards and recognition programmes to increase
labour productivity
60
3 5.3 Rewards and recognition programmes to evaluate labour
productivity
61
4 5.4 Rewards and recognition spending to increase labour
productivity
62
5 5.5 Recognition of creativity and innovation to enhance labour
productivity
63
6 5.6 Changing environment leads to changing rewards and
recognition schemes
64
7 5.7 Periodic evaluation of rewards and recognition schemes to
increase labour productivity
65
8 5.8 Revision in rewards and recognition to increase labour
productivity
66
9 5.9 Monetary and nonmonetary rewards for increasing labour
productivity
67
10 5.10 Impact Of monetary incentives in increasing labour productivity 68
11 5.11 Labour productivity trend and index in SAIL during 11th
five
year plan(2007-12)
71
12 5.12 Labour productivity trend and index in VIZAG during 11th
five
year plan(2007-12)
73
13 5.13 Labour productivity trend and index in TATA Steel during 11th
five year plan(2007-12)
75
14 5.14 Labour productivity trend and index in JSW Steel during 11th
five year plan(2007-12)
78
15 5.15 Labour productivity trend and index in JSW ISPAT during 11th
five year plan(2007-12)
80
XI
16 5.16 Labour productivity trend and index in ESSAR Steel during 11th
five year plan(2007-12)
82
17 5.17 Labour productivity trend and index in JSPL during 11th
five
year plan(2007-12)
84
18 5.18 Labour productivity trend and index in BHUSHAN Steel during
11th
five year plan(2007-12)
86
19 5.19 Labour productivity trend and index in UTTAM Steel during 11th
five year plan(2007-12)
88
20 5.20 Labour productivity trend and index in MUKAND Steel during
11th
five year plan(2007-12)
90
21 5.21 Rewards and Recognition spending and labour productivity in
SAIL during 11th
five year plan(2007-12)
93
22 5.22 Rewards and Recognition spending and labour productivity in
VIZAG during 11th
five year plan(2007-12)
95
23 5.23 Rewards and Recognition spending and labour productivity in
TATA Steel during 11th
five year plan(2007-12)
97
24 5.24 Rewards and Recognition spending and labour productivity in
JSW Steel during 11th
five year plan(2007-12)
98
25 5.25 Rewards and Recognition spending and labour productivity in
JSW ISPAT during 11th
five year plan(2007-12)
100
26 5.26 Rewards and Recognition spending and labour productivity in
ESSAR Steel during 11th
five year plan(2007-12)
101
27 5.27 Rewards and Recognition spending and labour productivity in
JSPL during 11th
five year plan(2007-12)
103
28 5.28 Rewards and Recognition spending and labour productivity in
BHUSHAN Steel during 11th
five year plan(2007-12)
104
29 5.29 Rewards and Recognition spending and labour productivity in
UTTAM Steel during 11th
five year plan(2007-12)
106
30 5.30 Rewards and Recognition spending and labour productivity in
MUKAND Steel during 11th
five year plan(2007-12)
108
XII
LIST OF ABBREVIATIONS
CAGR = COMPOUNDED ANNUAL GROWTH RATE
DEPB = DUTY ENTITLEMENT PASSBOOK SCHEME
FYP = FIVE YEAR PLAN
GDP = GROSS DOMESTIC PRODUCT
IISI = INTERNATIONAL IRON AND STEEL INSTITUTE
IIP = INDEX OF INDUSTRIAL PRODUCTION
INSDAG = INSTITUTE OF STEEL DEVELOPMENT AND GROWTH
ISA = INDIAN STEEL ALLIANCE
JSW = JINDAL STEEL WORKS
JSPL = JINDAL STEEL AND POWER LIMITED
RINL = RASHTRIYA ISPAT NIGAM LIMITED
SAIL = STEEL AUTHORITY OF INDIA LIMITED
XIII
EXECUTIVE SUMMARY
XIV
EXECUTIVE SUMMARY
PROFILE OF STEEL INDUSTRIES IN INDIA
Steel is crucial to the development of any modern economy and is considered to be the
backbone of the human civilization. All major industrial economies are characterized by the
existence of a strong steel industry and the growth of many of these economies has been
largely shaped by the strength of their steel industries in their initial stages of
development. The current global steel industry is in its best position in comparing to last
decades. The price has been rising continuously. The demand expectations for steel
products are rapidly growing for coming years. The shares of steel industries are also in a
high pace. The steel industry is enjoying its 6th
consecutive years of growth in supply and
demand. And there is many more merger and acquisitions which overall buoyed the
industry and showed some good results. The countries like China, Japan, India and South
Korea are in the top of the above in steel production in Asian countries. China accounts for
one third of total production i.e. 419m ton, Japan accounts for 9% i.e. 118 m ton, India
accounts for 53m ton and South Korea is accounted for 49m ton, which all totally becomes
more than 50% of global production.
The Indian steel industry has entered into a new development stage from 2007-08,
riding high on the resurgent economy and rising demand for steel.
Rapid rise in production has resulted in India becoming the 4th largest producer of
crude steel and the largest producer of sponge iron or DRI in the world.
As per the report of the Working Group on Steel for the 12th Plan, there exist many
factors which carry the potential of raising the per capita steel consumption in the
country, currently estimated at 55 kg (provisional). These include among others, an
estimated infrastructure investment of nearly a trillion dollars, a projected growth of
XV
manufacturing from current 8% to 11-12%, increase in urban population to 600
million by 2030 from the current level of 400 million, emergence of the rural market
for steel currently consuming around 10 kg per annum buoyed by projects like Bharat
Nirman, PradhanMantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among
others.
At the time of its release, the National Steel Policy 2005 had envisaged steel
production to reach 110 million tonnes by 2019-20. However, based on the
assessment of the current ongoing projects, both in greenfield and brown field, the
Working Group on Steel for the 12 th Plan has projected that the crude steel capacity
in the county is likely to be 140mt by 2016-17 and has the potential to reach 149mt if
all requirements are adequately met.
The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid
developments in the domestic steel industry (both on the supply and demand sides) as
well as the stable growth of the Indian economy since the release of the Policy in
2005.
CONCEPTUAL FRAMEWORK OF LABOUR PRODUCTIVITY
The term 'Productivity' was probably first mentioned by the FrenchMathematician Quesnay
in an article in 1766. In 1883, another Frenchman, Littre, defined productivity as the "faculty
to produce". In 1950, the Organization for European Economic Cooperation (OEEC), one of
the oldest organizations espousing productivity enhancement, particularly in the Europe,
issued a formal definition: "Productivity is the quotient obtained by dividing output by one of
the factor of production. In this way it is possible to speak of the productivity of capital,
investment, or raw materials, according to whether output is being considered in relation to
capital, investment or raw materials, etc."
XVI
LABOUR PRODUCTIVITY
From the above, it is clear that the Labour Productivity is a partial productivity ratio though
in the productivity context many other elements such as materials, machines, capital,
technology etc. exist, most of the researchers recognize the relative importance of the human
factor (i.e., Labour Productivity).
What is a reward?
An item given to an individual or team for meeting a pre-determined goal.
What is Recognition?
After-the-fact display of appreciation for individual or team efforts. Can be tangible or
intangible, and range from a thank-you email to travel
"Recognition" is more of an activity (a social or interpersonal activity), while a "Reward" is
more of a thing (money, merchandise, travel etc.).
REWARDS V/S RECOGNITION
Although these terms are often used interchangeably, reward and recognition systems should
be considered separately. Employee reward systems refer to programs set up by a company to
reward performance and motivate employees on individual and/or group levels. They are
normally considered separate from salary but may be monetary in nature or otherwise have a
cost to the company. While previously considered the domain of large companies, small
businesses have also begun employing them as a tool to lure top employees in a competitive
job market as well as to increase employee performance.
As noted, although employee recognition programs are often combined with reward programs
they retain a different purpose altogether. They are intended to provide a psychological—
reward a financial—benefit. Although many elements of designing and maintaining reward
XVII
and recognition systems are the same, it is useful to keep this difference in mind, especially
for small business owners interested in motivating staffs while keeping costs low.
SIGNIFICANCE OF THE STUDY
The above study is made for the participants who are involved in the routine activities of the
industries. The participants are as follows. Management, investor‘s, creditors, government,
employees and trade unions, societies and others.
The various actors mentioned above can take decisions on the basis of labour productivity of
the organizations for strategy formulation.
SCOPE OF THE STUDY
Analysis of labour productivity and rewards and recognition of Steel manufacturing
Companies in India of the above selected companies covered in the present study is fully
examined. The conclusion and suggestions attempted will provide practical guidance to the
management of the companies to promote for improvement of Labour productivity, as well as
Designing rewards and recognition in the organization for taking decision related to their own
regards of interest.
OBJECTIVE OF THE STUDY
In the context of Indian steel manufacturing companies the performance is declining as one of
the reason for this problem identified by planning commission of India is labour productivity.
Labour productivity is a big threat for the organizations which affects business and hence has
a wider scope for study. It is dependent on many factors such as ,the reward or compensation,
working conditions, decision making opportunity, job satisfaction, feeling of belonging etc.
XVIII
Among these factors the reward or Recognition is very important. The major challenge before
Indian steel manufacturing companies is to frame strategies to increase labour productivity.
Based on the above stated problem the following objectives have been formulated.
1) To analyze trends of Labour Productivity in Classified Steel Industries.
2) To study the impact of rewards and recognition on labour productivity in classified
steel industries.
3) To find the correlation between Rewards and recognition on labour Productivity in
steel industries.
4) To make Policy Recommendations & Evolved HR practices for inducing
Productivity.
RESEARCH METHODOLOGY
The research was conducted using secondary data with selected steel industries which
includes SAIL, VIZAG STEEL, TATA STEEL, JSW STEEL, JSW ISPAT, ESSAR STEEL,
JSPL, BHUSHAN STEEL, UTTAM STEEL, MUKUND STEEL. Discussions also held with
certain Officials with the objective of studying whether there is any correlation between the
rewards and recognition that are given and the labour productivity especially in large capital
industries like steel industries.
For this purpose necessary data was collected from steel industries as well as planning
commission for the last five years.
The data was analyzed using different statistical tools like chi square test, T-test and
correlation.
The data analyzed suggest that there exist a correlation between rewards and recognition and
improvement in labour productivity.
XIX
ANALYSIS OF LABOUR PRODUCTIVITY
LABOUR PRODUCTIVITY
The term ‗Labour Productivity‘ is generally defined as ―the ratio of physical amount of
output achieved in a given period to the corresponding amount of labour expended‖. It may
be true that any business organization all wage payments are directly or indirectly based on
the skill and productivity of the workers, therefore labour productivity is considered as the
most important factors in productivity computations. There are various types of methods for
calculating the labour productivity. Very simple method describe in the above definition.
‗Output divided by input‘ another method the output per man-years of man-hour and the
input per man-years or per man-hour. In the present research study labour input calculated by
cost/expenses labour productivity and capacity of utilization could be general indices, which
are easily understandable and could be the basis for measurement of the employees.
CONCLUSION
Based on the study the following conclusions were evolved.
The ultimate objective of every organization is to improve productivity and to maximize
profit which is possible through optimum utilization of the inputs used in the organization
which can be labour, material, Technology, land, energy, Process, System etc.
In the development process of the country steel sector is one of the biggest source to earn
revenue and it is foundation for any development activity which is needed everywhere in
India.
Labour productivity plays an important role in any organization as employees are only
responsible from start to end process of any business activity if labour productivity is higher
it helps to increase overall productivity of the organization.
XX
Reward and recognition is always considered as crucial element in the organization if it is not
managed properly it can affect productivity of the organization.
SUGGESTIONS AND RECOMMENDATIONS
The detailed discussion with knowledgeable person in steel industry and the analysis
conducted as mentioned above indicated that the following needs to be looked into in order to
improve labour productivity.
India needs to upgrade its technology to be at par with international market and improve its
productivity. India has a major scope to expand its market by improving the production and
quality by performing some changes in its dynamics of labour relations.
The management should emphasize on rewards and recognition programmes to increase
labour productivity. Rewards and Recognitions should be innovative and they should be
based on the socio psychological needs of the employees. Promoting innovative ideas for
rewards and recognition practices should be encouraged in order to increase productivity.
LIMITATIONS OF THE STUDY
External factors such as financial crisis, natural disaster, political climate and availability of
resources can also be responsible for labour productivity.
Demand fluctuations and competition can also affect labour productivity
Only cost is taken as input for calculation of labour productivity where as other aspects like
working conditions, motivation , satisfaction level etc. can also affect labour productivity.
Lack of access to technology can hamper labour productivity.
Only Rewards and Recognition is considered for correlating with labour productivity where
in other Elements are also related with it.
1
CHAPTER 1
LABOUR PRODUCTIVITY
CONCEPT OF PRODUCTIVITY
―Productivity is the basic mission of any organization to provide the maximum
welfare for the maximum number. Productivity as a measure of efficiency and
effectiveness and as a means of improving the quality of life is generic from achieving
the highest output from the limited resources. Productivity implies the certainty of
being able to do better than yesterday and keeping the tempo continuously to improve
upon. Such continuous improvements are to be generated through the research for
new technique, methods, process, materials, software, and expertise coupled with
vision and dedicated leadership having the ultimate faith in the welfare in the welfare
of human system.‖ ―Productivity means different things to different stake holders. To
workers‘ productivity means a speed up in their work pattern. To union leaders it
means the opportunities to negotiate for higher wages. To management, it means
increased profitability. To customer, it betters goods after costs. To marketing
directors productivity improvement increases the firm‘s competitiveness abroad by
reducing the coat of good sold in foreign market and to economists; it means an
increase in country‘s standard of living field to gain in output per man-hour.‖
Productivity is simply the ratio of output to input. When this ratio is calculated in
based price it indicates the change in productivity efficiency over the base year. As
the input consist of a number of production factors and elements. Productivity can
also be determined separately for each of these factors. Both the output and the input
may be expressed in terms of physical units or interims of money. Productivity is
measured as the ratio between the output of a given commodity or service and the
2
inputs used for that product. Productivity ratio is the ratio of output of wealthy
produced to the input of resources used in the process.
DEFINITION OF LABOR PRODUCTIVITY
The experts, consultants, academician and practitioners have expressed their views on
productivity. Some of the accepted definitions of productivity are given below:
(i) Productivity is a measure relating a quantity or quality of output to the inputs
required to produce it. Often means labor productivity, which is can be measured by
quantity of output per time spent or numbers employed. Could be measured in
monetary term like rupees per hour— Dictionary
(ii) From Wikipedia, the free encyclopedia, productivity is a measure of output
from a production process, per unit of input. For example, labor productivity is
typically measured as a ratio of output per labor-hour, an input. Productivity may be
conceived of as a metric of the technical or engineering efficiency of production.
(iii) Relative measure of the efficiency of a person, machine, factory, system, etc., in
converting inputs into useful outputs. Computed by dividing average output per
period by the total costs incurred or resources (capital, energy, material, personnel)
consumed in that period, productivity is a critical determinant of cost efficiency. --
`Business Dictionary
OBJECTIVES OF PRODUCTIVITY
Productivity is a measure of efficiency and defined as a ratio of output t to input use.
There are not differences over this definition among scholars, consultants, experts,
3
and practitioners. There are different measures of productivity. The objectives of
productivity are also general and not special. These are explained below:
SEARCH FOR SUITABLE TECHNOLOGY
Technology can be defined as a tool, technique, system, design and a process that has
been utilized for production of products or services. It has been utilized to convert the
resources into outputs (products and services) as planned by the management of the
company. There are three components of technology. These are hardware, software
and brain ware. These three elements together are utilized to get the finished output.
To do this work the search is there is find out the suitable method that can meet the
requirement in the present competitive situation so that the company can get
competitive edge in the business .The technology giving or contributing in providing
the higher productivity is the only choice. For that reason also the productivity is
measured. The technology needs a huge capital to invest and if proper care is not
taken then it may not meet the requirement of the company. In future it becomes very
difficult to replace it. Further, the existing technology productivity is also measured to
find out whether it is as per the requirement of time. If not meeting the required
level of productivity then the existing technology might be replaced by the new
one. Due to these reasons the productivity has been measured.
IMPROVE WORKING EFFICIENY
The present scenario across the world is drastically changing. In this situation the
changes are taking place very rapidly. The condition is very risky and uncertain. Over
and above stiff competition is being faced in the market worldwide. Every firm is
putting its best efforts to perform the work better and before other. This is the only
mantra in present situation for survival, grow, stabilize and excel in the business.
4
Efforts are put to increase the quality, quantity, decrease the time taken and cost
involved. This improves the efficiency. To know whether their efficiency is high or
low, it is measure. The productivity is the measure of efficiency. Efficiency is the
ability to perform the tasks with available resources i. e. manpower, machine, money
and materials .With the help of productivity measurement the remedial and
improvement actions can be planned by the management so that their working ability
stay in tune with the need of the time to fulfil the objectives. That is why the
productivity is measured.
REDUCE PRODUCTION COSTS
For carrying out a smallest task resources are needed. Without resources the tasks
cannot be completed. In every organization different types of big and small jobs are
being performed. The list of those jobs is very big. All these need resources like
manpower, machines, money, materials and information. In purchasing or acquiring
these resources a lot of capital is need Now the question arises how these resources
are being used. If the resources are used properly then total cost would go high and it
would have effect on the profitability of the company. When the resources are utilized
properly, there is not waste of any type then the total cost would be less. When the
production cost is high, the products or services would be available in the market at
the higher price .But we may get products of competitors at lower prices in the
market. This situation would not be favourable for the company because it would
have deterrent effect on the sales of the company. To improve the profitability the
costs are to be reduced. The costs can be reduced by finding out the productivity of
every person, system, plant and job. The unwanted activity and unwanted time are to
be identified and eliminated. This is possible by measuring the productivity of all
5
concerned persons and system. That is why it is needed to reduce the total operation
costs. This is a step ahead of cost control.
BENCHMARK PRODUCTION PROCESS
In competitive markets there is need to improve the production quantity and quality.
A comparative study in the industry is being carried out to find out the inefficiencies
in the total production system. A leading company from the global or national market
is selected. The products, production system, employees‘ performance and facilities
are compared with the selected company. The products and production system of the
selected company is considered as bench mark in the market. With the help of the
comparison the company finds out the position of the products of the company in the
market. On the basis of comparison the weak areas are identified and management
takes remedial action for improvement. To do all these things the productivity is to be
measured otherwise this comparative study cannot be carried out. That‘s why the
productivity is measured.
ASSESSMENT OF LIVING STANDARDS
To find out the living standard at national level the level of per capita income is to be
found out. The income of individual reflects the living standard level. As per income
everyone spend on the requirement of life. The per capita income is the measure for
living standards. When the productivity of the individual is high their earning also go
high. Out of higher income a person spends on their day to day requirement like food,
clothes, shelter, education, medical, entertainment and luxury items .It reflects on the
living standards. The higher living standard would affect the growth of the economy
also. When the authority is interested to know the level of living standard the
productivity at individual, division, department and organizational level are required
6
to be measured. For having the clear idea of income and living standards of people the
need for productivity measure is strongly felt. The living standard of different
countries‘ people is measured on the basis of productivity and income level. This is
the clear indicator of living standard.
WHAT IS A REWARD?
An item given to an individual or team for meeting a pre-determined goal.
WHAT IS RECOGNITION?
After-the-fact display of appreciation for individual or team efforts. Can be tangible
or intangible, and range from a thank-you email to travel.
"Recognition" is more of an activity (a social or interpersonal activity), while a
"Reward" is more of a thing (money, merchandise, travel etc.).
WHY REWARDS?
In a competitive business climate, more business owners are looking at improvements
in quality while reducing costs. Meanwhile, a strong economy has resulted in a tight
job market. So while small businesses need to get more from their employees, their
employees are looking for more out of them. Employee reward and recognition
programs are one method of motivating employees to change work habits and key
behaviors to benefit a small business.
REWARDS V/S RECOGNITION
Although these terms are often used interchangeably, reward and recognition systems
should be considered separately. Employee reward systems refer to programs set up
by a company to reward performance and motivate employees on individual and/or
7
group levels. They are normally considered separate from salary but may be monetary
in nature or otherwise have a cost to the company. While previously considered the
domain of large companies, small businesses have also begun employing them as a
tool to lure top employees in a competitive job market as well as to increase employee
performance.
As noted, although employee recognition programs are often combined with reward
programs they retain a different purpose altogether. They are intended to provide a
psychological—reward a financial—benefit. Although many elements of designing
and maintaining reward and recognition systems are the same, it is useful to keep this
difference in mind, especially for small business owners interested in motivating
staffs while keeping costs low.
DIFFERENTIATING REWARDS FROM MERIT PAY & THE
PERFORMANCE APPRAISAL
In designing a reward program, a small business owner needs to separate the salary or
merit pay system from the reward system. Financial rewards, especially those given
on a regular basis such as bonuses, profit sharing, etc., should be tied to an employee's
or a group's accomplishments and should be considered "pay at risk" in order to
distance them from salary. By doing so, a manager can avoid a sense of entitlement
on the part of the employee and ensure that the reward emphasizes excellence or
achievement rather than basic competency.
Merit pay increases, then, are not part of an employee reward system. Normally, they
are an increase for inflation with additional percentages separating employees by
competency. They are not particularly motivating since the distinction that is usually
8
made between a good employee and an average one is relatively small. In addition,
they increase the fixed costs of a company as opposed to variable pay increases, such
as bonuses, which have to be "re-earned" each year. Finally, in many small businesses
teamwork is a crucial element of a successful employee's job. Merit increases
generally review an individual's job performance, without adequately taking into
account the performance within the context of the group or business.
FACTORS TO CONSIDER IN THE ESTABLISHMENT OF A PROGRAM
The rewards and recognition programmes has to be designed very carefully and with
the motive of improving performance and productivity. The objective for establishing
recognition programmes has to be clearly defined and to be communicated to all in
the organization.
The areas on which the rewards and recognition programmes to be given includes
time ,money and energy saving ideas and suggestion, customer compliments, solution
to critical problems, attendance records and improvements in efforts by the
employees,.
DESIGNING A REWARD PROGRAM
While designing a reward program the organization must taken into account the work
environment and the work life of the employee. They must provide them with
compensations and benefits to develop their professional as well as personal life. The
organization must aim to motivate the employees, attract new employees and retain
them for the well-being of the organization.
The keys to developing a reward program are as follows:
9
Identification of company or group goals that the reward program will support.
Identification of the desired employee performance or behaviors that will
reinforce the company's goals.
Determination of key measurements of the performance or behavior, based on
the individual or group's previous achievements.
Determination of appropriate rewards.
Communication of program to employees.
In order to reap benefits such as increased productivity, the entrepreneur designing a
reward program must identify company or group goals to be reached and the
behaviors or performance that will contribute to this. While this may seem obvious,
companies frequently make the mistake of rewarding behaviors or achievements that
either fails to further business goals or actually sabotage them. If teamwork is a
business goal, a bonus system rewarding individuals who improve their productivity
by themselves or at the expense of another does not make sense. Likewise, if quality
is an important issue for an entrepreneur, the reward system that he or she designs
should not emphasize rewarding the quantityof work accomplished by a business unit.
Properly measuring performance ensures the program pays off in terms of business
goals. Since rewards have a real cost in terms of time or money, small business
owners need to confirm that performance has actually improved before rewarding it.
Often this requires measuring something other than financial returns: reduced defects,
happier customers, more rapid deliveries, etc.
When developing a rewards program, an entrepreneur should consider matching
rewards to the end result for the company. Perfect attendance might merit a different
reward than saving the company $10,000 through improved contract negotiation. It is
10
also important to consider rewarding both individual and group accomplishments in
order to promote both individual initiative and group cooperation and performance.
Lastly, in order for a rewards program to be successful, the specifics need to be
clearly spelled out for every employee. Motivation depends on the individual's ability
to understand what is being asked of her. Once this has been done, reinforce the
original communication with regular meetings or memos promoting the program.
Keep your communications simple but frequent to ensure staff members are kept
abreast of changes to the system.
RECOGNITION PROGRAMS
For small business owners and other managers, a recognition program may appear to
be merely extra effort on their part with few tangible returns in terms of employee
performance. While most employees certainly appreciate monetary awards for a job
well done, many people merely seek recognition of their hard work. For an
entrepreneur with more ingenuity than cash available, this presents an opportunity to
motivate employees.
Nor will the entrepreneur be far off the mark. As Patricia Odell reported, writing for
Promo, "Cash is no longer the ultimate motivator." Odell cited data from the Forum
for People Performance Management and Measurement at Northwestern University—
which had discovered that non-cash awards tend to be more effective; the exception
was rewarding increasing sales. "The study found," Odell wrote, "that non-cash
awards programs would work better than cash in such cases as reinforcing
organizational values and cultures, improving teamwork, increasing customer
satisfaction and motivating specific behaviors among other programs."
11
In order to develop an effective recognition program, a small business owner must be
sure to separate the program from the company's system of rewarding employees.
This ensures a focus on recognizing the efforts of employees. To this end, although
the recognition may have a monetary value (such as a luncheon, gift certificates, or
plaques), money it is not given to recognize performance.
Recognition has a timing element: it must occur so that the performance recognized is
still fresh in the mind. If high performance continues, recognition should be frequent
but cautiously timed so that it doesn't become automatic. Furthermore, like rewards,
the method of recognition needs to be appropriate for the achievement. This also
ensures that those actions which go farthest in supporting corporate goals receive the
most attention. However, an entrepreneur should remain flexible in the methods of
recognition, as different employees are motivated by different forms of recognition.
Finally, employees need to clearly understand the behavior or action being
recognized. A small business owner can ensure this by being specific in what actions
will be recognized and then reinforcing this by communicating exactly what an
employee did to be recognized.
Recognition can take a variety of forms. Structured programs can include regular
recognition events such as banquets or breakfasts, employee of the month or year
recognition, an annual report or yearbook which features the accomplishments of
employees, and department or company recognition boards. Informal or spontaneous
recognition can take the form of privileges such as working at home, starting late/
leaving early or long lunch breaks. A job well done can also be recognized by
providing additional support or empowering the employee in ways such as greater
choice of assignments, increased authority, or naming the employee as an internal
12
consultant to other staff. Symbolic recognition such as plaques or coffee mugs with
inscriptions can also be effective, provided they reflect sincere appreciation for hard
work. These latter expressions of thanks, however, are far more likely to be received
positively if the source is a small business owner with limited financial resources.
Employees will look less kindly on owners of thriving businesses who use such
inexpensive items as centerpieces of their reward programs.
Both reward and recognition programs have their place in small business. Small
business owners should first determine desired employee behaviors, skills, and
accomplishments that will support their business goals. By rewarding and recognizing
outstanding performance, entrepreneurs will have an edge in a competitive corporate
climate.
Recognition is most effective when it takes place on a regular basis and in a variety of
different ways. It is also important that recognition activities be aligned with the
culture of the workplace. To this end, some organizations‘ provides three different
opportunities for acknowledging co-workers and peers and has given each area
considerable freedom to customize their own activities.
The Appreciation Awards - Informal, on-the-spot, day-to-day recognition,
administered and delivered in local areas.
The Infinite Mile Awards- Typically more formal, semi-annual or annual awards
administered and presented in local areas.
The Excellence Awards- Formal, Institute-wide awards presented at an annual
ceremony, administered by central HR.
13
EMPLOYEE PERFORMANCE IMPROVEMENT PROGRAMS
Attendance
Training / Certification
Suggestions / Ideas
Participation
Compliance
Product or Service Quality
Productivity
Safety
Wellness
Teamwork
Referrals
Customer Service
New Sales, Up-Sell, Cross-Sell
Any measurable behavior or activity
Employee Recognition Programs
Our Human Resources application suite is designed to foster employee recognition
through engagement. With features including components like service awards, and
spot recognition, managers can effectively motivate their workforce and track and
improve performance.
Our HR module can be compared to an internal social media network, and can be
used to build a recognition culture.
The HR suite can include several or all of the following components:
Service Awards
Birthday Acknowledgement
Spot Recognition
Peer-To-Peer Recognition
Nomination Process
Suggestion Awards
Associate Referral Program
14
Sales Referral Program
Training
Surveys And Quizzes
Performance Management
RECOGNITION AND REWARD PROGRAMS ACCORDING TO
DEPARTMENT OF HUMAN RESOURCE MANAGEMENT (DHRM)
Employees not only want good pay and benefits, they also want to be valued and
Appreciated for their work, treated fairly, do work that is important, have
advancement Opportunities and opportunities to be involved in the agency.
Recognition and rewards play an important role in work unit and agency programs to
attract and retain their employees. It is the day-to-day interactions that make
employees feel that their contributions are appreciated and that they are recognized
for their own unique qualities. This type of recognition may contribute to high morale
in the work environment. So, it‘s extremely important that managers, who
communicate the agency goals to employees, are Included in the development of
recognition programs.
Recognition programs according to:
TO SENIOR MANAGEMENT:
1. Increases productivity
2. Produces Return On Investment (ROI)
3. Improves attitudes
4. Builds loyalty and commitment
5. Generates positive feedback
6. Empowers the workforce
15
7. Assures efficiency
TO EMPLOYEES:
1. Satisfies recognition Needs
2. Creates positive recognition experience
3. Provides a wide selection of attractive, personalized awards
4. Provides timeliness of recognition
5. Guarantees quality of award
6. Fosters open communication of appreciation
TO MANAGERS OF PROGRAM:
1. Includes Efficient
2. Administration
3. Excites Employees
4. Creates Pride
5. Pleases Management
6. Involves All Employees
16
CHAPTER 2
LITERATURE REVIEW
Knowledge is of two kinds. We know a subject ourselves, or we know where we
can find information on it- Samuel Johnson.
Mehta Has indicated the productivity growth of 8.8 per cent in the Indian steel
industry during the period 1953 to1965. He also found the evidence of capital
deepening in the production process of steel during this period.
Brahmananda has Proposed that the single and total factor productivity for the
sectors and sub-sectors of Indian economy, he found that the capital productivity
declined by as much as 40 per cent, but the labour productivity went up to 2¼
times in the registered Indian manufacturing sector. He estimated that this sector
witnessed an increase in the total factor productivity at an annual rate of 0.70 %
Ahluwalia studied the productivity growth in Indian manufacturing. He applied
both Solow and Tran slog measures and found that the results of both the
measures were similar. The study identified that rubber products and
miscellaneous manufacturing industries suffering a sharp decline in the total factor
productivity growth whereas the footwear‘s and furniture industries registered a
high growth rate at around 2.00 and 3.00 per cent per annum. The study estimated
the declining total factor productivity growth at a rate between 0.2 and 1.3 per
cent per annumDuringmid-60s and 70s.
Romer recommended that the technological change has been an important factor
to contribute output growth. Technological change arises in large part because of
intentional actions taken by people who respond to market incentives and hence
the technical change happens more to be endogenous rather than exogenous. In his
17
study, he concluded that the stock of human capital (levels of education and
experience) accelerated the growth but the growth did not depend on total size of
labour force or the population. He found that international trade facilitates free
flow of new ideas and technologies and reduces the idea-gap, which was a major
source of spillovers and growth. Most of the new ideas and technologies were
developed in developed countries and trade with them helped in realizing these
dynamic gains to promote productivity. He further found that the use of non-
rivalry nature (use of a blue print of a technology or new idea by one agent does
not preclude use by other agents) of technological change was a source of
increasing returns to scale and sustained long run growth.
Kumari estimated total and partial factor productivity and elasticity of factor
substitution of public sector enterprises for 11 groups of industries in India. In the
estimation, she applied the three basic measures of productivity estimation,
Kendrick, Solow and Divisia index. The study found significant variations in the
growth levels of factor productivity and substitution. For chemical industries, the
study estimated the annual growth of total factor productivity at 4.19 percent, 4.93
per cent and 4.80 per cent in Kendrick, Solow and Translog measures
respectively. The annual growth of labour productivity at 8.39 and capital
productivity at 2.82 percent was also estimated by the study. In the estimation of
factor substitution, the Cobb-Douglas production function estimated constant
returns to scale and the CES production function estimated unit elasticity of factor
substitution for chemical industries in the Indian public sector.
18
Majumdar studied the pattern of productivity growth of Indian Industrial sector.
The study empirically proved the positive impact of liberalization measures on
productivity. The reforms process was not exacerbated entry threats for the sitting
incumbents in Indian industry, but the environment was equally competitive for
the new entrants.
Attainment of efficiency was a key survival criterion in such situations and the
Indian firms had so far yielded positive efficiency out comes. The adoption of
technological and organizational innovations had a very large impact on
productivity at the firm level. The policy changes that took place in India in the
1990s did significantly enhance potential opportunities on one hand and increase
the uncertainties and ambiguities levels on the other.
Desai studied the problems in the technological transfers in India. According to
him, technological transfers did not take place properly. He highlighted the major
problems in the technological transfers, the inadequacy of knowledge and skills to
exploit the existing technology, lack of confidence in the successful exploitation
of the projects on commercial basis and poor R&D activities. Bureaucratic
inefficiency, high price of technology and import restrictions are some of the
impediments to the effective technological transfers.
Mongia and Sathaye studied the productivity trends in selected 6 energy intensive
industries including Steel industry with an elaborate survey on productivity during
the period 1947-1998. They applied Kendrick, Solow and Translog index to
estimate productivity growth and found the total factor productivity in steel
industry was in the range of -1.6 per cent and 0.07 per cent.
19
Mahadevan and Kalirajan examined the criticism leveled against Singapore for
experiencing insignificant total factor productivity (TFP) growth. This paper
examines whether this criticism is valid in the context of the manufacturing sector
of Singapore. Using new data and the stochastic production frontier approach,
TFP growth is decomposed into technological progress and changes in technical
efficiency. While the results could not reject the hypothesis that Singapore‘s
output growth is mostly input-driven, they show that, despite technological
progress, technical inefficiency is the cause for the low and declining TFP growth
in the manufacturing sector.
Goldar in his paper studied the effect of ownership on efficiency of engineering
firms in India with a comparison of technical efficiency among three groups of
firm viz., firms with foreign ownership, domestically owned private sector firms
and public sector firms. The study explained that the foreign ownership firms had
greater efficiency than the domestic firms. It was so because, in a developing
country, the foreign firms had relatively better access to advanced technology.
The study concluded that the foreign firms in Indian engineering sector had
greater technical efficiency than that of domestic firms and there was no
significant variation in technical efficiency between private and public sector
firms. The study pointed out a fact that there were indications of a process of
efficiency convergence, that is, the domestic firms tended to 'catch-up' with
foreign firms in terms of technical efficiency. Among the various factors
responsible for inter firm variation in technical efficiency, the import intensity
played a significant role. The liberalization of imports increased the access of firm
20
to imported inputs and capital goods and thus contributed considerably to increase
the efficiency of engineering firms.
Sampath Kumar examined the assumption of homogeneity in the estimation of
total factor productivity at the aggregate level in the Indian chemical sector. He
classified the entire sector into five major sub-sectors and each subsector has
further been divided into small and large firms. The study further found that there
are productivity variations as the size of the firms differs. It was found in his study
that large firms tend to have higher level of TFPG than the small firms.
Kim decomposed total factor productivity (TFP) growth into technical progress
(TP), technical efficiency change (TEC), allocative efficiency change (AEC) and
scale efficiency change (SEC) to Malaysian manufacturing data from 2000 to
2004. The paper also identified the factors that determine each TFP component.
Empirical results show that TFP was driven mainly by TP, but plagued by
deteriorating TEC. The skill and quality of workers represent the most important
determinants of TE, whereas foreign ownership, imports and employee quality
represent those of TP. The impact of firm size on SEC differed across industries,
and AEC determinants were identified.
David McClelland (1953) worked on Maslow's need theory and condensed it to
three main needs for power, affiliation and achievement. Here again the need for
recognition is manifested in all the three forms of needs suggested by McClelland.
Frederick Herzberg opined that human needs were derived either from animal
instincts of humans (survival, hunger, etc.)or from an individual's urge to realize
21
potential. He and his associates developed a framework of two factor theory called
motivation and hygiene theory which categorized factors associated with work as
either motivators (driven from intrinsic needs) or movers (driven from extrinsic
needs). Recognition was found in Herzberg's study as a source of motivation when
given in the form of direct feedback.
Ryan and Deci propose the Self-determination theory which states that an
individual has three psychics needs i.e. need for competence, autonomy and
relatedness. Whenever the three psychic needs of humans are provided by the
environment, they support individual's self-determination and as such his/her
intrinsic motivation to do the activity increases and also the overall sense of well-
being. Whenever these needs are thwarted, motivation diminishes. Thus when
rewards are given as a source of satisfying these needs an individual's motivation
increases or else it decreases.
Fisher and Hostland found that while the relationship was stable over the period
1956 to 2001, labour productivity growth had significantly outpaced real wage
growth from 1994 to 2001. These recent developments could potentially call into
question the stability of the relationship going forward. They concluded that the
divergence in recent years was little cause for concern since labour and non-labour
income shares tend to revert to their respective means over the long term. With the
benefit of several more years of data, part five of this report largely confirms the
findings of Fisher and Host land and offers possible explanations for the observed
divergence between labour productivity and real wage.
22
Banga (2005) found that higher export intensity of an industry is associated with
lower wage inequalities. Higher exports in an industry have reduced wage most of
the exports take place from low skill and labour intensive industry, as a result
higher exports by raising the demand of these labour increases their return so as to
subsequently reduce the wage gap. However, as technological progress is skilled
biased, a higher extent of technology acquisition is found to be associated with
higher wage inequalities.
Kraay (1997) found that controlling for past firm‘s performance and unobserved
firm‘s characteristics, past exports are as significant indicators of an enterprises
current performance. The estimated co-efficient indicate that a ten percentage
point increase in a firm‘s export to output ratio in a given year causes thirteen
percent increase in labour productivity.
In a recent exploratory study, relations with superior emerged as an important
determinant of employees' perception of non-monetary rewards. Sonawane
(2007) it was claimed that it was critical for employees to share good relations
With superior or else the rewards bestowed would appear phony.
Attitude of supervisor is said to be the most common factor that is overlooked in
Motivating employees. It is asserted by Bessler et al (2002) that if a supervisor
approaches the workplace with a positive upbeat attitude about the work project,
that attitude gets transferred to the subordinates and thus created a better work
environment.
Duncan Brown and John Purcell (2007) did an extensive survey
(535organizations) and combined it with an in-depth study(5 organizations)
toconclude that lack of line management skills was the main barrier for
23
theSuccessful operation of the organization's rewards strategy. It is suggested
thatthe HR professionals must involve, support, skill and enable front line
managersto create a totally rewarding environment at work; the reward policy and
strategywould thus result in a highly committed and high performance workforce
withhigh business returns.
Jones and Lloyd (2005) assert through illustrations from leadership theories thatan
individual's motivation depends upon the nature of his/her relationship withthe
leader. As such they explored how employee behavior was influenced by
theemployee perception of senior management. It was found that 80% of those
whocontributed an idea had a positive attitude towards their line manager.
Theresults however also indicated that recognition from line managers was not
animportant factor in motivating desired behavior, but a poor perception of
linemanagers had a negative impact on employee behavior. That is, good
relationshipwith line managers had become a 'hygiene factor' for employees to
perform suchthat a mere absence of it would lead to dissatisfaction at work place
with anunhealthy work climate. "In the context of ideas generation and the two-
factormodel, the conclusion is that the relationship with the line manager in
thecontemporary context has ceased to be a motivator. Most contributors
appearnot to need line manager's recognition when it comes to motivating them
tocontribute ideas. However, a poor perception of the line manager has a
strongnegative impact on employee willingness to contribute ideas. This prompted
thethought that managerial recognition determines the climate within which work
isundertaken, and has become a major hygiene factor in the
contemporaryemployment context." (Jones and Lloyd, 2005, P- 938)
24
'Positive visibility' of senior management is said to be a 'high level satisfier'.
Theopportunity to speak with managers and executives provides employees
anopportunity to address their concerns and comments directly to the top,
andimmediate actions taken to resolve the issues show the employee that
theorganization cares. (Clive 2007)
Gallup conducted a study in 2004 findings of which suggested that if a
managerignores an employee, the chances of employee disengagement are 40%. If
themanager focuses on employee weaknesses, the chances of disengagement
are22%. And if the manager focuses on an employee's strengths, the chances of
theemployee being disengaged drops to just 1%. In a subsequent study in
2007,Gallup found it to be not uncommon for between one-fifth and one-third
ofemployees to say, "Not only have I not received any praise recently, my
bestefforts are routinely ignored." It is thus implied that providing
strategicrecognition satisfies a dire need of employees and also helps them in
betterengagement with the organization which eventually leads to better
productivity.
Jeffrey and Shaffer (2007) further emphasize the motivational characteristics
oftangible non-cash incentives that are contingent on performance by
elaboratingthe psychological concepts of justifiability, social reinforcement,
separability andevaluability. Non-cash incentives are said to have justifiability,
that is, they allowthe recipient to justify the consumption of that reward. A trip to
Hawaii, which may be affordable by the employee, may not be justified if taken
otherwise,however as a reward it becomes justified as there is no guilt indulging
in thatlevel of luxury.
25
Tangible non-cash incentives are also said to involve 'social reinforcement' thatis,
in addition to the 'consumption value' of reward, employees also tend to enjoythe
acknowledgement and recognition form peers, supervisors, family andfriends.
"The value of this "social reinforcement" comes from others knowingabout the
good performance rather than the receipt of the incentive‖
Pragya Sonawane (2008) conducted an exploratory study on non-monetary
rewards comparing organizational practices and employee perceptions in
theFMCG sector of India. Two analogous organizations, one Indian
multinationaland another American multinational were selected; qualitative
interviews wereconducted with the use of an interview guide understanding
employeeperceptions of organizational practices. Separate interviews were
conducted withorganizational representatives (HR managers handling Rewards
and Recognitionand Organization heads) and employees across different
functions.
The research emphasized the role of non-monetary rewards in the presentcontext
of hyper competition and soaring retention problems. The findingsindicated a gap
between what employees preferred and what was offered to them.Employers
emphasized formal platforms while employees stressed on formal andinformal
programs evenly. Another important finding emerged with respect tothe
differences between the two organizations; it was observed that the
Indianorganization was not keen on practicing non-monetary recognition as
extensively
as the American organization. Top management from the Indian
organizationrarely praised their employees and were not enthusiastic about
recognitionplatforms. This feeling was reciprocated by the employees from the
26
Indianorganization who referred to the recognition attempts by organization as
'mereadd-ons' and not important to their work. In contrast to this was the
Americanorganization which fostered a culture of recognition and appreciation.
Topmanagers actively participated in all recognition forums and likewise was
thefeeling responded by employees who emphasized the role of non-
monetaryrecognition to their work-life. A plausible rationale of different growth
patterns of
the two organizations was given for these differences. It was elucidated that the
Indian organization which had witnessed competition only since the opening up of
Indian economy was governed by traditional thinking and as such nontraditional
Rewards were not perceived as critical to them. While the American organization
had transcended the nascent stage, and had thus incorporated newstrategies of
ensuring employee wellbeing and performance. Other importantrelationships that
emerged from the qualitative analysis are as follows:
When the top management belief in the power of recognition is high, then
the organization will support an extensive non-monetary reward
configuration.
A manager, who believes in the power of recognition towards employee
motivation, will use it with his/her subordinates.
Sharing good relations with the superior tends to increase the perceived
value of the recognition (reward/ appreciation).
Employees perceive rewards as valuable when the organization supports a
culture of recognition and celebration and provides for an extensive
nonmonetary rewards configuration.
27
CHAPTER 3
OBJECTIVE AND RESEARCH METHODOLOGY
PROBLEM IDENTIFICATION
Productivity is a vital component in every organization and its people are the effective
means for improving productivity. Without a dedicated, committed and enthusiastic
workforce, the objective of optimum level of productivity cannot be achieved. But
these traits cannot be bought from the market. They have to be developed in the
people comprising the organization. Therefore, the enlightened and progressive
management has to create conductive work environment where people are
continuously motivated to realize their potentialities. That‘s why human resource
development seeks to achieve in an organization. Liberalization in the Indian
insurance sector has opened the sector to private competition. A number of Steel
companies have set up representative offices in India and have also tied up with
various asset management companies. All these developments have forced the Steel
companies to be competitive. What makes a firm best is not just technology, bright
ideas, masterly strategy or the use of tools, but also the fact that the best firms are
better organized to meet the needs of their people; to attract better people who are
more motivated to do a superior job. In this manner the management of human
resources becomes very crucial.
India is currently the world's fourth largest producer of crude steel after China, Japan
and the US. It accounts for 4.5 % in global trade Indian steel Industry is backbone of
country‘s development. 2007-2012 was watershed year of Indian Steel Industry. The
28
center of the focus is that the demands will reach110 million metric tons by the year
2020. To sustain this growth the industry should work on challenges studied by
researchers in India, which includes endemic deficiency, high cost of capital and most
importantly labour productivity. The steel is the most common constituent in
manufacturing sector, which helps to incorporate new technology at low cost.
There are approximately 18 small, Medium and large scale Steel
Manufacturing companies in India.
The production capacity of Indian Steel Industry accounts for 74 million
metric tone
In fiscal 2012-13, growth in domestic steel demand is expected to be around
5.5 percent.
In 2013-14, demand is expected to be higher at around 7%.
Compared to the global average per capita consumption of 150 kgs, India‘s
per capita consumption of steel is still a mere 39 kgs per head.
Technologically, the main hurdles before Indian steel industry are
the cost of power and non-availability of metallurgical coke.
In India, the advantages of cheap labour gets offset by low labour
productivity
High administered price of essential inputs like electricity puts Indian
steel industry at a disadvantage; about 45% of the input costs can be
attributed to the administered costs of coal, fuel and electricity
The Indian rural sector remains fairly unexposed to their multi-faceted use of
steel.
29
Excellent potential exist for enhancing steel consumption in other sectors
such as automobiles, packaging, engineering industries, irrigation, and
water supply in India.
Compared to the global average per capita consumption of 150 kgs,
India‘s per capita consumption of steel is still a mere 39 kgs per head.
Even by Asian standards India have a long way to go in the consumption of
steel. Technologically, the main hurdles before Indian steel industry
are the cost of power and non-availability of metallurgical coke.
Un-remunerative Prices
Stagnating demand, domestic oversupply, and falling prices in the last four
years have hit Indian steel makers. Barring the sporadic rise in demand in
the recent months, it has suffered from un-remunerative prices to the
extent that companies have been finding it difficult to maintain capital costs.
Endemic Deficiencies
These are inherent in the quality and availability of some of the essential raw
materials available in India, example, high ash content of indigenous coking
coal adversely affecting the productive efficiency of iron-making and is
generally imported. Advantage of high Fee content of indigenous ore is often
neutralized by high basic index. Besides, certain key ingredients of steel
making, eg, nickel, ferro-molybdenum is also unavailable indigenously.
Systemic Deficiencies
However, most of the weaknesses of the Indian steel industry can be
classified as systemic deficiencies. Some of these are described here.
High Cost of Capital
30
Steel is a capital intensive industry; steel companies in India are charged an
interest rate of around 14% on capital as compared to 2.4% in Japan and 6.4% in
USA.
Low Labour Productivity
In India, the advantages of cheap labour gets offset by low labour productivity;
e.g. at comparable capacities labour productivity of SAIL and TISCO is 75 t/man
year and 100 t/man year, for POSCO, Korea and NIPPON, Japan the values are 1345
t/man year and 980 t/man year.
High Cost of Basic Inputs and Services
High administered price of essential inputs like electricity puts Indian steel
industry at a disadvantage; about 45% of the input costs can be attributed to the
administered costs of coal, fuel and electricity, e.g. cost of electricity is 3 cents
in the USA as compared to 10 cents in India; and freight cost from Jamshedpur to
Mumbai is $50/ton compared to only $34 from Rotterdam to Mumbai. Added to
this are poor quality and ever increasing prices of coking and non-coking coal.
Besides these Indian steel makers also lacked in international
competitiveness on determinants like product quality, product design, on-
time delivery, post sales service, distribution network, managerial initiatives,
research and development, information technology and labor productivity
etc.
SCOPE OF THE STUDY
India is currently the world's fourth largest producer of crude steel after China, Japan
and the US. It accounts for 4.8% in global trade Indian steel Industry is backbone of
31
country‘s development. 2007-2012 was watershed year of Indian Steel Industry. The
center of the focus is that the demand will reach 110 million tones by the year2020.
To sustain this growth the industry should work on challenges studied by researchers
in India, which includes endemic deficiency, high cost of capital and most importantly
labour productivity. The steel is the most common constituent in manufacturing
sector, which helps to incorporate new technology at low cost.
There are approximately 18 small, Medium and large scale Steel
Manufacturing companies in India.
The production capacity of Indian Steel Industry accounts for 74 million
metric tones.
In fiscal 2012-13, growth in domestic steel demand is expected to be around
5.5 percent.
In 2013-14, demand is expected to be higher at around 7%.
Compared to the global average per capita consumption of 150 kgs, India‘s
per capita consumption of steel is still a mere 39 Kgs per head.
Technologically, the main hurdles before Indian steel industry are
the cost of power and non-availability of metallurgical coke.
In India, the advantages of cheap labour gets offset by low labour
productivity
High administered price of essential inputs like electricity puts Indian
steel industry at a disadvantage; about 45% of the input costs can be
attributed to the administered costs of coal, fuel and electricity
The Indian rural sector remains fairly unexposed to their multi-faceted use of
steel.
32
Excellent potential exist for enhancing steel consumption in other sectors
such as automobiles, packaging, engineering industries, irrigation, and
water supply in India.
Compared to the global average per capita consumption of 150 kgs,
India‘s per capita consumption of steel is still a mere 39 kgs per head.
Even by Asian standards India have a long way to go in the consumption of
Steel. Technologically, the main hurdles before Indian steel industry
are the cost of power and non-availability of metallurgical coke.
Besides these Indian steel makers also lacked in international competitiveness on
determinants like product quality, product design, on-time delivery, post sales
service, distribution network, managerial initiatives, research and development,
information technology and labor productivity etc.
The back bone of any economy is the industrial sector in any country. It is the
industrial growth of a country that contributes to the faster growth of the
economy. This realization has made the economic planners and PR actioners to
implement various policies and programmes that are highly favorable for the
development of industries. In the context of India, there are a few traditional
industries which contribute to the faster industrial development and the steel
industry is one. The government framed and implemented National Steel Policy in
2005. The long term strategic goal of NSP is that India should have a modern and
efficiency steel industry of world standards, catering to diversified steel demand.
The study on productivity becomes important in view of the limited availability of
factors of production, particularly the capital. The proportion of the factors of
production or the inputs will be different in the different industries depending on
33
the nature of product. The labour intensive industries with the abundant labour
and relatively low wages, the emphasis is on the increasing capital productivity.
On the other hand, in the capital intensive industries, the concern is to increase the
labour productivity. The productivity growth is the only plausible route to increase
the standard of life of the society. Economic and industrial growth is the result of
the interaction of two prime factors: the investment capabilities, which are a
function of savings and the productivity with which these capabilities are utilized.
Productivity is a major source of high levels of production. It is a measure of the
efficiency of factors or inputs in production. An increase in the levels of
productivity in an economy implies that its factors of production and commodity
inputs are manifesting increase in their output efficiency. The prosperity of new
developed nations has been attributed mainly to the sustained growth of its total
factor productivity. The performance of an industry can be understood with the
estimation of Total Factor Productivity Growth (TFPG) and its behaviour over a
period of time. Productivity growth is an indicator of the utilization of the factor
inputs and in turn a measure of performance of the firm or industry concerned.
SIGNIFICANCE OF THE STUDY
The above study is made for the participants who are involved in the routine activities
of the industries. The participants are as follows. Management, investors, creditors,
government, employees and trade unions, societies and others.
MANAGEMENT’S VIEW
The above study plays a vital role in providing such information. This in turn would
create foundation for its decision making and will also control the activities.
Management can construct its future plan based on the facts and the figures of the
34
report. Management can also do the analysis of what worked and what not based on
the output achieved. Irrespective of changing needs, cost, financial conditions,
availability of resources, technologies etc. employees are only responsible for the
higher productivity in the organization. If employees are engaged, satisfied and
motivated; labour productivity will also be higher.
INVESTORS
The financial position of the company which is reflected in earning per share ROI
(Return on Investment) helps to attract investors. The labour productivity plays a
crucial role to gain the recognition and confidence in market.
CREDITORS
Creditors who are involved in the business with the company studies its performance
by credit ratio, acid test ratio, equity and capitalization. Etc. The study of it describes
real features of the business organization to creditors.
GOVERNMENT
Government has significant role to study labour productivity and financial efficiency
of individual organization. As it is involved in taxation, revenue control, sanction and
other activities.
EMPLOYEES AND TRADE UNIONS
Human resources are most important and valuable resources for any organizations
that are involved and interested to study financial position and profit of the company.
They analyze comparison of past and present actors to find growth and opportunities
in the organization.
35
Productivity acts as an effective tool for assessing employee performance and
evaluation of machine, system, team, section, division, industry and national
economy.
Productivity plays a role of yardstick for comparing the effectiveness at work.
Productivity helps to guide to find problematic unit and which further helps to
identify possible remedial measures.
Organizations can have competitive advantage if productivity is high.
It helps to create benchmark which further helps to increase market share and
higher sales can be achieved.
The ultimate goal of any business is to earn goodwill in the market and to
become leader in the market which is possible through increasing productivity.
The contribution to excel in the performance, profits, progress and goodwill is
possible through improving productivity.
OBJECTIVE OF THE STUDY
1) To analyze trends of Labour Productivity in Classified Steel Industries.
2) To Study the Impact of rewards and recognition on labour productivity in
classified steel industries.
3) To find the correlation between Rewards and recognition on labour
Productivity in steel industries.
4) To make Policy Recommendations & Evolved HR practices for increasing
Productivity.
Please Note: Classification given by Planning Commission of India
36
RESEARCH METHODOLOGY
The research was conducted using secondary data with selected steel industries which
includes SAIL, VIZAG STEEL, TATA STEEL, JSW STEEL, JSW ISPAT, ESSAR
STEEL, JSPL, BHUSHAN STEEL, UTTAM STEEL, MUKAND STEEL
Discussions Were also held with certain Officials with the objective of studying
whether there is any correlation between the rewards and recognition that are given
and the labour productivity especially in large capital industries like steel industries.
For this purpose necessary data was collected from steel industries as well as planning
commission for the last five years.
This data then analyzed using different statistical tools like chi square test, T-test and
correlation.
The data analyzed suggest that there exist some correlation between rewards and
recognition and improvement in labour productivity.
DETERMINATION OF SAMPLE
Target population: Steel manufacturing Companies
Sample size: 100 employees from HR department was contacted from classified steel
manufacturing companies as per the classification given by planning commission.
The sample for the research work have been chosen for the year as per 11th
five year
plan of planning commission i.e. (2007-2012) Which has classified Steel
manufacturing companies into three group i e Group A ,B and C according to the
criteria given below.
37
CLASSIFICATION AS PER 11TH
FIVE YEAR PLAN
Table 3.1: Classification as per 11th five year plan
Producer/Group 11th
Plan (2007-12)
Production of Crude Steel 1.Main Producer (A) 2006-07 2007-08 2008-09 2009-10 2010-11 (P)
SAIL 13.51 13.96 13.41 13.51 13.76
RINL 3.50 3.13 2.96 3.21 3.24
TATA STEEL 5.17 5.01 5.65 6.56 6.86
TOTAL (1) 22.18 22.10 22.02 23.28 23.85
2. Major (B)
JSWL 2.64 3.15 3.22 5.26 5.85
ISPAT 2.76 2.83 2.20 2.69 2.38
ESSAR 3.01 3.56 3.34 3.47 3.37
JSPL - - 1.46 1.96 2.27
TOTAL(2) 8.41 9.54 10.22 13.38 13.87
3. Other Producer (C)
EAF Units/ COREX-BOF
*
4.84 5.28 8.15 9.36 9.79
INDUCTION
FURNACE*
15.39 16.93 18.05 19.82 22.07
TOTAL (3) 20.23 22.21 26.20 29.18 31.86
GRAND TOTAL(1+2+3) 50.82 53.86 58.44 65.84 69.58
Source: Joint Plant Committee *Provisional 2011
DATA COLLECTION
Primary Data
Through detailed discussion with knowledgeable persons in steel industry especially
with HR and also with selected employees. A total of 100 HR Personnel were
contacted from the selected steel industries. The sample size was restricted to 100 due
to lack of access and interest of employees and due to location of the industry. The
38
table mentioned below depicts name of the steel company, no of persons contacted in
each company and location.
Table no 3.2 Determination of sample
Name of the company No of persons contacted Location
SAIL 5 MUMBAI
TATA STEEL 7 MUMBAI
RINL 5 MUMBAI
JSW 15 TARAPUR
JSW ISPAT 5 MUMBAI
ESSAR STEEL 5 MUMBAI
JSPL 15 THANE
BHUSHAN STEEL 15 KHOPOLI
UTTAM STEEL 13 PUNE
MUKAND STEEL 15 THANE
The primary objective ofthe discussion was to identity role and importance of rewards
and recognition in increasing productivity and also to find out contribution of various
factors in improving labour productivity.
Questionnaire was designed to find the contribution of various factors in increasing
labourproductivity which includes investment on employees, research activities to
study and analyze the environmental change, audit, appraisal and identification of best
practices for improving efficiency.
39
Secondary Data
The Secondary data for the research have been collected from various sources which
include Websites, Journals, Annual Reports, and Government Reports etc.
STATISTICAL TOOLS USED
Chi Square Test
Chi Square test is a statistical measure used in the context of sampling analysis for
comparing a variance to a theoretical variance.It is also known as Non Parametric
test.Chi Square test is used when the research has categorical variables.It is used to
determine whether categorical data shows dependency or independency in research.
The comparison between theoretical and actual data is possible through chi square
test.In the present research the two categorical variables used for testing are rewards
and recognition and labour productivity.This test answers the question how well does
the theoretical data fit to the observed data. If the calculated chi square is less than the
table value at certain level of significance then it is considered to be a good fit and the
fluctuation may be due to sampling but if the value is more than table value then it is
not a good fit.In this research the calculated chi square value is found to be less than
table value and therefore the fit is considered as good and the fluctuations are due to
sampling.
40
Trend Analysis
Trend analysis means collecting information and attempting to spot a particular trend
or pattern under study.This analysis is also used to predict future events and to
estimate events in past.
The method of least square is used to find the trend for selected companies in this
research for comparison of actual and expected output in terms of labour productivity
Correlation Analysis
This technique is used in research to find the extent and degree of dependency among
the variables. Correlation analysis in this research among rewards and recognition and
labour productivity will help to measure and analyze the degree and extent to which
two or more variables fluctuate with reference to each other.This analysis denotes the
interdependence among the two variables.The study shows that rewards and
recognition is not related with labour productivity so fluctuations in labour
productivity may be due to other environmental factors.
T Test
This Test is also known as parametric test.T test is used when the sample size is less
than 30. This test is used for comparing means. In the present research this test has
been used to find the significance of correlation coefficient.
41
CHAPTER 4
INTRODUCTION OF STEEL INDUSTRY
Steel forms a bedrock of the developmental phase. All major economies are
characterized by the growth and development of steel industries. The level of per
capita consumption of steel is treated as one of the important indicators of socio-
economic development and living standard of the people in any country.
The countries like China, Japan, India and South Korea are in the top of the above in
steel production in Asian countries. China accounts for one third of total production
i.e. 419m ton, Japan accounts for 9% i.e. 118 m ton, India accounts for 53m ton and
South Korea is accounted for 49m ton, which all totally becomes more than 50% of
global production.
HISTORY & BACKGROUND
After independence, successive governments placed great emphasis on the
development of an Indian steel industry. In Financial Year 1991, the six major
plants, of which five were in the public sector, produced10 million tons. Rest of the
4.7 million tons came from private sector which was constituted by 180 small
plants. India's Steel production more than doubled during the 1980s but still did not
meet the demand in the mid-1990s, The commissioning of Tata Iron & Steel
Company's production unit at Jamshedpur, Bihar in 1911-12 was a milestone of
modern steel industry in India. At the time of Independence in 1947 India's steel
production was only 1.25 Mt of crude steel. Following independence and the
commencement of five year plans, the Government of India decided to set up four
integrated steel plants at Rourkela, Durgapur, Bhilai and Bokaro. The Bokaro plant
42
was commissioned in 1972. The most recent addition is a 3 Mt integrated steel
plant with modern technology at Visakhapatnam. Steel Authority of India (SAIL)
accounts for over 40% of India's crude steel production.
The New Industrial policy adopted has opened up the iron and steel sector for
private investment, it has removed from the list of industries reserved for public
sector and exempting it from compulsory licensing. Imports of foreign
technology as well as foreign direct investment are freely permitted up to certain
limits under an automatic route. This, along with the other initiatives taken by the
Government has given a definite impetus for entry, participation, and growth of
the private sector in the steel industry. While the existing units are being
modernized / expanded, a large number of new / green field steel plants have also
come up in different parts of the country based on modern, cost effective, state of-
the-art technologies. Soaring demand by sectors like infrastructure, real estate, and
automobiles, at home and abroad, has put India's steel industry on the world map.
Dominating the Indian horizon is steel giant Tata Steel, whose takeover of the UK-
Dutch steel company Corus is the country's biggest buyout. Meanwhile, the LN
Mittal-owned Mittal Steel acquired French steel company Arcelor to create the
world's number one steel company, Arcelor Mittal; and Korean steel giant POSCO
is pumping money into mines and steel plants in Orissa to emerge as one of the
biggest steel plants in the state.
Steel industry was delicensed and decontrolled in 1991 & 1992 respectively.
Today, India is the 4th
largest crude steel producer of steel in the world.
In 2011-12, production for sale of total finished steel (alloy + non alloy) was 73.42
mt.
43
Production for sale of Pig Iron in 2011-12, was 5.78 mt.
India is the largest producer of sponge iron in the world with the coal based route
accounting for 76% of total sponge iron production in the country (20.37 mt in 2011-
12; prov.):
Last five year's production for sale of pig iron, sponge iron and total finished steel
(alloy + non-alloy) are given below:
Table 4.1: Indian steel industry production
Indian steel industry : Production for Sale (in million tonnes)
Category
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12*
Pig Iron 5.28 6.21 5.88 5.68 5.78
Sponge Iron 20.37 21.09 24.33 25.08 20.37
Total Finished Steel (alloy + non
alloy)
56.07 57.16 60.62 68.62 73.42
Source: Joint Plant Committee; *provisional 2011
EXPORT AND IMPORT OF STEEL FROM INDIA
The steel exports of India over the decade have the compounded annual growth rate
(CAGR) of 22.27% against CAGR of imports of steel, which accounted 14.20%
44
in the respective period. In 1991-92, very inception of the Liberalization, the steel
exports amounted to 368 thousand tons, which increased year-by-year and reached
to 5221 thousand tonnes in 2003-04. It accounted for thirteen-fold increase over
the period. The Annual growth rates of exports of steel for the period showed the
fluctuating trend, which ranged between -14.41% in 1994-95 and 101.36 in 1992-93.
In 2003-04, the growth rate was 15.87 %.
IMPORTS
Iron & steel are freely importable as per the extant policy.
Table 4.2: Indian steel industry imports
Indian steel industry : Imports (in million tonnes)
Category
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12*
Total Finished Steel (alloy + non
alloy)
7.03 5.84 7.38 6.66 6.83
Source: Joint Plant Committee; *provisional 2011
EXPORTS
Iron & Steel are freely exportable.
Advance Licensing Scheme allows duty free import of raw materials for exports.
Duty Entitlement Pass Book Scheme (DEPB) was introduced to facilitate exports.
45
Under this scheme exporters on the basis of notified entitlement rates, are granted due
credits which would entitle them to import duty free goods. The DEPB benefit on
export of various categories of steel items scheme is currently applicable for steel
exports.
Table 4.3: Indian steel industry exports
Indian steel industry : Exports (in million tonnes)
Category
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12*
Total Finished Steel (alloy + non
alloy)
5.08 4.44 3.25 3.64 4.04
Source: Joint Plant Committee; *provisional 2011
DOMESTIC SCENARIO
The Indian steel industry has entered into a new development stage from 2007-08,
riding high on the resurgent economy and rising demand for steel.
Rapid rise in production has resulted in India becoming the 4th largest producer of
crude steel and the largest producer of sponge iron or DRI in the world.
As per the report of the Working Group on Steel for the 12th Plan, there exist many
factors which carry the potential of raising the per capita steel consumption in the
country, currently estimated at 55 kg (provisional). These include among others, an
46
estimated infrastructure investment of nearly a trillion dollars, a projected growth of
manufacturing from current 8% to 11-12%, increase in urban population to 600
million by 2030 from the current level of 400 million, emergence of the rural market
for steel currently consuming around 10 kg per annum buoyed by projects like Bharat
Nirman, PradhanMantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among
others.
At the time of its release, the National Steel Policy 2005 had envisaged steel
production to reach 110 million tonnes by 2019-20. However, based on the
assessment of the current ongoing projects, both in greenfield and brown field, the
Working Group on Steel for the 12th
Plan has projected that the crude steel capacity in
the county is likely to be 140mt by 2016-17 and has the potential to reach 149mt if all
requirements are adequately met.
The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid
developments in the domestic steel industry (both on the supply and demand sides) as
well as the stable growth of the Indian economy since the release of the Policy in
2005.
CURRENT SCENARIO
The demand for steel in India is expected to rise 7 percent in the next financial year
beginning April 1 as compared to the sluggish 5.5 percent projected growth in 2012-
13. The overall outlook for the steel sector is positive and the demand was likely to
pick up in the next financial year on the back of revival in economic growth and the
government's measures to ease infrastructure investment rules.
47
In fiscal 2012-13, growth in domestic steel demand is expected to be around 5.5
percent. Total demand is expected to be around 75 million tonnes, up from 71 million
tonnes in 2011-12. In 2013-14, demand is expected to be higher at around seven
percent. India is currently the world's fourth largest producer of crude steel after
China, Japan and the US. Major public as well as private sector firms including Tata
Steel, SAIL and JSW Steel are expanding production capacity. The steel
production is expected to reach 200 million tonnes by 2020 as compared to 71
million tonnes recorded last year. In steel production, India is expected to leave
behind USA and Japan in a couple of years. However, it will substantially lag
behind China that produces almost 700 million tonnes of steel per year.
CHALLENGES AND OPPORTUNITIES OF INDIAN STEEL INDUSTRY
CHALLENGES
India‘s per capita consumption of steel is still a mere 39 kgs per head Compared to
the global average per capita consumption of 150 kgs, Even by Asian standards India
have a long way to go in the consumption of steel.
UN-REMUNERATIVE PRICES
Stagnating demand, domestic oversupply, and falling prices in the last four years
have hit Indian steel makers. Barring the sporadic rise in demand in the recent
months, it has suffered from un-remunerative prices to the extent that companies
have been finding it difficult to maintain capital costs.
48
ENDEMIC DEFICIENCIES
These are inherent in the quality and availability of some of the essential raw
materials available in India, example, high ash content of indigenous coking
coal adversely affecting the productive efficiency of iron-making and is generally
imported. Advantage of high Fee content of indigenous ore is often neutralized by
high basic index. Besides, certain key ingredients of steel making, eg, nickel, ferro-
molybdenum is also unavailable indigenously.
SYSTEMIC DEFICIENCIES
However, most of the weaknesses of the Indian steel industry can be
classified as systemic deficiencies. Some of these are described here.
HIGH COST OF CAPITAL
Steel is a capital intensive industry; steel companies in India are charged an interest
rate of around 14% on capital as compared to 2.4% in Japan and 6.4% in USA.
LOW LABOUR PRODUCTIVITY
In India, the advantages of cheap labour gets offset by low labour productivity;
e.g., at comparable capacities labour productivity of SAIL and TISCO is 75 t/man
year and 100 t/man year, for POSCO, Korea and NIPPON, Japan the values are 1345
t/man year and 980 t/man year.
HIGH COST OF BASIC INPUTS AND SERVICES
High administered price of essential inputs like electricity puts Indian steel
industry at a disadvantage; about 45% of the input costs can be attributed to the
administered costs of coal, fuel and electricity, e.g., cost of electricity is 3 cents in
49
the USA as compared to 10 cents in India; and freight cost from Jamshedpur to
Mumbai is $50/ton compared to only $34 from Rotterdam to Mumbai. Added to
this are poor quality and ever increasing prices of coking and non-coking coal.
TECHNOLOGICAL
Besides these Indian steel makers also lacked in international competitiveness on
determinants like product quality, product design, on-time delivery, post sales
service, distribution network, managerial initiatives, research and development,
information technology and labor productivity etc. As is evident in Table 4, the
weaknesses gets reflected in India‘s poor standing in the global
competitiveness as measured in terms of indicated parameters.
OPPORTUNITIES
The biggest opportunity before Indian steel sector is that there is enormous scope
for increasing consumption of steel in almost all sectors in India. The following graph
gives a glimpse of untapped potential of increasing steel consumption in India; eg,
even to reach the comparable developing and lately developed economies like China
and other Europe, a quantum jump in steel consumption will be required. India has
rich mineral resources. It has abundance of iron ore, coal and many other raw
materials required for iron and steel making. It has the fourth largest iron ore
reserves (10.3 billion tonnes) after Russia, Brazil, and Australia. Therefore, many
raw materials are available at comparatively lower costs. It has the third largest pool
of technical manpower, next to United States and the erstwhile USSR, capable of
understanding and assimilating new technologies. Considering quality of
workforce, Indian steel industry has low unit labor cost, commensurate with skill.
50
This gets reflected in the lower production cost of steel in India compared to many
advanced countries.
UNEXPLORED RURAL MARKET
The Indian rural sector remains fairly unexposed to their multi-faceted use of steel.
The rural market was identified as a potential area of significant steel consumption
way back in the year 1976 itself. However, forceful steps were not taken to
penetrate this segment. Enhancing applications in rural areas assumes a much
greater significance now for increasing per capital consumption of steel. The usage
of steel in cost effective manner is possible in the area of housing, fencing,
structures and other possible applications where steel can substitute other materials
which not only could bring about advantages to users but is also desirable for
conservation of forest resources.
OTHER SECTORS
Excellent potential exist for enhancing steel consumption in other sectors such as
automobiles, packaging, engineering industries, irrigation, and water supply in
India. New steel products developed to improve performance simplify
manufacturing/installation and reliability is needed to enhance steel consumption in
these sectors. Main objective here have to be improvement of quality for value
addition in use, requirement of less material by reducing the weight and
thickness and finally reduction in overall cost for the end user.
Latest technology must be adopted by Indian steel manufacturers for production of
superior quality of steel for these applications. For example, pre-coated sheets
can be used in manufacture of appliances, furnishings, electric goods and public
transport vehicles. Production and supply of superior grades of steel in desired
51
shapes and sizes will definitely increase the steel consumption as this will reduce
fabrication need; thereby reduce cost of using steel.
EXPORT MARKET PENETRATION
It is estimated that world steel consumption will double in next 25 years. Quality
improvement of Indian steel combined with its low cost advantages will definitely
help in substantial gain in export market.
PERFORMANCE OF INDUSTRY DURING 11TH
YEAR PLAN (2007-2012)
Present status of Indian Steel Industry and its performance during the 11th
Five Year
Plan (2007-12).
GLOBAL STATUS OF INDIAN STEEL INDUSTRY
Indian Iron and steel industry with its strong forward and backward linkages
contributes significantly to overall growth and development of the economy. As per
official estimates, the Industry today directly contributes 2 per cent of India‗s Gross
Domestic Product (GDP) and its weightage in the official Index of Industrial
Production (IIP) is 6.2 per cent. Globally also, over the last two decades, the
industry has been able to carve out a niche for itself.From a country with a
fledgling status of one million tonnes of capacity at the time of Independence, it
has today become the world‗s 4th
largest producer of crude steel preceded only by
China, Japan and USA.
In spite of being one of the largest producers of steel in the world, India has been
lagging behind other major steel producing countries in terms of intensity of steel
usage in overall economic activities (i.e., per unit of GDP) or per capita
consumption of steel. In 2010 our per capita consumption of steel was only 51.7 kg
52
as against the world average of 202.70 kgs. There is a tremendous potential for
improvement in the domestic steel consumption given the economy‗s large untapped
markets especially in rural areas.
India also remains the world‗s largest producer of sponge iron since 2002. As per
latest available information (Table- 1.3), during 2010 total global production of
sponge iron was 71.3 million metric tonnes - of which India alone accounted for
26.3 million metric tonnes or 36.9% of the total.
TRENDS IN PRODUCTION AND CONSUMPTION OF STEEL DURING 11TH
PLAN (2007-12)
For the domestic steel industry, the 10th
five year Plan (2002-07) was a period of fast-
paced growth with significant increases in both steel production and
consumption. Therefore, business expectations at the time of formulation of the 11th
plan (2007-12) were largely optimistic and this was justified in the
performance of the industry in the initial years of the plan period. In fact, the first
year of the Plan i.e. 2007-08 had been a year of high growth for the industry.
However, with onset of the global economic downturn the same pace could not be
maintained in the second year i.e. 2008-09. Like all other manufacturing
industries, steel making is also largely market driven and therefore was affected
directly by the adverse global market conditions. Fortunately, the sector was able
to contain the rate of deceleration thanks to the timely policy interventions and
counter-cyclical stimulus of fiscal and monetary packages announced by the
government and more importantly by the inherent stability of the Indian economy
itself. As a result, by the beginning of the third year i.e. 2009-10 there were signs
of recovery with stable and strong growth rates in both steel production and
53
consumption. The growth rates have, since then, remained steady and over the last
two years i.e. Since 2009-10, have matched the pre-crisis levels in both production
and consumption with simultaneous acceleration in capacity additions An analysis of
sector level performance during the first four years of the 11th
Plan, show that
growth rate in both production and consumption of steel recorded during this
period was lower than that achieved during the 10th
Plan. While finished steel
production for sale and real consumption (i.e. production + imports-exports adjusted
for stock variation/double counting) increased by below 5.8% and by 8.8%,
respectively, the corresponding growth rates during the 10th
Plan were much higher
at 9.4% and 10.4%. However, despite the slowdown, performance of the Indian
steel industry during the 11th
Plan period has been better not only in comparison to
the levels achieved in the 9th
Plan but to that of the entire decade preceding
liberalization. The relative periodic growth performance of the Indian steel
industry is placed at Table - 1.6. In fact, if we ignore the crisis year of 2008-09 then
the average growth rates during the 11th
Plan in production and consumption do not
actually show any significant deceleration compared to the earlier period.
Table 4.4: Trends in production and consumption of finished steel (plan wise)
No Five Year Plan Production
(Million
Tonnes)
CAGR
(%)
Consumption
(Million
Tonnes)
CAGR
(%)
1 9th
Plan (1997-98 to 2001-02) 27.42 -33.38 4.9 23.81 to 28.52 4.1
2 10th
Plan (2002-03 to 2006-07) 37.17 -52.53 9.4 30.68 to 46.78 10.4
3 11th
Plan (2007-08 to 2010-11)* 56.07-66.01 5.8 52.12 to 65.61 8.8
54
4 Decade preceding deregulation
(1982-83 to 1991-92)
8.48 14.23 5.9 9.26 - 14.84 5.3
5 Post De-regulation Period
(1992-93 to 2010-11)
16.89-66.01 8.4 15.81 to 65.61 8.1
Source: Joint Plant Committee; *provisional 2011
Note:
(1) *First four years
(2) For calculating growth rates (CAGR) for a five year plan, the terminal year of
previous plan has been taken as the base year One striking feature to be noted in
sectoral performance is the relatively higher growth in domestic demand for steel
vis-à-vis that of availability during this period. With growth in demand overtaking
supply the country has in fact become a net importer of steel since 2007-08, i.e.
beginning of the 11th
Plan.
Capacity utilization rates achieved during the 11th
plan (2006-07 to 2011-12)
ranged between 88% and 90% (Table-1.8). Operation at such high capacity
utilization levels is also a strong indicator of the need for going in for capacity
additions for meeting potential future demand.
The producer/group/company-wise performance during the Plan period, as
presented in the Table - 1.9 indicates that the rate of growth of Majors and Other
Producers‗ was higher than that of the BF-BOF based Main producers (SAIL,
RINL, Tata Steel). The combined share of this group has increased from 66.5% in
2006-07 (end of the 10th
Plan) to 72.3% in 2010-11. However, the future scenario
55
may be different with the implementation of substantial capacity expansion projects
by the main producers.
Table 4.5: The company wise performance during plan period
Producer/Group 11th
Plan (2007-12)
Production of Crude Steel 1.Main Producer 2006-07 2007-08 2008-09 2009-10 2010-11 (P)
SAIL 13.51 13.96 13.41 13.51 13.76
RINL 3.50 3.13 2.96 3.21 3.24
TATA STEEL 5.17 5.01 5.65 6.56 6.86
TOTAL (1) 22.18 22.10 22.02 23.28 23.85
2. Major
JSWL 2.64 3.15 3.22 5.26 5.85
ISPAT 2.76 2.83 2.20 2.69 2.38
ESSAR 3.01 3.56 3.34 3.47 3.37
JSPL - - 1.46 1.96 2.27
TOTAL(2) 8.41 9.54 10.22 13.38 13.87
3. Other Producer
EAF Units/ COREX-BOF * 4.84 5.28 8.15 9.36 9.79
INDUCTION FURNACE* 15.39 16.93 18.05 19.82 22.07
TOTAL (3) 20.23 22.21 26.20 29.18 31.86
GRAND TOTAL(1+2+3) 50.82 53.86 58.44 65.84 69.58
Source: Joint Plant Committee; *provisional 2011
TRENDS IN INTERNATIONAL TRADE IN IRON & STEEL
Prior to deregulation, imports of steel were permitted under a rigorously defined
Foreign Trade Policy designed to bridge the gap between domestic demand and
domestic availability. Like most other industries the steel industry was also
insulated from foreign competition by high import tariffs and quantity restrictions
via canalization and import licensing. As for exports- it took place primarily to
take care of surplus availability if any.
56
Deregulation brought about far-reaching changes in the international trading
scene for the globally integrated Indian steel industry. Import duty rates were
progressively reduced from above 150% to 5% with abolition of all quantitative
controls. Protection from unfair import competition is currently being provided
through the mechanism of Trade Actions (Anti-Dumping, Anti-Subsidy and
Safeguard actions) as permitted under the WTO. Most importantly, during the 10th
Five Year Plan (2002-07) there was substantial reduction in the peak duty rates i.e
from then existing 25% to 5%. In the case of seconds and defective steel products,
however, a higher import duty rate of 20 per cent continues to be maintained.
Liberalization of the foreign trade regime has had a favorable effect on Indian
exports as it is no longer subject to availability of surplus. In fact between 1991-92
and 2002-03 our exports grew fast at a rate exceeding 25% per annum.
Thereafter, till 2005-06 export levels stagnated at around 4-4.5 Million Tonnesper
year. During this period, the country‗s export basket also changed in favourof more
value added and sophisticated products. The export destinations also got widened
with Indian steel reaching a very large number of countries across the world.
During the first four years of the 11th
plan period (i.e. up to 2010-11), additions to
existing capacities have not been adequate to meet the growing demand. Further,
with the onset of global financial crisis, there was significant decline in global
demand and International Steel Producers had to substantially scale down their
operations. Under such conditions margins on export sales had also come
under pressure and domestic producers had to opt for domestic sales to contain their
losses. As a result finished steel exports declined from 5.24 million tonnesin 2006-
07 to 3.46 million tonnes in 2010-11 (Table - 1.11). Exports of semis have also
showed a similar declining trend during the period
57
Table 4.6: Import & Export of finished steel during 11th
plan (2007-12)
Year Total Finished Steel Semis
Import Export Import Export
2006-07 4.927 5.242 0.435 0.665
2007-08 7.029 5.077 0.367 0.373
2008-09 5.839 4.437 0.598 0.746
2009-10 7.382 3.251 0.443 0.625
2010-11$ (P) 6.798 3.461 0.339 0.35
Source: JPC $ as estimated in September, 2011
As regards steel Imports -it remained static around the pre-liberalization level of 1- 2
million tonnes per annum till 2003-04 but thereafter almost doubled between 2003-04
and 2005-06 i.e., from 1.7 million tonnes to 4.1 million tonnes. This surge has
continued during the 11th
plan also - primarily to bridge the gap between
domestic demand and availability as well as due to price considerations.
From 4.93 million tonnes in 2006-07 steel imports peaked to 7.38 million tonnes in
2009-10 before declining marginally to 6.8 million tonnes in 2010-11. An
important reason for the high level of imports during the 11th
Plan has been the
domestic non-availability or limitedavailabilityofsophisticated/specialized steel
products like the following:
CR Sheets / Coils for Auto Sector
CRGO and High Grades of CRNO
Over Dimensional Plates, Quenched and Tempered Plates, Special grades of
Boiler Quality Plates, etc.
Organic coated, Vinyl coated sheets.
Prime quality Tinplate (OTSC Grade)
58
FUTURE OF INDIAN STEEL INDUSTRY
Though in recent years the growth rate of stainless steel in the country has been
much higher than that of carbon steel, the per capita consumption has reached about
700 grams as compared to 12.15 kilograms in the western world. There is a great
scope of increasing the domestic consumption. The Indian steel industry came a
long way from the days when steel market suffered from both fund crunch and
supply shortage. After the government decided to stop funding any green field steel
plant the changing face of the steel industry of the country became clearer. Back
to back the policy reforms, private investments started pouring in and production
was up like never before. This trend prompted the industry to export in larger
quantity after meeting the domestic demand. In the last financial year the country‘s
exports of steel were more than 3 million tonnes. The government is in favour of
exporting steel to the foreign countries.
The investment in the economy at present is on the other fronts while the need
of the hour remains gross amount of investment in the infrastructure. Till now,
either the government agencies companies on their own supplied the necessary
infrastructure of this sector. But as new avenues are being opened up for investment
in various sectors, ideally the steel companies would concentrate more on steel
making now. The state is gradually being designated to arrange necessary funds
for the infrastructural developments of the steel industry.
59
60%
30%
10%
0% 0%
Should Labour productivity be the primary objective while
designing Rewards and recognition programmes in your organization?
SA
A
N
D
SD
CHAPTER 5
DATA ANALYSIS & INTERPRETATION
1. Should Labour productivity be the primary objective while designing
Rewards and recognition programmes in your organization?
Table 5.1: Labour productivity for designing rewards and recognition programmes
Strongly agree 60
Agree 30
Neutral 10
Disagree 0
Strongly disagree 0
Figure 5.1: Labour productivity for designing rewards and recognition programmes
INTERPRETATION
From the above pie chart we can conclude that for most of the companies (60%)
labour productivity is the primary objective while framing rewards and recognition
policy in the organization.
60
50%
30%
20%
0% 0%
Is the current Rewards and recognition programmes adequate to increase labour productivity?
SA
A
N
D
SD
2. Is the current Rewards and recognition programmes adequate to increase
labour productivity?
Table 5.2: Adequacy of rewards and recognition programmes to increase labour
productivity.
Strongly agree 50
Agree 30
Neutral 20
Disagree 0
Strongly disagree 0
Figure 5.2:Adequacy of rewards and recognition programmes to increase productivity
INTERPRETATION
It has been clearly observed from the above pie chart that only few companies agreed
that their current rewards and recognition programmes are adequate to increase labour
productivity.
61
40%
30%
30%
0% 0%
Does Rewards and Recognition contributes to evaluation of labour productivity in the organization?
SA
A
N
D
SD
3. Does Rewards and Recognition contribute to evaluation of labour
productivity in the organization?
Table 5.3: Rewards and recognition programmes to evaluate labour productivity.
Strongly agree 40
Agree 30
Neutral 30
Disagree 0
Strongly disagree 0
Figure 5.3: Rewards and recognition programmes to evaluate labour productivity.
INTERPRETATION
From the above findings we can conclude that contribution of rewards and recognition
is less in evaluating labour productivity which suggests that other factors can also
influence labour productivity.
62
10%
30%
40%
20%
0%
Does an increase in Rewards and Recognition Spending results in increasing labour productivity?
SA
A
N
D
SD
4. Does an increase in Rewards and Recognition Spending results in increasing
labour productivity?
Table 5.4: Rewards and recognition spending to increase labour productivity.
Strongly agree 10
Agree 30
Neutral 40
Disagree 20
Strongly disagree 0
Figure 5.4: Rewards and recognition spending to increase labour productivity.
INTERPRETATION
The above pie chart suggests that increase in spending on rewards and recognition
programmes does not necessarily impact labour productivity in the organization.
63
5. Does increase recognition of creativity and innovation helps to enhance labour
productivity?
Table 5.5: Recognition of creativity and innovation to enhance labour productivity.
Strongly agree 20
Agree 10
Neutral 50
Disagree 20
Strongly disagree 0
Figure 5.5:Recognition of creativity and innovation to enhance labour productivity.
INTERPRETATION
The above finding states that incorporating changes in rewards and recognition
programmes does not attract labour productivity.
20%
10%
50%
20%
0%
Does increase recognition of creativity and innovation helps to enhance labour productivity?
SA
A
N
D
SD
64
6. Does changing environment leads to change in Rewards and Recognition
schemes?
Table 5.6: Changing environment leads to changing rewards and recognition scheme.
Strongly agree 50
Agree 40
Neutral 10
Disagree 00
Strongly disagree 00
Figure 5.6: Changing environment leads to changing rewards and recognition scheme.
INTERPRETATION
It has been clearly observed from the above findings that changes in environment has
moderate impact on bringing change in rewards and recognition programmes in the
organization.
50%
40%
10%
0% 0%
Does changing environment leads to change in Rewards and Recognition schemes?
SA
A
N
D
SD
65
7. Does periodic evaluation of Rewards and Recognition programmes helps to
enhance effectiveness of labour productivity?
Table 5.7:Periodic evaluation of rewards and recognition to increase labour
productivity.
Strongly agree 10
Agree 30
Neutral 50
Disagree 10
Strongly disagree 0
Figure 5.7: Periodic evaluation of rewards and recognition to increase productivity.
INTERPRETATION
From the above pie chart we can conclude that periodic evaluation of rewards and
recognition programmes has moderate impact on labour productivity.
10%
30%
50%
10%
0%
Does periodic evaluation of Rewards and Recognition programmes helps to enhance effectiveness of labour
productivity?
SA
A
N
D
SD
66
8. Does increase in Rewards and Recognition revision helps to increase labour
productivity in your organization?
Table 5.8: Revision in rewards and recognition to increase labour productivity.
Strongly agree 0
Agree 30
Neutral 60
Disagree 10
Strongly disagree 0
Figure 5.8: Revision in rewards and recognition to increase labour productivity.
INTERPRETATION
The increase in revision of rewards and recognition programmes has greater impact
on increasing labour productivity.
60%
30%
10%
0% 0%
Does increase in Rewards and Recognition revision helps to increase labour productivity in your organization?
SA
A
N
D
SD
67
9. Rewards and recognition comprises of monetary and non-monetary benefits
in increasing labour productivity?
Table 5.9: Monetary and non-monetary rewards for increasing labour productivity.
Strongly agree 23
Agree 31
Neutral 27
Disagree 19
Strongly disagree 0
Figure 5.9: Monetary and non-monetary rewards for increasing labour productivity.
INTERPRETATION
It has been clearly observed that rewards and recognition comprises of monetary and
non-monetary and sometimes mix of both at different proportions to increase
productivity.
23%
31%
27%
19%
0%
Rewards and recognition comprises of monetary and non monetary benefits in increasing labour productivity?
68
10. Monetary incentives give higher impact than non-monetary incentives in
increasing labour productivity?
Table 5.10:Impact Of monetary incentives in increasing labour productivity
Strongly agree 70
Agree 20
Neutral 10
Disagree 0
Strongly disagree 0
Figure 5.10:Impact Of monetary incentives in increasing labour productivity
INTERPRETATION
From the above findings we can conclude that monetary incentives giver higher
impact than non-monetary incentives so incentives acts as a driving force to improve
performance thereby increasing productivity.
70%
20%
10%
0% 0%
Does increase in Rewards and Recognition revision helps to increase labour productivity in your organization?
SA
A
N
D
SD
69
ANALYSIS OF LABOUR PRODUCTIVITY
Labour Productivity
The term ‗Labour Productivity‘ is generally defined as ―the ratio of physical amount
of output achieved in a given period to the corresponding amount of labour
expended‖. It may be true that any business organization all wage payments are
directly or indirectly based on the skill and productivity of the workers, therefore
labour productivity is considered as the most important factors in productivity
computations. There are various types of methods for calculating the labour
productivity. Very simple method describe in the above definition. ‗Output divided by
input‘ another method the output per man-years of man-hour and the input per man-
years or per man-hour. In the present Research study labour input calculated by
cost/expenses labour productivity and capacity of utilization could be general indices,
which are easily understandable and could be the basis for measurement of the
employees.
70
ANALYSIS OF LABOUR PRODUCTIVITY IN SAIL
Table 5.11: Analysis of Labour Productivity in SAIL
Year AS per 11th
five year plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 46175.85 7919.28 5.83 100 106.1 0.17
2008-2009 49331.47 8401.73 5.87 100.69 108.83 0.17
2009-2010 44059.72 5417 8.13 139.45 111.56 0.12
2010-2011 47156.25 7530.24 6.26 107.37 114.56 0.15
2011-2012 51036.16 7932.05 6.43 110.29 117.02 0.15
Total 237759.4 37200.3 32.53 557.8 558.07 0.77
Average 47551.89 7440.06 6.50 111.56 111.614 0.15
Standard
deviation
1.06
Source: Compiled from annualreports of the company from 2007 – 12
Table 5.12: Calculation of chi square value for SAIL
Observed
Values
Expected (O-E) (O-E)2 (O-
E)2/E
100 106.1 -6.1 37.21 0.35
100.69 108.83 -8.14 66.25 0.60
71
0
20
40
60
80
100
120
140
160
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five year Plan(2007-2012)
SAIL
Labour Productivity Index
Labour Productivity Trend
139.45 111.56 27.89 777.85 6.97
107.37 114.56 -7.19 51.69 0.45
110.29 117.02 -6.73 45.29 0.38
Chi
Square Value
8.77
The above table describes the labour productivity ratio and index of labour
productivity average of labour indices, co-efficient of variation and value of chi-
square for selected Steel manufacturing companies in India under study.
Figure 5.11: Labour productivity trend and index in SAIL during 11th
five year (2007-
12)
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of SAIL counted to Rs. 46175.85 crores during
the year of 2007-08, which has increased to Rs. 49331.47 crores in 2008-09. The
trend of labour productivity fluctuated during the study period. The employee cost
expanded from Rs.7919.28 crores to Rs.8401.73 crores during the study period. The
72
ratio was highest in 2009-10. The ratio was the lowest in 2007-08. The average ratio
was 6.51 which were greater than the years except 2009-10. Thus the ratio decreased
in the last two years. The co-efficient of variance shows 17.601 percent and standard
deviation also indicated 1.06 percent, so the trend was fluctuated during the study
period. Computed value of chi-square describes 8.77 which less than the critical value
of 11.07 therefore null hypotheses is accepted and alternative hypothesis is rejected. It
means that labour productivity indices follow the trend value. From the above table
we can see that labour productivity index fluctuated than the labour productivity trend
during the specified study period it showed steep decline in 2009-2010 as the
employee cost was also decreased in the same year. Further above table showed the
input required per Rupees of output was lowest in 0.12 in 2009-10 and the highest of
0.17 in 2007-08.
ANALYSIS OF LABOUR PRODUCTIVITY IN RINL
Table 5.13: Analysis of labour productivity in RINL
Year AS per
11th five year
plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 10433.07 1030.72 10.12 100 90.74 0.09
2008-2009 10411 1156.68 9.00 88.93 90.41 0.11
2009-2010 10463.63 1399.74 7.48 73.91 90.08 0.13
2010-2011 11516.99 1272.95 9.05 89.43 89.75 0.11
2011-2012 14570.19 1466.67 9.93 98.12 89.42 0.00
Total 57394.88 6326.76 45.58 450.39 450.4 0.46
73
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year As Per 11Th Five Year Plan
RINL
Labour Productivity Index
Labour Productivity Trend
Average 11478.97 1265.35 9.11 90.078 90.08 0.09
Standard
Deviation
2.91
Source: Compiled from annual reports of the company from 2007-12
Table 5.14: Calculation of chi square value for RINL
Observed
Values
Expected (O-E) (O-E) (O-E)/E
100 90.74 9.26 85.75 0.94
88.93 90.41 -1.48 -2.19 0.02
73.91 90.08 -16.17 -261.45 2.9
89.43 89.75 -0.32 -0.1 0.001
98.12 89.42 8.7 75.69 0.85
Chi Square Value 4.715
Figure 5.12: Labour productivity trend and index in RINL during 11th
five year plan 2007-12
74
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of RINL counted to Rs. 10433.07 crores during
the year of 2007-08, which has decreased to Rs. 10411 crores in 2008-09. The trend
of labour productivity fluctuated during the study period. The employee cost
expanded from Rs.1030.72 crores to Rs.1466.67 crores during the study period. The
productivity ratio was 10.12 in 2007-08 which decreased to 9.00 in 2008-09. The ratio
was highest in 2007-08. The ratio was the lowest in 2009-10. The average ratio was
9.11. Thus the ratio increased in the last two years. The co-efficient of variance shows
17.601 percent and standard deviation also indicated 2.91 percent, so the trend was
fluctuated during the study period. Computed value of chi-square describes 4.17
which less than the critical value of 11.07 therefore null hypotheses is accepted and
alternative hypothesis is rejected. It means that labour productivity indices follow the
trend value.From the above table we can see that labour productivity index fluctuated
than the labour productivity trend during the specified study period it showed steep
decline in 2009-2010 as the employee cost was also increased in the same year.
Further above table showed the input required per Rupees of output was lowest in
0.006 in 2011-12 and the highest of 0.13 in 2009-10.
ANALYSIS OF LABOUR PRODUCTIVITY IN TATA STEEL
Table 5.15: Analysis of labour productivity in TATA Steel
Year AS per
11th five
year plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 22191.43 1589.77 13.95 100 92.19 0.071
2008-2009 26843.53 2305.81 11.64 83.38 89.97 0.085
75
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five year Plan (2007-2012 )
TATA STEEL
Labour Productivity Index
Labour Productivity Trend
2009-2010 26757.6 2361.48 11.33 81.16 87.75 0.088
2010-2011 31901.94 2618.27 12.18 87.25 85.53 0.082
2011-2012 37005.71 3047.26 12.14 86.96 83.31 0.082
Total 144700.21 11922.59 61.25 438.75 438.75 0.410
Average 28940.042 2384.518 12.25 87.75 87.75 0.082
Source: Compiled from annual reports of the company from 2007-12
Table 5.16: Calculation of chi square value for TATA Steel
Observed
Values
Expected (O-E) (O-E)2 (O-E)
2/E
100 92.19 7.81 60.99 0.66
83.38 89.97 -6.59 43.42 0.482
81.16 87.75 -6.59 43.42 0.494
87.25 85.53 1.72 2.95 0.034
86.96 83.31 3.65 13.32 0.159
Chi Square Value 1.833
Figure 5.13: Labour productivity trend and index in TATA Steel during 11th
FYP
76
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of TATA Steel counted to Rs. 22191.43 crores
during the year of 2007-08, which has increased to Rs. 26843.53 crores in 2008-09.
The trend of labour productivity fluctuated during the study period. The employee
cost expanded from Rs.1589.77 crores to Rs 3047.26.crores during the study period.
The productivity ratio was 13.96 in 2007-08 which decreased to 11.64 in 2008-09.
The ratio was Highest in 2007-08. The ratio was the lowest in 2009-10. The average
ratio was 12.25. Thus the ratio decreased in the last two years. The co-efficient of
variance shows 17.601 percent and standard deviation also indicated 5.13 percent, so
the trend was fluctuated during the study period. Computed value of chi-square
describes 1.83 which less than the critical value of 11.07 therefore null hypotheses is
accepted and alternative hypothesis is rejected. It means that labour productivity
indices follow the trend value.
From the above table we can see that labour productivity index fluctuated than the
labour productivity trend during the specified study period it showed steep decline in
2009-2010 even though employee cost was increased in the same year. Further above
table showed the input required per Rupees of output was lowest in 0.07 in 2007-08
and the highest of 0.08 in 2009-10.
ANALYSIS OF LABOUR PRODUCTIVITY IN JSW STEEL
Table 5.17:Analysis of labour productivity in JSW Steel
Year AS per
11th five year
plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 12628.91 273.98 46.09 100 104.3 0.02
77
2008-2009 15,179.29 288.75 52.56 114.06 107.55 0.01
2009-2010 19,456.64 365.2 53.27 115.6 110.79 0.01
2010-2011 25,130.76 534.47 47.01 102.1 114.03 0.02
2011-2012 34,671.85 615.59 56.32 122.2 117.27 0.01
Total 107067.5 2077.99 255.28 553.96 553.94 0.09
Average 21413.49 415.59 51.056 110.79 110.78 0.01
Source: Compiled from annual reports of the company from 2007-12
Table 5.18: Calculation of chi square value for JSW Steel
Observed
Values
Expected (O-E) (O-E)2 (O-E)
2/E
100 104.3 -4.3 18.49 0.17
114.06 107.55 6.51 42.38 0.39
115.6 110.79 4.81 23.13 0.20
102.1 114.03 -11.93 142.32 1.24
122.2 117.27 4.93 24.30 0.20
Chi Square Value 2.23
Source: Compiled from annual reports of the company from 2007-12.
78
Figure 5.14: Labour productivity trend and index in JSW Steel during(2007-12)
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of JSW STEEL counted to Rs. 12628.91 crores
during the year of 2007-08, which has increased to Rs. 15179.29crores in 2008-09.
The trend of labour productivity fluctuated during the study period. The employee
cost expanded from Rs.273.98 crores to Rs.615.59 crores during the study period. The
productivity ratio was 46.1 in 2007-08 which increased to 52.56 in 2008-09. The ratio
was highest in 2011-12. The ratio was the lowest in 2007-08. The average ratio was
51.05 which were greater than the previous years. Thus the ratio decreased in the last
two years. The co-efficient of variance shows 17.601 percent and standard deviation
also indicated 32.56 percent, so the trend was fluctuated during the study period.
Computed value of chi-square describes 2.23 which less than the critical value of
11.07 therefore null hypotheses is accepted and alternative hypothesis is rejected. It
means that labour productivity indices follow the trend value.
0
20
40
60
80
100
120
140
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five Year Plan
JSW STEEL
Labour Productivity Index
Labour Productivity Trend
79
From the above table we can see that labour productivity index fluctuated than the
labour productivity trend during the specified study period it showed steep decline in
2010-2011 as the employee cost was increased in the selected years.
ANALYSIS OF LABOUR PRODUCTIVITY IN JSW ISPAT
Table 5.19:Analysis of labour productivity in JSW Ispat
Year AS per
11th five year
plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 9,478.75 202.6 46.78 100 95.27 0.021
2008-2009 9,181.29 207.6 44.22 94.53 93.97 0.022
2009-2010 11,079.40 273.36 40.53 86.64 92.67 0.024
2010-2011 9,100.50 234.81 38.75 82.85 91.37 0.025
2011-2012 12,123.55 260.86 46.47 99.34 90.07 0.021
Total 50,963.49 1179.23 216.77 463.36 463.35 0.115
Average 10192.7 235.846 43.35 92.672 92.67 0.023
Source: Compiled from annual reports of the company from 2007-12
Table 5.20:Calculation of chi square value for JSW Ispat
Observed
Values
Expected (O-E) (O-E)2 (O-E)
2/E
100 95.27 4.73 22.37 0.23
94.53 93.97 0.56 0.31 0.00
80
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five year Plan (2007-2012)
JSW ISPAT
Labour Productivity Index
Labour Productivity Trend
86.64 92.67 -6.03 36.36 0.39
82.85 91.37 -8.52 72.59 0.79
99.34 90.07 9.27 85.93 0.95
Chi Square Value 2.37
Figure 5.15:Labour productivity trend and index in JSW ispat during 11th
FYP
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of JSW ISPAT counted to Rs. 9478.75 crores
during the year of 2007-08, which has decreased to Rs. 9181.29 crores in 2008-09.
The trend of labour productivity fluctuated during the study period. The employee
cost expanded from Rs.202.6 crores to Rs.273.26 crores during the study period. The
productivity ratio was 46.78 in 2007-08 which decreased to 44.22 in 2008-09. The
ratio was highest in 2007-08 the ratio was the lowest in 2010-11. The average ratio
was 43.35. Thus the ratio decreased in the last two years. The co-efficient of variance
shows 17.601 percent and standard deviation also indicated 27.12 percent, so the
trend was fluctuated during the study period. Computed value of chi-square describes
2.38 which less than the critical value of 11.07 therefore null hypotheses is accepted
81
and alternative hypothesis is rejected. It means that labour productivity indices follow
the trend value.
From the above table we can see that labour productivity index fluctuated than the
labour productivity trend during the specified study period it showed steep decline in
2009-2010 even though the employee cost was also increased in the same year
ANALYSIS OF LABOUR PRODUCTIVITY IN ESSAR STEEL
Table 5.21:Analysis of labour productivity in ESSAR Steel
Year AS per
11th five year
plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 11,910.66 223.2 53.36 100 104.59 0.01
2008-2009 12,703.78 227.81 55.76 104.5 99.19 0.01
2009-2010 11,388.31 215.86 52.75 98.87 93.79 0.01
2010-2011 13,345.85 309.27 43.152 80.86 88.39 0.02
2011-2012 17,561.42 388.51 45.20 84.7 82.99 0.02
Total 66,910.02 1364.65 250.24 468.93 468.95 0.10
Average 13382 272.93 50.04 93.78 93.79 0.02
Source: Compiled from annual reports of the company from 2007-12.
Table 5.22:Calculation of chi square value for ESSAR Steel
Observed
Values
Expected (O-E) (O-E)2 (O-E)
2/E
100 104.59 -4.59 21.06 0.20
104.5 99.19 5.31 28.19 0.28
82
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five Year Plan (2007-2012)
ESSAR STEEL
Labour Productivity index
Labour Productivity Trend
98.87 93.79 5.08 25.80 0.27
80.86 88.39 -7.53 56.70 0.64
84.7 82.99 1.71 2.92 0.03
Chi Square Value 1.43
The above table described that the labour productivity in selected company for the
specified year. It reveals that the Sales of ESSAR STEEL counted to Rs. 11910.66
crores during the year of 2007-08, which has increased to Rs. 12793.78 crores in
2008-09. The trend of labour productivity fluctuated during the study period. The
employee cost expanded from Rs.215.86 crores to Rs.388.51 crores during the study
Figure 5.16: Labour productivity trend and index in ESSAR steel during 11th
FYP
period. The productivity ratio was 53.36 in 2007-08 which increased to 55.76 in 2008-
09 which was highest in the study period. The co-efficient of variance shows 17.601
percent and standard deviation also indicated 31.85 percent, so the trend was
fluctuated during the study period. Computed value of chi-square describes 1.43
which less than the critical value of 11.07 therefore null hypotheses is accepted and
83
alternative hypothesis is rejected. It means that labour productivity indices follow the
trend value.
ANALYSIS OF LABOUR PRODUCTIVITY IN JSPL
Table 5.23:Analysis of labour productivity in JSPL
Year As per 11th
five year plan
Sales Employee
Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 6131.63 132.2 46.38 100 98.98 0.02
2008-2009 8,433.81 181.46 46.47 100.21 93.48 0.02
2009-2010 7,895.58 219.72 35.93 77.47 87.98 0.02
2010-2011 10,460.43 282.65 37.00 79.77 82.48 0.02
2011-2012 14,741.81 385.44 38.24 82.47 76.98 0.02
Total 47663.26 1201.47 204.04 439.92 439.9 0.12
Average 9532.65 240.29 40.80976 87.984 87.98 0.02
Source: Compiled from annual reports of the company from 2007-12
Table 5.24: Calculation of chi square value for JSPL
Observed Values Expected (O-E) (O-E)2 (O-E)
2/E
100 98.98 1.02 1.0404 0.010511
100.21 93.48 6.73 45.2929 0.48452
77.47 87.98 -10.51 110.4601 1.255514
79.77 82.48 -2.71 7.3441 0.089041
84
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five year Plan (2007-2012)
JSPL
Labour Productivity Index
Labour Productivity Trend
82.47 76.98 5.49 30.1401 0.391532
Chi Square Value
2.231117
Figure 5.17: Labour productivity trend and index in JSPL during 11th
FYP
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of SAIL counted to Rs. 6131.63 crores during
the year of 2007-08, which has increased to Rs. 8433.81 crores in 2008-09. The trend
of labour productivity fluctuated during the study period. The employee cost
expanded from Rs.132.2 crores to Rs.385.44 crores during the study period. The
productivity ratio was 46.38 in 2007-08 which increased to 46.47 in 2008-09. The
ratio was highest in 2008-09. The ratio was the lowest in 2009-10. The average ratio
was 40.81. Thus the ratio decreased in the last two years. The co-efficient of variance
shows 17.601 percent and standard deviation also indicated 25.32 percent, so the
trend was fluctuated during the study period. Computed value of chi-square describes
2.23 which less than the critical value of 11.07 therefore null hypotheses is accepted
85
and alternative hypothesis is rejected. It means that labour productivity indices follow
the trend value.
From the above table we can see that labour productivity index fluctuated than the
labour productivity trend during the specified study period it showed steep decline in
2009-2010 even though the employee cost was increased in the same year.
ANALYSIS OF LABOUR PRODUCTIVITY IN BHUSHAN STEEL
Table 5.25:Analysis of labour productivity in BHUSHAN Steel
Year AS per 11th
five year plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivit
y index
Labour
Productivity
Trend
I/0
2007-2008 4672.73 73.87 63.25 100 83.68 0.01
2008-2009 5,409.55 100.86 53.63 84.78 84.29 0.01
2009-2010 6,003.07 140.94 42.59 67.32 84.9 0.02
2010-2011 7,576.28 222.14 34.10 53.9 85.51 0.02
2011-2012 10,792.6
4
143.98 74.95 118.5 86.12 0.01
Total 34454.27 681.79 268.54 424.5 424.5 0.10
Average 6890.85 136.35 53.70 84.9 84.9 0.02
Source: Compiled from annual reports of the company from 2007-12.
86
0
20
40
60
80
100
120
140
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year as per 11th Five year Plan (2007-2012)
BHUSHAN STEEL
Labour Productivity Index
Labour Productivity Trend
Table 5.26: Calculation of chi square value for BHUSHAN Steel
Observed
Values
Expected (O-E) (O-E)2 (O-E)
2/E
100 83.68 16.32 266.34 3.18
84.78 84.29 0.49 0.24 0.00
67.32 84.9 -17.58 309.05 3.64
53.9 85.51 -31.61 999.19 11.68
118.5 86.12 32.38 1048.46 12.17
Chi Square
Value
30.68
Figure 5.18: Labour productivity trend and index in BHUSHAN steel during 11th
FYP
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of BHUSHAN STEEL counted to Rs. 4672.73
crores during the year of 2007-08, which has increased to Rs. 5409.55 crores in 2008-
87
09. The trend of labour productivity fluctuated during the study period. The employee
cost expanded from Rs.73.87 crores to Rs.222.14 crores during the study period. The
productivity ratio was 63.25 in 2007-08 which decreased to 53.63 in 2008-09. The
ratio was highest in 2011-12. The ratio was the lowest in 2010-11. The average ratio
was 53.71. Thus the ratio decreased in the last two years. The co-efficient of variance
shows 17.601 percent and standard deviation also indicated 34.44 percent, so the
trend was fluctuated during the study period. Computed value of chi-square describes
8.77 which less than the critical value of 11.07 therefore null hypotheses is accepted
and alternative hypothesis is rejected. It means that labour productivity indices follow
the trend value.
From the above table we can see that labour productivity index fluctuated than the
labour productivity trend during the specified study period it showed steep decline in
2009-2010 as the employee cost was also decreased in the same year. Further above
table showed the input required per Rupees of output was lowest in 0.12 in 2009-10
and the highest of 0.17 in 2007-08.
ANALYSIS OF LABOUR PRODUCTIVITY IN UTTAM STEEL
Table 5.27:Analysis of labour productivity in UTTAM Steel
Year AS per 11th
five year plan
Sales Employe
e Cost
Labour
Productivity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 3290.58 33.29 98.84 100 97.6 0.01
2008-2009 4553.47 50.09 90.90 91.96 92.81 0.01
2009-2010 4695.46 57.55 81.58 82.55 88.02 0.01
88
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
year as per 11th five year Plan (2007-2012)
UTTAM STEEL
Labour Productivity Index
Labour Productivity Trend
2010-2011 5324.38 61.8 86.15 87.16 83.23 0.01
2011-2012 5475.38 70.62 77.53 78.45 78.44 0.01
Total 23339.2 273.35 435.02 440.12 440.1 0.05
Average 4667.85 54.67 87.00 88.02 88.02 0.01
Source: Compiled from annual reports of the company from 2007-12.
Table 5.28:Calculation of chi square value for UTTAM Steel
Observed
Values
Expected (O-E) (O-E)2 (O-E)
2/E
100 97.6 2.4 5.76 0.05
91.96 92.81 -0.85 0.7225 0.00
82.55 88.02 -5.47 29.9209 0.33
87.16 83.23 3.93 15.4449 0.18
78.45 78.44 0.01 0.0001 1.27E-06
Chi Square Value 0.592304
Figure 5.19: Labour productivity trend and index in UTTAM steel during 11th
FYP
89
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of UTTAM STEEL counted to Rs. 3290.58
crores during the year of 2007-08, which has increased to Rs. 4553.47 crores in 2008-
09. The trend of labour productivity fluctuated during the study period. The employee
cost expanded from Rs.33.29 crores to Rs.70.62 crores during the study period. The
productivity ratio was 98.84 in 2007-08 which decreased to 90.90 in 2008-09. The co-
efficient of variance shows 17.601 percent and standard deviation also indicated 57.98
percent, so the trend was fluctuated during the study period. Computed value of chi-
square describes 0.59 which less than the critical value of 11.07 therefore null
hypotheses is accepted and alternative hypothesis is rejected. It means that labour
productivity indices follow the trend value.From the above table we can see that
labour productivity index fluctuated than the labour productivity trend during the
specified study period it showed steep decline in 2009-2010 as the employee cost was
also increased in the same year.
ANALYSIS OF LABOUR PRODUCTIVITY IN MUKAND LTD
Table 5.29:Analysis of labour productivity in MUKAND Steel
Year AS per 11th
five year plan
Sales
(Crores)
Employee
Cost
(Crores)
Labour
Producti
vity
Labour
Productivity
index
Labour
Productivity
Trend
I/0
2007-2008 2204.79 85.3 25.84748 100 98.34 0.038
2008-2009 2154.94 88.68 24.30018 94.04 93.87 0.041
2009-2010 2128.8 96.25 22.1174 85.56 89.4 0.045
2010-2011 2770.34 125.47 22.0797 85.45 84.93 0.045
90
0
20
40
60
80
100
120
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Lab
ou
r P
rod
uct
ivit
y
Year As Per 11Th Five Year Plan
MUKAND LTD
Labour Productivity Index
Labour Productivity Trend
2011-2012 2790.91 131.85 21.16731 81.92 80.46 0.047
Total 12049.78 527.55 115.5121 446.97 447 0.217
Average 2409.956 105.51 23.10241 89.394 89.4 0.043
Source: Compiled from annual reports of the company from 2007-12.
Table 5.30:Calculation of chi square value for MUKAND Steel
Observed Values Expected (O-E) (O-E)2 (O-E)
2/E
100 98.34 1.66 2.75 0.028
94.04 93.87 0.17 0.02 0.000
85.56 89.4 -3.84 14.74 0.16
85.45 84.93 0.52 0.27 0.003
81.92 80.46 1.46 2.13 0.026
Chi SquareValue 0.22
Figure 5.20: Labour productivity trendand index in MUKAND Steel during 11th
FYP
The above table described that the labour productivity in selected Company for the
specified year. It reveals that the Sales of MUKAND LTD counted to Rs. 2204.79
crores during the year of 2007-08, which has decreased to Rs.2154.94 crores in 2008-
91
09. The trend of labour productivity fluctuated during the study period. The employee
cost expanded from Rs.85.3 crores to Rs.131.85 crores during the study period. The
productivity ratio was 25.84 in 2007-08 which decreased to 24.30 in 2008-09. The
ratio was highest in 2007-08. The ratio was the lowest in 2011-12. The average ratio
was 23.10. Thus the ratio decreased in the last two years. The co-efficient of variance
shows 17.601 percent and standard deviation also indicated 12.80 percent, so the
trend was fluctuated during the study period. Computed value of chi-square describes
0.22 which less than the critical value of 11.07 therefore null hypotheses is accepted
and alternative hypothesis is rejected. It means that labour productivity indices follow
the trend value.
From the above table we can see that labour productivity index fluctuated than the
labour productivity trend during the specified study period it showed steep decline in
2009-2010 as the employee cost was also increased in the same year.
92
ANALYSIS OF REWARDS AND RECOGNITION AND ITS IMPACT ON
LABOUR PRODUCTIVITY
Rewards and recognition
Reward is considered as a thing which is given to employees for their performance
which can be monetary as well as non-monetary and recognition is considered to be
an activity (social or interpersonal) for the performance and for the achievement.
The labour in any organization likes to feel appreciated and honored and one of the
modes of expressing this to labour is rewards and recognition. The labour should be
continuously rewarded and recognized for their good performance by giving praise
and positive feedback which also creates healthy competition and which acts as a
motivator for all the employees in the organization.
In any organization all wage payments are directly or indirectly based on skills and
productivity of the workers therefore labour productivity is considered as most
important factor in productivity computation.in the present research study the
investment in rewards and recognition programmes and labour productivity is
compared and correlated to find significance of rewards and recognition programmes.
Analysis of impact of rewards and recognition on labour productivity in
SAIL
Table 5.31:Impact of rewards and recognition on labour productivity in SAIL
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 336.93 100
2008-2009 473.95 100.69
93
0
20
40
60
80
100
120
140
160
0 100 200 300 400 500 600 700 800
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
SAIL
LP INDEX
2009-2010 522.47 139.45
2010-2011 670.68 107.37
2011-2012 440.63 110.29
Source: Compiled from annual reports of the company from 2007-12.
Figure 5.21: Rewards and recognition spending and labour productivity in
SAIL during 11th
FYP
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 670.68cr in 2010-2011
and it was lowest in 2007-2008 i.e. 336.93 cr. The labour productivity
fluctuated during study period it was highest in 2009-2010 and lowest in 2007-
2008. The correlation of rewards and recognition and labour productivity
which accounted for 0.27.
To find significant correlation t test has been used at 5% level of significance.
94
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
The employee in this particular organization has different socio-cultural
background so their expectations are difficult to identify and satisfy hence
rewards and recognition does not have much impact on labour productivity.
Analysis of impact of rewards and recognition on labour productivity in
VIZAG
Table 5.32:Impact of rewards and recognition on labour productivity in VIZAG
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 129.39 100
2008-2009 209.74 88.93
2009-2010 245.74 73.91
2010-2011 171.49 89.43
2011-2012 100.58 98.12
Source: Compiled from annual reports of the company from 2007-12.
95
0
20
40
60
80
100
120
0 50 100 150 200 250 300
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
VIZAG STEEL
LP INDEX
Figure 5.22:Rewards and recognition spending and labour productivity in
VIZAG Steel during 11th
FYP
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 245.74crin 2009-2010
and it was lowest in 2011-2012 i.e.; 100.58cr. The labour productivity
fluctuated during study period it was highest in 2007-2008 and lowest in 2009-
2010. The correlation of rewards and recognition and labour productivity
which accounted for -0.92
To find significant correlation t test has been used at 5% level of significance.
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
96
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
The rewards and recognition programmes does not matches with requirements
of the employees in this organization and work flexibility and more no. of
leaves attracts their attention more than rewards and recognition. Even though
organizations have earned profits but rewards and recognition does not have
much impact on labour productivity.
Analysis of impact of rewards and recognition on labour productivity in
TATA STEEL
Table 5.33:Impact of rewards and recognition on labour productivity in TATA Steel
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 234 100
2008-2009 252 83.38
2009-2010 331 81.16
2010-2011 239 87.25
2011-2012 101.76 86.96
Source: Compiled from annual reports of the company from 2007-12.
97
0
20
40
60
80
100
120
0 50 100 150 200 250 300 350
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
TATA STEEL
LP INDEX
Figure 5.23: Rewards and recognition spending and labour productivity in
TATA STEEL during 11th FYP.
The above table describes rewards and recognition cost for the particular year
and labour productivity. It reveals that rewards and recognition cost was higher
331cr in 2009-2010 and it was lowest in 2011-2012 i.e. 100.58cr. The labour
productivity fluctuated during study period it was highest in 2007-2008 and
lowest in 2009-2010. The correlation of rewards and recognition and labour
productivity which accounted for -0.25.
To find significant correlation t test has been used at 5% level of significance.
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.The country
faced recession and had major elections during this period which resulted in
unstable political and economic environment as employees experienced
insecurity for their job which affected performance thereby productivity.
98
0
20
40
60
80
100
120
140
0 5 10 15 20
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
JSW STEEL
LP INDEX
Analysis of impact of rewards and recognition on labour productivity in
JSW STEEL
Table 5.34:Impact of rewards and recognition on labour productivity in JSW Steel
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 16.68 100
2008-2009 15.85 114.06
2009-2010 15.05 115.6
2010-2011 9.73 102.1
2011-2012 13.83 122.2
Source: Compiled from annual reports of the company from 2007-12.
Figure 5.24:Rewards and recognition spending and labour productivity in JSW
steel during 11th
FYP
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 16.68 crin 2007-2008
and it was lowest in 2010-2011 i.e. 9.73cr. The labour productivity fluctuated
during study period it was highest in 2009-2010 and lowest in 2007-2008. The
99
correlation of rewards and recognition and labour productivity which
accounted for 0.16.
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
The Rewards and recognition programmes found to be monotonous and
repetitive hence there was no creativity and innovation to attract and influence
employees to perform which ultimately resulted in low labour productivity.
Analysis of impact of rewards and recognition on labour productivity in
JSW ISPAT
Table 5.35:Impact of rewards and recognition on labour productivity in JSW ISPAT
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 28.22 100
2008-2009 27.58 94.53
2009-2010 33.21 86.64
2010-2011 28.03 82.85
2011-2012 29.77 99.34
Source: Compiled from annual reports of the company from 2007-12.
100
0
20
40
60
80
100
120
0 5 10 15 20 25 30 35
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
JSW ISPAT
LP INDEX
Figure 5.25: Rewards and recognition spending and labour productivity in JSW
ISPAT during 11th
FYP.
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 33.21crin 2009-2010
and it was lowest in 2008-2009 i.e. 27.58 cr. The labour productivity fluctuated
during study period it was highest in 2007-2008 and lowest in 2010-2011. The
correlation of rewards and recognition and labour productivity which
accounted for -0.27
To find significant correlation t test has been used at 5% level of significance.
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
101
0
20
40
60
80
100
120
17 17.5 18 18.5 19 19.5 20
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
ESSAR STEEL
LP INDEX
Unhealthy practices and favoritisms has led to partial allotment of rewards and
recognition programmes which resulted in negative message and demotivation
among employees hence affected performance.
Analysis of impact of rewards and recognition on labour productivity in
ESSAR STEEL
Table 5.36:Impact of rewards and recognition on labour productivity in ESSAR Steel
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 17.57 100
2008-2009 18.01 104.5
2009-2010 19.4 98.87
2010-2011 18.59 80.86
2011-2012 19.72 84.7
Source: Compiled from annual reports of company from 2007-12.
Figure 5.26: Rewards and recognition spending and labour
productivityESSAR Steel during 11th
FYP .
102
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 19.72crin 2011-2012
and it was lowest in 2007-2008 i.e. 17.57 cr. The labour productivity fluctuated
during study period it was highest in 2008-2009 and lowest in 2010-2011. The
correlation of rewards and recognition and labour productivity which
accounted for -0.49
To find significant correlation t test has been used at 5% level of significance
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
The Organization has failed to create competitive environment to earn rewards
and recognition and therefore employees has failed to meet the expectations of
the employer as labour productivity found to be low in this organization,
Analysis of impact of rewards and recognition on labour productivity in
JSPL
Table 5.37:Impact of rewards and recognition on labour productivity in JSPL
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 5.34 100
2008-2009 7.09 100.21
2009-2010 6.89 77.47
103
0
20
40
60
80
100
120
0 2 4 6 8 10 12 14 16
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
JSPL
LP INDEX
2010-2011 9.01 79.77
2011-2012 14.88 82.47
Source: Compiled from annual reports of the company from 2007-12.
Figure 5.27: Rewards and recognition spending and labour productivity in
JSPL during 11th
FYP.
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 14.88 crin 2011-2012
and it was lowest in 2007-2008 i.e5.34 cr. The labour productivity fluctuated
during study period it was highest in 2008-2009 and lowest in 2009-2010. The
correlation of rewards and recognition and labour productivity which
accounted for -0.46
To find significant correlation t test has been used at 5% level of significance.
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
104
0
20
40
60
80
100
120
140
0 100 200 300 400 500
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
BHUSHAN STEEL
LP INDEX
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.The rewards and
recognition programmes were not in line with the requirements of the
employees as both monetary and non-monetary schemes have different
weightage in their minds so it has not excited them to perform which affected
performance and ultimately low labour productivity.
Analysis of impact of rewards and recognition on labour productivity in
BHUSHAN STEEL
Table 5.38:Impact of rewards and recognition on labour productivity in BHUSHAN Steel
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 1.8 100
2008-2009 1.9 84.78
2009-2010 2.4 67.32
2010-2011 3.3 53.9
2011-2012 3.9 118.5
Source: Compiled from annual reports of the company from 2007-12.
Figure 5.28: Rewards and recognition spending and labour productivity in
BHUSHAN STEEL during 11th
FYP.
105
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 395.16 in 2011-2012
and it was lowest in 2007-2008 i.e. 5.34 cr. The labour productivity fluctuated
during study period it was highest in 2011-2012 and lowest in 2010-2011. The
correlation of rewards and recognition and labour productivity which
accounted for 0.15.
Analysis of impact of rewards and recognition on labour productivity in
UTTAM STEEL
Table 5.39:Impact of rewards and recognition on labour productivity in UTTAM Steel
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 3.2 100
2008-2009 3.87 91.96
2009-2010 4.47 82.55
2010-2011 5.34 87.16
2011-2012 5.65 78.45
Source: Compiled from annual reports of the company from 2007-12.
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0
20
40
60
80
100
120
0 1 2 3 4 5 6
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
UTTAM STEEL
LP INDEX
Figure 5.29: Rewards and recognition spending and labour productivity.
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 5.65 crin 2011-2012 and
it was lowest in 2007-2008 i.e. 3.2 cr. The labour productivity fluctuated during
study period it was highest in 2007-2008 and lowest in 2011-2012. The
correlation of rewards and recognition and labour productivity which
accounted for -0.87
To find significant correlation t test has been used at 5% level of significance
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
107
The employees in this particular organization are much influenced by
interference of trade union and intermediaries which affected performance
hence rewards and recognition does not have much impact on labour
productivity.
Analysis of impact of rewards and recognition on labour productivity in
MUKAND STEEL
Table3:Impact of rewards and recognition on labour productivity in MUKAND Steel
Year AS per 11th five year plan R&R COST LP INDEX
2007-2008 6.48 100
2008-2009 6.69 94.04
2009-2010 7.56 85.56
2010-2011 9.96 85.45
2011-2012 11.14 81.92
Source: Compiled from annual reports of the company from 2007-12.
108
0
20
40
60
80
100
120
0 2 4 6 8 10 12
Lab
ou
r P
rod
uct
ivit
y
Rewards and recognition cost
MUKAND
LP INDEX
Figure 5.30: Rewards and recognition spending and labour productivity in
MUKAND during 11th
FYP
The above table describes rewards and recognition cost for the particular year
and labour productivity.
It reveals that rewards and recognition cost was higher 11.14 crin 2011-2012
and it was lowest in 2007-2008 i.e6.48 cr. The labour productivity fluctuated
during study period it was highest in 2007-2008 and lowest in 2011-2012. The
correlation of rewards and recognition and labour productivity which
accounted for -0.83
To find significant correlation t test has been used at 5% level of significance
The result shows that the investment in rewards and recognition programmes
has not influenced the motivation and productivity of employees as the
organizations has failed to attract employees to perform through rewards and
recognition schemes which resulted in low labour productivity.
109
The employees in this particular organization has different socio-cultural
background so their expectations are difficult to identify and satisfy hence
rewards and recognition does not have much impact on labour productivity.
110
CHAPTER 6
CONCLUSION
Analysis of Rewards and recognition and labour productivity of Steel Industry in
India of the above companies covered in the present study is fully examined. The
conclusion drawn and suggestions attempted will provide practical guidance to the
management of the companies to promote for improvement of Performance of their
companies and workers for taking decision related to their own regards of interest.
The attempt has been made to analyze trends of labour productivity and to study the
impact of rewards and recognition on labour productivity.
The ultimate objective of every organization is to improve productivity and to
maximize profit which is possible through optimum utilization of the inputs used in
the organization which can be labour, material, Technology, land, energy, Process,
System etc.In the development process of the country steel sector is one of the biggest
source to earn revenue and it is foundation for any development activity which is
needed across India. This highlights the role of steel sector in India.
The organizations effectiveness and efficiency is not only dependent on technological
and non-technological factors but also on the efficiency of labour. The employees are
responsible and involved for all the movements in the organization therefore their
effective utilization and control has to be primary objective of the organization.
There are many challenges that steel Industries are facing currently such as Un –
Remunerative prices , endemic deficiencies , systemic deficiencies, high cost of
capital low labour productivity etc., out of which labour productivity plays very
crucial role and can be targeted and improved through taking some proactive
measures.
111
Labour productivity plays an important role in any organization as employees are
involved from the beginning till the end of any business process activity .if labour
productivity is higher it ultimately boost the overall productivity of the organization.
Labour productivity can be achieved through Rewards and recognition which is
Obligatory for the employers to motivate their employees and provide opportunities
for them for their growth and development.The study has shown that the increase in
revision of rewards and recognition programmes has greater impact on increasing
labour productivity.
Labour productivity is useful to increase overall productivity of any organization,
every employee should give their best performance for which motivation and sense of
belongingness is very necessary which can be created through healthy environment.
Reward and recognition is always considered as crucial element in the organization if
it is not managed properly it can affect productivity of the organization.Policy
recommendations and evolved HR practices are the major tools which provides the
scope for creativity and innovation.
In manufacturing sector productivity is important factor for the success of business.
Enhancement of labour productivity remains single largest challenge among steel
manufacturing companies.Increasing Labour productivity is win win approach for the
development of the organization. As rewards and recognition provides satisfaction to
the employees which also result in minimum interference of trade unions therefore
causes minimum disruption in work process.
112
CHAPTER 7
SUGGESTIONS AND RECOMMENDATIONS
India needs to upgrade its technology to be at par with international market and
improve its productivity .The organizations should focus on increasing productivity
by continuous analysis and observation of changing external environment so that it
can withstand the changes and cope up with it. India has a major scope to expand its
market by improving the production and quality by performing some changes in its
dynamics of labour relations.
It can be achieved through the management which can build sense of responsibility,
achievement, participation among the employees In order to increase employee
productivity in the organizations The employees should undergo necessary training
which is scientifically designed to improve efficiency. The training should be relevant
and made compulsory, Employees need to be motivated to go through the training at
least once in a year by making it a significant factor in their promotion, also necessary
leaves needs to be sanctioned to them for taking up the training . Good infrastructure
needs to be provided for training centers and skilled trainers needs to be appointed.
The management should emphasize on rewards and recognition programmes to
increase labour productivity. Rewards and Recognitions should be innovative and
they should be based on the socio psychological needs of the employees. They should
be treated as matter of pride among employees. The rewards should boost the
motivation level of the employees for the mutual growth.
The management should identify the most effective practices in organization which
helps in increasing labour productivity to utilize it for improving productivity.The
113
organization should revise policies from time to time as per the change in
environment to get the better results .Which will help it to face changes and
challenges. Best HR practices and policy formulations are very effective tools for
executing the reward processes in working environment. Promoting innovative ideas
for rewards and recognition practices should be encouraged in order to increase
productivity. Time management is very crucial so that employee doesn‘t treat the
criteria for achievements as cumbersome process and works on effectively utilizing
the time and performing the tasks at hand more efficiently. The productivity based
incentive should be the same for all the employees.
The organization should conduct audit to find out the effectiveness of the rewards and
recognition programmes in the organization. Effective grievance redressal mechanism
and feedback process is very important for achieving the targets set by organisation.
Emphasis should be given to the organization for effective delegation of authority and
accountability.
Labour productivity in the organization can also be increased by adopting modern
manufacturing processes and by implementing wage policy in the organization.To
improve labour productivity in the organization Industrial engineering and behavioral
science should be studied carefully and scientific management should be incorporated
as well.
Appraisal is extremely important for employees and employers as single point
evaluation process of the working trajectory of the employees. There should be clear
and effective appraisal system differentiating performance and it should be
progressive not regressive. There should be 360 degree feedback provision for the
employees to review the performance appraisal system.The awareness about
114
evaluation criteria and the factors to be considered for the appraisal of the employees
should be clearly communicated to the employees beforehand. Favoritism should be
strictly avoided and it should be based on merit. Therefore the appraisal system
should be transparent and more participative. The appraisal system should have scope
for collecting information on all rewards and recognitions of the employee. And it
should also focus on giving valuable feedback to all employees for them to aspire for
better performance.
The employee participation in the decision making is very crucial.The job should be
assigned to the eligible person, it should be clearly defined, responsibilities should be
well assigned and deadlines should be set tight but realistic.The management should
give employees scope for improvement and growth through succession management,
also their aspirations should always be considered and set.
115
CHAPTER 8
LIMITATIONS OF THE STUDY
While attempting this project to study the correlation between the employee
motivation and rewards and recognition External factors such as financial crisis,
natural disaster, political climate and availability of resources which are also
responsible for labour productivity are not taken in purview. Many external factors
such as Demand fluctuations and competition can also affect labour productivity, In
this study Only cost is taken as input for calculation of labour productivity where as
other aspects like working conditions, motivation , satisfaction level etc. can also
affect labour productivity.
It was also noticed that Lack of access to technology can hamper labour productivity.
Only Rewards and Recognition is considered for correlating with labour productivity
where in other Elements are also related with it like Fluctuation in policies has not
been incorporated in this study.Leadership training needs to be given to supervisors as
they are the motivators for the employees and have close relationship with workers,
also they are primary in monitoring and regulating the work.
In this report the conclusion is based on the data observed in 11th
FYP. The sample
size of the steel companies was kept as 10. Based on the study it‘s clear that good
reward management is not the only way to increase labour productivity, but other
options needs to be explored too.
116
ANNEXURE
BIBLIOGRAPHY
1. Ashok Chanda and Shlipa Kabra, HR Strategy (Architecture for Change),Response
Books, A Dlvision of Sage Publication, Delhi, 2000.
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10. Satyanarayana J, Incentives and Productivity in Public Enterprises,
BombayPopular Prakashan.
117
11. SINHA D.K.: Economics of industrialization in India–productivity
industrialization and economic development‖ Deep and Deep Publications, New
Delhi, 1988,
12.
ARTICLES
1. Anita Kumari, Productivity in Public Sector, Analysis at Industrial Group
Level, Economic and Political Weekly, Nov. 27, 1993. p.M 145.
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Indian Industries, Economic and Political Weekly, July 3 1, 1999. p. M98.
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Experience, Natronal Productivity Council, 1989, p.1 14.
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9. Dr. Vilayakumar A., Factor Productivity in the Indian Public Sector Steel
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PERIODICALS
1. Annual reports of selected companies from 2007-2012.
2. Business India
3. Bombay Stock exchange Official directory
4. Financial express Mumbai and Delhi (India)
5. Indian Journal of public enterprise
6. Manorama year book
WIBLIOGRAPHY:-
http://www.cci.gov.in
www.cptgl.com
http://planningcommission.gov.in
http://steel.nic.in
www.ipcindiansteel.nic.in
www.ibef.org
119
www.indiastat.com
www.pib.nic.in
www.moneycontrol.com
www.bse.com
www.nse.com
NEWSPAPERS:-
1. The Economic Times
2. The Financial Express
3. The Indian Express
4. The Times of India
120
QUESTIONNAIRE
Q1) Should Labour productivity be the primary objective while designing
Rewards and recognition programmes in your organization?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q2) Is the current Rewards and recognition programmes adequate to increase
labour productivity?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q3) Does Rewards and Recognition contributes to evaluation of labour
productivity in the organization?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q4) Does an increase in Rewards and Recognition Spending results in increasing
labour productivity?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
121
Q5) Does increase recognition of creativity and innovation helps to enhance
labour productivity?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q6) Does changing environment leads to change in Rewards and Recognition
schemes?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q7) Does periodic evaluation of Rewards and Recognition programmes helps to
enhance effectiveness of labour productivity?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q8) Does increase in Rewards and Recognition revision helps to increase labour
productivity in your organization?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
Q9) Rewards and recognition comprises of monetary and non-monetary benefits
in increasing labour productivity?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree
122
Q10) Monetary incentives give higher impact than non-monetary incentive in
increasing labour productivity?
A) Strongly Agree B) Agree C) Neutral D) Disagree
E) Strongly Disagree