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PREFACE:
The human resource of an organization constitutes its entire workforce. Human resource
management(HRM) is responsible for selecting and inducting competent people, training them,
facilitating and motivating them to perform at high levels of efficiency, and providing
mechanisms to ensure that they maintain their affiliation with the organization.

Earlier the human resource was not considerd as such an important part of any organization
however today human resource is referred to as human capital by a number of organizations.

In 1997 Infosys was the first Indian organization to actually declare the value of its human
assets.The human resource department of any organization is responsible for ensuring the
satisfaction of its employees.It must be noted that a happy and satisfied employee is a productive
employee.Today almost all organizations try various ways and means to keep their employees
happy,however every organization on will conduct any such activity in keeping with its
organization culture and mission and vision of the organization.

In this small treatise I shall try to profile TATA MOTORS in terms of its mission,vision,culture
and steps it has taken to ensure employee satisfaction.
INTRODUCTION:
Established under the parent company, Tata Group, in 1945, Tata Motors Limited has become
India’s largest automobile company. It was the first Indian automobile company to list on the
New York Stock Exchange. Tata Motors began manufacturing commercial vehicles in 1954 with
a 15-year collaboration agreement with Daimler Benz of Germany. This partnership has led Tata
Motors to not only become India’s largest automobile company but also India’s largest
commercial vehicle manufacturer; the world’s top five manufactures of medium and heavy
trucks and the world’s second largest medium and heavy bus manufacturer. Having just entered
the passenger vehicles market segment in 1991, Tata Motors now ranks second in India’s
passenger vehicle market. Tata has enjoyed the prestige of having developed Tata Ace, India’s
first indigenous light commercial vehicle; Tata Safari, India’s first sports utility vehicle; Tata
Indica, India’s first indigenously manufactured passenger car; and the Nano, the world’s least
expensive car.

CURRENT SITUATION:
The Tata Motors group is a passenger and commercial vehicle manufacturer based in India. The
motor group was established in 1945 as part of the larger Tata Group. They have long been
known for their commercial vehicles and in the past ten years entered into the passenger car
market. Currently, Tata Motors has a line of five passenger vehicles and a large line of
commercial vehicles producing pickups, trucks, tractor trailers, tippers, and buses. Both product
lines of the Tata Motors group have seen success, but much of this has been built upon the more
deeply established commercial vehicle product line.
Tata Motors commercial line has been established for several years in many market segments
such as Europe, Africa, The Middle East, Australia, Southeast Asia, and South Asia. Tata
Motors has expanded their business and market share around the world through a series of
acquisitions. In 2004, they acquired Daewoo commercial vehicle Company in South Korea
which was South Korea’s second largest truck manufacturer. This acquisition gave Tata Motors a
significant presence in the Korean market. They have also entered into joint ventures with
companies such as Thonburi Automotive in 2006, which allowed them to manufacture and
market pickup trucks in Thailand.
Tata Motors have been making global headlines in the auto industry lately; the largest news
being their acquisition of Jaguar and Land Rover from Ford. “Tata paid 2.3 billion dollars to
Ford for the two brands that cost Ford 5.3 billion” (Carty, USA Today). This is a major step for
the company because it catapults them into the luxury car business.
The vision, mission and core values for the two business units of Tata Motors, Passenger Car and
Commercial Vehicle are

(Source:Tata Motors Annual Report 2009)

(Source:Tata Motors Annual Report 2009)
The vision of both the units of Tata Motors clearly states their desire to be world class units in
their own area of expertise.If we look at the mission statement we clearly see a statement saying
“create an organization people enjoy working for”,this single line is enough to reinforce the fact
that Tata Motors considers its employees of supreme value and follows a culture that is very
much employee oriented as in it always is ready to look into the needs of its employees and do
its best for them.No doubt then that today it is one of the most admired organizations and
employees are proud to be associated with Tata Motors.

What then are the various measures that Tata Motors takes to ensure its employees are
satisfied,what facilities does it provide to them to keep them motivated.

Which departments play a key role in formulating these policies and executing them,and the
corporate governance policy are discussed in the next part.

Deploy
Identify, Trai

n/
Develop, Grow, Rotate
S Y S T E M S SY S T EY S T E M S
Labour issues are managed by Employee relations department at each manufacturing location,
which forms a part of the human Resources Department. Within a manufacturing unit, there are
multiple factories and in each factory there is an officer in charge of safety. These officers in turn
identify and train Safety Stewards from amongst the workers. The structure enables the effective
implementation of Poka-Yoke (mistake proofing).
Manpower planning department looks after recruitment, training and performance management
at all levels. Training division at every location is in charge of identifying skill gaps and
designing and organising training programmes for both the blue-collared and the white-collared
workers.The said structure is at every manufacturing location and the Plant Head is in charge for
the unit.Functional Heads function at the corporate level as well and report to the Managing
Director or to the Executive Director.

A. LABOUR PRACTICES AND DECENT WORK

LA 1: Total Workforce by region

The Management team comprises of Executive Grade which represents the senior leadership, the
TM grade which represents Middle Management as well as the various entry points based on
different level of education like graduation, post graduation etc. Operatives refer to workmen
who have requisite technical qualification employed for direct production activities.
LA 2: Total rate of employee turnover
Tata Motors’ Annual Attrition Percentage for various grades is as follows:

LA 3: Benefits provided to full-time employees that are not provided to temporary or

part-time employees
Employee Benefits

(i) Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump sum payment to vested employees at
retirement, death while in employment or on termination of employment of an amount equivalent
to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon
completion of five years of service.The Company makes annual contributions to gratuity fund
established as trust. The Company accounts for the liability for gratuity benefits payable in future
based on an independent actuarial valuation.

(ii) Superannuation
The Company has two superannuation plans, a defined benefit plan and a defined contribution
plan.An eligible employee on April 1, 1996 could elect to be a member of either plan.
Employees who are members of the defined benefit superannuation plan are entitled to benefits
depending on the years of service and salary drawn. The monthly pension benefits after
retirement range from 0.75% to 2% of the annual basic salary for each year of service. The
Company accounts for the liability for superannuation benefits payable in future under the plan
based on an independent actuarial valuation. With effect from April 1, 2003, this plan was
amended and benefits earned by covered employees have been protected as at March 31, 2003.
Employees covered by this plan are prospectively entitled to benefits computed on a basis that
ensures that the annual cost of providing the pension benefits would not exceed 15% of salary.
The Company maintains a separate irrevocable trust for employees covered and entitled to
benefits. The Company contributes up to 15% of the eligible employees’ salary to the trust every
year. The Company recognizes such contributions as an expense when incurred. The Company
has no further obligation beyond this contribution.

(iii) Bhavishya Kalyan Yojana (BKY):

BKY is an unfunded defined benefit plan. The benefits of the plan accrue to an eligible employee
at the time of death or permanent disablement, while in service,either as a result of an injury or
as certified by the Company’s Medical Board. The monthly payment to dependents of the
deceased / disabled employee under the plan equals 50% of the salary drawn at the time of death
or accident or a specified amount, whichever is higher. The Company accounts for the liability
for BKY benefits payable in future based on an independent actuarial valuation.

(iv) Post-retirement Medicare Scheme:

Under this scheme, employees get medical benefits subject to certain limits of amount, periods
after retirement and types of benefits, depending on their grade and location at the time of
retirement.Employees separated from the Company as part of Early Separation Scheme, on
medical grounds or due to permanent disablement are also covered under the scheme. The
liability for post-retirement medical scheme is based on an independent actuarial valuation.

(v) Provident Fund:

The eligible employees of the Company are entitled to receive benefits under the provident fund,
a defined contribution plan, in which both employees and the Company make monthly
contributions at a specified percentage of the covered employees’ salary (currently 12% of
employees’ salary). The contributions as specified under the law are paid to the provident fund
and pension fund set up as irrevocable trust by the Company or to respective Regional Provident
Fund Commissioner and the Central Provident Fund under the State Pension scheme. The
Company is generally liable for annual contributions and any shortfall in the fund assets based
on the government specified minimum rates of return or pension and recognises such
contributions and shortfall, if any, as an expense in the year incurred.

(vi) Compensated absences:

The Company provides for the encashment of leave or leave with pay subject to certain rules.
The employees are entitled to accumulate leave subject to certain limits, for future encashment.
The liability is provided based on the number of days of unutilised leave at each balance sheet
date on the basis of an independent actuarial valuation.Some other benefits advanced to the
permanent employees are:
• Allowances like Transport allowance, Education allowance, Sanitation allowance, Leave
travel allowance etc
• Annual Performance linked Payment
• Free Medical facility for family
• Company loans & advances

LA 4: Percentage of employees covered by collective bargaining agreement

Tata Motors has internal unions at its manufacturing units at Pune, Jamshedpur and Lucknow,
which enjoy majority with upto 98%-99% membership. These unions form representative bodies
of the workmen and negotiate with the management and settlements signed with these unions
respectively cover all permanent workmen present. At Uttarakhand, which is our new
manufacturing unit location,compensation of the operatives is decided on the basis of industry
and region parity and in consultation with Works Committee formed from time to time.

LA 5: Minimum notice period(s) regarding operational changes, including whether it

is specified in collective agreements
For Notice period regarding operational we follow the procedures mentioned in the Industrial
Disputes
Act (21 days). This Act was passed by the Central Government of India to make provisions for
investigation and settlement of industrial disputes and came into existence in April 1947.

LA 6: Formal Joint Management-Worker Health and Safety Committees

Tata Motors has a Safety Health and Environment (SHE) policy, which encompasses all
regulatory norms along with International Labour Organisation recommendations. Tata Motors
has a process for reporting, recording, analysis and action on accidents and unsafe conditions.
The safety issues are addressed through a bipartite (management and union) arrangement as
depicted in the table here below.
Table 1: Various Health and Safety committees at plant location

These committees thus cover 100% of the workforce.

LA 7: Injury, accidents, work-related fatalities:

The practices are in line with the International Labour Organisation (ILO) “Model code of Safety
Regulations for Industrial establishment for the guidance of Government and Industry”. The
decision taken by the Governing body of the ILO conference held in 1948, the model code is not
an instrument involving any binding obligations, and Government and industries are free to make
such use of it as they see fit in framing or in reviewing their own safety regulations. The above
guidelines are,however, incorporated in the Factories Act 1948 and the Company strictly follows
the rules and accordingly the accident reporting or notice of accident or dangerous occurrence is
recorded and communicated to the concerned authorities (CIF) in FORM No. 17A.

LA 8: Risk-control programmes in place to assist w orkforce members, their families

or community members regarding serious diseases:
Tata Motors provides curative and preventive health services to the employees, their families as
well as the community at large. It views its initiatives as a part of its social responsibility and as
an investment in improving social capital. Of these initiatives, some have been highlighted in the
following paragraphs. The Company has a robust Medical Scheme which covers complete health
care of employees and their dependent family members.
Tata Motors is committed to take initiatives to combat the spread of HIV/AIDS. Tata Motors is
aware of the social stigma that accompanies the contraction of HIV / AIDS and thus as a
conscious decision,the Company does not make any discrimination, right from employment to
retirement of employees.
• During pre-employment medical check-up, no HIV testing is done
• Employees having HIV /AIDS are allowed to work in the Factory until they are able to
continue normal duty.
• Company’s Medical Benefit Scheme extends its’ benefits (reimbursement of medical
expenses) to employees who are suffering from HIV / AIDS. These benefits are at par
with any other medical benefits (It is not under exclusion as most of Insurance
Companies are having)
• Total confidentiality is maintained about HIV +ve status of any employee
Tata Motors sta rted its AIDS awareness programme with the primary aim to cover all
employees and to make them aware about the causes, symptoms, myths and
prevention of HIV/AIDS. Company doctors designed a 30 minutes lecture module and
delive red it to all employees on the shop floor, followed by distribution of informative
bookl e t o n A IDS. A l l e xpenses for the d e si gn i n g an d implementation of the programme
were b o rne b y the Company.
In addition, Tata Motors supports a hospital in Jharkhand state and also runs Mobile Health
Clinics in various villages adopted by the Company in Jamshedpur, Lucknow and Pune.
Awareness programmes are extensively organised on various health issues for the community
members. The curative and preventive health services were provided to over 92390 non-
employee patients in 2007-2008.

Photo: Jamshedpur Hospital

Tata Motor s has also treated 8,000 leprosy patients in last two decades through the Nav Jagrat
Manav Samaj (NJMS) in Jamshedpur, Jhar khand. The ser vices extended have contributed
towards the reduction of leprosy prevalence rate in Jamshedpur down from 22/1000 to 2.2/1000.
Photo: Mr . Jowahar Ram Paswan, a beneficiary of the NJMS programme and now a full-time
volunteer with NJMS, with a patient at the ashram
Rehabilitation work for leprosy-affected people is carried out by the Nav Jagrat Manav Samaj in
Jamshedpur. 8 ashrams situated around the city of Jamshedpur, which are self-settled colonies of
people affected by leprosy, are supported with medical and institutional help for making their
lives comfortable and humane. More than 400 children of cured leprosy patients have been
helped into the formal stream of education. Also promoted are savings in banks by these people
and adoption of small business/vocations like rearing of livestock, poultry, cycle-rickshaw, cart
and even growing vegetables and selling them. A temporary hospitalization facility with 28 beds
is available for the treatment of seriously afflicted patients of leprosy. A 30-bedded Old Age
Home run by NJMS caters to the old and destitute.

LA 9: Health and Safety topics covered

Safety has been a concern for Tata Motors and the Company is taking steps to reduce the injuries
and accidents. All Tata Motors manufacturing units, including the new manufacturing unit at
Uttarakhand are certified under Occupational Health and Safety Standards 18801 (OHSAS
18001,2007 version). OHSAS 18001 is an Occupation Health and Safety Assessment Series for
health and safety management systems. It is intended to help an organization to control
occupational health and safety risks. It was developed by the Government of India in response to
widespread demand for a recognized standard against which to be certified and assessed.
In addition, Tata Motors manufacturing unit at Pune has been certified Social Accountability
8000 compliant. Clause No. 3 of the SA 8000 pertains to occupational health and safety. A Zero
Accident Plan was launched in 2007-08, wherein area ownership was developed by teams
comprising of management and supervisory grade workers called Bay Owners. The Bay Owners
met twice a week and conducted cross audits and organised awareness building programmes.

LA 10: Employees receiving regular performance and career development reviews

All employees are evaluated based on performance and merit. The Company has customized the
PMS for the requirements of different categories of employees-managerial, supervisors and
bargainable employees. In the PMS system, Individual performance plans are cascaded from the
Balance Score Card down to the smallest work unit, bringing business and customer focus to all
levels and teams. Monthly and mid-course half yearly reviews are held to ensure resources;
targets and training are in alignment with business needs. Employees have an opportunity to
develop their own view of their performance and discuss it with their supervisor. Formal
evaluation ratings are assigned at the end of the year. PMS instills a high performance culture in
the organisation.Competencies of successful executives are used as input to project the ‘Pen
portrait’ of the ideal incumbent. To track the state of readiness and migration paths, the
succession planning process includes colour coding for potential successors. This helps in
arriving at the best fit.The process is reviewed periodically for status of successors and for
process improvements. In case a successor is not identified from the Department and Talent
Pool, an internal advertisement is released. If the position cannot be filled internally, a suitable
candidate is selected through External Advertisement.All employees have the opportunity to
advance their careers. The Company administers career progression through the PMS system for
managerial employees. All employees have the opportunity of moving to higher levels. This is
based on their personal preparation and desire to move, windows of opportunity and a fair
selection process.

B. HUMAN RIGHTS
The Ethics team at Tata Motors is in charge of the human rights aspects in the Company. The
structure of the Ethics Department is given below.
HR 1: Human Rights Screening for Suppliers and Contractors
Tata Motors Limited has Supplier and Dealer assessment process to take care of issues related to
social aspects before inducting them in organisation. All legal and regulatory requirements need
to be fulfilled before final selection into the Tata Motors fold. The company periodically audits
the job contractors for adherence to labour laws and other statutory requirement like minimum
wages, PF,payment of gratuity etc. thereby ensuring prevention of violation of Human rights and
employment malpractices.
HR 3: Employee training on Policy and Procedures concerning Human Rights
Tata Motors adheres to the Tata Code of Conduct in its business. Tata Code of Conduct has
covered all the Human Rights principles proclaimed in Universal Declaration of Human Rights.
However, to strengthen and support internationally proclaimed Human Rights within the
business of the Company,it was decided to design exclusive policies on various aspects of
Human Rights.The Policy on Human Rights is as under:
“Tata Motors believes in and respects Human Rights as enunciated by the International Labour
Organisation.
Tata Motors is committed to protect the Human Rights of its employees while dealing with them
in all the activities falling under the relationship of ‘Employer’ and ‘Employee’.Decision to seek
employment rests with the individual only, and it is completely voluntary. Tata Motors does not
and will not allow or encourage Compulsory or Forced Labour in any of its processes and
practices.Tata Motors respects the right of its eligible employees to organise for the purpose of
Collective Bargaining as well as their right to support or oppose the labour union recognised by
Tata Motors.Tata Motors respects the definition of Child Labour as mentioned in the guidelines
of International Labour Organisation. Tata Motors will not engage any person under the age of
18 years (legal age of employment) for any operations or services (as presented in law) unless it
is part of government approved job training or apprenticeship programme.Tata Motors honours
the right of its employees to choose and decide the extent of their involvement in Political
Activities in their Personal Time.Tata Motors expects its Channel Partners and Contractors to
adhere to business principles consistent with its own.” Each new joinee receives a copy of the
TCoC. Furthermore, Excerpts from the Code is prominently displayed at all locations and
employees are well aware of its components and adhere to it in letter as well as in spirit.
All these clearly show that Tata Motors treats its employees with great importance and ensures
that they do not face any hindrances at work or otherwise.The various social initiatives taken up
by Tata Motors reveals that human resource is of utmost importance to them.It is obvious that an
organization which follows do many good labour practices enjoys the confidence of its
employees.The culture at Tata Motors is at par with any organisation under the Tata group.
Since Tata Motors is a part of a large conglomerate company it needs to have a strong corporate
governance to ensure that its employees act ethically and the business continues to run smoothly
especially during the ever changing and dynamic global economy. “Tata Group’s corporate
governance is founded upon a rich legacy of fair, ethical, and transparent governance practices”
(tatacarsworldwide.com). One of the more important parts of this is the transparency of the
company people have a right to know what the company is doing not only to ensure ethical
practices, but for the insurance of their many shareholders whom have a right to know the inner
workings of the company.
Tata has created some models for employees to guide themselves through everyday business
practices to ensure that the corporate governance is continuously being upheld. The Tata
business excellence model is upheld by Tata quality management services. Quality management
is an in-house group dedicated to helping the various Tata companies achieve their business
objectives through specific processes. The two main processes that the quality management
services employees focus on are business excellence and business ethics. These two objectives
have helped build Tata into the strong, dynamic company it is today. These models are
entrenched in the company’s ethnical standards and Tata feels strongly about enforcing both
throughout the company. “Tata quality management services plays the role of supporter and
facilitator in the journey that Tata enterprises undertake to reach the peaks of business eminence
while, at the same time, adhering to the highest ethical standards” (Tata.com).

According to the Tata lexicon, good governance has to stretch way beyond staying on the right
side of the law — and it has to come from faith rather than force. “Yes, we have a code of
conduct, but ethical behaviour cannot be enforced by diktats and through written documents,”
says Kishore Chaukar, GCC member and chairman of Tata Industries. “You have the Bible, the
Bhagwad Gita, the Koran; they all tell you how to behave. Doesn’t help. The Indian Penal Code
is clear about what constitutes criminal behaviour, but that hasn’t stopped the rapes and the
murders, the felonies and the burglaries.An implicit sense of ethical business conduct has been
the cornerstone of the Tata way of corporate governance. Rules and regulations certainly have a
place in this scheme, but they supplement rather than supplant the traditional values on which the
group has been shaped. Good governance has taken root in and spread to all branches of the Tata
Group. There’s nothing amorphous about that.

To sum up Tata Motors is one of the most ethical and employee oriented organizations today.It is
an organization which prides itself in its employees.The employees on the other hand are also
very proud and possessive about Tata Motors.