A CRITICAL STUDY OF HUMAN RESOURCE DEVELOPMENT

PRACTICES IN DURGAPUR STEEL PLANT

SYNOPSIS SUBMITTED TO THE UNIVERSITY OF BURDWAN FOR THE AWARD

OF DOCTOR OF PHILOSOPHY IN ARTS (BUSINESS ADMINISTRATION)

Submitted by

AMAR KUMAR MISHRA

Supervised by
Dr. PRADYUMNA KUMAR TRIPATHY
ASSISTANT PROFESSOR
DEPARTMENT OF BUSINESS ADMINISTRATION
UNIVERSITY OF BURDWAN

THE UNIVERSITY OF BURDWAN

BURDWAN- 713104
WEST BENGAL
2012

Synopsis:
Human Resources Development (HRD) as a theory is a framework for the expansion of human
capital within an organization through the development of both the organization and the
individual to achieve performance improvement. HRD develops the key competencies that
enable individuals in organizations to perform current and future jobs through planned learning
activities. Groups within organizations use HRD to initiate and manage change. Also, HRD
ensures a match between individual and organizational needs.
Rao and Pareek have defined HRD as HRD in the organizational context is a process by which
the employees of an organization are helped in a continuous planned way, to:
1. Acquire or sharpen capabilities required to perform various functions associated with
their present or expected future roles;
2. Develop their general capabilities as individuals and discover and exploit their own inner
potentials for their own or organizational development purposes, and;
3. Develop an organizational culture in which supervisor-subordinate relationships, team
work and collaboration among sub-units are strong and contribute to the professional well
being, motivation, and pride of employees.

According to Nadler who coined the term HRD is defined as organized learning experiences in
a definite time period to increase the possibility of improving job performance and growth.
McLean and McLean (2001) have offered the following global definition of HRD after
reviewing various definitions across the world Human Resource Development is any process or
activity that, either initially or over the longer term, has the potential to develop adults work
based knowledge, expertise, productivity and satisfaction, whether for personal or group/ team
gain, or for the benefits of an organization, community, nation or ultimately the whole
humanity.

Another popular definition of HRD given by Patricia McLagan of ASTD is HRD is the
integrated use of training and development to improve individual, group and organizational
effectiveness.
HRD, it is obvious, is not a set of mechanisms and techniques but a process. The mechanisms
and techniques such as performance appraisal, counseling, training, potential appraisal, career
planning etc. are used to initiate, facilitate and promote this process.
HRD is needed by any organization that wants to be dynamic and growth-oriented or to succeed
in a fast-changing environment. In the wake of globalization, liberalization and privatization on
economic front, organizations are expected to make objective assessment of existing status of
their HRD system and processes in order to evolve need based pragmatic HRD agenda for the
future. The increasing global level competition forced Indian organizations too to give top
priority to the issues of human resource development (HRD). Currently, HRD system, processes
and practices make significant difference for all those who emerge as winners and who maintain
their position for a long time in the global market. All the relevant processes of change can be
implemented successfully, if the human resource effectiveness is ensured through the HRD
system and processes and if the management practices an appropriate style for managing the
same. It is the need of the hour that all the individuals, groups and teams of an organization have
to give their best and to get the best from one another if the organizations intend to have
competitive edge over their rivals. Organizations, therefore, need to configure their HRD
strategies keeping them well aligned with the overall corporate strategies and for the purpose,
HRD functionaries must develop various subsystems and appropriate climate to facilitate the
competence and commitment development of human resources. Further, management must
facilitate the effective implementation of HRD policies and strategies and must ensure the
effective functioning of various sub-systems at pragmatic level. In the process of HRD,
competence and commitment development of human resources must be focused in relation to
their existing jobs / roles as well as to their likely future jobs / roles with which they will be
expected to engage themselves. Besides these, in the process of HRD, mutual relationships and
team spirit & team work among the people and groups in organization should be emphasized.
Finally, in the process of HRD, designing / re-designing of various sub-systems and maintenance
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and ongoing improvement in organizations overall health & self renewing capabilities should
also be taken care of. In order to facilitate such a process of HRD, various sub-systems need to
be designed / re designed; the related policies / strategies need to be formulated / re-formulated;
and their effective functioning / effective implementation need to be ensured. For all these, not
only the qualified, competent and committed HRD professionals are required but such
professionals need to develop and maintain high concern for HRD cause in the mind set not only
of themselves, but also of line & staff managers, trade union leaders, team leaders & members,
and individuals in organization.

The present research work on A critical Study of Human resource Development Practices in
Durgapur Steel Plant as such has been done with a view to study the nature, extent and
effectiveness of various HRD practices in the Durgapur Steel Plant, measurement of the HRD
climate of the Durgapur Steel Plant which is but the intangible reflection of the effectiveness of
HRD practices in the organization and finding the impact of these practices on the tangible
individual, organizational and financial performance of the Durgapur Steel Plant as stated below:
a) Critical study of different HRD practices being followed in Durgapur Steel Plant.
b) Measurement of HRD climate prevailing in Durgapur Steel Plant which is but the
reflection of effectiveness of HRD practices followed in the plant.
c) Finding the causal relationship with the help of correlation coefficient between various
lost time, labor productivity-production, labor productivity-profit etc.
d) Finding the nature of relation between the independent and dependent variables using
multiple regressions to study the impact of independent variables manpower, training,
labor productivity on dependent variables profit and production.
e) Establishing a model showing linkage between HRD practices, HRD Climate and
outcome.
As such the researcher has envisaged the following simplistic conceptual model to be explored in
holistic way:

HRD Practices HRD Climate

Individual outcome
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Organizational outcome

The entire research work has accordingly been segregated in seven chapters:
Chapter I has covered definition, need and growing importance of Human Resource
Development. It has further laid down the objectives of the research and a conceptual model
based on the objective of the research that the researcher had envisaged. The research design and
research methodology has been described in detail.
The design was selected such that it tracked all the research questions that needed to be
answered. It also facilitated the framework for collecting and analyzing data. The researcher felt
the need to pursue a two pronged approach for the research agenda. The first one was directed
towards a critical descriptive study of the various HRD practices that are being followed in the
Durgapur Steel Plant and measurement of HRD climate based on primary data. The second one
was carried out to find relation between the various independent and dependent variables.
Accordingly the research design involving sampling techniques, questionnaire construction, data
analysis techniques etc were formulated.
The nature of the present research necessitated the need to employ both qualitative and
quantitative research techniques to trace all present issues related to the research. Accordingly
the present research was segregated into two parts- the first part involved critical study of various
HRD practices followed in the plant and measurement of HRD climate prevailing in the
organization and the second one was directed towards finding relation between various
independent and dependent variables. Since the two parts of the research entailed two
approaches, the research methodology was also segregated into two parts.
In the first part survey has been used to find out the extent to which developmental climate exists
in the organization after a detailed and critical study of the various HRD practices.
In the first part two questionnaires were deployed:
The first one was HRD climate questionnaire that consisted of 38 items on five-point scale to
measure 12 dimensions like : positive problem solving, recognition and reward, growth and
development, innovation and change, experimentation, interpersonal openness and risk taking,
top management commitment to HRD, commitment to competence development, personnel
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policies, positive attitude and objectivity, developmental climate, interpersonal helpfulness and
team spirit. Convenience Sampling technique, a form of non-probability sampling was used for
primary data collection. This technique was used to make research process faster and meaningful
by obtaining a large number of completed questionnaires quickly. A list of executives was taken
from the CHRD office. 93 positive responses were obtained out of 124 executives from across
the departments and hierarchy whom the questionnaires were given to. Coefficient of correlation
computed between the 38 items revealed high inter-item coefficient of correlation, indicating
high internal consistency among the items. Further to check the reliability of the questionnaire
Cronbach alpha was computed. The value 0.769 revealed high reliability.
The second was Training Effectiveness Questionnaire to check the effectiveness of training
function at the plant. The instrument consisted of 25 items on five-point scale to measure various
dimensions of training functions effectiveness such as induction programme, training facilities,
trainers effectiveness, training need identification effectiveness etc. Random Sampling
technique, a form of probability sampling was used for primary data collection. A list of
executives was taken from the CHRD office. The questionnaires were given to 47 line managers
and 22 HR personnel. Coefficient of correlation computed between the 25 items revealed high
inter-item coefficient of correlation, indicating high internal consistency among the items.
Further to check the reliability of the questionnaire coefficient of alpha also known as Cronbach
alpha was calculated. Cronbach alpha computed was 0.82 that revealed high reliability.

In the second part data regarding profit, turnover, labor productivity, manpower, lost time were
collected from various secondary sources which include Annual Training Report, Annual Report
of the plant, Directors Report of SAIL, Labor Statistics, earlier research work, books etc. After
the data collection, it was coded in SPSS 16.0 statistical tool. Statistical tools such as Karl
Pearsons coefficient of correlation, coefficient of determination, t test; multiple regressions were
used to find degree and extent of relation between various independent and dependent variables.
Finaly the scope of the research has been included in chapter I that was Durgapur Steel plant.

Chapter II involved literature review. The entire literature review was conducted keeping in
view the specific objective of the study to keep it compact and concise and for this the review
was disseminated in the following categories:

Literature Review of relation between HRD practices and firm performance.

Literature Review of relation between HRD practices and financial performance.

Literature Review of relation between HRD practices and HRD Climate.

Literature Review of relation between HRD Climate and firm performance.

Literature Review of Research with firms across rest of the world.

Literature Review of Research with reference to Indian firms.

An exhaustive review indicated that while a direct relation and exact degree of relation between
the two variables under study (Independent HRD practices and Dependent Organizational
Outcomes) is not so visible, nevertheless the impact is there. 4 levels of outcomes of HR
practices were identified - employee, organizational, financial and market, suggesting that the
impact of HR is likely to work outward through these levels.

Employee outcomes consist of effective affective reactions such as satisfaction and

commitment as well as behavioral reactions such as absenteeism and turnover.

Organizational outcomes focus primarily on operational performance measures such as

quality, productivity and customer satisfaction.

Financial outcomes, such as, accounting profits, represent the next step in their casual
chain.

Market outcomes consist of measures of the market value of firms based on stock price.

The literature review found the importance of moderating variable HRD climate.

Chapter III involves organizational profile. While the recent past has seen a surge by
organizations in the adoption of HRD policies, only a few have adopted and promoted it like a
religion in their premises rather than treating it as a mere tradition. SAIL has been one such
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organization where HRD has been adopted and promoted in true sense. The change in fortune of
the organization has forced organizations world wide to emulate its practices and policies. This
chapter involved a detailed profile of the organization where research had been conducted i.e.
Durgapur Steel Plant after a brief history of Iron and Steel Plants in India and organizational
profile of the parent organization Steel Authority of India Limited. The chapter also contains the
history, success and data regarding manpower, production, productivity and profit of the two
organizations for the last 20 years.

In Chapter IV the various HRD practices that are being practiced in the Durgapur Steel Plant
had been studied to make a critical analysis. The chapter also involved the account of various
HRD practices that are being followed in various nations as well as in major organizations across
the country. This section covered five HRD practices prevalent in the organization: training and
development, performance appraisal, potential appraisal, career planning and promotion policy.
The study of each practice had been followed by a small questionnaire to critically analyze the
extent and effectiveness of these practices.

Chapter V has covered HRD climate- introduction, definition, measurement and analysis &
interpretation of HRD climate in Durgapur Steel plant. The literature review had stressed on the
importance of moderating variable. The researcher had also emphasized the importance of HRD
climate in the conceptual model. As such it was added as a separate chapter. The HRD Climate
was measured using 38 item questionnaire developed by T V Rao and E Abraham. The climate
was segregated in three parts for better understanding: General Climate, HRD mechanisms and
OCTAPAC culture. The researcher had used descriptive statistics mean, standard deviation to
analyze the result. The analysis has lead to the conclusion that excellent HRD climate is
prevailing in the organization. Category wise, it was observed that OCTAPAC culture the
essence of HRD Climate was more prevalent than HRD mechanisms and general HRD climate.
The organization has a pool of professionals which are working for a larger cause and meeting
their professional satisfaction. The organization shows great degree of transparency in decision
7

making and shares information across levels. The management believes in having a participative
approach to decision making. There is enough autonomy to perform ones job. Also the
organization offers enough scope for personal and professional growth. The leadership of the
organization is approachable and is sensitive to the needs of the employees. There is a great
emphasis on capacity building and skill enhancement of the employees. Overall, the
organizational climate is conducive to develop potential and competencies of the employees and
provide opportunities for fulfillment. The positive motivational work culture has ensured
optimum utilization of the capabilities of the team members leading to increased productivity
and organizational effectiveness.

Chapter VI presents the results of the research findings with the interpretation of the same,
outlining the various forms of analysis utilized to find the degree and nature of relationship
between independent variables and dependent variables like training- labour productivity,
training- lost time, labour productivity- production, labour productivity- profit, manpowerproduction etc. A schematic presentation involving the relation between all variables has been
presented in the end. The interpretations have been done- chart wise, graph wise as well as
statistically.
As the years have passed, the impact of Human Resource Development Practices has spread
through out the organization, resulting in higher productivity, turnover and profit. The researcher
found a high degree of correlation between Labor productivity and Profit, Labor productivity and
Production, Training and Labour Productivity. On the other hand, the relation between the
following variables was found to be negative: Labor productivity and Manpower, Manpower and
Profit, Correlation between Manpower and Production, Correlation between Training and Lost
time. Multiple regression models were used to examine the nature of relationship between
dependent variable Profit and other independent variables. The multiple regressions to analyze
the combined effect of training, labor productivity, production and manpower on the profit
strengthened the results found earlier through graphical analyses and correlation between various
variables.

Chapter VII is the concluding chapter where all the findings, conclusions, limitation and scope
for future research have been summarized.
The findings have been segregated objective wise.
Findings Regarding objective Critical study of different HRD practices being followed in
Durgapur Steel Plant

The system has a distinct identity of its own, in the form of Centre for Human resource

Development (CHRD) headed by a senior manager taking care of the implementation

process. The HR department created for this purpose has proper linkages with outside

systems as well as internal subsystems. The system is reviewed periodically so as to find

out the progress and effectiveness of the programme.

The research finds existence of sound, inclusive, proactive, development oriented HRD
practices consisting of well designed and widely shared Training policy and appraisal
mechanisms that coupled with rationalized manpower has ensured consistently
increasing labor productivity (one of the prime objective of HRD policy of DSP) that has
resulted in better financial performance (turnover and profit) and better fulfillment of
plan.

HRD in Durgapur Steel Plant is gaining consistent support from managers working at

various levels. They formulate the HRD policies keeping organizational requirements in

mind and implement these wholeheartedly.

The system has been designed keeping various contextual factors such as size,

technology, skill levels, support for function, in mind. It is focused on developing human

resources at various levels (problem solving capabilities leading to increased employee

productivity) and commitment which is taking the organization forward by anticipating

changes and preparing people for future challenges. It is properly integrated with other

long range functions such as corporate planning, budgeting, etc. Line managers are

actively involved in all the above steps.

The system provides for appropriate feedback from various departments at regular

intervals. It maximizes the quantification of the various aspects of HRD and arrange for

storage of data in computers. Internal experts and external consultants judiciously use to
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offer training to various departments/ persons. Various aspects of HRD have been
introduced in a gradual way, after a thorough review of the organizations size, its needs
and level of sophistication. Each stage has been planned carefully, with subsequent
phases built one over the other
Findings Regarding objective Measurement of HRD climate prevailing in Durgapur Steel
Plant which is but the reflection of effectiveness of HRD practices followed in the plant.

It has been found that excellent HRD climate is prevailing in the organization.
Category wise, it is observed that that OCTAPAC culture the essence of HRD
Climate was more prevalent than HRD mechanisms and general HRD climate.

The organization has a pool of professionals which are working for a larger cause
and meeting their professional satisfaction. The organization shows great degree
of transparency in decision making and shares information across levels. The
management believes in having a participative approach to decision making.
There is enough autonomy to perform ones job. Also the organization offers
enough scope for personal and professional growth. The leadership of the
organization is approachable and is sensitive to the needs of the employees. There
is a great emphasis on capacity building and skill enhancement of the employees.

Overall, the organizational climate is conducive to develop potential and

competencies of the employees and provide opportunities for fulfillment. The
positive motivational work culture has ensured optimum utilization of the
capabilities of the team members leading to increased productivity and
organizational effectiveness.

Findings Regarding objective Finding the causal relationship with the help of correlation
coefficient and finding the nature of relation between the independent and dependent variables

These findings have been strengthened by the statistical analysis. The correlation
coefficients between labor productivity - profit, labor productivity- turnover, traininglabor productivity are found to be highly positive implying strong relation between them
whereas between labor productivity and loss time is negative.
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The multiple regressions have strengthened the result by showing the impact of training,
labour productivity, manpower on organizational outcome profit and production.

Findings Regarding objective Establishing a model showing linkage between HRD practices,
HRD Climate and outcome, the schematic finding is given in the conclusion part.
Finally, the results add to the growing empirical evidence that people are the most important
resource in achieving superior performance as said by Peter Senge As the world becomes more
interconnected and business becomes more complex and dynamic.the organizations that will
truly excel in future will be the organizations that discover how to tap peoples commitment and
capacity to learn at all levels in an organization.

Finally the researcher has come to the following conclusion that that various HRD practices if
applied in it its true sense as a religion rather than mere rituals do impact directly the HRD
climate of the organization concerned. This better HRD climate, in turn, enthuse motivation,
willingness, commitment, belongingness among the Human Resources that coupled with
effective and efficient training and development pedagogy, an unbiased and progressive
performance management system, proactive growth policy, career planning and potential
appraisal improves the ability and skill. The ultimate effect is on the productivity that harbingers
production, profit, reduced labor turnover, reduced loss time, more congruence between plan and
actualization.

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The findings can be schematically presented as below:

Performance

Role clarity

Collaboration

Openness

Trust

Authenticity

Pro activity
Team work

More competent
People

Technological up
gradation

Better Developed
Roles

Rationalized man
power

Better utilization
of Human
Resources

appraisal

Potential

Otherfactors

Employee outcome

HRD climate

HRD practices

development
exercises

Organizatio

Training

Job rotation

Org. output

Career Planning

More teamwork

Positive synergy

Satisfaction

Commitment

Reduced loss of

Autonomy

programs

Org. output
Higher Production
Increased labour
productivity

Financial outcome
Increased Profit

Other factor

216
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Personnel policies

Line Managers
interest

The limitations of the research work had been found to be the following:

The sample unit consists of executives only.

The sample size could have been larger.

Labor turnover is an important indicator of successful HRD that has not been accounted
for in the present study due to the unavailability of data.

Labor productivity depends on many factors besides an effective and efficient HRD
practices such as technological up gradation. Those factors have not been accounted for
in the present study.

The timing of data collection regarding HRD Climate in the organization is very
significant. As such a time-series research would have been better predictor.

The linkage between HRD climate and Employee outcome, as shown in the model
diagram above is moderated by personnel policies as well as other factors that have not
been explored.

Similarly and more gravely, the linkage between employee outcomes and organizational
outcomes, as shown in the model diagram above is moderated by technological up
gradation and rationalized manpower that have not been explored.

The chapter has been concluded mentioning following scopes for future research:

The same type of study may be taken up in other types of organizations such as BHEL,
NALCO, IISCO, HMT etc.

The same type of study may be taken up in other plants of SAIL to have a comparative
analysis of various plants under the umbrella-SAIL.

The study may be extended for non-executive levels not included in this study that
constitute approximately 80 % of the manpower in any organization

The study could be done in longitudinal design.

Though its a different proposition in organizational research, a better sampling

procedure that would come closest to random sampling or stratified sampling and a
considerable large sample size would be highly desirable.

While the present research is qualitative regarding HRD Climate- organizational

performance; a quantitative analysis would be icing on the cake.
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