By Vijay Pereira
11/12/2009
EXECUTIVE SUMMARY
Introduction and objective:
The 21st century has witnessed India undergo sweeping economic changes. Riding on a host of factors, India today stands at the cusp of becoming one of the top four economies in the world. A growth rate of over 8%, prior to the slowdown, was despite the inadequacies of infrastructure. Yet, one organization, which has shouldered the infrastructural burden of the transportation sector in India’s growth story, is Indian Railways (IR). IR’s profits – $5 billion over the last four years - are a far cry from its loss making days, which tempted the Government of India to consider privatization in 2001. The transformational turnaround would not have been possible but for IR’s employees who are its true assets. The objective, therefore, was to understand the ‘people side’ of IR - the world’s largest commercial employer1. The study, while looking to increase awareness of contemporary HR challenges in India, was attempting:
• To study the HR practices in the Indian Railways.
• To compare and contrast HR practices geographically within Indian Railways.
• To investigate changes if any in its HR practices over a period of time and the role of HR in its turnaround strategies
Case study methodology
Indian Railways comprise 16 zones, which include 67 divisions spread across the nation. Additionally, they have several public sector undertakings (PSUs) and production units (PUs) under their control. Since approaching all zones for the purpose of the study would be an administrative inconvenience, it was decided to approach those zones that would represent different geographical areas of India. Accordingly, the following six zones were approached.
Zone Headquarter
Western Railways Mumbai
Central Railways Mumbai
North-Eastern Railways Gorakhpur
North-Central Railways Allahabad
South-Western Railways Bangalore
South-Central Railways Secunderabad
The above six zones include 30 of the 67 divisions under IR. It was also decided to include two PSUs - Konkan Railway Corporation Limited (KRCL) and Mumbai Rail Vikas Corporation (MRVC) - both headquartered in Mumbai- to provide a holistic understanding of IR’s HR practices. It was also decided that the best way to achieve the aims of the study would be to focus on five key HR areas namely:
• Recruitment and Selection
• Training and Development
• Compensation and Benefits
• Employment Relations
• Welfare
62 interviews were conducted, covering the five areas mentioned above. These included interviews with Chief Personnel Officers (CPOs) in the respective zonal headquarters (including the two PSUs), Divisional Personnel Officers (DPOs) in the respective divisions and trade union officials. This data formed the qualitative part of the case study. Questionnaires, both in English and in Hindi, were also administered to the 4086 personnel in these various zones, divisions and PSUs. A response rate of 37.08% was achieved. This formed the quantitative part of the case study.
Key findings of the research study
IR is a self sufficient and self reliant organization
IR is often referred to as a ‘country within a country’ as they have their own schools, hospitals, housing and cooperative banks at the disposal of their employees. They also have their own federal ‘railway budget’ and maintain their own security force known as the Railway Protection Force (RPF).
IR provides an attractive employment proposition
IR’s employees and their dependents avail of free passes and concessional tickets to travel on all routes. Other ‘motivational’ factors that excite people about a career in IR are that it gives its employees the opportunity to maintain a ‘work-life’ balance and a definite ‘career progression’. Even the low remuneration vis-à-vis the private sector is offset via ‘job security’ at all levels.
Recruitment and selection is highly formalized
IR classifies its employees in four groups. The ‘gazetted staff’, comprising classes 1 and 2, are officers selected through a national selection board which is common for all civil services, namely the Union Public Service Commission. Class 3 officers are clerical and supervisory staff, while Class 4 constitute technical and other maintenance staff - both these groups are referred to as ‘non-gazetted staff.’ Selection to Class 3 is also on a national basis, through the Railway Recruitment Board (RRB), which is run by existing railway officials. Class 4 employees are recruited through Railway Selection Boards (RSBs) with assistance of the local employment exchanges. Non-gazetted staff can advance to become Class 2, and in some cases to Class 1, gazetted officers. In the case of the two PSUs, staff were recruited from the existing zones and divisions on ‘deputation’ and had fixed tenures. At all zones and divisions, workforce planning was seen to be important. Interestingly MRVC recruited ex-railway staff that had relevant experience. ,
Training and development is available at all levels
This is of paramount importance to IR as it concerns transportation and hence safety. All new recruits undergo training when they join. Gazetted officers train at seven ‘centralised training institutes’ (CTIs). The training needs of non-gazetted staff are being taken care of by 200 training centres located across IR. These training institutes and centres specialise in various functional training based on the different functions or departments. Railway personnel also receive periodic training in the form of refresher courses or when new methods or technology are introduced. Gazetted officers additionally, undergo management training courses at premier institutes, both in India and abroad.
Pay and conditions: a complex structure
The structure of emoluments and conditions of service of railway employees are reviewed periodically by Government ‘Pay Commissions’. All employees on the regular establishment of the Railways are placed on scales of pay, in which they draw annual increments as a matter of course except on reaching an 'efficiency bar'. ‘Allowances’ are related to the cost of living index (as in the case of inflation linking known as ‘dearness allowance’). Employees are also compensated on account of unusual working hours or special nature of duties (such as night-duty allowance and running allowance) or inhospitable or expensive place of posting (such as bad climate allowance, hill allowance, house rent allowance, city compensatory allowance). Employees on deputation from different zones and divisions working in the PSUs were fixed in higher grades as an incentive.
Employment relations have been successfully managed for decades
Employee representation in IR is in the form of recognised trade unions present in the zones, divisions and PSUs. Employment Relations was generally seen to be congenial amongst the three main actors i.e. staff, management and trade unions, and interestingly was seen to be moving from a ‘pluralist2 perspective’ to a ‘unitarist3 perspective’. As a result, there have been no major reported industrial conflicts since the 1974 historic strike, which attracted worldwide attention.
Other findings
• There were some cultural differences between the North, South and West/Central Railway zones. In the North, the national language was more in use than English. In comparison, South and West/Central zones were more comfortable with English language. To solicit reponse, questionnaires had to be translated in Hindi for the North zone.
• The West/Central zones were also seen to be more technologically advanced –the evidence being West/Central zones are the first to use touch screen kiosks, where employees can check the status of their provident fund, loans, savings balance et al.
• Also the trade unions were more active in the North zone but their presence was uniform in all six zones.
• Recruitment and selection is now more transparent, leaving less scope for corruption and malpractices
• The last two pay commissions have increased the pay levels of all employees substantially. They have also introduced several strategies to attract and retain key talent. Some of them include substantial pay hike, personal development initiatives which include a 2-year study leave and a 2-year child-care leave for female employees.
• More and more emphasis is being placed on quality training both nationally and internationally. Safety is paramount as the accident levels within the Indian Railways is one of the lowest globally. Also, the latest management practices such as benchmarking’ within its workforce management, supply chain management, operations management, logistics management to name a few- are being introduced in the railways.
• There is a growing realization among the three main stakeholders - staff, management and trade unions that their goals are common. Hence, a movement from being pluralist to unitarist.
• They are shedding their image and culture of a typical PSU as the benefits of a global economy are seen to be trickling down. The respondents comprising officers and other staff said they want to be seen as a professional and transparent organization (the RTI-right to information act has now been in force in the Indian Railways) as they are now seen to be on the global stage with the world’s eyes on them.
Reflections and Conclusion
The case-study on HR practices in this very large organization brought to light various challenges. The vastness and spread of IR’s operations, the intricacies and complexities of its working and operations, its unique culture etc were just a few. A great deal of data has been collected so far, but in many ways this is no more than the ‘tip of the iceberg’: the scope for further research is enormous.
Footnotes
1. Indian Railways (IR) has 1.7 million employees (of which 300,000 are casual workers) and 1 million pensioners.
2. ‘Pluralist’ perspective: The general philosophy that an enterprise contains people with a variety of different interests, aims and aspirations.
3 ‘Unitarist’ perspective: The general philosophy that every workplace is an integrated and harmonious entity that exists for a common purpose.
The author is Senior Lecturer and Researcher at the University of Portsmouth Business School, United Kingdom
