Scarcity of resources and debt burden accompanied with dry spells of monsoon force people from these areas to migrate to nearby districts. Over 90% of sugarcane cutters belong to OBC, SC and ST categories. The remaining 10% consist of higher castes and Muslims. These laborers come through contractors/ agents, popularly known as Mukadams appointed by the factory management system.
Owns and operates medical vans in rural India through its various charitable trusts.
HR practices in sugar industries
HR Practices in Sugar IndustriesBy,JDBIMS
Industry Profile• Sugar Industry – Agro based Industry• Sugarcane – Basic Raw Material – Industry is located in and around Sugarcane Producing regions• Industry – Initiated on Cooperative Sector Model – Paravara, Maharashtra• Today – Private, Public and Cooperative• Highly Regulated – Politically Sensitive Product – Price regulation in both input and output
Industry Profile• India - Second Largest Producer of Sugar in World – Approx 651 sugar factories(62 – PSU, 269 – Pvt, 320 – cooperative) – Annual Turnover of Rs 500 Billion – Contributes Tax of Rs 22.5 Billion• Main Product – Sugar – By Product – Mollasses, Baggases• States with Sugar Industry – Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu, Andhra Pradesh• 7.5% of Rural Population – Laborers and 50 million Sugarcane farmers• Top Players – Renuka Sugars, Gem Sugars, Bajaj Hindustan, Dwarikesh, Laxmi Sugars, KM Sugars
Industry Profile• Sugarcane-crushing season is operational from November to April/May migrate to the lush sugarcane belt.• Contractors/Agents bring labourers in toils or groups. Each toil consists of 30 to 100 labourers.• Factory management makes advance payments to these agents, who in turn give advances to the labourers. Agents get a commission from the wages of the labourers (approx 15%).• A typical migrant household usually earns between Rs. 15,000-25,000 in the migration period ( six months) and cuts 1.5 to 2.5 tons of sugarcane a day.• At their native village they do agriculture, labour work, and participate in various drought relief schemes. They avail of the facilities of the Public Distribution System as they all have ration cards. When they migrate, they bring with them bulls, buffaloes, goats, vessels, wood, clothes, grains and some necessary household articles.• The Labourers are not covered by any insurance scheme.• Last year, two women met with accidents while walking alongside the tyre gadi. They sustained serious injuries and the sugar factory bore their medical expenses. Of course the resulting loss of employment has to be borne by the family.
Organizational Structure• Earlier a Centralized Authoritative Style of Administration followed• Top Players follow the McKinsey’s 7s Model. – Strategy, Structure, System, Style, Staff, Skills and Shared Values – 3 Hard’s S and 4 Soft S elements• With entry of Private Sector it is professionally managed.• Strategy – Employees with Positive Strategic Plans are encouraged.
Organizational Structure• Departmentation - basis of functions – Dividing large Functional Organization on the basis of small and flexible administrative units.• Various Departments are :• Production, Purchase, Stores, Administrative, Finance, Accounts, Sales, Engineering, Cane, Power, Distillery.
Administrative Department• Admin Office controls and monitors activities of timeoffice, security personnel and personnel dept.
Personnel Department• Recruitment and Selection – Statutory Obligation - Advertisement of Recruitment is made through leading news papers – Appoints trainee through Applications received – Unskilled, Semi Skilled, Skilled Workers – Fulltime and Contract Labourers – Seasonal Production• Equal-Opportunities Employment• Recruitment at Gate• Sugar Industry being a seasonal industry has different staff (non-management cadre) strength during season and off- season. Private company, which is not over-staffed in spite of political pressures and other constraints.
Skillset of Employees• Semi/Unskilled and Skilled• Technical, Clerical, Managerial• Sales Executives are mainly from Bcom, BBM and MBA• Technical generally are Diploma, ITI, Engineers• Engineers mainly are – Chemical, Mechanical, Production and Electrical• Unskilled – Labourers are mostly seasonal and are on contract basis
Training and Development• Training Programs and Management Development Programs are conducted to educate the employees and to enable them to discharge their duties with panache and aplomb.• Imparting Skills to new recruits – Necessary in Production, Mechanical and electrical – On the Job Training in most of plants – Training is provided to all level of employees on specific tasks related to jobs and also on various other broad aspects – Vasantdada Sugar Institute, Indian Institute of Sugar – Up gradation and Post Graduation – Need Based training – In Compliance with ISO9001/14000 – In house trainings of Operation, Maintenance, Instrumentation, Electrical, Finance and IT throughout the year – Executives - Awareness Programs on Internal Quality Auditor training ISO 9001(QMS), ISO 14001 (EMS) – Shop floor training is imparted to workers to hone their skills – Workshops are conducted for the benefit of employees to educate them on preventive maintenance. – Services of experts are summoned to help educate the workers. – Employees are continuously guided about industrial safety and safe industrial practice
Compensation and Wages• Wages - On the basis of hours worked, tonnes, piece rate – Minimum piece rates are fixed by the authorities. However individual factories can give more if they wish. – Piece rates differ according to categories of labourers. – Head load carriers normally get Rs. 66/- per ton and those with their own transport get Rs. 74/- per ton. Those who have bullocks but no cart, hire a tyre gadi from the factory for Rs. 10 per day.• Salary to Management Personnel as per industry standards – Shifts – 8 hrs, 3 shifts a day – Fringe Benefits: • Canteen, Transportation, Housing, Electricity, Exgratia, Health Card, Workmen Compensation Policy – Salary details of various designations – payment dates and payments made are recorded and also incentives are maintained – Software Systems like SAP are used in top firms.• Current Scenario – Shortage of Labour – Wage hike – 15% hike in UP to as high as 43.35% in Punjab, Maharashtra, Karnataka, TN – 36, 35, 22
Compensation of ChairmanCompensation – ChairmanSalary : Rs. 2,00,000/- per month or suchPerquisites : Classified under the category A, B & C as follows:Category Aa. Medical Expenditureb. Leave Travel assistancec. Personal accident InsuranceCategory Bd. Company’s Contribution towards Provident Funde. Company’s Contribution towards pension/superannuationf. GratuityEncashment of LeaveCategory Ch. Leavei. Travellingj. Telephonek. Other Perquisites
Time Office• Scheduling of workers working shift time• Keeping Attendance Records for Payment purposes• For Increment and Promotion• Punching Machine is used to record attendance of the employees• Modern techniques of Biometrics are also implemented
Time Office• General Office Time – 8.30 am to 5.30 pm• Lunch – 1 am – 2 pm• 4 Leave in a month• Weekly 1 Leave• Holidays – All Govt Holidays• Workers work in 3 shifts – 6 am - 2 pm – 2 pm – 10 pm – 10 pm -6 am
Security• Check on in – out movement of people• Record of material, repair material in thefactory• Protect factory from theft
Staff Activities• Line and Staff Organizational Structure• MD is responsible for QMS and Overall Growth• Plant Heads – look after day to day activities• Span control of 10 – 20 members in particular section• Values : Integrity, Honesty, Commitment, Teamwork, Leadership, Passion for Excellence• Rewards and Recognizes Standard
Administrative Style• Combination of Authoritative, Democratic, Participative Leadership is used• Major Decisions are taken by Top Management – Partly Centralized and Partly Decentralized• Regular meetings and updates are sent across – Vertical Communication is strongly prevalent.• In private sector policies are made on the basis of suggestions and feedback from employees.• Each Department has the power and responsibility to make decisions• Internal Control Procedure Manual to ensure proper procedures are followed by all departments.• Unions are common in sugar industry. All companies try and work around so as not to face strikes and protests. – Strike to increase salary by 20 – 40% – Strike for payment of contract labourers – pending wages and interim wage rise – Protest in case of changes – new machines or automation of plants – Frequent Sympathy strikes• Cordial and friendly Industrial Relations with employees and the Unions. – HR department of the company plays a vital role in crafting and implementing people oriented industrial practices across the organization for establishing a healthier value based relationship between employees and the organization.
Promotion and Career Growth• Continuous Inspection of every worker to assess their performances• Better scope for hard workers• Promotion is based on Qualification, length of time worked and experience• Indian Sugar Industry has so far treated the human resource as an adjunct to industrial relation and worker welfare matrix.• Pvt Players focused on the development of human resources and pooling of intellectual capital to attain increased productivity.
Technology Development• Admin department are mostly computerized. Other departments still run by Manual basis• Communication is through telephone and internet• Factory machines are more or less old• Due to shortage of labour – cutting and crushing are being mechanized and automated
Quality Management• Total Productivity Management to reduce the breakdowns of the machines.• Company has implemented the 5S concept of Sorting, Systematizing, Sanitation, Standardization and Self – discipline, – which makes the work place, i.e. the plant a better place to work, thereby improving operational efficiency.• Implementation of KAIZEN (improvement). – it calls for never-ending efforts for improvement – involving everyone in the organization - managers and workers alike.
Quality Management• Awards like ISO 9001:2000 certification for Quality Management System pertaining to manufacture and supply of ‘Plantation – White Sugar’ from International Certification Services (ICS) accredited by Joint Accredition System of Australia and New Zealand.
Performance Management• Aims at – Giving a sense of direction and challenge to the individual and their team through role clarity – Helping different functions and departments to go beyond targets and benchmarks and take quantum jumps – Creating a supportive and empowering culture in the organization – Providing information for annual increments-incentives, promotions, job-rotation, identifying training needs etc. – Identify talent for succession planning – Identifying employees with long term growth potential – Identifying employees performing below expectation and what inputs are required to improve their performance – To ensuring growth of employees for organizational perpetuity• Creating of Total Quality Environment through enhancing the commitment of people in terms of productivity, quality, technology, structure and systems• Mechanism is two - fold. – 360 degree performance feedback is provided to each employee by his supervisors, peers, subordinates, internal and external customers on his attitude towards work, planning/work management, controlling and coordinating, team work and collaboration, supervisory and leadership behavior, change management, strength, weakness, opportunity and threats. – It provides insights into the strong and weak areas of the employee in terms of effective performance of roles, activities, styles, traits, qualities, competencies, knowledge, attitude and skills, impact on others and the like.• Supervisors, peers, subordinates, internal and external customers of each employee evaluate the achievement level of targets associated with predetermined and mutually agreed upon Key Result Areas. Targets and Key Result Areas are dynamic and are modified each year in response to the organizational challenges. A weightage is attached to each Key Result Area accordingly. This evaluation leads to rating of the employees which has several linkages.
Labour Welfare Activities• Employees are encouraged to participate in management and a suggestion scheme is in operation, which enables the employees to frankly and fearlessly put-forth their suggestions for overall improvement of the performance.• Strengths and weaknesses of each employee are critically evaluated to ensure that the right peg is in right hole.• Career planning and job enrichment of each employee is an ongoing• Series of measures aimed at providing comfortable housing and other amenities to the employees.• Incentive based technique for Motivation• Employee Counseling• Family – Employee and Family Support• Vocational Career Guidance• Investment and Insurance Guidance• Post retirement guidance
Labour Welfare Activities• Conducting on an annual basis, a sport meet to spot and encourage local talent and then sponsor the deserving sports-person for bigger events.• Provides for employees clean, safe and healthy environment inside & outside the operational areas of its businesses. – To ensure this the factories have delineated strict norms on industrial safety. – Operational space of entire infrastructure have been intuitively designed and maintained for smooth and safe conduct of business affairs.• Regulations concerning the preservation of environment in the areas where it has constituted its production facilities. – Commitment to prevent any excess or negligent use of natural resources. – Strives to minimize hazardous secretions in production and disposal of waste/production excesses that can harm the environment.• Compliance with all relevant laws and regulations of the state. – In addition to that it has pro actively assumed the role of a socially responsible business by extending its assistance to people in its surrounding regions.
Labour Welfare Activity• Respect for people: – Organizational culture of the company is centered on creating an amicable work environment based on mutual respect and friendly behavior free from favor or bias. – Strict rules against any form of intolerance, harassment or discrimination.• Work / Life balance – Believes that employees must have a balanced professional and personal life. – Respects personal space and time the organization also expects from its employees a firm commitment to their roles and responsibilities within the organization.• Social welfare and development initiatives of the company are aimed at: – Supporting those in dire need and in turn provide them the required assistance to enhance their quality of life, both economically and socially. – Contributing extensively in the fields of community health, family welfare, water management, education and literacy, development of rural roads and in the application of modern scientific and managerial techniques for nurturing agriculture and uplifting the farming community.
Labour Welfare Activity• Established several healthcare centres and hospitals in the vicinity of its factories – Conducts regular health check-up camps – ranging from eye camps to general check-ups – – Distributes free medicines at each of its factory sites for poorer sections of society• Establish schools and colleges at various factories owned and operated providing• educational facilities to the poor in rural• Besides, it conducts vocational training, stitching and embroidery classes.• Schools also provides clothes, free stationery and snacks, organises annual picnics and celebrates the country’s Independence Day, Republic Day and Children’s Day.• Farmer relationship - Harmonious farmer relationships through timely raw material payments and training in agricultural techniques leading to enhanced sugarcane yield and prudent cane variety selection according to varying soil conditions.• The companies also provide high-yielding seeds and quality fertilisers at subsidised costs.
SWOT ANALYSIS of Sugar Industry Strength Weakness India second largest producer Shortage of labour Employee opportunities Currently in lossesSugarcane production far more Highly regulated industry profitable than cash crop Labour input highly unutilized Rural development Lack of professionalism Multiple streams of revenue Threats Opportunities Obsolete technology High value of by-products Low capacity utilisation Huge potential to increase productivity Poor financial condition Flexible labour recruitment Supply sale constraints policies are suitable Unhealthy competition Labour laws needed to be Quality of soil detiorates due toappropriately amended to deal overuse of fertilizerswith the issue of surplus labour.