International Research Journal of Business and Management IRJBM. AFFIRMATIVE ACTION - A Case Study on Tata Steel

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1 AFFIRMATIVE ACTION - A Case Study on Tata Steel R N Misra Head - HR/IR, Tata Steel Limited rudramisra1@gmail.com The vision and philosophy of Jamsetji Nusserwanji Tata, the Founder of Tata Steel, is the beacon that continues to guide the Company s actions that are aimed at creating value for society in and around its areas of operations. The Founder s stated philosophy was that, in a free enterprise, the community is not just another stakeholder in business but is, in fact, the very purpose of its existence. For Tata Steel, the community in and around its operational areas in the States of Jharkhand, Odisha and Chhattisgarh largely consist of people who belong to the Scheduled Caste (SC) and Scheduled Tribe (ST) communities. Most of them are dependent upon rain fed, single crop agricultural produce for their livelihoods. Historically, several socio-economic factors have hindered the economic upliftment of the SC & ST communities in these States. For Tata Steel, a major concern has been the socio-economic development of the SC and ST communities through initiatives veering round Affirmative Action (AA). This has special significance when the core demographic and socioeconomic indicators of the States where Tata Steel has its operations are taken into account (see table below). Indicators Jharkhand Odisha Chandigarh National DEMOGRAPHY % population of ST 27% 22% 32% 8% % population of SC 12% 17% 12% 16% ECONOMY Workforce (main workers) 24% 30% Population BPL 40% 47% 43% 25% ST BPL population Rural-54% Rural-94.5%, Rural-46%, NA Urban-45% Urban-5.5% Urban-36% SC BPL population Rural-55% Urban-47% Rural-88.5%, Urban12% Agricultural productivity 1 ton/hectare 1.08 ton/hec. NA NA Rural-36%, Urban-38% National-1.6 ton/hec. % population in agriculture 85% 76% 80% 59% % land under irrigation 9% 22% 19% 34% EDUCATION Overall literacy 54% 64% 65% 65% ST literacy 41% 37% 52% 47% SC literacy 38% 55% 64% 55% Overall school drop out 60% 64% 65% 62% HEALTH ANC 46% 61% 89% 51% Infant mortality Child immunisation 54% 52% 49% 63% Institutional delivery 18% 39% 16% 41% Global Wisdom Research Publications All Rights Reserved. 63

2 For several years now, Tata Steel has concentrated on improving the socio-economic condition of the SC & ST communities through focused interventions in various domains, such as education, agriculture, vocational training, enterprise development, women s empowerment, etc. The rationale to relentlessly pursue its policy of AA is in consonance with the Founder s philosophy. Tata Steel firmly believes that no success in material terms is worthwhile unless it serves the needs and interests of the country and its people. Tata Steel s belief in promoting AA based on positive discrimination is in keeping with the larger objective of nation building that is focused on inclusive and equitable growth. Tata Steel believes that it is also important to ensure that every member of the community living in and around its areas of operations is treated equally with access to opportunities that provide for gainful engagement in society. Tata Steel s interventions on AA are guided by its Policy on Affirmative Action which reads as follows: Tata Steel recognizes that diversity in the workplace positively impacts business. The Company will ensure equal employment opportunities and provide training to develop the socially disadvantaged. Tata Steel will volunteer its training resources to the extent possible to improve employability of disadvantaged sections of society. The Company will encourage business entrepreneurs from socially disadvantaged communities through monitoring and inclusion in supply chain on the basis of equal merit. Tata Steel will assist in upward mobility of talented youth from marginalized communities by increasing their access to quality higher education. Tata Steel will report Affirmative Action initiatives in its annual report. Tata Steel s AA initiatives are focused on four domains Employment, Employability, Entrepreneurship and Education. Directions in this regard are provided by the top management of the Company. Process owners have been identified for the rollout and implementation of AA initiatives across the 4Es. The Leadership team champions the AA cause and reviews the implementation of AA initiatives. It also engages and communicates to stakeholders on actions related to AA. AA strategies are driven through the Annual Business Plans of divisions and departments. Successful execution of the interventions is measured on the basis of accomplishment. Improvement of ongoing programmes is based on the feedback from review forums. The assessment of Affirmative Action performance is based on 1) % of SC/ST beneficiaries and 2) the success rate, i.e. how many of the beneficiaries of employability programmes have been placed, how many have completed education/coaching and what they are doing, etc. Post programme status of beneficiaries is the core quality measure of AA. A) EMPLOYMENT: TSL has been an equal opportunity employer which is enumerated in Clause 4 of the Tata Code of Conduct. However, active consideration is accorded to engaging applicants from the SC/ ST community, recognising the fact that diversity at work place, aligned to the AA policy, positively impacts the production and productivity. Global Wisdom Research Publications All Rights Reserved. 64

3 For Trade Apprentices (TA), positive discrimination is made, such as eligibility relaxation with respect to age by one year, lower cut-off marks in written tests and, merit being equal, preference during interviews. For Junior Engineer Trainees (JET), three years relaxation in terms of age is provided. Over and above, there is positive discrimination in terms of minimum p r e s c r i b e d physical standards. For aspirants who do not directly qualify to TA programme, a bridge course prepares AA aspirants for Trade Apprentice exam. Contracts have been signed with some vendors for them to address needs of AA and local tribal population. TEJASWINI, a unique initiative where women employees engaged in unskilled jobs were trained in operating Locomotives, Heavy Earth Moving Equipment, Driving, Welding etc. On successful completion of training they were put on the job where they excelled. More than 80 per cent Tejashwini s are from SC/ST community. B) EMPLOYABILITY: The employability programme is aimed at imparting skills/knowledge to the youth through training and coaching to make them employable. Viewing the diversity of the area in terms of academic qualification, knack and area of interest, Tata Steel has strategized the training courses accordingly, thereby widening the basket of choice. Major coaching and training programmes held in the last 3 years are provided in the table below: COACHING Nursing school entrances (residential) Professional course entrances, viz. Trade Apprentices Polytechnic, etc. (residential) Govt. service exams, e.g. Bank, Railways, etc. (residential) VOCATIONAL TRAINING IT based trainings; BPO, Computer software Site Safety Supervisor Nursing training Community Health Providers Security Guard Technical Training Arc Welding & Gas Cutting AC & Refrigeration technician Motor Driving PARTNER / RESOURCE AGENCY Xavier Institute of Tribal Education, Gamharia, Jamshedpur. Hired professionals, coaching being conducted at Tribal Culture Centre (TCC), Sonari, Jamshedpur Hired professionals, coaching being conducted at Tribal Culture Centre (TCC), Sonari, Jamshedpur PARTNER / RESOURCE AGENCY Tata Business Support Services; hired professionals Safety Department, Tata Steel Tata Main Hospital, Jeevan Jyoti (Tata Motors) Tinplate Hospital Turret Industrial Security Pvt. Ltd. J N Tata Technical Education Centre, Gopalpur George Telegraph George Telegraph Nag Motors, Maruti Driving School The effectiveness of the above programmes is measured on the basis of the number/percentage of beneficiaries placed after the training/coaching. Subsequent to training, candidates are prepared to face interviews and handholding is also done for placements. Global Wisdom Research Publications All Rights Reserved. 65

4 FUTURE PLAN IN EMPLOYABILITY a) Setting up rural BPO at Jagdalpur, Bastar district, Chhattisgarh: This will generate jobs for 200 youth. A particular focus will be provided to the employment of SC/ST youth. This programme will be launched in partnership with Tata Business Support Services (TBSS). b) Site safety supervisor training at Sukinda and Noamundi: Twenty-five youth at each of these tribal dominated out-locations will be trained every year. c) E-junction: This programme will aim at imparting computer skills and spoken English to the youth for their employment in call centres and other places. In a year, three batches will be completed, each of 25 youth. This programme will be in partnership with Metal Junction Services ltd. Name of Coaching Coached Placed % Placed Nursing Entrance % Professional course entrances Competitive exams for Govt. Services/others Name of Vocational training % % trained placed % placed Security Guard % Community Health Providers TOTAL FOR COACHING & TRAINING % % Remarks Out of those placed, 20 are pursuing Nursing courses in institutes supported by Tata Group companies their fees are being paid by Tata Steel. Out of those placed, 12 got in Tata Steel Trade Apprentice (TA) and 4 in Tata Motors. Others qualified in Diploma/Degree Engineering Out of those placed, 18 have got full time Govt. jobs. Others have got private/contractual Govt. jobs. Two have been elected to Panchayat as Mukhia & Ward Member Several others have qualified in the written test and undergoing interview/medical tests. Remarks All the trainees were absorbed by the training institute, i.e. Turret. Apart from those placed, 10 others are undergoing 2 nd year advanced training as Operation Theatre Assistant in Tinplate Hospital. The outcome of employability coaching and training, exclusively for the SC/ST youth, in the last three years ( to ) is provided in the table alongside: The coaching and training were exclusively for SC/ST youth. There are other training modules under employability which cover all categories, i.e. ST, SC, Backward Castes and General categories. The data for major training programmes held in is as under: Name of Training Trained of SC/ST Trainees of SC/ST Trainees % placed SC/ST Site Safety Supervisor % Remarks Are placed under various construction agencies for Global Wisdom Research Publications All Rights Reserved. 66

5 Driving % supervising practice of safety norms and standards at sites. Training is provided at our Employee Training Centre, with Safety Dept. as resource persons. BPO (Call Centre) % Plumbing & Sanitation % Tailoring/Stitching Self employed TOTAL % Training and placement is provided by %Tata Business Support Services. (JV of TSL & TBSS named Pragati Sambhavna Does not include self employed youth C. ENTREPRENEURSHIP: The Procurement Division of Tata Steel has identified certain services and businesses that are to be given to AA entrepreneurs/organisations. A Policy on positive discrimination in favour of vendor organisations that have 50 per cent or more SC/ST ownership or 75 per cent or more work-force comprising SC/ST workers is already in place. Various Self Help Groups (SHGs) of AA community, especially of women, is formed and they are trained in trades of marketable products. Tata Steel supports in marketing of these products by purchasing them as corporate gifts and also through Gram Shree Melas. Future Plan in Entrepreneurship a) Increase the share of business of SC/ST community. b) Contracting with vendors to augment employment and employability of local underprivileged communities c) Discussions being held with key vendors to create jobs for SC/ST communities and facilitate entrepreneurship among them. d) Capacity building of SHG members in partnership with XLRI and Entrepreneur Development Institute of India (EDII), Ahmedabad. Name of AA Society FY 09 FY 10 FY 11 The Adivasi Welfare Society Association of Adivasi Societies TOTAL b. Micro-enterprise development through Self Help Group (SHG) Facilitating SHGs for enterprise development is a core intervention of Tata Steel under Entrepreneurship. At present, 344 SHGs are functional with a total membership 4,017. Number of Global Wisdom Research Publications All Rights Reserved. 67

6 SC/ST member is1,410, i.e. 35%. The enterprises that have been set up include: Vermicompost, Jewellery, Docra craft, Pickle making, Leaf plate making, Soap making, etc. Improvement in SHG Nos. & Growth of SC/ST Members Loan & Savings (Rs. Lakh) of SHGs Level 1 (Just Formed) Level 3 (received revolving Fund) Level 2 (Bank Account opening) Level 4 (High volume loan received) D. EDUCATION: A major concern in Tata Steel s operational areas is access to education. The focus is on need-based, multi-pronged interventions in the education domain that address the specific needs of different age and gender groups. The table below enumerates the interventions on education: Critical Issue Programme / Intervention Activities Pre-School 1) Early Child Education (rural area); Pre-school education to children 3-6 education/school leftouts 2) Bal Vikas Kendra (urban area) years so that they enrol into formal school at proper age. School drop-outs 1) Camp School Running bridge course for the school dropout to re-enrol them into formal schools. 2) Scholarship/Scholarship programme; Jyoti Scholarship (only for SC/ST candidates) Financial assistance to complete school education. Financial constraint in accessing coaching for Board Exams. Financial constraints in pursuing higher studies Limited infrastructure Pre-Matriculation Coaching Scholarship/Scholarship program; Jyoti Scholarship and Moodie Scholarship (only for SC/ST candidates) Millennium scholarship and V.G.Gopal Scholarship-lower cut-off for AA community + Run coaching classes on English, Mathematics and Science for candidates appearing Matriculation exams. Financial assistance to college level students, from Intermediate to Post Graduate level, including professional courses like MBA, MCA, MBBS, Engineering, Hotel Management etc. Global Wisdom Research Publications All Rights Reserved. 68

7 10% quota + from general quota. Support to academic institutes Financial and material support to academic institutes (schools and colleges) for developing infrastructure. Scholarship disbursement to meritorious students from SC/ST communities is the key intervention of Tata Steel. Due to financial constraints, the SC/ST students are unable to access education which is the most powerful enabler for improving their economic condition, quality of life and for earning respect in society. To propagate education, Tata Steel has designed three major programmes which are coming up in near future. They are: ENHANCEMENT OF SCHOLARSHIP BUDGET: In , the budget has been enhanced to Rs 75 lakhs. The coverage area has also been expanded by including Odisha, in addition to Jharkhand. Mid-day meal scheme: Tata Steel has partnered with the Govt. of Jharkhand and ISKCON Food Relief Foundation to operate a Mid-day meal programme for school going children in the Saraikela-Kharsawan region. The primary objective of this programme is to check drop-outs among students and ensure their regularity attending school.substantial financial resources were allocated towards prioritised AA interventions, i.e. Education & Employability in the last three years (see table below) Amount in Rs lakhs. PROGRAMMES REMARKS EDUCATION 1 Scholarship programme % beneficiaries SC/ST 2 Camp School % SC/ST beneficiaries in 08-09, 80% in & 92% in Pre-Matriculation Coaching Not run Not run % SC/ST beneficiaries EMPLOYABILITY 1 Vocational trainings Coaching programmes; Nursing 3 Coaching programmes; Govt. Services & Profession course entrance exams. Was under scholarship 67% SC/ST beneficiaries in 08-09, 71% in & 59% in % beneficiaries SC/ST % beneficiaries SC/ST TOTAL Global Wisdom Research Publications All Rights Reserved. 69

8 Additionally, in , financial support of Rs 1.92 crores was provided to Xavier Institute of Tribal Education, Gamharia, (around 60% SC/ST students) and St.Xaviers Inter College, Lupunghutu, Chaibasa (around 80% SC/ST students). The data above reflects that: 1) There are 3 major interventions which are exclusively for SC/ST candidates. In fact, the programme under Education/Employability with the highest budget, i.e. Scholarship programme, is exclusively for SC/ST 2) over the years, the percentage of SC/ST beneficiaries is substantially above 50 per cent even for those programmes which are for all the categories and 3) a major portion of funds under Education and Employability programmes are utilised for SC/ST communities. a) Scholarship programme (Jyoti Scholarship, Moodie Scholarship and Tata Steel Pariwar Scholarship) This programme is only for SC/ST students. In the last 3 years, 2,068 Scholarships have been provided. This programme covers school as well as college students. The levels that are covered are Std. VII- X (School level); Intermediate; Degree; P.G. (general stream); Bachelor in Law; B.Ed.; BBA; BCA; MBA, MCA; Engineering (Degree and Diploma both); M.Tech; MBBS and some others. b) Early Child Education (ECE) In rural areas, since (last 3 years), 1,572 children have been provided with early child education and were enrolled into formal schools. All of them were from ST category. This programme was run in partnership with Jharkhand Education Project (JEP). For urban children, Bal Vikas programme is being run in basti areas to prepare them for formal schools. In FY11, 667 children underwent Bal Vikas classes of which 251 (38%) were SC/ST. c) Camp School Since 08-09, 515 children who dropped out from schools, benefitted from the Camp School. It is a residential programme of 6 months duration. Ninety per cent of the students were from SC/ST category. This bridge course enabled them to be enrolled in the formal school again. Like ECE, this programme also is implemented in partnership with JEP. d) Pre-Matriculation Coaching Initiated from FY11, this programme aims at providing coaching to students appearing for their Matriculation exams. One hundred and thirty seven students were coached of which around 63 per cent were SC/ST. The accomplishment under Education in last three years: Sl. Programme Total for 3 years Total SC/ST Total SC/ST Total SC/ST Total SC/ST 1 Scholarship (100%) 2 Early Child Education (81%) 3 Camp School (90%) 4 Pre-Matric coaching (63%) Global Wisdom Research Publications All Rights Reserved. 70

9 EDUCATION: JYOTI SCHOLARSHIP This four-decade-old scholarship programme has been kept current with time through various improvements. This was branded as Jyoti scholarship in and structured to cater to high school, intermediate, UG, PG and professional courses. This is exclusively for students from AA community. The cumulative effect of this programme has created a feed-line of deserving students for professional courses and Tata Steel has progressively increased allocation to this segment. It has also put in place a feedback mechanism to track post scholarship engagement. Name of Coaching Coached Placed % Placed Nursing Entrance % Professional course entrances Competitive exams for Govt. Services/others Name of Vocational training % % trained placed % placed Security Guard % Community Health Providers TOTAL FOR COACHING & TRAINING % % Remarks Out of those placed, 20 are pursuing Nursing courses in institutes supported by Tata Group companies their fees are being paid by Tata Steel. Out of those placed, 12 got in Tata Steel Trade Apprentice (TA) and 4 in Tata Motors. Others qualified in Diploma/Degree Engineering Out of those placed, 18 have got full time Govt. jobs. Others have got private/contractual Govt. jobs. Two have been elected to Panchayat as Mukhia & Ward Member Several others have qualified in the written test and undergoing interview/medical tests. Remarks All the trainees were absorbed by the training institute, i.e. Turret. Apart from those placed, 10 others are undergoing 2 nd year advanced training as Operation Theatre Assistant in Tinplate Hospital. Global Wisdom Research Publications All Rights Reserved. 71

10 CONCLUSION Recently the Govt of India has amended the Company s Act and incorporated few provisions. Section 135 (Corporate Social Responsibility) has been amended providing for Corporate Houses to spend at least 2% of the average net profit of the company made during every financial year towards corporate social responsibilities as a matter of policy. The Scheduled VII to this section has listed ten activities for the companies to take under CSR activities. It is therefore imperative on the corporate houses having net worth of Rs.500 crores or more or turnover of Rs.1000 crores or more or a net profit of Rs.5 crores or more during any financial year to contribute 2% of their net profit towards CSR activities. While many companies have been undertaking CSR activities / affirmative action, the case study of Tata Steel may be an eye opener for them to follow and undertake actions as it suits their corporate philosophy. After all a portion of the wealth which is generated from the business must be recycled and invested for the purpose of the general people and the societies, they being the stake holders also. Such corporate houses may also entrust such activities under one of the director of the company and the latter must be made responsible to report that to the board with regard to the amount spent and the activities being undertaken under affirmative action, so that the board takes wiser decisions to promote their responsibilities for the society. REFERENCES This case study is based on the personal experience and the data have been collected from various documents / journals published by the company from time to time. Global Wisdom Research Publications All Rights Reserved. 72