R Chapter Four Human Resource Practices in Selected Industrial Units
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/r =^ Chapter Four Human Resource Practices in selected industrial units. I CHAPTER 4 HUMAN RESOURCE PRACTICES IN SELECTED INDUSTRIAL UNITS 4.1 Cummins India Ltd. (Company One) 4.1.1 Profile Cummins India Ltd. (formerly known as Kirloskar Cummins Ltd.) commenced operations in India at Pune in 1962. The manufacture of heavy duty Cummins Diesel Engines was started in India at a time when market requirement in the country was being met entirely through imports. Since then Cummins India Limited has pioneered in advancing the diesel engine technology and meeting the diverse power requirement of the country's core sectors. Vision : "Making people's lives better by unleashing the power of cummins." Manufacturing : Cummins India Limited manufacturing facilities are based at Pune Plant-I, spread over 93.2 acres, is a complete integrated engine manufacturing plant. All major engine components like cyllinder blocks, cyllinder heads, cranckshafts, camshafts, connecting rods, gears etc. are produced in house. All fuel system components are also produced in house. State of the art machines like CNC flexible matching centres are available. Comprehensive heat treatment facility with computerised online monitoring systems engines and components are assembled in a dust free, positive pressure and temperature controlled environment. Plant-II has a pattern shop and a captive foundry for special CI castings. Cummins Tech. Center : The R&D Tech. Center at Cummins India Limited is committed to develop world class products for customers. (43) This state of the art Tech. Center is equipped with 14 computerised engine test cells fatigue testing facitility, structured analysis facility, electronic/instrumentation laboratory and computerised exhaust gas analyser. Cummins Tech. Center is recognised by Deptt. of Science and Technology (Govt, of India). Total Investment of over Rs.l70 million. 4.1.2 Milestones : 2004 - Cummin Inc. Chairman's Award for Six Sigma Black Belt project. QCFl National Award for Productivity. National Award for Energy Conservation. QUIMPRO silver standard for quality system. Global Initiative - CRTI established. 2003 - Diversification of Exports productwise and to S-E Asia, China, US, Africa and Middle East. 2002 - Kaizen launch. CASE launched. Cummins India Foundation unveils Pune's "first school on wheels". 2001 - Helen Keller Award for 2001 for Social Responsibility from Nation Center for Promotion of Employment for Disabled People. 2000 - CDSS wins Rajiv Gandhi National Quality Award for Service Excellence. 1998 - Introduction of Quantum Service Engines. 1997 - Production crosses 10000 engines per year. ISO 9001 certification revalidated. Kirloskar Cummins Ltd. becomes Cummins India Ltd. 1996 - Aluminium Foundry started at Pune. 1995 - Annual Exports cross Rs. 100 crores. 1994 - ISO 9001 Recertification. EEPC Top Exporter Award for the 5th consecutive year. 1993 - Rajiv Gandhi National Quality Award "Best Among the Winners" - 1991-92. 1991 - ISO 9001 certification from BVQI-UK/Holland. (44) 1989- EEPC Top Exporter Award I Diesel Engines and Spares Category. 1987 - Becomes the single global source for Cummins V 28 Engines. 1986 - 50,000th engine manufactured. 1983 - Development Foundry I, Plant II started functioning. 1980 - Engine plant approved for self certification by Lloyd's certification of Shipping. 1979- Introduction of K engines. 1975 - 10000th engine despatched at the hands of Mr.J.I.Miller, Chairman of the Board, Cummins. 1972- Introduction of V engines. 1968 - 1000th engine shipped. First 15 engines exported to Egypt. 1967 - Cummins acquires CDSS. 1964 - First 11 engines produced for Industrial/Mining applications. 1962 - Incorporated in Pune, India. 4.1.3 Human Resource Practices (initiatives) launched by Cummins India Ltd. : Cummins India Ltd. is known for various innovative human resource practices launched in past many years that had collective effect on the productivity and business performance. All these practices contributed to competencies, commitment and good work culture in the organisation. It also maintained harmonious and cordial relations with the employees in company. Important initiatives launched by the company and the improvements made in it over a period of last five years i.e. from 2000 to 2004 are discussed here for the purpose of the study. Considering the vast scope of the study the minute details of the scheme, procedural aspects and documents incorporated for implementation are not covered. The basic approach, attitude and policy of Management while launching the scheme are considered important. 1. Organisational Redesigning and Restructuring : During the year 2001 and 2002 the organisation focused its HR/ OE (organisational effectiveness) efforts to become a customer centric (45) and a high performance organisation. The business was organised into performance cells and business units with score cards and performance metrics for all performance cells. Integration and alignment of resources tobe close to external customer and getting organised along processes was the most critical agenda for the organisation. The company simplified the structure to provide greater focus on specific operations. It was organised in to eight manufacturing business units and three broad business performance cells, supported by common functions like Finance, HR, IT and Maintenance. This structure helped to improve productivity, speed of operations and decision making. As business diversity demanded the talents and creativity of individuals with a wide range of backgrounds, company strives to unleash the power of Cummins by giving an employee the freedom to take charge, the opportunities to grow and the benefits to build his future. The Chairman and Joint Managing Director Mr.Anant Talaulikar mentions in the annual report 2004 of the company- "Cummins India continued its journey of progress with a sense of purpose and direction. Our road to sustainable and profitable growth for our shareholders is guided by our vision of "Making peoples lives better by unleashing the Power of Cummins." For all of us at Cummins this vision statement is our anchor. The vision statement is elucidated further by our mission. These two keep us rooted to our core values which we follow like a "mantra" in our day to day dealing with all shareholders." 2. Performance Management: During the year 2001 company rolled out a new performance management system (PMS). The objective was to link in better manner the individual performance to organisational goals and help to provide appropriate career options/roles for various members in the organisation. This helped company to manage resources and performance better. The data available from the process also helped to objectively evaluate and implement several key related decisions and also provide input for other important initiatives like capacity building, organisational redesign, job rotations and job enrichments. On the basis of experience the PerfoiTnance (46) Management System was further strengthened through the involvement of managers at all levels. The leadership team supported the process more rigourasly. This helped people gain more confidence in the system. Now the system is established and has found its feet. Its execution has reached a high degree of maturity. Managers have become well versed and are using its functionality well for mananging performance. The important features of the PMS are- (1) Preparation of Quarterly Work Plans. (2) Regular review and feedback that strengthens the performance ethic. (3) Company believes in well defined set of core values. They are the ground rules of leadership behaviour for the employees. Demonstration of these values form a very important part of the Performance Management System. (4) Company believes in attracting and retaining people who believe in these Core values and consistently demonstrate them in their professional and in personal lives as well. The Performance Management System not only measures the achievement of targets but also the employee commitment to core values of Cummins in achieving them. Core values of Cummins with solid and longstanding foundation. 1. Integirty 2. Innovation 3. Delivering Superior Results 4. Corporate Responsibility 5. Diversity 6. Global Involvement "We have a great, skilled and diverse employee base and a leadership team that is moving the organisation from a "best efforts' environment to the one that is results and performance oriented. We have embraced a company personality that aspries to be decisive, driven to win, agile, passionate and caring. We therefore look for and reward these attributes in each one of our employees. We accomplish our vision and mission based on a solid longstanding foundation of stated core values which are (47) Integrity, Innovation, Delivering Superior results, Corporate Responsibility, Diversity and Global Involvement." - Chairman, Cummins India Limited (A.R. 2004) 3. Remuneration Philosophy : In order to create high performance organisation company designed its remuneration policy that encourages pay for performance and drives distinction between various levels of performance. For achieving this objective of high performance Market Led Compensation Philosophy was adopted. In order to attract and retain the best talent company benchmarked it's compensation with a basket of companies in the Engineering and Service sectors. This policy enabled company to make more market based revision of compensation for managers. It was continued to focus on differentiating levels of