SAIL's Voluntary Retirement Scheme

Details

Themes: HR Practices and Policies
Period : 1999-2001
Organization :SAIL
Pub Date : 2001
Countries : India
Industry : Metals & Mining

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Case Code : HROB002
Case Length : 07 Pages
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Under the new package, employees who opted for the scheme, depending on their age, would get a monthly income as a percentage of their prevailing basic salary and dearness allowance (DA) for the remaining years of their services, till superannuation. Employees above 55 years of age would be given 105 per cent of the basic pay and dearness allowance (DA) every month. Those employees who were between the age of 52 and 55 years would receive 95 per cent of the basic pay and DA while those below 52 years would get 85 per cent of the basic pay and DA. The new scheme, like the old one was a deferred payment scheme, with extra incentive like a 5% increase in monthly benefits for each of the three age groups.

By September 1999, over 4,000 employees opted for the new scheme. About 1,700 employees opted for VRS in the Durgapur steel plant while in the Bhilai, Bokaro and Rourkela steel plants. The number varied between 400 and 700.

In September 2000, SAIL announced yet another round of VRS, in a bid to remove 10,000 employees by the end of March 2001.

The company planned to approach financial institutions for a credit of Rs. 500 crore. Pande said: "We are awaiting the government nod for the VRS scheme, drawn on the pattern of the standard VRS by department of public enterprises. We expect to get the clearance by the end of the month."

On February 08, 2001, SAIL ended its four year recruitment freeze by announcing its plans to fill up more than 250 posts at its various plant sites in both technical and non-technical categories. According to a senior SAIL official: "This recruitment is being done to ease the vacancies created due to natural attrition and those that arose after the previous VRS."

The Persuasion

In mid 1998, in a bid to convince its employees to accept VRS, SAIL highlighted six 'plus' points of VRS, in its internal communique, Varta. They were as follows:

During the next 4-5 years, SAIL has to reduce its workforce by 60,000 for its own survival. Employees with chronic ailments, and habitual absentees, who add to low productivity, have to go first - maybe, with the help of administrative actions.

The employees may have to be transferred to any other part of the country in the larger interest of the company.

For those who started their career as healthy young men 25-30 years ago, the VRS will take care of their financial worries to a great extent, and they can discharge their domestic duties more comfortably.

VRS can be used for special purposes like paying huge sum of money for getting one's son admitted to a professional course.

VRS will give many individuals the money and time on pursuing personal dreams.

It can be a good opportunity to do social service.

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