Says M K Moitra, director, HRD, SAIL, `'The existing voluntary retirement scheme (VRS) was designed when the retirement age was 58 years. Under the VRS, the monthly benefit is limited to a maximum of 10 years. It means that the employees who are above 48 years and opt for VR get the VR payment for the balance of service period. With the retirement age going up by 2 years from 58 to 60 years the benefit under the scheme needsto be enhanced to make it attractive. Accordingly the VRS has been modified by extending VR payment up to 60 years and also increasing the maximum ceiling for payment from 10 years to 12 years. With these modifications the scheme will retain its lucrativeness.''

SAIL started the revamped VRS on March 1 this year and till the end of May 2,200 people had applied for it. Almost 700 employees availed of it every month. Of the 2,200 workers 400 have been already relieved. To avail of the VRS the employee should have put in a minimum of 20 years of service.

Explaining the VRS, Moitra says: `'Those between 55-58 years get 100 per cent of basic wages plus DA; those employees between 52-55 years get 90 per cent of the basic for six years; below 52 years of age the workers get 80 per cent for 10 years or age of superannuation, whichever is less. From May 29, the retirement age was increased so the benefits have also been increased by two years, without modifications to the amount to be given.''Any employee whowants to avail of a VRS may not eventually get it. Points out Moitra: `'The right to release or not is with the management. The workforce has come down from 230,000 to 180,000 in the last 10 years by natural separation. SAIL has its annual Human Resource plan which is modified every year taking into consideration the natural separation for the year and the necessity of filling up posts left vacant as a result. SAIL is trying to restrict recruitment to the bare minimum to make it a trim and competitive organisation.''

As a result of maintaining strict control over recruitment, SAIL has managed to reduce manpower to 1.80 lakh workers. From 1989 to 1993, in all, 32,000 employees have been relieved and by the end of 1994 another 35,000 left the company. Sources in SAIL say that there is a freeze on recruitment for the next two years and efforts are on to maintain or rather accelerate the current process of manpower reduction.

But the real challenge for SAIL is to evolve policies that can produce quickresults. In the West, steel plants of similar capacity operate with much less workforce. Also as the technology changes, fewer people are required to do a particular job and the companies can effectively pay-more-to-less.

Says Moitra: `'Ever since its inception, SAIL has provided ideal working and living conditions, educational and medical facilities to its employees. As a result of welfare measures, SAIL had to maintain a large manpower in the past. But we realise that in today's competitive environment, measures have to be taken to reduce manpower so that the massive financial burden in terms of employment costs can be curtailed. SAIL does not believe in retrenchment of employees and therefore we have to look at other alternatives. The VRS is one such alternative.''

He further adds: `'Simultaneously it has been felt that the VRS might not be enough to reduce manpower substantially and various other alternatives have to be looked into.'' On the advantages of the present VRS, Moitra says: `'It is easy tooperate and is better for the employees who are ensured of a monthly `pay' packet.''

SAIL has been able to effectively involve workers, but perhaps, its Achilles' heel remains its huge workforce. In the West, much bigger steel plants operate with bare minimum manpower. Even if SAIL reduces its workforce to 150,000 by the year 2002, it will be very large as compared to international standards. It remains to be seen how the navratna tackles this vital area to meet the challenges ahead.