Exclusive: Doc shows Indian Oil looking at rationalisation of workforce

New Delhi: State-run Indian Oil Corporation (IOC) seems to be headed for rationalisation and better utilisation of the available workforce and has also chalked out a plan to do the same, an inter-office memo accessed by PSU Watch has shown. Sources said that the memo circulated within Indian Oil has stoked anxiety and uncertainty among employees. The news comes as the government is going after disinvestment of public sector companies with a lot of aggression, taking up a number of profitable PSUs for strategic sale. The disinvestment drive has created, in general, a feeling of apprehension among employees in the PSU sector.

Is Indian Oil mulling rationalisation of workforce?

While stressing on the need for the company "to be agile and productive" in order to remain "relevant and competitive" at a time when "companies in our country are currently passing through a critical phase," the memo talked of a three-pronged approach for "proper utilisation of manpower so that their full potential is available to the company."

What exactly does the memo say?

"There are blend of employees existing in terms of their potential utilisation, ie, who are either (a) highly engaged, (b) partly/not engaged or (c) negatively engaged. Our objective should be to identify such individual employees who are partly/not engaged or negatively engaged. The sectional/departmental leadership may accordingly intervene and make efforts to bring them to the mainstream so that work-life balance for engaged employees is achieved," the memo said. The three-pronged approach that it advocates involves persuasion by senior officials, followed by counselling to improve their productivity and disciplinary action as the last resort. "Ideally, the efforts should be made at all levels to adopt the above approach and in case of exhausting all options, the disciplinary action may be initiated, if situation warrants," the memo said.

Does this mean job cuts could be on the anvil?

The memo mentions an assessment system to evaluate the jobs being performed by employees vis-a-vis the engagement of time for discharging such jobs and looking at the prospect of trimming down the system. "Concurrently, the jobs being carried out by officers may be looked into. In case it is found suitable, such jobs may be considered to be assigned to those workmen whose engagement/utilisation is not seen to be optimum. The jobs of officers may accordingly be suitably re-assigned for upgradation/higher responsibilities, thereby leading to rationalisation of officers," the memo says. It also advocates evaluating "multi-layer" supervision processes to adopt a "leaner structure at work locations."

What does rationalisation of workforce mean?

Rationalization is a reorganization of a company in order to increase its operating efficiency. This sort of reorganisation may lead to an expansion or reduction in company size, a change of policy, or an alteration of strategy pertaining to particular products offered.

What does the management say?

While clarifying that the memo is only a proposal, the Indian Oil management said, "It is a proposal for exploring the prospect of rationalisation/utilisation of the work force. It must not be looked at as an order for carrying out job cuts. It is part of a plan to explore ways to reform the system. It is not a final order and has only been circulated as a proposal."

Is this good or bad?

Commenting on the matter, Professor Lallan Prasad, former founding faculty and head of Business Economics at University of Delhi, said that social welfare are at the heart of PSUs. "Social welfare is at the heart of PSUs. The government sets up a PSU to venture into areas where the private sector wouldn't go to create jobs. Therefore, the cost of production in PSUs is always higher when compared to the private sector. Despite that, it is not a responsibility that can be shirked away by the regime," Prasad, bulk of whose academic work focuses on the public sector, said.

Cases in point: BSNL & MTNL

One of the cases that one would have to look at is Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telecom Nigam Ltd (MTNL). Before the government decided to revive the companies, BSNL and MTNL were spending 75.06 percent and 87.15 percent of their total income on salaries. The big salary bills at these organisations turned out to be difficult to sustain when the two PSUs' financial health declined, leading to non-payment of salaries.

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