Motivating Employees in Tata Steel
In Tata Steel several initiatives have been taken to further improve the motivation levels and participation in the decision making process of the officers, greater impetus to training through a formalised system of a personal development programme, talent review and job rotation systems, compensation linked to the performance management system, formal rewards and recognition systems, knowledge management systems linked with appraisals, leadership opportunities in quality circles, continuous improvement and value engineering programmes and an extremely transparent and credible multi-path communication system to address queries and concerns of all employees through various dialogues both formal and online, with such tools as video conferencing, ‘MD Online’, special dialogues with senior management, meetings, conferences and seminars. These initiatives have helped to build a homogeneous and focused team in Tata Steel, increasing motivation and binding to the vision of the company and spurred employees to deliver targets on a participatory management basis leading to ownership of processes. Tata Steel is a company that actively promotes freedom to work, freedom to innovate and even the freedom to fail. It is a nimble, fast, modern and forward-looking company on a strong growth path. The company has undergone a revolutionary change in terms of its production facilities and the technology in the manufacturing process. These changes have resulted in creating greater opportunities for taking up newer challenges for young recruits work and for performance based on IT enabled systems and high levels of automation. These have led to making the company one of the lowest cost producers of steel and the only Indian company to be recognised by the World Steel Dynamics as one of the top most ‘World Class’ steel makers. Tata Steel hopes not only to consolidate but better its leadership by robust leadership development systems that have seen the company create many CEOs for other companies.
Select the non-financial incentive used by Tata Steel to motivate their employees:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Employee recognition programme
Option (1) Perquisites — Incorrect. Perquisites or fringe benefits, such as a car allowance or medical aid, are financial incentives, rewards in money or measurable in money.
Option (2) Employee recognition programme — Correct. Recognition means acknowledging an employee’s work with a show of appreciation. It satisfies the need for esteem and costs no direct money, so it is a non-financial incentive, one that meets psychological, social and emotional needs without direct payment. Tata Steel set up formal rewards and recognition systems.
Option (3) Co-Partnership — Incorrect. Co-partnership or stock option gives employees shares of the company. It is a financial incentive.
Option (4) Retirement plans — Incorrect. Retirement benefits such as provident fund, pension and gratuity are financial incentives.
Note: The passage is the NCERT box ‘Motivating Employees in Tata Steel’ from the chapter ‘Directing’, which has been reproduced by NTA in the exam.
NCERT (2026-27 Edition): “Motivating Employees in Tata Steel … In Tata Steel several initiatives have been taken to further improve the motivation levels and participation in the decision making process of the officers, greater impetus to training through a formalised system of a personal development programme, talent review and job rotation systems, compensation linked to the performance management system, formal rewards and recognition systems, …” “Financial and Non-Financial Incentives … (v) Co-partnership/ Stock option: Under these incentive schemes, employees are offered company shares at a set price which is lower than market price. …” “(vi) Retirement Benefits: Several retirement benefits such as provident fund, pension, and gratuity provide financial security to employees after their retirement. …” “(vii) Perquisites: In many companies perquisites and fringe benefits are offered such as car allowance, housing, medical aid, and education to the children, etc., over and above the salary. …” “Non-Financial Incentives: All the needs of individuals are not satisfied by money alone. …” “(v) Employee Recognition programmes: Most people have a need for evaluation of their work and due recognition. They feel that what they do should be recognised by others concerned. Recognition means acknowledgment with a show of appreciation. …” |