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.
“Tata Steel’s leadership style encourages employee participation in the decision-making process”. Select the leadership style described in the above statement:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Democratic
Option (1) Autocratic — Incorrect. An autocratic leader gives orders and expects them to be obeyed. He takes decisions alone and does not consult his subordinates.
Option (2) Supportive — Incorrect. The three leadership styles are autocratic, democratic and laissez faire. “Supportive” is not one of them.
Option (3) Democratic — Correct. A democratic or participative leader develops action plans and takes decisions in consultation with his subordinates. Tata Steel improved the participation of its officers in decision making and worked on a participatory management basis, which is this style.
Option (4) Laissez Faire — Incorrect. A laissez faire leader leaves the group to set its own goals and solve its own problems, and uses his own authority very little.
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. This box sits in the middle of the Directing chapter, and NTA made five questions out of it. Read the boxes as carefully as the main text.
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, …” “Leadership Style … There are several bases for classifying leadership styles. The most popular classification of leadership styles is based on the use of authority. Depending on the use of authority, there are three basic styles of leadership: (i) Autocratic (ii) Democratic, and (iii) Laissez-faire” “(ii) Democratic or Participative leader A democratic leader will develop action plans and makes decisions in consultation with his subordinates. He will encourage them to participate in decision-making. This kind of leadership style is more common now-a-days, since leaders also recognise that people perform best if they have set their own objectives. …” |