Knowledge Management at Tata Steel - Case Study Example

Knowledge management at Tata Steel Knowledge management at Tata Steel The term psychological contract means expectations, a lot that are unspoken, between the organization and the employees. This aspect can be traced back many years ago to the religious perspective, where there were mutual expectations between faithful and God. In addition, psychological contract can be defined as unwritten expectations existing between every organization’s member and managers and others involved in the organization. Employee may expect things like pay, personal support or development. Expectations of the group may include results, working hard, loyalty or even enhancement of the organization’s reputation. Most organizations implement their psychological contract indirectly via their websites, literature of recruitment or any other avenue where employee can get to know what is expected from them. In addition, employee may get to know what they expect from the organization. Most organizations have their psychological contracts that makes reference to results/efforts expected from employees to deliver and also how the organization will contribute the employees well being and development (Fernando, A. 2009). There is always great pressure between employees and organization to change people’s expectations hence their psychological contract. An argument from a case study by Sandra L. Robinson and Elizabeth Wolfe Morrison in 2000, people grow their individual needs from work changes. People at their twenties typically seek to try to experiment new things; those in fifties usually finds security and continuity. The same case advancement of technology and rivalry from exponentially growing economies of India and China are giving pressures on established corporations to articulate psychological contracts, which has greater output from the individuals, customer responsiveness, and flexibility (Robinson and Wolfe Morrison, 2000). The current organization’s psychological contract have shifted to the one characterized by adhocracy, through bureaucracy from emerging type. This involves both the organization and the individual being adult; employee justifies their identity and worth through accomplishment. Individuals regularly move in and out of the company, and there is less likelihood of long-term employment (Paul, J. 2011). The term psychological contract may sound contradictory. If you have a contract with someone, this means there is legally and precise binding arrangement with the person or the organization involving exchange of service or an object with money. This is very different from anything psychological that requires mind and nothing tangible. Virtually psychological contract refers to mutual expectations individuals have in a relationship, and the manner these expectations impact and change our way of doing things with time. Currently, the term psychological contract is used to describe the expectations between the employee and the organization (Paul, J. 2011). Psychological contracts are personal beliefs in reciprocal responsibilities existing between employers and workers. The study on the psychological contract has grown over the last ten years to a level that it has been incorporated in the discipline of Human Resource Management (HRM). There is an associated deficiency based on the theoretical assumptions that pervade the psychological contract. Although the concept of the subconscious has its roots outside the field of Human Resource Management (HRM), it has become an essential analytical device in explaining and propagating HRM. There is ambient amount of interest psychological contract from practitioners and academics and both look for factors likely to contribute to employee’s sustained commitment and motivation. The concept of the psychological contract has a deeper and much longer pedigree. Social relationships have always been comprised of unequal distribution of power resources and unspecified obligations. Expectations from organization and the employee do not cover only the extent of the work to be done with the corresponding pay, but also the rights, privileges and obligations. It is understood that labor unrest, worker alienation, and employee dissatisfaction arises from the violation of the psychological contract, which entails; working hours, pay and working conditions, which are more negotiable than mental agenda. It was until 1990s when a more expansive application of the psychological contract was effected. At this time, psychological contract was driven by academics’ and practitioners’ desire to search for more innovative and new people management practices amidst heightened international competition, economic restructuring context and varying labor market dynamics. Rousseau first used the psychological contract renaissance, with use of transactional psychological contracts, in which employees expects short-term organizational, relational process based on job security and loyalty, but their employment is perceived as a transaction in which more hours has provided in exchange for trainings and high contingent pay. It is wise to appreciate contextual factors contributing to the psychological contract cultivation, as more of it has subsequently underpinned analysis and research (Rothermund, D. 1993). From the contextual dynamics, there were a series of changes that called into question many of the assumptions based the employment relations systems. Workplaces are viewed as fragmented due to more flexible and newer forms of employment (Rothermund, D. 1993). At the same moment, managers are becoming intolerant to sluggish and time-consuming negotiation processes under the systems of conventional employment relations. Because of declining collective bargaining and upcoming individualist qualities amongst the workforce, arrangements, which are informal, are becoming more pronounced in a workplace. From the traditional employment relations, it is believed that it is out of reach with the rapidly changing world of work context. Given the rapidly increasing diverse and idiosyncratic nature of employment, a psychological contract framework, this is emphasizing the needs of the individual with unvoiced and implicit expectations from the job, which can easily get favour as sure way of studying people at work. People are the most valuable asset in the company. However, few companies have put in place systems, which support psychological contract. In India, there are a number of challenges in industry, which needs close attention from human resource managers in finding the appropriate candidate and building a conducive working environment, which is beneficial to both the organization and the employees. In a view of dynamics of the industry, at this moment, there is high demand for informed workers. Many companies search people who can make a difference in businesses. The knowledgeable professionals have significant bargaining power because of their skills and knowledge they possess. The attitude differs from those who are taking responsibilities of lesser experience and age. These elements have contributed to the approaching shift to individualism from the commitment to organization career. There is a stiff competition from the global market; this has prompted managers to motivate their workers to adopt new developments. Human capital is the most crucial part of any organization. Thus, the managers need to recruit, manage and retain the best. About Tata Steel Tata Steel Group is among the ten top global steel companies with crude steel capacity of about 29 million tons in a year. It was established in 1907 as the first Asia’s integrated steel company in the private sector. It is now the second world worldliest diversified steel producer operating in twenty-six countries and over fifty countries of commercial presence. It has over eighty thousand employees in five continents. The company’s vision is to be the leading steel manufacturer and benchmark in corporate citizenship and value creation through excellence of their workers (Paul, J. 2011). Tata Steel Company went through various stages to reach where it is now. There were different phases of development towards modernization. The first phase of the company was from 1981-85; its cost was Rs 2.3 billion. Two 13t LD converters were installed in place of old open hearth furnaces. The second phase took place from 1985-92, it had a 0.3 Mtpa wire rod that was to enrich the product mix. Phase three took place from 1992-96, there were two stamps charged oven batteries added. LD shop was installed two blown converters. The last phase took place from 1996-2000, it had an increase in crude steel and hot metal (Sengupta, N. 2006). Third vessel was installed, which allowed 100% casting continuously and a more flat steel was produced. In early 1990s, the Group started to introduce management of knowledge initiatives in the organization. To increase knowledge management, in early 20001 Tata Steel industry, introduced the KM index to measure and award system as per the performance. Two other major changes were made to KM index to improve the effectiveness, these were; Executive officers started using a scorecard to monitor employees performance. Secondly, Tata Steel started a formal rewarding in recognition of KM system. CEO rewarded industrious employee, knowledge community and team. KM index system had two major positive impacts, that is; reduced cost of production which increased the revenue and it also lead to utilization of available knowledge and creation of another. Out of this effective knowledge management, Tata became one of the leading steel producers in the world (Sengupta, N. 2006). The company went on and introduced a knowledge repository where each employee participated actively. Employees were able to share their experiences of accomplishments and shortcomings in the implementation of the project. Employees were highly encouraged to use the program. Their contribution or any query was posted on the website and all queries were responded accordingly, this improved psychology contract of the company a lot. In 2003, the company was chosen as best of Asia’s Most Admired (MAKE) Knowledge Enterprises. It was the first manufacturing company in India and Steel industry in the world to receive the award. KM knowledge management system played a key in the success of the company. After knowledge repository, knowledge communities were formed, which gave forum for meeting and sharing experience, learn and exchange of knowledge to like-minded people, if a problem was identified it was solved by brainstorming (Sengupta, N. 2006). Through KM system, there was an increase collaboration and interaction of the employees, there was skilled personnel was always available in the organization throughout. There was job satisfaction increase among the employees that reduced intellectual capital loss. In future Tata Steel is planning to incorporate e-learning into the KM communities and the KM repository and devise a mechanism where the retired employees can network with the ones at work to exchange their intellectual know-how. When above factors are available to the workers, the obvious consequence is employee satisfaction that will lead to reciprocation of employee to meet the organization expectation, thus promoting psychological contract (Paul, J. 2011). References Al-Bastaki, Y. (n.d.). Building a competitive public sector with knowledge management strategy. Fernando, A. (2009). Business ethics. Chennai: Pearson Education. Paul, J. (2011). International business. New Delhi: PHI Learning. Robinson, S. and Wolfe Morrison, E. (2000). The development of psychological contract breach and violation: a longitudinal study. J. Organiz. Behav., 21(5), pp.525-546. Rothermund, D. (1993). An economic history of India. London: Routledge. Sengupta, N. (2006). Managing change in organizations. [S.l.]: Prentice-Hall Of India. Read More