Causes of Opting VRS by Employees in Selected Steel Manufacturing Organizations in India-AComparative Study

In the post independence era, due to the socialistic approach of Indian policy makers, non existence of advanced technology and several other socio-economic and political considerations resulted in employment of huge manpower in the industrial organizations in general and steel industry in particular. The Indian corporate strategy of "employ more and produce more" subsequently proved to be ineffective because of the outdated technology, closed economy policy of government and several other factors which resulted in a huge budgetary deficit. It so happened that in 1991, the then government had no other option but to go for structural reforms of Indian economy and there was emergence of New Economic Policy (NEP). As a result, it necessitated the Indian companies to adopt cost reduction strategy and quality improvement practices to face the challenges of global competition. Indian Steel Industry which used to employ huge manpower adopted VRS as one of the important cost cutting mechanisms to rightsize their manpower. In fact there could be several causes which led to opting VRS by the employees but present study is a modest attempt to find out what are the major causes behind opting VRS by the employees, especially in steel manufacturing organizations in India. With a sample size of 290 VRS opted employees (both from public and private sector), there has been efforts to examine whether the causes of opting VRS vary across organizations because of the categorization on the basis of their ownership. The findings of the study reveals the existence of difference in causes which need to be addressed by the management of organizations and the planners and policy makers of the country.