CHAPTER 1  INTRODUCTIONOF THE STUDY 1.          INTRODUCTION The beginning of the present studystates about the history of Indian Railways , conceptual framework of Human ResourceManagement (HRM), overview of Human Resource Management in public and privatecompanies, orientation of HRM practices in Indian railways etc. It also gives abrief description about problem statement, objectives of the research, researchmethodology, and significance of this research and further explores importantfindings of the study.  1.1     ORIENTATION TO THE STUDY Indian Railways (IR) is a great nationalasset. The Indian Railways (IR) is the second largest system in the world undera single management and 7th largest employer in the world. The firstRailway line in India ran between  Boribunder(Bombay) and Thana was opened to traffic on 16th April, 1853, just  28years after the World’s first train thatran  successful  between Stockton and Darlington in England in1825.

Indian Railways is a mammoth organization carrying 140 lakh passengersand 14 lakh tonne of freight daily, and employs more than 15 lakh staff1. Though,IR in last two decades has remained under-invested whereas the road sector haswitnessed a surge in investments. Statistics have been shown in the below table: Table1.1     Share of Transport Sector inOverall GDP (%)  Overall share of transport sector inoverall GDP has remained stable from 2008-09 to 2012-13. Road transport playsan important part in the overall GDP, railways comes after the road transport.

Theshare of IR in overall GDP has been static at 1% and has, in fact, gone down to0.9% in 2012-132.Although the Traffic Density on IR is quite high as perworld standards,   Source: Governmentof India, Ministry of Railways (2015), “IndianRailways: Lifeline of the Nation” Retrieved form//www.indianrailways.gov.in/railwayboard/uploads/directorate/finance_budget/Budget_2015-16/White_Paper-_English.

pdfFigure1.1 Traffic Density The above graph 1.1 portrays the trafficdensity of India in comparison with some top class countries’ trafficstatistics. After China and Russia, India is considered third largest countryin terms of traffic density. The Indian Railways continuously increases growthof the network is order to commensurate with the growth of the traffic.

 Any industry or organizations succeed,or fail, based on the quality and effectiveness of their employees. The success of India’s railway industry majorlydepends upon the employees working under its roof. Currently railway industryof India accounts for 1.334 millioncommitted and dedicated employees3.The core aim of Human Resource Management isto attain the organization effectiveness that can only be achieved with thesatisfaction of employees working in the sector.  Today all over theworld companies have realized the importance of Human Resource managementpractices and its direct relation with productivity.

In a huge organizationlike Indian Railways Human Resource management has to be kept on toppriorities. Humans are the most complex of all organisms on the earth. Managinghumans is not an easy task.  The corecompetency of any organization depends upon its human resources. Human Resourcemanagement is an important part in any organization. Companies are coming upwith more and more innovative methods of Human Resource management practices.Human Resource management involves various activities from recruitment,selection, training, appraisal, welfare, promotion, compensation andretirement. Human Resources are the art of managing people.

The majorchallenges in front of an Indian Railways Human Resources manager are torecruit and attract new talented employees, to retain them, come up withcompetitive packages, working on the welfare programmes for the employees,managing workforce complexities, designing appraisal, etc. Indian Railways isthe largest sector employing lakhs of employees. The below chart explains thenumber of employees increased over the years in the Indian railways.  * No. of Employees in Thousands (000)’Source: Statistical Summary: Indian Railways, Retrievedfrom http://indianrailways.

gov.in/railwayboard/uploads/directorate/stat_econ/IRSP_2013-14/pdf/Statistical_Summary/Summary%20Sheet_Eng.pdf Figure1.2: Number of Employees working in Indian Railways Therefore analyzing the satisfactionlevel of employees, working in the important sector of the country which is themajor source of economic growth, seems very crucial. The railway industry ofIndia needs to know and understand what their employees feel about working inthis sector? What is their level of satisfaction? Employee satisfaction is akind of survey, followed in HR practices, conducted by every organization orbusiness to analyze and assess the company’s HR performance. An organizationcan find out if its employees’ satisfaction level was excellent, good,satisfactory or poor with the help of the stated method, which help them torevise and develop their HR practices. The present research tries to state the employeesatisfaction level working in the railway industry of India. It further triesto examine the socio-economic measures like wage structure, job satisfactionlevel and examine the performance appraisal and employer employee relationship inIndian Railways and also suggest measures in improving the present system ofHuman Resource management in Indian Railways.

 Servicesector industry is growing day by day. It is the largest industry in India andthe important reason for the economic growth of the country. Gross Value Added(GVA) at current prices for services sector is estimated at 61.

18 lakh croreINR in 2014-15. Services sector accounts for 52.97% of total India’s GVA of115.50 lakh crore Indian rupees4. Transportis one of the service sectors in India. Indian Railways is the life line ofIndia.

The total approximate earnings of Indian Railways onoriginating basis during FY2014-15 were Rs 157,880 crore (US$ 23.68 billion)compared to Rs 140,761 crore (US$ 21.11 billion) during the same period lastyear, registering an increase of 12.16 per cent. The total approximate earningsfrom goods during fiscal 2014-15 were Rs 107,074.

79 crore (US$ 16.06 billion)compared to Rs 94,955.89 crore (US$ 14.24 billion) during the same period lastyear, registering an increase of 12.76 per cent5.Thus railway industry isamong the world’s largest service industry.  1.2     HISTORYOF INDIAN RAILWAYSThis section would portray the history ofworld’s largest rail network i.

e. Indian Railways before Independence and afterIndependence.  IndianRailways Before IndependenceRailways were first started in 1825 inEngland and thereafter in 1829 in France, and in 1930  in America. The railways in India are thelargest rail web in Asia and the world’s second largest under one management.With a huge workforce of about 1.

65 million, it runs some 11,000 trains everyday, including 7,000 passenger trains.6The tale of how railway communication gained foothold in India, where thelocomotive was once considered as a “fire-spitting demon”, is indeed aninteresting one. It was started when Railways were first started in 1825 inEngland and thereafter in 1829 in France, and in 1930  in America. Cotton was produced in various parts of the Indian sub-continent and ittook days to bring it to the nearest port to transport it to England throughships, the only major means of international communication then. The Britishthen had to build a link from the hinterland to India’s major ports for quickertransport of cotton and other goods as demand soared.

This expedited mattersfor the British to introduce a railway in India.TheBritish also felt that organising and dispersing the growing native populationfaster deployment of troops could be better handled by a railway. As early as1843, Lord Dalhousie had first conceived the possibility of opening up of Indiaby means of railway communication. He had proposed to link the three ports ofBombay, Calcutta and Madras by a railway.  Formation of First Railway Company GreatIndian Peninsular CompanyThebill for incorporation of first railway company, the Great Indian PeninsularRailway Company G.

I.P.R was presented twice in March 1847 and later in 1849before the British parliament. In March 1847 the East India Company the thanruler opposed the bill on specific clauses and asked for withdrawal of thebill.

7This prolonged till 1849 when Lord Dalhousie,came into picture backed up with his experience in railway matters in England,took charge  as the Governor-General ofIndia. With this the act to incorporate the Great Indian Peninsula Railway cameinto being on August 1, 1849. The original contract made on August 17, 1849,between the East India Company and the Great Indian Peninsula Railway statedthat the capital of the GIP Company shall be 5 lakh pounds, but can besubsequently increased to one million pounds in case the railway line has to beextended beyond Callian (Kalyan) and across the Thull and Bhor Ghats. Therailway line has been referred to as an “Experimental line of Railway”throughout the contract.8 Sir Jamsetjee Jejeebhoy & Hon.Jaganath Shunkerseth (known as Nana Shankarsheth) formed the Indian RailwayAssociation.

Ultimately, the association was integrated into the Great IndianPeninsula Railway. India’s first ever train ran for a distance of 21 miles(33.8 km) between Bombay (Mumbai) and Tannah (Thane). The journey tookapproximately 45 minutes.

  The importance of the day can be gauged fromthe fact the Bombay government declared the day as a public holiday. The train,hauled by three engines — Sindh, Sahib and Sultan — carried as many as 400passengers in its 14 coaches on its debut run. Indian Railways, which had a modest beginning in 1853, has since thenbeen an integral part of the nation — a network that has held together apopulation of one billion.

9 A self-propelled socialwelfare system that has become the lifeline of a nation, Indian Railways haswoven a sub-continent together and brought to life the concept of a unitedIndia.  British engineer, Robert Maitland Brereton, wasresponsible for the expansion of the railways from 1857 onwards.  EastIndian Railway Company The East Indian Railway Company, laterknown as the East Indian Railway (EIR), introduced railways toeastern and northern India. The company was established in 1 June 1845 in London by a deed of settlement with a capital of £4,000,000,largely raised in London. Calcutta, the then capitalof India, on the western coast of the sub-continent was also in the race to befirst to introduce railway into India. The survey from Calcutta to Delhi forthe East Indian Railway was carried out during 1945-46.

But the construction ofrailway line from Howrah to Raniganj was sanctioned only after three years.The Calcutta-Allahabad-Delhiline was completed by 1864. The Allahabad-Jabalpur branch line of the EastIndian Railway opened in June 1867. Brereton was responsible for linking thiswith the Great Indian Peninsula Railway, resulting in a combined network of6,400 km (4,000 mi). Hence it became possible to travel directly from Bombay toCalcutta via Allahabad. MadrasRailway Company Inthe south, the Madras Railway Company was formed in London as early as July 8,1845. The shareholders held a general body meeting in February 1846 toconstruct a railway line from Madras to Arcot , known as Wallajah Nagar.

Butmatters were delayed and the actual construction begun on June 9, 1853. Thefirst train between Royapuram and Wallajah Nagar steamed out on June 26,1856.The Bangalore section was opened an August 1, 1864. Railway lines to Nagari,Raichur, Bellary were completed subsequently.10TheBombay-Baroda and Central India RailwayThe Bombay, Baroda and Central India Railway (BB&CI) was a company incorporatedin 1855 for the construction of railway line between Bombay and Vadodara in India. On the 3rd of November, 1854, the Governor-General, LordDalhousie, sanctioned the construction of the sections Broach, and Baroda, to Ahmedabad, leaving theremainder of the scheme for future decision, and the work to be commenced at Bombay. Construction commenced in 1855 and began work on track from Baroda to Surat.

By 1865, the Bombay-Surat-Baroda-Ahmadabad route was complete; in 1867, the Virar -Bombay Backbay suburbanservice commenced with one train in each direction each day. In 1871, track agewas 300 miles (480km).11TheScindia RailwaysThe Scindia RailwaySurveys between Indore and Neemuch started long back in 1871-72 when the planand estimates for the whole project was submitted to the Government of India in1872-73. The Maharaja of Scindia agreed to grant a loan of Rs. 75 lakhs at 4per cent per annum interest for the project and the railway was renamed theScindia-Neemuch Railway. It also included a branch line to Ujjain from Indore.The Indore–Ujjain branch line was opened in August 1876 and the line wascompleted in 1879-801213.The Scindia-Neemuch Railway; the firstsection was opened in 1874 as a metre gauge(MG)  line from Neemuch  to Indore.

TheEastern Bengal RailwayThe Eastern Bengal Railway (full name Eastern Bengal Railway Company, shortenedEBR) was one of the pioneering railway companies that operated from 1857 to1942, in Bengal and Assam provinces of British India. The first line ofEastern Bengal Railway was from Calcutta to Kushtia in 1862 (presently covered by Sealdah-RanaghatLine, Ranaghat-GedeLine and Chilahati-Parbatipur-Santahar-DarshanaLine). It was extended to GoalundoGhat in 1865.

By 1902, itwas extended north to as far as Dhubri in Assam14.TheSouth Indian Railway The GreatSouthern of India Railway Company was established with its headquarters in England in 1853. The Carnatic Railway Company was founded in 1869. The two companies merged in 1874 toform the South Indian Railway Company.

 Thenew firm was registered in London in 1890 with Trichinopoly as its headquarters. In 1891, the Pondicherry Railway Company(incorporation in 1845) merged with the South Indian Railway Company. Thecompany moved its headquarters to Madurai and later, ChennaiCentral. The company operated a suburban electric train service forMadras city from May 1931 onwards.

15 The Calcutta and South Eastern Railway   The Bengal Nagpur Railway incorporatein 1887 under the guarantee system later on came to be known as TheCalcutta and South Eastern Railway .TheEarly Gauranteed system:Inthe north, the first train ran between Allahabad and Kanpur, a distance of 180km, on March 3, 1859, six years after the first train. The railways then werebuilt on a Guarantee System, which meant that the railway companies wereguaranteed a certain rate of interest on its capital investment.

The guaranteewas to be honoured by the East India Company.                 1849-1868The Early Guarantee System: Under these contracts the Railway Companiesundertook to construct and manage specified lines, while the East India Company(or the Secretary of State for India) agreed to provide land and guaranteedinterest on the capital, the rate fixed being in various cases 5, 4.75 and 4.5percent according to the market rates prevailing when the various contractswere made.1869-1881State Railway constructions: There were three kinds: Imperial State Railways- owned by the British Government of India through the Governors of one of the Presidencies of Bombay, Bengal or Madras. Provincial State Railways- owned by the British provinces e.g.

Northwest Awadh, Punjab etc.16 Railways owned by the native states e.g. Jodhpur Railway owned by the Maharaja of Jodhpur etc.TheNew Guarantee System- Three new guaranteed companies were formed- SouthernMaratha in 1882, the Indian Midland Railway in 1885 and the Bengal NagpurRailway in 1887.Oldguaranteed companies were acquired by the state as and when  they cup for renewal. RailwayBoard 1905 emerged from Robertson Committee of 1901.

It was so that in 1901 Mr.Thomas Robertson who was then appointed to look into the railway administrationand organisation matters after careful analysis othe entire situation came upwith the following recommendations -a.           Creationof a Railway fund  line for improvementof old and new railway lines.

 b.All lines should be leased out to the railway companies.c.

Establishmentof a Railway Board. d.Steps should be taken to improve the operational efficiency of the railways. e.For the construction of new lines the Guarantee system should continue. Thefirst three suggestions were very significant.

Sufficient amount of money wasnot available from the General Reserve Fund for the development of railways.The Govt. did not consider it worthwhile to create a separate railway fund butthey established a Railway Board in 1905 with 3 members – 1.

President and 2members; and it were put under the Department of commerce and Industries. 17 Thencame the Nationalization of Railways: Acworth committee recommended thegovernment should take control of railways. IndianRailways After IndependenceFollowingindependence in 1947, India inherited a decrepit rail network. About 40 percent of the railway lines were in the newly created Pakistan. Many lines had tobe rerouted through Indian Territory and new lines had to be constructed toconnect important cities such as Jammu.

A total of 42 separate railway systems,including 32 lines owned by the former Indian princely states existed at thetime of independence spanning a total of 55,000 km. These were amalgamated intothe Indian Railways. In 1952, it wasdecided to replace the existing rail networks by zones. A total of six zonescame into being in 1952. As India developed its economy, almost all railway productionunits started to be built indigenously.

The Railways began to electrify itslines to AC. On 6 September 2003 six further zones were made from existingzones for administration purpose and one more zone added in 2006. The IndianRailways has now seventeen zones including 1 Agarwal, V. K., & Kumar, N.(2004).

Managing Indian Railways: The Future Ahead. New Delhi: ManasPublications. 2 Government of India, Ministry of Railways (2015), “Indian Railways: Lifeline of the Nation”Retrieved form //www.indianrailways.gov.

in/railwayboard/uploads/directorate/finance_budget/Budget_2015-16/White_Paper-_English.pdf3 Statistics Summary of Indian railways, 20144 Planning Commission. (2015, July08). Sector-wise contribution of GDP of India. Statistics Times .StatisticsTimes.com. 5 IBEF.

(2016, February). Indian Railways. Strong RevenueGrowth For Indian Railways . Indian Brand Equity Foundation.6 http://www.worldjute.com/wj_rail3.

html7 https://en.wikipedia.org/wiki/Company_rule_in_India8 Haque, S.M. Imamul (1989), “Management of Indian Railways”, MittalPublications, New Delhi.

9 http://www.kportal.indianrailways.gov.in/index.php/history-of-railways10 http://www.

dnaindia.com/blogs/post-the-complete-story-of-indian-railways-182286811 https://wiki.fibis.org/w/Bombay,_Baroda_and_Central_India_Railway12 “History of Railway Division” http://www.wr.indianrailways.

gov.in/cris/uploads/files/1397109746468-history_1.pdfRetrieved on 13 December 2015 13 Wikipedia “Neemuch/Nimach” https://en.wikipedia.org/wiki/Neemuch; Retrieved on 13 December 2015 14 Mukherjee, Hena(2012).

 “Eastern Bengal Railway”. In Islam, Sirajul; Jamal,Ahmed A. Banglapedia: National Encyclopedia of Bangladesh (Seconded.). Asiatic Society of Bangladesh.

 15 https://en.wikipedia.org/wiki/South_Indian_Railway_Company16 http://www.kportal.indianrailways.gov.in/index.php/history-of-railways17 https://wiki2.org/en/Railway_Board

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