Aka It Industry Major
Aka It Industry Major
Aka It Industry Major
HR PRACTICES IN IT INDUSTRY
Submitted by
AKARSHIKA PANDEY
1704770005
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PREFACE
M.B.A. is stepping-stone to Management career. In order to achieve practical, positive and
concrete results the theoretical knowledge must be implemented with exposure to real
environment. M.B.A. combines both theory and its practical applications as its major content of
study in the field of management. Theoritical knowledge without practical knowledge is of little
value. Theoritical studies in classroom are sufficient to understand the marketing concepts.
Therefore, it becomes necessary to undergo any project work. Practical project supplements the
theoretical studies. It exposes a student to invaluable treasure of experiences. I took my Research
work is a part of our curriculum, which helps to correlate our theoretical concepts with practical
experiences. The topic that I have taken for project is “HR PRACTICES IN IT INDUSTRY”.
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DECLARATION
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ACKNOWLEDGEMENT
This is doubtlessly what this project is about. Before getting to brass tacks of things .I would like
to add heartfelt word for the people who have helped me in bringing the creativeness of this
project.
To commit things I would like to present my vote of thanks to the Director of Dr. Virendra
Swaroop Institute of Computer Studies Prof . Pragya Awasthi for being appreciative
enough for giving me this opportunity to undertake this project.
I would like to express my sincere gratitude to Head of Department of Virendra Swaroop
Institute of Computer Studies Mr. Saurabh Shukla of Management of Business
Administration for his encouragement and assistance throughout the work.
I am deeply indebted to mentor of this project Mrs. Ila Pandeyfor their valueable and
enlightened guidance for completion of this report.
My parents need special mention here for their constant support and love in my life.
I also thank my friends and well wishers, who have provided their whole hearted support to me
in this exercise.
I believe that thie Endeavor has prepared me for taking up new challenges opportunities in
future.
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EXECUTIVE SUMMARY
Information Technology Industry in India has come of age and the competition between the
various players have intensified. The main resource based on which IT companies define their
core competencies have always been “manpower”. Therefore attracting capable employees,
developing them in the organization, retaining them and maintaining the knowledge they create
is a major strategic objective for all the organizations in the sector. To do so the Human resource
departments in these companies has to evolve and take on a more central role in the organization.
With the top management support, the HR function in IT organizations has taken to the new
challenges posed by the business environment by bringing in innovation in the Human Resource
practices. While trade papers intermittently record these efforts, research efforts have not been
undertaken to understand the extent and impact of HR practices in India especially in the
Information technology context. Therefore this study attempts to understand:
1. The extent to which HR managers believe that innovation in HR practices are important for
achieving goals of the organization
2. The major areas in which innovation is required
3. The extent to which Indian companies have succeeded in inculcating HR practices
4. The major influences on the kind of HR practices adopted by Indian IT organization
5. The important outcomes of innovation in HR practices with reference to organizational
commitment and performance.
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TABLE OF CONTENT
1. INTRODUCTION
Introduction of the Industry
Problem to be investigated
Hypothesis Test
Research Design:
a. Population:
b. Sampling design
1. Sample Size:
2. Sample Unit:
3. Sampling procedure
c. Source of data
d. Methodology of collection of data i.e.
contact methods
e. Statistical tools for evaluating and
utilizing data.
6. BIBLIOGRAPHY
ANNEXURE
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CHAPTER 1
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1 .INTRODUCTION
Information Technology (IT) sector in India is one of the rapidly growing sectors. Indian IT
sector has a great reputation and brand value in the global markets. Indian IT industry comprises
of software sector and Information Technology Enable Services (ITES). Indian IT industry also
includes Business Process Outsourcing (BPO) industry. India is an affordable market destination
for software development and IT & ITES services.
Indian Information Technology (IT) industry has played a key role in putting India on the global
map. The IT-BPO sector has become one of the significant growth sector for the Indian
economy. In addition to fuelling India’s economy, this sector is also positively influencing the
lives of its people through an active direct and diversity. IT sector has played a significant role in
transforming India’s image from a slow moving bureaucratic economy to a place of innovative
entrepreneurs and a global player in providing world class technology solutions and business
services.
According to National Association of Software and Service Companies (NASSCOM), “The
sector is estimated to have grown by 19% in the F.Y. 2011, clocking revenue of almost US$ 76
billion. India’s outsourcing industry has witnessed a rebound and and indirect contribution to
various socio-economic parameters such as employment, standard of living registered better than
expected growth according to NASSCOM.”
ROLE OF IT INDUSTRY:
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The IT industry serve as a medium of e-governance, as it assures easy accessibility to
information. The use of information technology in the service sector improves operational
efficiency and adds to transparency.It also serves as a medium of skill formation.
Economies of scale for the Information Technology industry are high. The marginal cost
of additional unit of additional software or hardware is insignificant compared to the
value addition softare or hardware is insignificant compared to the value addition that
results from it.
Unlike other common industries, the IT industry is knowledge based.
Efficient utilization of skilled labor forces in the IT sector can help an economy achieve a
rapid pace of economic growth.
The IT industry helps many other sectors in the growth process of the economy including
the services and manufacturing sectors.
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HISTORY AND EVOLUTION OF IT INDUSTRY:
HISTORY:
India’s IT Services was born in Mumbai in 1967 with the establishment of the Tata Group in
partnership with Burroughs. The first software expert zone, SEEPZ- the precursor to the modern-
day IT park-was established in Mumbai in 1973. More than 80 percent of the country’s software
exports were from SEEPZ in the 1980’s.
The Indian economy underwent major economic reforms in 1991, leading to a new era of
globalization and international economic integration, and annual economic growth of over 6%
from 1993-2002. The new administration Sri Atal Bihari Vajpayee (who was Prime Minister
from (1998-2004) placed the develpoement of Information Technology among its top five
priorities and formed the Indian National Task Force on Information Technology and Software
Development.
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Walcott & Goodman (2003) report on the role of the Indian National Task Force on Information
Technology and Software Development.
The Indian IT industry originated under very unfavourable conditions. During olden times local
markets were absent and government policy toward private enterprise was hostile. The Indian IT
industry was begun by Bombay –based conglomerates who entered the business by supplying
programmers to global IT firms located overseas. During 1970s the indian economy was the
Indian Economy was state-controlled and remained hostile to the software industry.
IT Industry in the country has played a major role in placing India on the international map. The
Indian IT industry mainly comprises of instance system integration, software experiments, netork
services and IT solutions. According to the analysis done by the annual report 2009-10,prepared
by the Department of Information Technology (DIT), the IT-BPO industry was expected
toachieve a revenue aggregate of US$ 69.6 billion in 2008-09, growing a rate of over 5%. The
report even predicts that the indian IT-BPO revenues may reach US$ 225 billion in 2020.
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EVOLUTION:
• Stage 2 1980 to 1990 :During this stage, in spite of government initiatives, the software
exports could not be reached at the expected level because of two reasons. First, the export of
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software was dependent on the imports of hardware and the procedural aspects ware too
cumbersome. Second, there were no proper infrastructural facilities for software
development. In order to encourage more participants in this sector, it was mandatory to
reduce import duty and to simplify import and export procedure. To overcome the above
problem, a new software policy was formulated. According to this policy, the import
procedure was simplified and the import duty for import on hardware for software developers
was reduced. In 1986, the government took some healthy corrective steps to develop IT
sector. As a result, Indian Government software policy and liberalized the IT sector.
According to this policy, the imports of hardware were de-licensed and were also made duty
free for exporters. This policy has reduced a number of entry barriers making the growth in
this sector inevitable.
• Stage 3 1990 to 2000: This period has witnessed intensified competition in the IT sector.
During this stage, there were some significant changes in Indian economy, including trade
liberalization, relaxation in the entry barriers, opening up of Indian economy for foreign
investments and devaluation of rupee. Due to the liberalization, a flow of foreign investments
was come in India and MNCs in India were introduced. “Offshore Model”, “Onsite Model”
and “Global Delivery Model (GDM) were also introduced as part of their distinguished
services.
• Stage 4 Post 2000: The global problems like Y2K, the dotcom crash and the recession in the
US economy has forced many US firms to utilize the services of the Indian firms. This has
resulted in placing the Indian IT industry on the global map. Post 2002-2003, the industry
had registered a robust growth rate. During this stage, there was in increase in the Indian
client base, large sized contracted and a strong global delivery model.
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MAJOR PLAYERS ARE:
Players
Indian software industry has a mix of a few large companies and several small to medium sized
companies. Currently 42 Indian companies have exports of more than Rs 1 billion. First
generation entrepreneurs, who had limited access to finance and low risk taking capabilities,
operate most of these large companies. Smaller companies which are also typically entrepreneur
run companies, have a similar potential to strike it reach. Some of the key players in this industry
are Infosys, Wipro, Mahindra British Tele., Mastek etc.
Geographical Distribution
Most of the software companies are concentrated in western and southern part of India. These are
further concentrated in a few cities. Choice of location has been driven by availability of
infrastructure facilities, cost of space and manpower availability. In terms of business size,
Mumbai, Pune, Hyderabad, Banglore and Chennai have the highest concentration
Most of the software companies are concentrated in western and southern part of India. These are
further concentrated in a few cities. Choice of location has been driven by availability of
infrastructure facilities, cost of space and manpower availability. In terms of business size,
Mumbai, Pune, Hyderabad, Banglore and Chennai have the highest concentration.
TCS
Wipro
HCL
Tech Mahindra
SLK Software
Accenture
Infosys
Oracle financial service
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PRESENT SCENERIO:
The current scenario in the IT sector
India has the largest pool of manpower, second only to the US.
According to a study conducted by the National Association of Software and Services
Companies (NASSCOM)-quantity of skilled knowledge workers in India seems to be a non-
issue, and it would be so atleast for another couple of years.
The arithmetic out of 1.22lakh engineering graduates qualifying every year in India, about
73,000 are software engineers from IITs and other RECs. Thus, around 73,000 fresh software
engineers are expected to be available annually. Total demand for software professionals during
the next couple of years is estimated at 1.40 lakh. Against this, India is expected to have a pool
of 1.46 lakh software engineers. Besides, quite a few Indian universities have started courses
leading to Masters in computer Applications and there are private Training Institutes which offer
high level software engineering courses.
According to an AIMA survey, 60% of the IT Companies have a written job description of all
levels of employees. The rest 40% either have a partly written job description or they donot have
anything written at all making it difficult for both the employee and the employer.
Most CEOs site lack of skilled professionals as one of the major hindrances to growth in the
Indian Software Industry. Reputed software companies might get people at the base level but
getting somebody with an experience of more than 4-6 yrs is a problem. The problem of
retention was more prevalent in the telecom, IT and the Services sector than manufacturing and
traditional sector.
When asked about employee retention, the majority among HR professionals of IT felt that it
was all about retaining good people in the company and creating such situations for the non-
performing employees that they quit on their own. It was felt that employee retention was a
collective responsibility of the HR department, top management and individual departments in
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an ascending order with the HR Department having the maximum and individual department
having minimum accountability.
Data shows that in companies with more than 1000 employees, the HR Department was strong
whereas in mid-sized companies, the individual department was responsible along with the top
management.
Large companies with growth rate higher than 10% did not face serious retention problems, but
large companies with lower growth rates had acute problems in retaining their employees. In all
industry segments, the employee attrition rates at the junior level were on the higher side
compared to that at the top management level.
Studied over the last two years, retention levels have either increased or remained same due to
better compensation, healthy competitive environment, higher profitability of the company, and
good working conditions. But the case is not so with the IT sector, where the key motivator is the
lure of U.S market.
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NEED OF THE STUDY:
The boom in the information technology revolution has been rising during the recent past and is
expected to go on for many years to come. Attracting the best professionals is never easy, no
matter what industry segment we consider.
This is especially true in the case of the IT industry where the attrition rate has been the highest.
Attracting and retaining talent has become a Herculean task in this sector. The objective of this
project has been to find out the major causes of employee turnover in the IT companies. It also
looks at how this brain drain can be reduced and what methods can be adopted to retain the
knowledge worker in the company.
This is especially true in the case of the IT industry where the attrition rate has been the highest.
Attracting and retaining talent has become a Herculean task in this sector. The objective of this
project has been to find out the major causes of employee turnover in the IT companies. It also
looks at how this brain drain can be reduced and what methods can be adopted to retain the
knowledge worker in the company.
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The project focuses on
1. The importance of retentior in the IT companies.
2. Most effective methods to find the cause of turnover.
3. Factors favoring retention.
4. Innovative methods adopted by companies to retain people.
5. Constraints faced by the organization in implementation of retention strategies.
6. Effectiveness of the methods used to retain people.
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CHAPTER 2
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2.REVIEW OF LITERATURE:
INTRODUCTION:
A detailed review of literature has been made to find out the research gap and to identify
the relevant researchable issues for the study. It is essential for a researcher to review the related
literature study to have a clear knowledge about the subject and understand the research gap in
order to draw the scope for the study. This chapter contains discussion on research work of
various authors on the research topic of HR (Human Resource) practices and policies of
employee.
HR Department would be accountable for the strategic decisions and the overall performance of
the organization (Harvey, Dec 2001). A lot of Researchers have emphasized that employees that
work in teams or team work has resulted in productive performance of the organization (Carmen
Camelo Ordaz, April 2008). Nowadays, there are many companies which have also adopted
newer technologies like internet services in an effort to undertake their HR
Resource Management Practices
(HRM) Human Resource Management Research has always been a very hot topic and has been
discussed and researched by several researchers all over the world. There have been several
developments in the Human Resource field and the Human resource department has eventually
evolved over the years (Paauwe, Nov 2001) (Harvey, Dec 2001). Because of rapid
industrialization and globalization, the need for trained and skilled manpower becomes
imperative. Companies have started recognizing the importance of the HR Department and are
aligning the HR function to the strategic business goals and objectives (Srimannarayana, Oct
responsibilities. There are many social networking websites available which connect people from
the farthest corner of the world. Websites such as naukri.com, timesjobs.com and LinkedIn are
very popular websites for recruitments in India. (Bing, 2011).
While a few research efforts have been made in this area,a definition for it is sparce. Som in the
article titled “What drives adoption of innovation in SHRM practices in Indian Organizations”,
(May 2007) and in “Bracing for MNC Competition through Innovative HRM Practices : The
way ahead for Indian Firms”, (March-April 2006) defines innovative HRM practices as “Any
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intentional introduction of HRM programme, policy, practice or system designed to influence or
adapt employee the skills, behaviors, and interactions of employees and have the potential to
provide both the foundation for strategy formulation and the means of strategy implementation
that is perceived to be new and creates current capabilities and competencies”.
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CHAPTER 3
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3.H R PRACTICES:
Global Workforce
About 8,000 employees of our global workforce are from 65 different nationalities
including Chile, Brazil, China, Romania, Australia, Mexico, and Hungary
IT Industry continues to have the lowest attrition rate in the industry 10.8 per cent as
against the industry attrition average of about 15 per cent
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The HR Policies
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Human Resource Planning
Human resource planning involves getting the right number of qualified people into the
right jobs at the right time so that an organization can meet its objectives.
It is the system of matching the supply of people with the openings the organization
expects over a given time frame.
At IT Industry, its main objectives are:
o Forecast Personnel Requirements
o Use Existing Manpower Productively
It is done at top level at the end of every quarter and for every project
Process of HR Planning at IT Industry:
o First clients requirements are collected at the central level
o Then they are considered Geography wise, Branch wise & Project wise respectively
Project wise
Branch wise
Geography wise
Client
requirements
are considered
(Centrally inf. Is
given)
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Job Analysis
IT software and services has attempted to create a segments solution to fit the needs of
different layers of job opportunities within its environs.
It is based on
o Activity to be performed
o Skills required for that job
To begin with, the company has mapped the educational streams to the hierarchy of job
opportunities within its domain.
o Typically, the company has found that non graduates need to be trained in basic IT
and deployed for the spectrum of jobs provided in the basic level of ITES.
o Graduates in Arts and Science can fit into the programming profiles.
o A sub-set from the engineering and management teams can get placed in software
engineering activities.
o The high performers in graduate level engineering and a subset from the master’s
level can be used in high end services.
o The high performers at the master’s level and PhDs can get routed to research.
By undertaking this mapping for its internal purposes, IT Industry is ensuring that there is
a constant supply of the right human resources to the right career opportunities and that
there is no mismatch between the roles and the available skill sets.
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Hierarchical Structure in IT Industry
National
Head
Regional Head
Delivery
Centre Head
Group Head
Project Lead
Team Lead
Module Lead
(not necessary)
Team
Members
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Recruitment & Selection
Depends on:
o Manpower cost
o Effectiveness
o Past data
o Advertisements
o Job Portal
o Consultants
Fresher
Experienced Professionals
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Selection Procedure
Those who clear written test will face technical and HR Interview.
The HR Interview is very general to test your temperament. General questions based on
current affairs, general awareness, trends in IT etc. may be asked.
The technical interview is based on subjects you have already studied in your curriculum.
Online Technical HR
Test Interview Interview
Management
Technical HR Review Round
Interview Interview (by Senior
Mgmt)
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Training & Development
The primary motive of this consulting firm is to make its employees knowledgeable
about the on going practices in their respective domains.
For this, it invests 4% of its annual revenue on training, development and other
employee empowerment programs.
Its learning centers are at Tiruvnanthapuram & Bhubaneswar.
Its learning centers have state of the art facilities coupled with all modern day amenities
to make learning fun.
It has in place a well-planned induction programme for new recruits, which includes
two months of intensive training at its dedicated training facility.
This facility is equipped to train over 600 people simultaneously in various software
subjects and technologies and soft skills.
IT Industry also sends its consultants overseas for further education programmes.
The company is also providing employees with Just -in-time training, which is more
reactive in nature and caters to the skills related to platform, technology, application
domain, etc. specific to a project.
It reinforces the concepts learnt during education/induction training through on-the-job
experience.
At IT Industry, the experience gained in handling projects is captured, encapsulated and
disseminated through Continuing Education Programs.
These programs have been designed in such a way that they are consistent with IT
Industry strategic thrust areas, career opportunities available in the company’s ladder and
individual aspirations of employees.
Under the umbrella of its HR policies, IT Industry has earmarked the following career
paths for employees:
o technical architecture
o project management
o business relationship/geography management
o corporate functions such as Finance, HR, quality and R&D
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Despite the vast size of IT Industry, the company is providing learning opportunities to
its professionals so that they can move up the value chain in terms of skill sets and across
streams.
The company has developed a robust framework for career progression and professional
development and created and implemented a three –tiered training program to create a
better alignment between its expectations from employees and their knowledge and
practical skills.
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Compensation Management System
IT Industry is reputed to be a world class employer which always cares for its employees
and maintains sound yet flexible HR policies.
Its pay packages are designed in a way to accommodate for both the basic and incentive
components.
The package is determined on the basis of the level (recruited for) and the amount of
experience an employee has.
Fixed part includes basics + bunch of benefits (cafeteria benefits, LTA, conveyance,
etc.)
Corporate EVA
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Performance Appraisal
o Identifying employees for salary increases, promotion, transfer and lay off or
termination of services.
Appraisal at IT Industry is done for both the Services & Managerial Employees
It happens on
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Process of Performance Appraisal
Associate
Supervisor
Reviewer
Associate
Accept Reject
HR
Department
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Retention Strategies
IT Industry has been able to retain talent by offering software professionals a clear
defined career growth path.
This includes ability to work in diverse geographies across network of 169 offices and
development centres in 35 countries, as well as on new technology platforms and
domains like banking, telecom, life sciences and retail.
This is facilitated by a promotion policy, which is performance-based.
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Job Rotation
IT Industry offers its employees a flexibility of choices on career streams across domains,
technologies and services.
It encourages job rotation and allows movement of associates across different job roles
and functions.
For instance, employees can move from a technical role to HR, finance or learning and
development to facilitate their professional requirements and individual aspirations.
But before that an employee must have worked in his or her present role for at least 2
years.
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Succession Planning
It is planned in each ‘practice’ which happen to be the business units of the company
High-fliers are identified at the time of appraisals and their progress is monitored
When somebody gets identified as an exceptional performer by more than one manager,
he/she comes up for positioning in the succession planning system.
The process however just does not stop at identifying the successors. The need is also to
provide challenges and motivation to those who have been identified as successors.
Therefore there has to be an excellent career planning process and talent mindset.
For Example:
At Project Level – Module Lead whose role is to provide back-up to Project Lead
is considered as a successor of Project Lead
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Employee Benefits
It has an Adoption Leave Policy benefits which is extended to male associates also
o This means that associates of both genders are eligible to three months paid leave
after they adopt a child
IT Industry also has other add-ons such as sabbaticals, joining spouse overseas, part-time
or work from home facility, holiday homes across the country and welfare trust
facilitation for higher education
Also, as employees of the Tata group, associates get discounts on products and services
of other Tata Group companies
The other employee benefits which are offered here include House building loans,
automobile loans, mentoring, career counseling, stress development programs and many
more
o Basic Cover of 7x24 hrs of hospital facilities – Rs. 45,000& day-to-day expenses
– Rs. 5000
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Employee Welfare, Safety & Health
Grievance Handling
They have an Open door policy i.e. any employee can approach his supervisor anytime
for his or her problems.
They also have a special “Organization Effectiveness Department” for this purpose.
Every weak HR hour is there i.e. HR Person is available on the floor to discuss the issues.
Also every associate must be covered at least by the HR personally in every quarter.
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Organizational Exit
At IT Industry exit Interviews are conducted & purpose of them is mainly to know two
things:
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Spirit of IT Industry
Intensity to Win
Unyielding Integrity
o Delivering on commitments
The Spirit of IT Industry is the core of IT Industry, the Spirit is rooted in current reality, but it
also represents what IT Industry aspires to be, thus making it future active.
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Training and Development
On need basis
Induction
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Additional Training is also provided on:
3. Standard responses
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Induction
Exit Interviews
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CHAPTER 4
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4.RESEARCH METHODOLOGY:
The objective of this project is to throw light on various strategies used by the IT companies to
retain people.
The objective of this project has been to find out the major causes of employee turnover in the IT
companies. It also looks at how this brain drain can be reduced and what methods can be adopted
to retain the knowledge worker in the company.
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STATEMENT OF THE PROBLEM:
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HYPOTHESIS OF THE STUDY:
To justify the objectives of the study following hypotheses are framed:
The IT industry staff does not differ in their opinion on talent based
recruitment practices adhered by their organisation.
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hospitals and their talent management.
Research Methodology:
The research methodology of the study consists of two stages, explorative and descriptive in
nature.
Stage I: Explorative research form part of desk work carried for collection
of review of literature. The data collected in this stage of researcher helped
the researcher to frame interview schedule.
Stage II: Filed survey form part of descriptive study, that is a fact finding
investigation with adequate interpretation. The present study depends on
primary and secondary sources of information.
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Research Design:
The study aims to analyse the talent management practices of
private hospital in Kanpur city:
(i) Study focused only on the senior level employees, those who
are working in the multi-specialty hospitals in Kanpur city, with
more than 3 years of work experience in the present
organisation.
(ii) Industry are large, diverse organizations with numerous
departments that often dramatically differ from each other in
size, function and performance quality. This study uses
department level data drawn from the industry
(iii). Sample subjects who participated in the survey were: junior
employees(senior level), staff and administrators and officers.
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CHAPTER 5
51
5.DATA ANALYSIS AND FINDINGS:
52
Confi
Leade dence 4 Emoti
2 3
Dialogu 2 6T.3r2u
Mainte 4 4 5.35
Liste F
It has been found that on an average score of 4.15 employees feel that there is
low scope for personal and career development in the current job; it is ranked first.
Followed by, a sizeable number of respondents have opined that there is disintegration
with organizational policies and they are in an urge to
enrich work experience, so they claim that they feel less committed towards their
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organisation. These variables are placed in second and third places with the mean
score of 4.12 and 4.06, respectively.
Individuals prefer to stay in a company that clearly consider and take care of
their career priorities (life stage needs), health, location, family, dual- career, and
other personal needs. Table 6.4 depicts employee’ s intention to either stay or leave
the present organisations.
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EMPLOYEES’ PERCEPTION TOWARDS THEIR TURNOVER
INTENTION
According to the study, an absolute majority i.e., 80.20 per cent of employees
have an intention to stay in the current organisation. On the contrary, 19.80 per cent of
employees have the intention to leave their current organisation.
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EMPLOYEES’ PERCETION TOWARDS HR PRACTICES AND
ORGANISATION POLICIES EMPLOYEES’ COMMITMENT
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MULTIPLE REGRESSION MODEL SUMMARIES HR PRACTICES
AND ORGANISATION PRACTICES ON EMPLOYEES’
RETENTION
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HR PRACTICES AND ORGANISATION PRACTICES ON
EMPLOYEES’ RETENTION
To assess multi-collinearity one looks at the size of tolerance and VIF (Variance
Inflated Factor). For the tolerance, small values indicate the absence of collinearity.
The VIF is the inverse (opposite) of tolerance, one looks for large values. If the
tolerance value is smaller than .10, it is concluded that multi-collinearity is a problem.
Similarly, if the VIF is 5 or larger, then multi- collinearity is a problem. Since the
tolerance value is substantially above .10 and the VIF is smaller than 5, it is concluded
that multi-collinearity among the independent variable is statistically significant.
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EFFECTIVE TALENT MANAGEMENT PRACTICES AND
EMPLOYEES’ NEGATIVE COMMITMENT TOWARDS THE
ORGANISATION
It may be found that probability value of ANOVA at 5 per cent level does not
establish good relationship between the variables. Hence the hypothesis framed stands
rejected and it is concluded that there exists association between effective talent
management practices and employees’ commitment towards the organisation.
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ANALYSIS AND FINDINGS:
Need for innovation and areas of HR
1.Importance of innovation in various areas of HR
From the senior Human resource representatives the study attempted to understand the major
areas in the Human resource function in which they felt that innovation was necessary. The data
was collected on a likert scale. The mean value for the importance ascribed to each of the areas is
represented in figure 1. in a descending order. Employee Retention strategies were considered
the most crucial area in which innovative practices is required followed by Rewards and
Recognition, Compensation and incentives and employee retention strategies.
The areas which have been rated as least important for Indian IT companies while investing in
innovative practices are Knowledge management and CSR.
The mean value for the extent to which the HR managers of IT companies felt that companies
have adopted iHRM in each of the areas is represented in in a descending order.
Extent to which Indian IT companies have adopted iHRM
Reward and Recognition strategies, compensation and incentives were considered the most
common areas in which innovative practices is adopted followed by employee acquisition
strategies and performance appraisal. The areas which have been rated as least prevalent are
Employee exit and separation management, welfare measures and knowledge management in
Indian IT companies.
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Adoption of HRM and size of organizations
The areas adoption for innovation in HR practices of the Indian IT industry were subject to factor
analysis and the three factors thus evolved were used to compare between IT organizations of
different sizes.
Ho: There is no significant difference between large, medium and small IT organizations in the
adoption of Employee acquisition and reward strategies, Employee growth management
strategies and other HR initiatives
Ha: There is significant difference between large, medium and small IT organizations in the
adoption of Employee acquisition and reward strategies, Employee growth management
strategies and other HR initiatives
Based on the results of the analysis of variance and the acceptance of the null hypothesis, it is
evident that there is no difference adoption of these initiatives by the HR managers in IT
organizations of different sizes.
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CHAPTER 6
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CONCLUSION:
It can be concluded that Emerging HR trends of Indian IT Industry are quite different from
the old economy industry. India is considered one of the super power in Information
Technology and allied fields. Majority of world leaders in It sector are outsourcing their
requirements from Indian IT industry and recruiting Indian IT professionals.
HR managers in IT industry must keep the sensitive nature of IT professionals and state
greater opportunities outside in mind for devising HR policies for their organisations
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FINDINGS:
Complex business equations made more difficult y competitors all offering great
incentives, good work environment, and work place satisfaction and career development
opportunities.
The problem however, is that even though most companies recognize that they could
improve, few realize that they have a retention problem.
Retention problems are like cancer that can hit any company anytime, but there are ways
to combat leaving, most importantly knowing your staff needs and how to provide them.
The biggest challenge employer’s face is the changing nature of workplace with advent
of new technologies and practice.
The buoyant job market is one of the most serious issues facing employers who are
struggling to keep staff.
The number one reason for employees to leave is lack of opportunities for career
development.
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Other areas of difficulty are poaching by competitors, people chasing money and senior
professional positions and the challenge of providing interesting and varied work and
global opportunities
People are becoming increasingly selective about who they work for “Can I be proud of
the company I work for?”
It’s a candidate tight market where there are more jobs than candidates and employees
feel they are better informed about what the market is providing and employment
conditions in competitor companies to make career-shift judgements.
Salary is not the single most important factor. Employees are also looking at poor
management and whether companies have innovative means of rewarding people.
“Who is hit?” lower levels are the most vulnerable. Small companies are becoming
increasingly vulnerable and departure of even one person hits hard.
Exit interviews and employee satisfaction survey do help. These are the two most
commonly used methods used to find the cause of turnover.
Employer’s version
1) Growth opportunities
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2) Opportunity to work on new technology
3) Compensation
4) Rewards and recognition
5) Good work environment(open culture)
Employee’s version
1) Compensation
2) Career advancement
3) Job challenges
4) Work life balance
5) Boss
6) Education
7) Health
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LIMITATIONS:
This study is limited in many ways:
Sample size: While attempt was made to include different kinds of IT companies in the sample,
the generalizability of the study is limited by the fact that it has used a small sample
1. Data collection: The data for the study has been collected from Mumbai but other cities
like Hyderabad, Thiruvanthapuram, Pune etc. have also become established IT hubs. Future
studies can cover HR mangers in firms in these cities.
2. Cross Sectional study: While a cross sectional study has its uses, it would be ideal to garner
better depth of information on the topic if the study could access longitudinal data gathered
from deep within the firms over a period of time.
3. Analytical tools used: Normal distribution of data has been assumed for data analysis.
Further the Bartlett test was used to check ensure the applicability of techniques like factor
analysis but ideally a larger sample would be suited to conduct these tests Future studies
should look at larger samples in terms of larger participation of IT managers and larger
participation of IT companies. Attempt can also be made to look at differences between
different companies and different sub-divisions like IT and ITES or companies that cater to
the US markets vis-à-vis the European or the other markets in differences in adoption. While
this study indicates that the size of the organization in itself has limited impact a more
detailed study into actual practices instead of the reports by the IT managers would give
better insights.
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ADVANTAGES OF INFORMATION TECHNOLOGY:
Increases production and saves time.
Improves Communication
Improves data storage, File Management, Data Reporting
Improves financial management
Cut cost of operation and increases in RIO
Improves business to consumer relationship
Improves business competitive advantage
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DISCUSSIONS AND SUGGESTIONS:
Information Technology Industry in India has come of age and the competition between the
various players have intensified. The main resource based on which IT companies define their
core competencies have always been “manpower”. Therefore attracting capable employees,
developing them in the organization, retaining them and maintaining the knowledge they crate is
a major strategic objective for all the organizations in the sector.
To do so the Human resource departments in these companies has had to evolve and take on a
more relevant role in the organization. With the top management support, the HR function in IT
organizations has taken to the new challenges posed by the business environment by bringing in
innovation in the Human Resource practices.
While trade papers intermittently record these efforts, research efforts have not been hither to
undertaken to understand the extent and impact of iHRM practices in India especially in the
Information technology context. Therefore this study attempts to understand:-he extent to which
HR managers believe that innovation in HR practices are important for achieving goals of the
organization, the major areas in which innovation is required, the extent to which Indian
companies have succeeded in inculcating innovative HR practices, the major influences on the
kind of HRM innovations adopted by Indian IT organization, and the important outcomes of
innovation in HR practices with reference to organizational commitment and performance
In order to do so, HR managers at twenty large, medium and small IT companies were
interviewed in the city of Mumbai with head quarters in Bengaluru.. The data collection
instrument was tested for reliability and validity before proceeding. The data thus collected was
subjected to empirical analysis using descriptive analysis, Factor analysis and Analysis of
variance.
The results of the study indicate that HR mangers agree that including innovative HR practices is
extremely important especially in the process of attracting and rewarding employees which are
two of the largest challenges they face. Of all the major areas in which the function oversees,
Employee Retention strategies were considered the most crucial area in which innovative
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practices is required followed by Rewards and Recognition, Compensation and incentives and
employee retention strategies. The areas which have they been rated as least important for Indian
IT companies while investing in innovative practices are Knowledge management and CSR
The areas in which these mangers are currently seeing extensive use of iHRM practices include
the Compensation, Rewards and Employee acquisition strategies. In Employee acquisition use of
referral bonus and the social media is increasingly common while in use of a blend of financial
and non-financial rewards in addition to “Best employee” ect. is finding more takers. Virtual
working has also become increasingly acceptable to organizations if it means that they can retain
talent.
The main motivation for organizations to adopt iHRM is to remain competitive in the market
according to the HR managers interviewed in this study. Moreover the external environmental
factors including competition and the customers compel organization to incorporate innovate
practices. The other major reasons include attempt to provide a satisfying work environment,
Top management insistence, already inculcated organizational culture and structural
characteristics.
The respondents were very positive about the impact of innovative practices in HRM. They said
that the most visible impact is on the ability of the organization to attact and retain talent. This
first may also be because of the increased employee satisfaction which is also a outcome of
iHRM. The third area in which the impact of iHRM can be felt is Employee productivity. Other
areas in which the managers felt that iHRM practices can have apositive effect are: Employee
attitude and Behavior, Sales growth and People orientation of the management. While ROI,
market share and customer satisfaction are according to them positively impacted too. These
have been rated the least since these iHRM may not have a direct or immediate impact on these.
An organization investing in iHRM naturally would do so only if the outcomes gave them
strategic advantages. These innovative practices according to HR mangers of these companies
help organizations to remain competitive in the job market; moreover their clients also audit
them to ensure that their HR practices as per acceptable international standards. With these and
the employee satisfaction in view, top managements have also been pushing their HR
departments to bring in innovative HR strategies. But at the same time it’s interesting to note that
the impact of the iHRM initiatives is significantly higher for larger organizations than for smaller
ones. In Impact of organizational effectiveness at the micro level including Employee
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satisfaction, employee productivity, attitude and behavior and on people orientation of the
management, the
smaller firms are similar to the medium sized firms but larger firms have higher impact. This
may be because the larger firms are able to implement these initiatives more fully and have the
costs spread over a larger group of people.
But the bad news is that these HR managers feel that in spite of the efforts the industry is
making, the employee commitment levels are low and they will shift for higher pay or status.
Solving this issue is the holy grail as far as HR managers are concerned. It is well known that
when employees are committed to their employer, they will deliver higher levels of performance.
Highly committed employees can also help an organization achieve much more each year than
employees with average or low commitment.
IT Organizations can use different innovative HR and leadership strategies to increase the level
of commitment of their employees. For this it’s important that the iHRM practices are tailored to
induvidual workplace culture and objectives of the companies. This begins with recruitment.
Hiring well-qualified employees who match clearly-defined job descriptions is important. Induct
them successfully into the organizational culture is also important.
Since in the IT industry it is quite prevalent to find employees shift for larger packages its
important to hold people within in its culture through informal bonding as well. While this brings
with it the fear of large chunks of an organization together, this occurrence is rare. Initiatives to
build the teams into cohesive wholes have to be initiated by HR. It seems likely that, as
employees become more embedded in a social identity, changing organizations would become
less attractive.
It is also important to develop employees as assets by giving them increasingly challenging
tasks, allowing them to become more influential and derive intrinsic benefits. Effort could also
be made to keep an ongoing dialog with employees to understand what motivates them and
adjust their development plans to help them achieve their goals inside the organization.
Therefore one of the goals of iHRM has to be to move decision making rights from mangers to
lower levels. This will help make decisions by tapping into a much larger knowledge base and
simultaneously develop problem solving skills down the line. It is also important that firms stay
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committed to iHRM practices though it may not show immediate visible results. There is
increasing body of evidence that iHRM improves employee
productivity. But the advantages of using iHRM practices can go beyond employee productivity
and performance. An emotionally committed employee is a loyal employee.
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RECOMMENDATIONS:
To aid in retention, companies must look at valued employees place highly and attempt to meet
these with the core values of the organization.
Invest efforts and money in becoming an employer of choice and build company
branding to overcome retention dilemmas.
Companies need to continually invest to ensure that they are a step ahead and know what
competition is doing.
Be a people’s person
Both employees and employers are equally responsible for employee retention. Senior
executives can make this happen by discussing both company goals as well as
employee’s ambitions.
One of the most important tasks for any manager is hiring an employee. Yet, very few are
rained in this skill. Responsibility lies with management in hiring managers. Right hiring
will ensure longer retention cycles.
Look at retention linked performance bonuses for managers who are good at retaining
their people.
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Treat employees as you would treat valuable investments and ensure that they have clear
job roles, clear links to business needs and skills to successfully perform their roles is a
must.
Employee satisfaction is the key to business success. Take care of your people, they will
atke care of your business.
Training
1) Train and re-train
2) Skill based training
3) Training on new technology
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BIBLIOGRAPHY
A. Internet sites
www.indiainfoline.com
www.atosorigin.com
www.rave-tech.com
B. Publications
Business Today
Human capital
C. Reports
Mc. Kinsey Report on retention
AIMA study on retention
D. Books
Employee rewards
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