Human Resource Management

Assignment – 2
Case Writing
On

By:-
Section – B, EPGDIB-19-20
1. Adarsh Dixit (Roll No. -2)
2. Pranshu Mathur (Roll No. -28)
3. Pretyush Sharma (Roll No. -30)
4. Sahil Chadha (Roll No. -36)
5. Samarth Sikka (Roll No. -37)
Index:

● Abstract
● Introduction
● About Zomato
● HR Policy and Practices at Zomato
● Case Detail
● Solution
Abstract:

This case will talk about the recent layoffs by Zomato of their 541 employees across
its customer, merchant and delivery partner support teams. The was a second round
of layoff with in a spam of a month, where they laid off 60 employees.
What was the reason that caused Zomato firing so many employees? How they have
encountered the situation? Was the decision taken by Zomato was right or they could
have applied any alternate solution to such situation?
Introduction:

Human resource management (HRM) is the process of employing people, training

them, compensating them, developing policies relating to them, and developing
strategies to retain them. As a field, HRM has undergone many changes over the last
twenty years, giving it an even more important role in today’s organizations. In the
past, HRM meant processing payroll, sending birthday gifts to employees, arranging
company outings, and making sure forms were filled out correctly—in other words,
more of an administrative role rather than a strategic role crucial to the success of the
organization.
Every organization has policies to ensure fairness and continuity within the
organization. One of the jobs of HRM is to develop the verbiage surrounding these
policies. In the development of policies, HRM, management, and executives are
involved in the process. For example, the HRM professional will likely recognize the
need for a policy or a change of policy, seek opinions on the policy, write the policy,
and then communicate that policy to employees. It is key to note here that HR
departments do not and cannot work alone. Everything they do needs to involve all
other departments in the organization.
Employee Retention is the process of keeping and motivating employees to stay with
the organization. Compensation is a major factor in employee retention, but there are
other factors as well. Ninety percent of employees leave a company for the following
reasons:
● Issues around the job they are performing
● Challenges with their manager
● Poor fit with organizational culture
● Poor workplace environment

It’s necessary to point out here, at the very beginning of this text, that every manager
has some role relating to human resource management. Just because we do not have
the title of HR manager doesn’t mean we won’t perform all or at least some of the HRM
tasks. For example, most managers deal with compensation, motivation, and retention
of employees—making these aspects not only part of HRM but also part of
management. As a result, this case is equally important to someone who wants to be
an HR manager and to someone who will manage a business.
About Zomato:

Zomato is an Indian restaurant aggregator and food delivery start up founded in 2008.
It was started by Deepinder Goyal and Pankaj Chaddah. It provides information,
menus and user-reviews of restaurants, and also has food delivery options from
partner restaurants in selected cities.
Zomato was founded as Foodiebay in 2008. It was renamed Zomato in 2010. In 2011,
Zomato expanded across India to Delhi NCR, Mumbai, Bangalore, Chennai, Pune and
Kolkata. Subsequently, in 2012, the company expanded operations internationally in
several countries like the United Arab Emirates, Sri Lanka, Qatar, the United Kingdom,
the Philippines, and South Africa. In 2013, Zomato was launched in New Zealand,
Turkey, Brazil and Indonesia, with its website and apps available in Turkish, Brazilian
Portuguese, Indonesian and English languages. Further in April 2014, Zomato
launched its services in Portugal, followed by launches in Canada, Lebanon and
Ireland in the same year.
The acquisition of Seattle-based food portal Urbanspoon marked the firm's entry into
the United States, Canada and Australia, and brought it into direct competition with
Yelp, Zagat and OpenTable.
Back in 2008, all it took was an idea to enable digital access to thousands of restaurant
menus. Three passionate foodies who hated waiting in lines, drove around Delhi to
collect menus from restaurants, scan them and put them online. Their idea has now
grown into the vision that drives our team of 5000+ people everyday.
HR Policy and Practices at Zomato
Vision & Moto: Better food for more people
Employee benefits:
● Parental Leave Policy: For men and women at Zomato, we offer 26 weeks
paid leave. This policy also applies to non-birthing parents, and in cases of
surrogacy, adoption, and same-sex partners. In addition to the above, new
parents are also given an endowment of $1000, per child. In countries where
the mandated leave policy is more than 26 weeks, the local regulations apply.
● No Probation and Notice Periods: There's no probation period for anyone
who works at Zomato. Additionally, they do not require to serve notice periods.
● Medical Coverage: The medical insurance at Zomato covers all employees
across all our locations. In some markets, it also covers their spouse and up to
two children.
● In-office creche: An in-house creche and daycare facility is available in all their
large offices.
● In-office Psychiatrist Team: Zomato have an in-house team of psychiatrists
and counsellors focusing on creating a healthier work environment for all.
● Food and Snacks: Zomato offers free food and snacks to its employees in all
their large offices.
Zomato Employee Code of Ethics
Employees of Zomato are expected to adhere to and uphold the highest standard of
ethics and integrity. This includes acting in accordance with our core values and the
below listed policies at all times.
Zomato employees are prohibited from using their employee status to solicit discounts,
freebies, or special treatment at restaurants. Unless visiting a restaurant for official
business, Zomato employees are to refrain from identifying themselves as employees
of Zomato.
All Zomato employees in client facing roles including but not limited to Sales, Sales
Support, Neutrality, Media Content and Client Servicing across all transaction/
business/function at Zomato are prohibited from writing reviews and/or giving ratings
for dine out experiences on Zomato from either their personal or Zomato accounts.
They are also not permitted to influence others to write biased reviews or give ratings.
Zomato's review and photo moderators are required to always act in favor of keeping
Zomato a neutral platform. They are required to use their best judgement in
implementing moderation guidelines and are prohibited from giving preferential
treatment to restaurants. Deleting any authentic review from a restaurant page is in
violation of our policies. Similarly, keeping reviews, which are proven to be
unauthentic, is in violation of our policies.
The Case: Zomato fires 540 employees!

In one of its largest firing rounds in September 2019, Zomato, the online food delivery
and restaurant discovery platform, has laid off 540 employees at its Gurugram office -
- about 10 per cent of the overall strength at its head office in India. The company has
fired employees from its teams across customer, delivery and merchant support
segments. The company had also fired 60 employees from its customer support team
in August 2019.
The development comes close on the heels of food delivery platforms, including
Zomato and Swiggy, being accused of unfair and anti-competitive practices by
thousands of restaurant partners. The food delivery company has given two-four
months of severance package to the employees who have been sacked. Over the last
few months, improvement in its technology interface across functions has led to a
reduction in support-related queries; this has led to several roles becoming redundant,
prompting the company to layoff employees.
Zomato had earlier laid-off close to 300 employees in early 2015, or 10% of its staff,
due to cost-cutting. The food delivery market in India has exploded in the last few
years, with ordering apps such as Swiggy, Foodpanda, Zomato and UberEats gaining
popularity among customers. However, the burn rate for fulfilling these orders is also
very high. Zomato claims to fulfil 40 million monthly orders in India currently.
The aggregators together employ over 4 lakh-plus riders. However, riders or delivery
boys are mostly contract employees, who are not directly employed by companies.
The layoffs come at a time when Zomato, along with Swiggy, are struggling to
negotiate fair and better terms and conditions with restaurant partners after the
National Restaurant Association of India (NRAI) wrote to large food aggregators last
month alleging unfair and anti-competitive practices followed by such companies,
which they claim were hurting business for eateries.
Where on other hand, Zomato officials said, “Over the last few months, we have seen
our technology products and platforms evolve and improve significantly. While the
business has continued to grow consistently, this has led to an overall reduction in
direct order-related support queries. We have dramatically improved the speed of
service resolution, now only 7.5% of our orders need support (down from 15% in
March)," Zomato said, reported the daily. After the current round of layoffs, Zomato's
total employee strength stands at 5,000. Apart from layoffs across customer, delivery
and merchant support segments, Zomato also hired around 1,600 employees in 2019,
including 400 off-roll people, said the company.
Food delivery companies, particularly Zomato, are at loggerheads with restaurant
partners over aggressive discounting and predatory pricing. The issue had recently
led to hundreds of restaurants in Delhi, Mumbai and Gurugram pulling out of the
popular Zomato Gold programme amid growing unrest between the restaurant
industry and online ordering platforms.

Zomato Gold, which offers complimentary food and drinks to diners, has 1 million
subscribers and around 6,500 restaurant partners. After several rounds of meetings
with restaurant owners, Zomato had come up with a modified Gold programme in
August. However, post the 'logout movement', Zomato asked them to serve a 45-day
notice period before logging out, but it's not clear how many of them are listening.
#Logout Movement:
The Logout movement was started on August 14 when 300 restaurants under NRAI
started a twitter campaign with the hashtag #Logout to announce that they were
delisting themselves from platforms such as Zomato Gold, EazyDiner, Dineout’s
Gourmet Passport, Nearbuy, MagicPin among others.
The main pain point between NRAI and Zomato has been the very successful Zomato
Gold programme, which offers one-on-one offers on food and drinks to dine-in
customers at partner restaurants. In September, Zomato diluted the programme but
introduced the Gold offering on delivery as well, which led to further discontent among
NRAI members.
The Federation of Hotel and Restaurant Association of India (FHRAI), one of the
biggest body of the hotel industry in India that comprises over 27,000 members, has
extended its support to the 'Logout' movement initiated by the National Restaurant
Association of India (NRAI). Along with FHRAI, several other associations such as
Thane Hotel Association, Pune Restaurants and Hotel Association (PRAHA),
Vadodara Food Entrepreneurs (VFE) have also joined the movement.
While it started as a fight against deep discounts offered by online aggregators, it has
been reduced to restaurants versus Zomato fight. Rather than rolling back its Gold
programme for diners, Zomato has introduced it in delivery as well leading to this flare-
up. Anurag Katriar, president of NRAI, says reasons for two national bodies to come
together is to not let Zomato dictate the terms of operation. He said while other
aggregators have agreed to renegotiate and come back with new terms of operation,
Zomato has not relented.
"We want to keep the reigns of our business in our hands. Zomato is a marketplace
that purely connects buyers and sellers online. It cannot decide discounts on our
behalf," Anurag Katriar, president, NRAI said.
"Our group will not hesitate in embarking on a nationwide agitation and resistance
against Zomato and others if its demands are not met within a stipulated timeframe,"
said Pradeep Shetty, joint honorary secretary, FHRAI.
There were some speculations about Firing of 541 employees on the name of
Automation Activity at the same time of #Logout movement. Where Zomato itself
declared that there is growth in online orders. Is the layoffs are strategic decisions to
cope-up with the aftermath that will happen at the end of Logout movement?
But right now the reason of Layoffs is clearly pointing at “Improvement in
technology”.

Solution:

What Zomato did after Lay-offs:

Zomato has extended 2-4 months of severance pay to employees laid off over the
weekend.

What Zomato could have done:

The solution for such situation could be explained better with a concept called
“Managing Organizational Change”
In one of its statement to newspapers, Zomato representative said:
“This year we have hired over 1,200 people in our non-delivery teams and another
400 off-rolls positions. We have also created jobs for hundreds of thousands of
delivery partners. We are still hiring in our technology, product and data sciences
teams.”
This states that there was no lack of job opportunities in Zomato. However, there was
lack of competency in employees due to advancement in technological approach.
Change management is the systematic approach and application of knowledge, tools
and resources to deal with change. It involves defining and adopting corporate
strategies, structures, procedures and technologies to handle changes in external
conditions and the business environment. Effective change management goes beyond
project management and technical tasks undertaken to enact organizational changes
and involves leading the "people side" of major change within an organization. The
primary goal of change management is to successfully implement new processes,
products and business strategies while minimizing negative outcomes.
HR should be involved in major organizational changes from the beginning and can
assist by influencing the following:

● Improving employees' understanding of change.

● Increasing communication between management and employees.
● Identifying and mitigating risks.
● Enhancing employee satisfaction.
● Boosting trust between management and employees.
● Improving employee skills and proficiency through change-related training
initiatives.
Zomato fired the employees across its customer, merchant and delivery partner
support teams. Rather than giving them payout for 2 months they would have asked
them to enhance their technical competencies and enrolled them in tech support
department. Since the technical enhancement was done to improve customer service,
these people could have been better assets if their tech skills were sharp, rather then
hiring people from outside. This could have resulted in laying off lesser number of
employees.
According to an article by TrueStory:
Here’s how chatbots are impacting business:
● Chatbots for e-commerce - Chatbots are revolutionizing the conversation that
occurs between a shopper and his search patterns. The chatbot assesses the
shopping patterns of the customer to cull out similar trends while saving
interests and filtering recommendations for smarter and personalized shopping
experience. Chatbots provide assistance with discount codes, shipping
information, and out of stock items. This creates a loyalty factor within
operations, creating an inimitable experience.
● Chatbots for customer care - Chatbots come armed with the potential to
replace the existing conventional BPO or Call Center jobs/systems with their
automated mechanism. They meticulously sop up human interaction and
assimilate the same for further queries, based on the patterns. They are
programmed to self detect the solutions, solving basic concerns automatically,
free from human intervention.
● Chatbots in job perspective - When it comes to job automation, chatbots have
a bracing predicament- making most of the jobs redundant. According to a
recent Forrester research, AI will push out 17 percent of total US workforce in
next few years. Yet, the same report also states that 10 percent new jobs will
be created in domain of AI.Truth is, every technical revolution plays a key role
in making many jobs redundant, while at the same time, generating newer jobs,
similar to that of the industrial revolution. History has shown that although
automation has replaced humans in certain job types like manufacturing, it
hasn’t dented overall unemployment levels. In other words, when technology
renders our roles obsolete, we apply our talents in fresh ways and new jobs are
born.

The net result is an overall upward shift for the working class, in terms of skills
and quality of jobs. However, there would be a slack period where more jobs
will be lost as compared to the new ones being created. Domains like
accounting, legal, healthcare, BPO are likely to be affected the most, while
cheap manpower in India can last longer before being replaced by chatbots.
These positives clearly point towards a welcoming trend in jobs being enhanced
through technology.

Read more at: https://yourstory.com/2017/11/analysing-chatbots-making-many-jobs-

redundant