A Study of Best HR Practices and their Impact on

Employee Satisfaction with special reference to Select

Large Scale Companies in Pimpri - Chinchwad
during 2007-2012

A thesis submitted to

Tilak Maharashtra Vidyapeeth, Pune

For the Degree of Doctor of Philosophy (Ph.D.)

In Management Subject

Under the Board of Management Studies,

Submitted by

Mr. Ashok Sukdeo Nanaware

Research Student

Under the guidance of

Dr. Shashank K. Pole

Research Guide

May 2016
 CERTIFICATE

This is to certify that the thesis entitled “A study of best HR practices and their
impact on employee satisfaction with special reference to select large scale
companies in Pimpri Chinchwad during 2007-2012” which is being submitted
herewith for the award of the Degree of Vidyavachaspati, Ph. D. in Management
Faculty of Tilak Maharashtra Vidyapeeth, Pune is the result of original research work
completed by Shri Ashok Sukdeo Nanaware under my supervision and guidance. To
the best of my knowledge and belief the work incorporated in this thesis has not
formed the basis for the award of any degree or similar title of this or any other
university or examining body upon him.

Dr. Shashank K. Pole

Principal,
S.B.B. alias Appasaheb Jedhe
Arts, Commerce & Science College,
RESEARCH GUIDE

Place: Pune
Date: ____ May 2016

ii
 DECLARATION

I hereby declare that the thesis entitled “A study of best HR practices and their
impact on employee satisfaction with special reference to select large scale
companies in Pimpri Chinchwad during 2007-2012” completed and written by me
has not previously formed the basis for the award of any degree or other similar title
upon me of this or any other Vidyapeeth or examining body.

Place: Pune
Date: ____ May 2016 Ashok Sukdeo Nanaware
Research Student

iii
 Acknowledgements

At the very outset I express my sincere thanks to my guide Dr. Shashank K.

Pole, Principal of S.B.B. alias Appasaheb Jedhe Arts, Commerce & Science
College,Pune 411002, for his unstinted support and valuable guidance to complete
this research work.

My thanks are also due to Dr. Sudhakar Janardan Bokephode – Director,

Audyogik Shikshan Mandal’s Institute of Professional Studies, Pimpri, Pune, for his
constant encouragement and support in completing this work.

I express my deep sense of gratitude to my mother Smt. Gayabai S. Nanaware

for her blessings and providing motivation to undertake this research work.

I am thankful to my better half Mrs. Sujata, my sons, Arhat and Akshat, who
have been giving me sufficient time for this research work .

I consider it my duty to extend thanks to M/s. Sameer Copiers, Pune for

providing their professional services in compiling and presenting this research work.

Place : Pune Ashok Sukdeo Nanaware

Date: ___ May 2016 Research Student

iv
 Table of Contents

I Certificate of the Guide ii

II Candidate’s Declaration iii
III Acknowledgement iv
IV Table of Contents v – vii
V List of Tables viii – ix
VI List of Figures x
VII List of Abbreviations xi
VII Abstract xii – xxxiv

Chapter No. Particulars Page No.

I INTRODUCTION 1 – 32
1.1 Introduction 1
1.2 Classification / Types of Industries 3
1.3 Role and Importance of Industries in Indian
4
Economy
1.4 Historical Perspective of Indian Industries 5
1.5 History of Industrial Development of India 6
1.6 Indian Industry Prior to Reforms
11
( Liberalization, Globalization and Privatization)
1.7 Impact of Globalization on Indian Industry 11
1.8 Categorization of Industrial Units 12
1.9 Large Scale Industries 17
1.10 Monopoly and Restrictive Trade Practices
17
Commission
1.11 Definition of Human Resources Development 18
1.12 Evolution of Concept of Human Resources
19
Management in India
1.13 Importance of Human Resources Development 21
1.14 Significance of Human Resources Planning 21
1.15 Impact of Globalization on HR Practices 22
1.16 Strategic HR Management 24
1.17 Objectives and Goals of Human Resources 24
1.18 Functions of HR 26
1.19 The Role of HR Manager 27
1.20 Introduction to Concept of Best HR Practices 28
1.21 Summary 32

v
Chapter No. Particulars Page No.

II RESEARCH METHODOLOGY 33 – 53
2.1 Introduction 33
2.2 The Importance of Human Resources
34
Management in Modern Organizations
2.3 Significance of the Research Topic 40
2.4 A) Objectives of the Study 40
2.4 B) Justification of Objectives 40
2.5 A) Hypotheses 42
2.5 B) Justification of the Hypotheses 42
2.6 Research Universe 43
2.7 Data Collection 44
2.8 Sample Size 46
2.9 Questionnaire 49
2.10 Analytical Tools Used 50
2.11 Scope 51
2.12 Limitations of the Study 51
2.13 Chapter Scheme 52

III REVIEW OF LITERATURE 54 – 77

3.1 Introduction 54
3.2 Previous Research Work 54
3.3 Books (Indian Authors) 62
3.4 Foreign Authors 64
3.5 Newspaper Articles / Reports 74
3.6 Knowledge Gained 76
3.7 Knowledge Gap 76

BRIEF PROFILE OF PIMPRI-CHINCHWAD

IV 78 – 87
AREA AND IDENTIFIED INDUSTRIES
4.1 Introduction 78
4.2 Identified Large Scale Companies 83

TRADITIONAL AND BEST HR PRACTICES IN

V 88 – 125
INDIA
5.1 Introduction 88
5.2 Traditional HR Practices in India 91
5.3 Relevance of HR 92

vi
Chapter No. Particulars Page No.

5.4 HRM in Multinational Companies 98

5.5 Best HR Practices 100
5.6 Guidelines for Ideal HR Role 104
5.7 Significance of Motivation 105
5.8 HR Practices in IT Companies 110
5.9 HR Practices Result in IT Companies 112
5.10 Employee Satisfaction 114
5.11 Determinants of Employee Satisfaction 117
5.12 Effect of Employee Satisfaction on Performance 120
5.13 Consequences of Employee Satisfaction 121
5.14 Measures to Increase Employee Satisfaction by
123
Management
5.15 Expectations of Employees regarding
125
Satisfaction

VI ANALYSIS AND INTERPRETATION OF DATA 126 – 169

6.1 Introduction 126
6.2 Primary Data Presentation and Analysis 129
6.3 Descriptive Analysis of Variables 160
6.4 Data Analysis of Hypotheses 1, 2, 3 164
6.5 Data Analysis of Hypothesis 4 168

OBSERVATIONS, SUGGESTIONS AND

VII 170 – 186
CONCLUSION
7.1 Observations 170
7.2 Suggestions 181
7.3 Attainment of the Objectives 183
7.4 Scope for Further Research 184
7.5 Conclusion 184

BIBLIOGRAPHY 187 – 188

ANNEXTURES 189 – 197

vii
 List of Tables

Table Particulars Page No.

No.

1.1 Manufacturing Enterprises - Investment in Plant and 16

Machinery
2.1 Data relating to the Large Scale Industrial Units in the Pimpri- 47
Chinchwad Corporation area
2.2 Activity wise Broad classification of the industries 47
2.3 Identification of Large Scale Industries 48
2.4 Class of Employee from each identified industry 48
2.5 Employees identified 49
4.1 Performance of the Cognizant Technology Solutions during the 86
study period
5.1 Some required and discretionary benefits to the employees in 97
India
5.2 Example of Work Life Programs 109
5.3 Factors Influencing Employee Satisfaction 120
6.1 Senior & Middle Managements Priority for the Best HR 130
Practices
6.2 Age wise classification of the respondents 132
6.3 Marital status wise classification of the respondents 133
6.4 Education qualification wise classification of the respondents 134
6.5 Work experience wise classification of the respondents 135
6.6 Monthly emoluments wise classification of the respondents 137
6.7 Management Grade wise, Gender wise classification of the 138
respondents
6.8 Total employees of Tata Motors during the study period 141
6.9 Financial Highlights (Kirloskar Oil Engines Ltd.) 142
6.10 Total employees of Tech Mahindra during the study period 147
6.11 Financial Performance of the Company (Cognizant 150
Technology Solutions Ltd.)

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Table Particulars Page No.
No.
6.12 Rating given by the identified employees in Senior 154
Management cadre for the Best HR Practices observed in the
Company
6.13 Rating given by the identified Middle Management employees 156
for the Best HR Practices observed in the Company
6.14 Rating given by the identified employees who are the members 158
of Trade Union for the Best HR Practices observed in the
Company
6.15 Summary of Analysis for Hypotheses 1 to 3 164
6.16 Summary of Analysis for Hypothesis 4 168

ix
 List of Figures

Figure Particulars Page No.

No.

6.1 Age wise classification of the respondents 132

6.2 Marital status wise classification of the respondents 133
6.3 Education wise classification of the respondents 134
6.4 Work experience wise classification of the respondents 136
6.5 Monthly emoluments wise classification of the respondents 137
6.6 Management Grade wise, Gender wise classification of the 139
respondents
6.7 Movement of Sales of Kirloskar Oil Engines Ltd. during the 142
study period
6.8 Movement of Sales per Employee of Kirloskar Oil Engines 143
Ltd. during the study period
6.9 Movement of Profit after Tax per Employee of Kirloskar Oil 143
Engines Ltd. during the study period

x
 LIST OF ABBREVIATIONS USED
Abbreviation Full form
BPO Business Process Outsourcing
BT British Telecom
CA Chartered Accountant
CEO Chief Executive Officer
CII Confederation of Indian Industries
CRM Customer Relationship Manager
CSR Corporate Social Responsibility
FDI Foreign Direct Investment
FERA Foreign Exchange Regulation Act
FMLA Family and Medical Leave Act
GSD Gross Domestic Product
HR Human Resources
HRD Human Resources Department
HRM Human Resources Management
IC&T Information, Communication Technology
KOEL Kiroloskar Oil Engines Ltd.
LSI Large Scale Industry
MIDC Maharashtra Industries Development Corporation
MNC Multi National Corporation
MRTP Monopoly & Restrictive Trade Practices
MSME Micro Small Medium Enterprises
OCB Organizational Citizenship Behaviour
OHSAS Occupational Health and Safety Management System Specification
PAS Performance Appraisal System
PCMM People Capability Management Model
PSU Public Sector Undertakings
SIC Standard Industrial Classification
SMES Small , Medium scale Enterprises
SSI Small Scale Industry
TPA Third Party Administrator
U.S.A. United States of America
UK United Kingdom
WTO World Trade Organization

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 ABSTRACT
Introduction

The manufacturing sector of the Indian economy is a vital sector for the
economic growth of the country. Particularly in the post globalization era India has
become a focal point for the manufacturing activity and many multinational
manufacturing units are attracted to India to establish their manufacturing units in
India. E.g. numbers of automobile companies, mobile manufacturing companies have
established their units in and around Pune.

Activity which converts raw material into finished product or process the raw
material or preserve the raw material for ultimate consumption with the use of
machinery is called an industrial unit. Thus the production of finished goods through
conversion of raw material is an industrial activity. E.g. Production of cars is a
manufacturing industry, dyeing and bleaching activity is a processing industry, while
preparation of pickles is a preservation industry.

Industries are classified using different criteria. According to one criteria

industries are classified as i) primary industry ii) Genetic industries iii) extractive
industries. Industries are also defined on the basis of their activity criteria as i)
Manufacturing industry ii) Processing industry and iii) Service industry.

After the independence, for the first time in 1948 there was first industrial
policy which gave direction to the industrial growth. Since 1951 India has embarked
upon the Five Years Plan as a strategy for development. In the second plan the thrust
of the govt. was to develop domestic raw materials instead of reliance on the foreign
powers. The government of India provided special incentives for production of
machineries and the raw agents dealt in various parts of instrumentation.

Subsequent to this at periodical interval the industrial policies were

announced. In 1956 the first detailed industrial policy resolution was announced.
Since then in 1977, 1980, 1991, 1997 revised policies were announced wherein the
thrust on the industrial growth was highlighted. The definitions of small and cottage
industry, tiny industry, ancillary industry, small and medium enterprises, large scale
industries were given and the various sops were also provided in these policies. The
present one is the policy on SMEs which has been introduced in 2006.

The banking industry has been asked to accord priority in the matter of
allocation of credit to SME sector as it is contributing to the India’s economy as well
as generating employment opportunities on a large scale.

For the purpose of this research the industries are classified using the
investment in plant and machinery criteria. More particularly as defined in the Micro
Small and Medium Enterprises Development Act, 2006.

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 The Micro, Small & Medium Enterprises Development Act, 2006 has
provided definitions of MSM Enterprises as follows:
Investment in plant and machinery/requirement
(excluding land and building)
Manufacturing Enterprises Services Enterprises
Micro Up to Rs.25 lakh Up to Rs.10 lakh
Small More than Rs.25 lakh and up to Rs.5 crore More that Rs.10 lakh and
up to Rs. 2 crore
Medium More than Rs. 5 crore and upto Rs.10 crore More that Rs. 2 crore and
up to Rs. 5 crore.
Source: Micro Small and Medium Enterprises Development Act, 2006.

Large Scale Industries (LSIs) are those industries with investment more than
Medium Manufacturing Enterprises, under MSMED Act 2006 and as shown in the
above table. It is because of this rationale the researcher has also followed this
definition of the large scale industries for the purpose of identifying the large scale
industries for this study.

Industries which require huge infrastructure, man power and large capital
assets are classified as large scale industries. There are number of types of large scale
industries. E.g. iron and steel industry, textile industry, pharmaceutical industry,
automobile industry, telecom industry etc. Of late, Information Technology industry
which brings lot of foreign exchange to the nation is also called large scale industry
because the number of employees is large and the revenues are also voluminous.
These large scale industries are contributing major share to the Indian economy.

Contribution of SMEs: Employing close to 40% of India's workforce and

contributing 45% to India's manufacturing output, SMEs play a critical role in
generating millions of jobs, especially at the low-skill level. The country's 1.3 million
SMEs account for 40% of India's total exports.

Human Resources Development Department: Human Resources Development is

considered as a sub discipline of Human Resource Management (HRM) in Business
Administration. HRM scholars, Werner and DeSimone (2006 p.5) defined Human
Resource Development (HRD) as: “A set of systematic and planned activities
designed by an organization to provide its members with the opportunities to learn
necessary skills to meet current and future job demands”. Haslinda-a (2009) expressed
referring many studies that numerous attempts to define human resource development
(HRD) by academics, researchers and practitioners have led to confusion in the
literature, illustrating the elusive nature of this concept.

“HRD is the process of increasing the knowledge, the skills, and the capacities
of all the people, in a society. In economic terms, it could be described as the
accumulation of human capital and its effective investment in the development of an
economy. In political terms, HRD prepares people for adult participation in the
political process, particularly as citizens in a democracy. From the social and cultural
points of view, the development of human resources helps to people lead fuller and
richer lives, less bound to tradition. In short, the processes of HRD unlock the door to
modernization”.

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Evolution of concept of Human Resources Management in India
In India, the post independence period witnessed number of changes in the
personnel management approach of the organizations. After independence India
adopted mixed economy growth model. The industries were broadly classified as
Private Sector and Public Sector. The public sector organizations were huge
organizations where heavy capital was required and it employed large number of
employees. The Indian Constitution provides several protections to the working class.

When the industrialization process was on, simultaneously the trade union
movement was also growing rapidly to protect the workers interest. The workers were
made aware of their rights and it was getting difficult to exploit this class. During the
period 1970 to 1980 the HRM department was handling the following functions:
(1) Personnel and administration,
(2) Industrial Relations, and
(3) Labor welfare. The prescribed and assumed role was crisis driven or issue
driven. (Chaterjee, 2006).

During this period there was rise of managerial unionism, the white collar
workers without formal union rights formed their association that acted as pressure
groups to get the benefits. At the same time the managements also formed their
industry wise association to protect their interests. The industries also started adopting
tools and techniques that could help improve the efficiency and productivity. This led
to defining the work output, staffing pattern and productivity linked incentive
schemes.

Today, the HRD in India is not in infant stage but at the same time it cannot be
said to be in its adulthood. It was in 1975 the first HRD department was established in
Larsen & Turbo. This was followed by the State Bank of India – the largest bank
network in India having large employee base in which case they established integrated
HRD system approach. In 1979 the first workshop on HRD was conducted by IIM
Ahmedabad by Dr. T.V. Rao , where the draft of the book Designing and managing
Human Resource System was presented and tested. After that a large number of
companies started showing interest in having HRD departments.

Over the years the concept of HRD has gone through various stages of
transformation. In the mid seventy’s the HRD started using motivational tool to build
the competence. By 1980 these motivational needs were fulfilled to a large extent.
Today in the globalized world the concept of HR for business and its role is very well
understood by the organizations.

“HRD is the integrated use of training and development, career development

and organizational development to improve individual and organizational
effectiveness” (McLagan).

“HRD is organized learning activities arranged within an organization to

improve performance and personal growth for the purpose of improving the job, the
individual, and the organization” (Gilley and England).

“HRD is the process of determining the optimum methods of developing and

improving the human resources of an organization and the systematic improvement of

xiv
the performance of employees through training, education and development and
leadership for the mutual attainment of organizational and personal goals” (Smith)

Importance of HR: In any organization the human resource occupies prime

importance. Therefore, the Human Resources Development department is the most
important department. This department takes care of hiring people and maintaining
benefits to the organization and takes care of company’s all important assets.

Human Resources Dept. assumes importance for several reasons. Employees

have a feeling that there should be someone in the organization to take care of their
benefits and at the same time they should have faith that the department will stand by
them in securing just compensation. HRD also takes care of the organization to ensure
that the human resources put in all their strength to improve their productivity and
profitability. Thus human resources results in a win-win situation for everyone
involved.

Importance of Human Resource Planning: Human Resource Planning is important

for any organization in the following ways;

Provides quality workforce,

Reduces labor costs,

Facilitates rise in skills,

Effective motivation,

Safety of health,

Impact of globalization on HR practices: After 1991 when the Indian government

adopted the policy of globalization, liberalization and privatization, it paved the way
for induction of multinational companies in India. These multinational companies
have now stabilized their operations in India. Along with the advanced technology
these overseas companies brought with them newer and newer ideas for handling
Human Resources Functions. Now the HR function has received a global dimension.
With the multinational companies making inroad in India naturally there are
employees from different countries. These different countries have numerous HR
practices depending upon the circumstances prevailing therein. Therefore, the Human
Resources department is now required to equip itself with the various styles of
functioning, methods of compensation, motivational tools used, fringe benefits
offered to the employees and above all these changes should be adopted to suite their
own company’s benefit and palatable to the management of the company. Thus from
this point of view the HR department has to play a complex role.

It is on this back drop the concept of Best HR Practices, has crept in. The
dictionary meaning of best practice is the recognized methods of correctly running
businesses or providing services. “Best practice is a method or technique that has
constantly shown good results with other means and that is used as a benchmark”.1

“A practice which is most appropriate under the circumstances, especially as

considered acceptable or regulated in business; a technique or methodology that,
through experience and research, has reliably led to a desired or optimum result”.2

1
http://www.businessdictionary.com/definition/best-practice.html#ixzz30Mb0fLWT
2
Collins English Dictionary –unabridged edition 2009

xv
Functions of HR: The direct handling of people has always been an integral part of
every line manager’s duties. The line supervisors’ responsibilities for effective human
resource management under these general headings:
1. Placing the right person on the right job.
2. Starting new employees in the organization (orientation).
3. Training employees for jobs that are new to them.
4. Improving the job performance of each person.
5. Gaining cooperation and developing smooth working relationships.
6. Interpreting the company’s policies and procedures.
7. Controlling labour costs.
8. Developing the abilities of each person.
9. Creating and maintaining department morale.
10. Protecting employees’ health and physical condition

Definitions of Best HR Practices:3 : A set of guidelines, ethics or ideas that

represent the most efficient or prudent course of action. Best practices are often set
forth by an authority, such as a governing body or management, depending on the
circumstances. While best practices generally dictate the recommended course of
action, some situations require that such practices be followed.

Any practice devised to increase the competence, commitment and improve

the culture building can be termed as Best HR Practice and this can be in the form of a
norm, rule, system, or some practices.4

Following are the few examples of the best HR practices:

HR Executive greeting / wishing the employee on his/her birth day or

marriage anniversary day.

Provision for health care / regular medical checkup, reimbursement of the
hospitalization expenses including those for the family members.

Providing babysitting facility.

Provision for granting special allowance if the employee attends office on
his/her birth day.

Updating the employees of the organization about the organization’s policies
and latest policy decisions, performance through an internal house bulletin.
(Ensuring transparency).

Highlighting the achievements of the employee and his family members
through the house bulletins.

Job rotation to remove the monotonous feeling.

Best HR Practices are dynamic and subjective. The best HR practices differ
from company to company. What is best for one company may not be so for the other
company. Therefore, each company’s HR department should identify from its
manpower folio as to what will be perceived by the human force at their disposal to be
the best practice

3
http://www.investopedia.com/terms/b/best_practices.asp
4
http://www.talentnet.vn/information-center/hr-articles/best-hr-practices

xvi
The Importance of Human Resources Management in Modern Organizations
The success of any organization does not depend solely on market realities and
sustainable competitive advantage. The success also lies on the utilization of the
human capital which is an important asset of the organization. The statistical
presentation demonstrates the success of any organization in quantitative terms. But
the success is also dependent on the qualitative aspects of the human resources
management. If those are used positively and skillfully, success is there, but if there
are any lapses in handling these human relations no one can stop the failure.

The management of the human force of the organization strategically is the

Human Resource Management. The employees individually and collectively
contribute to the success of the organization. Each individual has his own goal and
dovetailing of the said goal smoothly with that of the organization is the job attended
to by the Human Resources Management Department. The objective of the HRM
department is to enlist the commitment of the employees for achievement of the
organization’s goals.

The function of the HRD is to attract, retain, and develop Human resources
through training input so as to achieve the corporate goals. The HRD dept. provides a
link between the employees and the management. For this purpose the HRD dept.
should assess the needs of its employees and find out how best these needs can be
fulfilled within the overall framework of the organization. The HR Dept. should
ensure that the employees get wholly involved in the organization of their own. For
this oneness the HR should create an atmosphere that the employees develop this
attitude. Various motivational tools are required to be used to have sustainable
retention of their interest.

In today’s modern organizations the HR functions are not attended to in

isolation but in coordination with the General Management. It is not an individual’s
decision but the decision is the outcome of the strategic consensus.

Best HR Practices and its impact on the organization: Needless to say that for any
organization achieving the Corporate Goal and the market share targets is the prime
concern. In order to achieve this it is essential to enhance the competencies,
commitment and building of sound culture. The HR Department has a key role to
develop certain systems, process, and formulate rules and regulations to achieve the
appropriate organization culture which will be healthy and the employees on their
own will offer their commitment to the organization.
Any practice that deals with enhancing competencies, commitment and culture
building can be considered as best HR practice. The practice can take the form of a
system, a process, an activity, a norm, a rule, an accepted or expected habit, or just a
way of doing things. HRD has been defined as essentially consisting of these three Cs
:-

Competencies

Commitment

Culture

Significance of the research topic

From the above discussion about the new dimension to the HRM practices that
has come to stay in India after the introduction of reforms in 1991, it is evident that

xvii
the adoption of new strategy to deal with the HRM functions has assumed greater
importance. Lots of new facilities are being made available to the employees which
they had not even thought of earlier. In order to sustain the growth, the industries are
required to adapt to the new HRM policies and ensure that the organizations derive
the benefit of the Best HR practices in improving the quality as well as reducing the
cost of production / services to achieve the corporate goal of achieving higher market
share and the profits.

It is in this context the researcher has felt it appropriate to study the change
that has taken place in handling the human resources development by the Large Scale
Industries located in Pimpri-Chinchwad Corporation area which has a prominent
presence of large-scale industries of all types. There are multinational as well as
domestic large scale industries. There are manufacturing as well as service sector
large scale companies in this location. On this back drop the significance of the
research topic has been highlighted. The study would be quite useful to the
managements of today and tomorrow’s large scale industries.

Objectives of the study

Keeping in view the research topic the researcher has formulated the
following objectives for this research:
1. To analyze the HR practices currently used by the identified industries.
2. To study the Best HR practices in vogue subsequent to the opening of the
Indian economy (liberalization/ globalization/ privatization).
3. To study the impact of best HR practices on employee satisfaction.
4. To identify potential areas in achievement of employee satisfaction using the
best HR practices and to suggest possible solutions.

Justification of Objectives
After the introduction of economic reforms in India since 1991, the entire
picture of the labour market at least in certain centres like Pune has undergone a sea
change. Pune has become automobile hub as well as information technology hub. As
a result multinational companies have opened up their manufacturing / research and
development units in and around Pune. These industries have not only brought
technology to India but also their Human Resources Development practices. This has
also a bearing on the HR practices followed by the domestic companies either in
manufacturing segment or in information technology segment. Therefore, the
researcher considered it appropriate to undertake the study of HR practices being
followed by the industries identified for this study and to analyze those practices. This
is the rationale for identifying objective No.1.

As stated in the earlier paragraph, after 1991, the concept of best HR Practices
have come to India. Now human resources development department is constantly
innovating new HR Practices to ensure that the employees of the organization, in
whose selection and grooming lot of money, time and effort has gone in, continue to
work with the organization. These HR practices keep the employee attrition rate to
minimum. Therefore, the researcher has considered studying these Best HR Practices
newly introduced in the Indian industries. On this backdrop the researcher has
formulated this objective number 2.

xviii
 Retention of the employees who are the costly assets to the organization is big
task before the HRD department. Introduction of the best HR Practices also involves
costs. And hence impact of Best HR practices on employees’ job satisfaction also
needs to be studied. Satisfied employee is an asset and the managements have to study
the impact of these practices on the employees and ultimately the benefits
organization derives from it.

Naturally while studying the above three objectives there will be a lot of input
available to the researcher. Some problems will come to surface and as a research
scholar some solutions may emerge to address these problems. Hence the researcher
has formulated the last objective.

Hypotheses: The researcher has framed the following hypotheses for this research:
H1 There is positive impact of the best HR practices on the employee satisfaction
and efficiency of the employees.
H2 The application of best HR practices has a bearing on the quality of
production/ services.
H3 The application of best HR practices reduces the attrition rate.
H4 The employee satisfaction results in cordial employer – employee relations.

Justification of the hypotheses: Success of the management is dependent on the cost

benefit study of each of its actions which has impact on the profitability of it.
Introduction of the best HR practices will certainly entail benefits which are in the
form of employee satisfaction and in turn its impact on the efficiency of the
organization. In an organization where best HR practices are introduced the attrition
rate is very meager. Therefore the researcher has formulated the hypothesis number
one as stated above.

As stated earlier a satisfied employee is an asset and such employee gives full
commitment to the organization. Naturally this is reflected in the improvement in the
quality of the product and the services rendered by such a devoted employee. In order
to test this statement the researcher has formulated this hypothesis number two.

The researcher wanted to study the direct relation between the introduction of
best HR practices and attrition rate. Therefore this hypothesis is to be tested through
this research, hence framed this third hypothesis.

Needless to say, that the job satisfaction has its impact on the employees’
satisfaction. This employees’ satisfaction in turn has a positive impact on the
employer – employee relationship. Usually in such an organization relations are
cordial. There are less number of employee grievances. Management is keen in
ensuring employees’ welfare. The researcher therefore formulated this hypothesis
which has been tested in this research.

Research Universe: Large Scale Industries refer to those industries which require
huge infrastructure, man power and have influx of capital assets. The term 'large scale
industries' is a generic one including various types of industries in its purview. All the
heavy industries of India like the Iron and steel industry, textile industry, automobile
manufacturing industry etc., fall under the large scale industrial arena. However in
recent years due to the IT boom and the huge amount of revenue generated by it the

xix
IT industry can also be included within the jurisdiction of the large scale industrial
sector. Last but not the least the telecom industry also forms an indispensable
component of the large scale industrial sector of India. Indian economy is heavily
dependent on these large industries for its economic growth, generation of foreign
exchange and for providing job opportunities to millions of Indians.

Primary Data: The primary data has been collected in two stages. The first stage
refers to the data to be collected from the Heads of the HR Departments of the
identified industries with the use of pre formulated questionnaire. In the second stage
the researcher has thought it appropriate to collect primary data from the employees
and the staff of the identified industries. This data collection from the employees
helped to cross check the implementation of the HR policies and how it is received by
them.

Secondary Data: The secondary data has been collected from the related
literature on various books, committee reports, journals and periodicals, news papers
articles, research papers, previous research and websites. Pune being educational hub
lots of libraries are available and therefore the availability of the reading material did
not pose any problem.

Period covered by this study: This research covered the period financial year ending
31st March 2007 to 2012.

Sample size: Working out the sample size was a very complex activity. Therefore,
the researcher obtained the data on the number of large scale industries located in the
MIDC industrial estates. He also collected the data on the Large Scale industries
located in Pimpri Chinchwad Corporation but outside the MIDC industrial estates.

In order to have a cross section of the industries for the study purpose the core
activity like – Automobile industry, IT industry, etc. of the unit was also taken in
account. In order to have better understanding the best HR practices followed by the
Multinational industries also found place in the industries identified for this research.
This enabled to compare the best HR practices that are being followed by the
domestic large scale industries.

Table showing identified industries for this research

As on 31st March 2011
Sr. Name of the company Classification details Domestic/ MNC
No.
Manufacturing Industries
1 Tata Motors: Automobile: Mfg. of Multinational
Commercial Vehicles organization
2 Kirloskar Oil Engines Oil engine Mfgr. Domestic Mfg. Co.
Ltd.
Services Sector Cos.
3 Cognizant Technology IT Service Industry Multinational
Solutions Ltd. Organization
4 Tech Mahindra Ltd. IT – Service Industry Domestic

xx
Being a large scale industry the operations of the companies identified for this study
are spread over in number of locations. These companies are having a well developed
and equipped Human Resources Department. For the purpose of this research,
employees are divided in three broad categories as under:
1) Employees from Senior Management Cadre
2) Employees from Middle and Front level management Cadre
3) Employees who are the workmen and have their own trade union.

With a view to compile data we have identified staff from each cadre and from each
identified company, as under:
Sr. Class of employee from each identified industry Employees
No. identified
1 Employees from Senior Management Cadre 5
2 Employees from Middle and Front level management 35
Cadre
3 Employees who are the workmen and have their own 60
trade union.
TOTAL 100

Thus the total sample according to class of employees identified for this study is as
under:
Sr. Class of employee Employees
No. identified
1 Employees from Senior Management Cadre 20
2 Employees from Middle and Front level management Cadre 140
3 Employees who are the workmen and have their own trade 240
union.
TOTAL 400

Questionnaire: Two sets of questionnaire are compiled:

a) For HR heads of the identified companies.
b) For the employees of the identified companies.

Statistical Tools used: The following statistical tools have been used:-

Percentage & Ratios- This is a special kind of ratio which will be used to
compare variables. Percentages will be used to condense data and express in
relation to 100.

Correlation- This tool has been used to know the relationship between the
variables. That is the effect of change in one variable on another variable.

Diagrams and Graphs- The diagrams and graphs have been used as an aid in
interpretation of data and drawing conclusions.

Averages- This statistical method is often necessary to represent a set of data
in terms of one single number that should neither represent the lower nor the
highest value but a value in between the highest and the lowest value.

Proportionality Test
This test explains how to conduct a hypothesis test to determine whether the
difference between two proportions is significant. The test procedure, called the two-
proportion z-test, is appropriate and uses the following formulae.

xxi
 To test H0: p=p0, the sample size are so large that both np0 and n(1-p0) are 10
or more.
p − p0
Now compute Z statistics as Z=
p 0(1 − p 0)/ n
In terms of a variable Z having the standard Normal distribution, the approximate P-
value

For a test of H0 against some alterative hypothesis say Ha

Ha: p > p0 is P( Z ≥ z)
Ha: p < p0 is P( Z ≤ z)
Ha: p ≠ p0 is P( Z ≥ | z |)

This test has been performed for each variable given, and the results are
summarized in below table. P values have been used to take decision about the
variables. Level of Significance is 0.05.

Scope of Research Topic: From the foregoing discussion it is clear that Managing
Human Resources of any organization is a vital task in the changed management
philosophy. It is not limited to the personnel administration. It goes beyond.
Particularly after the adoption of the globalization, liberalization and privatization,
number of multinational companies have arrived in India and along with those
companies their approach to manage human resources has also made an entry in India.
These new role and the best HR practices have made a difference in the Indian
context. Therefore, the current research topic has posed several newer aspects in HR
management for this research study. Newer concepts, new type of facilities, altogether
new type of amenities which are being provided by these multinational companies are
new in the Indian context and the Indian companies will also have to adopt some of
these practices applying appropriate changes acceptable to the Indian context.
Therefore, the researcher is of the considered view that there is an ample scope to this
research topic.

Limitations of the study: Compared to the total number of large scale industries
operating in the identified study area the sample is moderate. Each company has
different HR practices, although there may be some common practices. Hence, the
sample may be treated as indicative but the findings may not be universally
applicable. And to that extent this is one of the limitations. It is practically, not
possible to cover a larger sample than the one that has been selected taking into
account the time, man power and resources available to the researcher.

The questions relating to the policy matters were put to the HRD officials.
Some of them expressed their limitation on the point of secrecy.

One of the limitations is that, while the responses came from employees who
were best placed to report the actual HR practices that exist, there is still room for
error. Employees may not be completely accurate and, in some cases, may not be
completely knowledgeable about practices that have an impact on others. Even after
ensuring that a cross section of the employees was covered by this research, the
problem is minimized, but not eliminated.

xxii
Chapter Scheme

Chapter – 1: Introduction: In this chapter the researcher discussed the definition of

industry, classification/ types of industries role and importance of industries in Indian
economy, historical perspective of Indian industries, history of industrial development
of India, post independence development of Indian industries, various Industrial
policy initiatives till date, Indian industry prior to liberalization, impact of
globalization on Indian industries, categorization of Indian industries, definition of
large scale industries in India, Definition of Human Resources Development,
evolution of concept of Human Resources Management, importance of HR and
Significance of HR Planning, traditional HR practices, impact of globalization on HR,
impact of HR Management on industry, strategies of HR management, objectives of
HR, functions of HR, the Role of HR Manager, the impediments in HR
implementation.

Chapter – 2: Research Methodology: This chapter deals with significance /

importance of the research topic, objectives of HR, hypotheses, research universe,
data collection, primary data, secondary data, sample size, questionnaire, analytical
tools used, scope and limitations and chapter scheme.

Chapter – 3: Review of Literature: In this chapter the researcher has taken a short
review of the various books, journals, periodicals, theses, reports, websites which are
related with the topic under research.

Chapter – 4: Brief Profile of Pimpri-Chinchwad Area and Identified Industries:

This chapter covers a brief profile of the study area and the identified companies for
this research. This helps in understanding the research work in its right perspective.

Chapter – 5: Traditional & Best HR Practices in India: In this chapter the

traditional HR practices have been brought out in details which, help to understand
the new approach to HR that is being currently implemented. It also brings out the
best HR practices being followed in India.

Chapter 6: Analysis and Interpretation of Data: The data collected through the
primary data collection from the field has been analyzed by using various statistical
tools like, tables, ratios, percentages, proportionality test etc. This chapter also
includes validation of hypotheses framed in the beginning.

Chapter – 7: Observations, Suggestions, Conclusion: This chapter covers

researcher’s observations based on the data analysis, suggestions, scope for further
research and conclusion.

HYPOTHESES TESTING
All the hypotheses formulated at the beginning of this research have been fully
tested with the use of proportionality test and the same has been detailed in the
chapter No. VI.

xxiii
OBSERVATIONS & SUGGESTIONS

OBSERVATIONS

A) Management Support
a) Sympathetic listening to employees by management: 57.25 per cent of the
respondents have stated that the management sympathetically listens to them.
21.25 per cent remained neutral and the rest have expressed their
disagreement.
b) Appreciation of the academic knowledge by the management: 67 per cent
of the respondents have stated that the management appreciates their academic
knowledge while 17 per cent remained neutral and the rest expressed their
disagreement.
c) Provision of medical facilities: 73.5 per cent respondents stated that they
receive adequate medical facilities from the management while 17.75 per cent
remained neutral and the number of respondents expressing disagreement is
negligible.
d) Management Climate: 65 per cent of the respondents reported that there is a
free atmosphere in the organization and that they can freely discuss their
problems with the management while 21 per cent of the respondents remained
neutral.
e) Communication channels: On this score 75 per cent of the respondents
reported that the organizational climate is such that they can communicate
with the management informally which is a good sign.
f) Management’s openness for suggestions: 61.00 per cent of the respondents
have reported that the management is very much open and welcomes their
suggestions for improvement in the systems and procedures. 25.5 per cent of
the respondent preferred to be neutral.
g) Involvement in decision making: 64 per cent of the respondents are of the
view that they are being involved in the decision making process.

Overall observation on Management Support

If we account for all the responses collectively the researcher is of the view
that the overall management support is satisfactory. It leads to job satisfaction,
increased production, and commitment of the respondents which collectively reflects
on the productivity and profitability of the organizations that they serve.

B) Working Environment
a) Working conditions in the department: 70.75 per cent of the respondents
stated that the working conditions are satisfactory, while 21.5 per cent of the
respondents remained neutral. Rest reported that they disagree with the
statement.
b) Sitting Arrangements & comforts: 67 per cent of the respondents reported
satisfaction while 25.5 per cent preferred to be neutral. Only 7.5 per cent of
the respondents reported dissatisfaction.
c) Office environment: 65.5 per cent of the respondents reported that the office
environment is healthy and 25.5 per cent of the respondent preferred to be
neutral. Hardly 9.0 per cent of the respondents reported negatively.

xxiv
d) Organizational discipline for the faculty: 77.75 per cent of the respondents
reported satisfaction while 19 per cent respondents remained neutral. Only
3.25 per cent viewed it negatively.
e) Availability of recreational facilities: 90.5 per cent of the respondents
reported satisfaction and rest 9.5 per cent remained neutral and there was no
one representing dissatisfaction.
f) Availability of the health care facilities: 72 per cent of the respondents
reported satisfaction while 17 per cent preferred to be neutral. 11 per cent
viewed it negatively.

Overall assessment of the Working Environment

Considering the above responses in aggregate it is observed that the working
environment in the organizations under study is quite healthy and has received
majority of the respondents’ satisfaction.

C) Job related Aspects

a) Love towards Job: 74.5 per cent of the respondents expressed that they Love
their job and the rest preferred to be neutral. No one gave negative response.
b) Leave rules of the company: 79.5 per cent of the respondents expressed
happiness about the leave rules and the rest remained neutral.
c) Continuation in the present job: 72.5 per cent of the respondents reported
that they do not think of giving up the present job, while 9.5 per cent remained
neutral. Rest answered it negatively i.e. they may think of switching over to
other job.
d) Job Involvement: 76.25 per cent of the respondents reported that they have
involvement in the job while 22.25 per cent preferred to be neutral.
e) View about the selection of the job: 76.5 per cent of the respondent feels that
they have selected the right job for them while 22.5 per cent preferred to be
neutral.
f) Assessment about the training arrangements: Here it was observed that all
the respondents are unanimous in reporting that they have excellent training
arrangements and that they receive comprehensive training from their
organization..
g) Assessment of Attrition Rate: 83.5 per cent assessed that the attrition rate is
less while 15 per cent remained neutral.
h) Improvement of the quality of the product: Here again yet another question
where the 100 per cent of the respondents are unanimous in assessment of the
improvement in the quality of the product.
i) Assessment of Job Rejection Rate: 70 per cent of the respondent rated it as
almost 0 per cent while 26 per cent of the respondents preferred to be neutral.

j) Cordiality of the Employer Employee Relations: 78 per cent of the

respondents reported as relations are quite cordial while 16.25 per cent
preferred to be neutral.

Overall Observation about the Job Related Aspects

If we look at the responses of the respondents in totality, it is observed that on
all the counts there is overwhelming majority of the respondents who have expressed
satisfaction on the job related aspects. Needless to say that such an atmosphere in the
organization increases productivity and profitability.

xxv
D) Motivational Aspects
a) Help from the Boss for achieving organizational goals: 72.25 per cent of
the respondents answered it in affirmative while the remaining preferred to be
neutral.
b) Motivation by Management: 84.5 per cent respondents were in the category
of happy while 10 per cent remained neutral, rest marginal percentage was that
of unhappy ones.
c) Assessment about in house communication: 77.5 per cent of the respondents
appreciated the in house communication while 20 per cent preferred to be
neutral.
d) Clarity about work assignment: 78.75 per cent of the respondents reported
that there is enough clarity about the work assignment while 15 per cent
respondents preferred to be neutral.
e) Management’s approach towards suggestions: 76.25 per cent of the
respondents reported satisfaction while 23.75 per cent of the respondents
remained neutral.
f) Attitude of the colleagues: 73.75 per cent of the respondents reported that the
colleagues are helpful, while the balance percentage represents that of neutral
respondents.
g) Scope for promotion: 58.75% respondents reported that there is a scope for
promotion and 41.25% respondents remained neutral.
h) Deputation to reputed professional training organizations: 46.5 per cent of
the respondents were satisfied on this score while the remaining preferred to
be neutral. Here one point is required to be noted and that is, such a deputation
is for the staff from Middle management and Senior Management for such
outside organization’s training programmes and hence the respondents
remaining neutral is higher.
i) Opportunity to display talent: 58.75 per cent of the respondents reported
satisfactory assessment while the remaining preferred to be neutral.

Overall observation on the Motivational Aspects

The overall responses of the respondents reveal that the organizations in which
they are working are using various motivational tools and ensure that the staff remains
motivated throughout. The percentage of the neutral respondents is relatively less.
There is no negative response from any of the respondents.

E) Perception about HR Practices

These are the statements included in the questionnaire which have a direct
bearing on the main theme of the research i.e. impact of the Best HR Practices.

a) Role of HR in pursuing innovative HR Practices: 58.75 per cent of the

respondents expressed that the HR department pursues best innovative
practices, while 41.25 per cent of the respondents preferred to be neutral.
There is no respondent stating a negative response.

b) Availability of House Bulletin: This is again a question which has been

answered in affirmative by all the respondents. That is to say in all the
organizations under study there is a house bulletin which provides an
opportunity to the respondents to understand what is happening in the

xxvi
 organization and it also provides them an opportunity to express their views
also.

c) Availability of the facility of the Flexi Timing: 62.5 per cent of the
respondents reported that in their organizations there is facility of availing
flexi office timings while the remaining 37.5 per cent of the respondents
remained neutral. Here it should be noted that in the study there were a few
manufacturing organization in which such flexi timing facility cannot be given
and hence the percentage of neutral respondents is on higher side.

d) Facility of work from home: 55 per cent of the respondents reported that
they have the work from home facility, of course with some rider on it. This
facility is usually available for the staff from the IT sector as well as BPO
organizations. This facility cannot be considered in the manufacturing
organizations as they have to use machinery as well as raw materials etc.
Hence such facility cannot be considered for them. Therefore, 41.25 per cent
of the respondents preferred to be neutral. There was a marginal number of
respondents i.e. 3.75 per cent who responded negatively. This is just a normal
phenomenon as in IT or BPO companies. This facility cannot be extended to
all the employees. There are certain positions particularly in the supervisory
cadre their physical presence in the office is a must.

e) Provision of Cafeteria / Canteen providing good food: This is again an area

where the employees are also concerned about the quality of the food that is
being served by the company canteens / cafeterias. Hence this question was
included. 57.75 per cent of the respondents expressed satisfaction about the
quality of the food while 23 per cent of the respondents preferred to be neutral.
19.25 per cent of the respondents expressed dissatisfaction about the quality of
the food. As compared to the satisfied respondents the dissatisfied percentage
is relatively less.

f) Availability of the subsidized food: This is also an aspect which the

employees consider to be dear to them. In number of companies the food and
other stuffs available in their cafeteria / canteen is subsidized by the
management. In some companies although such a facility is not available at
subsidized rates but the managements take care that there is no exploitation of
the employees by the canteen contractor by charging unreasonable rates.
Considering this aspect the question was included to get the feedback from the
respondents. It was revealed that in all the organizations under study the food
and the other stuffs are available to the employees at subsidized rates.

g) Birth day celebrations in the office: In number of organizations the

employees’ birth days are celebrated which again is a healthy best HR
practice. The celebration of the birth days in the office brings cohesiveness
amongst the working group in the department and which results in healthy
relationship amongst the group. Usually, the managements on such occasions
give some memento to the staff on certain special occasions. (Celebration of
50 / 60 years birthday etc.). 56.25 per cent of the respondents reported that in
their organizations birthdays are celebrated.

xxvii
h) Felicitation of the achievements of the employee’s kids: In order to boost up
the employees and their families to pay special attention to the education /
extracurricular / cultural / sports achievements of their kids, in some
companies as a part of motivational tool, the organizations organize
felicitation programmes for these achievers from the employee’s families. This
in turn boosts the morale of the employees which results in commitment to the
organizational goals. 74.5 per cent of the respondents reported that in their
organization such felicitation functions are organized.

i) Availability of well defined reward and recognition schemes: As a

motivational tool the organization use the rewards and recognition of the
excellent performance of their employees. Of course, it is important to ensure
that such schemes should be clearly defined to ensure that there is no element
of partiality. If this aspect is not ensured it adversely affects the morale of the
employees. In the sample under study, 73.75 per cent of the respondents
reported that they have well designed and clearly defined reward and
recognition schemes in their organization.

j) Opportunity to participate in NGO’s work: In recent times it has been

observed that the company managements are having concern about the social
development of certain areas which are dear to them. Therefore, some
companies have now accepted the philosophy of corporate social
responsibility. Very recently the Govt. of India has passed a legislation
wherein the companies are under obligation to spend 2% of their net profit on
certain identified educational / health care projects for the down trodden / up
till now neglected sections of the society. Therefore, some companies are now
building up tie up arrangements with reputed Non Governmental Organization
(non profit earning organizations) to fund their eligible projects. Even there
are some of the employees who are having special aptitude for social work. In
order to nourish this attribute some companies grant special holidays to their
interested staff on full pay basis to work on some social projects approved by
the company. Such a provision for the staff is welcomed by the staff as they
also get an opportunity to meet their own liking. It is on this back drop
feedback from the respondents was called for. It was observed that 43.75 per
cent of the respondents reported that their organizations have tie up with
NGOs for such a social work opportunity. 30 per cent of the respondents
remained neutral to this question. It may be because of their unawareness
about it or apathy on their part.

k) Introduction of best HR practices – an ongoing exercise: In order to

understand the approach of the Management (HR department) about the
implementation of the Best HR Practices, this question was included. Now in
order to ensure that the attrition rate is maintained at minimum possible level
there is need to be vigilant in introducing best HR practice. Hence, there
should be a constant (ongoing) pursuit to innovate Best HR Practices. 74 per
cent of the respondents reported that in their organization the HR is pursuing
this innovation function on best HR practices on ongoing basis. The rest of the
respondents preferred to be neutral.

xxviii
Overall observation on the Perception of Best HR Practices
This was a crucial area of the responses of the identified respondents as it had
a direct relation to the thrust area of the research. Normally when an employee takes a
decision to join any organization for employment he/she does take into account, apart
from the compensation and other benefits, the management’s outlook towards
introducing the Best HR Practices. Therefore the prospective job seekers also collect
information about the management’s attitude towards introduction of the Best HR
practices. They compare the best HR practices being followed in the various similar
organizations before taking a final decision of joining. It is on this score the feedback
was sought. 74 per cent of the respondents reported satisfaction on this score while
the remaining preferred to be neutral. On the whole majority of the respondents have
also expressed their satisfaction about the management’s approach towards best HR
practices and naturally it positively influence the productivity, commitment and
profitability of the organization which is translated into the company’s financial
statements.

F) Organizational Culture
Organizational culture is also an aspect which is subdivided in 20 statements
of which 18 statements received positive responses from the respondents while only 2
questions which were related to the sharing of information and performance appraisal
wherein the respondent’s response was negative. On the whole the organizational
culture was quite healthy.
Sr. Aspect % of respondents having
No
+ ve Neutral -ve
a. Willingness to help others 54.5 25.5 20
b. Free flow of information sharing 42 43.25 14.75
c. Keeping upto date about the developments in the 55 45 0
organization
d. Inter departmental cooperation 57.5 32.0 10.5
e. Failures are looked upon as opportunities 79.25 20.75 0
f. Positive impact of facilities 85.0 15.0 0
g. I always respect other’s views/ opinions. 100 0 0
h. Our company really cares about employees 55.0 26.5 18.5
benefits.
i. Loyalty to the organization. 100.0 0 0
j. Feelings about organizational pride 100.0 0 0
k. Delegation of authority 56.25 43.75 0
l. Free flow of interdepartmental responses 89.5 10.5 0
m. Easy availability of the departmental head 100.0 0 0
n. Investment in Skills 72.0 28.0 0
o. Offering ideas for improved functioning 81.25 18.75 0
p. Excellent team work is nurtured 73.75 26.25 0
q. Our company provides comprehensive training to 100.0 0 0
its employees.
r. Established proper systems and procedures 72.50 27.50 0
s. Well defined performance appraisal system 41.25 21.25 37.5
t. Approach towards new ways for improvement. 55.0 45.0 0

xxix
Best HR Practices identified by majority of the respondents in order of priority.
The respondents were asked to state 5 best HR Practices observed by their
organization, according to their priority. The commonly adjudged best HR practices
identified by the respondents were consolidated and the following picture emerged.
Naturally the preferences of the respondents from the various categories under study
are different. Therefore these preferences have been consolidated according to the
category: Workmen, / Middle Management / Senior Management

Sr. No. Best HR Practice in the organization

A) Workmen (who are members of union) responses
1 Compensation
2 Working Environment – comforts at work place (Safe, Healthy and
Happy Workplace)
3 Work from home and flexi working hours
4 Medical facilities for self and family
5 Job security
B) Middle Management’s responses
1 Compensation
2 Well chalked out career development plan. (Fair Evaluation System
for Employees/ )
3 Rich fringe benefits (leave travel concession/medical
reimbursement, reimbursement of club fees/ housing loans on soft
terms/ provision of residential accommodation /
4 Due recognition and appreciation by the management (Publicize
Good Performances /
5 Comprehensive training facilities including deputation to reputed
professional training organizations
C) Senior Management’s responses
1 Compensation
2 Organization’s work culture
3 Well developed Authority responsibility relationship
4 Scope for participation in strategic policy decisions
5 Fringe benefits (Executive perquisites like chauffer driven car,
petrol allowance, family holidays, etc.

General Observations about functioning of HR Departments

During the course of this research the researcher had an opportunity to interact
with various HR functionaries and could get the feel of the current level of HR
functioning. Following are some of the observations which are worth noting.
1. Management institutes face the challenge of reorienting their courses to reflect
newer HRM concepts. The department of management studies at IIT-Madras
has attempted such changes.
2. Because of increasing competition that has resulted from liberalization, Indian
organizations have adopted HRM practices both critically and constructively
to foster creativity and innovation among employees.
3. Local units of MNCs have been early adopters of annual performance
appraisals, employee development programs, and relative (normalized)
ranking of performance

xxx
4. There is an increased emphasis on HR related activities seen in Indian
organizations.
5. Indian managers like centralized decision making.
6. The majority of the lower level of employees are not aware of their rights and
are exploited by the management.
7. There is a shift taking place in the pattern of HRM practices in Indian
organizations, from the traditional administrative types to a more strategic and
proactive type.

SUGGESTIONS
As has been seen earlier there are number of factors that one has to take into
account while introducing new HR practices as ultimately it adds to the costs. Over
the years it has been observed that these costs are rising. At the same time we cannot
ignore the importance of retaining the talented employees as well as arresting the
attrition as it again involves heavy costs. Therefore henceforth the role of the HR
Department is going to be very crucial.

The researcher has identified certain key areas which should be addressed by
the HR department in the immediate future.

1. Stress Management: Day by day there is an ever increasing tension that the
employees have to bear. Therefore while designing the new HR practices there
should be an element which will ensure that the employees remain tension
free. For this purpose the organization will have to organize specific courses
on stress management on a continuing basis.
2. Focus on Health care: The fall out of mounting tension is the deterioration in
health of the employees. There are several studies which have brought out the
fact that the number of youth suffering from Diabetes, Blood pressure,
depression etc. are increasing. Therefore, the HR department should focus on
the regular health check up of its workforce at periodical interval. Now there
are some multinational organizations which have in their every building an
ambulance, on each floor there is a wheel chair, stretcher, first aid boxes etc.
3. Focus on personality development: The HR department should include in
their training schedules programmes which will help in the overall personality
development of the employees.
4. Family support: Now a day it has been observed that because of the spread of
technology particularly internet, mobile phones, etc. even after returning from
the office, the employee has to devote major time to the office work. In order
to maintain the standard of living usually the better half are also employed.
Therefore, the employee finds very little time to attend to his personal
domestic work. Because of the split families there is no one to look after the
kids. Therefore, this aspect also adds to employee’s stress. Therefore, while
introducing any new Best HR practices this aspect should also be borne in
mind. Apart from babysitting, crèches, for pregnant lady staff separate retiring
rooms are required, for breast feeding separate arrangements are required,
such facilities be introduced.
5. Provision of special arrangement at worksite: The employee finds very
little time to attend to various personal works: for filing of income tax returns,
for renewal of driving license, etc. the organizations can have a tie up with

xxxi
 these concerned departments and make special provision for on the house
arrangements so that the employee gets relief.
6. Job Rotation: There should be a system of job rotation which enables the
employee to acquire knowledge of other departments. The company also
stands to benefit since the workers are qualified to perform a number of
different jobs in the event of an emergency. Due to change in the job the
employee also gets job satisfaction. Job rotation relieves monotony.
7. Provide autonomy: If certain amount of freedom is given to the employees to
do their work in their own way it increases their job satisfaction. It has been
proved that if the people are given freedom to take their own decisions they
work hard and derive job satisfaction.

ATTAINMENT OF THE OBJECTIVES

The researcher started this research framing certain objectives which have
been dealt in the chapter II on Research Methodology. Now at the end of this
research, when the researcher looks back, he feels that the objectives are fully
achieved by this research. He has been able to analyze the Best HR Practices that are
being observed in the identified industries for this study. After the opening of Indian
economy since 1991 and with the entry of number of multinational companies in
India, number of new Best HR Practices have been introduced in India primarily with
the twin objective to retain the talented employees as the MNCs were experiencing
flight of talented employees as well as to ensure to maintain an edge in the
competitive markets. The HR practices that are being followed by the industries have
a positive impact on the employee satisfaction which ultimately reflects on the
employee’s productivity and the organization’s profitability. Each industry has its
own peculiarity which needs to be taken into account while introducing best HR
Practices. E.g. Work from home facility cannot be considered by the manufacturing
industries. It is possible only in Information Technology industry or to make a
generalization by the service industry. Introduction of the Best HR Practices are also
dependent on several other factors like size of the company, organization’s culture,
profitability, composition of the staff etc. Thus at the end the researcher is of the view
that the objectives originally set out have been fully achieved.

SCOPE FOR FURTHER RESEARCH

As has been stated in the introduction chapter that the concept of the HR
Practices is not a static one, but it is a dynamic concept. Day in and day out the work
situations are changing fast and therefore the Human Resources Development
Department has to be on its toes all the time to innovate new HR Practices on
continuing basis, which will induce the talented employees to continue with the
organization and to give maximum returns to the organization.

This research has revealed that there is a difference in the working of the
Human Resources Development Departments of the domestic companies and the
multinational companies. Therefore, a research can be undertaken to bring out this
difference in the approach between these two segments which will be helpful for the
domestic companies to improve upon their functioning and ultimately withstand the
fierce competition that has been faced as a result of globalization.

In times to come there is going to be a serious problem of retaining the

talented employees as the business opportunities in the underdeveloped companies are

xxxii
growing fast. There is a need to collaborate loyalty among employees. Hence a
research is also possible to study this problem and to come out with some practical
solutions.

As has been stated earlier that the process of attrition of the employees started
on a large scale after five years of India’s adoption of globalization in 1991. This is
adversely affecting the industries profitability. Therefore the researcher is of the view
that a research study can be undertaken to find out the impact of HR practices on the
employees’ attrition rate.

CONCLUSION
The Indian economy was forced to adopt a structural change process at the
beginning of 1991. Liberalization initiated the process of the opening up of an
otherwise closed economy of India and created a hyper-competitive environment. A
hyper-competitive business environment presented a number of challenges and
opportunities, both external and internal. External challenges and uncertainties
included barriers that were difficult to control. Internal challenges like dramatic
advances in technology, changing of organizational forms necessitated redesigning of
human resource practices. To respond to this confusion, Indian organizations adopted
innovative changes in their HRM practices.

India itself is not a homogenous entity. Regional variations in terms of

industry size, business culture, socio-cultural issues and bureaucracy play very
important role. The nature of hierarchy, status, authority, responsibility and similar
other concepts vary widely across the nation.

This research study was undertaken to find out the impact of the best HR
practices on the employees satisfaction and accordingly the primary data was
collected and analyzed. It has been revealed that the Best HR practices have a positive
impact on the employees’ satisfaction. Today the HR Departments are passing
through a transition stage and getting equipped with sharpening the tools of retaining
the talent in the organization.

While studying the Best HR practices it has been observed that the Best HR
practices followed by multinational companies cannot be copied in toto as those are
based on the environment prevailing in their Head Quarter country. In the Indian
context those practices are required to be suitably modified to suit the Indian
environment. Implementation of best HR practices also involved costs and therefore
the Indian companies are required to balance the cost and the benefit that they derive.
It can be said that HR practices that are being followed in India are subjective in
nature. These practices differ from company to company, based on location of the
units, nature of production/services etc. Therefore, HR practice which is considered as
best HR practice for one company may not be so for another company. This needs to
be understood correctly before its implementation.
To conclude that it can be said that HR practice is becoming more and more
challenging day by day. They have to face lot of problems like retention, attraction of
employee, dealing with different cultural people, managing work force diversity,
technological and informational changes to overcome with these challenges training
(Cross cultural training and technological and informational training) is necessary for
HR people. To reduce mobility of professional personnel, HR people have to motivate

xxxiii
them from monetary and non monetary techniques. Proper performance evaluation
system and proper career development plans should be used in the organization to
reduce professional mobility.

The end result of best HR practices is achievement of employee satisfaction

that is positive feeling which gives happiness, joy and delightfulness to an employee
and builds confidence in his or her personality. Satisfaction also helps in developing
loyalty among the employees towards their organization.

xxxiv
 CHAPTER I
INTRODUCTION

1.1 INTRODUCTION
The industrial sector plays a dominant role in the economic growth of India.
Its contribution to GDP is 16 per cent and there is still very good potential available
for further growth. Knowing its vital importance the government of India has taken
several initiatives to boost up this sector. These steps are showing good results.

India adopted the policy of globalization, liberation and privatization since

1991. After globalization, India opened up its economy gradually and has welcomed
the foreign direct investment in several sectors in a phased manner. As a result
number of multinational manufacturing companies of good repute has realized the
potential available in India. They came to India and established their manufacturing
units. E.g. Pune has become an automobile hub wherein number of world giants in
automobile sector has come up in the vicinity of Pune metropolitan centre. Number of
multinational companies engaged in manufacture of consumer durable goods has also
opened their manufacturing units in and around Pune.

Definitions
Technically a unit engaged in the manufacture, processing or preservation
activity is called an industry. Manufacturing industry is one which converts the raw
material into finished product to meet the consumer’s requirements. E.g. Production
of two wheelers, consumer durable goods etc. Processing activity means where the
unit processes the material for consumers consumption. E.g. industry engaged in
dyeing, bleaching of cloth, flourmills which convert wheat in aata, rava etc. and
Preservation activity means by using some agents and observing some process the
goods are preserved for a longer period. E.g. mango pickles, various masale etc.

The word Industry has been defined differently using various aspects such as
investment in plant and machinery, number of workers, activity criteria etc. In general
the economists have defined the word industry as a unit engaged in the manufacturing

1
activity or productive enterprise in a particular field. Usually industries are known by
their product. E.g. industries engaged in automobile sector are known as Automobile
Industries, industries manufacturing textile goods are known as textile industries etc.
Similarly there are Pharmaceutical industry, leather goods mfg. industry so on and so
forth.

In order to have uniformity for statistical purposes the industries are classified
and codified under uniform classification code. E.g. Standard Industrial Classification
(SLC).

Similarly other general business activities or commercial activities providing

various services are also called industry. E.g. Tourism industry, Entertainment
industry, etc.

Because of the industrial development, growth and expansion of the trade and
commerce is possible. The industries are on the supply side of the market.

The term management is essentially a decision making unit. The management

functions encompasses various aspects such as planning, budgeting, organizing,
recruitment, selection, training, control, communication, review etc.

Among these various aspects, certain aspects which deal with the selection,
recruitment, deciding compensation, training, administering the workforce, and in
broader terms ensuring uninterrupted supply of motivated workforce to the
organization are the functions which are usually clubbed under Human Resources
Development department. In good old days there used to be Administrative or
Personnel dept. which used to deal with the recruitment, and maintenance of
administrative records relating to the employees. However, after the adoption of
globalization and entry of multinational organizations in India this department is
being known as Human Resources Development Department and its role has been
widened. Apart from enlargement of role its importance in the entire organization has
also grown tremendously. It has become a key department in the organization. In the
foregoing paragraphs the various activities that are undertaken by the Human
Resources Development Department have been discussed in greater detail.

2
1.2 CLASSIFICATION / TYPES OF INDUSTRIES
The industries are classified using various yardsticks. Following are the major
classifications that are being followed.
1. Primary Industry
In this category the production of goods is taken up with the help of nature.
Very little human effort is required. E.g. Agriculture, forestry, fishing, horticulture
etc.

2. Genetic Industry
In this category the industrial activity carried out is re-production and
multiplication of certain species of plants and animals for ultimate sale. The sole aim
is to earn profit by effecting sale of the re-produced or multiplicated products. E.g.
plant nurseries, Poultry, cattle breeding etc.

3. Extractive Industry
In this type of industry the activity is extraction or drawing out goods from the
soil, air or water. The product comes in the raw form and is used in manufacturing
process. E.g. brick manufacturing, Oil from oil seeds, mining industry, coal minerals,
extraction of iron ore, and extraction of rubber and timber from the forests etc.

4. Manufacturing Industry
This type of industry is engaged in converting the raw materials into finished
product with the use of machinery and also using electrical power (with some
exceptions e.g. manufacturing the quick lime used in sugar industry. For
manufacturing quick lime firebrick kiln is required where no electricity or machinery
is required.) In this category some industries are very large and that they use finished
product of some of the small scale industrial units as their raw material and their final
product is out. For example in respect of unit engaged in manufacturing of two
wheelers under their own brand, they get the supplies of major parts such as handles,
crank shafts, etc. from various vendors developed by them and lift their product to use
it in their product, These small or medium industries which supply bulk of their
finished products to the large manufacturer are called ancillary unit of that major
company.

3
5. Construction Industry
This is yet another type of industry which also uses the raw material in their
finished output. This is mainly engaged in the construction of buildings, bridges,
dams, canals, roads etc. This industry is distinct from the other industry as its location
is at the spot where the sale takes place. E.g. construction of bungalow – this is being
done at the site of the bungalow, similarly construction of dam / bridge etc. Usually
goods are prepared at the work site only.

6. Service Industry
In this type of industry the product sold is ‘service’. Because of this peculiarity
this type of industry is known as service industry. The services sold by the industry
have now became so important that in a very short span of time this service industry
has became a prominent industry all over the world. E.g. hotel industry which
provides hospitality services, entertainment industry which provides entertainment,
tourism industry etc. In case of these service industries the specialized product i.e.
service which is usually a tailor made, is sold to the ultimate consumer.

1.3 ROLE AND IMPORTANCE OF INDUSTRIES IN INDIAN

ECONOMY
Development of industries is the key/ crucial factor on which the economic
development of any nation is dependent. Naturally this is also equally applicable to
Indian economy. The contribution of the industrial sector to India’s economy is
certainly sizable. Of late because of the developments in Information Technology
sector, the Indian economy has got a booster dose. There is a need to have a balanced
industrial growth as it increases the pace of economic growth. In order to have a
sustainable growth of economy there is dire need for continued industrial growth. The
healthy growth of the industrial sector minimizes the risk element in the economic
development. The flourishing industries plough back certain portion of their profit in
the business and expand their activities and in turn it helps the industry’s growth.
India is a vast country which has rich store of natural resources as well as youth
manpower unparalleled in the world at the current phase. Therefore, India has a very
wide scope to achieve higher development on the industrial front.

4
1.4 HISTORICAL PERSPECTIVE OF INDIAN INDUSTRIES
India got independence in 1947. Due to industrial revolution the pace of
economic development was geared up. This industrial development also led to the
multi dimensional growth in agriculture. The nation witnessed a good beginning of
the economy.

Due to use of the then prevailing technologies and simplified living standard
there was emergence of a wave of entrepreneurs and their presence of conspicuous.
E.g. Jamshetji Tata, K. M. D. Thakersey, Birla, Goenkas, etc. The names are
illustrative. These entrepreneurs also received very good respect at the government
quarters. It was a welcome development that the next generation of these
entrepreneurs was also taking active part in the management of these industrial units
and was getting groomed. The government gave all out support to them.

The government put in special initiative and ensured congenial environment

for the process of industrialization. The government came forward and started setting
up the godowns for stocking raw materials which were then in short supply. The
government also came forward and whenever needed it also imported raw material for
these industrial units. Thus the government came forward and provided all round
support for the development of these industries.

In the post independence period the Govt. of India, with a view to encouraging
the entrepreneurs to start Small Scale Industrial units, offered various incentives. In
order to assist these SSI units the government also adopted an import policy which
was favourable to these units.

Obviously the government of India was initially scared to invite foreign direct
investment in these Indian industries. It was restricted to 40% of the total outlay. The
government of India provided encouragement to the domestic researchers in the field
of technologies not only in the industrial sector but also in the agricultural sector.

India embarked upon the planning exercise for planned development in the
year 1951 when the Govt. of India established a Planning Commission. It started

5
planning for the five years period. The second five year plan witnessed that the
government gave thrust on the development of domestic raw materials instead of
resorting to import those from overseas. The government of India provided special
incentives for development of domestic machineries and raw agents.

1.5 HISTORY OF INDUSTRIAL DEVELOPMENT OF INDIA

At the time of India’s independence, there was very little presence of the large
scale industries on the Indian industrial horizon. Even after seven decades India is
being recognized as an agrarian country although the share of the agriculture in the
India’s Gross Domestic Product is less than that of the Industry. India is a land where
the traditional craftsmen have a world class capacity to develop handicrafts and they
have achieved a name all over the world. It has already been stated that India has a
rich storage of natural wealth.

During the course of British Raj they had framed the industrial policy to suit
their interests without giving due importance to India’s concerns. This was a
deliberate attempt to stem down India’s development. They preferred to export the
raw material to Britain and bring back the finished goods and sale it in the Indian
market and exploit the local people.

Post Independence Industrial Development of India

The first and foremost priority of the Indian government after attainment of
the independence in 1947 is to develop the industries to meet the domestic
requirements of several daily consumption items. The then government also realized
the potential of the industrial sector in the overall economic development. Therefore,
the government of India for the first time announced its first industrial policy in the
year 1948 and provided a direction to the industrial development.

The first industrial policy of 1948 was focused on laying down foundation of
the Govt.’s policy of mixed economy wherein both the government and the public had
a clearly spelt out role for the industrial development. The government gave
importance for the working together both by the private and public sector. This policy
had also received some criticism.

6
The Industrial Policy Resolution of 1956
In order to achieve a socialistic pattern of society the govt. adopted a mixed
economy policy. The policy clearly spelt out the role of both public and private sector.
This was with an aim to achieve a steady and parallel growth of both public and
private entrepreneurs to achieve its targeted socialism. Right from this policy the
government aimed at removing the regional imbalance in the industrial development.
This policy categorized the industrial sector into three sectors.

Schedule A
In this category the government listed all those industrial subsectors which the
government wanted to reserve for the State. This sector contained 17 industries. The
objective was to ensure that the strategic industries like Arms and ammunition,
defence equipment, atomic energy, heavy basic industries like iron and steel etc.
remain in the State sector. It also included generation and distribution of electricity,
mining and processing of copper, several specified items, Aircraft; Air transport;
Railway transport; Ship- buildings; Telephones; Telephone cables; Telegraph and
Wireless apparatus. There were some units in the private sector which were pursuing
production of the items these were subsequently reserved by the government. The
policy made an exception for these industries and allowed them to continue and even
to expand. The government also made it clear that whenever need arises they will
render assistance to them.

Schedule B
This category included those industries which the government wanted to own
progressively and expected the private enterprises to supplement the Govt. efforts.
This category included 12 industries like Aluminium and other non-ferrous metals ,
machine tools, ferro-alloyws and steel tools, Basic and intermediate products required
by chemical industries. Sea transport, fertilizers, essential drugs, manufacture of
drugs. In course of time the State increased its participation and established new units
but did not discourage the private sector to establish and expand new units.

Schedule C
Industries which are not included in the Schedule A or B are included in the
third category i.e. Schedule C. The private entrepreneurs were free to establish

7
industrial units in this category. Thus the government also wanted to develop
responsible private sector participation in the industrial development. So far as the
development of these industries was concerned the government restricted its role for
creation of environment congenial for the development of industries.

Industrial Policy of 1977

In this industrial policy the government further classified the small sector into
three categories. Mainly this categorization was based on the investment criteria.
a) Cottage and household industries: It included those industries which
provide self-employment on a large scale.

b) Tiny Sector: As the name indicates its size that the investment required for
starting those industries where the original cost of equipment used in business
is only upto Rs.1 lakh and also there was a condition about location of the unit
that it should be in towns having less than 50,000 population.

c) Small Scale Industries: All those small industries engaged in production,

processing or preservation having initial investment in plant and machinery
less than Rs.10 lakhs are referred to as Small Scale Industries. However, in the
case of ancillary industries which were having bulk production for the
principle large manufacturer, the investment limit was relaxed to Rs.15 lakhs.

In addition to the production of important and strategic goods, the government

encouraged public sector to ensure effiectively for stabilizing and maintaining
supplies of the essential goods to the consumer.

Industrial Policy of 1980

Through this policy the government addressed the problem of regional
imbalance of industrial development. It wanted to remove this imbalance. It took
initiative to provide infrastructural development to attract private investment in the
backward regions. It focused it’s attention for provision of electricity which was the
key requirement for industrial development. Alternative sources of energy such solar
power, wind power; biogas plants, tidal sea power etc. were encouraged. The

8
government also recognized the need for use of advanced technology, to meet the
international competition.

Thus this policy aimed at promoting competition in the domestic market, use
of advanced technology and modernization. The govt. also liberalized inflow of
foreign direct investment in high technology areas.

Industrial Policy of 1991 and thereafter

The year 1991 turned out to be a landmark year so far as Indian economy is
concerned. There was a sea change in the industrial policy of 1991. All along, the
government was pursuing mixed economy however since 1991 the government said
good bye to it and adopted a policy for encouraging privatization.

Industrial Licensing Policy

This policy was so generous that keeping certain key industries which were
relating to security and strategic concern, social reasons, hazardous chemicals and
riding environment reasons, the rest of the lists of industries included in the Schedule
A and B were scrapped. The licensing policy was so liberalized that the population
criteria was relaxed to some extent for establishing industrial units at places having
less than one million population, no license was required. However, the government
restricted the license requirement for establishing industrial units in cities having
more than one million of population. The govt. also spelt out that in such cities
industries should be of non-polluting nature such as electronics, computer software
and printing etc. will be allowed outside 25 km periphery, except in prior designated
industrial areas.

Policy on Public Sector

The 1956 industrial policy had reserved 17 industries for the public sector.
The 1991 industrial policy brought down this number to 8. It covered Arms and
ammunition, atomic energy, coal and lignite, mineral oils, Mining of Iron Ore,
Manganese ore, chrome ore, gypsum, sulphur, gold and diamond, Mining of copper,
lead, zinc, tin, molybdenum and wolfram; minerals specified in the schedule to the
atomic energy (control of production and user order), 1953 and Rail Transport.

9
 There were more hurdles for the expansion which were placed by the
Monopoly and Restrictive Trade Practices Act, (MRTP) in the form of threshold limit
for the assets of these MRTP companies. Because of this restriction these MRTP
industries were required to obtain prior approval of the Central Government for their
expansion or for establishing any new unit. This 1991 policy removed these hurdles
and the government amended the MRTP Act suitably.

Policy on Foreign investment and Technology agreements

The 1991 industrial policy drew out a list of priority industries in which high
technology and high investment priority is required to be given. India being a
developing country there were limitations for capital formation and hence has to be
dependent on inflow of foreign direct investment. This policy introduced automatic
permission availability for FDI upto 51 percent of foreign equity in these priority
listed industries. This improved the FDI inflow and paved the way for inflow of latest
technology along with the foreign capital inflow. The industries included mainly those
industries which require high dose of capital e.g. metallurgical industries, electronic,
food processing and entertainment industry, service sector like IT and BPO industry
etc. Besides this the policy included those industries which are key industries for
India’s speedy economic growth.

The government of India in the year 1997 issued guidelines for speedy
approval of the foreign direct investment in the areas which were not covered by the
automatic approval. The list for foreign direct equity investment of automatic
approval by the Reserve Bank of India route was further enlarged in the years 1997-
98 and again in 1998-99. In a bid to attract FDIs the Govt. of India on the 9th May
2001, announced further concessions for FDI. So far as the pharmaceutical industry is
concerned the Govt. of India allowed 100% FDI through automatic approval route.
Similarly in respect of airports sector the Govt. of India allowed 100% FDI as against
earlier stipulation of 74%. With a view to give boost to the tourism industry the Govt.
of India further relaxed the restrictions on FDI from then existing 51 per cent to 100
percent through automatic approval route. So far as mass rapid transport proposals in
the coming new township as against earlier stipulation of 51 per cent, 100 per cent
FDI was allowed through automatic approval route.

10
1.6 INDIAN INDUSTRY PRIOR TO REFORMS
(LIBERALIZATION, GLOBALIZATION AND
PRIVATIZATION)
Prior to the liberalization of the Indian economy in the year 1991 there was
certain protection from the Govt. of India in one form or the other to the Indian firms.
Imports were restricted. Payment of royalty was under restriction which had adverse
impact on the foreign suppliers to offer latest technology. There were several
restrictions under MRTP and Foreign Exchange Regulation Act (FERA). The other
restrictions were price controls; certain sectors were having barriers for multinational
companies to establish their units in power, electronic, mining, infrastructure,
aviation, oil, telecom sector and capital market restrictions. All these restrictions had
an impact of importing the latest technology to India.

1.7 IMPACT OF GLOBALIZATION ON INDIAN INDUSTRY

After adopting the policy of globalization the Govt. of India initiated several
steps and speeded up the process of integration of the world market. As a result, the
Govt. had to remove the various barriers it had placed as discussed in the earlier
paragraph. The policy of globalization could achieve trade in goods and services all
over the world, movement of capital and the flow of finance. Thus the globalization
resulted in the integration of the nation’s economy with that of the Global economy.
Since the entire world became one market place and there were no restrictions, it gave
rise to the fierce market competition and the survival of the fittest became the rule of
the day. If we look at the performance of the Small Scale Industries it was observed
that these were playing a prominent role in the development of the Indian economy. It
provided jobs to the millions and its exports were showing signs of increase. Because
of the globalization there was adverse effect on the small scale industrial sector as the
big companies started minting the benefit of the large production at lesser costs. This
resulted in closure of number of SSI units in India.

However, the globalization has resulted in positive impact in certain industrial

sector. The information technology, Business Process Outsourcing, pharmaceutical
sector, petroleum and manufacturing sector were boosted and huge inflow of FDI and
technology could be received. This had geared up the Indian economy to a great

11
extent. The liberalization paved the way for inflow of latest technology as well as the
competition had increased considerably. The domestic industries were required to
maintain high quality of their product to withstand the competition. Therefore, in
number of domestic industries the quality improvement took place and there was
greater awareness about the quality as well as to ensure the reduction of the costs of
the product. Now the goods manufactured in India in number of companies are having
excellent quality which can be compared with that of the world class manufacturers.
The ultimate result of the fierce competition was in shrinking of the profit margins.

1.8 CATEGORIZATION OF INDUSTRIAL UNITS

a) Cottage, Village and Tiny industry
Pt. Jawaharlal Nehru while speaking about the Cottage and small scale
industries stated that these are of very special importance in India. He further
observed that although India lacks capital, it has abundant manpower and that it
should be used to add wealth and employment.

The name itself focuses on the location of the industrial units which puts
certain limitation on its size. The industrial activity is carried out near to their
dwelling. The unit engages the family labour in it. In the rural area for want of
employment opportunities the localites have to pursue this activity using locally
available raw materials. Usually these units were producing home required products
and the marketing was local.

The capital requirement of the Cottage industry was not much as it was using
locally available skills and the raw material. This provided an opportunity to the
family members to carry out the activity as a family activity to supplement their
principle activity namely agriculture.

Before the introduction of the industrialization, the Cottage industries had an

important role in providing employment. However, once the industrialization came in
and the mass production with the use of machinery and power started naturally it had
adverse impact on the Cottage industries and gradually these industries were closed
down.

12
 Nearly 67 per cent of the Indian population resides in the rural area. The main
economic activity in the rural area is agriculture. Indian agriculture is mainly
dependent on the monsoon. The rural youth do not get yearlong employment in the
agricultural activity. There is a situation of disguised unemployment. Therefore there
is a greater degree of migration from rural to urban all these years. On this backdrop
the industrial sector provides full employment. Especially families which are pursuing
cottage industrial activity they get supplementary income to make better living.
Keeping this aspect in view the government of India is supporting the establishment
of cottage industries by providing various subsidies and reservation of its products for
govt. purchases etc.

b) Small Scale Industry

There is a phenomenal growth of the small scale industries after India’s
independence. The government in its five year plans accorded top priority in boosting
the establishment of the small scale industries. Prior to the adoption of the economic
reforms in 1991, the government had extended protection to the small scale industries
to make them comfortable to compete with the large scale industries. Certain products
were reserved for the production by small scale industries. The government purchases
of certain goods were reserved for the small scale industries.

The Industries (Development and Regulation) Act, 1951 for the first time
formally defined the term Small Scale Industry using the parameter of original
investment in plant and machinery.

The small scale industries carry certain unique features. It’s capital
requirement is relatively less. It provides employment to the entrepreneur as well as to
some others. Thus it generates employment opportunities. Because of the size, it helps
decentralization of industries. The government had conducted study about the
employment generation rate of the small scale industries. It was revealed that with an
investment of Rs.1 lakh in capital goods it provides 8 fold more employment
compared to the large scale industries.

13
 This small scale industrial sector plays a pivotal role in developing the Indian
economy. It accounts for nearly 40 per cent of the total production and its share in
India’s export is to the tune of 34 per cent.

Due to inflation and the prices of the capital goods were increasing. In order to
ensure that the original investment in plant machinery to get qualified for being a
Small Scale Industry, from time to time, the government amended the criteria of fixed
investment. The following paragraphs depict as to how these limits were enhanced.

It has already been stated that the original criteria was Rs.10 lakhs for small
scale and Rs.15 lakhs for ancillaries in 1975. This limit was enhanced to Rs.15 lakhs
and Rs.20 lakhs respectively in the year 1980. Again in the year 1985 these limits
were enhanced to Rs.35 lakhs and 45 lakhs respectively for SSI and ancillary units.

The year 1991 industrial policy raised this investment limit to Rs.60 lakhs for
SSI and Rs.75 lakhs for ancillary units.

The government of India had appointed a committee under the chairmanship

of Abid Hussain to review the performance of the SSI and Ancillary units. As per this
committee’s report in March 1997 the original investment in plant machinery limits
for SSI and Ancillary were further raised to Rs.3 crores and for tiny industries it was
raised to Rs.50 lakhs.

The new Policy Initiatives in 1999-2000 defined small-scale industry as a unit

engage in manufacturing, repairing, processing and preservation of goods having
investment in plant and machinery at an original cost not exceeding Rs. 100 lakhs.

The Planning Commission of India, for small scale industries uses the term
“village and small industries” . This term encompasses small scale industry and the
traditional cottage and household industry.

14
c) Ancillary Industrial Units
There are certain small scale industries because of their quality performance
they get bulk order from the large scale manufacturers. They buy some of the
components of their production from these SSI and enter into contract for minimum
supply. Therefore, these units have an advantage of assured market for their
production. To meet this requirement naturally they are required to invest slightly
higher in their machinery. Therefore, to get the benefits of the Small Scale Sector,
these units are allowed higher investment in plant and machinery. Those small scale
industrial units which supply more than 50 per cent of their production to large scale
industries and which forms a part/component of the large scale industry’s finished
product, are called as ancillary industry.

d) Small Medium Scale Enterprises (SMES)

It has been seen from the above discussion that the terms relating to small
scale industrial activity have been changed from time to time. Currently a new term
has been coined which refers to small scale industry as Small Medium Scale
Enterprises.

Today, the SME sector is a backbone of the Indian economy and its share is
about 45 per cent of the total industrial production. The share of SME’s in the India’s
export is 40 per cent and it provides employment to over 60 million people. The job
creation rate of the SME sector is also high at 1.3 million jobs every year and the
range of the products of these SMEs is over 8000 quality production which are also
forming part of the exports.

The government has estimated that the SMEs will provide about 12 million
jobs in the ensuing 3 years. The annual growth rate of this sector is placed at 8 per
cent per annum. Keeping in view the employment potential and its share in the
exports, of this SME sector, the Govt. has offered several sops to this sector. The sops
include provision of the required credit on the liberal terms and also according timely
approval/sanction by banking sector.

15
 The growth of the SME sector in India is attributed to several factors, to name
a few, 1) funding of SMEs requirement by domestic and foreign institutions,
technology used, facilitation of trade between buyer and the supplyer, greater use of
information technology etc.

As per the latest legislation i.e. “Micro Small and Medium Enterprises
Development Act, 2006” the currently prescribed investment in Plant and Machinery
is as follows:

Table 1.1 Manufacturing Enterprises – Investment in Plant & Machinery

Description Indian Rupees US $
Micro Enterprises Upto Rs.25 lakhs Upto $ 62,500
Small Enterprises Above Rs.25 lakhs & upto Above $62,500 and Upto $
Rs.5 crores 1.25 million
Medium Enterprises Above Rs.5 Crores and Above $ 1.25 million upto
Upto Rs.10 Crores $ 2.5 million
Service Industries – Investment in Equipments
Micro Enterprises Upto Rs.10 lakhs Upto $ 25,000
Small Enterprises Above Rs.10 lakhs & Upto Above $ 25,000 upto $ 0.5
Rs.2 Crores. million
Medium Enterprises Above Rs.2 Crores & Up Above $ 0.5 million and
to Rs. 5 Crores upto $ 1.5 million
Source: Micro Small and Medium Enterprises Development Act, 2006.

Following are some of the special features of the SMEs:

Low level of investment

Export earnings

Operational flexibility,

Limited mobility of the labour

Capacity to develop indigenous technology,

Import substitution

Development of entrepreneurs.

16
 The contribution of SMEs on the Indian canvas is worth praising. Its
contribution to domestic production as well as the export earning is high.

1.9 LARGE SCALE INDUSTRIES

The term large scale industries have been defined by several authors using
various parameters. Some have used the turn over criteria and some have used the
employees employed and some have used the originally cost used in plant and
machinery. There is no uniformity about these definitions at the world level. Now the
term SMEs has been defined by the legislation of 2006. So far as Indian definition of
Large Scale Industries is concerned, it can be defined as any industry which is larger
than SME .

Large Scale Industries (LSIs) are those industries with investment more than
Medium Manufacturing Enterprises, under MSMED Act 2006 and as shown in the
earlier table. It is because of this rationale the researcher has followed this definition
of the large scale industries for the purpose of identifying the large scale industries for
this study.

Normally the large scale industries are capital intensive. These industries also
require huge infrastructure and sizable man power. These large scale industries
include iron and steel industries, textile industries, pharmaceutical industries,
automobile industries, telecom industry etc. Presently the Information Technology
industry is growing fast wherein the human capital is large. Therefore, these IT
industries wherein the number of employees is large, are also termed as Large Scale
Industries irrespective of their investment in plant and machinery.

1.10 MONOPOLY & RESTRICTIVE TRADE PRACTICES

COMMISSION
In order to avoid concentration of economic power, in the past it was
considered appropriate to have a quasi-judicial body to restrict such concentration of
any particular company. Therefore, in the year 1969, through Monopolies and
Restrictive Trade Practices Act, a Commission popularly known as MRTP
Commission was constituted under the Department of Company Affairs.

17
 The main function of the MRTP Commission is to enquire into and take
appropriate action in respect of unfair trade practices and restrictive trade practices.
The Commission is empowered under section 10(b) to inquire into such practices:
(i) Upon a reference made to it by the Central Government or
(ii) Upon its own knowledge or information and submit its findings to
Central Government for further action.

1.11 DEFINITION OF HUMAN RESOURCES DEVELOPMENT

In business administration, Human Resources Development is a part of overall
Human Resource Management. Various authorities have defined Human Resources
Development in different ways. Prominent amongst them are : Warner and DeSimone
– HRM Scholar. He defined it as: “A set of systematic and planned activities designed
by an organization to provide its members with the opportunities to learn necessary
skills to meet current and future job demands”.

In the year Haslinda-a gave a definition of HRD in 1964. This definition was
in the form of a broader perspective. This definition explained HRD in relation to
culture, the economy and social and political contexts rather than individuals and
organizations. They defined HRD as:

“HRD is the process of increasing the knowledge, the skills, and the capacities
of all the people, in a society. In economic terms, it could be described as the
accumulation of human capital and its effective investment in the development of an
economy. In political terms, HRD prepares people for adult participation in the
political process, particularly as citizens in a democracy. From the social and cultural
points of view, the development of human resources helps to people lead fuller and
richer lives, less bound to tradition. In short, the processes of HRD unlock the door to
modernization”.1

1
Harbison and Myers, definition of HRD, http://files.eric.ed.gov/fulltext/ED504353.pdf

18
 “HRD is the integrated use of training and development, career development
and organizational development to improve individual and organizational
effectiveness” (McLagan).2

“HRD is organized learning activities arranged within an organization to

improve performance and personal growth for the purpose of improving the job, the
individual, and the organization” (Gilley and England),3

“HRD is the process of determining the optimum methods of developing and

improving the human resources of an organization and the systematic improvement of
the performance of employees through training, education and development and
leadership for the mutual attainment of organizational and personal goals” (Smith)

1.12 EVOLUTION OF CONCEPT OF HUMAN RESOURCES

MANAGEMENT IN INDIA
Since independence, in India there have been several changes in the personnel
management and the approach of the organization. After the independence India
adopted mixed economy model for its economic growth. There was coexistence of
both private and public sector. Industries classification was broadly based on the
ownership – whether private or public owned. Those types of heavy basic industries
which were capital intensive were taken up in public sector as India being a
developing economy the rate of capital formation was low and it was difficult to the
private entrepreneur to mop up huge capital investment. In the large sector
manufacturing industries the number of employees was quite large. The Indian
Constitution has given several protections to the working class.

Alongwith the industrialization process, there was a growth of trade union

movement which also protected the employees’ rights and interests. The trade unions

2
Gary N. Mclean & Xiaohui Wang, paper titled, Defining International Human Resource
Development, a Proposal.
3
McGuire, D., O'Donnell, D., Garavan, T. & Murphy, J. (2001): "Framing
Human Resource Development: An Exploration of Definitional Perspectives Using Discourse
Analysis", presented at the Irish Academy of Management Conference, Universityof Ulster, September
2001.

19
educated their members of their rights and in the organized sector; chances of
employees getting exploited were remote. During 1970 – 80 decade the HRM
department attended to the following functions:
(1) Personnel and administration,
(2) Industrial Relations, and
(3) Labor welfare. The prescribed and assumed role was crisis driven or issue
driven. (Chaterjee, 2006).

This period also witnessed the rise of managerial unionism. The white collar
workers, though deprived of formal union rights, formed their associations and these
associations started working as pressure group to obtain their demand settled by the
management. This development paved the way for Associations of Managements
again with the same objective to protect their interests. The industries concentrated on
development of tools that would increase the efficiency and productivity of the
employees. This development led to defining the work output, staffing pattern and
productivity linked compensation / incentives.

Today, HRD in India has come out of infant stage but has not reached a stage
of adulthood. For the first time, in India, in the year 1975, the first HRD department
was established in Larsen & Turbo. Then in the year 1979, HRD department was
established by State Bank of India – a large service sector organization, having the
largest branch network and number of white collared employees. It had an integrated
approach to HRD functions. Dr. T. V. Rao of Indian Institute of Management,
Ahmedabad conducted a workshop on HRD and brought out a draft book on
Designing and managing Human Resource System. Then after, number of
organizations showed interest in establishing HRD department in their organization
and now it has reached a stage that almost all the large sized organization this
department is in existence.

As the time passed, the concept of HRD has undergone various stages of
transformation. By mid seventy it started using motivational tools to build the
competence. In 1980s, by and large motivational needs were fulfilled. Today, the role
of HRD has been understood in right perspective by the organizations.

20
1.13 IMPORTANCE OF HUMAN RESOURCES
DEVELOPMENT
Today, the Human Resources Development department plays a pivotal role in
any organization. This is the most important department in every organization. It takes
care of recruiting the people, maintaining benefits to the organization and at the same
time takes care of the all important assets including the talent management for the
organization.

There are various reasons for assigning a key position to the Human Resources
Development department. The department takes care of all the employees of the
organization through which the employees voice their views. It creates a bond of
confidence between the employees and the management. At the same time it also
takes care of the organization to ensure that the right type of employee is available for
the right posting and that he/she devotes wholly and gives maximum output at the
affordable costs.

1.14 SIGNIFICANCE OF HUMAN RESOURCES PLANNING

The importance of planning in every department cannot be undermined and
the HRD department is not an exception to it. It is the objective of the HRD that there
is uninterrupted supply of adequate number of qualified and motivated employees
which are best suited to the job requirement. This requires proper planning, giving
training input to the newly recruited employee and that they are introduced to the
management’s objectives, mission systems and procedures.

Importance of Human Resource Planning

Human Resource Planning is important for any organization in the following
ways;

Provides quality workforce,

Reduces labor costs,

Facilitates rise in skills,

Effective motivation,

Safety of health,

21
Reduces labor costs
The HRD dept. has to perform a tight rope walk as while gaining the
confidence of the human resource it has also to satisfy the management. Particularly
in today’s marketing scenario when there is a fierce competition in the market, in
order to ensure that the cost of production is kept at low level it has to ensure that the
labour costs are to the extent possible at low level.

Facilitates rise in skills

The employees recruited by the organization are required to be oriented and
introduced to the organization’s policies, culture, practices and procedures, mission of
the organization etc. for which the HRD dept. should organize proper training to the
employees and ensure that their skills are sharpened on continuing basis.

Effective motivation
Fully motivated employees are invaluable assets to the organization. Through
various techniques the HRD dept. has to ensure that the employees are fully skilled as
well as fully motivated so that they will give their full potential to the organization. It
has to innovate on continual basis incentive schemes of various kinds to ensure that
the employee’s motivational needs are fully met. Motivational tools are not
necessarily monetary all the time. Even for achieving motivation job satisfaction
environment, recognition of the individual achievements, appreciation etc. are also
important from the employee’s point of view.

Safety of health
Ensuring health care of the human resources receives the top most priority of
the HRD dept. Only when the employee and his family’s health care has been taken
by the organization, the full potential of the employees can be drawn. For this purpose
the HRD Dept. takes every care for safety of the human resources

1.15 IMPACT OF GLOBALIZATION ON HR PRACTICES

India became the founder member of the WTO and adopted policy of
globalization, liberalization and privatization in the year 1991. This made the entry of
foreign direct investment possible in a phased manner due to which number of

22
multinational organizations came to India and established their manufacturing /
research and development and back offices in India. Along with this these
multinational companies also brought the modern technology as well as various latest
management practices including the Human Resources Management practices. Not
only for the trade but also for human resources the entire globe became a market
place. Lots of Indians are now working in various countries in various key positions
and also lots of foreign nationals have been inducted in the Indian companies and are
working in India. The whole canvas of the Human Resources Development has
undergone a sea change. It has received a global dimension. This led to the complex
role of the Human Resources Department as they have to take into account various
factors in handling their day to day functions.

The origin of the concept of “BEST HR PRACTICES” lies on this

background. In order to ensure that there is no attrition of the talented employees, the
HRD organizations has to be on its toes to innovate various HR practices that will
interest the talented people to continue with the organization. The best HR practices
according to its dictionary meaning are the recognized methods of correctly running
business or providing services. “Best practice is a method or technique that has
constantly shown good results with other means and that is used as a benchmark”.4

“A practice which is most appropriate under the circumstances, especially as

considered acceptable or regulated in business; a technique or methodology that,
through experience and research, has reliably led to a desired or optimum result”.5

Thus the HR department is expected to be pursuing the identification of the

Best HR practices without much involving the costs and at the same time improving
the morale of the employees. The HRD should also ensure that the human resources
remain motivated all the time for attainment of the corporate goals. E.g. provision of
various acceptable fringe benefits to the employees, providing a well drawn career
path etc.

4
http://www.businessdictionary.com/definition/best-practice.html#ixzz30Mb0fLWT
5
Collins English Dictionary –unabridged edition 2009

23
 Therefore, we can say that the globalization has brought in the positive
approach to the functioning of the Human Resources Development dept. Not only this
phenomenon is restricted to the multinational companies but also the domestic
companies have adopted those with some little changes here and there to suite their
staff expectations. Indian companies are also deputing their staff to overseas sites for
onsite assignments and these employees also give feedback to their management
about the work environment and the various facilities the employees get there. This
feedback is useful to the HRD dept. to assess the possibilities to adopt similar
facilities in their company. HRD dept. has to perform a balancing act as it has to
satisfy the management and the human resources at the same time.

1.16 STRATEGIC HR MANAGEMENT

The strategic HR Management address the attainment of the organizational
objective and at the same time meeting the expectations of the employees on various
fronts. HRD has to perform a skilful job of undertaking the compensation
negotiations, training and administration etc. It also provides various incentives,
safety procedure and other routine aspects such as framing of leave rules and
administering those.

Strategic human resource management is a proactive management of people. It

involves planning for achievement of company needs of human resources and meets
those well in time. It involves in improving the hiring practices, training programmes,
enforcement of discipline and development of work culture conducive for the
attainment of the company goals.

1.17 OBJECTIVES AND GOALS OF HUMAN RESOURCES

Today, in order to remain in business and achieving growth the organizations
are using modern technology not only in the manufacturing sector but also in the
services sector. Therefore the need of the hour is to have skilled and competent
employees. There is a shift in demand for skilled and competent workers as well as
managers. Therefore, HRD Dept. has to develop and design new tools for the proper
recruitment, training and formulating the policies for employee retention. The success
of the HRD dept. lies in ensuring that there is very low attrition of the talented

24
employees and that the staff at all levels remains motivated to offer best potentials
they are having.

The Goal of HR Management is usually simplified as “right people at right

places”. The “at right time” should be added as well. This simplified goal represents
the complex system of HR processes, which have to be aligned to allow the skilled
work with employees and managers in the organization.

The HR Management consists of several areas and the key goals are defined
for each of them:
• Organizational Effectiveness
• Human Capital Management
• Knowledge Management
• Performance Management
• Compensation Management
• Employee Relations

In modern organizations organizational effectiveness is a key requirement.

Survival of the fittest is the order of the day. One who can withstand with the
current competition and ensure achievement of the organizational goals will
help the organization to function effectively.

In the current scenario where there is a constant increase in the demand for the
quality and skilled staff the HR department has to accord top most priority in
the knowledge management and the other aspect associated with it is the
compensation management. This is very crucial when there is flight of skilled
talent from one organization to the other.

The HRD dept. has to perform one more crucial job and that is the
performance management. This is important from both the sides. From the
management side attainment of the targets set out for achievement are
important and for the employees their performance is also required to be
assessed using well designed assessment system. Such a system should be
impartial, unbiased and based on the actual performance and using scientific

25
 method which is also acceptable to the employees. This confidence of the
employees that there is a fair assessment of the performance goes a long way
in ensuring employee turnover.

The HRD dept. has to ensure that the employer and employee relations are
always cordial and healthy. Both of them should have confidence in each other
which will be an enviable environment. Satisfied employee is an asset to the
organization. This should be recognized by the management in true spirit. At
the same time the employees should also be considerate towards
management’s approach when there is a full transparency.

1.18 FUNCTIONS OF HR
The HRM Executive assumes the staff position at the corporate office. The
direct handling of people is usually attended to by the line managers. The functions
and the responsibilities of HR have been listed hereunder:
1. Right person is placed at the right job.
2. Employee’s induction and orientation
3. For those employees who are new to the job they are required to be
trained.
4. Ensuring improved job performance of each employee.
5. Soliciting cooperation from the employees for smooth running of the
organization.
6. Interpretation of the company’s policies and procedures.
7. Containing the labour costs.
8. Developing abilities of each employee.
9. Ensuring high morale of the employees.
10. Take health care and physical conditions of all the employees.

In providing this specialized assistance, the human resource manager carries

out three distinct functions:

A line function: The Human Resource Managers provides direction to the

employees in his /her own department .

26
 A coordinative function: The HR Managers has to use his functional
authority and exercise coordination amongst the various departments of the
organization.

Staff (assist and advice) function: The most crucial job that the Human
Resources Development Manager has to attend is to assist and advise the line
managers. He understands the personnel aspects of the company’s strategic options,
and briefs those to the Head of the Organization. He renders assistants in hiring,
training, evaluation, rewarding, counseling, promoting and also firing the employees.
The HRD manager has to remain always upto date as to what is happening in the
similar organization which information helps him to decide the HR policies.

In large organizations the HRD has following specialists in the department:

1. Recruiters: Search for qualified job applicants.
2. Human resource development specialist: Manage employee development
activities in an integrated manner.
3. Engagement and fun specialists: Ensure that the workplace is fun-filled and
enjoyable.
4. Employees’ welfare officer: Take care of welfare amenities for employees
prescribed by law or otherwise.
5. Job analysts: Collect and examine information about the job descriptions.
6. Compensation managers: Develop compensation plans and handle the
employee benefits program.
7. Training Specialists: Plan, organize, and direct training activities.
8. Employment/Industrial relations specialists: Advise management on all
aspects of union-management relations.

1.19 THE ROLE OF HR MANAGER

The primary objective of HRM is to ensure the availability of a competent and
willing work force to an organization. HRM objectives are fourfold: societal,
organizational, functional and personal.

27

The HR Manager has to ensure that the organization attains to the social
requirements, i.e. enforcement of laws relating to the employees, reservation,
discrimination etc. It also encompasses legal compliance and rationalizing the
benefits and staff relations.

By performing the duties the HR Manager assist the organization to reach its
primary objective. This includes human resource planning, employee
relations, selection, training and development, appraisal, placement and
assessment.

The performance appraisal, placement, and compensation finalization are

covered in the personal objectives of the HR Manager. The HRM has also to
ensure that the while satisfying the personal goal the cost to the company
should not be kept aside.

1.20 INTRODUCTION TO CONCEPT OF BEST HR PRACTICES

Definitions:6
Usually the Best HR Practices are set forth by an authority, such as governing
body or management, depending on the costs involved. Normally the Best HR
Practices are the recommended course of action.

Any practice devised to increase the competence, commitment and improve

the culture building can be termed as HR Practice, and this can be in the form of a
norm, rule, system, or some practices.7

Following are the few examples of the best HR practices:

HR Executive greeting / wishing the employee on his/her birth day or
marriage anniversary day.

Provision for health care / regular medical check up, reimbursement of the
hospitalization expenses including those for the family members.

Providing babysitting facility.

6
http://www.investopedia.com/terms/b/best_practices.asp
7
http://www.talentnet.vn/information-center/hr-articles/best-hr-practices

28

Provision for granting special allowance if the employee attends office on
his/her birth day.

Updating the employees of the organization about the organization’s policies
and latest policy decisions, performance through an internal house bulletin.
(Ensuring transparency).

Highlighting the achievements of the employee and his family members
through the house bulletins.

Job rotations to remove the monotonous feeling.

The best HR practices differ from company to company as the composition of

the human resources is different and the expectations of the employees also differ.
Therefore, the HR Manager has to carefully study as to what the employees expect
from the company in the form of Best HR Practices.

Factors that influence Best HR Practices

Communication
According to the employees good communication should be broad based and
clear and at the same time it should be in the language known to the employees. The
HR manager should provide an opportunity to the employees at periodical intervals
to voice their suggestions to improve upon the working of the organization. A patient
listening of these suggestions by the management builds confidence of the employees.

Continuous Improvement
The concept of improvement is a dynamic concept and not a static one. It
should be an ongoing exercise. This enables the employees to bring out their hidden
talent.

Risk Taking
In terms of economics, profit is the reward for risks. Therefore, the
management should encourage the employees to take calculated risks. There should
be an atmosphere congenial to take calculated risks.

29
Recognition
The employee’s initiative will come only when the management is willing to
recognize the employees suggestions based on cost benefit analysis. The recognition
provides motivation to the employees.

Work life balance

This is an important aspect of handling human relations in business. Some
companies celebrate the birthdays of the employees and extend invitation to the
employees to participate in it. Else when the employee is being recognized or an
award is being given the employee’s spouse is also invited. Some companies have
started Kids clubs for the employee’s kids.

Cultural Consciousness
This is a very vital aspect of HR Management. The organizations are currently
very much concerned about maintaining high level of organizational culture. Number
of schemes is formulated for this purpose. On the company’s foundation day the
company organizes an opportunity to all those who contribute to the success of the
organizational culture, i.e. An opportunity is provided to the Employees, Management
and the prominent customers of the organization to share their views which go a long
way in framing the future strategy of the organization.

Training & Development

In the companies while undertaking annual performance appraisal exercise,
the employee’s training needs are also assessed and arrangements are made to provide
training in those areas so that his/her utility to the organization enhances. Companies
now consider the expenditure on training as investment and naturally they are also
concerned with the return on this investment.

Recruitment
Today the old practice of obtaining employees referral for the recruitment of
the vacancies in the organization are solicited and those are given due weightage. This
also acts as a motivational tool for the employees. On the final selection of the
employees some of the companies have introduced a practice of congratulating the
employees parents. (e.g. Max New York Life Insurance Co.). Companies also provide

30
opportunities to the internal employees to compete with the outsiders while filling up
the higher grade positions in the organization.

In order to enable the prospective to decide joining the organization or

otherwise, in some companies the list of Best HR Practices that they observe are also
briefed. The best practices may be financial or otherwise. Similarly in the Human
Resources department the best practices may focus in bringing out the hidden talent of
the employee along with his commitment for the job. The best H.R. practices may
cover various aspects of HR such as recruitment, training, promotion, compensation,
motivation etc.

The principle objective for the introduction of the Best HR Practices is to

ensure that the organization achieves the targets set out by it. This is very vital issue
as far as the organization is concerned. The best HR practices enable the employees to
offer their best hidden talents to achieve the targets set out by the organization.

The role of the HRM executive or the manager assumes greater importance.
Apart from the educational qualifications the HRM executive should have excellent
leadership qualities which have greater bearing on the organization’s performance.

The best HR practices should be more transparent, flexible, and those should
depict the management’s philosophy of taking utmost care of its human resources.
These aspects of leadership enables the employees that they identify themselves with
the organization.

The objectives of initiating best HR practices are:

It goes beyond employee satisfaction and gives the employee delight.

It creates a feel of good factor.

It achieves focus impact.

It adds to the creativity of the employee.

It improves the organization culture.
Worldwide in various sectors of industry and business the best
HR practices have been proved to be successful in achieving the desired goal.

31
1.21 SUMMARY
The industrial sector plays an important role in the economic development of
India. India has a rich historical background of industrial development. The
government of India has rightly recognized fright from the independence about the
role of the industry and has provided support for its development on sound footing.
From time to time the Govt. has rightly modified the definition of the industries and
have adopted policies which are congenial for its sustainable development on sound
footing. The Central as well as the State Govt.s have recognized the need for
development of industries and removing the regional imbalance.

For the couple of years in the manufacturing sector automobile, forging,

pharmaceutical, gems and jewelry industries are doing well. In the services sector,
Information Technology, Business Process Outsourcing, etc. are also faring well and
progressing. Because of the nature of work these industries have, the manpower that
they require need to be trained and motivated. This has added the importance of the
Human Resources Development Department.

After the adoption of the policy of globalization the entire canvas and the
perspective of the human resources development has been thoroughly changed. There
is a cut throat competition and the profit margins are shrinking. This has led to give
thrust on the reduction of the cost of production / services. Initially the attrition rate in
the above named industries was quite high due to entry of number of new industries in
those sectors. However, over a period this attrition rate has been arrested and it is now
getting stabilized at low rate. This has been possible because of the policies pursued
by the Human Resources Development dept. for retaining the talented employees.

Now the industries in the large manufacturing as well as service sector have
very well recognized the importance of the Human Resources Development Dept.
Accordingly these departments are pursuing policies which ensure availability of
talented, skilled and fully motivated staff at the required number. It has been well
recognized that the satisfied employee is an asset and accordingly every care is being
taken by the organizations. The process of innovating best HR practices will be an
ongoing process and it will continue in times to come.

32
 CHAPTER II
RESEARCH METHODOLOGY

2.1 INTRODUCTION
HRM scenario prior to reforms in 1991
Prior to commencement of the reforms in 1991, India was pursuing a
shortsighted policy under the guise of self reliance, and had blocked out the rest of the
world in the manufacturing and services sectors. Through licensing and centralized
planning, and heavily relying on the bureaucratic controls, there were several
restrictions on the business capacity of the units, their location, choice of raw material
etc. Through Monopolies and Restrictive Trade Practices Commission (MRTP) it had
also kept control on corporate takeovers and mergers.

The State had reserved core sectors for itself and played a vital role in the
industrial development of the country. There were number of laws and regulation to
enforce its authority and to influence them. This period was used to be referred to as
“License Raj”. The Government had controlled the collective bargaining in the Public
Sector. There were restrictions for the entry of the multinationals and they can enter
only after the Govt. Clearance is obtained. The Human Resources function was
considered to be a controlling function. It was aimed at enforcing discipline and there
were punitive actions for non compliance of the systems and procedures. Today, such
an approach is considered to be an abnormality.

Impact of globalization
Globalization is the process of denationalization of markets, at political and
economic level and the use of so called global economy. Globalization breaks the
national borders of the similar market forces that have been in force for years
together. The entry of the multinational was facilitated by the reforms process and
thereby number of multinationals were established in India. These multinationals
were from various sectors of economy, i.e. banking and finance, manufacturing,
service sector etc. The multinationals were new to the Indian scenario so far as the HR
management is concerned. They were not fully aware of the Indian laws as well as the

33
attitude of the managements and HR practices then prevailing. There were several
differences in respect of compensation, fringe benefits, incentives, motivational tools
used, management styles, etc.

After adoption of the policy of globalization, liberalization and privatization,

number of multinational companies entered on the Indian industrial canvas. These
companies were using latest technology for production as well as extending services
and their cost of production was low and hence these companies increased the
competition to the domestic companies. These multinationals were adopting HRM
practices which were altogether new to the Indian industries. The Human Resource is
the most important asset for any organization and it is the source of achieving
competitive advantage. Managing human resources is very challenging as compared
to managing technology or capital and for its effective management, organization
requires effective HRM system. HRM system should be backed up by sound HRM
practices. HRM practices refer to organizational activities directed at managing the
pool of human resources and ensuring that the resources are employed towards the
fulfillment of organizational goals.

2.2 THE IMPORTANCE OF HUMAN RESOURCES

MANAGEMENT IN MODERN ORGANIZATIONS
The success of any organization does no depend solely on market realities and
sustainable competitive advantage. The success also lies on the utilization of the
human capital which is an important asset of the organization. The statistical
presentation demonstrates the success of any organization in quantitative terms. But
the success is also dependent on the qualitative aspects of the human resources
management. If those are used positively and skillfully success is there, but if there is
any laps in handling these human relations no one can stop the failure.

The management of the human force of the organization strategically is the

Human Resource Management. The employees individually and collectively
contribute to the success of the organization. Each individual has his own goal and
dovetailing of the said goal smoothly with that of the organization is the job attended
to by the Human Resources Management Department. The objective of the HRM

34
department is to enlist the commitment of the employees for achievement of the
organization’s goals.

The function of the HRD is to attract, retain, and develop through training
input so as to achieve the corporate goals. The HRD dept. provides a link between the
employees and the management. For this purpose the HRD dept. should assess the
needs of its employees and find out how best these needs can be fulfilled within the
overall framework of the organization. The HR Dept. should ensure that the
employees get wholly involved in the organization of their own. For this oneness the
HR should create an atmosphere that the employees develop this attitude. Various
motivational tools are required to be used to have sustainable retention of their
interest.

In today’s modern organizations the HR functions are not attended to in

isolation but in communication with the General Management. It is not an
individual’s decision but the decision is the outcome of the strategic consensus.
The main goals / responsibilities of HRM are:

To retain low employee turnover rate by inspiring people to work for
the company

To attract new employees

To contribute to employee development

The Human Resources Department imparts training to the employees and also
motivates the employees by bringing out to them the ethical policies and socially
responsible behaviour. It shares the organization’s problems in providing solutions to
increase their efficiency, in such a way that there is no bitterness amongst the
organization and the employees.

In today’s competitive world, the success of the organization solely depends

on the utilization of the full potential of the employees for which the HR Department
makes all out efforts. Some companies fail to recognize the importance of the human
capital for the successful operations. Even a few top ten companies took a long time
to understand the importance of the human capital in the organization.

35
 The HR Department is continually faced with the challenges and they have to
find out solutions to the satisfaction of the concerned employees. It not only works for
quantitative achievement but also for qualitative achievement and enriching the
organizational culture.

Effect of competition on Human Resource Management

As is stated earlier that after the globalization there has been emergence of the
fierce competition not only in the domestic market but at the international market.
This has impacted the HR policies to a great extent. Various surveys carried out by
different organizations have revealed the following prominent changes:

1 When there is a competitive situation naturally every organization tries to

contain the cost and to keep the prices of their product to the minimum
possible level. In the process the organization tries to save on manpower costs
which continue to go up over the period. In such a situation the HR
Department plays a key role to achieve the management objective.

2 In the case of joint ventures the professional predict and manage culture fit
policies. Organizations are more particular in right profiles and who are more
capable.

3 In order to get optimum from the employees there is greater thrust on training
and retaining talented employees.

4 Now in order to retain the competent employees the organizations are drawing
out a well developed career path which assures the employees that they will
get higher position on achieving certain pre-decided targets. Here it is
important to note that employees do not solely work for compensation but also
for the position in the organization.

5 Companies are currently accepting retail talent and redeploy manpower

whenever necessary.

36
6 Because of the sincerity and hardworking character of the Indian workers,
there are number of foreign companies they are recruiting Indian employees
on preferential basis. Of course this has lead to growth in attrition rate and the
retention of the competent employees becomes costly. In order to solve this
problem the HR departments are not trying to fix up bench marking for salary
revisions for specific industries

7 As a consequence of the globalization there is inflow of foreign managers in

India. This has resulted in greater mobility even at international level. As a
result of this the HR department is expected to be in known of HR practices
followed worldwide.

8 This has lead to the redefining the roles of various functionaries.

9. Lastly it has been observed that the HR departments are innovating Best HR
Practices to keep ahead of their competitors.

Best HR Practices and its impact on the organization

Needless to say that for any organization achieving the Corporate Goal and the
market share targets is the prime concern. In order to achieve this it is essential to
enhance the competencies, commitment and building of sound culture. The HR
Department has a key role to develop certain systems, process, and formulate rules
and regulations to achieve the appropriate organization culture which will be healthy
and the employees on their own will offer their commitment to the organization.

Any practice that deals with enhancing competencies, commitment and culture
building can be considered an HR practice. The practice can take the form of a
system, a process, an activity, a norm, a rule an accepted or expected habit, or just a
way of doing things. HRD has been defined as essentially consisting of these three
Cs:-

Competencies

Commitment

Culture

37
 All three are needed to make an organization function well. Without
competencies many tasks of the organization may not be completed cost effectively or
with optimal efficiency. Without commitment they may not be done at all or are done
at such a slow pace that they loose relevance. Without an appropriate culture
organizations can’t live.

Competency is not an individual trait but it is a team related one. It may be for
pairs of individuals or teams or informal groups that emerge from time to time in
different work situations. Competencies are also dependent on various factors such as
level of advancement of technology, skills of the workforce, management’s approach.
Therefore, there should be comprehensive approach to ensure that all out efforts are
made on all fronts to achieve highest efficiency and increasing the competency.

In order to achieve the high commitment lots of efforts have to be put in.
Motivation at high level creates an atmosphere which is conducive for development of
work culture amongst the employees. Commitment building is an ongoing process
and gradually it becomes habit. There should be proper system of rewards and
recognition to inculcate work culture.

The continuity of the organization on the long term basis depends upon the
work culture cultivated in the organization. The employees should feel about being a
member of the organization/ team which is fully motivated and contributing its mite
for the achievements of the set corporate goals. This can be achieved through properly
development of the Mission Statement, Vision of the organization, conducting
workshops for morale development, motivation, personality development etc.

Here it will be in the fitness of the things as to what are best HR Practices?
Best HR practices are those which contribute to one or all the three C’s i.e.
Competency, Commitment and Culture. These are of the prime concern for the
organization. For this HR department has a role to play. They have to identify from
time to time, the HR practices which will enable achievement of these three Cs. This
identification of best HR practices is an ongoing process in itself as these changes day
in and day out.

38
Impact of Best HR practices
There are number of case studies to show that there is a relationship between
the best HR practices and the organizational effectiveness. Even for motivating the
HR Department staff there are National HRD Network and Confederation of Indian
Industries (CII) awards for outstanding HR Practices.

It has been observed that these awards have been bagged by those companies
which have faced turbulent environment and despite this they have achieved the
awards. Almost 90 per cent of the awardees are from this category. This could be
possible because of the introduction of Best HR practices followed by these
organizations.

Most of these companies exhibit the following characteristics:-

1) These companies are capable to have smooth change over of the

leadership.

2) These companies have adopted the new changes that have come in
their way. These companies have grabbed these opportunities of
liberalization to their benefit.

3) All these companies have after the liberalization, focused on the

customer orientation which is the secret of their success.

4) Managing the change in the organization is a typical problem faced in

every organization. If the change is accepted with an open mind the
success is there. For this, organizations are now a days even
conducting training programs for their staff.

5) All these companies have combined the personnel and HRD function.
They have integrated well the personnel and HRD functions.

39
2.3 SIGNIFICANCE OF THE RESEARCH TOPIC
From the above discussion about the new dimension to the HRM practices that
has come to stay in India after the introduction of reforms in 1991 it is evident that the
adoption of new strategy to deal with the HRM functions has assumed greater
importance. Lots of new facilities are being made available to the employees which
they had not even thought of earlier. In order to sustain the growth the industries are
required to adapt to the new HRM policies and ensure that the organizations derive
the benefit of the Best HR practices in improving the quality as well as reducing the
cost of production / services to achieve the corporate goal of achieving more market
share and the profits.

It is in this context the researcher has felt it appropriate to study the change
that has taken place in handling the human resources development by the Large Scale
Industries located in Pimpri-Chinchwad corporation area which has a prominent
presence of large-scale industries of all types. There are multinational as well as
domestic large scale industries. There are manufacturing as well as service sector
large scale companies in this location. On this back drop the significance of the
research topic has been highlighted. The study would be quite useful to the
managements of the today and tomorrow’s large scale industries.

2.4 A) OBJECTIVES OF THE STUDY

Keeping in view the research topic the researcher has formulated the
following objectives for this research:
1. To analyze the HR practices currently used by the identified industries.
2. To study the Best HR practices in vogue subsequent to the opening of
the Indian economy (liberalization/ globalization/ privatization).
3. To study the impact of best HR practices on employee satisfaction.
4. To identify potential areas in achievement of employee satisfaction
using the best HR practices and to suggest possible solutions.

2.4 B) JUSTIFICATION OF OBJECTIVES

After the introduction of economic reforms in India since 1991, the entire
picture of the labour market at least in certain centres like Pune has undergone a sea

40
change. Pune has become automobile hub as well as information technology hub. As
a result multinational companies have opened up their manufacturing / research and
development units in and around Pune. These industries have not only brought
technology to India but also their Human Resources Development practices. This has
also a bearing on the HR practices followed by the domestic companies either in
manufacturing segment or in information technology segment. Therefore, the
researcher considered it appropriate to undertake the study of HR practices being
followed by the industries identified for this study and to analyze those practices. This
is the rationale for identifying objective No.1.

As stated in the earlier paragraph, after 1991, the concept of best HR Practices
have come to India. Now human resources development department is constantly
innovating new HR Practices to ensure that the employees of the organization, in
whose selection and grooming lot of money, time and effort has gone in, continue to
work with the organization. These HR practices keep the employee attrition rate to
minimum. Therefore, the researcher has considered studying these Best HR Practices
newly introduced in the Indian industries. On this backdrop the researcher has
formulated this objective number 2.

Retention of the employees who are the costly assets to the organization is big
task before the HRD department. Introduction of the best HR Practices also involve
costs. And hence impact of Best HR practices on employees’ job satisfaction also
needs to be studied. Satisfied employee is an asset and the managements have to
study the impact of these practices on the employees and ultimately the benefit
organization derives from it.

Naturally while study the above three objectives there will be lot of input
available to the researcher. Some problems will come to surface and as a research
scholar some solutions may emerge to address these problems. Hence the researcher
has formulated the last objective.

41
2.5 A) HYPOTHESES
The researcher has framed the following hypotheses for this research:
• H1 There is positive impact of the best HR practices on the
employee satisfaction and efficiency of the employees.
• H2 The application of best HR practices has a bearing on the
quality of production/ services.
• H3 The application of best HR practices reduces the attrition rate.
• H4 The employee satisfaction results in cordial employer –
employee relations.

2.5 B) JUSTIFICATION OF THE HYPOTHESES

Success of the management is dependent on the cost benefit study of each of
its actions which has impact on the profitability of it. Introduction of the best HR
practices will certainly entail benefits which are in the form of employee satisfaction
and in turn its impact on the efficiency of the organization. In an organization where
best HR practices are introduced the attrition rate is very meager. Therefore the
researcher has formulated the hypothesis number one as stated above.

As stated earlier a satisfied employee is an asset and such employee give full
commitment to the organization. Naturally this is reflected in the improvement in the
quality of the product and the services rendered by such a devoted employee. In order
to test this statement the researcher has formulated this hypothesis number two.

The researcher wanted to study the direct relation between the introduction of
best HR practices and attrition rate. Therefore this hypotheses is to be tested through
this research. Hence framed this third hypothesis.

Needless to say that the job satisfaction has its impact on the employees’
satisfaction. This employees’ satisfaction in turn has a positive impact on the
employer – employee relationship. Usually in such an organization relations are
cordial. There are less number of employee grievances. Management is keen in
ensuring employees’ welfare. The researcher therefore formulated this hypotheses
which has been tested in this research.

42
2.6 RESEARCH UNIVERSE
Large Scale Industries refer to those industries which require huge
infrastructure, man power and a have influx of capital assets. The term 'large scale
industries' is a generic one including various types of industries in its purview. All the
heavy industries of India like the Iron and steel industry, textile industry, automobile
manufacturing industry fall under the large scale industrial arena. However in recent
years due to the IT boom and the huge amount of revenue generated by it the IT
industry can also be included within the jurisdiction of the large scale industrial
sector. Last but not the least the telecoms industry also forms and indispensable
component of the large scale industrial sector of India. Indian economy is heavily
dependent on these large industries for its economic growth, generation of foreign
currency and for providing job opportunities to millions of Indians.

Large Scale Industries (LSIs) are those industries with investment more than
Medium Manufacturing Enterprises, under MSMED Act 2006 and as shown in
the table No. 1.1 in chapter I. It is because of this rationale the researcher has also
followed this definition of the large scale industries for the purpose of identifying the
large scale industries for this study.

The researcher has decided to restrict his research to the large scale industries
located in Pimpri-Chinchwad Corporation area. The area is quite vast and there are
following industrial locations established by the Maharashtra State Industries
Development Corporation which provide all the infrastructural needs of the industrial
sector.
a) MIDC – Bhosari
b) MIDC – Hinjewadi
c) MIDC – Pimpri
d) MIDC – Chinchwad

Apart from the large scale industries which are located in the MIDCs, there
are few large scale industries which are outside the MIDC industrial estates. E.g.
TELCO, Sandwik, Vulcan Laval, etc. Bajaj Auto etc. In view of this the researcher

43
has carved out his research universe restrict it to the large scale industries in the
Pimpri-Chinchwad Corporation area.

2.7 DATA COLLECTION

Data Collection
In the first stage, with due permission from the senior management, the
researcher visited a few identified large scale industries in Pimpri –Chinchwad area
and got himself acquainted.

Semi structured interview is chosen as an instrument for this research because

it involves a series of open ended questions based on the topic area. The open ended
nature of the question defines the topic under investigation but provides opportunities
for both interviewer and interviewee to discuss some topics in more detail. If the
interviewee has difficulty in answering a question or provides only a brief response,
the interviewer can use prompts to encourage the interviewee to consider the question
further.

In a semi structured interview the interviewer also has the freedom to probe
the interviewee to elaborate on the original response or to follow a line of inquiry
introduced by the interviewee.

The employees will be asked to share their experiences in relation to various

HR practices in their respective companies.

Discussion Themes

Background to the organization and to the interviewee (Employee/line
manager).

Discussion about the expectations of employees from their organization/s.

Discussion about the experiences of employees. in relation to HR practices in
their respective organizations.

Discussion about the relevance of these unique HR practices in Indian
Context.

44

Discussion about changing/adding anything to the existing HR practices for
improvement.

Primary Data
The primary data has been collected in two stages. The first one refers to the
data to be collected from the Heads of the HR Departments of the identified industries
with the use of pre formulated questionnaire. In the second place the researcher has
thought it appropriate to collect primary data from the employees and the staff of the
identified industries. This data collection from the employees helped to cross check
the implementation of the HR policies and how it is received by them.

Secondary Data
The secondary data has been collected from the related literature on various
books, committee reports, journals and periodicals, news papers articles, research
papers, previous research and websites. Pune being educational hub lots of libraries
are available and therefore the availability of the reading material did not pose any
problem.

Period covered by this study

This research covers the period financial year ending 31st March 2007 to 2012.

Limitation of the data

There is a sort of limitation of the data and that is non availability of the data
prior to introduction of the Best HR Practices. This is because of the following
situation.

Prior to globalization India was having a massive unemployment, particularly

of those who have been graduated in various disciplines. The employment situation
was rather grim. However, in 1991, when the Indian government adopted policy of
globalization, liberalization and privatization and started taking effective steps to ease
the situation for inflow of foreign direct investment and entry of multinational
corporations in the various fields the employment started moving favourably. Number
of multinational corporations in manufacturing and services sector opened their either

45
manufacturing plants / assembling divisions / Business Process Outsourcing outfits in
India. Though in the initial stages the process was rather slow however in about 5
years time the situation was favourably changed paying the entry of number of new
MNCs.

Therefore, prior to 1991 in India there was lot of unemployment and not much
employment avenues were opened and the attrition rate in all the then companies was
more or less within a reasonable level. However, after the globalization, the
employment scenario in India particularly in the organized sector changed favourably.
Numbers of job opportunities were available. New MNCs were establishing their
units, the IT sector was flourishing and hence the employees were tempted to switch
their jobs to the new companies offering better terms. This sort of approach paved the
way for employees’ turnover started assuming concern by the managements. The
Human Resources departments of these companies had to address with full focus this
problem of attrition of the employees. In this pursuit these HRD departments started
on a continual basis innovations to take care of the retention of the talented
employees. This further gave rise to the introduction of Best HR Practices.

On this backdrop there is no data available for the period prior to starting
employees’ attrition in India. Hence the above background has been incorporated in
the thesis at the preamble.

2.8 SAMPLE SIZE

Working out the sample size was a very complex activity. Therefore, the
researcher obtained the data on the number of large scale industries located in the
MIDC industrial estates. He also collected the data on the Large Scale industries
located in Pimpri Chinchwad Corporation but outside the MIDC industrial estates.
The picture that emerged was as under:

46
 Table 2.1 : Data relating to the Large Scale Industrial units in the Pimpri-
Chinchwad Corporation area
Position as on 31st March 2011
Sr. No. Location No. of large scale
Industries
1 Bhosari MIDC 9
2 Pimpri MIDC
3 Chinchwad MIDC 26
4 Hinjewadi – IT Park 19
5 Large scale Industries outside the MIDC area 7
Total number of industries 61

Further these industries were broadly classified on the basis of their activity:

Table 2.2: Activity wise Broad classification of the industries.

Manufacturing Units 37
Services sector units 24

In order to have a cross section of the industries for the study purpose the core
activity like – Automobile industry, IT industry, etc. of the unit was also taken
account. In order to have better understanding the best HR practices followed by the
Multinational industries also found place in the industries identified for this research.
This enabled to compare the best HR practices that are being followed by the
domestic large scale industries.

47
 Thus finally the following sample of Large Scale Industries has been
identified for this research:
Table 2.3 : Identification of Large Scale Industires
As on 31st March 2011
Sr. Name of the company Classification details Management
No. Domestic/ MNC
Manufacturing Industries
1 Tata Motors: Automobile: Mfg. of Multinational
Pimpri-Chikhali, Commercial Vehicles organization
Chinchwad

2 Kirloskar Oil Engines Bearing Manufacturing Domestic Mfg. Co.

Ltd. activity
Services Sector Cos.
3 Cognizant Technology IT Service Industry Multinational
Solutions Ltd. Organization
4 Tech Mahindra Ltd. IT – Service Industry Domestic

Being a large scale industry the operations of the companies identified for this
study are spread over in number of locations. These companies are having a well
developed and equipped Human Resources Department. For the purpose of this
research employees are divided in three broad categories as under:

1) Employees from Senior Management Cadre

2) Employees from Middle and Front level management Cadre
3) Employees who are the workmen and have their own trade union.

With a view to compile data we have identified staff from each cadre and from
each identified company, as under:
Table 2.4: Class of Employee from each identified industry
Sr. No. Class of employee from each identified industry Employees
identified
1 Employees from Senior Management Cadre 5
2 Employees from Middle and Front level management 35
Cadre
3 Employees who are the workmen and have their own 60
trade union.
TOTAL 100

48
 Thus the total sample according to class of employees identified for this study
is as under:
Table2.5 : Employees identified
Sr. No. Class of employee Employees
identified
1 Employees from Senior Management Cadre 20
2 Employees from Middle and Front level management 140
Cadre
3 Employees who are the workmen and have their own 240
trade union.
TOTAL 400

2.9 QUESTIONNAIRE
Two sets of questionnaire were compiled:
a) For HR heads of the identified companies.
b) For the employees of the identified companies.

For HR heads the questions were mostly related to the policy matters while the
employees were asked questions on specific Best HR practices.

So far as employees are concerned a broad spectrum of employees

representing workers, office staff, and officers from Junior Management, Senior
Management were randomly selected from the identified companies.

The questionnaire was designed Liker scale. The questions were broadly
categorized under the following heads:
1. Management support
2. Working Environment
3. Job related aspects
4. Motivational aspects
5. Perception about Best HR Practices
6. Organizational Culture

Under each of the above heads questions were framed to obtain the
respondents answers in the following form:

49
 Statements

Disagree

Disagree

Disagree
Strongly

Strongly
Neither

Agree

Agree

Agree
Nor
2.10 ANALYTICAL TOOLS USED
The data so collected from the field through the questionnaire has been entered
in the computer and using the tabulation of it various tables have been drawn.
Wherever it was practical and essential percentages have also been drawn. For easy
understanding of the data, at some points graphic presentation of the data has also
been resorted to.

The following statistical tools have been used:-

Percentage- This is a special kind of ratio which will be used to
compare variables. Percentages will be used to condense data and
express in relation to 100.

Correlation- This tool has been used to know the relationship between
the variables. That is the effect of change in one variable on another
variable.

Diagrams and Graphs- The diagrams and graphs have been used as
an aid in interpretation of data and drawing conclusions.

Averages- This statistical method is often necessary to represent a set
of data in terms of one single number that should neither represent the
lower nor the highest value but a value in between the highest and the
lowest value.

Proportionality Test - This test explains how to conduct a hypothesis
test to determine whether the difference between two proportions is
significant. The test procedure, called the two-proportion z-test, is
appropriate and uses the following formulae.

To test H0: p=p0, the sample size are so large that both np0 and
n(1-p0) are 10 or more.
p − p0
Now compute Z statistics as Z=
p 0(1 − p 0)/ n

50
 In terms of a variable Z having the standard Normal
distribution, the approximate P-value

For a test of H0 against some alterative hypothesis say Ha

Ha: p > p0 is P( Z ≥ z)
Ha: p < p0 is P( Z ≤ z)
Ha: p ≠ p0 is P( Z ≥ | z |)

This test has been performed for each variable given, and the
results are summarized in below table. P values have been used to take
decision about the variables. Level of Significance is 0.05.

2.11 SCOPE
From the foregoing discussion it is clear that the managing Human Resources
of any organization is a vital task in the changed management philosophy. It is not
limited to the personnel administration. It goes beyond. Particularly after the adoption
of the globalization, liberalization and privatization, number of multinational
companies has arrived in India and along with those companies their approach to
manage human resources has also made an entry in India. These new role and the best
HR practices have made a difference in the Indian context. Therefore, the current
research topic has posed several newer aspects in HR management for this research
study. Newer concepts, new type of facilities, altogether new type of amenities which
are being provided by these multinational companies are new in the Indian context
and the Indian companies will also have to adopt some of these practices applying
appropriate changes acceptable to the Indian context. Therefore, the researcher is of
the considered view that there is an ample scope to this research topic.

2.12 LIMITATIONS OF THE STUDY

Compared to the total number of large scale industries operating in the
identified study area the sample is moderate. Each company has different HR
practices, although there may be some common practices. Hence, the sample may be
treated as indicative but the findings may not be universally applicable. And to that
extent this is one of the limitations. It is practically, not possible to cover a larger

51
sample than the one that has been selected taking into account the time, man power
and resources available to the researcher.

The questions relating to the policy matters were put to the HRD officials.
Some of them expressed their limitation on the point of secrecy.

One of the limitations is that, while the responses came from employees who
were best placed to report the actual HR practices that exist, there is still room for
error. Employees may not be completely accurate and, in some cases, may not be
completely knowledgeable about practices that have an impact on others. Even after
ensuring that a cross section of the employees was covered by this research, the error
is minimized, but cannot be eliminated.

2.13 CHAPTER SCHEME

Chapter – 1: Introduction
In this chapter the researcher discussed the definition of industry,
classification/ types of industries role and importance of industries in Indian economy,
historical perspective of Indian industries, history of industrial development of India,
post independence development of Indian industries, various Industrial policy
initiative till date, Indian industry prior to liberalization, impact of globalization on
Indian industries, categorization of Indian industries, definition of large scale
industries in India, Definition of Human Resources Development, evolution of
concept of Human Resources Management, importance of HR and Significance of HR
Planning, traditional HR practices, impact of globalization on HR, impact of HR
Management on industry, strategic of HR management, objectives of HR, functions of
HR, the Role of HR Manager, the impediments in HR implementation.

Chapter – 2: Research Methodology

This chapter deals with significance / importance of the research topic,
objectives of HR, hypotheses of HR, research universe, data collection, primary data,
secondary data, sample size, questionnaire, analytical tools used, scope and limitation,
and the chapter scheme followed.

52
Chapter – 3: Review of Literature
In this chapter the researcher has taken a short review of the various books,
journals, periodicals, theses, reports, websites which are related with the topic under
research.

Chapter – 4: Brief Profile of Pimpri-Chinchwad Area and Identified Industries

This chapter covers a brief profile of the study area and the identified
companies for this research. This helps in understanding the research work in its right
perspective.

Chapter – 5: Traditional & Best HR Practices in India

In this chapter the traditional HR practices have been brought out in detail
which, help to understand the new approach to HR that is being currently
implemented. It also brings out the best HR practices being followed in India.

Chapter 6: Analysis and Interpretation of Data

The data collected through the primary data collection from the field has been
analyzed by using various statistical tools like, tables, ratios, percentages etc. This
chapter also includes validation of hypotheses framed in the beginning.

Chapter – 7: Observations, Suggestions, Conclusion

This chapter covers researcher’s observations based on the data analysis,
suggestions, scope for further research and conclusion.

Bibliography
This annexure gives the details of books, journals, periodicals, reports, Ph. D.
theses, and web site which the researcher has used.

Annexure
Questionnaire: A copy of the questionnaire used for obtaining the primary data has
been placed as Annexure – 1.

53
 CHAPTER III
REVIEW OF LITERATURE

3.1 INTRODUCTION
This Chapter includes a review of past literature on various facets of best HR
Practices in India. The review of the past literature provides guidance to the
researcher for conducting research in the right direction. The review also helps to
adopt an appropriate methodology for completing an investigation. Thus, it helps in
proper understanding of the concept, methodology, analytical issues relating to the
problem under study. The researcher has studied previous research literature on the
subject, as well as studied various committee reports, books, journals, periodicals and
news items he has brought out reviews in brief hereunder.

3.2 PREVIOUS RESEARCH WORK

a) Pankaj Tiwari & Karunesh Saxena: paper titled, “Human Resources
Management Practices – A comprehensive Review”.

In this paper Mr. Tiwari and Saxena have brought out a detailed account of
Human Resources Management. The Human Resources Development department
occupies competitive advantage. As compared to the management of technology or
capital, managing human resources is a challenging task. For effective management
the organization requires HRM system. The HRM practices refer to the activities
concerned with the human resources.

The paper writers have reviewed the then existing literature on HRM practices
and observed that HRM practices are affected by external and internal factors. These
directly affect other variables such as employer employee relations, employee’s
attitude, performance of the organization on the financial front and employee’s
productivity. Above all this affects the overall corporate performance.

b) Raigama Rathnaweerage Neelamani Thanuja Rathnaweera, (2010)

published his study titled “Do HRM Practices Impact Employee Satisfaction,
Commitment or Retention?”

54
 In this research paper the authors have brought out that the training of
employees is positively related to higher job satisfaction, commitment of the
employees and arresting the attrition of the talented employees. The analysis carried
out by these authors has resulted in supporting the hypotheses which states that the
performance evaluation is directly related to employee’s satisfaction.

Their research brought about the following aspects on the forefront:

1. A package of HRM practices has positive impact on the employee

satisfaction.

2. The package of HRM practices also has positive correlation with the
better employment commitment.

3. For retention of talented employee’s compensation, social benefits,

performance appraisal and training and development have a great
bearing in Sri Lankan Public Sector Banks.

4. Package of HRM practices brings about employee satisfaction,

employee’s commitment and retention of the employee.

5. The compensation and social benefits have a strong bearing on the

employee’s commitment and retention.

6. The training input in the employees enables them to secure higher

positions and improve their performance. This ultimately resulted in
the employee satisfaction, commitment and retention.

In an exercise carried out by Arthur , 1994, Huselid, 1995, Sivasburamaniyam

and Venkataratnam 1998 have analyzed the prior research and have identified some
effects which are considered as HRM outcomes. This analysis also throws light on the
various variances which resulted in throwing a focus on the organizational outcomes
as employee turnover.

55
c) Park et al. (2003) observed that the HRM practices are the tools with which
8
the employee skills are developed. Human resources practices are the means by
which the organization can influence and shape the skills, attitudes and behavior of
individuals for attainment of the organizations targets set out.9

Outcomes of previous empirical studies

The outcomes of the empirical literature brought out that there is relationship
between HRM and the performance of the organization. The findings of the
researchers have been stated in brief:

d) Bateman & Organ, 1983, Puffer, 1987, Organ & Konovsky, 1989:
In the research work of these authors it has been observed that the HR
practices has a direct correlation with the job satisfaction. It has been further observed
by them that the HR practices motivate them and they repay this in the form of
building organizational culture.

e) Arthur (1994), in this research the author has observed that the high
commitment strategy has significant higher level of both productivity and quality as
compared with the controlled strategy.10

f) Walters 1995: The author has observed that Indian companies are found to be
stronger than the multinational companies. Both types of companies give thrust on
planning and recruitment. He further observed that performance management enables
continuous improvement of business through best human resources management.11

g) Arnett and Obert 1995; Dessler 1999; Pfeffer and Veiga 1999)
The authors have observed that there is a favourable impact of the innovative
HR practices on the retention of the talented employees and has arrested the attrition
rate. They have further observed that the support from the line managers has a strong
bearing on the employees. From the employees point of view the relations between

8
Park et al. (2003)
9
Collins & Clark, 2003.
10
Arthur (1994), http://www.markhuselid.com/pdfs/articles/1997_Shareholder_ Wealth.pdf
11
Walters 1995: http://library.imtdubai.ac.ae/content%5Ce_books%5CE0016.pdf

56
the immediate line managers are of vital importance. There is strong influence of the
line manager on the perception of the employees about the work culture.

h) Harel and Tzafrir 1996: The authors observed that the HR practices are
used to improve the knowledge, skills and abilities of employees, to boost their
motivation. It minimizes or eliminates the loitering on the job.12

i) Patterson et al (1997): The researchers have observed that HR practices have

a bearing on profitability and productivity. The study also points out Development of
Employee skills and job designing including flexibility, responsibility and the use of
Formal teams.13

j) Thompson (1998): There should be a fair balance between the work force
covered and HR practices for achievement of the success of the organization.14

k) Spears, M.C. & Parker, D.F. (2002),15 studied 285 employed business
professionals and observed that training and support for continuing education reduces
the probability of employees dissatisfaction. Training and performance appraisal
system provides specific measurable feedback to the employee.

l) Purcell et al; (2003): The most successful companies have a clear vision and
set of integrated values which are embedded in the organizational culture. These
companies have aim to have sustaining performance and flexibility16

m) Patrick M. Wright, Timothy M. Gardner, Lisa M. Moynihan (2003),

Article titled “The impact of HR practices on the performance of business units”. In
this article the authors have examined the impact on HR practices and organizational

12
Harel and Tzafrir 1996
13
Patterson et al (1997): http://www.leeds.ac.uk/esrcfutureofwork/downloads/
workingpaperdownloads/paper9.pdf
14
Thompson (1998): and productivity.pdf
15
Spears, M.C. & Parker, D.F. (2002), http://ephjournal.com/EPH-df/International-Journal -of-Science-
and-Engineering/September-2015/International-Journal-of-Science-and-Engineering-1.pdf
16
Purcell et a; (2003): https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source
=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiO_LGZ6IrMAhXCV44KHd1QBA4QFggfMAA&url
=http%3A%2F%2Fwww.koganpage.com%2Fdownload%3Fid%3D2271&usg=AFQjCNFpvtbUjCN_b
kdTNTCQa3YQpidvuQ&sig2=GORonBtkjLm5_7ItSj4j1g

57
commitment on the operating performance and profitability. The study was based on
the employees attitude survey. The study revealed that the HR practices are very
closely related to organizational commitment. 17

n) Paul A. K. and Anantharaman (2003): The authors have observed that there
is no connection even casual of HR practices with the financial performance. 18

o) Collins & Clark, (2003) Human resources practices are the primary means by
which firms can influence and shape the skills, attitudes and behaviour of individuals
to do their work and thus achieve organizational goals.19

p) Bowen and Ostroff, (2004): The authors have observed that perception of
the HR practices influences the relations with their managers. Innovative practices
implemented in right manner increase the employee’s satisfaction.

q) Bjorkman and Budhwar (2007) The authors have suggested that the
introduction of HRM practices from the foreign parent organization was negatively
associated with performance, local adaptation of HRM practices was positively
related with the performance of foreign firms operating in India20

r) Parvin, M. M., & Kabir, M. M. (2011): The authors have examined major
factors that are responsible for job satisfaction in identified pharmaceutical
companies. The findings were applicable to the pharmaceutical industry. According to
them money is a good motivator. Next to monetary gain relations with the coworkers
was the aspect highly weighed by the workers. The environment particularly clean
work place, pleasantness, lighting, noise free atmosphere, furniture have also a
bearing on the job satisfaction. Fairness in the treatment, compensation, interpersonal
relationship contributes to the development of sound attitude of the employees. It was

17
Patrick M. Wright, Timothy M. Gardner, Lisa M. Moynihan (2003), Article titled “The impact of HR
practices on the performance of business units”. https:/ / huntsman.usu.edu/
files/uploads/Publications/Impact%20of%20HR%20on%20Business%20Units.pdf
18
Paul A. K. and Anantharaman (2003) http://www.ingentaconnect.com/content
/routledg/rijh/2003/00000014/00000007/art00010
19
Collins & Clark, 2003
20
Bjorkman and Budhwar (2007) http://www.emeraldinsight.com/doi/abs/10.1108/
01425450710826104

58
further observed that compared to female workers the male workers accord more
importance to the job security.

s) Appalayya Meesala, Asma Sultana: (2011),21 “A Study on Employees’

Satisfaction with Performance Appraisal System in Andhra Pradesh Tourism
Development Corporation”. The objective of the study was to find out which are the
variables that contribute most to the satisfaction of Performance Appraisal System
(PAS)? Whether PAS covers all aspects most accepted by the employees? Does fair
fixation of performance standards contribute to satisfaction with PAS? etc.

The authors have observed that the organization has to see that all aspects are
covered in the performance appraisal. Secondly, the employees are not clear with the
reward system. In the subject sample except with reward system, the employees were
clearly satisfied with the other determinants.

t) Ball (2012): The researcher has observed that in the current organizational
scenario the human resources management has got its due importance. 22

u) Akanbi, F. K., & Ojokuku, R. M. (2012): The authors studied the impact of
training on their job performance. Their finding was that the training is a very
significant factor so far job performance is concerned. In turn this will enable the
organization to achieve the targeted performance. 23

v) Business & Legal Resources, (BLR) (2012) “Special Report – Top 10 Best
Practices in HR Management for 2012”.

In the global market place the role of human resources is changing very fast.
Traditionally HR Dept. was regarded as administrative overhead. In good old days the
personnel department was attending to benefits administration, maintenance of
individual files and other records, the recruitment of staff etc. In today’s context the
role is totally changed.

21
Tecnia Journal of Management Studies, Vol. 6,No.1, April 2011-Sept. 2011.
22
Ball 2012, http://www.iima.org/CIIMA/11 5.4_Beadles_39-46.pd
23
Akanbi, F. K., & Ojokuku, R. M. (2012): ijrcm.org.in/download.php?name=ijrcm-1-vol-3_issue-
8.pdf...

59
 The positive result of these changes is that HR professionals have the
opportunity to play a more strategic role in the business. The challenge for HR
managers is to keep up to date with the latest HR innovations – technological, legal
and other wise. The HR Managers should anticipate the challenges that will be posed
and should address those in advance.

This report is based on the study of HR practices followed in U.S.A. However,

because of the globalization and entry of the multinational companies, the labour
market has become a global entity. Therefore this is also relevant to the Indian context
barring some marginal adjustments.

The report has discussed some of the Best HR Practices which have been
briefly discussed hereunder: These practices are based on the environment available
in U.S.A. Therefore, those cannot be accepted in Indian context but it can give an idea
as to what can be considered as the best practice and with little modification and de-
novo thinking on these issues the Indian HR Managers can get a clue and address
their innovations.

Health Care
Benefits Summary Requirement: The employees are given requisite
information as to what health care benefits they are entitled to at the time of entry in
the organization and before delivering the insurance document to them.

Health Insurance Administration Simplification: The committee

recommended that there should be only one single set of operating rules for eligibility
verification.

Requirement on Employers to inform employees of coverage options:

This suggestion of the committee is totally based on USA practices and is not relevant
to the Indian context at the moment.

60
 Family and Medical Leave Act (FMLA): The suggestion of the committee is
that the employees be given prior knowledge about the various leave rules and
regulations and the changes that are going to take place if any.

Paid Sick Leave benefits: What the Numbers Show: For paid sick leave
benefits there should be no minimum length of service requirement.

Highlights of the report include

In private industry there is a variation about paid sick leave benefits for
management, professional and service workers. For management, professional
employees the benefit is 84 per cent while for the employee workers it is 42
per cent.

Here again there is variation in availability of paid sick leave based on the
wages. Employees who are drawing higher wages are getting more as
compared to the low paid employees.

The committee has observed that there is a 8 days of paid sick leave after
completion of 1 year of service while in some large establishments it is 11
days and in small establishments it is 6 days.

In the state and local govt. the cost of sick leave per employee hour worked
was as high as 81 cents as against 23 cents in private industry.

Cost of sick leave per employee hour worked in state and local self
governments is as high 53 cents for higher salaried employees as against 8
cents in service occupations.

Ethics
In USA workplace ethics have been defined. It has a well defined set of rules
of behavior at the work place on which the behavior and the conduct at the workplace
is judged. These rules are strictly observed. Usually the problem comes when there is
a conflict of interests between self and the co-worker or between the two departments.
Drawing a de-marketing line between personal and business relationship is a difficult

61
task. Confidentiality of important information is also an area where ethics are strictly
observed.

Employee’s use of Social networking Sites: Employers may find that

employees use social networking sites to post positive information about their
organization’s products or work culture.

Employee Recognition. The Development Community focuses on rewards

and recognitions for employees. There is the “Above and Beyond Award”, given on a
monthly basis to an employee doing something well beyond what is expected.
Employees make the nominations for the award.

Best Practice: Using Social media to Communicate Sustainability

Achievements: Now employees can share their achievements with the outside world
using social media.

HR initiative
It has been already stated that the HRD has to follow ongoing pursuit of
innovation. In one exercise an organization recruited non engineering graduates in the
company and imparted them training for four weeks and then they were put on job.
This was primarily a coding work. The loyalty of these employees was quite higher as
these employees found their identity as part of IT industry. Innovation should become
a part of culture building.

3.3 BOOKS (INDIAN AUTHORS)

a) Nisha Nair, Neharika Vohra, T. V. Rao and Atul Srivastava (2009), book
titled, “HR Best Practices: Manufacturing Sector in India”. In this book the authors
have observed that HR practices reveal as to how the organization is concerned with
its human resources. It is based on the belief that the employees perform well when
they are cared by the organization. This book is written on studying 49 manufacturing
organizations in India.

62
 This book also discusses the practices for effective functioning of the
management and competency mapping, practices addressed to women employees,
practices followed by the organizations for motivating the employees, recognition and
reward system, and welfare schemes. The book also discussed the need for succession
planning.

b) K. Aswathappa, (2010), book titled, “Human Resource Management”. In this

book the author has discussed in detail the functions of human resources development
department. More particularly HR planning, recruitment, selection, training,
development, compensation negotiation, training, safety and health, welfare, are the
topics elaborately discussed. The main objective of any HRM is to ensure availability
of the competent and efficient staff as and when required by the organization. A
strategy is understood as the way of doing something. Strategic management refers to
the process of formulating and implementing strategies. After executing strategies,
they need to be evaluated for their usefulness and effectiveness.

The training to the staff involves high costs. However the return that the
organization gets in the form of refinement of the skills of the employees,
development of precision culture, and development of the leadership qualities is
invaluable. The author states that skills, education, development, ethics, attitudinal
changes and decision-making skills must go into any programme of training and
development. While discussing the training aspect the author has also elaborated the
24
training process which comprises of the following: Training process involves
several steps:
i) Defining organizational objectives and strategies.
ii) Assessment of training needs.
iii) Establishing training goals.
iv) Devising the training programme;
v) Implementation of the programme.
vi) Evaluation of the results.
The book has been nicely presented.

24
K. Aswathappa, (2010), http://www.andhrauniversi...-SDE-Syllabus-2015-16.pdf

63
c) Arun Monappa, (2011) book titled, “Managing Human Resources”. This
book has been published on the backdrop of the India’s adoption of the new economic
policies of globalization, liberalization and privatization. The author has observed that
as a result of this policy there is a stiff competition for survival and the organizations
have to manage their human resources in such manner that they give their best
potential to the organization. The organization’s main objective is to improve the
production and productivity. The book has discussed the means to improve the
production without involving additional costs and the role of HR department in
achieving it.25

The author has observed that number of multinational companies that have
come to India have brought with them their tested technology and HR practices. The
author has drawn some case studies from these multinational companies and
discussed those. The author himself has raised some questions about the HR
management and has provided its replies which part is quite interesting. This book
gives updated knowledge of the HRM practices in the post globalization era.

3.4 FOREIGN AUTHORS

a) Zorlu Senyucel (2011): “Managing the Human Resources in the 21st
Century”. In this book the author has covered overall view of the HRM field. Human
resources are the most important asset of the organization. The author has stated that
in the 21st century the Hurman Resources Management function has attained a
different dimension compared to the earlier century. The book gives all the relevant
aspects of HRM keeping in view the 21st century environment prevailing in the
industries. The book has discussed the nature of human resources, definition of
HRM, functions of HRM, motivation, commitment of the employees, team building,
leadership development etc. The book has been written keeping the overseas
environment in mind. 26

25
Arun Monappa, (2011) Managing Human Resources, Publisher: Delhi : Macmillan Pub. India Ltd. ;
2011
26
Zorlu Senyucel : “Managing the Human Resources in the 21st Century”. Bookboon Premium - Gain
access to over 800 eBooks.

64
b) Raymond A Noe, Amitabh Deo Kodwani (2012), book titled, “Employee
Training and Development”. In this book the authors have brought out the importance
of the training and its impact on the overall performance of the organization. The 21st
century has brought out number of challenges and the employees are required to be
trained to meet the challenges. In order to have a well designed and implemented
career development plan the employees need to undergo training programs and refine
their skills.

The role of training has been widened. The authors have observed that the
motivation has been of greater importance for getting desired performance. Gaining
knowledge and sharing it with other employees i.e. acceleration of training input is
necessary.

The authors further observe that there is a change in the relationship between
the employer and the employees. Competition is increased and profits have been
shrinking. There is no job security.

On this backdrop there is need to sharpen the employees skill to retain them in
the organization.27

The authors have further discussed the following best practices which have a
long bearing on the performance of the organizations:

1) Energy –Saving Opportunities

This saving on energy bill can well be achieved without involving much
expenditure but by merely creating awareness about it amongst the employees. What
is required is to track the energy bills. Seasonal changes may be noted. Focus on the
following points to achieve the goals:

Pinpoint equipment using the most energy.

Identify no- or low cost projects

Enlist management support.

27
Raymond A Noe, Amitabh Deo Kodwani (2012), Tata McGraw Hill Education Pvt. Ltd. 5th edition,
pp. 273-407

65

Create an energy team at your plant.

Develop an ongoing strategy to sustain plant wise efforts and to improve and
maintain energy-efficient systems

Shut of any lights you are not using.

Use compact fluorescent light bulbs.

Wherever possible the management may be persuaded to use alternative

source of energy such as solar energy, wind power etc.

Similarly create awareness about clean environment. Resorting to paperless

office may lead to savings of trees from cutting. Use cycles and bikes wherever
possible.

2) Adopting a Recycling Policy

Identify those materials which are used in the company of which those can be
recycled. Of course it presupposes that there should be clear guidelines and
procedures. If this is followed apart from money saving it improves the employee
morale and organization’s image in the eyes of the society.

3) Hygienic Workplaces
Today the healthcare costs are rising at a rapid speed and hence this should be
given utmost importance whether it is school, office, and factory or for that matter any
workplace. The need of the hour is to inculcate the cleanliness as a habit. There are
studies which have proved that hygienic workplaces have a positive impact on the
productivity of the employee and the healthcare cost is reduced. The companies
should organize wellness programs not only for the employees but their families also.

The concept of wellness includes the following aspects which are required to
be addressed:

Wellness is a comprehensive term which encompasses every aspect of our life.

66
 Physical: Maintenance of sound physical health by carrying out regular
exercises, having nutritious food intake, and above all abstaining from harmful habits
like smoking, habitual drinking etc.

Emotional – This is a difficult task for which one has to learn as to how to
control ones emotions, control over feelings and moods. Pranayam and Yoga are now
a day’s being used even in the Western World.

Intellectual – This again is an area where one can learn to keep sound mental
health by developing creativity, learning ability and also problem solving skills.

Occupational- In today’s work environment where everybody has some stress

having an adverse effect on individual’s health. Therefore the managements should
organize Stress Management Training Programs and development of aptitudes and
skills for releasing stress.

Social – Man is a social animal. Employees may be allowed rather motivated

to mix / participate in the community development programs which are either
organized by govt. or Non Governmental Organizations. This gives a sense of
satisfaction to the employee.

Spiritual – Provide an outlet for pursuing spiritual offerings at the work place
to the extent possible. These spiritual values does have a positive impact on the work
life balance and the performance of the employee.

4) Suggestions for Wellness Programs

There are number of ideas, a group of employees can use for improving the
wellness of the employees. Like the Quality Circle the employees can well be conduct
a Brain Storming Session and solicit ideas from each individual and then decide
priorities and get involved the management also. Following is the list of some of the
successful ideas that have been tried in some industries:

Organize blood pressure, cholesterol levels checking at regular

intervals.

67

Counseling for the domestic financial management.

Smoking cessation program.

Providing financial assistance for voluntary participation in health care
assessment.

Financial incentives for voluntary participation in healthcare
assessment.

Health insurance discounts for nonsmokers.

Provision of gyms at the central place without charging any fees.

Making arrangements with the local restaurants to provide healthy and
hygienic lunch/breakfast etc.

Healthy food options in company cafeteria or vending machines.

On site medical facility, fitness center, and pharmacy for employees’
use.

No out of pocket cost to employees for preventive care e.g. annual
physical exam, well child exams, mammograms.

Free Vaccinations

5) Succession Planning: A Strategy for Meeting Talent Needs

In order to have smooth transition of the management hierarchy every
organization has to draw out a succession plan. At least for the key positions in the
organization there should be a well drawn plan to replace this position as and when
necessary.

6) Identifying High Potential Employees

In every organization there are some employees whose presence is felt
because of their outstanding performance. These employees should be spotted and
they should be groomed specially for taking up higher positions whenever the
situation demands. For this purpose the line managers and the immediate bosses
should have dispassionate and impartial approach in spotting such employees
applying certain pre-determined criterion. When such employees are spotted by the
organization there should be a proper training input given to them so that they can
conveniently assume the higher position successfully.

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7) Preventing Security Breaches
Today is the age of computers and information technology. It is very essential
to make sure that the data and the information stored in the computer /software
program is properly secured and no access is available to an unauthorized person. The
organization should have a designed and setup an internal unit to ensure that the data
and the information remain intact. Keeping this high importance in view this is also
considered as best HR practice. All the staff members should be given training to
maintain the preventing security and breach of it should be severely punished.

8) Protecting Employees from Identifying Theft

There can be a theft and the organization should be prepared to meet this
challenge.

Following four types of protections are available:

Install appropriate antivirus, antispyware, and wireless security for the

computer based systems.

Guidance on protecting against a variety of exposures of personal data
from shredding documents, to opting out of marketing databases, to
tracking data in Social Security, motor vehicle, medical and financial
databases.

Credit monitoring at varying levels of frequency, sometimes with alert
services in the event of credit inquiries or charges.

Insurance coverage sometimes including assistance with identifying
recovery activities.

Use of passwords and those should be appropriately changed as per
laid down system.

9) Communications
Benefits of Good Communications
In every organization there is formal and informal communication.
Communication process involves sharing of information or ideas with one another
which help them to understand each other’s view point and things can be got done
smoothly. Positive and effective communication is very much essential for the success

69
of the business operations. Free flow of vital information increases the confidence
amongst the employees. It improves the employee’s morale as the employees get the
clear idea as to what is expected of him. It enables the management, to pin point the
responsibility. It also leads to better productivity.

Employers also have an interest in maintaining the privacy of certain

information, such as trade secrets, customer lists, and other proprietary information.
Employers are provided with adequate protection taking a legal action in case an
employee or former employee violates such an agreement.

Company Newsletter
Today, in almost all companies there is company news letter through which
changes in every field related to the company are informed to the employees. This
also is used to recognize best performances, achievements of the employees and the
members of their families as a motivational tool. With the advent of modernization
now instead of print media companies are using electronic media for Company
Newsletter.

Meetings
This is yet another way of communicating with the employees. Meetings
provide an opportunity to interact face to face and seek clarification / guidance and
also help the management to understand the thoughts of the employees, their
concerns, ideas which it can take into account while planning its future activities.

E-mail
This is a new outfit available for communication. It is speedy and very easy to
operate. It is a written communication and hence should be carefully used. These are
stored on the company’s computer. However, there should be internal checks and
controls to ensure that this facility is not abused by the employees.

Encourage Employees to Communicate Better

Needless to say that good communication is an art and if properly used it helps
to enhance the overall morale of the employees.

70
10) Avoid Scheduling Meetings on Friday Afternoons or Monday Mornings
In an environment where the organizations are observing five days week the
usual tendency is pack up early on Friday and try to reach Monday morning office in
time, but sometimes there may be some delay. If a meeting is scheduled on Friday and
if the meetings gets dragged for a longer time the employee’s mindset gets upset as
his/her plans to reach the weekend destination gets disturbed. Similarly if a meeting is
scheduled early hours on Monday the employee has to rush to the office sacrificing
some comforts of reaching bit late. Therefore, keeping this mindset of the employees
at all levels as far as possible the scheduling of meetings on Friday or Monday early
hours should be avoided. This practice is welcomed by the employees as a best
practice.

c) Environmental Careers Organization of Canada’s Best HR Practices

Report 2009: 28
ECO Canada is an organization that develops programs that help individuals
build environmental careers, provides employers with resources to hire and retain
environmental professionals, and informs educators and government about
environmental employment trends.

This organization conducted survey of employee satisfaction in renowned

companies in Canada using the following 6 measures and has given its report wherein
the best HR practices of 2009 are presented.

1. Human Resource Function and Policies

2. Professional Development
3. Performance Management
4. Communications
5. Employee Benefits and Compensation
6. Employee Relations, Welfare, and Fulfillment

28
Environmental Careers Organization of Canada’s Best HR Practices Report 2009
http://www.eco.ca/ecoreports/pdf/HR-Best-Practices-Report-2009.pdf

71
 Effective human resource (HR) planning and management is required at all
stages of an employee’s corporate lifecycle to help ensure employee growth and
satisfaction.

Fully occupied employees are invaluable assets as they are motivated to give
peak performance of their abilities because of their dedication and voluntary
commitment to the success of the organization. The reported listed out the best HR
practices which are as under:

a) Reinforcing Company Values

In order to create employer brand awareness, employees who commonly share
same environmental leadership values, the company gives awards to the public. This
creates greater awareness about the corporate culture.

b) Selective Recruitment
Currently there are number of avenues open for recruiting right type of people
for the right placement. Usually the details required are: level of entry, educational
qualification, professional qualification and technical requirements etc.

c) University Internships
Using the internship program, can target students who excel academically and
provide them with the opportunity to obtain practical work experience. This helps to
train and develop the skill sets of interns at an early stage of their career while giving
the company an opportunity to gauge the intern’s skills, abilities and inner drive.
However this facility has not yet been introduced in India.

d) Hiring for fit

Biodatas/resumes received are properly screened to see whether there is
previous experience, interests of the individual, and his ability to contribute to the
organization.

e) eam Hiring: Recruitment

here are three stages through which a candidate has to pass through. In the first
stage the interviewing team takes a broad view whether the proposed candidate fits

72
into the organizations set up. The second interview is usually conducted by the team
manager. Before the final interview is taken all those who were involved in the
interview process give their opinions. In the final interview the final decision is taken
by the team. Of course all this depends on which vacancy or position the interview is
being taken. If the selection is of a senior level official and if it is a canvassed
candidate (i.e. for which details have already been obtained and the organization
wants to induct him because of his performance /achievements in the other
organization) the process is relatively simple. On line interview and negotiations take
place and selection is made.

On the very first day the employees are provided with the orientation check
list which provides him details such as the organization and the department, internal
network, passwords, HR policies and paperwork, safety equipment and training. Thus
the employee is introduced to the organization thoroughly.

f) Sharing Satisfaction Results: Employee’s feedback on HR policies,

procedures and leadership practices is collected and using it annual employee
satisfaction survey is made.

g) Family First: Companies appreciate that employees work more effectively

when family and professional responsibilities are not conflicting. As a result, the
companies have developed several policies to create a supportive and flexible work
environment that promotes work-life balance.

h) Employee- Initiated Events: To encourage team building and reward

employees for their hard work, Companies celebrate staff achievements through a
variety of social events.

i) Supporting Employee Values: To provide employees with the necessary

time to build relationship in the community, a company allows each employee to
spend up to 10% of their paid work time on volunteer activities.

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3. 5 NEWS PAPER ARTICLES / REPORTS
a) Business Standard: Bangalore March 3, 2011
HR practices in India 10-15 years behind the curve: Pai
Mr. T. V. Mohandas Pai – a Member of the Infosys Board observed that the
current HR practices in India are behind 10-15 years compared to the practices being
followed in the Western World.

Mr. Pai while addressing CII Karnataka Annual HR Conference 2011, stated
that India is producing talent and intellectual capital that is world Class. He further
observed that there is need for regular research on HR and case studies on career
development frame work.

He pointed out that there is a lack of experienced and expert HR manpower.

HR is a specialized job and the person assuming this position should have problem
solving attitude. He further observed that in the ensuing five year’s period there will
be globalized demand for skilled workforce. There will be scope for attrition in view
of the increased demand. Therefore, the need of the hour is design the policies in such
a way that the intellectual competence created will have to be retained in the
organization.

He also observed that the new workforce would be young and fully skilled and
would communicate differently, work differently with different aspirations. For
achieving success in such an environment the HR should be able to understand this
differentness and nurture it. Expectations from HR are very high.

"Managing a global work force, bridging cultural gaps and creating common
goals" would be the challenges that HR would have to deal with.

He opined that communication is very important factor and also HR should be

able to understand business strategy as well as costs of talent and derive efficiency.
He also expressed that becoming employee supporter is a crucial task of HR.

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b) Times of India 13th August 2014, news titled, “Cool offices have vibrant &
hot desks.
Non-Fixed Work Spaces new Trend in India. The news discusses the new
style of approach to HR adopted at some of the companies in India. In Cummins’
there over 1600 employees at the newly constructed office building. None of the
employee has a fixed desk. The companies allow the co-workers to choose their desk
for the day rather than allocating one permanently. The upcoming head office of the
$4.2 billion Godrej Group – called Godrej One – in Mumbai’s eastern suburbs is also
being planned as a collaborative office while e-commerce company Zomato too
doesn’t assign employees a fixed place to work. In collaborative workplaces, personal
space is out and collective space is in. Dividers and desk tops make away for laptops
and lounge style spaces where employees can bump into each other and have
serendipitous conversations.

Balanga Nagarajan, Vice President HR, Cummins Group, India stated that he
believes a work space will be effective only if people are mobile. It’s a bold move for
a manufacturing company, but he further says, while designing the new office, we
asked ourselves, can we create an environment which is vibrant and fosters
collaboration? Line managers don’t really need to see employees eight hours a day.
Work gets done based on plans which are defined. At Zomato, employees don’t even
have drawers and storage in the work areas. Deepinder Goyal, founder & CEO, says,
“For us, ‘deskless’ is a figurative word. It means ‘flexible’ – in terms of roles,
locations and reporting structures. All of us are here to learn and grow on a personal
level.”

Four years ago, Godrej created a ‘space’ office in the old building as a
prototype of future Godrej. “It is a central point where employees from across the
group can meet and brainstorm. Today, we are excited to take this concept further to
our new headquarter, Godrej One” says Sumit Mitra, Head, Group HR and Corporate
services, Godrej Industries and associate companies.

While Godrej One will have a certain number of fixed work stations, the
interiors will have innovative spaces that break down silos and help people work
together better.

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 While Cummins hopes its new approach will help the firm attract and retain
talent in addition to boosting productivity. P &G India claims their ‘agile workplaces’
have already speed up decision making. “A collaborative and openwork environment
results in exchange of new ideas that enables employees to deliver superior business
results.” Says Sonali Roychowdhury, Country Head, HR P & G, India.

The above news item focuses how the changes are taking place with the new
HR approach keeping in view the ultimate objective of increasing the productivity.
This also is a part of excellence in HR practice.

3.6 KNOWLEDGE GAINED

Upon reading all these books this researcher has been fully enlightened on the
changing role of Human Resources Management after India’s adoption of
globalization, liberalization and privatization. Now in the changed circumstances the
importance that the HR is getting in the whole organizational set up is really envying.
This department should always be on its toes to see that the talent management
particularly its retention is managed well and within the overall costs too.

This reading enabled this researcher the need for constant innovation in the
HR department to find out which are the widely acceptable best HR practices and at
the same time within the manageable costs. The role the best HR practices plays in the
satisfaction of the employee has been rightly stressed by the various authors.

Now number of multinational companies has come to India and along with
they have brought new technology as well as new approach to human resources
development. Domestic companies are surely learning from their best HR practices
but they should not copy these practices in toto but those should be modified
wherever necessary by giving Indian touch to it. This will evince greater acceptance.

3.7 KLOWLEDGE GAP

After carefully reading this topic related literature the researcher has observed
that there was no study of impact of best HR practices on the employees satisfaction
conducted so far. Even when the researcher cursorily went through the various

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research studies available on shodhganga.com, there also it was observed that there
was no previous research in this respect. Therefore, this researcher is of the
considered view that there is a research gap which this study will fill it up.

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 CHAPTER IV
BRIEF PROFILE OF PIMPRI-CHINCHWAD
AREA & IDENTIFIED INDUSTRIES

4.1 INTRODUCTION
In order to understand this research work it is considered appropriate to have a
brief profile of the study area as well as the identified industries to understand the
observations and findings in the right perspective.

Pimpri-Chinchwad
Pimpri and Chinchwad were initially twin cities of Pune district of
Maharashtra. With the demographic growth as well as area wise growth both the cities
are having independent Municipal Corporations. Pimpri Chinchwad is located on the
North-West of Pune City and is very well connected by road as well as railway route.
Now both the corporations have promoted a new company namely Pune Mahanagar
Parivahan Mahamandal Limited for the communication within both the cities and the
outskirts.

As per the latest censue of India conducted in 2011 the population of Pimpri
Chinchwad Corporation area is 17,29,320 which comprises of 9.45 lakhs male and
7.83 female. The literacy rate of this area is higher than the national average. 29

The local main spoken language of this area is Marathi. The number of Sindhi
families is also quite large who speak Sindhi language.

Geography
The Pimpri Chinchwad city is situated at 530 meters above the sea level. It’s
climate is very pleasant round the year. The city is bestowed with three rivers namely
Pavana, Mula and Indrayani. Pavana River supplies water to this city. There are
number of industries which pollute these rivers due to dumping of contamination,

29
Census of India, 2011 Dahiwal, Archana (April 4, 2011). "Pimpri-Chinchwad population is 17.29
lakh". DNA India. Retrieved 29 January 2012.

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debris, and industrial effluents etc. The local body has taken several steps including
creating awareness amongst the masses to keep the Rivers free from pollution.

History
This PCMC is comprised of the following original main areas.

Chinchwad

Pimpri, Nigdi

Akurdi

Kalewadi

Bhosari

The name Chinchwad is originated from the presence of Tamarind (Chinch)

and Banayan (Wad) trees. Chinchwad is also a holy place as the Shrine of Sant
Moraya Gosavi is located here. Chinchwad is the birth place of Chaphekar Brothers
who have led their lives in the freedom struggle. Adjacent to Chinchwad is Bhosari
which was known as Bojapuri. It was the capital of Raja Bhoj 2000 years ago.

Because of the industrialization of this area there is a huge migration from all
over the country.

Transport
The twin city is very well connected by the railway route as well as by road.
Lohagaon – Pune is the nearest Air port for this twin town. Because of the vast
industrial development and as a result of genuine demand a new airport is being
located in the vicinity of this twin city and it is likely to come up within a two-three
years time. Vallabhanagar – a suburb of Pimpri has a bus depot of Maharashtra State
Road Transport from where this twin town is connected to all parts of Maharashtra. In
view of the huge transport between this twin city and Pune Municipal Corporation
Area recently Bus Rapid Transport (BRT) has been put in operation and is gaining
mass acceptance.

There are about 29 suburbs of Pimpri-Cinchwad twin city which are detailed
hereunder:

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 1. Pimpri 16. Wakad
2. Chinchwad 17. Sant Tukaram Nagar /
3. Bijalinagar, Chinchwad Nehrunagar
4. Nigdi 18. Pimple Gurav
5. Nigdi Pradhikaran 19. Kalewadi
6. Akurdi 20. Thergaon
7. Tathawade 21. Chikhali
8. Bhosari 22. Rahatni
9. Talegaon Dabhade 23. Punawale
10. Talwade 24. Pimple Saudagar
11. Hinjewadi 25. MOSHI
12. Sambhajinagar 26. Ravet
13. Ajmera Colony - Masulkar colony 27. Dapodi
14. Sangvi 28. Pradhikaran
15. Pimple Nilakh\Aundh Camp 29. Shahunagar

One of the first large scale industry that was started immediately after
attaining the independence was established at Pimpri. It was in 1954, Hindustan
Antibiotics Ltd. was established to manufacture penicillin. This was the starting point
of industrialization of Pune district. Today, Pimpri Chichwad area is well developed
so far as industries are concerned there is no parallel in the state of Maharashtra.
There are two large scale MIDC (Maharashtra Industrial Development Corporation’s)
industrial areas located in this twin town at Bhosari and at Chinchwad. MIDC has
provided all the infrastructural development facilities in these two industrial estates.

Today, this area is popularly known as Industrial Township. A large number

of small scale, ancillary MSMEs and large scale industries have their presence in this
area. To name a few large scale industries in this Pimpri Chinchwad area, are:
1. Telco, 15. Tata Electric And Locomotive
2. Bajaj Auto Ltd., Company
3. Premier 16. Mercedes Benz India Ltd
4. Bajaj tempo 17. Kirloskar Oil Engines
5. Sandvik Asia 18. Indian card Clothing
6. Forbes Marshall 19. Alfa Laval
7. Phillips India 20. SKF Bearings
8. Bajaj Auto 21. State Transport Body Building
9. Kirloskar Cummins Division
10. Kirloskar Filters 22. Weikfield India
11. Kalyani Sharp 23. Serum India
12. Mahindra And Mahindra 24. Duro Shocks
13. Hindustan Antibiotics 25. Kinetic Honda
14. Kirloskar Pneumatics

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Pimpri-Chinchwad industrial belt: Placing Pune at the front
All together there are over 4000 industrial units of all types in this area. This is
one of the largest developed industrial parts of India. Telco, Bajaj, Kinetic (now Force
Motors) are the pioneering automobile industries of this area. These industries have
developed number of vendors in Ancillary sector and have provided employment to a
large number of youths of this area.

After the globalization and entry of multinationals took place in India after
1991. Pune has witnessed a large inflow of automobile giants preferring to establish
their manufacturing base in and around Pune as a result of which this area is now
being regarded as an Automobile Hub of India. In the vicinity of this area there are
lots of consumer durable manufacturing industries as also electronic goods
manufacturing industries. Some of the domestic large scale industries from this area
have made their global presence e.g. Bharat Forge is being regarded as world number
one so far as forging industry is concerned, Tata Motors has opened its units even in
European countries. These industries have been successful in obtaining much needed
foreign exchange inflow and enriched our export performance.

Thermax Babcock & Wilcox has developed an innovative combustor called

Hopper Bottom Atmospheric Fluid Bed Combustor which permits the use of multi
fuel, high alkali bio-mass for sustained operation of bio-mass power plants.

Since 1990s there is a very good development of establishment of service

sector industries in and around Pune. These past 25 years have witnessed a rapid
growth of Information Technology industries and today all the world known IT
industries have located their units in Pune-Pimpri-Chinchwad and its surrounding
area. There are software industries as well as large scale Business Process
Outsourcing industries. To name a few world fame IT companies we may state:
Infosys, Tata Consultancy Services, Cognizant Technologies, Persistent Systems,
Tech Mahindra etc. These industries are earning sizable foreign exchange as they are
mainly exporting their services overseas. These industries have provided employment
to over One lakh youths from all over India. Today Pune city is also being known as
IT Hub.

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 As a result of this huge industrialization there is a spurt in the demand for
electricity which the State Govt. has to arrange from the national electricity grid. Now
the government has issued letters of intent for number of industries for generation of
power and it is hoped that in another 5 years period the State will be self reliant so far
as its power requirement is concerned. The government is seriously working on these
projects.

Pune is also a world famous Education Centre. There are more than a dozen
universities (including Deemed Universities) which cater to the man power
requirement of both the IT as well as Automobile Industry. Almost all the faculties of
post graduation facilities are available in Pune city.

Business Information
Pune and Pimpri Chinchwad are the two twin corporation governing the
respective cities. Over the past two decades this entire region is developing at a rapid
stride and lots of multinational organizations are establishing their organization in and
around these two cities. Particularly the IT sector is developing at a very fast speed
and the government of Maharashtra has announced that they want to develop this area
for IT sector on a big scale for which they are offering several sops. Along with this
industrial development, Pune is also being developed as an educational hub and
number of new educational institutions is coming up on the education map of Pune
Metropolitan city.

In both these twin cities (Pimpri Chinchawad) and Pune there is availability
of all modern health care facilities which can be rated as worldclass. Even there is
inflow of foreign patients in Pune hospital. Both the Municipal Corporations are
creating awareness amongst the masses about ensuing hygienic environment in their
residential area.

There is lot of environmental awareness in both these cities. It is gratifying to

note that the Govt. of India has selected to develop Pune city as a “SMART CITY” –
a new concept evolved by the present Modi Govt.

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 As the industrialization is growting fast, there is huge inflow of migration of
workers from all over India which has given boost to the building construction
industry. Today, this is one of the biggest industrial sector of Pune region providing
employment to thousands of employees and workers. Pune is regarded as one of the
fastest growing cities of the world.

4.2 IDENTIFIED LARGE SCALE COMPANIES

A) Tata Motors Group
Telco was the pioneer automobile large scale industry in Pimpri-Chinchwad
area established in the year 1945. Today it is the largest automobile company
manufacturing commercial and passenger vehicles in India.

Apart from the domestic sales of their product it is also being sold in the
various export markets. Company’s manufacturing activities are spread all over India
e.g. Jamshedpur, Pune, Lucknow, Pantnagar, Sanand, Dharwad etc. After the
globalization the company has expanded its operations in various other countries like
UK, Korea, Thailand, and South Africa. The company has taken over Jaguar Land
Rover brand in 2008.

The company has a thrust on the Research and Development. The company is
a pioneer in accepting Corporate Social Responsibility well before the legislation was
passed. Over 5000 engineers and technicians are working in its R & D. Centre. The
company is one of the largest employment providers in this area.

B) Kirolskar Oil Engines Ltd. (KOEL)

Kirloskar Group is one of the renowned industrial group from Maharashtra
and Kirloskar Oil Engines Ltd. is the flag ship company of this group. Its first
manufacturing unit was established in Kirloskarwadi in Sangli District. The company
has manufacturing units with state of the art technology. Company has its
manufacturing unit in Pune. It manufactures oil engines of a wide range of sizes and it
does not only meet the domestic requirement but also exports its engines which have a
good demand. The company has established its offices in Dubai, South Africa and

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Kenya and has representatives in Indonesia, Nigeria etc. The company has established
a well knit distribution network in the Middle East.

KOEL commands market leadership in the manufacturing of diesel engines,

agricultural pump sets and generating sets. The company has introduced “Kirloskar
Green Gen Set” which is a preferred brand amongst customers.

Company is engaged in providing customized power solutions to suit a wide

range of applications. It’s generator sets are in both open and soundproof environment
friendly canopies.

The major markets served are

The company’s buyers are mainly in service industries such as Telecom,
Information Technology / Information Technologies Enterprise Solutions, Business
Process Outsourcing, shopping malls, hotels, hospitals and banks, educational and
financial institutions. Company serves large customer base including number of
infrastructure projects like airports, bridges, residential and commercial township
complexes.

In nut shell, one can say wherever there is a standby requirement of power one
will find that the generator set is supplied by the KOEL. The company also caters to
the defense requirements on a large scale.

KOEL’s engines are the first choice when powering earth moving,
construction, mining, fluid handling equipment and marine applications are being
taken up. The company’s products meet the international standards and are emission-
compliant.

Building for the future

KOEL is the market leader in the power generation activity. Its products are
being used both by agriculturists as well as industrial units. It has heavily invested in
Research and Development. It has provided employment to a large number of youths
from this region.

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 The Company’s Human Resources Development Department has focused on
the training and development of its employees. It has introduced various new
techniques like six sigma, quality circle etc., in improving the employee productivity
and quality.

The company is currently focusing on the export market as it fetches better

return. The company supports its employees and has a very good team of committed
staff.

C) Cognizant Technology Solutions Ltd.

The company is having its headquarter at , Plot No 26/27 Rajiv Gandhi
Infotech Park, Hinjewadi, Pune - 411057, MIDC Hinjewadi. Its contact numbers of
Phone: +(91)-20-66521100, 40216000, 39196000 Phone: +(91)-20-22933555
Website: www.cognizant.com

Cognizant Technology Solutions Pune, is the fastest growing IT company

having its presence at Hinjewadi and Pune. It is a an IT Consulting and BPO
organization. It is an internationally renowned company having its presence in US,
South East Asia and UK. It has a strong hold on the Indian market. Apart from Pune
the company has its establishments, in Mumbai, Bangalore, Chennai, Hyderabad,
Coimbatore, Gurgaon, Kerla and Kolkata.

Achievements of Cognizant Technology Solutions

This international company has to its credit several recognitions and awards.
Frobes fast Tech 25, one of Fortune World’s Most Admired Company, Innovation
Week’s Top Innovator, CRM Magazine’s award for CRM Market winner and many
others.

The company offers a wide range of services encompassing application

services, business process services, consulting, quality assurance and information
infrastructure services.

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 Cognizant Pune IT Park monitors business activities and movement on the
application and if needed they will redevelop it so as to keep up with increasing
competition.
Table 4.1 : Performance of the Cognizant Technology Solutions during the study
period
Years ended December 31st each year
(Dollars in thousands)
Item 2008 2009 2010 2011 2012 2013
Income from 516,670 618,490 861,852 1,136,468 1,361,496 1,677,910
operations
Source: Annual Reports of the company for the respective years.

D) Tech Mahindra Ltd.

This is one of the leading companies from Mahindra Group. Earlier this
company was known as Mahindra British Telecom Ltd. which was established in the
year 1986. The company provides solutions and services to the telecommunication
industry. British Telecommunications plc (BT) from U.K. is in partnership with this
IT Company.

This is a listed company on the Mumbai and National Stock Exchange. 51% of
the capital is held by Mahindra, 36% is by British Telecom Plc. and the rest is with
the general public.

The company’s offices have been spread over in Europe, North America, the
Australia and New Zealand region and Asia Pacific.

The business of the Satyam Software Company has been taken over by this
company and now it has become a company having a major share in the IT sector.

Company’s focus is on quality and solutions that add value to the client’s
businesses. Tech Mahindra is ISO 9001:2000 certified and is assessed at SEI-CMMi
Level 5. Tech Mahindra is also BS7799 certified across all development centres.

Tech Mahindra is a leading provider of solutions and services in the

Information, Communications & Technology (ICT) industry.

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 Tech Mahindra has successfully implemented more than 18 Greenfield
Operations globally and has over 151 active customer engagements mostly in the
Telecom sector.

In the Telecom sector, Tech Mahindra has niche and proven domain expertise,
distinctive IT skills, research and development, innovative delivery models and
approach to off-shoring.

The company has a global presence and has operations in 31 countries with 17
sales offices and 15 delivery centers. The company has a track record for value
delivery and is supported by over 47,000 professionals who provide a unique blend of
culture, domain expertise and in depth technology skill sets.

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 CHAPTER V
TRADITIONAL AND BEST HR PRACTICES
IN INDIA

5.1 INTRODUCTION
Traditional philosophy of management was being practiced by the Indian
organizations. In the traditional approach the control aspect was much powerful.
Managerial control was the essence of the managerial functions.

After attainment of certain level of industrialization since 1981 onwards the

Indian managements started recognizing the importance of human resources. Until
then every organization used to have a department called Administration / Personnel
dept. which used to attend to recruitment, administration of leave, increment,
placements/transfers and administration of wage management. Since 1981 onwards
the Indian management seriously developed because of the need for maintaining
competitive edge. This necessitated the need for upgrading the skills of its workforce
and linking of capabilities to suit the market requirement.

After the globalization the Human Resources Management department

assumed greater importance in most important areas of organizational practice. This
was the result of the changed industrial scenario and the economic development.
Today Human Resources department requires altogether different skill set. It offers
greatest challenges and also opportunities.

As the time passes Major HR concepts are evolving. The thrust is on shifting
the focus from control to realization of HR functions emphasizing requirements of the
organization in a comprehensive manner.

In the traditional control oriented approach there used to be emphasis on the

rules and regulations and systems and procedure and failure to adhere to such sets of
rules and procedures used to attract some sort of punishment.

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 Those days were peaceful when the sense of understanding and kindness were
regarded as a weakness. A manager was expected to have a fine blending of firmness,
and fairness and a sense of empathy.

With the overall changes in the organization the organization structures were
revamped so as to ensure more flexibility, freedom and accountability. Now the HR
Department has been bestowed with greater authority. Jobs have been redesigned
wherein an employees is expected to have multiplicity of roles and skills, having a
clear cut job description. A definite role has been now established between the job
and the competencies required for performing it. Now there is a well designed link
between the job design, performance appraisal and the compensation. Now the
periodical performance appraisal is being carried out in a most scientific manner.

The Indian government opened up its economy in the year 1991 and adopted a
policy of globalization, liberalization and privatization. It adopted policy of
welcoming the Foreign Direct Investment in the domestic companies. The earlier
industrial scenario was characterized by one or more of the following features:

India was having a socialistic pattern of economy which was switched

over to mixed economy where along with public sector, private sector and
cooperative sector co-existed. There were tiny, small cottage industries,
small scale industries, ancillary industries, medium sized as well as large
sized industries. In such a situation the ownership pattern, size of the
business, its reach was varied.

The employment generation and the social concerns were the focal point
as against the commercial objectives.

The government was much apprehensive about the existence of large scale
industries to be in the private hands. This was with a view to ensure that it
does not dominate the markets. Therefore, Monopolies and restrictive
Trade Practices Act and the subsequent Monopolies Commission were
established.

89

There were upper limits on the salaries of the C.E.O.s of the State
controlled enterprises and for every wage revision the approval of the
government was a must.

There was controlled collective bargaining where the government had

established certain norms.

There were several restrictions on the entry of the Multi National

Corporations and the government clearance was required for products, raw
materials supply, capital outlay, and exports.

The government used to pursue a policy of self-reliance and giving stress

to indigenous manufacture of products.

By that the industries were used to protected conditions and there was no
incentive to go in for Research and Development.

Compared to the total operating costs the manpower costs were quite
negligible. Industries were located in the backward areas. Political
leadership used to have significant leverage in public sector industries.
Industries were overstaffed thereby the productivity and profitability was
hampered. Promotions were based on the seniority and not on merits and
performance which also affected the morale of the efficient employees.

The total Indian work environment was bureaucratic and was very much
concerned about the observance of the rules and procedure. There was no
flexibility in their approach. This aggravated the productivity and
profitability problem.

The above stated background made it easy to introduce the reform package
and to adopt the New Economic Policy of 1991. This paved the way for
the HR department to take a centre stage.

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5.2 TRADITIONAL HR PRACTICES IN INDIA
1. Job Description
In the public sector organizations the employees whose work roles was
defined were quite high.

2. Recruitment
There was over dependence on the formal labour market. Recruitment of top
students from the campus interviews conducted in management, engineering and
other professional institutions was prevalent. Placement agencies, internet and print
media was also tapped.

3. Compensation
Job security and life time employment was the practice in the public sector
organizations. Facilities like Health care, housing and schooling of children was also a
part of the compensation package.

4. Training and Development

There was poor organization of the training programmes in respect of both
quality and input, coverage, as a result there used to be no proper skill development.

5. Performance Appraisal
Traditional performance appraisal was based on the superior’s confidential
reports and there was no much recognition on the basis of the performance appraisal
or organizational goals.

6. Promotion and Reward

Promotions were awarded mainly on the seniority basis and merit had no
munch recognition barring the exception of the then prevailing MNCs in India.

7. Career Planning
There was very limited scope for career planning. Promotions on the basis of
the seniority was the criterion. There was absence of the well defined career paths in
most of the organizations.

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8. Gender Equity
Because of the court rulings, ILO guidelines, and legal provisions gender
equity was maintained but for strategic position female employees postings were
rarely seen.

9. Reservation System
Even today reservations in jobs is prevalent. The reservation is based religion,
castes. It was 15% of for scheduled castes, 7.5% for scheduled tribes and 2.27%
percent for backward communities. This percentage slightly vary across the states.

5.3 RELEVANCE OF HR
The prime responsibility of the HR Manager is to look out for the right person
for the right job. In today’s business world, Human Resources is a much discussed
subject. In a situation where the competencies and skills are not precisely referred, the
job of the Human Resources department has become more challenging.

During the past two decades, the world has witnessed the complete makeover
of the Human Resources Depts. In all organizations, this department has now assumed
greater importance and has a say in deciding the management strategies as well. This
change can be attributed to the entry of number of MNCs on the Indian industrial
horizon.

Today the role of the HR dept. has become more complex. Managing the
employee’s expectations, motivation of skilled workforce has made the HR job a tight
rope walk.

In good old days Administration Or Personnel dept. function was considered

to be a support function. Today, HR dept. plays a strategic role in the organization’s
business strategies.

With the changed circumstances the shift in focus from traditional HRM to
Strategic HRM was inevitable. Organization should concentrate on tapping
company’s special skills and core competencies and promptly respond to the

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expectation of the customers. HRM should carry out on an ongoing basis its SWOT
analysis and grab the opportunities.

Competency mapping
In the rapid growth of the industries, undoubtedly human force is the most
valuable asset of any industry. It is necessary that a right person is selected for the
right job. In order to achieve this objective now a day HR is resorting to competency
mapping which envisages mapping of core competencies of a particular position in
the organization. Then these are used to identifying it for job-evaluation, recruitment,
training and development and performance evaluation and the succession planning. In
spite of growth of industries in the recent past, still this process of competencies
mapping is in its infant stage and needs to be groomed further.

To day it has become necessary that instead of calling HR as a staff function it

has become a line function as every manager is expected to have involved in HR
activities as a part and parcel of his responsibilities. Therefore, it has become essential
that all the line managers are also groomed in HR activities to have better
performance.

Now the management institutions are well seized with the need for updating
their courses so as to include various new concepts that are being introduced in HR
department. The new trends and best practices include, cross cultural management,
change management, international HRM , familiarization of the students to the new
concepts etc.

The need of the hour is for premier institutes such as the IIMs, IITs as well as
other professional institutions to rise to the occasion and re-design their curriculum
and pedagogical methods in consultation with the industry, in order to train their
students to meet the changed expectations of the industry.

Outcome of the Reforms

There has to be a common thread amongst the organization’s mission, the
strategy formulated to attain the mission, and it should be based on the available skill
and quality of the labour force at command. The workforce assumes a greater role.

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The aim of any organization in today’s scenario is to achieve greater productivity at a
low investment. Therefore, the workforce plays a pivotal role. This requires the
employee’s involvement, full of motivation and skill to be nourished and fostered.

Today every organization is heavily investing in the latest technology and

naturally in order to use that technology the man power using it has to be properly
oriented and skilled. All the work norms are required to be formulated keeping the
employee at the centre of it.

Now more than two decades have passed when India adopted the policy of
globalization, liberalization and privatization. Number of Multi National Companies
have come to India along with their new technology and also the new HR approaches.
The Indian counterparts have also studied these HR practices in the Indian contexts
and have also modified their approaches wherever necessary giving Indian touch as
the environment is not the same.

On account of globalization and the other reforms there is a rapid growth of

the industries in India. Lot of multinational manufacturing and service industries
come to India and have established their plants and offices in India. This has given
rise to the high demand for the talented people. The Human Resources Development
department came to limelight and has taken up strategic position in the overall
management set up of all the organizations. Since the multinational companies were
from different companies there were number of HR practices prevailing in these
industries. There was an industrial recession during 2008-09 as a result of number of
companies had to slash down their training and recruitment budgets as well as cutting
down several benefits offered to the employees earlier.

While discussing these changes one cannot ignore that the peculiarities of the
Indian labour market and the legislative and institutional framework therein. There are
several legislative provisions giving protection to the employees, certain mandatory
benefits to be given to them, the role being paid by the trade unions in India. Some of
these trade unions are controlled by the political parties which have diverse interests.
Against this back drop the HR had to strike a balance in the management of their
workforce.

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The changing role of human resources management
For quite some time there was misconception about the role that is assigned to
the Human Resources Management. However, in the changed industrial scenario after
the globalization and entry of multinational organizations in India there was a shift in
the approach of HRM. The stiff competition required to be faced in the market gave
rise to the importance of HR as it had to address the employees productivity as well as
achieving profit targets by cutting staff costs to a reasonable extent. The most
important task was to ensure that there is no outflow of talented employees at any
cost.

Until then the HR function was looked upon as the administrative enforcers
and were considered as an impediment in the performance of the other employees.
However, once the organizations were opened up for fierce competition for survival
in the business, the emphasis and the focus on the HRM was totally changed and the
department gained lot of importance in all the management activities.

Supporting the business

In the first place the HR department had to accept the concept of its role as
supporting the business. They had to understand the expectation of the modern
industry and business practices. They had to redefine the job roles in greater detail
and had to hunt for specific talent requirement for which the HR had to adopt
innovative practices to spot such talents and to retain them in the organization. They
had to plan their training schedules and had to introduce various new training inputs
like motivation, leadership development, personality development, stress management
etc. The HRM had to resort to innovative practices to attract and retain the talented
staff and keep a constant eye on the employee’s productivity and profitability of the
organization.

Employee engagement
In the changed circumstances the HRM had to play a very crucial role of
active involvement in the staff issues, and had to perform a role of championing the
cause of the employees and had to forge a positive link between the employees and
the management. HRM had to ensure that the relations between the management and
the employees remain quite healthy which will have positive impact on their output.

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 Today it has been seen that there is a change in the approach of the
organizations. They do not recognize collective bargaining. There are no trade unions
in IT Sector and the newly emerged automobile sector. The compensations packages
are discussed and finalized with the individual employee. Even there is no time scale
as such in many organizations. The annual increments relate to the performance of the
employee and his contribution to the profit kitty of the organization. It is in this
context the role of the HR Department has become very crucial as they have to
undertake preliminary negotiations with the concerned employee.

The HR department has also to take care that the staff inducted in the
organization is properly trained and acquainted to the organization’s philosophy and
the working systems and culture. Therefore, planning the training of the individual
employee is also on the top of the agenda of HR Dept. The skills of the employees are
required to be updated and sharpened and for this purpose the training has become an
ongoing exercise in the current scenario.

In the absence of the trade union the HR department has to play the role of
link between the employee and the management. The employees are required to be
constantly motivated to offer their best potential so far as productivity is concerned.

Change management
As a result of constant research and development being carried out by each
organization day in and day out there are changes in the systems and procedures
which the new software brings in. Therefore it becomes essential for the HRM to
ensure that all the concerned employees who are to work on the said software are well
equipped with the thorough knowledge about it. Therefore, the HR department has to
manage the change and also ensure that these changes as well as other happenings in
the organization reach each and every employee.

HR can play a vital role in ensuring that change is carried out according to
plan because of its unique position as the hub of all employee relations. This added
dimension allows the HR manager to take a direct role in developing the business
according to the available human resources and capacity, meaning that drastic

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changes are better thought through and presented in a manageable way to the
employees who need to work through it.

Employee benefits
As stated earlier the HR department has to negotiate with the individual
employee about the annual compensation and the other benefits that the employee will
get. For this purpose the HRM should always bear in mind the cost to company of the
concerned employee. This is a very tricky job the HRM has to perform. Today in a
competitive market with the use of social media by the young generation, everybody
knows what the benefits are being given by the organization to its employees. The
HRM is in constantly on an ongoing basis innovating the new benefits which may
induce the employee to continue with the organization. Therefore, the concept of best
HR practice has come into being.
Table 5.1: Some required and Discretionary benefits to the employees in India.
Benefits required by Central or State Law Discretionary benefits provided by
(applicable only to such employees covered employers
by the law or guideline.

Provident fund, gratuity, health
Superannuation benefits (pension after
insurance, family pension. retirement).

Medical Care and hospital facilities under
Life and health insurance for family and
ESI. dependents, Medical care for retired
employees.

Workers’ compensation for accidents and
Housing, subsidy on housing loans,
workplace injury conveyance allowance, telephone and
entertainment allowance, recreational
benefits like health clubs and hobby
classes, education allowances for self and
family, soft loans for asset building.

Death benefits, compassionate
Payment to relative of employee jobs for
appointment for relative in government relatives in private sector. Financial
organizations/PUSs. support for children’s education.

For women: maternity leave, transport
Different types of leaves like study leave,
and security for night shifts. Paternity extraordinary leave, etc. Paternity leave
leave for men in government in private sector, Leave during school
organizations and PSUs. examination time. Holiday/vacation/ care
for children.

Regular leave, sick leave, and leave
Executive perquisites like chauffer driven
travel allowance/ concession for self and car, petrol allowance, family holidays,
family. etc.

Overtime payment as per law
Compensatory off day and encashment of

accumulated off days.

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 Of late, many traditional firms have come out with the formal retirement
policies so that the old staff which is not fitting well in the new set up put up their
papers and the management is free to seek replacement of their choice.

5.4 HRM IN MULTINATIONAL COMPANIES

The growth in the business is now essential for survival. If there is no growth
in business you are finished. Therefore, the organizations cannot solely depend on the
domestic market and have to tap foreign markets as well. Things are changing fast.
Society’s values as well as workers values undergo change. Technology changes
giving rise to the new dimensions to production both in terms of quality and quantity.
Therefore, the human resources of any organization are required to be managed
professionally. Even there are organizations which have a fair mix of foreign
nationals on their roll. Dealing with them is also a specialized job as their culture,
requirements, and settlement in the new environment also needs to be taken care of.
All this call for unique approach.

There has to be a certain degree of local flexibility and responsiveness in

personnel policies: yet under an umbrella a coordinating all HR policy decisions,
company values, philosophy and outlook on key issues should form the basis of HR
decisions and this is the coordinating factor. It is important that the person in charge
of this HR department at the corporate head quarters is part of top management, if
human resources are to be deployed in accordance with the overall and long term
goals and strategy of the company in question.

In a global scenario a company has to integrate its activities on a worldwide

basis and HRM cuts across the entire value chain of a firm.

The HR function in the international environment is need based both quality

and quantity wise. To achieve an effective HR policy an MNC would have to pay
attention to the following:

Recruitment: Though technical competence is important for success,

relational abilities increase the possibility of successful performance.

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 Training: Ideally, the corporate office or local HRM offices of a MNC would
have to maintain a company requirement profile with the performance and potential of
junior managers and experts in terms of the present and the future. Training is an
important area in international HR development and planning in a MNC.

Remuneration and Benefits: As a general rule multinationals base their pay

scale on those prevalent in the host country with added benefits (to supplement loss of
purchasing power) when they are below those paid by the corporate office at its
headquarters. Sometimes a mobility supplement of about 10per cent of remuneration
is paid and some companies find it worthwhile to pay traditional salaries for
profitability of division’s performance or for targets set for the individual by the
company. In India with the process of liberalization, the government has allowed
companies to pay their managers salary packages which are more in keeping with
those of their counterparts abroad.

Dissemination of Information: The HR department in a multinational

corporate office and in local units has to play an important role in disseminating
information. Information dissemination is to ensure that the equal opportunities are
available to all employees and that planning for the management of HR’s coincides
with the overall planning process, taking into account local dissimilarities, needs and
obligations.

The companies and technology, however superior, are all managed by people
and hence the success of an operation will ultimately depend on the ‘ingenuity of its
people’.

Attractive benefits are also offered by MNCs and private employers. The
company’s focus on the health and well being of employees. In some companies gym
is provided at the office so that employees are saved the trouble of driving down to a
private gym. Facilities for indoor sports like table tennis, carom, and high tech gaming
facilities are available within the company. Employees and their families are invited
for celebrations and the company also has days meant for bringing family members to
the office.

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5.5 BEST HR PRACTICES
Here are some of the best HR practices that help in the creation of a highly
satisfied and motivated work force.
1. Work Environment
It is obvious that the employees prefer to workplace to be safe and has healthy
atmosphere where working is pleasurable. Every employee is being accorded his due
importance and also the motivational support to stay in. For this purpose in the
organizations there are internal surveys carried out and the employee’s satisfaction
level is assessed. Wherever necessary prompt actions are taken to rectify any
deficiency observed in the surveys.

2. Open Management
Today every employee expects that the organization maintains a satisfactory
level of transparency and keeps its employees updated of the various developments
taking place in the organization. This also ensures that the employee’s feel secure as
well as recognition of their importance in the organization. This is achieved by
internal e-bulletins, blogs and frequent floor level meetings. The employees are kept
updated on the changes in the company’s policies, achievement of new contracts and
the sales trend, any new Sr. Executive joining the organization etc. The organizations
also give every employee to put forth his/her ideas for improvement of the company’s
performance. Rewards are also given on assessing the cost benefit of the suggestions.

3. Performance Incentives
Today’s organizations have altogether different type of functioning. They
divide the staff in different modules by applying certain parameters e.g. for each order
a different module. Accounts are also maintained and the profitability of the order is
assessed. This provides the management a tool to assess the financial performance
and to give team incentives based on the actual performance displayed. In today’s
organizational set up there is a system of promptly recognizing individual’s
achievements which motivates not only the said staff but also inspire the other staff to
perform better. While doing so the HR always keeps it’s one eye on the cost to the
company.

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4. Performance Feedback
Today the traditional system of writing confidential performance report by the
boss is no more in vogue in any organization. Now the performance is assessed using
scientific tools and also involving not only the top boss but also the senior officials as
well as subordinates. Thus everyone’s opinion is taken into account while assessing
the performance. This appraisal is also discussed with the individual employee who is
taught to use this feedback for his /her improvement in the performance.

5. Employee Evaluation
Every company has an employee evaluation system in place but a good system
links individual performance to the goals and priorities of the organization. This
works well when achievements are tracked over an year. For a fair review of each
employee, the evaluation, apart from being done by the boss, should be done by
another person at a higher level, for whom the employee’s contribution is important.
Ratings can also be obtained by other employees. This ensures a fair and accurate
rating of each and every employee.

6. Sharing of Knowledge
Today because of the technology development knowledge gained by an
employee in a training programme or a workshop is stored in the data base and access
is available to those who can use it for increasing their knowledge. This centralized
system of knowledge storage accelerates the training effect at no additional
costs.Even innovative ideas that the management deems fit for employees to see, can
be stored here for all to see.

7. Publicize Good Performances

Quite obviously every organization has some employees who display
outstanding performance. Organizations highlight such performance through various
media available to it e.g. house bulletin, display of board at the entrance, holding
special meeting etc. so that the achiever gets due recognition. This approach and
actions inspire the other employees of the organization.

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8. Discussions
All that wisdom is not centered at the top. Every employee has some genius
and has some practicable ideas which can be tested for its techno economic feasibility
and economic viability. Therefore, in the organizations there is a system of group
discussion on specific areas where the employee can share his ideas which may prove
to be useful to the organization. There are suggestions boxes in each of the
departments or at central place where the employee can drop his suggestion. These
suggestions are evaluated by an expert committee and appropriately the employee is
informed the outcome of it. Suggestions which are acceptable to the organization are
promptly rewarded.

9. Rewards
For the best suggestion of the employee, organizations organize special
meetings and the achievement made known to the other employees of the
organization. This instills confidence in the employees that the management is
considerate for good suggestions.

10. The Surprise Factor

Everyone likes a surprise. When one is not expecting a surprise and if a
surprise gift is received everyone is thrilled. The gift may be a certificate, a small
reward. The surprise need not be restricted to the achievers it can be given on
randomly selected basis. Such a small gift also proves to be a best motivational tool.

The success of the organization largely depends upon the employees’

strenuous efforts and involvement. These healthy HR practices go a long way in
developing a cordial and healthy relations with the employees. The organization’s
work culture and the overall approach towards the employees should be such that
every employee should feel proud of his company’s performance.

11. Exit Interviews

This is relative a new concept. Now a day this is a common practice in almost
all the organizations. When the employee calls it a day and tenders his papers, exit
interview is conducted by a senior executive from HR department. The objective is to
find out why the employee is leaving the organization. When the employee is leaving

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the organization he can express his free and frank opinions about the organization and
its people. He can voice all that he feels about the organization good things as well as
undesirable ones. The outcome of the interview helps the organization to take
corrective steps wherever necessary.

The experts feel that such interviews should be oriented to obtain

comprehensive impression about the organization, managerial deficiencies, HR
policies etc. This interview outcome helps the HR department to sort out any genuine
problems faced by the employees which will result in arresting the further attrition of
the employees.

Some people have a doubt about the true and honest feedback. Usually
employees are reserved and give goody goody responses. Sometimes the employee
leaving now may be intending to come back again and hence takes a position and do
not express his adverse opinions. Of course, the Sr. Executive who conducts such an
exit interview cross checks the feedback given by the outgoing employee to ascertain
its correctness and reliability before acting thereon.

Here are a few points usually one should inquire into at the time of exit
interview.

For the Interviewer

Let the employee be placed in a comfortable position so that his confidence
will help him in giving the genuine reporting.

Normally it should be of about 30 to 45 minutes. Interviewer should
empathize with the employee who is severing emotional connects with the
organization and is difficult too.

For Employees

Employee should present his views without any bias.

Let him express his frank opinion about the organization which will go a long
way in improving the position. Wherever needed let him give an unbiased
account to substantiate his views.

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The employee should remember that his frank views which are positive in
nature may help the other employees as the management may take a serious
note of those and may take some action.

Expected Questions

Why are you leaving?

What was most satisfying gratifying about work?

Any restraints through company procedures/policies to your performance?

Detail the level of support from the company towards your duties

Exit Interviews if taken in the right spirit can be valuable retention tools. They
are definitely a win-win for employee and company, if two-way.

5.6 GUIDELINES FOR IDEAL HR ROLE

Following are the few guidelines which the HR Dept. should follow:

Definite Job Description
There is a need to precisely define the job description. This is very much
essential as it provides a clear idea to the HR department while hunting for the
right person. More particularly what should be the educational qualification,
technical knowledge required by the job, experience and temperament and so
on.

Begin from the Beginning

Clearly define the work, address dress codes, iPod Volume, start times, TMI
conversation etc. to maintain a healthy working relationship. Remember HR
Manager’s time as a learner? Now, Empathize!

Assign Real Projects

The purpose of an internship is to provide the candidate a working-knowledge
of business. Involve them positively in the on-going projects. Take them on a
sales call or assign them tasks they can independently handle. Introduce them
to clients, so his clients won’t anticipate perfection every time.

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Do Not Guarantee Only Interesting Work
Please do not give any assurance that he will be assigned only those projects /
assignments in which he is interested. Assignments will be a balanced mix.
They should not be choosy in getting a specific assignment.

Give Feedback
There should be exchange of feedback to and fro from the employee and his
immediate supervisor. Such a feedback provides an opportunity to improve
upon in the weak areas and to further develop the strong areas. This helps in
making a career in the organization.

Best Grades Do Not Matter

If one is really interested in a particularly his job his grades do not matter for
the HR Manager. The employee’s enthusiasm and proactive approach is
heavily weighed at the time of selection.

Reference
For an intern his or her direct manager would be the best reference they could
get. So, HR Manager has to be honest and tell them whether they are good or
bad. However, do not “grade” them on par with your experienced employees.
Do give them the benefit of doubt.

5.7 SIGNIFICANCE OF MOTIVATION

In any business organization employee’s motivation plays a predominant role.
The high productivity of the motivated staff does reflect in the high productivity
which ultimately help the organization to achieve its set goals.

In order to prepare a motivation strategy, it is the pre requisite that the

organization should have firsthand knowledge of what motivates the employees. Then
only the HR may be able to draw an effective strategy. Motivated employees perform
well and that good motivational programmes help to retain the talent in the
organization.

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 Motivational needs of the employees are varied. Therefore, number of
motivation programmes need to be formulated. The programmes will include, best
compensation packages, well defined and unbiased incentives, individual incentives,
group incentives, rewards and recognition, developing programmes that support
work-life balance, relaxed office environment. The list of programmes is endless and
as the time passes the list needs to be updated.

It is usually easy to draw employee incentive programs which can be linked to

the production. It is not necessary that every programme should have a monetary
element. Rewards and recognition and its publicity may motivate the employee at
relative low costs.

Programmes like “employee of the month” which focuses on the best

performer of the month and spotlighting him/her on the websites, banners at the
corporate office and internal internets, giving bonus points which may ultimately can
be cashed are also some of the motivating instruments.

Key factors to increase employee’s motivation

Although on the face of it, motivating the employees appear to be easy, it is
not so in real practice. It does require lot of efforts in identifying the motivational
needs. It is a tricky subject for most of the managers. However, this has to be tactfully
used as the organization’s success is dependent on the motivated staff.

Ultimately motivation essential means developing effective programmes that

recognize and applaud the employees contribution to the organization whereby the
employee will on his own offer all the potential within him. By using both tangible
and intangible rewards the employee enthusiasm should be nourished.

Mr. J. P. Maroney, the founder of People Builders has enlisted five success
key factors to effective employee motivation which are given in the following
paragraphs.

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1. Satisfaction
The employees who are well motivated are happy at work and offer
their full potential in whatever assignment they are doing. Vice versa, unhappy
employee’s productivity gets adversely hampered. Therefore the organization
should ensure that within the permissible limits (cost to company) the
employees are happy all the time. It is for this reason the organization should
understand as to what ensures the happiness of the employees. It is not always
the monetary benefits sometimes even intangible benefits also work well
(recognition, rewards, appreciation etc.).

The happiness of the employees is well translated in the satisfied

customer service whereby the customers offer loyalty to the organization.

2. Appreciation
It is a human tendency that whenever he/she receives appreciation
from the bosses they tend to be happy. Everyone expects that the organization
should take a note of the special work that he/she has done. Therefore,
managers should develop a practice to appreciate the employee’s efforts and
praise them on the floor. If it is done frequently for just cause naturally the
employee stands fully motivated and committed to the organization.
Particularly when there are in house meetings such praising of the employee
brings wonderful results. It also gives a signal to the other employees that their
good performance will also be appreciated and they will stand inspirited.

3. Recognition
Satisfied employee is an asset and the management should realize it at
all times and treat the employees as assets. The way one takes care of the other
assets similarly this human asset also requires to be recognized.

The managers should cultivate habit of recognizing the work put in by

the employees and wherever considered appropriate rewards be also given
after studying the cost benefit of the implementation of the particular
suggestion. Accomplishment of any job well before the scheduled time in a

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 satisfactory manner should receive appreciation and recognition. Depending
upon the recognition, it may be held in the regular staff meetings or in a
specially convened meeting.

Not only should that if any of the employees as achieved even outside
the organization, in a society such achievements also be recognized. This
motivates the employee to do similar good jobs in future.

4. Inspiration
Employees who have performed well and have been properly
recognized of their achievement prove to be role model and provide
inspiration to their colleague. Therefore, these role models be given due
publicity in bulletins, banners in the entrance etc.

When leaders lead form the front, employees will be inspired to follow
them. Employees will be happy to work for an organization that is true to its
beliefs and works towards realizing its dreams. Since every employee aspire
the same, he will take inspiration from the organization itself. Inspired
employees are also motivated and loyal.

5. Compensation
In number of surveys carried out in different industries it has been
observed that the first and foremost priority is accorded by the employees to
their compensation factor. If the compensation commensurate with the
performance, knowledge, packages in other similar concerns, naturally the
employees tend to offer their full potential and remains committed to achieve
the targeted set goals. Therefore, the HR department should be on constant
look out as to the reasonability of the expectations of the employees so that
talented employees on which the organization has heavily invested through
identification as well as training etc. remains with the organization. Of course,
while saying so one should always keep an eye on the cost to the company and
that there is no much discrimination amongst the equals.

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 Life needs and Communicating information about work and non-work
policies and job demands
Companies have to understand employees’ needs, solicit their input, and make
work-life benefits accessible to everyone. To do so, companies need to comprehend
the diversity, complexity, and reality of employees’ lives. Programs should be
designed to provide as many benefits as possible to meet the needs of as many people
as possible.
Table 5.2: Example Work life Programs:
Company Program
Marriott To encourage employees to take summer vacation,
International management discourages meetings and conference calls, on
Fridays between May 21 and September 1.
American Electric Parents can use back-up child care that offers subsidized
Power babysitting at home or in a local child-care center.
Genetech Busy employees can order healthy dinners on line and pick
them up at work.
Patagonia Pays for children (and their caregivers) to accompany parents
on business trips. Parents can take up to seven paid days to
care for an ill child. Hires a surfing instructor for employees at
headquarters.
Bank of America Created the “My Work” program, which allows associates to
work at Home. Company will outfit a home office or
associates can work from a fully equipped satellite office.
Moffitt Cancer Leave policy gives all new moms 16 job-guaranteed weeks
Center off, including four paid; Fathers, domestic partners, and
secondary adoptive caregivers receive one paid week. Moms-
to- receive two weeks of pre-maternity leave at full pay.
Source: 2008 – 100 Best Companies, Working Mother magazine Web site: www.workingmother.com

Flexibility in Work arrangements and work schedules

The HR department is also expected to ensure that there is no work life
conflicts. One way of looking at it is allowing more flexibility in working hours and
work locations. To help employees with their work schedules, companies should
educate them about the positives and negatives of various schedules, allow them to
participate in choosing their schedules, and train them in handling the physical, family
and social effects of their work schedule. In the current environment when both
husband and wife are working naturally they need some adjustments to take care of
the family. There should be proper understanding between the HR Dept. and the
employee concerned so that a sincere attempt can be made to adjust the work
schedules. In certain organizations where it is practicable at times the employees are

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allowed to work from home on certain occasions. Such flexibility is appreciated by
the employees as they are not required to avail off leave and dislocate the work of the
organization for a short period.

It has been observed that the flexible business practices attract new talent,
improve productivity, raise morale and job satisfaction and reduce stress or burnout.
By supporting work life policies, top level managers can reduce employees’ anxiety.

Dependent Care support: Child and Elder care and adoption support
Usually the employees require support for taking care of the child or the elders
in the family. Companies can certainly help the employees to deal with these
requirements. Companies can help their employees in number of ways. Usually the
employees require assistance for school admission or for arranging baby seating
facilities etc. Company can have tie up with the reputed schools. Particularly the
companies can assist the reputed schools from out of their funds for fulfilling
commitment under Corporate Social Responsibility.

5.8 HR PRACTICES IN IT COMPANIES

1. Safe, Healthy and Happy Workplace
The office environment should be such that the employees should feel homely.
It is worth noting that the employees spend much more time in the office than
in the house. Therefore, their comforts should be properly addressed. This can
be done if the employees pulse can be captured through employees’ survey.

2. Open Book Management Style

The employees are very much interested to know as to the company’s plans,
day to day developments, new contracts, sales, induction of new clients in
their portfolio, company policies, employees personal achievements etc.
Therefore they expect greater degree of transparency. It helps in building trust
& motivates employees.

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3. Performance linked Bonuses
Today number of companies has started practice of variable compensation
plan which serves an incentive to the employees. In order to get the variable
pay the employees do contribute their mite to the organization. So also in
some companies performance linked bonus schemes are in operation. Never
pay out bonus without measuring performance, unless it is a statutory
obligation.

4. 360 Degree Performance Management Feedback System

Every organization has a system of performance appraisal which is conducted
at a regular periodical interval. Some companies have system of self appraisal
which is reviewed by the immediate supervisor and moderated by his senior.
Recently a new system of performance appraisal called 360 Degree
Performance Management Feedback has been adopted by many companies. It
envisages performance feedback from seniors, peers and subordinates and this
is considered to be the best available methods for collecting performance
feedback. Every person in the team is responsible for giving relevant, positive
and constructive feedback. Such systems also help in identifying leaders for
higher level positions in the organization. Senior managers could use this
feedback for self development.

5. Fair Evaluation System for Employees

The HR department has to develop an evaluation system which clearly links
individual performance with that of corporate business goals and the priorities.
Each employee reports to a particular officer as per the management hierarchy.
Evaluation becomes fairer if it is based on the records of periodic counseling
& achievements of the employee, tracked over the year. For higher objectivity,
besides the immediate boss, each employee should be screened by the next
higher level (often called a Reviewer). Cross – functional feedback, if
obtained by the immediate boss from another manager (for whom this
employee's work is also important), will add to the fairness of the system.
Relative ratings of all subordinates reporting to the same manager are another
tool for fairness of evaluation. Normalization of evaluation is yet another
dimension of improving fairness.

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6. Knowledge Sharing
In the current developed technology environment storing of knowledge for
ensuring accelerating effect, has become very easy. Greater access to the
information instills confidence amongst the employees. Whenever any
employee attends any training programme the training material received by
him in the form of handouts, notes, case studies etc. can be stored on the portal
and it can be accessed by the other employees interested to keep them updated.
This not only helps the individual employees but in turn also helps the
organization.

7. Highlight performers
Excellent top performer’s profile be created and those be displayed on the
company intranet, display it on the board. In turn it encourages the others to
put their best and the competitive spirit can be instilled.

8. Open house discussions and feedback mechanism

Genius ideas always rule over the world. Employees are the best source for
generating ideas. There is need to nurture and execute the great ideas. Open
house discussions, employee-management meets suggestion boxes and ideas
capture tools such as Critical Incidents diaries are the building blocks that can
help the Managers to identify & develop talent.

9. Reward Ceremonies
It is not enough to recognize the talent. Those are required to be highlighted
for which organization may conduct ceremonies. This provides inspiration to
the others to follow their suit.

5.9 HR PRACTICES RESULT IN IT COMPANIES

In the following paragraphs the L&T InfoTech senior executives have narrated
as to how the HR Practices resulted in the company in achieving 10 level People
Capability maturity Model.30

30
Interaction with the L&T InfoTech Senior Executives by the researcher.

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 The People Capability Maturity Model is a tool that helps you successfully
address the critical people issues in organization. L&T InfoTech is one of the ten
companies in the world to get the PCMM (People capability maturity model) level
5certification. Sudipta Dev executive from L&T Infotech explained how the company
provides continuous learning opportunities to its employees for developing their
competencies. L&T InfoTech takes great pride in its rich HR culture. This company
has achieved PCMM level 5 certifications. L&T InfoTech is among the 10 companies
in the world which have earned this batch of Recognition. The Company currently has
a workforce of more than 4,000 professionals. “L&T has always been focused on
HR,” states Dr Devendra Nath, executive vice president of L&T InfoTech. The
organization believes that there are four major pillars of HR—acquiring talent,
enabling talent, grooming talent and building 'the culture'. Nath asserts that
competency-based HR is the essence of good HR. “It is the dream of all HR people
that everything in the organization be linked through the competency matrix.
Competency for every role is well-defined (technical as well as behavioral), even at
the time of recruitment and succession planning,” he says, adding that once people are
shown a particular career path, they should be equipped with the skills to reach that
particular position. And this is enabled by enhancing competencies. Competency
development is at PCMM level 3. The HR vision of the organization is to maximize
'Sigma motivation' and the organization believes that implementing the PCMM model
in letter and spirit will help it achieve that.

Training emphasis
As a group, L&T has always believed in a life-long association with its
people. Most of our top brass have joined at junior levels and risen through the ranks.
The organization provides continuous learning opportunities to its people to develop
competencies,” points out Vinod Khisty, associate vice president, Human Resources,
L&T InfoTech. There is a lot of emphasis on training. It is believed that all those
people who have been recruited in the organization after the stringent hiring process
are already champions; consequently the entry-level training is called 'Enabling the
champions'. This includes 100 days of focused training in classrooms. The modules
range from technical to voice modulation to team management, etc. The soft skills
training for L&T InfoTech professionals is conducted at the group's Rs 10-crore
training centre at Lonavala, near Mumbai. The e-learning channel called Gyanpeeth

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provides just-in-time technical as well as soft skills training. “A person in Sweden
might have to make a presentation to the customer the next day. What he has to do is
to just log in and learn from the programmed on presentation skills. Furthermore,
based on responses the course will keep getting updated to the next higher level. The
sense of satisfaction with training is very high in the company and is a great
motivator,”

Stringent Recruitment
One of the rules of the recruitment process is not to encourage nepotism. This
ensures that nobody enjoys a privileged position because of any relationship or
association—merit is the primary criteria. Finding the right person is a painstaking
effort. “During the selection process, a lot of elimination takes place. Only 4 percent
of the people who apply are selected,” informs Khisty. Careful background screening
of the candidate is done to judge the attitude and mindset of the individual as the
organization only wants to induct those people who want to be “happy doing the job.”
Furthermore, when it comes to finding unusual talent, for instance an IT professional
with a financial background, they hire CAs and groom them in four months to do the
job.

5.10 EMPLOYEE SATISFACTION

Introduction
In every organization the accomplishing the organization’s goals is the
responsibility vested in the Chief Executive. He has a team of requisite staff at his
disposal through which he gets the work done. Thus the manager’s performance is
dependent on the employees reporting to him. In order to ensure high performance of
the organization he has to manage these human resources in such a manner that gives
desired performance. Therefore the Chief Executive has to ensure that the employees
of the organization are satisfied and that they put in their best efforts in accomplishing
the set goals of the organization.

There are certain parameters usually taken into account while assessing the
performance of the organization. E.g. per employee turnover, per employee sales, per
employee profit etc. These include multi-skilled work teams, empowered front-line

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workers, extensive training, labour-management cooperation, commitment to quality
and customer satisfaction. High performance practices generally aspire to help
workers to manage themselves.

It is therefore necessary that the Human Resources Development department

has to ensure that right from recruiting, screening, training and motivation aspects are
taken seriously and that the right employee has been posted at the right place.

Today after the globalization the industry is facing tremendous competition

and hence it is important for the Executives that they have to develop their own staff
and strategies which will excel in achieving the desired organizational goals. Sound
HR policies lead to promote organizational effectiveness.

The thrust of the organization to develop motivated and committed employees

who will involve themselves in the organization’s activities. Building motivated and
committed employees is a very crucial task and takes long time. HR department has to
make special efforts for this purpose. For this purpose it is necessary to understand as
to what makes the employees satisfied so that they can offer their full potential.

Achieving job satisfaction is a long drawn process and it can be achieved as

the employee gets experience. For development of employee satisfaction much time is
taken while it declines at a faster rate. Therefore, the HR department should attempt
continuously achievement of satisfaction of their employees. Employees interest
should be taken into account while developing the HR strategies. Like other attitudes,
job satisfaction consist of emotional, informational, and variety of sources, and can
serve a number of functions for the individual. Job dissatisfaction does mean lack of
motivation at work.31

Job satisfaction is optimistic and it gives feeling of happiness, joy and

delightfulness. Job satisfaction builds confidence employee’s personality. It also
develops loyalty with the organization.

31
Subba Rao, P. (2006). Personnel and Human Resource Management, Himalaya Publishing House,
Mumbai, Pg. 268.

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Defining Employee Satisfaction
1. Employee satisfaction is the amount of overall positive effect or feelings
that individuals have towards their job.32

2. Employee satisfaction is a reintegration of effect produced by

individual’s perception of fulfillment of his needs in relation to his work
and the situations surrounding it. (Sinha, 1974).33

Significance of Employee Satisfaction

For the Executives the study of employee’s job satisfaction is very much
important for the following reasons.
• It provides opportunity for further improvement.
• It focuses on the reasons for discontentedness of the employees.
• It brings out the factors which the employees value most.

Job satisfaction leads to life satisfaction in the short term.

Tools of Employee Satisfaction

Job
Hours of work, nature and type of work, colleagues in the office, promotional
opportunities and advancement in a reasonable span of time, physical environment
and machines, equipment and tools etc. are the factors that decide the job satisfaction.

Management
The approach of the immediate supervisor, recognition, reward and
punishments, appreciation, unbiased and fair employees’ policies, compensation,
fringe benefits, transparency, etc. are the factors connected with the management.

Social Relations
Attitude towards people in community, participation in social activities, caste
barriers, etc.
32
Singh, Y., & Pandey, M. (2004). Organizational Behaviour, A.I.T.B.S. Publishers and Distributors
(Regd.), Delhi, First Edition, Pg. 206.
33
Saiyadain, M. S. (2003). Human Resource Management, Tata McGraw - Hill Publishing Company
Limited, New Delhi, Third Edition, Pg. 13.

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Personnel Adjustment
Emotionalism, health, home and living conditions, finances, relations with
family members, etc

5.11 DETERMINANTS OF EMPLOYEE SATISFACTION

Race and Gender
Women are relatively lesser ambitious and they get satisfied with even little
favourable things. Therefore gender is also one of the determinants of job satisfaction.

Age
There is a positive correlation between age and job satisfaction. As the man
matures he tends to satisfied as he gets accustomed with the job conditions over a
time. Younger generations demand is always more.
They often tend to report dissatisfaction, probably because they find that they are not
going ahead fast enough.

Working Conditions
Job satisfaction is related to working conditions also. The work will be more
satisfying if working conditions are congenial to the task a worker proposes to
accomplish. Good working conditions involve such facilities as adequate light,
comfortable temperature, attractive surroundings etc.

Job Content
Herzberg holds the view that job content factor such as achievement,
recognition, advancement, responsibility and the work itself tend to provide
satisfaction but their absence does not tend to create dissatisfaction. Also job
satisfaction is related to the aptitude of the employee. If the employee is given a work
for which he has no aptitude, the job will provide no attraction to him.

Employee Morale
If the employee morale in an organization is high, satisfaction with job is
likely to be high and vice versa. The worker will be loyal to the organization if their

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morale is high. The rates of absenteeism and labour turnover will also be low because
of psychological satisfaction from the job.

Avenues of Promotion
Opportunities of promotion affect job satisfaction considerably. The desire for
promotion is generally stronger among higher level employees. It is no surprise that
the employee takes promotion as the ultimate achievement in his career and when it is
realized, he feels extremely satisfied.

Specialization
It also leads to greater efficiency, but it also contributes to dissatisfaction.
Repetitiveness of task is found to be boring and monotonous by workers. Greater
variety of tasks may not increase satisfaction unless the tasks form a unified, integral
and meaningful whole.

Work Group
People seek satisfaction of their social and psychological needs in the
interaction with others in a group situation. However, the amount of satisfaction that a
person derives from interaction with his co-workers depends on his own need for
affiliation. If the group enjoys a higher status, the employee’s level of job satisfaction
will increase further.34

Number of Dependants
It has been found that if white- collar workers in America have more number
of dependants one has, the less satisfaction he has with his job. In the Indian study by
Sinha and Nair, workers having to support fewer dependants (one to four) tended to
have higher job satisfaction while those with five or more dependants tended to be
dissatisfied.

34
Singh, Y., & Pandey, M. (2004). Organizational Behaviour, A.I.T.B.S. Publishers and Distributors
(Regd.), Delhi, First Edition, Pg. 208 - 211.

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 Education
Indian studies have generally shown that there is a tendency for the more
educated workers to be less satisfied and conversely the less educated workers to be
more satisfied.35

Factors Controllable by Management

Salary
Adequate salary plays a significant role in influencing job satisfaction. This is
due to two reasons. First, money is an important instrument in fulfilling one’s needs.
Secondly, employees often see pay as a reflection of management’s concern for them.
Employees want a wage or pay system which is simple, fair and in line with their
expectations and if these criteria are met they feel satisfied.

Security
Job security is the second most important preference out of various job factors.
In short while getting a job is of foremost importance being secured on the job is the
very next requirement of the Indian worker. This is understandable in the face of
widespread unemployment, uncertainties in the employment market and the
conditions which are often termed as unfair labour practices.

Opportunity for Advancement

The fact that opportunity for advancement is so highly ranked may lead to the
interpretation that every worker will want to get promotion and will feel satisfied in
getting it.

Co-workers
It has been found that relationship with co-workers, usually considered as a
hygiene, extrinsic, or dissatisfier factor and considered as the most important satisfier
among a group of highly skilled personnel. Moreover it was also found that friendly
people to work with was ranked fairly high by better performers whereas it was
ranked low by poorer performers.

35
Ghosh, P.K., & Ghorpade, M.B. (2010). Industrial Psychology, Himalaya Publishing House, Pvt. Ltd.,
Mumbai, Fourth Edition, Pg. 334 - 335.

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Fringe Benefits
Adequate personal benefits have been given frequently moderate ranking
within the Indian studies. It has been found that fringe benefits including housing,
canteen, etc. are rated second in importance to wage and salary.

According to Baron certain factors which influence job satisfaction are as follows:
Table 5.3: Factors Influencing Employee Satisfaction
Factor Comment
1. Challenging work Work should be interesting, but not fatiguing.
2. Rewards for good Clear contingencies between performance and reward
performance are desirable.
3. Verbal recognition Appreciations, praises and feedbacks.
4. Good working Physical working conditions should be comfortable.
conditions
5. Concerned supervision Supervisors should demonstrate their concern for
helping employees.
6. Positive interpersonal Satisfaction is strongly enhanced by friendly relations
relations and supervisors with co-worker

7. Effective company These should aid employees to attain goals.

policies
Source: John W. Kendrick, Understanding Productivity, John Hopkins, Baltimore, (1977), Pg. 14.

5.12 EFFECT OF EMPLOYEE SATISFACTION ON

PERFORMANCE
For a very long time it was believed that satisfied workers were productive
workers, but later studies found it to be a myth. The traditional view that a happy
worker is a productive worker does not clarify the complex relationship between job
satisfaction and productivity. No doubt some studies have reported positive
correlation between satisfaction and productivity but these are often not statistically
significant.

Herzberg analyzed the results of twenty six studies focusing on the

relationship between job satisfaction and productivity. Fourteen of these showed that
worker with positive job attitudes had higher productivity than those with negative
attitudes. In nine studies job attitudes and productivity were not related and in three
studies workers with the positive attitudes had poorer production records than those
with negative attitudes.

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5.13 CONSEQUENCES OF EMPLOYEE SATISFACTION
From an individual as well as organizational effectiveness viewpoint it is
significant to understand the relationship of satisfaction to outcome variables. The
effect of job satisfaction on some key organizational and individual factors is given
below:

Performance
There are essentially three perspectives on the relationship between
performance and job satisfaction. They are:

The traditional human relations approach suggests that satisfaction leads to

exerting more effort by employees and subsequently results in higher levels of
performance. It is the common sense view that a satisfied worker is also a
more motivated and productive worker.

The second approach suggests that performance indirectly leads to satisfaction

as performance levels affect the rewards employee receive. Thus, performance
and satisfaction will most strongly be correlated when rewards are made
contingent upon performance than when they are not.

Another alternative view is that there is no specific relationship between job

satisfaction and performance - offering hardly any comfort to those seeking to
confirm that a satisfied employee is a productive employee.

Turnover
Most research studies indicate that satisfied workers are in general less likely
to leave the organization. These studies find a little over 15 per cent of variance in
turnover to be associated with variance in satisfaction. Thus there is a moderate
association between satisfaction and turnover (Lee and Mowday, 1987) because it is
perhaps only one of the many factors responsible for an individual’s decision to quit.

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Absenteeism
It is widely known that absenteeism causes costly interruptions at the work
place. Since temporary workers replace regular workers it can also result in poor
quality products. Hence there is an inverse relationship between satisfaction and
absenteeism (Kumari and Singh, 1998). Besides, while job satisfaction will not
necessarily lead to low absenteeism, low job satisfaction is inclined to bring about an
increase in absenteeism.i

Organizational Citizenship Behaviour

It seems logical to assume that job satisfaction should be a major determinant
of an employee’s organizational citizenship behaviour (OCB). Satisfied employee
would seem more likely to talk positively about the organization, help others, and go
beyond the normal expectations in their job. Moreover, satisfied employees might be
more prone to go beyond the call of duty because they want to reciprocate their
positive experiences. Thus, evidence suggests that job satisfaction is moderately
correlated with OCBs.ii

Mental Health
Studies have reported that high job satisfaction is associated to better mental
health (Sutaria, 1970; Gunthey and Singh, 1982). Employees with good mental health
have found to learn job-related tasks faster, have less on-the- job accidents, and
reports fewer grievances. Another aspect of mental health could be the degree of
frustration experienced on the job and its impact on the work and life of employees.
Prolonged dissatisfaction can result in frustration.

Culture
Research has uncovered that executives in less industrialized countries have
lower job satisfaction. Besides, Japanese workers were reported to have significantly
lower job satisfaction than US workers (Lincoln, 1989). In a comparison of
employees in the US and India, factors that lead to job satisfaction were found to
differ greatly. While leadership style, pay, and security influenced job satisfaction for
the Americans, for Indians recognition, innovation, and the absence of conflict led to
job satisfaction (Krishnan and Krishnan, 1984).

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Non-Work Life
Researchers have reported that there is a spillover of job satisfaction to other
spheres of life too. In other words, satisfaction in job seems to increase satisfaction in
other spheres of life or what is called satisfaction in general (Mehta, 1978). A Meta
analysis by Kossek and Ozeki (1998) of fifty studies with fifty groups found a
negative relationship between all forms of work-family conflict and job and life
satisfaction. Women are found to be more adversely affected by work-family conflict
than men because of their double responsibilities of work and home.

5.14 MEASURES TO INCREASE EMPLOYEE SATISFACTION

BY MANAGEMENT
Job Enlargement
To check the harmful effects of specialization, the engineering factors
involved in each individual job must be carefully analyzed. Perhaps the assembly
lines can be shortened so that there will be more line and fewer workers on each line.
Moreover, instead of assigning one man to each job, a group of men can be assigned
to a group of jobs and then allowed to decide for themselves how to organize the
work. Such changes permit more social contacts and greater control over the work
process.

Job Rotation
Many companies are seeking a solution to on-the-job boredom through
systematically moving workers from one job to another. This practice provides more
variety and gives employees a chance to learn additional skills. The company also
benefits since the workers are qualified to perform a number of different jobs in the
event of an emergency.

Change of Pace
Anything that will give the worker a chance to change his pace when he
wishes will lend variety to his work. Further if workers are permitted to change their
pace that would give them a sense of accomplishment.

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Scheduled Rest Periods
Extensive research on the impact of rest periods indicates that they may
increase both morale and productivity. Scheduled rest periods bring many advantages:

They counteract physical fatigue.

They provide variety and relieve monotony.

They are something to look forward to-getting a break gives a sense of
achievement.

They provide opportunities for social contacts.

Shorter Hours
Shorter work-day in many cases leads to higher production, reduced
absenteeism, accident rate, and giving a feeling of accomplishment. Most people get a
sense of accomplishment from completing a whole job. If the job becomes too
specialized, the worker loses his feeling for the relationship between his work and the
overall process. The concept of whole job gives satisfaction to a worker:
• That he plays a significant part in the work process as a whole, and
• That the process itself is important.

Greater Autonomy
Possibly the single most effective way of increasing job satisfaction is to give
workers more freedom to do their work in their own way. People will work harder and
derive satisfaction if they are given the freedom to make their own decisions.

Automation
The effect of automation on job satisfaction depends largely on the degree of
automation that is introduced. Clearly, automation means different things in different
situations, and it is difficult to state firmly that it either decreases or increases job
satisfaction.

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5.15 EXPECTATIONS OF EMPLOYEES REGARDING
SATISFACTION
1. Recognition as an individual.
2. Meaningful task.
3. An opportunity to do something worthwhile.
4. Job security for himself and his family.
5. Good wages.
6. Adequate benefits.
7. Opportunity to advance.
8. No arbitrary action – a voice in matters affecting him.
9. Satisfactory working conditions.
10. Competent leadership - bosses whom he can admire and respect as
persons and as bosses.

Thus, job satisfaction refers to an employee’s general approach towards his

job. To the extent that a person’s job fulfills his principal needs and is consistent with
his expectations and values, the job will be satisfying. A number of characteristics
such as pay and benefits, supervision, working conditions, the nature of the work
itself, and company policies, affect job satisfaction.

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 CHAPTER VI
ANALYSIS AND INTERPRETATION OF DATA

6.1 INTRODUCTION
Best HR Practices
Researcher has already defined what best HR practices are and what their
significance in any organization is, whether it is a manufacturing organization or a
service organization. We have also seen in the earlier paragraphs what employee
satisfaction is. Now, in the following paragraphs the researcher has brought out the
impact of the Best HR practices on the employee satisfaction and how to measure it.

Compensation, various allowances, authority, learning opportunities and well

drawn career path are the factors that influence the employee satisfaction. The
companies while recruiting any employee keep its one eye on the employees cost to
the companies and decides the various components of the compensation. There are
factors other than the compensation, like organizational culture etc. which have a
bearing on the employee satisfaction. Now the companies have realized through their
experience that the satisfied employee is an asset to the organization and on this
satisfaction the performance of the company is dependent. Therefore the sound
managements take this aspect in view and take long term decisions.

Since the performance of the organization is dependent on the consumer

satisfaction and for achieving it the company has to incur heavy costs, naturally the
companies are constantly measuring the customer satisfaction. They identify as to
what the consumer needs. They also understand the consumer’s perception of the
product. The factors which motivate the consumer in taking a buying decision are also
studied by the marketing team of the company. As against this in order to understand
and assess the employee satisfaction there are several factors which the company has
to keep in mind. The foremost factors to bear in mind are the per employee
productivity, per employee profit, absenteeism percentage and the rate of attrition and
employees turnover. If the productivity and profitability per employee shows an
increasing trend it can safely be concluded that the employee satisfaction level is high.

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Satisfaction cannot be ascertained by using any mathematical formula. This needs to
be ascertained indirectly relating it to the production, profitability etc.

It has been proved beyond doubt that there is a direct relation between the
employee satisfaction and the productivity and profitability and achievement of the
other goals. If the employees are not satisfied it does impact on the production, its
quality, rejection rate and ultimately the performance of the organization. Therefore, it
has now been a proven fact that the employee’s satisfaction has a direct bearing on the
performance of the company. This chain of events can be shown in the following
way:

Consumer’s satisfaction about the quality of the product as well as the

low rejection rate.

Employee’s devotion, dedication for the achievement of the
organizational goals.

Employees’ loyalty has its impact on the productivity of the employee.

The value of the product is also dependent on the increase in
productivity.

The quality product pushes the demand for the product.

Ultimately the customer’s satisfaction results in building up of the
customer’s loyalty and in turn the achievement of the corporate goals.

Thus for every organization the mechanism for measuring the employee
satisfaction as well as customer satisfaction and loyalty is of paramount importance.
Higher the employee satisfaction higher is the commitment and higher the
commitment, higher is the employee’s contribution.

Keeping in view the foregoing discussions, the researcher has also analyzed
the performance of the identified organizations on these two primary parameters i.e.
per employee productivity and per employee revenue /profit after tax. The researcher
has also tried to get the data relating to the rate of absenteeism as well as workforce
turnover of these identified companies. This has helped the researcher to understand
the extent of impact on the performance of the identified companies.

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 Very often in the management jargons the term Organizational Culture is used.
It is a concept developed by research. It explains the attitudes, values, belies,
experience of the organization and the psychology. Usually it is values cherished by
the individuals and groups in the organization. The method of interaction amongst the
employees, the customers as well as the suppliers and stakeholders depicts the
organization culture.

The management and the executives play a significant role in developing a

healthy organizational culture. Involving the employees at various levels in the
decision making process, and ensuring the visualization of the transparency in
decision making, helps to build good organizational culture.

Employees have their own perception of the various values, beliefs and the
management’s attitude towards not only the employees but also the suppliers,
customers and the stakeholders. How positive is the management in expressing these
values decides the organizational culture. Sound organizational culture binds all the
employees to the organization and wins their loyalty which ultimately results in the
fair achievement of the corporate goals. This organizational culture has a great
bearing on the employees satisfaction which helps them in offering full involvement
in the company’s activities.

Earlier research has proved that there is direct relation with absenteeism as
well as employees’ turnover. If the organization is observing best HR practices
naturally the employee will not be tempted to remain absent and also to continue with
the organization. In today’s technology driven environment there are number of
companies which are adopting various new practices. E.g. Now for a casual work of
few hours the employee need not avail of any leave as such but he/she can request the
company to permit him to work from home so that he/she need not take leave and the
company’s work is also not suffered. Of course this is possible only in service
industry and partially for the manufacturing companies. Even the working hours can
also be got adjusted to suite the employee’s needs. There are certain works normally
the employees are required to attend e.g. filling of Income Tax Return, Work with the
Regional Transport Office, Medical checkup etc. for which the employees are
required to be away from the work place for some time and they avail of leave. But if

128
there is any alternative for this, they would prefer to work in the company and be
away for a short time to attend to these small works. Now some companies are
making arrangements with the various govt. organizations like IT Office, RTO office,
Insurance Cos. etc. to depute their staff at the company’s office and extend these
routine services. This system is in operation for quite some time and is working
smoothly. This approach helps both the employee and the organization as the
employee is not required to consume his leave and at the same time the company’s
work is not hampered.

6.2 PRIMARY DATA PRESENTATION AND ANALYSIS

Categorization of Human Resources in a large scale organization
The perception of Best HR Practices differs from individual to individual. It
also differs from the category of employees. Usually the middle and senior
management are conscious about the status needs and hence to them HR practices
relating to the status recognition are relatively more important than others. Same is the
case with the operative employees who are the members of the trade union and who
are able to reap the benefit of collective bargaining, they are more conscious about the
compensation package and other fringe benefits which can be convertible in cash.
Hence, in order to study the best HR practices the researcher has made out the
following three categories which are commonly seen in large scale organizations.
Category of employee No. of employees selected
1) Senior Management 20
2) Middle Management 140
3) Operative Employees who are allowed to form Trade Union 240

Best HR Practices prevailing in various organizations

It has been seen that there are number of best HR practices observed by
various companies. It all depends on the category of employees. The employees in
Senior and Middle Management grade have different preferences than the office staff
as their approaches towards the job satisfaction are different. In the following table
the researcher has brought out the various aspects for which the Senior Management
and Middle Management give priority for the HR practices. In the same process the
junior management have different preferences for HR practices.

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 Table 6.1: Senior & Middle Management’s Priority for the Best HR practices
Best HR Practice
Work Environment:
1) Safety
2) Pleasant atmosphere
3) Availability of latest electronic gadgets
4) Air conditioned office
5) Delegation of powers
6) Promotional opportunities
7) Advanced Training in Management or subject related specialized areas
8) Availability of well equipped gym at the work place.
9) Availability of various service providers at the work place: e.g. R.T.O.
official visit to the work place for providing various services related to
the staff’s vehicles. Provision of school admission/ provision of sale of
branded items at the work place during festivals etc.
Open Management
1) Happenings in the company
2) Involvement in decision making
3) Giving special responsibilities
4) Forum for sharing ideas
5) Deposition of trust
6) House Bulletin
Compensation:
1) Annual increase
2) Overseas tours with family
3) Other perks like furnished bungalow
4) Provision of staff at the residence
5) Provision of amenities at the residence
6) Provision of new allowances

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1) Workmen Category’s Priority for the Best HR Practices
Work Environment:
1) Safety
2) Pleasant atmosphere
3) Availability of latest electronic gadgets
4) Air conditioned office
5) Delegation of powers
6) Promotional opportunities
7) Advanced Training in Management or subject related specialized areas
8) Availability of well equipped gym at the work place.
9) Availability of various service providers at the work place: e.g. R.T.O.
official visit to the work place for providing various services related to the
staff’s vehicles. Provision of school admission/ provision of sale of branded
items at the work place during festivals etc.
Open Management
1) Happenings in the company
2) Involvement in decision making
3) Giving special responsibilities
4) Forum for sharing ideas
5) Deposition of trust
Compensation:
1) Annual increase
2) Overseas tours with family
3) Other perks like furnished bungalow
4) Provision of staff at the residence
5) Provision of amenities at the residence
6) Provision of new allowances

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2. Age wise classification of the respondents
The age of the employee has a bearing on the assessment of the Best HR
practices. If the employee is young he is ability to move from one organization to the
other until he gets job of his choice is high. In case of the aged employees he has to
take into account various factors attendant to the family and hence his mobility is
relatively less. Hence the identified sample has been categorized on the basis of the
age group. It reveals the following:
Table 6.2 : Age wise classification of the respondents
Age Age Age between Age Total
between between 41-50 between
21-30 31-40 51-60

187 79 90 44 400
Source: Field survey data
Fig. 6.1 : Age wise classification of the respondents

187
200

150

79 90
100
44
50

0
Age 21-30 Age 31-40 Age 41-50 Age 51-60

Observations
It can be seen that out of the 400 respondents 46.75% were in the age group of
21 to 30, while 19.75% were between 31 to 40 years, 22.5% were in 41 to 50 and
11% were in the age group of 51 to 60. The respondents in the age group of 21 to 30
were mainly the new entrants in the jobs while those in the group of 51 to 60 mainly
represented the executive cadre.

It can be observed from the data collected that in respect of the Sr.
Management employees barring the exception of a solitary employee in the age group

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of between 31-40 rest of the Sr. Management employees are in the age group of over
40 years. The solitary young executive in senior management grade is a Chartered
Accountant. That is the employees have fairly worked with the organization and have
acquired experience as well as maturity. The Middle management employees have a
fair spread throughout the age span plotted. So far as the employees are concerned the
majority (65%) of them are below 40 years. Company (KOEL) is a fairly old
company and that is why there are 10 employees who are above the age of 50 years.

3. Marital Status of the identified sample

The marital status of the employee has a bearing on the employees
satisfaction. If the employee is a bachelor he is very much mobile as he does not
carry many responsibilities. If the employee is a married he has to take into account
several factors like accommodation, education, society life, communication facilities,
etc. Hence the data on this score has been collected and presented in the following
table:
Table 6.3 : Marital status wise classification of the respondents
Male Female Total
Married Unmarried Married Unmarried Married Unmarried
215 25 145 15 360 40
Source: Field survey data
Fig. 6.2 : Marital status wise classification of the respondents

215
250

200 145

150

100
25
15
50

0
Married Unmarried

Male Female

Observation
In the identified sample, 90% of the respondents were married.

133
4. Educational Qualifications
The educational qualifications have a bearing on the mobility of the
employees. If the employee is highly qualified and particularly professionally
qualified there would be higher demand for such a qualified person. Hence the
availability of the job opportunities may attract the employee to compare with the
overall compensation package offered and take a suitable decision. Keeping this
aspect in mind the researcher has also analyzed the educational background of the
respondents which revealed the following data.
Table 6.4 : Educational qualification wise classification of the respondents
Sr. No. Management Diploma Graduation Post graduation Total
grade holders /Professional qualifications
/Below
M. C.A. ICWA MCA
12 Std.
B.
/ITI pass
A.
outs
1 Employees 112 126 2 0 0 0 240
(members of
the Trade
Union)
2 Middle 8 103 20 2 2 5 140

3 Senior 6 10 2 2 0 20

Total 120 235 32 4 4 5 400

Source: Field survey data
Fig. 6.3 : Education wise classification of the respondents

235
250

200

150 120
112 126
103
100

32
50
8 20
4 4 5 5
2 2
0 0 0 2 0
Graduation
Holders/Below

M.B.A.

C.A.

ICWA

MCA
12th Std.
Diploma

Workmen Middle Management Senior Management

134
Observation
The above data reveals that 30% of the respondents had less than 12th standard
education. They mainly come from the workers class as the study also covers two
manufacturing industries. Graduates account for major portion i.e. 58.75% of the
respondents are graduates in various discipline while11.25% were having professional
qualification in addition to graduation. These mainly represented the executive
respondents.

The above data reveals that all the senior executives are post graduates or are
having a professional qualification.

In the middle management 8 employees are having diploma while 103 have
obtained graduation degree, and the rest are having post graduation / professional
qualifications.

In the employees category there are 112 i.e. 46.66% of the sample who have
studied upto XII standard. 126 are having diploma while 2 are postgraduates. The
graduate employees are mainly working in the back office (accounts, marketing etc.)

5. Work experience
Work experience has a bearing on the employees’ views about the HR
practices introduced in an organization. The senior employee’s views differ from that
of the junior employees. Junior employees have greater expectations and offer
mobility and hence their assessment of the HR practices have greater expectations
from the management. This has been reflected in their responses on the relevant
questions which have been analyzed in the subsequent paragraphs which deal with the
justification of hypotheses.
Table 6.5 : Work experience wise classification of the respondents
Experience of 1 to Experience of 11 to Experience of Total
10 years 20 years over 21 years
206 176 18 400

135
Observations
It is quite obvious that IT industries being of recent original the experience
level as depicted in the above table is quite acceptable.
Fig. 6.4: Work experience wise classification of the respondents

250 206
176
200

150

100
18
50

0
1 to 10 Yrs. 11 to 20 Yrs Over 21 Yrs.

Observation
51.5 % of the respondents were having 1 to 10 years, while 44% were having
work experience of 11 to 20 years, while rest 4.5% were having experience over 21
years.

6. Monthly emoluments wise classification of the sample

In fact, of all the factors that are taken into account for leaving the
organization the monthly monetary compensation is the most vital criterion for
continuing with the organization. If the compensation is not favourable in tune with
the compensation being given by the other comparable concerns naturally it may
induce the employee to switch on to other job. Therefore, the organizations should,
while deciding the monthly monetary compensation have to take into consideration
the compensation given in the area by the similar organization. This is a vital
consideration for the employees to take their decision about the continuance with the
present organization.

136
 Table 6.6 : Monthly emoluments wise classification of the respondents
Grade Up to Rs.40001 Rs.60001 Rs.80001 to Over
Rs.40000 to to Rs.100000 Rs.100000
Rs.60000 Rs.80000
Employees 120 114 6 0 0
(Members of
trade union)
Middle 0 84 49 7 0
Management
Senior 0 0 2 12 6
Management

Total 120 198 57 19 6

Fig.6.5 : Monthly emoluments wise classification of the respondents

120 114
120

100
84
80

60 49

40

20 7 12
6
6
0 0 0 2 0 0 0
0
Upto Rs.40000 40001-60000 60001 to 80000 80001 to 100000 Over Rs.1 Lakh

Workmen Jr. Management Sr. Management

Observations
It can be seen from the above data that all the Sr. Management employees are
drawing an annual compensation of Rs.7.00 lakhs and over.

Same is the case with the Middle Management employees in which case 84
employees are getting annual compensation over Rs.6.00 lakhs while 56 are drawing
over Rs.9.00 lakhs.

137
 So far as the employees –workers are concerned 120 employees are drawing
annual compensation of Rs.5 lakhs while 114 employees are getting compensation
between Rs. 6 lakhs to Rs.7.5 lakhs. Only 6 employees are getting annual
compensation over 7.5 lakhs

7. Grade wise and gender wise classification

Grade wise and gender wise classification of the employees has also a bearing
on the employee’s turnover. Usually there are limitations on the mobility of the
female employees. After the marriage their preference is always for a place where the
spouse is employed. Hardly few women who are interested in making career and who
do not have any family responsibility offer mobility and may consider in switching
over the job for better prospects.

So also in the case of junior management the employee turnover is relatively

less. Only those who are competent and have set a career goal to be achieved they
may only think of switching over to the progressive organization offering better
overall compensation package.

In the case of senior management grade usually the switch over is considered
only when there are no further promotional opportunities, or there is no fine tuning
with the management or where there is no properly defined authority responsibility
relationship. At this age usually the authority consideration plays a vital role.

Table 6.7 : Management grade wise, gender wise classification of the

respondents
Junior Management Middle Management Senior Management
Male Female Male Female Male Female
141 99 80 60 19 1

138
 Fig.6.6 : Management grade wise, gender wise classification of the
respondents

160
141
140
120 99
100 80

80 60

60
40 19
20 1
0
Jr. Mgmt. Middle Mgmt. Senior Mgmt.

Male Female

Observations
Since two IT industries are covered by this study naturally the number of
female respondents is 42.85%. In manufacturing industries the female percentage is
negligible. Whatever female presence we find in manufacturing industries is limited
to Accounts and Administration Dept.

Analysis of the Data from each of the Company under Study

The researcher has presented here under the data collected from each of the
identified company for this study. Although this research has been stated to be for the
period financial year ending 31st March 2007 to 2012, wherever available the data for
the subsequent period has also been incorporated.

1. Tata Motors Group

This is a automobile manufacturing industry engaged in manufacturing trucks,
cars, pickups etc. Brief profile of this company has been presented in the Chapter IV
of this study. The following are the highlights on Human Resources Front during the
respective years:

139
2007

This TATA MOTORs Group enjoys very cordial relations with its employees
and workers.

These cordial relations between the management and the workmen unions help
in implementing the reforms smoothly and to improve the quality, arresting
costs, and improving the performance on the productivity front.

This being a large engineering industry where there is scope for accident, the
company accords top priority to the safety of the staff at all costs. Right from
the Board of Directors, executives everyone is concerned about the
employee’s safety and at all management levels there are Safety, Health and
Environment Committees are constituted and functioning smoothly.

The company has so far imparted defensive driving training not only to its
employees but also to its contractors who are regularly involved in the
company’s operation. This training has been imparted to over 8000 members.

2008

The company’s wage settlement with the employees union was overdue for
renewal. The company has now entered into a new wage settlement to the
satisfaction of both.

During this year, the Business Today magazine has awarded India’s Best
Managed Company in Automobile sector. This selection for the award was
done by an International firm namely Ernst and Young.

2009

Along with the other plants in various parts of India, Pune plant has been
awarded certification from Occupational Health and Safety Management
System Specification (OHSAS 180001 2007).

The Company’s plant at Pune has received a certificate withSA-8000, for the
global social accountability standard for working condition and labour
practices as well as facilities extended to their suppliers and vendors.

140
2010

The company continued to receive best cooperation from the workmen union
for all its management initiatives to improve its performance.

2011

The management and employees relations remained quite cordial and healthy
throughout the year.

2012

The management has taken number of initiatives for the health and wellness of
the employees and has developed Health Index metrics in all its plants in
India.

2013

The company was successful in renewing the wage settlements and other
terms and conditions with the employees unions.

2014

The company’s focus is to ensure safe and healthy workplace for its
employees and developed right safety culture in all its plants in the country.
Table 6.8: Total employees of Tata Motors during the study period
2007-2012
2011 2012 2013* 2014*
Total revenue of the 122128 166316 193698 232834
company net of excise
duty
No. of permanent 26214 29217 30334 29566
employees
Per employee revenue 4.658 5.692 6.385 7.875
* Latest figures are also shown in the table
Source: Annual reports of the company for respective years.

141
2. Kirolskar Oil Engines Ltd.
Brief profile of this company has been incorporated in Chapter IV. The
company is manufacturing Oil engines and is also exporting its products overseas.

Table 6.9: Financial Highlights

(Rs. In crores)
2008 2009 2010 2011 2012 2013 2014
Net Sales 2000 2000 2219 2364 2276 2320 2287
Profit after Tax 140 152 164 174 192 199 178
Employees’ No. 2135 2189 2205 2253 2318 2376 2428
Sales per employee 1.0 1.0 1.01 1.05 0.98 0.98 0.94
Profit per employee 0.5 0.6 0.07 0.08 0.08 0.08 0.07
Source: Respective year’s published Annual Reports

Fig.6.7 : Movement of Sales of Kirloskar Oil Engines Ltd. during the study
period Rs. in crores

2400 2364 2320

2276 2287
2300 2219

2200

2100 2000 2000

2000

1900

1800
2008 2009 2010 2011 2012 2013 2014

Observations
It can be seen from the above data that there are marginal ups and downs in
the sales which is dependent upon the market conditions. The market was little
sluggish during 2012 and 2014 and hence the sales were slightly down. Again the
sales pick up as the market improves.

142
Fig. 6.8 : Movement of Sales per employee of Kirolskar Oil Engines Ltd. during
the study period Rs. in crores

1.06 1.05
1.04 1.01
1 1
1.02
1 0.98 0.98
0.98
0.96 0.94
0.94
0.92
0.9
0.88
2008 2009 2010 2011 2012 2013 2014

Observations
During the period 2008 to 2011 the sales per employee showed steady
increase. However thereafter during 2012 and 2013 the sales per employee declined
marginally and remained constant. This was mainly because of the decrease in sales
as a result of sluggish market. The number of employees slightly increased which has
its effect on the per employee sales.

Fig. 6.9: Movement of Profit after Tax per employee of Kirolskar Oil Engines
Ltd. during the study period Rs. in crores

0.08 0.08 0.08

0.08 0.07 0.07
0.07 0.06

0.06 0.05
0.05
0.04
0.03
0.02
0.01
0
2008 2009 2010 2011 2012 2013 2014

Observations
During the financial year ending 2008 to 2013 the net profit after tax has
shown steady increase. However thereafter during 2014 there was marginal decline in

143
the net profit after tax. This was mainly because of the decrease in sales as a result of
sluggish market. The number of employees slightly increased which has its effect on
the per employee profit.

Observations on Human Resources

2008, 2009
The employees’ relations continued to be satisfactory. The company has taken
care to ensure the employees safety and attended to the training needs of the
employees.

2010
The management’s industrial relations continued to be cordial and healthy.
Even before the expiry of the wage settlement in vogue a new wage settlement was
signed.

The employee’s health care continued to be focak point of the company. The
company conducts regular medical checkup of its employees. Eminent guest faculties
in health care are invited to deliver lecture to the employees. These lectures focus on
fitness, common ailments, and life time improvements. These lectures create greater
awareness amongst the employees.

The company encourages its employees to participate in outbound training

programs, team building and other various participative activities both within and
outside the company.

In order to enable the employees to conduct their sports activities after the
working hours, the company has maintained a well developed sports ground.
Company believes in sound mind in healthy body and conducts Yoga classes for three
days in a week.

2011
The company HRD department had taken several initiatives. It conducted
Employee Engagement Survey by deploying an outside agency. On receipt of its
report, the company has now concentrated on enhancing the employees’ engagement.

144
 The company has introduced performance management system for the staff in
Managerial category. In the senior management grade job based level matrix has been
created for job evaluation. In a planned effort the company had nominated 20
managers for Leadership Development Programme. This programme was jointly
organized by the company in association with a leading management institute.

The Middle Level Managers have been given a special training programme in
collaboration with Kirloskar Institute of Advanced Management Studies.

All these programmes have been aimed at improving the skill and competency
levels and it has been proved to be successful.

2012
The year witnessed harmonious industrial relations with the employees.
Leadership Development Programme continued to be a focal point. So also the
company repeated its training programme for the Middle Management for a fresh
batch. The company has introduced a new system with a view to identify fast trackers
at the junior level management.

Conscious efforts have been made by the company to develop performance

oriented culture in the organization. It also took steps to synchronizing individual
goals with that of the corporate goals. The company has introduced an online
Performance Management System for Managerial staff.

2013
A fresh wage settlement was signed at Pune plant. The harmonious industrial
relations made it possible. It is interesting to note that this was the 7th in continuation
which has been signed before the expiry of the settlement in vogue. Not a single man
day was wasted. This speaks of the harmonious relations and the understanding
between the management and the employees. In fact in the manufacturing industrial
sector this is considered to be the achievement over the past 50 years.

The thrust of the HRD continued to be strengthening the core values of the
organization. The company has taken up several initiatives for skills, knowledge and

145
attitude development, and organizational capabilities, and culture. Talent
Management and the Leadership Development continued to be the main focus of the
HRD.

2014
According to the company the employees health and well being is of vital
importance. Medical checkups are carried out at regular intervals. Special checks up
are also organized regularly.

Health assessment camps and Eye check camp for vision were organized.

The management is addressing safety of the employees at work giving top

priority to it. Online accident reporting system has been introduced. The company has
developed project safety manual. Company has conducted 103 health camps during
the year.

The company continued to conduct training programmes, career path

planning, for motivation purpose rewards and recognition programs, competitive
compensation etc. which ensured high level of motivation and this has resulted in
higher productivity per employee.

3) Tech Mahindra Ltd.

This is also one of the leading IT companies in Pune. Originally it was
Mahendra British Telecom Ltd. and subsequently it has been changed to Tech
Mahindra Ltd. The erstwhile IT giant company from Hyderabad Satym Technologies
has been taken over by Tech Mahindra. Profile of this company has been given in
Chapter IV.

146
Table 6.10: Total employees of Tech Mahindra during the study period 2007-12
2007 2008 2009 2010 2011 2012
No. of 19479 22614 24972 33524 38333 40763
employees
BPO employees 1755 3445 3769 8067 11011 14792

Total Revenue 29290 37661 44647 46254 51402 54897

Rs. Mn.

Per employee 1.50 1.67 1.79 1.38 1.34 1.35

productivity
Rs. In Mn.

PAT (Profit 1215 3299 10145 7005 6442 10954

After Tax Rs. In
Mn.)
Per employee 0.062 0.145 0.406 0.209 0.168 0.269
profit after tax

Some of the highlights of the Human Resources Policy

2008
The objective of the company is to develop competence driven organization
and to build up culture of high performance.

The company’s thrust has been the employees training for which ample
opportunities are provided to the employees. In collaboration with IIT Mumbai and
BITS Pilani the company has developed a post graduate progamme. The company in
its training establishment conducts soft skill development programmes for its
employees.

The company targets its hiring exercise from the top academic campuses and
hires best available talent. The company grooms its employees with the objective of
tapping the hidden talent and for higher managerial position. It’s focus is on the
decision making, and responsibilities sharing. The company also develops the talent
from within for higher positions.

147
2009
Company holds an exhaustive induction training programme of 14 weeks for
the fresh recruits through which these employees are attuned to the company’s work
culture, values and imparts telecom domain knowledge as it is the key business
activity of the company.

Company has developed a learning framework namely QUEST which allows

online end-to-end management input, learning paths which includes creating new
learning paths, and covers training assignments, course material developed and also
the online tests.

The company firmly believes in nurturing employee’s talent, motivating the

employees for indigenous innovation and for promoting leadership development.

For employees who are keenly interested in carrying out further studies for
higher qualifications, the company has entered into tie up arrangement for Distance
Learning Programs with Indian Institute of Technology,Mumbai, Birla Institute of
Technology (BITS) Pilani and University College of London, UK. The company
provides learning assistance to the deserving employees.

2010
The company has been running a Global Leadership Cadre (GLC) program for
the past five years. It continues to infuse fresh and new ideas and talented youth in the
company.

2011
In order to enhance the business sharpness and insight of its associates
company provides new platforms. The company has started a new program titled,
Executive Post Graduate Diploma in Telecom Management in collaboration with
Symbiosis Institute of telecom Management (SITM), Pune. This program comprises
of in depth knowledge of telecom concepts, and makes it’s employees to accept the
challenge thrown open by the new business environment. There are day in day out
changes in the telecom scenario and it has become a dire necessity for the company to
keep its employees updated to face the fierce competition in the field. There is a great

148
gap between the company’s requirement of the talent and the potential available and
therefore the company’s HR department has to be always on their toes to meet the
organization’s demand for the right type of input and the set out cost to the company.

2012
Company continues its thrust for talent management and conducts motivation
programs and leadership development programmes throughout the year for its
employees.

The company has cherished beliefs in inclusivity and has undertaken number
of initiatives to foster diversity in age, gender, culture and capability. Specially for
women employees of the company, the company has created a new platform to voice
their opinions and suggestions and create ideal women workplace in the company.

2013
The company has a full faith in the ability of each of its employee and hence it
takes every care to provide opportunities to tap the hidden talent and potential and
considers expenditure incurred on this activity as an investment. The company has
developed benchmark for talent management , talent engagement and set out key
parameters for this purpose.

The company has designed and developed “Young CEO” Programme through
which it nurtures young leaders to take on vital roles and entrusts them with “end to
end” responsibility in the Mergers and Acquisition, new business development
initiatives, joint ventures for various overseas clients etc.

In order to have a young talented employees team for participating in the

development of organization’s strategic planning, the company has developed a
concept of “Shadow Board and Global Leadership Cadre Programme”

2014
After the merger of the Mahindra Satyam, the Tech Mahindra’s HR policies
and process have been further strengthened to suit the changed demographic and to

149
enhance the quickness in its responses and ensure the compliance of various changing
regulatory requirements.

The aim of the organization continues to develop and learning and building
capacity in technology, project management, and leadership in the assumed field of
operation.

4) Cognizant Technology Solutions Ltd.

In the year 1994, the company began its IT development and maintenance
services, initially as an in-house technology development center for the Dun &
Bradestreet Corporation and its operating units. Along with certain other entities
which were taken from the host company, a new company was established in the year
1996 and it was named after “Cognizant Corporation”. The company came out with
its first ever public offering on the 24th June 1998 in Class A Common stock. On
February 21, 2003, pursuant to the terms of its Certificate of Incorporation, all of the
shares of Class B common stock automatically converted into shares of Class A
common stock. Since then there are no shares of class B common stock.
Table 6.11: Financial Performance of the Company
(Figures in U.S. $)
Year  2007 2008 2009 2010 2011 2012 2013
Revenue 2135577 2816304 3,278,663 4592389 6121156 7346472 8843189
Net 350133 430845 534,963 733540 883618 1051263 1228578
Income

Total 55400 61700 78400 104000 137700 156700 171400

staff

2007
The company heavily invested in the talent management which showed good
results in 2007. During the year there was recruitment of over 16,000 associates.
There was reduction in the employee attrition rate from 16% in 2006 to 15% in 2007.
Company carries out employee satisfaction exercise every year through a third party
organization. The employees satisfaction level is high. Existing associates referrals for
new hires increased substantially. The existing associate’s 33% referrals were hired
by the company.

150
 This globally spread organization focused on the customer satisfaction and at
the same it enabled its associates to make a career in the company. The company
expanded its operation in the new geographical areas as well as in service lines and
industry sectors.

2008
During the year under review the company’s associates strength grew upto
67000. Of this approximately 47000 are deployed in the Asia Pacific region 12000 in
North America and South America and over 2000 in Europe, mainly in the United
Kingdom. Company is not a party to any collective bargaining agreements. Company
enters into individual’s contract for compensation. According to the company its
relations with the associates are quite harmonious. The company believes that its
success lies in attracting talent in the organization and train them extensively to
become a good project manager. This helps the company to have a large pool of
professionals. The company conducts a comprehensive Orientation Training
Programmes for the new recruits which introduces them to the organization culture
and the company policies and procedures.

2009
The total associates strength in the year 2009 reached 78,400. Of this 62,400
associates are in the Asia Pacific region, 13,000 in various locations in America and
the remaining 3000 in the European countries mainly in United Kingdom.

Company continued to attract talent and to provide them extensive training to

sharpen their IT skills as well as other professional qualities.

2011
The company’s associates strength at the end of 2011 reached 137,700 of
which over 111,600 associates are in the Asia Pacific region, 21,800 in America and
4300 in European countries. It clearly shows that the company is expanding its
operations in the Asia Pacific region quite vigorously. The company has recruited
majority of its Project Managers from the professional consulting firms in the United
States, Europe and India.

151
2012
The growth of the associates continued even during the year under review
reaching a level of 156,700 of which over 124,100 are in Asia Pacific region, 27,300
in the USA and 5300 in the European countries mainly in United Kingdom.

Some of the HR Initiatives in Cognizant Technology Solutions

In order to encourage its associates to participate and contribute their full
potential not only in their given assignment but also in the various initiatives in the
other organizational levels, the company has introduced Wah in India which provides
non monetary reward and recognition for encouraging the young and enthusiastic
associates.

Personal Accident Benefit Insurance Policy

The company has provided personal accident benefit insurance policy which
covers the risk of disablements due to accidents.

This insurance scheme is being administered through ICICI Lombard General
Insurance Co.

The company has introduced for its associates an allowance of Rs.250 on

regular working day for the on call support and on holidays the allowance is for
Rs.400/-

The company grants night shift allowance to monetarily compensate for the
associates who are required to work beyond the standard working hours. This amount
is fixed at Rs.300 per night in the office and is paid on monthly basis deducting the
Tax Deducted at Source.

Medical Insurance

The company has a medical insurance for hospitalization expenses, including
the enrolled dependent

This medical insurance scheme is from the New India Insurance Co Ltd. and
their TPA.

The policy covers ailments which are normally covered by the Group Medi
claim base. policy

152
 Medical Emergencies loan The company provides medical emergencies loan
assistance upto Rs.15000/- or one month’s salary whichever is less.

Marriage loan: On the same line of medical emergencies loan the company
grants marriage loan upto Rs.15000 or one month’s salary which is less.

Leave policy: To enable employees to avail time off from work in order to
relax, recover from illness, avail maternity leave, or for personal reasons.

India Initial Settlement Advance: For the new joiners the company gives
interest free advance of Rs.10000/- for easy settlement in the new set up.

6th day Allowance: if the weekly working hours put in exceeds 40 hours the
company monetarily compensate for the additional work giving a project allowance.

Approach towards Best HR Practices

During the course of interaction with the HR executive it was transpired that
the companies have a very good rapport with the employees union and that with all
sincerity the HR department is taking every care to ensure that healthy and
harmonious employee-management relations are maintained.

It was observed that the HR department is making constant efforts to ensure

that the employees are offering their best to the organization.

The HR people proudly stated that because of the dedicated and fully
motivated employees the rate of rejection has been near zero and that they are able to
achieve good customer satisfaction too.

HRD is making all-out efforts to offer best possible HR practices keeping

thrust on the employees health and safety at the work place.

It is very difficult to determine the employees satisfaction by using any

mathematical formula as such but the same is reflected by the dedication of workers
and the per employee sales and profit. Productivity can be measured in mathematical

153
terms and it was informed that per employee productivity is showing an increasing
trend. Since the researcher has to depend only on the published data separate
productivity per employee could not be worked out and the company officials were
reluctant to part with the data. Hence only per employee sales and profit in monetary
terms have been regarded as the indicator.

The HR officials were proud to state that without any single hours loss of time
this manufacturing company has been able to achieve the wage settlement even prior
to the expiry of the existing one. This they pointed was the first achievement of its
kind in the Indian Manufacturing history.

Consolidate position of the ratings: In the following table the priorities

given by all the identified Senior Management of all the companies have been given.

Table 6.12 : Rating given by the identified employees in Senior Management

Cadre for the best HR Practices observed in the company.
Sr. Best HR Practice 10 9 8 7 6 5 4 3 2 1 Total
No.
1 Compensation 0 8 6 6 0 0 0 0 0 0 20

2 Challenging work 0 2 3 10 5 0 0 0 0 0 20

3 Overseas tours for 0 2 1 9 7 1 0 0 0 20

good performance
4 Delegation of 0 8 6 6 0 0 0 0 0 0 20
Authority
5 Verbal recognition 0 0 8 7 5 0 0 0 0 20

6 Good working 0 0 10 10 0 0 0 0 0 0 20
conditions
7 Positive interpersonal 0 0 12 5 3 0 0 0 0 0 20
relations
8 Effective company 0 0 12 8 0 0 0 0 0 0 20
policies
9 Ideal Training 0 0 5 12 3 0 0 0 0 0 20
programmes
10 Concern for women 0 20 0 0 0 0 0 0 0 0 20
employees
Source: Field survey data

154
Observations
The employees in the senior management cadre has accorded over and above
7 rating for compensation, challenging work, opportunities of foreign tours,
delegation of authority and word of appreciation.

Challenging work has been accorded over 6 rating by all the 20 senior
executives.

Delegation of authority is also accorded weightage over 7 by all the

respondents from this category.

Good working conditions are also preferred by all the senior executives
according 7 and over rating.

Organization’s concern for women employees has been 9 rating by all the 20
employee.

During the course of the collection of the primary data, the researcher has also
interacted with some of the other executives present and it transpired that the
employees have identified their individual goals with that of the goals of the
organization and that they are fully satisfied with the company’s HR policies.

Good working conditions have also been weighted heavily by the senior
management employees. All of them have rated it over and above 7 rating.

In a manufacturing organization depending upon the products being

manufactured, its nature, consumable or otherwise, the production process, use of
technology determines the strength of the workers. Besides the availability of the
skilled staff at a cheaper cost has also bearing on the staffing pattern. In the instant
case under study the number of employees actually engaged in the manufacturing
activity is quite large. Their perception about the HR practices is naturally different
than that of the management cadre employees. Their preferences about the HR
practices have also been obtained and those are indicated in the following
presentation.

155
 The researcher would like to state that for obtaining the data the employees’
organization extended very good help and they also praised the management’s
approach towards the workers and their safety, security and health.

Data from Middle Management:

Table: Rating given by the identified Middle Management employees for the best
HR Practices observed in the company.
Table 6.13: Weightage given by the employee on a scale of 1 to 10 (10 being the
highest)
Sr. Best HR 10 9 8 7 6 5 4 3 2 1 Total
No. Practice Employees
Compensation 0 86 35 19 0 0 0 0 0 0 140
package
2 Rewards for 0 0 84 35 21 0 0 0 0 0 140
good
performance
3 Delegation of 0 0 72 28 40 0 0 0 0 0 140
Authority
4 Verbal 0 0 0 0 82 45 13 0 0 0 140
recognition
5 Good working 0 0 96 34 10 0 0 0 0 0 140
conditions
6 Concerned 0 0 0 68 58 14 0 0 0 0 140
supervision
7 Positive 0 0 0 90 50 0 0 0 0 0 140
interpersonal
relations
8 Concern for 0 0 70 60 10 0 0 0 0 0 140
the employees
family
9 Ideal Training 0 0 0 55 45 40 0 0 0 0 140
programmes
10 Concern for 0 110 25 5 0 0 0 0 0 0 140
women
employees

Observations
From the above data following observations have been recorded:
1) Out of 140 Middle Management employees all the employees have accorded
over 7 rating to compensation of which 86 have accorded 9 score while the
rest 35 have accorded 8 score. It means that the compensation is obviously the
main consideration.

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2) 84% of the respondents have accorded over 8 score for the second attribute i.e.
rewards for good performance. This is also quite natural if the good
performance is rewarded the employees are satisfied and put their best in their
work assignments.

3) Only 20% of the respondents have accorded over 7 score for the delegation of
authority. It means majority of the middle management employees are not
much concerned about the delegation of authority.

4) Verbal recognition of good work has been rated below 7 by all the
respondents.

5) 92.85% of the respondents have rated good working condition over 7 score.
That means good working conditions are preferred by major segment of the
employees.

6) 48.57% of the respondents have accorded concerned supervision 7 score while

rest of the respondents has given less than 7. It means majority of the
employees are not concerned with the supervision.

7) All the 140 respondents have accorded over 6 score for the positive
interpersonal relationship.

8) 92.85% of the respondents have accorded score of 7 for the organization’s

concern for the employee’s family. It means this is also a point which should
figure while introducing Best HR Practices.

9) 39.29% of the respondents accorded 7 score for ideal training facilities. It

means relatively it has low rating.

10) 96.42% of the respondents have accorded over 8 score for the concern for
women employees which is a welcome situation.

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 Table: Rating given by the identified employees who are the members of
Trade Union for the best HR Practices observed in the company.
Table 6.14: Weightage given by the employee on a scale of 1 to 10 (10 being the
highest)
Sr. Best HR 10 9 8 7 6 5 4 3 2 1 Total
No. Practice Employees
1 Compensation 0 0 224 16 0 0 0 0 0 0 240
package
2 Rewards for 0 0 128 80 32 0 0 0 0 0 240
good
performance
3 Delegation of 0 0 0 0 165 64 11 0 0 0 240
Authority
4 Verbal 0 0 0 0 0 0 95 55 90 0 240
recognition
5 Good working 0 0 160 80 0 0 0 0 0 0 240
conditions
6 Concerned 0 0 0 0 0 0 0 90 110 4 240
supervision 0
7 Positive 0 0 0 0 0 160 80 0 0 0 240
interpersonal
relations
8 Concern for 0 0 110 70 60 0 0 0 0 0 240
the employees
family
9 Ideal Training 0 0 0 0 0 0 96 40 104 0 240
programmes
10 Concern for 0 0 130 90 20 0 0 0 0 0 240
women
employees

Observations
1. It is but natural that as the beginners 100% of the employees in the Jr.
Management cadre have accorded over 8 score for the compensation.
2. 86.66% of the respondents have accorded over 7 score for the rewards for
good performance.
3. No one has given over 6 score for the delegation of authority. This is also a
usual phenomenon all over that juniors are afraid of taking decisions and
hence they have rated accordingly.
4. None has given over 4 marks for oral recognition of the good performance. It
means mere words are not enough for good performance it should have some
financial consideration at least depending upon the cost benefit.

158
5. 100% of the respondents have accorded over 7 score for good working
conditions. Naturally it is everybody’s expectation, as the employees spend
more time at the work place. The expectation is not out of place.
6. Concerned supervision has been accorded below 3 score by all the
respondents. It means the juniors are not very much concerned about the
supervision.
7. 100% of the respondents have accorded 6 score for concern for employees
family.
8. Training facilities have been accorded less score.
9. Majority of the employees have accorded over 7 score for organization’s
concern for the women employees.

Data from HR Heads /official from HRD

The HR officials expressed that the main challenge before them is to contain
the staff costs particularly for the workmen cadre as the number of workmen
employees is greater.

HR is also persuading the manufacturing department to explore the possibility

of resorting to the outsourcing of major jobs so that the company is not required to
carry current size of the workmen and that they can achieve certain savings from
fringe benefits costs.

The officials from the HR department expressed their satisfaction over the
employees approach towards the management. They stated that the relations are quite
cordial.

Validation of Hypotheses
Introduction
Objectives of the research are explained in Chapter II section 3 A. To achieve
these goals the survey was planned. In this chapter the researcher has presented
statistical analysis of the 4 hypotheses these were proposed by the researcher:

H1 There is positive impact of the best HR practices on the employee satisfaction

and efficiency of the employees.

159
H2 The application of best HR practices has a bearing on the quality of
production/ services.
H3 The application of best HR practices reduces the attrition rate.
H4 The employee satisfaction results in cordial employer – employee relations.

6.3 DESCRIPTIVE ANALYSIS OF VARIABLES

Here we have 63 questions with five categorical response, strongly disagree,
disagree, neutral, agree, strongly agree. So we have treated these responses as a
variables and performed descriptive statistical analysis. Results are given as below:

160
161
 Variable N Percent Mean SE TrMean Standard
Mean Deviation
Strongly
Disagree 63 100 5.9 1.74 3.63 13.8
Disagree 63 100 16.33 3.13 13.23 24.8
Neutral 63 100 88.6 6.64 87.86 52.71
Agree 63 100 230.56 8.87 227.89 70.44
Strongly
Agree 63 100 59.7 5.4 58.05 42.84

Variable Variance CoefVar Sum Sum of Minimum Q1

Squares
Strongly
Disagree 190.57 233.79 372 14012 0 0
Disagree 615.26 151.86 1029 54953 0 0
Neutral 2778.79 59.49 5582 666868 0 60
Agree 4961.38 30.55 14525 3656425 102 185
Strongly 1835.31 71.76 3761 338315 0 25

Variable Median Q3 Maximum Range IQR Skewness Kurtosis MSSD

Strongly
Disagree 0 8 82 82 8 3.53 15.27 145.39
Disagree 0 27 105 105 27 1.88 3.7 612.73
Neutral 89 110 214 214 50 0.11 -0.26 2373.78
Agree 225 265 400 298 80 0.64 0.39 4289.02
Strongly
Agree 52 85 155 155 60 0.35 -0.73 1372.21

Conclusion
From the above graphs it can be concluded that variable “Agree” and
“Strongly Agree” follow normal distribution. This is evident from the histograms as
well as p values of Anderson Darling test which says that the variables agree and
strongly agree are normally distributed.

Also from the graphical summary we can easily conclude that average value of
the variable “Agree” is greater than other variables. So we can conclude that for most
of the questions, average response from respondents is “Agree” i.e. they agree with
the question/opinion they answer so eventually we get support for our hypothesis.

162
 As mentioned in permeable that no previous data is available for current study
so now we use following methodology to test the hypothesis.

We have set our hypothesis as follows:

Let X: Sum of number of respondents who responded to given question as

agree and strongly agree.

Now we calculate the proportion of X for each question out by dividing it by

400. Now we will check this proportion by setting the hypothesis as follows:

H01 Proportion of X=0.5 that is 50% respondents have affirmative response for the
question that is asked and 50% are either neutral or disagree or strongly
disagree.
Vs
H02: Proportion of X >0.5 that is more than 50% respondents have affirmative
response for the question that is asked and less than 50% are either neutral or
disagree or strongly disagree

So if this H02 is accepted for the given question it will eventually support one
of the hypotheses that we have set above.
So we use proportional test as follows:

We test H0: p=p0, the sample size are so large that both np0 and n(1-p0) are 10
or more.
p − p0
Now we compute Z statistics as Z=
p 0(1 − p 0)/ n

In terms of a variable Z having the standard Normal distribution, the

approximate P-value

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 For a test of H0 against some alterative hypothesis say Ha
Ha: p > p0 is P( Z ≥ z)
Ha: p < p0 is P( Z ≤ z)
Ha: p ≠ p0 is P( Z ≥ | z |)

We performed this test for each variable given, and the results are summarized
in below table. Here we have used the P values to take decision about the variables.
Level of Significance is 0.05.

6.4 DATA ANALYSIS OF HYPOTHESIS 1, 2, 3

Table 6.15: Summary of Analysis for Hypotheses 1 to 3
Sr. No. Statement X Proportion P-value Decision
A - Management Support
1 Management 229 0.5725 0.002 Accepted
sympathetically listen to
me
2 Management appreciate 268 0.67 0 Accepted
my academic
knowledge
3 Management provides 294 0.735 0 Accepted
me with adequate
medical facilities
4 I am free to discuss my 260 0.65 0 Accepted
problem with
management
5 I have informal 300 0.75 0 Accepted
communication with
management
6 Management welcomes 244 0.61 0 Accepted
suggestions for
improvements in the
systems and procedures
7 Management involves 256 0.64 0 Accepted
me in decision making
process.

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Sr. No. Statement X Proportion P-value Decision
B -Working Environment
1 The overall working 283 0.7075 0 Accepted
condition in my
department is
satisfactory
2 The sitting 268 0.67 0 Accepted
arrangements are quite
comfortable.
3 The office environment 262 0.655 0 Accepted
is quite healthy.
4 Organization has proper 311 0.7775 0 Accepted
mechanism for
maintaining discipline
for the faculty
5 The organization has 362 0.905 0 Accepted
adequate recreation
facilities.
6 The organization has 288 0.72 0 Accepted
proper health care
arrangements at the
work place.

Sr. No. Statement X Proportion P-value Decision

C -Working Environment
1 I love my job 298 0.745 0 Accepted
2 I am happy with leave 318 0.795 0 Accepted
rules of my company
3 I do not feel like giving 290 0.725 0 Accepted
up this job and taking
up some other job
4 I feel that I have job 305 0.7625 0 Accepted
involvement
5 I think that I have 306 0.765 0 Accepted
selected the right job for
my self
6 My company has 336 0.84 0 Accepted
excellent training
arrangements and gives
extensive training.
7 In our organization the 334 0.835 0 Accepted
attrition rate is less.
8 The quality of our 400 1 0 Accepted
product / service has
improved a lot.

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 C -Working Environment … contd
Sr. No. Statement X Proportion P-value Decision
9 The job rejection rate 280 0.7 0 Accepted
(in case of mfg.
industries) is almost 0%
10 The employer employee 312 0.78 0 Accepted
relations are very
cordial

Sr. No. Statement X Proportion P-value Decision

D - MOTIVATIONAL ASPECTS
1 I feel that my boss helps 289 0.7225 0 Accepted
me to achieve the
organizational goal.
2 My Management 338 0.845 0 Accepted
motivates me to increase
my efficiency.
3 Communication seems 310 0.775 0 Accepted
good within this
organization.
4 Work assignments are 315 0.7875 0 Accepted
explained clearly
5 Management takes 305 0.7625 0 Accepted
interest in my
suggestions
6 My colleagues are very 295 0.7375 0 Accepted
helpful
7 My job has scope for 235 0.5875 0 Accepted
promotions in time
8 Apart from in house 186 0.465 0.927 Rejected
training facilities the
company has a
provision for deputing
9 My work provides 235 0.5875 0 Accepted
opportunity to display
my talent and skills

Sr. No. Statement X Proportion P-value Decision

E - PERCEPTION ABOUT BEST HR PRACTICES
1 Our HR Department 235 0.5875 0 Accepted
pursues innovative ideas
and excellent HR
practices.
2 In our company there is 400 1 0 Accepted
a house bulletin.
3 Our company allows 320 0.8 0 Accepted
flexi office timings in
case of need.

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 Sr. No. Statement X Proportion P-value Decision
E - PERCEPTION ABOUT BEST HR PRACTICES
4 For back office 220 0.55 0.026 Rejected
employees, the company
allows work from home
if needed.
5 In our company there is 231 0.5775 0.001 Accepted
a cafeteria /canteen
which provide healthy
food.
6 We get subsidized food 400 1 0 Accepted
in the company.
7 Employees birth days 225 0.5625 0.007 Accepted
are celebrated by the
office
8 Employees’ kids 298 0.745 0 Accepted
showing excellent
academic performance
are felicitated by the co
9 There is a precisely 295 0.7375 0 Accepted
defined and fully
transparent rewards and
recognition scheme
10 Our company has tie up 175 0.4375 0.995 Accepted
with NGOs and we get
an opportunity to
participate in soc
11 Introduction of best HR 296 0.74 0 Accepted
practices is an ongoing
process in our company

Conclusion
Almost for all the questions asked, the researcher has more than 50% of
respondents who have responded either as Agree or Strongly Agree for the question
asked. For the question 8 in section D and question 10 in section E there are less than
50% respondents who responded as Agree and Strongly Agree. So for these two
questions we can conclude that more people are either neutral or disagree with the
statement of the question.
So overall we can accept the hypothesis H1, H2, H3.

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6.5 DATA ANALYSIS FOR HYPOTHESIS - 4
Table 6.16: Summary of Analysis for Hypothesis 4
Sr. Organizational Culture X Proportion P- Decision
No (H-4) Value H02
1 I willingly give my time to help 218 0.545 0.04 Accept
others who have work-related
problems.
2 Information is widely shared so 168 0.42 0.999 Reject
that everyone can get the
information.
3 I keep up with developments in 220 0.55 0.026 Accept
the institution
4 Cooperation across different 230 0.575 0.002 Accept
departments of the institution is
actively encourage
5 I view failure as an opportunity 317 0.7925 0 Accept
for learning and improvement.
6 I believe that facilities can have a 340 0.85 0 Accept
positive impact.
7 I always respect other’s 400 1 0 Accept
views/opinions.
8 Our company really cares about 220 0.55 0.026 Accept
employees benefits.
9 I always express loyalty towards 400 1 0 Accept
the organization.
10 I feel pride when representing the 400 1 0 Accept
organization in public.
11 Authority is delegated so that 225 0.5625 0.007 Accept
faculties can act on their own.
12 My department can always 358 0.895 0 Accept
provide quick response to the
requests from other departments
13 My Head of the Department is 400 1 0 Accept
available to me when needed.
14 There is continuous investment in 288 0.72 0 Accept
the skills of employees.
15 I offer ideas to improve the 325 0.8125 0 Accept
functioning of the organization.
16 In our organization, team work 295 0.7375 0 Accept
occurs among individuals and
between departments
17 Our company provides 400 1 0 Accept
comprehensive training to its
employees.
18 In our organization, there are 290 0.725 0 Accept
proper policies and procedures to
help us to serve

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 Sr. Organizational Culture X Proportion P- Decision
No (H-4) Value H02
19 Our company has systems to 165 0.4125 1 Reject
measure gaps between current and
expected performance
20 New and improved ways to do 220 0.55 0.026 Accept
work are continually adopted.

Conclusion
Barring the second and nineteenth question we accept hypothesis H02 for the
all other questions. So we can accept the hypothesis 4.

To conclude our analysis we can say that from study of overall survey, we can
accept our all four hypotheses.

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 CHAPTER VII
OBSERVATIONS, SUGGESTIONS &
CONCLUSION

The researcher has presented the primary data collected and has analyzed the
same in the earlier chapter. The interpretation of the same has also been presented at
the appropriate places. Now the researcher has brought out here under his
observations on the primary data.

7.1 OBSERVATIONS
A) Management Support
a) Sympathetic listening to employees by the management
57.25 per cent of the respondents have stated that the management
sympathetically listens to them.21.25 per cent remained neutral and the rest
have expressed their disagreement.

b) Appreciation of the academic knowledge by the management

67 per cent of the respondents have stated that the management appreciates
their academic knowledge while 17 per cent remained neutral and the rest
expressed their disagreement.

c) Provision of medical facilities

73.5 per cent respondents stated that they receive adequate medical facilities
from the management while 17.25 per cent remained neutral and the number
of respondents expressing disagreement is negligible.

d) Management Climate
65 per cent of the respondents reported that there is a free atmosphere in the
organization and that they can freely discuss their problems with the
management while 21 per cent of the respondents remained neutral.

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e) Communication channels
On this score 75 per cent of the respondents reported that the organizational
climate is such that they can communicate with the management informally
which is a good sign.

f) Management’s openness for suggestions

61.05 per cent of the respondents have reported that the management is very
much open and welcomes their suggestions for improvement in the systems
and procedures. 25 per cent of the respondent preferred to be neutral.

g) Involvement in decision making

66.5 per cent of the respondents are of the view that they are being involved in
the decision making process.

Overall observation on Management Support

If we account for all the responses collectively the research is of the view that
the overall management support is satisfactory which of course leads to job
satisfaction, increased production, commitment of the respondents which collectively
reflects on the productivity and profitability of the organizations that they serve.

B) Working Environment
a) Working conditions in the department
70.75 per cent of the respondents stated that the working conditions are
satisfactory, while 21.5 per cent of the respondents remained neutral. Rest
reported that they disagree with the statement.

b) Sitting Arrangements & comforts

67 per cent of the respondents reported satisfaction while 25 per cent preferred
to be neutral. Only 7.5 per cent of the respondents reported dissatisfaction.

c) Office environment
65.5 per cent of the respondents reported that the office environment is healthy
and 25 per cent of the respondent preferred to be neutral. Hardly 9.5 per cent
of the respondents reported negatively.

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d) Organizational discipline for the faculty
79 per cent of the respondents reported satisfaction while 19 per cent
respondents remained neutral. Only 2 per cent viewed it negative.

e) Availability of recreational facilities

90.5 per cent of the respondents reported satisfaction and rest 9.5 per cent
remained neutral and there was no one representing dissatisfaction.

f) Availability of the health care facilities

72 per cent of the respondents reported satisfaction while 17 per cent preferred
to be neutral. 11 per cent viewed it negatively.

Overall assessment of the Working Environment

Considering the above responses in aggregate it is observed that the working
environment in the organizations under study is quite healthy and has received
majority of the respondents’ satisfaction.

C) Job Related Aspects

a) Love towards Job
74.5 per cent of the respondents expressed that they Love their job and the rest
preferred to be neutral. No one gave negative response.

b) Leave rules of the company

72.5 per cent of the respondents expressed happiness about the leave rules and
9.5% remained neutral. Rest answered it negatively.

c) Continuation in the present job

72.5 per cent of the respondents reported that they do not think of giving up
the present job, while 9.5 per cent remained neutral. Rest answered it
negatively i.e. they may think of switching over to other job.

d) Job Involvement
76.25 per cent of the respondents reported that they have involvement in the
job while 22.5 per cent preferred to be neutral.

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e) View about the selection of the job
76.5 per cent of the respondent feel that they have selected the right job for
them while 22.5 per cent preferred to be neutral.

f) Assessment about the training arrangements

Here it was observed that all the respondents are unanimous in reporting that
they have excellent training arrangements and that they receive comprehensive
training from their organization.

g) Assessment of Attrition Rate

83.5 per cent assessed that the attrition rate is less while 15 per cent
remained neutral.

h) Improvement of the quality of the product

Here again yet another question where the 100 per cent of the respondents are
unanimous in assessment of the improvement in the quality of the product.

i) Assessment of Job Rejection Rate (in the case of Mfg. Companies)

70 per cent of the respondent rated it as almost 0 per cent while 25 per cent of
the respondents preferred to be neutral.

j) Cordiality of the Employer Employee Relations

78 per cent of the respondents reported as relations are quite cordial while
16.25 per cent preferred to be neutral.

Overall Observation about the Job Related Aspects

If we look at the responses of the respondents in totality it is observed that on
all the counts there is overwhelming majority of the respondents who have expressed
satisfaction on the job related aspects. Needless to say that such an atmosphere in the
organization in the increase in productivity and profitability.

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D) Motivational Aspects
a) Help from the Boss for achieving organizational goals:
72.25 per cent of the respondents answered it in affirmative while the
remaining preferred to be neutral.

b) Motivation by Management
84.5 per cent respondents were in the category of happy while 10 per cent
remained neutral, rest marginal percentage was that of unhappy ones.

c) Assessment about in house communication

77.5 per cent of the respondent appreciated the in house communication while
20 per cent preferred to be neutral.

d) Clarity about work assignment

78.75 per cent of the respondents reported that there is enough clarity about
the work assignment while 15 per cent respondents preferred to be neutral.

e) Management’s approach towards suggestions

76.25 per cent of the respondents reported satisfaction while 23.75 per cent of
the respondents remained neutral.

f) Attitude of the colleagues

73.75 per cent of the respondents reported that the colleagues are helpful,
while the balance percentage represents that of neutral respondents.

g) Scope for promotion

58.75% of the respondents responded satisfaction about the promotional
opportunities.

h) Deputation to reputed professional training organizations

46.5 per cent of the respondents were satisfied on this score while the
remaining preferred to be neutral. Here one point is required to be noted and
that is, such a deputation is for the staff from Middle management and Senior

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 Management is usually deputed for such outside organization’s training
programmes and hence the respondents remaining neutral is higher.

i) Opportunity to display talent and skills

58.75 per cent of the respondents reported satisfactory while the 42.25 per cent
remaining preferred to be neutral.

Overall observation on the Motivational Aspects

The overall responses of the respondents reveal that the organizations in which
they are working are using various motivational tools and ensure that the staff remains
motivated throughout. The percentage of the neutral respondents is relatively less.
There is no negative response from any of the respondents.

E) Perception about HR practices

These are the statements included in the questionnaire which have a direct
bearing on the main theme of the research i.e. impact of the Best HR Practices.
a) Role of HR in pursuing innovative HR Practices
58.75 per cent of the respondents expressed that the HR department pursues
best innovative practices, while 41.25 per cent of the respondents preferred to
be neutral. There was no respondent stating a negative response.

b) Availability of House Bulletin

This is again a question which has been answered in affirmative by all the
respondents. That is to say in all the organizations under study there is a house
bulletin which provides an opportunity to the respondents to understand what
is happening in the organization and it also provides them an opportunity to
express their views also.

c) Availability of the facility of the Flexi Timing

62.5 per cent of the respondents reported that in their organizations there is
facility of availing flexi office timings while the remaining 37.5 per cent of the
respondent remained neutral. Here it should be noted that in the study there
were a few manufacturing organization in which such flexi timing facility

175
 cannot be given and hence the percentage of neutral respondent is on higher
side.

d) Facility of work from home

55 per cent of the respondents reported that they have the work from home
facility, of course with some rider on it. This facility is usually available for
the staff from the IT sector as well as BPO organizations. This facility cannot
be considered in the manufacturing organizations as they have to use
machinery as well as raw materials etc. Hence such facility cannot be
considered for them. Therefore, 41.25 per cent of the respondents preferred to
be neutral. There was a marginal number of respondents i.e. 3.75 per cent who
responded negatively. This is just a normal phenomenon as in IT or BPO
companies this facility cannot be extended to all the employees. There are
certain positions particularly in the supervisory cadre their physical presence
in the office is a must.

e) Provision of Cafeteria / Canteen providing good food

This again an area where the employees are also concerned about the quality
of the food that is being served by the company canteens / cafeterias. Hence
this question was included. 57.75 per cent of the respondents expressed
satisfaction about the quality of the food while 23 per cent of the respondents
preferred to be neutral. 19.25 per cent of the respondents expressed
dissatisfaction about the quality of the food. As compared to the satisfied
respondents the dissatisfied percentage is relatively less.

f) Availability of the subsidized food

This is also an aspect which the employees consider to be dear to them. In
number of companies the food and other stuffs available in their cafeteria /
canteen is subsidized by the management of the organization. In some
companies although such a facility is not available at subsidized rates but the
managements take care that there is no exploitation of the employees by the
canteen contractor by charging unreasonable rates. Considering this aspect the
question was included to get the feedback from the respondents. It was

176
 revealed that in all the organization under study the food and the other stuffs
are available to the employees at subsidized rates.

g) Birth day celebrations in the office

In number of organizations the employees’ birth days are celebrated which
again is a healthy best HR practice. The celebration of the birth days in the
office brings cohesiveness amongst the working group in the department and
which results in healthy relationship amongst the group. Usually, the
managements on such occasions give some memento to the staff on certain
special occasions. (Celebration of 50 / 60 years birthday etc.). 56.25 per cent
of the respondents reported that in their organizations birthdays are celebrated.

h) Felicitation of the achievements of the employees kids

In order to boost up the employees and their families to pay special attention
to the education / extracurricular / cultural / sports achievements of their kids,
in some companies as a part of motivational tool the organizations organizes
felicitation programmes for these achievers from the employees families. This
in turn boosts the morale of the employee which results in commitment to the
organizational goals. 74.5 per cent of the respondents reported that in their
organization such felicitation functions are organized.

i) Availability of well defined reward and recognition Schemes

As a motivational tool the organization use the rewards and recognition of the
excellent performance of their employees. Of course it is important to ensure
that such schemes should be clearly defined to ensure that there is no element
of partiality. If this aspect is not ensured it adversely affects the morale of the
employees. In the sample under study,73.75 per cent of the respondents
reported that they have well designed and clearly defined reward and
recognition schemes in their organization.

j) Opportunity to participate in NGO’s work

In recent times it has been observed that the company managements are
having concern about the social development of certain areas which are dear to
them. Therefore, some companies have now accepted the philosophy of

177
 corporate social responsibility. Very recently the Govt. of India has passed a
legislation wherein the companies are under obligation to spend 2% of their
net profit on certain identified educational / health care projects for the down
trodden / up till now neglected sections of the society. Therefore, some
companies are now building up tie up arrangements with reputed Non
Governmental Organization (non profit earning organizations) to fund their
eligible projects. Even there are some of the employees who are having special
aptitude for social work. In order to nourish this attribute some companies
grant special holidays to their interested staff on full pay basis to work on
some social projects approved by the company. Such a provision for the staff
is welcomed by the staff as they also get an opportunity to meet their own
liking. It is on this back drop feedback from the respondents was called for. It
was observed that 43.75 per cent of the respondents reported that their
organizations have tie up with NGOs for such a social work opportunity. 30
per cent of the respondents remained neutral to this question it may be because
of their unawareness about it or apathy on their part.

k) Introduction of best HR practices – an ongoing Exercise

In order to understand the approach of the Management (HR department)
about the implementation of the Best HR Practices, this question was
included. Now in order to ensure that the attrition rate is maintained at
minimum possible level there is need to be vigilant in introducing best HR
practice. Hence, there should be a constant (ongoing) pursuit to innovate Best
HR Practices. 74 per cent of the respondents reported that in their organization
the HR is pursuing this innovation function on best HR practices on ongoing
basis. The rest of the respondents preferred to be neutral.

Overall observations on the Perception of Best HR Practices

This was a crucial area of the responses of the identified respondents as it had
a direct relation to the thrust area of the research. Normally when an employee takes a
decision to join any organization for employment he/she does take into account, apart
from the compensation and other benefits, the management’s outlook towards
introducing the Best HR Practices. Therefore the prospective job seekers also collect

178
information about the management’s attitude towards introduction of the Best HR
practices. They compare the best HR practices being followed in the various similar
organizations before taking a final decision of joining. It is on this score the feedback
was sought. 74 per cent of the respondents reported satisfaction on this score while
the remaining preferred to be neutral. On the whole majority of the respondents have
also expressed their satisfaction about the management’s approach towards best HR
practices and naturally it positively influence the productivity, commitment and
profitability of the organization which is translated into the company’s financial
statements.

F) Organizational Culture
Organizational culture is also an aspect which was subdivided in 20 statements
of which 18 statements received positive responses from the respondents while only 2
questions which were related to the sharing of information and performance appraisal
wherein the respondent’s response was negative. On the whole the organizational
culture was quite healthy.
Sr. Aspect % of respondents having
No
+ ve Neutral -ve
a. Willingness to help others 54.5 25.5 20
b. Free flow of information sharing 42 43.25 14.75
c. Keeping upto date about the developments in the 55 45 0
organization
d. Inter departmental cooperation 57.5 32.0 10.5
e. Failures are looked upon as opportunities 79.25 20.75 0
f. Positive impact of facilities 85.0 15.0 0
g. I always respect other’s views/opinions. 100 0 0
h. Our company really cares about employees benefits. 55.0 26.5 18.5
i. Loyalty to the organization. 100.0 0 0
j. Feelings about organizational pride 100.0 0 0
k. Delegation of authority 56.25 43.75 0
l. Free flow of interdepartmental responses 89.5 10.5 0
m. Easy availability of the departmental head 100.0 0 0
n. Investment in Skills 72.0 28.0 0
o. Offering ideas for improved functioning 81.25 18.75 0
p. Excellent team work is nurtured 73.75 26.25 0
q. Our company provides comprehensive training to its 100.0 0 0
employees.
r. Established proper systems and procedures 72.50 27.50 0
s. Well defined performance appraisal system 41.25 21.25 37.5
t. Approach towards new ways for improvement. 55.0 45.0 0

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G) Best HR Practices identified by majority of the respondents in order or
priority.
The respondents were asked to state 5 best HR Practices observed by their
organization, according to their priority. The commonly adjudged best HR practices
identified by the respondents were consolidated and the following picture emerged.
Naturally the preferences of the respondents from the various categories under study
are different. Therefore these preferences have been consolidated according to the
category: Jr. Management, / Middle Management / Senior Management
Sr. No. Best HR Practice in the organization
Workmen (who are members of union) responses
1 Compensation
2 Organizational culture – comforts at work place (Safe, Healthy
and Happy Workplace)
3 Work from home and flexi working hours
4 Medical facilities for self and family
5 Job security

Sr. No. Best HR Practice in the organization

Middle Management’s responses
1 Compensation
2 Well chalked out career development plan. (Fair Evaluation
System for Employees/ )
3 Rich fringe benefits (leave travel concession/medical
reimbursement, reimbursement of club fees/ housing loans on
soft terms/ provision of residential accommodation /
4 Due recognition and appreciation by the management (Publicize
Good Performances /
5 Comprehensive training facilities including deputation to reputed
professional training organizations

Sr. No. Best HR Practice in the organization

Senior Management’s responses
1 Compensation
2 Organization’s work culture
3 Well developed Authority responsibility relationship
4 Scope for participation in strategic policy decisions
5 Fringe benefits (Executive perquisites like chauffer driven car,
petrol allowance, family holidays, etc.

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General Observations about functioning of HR Departments
During the course of this research the researcher had an opportunity to interact
with various HR functionaries and could get the feel of the current level of HR
functioning. Following are some of the observations which are worth noting.
1. Management institutes face the challenge of reorienting their courses to reflect
newer HRM concepts. The department of management studies at IIT-Madras
has attempted such changes
2. Because of increasing competition that has resulted from liberalization, Indian
organizations have adopted HRM practices both critically and constructively
to foster creativity and innovation among employees.
3. Local units of MNCs have been early adopters of annual performance
appraisals, employee development programs, and relative (normalized)
ranking of performance
4. There is an increased emphasis on HR related activities seen in Indian
organizations.
5. Indian managers like centralized decision making.
6. The majority of the lower level of employees is not aware of their rights and is
exploited by the management.
7. There is a shift taking place in the pattern of HRM practices in Indian
organizations, from the traditional administrative types to a more strategic and
proactive type.

7.2 SUGGESTIONS
As has been seen earlier there are number of factors that one has to take into
account while introducing new HR practices as ultimately it adds to the costs. Over
the years it has been observed that these costs are rising. At the same time we cannot
ignore the importance of retaining the talented employees as well as arresting the
attrition as it again involves heavy costs. Therefore henceforth the role of the HR
Department is going to be very crucial.

The researcher has identified certain key areas which should be addressed by
the HR department in the immediate future.

181
1. Stress Management: Day by day there is an ever increasing tension that the
employees have to bear. Therefore while designing the new HR practice there
should be an element which will ensure that the employees remain tension
free. For this purpose the organization will have to organize specific courses
on stress management on a continuing basis.

2. Focus on Health care: The fall out of mounting tension is the deterioration in
health of the employees. There are several studies which have brought out the
fact that the number of youth suffering from Diabetes, Blood pressure,
depression etc. are increasing. Therefore, the HR department should focus on
the regular health check up of its workforce at periodical interval. Now there
are some multinational organizations which have in their every building an
ambulance, on each floor there is a wheel chair, stretcher, first aid boxes etc.

3. Focus on personality development: The HR department should include in

their training schedules programmes which will help in the overall personality
development of the employees.

4. Family support: Now a day it has been observed that because of the spread of
technology particularly internet, mobile phones, etc. even after returning from
the office, the employee has to devote major time to the office work. In order
to maintain the standard of living usually the better half are also employed.
Therefore, the employee finds very little time to attend to his personal
domestic work. Because of the split families there is no one to look after the
kids. Therefore, this aspect also adds to employee’s stress. Therefore, while
introducing any new Best HR practices this aspect should also be borne in
mind. Apart from babysitting, crèches, for pregnant lady staff separate retiring
rooms are required, for breast feeding separate arrangements are required,
such facilities be introduced.

5. Provision of special arrangement at worksite: The employee finds very

little time to attend to various personal works: for filing of income tax returns,
for renewal of driving license, etc. the organizations can have a tie up with

182
 these concerned departments and make special provision for on the house
arrangements so that the employee gets relief.

6. Job Rotation: There should be a system of job rotation which enables the
employee to acquire knowledge of other departments. The company also stand
to benefit since the workers are qualified to perform a number of different jobs
in the event of an emergency. Due to change in the job the employee also gets
job satisfaction. Job rotation relieves monotony.

7. Provide autonomy: If certain amount of freedom is given to the employees to

do their work in their own way it increases their job satisfaction. It has been
proved that if the people are given freedom to take their own decisions they
work hard and derive job satisfaction.

7.3 ATTAINMENT OF THE OBJECTIVES

The researcher started this research framing certain objectives which have
been dealt in the chapter II on Research Methodology. Now at the end of this research
when the researcher looks back, he feels that the objectives are fully achieved by this
research. He has been able to analyze the Best HR Practices that are being observed in
the identified industries for this study. After the opening of Indian economy since
1991 and with the entry of number of multinational companies in India number of
new Best HR Practices have been introduced in India primarily with the twin
objective to retain the talented employees as the MNCs were experiencing flight of
talented employees as well as to ensure to maintain an edge in the competitive
markets. The HR practices that are being followed by the industries have a positive
impact on the employee satisfaction which ultimately reflects on the employee’s
productivity and the organization’s profitability. Each industry has its own peculiarity
which needs to be taken into account while introducing best HR Practices. E.g. Work
from home facility cannot be considered by the manufacturing industries. It is
possible only in Information Technology industry or to make a generalization by the
service industry. Introduction of the Best HR Practices is also dependent several other
factors like size of the company, organization’s culture, profitability, composition of
the staff etc. Thus at the end the researcher is of the view that the objectives originally
set out have been fully achieved.

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7.4 SCOPE FOR FURTHER RESEARCH
As has been stated in the introduction chapter that the concept of the HR
Practices is not a static one, but it is a dynamic concept. Day in and day out the work
situations are changing fast and therefore the Human Resources Development
Department has to be on its toes all the time to innovate new HR Practices on
continuing basis, which will induce the talented employees to continue with the
organization and to give maximum returns to the organization.

This research has revealed that there is a difference in the working of the
Human Resources Development Departments of the domestic companies and the
multinational companies. Therefore, a research can be undertaken to bring out this
difference in the approach between these two segments which will be helpful for the
domestic companies to improve upon their functioning and ultimately withstand the
fierce competition that has been faced as a result of globalization.

In times to come there is going to be a serious problem of retaining the

talented employees as the business opportunities in the underdeveloped companies are
growing fast. There is a need to collaborate loyalty among employees. Hence a
research is also possible to study this problem and to come out with some practical
solutions.

As has been stated earlier that the process of attrition of the employees started
on a large scale began after five years of India’s adoption of globalization in 1991.
This is adversely affecting the industries profitability. Therefore the researcher is of
the view that a research study can be undertaken to find out the impact of HR
practices on the employees’ attrition rate.

7.5 CONCLUSION
The Indian economy was forced to adopt a structural change process at the
beginning of 1991. Liberalization initiated the process of the opening up of an
otherwise closed economy of India and created a hyper-competitive environment. A
hyper-competitive business environment presented a number of challenges and
opportunities, both external and internal. External challenges and uncertainties

184
included barriers that were difficult to control. Internal challenges like dramatic
advances in technology, changing of organizational forms necessitated redesigning of
human resource practices. To respond to this confusion, Indian organizations adopted
innovative changes in their HRM practices.

India itself is not a homogenous entity. Regional variations in terms of

industry size, business culture, socio-cultural issues and bureaucracy play very
important role. The nature of hierarchy, status, authority, responsibility and similar
other concepts vary widely across the nation.

This research study was undertaken to find out the impact of the best HR
practices on the employees satisfaction and accordingly the primary data was
collected and analyzed. It has been revealed that the Best HR practices have a positive
impact on the employees’ satisfaction. Today the HR Departments are passing
through a transition stage and getting equipped with sharpening the tools of retaining
the talent in the organization.

While studying the Best HR practices it has been observed that the Best HR
practices followed by multinational companies cannot be copied in toto as those are
based on the environment prevailing in their Head Quarter country. In the Indian
context those practices are required to be suitably modified to suit the Indian
environment. Implementation of best HR practices also involved costs and therefore
the Indian companies are required to balance the cost and the benefit that they derive.
It can be said that HR practices that are being followed in India are subjective in
nature. These practices differ from company to company, based on location of the
units, nature of production/services etc. Therefore, HR practice which is considered as
best HR practice for one company may not be so for another company. This needs to
be understood correctly before its implementation.

To conclude that it can be said that HR practice is becoming more and more
challenging day by day. They have to face lot of problems like retention, attraction of
employee, dealing with different cultural people, managing work force diversity,
technological and informational changes to overcome with these challenges training
(Cross cultural training and technological and informational training) is necessary for

185
HR people. To reduce mobility of professional personnel, HR people have to motivate
them from monetary and non monetary techniques. Proper performance evaluation
system and proper career development plans should be used in the organization to
reduce professional mobility.

The end result of best HR practices is achievement of employee satisfaction

that is positive feeling which gives happiness, joy and delightfulness to an employee
and builds confidence in his or her personality. Satisfaction also helps in developing
loyalty among the employees towards their organization.

186
 BIBLIOGRAPHY
BOOKS

1. Arun Monappa, (2011), “Managing Human Resources”, publisher

Macmillan Publishers India Ltd. Delhi

2. Chatterjee, S.R. (2006). Human resource management in India. In A.

Nankervis, Chatterjee, S.R. & J. Coffey (Eds.), Perspectives of human
resource management in the Asia Pacific (41-62). Pearson Prentice Hall:
Malaysia.
3. Gary Dessler & Biju Varkkey, (2011) “Human Resource Management”,
12th Edition, Pearson, New Delhi
4. K Aswathappa, (2010, “Human Resource Management – Text and Cases,
Tata McGraw Hill, New Delhi 110008

5. Khandekar, A., & Sharma, A. (2005). Managing human resource

capabilities for sustainable competitive advantage: An empirical analysis
from Indian global organization. Education & Training, 47(47/48), 628-639.
6. Mirza S Saiyadain, (2010), Human Resources Management, published by
Tata McGraw Hill Education Private Limited, New Delhi
7. Nisha Nair, Neharika Vohra, T. V. Rao and Atul Srivastava (2009) “HR
Best Practices: Manufacturing Sector in India”
SAIL, 2009

8. Raymond A Noe, Amitabh Deo Kodwani (2008), “Employee Training and

Development”, published by Tata Magra-Hill New Delhi
9. Atkinson, J. 1984. Manpower strategies for flexible organizations.
Personnel Management 16
10. (8): 28–31.
11. Ball, K. S. 2001. The use of human resource information systems: A survey.
Personnel Review 30 (6): 677–93.
12. Bjorkman, I. and P. Budhwar. 2007. When in Rome . . . ? Human resource
management and the performance of foreign firms operating in India.
Employee Relations 29 (6): 595–610.

187
13. Ball, K. S. 2001. The use of human resource information systems: A survey.
Personnel Review 30 (6): 677–93.
14. T V Rao (2010), Designing and Managing Human Resource System.
15. T. V. Rao, Raju Rao, (2008), 360 Degree Feedback and Performance
Management Systems

MAGAZINES

1. Perfect Professional,
2. Business Manager

PAPERS

1. Arun Monappa, (2011), “Managing Human Resources”, publisher

Macmillan Publishers India Ltd. Delhi

2. Chatterjee, S.R. (2006). Human resource management in India. In A.

Nankervis, Chatterjee, S.R. & J. Coffey (Eds.), Perspectives of human
resource management in the Asia Pacific (41-62). Pearson Prentice
Hall: Malaysia.
3. Gary Dessler & Biju Varkkey, (2011) “Human Resource Management”,
12th Edition, Pearson, New Delhi

Websites

http://www.bizcommunity.com

http://www.theskillsportal.com

http://www.simplehrguide.com

http://www.wisegeek.com

http://www.talentnet.vn/information-center/hr-articles/best-hr-practices

http://blogs.worldbank.org/impactevaluations/job-satisfaction-matters-and-the-
measurement-of-job-satisfaction-matters

188
 ANNEXURE

1 Name

2 Age 21 to 31 to 41 to 50 51 to 60 3 Gender : Male Female

30 yrs 40 yrs yrs yrs
4 Marital Status: Married Unmarried

5 Contact No.
6 Name of the
Company
7 Employee’s classification

Senior Management cadre Middle Management Jr. Management Cadre

cadre

8 1 2 3 4 5
Post Professional qualification
Graduation (M.B.A. / C.A. /C.S. /
Educational M.C.M./ M.C.A., etc.)
Qualification
9 Working 1 1 to 10 yrs 2 11 to 20yrs 3 .20 yrs. &
Experience above

Current Up to 40,001 to 60,001 to 80,001 to Over Rs.1,00,000

10 Monthly 40,000 Rs 60,000 Rs 80,000Rs 1,00,000 Rs
Salary

189
 ANNEXURE - I
Questionnaire For employees of Large Scale Industrial Units in Pimpri-
Chinchwad area
Please put
mark at the appropriate answer
I. Job Satisfaction: (H-1) (H-2)
Please Kindly put tick mark
in 5 point scale 1 2 3 4 5

Disagree
Disagree

Disagree
Strongly

Strongly
Neither

Agree
Agree

Agree
Nor
Statements

A MANAGEMENT SUPPORT
1 Management sympathetically listen to me
2 Management appreciate my academic knowledge
3 I have cordial relationship with management
4 Management provides me with adequate medical facilities
5 I have informal communication with management
6 Management welcomes suggestions for improvements in
the systems and procedures
7 Management involves me in decision making process.
B WORKING ENVIORNMENT
1 The overall working condition in my department is
satisfactory
2 The sitting arrangements are quite comfortable.
3 The office environment is quite healthy.
4 Organization has proper mechanism for maintaining
discipline for the faculty
5 The organization has rest room facility
6 The organization has proper drinking water facility
C JOB RELATED ASPECTS
1 I love my job
2 I am happy with leave rules of my company
3 I do not feel like giving of this job and taking of some other
job
4 I feel that I have job involvement
5 I think that I have selected the right job for my self
6 My company has excellent training arrangements and gives
extensive training.

190
 Please Kindly put tick mark
in 5 point scale 1 2 3 4 5

Disagree
Disagree

Disagree
Strongly

Strongly
Neither

Agree
Agree

Agree
Nor
Statements

7 In our organization the attrition rate is less.

8 The quality of our product / service has improved a lot.
9 The rejection rate is almost 0%
10 The employer employee relations are very cordial
D MOTIVATIONAL ASPECTS
1 I feel that my boss helps me to achieve the organizational
goal.
2 My Management motivates me to increase my efficiency.
3 Communication seems good within this organization.
4 Work assignments are explained clearly
5 Management takes interest in my suggestions
6 My colleagues are very helpful
7 My job has scope for promotions in time
8 My company sponsors me for various professional training
programmes organized by renowned Training
Organizations.
9 My work provides opportunity to display my talent and
skills
E PERCEPTION ABOUT BEST HR PRACTICES
1 Our HR Department pursues innovative ideas and excellent
HR practices.
2 In our company there is a house bulletin.
3 Our company allows flexi office timings in case of need.
4 For back office employees the company allows work from
home if needed.
5 In our company there is a cafeteria /canteen which provide
healthy food.
6 We get subsidized food in the company.
7 Employees birth days are celebrated in the office
8 Employees’ kids showing excellent academic performance
are felicitated by the company every year.
9 There is a precisely defined and fully transparent rewards
and recognition scheme.

191
 Please Kindly put tick mark
in 5 point scale 1 2 3 4 5

Disagree
Disagree

Disagree
Strongly

Strongly
Neither

Agree
Agree

Agree
Nor
Statements

10 Our company has tie up with NGO and we get an

opportunity to participate in social service.
11 Introduction of best HR practices is an ongoing process in
our company

III. ORGANIZATIONAL CULTURE (H-4)

1 2 3 4 5

Disagree
Disagree

Disagree
Strongly

Strongly
Neither

Agree
Agree

Agree
Nor
Statements

1 I willingly give my time to help others who have work-

related problems.
2 Information is widely shared so that everyone can get the
information.
3 I keep up with developments in the institution
4 Cooperation across different departments of the institution
is actively encouraged.
5 I view failure as an opportunity for learning and
improvement.
6 I believe that facilities can have a positive impact.
7 I always respect other’s views/opinions.
8 Our company really cares about employees benefits.
9 I always express loyalty towards the organization.
10 I feel pride when representing the organization in public.
11 Authority is delegated so that faculties can act on their
own.
12 My department can always provide quick response to the
requests from other departments/other employees.
13 My Head of the Department is available to me when
needed.
14 There is continuous investment in the skills of employees.
15 I offer ideas to improve the functioning of the
organization.

192
 1 2 3 4 5

Disagree
Disagree

Disagree
Strongly

Strongly
Neither

Agree
Agree

Agree
Nor
Statements

16 In our organization, team work occurs among individuals

and between departments when necessary.
17 Our company provides comprehensive training to its
employees.
18 In our organization, there are proper policies and
procedures to help us to serve students in a better way.
19 Our company has systems to measure gaps between
current and expected performance.
20 New and improved ways to do work are continually
adopted.

II. BEST HR PRACTICES & ATTRITION RATE (H-3) (O-1, 2 and 3)

A) Please mention 5 best HR practices (in order of importance) from the following best practices data
bank, followed by your company which you value most?
1. Compensation
2. Comprehensive training facilities including deputation to reputed professional training organizations

3. Due recognition and appreciation by the management (Publicize Good Performances /

4. Fringe benefits (Executive perquisites like chauffer driven car, petrol allowance, family holidays, etc.

5. Job security
6. Medical facilities for self and family
7. Organization’s work culture

8. Organizational culture – comforts at work place (Safe, Healthy and Happy Workplace)
9. Rich fringe benefits (leave travel concession/medical reimbursement, reimbursement of club fees/ housing
loans on soft terms/ provision of residential accommodation /
10. Scope for participation in strategic policy decisions
11. Well chalked out career development plan. (Fair Evaluation System for Employees/ )
12. Well developed Authority responsibility relationship
13. Work from home and flexi working hours

Sr. No. Best HR Practice in the organization

1
2
3
4
5

193
B) Name three best HR practices which you know and expect your company to introduce it in your
company.

III. ATTRITION RATE

What is your perception about the attrition rate of your organization?
HIGH AGERAGE LOW

What is your perception about impact of Best HR practices on the attrition rate?
Attrition rate is arrested Has no relevance to best HR Practices

What is your assessment about the current attrition rate?

___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

194
QUESTIONNAIRE FOR HEAD OF HR DEPT Annexure II

Name of the Company: ______________________________________

Location: _______________________________________________________

Name of the Head of H. R. Dept. ________________________________

Type of industry: Manufacturing / Service Industry
What are the products/services of the company: _______________________
_____________________________________________________________________
_________________________________________________________

Total number of staff: Top Management: ________ Middle Management _____,

Junior Management: ________ Workers: _________ Total _________ 31.3.2012

What are the BEST HR practices introduced in your esteemed organization in respect
of the following? (In case you have a codified document, if permissible, a copy may
be spared, if not, salient features of each aspect may please be furnished.)

1) Job Description: __________________________________

2) Recruitment: ____________________________________________________

3) Compensation: __________________________________________________
_______________________________________________________________

4) Training and Development: ________________________________________

_________________________________________________________

5) Performance Appraisal: ___________________________________________

_______________________________________________________________

195
6) Promotion and Reward: ___________________________________________
_______________________________________________________________

7) Career Planning: _________________________________________________

8) Gender Equity: __________________________________________________

9) Reservation System: ______________________________________________

10) Attrition rate of staff: _____________________________________________

To what extent do HR practices influence employee performance/satisfaction?

Is there any positive change in HR practices after adoption of Reforms?

(Globalization, liberalization, privatization)
If your answer is affirmative please state in brief: _____________________________
_____________________________________________________________________

Do you have a recognized union in your organization? Yes / No

If the answer is affirmative how do your rate the industrial relations?
(Please put
at appropriate rating)

Cordial Excellent Good Average

Does your organization have in house training facility? Yes No.

How the training needs are assessed ______________________________________
___________________________________________________________________

Other than the job training which are the other areas covered by the training
programmes?
_____________________________________________________________________
_____________________________________________________________________

196
Does your organization conduct training programs on concepts like SIX SIGMAS,
QUALITY CIRCLE etc.? Yes No.

Does your organization conduct Exit Interviews? Yes No

If the answer is affirmative, what action is taken on the feed back from such
interviews? ___________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

Place: ___________
Date: ____________ (Signature of the respondent)

197