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Employee Engagement in

“IT Industry”
Business Research Project

Submitted to,
Ms. Tripti Sharma
Submitted By:
Arunanshu Pal
Dhiraj Agarwal
Neha Sikka
Rekha Mittal
Sakshi Gupta
Suruchi Goyal
Abstract
Employee engagement is the level of commitment and involvement an
employee has towards their organization and its values. An engaged
employee is aware of business context, and works with colleagues to
improve performance within the job for the benefit of the organization. It
is a positive attitude held by the employees towards the organization and
its values. The project focuses on how employee engagement plays a
vital role in significantly improving the overall structure of the
organization and hence helps in substantial growth of the organization.

The project presents a generalized view of the growing importance of


employee engagement which is been used as an essential tool to solve
many problems faced by the economic environment such as .Though,
employee engagement impacts every industry ,we have concentrated
our study mainly in one of the most emergent industy,Information
Technology(IT) industry.

The advent of new technology, change in work lifestyle, emergence of


generation y in the work culture and dynamic economic environment has
led to re-think the norms and policies being carried out by the
organization .the hr department has emerged as an important area in the
organization and numerous studies are being undertaken to know the
intricacies involving employee engagement towards their work.

Our research is an outcome of collection of secondary data from various


sources to provide some knowledge towards importance of employee
engagement in IT industry, the salient features of employee engagement
and its impact on the organization as a whole.
Introduction
Employee engagement is a complex equation that reflects each
individual’s unique, personal relationship with work. The term
means different things to different organizations. Some equate it
with job satisfaction, some by gauging employee’s emotional
commitment to their organization but a conclusive nature and
definition of the same cannot be obtained.

To make an effort it can be defined as aligning employees’ values,


goals, and aspirations with those of the organization in the best
method for achieving the sustainable employee engagement
requires for an organization to reach its goals.
Engagement has been hailed as the secret ingredient to
competitive advantage and organizational success since through
full engagement of its employees which is seen as an alignment of
two factors simultaneously

1. Maximum job satisfaction

(“I like my work & do it well”)

2. Maximum job contribution

2. Maximum job contribution

(“I help ACHIEVE the goals of my organization”)

organization look for people who are not just committed


,passionate or proud but also have a line of sight on their future
and are enthused and geared up to use their talents and efforts to
make a difference in their employer’s quest for sustainable
business success.
Industry profile
The IT industry is the blend of various forms of technology to easily
disseminate the information from one place to another making all
the processes in a business all the more easy and convenient.

India is the world’s largest democracy and the second most


populous nation, with a population of over one billion people
Constituting the majority of the landmass of Southern Asia, India’s
ethnic, linguistic, religious, economic, political, and geographic
diversity is greater than perhaps any other country in the world. As
an emerging country one of the factors contributing in putting India
on the global map is The Indian information technology (IT)
industry.

A large number of companies are operating in various areas of IT


mainly BPO, Analytics, Finance & Accounting, Remote
Infrastructure Management, ADM, Cloud Services, The data centre
services, telecommunication to name a few. With the growing
market ,the IT services is expected to grow by 2.4 per cent in
2010, and 4.2 per cent in 2011 as companies coming out of
recession harness the need for information technology to create
competitive advantage.

With growing companies, more employees need to be hired and


the companies that employ technology workers face special
challenges in managing their workforces. These businesses need
highly skilled and motivated workers to operate at peak
performance in a competitive, innovative industry.
Presently, the top companies in it industry shows the following
statistics of current employment which is expected to rise given the
improving market conditions.

Company

INDIAN IT COMPANIES Employees


Wipro 41,857
Tata Consultancy Services 40,992
Infosys Technologies 35,000
HCL Ltd 22,034
Satyam Computer Services 20,000
Cognizant Technology Solutions 17,000
Patni Computers 10,000
BFL MphasiS 8,375
Polaris 6,003
I-flex 4,747

Human capital being the primary asset of these companies it is very


important for the organizations to ensure full employee engagement so
that sustainable growth is ensured.
IMPORTANCE OF EMPLOYEE
ENGAGEMENT IN “IT INDUSTRY”
The nature of IT work puts special pressure on employees. The work is
by definition intense, especially as technology becomes more essential
to every facet of modern global business. System downtime is
unacceptable and rapid technological change creates constant demands
on IT employees to perform at zero error levels.

Because of the 24/7 nature of the work, IT employees require maximum


flexibility in order to meet these high demands. They often need to work
nights, weekends, and overtime, and consequently require sufficient
downtime to recharge after an intense work period. This makes
timekeeping, leave tracking, and wage and hour compliance complex
and demanding for businesses. In addition to the demands of the job, IT
workers are under constant pressure to stay abreast of rapid innovation
as each generation of technology appears and then quickly becomes
obsolete. This requires employers to provide constant training and
development to their tech workers, which can create both budgetary and
time allocation issues.

In Indian context, the meaning of employee engagement is different


considering the difference in the work conditions, background and
culture of the organization as well as adaptability of the employees.
Again, reports suggest there is to be a substantial increase in the
number of recruits with respect to the positive global cues.
KEY FINDINGS

 HCL chief executive Vineet Nayar, whose book Employees First, Customers
Second: Turning Conventional Management Upside Down hit the stands
earlier this month, spends about seven hours a week addressing and
resolving employee queries
 Other studies indicate that companies found the following from their efforts to
study the links between employee satisfaction, productivity, and financial
performance
• Unhappy employees are less productive and more likely to have higher
absence rates
• Satisfied employees are more productive, innovative, and loyal
• Increases in job satisfaction lead to increases in employee morale, which lead
to increased employee productivity
• Employee satisfaction leads to customer retention ultimately to shareholder
return.

 Business results supplemented by the pioneer research by Hewitt


associates which shows that leadership in employee engagement leads to
double digit growth in the companies and vice versa.
 Studies such as Frederick Reich held’s “The Loyalty Effect,” (1996) and
James Heskett, W. Early Sasser, and Leonard Schlesinger’s A Watson
Wyatt Worldwide study found that the practice of maintaining a collegial,
flexible workplace is associated with the second-largest increase in
shareholder value (Nine percent), suggesting that employee satisfaction is
directly related to financial gain.
 Watson Wyatt Worldwide Human Capital Index study suggests that
effective human resources practices lead to positive financial outcomes
more often than positive financial outcomes lead to good practices.
There obviously seems to be a rise in the in almost every positions of
the job profile offered in IT industry along with the identification of needs
of engaging employees for overall organizational structure, so it is
important to address the main issues due to dynamic business
environment which mainly include:

 aging of baby boomers and emergence of generation y


 level of engagement in the company
 level of seniority
 task design
 job tenure

All these attributes lead to different perceptions in terms of employee


engagement and the efficiency of management lies to effectively
observe the need of the individual and provide the benefits that satisfy
his needs to entirely and completely commit him to the organization.
WORK EXPERINECE <3
YEARS
JOB SECURITY

PAY PACKAGE

BRAND
6
27 WORK
ENVIRONMENT
LEARNING

43 DESIGNATION
14
FUTURE
10 GROWTH
OTHERS

WORK EXPERIENCE 3-6 YEARS


9
23 JOB SECURITY
16
PAY PACKAGE
BRAND
18
WORK ENVIRONMENT
34
LEARNING

WORK EXPERIENCE >6 YEARS


JOB SECURITY
10 12
PAY PACKAGE
BRAND
15 WORK ENVIRONMENT
29 LEARNING
DESIGNATION
FUTURE GROWTH
24
OTHERS
Researches shows that the employees differ in their approach towards
attrubute which contribute towards their creating a positive attitude
toward the work environment as the factors mentioned below has
different level of effect on the need of the employees depending upon
the tenure they spent in the organization.

From the above deduction we can see that the people with an
experience less than 3 years or in between 3-6 years value pay package
and work environment respectively as their primary concern while
employees who have been in the company for substantially longer time
give more emphasis to their level of seniority (position) and work
environment as their engagement determining attribute.
Similarly, depending upon the level of engagement employees have
achieved we can determine the characteristics and corresponding
attitude towards their work like:

The Engaged: These employees are at “the apex”


where personal and organizational
High contribution interests align.
& high satisfaction They contribute fully to the success of
the organization and find great
satisfaction in their work. They are
known for their discretionary effort
and commitment. When recruiters call,
they cordially cut the conversation
short. Organizations need to keep them
engaged, because they can transition
over time to any of the three adjacent
segments, a move that would likely
impact workforce morale and the
bottom line.

Almost Engaged: A critical group, these employees are


among the high performers and are
Medium to high reasonably satisfied with their job.
contribution & They may not have consistent “great
days at work,” but they know what
satisfaction those days look like. Organizations
should invest in them for two reasons:
They are highly employable and more
likely to be lured to greener pastures;
they have the shortest distance to travel
to reach full engagement, promising the
biggest payoff.
Honeymooners & Hamsters Honeymooners are new to the
organization or their role — and happy
Medium to high to be there.
satisfaction but They have yet to find their stride and
clearly understand how they can best
low contribution contribute. It should be a priority to
move them out of this temporary
holding area to full alignment and
productivity.
Hamsters: may be working hard, but
are in effect “spinning their wheels,”
working on non-essential tasks,
contributing little to the success of the
organization. Some may even be hiding
out, curled up in their cedar shavings,
content with their position (“retired in
place”). If organizations don’t deal with
them, other employees may grow
resentful or
have to pick up the slack

Disillusioned and potentially exhausted,


Crash & Burners: these employees are top producers who
aren’t achieving their personal
definition of success and satisfaction.
Medium to high They can be bitterly vocal that senior
contribution but leaders are making bad decisions or
that colleagues are not pulling their
Disengaged, low satisfaction Weight. If left alone, they are likely to
slip down the contribution scale to
become often bringing down those
around them. They may leave, but they
are more likely to take a breather and
work less hard.
LEVEL OF ENGAGEMENT ON THE BASIS OF
TENURE
80

70

60

50

40 SINGLE DIGIT GROWTH


EMPLOYEE ENGAGEMENT
30
DOUBLE DIGIT GROWTH
EMPLOYEE ENGAGEMENT
20

10

0
LESS THAN 2-5 YEARS 6-9 YEARS 10-14 15-19 20 OR
2 YEARS YEARS YEARS MORE
YEARS

We can observe that the level of engagement depends upon the tenure
of employee where increase in the number of years in an organization
leads to an automatic increase in the employee engagement. The higher
engagement being noticed in double digit companies.

But, mainly the following contributes to be the essential parameters


looked upon by the employees generally from the organization to
motivate to work beyond their capacity and portray the picture of
organization citizenship behavior.
Career Development- Opportunities for
Personal Development

Organizations with high levels of engagement provide employees with


opportunities to develop their abilities, learn new skills, acquire new
knowledge and realize their potential. When companies plan for the
career paths of their employees and invest in them in this way their
people invest in them.
Career Development – Effective
Management of Talent
Career development influences engagement for employees and
retaining the most talented employees and providing opportunities for
personal development.

Leadership- Clarity of Company Values


Employees need to feel that the core values for which their companies
stand are unambiguous and clear.

Leadership – Respectful Treatment of


Employees
Successful organizations show respect for each employee’s qualities
and contribution –regardless of their job level.

Leadership – Company’s Standards of


Ethical Behavior
A company’s ethical standards also lead to engagement of an individual.

Empowerment
Employees want to be involved in decisions that affect their work. The
leaders of high engagement workplaces create a trustful and challenging
environment, in which employees are encouraged to dissent from the
prevailing orthodoxy and to input and innovate to move the organization
forward.

Image
How much employees are prepared to endorse the products and
services which their company provides its customers depends largely on
their perceptions of the quality of those goods and services. High levels
of employee engagement are inextricably linked with high levels of
customer engagement.

Other factors

Equal Opportunities and Fair Treatment


The employee engagement levels would be high if their bosses
(superiors) provide equal opportunities for growth and advancement to
all the employees
Performance appraisal
Fair evaluation of an employee’s performance is an important criterion
for determining the level of employee engagement. The company which
follows an appropriate performance appraisal technique (which is
transparent and not biased) will have high levels of employee
engagement.
Pay and Benefits
The company should have a proper pay system so that the employees
are motivated to work in the organization. In order to boost his
engagement levels the employees should also be provided with certain
benefits and compensations.
Health and Safety
Research indicates that the engagement levels are low if the employee
does not feel secure while working. Therefore every organization should
adopt appropriate methods and systems for the health and safety of their
employees.
Job Satisfaction
Only a satisfied employee can become an engaged employee.
Therefore it is very essential for an organization to see to it that the job
given to the employee matches his career goals which will make him
enjoy his work and he would ultimately be satisfied with his job.
Communication
The company should follow the open door policy. There should be both
upward and downward communication with the use of appropriate
communication channels in the organization. If the employee is given a
say in the decision making and has the right to be heard by his boss
than the engagement levels are likely to be high.
Family Friendliness
A person’s family life influences his wok life. When an employee realizes
that the organization is considering his family’s benefits also, he will
have an emotional attachment with the organization which leads to
engagement
Co-operation
If the entire organization works together by helping each other i.e. all the
employees as well as the supervisors co-ordinate well than the
employees will be engaged.
MANAGING IT EMPLOYEE
Employment in all IT occupations is expected to increase by about
800,000 jobs through 2016, according to the latest projections by BLS,
up 24 percent compared with 10 percent for all occupations.

In this still rapidly expanding profession, IT workers tend to be constantly


on the lookout for new career opportunities and have both ease of
access to and familiarity with online job searches. For businesses, the
resulting rapid turnover among IT professionals is a constant concern.
Replacing an IT professional is costly not only in lost work time but also
in the loss of institutional knowledge when an employee familiar with a
company’s IT system leaves. Other management problem employers
Face is that career paths for IT employees are indefinable and therefore
a company often cannot offer employees a clear path of advancement in
the shifting landscape. The solution to this dilemma is: “Early and
Frequent communication of the relative benefits of the current
organization over labor market competitors,” combined with reliable
delivery of those benefits. To address the problem of maintaining
adequate staffing levels of quality IT professionals, many companies
have turned to outsourcing and/or off shoring their IT functions In
countries such as India which creates managing the employees in the
industry a tedious job. It has been noticed that the it industry is among
the ones burdening with the problems such as
ATTRTION OF EMPLOYEES

In Asia, organizations faced an overall attrition rate of 16% in


2005. Attrition rate was 14% in 2004 and 10% in 2003.

According to the employees, attrition at the


professional/supervisor/technical level was the highest (39%) and
lowest at the senior/top management level (1% approximately).

Almost every sector in India is facing high rates of attrition these


days. A recent study revealed that employees leave either
because of compensation reasons or due to better growth
opportunities. According to NASSCOM, Indian IT-ITES industry
recorded US$ 39.6 billion in revenues in 2006-07. The revenue of
US$ 49-50 billion has been projected in 2007-08 at a growth rate
of 24-27 per cent. The IT industry's contribution to GDP was 4.8
per cent in 2005-06.

Though, the IT/ITES sector is booming, it is constantly facing high


attrition rates of 25% - 30%. Even the big brands are also facing
the problem of high attrition.

18

16

14

12
TCS
10
INFOSYS
8 WIPRO
6 HCL

0
2008 2009 2010

ATTRITION RATES AT MAJOR IT COMPANIES IN INDIA


The high level of attrition rates has become a major concern for the

growth of the organisatIion.The main causes of attrition being:

 Designing a competitive package of benefits to attract and retain


high-caliber IT employees is a challenge for employers.

 High-stress and irregular demands of the profession

 Employees are particularly concerned about work-life balance and


flexibility of working hours.

 IT professionals also require continuing education and training to


stay current with their rapidly changing field

 Diversity in work culture to meet the globalization scenario of


present time leads to problem with adaptability.
KEY FINDINGS

 According to a research conducted by the state of employee engagement 2008


global report it has been found that hr and sales departments have the most
engaged (36% each), and finance and it have the least (23% and 22%
respectively).

 According to Hewitt’s attrition and retention study Asia pacific 2006; the no.1
reason for this growing attrition rate is compensation unfairness. 21% of the
organizations who took part in the survey said that their employee left the
organization because they got offers from other organizations offering better
pay packages.
 The Indian IT industry has witnessed higher attrition levels over the past few
quarters as increasing global demand for information technology services has
sent firms scrambling for talent.

 . "IT could also be the perceived better brand value of competing employers."
leading to attrition as suggested by said Pankaj Kapoor, an analyst who tracks
HCL at RBS equities (India) ltd
 BLS report indicates that subspecialties such as wireless networking will grow
rapidly through 2016 leading to high rate of attrition in search of talented
candidates."May be a disparity in salary levels or perceived differences in job
satisfaction at its peers could explain the relatively higher attrition levels at
HCL," said Pankaj Kapoor, an analyst who tracks HCL at RBS equities (India)
ltd, a subsidiary of the Royal Bank of Scotland NV.
A SIGNIFICANT STEP
EMPLOYEE ENGAGEMENT
PROGRAMMES
Given the importance of employee engagement in the company to

overcome the challenges faced by the organizations many IT industries

has undertaken programs to facilitate their employees and rewarding

results has been witnessed in lieu of these efforts.

TCS

Employee inputs are solicited through the annual survey called

PULSE, conducted through the Company’s digital portal, Ultimatix.

Opinion polls, Proactive Employee Engagement Programme (PEEP),


open-house sessions, Process Improvement Proposals (PIPs),

grievance mechanisms, and exit interviews are some other mechanisms

to solicit feedback from employees. Cross- Functional Teams (CFTs) of

local Admin, HR and employees are deployed for seeking the feedback.

To ensure appropriate client site work environment, our work contract

provides a baseline, and HR regularly liaisons with client support groups.

Some channels of Employee Engagement in TCS are:

a) Speak Up: Speak Up is a platform for employees to discuss pertinent

matters with the Company’s seniors and to bring themselves closer to

the Company and its management; thus developing the channels of

communication between employees and the Company’s top executives.

b) Grievance Redressal System: Employee grievances are logged through

a centralized grievance redressal system. Branch Grievance

Coordinators and the Corporate Grievance Process Lead perform

weekly and monthly reviews to ensure quality grievance resolution by

the Human Resources Team within the specified timeframe. Ethics

Counselors at regional and corporate levels also play a key role in

handling the sensitive grievances.


c) PIPs: Employees can log PIPs through a link in Ultimatix. To

encourage employee participation in the Endeavour, the ‘Best PIP’

award is given annually.

d) PEEP – Mentoring: PEEP is a mentoring initiative in which employees

connect one-on-one with TCS’s senior management.

e) Propel: Propel provides a forum to discuss issues and ideas, to

promote the ideas and to resolve issues at inception level itself. Propel

covers all employees across TCS. Camps and confluences are

conducted for problem solving, discovery of new ideas, dialogue,

reflection and fun. Through these sessions, the employees are provided

a platform for learning, interacting and problem solving.

f) PULSE: PULSE is the company's annual Associate Satisfaction

Survey, undertaken every year to measure and understand the TCS

Associate's attitude, opinions, motivation, aspirations and satisfaction.

Through PULSE, TCS attempts to find out opportunities for

improvement, invite suggestions, ascertain shortcomings, design

appropriate plans, which finally conclude in action. The steady rise in the

Associate Satisfaction Index (through PULSE) is an indication of TCS

culture and care for its associates.


g) Stress Management: The IT industry is known for its high-pressure

work atmosphere and long working hours, which create high levels of

stress. TCS encourages its employees to de-stress by participating in

Fun@Work which is a term used across TCS to refer to any activity or

programme that is conducted during work. Fun@Work Committees are

formed across accounts which organize picnics, parties and get-

togethers with fun and games. Annual picnics take place in each region

that gives TCSers spread across a region to come together and

celebrate with their families and colleagues.


HCL

Most organizations have a range of programmes to improve the

engagement level of their employees. Vivek Punekar, Associate Vice-

president, HRD, HCL Info systems, lists the initiatives made by the

organization, which start right at the selection stage:

 Choosing the right fit and giving a realistic job preview

 Strong induction and orientation programme

 Rigorous training and development, from technical to soft skills to

leadership development programmes. Apart from this, there are

other forums like enable@HCL which has regular technical/soft-

skill updates. HCL also has a certification programme for freshers

which empowers young engineers


 To keep up the morale of people and drive them towards excellent

performance, HCL has various incentives such as recognition

letters, profit sharing schemes, long performance awards, ESOPS,

building assets like own home

 Regular feedback to all people

 Communication forums like the in-house magazine Intouch,

innovate@HCL (an e-forum to develop entrepreneurship), and

regular surveys and conferences

 To maintain the quality of work-life and a balance between

personal/professional lives, there are recreational activities like

festivities@HCL, get-togethers@HCL, sports@HCL, etc

 An open and transparent culture to empower its people and

develop entrepreneurs.

“The result of these practices is evident through the regular feedback

from our employees collected through conferences and surveys; apart

from the employee engagement survey conducted every second year.

The proof is the latest increase in employee engagement from 54

percent to 64 percent,” informs Punekar.


Conclusion
KEY FINDINGS
 “The Service Profit Chain” (1997) produced the first sets of hard
data quantifying the links between employee satisfaction with
productivity the study concluded that there are direct and
quantifiable links between employee variables (such as satisfaction,
enthusiasm, loyalty, commitment, capability, and internal service
quality), and financial results.
 Gallup reports that highly satisfied groups of employees often
exhibit above-average levels of the following characteristics:7
• Customer loyalty (56 percent)
• Productivity (50 percent)
• Employee retention (50 percent)
• Safety records (50 percent)
• Profitability (33 percent)

 The study measured participants in the five categories,


reviewed turnover rates within the participant population, and
compared this data with the organizations’ financial
performance for the following year. Findings support the idea
that employee satisfaction, behavior, and turnover predict the
following year’s profitability.
 Past research has shown that companies who are better able
to engage their people also deliver better
 Price Waterhouse Coopers reported in April of 2002 that 47
percent of surveyed executives from multinational companies
cite employee satisfaction and decreased turnover as major
contributors to long-term
.
In rapidly changing economic and technological conditions, IT

professionals are critical to every business function it is necessary that

the reward of successfully negotiating the turbulent waters faced by the

organization is retaining a motivated, high caliber IT team with the

institutional knowledge and loyalty is what a top-notch businesses

require.
Bibliography
 http://www.nasscom.in/Nasscom/templates/NormalPage.aspx?i
d=55394 – Growth in IT industry
 http://www.blessingwhite.com/EEE_report.asp - Employee
engagement 2011 report.
 http://www.hewittassociates.com/Intl/NA/en-
US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=8775
– Engagement survey by Hewitt
 http://www.siescoms.edu/images/pdf/reserch/working_papers/e
mployee_engagement.pdf - Survey by Gallup
 http://www.businessweek.com/managing/content/aug2010/ca20
100813_586946.htm - Engagement levels after recession,
Bloomberg analysis
 http://www.davidzinger.com/employee-engagement-50-
companies-to-admire-and-imitate-6603/ - Employee
engagement in 50 companies
 http://www.hcltech.com/employee-first/ - Employee engagement
at HCL
 http://www.infosys.com/iengage/platforms/Pages/employee-
engagement-platform.aspx - Engagement at Infosys
 www.tcs.COM – Engagement at TCS
 http://labour.nic.in/annrep/files2k1/lab18.pdf - Indian Labor
statistics.
 http://retention.naukrihub.com/attrition-rates.html Attrition in IT
industry