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1.0.1 Success of every business enterprise depends on its human resource. Money, material and machines are inert factors; but man with his ability to feel, think, conscience and plan is the most valuable resource. At the same time human elements are most difficult to be inspired, controlled and motivated. The upcoming competition in India, will demand high motivational level of its employees. 1.0.2 Growth of an enterprise is vital for the economic development of the country. This is possible only by maintaining the enthusiasm and motivation of the employees, which is vital for carrying out the operations in most efficient manner. The most successful companies, all over the world have designed their business policies to achieve higher productivity by using potentiality and strength of people. 1.0.3 The basic aim of human policies is the genuine concern for the people. Proper design of human policies is based on the higher responsibilities, personal and positive approach in the total perspective of organisational interest. The world's best companies have established their strength with their people. The employees identify themselves with the company they are working for. This also help in building up their spirit, morale and espirit-de-cops which becomes strength of the company. The culture of excellence thus nurtured contribute to growth with stability and continuous improvement in productivity. 1.0.4 Finding the right man for the job and developing him into a valuable resource is an indispensable requirement of every organisation. Human resources are capable of enlargement i.e. capable of providing an output that is greater than the sum of the inputs. Proper recruitment helps the line managers to work most effectively in accomplishing the primary objective of the enterprise. In order to harness the human energies in the service or organisational goals, every manager is expected to pay proper attention to recruitment, selection, training, development activities in an organisation. Proper promotional avenues must also be created so as to motivate employees to peak performance. Thus, personnel functions such as manpower planning recruitment, selection and training, when carried out properly, would enable the organisation to hire and retain the services of the best brains in the market. 1.0.5 The human resource management is very crucial in respect of information technology services than other manufacturing or marketing enterprises. The IT services are technical in nature and at every stage the human touch is involved. Hence it is well motivated and devoted manpower which is very much essential for the success of IT industry. 1.1 ROLE OF HR MANAGERS
1.1.1. And Some industry commentators call the Human Resources function the last bastion of bureaucracy. Traditionally, the role of the Human Resource professional in many organizations has been to serve as the systematizing, policing arm of executive management. In this role, the HR professional served executive agendas well, but was frequently viewed as a road block by much of the rest of the organization. While some need for this role occasionally remains you would no want every manager putting his own spin on a sexual harassment policy, as an example—much of the HR role is transforming itself. The role of the HR manager must parallel the needs of his changing organization. Successful organizations are becoming more adaptable, resilient, quick to change direction, and customer-centered. Within this environment, the HR professional, who is considered necessary by line managers, is a strategic partner, an employee sponsor or advocate, and a change mentor. 1.1.2 Strategic Partner:-In today’s organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives. The HR business objectives are established to support the attainment of the overall plan and objectives. The tactical HR representative is deeply knowledgeable about the design of work systems in which people succeed and contribute. This strategic partnership impacts HR services such as the design of work positions, hiring; reward, recognition, and strategic pay; performance development and appraisal systems; career and succession planning; and employee development. 1.1.3 Employee Advocate:-As an employee sponsor or advocate, the HR manager plays an integral role in organizational success via his knowledge about and advocacy of people. This advocacy includes expertise in how to create a work environment in which people will choose to be motivated, contributing, and happy. Fostering effective methods of goal setting, communication, and empowerment through responsibility build employee ownership of the enterprise. The HR professional helps establish the organizational culture and climate in which people have the competency, concern, and commitment to serve customers well. In this role, the HR manager provides employee development opportunities, employee assistance programs, gain sharing and profit-sharing strategies, organization development interventions, due process approaches to problem solving, and regularly scheduled communication opportunities. 1.1.5 Change Champion:-The constant evaluation of the effectiveness of the organization results in the need for the HR professional to frequently champion change. Both knowledge about and the ability to execute successful change strategies make the HR professional exceptionally valued. Knowing how to link change to the strategic needs of the organization will minimize employee dissatisfaction and
resistance to change. The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals, and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this. 1.2 LEADERSHIP AND EMPLOYEE INVOLVEMENT. 1.2.1 The main role of leadership was seen as creating a participatory process for employee involvement, to build collective wisdom. Control has given way to collaboration and the old paradigm of promoting competition and motivating through incentives shifted to creating co-operation and oneness amongst people. This is a marked shift to build effective teams. Research shows that six out of every 10 employees like to work in teams. 87 per cent of all Fortune 500 companies use parallel teams and about 100 per cent of all companies use project teams. 1.2.2 Story telling and appreciative enquiry are emerging as a new dimension in positive motivation. Finding out what's wrong seems to be the trend. In Walt Disney, telling success stories is one of the important methods used to remind people of greatness and goodness of the organisation. Leaders in Disney concentrate on quality, values and involvement. Speaking in the plenary sessions, Tom Peters said, " We have transitioned from an asset-based economy to a talent-based economy. The new definition of lay-off is untalented go talented stay. Leaders must realise that talent is equal to brand". His new theory is EVP which means "Employee Value Proposition". 1.2.3 Rosabeth Moss Kanter said, " Human beings are good raw material, they become assets when you train them to increase their knowledge and skills". She added that only a few organisations really train people to make them a success. Seconding this, Mr Peters pointed out how most organisations are not serious about developing people. They spend on an average 26.3 hours per person per year on training. A surgeon, a pilot or an athlete on the other hand spends 10-15 times more on training. 1.2.4 He also stated that the HRD department should be renamed TDFD (Talent Development Fanatic Department) and wealth for this new regime will flow from innovation, not organisation. Quoting Gary Hamel he said, only those employees will succeed who are "certified radical". Only those companies will succeed who create a cause, not a business. Leaders according to him are living individuals, whom people can smell, feel and touch. Their passion for work must be infectious. 1.2.5 Another aspect of leadership if the decision to introduce fun in the work place. Research shows that this reduces absenteeism and builds stronger, deeper and
longer lasting relationships. It appears out of every 100 Fortune companies in the last decade, 69 are dead and only 31 are alive. In a Forbes Magazine study of around 100 companies from '17 to '87, only 39 companies were found to survive. Management of Change:-Research proves that many change models don't consider the human experience during change. The overriding concern seems to be to downsize. It was found that most change processes go through four fundamental stages.
People try to resist or deny change They adapt, participate in the change They attempt to add value The culmination or formation of a new status-quo
1.2.6 A number of presentations revealed that leaders who initiate change must do so with one foot in the future and the other planted in past values. Forgetting tradition must can devalue existing strengths. The success of a change process depends on the skill of the facilitator to create a participatory process to enlist the support of people and address the issue of grief. 1.2.7 E-Learning :- Organisations like Ford Motor, Hewlett Packard, Intel and IBM are using e-learning to increase the knowledge of their people. Companies like Fordstar even manage time differences between countries while conducting virtual class rooms, chats, demos, presentations to communicate new concepts, product details, core values, issues of governance and corporate communities. 1.2.8 CEO's are talking to their people about new ideas and enlisting their support through forums and message boards. This is changing the way people behave and work. The advantages of e-learning are many: It is self-paced, flexible, less expensive, modular and has a huge reach. 1.2.9 Universities like Cornell, MIT, Stanford, etc, have started emphasizing elearning to attract a worldwide audience. Web-centric universities are becoming the order of the day. William Taylor, editor and managing partner of the Fast Pace magazine, said, "There is no going back from back from dotcoms". He was of the opinion that there is a merger taking place between computers and human beings. 1.3 INNOVATIVE PRACTICES IN HR 1.3.1 The Innovative Practices in Human Resources study uncovered 12 practices that are reducing HR costs and improving service quality to employees. Key findings from this research included the need for HR managers to streamline processes, lower overhead costs, and enable their departments to advance from transactional organizations to strategic partners in the business.
1.3.2 Practices and technologies include:
Internet and intranet employee services Strategic human resources Centralized HR departments and call centers 360-degree performance appraisals HRIS systems Employee self-service Voice response systems (VRUs) Resume scanning and Internet recruitment Kiosks Automated time and attendance systems Team policies and development Outsourcing Business process reengineering (BPR)
1.4 LINKING PAY TO PERFORMANCE 1.4.1 Most Human Resource professionals are familiar with the concept of strategy. There is much more concentration and focus today on the strategic outcomes of human resource activity than ever before. The area of compensation is no exception. 1.4.2 Pay for performance systems are becoming more and more popular as senior managers reach beyond the use of compensation systems to deliver pay. There is far more interest in more closely linking the reward mechanisms to the achievement of corporate objectives. Motivation for superior performance is the goal. 1,4.3 In experience, most organizations will profess to a "pay-for-performance" philosophy as a keystone of their compensation system. Such a system requires solid grounding in a clear and documented link between performance and salary increases. Unfortunately, the link between individual performance and pay is frequently nonexistent - "merit" pay is a hollow concept in this regard. 1.4.4 A merit system demands that managers be willing to make distinctions in merit increases based on performance. However, several factors get in the way of this happening. First, the annual salary change is usually a small percentage. Giving the better performer 2% more than the cost of living has little motivation or recognition attached to it. Similarly giving the poor performers 2% less than the cost of living increase is not that much of a penalty. So many managers don't make that distinction it is too much hassle. So everybody gets the same increase.
and has a great deal to do with building managerial and individual competence.5 CHANGING JOB DESIGN IN IT COMMUNITY 1. cost containment and behavioral changes. they wait until the penny literally "drops". 1. most performance appraisal systems are after-the-fact appraisals.4.6 The end result is usually a lot of avoidance behavior.5. particularly for middle and upper management positions but increasingly for teams and individuals lower down in the organization as well.4. is qualitative in nature..4. 1. Technology initiatives within the CSU have resulted in significant advances and improved technical capabilities and efficiency. In other words. The first two areas are quantitative and the third area. Besides. Even though funding levels for higher education have been cut in recent years. at appraisal time. Human resource and organizational systems are also needed to capitalize on and thrive in this rapidly changing work environment.5 Second. . access.4. Managers avoid the appraisal process like the plague. "What is my rating and how much do I get?" is a constant theme in merit systems where salary decisions are tied so closely with the appraisal process. 1. public/taxpayer expectations and the demands for quality education. Sound like a familiar pattern? It is a process that repeats itself year after year. and accountability have grown. service. 1.4. which is gaining in importance.8 They are adopting a system of annual incentive bonuses linked directly to the achievement of corporate and individual objectives in three specific areas. Organizations that are the best and want to separate themselves from the rest. capturing it in a non-threatening way.7 You might well ask is there any way out of this mess? The answer is fortunately yes. making a merit increase recommendation. which is usually toward the end of the year. there are many challenges facing businesses today and these challenges are driving them to find better ways of linking pay and performance to the achievement of corporate results. communicating the evaluation without a fuss and finally.9 Why Is This Transition Occurring? :-Well. It means sitting down and trying to reconstruct what each staff member did.1. are turning away from the merit system and toward an annual incentive system. Although employees profess to want to "know where they stand" they often take issue with the appraisal. they don't listen to the evaluation.1 The California State University (CSU) system is being challenged to meet increasing demands for educational and administrative services through the innovative use of technology and human resource systems. The areas are corporate revenues and gains. managers are required to evaluate the performance of their staff. 1.
5. and video technologies continue to be combined in more interactive and user-friendly formats.3 This article begins by identifying several trends that led to the study. Students expect guaranteed access to technology and to research databases.6 In terms of educational trends. Finally. and decision-support purposes. 1. voice. as data are shared across multiple platforms on a network "highway" that is linked to external information sources. 1.5. increased demand for educational access and (b) changes in instructional delivery methods.5 The technology demands within higher education lead to a complex and dynamic computing environment. many institutions offer distance learning using various transmission media and are incorporating instructional technology into curriculum development. Data. a process often associated with the term "reengineering. and this access has become an issue of social responsibility.4 Three trends have had a direct impact on the development of a strategic job design approach for the information technology community at the CSU: (a) diversification and convergence of technology. 1. the study focused on developing a job design approach that could adapt to changing skill requirements and that would promote the continuous acquisition of skills for knowledge-based employees in information technology. The development phase of the project has been completed. Library and computing functions are becoming increasingly interdependent in "an .1. The goal of improved organizational effectiveness and an orientation towards reengineering and skills guided the development of the proposed job design approach.2 In 1991. and changing work place demands and priorities.5. This has resulted in widely diverse systems and technology within and across the CSU's twenty campuses. Increasingly. Networking and desktop computing have removed traditional boundaries for information access. then describes the overall project within the context of an organizational effectiveness equation. other supporting systems are described for an integrated human resources approach." Secondly. however. 1.5. A new job design approach that was proposed as a result of the study is presented. Academic and administrative computing strategies tend to be at cross-purposes in terms of defining systems requirements. campus systems are becoming more integrated. and the CSU anticipates entering into negotiations with its employee representatives in the near future. including a new classification structure and competency dimensions and measures for defining and evaluating positions. research. the CSU began a study to look at alternative work and job design approaches to meet these challenges. The study focused on the information technology community and how work processes and activities could be better organized to remove artificial barriers and improve organizational effectiveness.5.
1. With fewer people and greater access to information. To quote Thomas P. two key objectives were established for a new job design approach for the CSU: flexibility and skill development. work design. each campus needs the flexibility to achieve its goals by distributing work assignments in a way that optimizes its available skill mix and promotes individual skill development and initiative. educational.S. Fundamentally. workers must possess a skill that they continually upgrade just to keep pace in the professions they choose." (4) The influx of new technology and applications has created a demand for continual learning and adaptation. Two key issues are identified: (1) Economics. Department of Labor in its Secretary's Commission on Achieving Necessary Skills (SCANS) report. organizations are moving responsibility for decision-making downward to the point of service.5. Secretary of the Pennsylvania Department of Labor and Industry:"We've changed from the idea of "one skill. Knowledge requirements are expanding to encompass a greater breadth of technologies and subject expertise. and workplace trends point directly to the need to reengineer organizational structures. Work organization is shifting away from job specialization and a task/procedure orientation. Foley.7 The implications of these technological . (2) Decentralization of responsibility. Reductions in staff are occurring at the same time as transaction volume and service expectations are growing. one job" to the reality of a range of skills that have to apply to a number of different kinds of professions. and processes. Workplace trends.6. Based on these trends and overall organizational goals. maintaining skills to keep pace with changing technology was identified as a critical goal. to more generalized job responsibilities focused on outcome and greater participation on cross-functional teams (3) Another central workplace trend is the "earning and learning" environment described by the U. as well as including process-oriented capabilities such as communication and negotiation skills. Due to the CSU's relatively stable workforce. 1. There is increasing pressure to constrain administrative costs within the "labor intensive cost structure" that exists in higher education.infrastructure of scholarly communication" within higher education.6 OBJECTIVES OF STUDY 1. as presented in Sustaining Excellence in the 21st Century: A Vision and Strategies for College and University Administration. More to the point. well represent the outlook for the CSU.1 Following were the objectives of the study:- .
1. To enlist emerging HR trends in Indian IT Industry 2. The convenient random sampling technique was used for the selection of the respondents. 5.2 In order to measure the employees perceptions of emerging HR trends in different IT organisation. the survey was undertaken.7.1 The study was exploratory in nature. Then the questionnaire was modified accordingly.7. Primary and secondary data available with these organisations was also used for this project study. To find out lacking areas regarding the HRD in IT sector. Interview and discussions were held with the various executive/ Managers/ staff employed in IT sector. analyzed and interpreted to meet the required needs of this project study and presented in Report form. 3. To measure the perceptions of IT sector employees in respect of application of HRD in their organisation. The 100 respondents were selected among the executives and staff working in various IT organizations. .5 Finally. To review literature and research done in this area. the results of the survey has been presented in Tabular form. 1. if desired. The survey was based on structured questionnaire.1. The questionnaire was mainly based on objective type closeended question. the pilot survey on ten randomly selected respondents was undertaken. To suggest the measures to fill the gaps and improve motivation level of employees and HR management in IT industry.7.7. The HRD functions/ activities being undertaken in different IT organisations were also studied. 1. 1.3 Firstly.4 The final questionnaire was administered in person to the extent possible and through mail if needed. All published and unpublished available on the subject matter was consulted. 1.7.7 RESEARCH METHODOLOGY 1. 4. but few open ended questions were also included.
Reaching out to the world market place is no more the challenge in achieving corporate victories.e.1.1 INNOVATION IS THE KEY Information technology and Internet have changed several equations.0. The question is not about what else you can do to retain an employee but it is about making him productive.0. on the move all the time. 2. At this point you operate on your knee i. The value addition will then happen for both the employee as well as the employer resulting in a win-win situation.1 2.2.1 HR IT SCENARIO The web is altering the HRD landscape beyond recognition.0 2. 2. while he is with you. The key to corporate success in the fast changing information era is ‘thinking on your knees’. They camp at some location. A repositioning is required in your decision process with questions like why. Out thinking the competition at electronic . responsibility levels and move on. how and when and not just what. with far more dynamism and with a lot more effectiveness than thinking on your feet. enhance their skills. Opportunities are plenty and the next job opening is only a mouse click away. This means that the new strategy calls for the recognition that no employee is expected to be permanently with you. 2. Normal tenure in any organisation is likely to be between two to three years. This is particularly true of the professional from Software Industry.2 What is this thinking on your knees? Normally as the HR person you know what the situation is and operate from there.0.3 The employees are like gypsies.
2 The key to employee longevity :-Today’s most successful organisations recognize that to fuel growth and sustain a competitive advantage.1. 2. not just being expected to change. analyse.1. which may not necessarily be welcomed by veterans in the organisation. But ‘change is the only Constant’ for guaranteed success. Learning. as the organisation’s major thrust area. Establishing a sense of urgency well ahead of the problem surfacing.2 Organisations recognize that that their ability to gather. The corporate success is sum total of entrepreneurship practiced by your staff. People are responsible People desire opportunities to effect change.1. hiring and retaining top talent. 2. they must make recruiting. · People have a great deal of informational knowledge to contribute to the organisation. must be obviously followed by changes. Competent people deliver the rest don’t matter. Organisations need to create awareness amongst their employees about their vision and then empower them to act on that vision. manage. Encourage the group to work together as a team.3 Points to note: The following points are important and must be properly understood. Form inter-functional core group. Systematic organizational learning should be central corporate philosophy. Successful business organisations have no choice but to promote the performers and let non-performers go.speed is the key to winning corporate battles. distribute information and transform themselves into a learning organisation will provide continuity and ensure for them their leadership role. 2. · · · · · .
New Paradigms In HR · · Business plans must consider HR issues.· · Plan and create short-term win targets – reward employees and recognise achievers. and suddenly we can envision $50-billion software exports target by the end of this decade. Population: 1 billion-plus. Capturing experience and making it available ‘corporate wide’ should be a permanent feature of an organizations.2 2.2 Country: India. If that sounds like too many people. 2.6 million new jobs in the next one year.2.1 WAR FOR TALENT The world’s most popular people resource base seems to be falling short of numbers to meet its own demands. which needs to fill 1. can India’s IT industry achieve its software and services revenue target of $87 billion by 2008? 2. With added pressures of migration and attrition.6 Job responsibilities must facilitate personal development and learning should be institutionalized with well-established knowledge bases. think again. . Plug in English-speaking and low labor costs.5 2. Consolidate improvements through a knowledge base driven system and institutionalise proven new methodologies. if we consider the scarcity of IT manpower across the world. Take a look at the US. already with a 10million-strong IT workforce.1. focus and adapt. Corporate goals must factor in individual career growth and personal growth must be tied to corporate growth and vice versa 2. Not impossible.1.2.
3 4 R’s of HR in IT Table 2. To meet the overall software and services (domestic and export) target of $87 billion by 2008.5 According to industry estimates. majority of the demand for manpower will be in the area of IT-enabled services. You just need smart graduates who can speak English. is struggling with numbers to meet its own demand. the country will require a minimum of 2." 2. in a call center. "IT-enabled services is a wonderful opportunity for India and for such services you don’t need highly skilled professionals.2.2. all you need to do is train them. we can easily meet this demand.000.1 Recruiting Signing bonus Retaining Retention bonus Retraining Job rotation Restructuring Broad job .000 additional manpower.2.3 Japan is no different and estimates close to a million new jobs. not just in quantity but in quality as well. Experts insist that since this sector does not require very highly skilled manpower. While Nasscom puts the requirement at 11.000 (December 2004). the country which has been such a popular people resource for the IT industry the world over.2 million knowledge workers for its domestic needs. Germany is looking for 20. 2.000 workers by 2007. according to the NasscomMcKinsey report. they need to be trained on accents and customer services.70.000 IT specialists and Italy is seeking 15.4 Ironically.2. This implies that the present strength.00. has to increase about twice. MIT says IT-enabled services and e-business will need 12.00. which stands at 12. For instance. 2. Their choice destination—India.
3. broadbanding.3 1. 4. etc.) Recruiting/retaining students Identifying tech skills in all jobs/people (Skill Inventories/assessment) Sharing staff RETENTION FACTORS Quality of boss Direction of department Exposure to new technologies Confidence in the company . 3.3.3. Denial (This is and long term) Misalignment (Ramping up/Ramping down) Timing Treating everyone the same Navigating the bureaucracy Demographics WHAT OTHERS ARE DOING Pooling recruitment efforts Increasing freedom at the dept level (on-the-spot hiring.Finders Fee Alumni connections Non-techs Students Interns Project pay Reduct FTE/same pay Telecommuting Externs Team assignments Skill inventories Competency development Certification descriptions Flexible compensation programs Flexible jobs Positive problemsolving spirit Job sharing Recognition programs 2. 2.1 OBSTACLES · · · · · · 2.2 · · · · · 2.
profit sharing. 6. 9.3.7 ATTRACTING Ø Recruiting sign on bonuses . 8.5 Job security Challenging work Location Access to capital resources Caliber of co-workers Empowerment Department leadership Ability to influence department success TAKING THE LEAD See ourselves as problem-solvers Develop critical skills and competencies in ourselves.3. 2. not seniority Involve everyone. simplify) Utilize the full range of individual talents THE CRISIS Ø Shortage of IT workers COMPETITION Ø Ø Compensation stock options. incentives Alternatives outsourcing 2. 10.4 · · · · 2.3.3. competencies. simplify. 12. retain and reward the best performers (Encourage all to be the best) Increase flexibility Reduce fixed costs Reduce administrative effort (Simplify. Constantly align and balance resources to meet changing needs SEARCH FOR TOMORROW Attract. 11.6 2.6 2. then others Build compensation around results not tasks.3.5. 7.
3.Ø Ø Ø Ø Relocation incentives Recruiters Reduced cycle time for hiring Campus/ job fairs / referrals/ internet 2.8 RETAINING Ø Ø Ø Ø Ø 2.9 Work environment Communication forums Telecommuting Flexible staffing Exciting projects PRACTICES Ø Ø Ø Ø Ø Ø Ø Ø Focus on value Financial and human value Commitment to core strategy Linkage between culture an system Multi dimension communication Stakeholders partnerships Mutual support and collaboration ( teamwork) Risk and innovativeness .3.
3. In particular.10 Ø Ø Ø 2.12 KEY SUCCESS FACTORS Understand people What they want Long term perspective’ Innovative Co ordinated approach Career development I 2. . The changing business environment is demanding new applications.Ø 2.1 OUT SOURCING In the last few years. industry partnerships Curricula: technical skills and career skills ( teamwork and communication) 2. the spread of client-server computing in decentralised organisations involves the development of applications specific to a user's business.11 Ø Ø Passion DEVELOPING Internship programs Training programs Career development programs LONG TERM SOLUTIONS Education. government.3. more and more companies around the world are looking towards India for outsourcing their software requirements.3.4 2.4.
It should enhance and add value to the business.4.6 In 2004-05 more than US$ 2500 million worth of software development work was outsourced to India (The total software exports from India during the year was US$ 4085 million). but a tool for adding value to business. "any use of an outside contractor to replace or extend in-house resources". If IS is high cost and of low value addition.4 Outsourcing is closely linked with corporate strategy. the Indian software companies have substantially helped to cut costs in software development projects or MIS environments.4. It enables organisations to concentrate on their core business. This was 56% higher than outsourcing orders in 2003-04. consider outsourcing". Moreover. It is estimated that the quantum of . timely and adequate to assist decision making at the management level and quality and cost control at the middle and lower levels.2 Outsourcing is becoming a strategy for forward thinking IS managers.2. carry out business re-engineering and provide information that is valid. i. outsourcing has gradually grown beyond the traditional idea of "having a third party running the data centre". all these cost and quality advantages are coupled with the use of state-of-the-art technologies. It has come to mean. keep it within the organisation.5 In the past few years. It is no longer just a means for reducing costs. in-source.e.4. A rule of thumb to start and gain experience is. 2. "if IS is low cost and of high value addition.3 As a result. while maintaining high quality. whenever organisations around the world have outsourced to India.4. 2. since it must support the organisation's major initiative in using IS.4. 2. 2.
0 3.3 With the enormous opportunities for employment.large. Y2K.0. 3. The sudden eruption of opportunities in this area left no time for development of human resources in a planned manner and also software solutions which tended to be more ad hoc than being assured of quality.have been established.1 OVERVIEW OF PROBLEMS The IT revolution is sweeping the world. a very large number of organisations . creating enormous employment opportunities in this area.0. particularly the western world in for nearly a decade now. higher returns per employee and large return on investment/EPS. medium. quality assurance and customisation of existing packages. Correspondingly a large number of training establishments .outsourcing may jump to US$ 5 billion and reach as high as US$ 10 billion by 2010 A. small . sustained encouragement from government. CHAPTER .2 Our main contribution seems to be in the less glamorous areas of value addition.0.D. India joined the bandwagon well in time and smoothly though it is yet to entrench itself strongly in terms of corporate identity and significant share of global revenues in IT.3 HR PROBLEMS OF INDIAN IT PROFESSIONALS 3. maintenance. 3. entrepreneurship with low capital investment and low gestation period for turning profitable.
Even those trained in reputed institutions find their jobs monotonous. The employee. There does not appear to be any respectable ethics . leading to depression. among others.0.6 Despite these deficiencies. 3. most of which are in the cities and towns to cash in on the enthusiasm of the urban middle class. There are about 500 private engineering colleges besides IITs. The problems are further compounded by a lack of proper teaching faculty in most colleges and franchises.E. 3.0. bank guarantees. M. for their part.retention period even in good companies has been shrinking and is found to be three to six months. and M. employee's stock option (ESOP) and housing facilities.4 A number of higher level courses have also been started mainly through private organisations besides the existing government (State/Central). 3.Tech. In view of the apparent demand that appears to be exaggerated. RECs. students prefer software jobs mainly with an eye on the pay-package and urban locations. most of the programmes (barring a few by government institutions and IITs) are very expensive. universities. Jobs offered by the software industry have demonstrated the above factors as they are able to carry out the projects with persons of any background and levels of attainment.Sc. almost beyond the reach of a middle-class student.. resort to innovative methods to wriggle out of their contracts.0. job-placements are poor. but with a few months training either prior to employment or a short training during probation. M. university and autonomous institutions. The companies also try to devise methods to make their employees almost captive with surety bonds.and cyber cafes have come up. colleges offering courses such as MCA.. The employees.5 Except in well-established institutions. Yet candidates and their parents strain themselves financially to pursue the courses hoping to get an attractive job (financially) which remains a mirage by and large.
If it is no on-line. To go abroad and become rich has become the motive of most of the employees even if the job does not offer any intellectual satisfaction. GMAT etc. The various steps of the proposed approach are as follows: i. The scenario appears to be quite fluid with a predominant western bias in all the activities concerning software profession with scores of Indian boys getting lured and sucked into the vortices created by the opportunities in this area 3. 3.1. Aptitude tests could be conducted by reputed institutes like IITs/ private organizations/HR agencies for prospective professionals preferably ``online'' like GRE.even among companies as well as the employees in this type of free for all market.2 Recruitment process :-Without going into the deficiencies of the present practices. spend their earnings on expensive lifestyles. vehicles.7 Even those software professionals. or physically at regular intervals and scores are given. 3. who are offered good financial packages.1. the periodicity can be a month or two and . and credit card syndrome and find themselves disenchanted on all fronts including the intellectual front.0.1 3. It should also be a cause for concern to project beyond the present software boom as to what happens to all these if the opportunities decline. The manufacturing and hard-core engineering sector has also shrunk in terms of job opportunities and attractiveness. the following suggestions are made to improve the process in terms of efficiency. availability of manpower and equity to all the aspirants irrespective of the fact where they got educated.1 MAIN PROBLEM AREAS The significant problem areas which may be contributing to the present scenario and can be addressed can be identified as given in the succeeding paragraphs.
This will also avoid the unnecessary expenses for (which are high) the candidates. The selection can be conditional that he acquires certified skills in the required areas either through training in house or through approved training agencies and establishments. ii. vi. C. Small companies can form some kind of a cooperative society wherein software professionals' services can be tapped and steer clear and manpower shortage (less than critical mass levels). vii. v. B. Interviews can also be conducted simultaneously either physically or over the phone or by video conference and selections completed. companies can ask for a video clip for subsequent interview if required. .) with the ratio of maximum pay within reasonable and realistic limits. This will also ensure that there is a focus on proper training and optimal deployment of time. Once selected and the candidate joins the organizations. iii. who are presently spending lot of money with a hope of employment. effort and finances. Based on scores and preferences of the candidates (career counselling).the validity can be for an year or so which can also be fixed based on general agreement. iv. all member organizations should adopt a code of conduct such that the candidates stays at least for a period of one year. There can be general norms of pay packages depending on the reputation of the companies (classifying them as A. The selection process can thus be continuous and commensurate with the requirements thus avoiding idle inventory. D by any reputed management institute like IIM etc.
iii. Incentives like ESOP. Advantages:. viii. Opportunities for creative work in the first phase particularly for those who are bright.1. Cost effective and efficient process. ii.3 Encouraging simplicity and excellence. Opportunities to lessen the monotony and improve interpersonal relationship and mixing and group activities. Make the employee more versatile with wider perspective and flexible for easy deployment in areas needing strengthening. iii. Conducting effective career development programs regularly.1. vi. iv. v. opportunities of higher education.The companies/organizations should take adequate interest in the career development of the employee by suitable HRD approaches which should include the following: i. Proper deployment of skills optimally. lucrative assignments and challenging projects. Periodic rotation of the rolls and jobs if possible. ii.3. Opportunities for retraining and upgrading the skills. vii. and have an aptitude and come with a good pedigree say from IITs. Retention can be improved.The suggested processes in 4 and 5 above can be expected to have the following significant advantages: i. Idle employment can be minimized. .2 Post employment care:. iv. 3.
The aptitude tests can become richer and more representative over a few years and as the question bank becomes larger and random on-line questioning can be introduced which is more objective like GRE. Reduces the mushrooms of training shops with inadequate faculty. viii. ix. This will help in decreasing the pressure on engineering education as otherwise the skills acquired by the candidate at a great cost in branches other than computer sciences are wasted and lost for good if employed by the software industry. The process also enables a realistic assessments of needs and demands regularly and meeting them even at short notices. .2. xii. vii. The process is ideally suited for candidates to plan their careers with adequate preparation in core areas. pedigree and background. xi. vi. The candidate's skills are moulded to suit the needs of the job and need not waste time. money and efforts. level also and train the candidate with or without stipend in courses where he could get admission for his degree. x. Particularly useful for small firms which can also operate in the cooperative society mode.Sc. Equitable opportunities to all aspirants irrespective of location.v.2 3. GMAT 3.1 LONG TERM PERSPECTIVE These tests can be conducted at the end of 10+2 level or B. This may also give the manufacturing and core engineering sector jobs reasonable chance to attract willing and bright candidates.
0. and can play a catalytic roll in streamlining the processes for an efficient HRD in this vital area of software manpower which is a national resource.0.3. CHAPTER .1 EMPLOYEE STOCK OWNWERSHIP PLAN Employee Stock Ownership Plan(ESOP): is a defined contribution employee benefit plan that allows employees to become owners of stock in the company they work for.2 How does ESOP work? .4 IT SECTOR COMPENSATION METHODS 4. While otherwise they may face the problems of lack of adequate manpower (below the critical mass level) because of less attractive pay and perks they are able to offer.0 4. 3. 126.96.36.199. IIMs and MNCs.4 Renowned organizations like IITs.3 The idea of forming a cooperative society by small firms may prove to be beneficial as the facilities and manpower can be shared optimally.2 It may be a good idea to have a National Test for Software Talent similar to science talent test which can be sponsored by NASSCOM and such other interested groups 3.
The ESOP operates through a trust. . 4.1.1 STOCK OPTIONS Stock Options: The ‘right’ to purchase stock at a given price at some time in the future.1. 4. Nonqualified stock options (NSOs) in which the employee must pay income tax on the 'spread' between the value of the stock and the amount paid for the option. The company does not receive a tax deduction for this type of option. Usually the price of the option (the 'grant' price) is set to the market price of the stock at the time the option was sold. or position. The company may receive a tax deduction on the 'spread'. setup by the company. The amount they may cash out may depend on the vesting requirements. The amount of stock each individual receives may vary according to pre-established formulas based on salary. 2. that accepts tax deductible contributions from the company to purchase company stock 2.1 4.2 How do Stock options work? An option is created that specifies that the owner of the option may 'exercise' the 'right' to purchase a company’s stock at a certain price (the 'grant' price) by a certain (expiration) date in the future. Incentive stock options (ISOs) in which the employee is able to defer taxation until the shares bought with the option are sold.1. The contributions made by the company are distributed to individual employee accounts within the trust. the option becomes more valuable. The employees may ‘cash out’ after vesting in the program or when they leave the company. Stock Options come in two types: 1. If the underlying stock increases in value. 4. service. 3.
1 GAIN SHARING Gainsharing is a technique that compensates workers based on improvements in the company's productivity.2.2.2 How does Gainsharing work? A Company shares productivity gains with the workforce. Because this pay is only implemented when . dependent upon the availability of funds and other constraints. 4.2 · · · Advantages OF Merit Pay :Allows the employer to differentiate pay given to high performers.3.2 4. regardless of funding source.3. The merit increase program is implemented when funds are designated for that purpose by the institution's administration.3 4. productivity or costs).If the underlying stock decreases below the 'grant' price or stays the same in value as the 'grant' price. . then the option becomes worthless. Workers voluntarily participate in management to accept responsibility for major reforms. This type of pay is based on factors directly under a worker’s control (i.e. Allows the employer to satisfactorily reward an employee for accomplishing a task that might not be repeated (such as implementation of new systems). 4. 4.. Allows a differentiation between individual and company performance. Gains are measured and distributions are made frequently through a predetermined formula.1 MERIT PAY Merit Pay is an incentive plan implemented on an institutional wide basis to give all employees an equal opportunity for consideration. 4.
4. What are examples of Gainsharing formulas? · 4. gainsharing plans do not adversely affect company costs.3.2 How does Profit sharing work? The company contributes a portion of its pre-tax profits to a pool that will be distributed among eligible employees.3. This article will start you down the path to choosing and implementing the plan or plans best suited to your company.gains are achieved. 4.1 PROFIT SHARING Profit Sharing is an incentive based compensation program to award employees a percentage of the company's profits. . 4.4. usually based on specific needs and goals. And yet others say they'd like to have an employee ownership plan. Equal levels of production with less effort. However.4 4.3 Calculate gain in hours: The actual hours worked minus the expected hours (for the given level of output) equals the gain in hours.4. The amount distributed to each employee may be weighted by the employee's base salary so that employees with higher base salaries receive a slightly higher amount of the shared pool of profits. Generally this is done on an annual basis 4. 4. but they're not sure what it might be.3 How to Choose an Employee Stock Plan for Your Company:Many companies we encounter have a pretty good idea of what kind of employee ownership plan they want to use.2 · · What are the 'Gains' that are measured? Increases in production with equal or less effort. sometimes they might be better served by another kind of stock plan.
participate in ESOPs.4. contributes cash to buy its own stock (often from an existing owner). A "broad-based" plan is one in which most or all employees can participate. the employee can "exercise" the option and buy those 100 shares at $10 each. an ESOP generally must include at least all full-time employees meeting certain age and service requirements. Employees gradually vest in their accounts and receive their benefits when they leave the company (although there may be distributions prior to that). Stock options can be given to as few or as few employees as you wish.5 ASSESSMENT OF PLANS EMPLOYEE OWNERSHIP 4. But if the stock price never rises above the option price. Like profit sharing and 401(k) plans. All of these uses have significant tax benefits for the company. So if an employee gets an option on 100 shares at $10 and the stock price goes up to $20. Employees do not actually buy shares in an ESOP. sell them on the market for $20 each. Over 8 million employees in over 11. the company contributes its own shares to the plan. the employee will simply not exercise the option. and pocket the difference. with the company repaying the loan.5.5. Perhaps .3 A stock option plan grants employees the right to buy company stock at a specified price during a specified period once the option has vested. has the plan borrow money to buy stock.1 FOR BROAD-BASED Let us begin by quickly reviewing the main possibilities for broadbased employee ownership. which are governed by many of the same laws. and the sellers.2 An employee stock ownership plan (ESOP) is a type of taxqualified employee benefit plan in which most or all of the assets are invested in stock of the employer. mostly closely held. Instead. or. most commonly. the employees. 4.5.000 companies. 4.
Unlike stock options. employees can choose to buy stock at a discount from the lower of the price either at the beginning or the end of the ESPP offering period. and the company may make a matching contribution. As with a stock option. are in ESPPs. 4. almost always in public companies. company stock may be an investment choice for the employees and/or the means by which the company makes matching contributions. Companies usually set up ESPPs as taxqualified "Section 423" plans. is designed to provide the employee with a diversified portfolio of investments. Frequently. presently hold stock options.5. a 401(k) plan is a tax-qualified plan that generally must include all full-time employees meeting age and service requirements.5. The employees can choose among several or more choices for investments. It gives employees the chance to buy stock.4 An employee stock purchase plan (ESPP) is a little like a stock option plan. Like an ESOP. which means that almost all full-time employees with 2 years or more of service must be allowed to participate (although in practice. many choose not to). both public and private. usually through payroll deductions over a 3. 4.7 to 10 million or more employees in thousands of companies. however. Perhaps several million employees in a few thousand companies participate in plans with a heavy company stock component. Many millions of employees. 401(k) plans may be combined with ESOPs (these are called "KSOPs").to 27-month "offering period. which can increase the discount still further. .5 Section 401(k) plan is a retirement plan that. unlike an ESOP. the discounted price built into most ESPPs means that employees can profit even if the stock price has gone down since the grant date." The price is usually discounted up to 15% from the market price. where the company match is an ESOP contribution. after acquiring the stock the employee can sell it for a quick profit or hold onto it for awhile.
. Leslie Hakala authored the study.4. She began the project as an NCEO research intern and completed it for a thesis requirement at Harvard University. but it did find that these costs declined as employee ownership plans matured.6 EMPLOYEE OWNERSHIP : COMPANIES PAY LESS FOR WORKERS' COMPENSATION COSTS 4.1 A study has found that employee ownership companies have lower workers' compensation insurance rates than comparable non-employee ownership firms. The study was unable to ascribe a specific causal relationship between employee ownership and lower workers' compensation costs.6.
employers spent over $48 billion on workers' compensation costs. .S. The ratings compare an individual firm's experience with other firms of its type. but in most programs. At the same time.6. Cost increases were partly attributable to increased benefits mandated by state workers' compensation insurance reforms.6. more employees sought to cover health problems under workers' compensation. If the rating is better than average. if it is worse. insurance premiums will be lower.9% per year in the mid-1980s. insurers attempt to provide employers with an incentive to limit safety problems by developing an experience rating.In 1989. as employer provided health care coverage has declined. Many people believe there has been increased fraud as well.. they will go up. 4.4. U.3 Workers' compensation programs vary from state to state.2 Background:. the last year for which we have data. These costs grew at 16.
6. a bad record would rate higher. A company with a good record would have a rating under 100%.4. The experience modification rate is determined by looking at actual experience modified by a size weighting factor. Except for a few who have benefitted from older .4 Theoretically. actual experience is given a lower weight because a single incident can skew results dramatically. have now been left holding pieces of paper that are. we looked only at California firms. excluding the most recent year (because data are generally not yet available). All those who happily grabbed at ESOP's issued by their companies last year. For larger firms. in some cases. the adjustment may be very small.1 Will I ever get to exercise my stock options? It's the one question haunting IT industry professionals sitting on piles of employee stock options.6. the average rating is somewhat under 100.7. Rates are assigned to all companies based on their industry classification. the average experience modification factor for any business classification should be 100%.4 In this study. The experience modification rate is set for each year based on three years of past experience. 4. for smaller firms. In California. In practice. 4. These rates are then adjusted for companies with a premium above a certain level according to their actual experience. These numbers are then multiplied by the manual rate to set the premium. This means smaller and less risky firms are not assigned an experience modification rating." an insurance rate expressed as a percentage of every $100 of payroll.7 IT COMPANIES WRITE NEW ESOP STORY 4. This weighted experience rating now becomes the "experience modification" figure. worth a fraction of the price at which employees brought into them. employers are assigned a "manual rate.
those employees saw their company's scrips scaling new heights. 4. But all this was merely on paper. an employee who exercised his option now. had to sit back and watch their share prices hit the roof while they waited out the lockin period. the company has terminated the ESOP scheme.2 According to a study carried out by Nasscom . for instance.7.8 4. your friends. and could not be sold. sell at the current market price. The . neighbours and everyone else went up like a blimp. the great ESOPs dream is turning out to be a nightmare.3 A year later.schemes like Infosys 1994 scheme. and pocket the difference between the exercise price at the time of the grant. Last year. It's resulted in a situation where employees have been left holding NIIT options which they would have to exercise at a price of Rs 1. 4.000 IT staff last year holding around 18 million ESOPs valued at roughly Rs 12.8. would have to buy at the exercise price.4 Theoretically. Employees who were given ESOPs at the prices prevailing during the IT boom. And employees brought into them.593 or Silverline options. the situation's something like this.000 crore($3 billion) at February '00 prices. and the current market price. 4. even at the higher prices that the grants came from. Now. they could not benefit as the ESOP's had 1-2 year lock-in periods. companies issued ESOPs in cartloads. they can exercise their options that is sell them. which they would have to exercise at a price of $25. there were more than 10. At VisualSoft. all employees who were granted options have returned them to the company.7.7. Consequently. 4. if you were given ESOPs in an IT company.1 ESOPs HARDLY BENEFICIAL At the height of the IT euphoria in the markets. and pay out the difference.
and 10 in the case of Aptech.0 5.9.532 116 120 4.5 1 NA 3 1-2 5 1 5 Current Price (Rs) 162 41 54 72 164 1. that is converted into shares. which about 1.1 ESOP IN INDIAN CONTEXT Recent ESOPs No of Shares (Lakh) Plan Exercise Plans (Rs) NIIT Silverline Patni HCL Infosys SSI Wipro Infosys VisualSoft Polaris 18.593 425 245* 289 555 2. . For instance.5 3." which about 2.lock-in period.1 EMPLOYEE STOCK PURCHASE PLANS (ESPPS) Employee stock purchase plans (ESPPs) include both tax-qualified "423 plans.2 8.5 30. also known as the vesting period in industry jargon. and nonqualified plans. To make matters worse.6 0.2 1.500 companies offer.5 19.5 Aug '04 Nov '04 Dec '04 Aug '04 Sep '04 Oct '04 Oct '04 Aug '04 Aug '04 1. within a specified time frame after the lockin period expired. Our estimates are based on data from ShareData's Equity Compensation Trends in America (1991).249 NA 480 Vesting Period (Yrs) 1 1.400 companies offer.485 3. this was one year in the case of Silverline. some companies has specified that the option had to be exercised.397 6.9 4.5-3. Table 4. in the period during which the employee cannot convert his or her option into shares.1 10.
Hewitt Associates' On Employee Stock Ownership (1996). For example. and multiplied that number by the average percentage of participation in the plans (34% for 423 plans and 17% for nonqualified ESPPs). stock option.2 Multiple Plans: Many companies offer multiple e plans.1. and many employees participate in more than one plan.2 Subsequent studies by the General Accounting Office and by academics in Washington State and New York found the same . Hence. multiplied those numbers by the average number of employees in the companies (13. 4. To estimate the number of employees covered under the plans.9. and the National Association for Stock Plan Professionals' Stock Plan Design and Administration Survey (1998). especially the more recent studies. A 2000 study by Joseph Blasi and Douglas Kruse at Rutgers Univerity found that ESOP companies grow 2. we took the total number of companies offering plans. many ESPP participants are also in 401(k).10. Almost all companies with ESPPs are public.790 for nonqualified plans). 4.207 for 423 plans and 17. and sales per employee. the total number of participants in all these plans is definitely not the total of the numbers in the "Number of participants" column. A 1987 NCEO study of 45 ESOP and 225 non-ESOP companies found that companies that combine employee ownership with a participative management style grow 8% to 11% per year faster than they would otherwise have been expected to grow based on how they had performed before these plans.10 ESOPS AND CORPORATE GROWTH 4.10. 4.3% to 2. The study looked at all ESOP plans set up between 1988 and 1994 for which data was available.4% faster than would have been expected without an ESOP for sales. Hewitt Associates' Survey Findings: Employee Stock Purchase Plans (1998). or other equity compensation plans. employment.
. A characteristic of modern socio-economic development has been major the increasingly dominant role of service sector .10.3 Studies on participative management alone find a small positive impact on performance. 5.. CHAPTER – 5 SURVEY ANALYSIS 5.and IT belongs to service sector.0 5. A developing country like India can ill afford continued conflict ridden. So. IT sector is fastly growing industry in India and HR requirements of Indian IT Industry are quit different from traditional industrial sectors.relationship. 4.0.2 Indian IT sector is contributing a large in employment and foreign exchange.7% per year greater than what a model of their predicted performance would have been. And employees are the best judge of the HR policies of any organisations..1 SURVEY BACKGROUND HR management gets best out of its employees to meet the organisation's goals.0. rigid and litigation oriented Industrial Relations. but not nearly enough to explain the synergy between ownership and participation these other studies have found. A 1999 study for Hewitt Associates by Hamid Mehran of Northwestern University found that the returns on assets for 382 publicly traded ESOP companies was 2. its HR needs must also be properly identified. What employees perceive about the emerging HR trends of the IT organisations has been measured..
1.1 RESPONDENTS PROFILE . The questionnaire included both open ended and close ended questions.5. The views expressed by the respondents has been analysed in the succeeding paragraphs. education-wise and type of functions wise has been provided here in the succeeding paras. Percentage Of Respondents 11% 23% 34% . 5. The responses given by the respondents were recorded on the questionnaire. both non-technical and technical. About 100 respondents were selected by convenient random sampling technique.1.1. The education qualification wise distribution of the employees who agreed for responding to our questionnaire has been given below in Table 5.3 To measure the success and failures of emerging HR trends of Indian IT Industry a structured questionnaire was designed for this purpose.1 5. interview with the employees randomly selected from IT organisations to the extent possible and also through mail.2 IT industry requires higher level of education standards. The questionnaire used is placed The procedure at adopted for data Appendix collection was "I". Table 5. .1 RESPONDENTS PROFILE The main features of the employees randomly selected sex-wise.Tech/ BCA etc.EDUCATION-WISE (%age) Respondents' Qualification Non-Tech Graduate and Below Non-Tech Post Graduate B.0. The 54 per cent of the respondents were Male and 46 per cent of the respondents were Female 5.
2 WHETHER HR NEEDS OF INDIAN IT INDUSTRY ARE DIFFERENT Through the Question No. 5.2 of the questionnaire the respondents were asked to comment whether the HR needs of Indian IT industry are different from traditional HR Management systems.2.3. 5. Only13 percent are working in HR and Personnel Management area.2.1 . The responses have been tabulated in Table 5. Hence. the HR needs of IT industry must look after the software professionals at priority. Being highly educated employees are very sensitive in pride and behaviour.Tech/MCA Etc. TOTAL 5. The majority of respondents (69%) view that HR needs of IT industry are different from old economy sector and HR managers in IT industry has to keep this into mind. It was a direct question in Yes/NO/No comments format and IT professionals selected for survey were asked to tick one of the choices as mentioned.3 32% 100% In the similar fashion the job wise profile of the respondents has also been compiled and the same is tabulated below in the Figure 5.M. As per Figure the IT industry is dominated by the software professionals And next computer hardware and marketing services of IT are sharing the other half.1.
It has a negative effect.4. As per Figure-5. 46% of the employees opined that newer compensation methods has a positive effect in IT industry while 19% said that it has a negative effect on employee welfare.1 EFFECT OF NEW COMPENSATION METHODS The IT industry has been devising newer compensation methods like Profit Sharing/ Stock Options etc. Whether these new compensation techniques are positively effecting or not was the key point in our next question. . 26% view that it has no major effect and 9 percent has replied in CAN NOT SAY.1 In has been found that in many organisations the management ignores the employees welfare for their profit sake and does not give proper attention towards employees career and prospects.TABLE-5.4.. 5.3.3 5. to increase employee welfare and retentively.4 WHETHER IT INDUSTRY HAS POSITIVE ATTITUDE TOWARDFS ITS EMPLOYEES 5. In the initial stages when IT Industry was sunrise it was mostly welcomed by the employees and when IT industry share prices has gone down.3 Emerging HR TRENDS OF INDIAN IT INDUSTRY ARE DIFFERENT (%age) Respondents' Observation Yes No Can not say TOTAL Percentage Of Respondents 69% 23% 08% 100% 5. What is the state of affairs in IT Industry in India .
5. The data collected is given below in Table-5.5 STATE OF GRIEVANCES HANDLING IN INDIAN IT INDUSTRY The respondents responses to the status of grievances handling mechanism was through an indirect approach. TABLE . disagree and strongly disagree.was quizzed from our valued learned respondents.1 GRIEVANCE HANDLING IN . In the Question No.5. The respondents views are given below Table 5. 5 of the questionnaire the respondents were to comment upon the positive hypothesis that grievance handling is done properly in the IT organisation.6 5.5.5 WHETHER IT INDUSTRY HAS A POSITVE ATTITUDE TOWARDS ITS EMPLOYEES (%age) Respondents' Observation Yes No No comments TOTAL Percentage Of Respondents 43% 48% 09% 100% 5.6.5. So. The five choices provided were strongly agree. agree. TABLE . there is a profit motive operating more than employees proper welfare management in Indian IT Industry. no comments. While 48% of the respondents' replied in negative and 43% gave a positive reply. The results are mixed one.
1 TOP MANAGEMENT AWARENESS Whether top management awareness about working conditions of the employees and state of working conditions in the organisation was measured through next question. 65% of the respondents view that the top management's are not aware or little aware about the employees working conditions in the IT organisations Only 6 percent vouched that top management is very well aware about the nature of working conditions and 18 percent say "Much Aware". 5. Only 14 percent have nothing to comment.7 TOP MANAGEMENT AWARENESS (%age) Respondents' Percentage Of .INDIAN IT INDUSTRY IS PROPER (%age) Respondents' Observation Strongly Agree Agree No Comments Disagree Strongly Disagree TOTAL 5.7 shows the response. 39 percent agree that The grievance handling IN Indian IT industry is done properly and remaining 26 percent disagree with it.5. Table-5.6 5. Table 5.6.2 Percentage Of Respondents 12% 39% 14% 26% 09% 100% Only 12 respondents strongly agree to the statement and similarly a small number of 9 respondents strongly disagreed with this.
2 Percentage Of Respondents 14% 44% 28% 14% 100% 58 percent of the respondents has graded it very good and above.8 STATE OF EMPLOYEE EMPLOYER RELATIONSHIP IN IT INDUSTRY (%age) Respondents Grading Excellent Very Good Satisfactory Poor TOTAL 5. The state of employee-employer relationship is not very encouraging. The state of employee employer relationship in Indian IT Industry was measured through the next question.7.1 Table 5.7 EMPLOYEE EMPLOYER RELATIONSHIP IN IT INDUSTRY Cordial employee employer relationship is very essential in the upcoming highly competitive economy.Observation Not at all aware Very little aware Some what aware Much aware Very much aware TOTAL Respondents 20% 45% 11% 18% 06% 100% 5. The employment of modern technology requires more positive and effective relationship between . 5. While 42 percent consider it satisfactory and below.7.
Few suggestions were listed and one column was open ended to express their any other suggestion.9. the opportunities outside are very attractive. Their opinions in this regard are presented below in "YES/NO/NO COMMENTS" format in the Figure 5.8 EMPLOYEES RETENTIVITY IN INDIAN IT INDUSTRY The most of the employees of IT sector are highly educated and sensitive in nature. Whether Indian IT Industry is able to retain its employees was the next opinion query from the randomly selected IT industry employees.5.1 suggestions.1 5. Moreover.management and the employees. 5.10 list outs all the 5. what the employers has to do for retaining its professionals was asked from the respondents. 5. Only 23% viewed that they are able to retain the employees. Indian IT Industry has very effective employee employer relationship.10 SUGGESTIONS FOR INCREASE RETENTIVITY IN INDIAN IT INDUSTRY .8.9. The Table 5. 5.8.2 61% of the employees view that Indian IT companies are unable to retain its employees due to most attractive avenues outside.9 HOW TO INCREASE EMPLOYEES RETENTIVITY IN INDIAN IT INDUSTRY As has been observed in general and also concluded in previous paras that the IT sector employees in India are very quickly jumping the employment. I TABLE. So.
The comfortable majority of respondents (89%) strongly agree or agree with the hypothesis that Indian IT sector requires separate labour management system/ regulations.2 A 22% of the respondents has suggested to increase the wages to international level to increase employees retentively in Indian IT industry.1 "Existing Indian labour Laws/Rules are not strictly applicable to Indian IT Industry as IT sector employees are quite different from general factory workers and are well educated and trained.11 . This hypothesis was presented to the respondents. 21% of the other suggestions included lateral induction from lower the institutes and better HR management.11. The employees responses have been tabulated below in the Table 5.9. 10% suggest increase profit sharing and 11% suggested more promotions. 5.Respondents' Suggestions Increase wages to international levels Increase foreign postings Increase profit sharing More promotions Others TOTAL Percentage Of Respondents 22% 36% 10% 11% 21% 100% (%age) 5. Low TABLE-5.10. 36% want more foreign postings.10 APPLICABILITY INDIAN LABOUR LAWS Y OF EXISTING IN INDIAN IT INDUSTR 5. While only minority of 13% has given divergent views. They were to respond upto which extent they agree or disagree. The separate Labour to whether as a Laws/Rules should be designed for IT Industry:.
it is concluded that old agitational techniques of trade unions are not desired in IT industry. As has been listed in Figure 5. 5.12. 67% of the respondents has given their reply in No and 28% answered in affirmative.11. . was also asked from the employees.5.12 below.1 EFFECTIVENESS OF OLD AGITATIONAL METHODS IN IT INDUSTRY Whether IT industry can afford old traditional trade union methods of agitations like Strike or Gherao etc. While 35% has a negative viewpoint.11 5.1 TABLE .INDIAN IT INDUSTRY REQUIRE SEPARATE LABOUR LAWS/ RULES (%age) Respondents' Observation Strongly Agree Agree No Comments Disagree Strongly Disagree TOTAL Percentage Of Respondents 57 % 32 % 02% 07% 02% 100% 5. 53 percent of the respondents has replied in Yes to this question. 5. So. The question was direct in nature of Yes or No.13. The table above clearly indicates that excessive competition is observed as harmful to the employees prospects. 5% has ticked No Comments choice.13 .12 EFFECT OF EXCESSIVE COMPETION IN INDIAN IT INDUSTRY Whether excessive competition in Indian IT sector is harming the overall long term prospects of employees in this sector The respondents opinion is tabulated below in Table 5.
14 ROLE OF TRADE UNION IN IT INDUSTRY (%age) Respondents Grading No Trade Union Single Trade Union Multi Trade Union Only welfare association Total Percentage Of Respondents 21% 13% 09% 57% 100% .EXCESSIVE COMPETITION IS HARMING EMPLOYEES LONG TERM WELFARE (%age) Respondents' Observation Yes No No Comments TOTAL Percentage Of Respondents 53% 35% 12% 100% 5. The Table 5.13.13 5. Table 5.14 shows the responses in this regard.1 ROLE OF TRADE UNION IN IT INDUSTRY The respondents were asked to comment upon whether Indian IT Industry needs a trade union or management's are looking after the employees interest in the best possible manner.
5.2 The largest 57 percent of the respondents view that there should be only welfare association in Indian IT industry.0.13. they have been growing phenomenally in workforce strength. very good. but not in the IT industry. good. The growth of IT companies worldwide depends on its people and the intellectual capital it possesses. To make it big in the global software market. Small may be beautiful.2 ‘Knowledge workers’ has become a buzzword in today’s IT scenario . 65% of the respondents were in positive grading of excellent. A company-wise break-up of this figure reveals that nearly 525 companies .0.1 In the end respondents were asked to give their overall assessment/ grading of emerging HR trends in Indian IT Industry.0. 6.0 OVERVIEW 6. India needs to increase its mass of knowledge workers. And if we look at the top software exporters. in other words. While 35% gave a assessment of satisfactory and poor CHAPTER . but what the industry needs is experts in niche areas. it is this skilled workforce that will make all the difference.609. The overall assessment on five point scales of excellent..14 OVERALL ASSESSMENT OF EMERGING TRENDS IN INDIAN IT INDUSTRY HR 5.1 The era of skill-based workers has arrived but if India wants to truly move to the global arena. satisfactory and poor is tabulated below in the Table 5. The establishment of Indian Institutes of Information Technology is definitely a step ahead in the right direction. very good and good. 5. 9 percent of the respondents opted for multi trade union. 6.14.6 SUMMARY AND CONCLUSION 6.15.3 The total human resource strength of the IT industry as a whole stands at 425. In the knowledge era and a skill-based economy. In the era of cutting-edge technologies. it has to spruce up its workforce. it has become imperative that human resources become one of the most essential ingredients of success. 21% need no trade union and 13% like single trade union only. persons with domain expertise.
Wipro.0. As the things are running fast. As it is commonly known that man learns by experience. The life has become quite fast and speed of provisioning of different services has also increased. has created lot of revenues for government and number of avenues for employees. But all this activities are being managed by number of well qualified professionals.0.0. likings and attitude. Due to availability of written down procedures and rules by the learned managers. 6.6 These fastness of services and higher level of education/training standards are not easy to manage by the organisations concerned. so they have to be managed fast. The introduction of computers has changed the way of life every where. So. The hundreds years of organisational management experience has been converted into a standard personnel management and industry and service organisations are following these HR techniques for their organisational management. emerging HR trends of Information Technology industry can not be managed properly by the old traditional HR techniques . it was felt that HR managing was not so typical. They may be from computer hardware developers. As we already know that Human Resource Management of the organisation deals with the individuals putting their hardwork to meet the organisations goals.7 Different type of employees/workers recruited for different level of working has to be managed in different styles.000 employees. Managing people is the toughest element of any organisation than land. Every human beings has its own degree of preferences. 6. 6. .0. HR managers has to take care of all these things in mind while dealing with the number of people working in the organisation. At least 40 companies have more than 1. if remedial actions are not taken immediately. 6.constituting 35% of the IT industry employ an average of 58 persons each.4 Despite having abundant English-speaking skilled workforce. 750 companies constituting 50% of the industry employ an average of 275 persons each. due to existence of old conservative . machinery or finances. Indian IT industry is not an exception. HCL and Infosys have staffs above 5. software engineers or marketing managers. including work places and our homes.0. an acute shortage of skilled workforce will affect the country’s software exports in the long run.5 Geometrical growth of Information Technology in the world as well as India. while some very big companies like TCS.and protective labour laws it is not possible to meet the ever-growing international competition in the IT services.8 But. and 150 companies constituting 10% of the industry employ an average of 726 persons each. 6. Moreover.000 each. 50 years of introduction of computers has provided us the areas to be additionally addressed by the HR managers in IT sector.
1. So. 65% of the respondents view that the top management's are not aware or little aware about the employees working conditions in the IT organisations .5 As per 48% of the respondents IT organisation has more concern for profit motive than employees welfare.1.4 The IT industry has been devising newer compensation methods like Profit Sharing/ Stock Options etc.6 51 percent of the respondents strongly agree/agree to the statement that grievance are handled properly in the Indian IT industry.1. HR managers mainly in developing countries like India find it very difficult to retain and recruit their manpower. 6.0.6. 6.1 RESPONDENTS OBSERVATIONS 6. The survey was conducted by randomly selecting 100 persons working in Indian IT Industry.1. The majority of respondents (69%) view that HR needs of IT industry are different from old economy sector and HR managers in IT industry has to keep this into mind.9 Hence. to increase employee welfare and receptivity. 6. The main reason for this is high standards of education and professional training required for this industry. 46% of the employees opined that newer compensation methods has a positive effect in IT industry while 26% said that it has a negative effect on employee welfare. Though over the period few schemes has flopped like ESOP due to heavy fall in company share prices. While 33% think otherwise.1. the IT industry has been devising newer Personnel Management/ HR techniques which specifically meet the needs of IT industry. the employees opinion survey regarding status of HR management in Indian IT Industry and success of emerging HR trends was conducted through the use of a structured questionnaire.1. 6. computer hardware and marketing services of IT are sharing the other half. It was observed that IT industry is dominated by the software professionals (46%)..7 Whether top management awareness about working conditions of the employees and state of working conditions in the IT organisations. Employee Stock Option Schemes ESOP etc. Secondly.1.2 The 54% of the were Male and 46 per cent of the respondents were Female. The respondents observations in this respect are described in brief in the following paragraphs 6. HR managers worldwide has devised handsome compensation methods like Profit Sharing.1 As given out in Chapter 1.3 The respondents were asked to comment whether the HR needs of Indian IT industry are different from traditional HR Management systems. 6. Only 4 percent vouched that top management is . there is excessive job demands for developed countries in this sector and high wage standards. While 43% were not agree to this proposition 6.
6.very well aware about the nature of working conditions and 16 percent say "Much Aware". While 35% gave a assessment of satisfactory and poor . 6. The separate Labour Laws/Rules should be designed for IT Industry:.1. The overall assessment on five point scales of excellent. 58 percent of the respondents has graded it very good and above.11 Whether excessive competition in Indian IT sector is harming the overall long term prospects of employees in this sector .9 Whether Indian IT Industry is able to retain its employees was the a query from the randomly from IT industry employees. 61% of the employees view that Indian IT companies are unable to retain its employees due to most attractive avenues outside . 36% want more foreign postings. 6. very good and good. While 35 percent has a negative viewpoint.1. 21% need no trade union and 13% like single trade union only.1. very good. 6. While 42 percent consider it satisfactory and below. This hypothesis was presented to the respondents. 9 percent of the respondents opted for multi trade union. good. 6. 10% suggest increase profit sharing and 11% suggested more promotions. 65% of the respondents were in positive grading of excellent. 6.10 Existing Indian labour Laws/Rules are not strictly applicable to Indian IT Industry as IT sector employees are quite different from general factory workers and are well educated and trained.1. 22% of the respondents has suggested to increase the wages to international level to increase employees retentivity in Indian IT industry. satisfactory and poor. The majority of respondents (89%) strongly agree or agree with the hypothesis that Indian IT sector requires separate labour management system/ regulations.8 Cordial employee employer relationship is very essential in the upcoming highly competitive economy. Further.1.9 The largest 57 percent of the respondents view that there should be only welfare association in Indian IT industry. 21% of the other suggestions included lateral induction directly institutions and better HR management.1. 67% of the respondents has opined that old agitational techniques of trade unions are not desired in IT industry. While only minority of 11% has given divergent views. The state of employee employer relationship in Indian IT Industry was measured through the next question.10 In the end respondents were asked to give their overall assessment/ grading of emerging trends of Indian IT industry. 53 percent of the respondents has replied in Yes to this question.. The state of employee-employer relationship is very encouraging..
Nicholos. Mustafi. Macmillon New Delhi.. E. 2. 6. & Mc. HR managers in Indian IT Industry must keep the sensitive nature of IT professionals and state of greater opportunities outside in mind for devising HR policies for their organisations China is also entering this area vigorously and Government of India must help Indian It industry to meet this challenge.R. .3. N.6. Lawler III. "Manpower Planning". Gelden. Kothari. The Comparative Administration Research Institute of the Centre for Business and Economic Research. The Problem of Unemployment.. College of Business Administration. I.2 CONCLUSION 6. Edward E. Human Research Planning: Technology.1 Hence. T. John Wiley. Moreover. Burack. 5. India is considered one of Super Power in Information Technology and allied fields.Y. & Aaron." In Handbook of Industrial and Organizational Psychology." Report Writing for Business and Industry". "Overcoming Resistance to Change. 512-532.1983 4. 1948. Paul. BIBLIOGRAPHY 1.. Hence. 1931.2. Macmillan. Director. 3.niques".H.al. pp. Coch. Vol. Majority of world leaders in IT sector are outsourcing their requirements from Indian IT Industry and recruiting Indian IT professionals.P. 7. Kent State University. (Rand-Menally..J. "Control Systems in Organizations. CR. Douglas. P Stevan. the Indian Government must allow the Industry to meet international competition and desired environment in respect of Labour Laws and financial rules must be liberalized for this Indian IT Industry. Policy and & Change." Human relations. French. Wiley Eastern Limited. New York. 1976). 1973. Lester and John R. CK 1981." research Methodology Methods and tech. John et. Business Communication Service. it can be concluded that Emerging HR trends of Indian It industry are quite different from the old economy industry. Edwards. "Statistical Methods in Managerial Decisions.
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