2011

CONTROL SYSTEM AT
ITC LIMITED
AN ILLUSTRATION OF ITC HOTELS

By:
Kumar Shreyas

MCS PROJECT
12/28/2011
Contents
CHAPTER 1 .................................................................................................................................................... 4
ITC LIMITED ................................................................................................................................................... 4
INTRODUCTION ......................................................................................................................................... 5
Organizational Structure ........................................................................................................................... 6
Chairman ............................................................................................................................................... 6
Executive Director ................................................................................................................................. 6
Non-Executive Director ......................................................................................................................... 7
Divisional / SBU Chief Executive Officer (CEO) ..................................................................................... 7
Control System .......................................................................................................................................... 7
ROLES OF VARIOUS ENTITIES ................................................................................................................ 7
Advantage ............................................................................................................................................. 8
Compensation Management and Remuneration System......................................................................... 8
Remuneration committee..................................................................................................................... 8
Composition .......................................................................................................................................... 8
Remuneration of Directors ................................................................................................................... 8
Employee Stock Option Schemes.......................................................................................................... 9
Service Contracts, Severance Fee and Notice Period ........................................................................... 9
MANAGEMENT COMMUNICATION SYSTEM........................................................................................... 10
Policies on human Rights .................................................................................................................... 10
Policy to Ensure Respect for Human Rights Policy across the Supply Chain ...................................... 11
Policy to Prevent Discrimination at Workplace .................................................................................. 12
Policy on Freedom of Association ....................................................................................................... 13
Policy on Information and Consultation on Changes.......................................................................... 13
CHAPTER 2 .................................................................................................................................................. 15
ITC HOTELS .................................................................................................................................................. 15
STRATEGIC BUSINESS UNIT “ITC – FIVE BRANDS OF HOTELS” ................................................................ 16
ITC HOTELS- Luxury Collection, Organizational Structure ...................................................................... 16
The organizational structure at ITC Hotels ............................................................................................. 17
COMMUNICATION .................................................................................................................................. 18
PERFORMANCE MANAGEMENT AT ITC HOTELS ..................................................................................... 18
MANAGEMENT CONTROL IMPLICATIONS .............................................................................................. 20
MANAGEMENT STYLE AND SIX SIGMA CONTROL SYSTEMS ................................................................... 20
1) WOW Ratios .................................................................................................................................... 21
2) Model Areas .................................................................................................................................... 21
3) Process Line Charts ......................................................................................................................... 21
Culture and the Management Style ........................................................................................................ 21
AWARDS .................................................................................................................................................. 22
CHAPTER 1

ITC LIMITED
INTRODUCTION
ITC is one of India's foremost private sector company. It is rated among the World's Best Big
Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine,
among India's Most Respected Companies by Business World and among India's Most Valuable
Companies by Business Today. ITC also ranks among India's top 10 `Most Valuable (Company)
Brands', in a study conducted by Brand Finance and published by the Economic Times.

The ancient Imperial Tobacco Company of India Limited is ITC Limited today, which was
incorporated in August 24, 1910. The growth after long way in its journey, ITC posted its face as
sector leader in its traditional businesses and spread over more than 60 locations across India.
ITC has commitment with the business segments of

 Cigarettes
 Hotels
 Paperboards & Specialty Papers
 Packaging, Agri-Business
 Packaged Foods & Confectionery
 Information Technology
 Branded Apparel
 Personal Care
 Stationery
 Safety Matches and
 Other FMCG products.

The Company's ownership progressively Indianised and the name of the Company was changed
to I.T.C. Limited in 1974. As a strategic backward integration for ITC's Cigarettes business, the
Packaging & Printing Business was set up in 1925. It is today India's most sophisticated
packaging house. Spanning the network the company has 11 Subsidiaries, 3 JV Companies and 2
Associate Companies. The Company continuously endeavors to enhance its wealth generating
capabilities in a globalizing environment.
Organizational Structure
Board of Directors

Audit Committee Compensation Committee Nominations Investor Services

Committee Committee

Corporate Management Committee

Divisional/Strategic Business Unit (SBU) Corporate Functions, each headed by a HOD

Management Committees, each headed by a
Divisional/SBU Chief Executive

Businesses include: Corporate Functions include:

FMCG, Hotels, Paperboards, Specialty Papers Planning and Treasury, Accounting, Legal,
& Packaging and Agri-Business Secretarial, EHS, Human Resources,
Communications, Internal Audit and
Information Technology

Chairman The Chairman of ITC is the Chief Executive of the Company. He is the Chairman of
the Board and the CMC. His primary role is to provide leadership to the Board and the CMC for
realizing Company goals in accordance with the charter approved by the Board. He is
responsible, inter alia, for the working of the Board and the CMC, for ensuring that all relevant
issues are on the agenda and for ensuring that all Directors and CMC members are enabled and
encouraged to play a full part in the activities of the Board and the CMC, respectively. He keeps
the Board informed on all matters of importance. He is also responsible for the balance of
membership of the Board, subject to Board and Shareholder approvals. He presides over General
Meetings of Shareholders.

Executive Director The Executive Directors, as members of the CMC, contribute to the strategic
management of the Company’s businesses within Board approved direction / framework.
Executive Directors assume overall responsibility for the strategic management including
governance processes and top management effectiveness for businesses / functions reporting to
them. In the context of the multi-business character of the Company, an Executive Director is in
the nature of a Managing Director for those businesses and functions reporting to him. As an
Executive Director accountable to the Board for a wholly owned subsidiary or its wholly owned
subsidiary, he acts as the custodian of ITC’s interests and is responsible for its governance in
accordance with the charter approved by the Board.
Non-Executive Director Non-Executive Directors, including Independent Directors, play a
critical role in imparting balance to the Board processes by bringing an independent judgment on
issues of strategy, performance, resources, standards of Company conduct etc.

Divisional / SBU Chief Executive Officer (CEO) The Divisional / SBU CEO for a business has
the overall executive responsibility for its day-to-day operations and provides leadership to the
DMC / SBU MC in its task of executive management of the business.

Control System

Strategic BOARD OF
DIRECTORS
supervision

Strategic Corporate
Management
management Committee

Executive Divisional /
Strategic Business
management Unit (SBU) Chief

ROLES OF VARIOUS ENTITIES

Board of Directors (Board) The primary role of the Board is that of trusteeship to protect and
enhance shareholder value through strategic supervision of ITC, its wholly owned subsidiaries
and their wholly owned subsidiaries. As trustees, the Board ensures that the Company has clear
goals relating to shareholder value and its growth. The Board sets strategic goals and seeks
accountability for their fulfillment. The Board also provides direction and exercises appropriate
control to ensure that the Company is managed in a manner that fulfils stakeholders’ aspirations
and societal expectations. The Board, as part and parcel of its functioning, also periodically
reviews its role.

Corporate Management Committee (CMC) The primary role of the CMC is strategic
management of the Company’s businesses within Board approved direction / framework. The
CMC operates under the strategic supervision and control of the Board.
Divisional Management Committee (DMC) / SBU
Management Committee (SBU MC): The primary role of the DMC / SBU MC is executive
management of the Divisional / SBU business to realize tactical and strategic objectives in
accordance with Board approved plan.

Advantage
The three-tier governance structure ensures that:

(a) Strategic supervision (on behalf of the shareholders), being free from involvement in the task
of strategic management of the Company, can be conducted by the Board with objectivity,
thereby sharpening accountability of management;

(b) Strategic management of the Company, uncluttered by the day-to-day tasks of executive
management, remains focused and energised; and

(c) Executive management of a Division or Business, free from collective strategic

responsibilities for ITC as a whole, focuses on enhancing the quality, efficiency and
effectiveness of the business.

Compensation Management and Remuneration System

Remuneration committee

The Remuneration Committee of the Board, under the nomenclature 'Compensation Committee',
inter alia, recommends to the Board the compensation terms of Executive Directors and the
senior most level of management immediately below the Executive Directors. This Committee
also has the responsibility for administering the Employee Stock Option Schemes of the
Company.

Composition

The Compensation Committee presently comprises five Non-Executive Directors, four of whom
are Independent Directors. The Chairman of the Committee is an Independent Director.

The names of the members of the Compensation Committee, including its Chairman, are
provided under the section 'Board of Directors & Committees' in the Report and Accounts.

Remuneration of Directors

Remuneration of Chairman and other Executive Directors is determined by the Compensation

Committee comprising only Non-Executive Directors. The recommendations of the
Compensation Committee are considered and approved by the Board subject to the approval of
the Shareholders. The Chairman and Executive Directors are entitled to Performance Bonus for
each financial year up to a maximum of 200% and 150% of their consolidated salary,
respectively, and as may be determined by the Board on the recommendation of the
Compensation Committee, based on qualitative and quantitative assessment of Company
performance.

Non-Executive Directors are entitled to remuneration by way of commission for each financial
year, up to a maximum of 6, 00,000/- individually, as approved by the Shareholders. Non-
Executive Directors' commission is determined by the Board based, inter alia, on Company
performance and regulatory provisions and is payable on a uniform basis to reinforce the
principle of collective responsibility. Non-Executive Directors are also entitled to sitting fees for
attending meetings of the Board and Committees thereof, the quantum of which is determined by
the Board, within the limit approved by the Shareholders. The sitting fees, as determined by the
Board, are presently 20,000/- for attending each meeting of the Board, Audit Committee,
Compensation Committee, Nominations Committee and Sustainability Committee and 5,000/-
for each meeting of the Investor Services Committee. Non-Executive Directors are also entitled
to coverage under Personal Accident Insurance.

Employee Stock Option Schemes

The Company granted 42,30,600 Options during the financial year to the eligible employees of
the Company and some of its subsidiary companies. Pursuant to the Shareholders' approval on
23rd July, 2010 to the Bonus share issue, in the ratio of 1 Bonus share for every existing 1
Ordinary share, adjustment was made to the outstanding Options with respect to the number of
Options and the exercise price, in accordance with the Employee Stock Option Schemes of the
Company read with the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, consequent to which
1,92,80,432 Bonus Options were allocated during the year.

Service Contracts, Severance Fee and Notice Period

The appointment of the Executive Directors is governed by resolutions passed by the Board and
the Shareholders of the Company, which cover the terms and conditions of such appointment
read with the service rules of the Company. A separate Service Contract is not entered into by
the Company with those elevated to the Board from the management cadre, since they already
have a Service Contract with the Company.

There is no separate provision for payment of severance fee under the resolutions governing the
appointment of Executive Directors who have all been drawn from amongst the management
cadre. The statutory provisions will however apply. In terms of the Articles of Association of the
Company, a notice of one month is required to be given by a Director seeking to vacate office
and the resignation takes effect upon the expiration of such notice or its earlier acceptance by the
Board.

ITC also empowers the employees with the following options like:

 Gives them an option to switch division if the person can perform better in some other
division.
  Company also encourage cross business movements for the capable employee.
 A constant focus is given on the career development of the employees- the organization
provides opportunities for learning and growth, it is the individual's responsibility to
ensure he/she enhances his/hers competencies to shoulder higher responsibilities.
 There is no age barrier when it comes to growth.
 They have a proper performance system in place - The cornerstone of the performance
management system is the Appraisal System. The individual agrees to performance
objectives at the beginning of the year with his/her superiors. These objectives naturally
flow from the objectives of the unit/business. At the end of the year the individual's
performance is assessed against the objectives set. The appraisal attaches as much
importance to ''how'' results were achieved as to the results themselves. The rating is
determined by the manager's boss and endorsed by his boss. Therefore, two individuals
are involved in assessing a manager's performance

The appraisal process also gives the individual an opportunity to share in a formal
manner his/her own career aspirations and what the individual needs from the
organization to enhance
 Their compensation package is very comprehensive - Apart from the monetary
component which comprises Consolidated Salary and Supplementary Allowance,
managers are provided with quality accommodation, medical assistance for self and
family, leave travel assistance, etc. At middle and senior levels, managers are provided
with company maintained cars and the facility of a club membership for business
purposes.

All managers are members of ITC's Retirement Funds, the Pension Scheme being one of
the most attractive in the country.
Other benefits include the facility of holiday homes, assistance for further education/self
development etc.

MANAGEMENT COMMUNICATION SYSTEM

ITC management communication system that it follows across the groups to avoid asymmetry of
information within the group. This it has a very robust and a clear cut defined communication
strategy that it follows:
Policies on human Rights

ITC believes that all its employees must live with social and economic dignity and freedom,
regardless of nationality, gender, race, economic status or religion. In the management of its
businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as
enshrined in existing international standards such as the Universal Declaration and the
Fundamental Human Rights Conventions of the ILO.
Policy
ITC upholds international human rights standards, does not condone human rights abuses, and
creates and nurtures a working environment where human rights are respected without prejudice.

Implementation
The Corporate Human Resources function of ITC is responsible for the Human Rights Policy
design, implementation and updation.

The policy is implemented at all locations of ITC through a set of separate policies and
procedures covering each of the main constituents of human rights applicable at the workplaces.

Monitoring & Audit

The assessment procedures for different constituents of this policy are defined against each
specific policy.

Consideration of Human Rights Impacts Across the Supply Chain

As a large and multi-product enterprise whose products are benchmarked nationally and
internationally, ITC's main supply chains can be grouped as follows:

1. For all its operations, technology, machinery and equipment are sourced from
reputed and globally benchmarked suppliers/vendors who are expected to follow
internationally accepted norms and standards on human rights.
2. ITC's major businesses are vertically integrated across several Divisions. A
substantial part of the supply chain is therefore internal through strategic backward
linkages. Common values relating to human rights performance are shared across
this supply chain.
3. Being a major agri-based company, the agriculture sector is a major supplier of
inputs for its operations. The bulk of agricultural commodities are procured from
state controlled trading platforms and the open market.
4. A very small proportion of ITC's business consists of supply chains comprising local
vendors and suppliers. The policy framework for such entities is enunciated
separately in 'Policy to Ensure Respect for Human Rights across the Supply Chain'.
Policy to Ensure Respect for Human Rights Policy across the Supply Chain

ITC provides products and services of superior quality and value by sourcing its technologies,
equipment and inputs from reputed international and Indian manufacturers and suppliers.
Common values, relating to human rights performance, are shared across the entire supply chain
because ITC is committed to the importance of a socially responsible and accountable supply
chain.

Policy
ITC nurtures an internal working environment which respects human rights without prejudice.
Likewise, it expects its business partners to establish a human rights compliant business
environment at the workplace.

Implementation
The responsibility for implementation of this policy rests with the Divisional Chief Executive of
the concerned business and the Unit Manager. The policy is communicated internally through
policy manuals and intranet portals, and externally by the HR personnel of concerned units to
vendors/suppliers.

Monitoring & Audit

ITC has established a policy intent for mapping/monitoring progress and performance of existing
and potential vendors/suppliers on human rights performance.

Policy to Prevent Discrimination at Workplace

ITC acknowledges that every individual brings a different and unique set of perspectives and
capabilities to the team. A discrimination-free workplace for employees provides the
environment in which diverse talents can bloom and be nurtured. This is achieved by ensuring
that a non-discrimination policy and practice is embedded across the Company in line with
corporate principles and benchmarked business practices.

Policy
ITC's approach to its human resources is premised on the fundamental belief in fostering
meritocracy in the organization which, pari passu, promotes diversity and offers equality of
opportunity to all employees. ITC does not engage in or support direct or indirect discrimination
in recruitment, compensation, access to training, promotion, termination or retirement based on
caste, religion, disability, gender, age, race, color, ancestry, marital status or affiliation with a
political, religious, or union organization or minority group.

Implementation
The policy is communicated to all employees through induction programmes, policy manuals
and intranet portals. The custodian of this policy is the head of each operational unit and
Divisional Chief Executives of the respective business. ITC's complaints resolution procedure is
premised on the freedom of employees to approach higher officials beyond his/her immediate
superior. For the unionized employees, compliance of the policy is ensured through a robust
grievance handling procedure and the presence of a union that brings violations to the notice of
the unit HR head.

Monitoring & Auditing

The accountability for the application of the non-discrimination employment policy rests with
the Unit Head who reviews anti-discriminatory complaints annually or on a case-by-case basis.
The Corporate Human Resources function conducts non-discrimination reviews annually on a
sample basis with unit heads and through on-site assessments.
Policy on Freedom of Association

ITC's culture is characterized by cooperative relationships and high employee involvement that
relies on building partnerships and interdependence. Adhering to these principles has helped
build, sustain and strengthen harmonious employee relations in the organisation.

Policy
ITC respects the employees' right to organize themselves into interest groups as initiatives of the
workers, independent from supervision by the management. In keeping with the spirit of this
Policy, employees are not discriminated against for exercising this right.

Implementation
The policy is communicated to all employees through induction programmes, policy manuals
and intranet portals. The custodian of this policy is the HR head of each operational unit who
reports directly to Unit Head on such issues. The actualization of this policy is evident from the
joint agreements and minutes that are signed between the union and the management.

Monitoring & Audit

Each ITC Unit has appropriate systems and checks to ensure compliance with the Policy and
statutory provisions, including means for filing of grievances, collective bargaining agreements
and minutes from worker meetings. Compliance with the Policy is regularly monitored by
Divisional and Corporate HR.

Policy on Information and Consultation on Changes

ITC's core values support an employee engagement process that aligns its employees with a
shared vision and purpose of the Company in the belief that every individual brings a different
perspective and capability to the team. ITC thus harnesses the creative potential of all its
employees by promoting a culture of partnerships to unleash relevant synergies between different
groups of employees.

Policy
All major changes in operations involving work processes, manning norms and other
productivity linked issues are carried out after discussions with the employees and the
recognized unions at each location.

Implementation
Business plans are shared with employees at all units through a series of formal communication
meetings, and through the intranet portals. Unionised employees at the concerned units are
informed of all major changes well in advance through their representatives.

The responsibility for the implementation of the policy rests with the Unit's HR Department in
the case of unionized employees and with the concerned Divisional Management Committees for
other employees.
The employees are given enough time to consider the implications of change and an opportunity
to discuss their apprehensions, if any, with the management.

The Policy is actualized through consultative meetings with representatives of employees,

culminating in joint minutes/agreements.

Monitoring & Auditing

Compliance with the Policy is regularly monitored by the Unit Head.
CHAPTER 2

ITC HOTELS
STRATEGIC BUSINESS UNIT “ITC – FIVE BRANDS OF HOTELS”
• ITC Hotels - Luxury Collection are super deluxe and premium hotels, located at strategic
business and leisure locations.

• ITC-Welcomgroup Sheraton Hotels offer warm, comforting services to the global traveler and
a chance to connect.

• WelcomHotels offer five-star hospitality for the discerning business and leisure traveler.

• Fortune Hotels offer full service properties all over India, including smaller towns and cities,
ideal for the budget traveler.

• WelcomHeritage brings together a chain of palaces, forts, havelis and resorts that offer a
unique experience.

ITC HOTELS- Luxury Collection, Organizational Structure

ITC Hotels follows a functional organizational structure. This type of structure involves a
manager who brings specialized knowledge to bear on decisions related to a specific function, as
contrasted with the general-purpose manager who lacks that specialized knowledge. A skilled
marketing manager and a skilled production manager are likely to make better decisions in their
fields than would a manager responsible for both functions. Moreover, the skilled specialist
should be able to supervise workers in the same function better than the generalist would, just as
skilled higher-level managers should be able to provide better supervision of lower-level
managers in the same or similar function. Thus, an important advantage of a functional structure
is efficiency.

There are even a few disadvantages attached to a functional structure. First, in a functional
organization there is no unambiguous way of determining the effectiveness of the separate
functional managers because each function contributes jointly to the organization’s final output.
Therefore, there is no way of measuring what fraction of determining how much of the profit
was earned respectively by the several production departments, the product engineering
department and the sales office.

Second, if the organization consists of managers in one function who report to higher-level
managers in the same function who in turn, report to still high-level managers in that function,
then a dispute between managers of different functions can be resolved only at the top, even
though it may have originated at a much lower organizational level.

Thirdly, functional structures are inadequate for a firm with diversified products and markets.

Finally, functional structures prevent cross-functional coordination in areas such as new product
development. However, this problem can be eliminated by supplementing the vertical functional
structure with lateral cross-functional processes such as cross-functional job rotation and team-
based rewards.
The organizational structure at ITC Hotels
The organizational structure at ITC Hotels consists of eight functional departments, namely:

1. Food and Beverages Production

2. Food and Beverages Service
3. Front Office
4. Housekeeping
5. Engineering’
6. Sales
7. Finance
8. Human Resource

Every department has its respective head of the department (HOD) as shown in the chart below:

GENERAL
MANAGER

HUMAN
FRONT OFFICE EXECUTIVE UNIT FINANACIAL
F&B MANAGER EXECUTIVE CHEF CHIEF ENGINEER SALES MANAGER RESOURCE
MANAGER HOUSEKEEPER CONTROLLER
MANAGER

ASSISTANT
ASSISTANT F&B SENIOR SOUS ASSISTAN FRONT ASSISTANT ASSISTANT CHIEF ASSISTANT SALES ASSISTANT HR
FINANCIAL
MANAGER CHEF OFFICE MANAGER HOUSEKEEPER ENGINEER MANAGER MANAGER
CONTROLLER

JUNIOR SOUS FRONT OFFICE HOUSEKEEPING

F&B EXECUTIVE SALES EXECUTIVE HHR EXECUTIVE
CHEF EXECUTIVE EXECUTIVE

MANAGER
ASSISTANT
LEARNING
MASTER CHEF
SERVICES

Under every department, there are two to three executives who report to the supervisor above
them and to the respective HODs and all the HODs report to the general manager, who is at the
top of the hierarchy. Each department has a clearly defined responsibility and thereby
accountability and authority attached to it.
COMMUNICATION
ITC Hotels follow a participative, two-way communication system where the flow of
information is from top to bottom and from the bottom to top.

Since, it is a service industry where the organization delivers experience, there needs to be
proper coordination and communication among all the departments which is maintained through
daily morning meetings among all the HODs and the general manager to discuss the guest
feedback and daily issues.

PERFORMANCE MANAGEMENT AT ITC HOTELS

Every organization has goals. An important role of management control systems is to motivate
organizational members to attain those goals.

Each organization has a strategy and the strategy’s success depends on its soundness. A
performance management system is simply a mechanism that improves the likelihood that the
organization will implement its strategies successfully.

What needs to be done here, is designing a performance measurement system, that measures and
rewards people to carry on tasks and targets that help the company achieve its strategy.

Each professional working in the organization is a cost to company and return on this investment
should be calculated wisely. This is taken care of by appraising every employee’s performance
from time to time and making his contribution to the overall organization as objective as
possible.

A doctor’s skill can be measured by the success ratio of operations, but in a service unit, where
each guest is looking for a different experience, its difficult to suggest the skills of people
involved very objectively.

The performances of employees who are in constant touch with the guests are more scrutinized
in behavioral aspects while those involved in providing food and beverage have a lot to do with
their skills and knowledge in their area.

The management realizes the importance of appraising and evaluating each employees
contribution objectively, and hence follows an yearly appraisal system.

The various attributes on which they are rated are:

1) JOB KNOWLEDGE
2) SKILLS
3) CO-OPERATION
4) RESPONSIBILITY
5) ATTITUDE TOWARDS WORK
6) INITIATIVE
 7) EFFICIENCY
8) ATTENDANCE
9) PUNCTUALITY
10) DISCIPLINE

 Each of these attributes carries certain weight age depending upon their importance to the
overall performance target of an individual.
 The employee is scored on a likert scale of 1 to 5, each level representing a certain level of
behavior or skill. The score is further multiplied to the weights and scores for each attribute
is finally added.
 Score for each attribute : weight of attribute * score on likert scale
 Depending upon the overall score, there are various actions that are taken and ratings are
provided to the concerned employee.
 Such an appraisal system followed by ITC HOTELS is known as FACTOR RATING
METHOD

For e.g.:

SCORE OBSERVATION RATING RECOMMENDATIONS

0-25 Re Rating Poor Worker File needs to be built
25-60 Needs further input Average Worker One increment
60-80 Needs to be groomed Good Two increments
80-100 Should be retained Excellent Three
increments/Promotion

The likert scale so developed is a modification of BARS, i.e. Behavioral Anchored Rating
Scale.

Behaviorally anchored rating scales (BARS) are rating scales whose scale points are defined by
statements of effective and ineffective behaviors. They are said to be behaviorally anchored in
that the scales represent a continuum of descriptive statements of behaviors ranging from least to
most effective. An evaluator must indicate which behavior on each scale best describes an
employee's performance.
Each attribute in the appraisal tells about different levels of behaviors. For e.g.: CO-
OPERATION.

ATTRIBUTE 0 1 2 3 4
CO Co-operates Gives limited Co operates Co operates Co operates
OPERATION grudgingly, Co operation to an willingly, fits willingly and
inclined to adequate easily to his helps others fit
be degree group into the group
troublesome easily.

MANAGEMENT CONTROL IMPLICATIONS

Following a strict and regular appraisal system helps the organization have a clear account of
average, good and excellent performers and further helps in taking important decisions that
involve considerable budget, time and other resources:

1) Training of individuals, deciding who needs to be trained and in which area.

2) Deciding on who needs what level of increments.
3) Understanding who needs to be retained in the organization and who needs to be layed
off.
4) Controlling employees behavior and check its sync with the organization culture and
values.

MANAGEMENT STYLE AND SIX SIGMA CONTROL SYSTEMS

With over 100 hotels at more than 90 destinations across the country, ITC Hotels offers
traditional Indian Hospitality combined with globally benchmarked services and sustainable
business practices. A good indicator of this dedication to excellence is the fact that ITC Hotels
have been regularly voted as amongst the best employers in Asia in the hospitality sector (latest
being in 2009).

ITC Hotels is well known for its participative style of management. Everyday the HOD’s and
General Managers meet to discuss feedback on the previous day’s performance. Employees are
constantly encouraged to recommend any process improvements and are regularly asked for
recommendations.

In addition to this the company is following the requirements of Six Sigma inorder to ensure
quality control. A separate department has been set up in each of its hotels called the 6 Sigma
Assurance Department.This department is responsible for quality control and maintaining
operational efficiency.The department comprises of 2 to 3 people and focuses on streamlining
hotel processes.The following are a few examples of the work this department is responsible
for:-
1) WOW Ratios
At the daily meetings each department submits its WOW ratios. These ratios indicate the
performance of each department on a likert scale as per the previous day. The performance of
each department is compared on a monthly basis the best performing department is rewarded for
they’re performance in the form of incentives and perks.

2) Model Areas
Each month departments have to take up Model Areas. Each department has to choose a specific
area within the organization ,not necessarily relating to their functional area , for the purpose of
improvement.

For example: Assuming the HR department decided to undertake improvement of the laundry
room of the hotel. They would be required to submit their recommendations and costing to the
senior management on how they can improve this space. Each of the hotels department then
compete with each other on the basis of the above mentioned plans for improvement and the best
recommendation is rewarded.

3) Process Line Charts

The 6 Sigma Assurance department also looks at Process line charts.Which clearly defines the
process flow of any department or function. The department look into the old process charts and
tries to make process improvements .Based on industry benchmarks and research it then goes
ahead and creates a new improved process chart.

For example: The process of availing of a duplicate key in case an employee misplaced his/hers
involved contacting an HR representative and gaining access to the duplicate. The problem with
this process was that the HR representatives left the office at 6 every evening and in case of an
emergency duplicate keys were not available. The new process required two individuals who
would be incharge of duplicate keys in 2 shifts i.e one in the morning and one at night.
Permission for access would be granted by an HR representative over the phone and this
improved the efficiency of the process and saved time.

Thus the Six Sigma Assurance Department plays a major role in controlling employee
performance by motivating them through rewards and incentives. Moreover constant
involvement of employee in process improvements encourages a sense of loyalty and ensures
that the hotel is adopting best practices.

Culture and the Management Style

The culture, as well as the management style, has been kept in line with ITC’s core values,
promoting diversity and offering equality of opportunity to all employees fostering meritocracy
in the organisation. It acknowledges that every individual brings a different and unique set of
perspectives and capabilities to the team. A discrimination-free workplace for employees
provides the environment in which diverse talents can bloom and be nurtured. This is achieved
by ensuring that a non-discrimination policy and practice is embedded across the Company in
line with corporate principles and benchmarked business practices. There have been various
examples to prove why the subsidiary is recognized and praised worldwide-

India’s best companies to work for 2009 -2010

Rank: 14
Gender Ratio (F:M): 1:11.8
Employee Turnover: 9%
Workplace Quotient:
The hotel community works as one big family, serving dollops of commitment to a common
goal.
Best Practices:
It’s a never-ending engagement. There is postretirement counseling on health and finance
matters for the retiree and spouse. They are also provided medical reimbursement as long as they
live. With more than 200 associates/managers from the DAP (Differently-Abled People)
category, the company conducts elaborate programmes to educate all employees on disabilities
and how to work with disabled people.

AWARDS
ITC Hotels awarded as Hewitt Best Employers in Asia for the Year

India’s management culture has been moving away from a traditional top-down culture where
age equals seniority toward a merit-driven system that promotes young achievers and strives to
bring out the best in employees. In the same regards, Hewitt produced a separate list of the five
best hotel employers, the winners of this category being Four Seasons, Resort Langkawi,
Malaysia, India’s ITC Hotels, JW Marriott Hotel Bangkok, The Conrad Bangkok and The Ritz-
Carlton Millenia, Singapore.

According to Hewitt’s research, Hotels as an industry understood very strongly the link between
the employee, the interaction with the customers, and business results.

Government of India honored ITC Hotels with ‘Best Employer’ National Award for
Empowerment of Persons with Disabilities

The Government of India, Ministry of Social Justice and Empowerment had conferred ITC
Hotels with the 2011 ‘Best Employer’ National Award for Empowerment of Persons with
Disabilities. The award was presented by Minister of Social Justice and Empowerment, Shri
Mukul Wasnik, in recognition of ITC’s philosophy of an ‘equal opportunities’ employer in
keeping with its policy to ensure respect for Human’s Rights and Prevention of Discrimination at
Workplace.
Dipak Haksar, COO, ITC Hotels, said, “The recognition further validated the fact that our
company starts with the work culture and we’ve really focused on making ITC Welcomgroup an
organization where employees grow beyond professionals.''

ITC Welcome group- empowering differently-abled people

-Everyone should be treated with sympathy and empathy.

-Opportunity to work and become self-sufficient

-People involved in Housekeeping, Teleworking, Bakery and as Musicians.

How do they do it?

Over the years, ITC Hotels has been redefining standards, showcasing the best from India to the
world. There lies a spirit of excellence that pervades at all ITC Hotels in key business and leisure
locations.
ITC Hotels is the only hospitality chain, perhaps in the world to have a unique programme like
the "Welcomlegionnaire". This competitive hotel management programme, recruits students on
their completion of class 12 for a 4-year course. The first two years are devoted to the basics in
hoteliering, personality development, culture building, etc., along with a bachelors in Tourism
Administration. The remaining 2 years are spent as Hotel Executive Trainees in sync with in
house Management Training Programmes, thus providing the students valuable hands on
practical experiences with solid theoretical knowledge. The two institutes are-

 The Welcomgroup Management Institute, Gurgaon

 The Welcomlegionnaire Programme