Chapter 1

INTRODUCTION

1
 Chapter 1

INTRODUCTION

1.1 Introduction
The era of 21st century has been one of the most challenging and innovation
driven for the economics of the world. The economies driven by industries are
thriving for finding out new ways, means and techniques of sustaining and
surviving in the cut throat competitive environment. Hence, the techniques and
skills of the resources of the companies become the key driving and
differentiating force. Human resource is one of the key resources determining
growth, performance, reputation and productivity of the companies’.
Companies are heavily dependent on the skills and abilities of human resources
to achieve their strategic goals and develop competitive advantage over
counterparts. Especially in service industries, human resource plays major role
as quality service, customer satisfaction, growth and market image is highly
dependent on their work performance. An individual employee’s work
performance is made up of two factors: a) the latent potential of the individual
and b) the effort that the individual puts forth.

Companies are introducing many activities to enhance the performance of

employee by providing training on customer relationship, quality service,
employee engagement, etc. All these activities are introduced based on the
assumptions that employees have basic required competencies to perform the
work. Therefore employee selection is very essential to select the human
resource with at least minimum required competencies, hence employee
selection is underpinning of the employee performance. And so the companies
have to identify and select employees who have high potential and willingness
to put efforts to perform the work by developing structured employee selection
process and implementing systematic way to find out the right employee for the

2
right work. Companies have to take most critical decision to select the human
resource that is having values and goals which are aligned with the companies’
values and objectives to ensure the long term relation of employee with
companies.

1.2 Definitions: Employee Selection Process

Recruitment and selection are very critical practices of human resource
management. Recruitment is to encourage and attract applicants to apply for
the jobs hence it is known as positive approach while selection process is to
identify an application from the pool of applications - suitable with required
experience, qualifications and skill-knowledge for the jobs. Selection process
eliminates unsuitable applications to identify the one right suitable application
thus it is known as negative process.

Yoder (1972)1 said that “selection is the process by which candidates for
employment are divided into two classes- those who will be offered
employment and those who will not.”

According to Koontz & O’Donnell (1972)2 “selection is the process of

choosing from among the candidates, from within the organization or from the
outside, the most suitable person for the current position or for the future
position”.

As per Decenzo (1996)3 “selection is a managerial decision-making process to

predict which job applicants will be successful if hired.”

1
Yoder, D. (1972). Personnel Management and Industrial Relations. Prentice Hall of India,
New Delhi, 229.
2
Koontz H. and O’Donnell, C. (1972). Principles of Management. McGraw-Hill, New York,
418.
3
Decenzo, D. A. (1996). Personnel/Human Resource Management. Prentice Hall of India,
New Delhi, 147.

3
As per Stone (1989)4 “selection is the process of differentiating between
applicants in order to identify (and hire) those with a greater likelihood of
success in a job.”

According to Monappa and Saiyadain (1996)5 “Selection means offering job to

one or more applicants from the applications by establishing the best fit
between job requirements on the one hand and the candidate’s qualifications on
the other.”

Singh (2004)6 said that “selection process is the system of functions and
devices adopted in a given company to ascertain whether the candidate’s
specifications are matched with the job specifications and requirements or not.”

Giri (2005)7 said that “selection is the process of picking up individuals (out of
the pool of job applicants) with requisite qualifications and competence to fill
jobs in the organization.”

Aswathappa (2006)8 defined “selection is a long process, commencing from the

preliminary interview of the applicants and ending with the contract of
employment.”

4
Stone, T. H. (1989). Understanding Personnel Management. CBS College Publishing, New
York, 173.
5
Monappa, A. & Saiyadain, M. S. (1996). Personnel Management, 2nd Edition. Tata
McGraw-Hill, New Delhi, 135.
6
Singh, N. (2004). Human Resource Management. Galgotia Publications, New Delhi, 281
7
Giri, Y. L. (2005).Human Resource Management- Managing people at work, Nirali
Prakashan, Pune, 2.22.
8
Aswathappa, K. (2006). Human resource and Personal Management. Tata Mc craw-Hill,
New Delhi, 158.

4
Ivancevich (2008)9 described “selection is the process by which an
organization chooses from a list of applicants the person or persons who best
meet the selection criteria for the position available, considering current
environmental conditions.”

Grimshaw (2009)10 described “selection covers the process of deciding

between a group of one or more candidates who is most suitable for a particular
role or organizational profile. It extends from the screening process up to
deciding which successful candidates to make an offer of employment.”

Weisberg (2010)11 defined “Selection process as the mechanism that

determines which particular individuals from a target population become
members of each particular study group.”

According to Gatewood, Field & Barrick (2011)12 “selection is the process of

collecting and evaluating information about an individual in order to extend an
offer of employment. The selection process is performed under legal and
environmental constraints and addresses the future interests of the organization
and of the individual.”

1.3 Objective of Employee Selection

Employee selection process is the most significant element in the companies to
select the right employee for the right job. Earlier, employee selection was
largely done based on employers’ intuition hence selection process was
9
Ivancevich, J. M. (2008). Human Resource Management, 10th Edition. Tata McGraw-Hill,
New Delhi, 214
10
Grimshaw, Ed. (2009). The Perfect Fit -Advanced Skills for Finding and Hiring the Ideal
Candidate. Dragon-Rising Publication, United Kingdom, 7.
11
Weisberg, H. I. (2010). Bais and Causation-Models and Judgment for Valid Comparisons.
A John Willey & Sons publications, New Jersey, 93.
12
Gatewood, R. D. Field, H. S. & Barrick, M. (2011). Human Resource Selection. Cengage
Learning, South Western, 3.

5
considered easy and simple. Gradually, various selection methods have
developed to support the intuition of employers for appropriate employee
selection. Use of various selection methods tries to reduce the bias and
discrimination of employers but it becomes lengthy and complex process to
select the employee. Siscon (1991)13 said “The main objective of good
employee selection is to acquire people who possess the ability and
competence to accomplish successfully the duties and responsibilities not only
of the job to be filled but also of the potential to grow with the company.”
Hence, to assess the current capabilities and possibilities of sharpening the
required skills for the job is the key component in the entire employee selection
process. Atthreya (1968)14 said that “the objective of the selection process is
the selected person should have the willingness to do the job, have the ability to
do the job, can fit into the work situation, has appropriate growth potentialities
and stays with the organization for a fair period.”

1.4 Importance of Employee Selection Process

In the organization, money, material, machines and manpower are key
resources. Among them, manpower which is also referred as employees with
their exclusive skills, knowledge and abilities use the money, material and
machine to develop the product and provide the service. Hence selection of
suitable and efficient employees contributes for the success of the organization.
Employee selection process is a complex and continuous process to find out the
most suitable person. Effective selection process is considered as one of the
vital practices to create the dynamic culture of the organization. Selection of
qualified employees increases the productivity, commitments and retains
relationship among employee and organization. Other human resource

13
Sison, P. S. (1991). Personnel and Human Resource Management – Sixth Edition ,
Personnel Management Association of Philippines, 120.
14
Atthreya, N. H. (1968). How to Select Well: Thought processes techniques and tools. MMC
school of management, Bombay, 17.

6
practices become easier if suitable applicants are selected for the job. Hence,
systematic employee selection is very crucial especially for small scale service
industries as performance of employee highly depend on it.

Employee selection is considered a critical function because of the cost factor

involved. The employee selection cost includes advertising cost, screening cost,
test development cost, interviewer time, reference check cost and other
miscellaneous cost like infrastructure, food, travelling, and etc. If there is an
error in employee selection then the huge cost is incurred, which includes
training cost, lower productivity, absenteeism cost, separation cost, etc. The
cost of rejecting right applicant is also considered as a part of wrong employee
selection cost. Thus the total cost of wrong selection= selection cost + training
cost + lower productivity cost + separation cost + rejection cost of right
applicant. Employee selection is also important due to legal obligations. The
government of India has introduced acts such as equal employment law,
employment exchange act for non-discriminatory employee selection.
Negligent hiring is also one of the serious issues. Negligent hiring means
selecting an applicant without proper verification of applicant’s background,
which can hamper company’s image. Negligent hiring can be avoided by
scrutinizing available information about the applicants; proper and timely
verification can also help eliminate applications with criminal records and / or
applications with false information. Therefore employee selection process
should be systematic, standard and fair to get the right person for the right job.

Organization’s decision about selecting employees is central to its ability to

survive, adopt and grow. Selection decision becomes critical especially when
organizations face right talent markets or must compete for talent with other
organization in the same industry. Aswathappa (2011)15 said that employee
selection is connected with work performance and cost in the organization.
15
Aswathappa, K. (2011). Human Resource Management: Text & Cases, Tata McGraw Hill
Education Private Limited, New Delhi, 196.

7
Appropriate match of applicant capabilities with requirements of the job and
willingness of applicants to perform the defined job roles enhance the work
performance while due to improper match, employees find themselves in the
wrong job which demoralizes them and their demoralization affect their
colleagues also. The cost of wrong selection process is very high. Thus,
accurate employee selection increases productivity and avoid unnecessary high
cost. Atthreya (1968)16 shared about employee selection that “good employee
selection is tangible and it always pays back in terms of greater output, better
production quality, lower cost, fewer grievances and meagre/negligible
turnover rate in the organization.”

It is observed in the companies some employees are performing well and some
are not. Poor performing employees create problems like absenteeism, low
productivity / delayed performance; late reporting, less job satisfaction and
high attrition ratio, increase discouragement among co-workers which affects
the health of the company and in a way affects the overall performance of the
company. Siscon (1991) has highlighted the study of Joseph E. King on
employee selection. Joseph did a survey with 3,12,602 employees from 600
companies of United States spanning across three years. This study revealed
that poor selection was often the basis of many employee problems. The
haphazard and poor execution of selection process creates possibilities to lose
suitable applicant and also possibility of selecting wrong employee. The spell
of bad employee selection on organization’s overall health had led to
‘employee selection’ becoming a specialist function. Hence, an organization
has to rethink and thoroughly concentrate about its employee selection process.

“The acquisition of new employees is a most important and complex task. To

find and employ the best individuals available is every Human Resource

16
Atthreya, N. H. (1968). How to Select Well: Thought processes techniques and tools.
MMC school of management, Bombay, 5 .

8
Manager’s goal. A company cannot proposer, grow or even survive without
adequate human resource.” Shared by Shermon (2004)17

1.5 Phases of Employee Selection Process

There is no defined standard employee selection process. It differs on the basis
of criteria’s like type of jobs, size of the company, operating sector etc.
Saiyadain (2003)18 said that employee selection practices vary in public and
private selector companies in India. Public sector companies followed the
principles laid down in 1961 and used by public enterprise selection board,
national institute of bank management, union public service commission, etc.

The selection process should consider use of more than one selection methods.
Previous studies have highlighted that four to five selection methods were used
for managerial position in large and public sector companies. There are
selection methods such as interview, resume/CV, application form,
psychological tests; personality tests, ability tests, integrity tests, work sample
tests, employment interview, reference check, physical examination, etc. which
are considered as part of selection process. Generally it is assumed that
companies’ follow the stages of selection process including resume/application
form, selection tests, interview, reference check, medical examination and final
decision. Flippo (1984)19 shared the sequence of popular selection methods -
initial or preliminary interview, application blank, check for references,
psychological tests, employment interview, approval by the supervisor,

17
Shermon, G. (2004). Competency Based HRM: A Strategic Resource for Competency
Mapping, Assessment and Development Centers. Tata McGraw-Hill Education, New Delhi,
206.
18
Saiyadain, M. S. (2003). Human Resource Management- third edition. Tata McGraw-Hill
publishing company limited, New Delhi, 73.
19
Flippo, E. B. (1984). Personnel Management – Sixth edition. McGraw-Hill book company,
Singapore, 149.

9
physical examination. However he had not claimed this sequence as standard
selection process model.

Ivancevich (2008)20 described the sequence of different selection methods are

preliminary screening using application blank and interview, employment
interview, employment tests, background & reference checks, selection
decision and last one is physical examination shown in below figure.

Figure 1.1: Stages of Selection Process

Source: Ivancevich, J. M. (2008). Human Resource Management, 10th Edition. Tata

McGraw-Hill, New Delhi, 215

Cole (2002)21 has described the key stages of selection process are; application
forms or CVs, Selection tests, reference check, interviews and selection
decision shown in the below figure.

20
Ivancevich, J. M. (2008). Human Resource Management, 10th Edition. Tata McGraw-Hill,
New Delhi, 215.
21
Cole, G. A. (2002). Personnel and Human Resource Management-fifth edition. London-
UK, 183.

10
Figure 1.2: Flow of Selection Process

References

Applications Interviews
-Application Sifting/Short
-one to one Selection
forms listing
-two to one Decision
-CVs process
-panels

Selection Tests
-Intellectual
ability
-aptitudes
Source: Cole, G. A. (2002). Personnel and Human Resource Management-fifth edition.
London-UK, 183.

According to the Singh (2004)22preliminary interview, application blank,

employment tests, employment interview, reference check, physical
examination and final selection are important stages for satisfactory selection
procedure. Thus there is no any specific standard employee selection model; it
varies position, company and country wise too.

Previous studies have highlighted that job analysis is also considered the part of
selection process. Hence the phases of selection process include the job
analysis, use of selection methods, verification of information about applicants
and final decision.

1.6 Employee Job Satisfaction

Job satisfaction defines the feelings and emotions of employees towards their
job. Employee expectations, job profile, pay scale, relation with supervisor and
peers, competitions in market, etc. are the factors that play major role in
determining job satisfaction.

22
Singh, N. (2004). Human Resource Management. Galgotia Publications, New Delhi, 281.

11
Blum and Naylor (1968)23 defined “job satisfaction as a general attitude of the
workers constituted by their approach towards the wages, working conditions,
controls, promotion related with job, social relations in the work, recognition of
talent and similar variables, personal characteristics, and group relations apart
from the work life.”

According to Arnold and Feldman (1982)24, “job satisfaction is the amount of

overall positive effect or feelings that individuals have towards their jobs.”

Berry (1997)25 defined “job satisfaction is an individual’s reaction to the job

experience.”

According to Armstrong (2006)26“job satisfaction refers to the attitudes and

feelings people have about their work. Positive and favourable attitudes
towards the job indicate job satisfaction. Negative and unfavourable attitudes
towards job indicate job dissatisfaction.”

Job satisfaction is an indication which shows overall picture of strong likes and
dislikes during the tenure of the job. In simple terms, Job satisfaction for an
employee is level of fulfilment and loyalty towards the job and respective
organization. Job satisfaction is basically a key driver to understand their level
of satisfaction and contentment with their current job. Thus, this is directly
related with the total output of the organization and ultimately leads to success
of the organization. In an organization, higher the employee satisfaction level,
23
Blum, M. and Naylor, J. (1968). Industrial Psychology: Its Theoretical and Social
Foundation. Harper and Row, New York.
24
Arnold, H. J. & Feldman, D. C. (1982). A multivariate analysis of the determinants of job
turnover. Journal of Applied Psychology, 67, 350-360.
25
Berry, G. (1997). Leadership and the development of quality culture in schools.
International journal of Education Management, 11(2), 52-64.
26
Armstrong, M. (2006). A Handbook Of Human Resource Management Practice- tenth
edition. Kogan Page Limited, UK, 264.

12
lower the employee turnover. So, it is very crucial to keep employees’ high job
satisfaction as the foremost priority of every organization.

1.7 Employee Attrition

In the last quarter of the 20th century, the definition of employee turnover has
undergone a major change. It has been renamed as employee attrition.

Shashikala and Ravindra (2014)27 defined “Attrition is defined as reduction in

the number of employees through retirement, resignation or death. The rate of
shrinkage in size or number of employees is known as attrition.” Thus
employee turnover is a rotation.

It is many-a-times, sudden, instant and abrupt with an element of dramatization

due to limited supply of skilled human resource in the market and cut throat
competition between the employers to choose the best for the desired job. The
evolution of the process of employee attrition has achieved huge importance
with a word of caution like the emergence of new industries and awareness in
segments like knowledge workers or professionals who are more loyal to
profession rather than employer/ organization. While selected employees are
either under qualified or over qualified for the job, they will not perform well
and within short time of joining they leave the organization otherwise
organization terminate them. In either case, employee turnover increased. This
trend is more prevalent and high in industries like IT and IT Enabled Services
(ITES).

Enough theories and techniques have been established to measure and ensure
selection of appropriate applicant for the desired job. Any deviation in the
selection process will surely hamper the productivity and profitability of the
27
Shashikala, S. and Ravindra, S. (2013). A Study on Causes and Control Techniques for
Attrition rate in Indian Industry. Asia Pacific Journal of Research- A peer reviewed
International Journal, 2(14), 1-8.

13
company. Especially in service industries as they are heavily dependent on the
skills and abilities of human resources to achieve their strategic goals and
develop competitive advantage. Information Technology (IT) is one of those
service industries where human resource is a critical and vital resource.

1.8 Information Technology - Background

Most of the digital technology we see today is dependent on the research work
and computer technology breakthroughs achieved in 1940s. Rapid
advancements led to the replacement of vacuum tubes by semi-conductor and
ICs in 1970s, which continue to power most devices even today. As computers
increasingly became ubiquitous, a new form of economy started to emerge
which created requirement for computer hardware, network administrators and
software designers.

However, IT as we know today didn’t gain its recognition till 1958, when an
article published in Harvard Business Review introduced the term to the world
for the first time. Leavitt and Whisler (1958)28 quoted “the new technology
does not yet have a single established name. We shall call it information
technology. It is composed of several related parts. One includes techniques for
processing large amounts of information rapidly, and it is epitomized by the
high-speed computer. A second part centres around the application of statistical
and mathematical methods to decision-making problems; it is represented by
techniques like mathematical programming, and by methodologies like
operations research. A third part is in the offing, though its applications have
not yet emerged very clearly; it consists of the simulation of higher-order
thinking through computer programs.”

In last few decades IT has become an umbrella term covering a large range of
products, solutions and services which primarily aim to supplement businesses
28
Leavitt, H. J. & Whisler, T. L. (1958), "Management in the 1980s", Harvard Business
Review, https://hbr.org/1958/11/management-in-the-1980s.

14
across all verticals. The Merriam-Webster dictionary29 defines IT as “the
technology involving the development, maintenance, and use of computer
systems, software, and networks for the processing and distribution of data.”

1.9 Classification of the IT Industry

Figure 1.3: Classification of IT Industry

As described in the above illustration, Gartner broadly30 classifies IT industry

into three categories viz. Business Process Services, Application Services and
Infrastructure services. Business Process Services refers to business functions
or operations such as payroll, accounting, recruitment etc. Application Services
refer to application or software development and support, while Infrastructure
Services include supply, deployment as well as management of hardware and
networks. These can be further classified on the basis of work allocation into
following three categories:

I. IT Outsourcing
In this type of business model, companies outsource their IT requirements to
external service providers. This includes software as a service (SaaS) and other
cloud-enabled services. With IT outsourcing organizations can take advantage

29
Merriam Webster Dictionary, Definition of Information Technology – http://www.merriam-
webster.com/dictionary/information%20technology, accessed on 1st May, 2016.
30
Gartner, Inc. http://www.gartner.com/it-glossary/it-services/, accessed on 30 th April, 2016

15
of service provider’s expertise and computing/storage assets to reduce costs
and to increase operational efficiency.

II. IT Insourcing
Insourcing refers to meeting IT requirements within the organization instead of
outsourcing it. A typical example of this model is businesses finding people
inside their organization who can take up the task, making use of their IT skills
or training them for the same.

III. IT Offshoring
Alternatively, organizations have also started hiring resources from low cost
centres (regions rich in high-skilled labour) from outside their organization to
setup captive units. Although IT Offshoring to destinations such as India may
offer significant cost savings, it is not the prime criteria for organizations
setting up captive units; businesses often choose this model to hire and own
skilled talent for projects requiring access to sensitive data and/or intellectual
property.

1.10 Information Technology Scenario in India

IT is the mainstay of Indian economy today and has transformed India from an
agrarian economy into a service economy. NASSCOM (2016)31 reported that
the industry employs a workforce of over 3.7 million people directly and
around 10 million indirectly, which makes it the largest private sector employer
in India. By leveraging its first mover advantage and championing the service
directed, export-oriented model, India has become an IT superpower. India
currently leads the global sourcing market housing 640 offshore development
centres for more than 78 countries.

31
NASSCOM Report (2016), Indian IT-BPO exports to grow slower at 10-12% in FY17:
Nasscom, http://www.dnaindia.com/money/report-indian-it-bpo-exports-to-grow-slower-at-
10-12-in-fy17-nasscom-2174188- New Delhi, accessed on 1st May, 2016.

16
It will not be wrong to say that IT in the country was kick-started by the
Software Technology Parks of India (STPI). STPIs were set up to promote
software exports from India in 1991. Performing under the purview of
Department of Information and Technology, and Ministry of Communication
and Information Technology, there were more than 50 STPIs in India at its
peak, and around 8000 units operated under their umbrella. STPIs played an
important role in setting-up and managing infrastructure, providing data centre,
leased line services, tax holidays as well as training to start-ups. Many of
India’s multinational software companies started their journey from STPI’s
incubation programs. However, the ending of tax relaxations in March 2011,
prompted many small units to leave this umbrella. Ramanathan (2013)32 shared
that in FY 2012-13, there were about 4,000 units operating under STPI,
accounting for exports worth Rs.2.26 trillion.

Nonetheless, the industry has grown manifold since it came into existence.
Dubay and Garg (2014)33 shared that at the start of this millennium (2000-
2001), the percentage share of IT industry in India’s GDP was just around
2.6%; and NASSCOM (2015)34 reported that today it accounts for an estimated
9.5% of India’s GDP. Further, NASSCOM35 estimates that IT industry is
expected to account for 14% of total services sector revenues by 2020. Thus, IT
is considered as a key industry for the development of Indian economy.

32
Ramanathan, A. (2013), Firms move out of software parks after govt ends tax incentives,
http://www.livemint.com/Industry/N9wc0ZVQaexGf2HKh4nd7L/Firms-move-out-of-
software-parks-after-govt-ends-tax-incenti.html, accessed on 28th April, 2016
33
Dubay, M. & Garg, A. (2014), Contribution of Information Technology & Growth of
Indian Economy, Voice of Research, Vol. 2 (4), 49-53.
34
NASSCOM Report (2015), The, IT-BPM Sector in India, Strategic Review-2015,
Executive Summary, accessed on 28th April, 2016.
35
NASSCOM Report, Impact of IT-BPO Industry on the Indian Economy and Society,
http://www.nasscom.in/impact-itbpo-industry-indian-economy-and-society?fg=71038,
accessed on 28th April, 2016.

17
Together IT services and BPM contribute a major portion of India’s IT exports
and revenues.

1.10.1 Major Segments of IT and their share in Indian IT market

Figure 1.4: Major Segments of IT and their share in Indian IT market

10% IT Services

18% Business Process

Management (BPM)
51% Software products and
engineering Services

21% Hardware

Source: IBEF, Indian IT and ITes Industry Analysis, Jan 2016

IBEF (2016)36 reported that this includes services in BFSI, Telecom,

Manufacturing and Retail and majority of these services (62%) are directed
towards the US market. The market for Software products and engineering
services was worth $24 billion in FY2014-15, with 83% of its revenues coming
from outside India. On the other hand, IT Hardware industry in India was
worth $13.5 billion with most of its revenue coming from the domestic market.

From last five years, NASSCOM37 has been ranking the top 20 IT services
companies in India. The below table listed out the top 20 IT services companies
in India of 2014-15 year.

36
IBEF –India Brand Equity Foundation (2016), IT & ITeS,
http://www.ibef.org/download/IT-and-ITeS-January-2016.pdf, accessed 30th April, 2016
37
NASSCOM Report, http://www.nasscom.in/industry-ranking, accessed 30th April, 2016.

18
Table 1.1: Top 20 IT Services Companies in India
Rank Company Name Rank Company Name
1 Tata Consultancy Services 11 iGate
Ltd
2 Infosys Ltd 12 KPIT Technologies Ltd
3 Wipro Ltd 13 Zensar Technologies Ltd
4 HCL Technologies Ltd 14 Cyient
5 Tech Mahindra Ltd 15 Hexaware Technologies Ltd
6 L&T Infotech 16 NIIT Technologies Ltd
7 Syntel Ltd 17 Persistent Systems
8 MphasiS Ltd 18 Infinite Computer Solutions
(India) Ltd
9 Genpact India Pvt. Ltd. 19 Geometric Ltd.
10 MindTree Ltd 20 MASTEK Ltd
Source: NASSCOM Industry Rankings
Note – The list does not include companies such as Accenture, Cognizant, HP, Capgemini,
and IBM as their corporate headquarters are located outside India, and they haven’t shared
their India-centric revenue figures.

1.10.2 Evolution of IT in India

Dossani (2005)38 discussed about India’s growth as an IT behemoth making an
interesting case study. Outsourcing as such was not a predominant idea in
technology sectors a few decades ago, till IBM came out with its ‘open
standards’ in 1969. This led to the rise of Independent Software Vendors who
now had the opportunity to collaborate with IBM and work on its mainframe
operating system, applications software and hardware. While initially a lot of
IBM clients preferred to keep their software development task in house, the

38
Dossani, R. (2005), “Origins and Growth of the Software Industry in India”, Working
Paper, Published by Shorenstein APARC, Stanford University, Stanford , CA, September
issue.

19
rising complexity in managing and developing software applications led to the
birth of outsourcing in 1970’s.

In the Telegraph, one article (2011)39 was on TCS story shared that this was
also the time when Tata Consultancy Services (TCS) first started its operations
as data processing hub for Tata Group of companies. The company later started
helping other Indian organizations by sourcing their application development
work. It also formed a joint venture with an US firm Burroughs, which
competed with IBM’s platform. Burroughs helped TCS train its engineers in
the US. Though, the JV didn’t last long, TCS continued its successful run and
encouraged other Indian organizations to adopt this evolving business model
which is now largely recognized as Bodyshopping.

Bhatnagar (2006)40 discussed that in the IT industry, Bodyshopping refers to

supply of engineers to clients on a short term contractual basis by consultancy
firms. This recognized practice played a crucial role in forming India’s
reputation of an exporter of skilled manpower during 1970s and 1980s when
there was a shortage of engineers in expanding computer industry in the West.
The engineers who had opportunity to work onsite in the US or Europe usually
returned back to find lucrative employment options awaiting them in India.

In 1980’s Bodyshopping used to contribute 75% towards India’s export

earnings. However, this came down to 58% by 2005, which indicates that it’s
slowly losing its status of being the most prevalent mode of business for IT
organizations in India. The trend has changed over the years with India

39
The Telegraph (2011), TCS story, told by Ram and ‘briefly’ retold by Ratan,
http://www.telegraphindia.com/1110920/jsp/frontpage/story_14529071.jsp, accessed on 25th
December, 2015.
40
Bhatnagar, S. (2006), India’s Software Industry, Technology, Adaptation, and Exports:
How Some Developing Countries Got It Right, Vandana Chandra (Ed.), World Bank, 95-124.

20
becoming a centre of excellence for critical software development and foreign
companies preferring to outsource their design and engineering jobs to units in
India. According to NASSCOM report41, there were more than 350 engineering
research and design centres in India in 2012 and the country is keen on
establishing itself as preferred global destination for engineering services and
solutions. Mcmanus, White & Botten (2008)42 discussed that Indian firms have
made a strategic shift towards end-to-end software development as there are
concerns that India would sooner or later lose its cost arbitrage to English
speaking computer science graduates in China and other emerging economies.

Figure 1.5: India’s IT industry: transition over the years

Source43: IBEF, Indian IT and ITes Industry Analysis, Jan 2016

1.10.3 Government Policy Intervention and Software Industry Growth

As discussed before also, India is known to be present in the software industry
circles since 1970s. However, during this time Indian government lacked

41
NASSCOM report, http://www.nasscom.in/building-india-global-hub-engineering-and-
design, accessed on 25th December, 2015.
42
Mcmanus, J. White, D. & Botten, N. (2008), Managing Global Business Strategies: A
Twenty-First-Century Perspective, Chandos Publishing Limited, UK, 18.
43
IBEF –India Brand Equity Foundation (2016), IT & ITeS,
http://www.ibef.org/download/IT-and-ITeS-January-2016.pdf, accessed on 30 th April, 2016

21
foresight and its protectionist policies hindered the industry growth. During this
period, Indian government was aiming to develop self-sustained hardware
capabilities. There were strong restrictions on hardware imports. Foreign firms
were not allowed to raise their stake in Indian investments beyond 40% as per
Foreign Exchange Regulation Act (FERA) of 1973.

However, in 1976 first steps were taken towards liberalization by the

government when it set up Export Processing Zones (EPZs) for expediting
clearance of software export applications. This was followed by reduction in
import duties on computer hardware. In 1984 a major policy change was
initiated with the drafting of new computer policy. This policy made it easier
for software firms in India to import hardware and removed hassles in
accessing foreign funds.

By 1986, the government was able to overcome its fixation by developing

indigenous hardware capabilities and recognized software industry’s potential
in transforming India’s economy. This led to the drafting of independent
software policy which removed all duties on import of hardware for
development of software by Indian firms. However, software imports still
attracted a 60% duty on their value.

In 1988, the government announced establishment of Software Technology

Parks of India (STPI). Apart from getting access to high speed satellite
communication links, dedicated office space and computing equipment,
organizations working within STPI enjoyed tax exemptions for a period of five
years within first eight years of starting their operations.

In 1991, the government of India announced its now famous New Economic
Policy, which brought in a slew of reforms for all sectors of the economy.
While devaluation of Rupee made a huge impact on economy, for software
industry there were some major incentives as the new policy reduced tax

22
burden on engineers travelling to foreign locations along with reduction in
telecom charges on satellite links. Moreover, software exports from STPI
scheme were exempted from income tax in 1993 and the exemption continued
till 2011.

The government formed a taskforce on IT and Software Development in 1998

to remove bottlenecks in the industry’s growth. Another major step was taken
in the formulation of IT Act in 2000 which for the first time introduced legal
implications against cyber-crimes in India. At the same time the government
also took steps towards improving communication infrastructure in the country.
The National Telecom Policy of 1999 was a major step in this direction as a
result of which India for the first time could access high speed Internet at
affordable rates.

It is evident that, despite the unstable political environment the government of

India has been able to make crucial policy changes in time. While industry
lobbies have played their part in pushing for the reforms, Indian government’s
support in implementing such policy level changes is also commendable.

1.10.4 Rise of India’s Software Industry

As any organization scales up, it requires software for managing its data and
business processes. Banks, financial institutions, insurance providers, and
virtually every large organization uses and in fact writes a lot of computer
software. While these software may be custom built for an organization’s
needs, many a times these are based on standard “platforms” such as those
provided by SAP, Oracle or Salesforce. However, these are not “install and
forget” type of software; they require maintenance and enhancement.
According to some estimates by Morschett, Schramm-Klein & Zentens (2009)
44
“over two thirds of all the software development effort is spent in maintaining
44
Morschett, D. Schramm-Klein, H. & Zentens J. (2009), Strategic International Management:
Text and Cases, Gabler Verlag, Springer Fachmedien Wiesbaden, 274.

23
and enhancing existing software code, rather than producing new software”. In
the 1990s, western organizations went through a technology revolution which
created a large demand for workers which would take up these software related
tasks and it is this demand which accelerated the growth of the Indian software
industry. Jhamb (2011)45 said that’s how Indian companies have traditionally
been known to focus of on BFSI, manufacturing and retail sector, providing
low level design, coding, testing and maintenance. However, in the recent
times, Indian companies have also seen a high demand for business
collaboration suites and ERP (enterprise resource planning) packages by
enterprises.

Business Standard reporter (2014)46 India’s software product industry is

currently the third largest in the world after the US and UK. Indian
Government has recognized software products as a distinctive category from
traditional software services, which can increase Indian organizations’
visibility among the global software brands. According to Electronics and
Computer Software Export Promotion Council, in FY15 India’s computer
software and services production was worth $118.5 billion, generating $75
billion of exports for India. RBI (2015)47 survey shared what makes this figure
even more substantial is the fact that today around 80% of this production is

45
Jhamb, R. (2011), Contribution of Software Industry in the Growth of Indian Economy in
the Last Decade, Zenith International Journal of Business Economics & Management
Research, 1(3), 97-111.
46
Reporter, BS (2014), Indian Software Product Industry to Enter Hyper-Growth Phase:
NASSCOM, Business Standard, http://www.business-standard.com/article/technology/indian-
software-product-industry-to-enter-hyper-growth-phase-nasscom-114102901134_1.html,
accessed on 5th February, 2016
47
RBI Press Release (2015), Survey on Computer software & Information Technology
Enabled Services Experts: 2014-15 –Data Release,
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=35669 , accessed on 5th
February, 2016

24
happening within India as compared to the 1990s when Heeks (1996)48 75% of
production was completed onsite.

Table 1.2: Software Services Export from India

Activity 2013-14 2014-15
₹ US $ Share ₹ US $ Share
billion billion* (%) billion billion* (%)
(1) (2) (3) (4) (5) (6)
A).Computer service 3,181.7 52.6 73.6 3,610.8 59.1 72.0
Of which: i) IT 2,936.7 48.5 67.9 3,399.7 55.6 67.8
services
ii) Software Product 245.0 4.0 5.7 211.1 3.5 4.2
Development
B). BPO Services 1,141.1 18.9 26.4 1,403.2 22.9 28.0
Of which: i) BPO 934.1 15.4 21.6 1,089.2 17.8 21.7
Services
ii)Engineering 206.9 3.4 4.8 314.0 5.1 6.3
Services
Total Export of 4,322.8 71.4 100.0 5,014.0 82.0 100.0
Software Services
(A+B)
Note: Sum of components may differ from total due to rounding off.. * Using annual
average Rupee/ Dollar exchange rate.
Source49: RBI Survey on Computer Software & Information Technology Enabled Services
Exports: 2014-15

48
Heeks, R (1996), India’s Software Industry: State Policy Liberalisation and Industrial
Development, Sage Publications, New Delhi.
49
RBI Press Release (2015), Survey on Computer software & Information Technology
Enabled Services Experts: 2014-15 –Data Release,
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=35669 , accessed on 5th
February, 2016

25
The benefits of this phenomenal growth have permeated throughout India’s
socio-economic strata, creating a positive image of vibrant young India which
has skills to meet the growth requirements of 21st century knowledge economy.

1.10.5 Factors Strengthening Software Industry’s Position in Global

Markets
Although there isn’t any particular series of events that could explain India’s
progress and prowess in Software sector; certain factors have played a
favourable role in giving a definite direction to the industry. Cost has always
been a major distinguisher; however, the software development costs are on
rise and the cost arbitrage is quickly diminishing. A large pool of English
speaking computer literate graduates which used to be India’s main strength is
now challenged by many competitors.

Despite increasing competition, India’s demographic dividend continues to

remain its main strength and it holds huge potential for driving India’s growth
in the future.

Figure 1.6: Graduates addition to talent pool in India

Source50: IBEF, Indian IT and ITes Industry Analysis, Jan 2016

50
IBEF –India Brand Equity Foundation (2016), IT & ITeS,
http://www.ibef.org/download/IT-and-ITeS-January-2016.pdf, accessed on 30 April, 2016
th

26
Table 1.3: Demographic Dividend
Population 2001 2006 2016
Total (million) 1027 1114 1268
Age (0-14) 35.6% 32.5% 27.1%
Age (15-59) 58.2% 60.4% 64%
Age (60+) 6.2% 7.1% 8.9%
Source51: Performances, Challenges and Opportunities of Indian Export.

The fact that India has a large pool of engineers, who unlike Japan, China and
Russia are comfortable communicating in English, is largely known and is
documented to be the prime reason for India’s emergence as an IT superpower.
What makes this even more interesting is the fact that while rest of the world is
facing aging issues, India will continue to supply working population (15-59
age groups) and the trend is likely to continue for decades to come. According
to a Sachs (2010)52 study, India will add about 110 million workers to its
labour force by 2020, more than China, Russia, Japan and the US combined.
Moreover, Thibodeau (2013)53 it is projected that the number of Software
developers in India will cross the US by as early as 2017.

I. Ability to take up new technology challenges

McManus, Li & Moitra (2007)54 said that from big data analytics, to enterprise
mobility; from mainframe systems to client server technology; whether its

51
Illiyan, A. (2008). Performances, Challenges and Opportunities of Indian Export, Journal
of Theoretical and Applied Information Technology, 1088- 1096.
52
Sachs, G. (2010), India will add 110 mn people to global workforce by 2020: Study, The
Economic Times, http://articles.economictimes.indiatimes.com/2010-07-
28/news/27623896_1_labour-laws-gdp-growth-ilo, accessed on 30th April, 2015
53
Thibodeau, P. (2013), India to Overtake U.S. on Number of Developers by 2017,
Computer world, http://www.computerworld.com/article/2483690/it-careers/india-to-
overtake-u-s--on-number-of-developers-by-2017.html, accessed on 30th April, 2015
54
McManus, J. Li, M. & Moitra, D. (2007), China and India: Opportunities and Threats for
the Global Software Industry, Chandos Asian Studies, 49.

27
collaboration suites or mobile-based e-commerce systems - the Indian software
industry has quickly provided answers to new technology challenges. Moreover
Schwalbe (2007)55 said that Indian organizations have also responded well
when it comes to adopting new Agile frameworks for software development
which are gathering huge interest in the west.

II. Meeting global quality standards

In the 1990s, when ISO: 9000 was introduced for software, Indian
organizations were quick to claim certifications such as ISO: 87, ISO: 91 and
ISO: 93 in order to improve their process standards and gain visibility.
However, over the years there have been several changes in the Industry and
new certifications put by CMM (Capability Maturity Model) are now
considered as the global standard. Jalote (2001)56 said that again, India leads
the tally with largest number of organizations with CCM Level 4 and 5
certifications.

III. Political will to sustain Industry growth

India is world’s largest democracy and elections are mega event in India.
However, at time when world was ushering itself into a technology and Internet
driven era, the Indian government showed signs of instability. Between 1989
and 2005, India witnessed five general elections. This somehow didn’t affect
India’s software business as the sector received its due focus form all incoming
and outgoing governments. On the other hand, Indian government’s
deregulation and economic liberalization also played a crucial role in the
industry’s growth.

55
Schwalbe, K. (2007). Information Technology Project Management-seven edition. Course
Technology, Cengage Learning, USA, 89.
56
Jalote, P. (2001), The success of the SPI efforts in India, Software Quality Professional-
American Society for Quality, 3(2).

28
IV. Strong business networks
With years of presence in the domain, Indian organizations have naturally
formed relations and networks with major clients in the Industry. Indian
organizations have entered both; equity strategic alliance as well as non-equity
strategic alliance with clients in the West. NRIs, many of whom are Indian
Engineers settled in the US, have always been crucial in getting business for
Indian firms. These traditional associations continue to strengthen India’s
software business prospects.

1.10.6 Challenges, Opportunities and Future of Software Industry in

India
The biggest challenge as illustrated in the graph below is - sustaining a high
growth rate. India’s strong export dependence has left it exposed to the
disturbances in the western economies.

Figure 1.7: India Software Exports (1980-2015)

29
Source57: Indian IT Sector Statistics, Centre for Development Informatics, University of
Manchester, UK.

The post 2000 recession in the US economy has affected Indian software
exports. While it’s true that the US has always been a major importer of India’s
software services, India can perhaps explore new frontiers for growth (refer
table below).

Table 1.4: Countries economy affected Indian Software Exports

Country IT India’s Key Segments
Spend Penetration
Canada $63 ~1.5 % Enterprise applications, cyber
billion security, healthcare IT
Europe $230 <1.5 % IT Sourcing, BPM, IS outsourcing,
billion CAD
Japan $235 <1 % CRM, ERP, Salesforce Automation,
billion SI
Spain $26 <1.5 % IT sourcing, SI
billion
Mexico $29 ~4% IT Sourcing, BPM
billion
Brazil $47 ~2% Low level application management,
billion AI, R&D
China $105 <1% Software outsourcing, R&D
billion
Australia $48 ~4% Procurement outsourcing,
billion infrastructure software & CAD
Source58: IBEF, Jan 2016, Indian IT and ITes Industry Analysis

57
Indian IT Sector Statistics, Centre for Development Informatics, University of Manchester,
UK.https://drive.google.com/file/d/0B-
14eY3gwnmGUWIzNEtaZDh1WGs/view?pref=2&pli=1, accessed by 30 th April, 2016.

30
Meanwhile, competition from other emerging economies also cannot be
ignored. Moreover, as the volume of Indian software exports increases,
sustaining a high growth rate would become even more difficult. Although,
emerging fields such as cloud, social, mobile and big data can help Indian
organizations sustain their higher growth numbers, India doesn’t have a large
talent pool to meet these demands.

According to NASSCOM (2015)59, India is at risk of facing a shortage of

engineers to take up high end software engineering tasks required in cloud, big
data and mobility. A report on employability trends in India (2016) 60 revealed
that out of more than 6,00,000 engineers being pumped into the economy each
year, only a handful (18.43%) are ready to be deployed as Software Engineers
in the IT Services industry. Singh (2015)61 said that cyber Security is another
big area which has serious shortage of skills; a key executive from cyber
security firm Symantec estimated a shortage of 5 Lakh cyber security
professionals in 2015. Jha (2015)62 said this fact also came out in a survey by
ISACA where 87% of the respondents from India reported a severe shortage of
skilled cyber security professionals in the country.

58
IBEF –India Brand Equity Foundation (2016), IT & ITeS,
http://www.ibef.org/download/IT-and-ITeS-January-2016.pdf, accessed on 30th April, 2016
59
NASSCOM (2015), Indian IT's growth at risk due to skill shortage: NASSCOM, The
Times of India, http://timesofindia.indiatimes.com/tech/jobs/Indian-ITs-growth-at-risk-due-
to-skill-shortage-Nasscom/articleshow/46189553.cms, accessed on 17 th January, 2016
60
Aspiring Minds, (2016), National Employability Report, Engineers Annual Reports,
http://www.aspiringminds.in/docs/national_employabilityReport_engineers_annual_report_2
014.pd, accessed on 17th January, 2016
61
Singh, A. (2015), Danger! India faces a shortage of 5 lakh cyber security pros,
http://www.firstpost.com/business/danger-india-faces-shortage-lakh-cyber-security-pros-
2482958.html, accessed on 17th January, 2016
62
Jha, S. (2015), Cybersecurity Skills Shortage in India, says ISACA Survey,
http://cio.economictimes.indiatimes.com/news/digital-security/cybersecurity-skills-shortage-
in-india-says-isaca-survey/45978938, accessed on 17th January, 2016

31
As India moves towards Internet of Things, Virtual Reality Applications and
Driverless Cars, it will have to upgrade its educational institutions to meet the
demand. In fact, according to a vision statement put forward by NASSCOM63,
India should aim to “increase the number of PhD holders to 200,000 by 2020”
and “Allocate 2% of national budget for research”.

Table 1.5: Need for ICT Driven Solutions in India

Healthcare: 50% of Indians do not have access to primary healthcare.
Technology can deliver healthcare at half the cost.

Financial Services: 80% of Indian households do not have bank accounts.

Technology can enable access to 200 million families.

Education: India faces a 3-fold shortage in teachers. Technology can address

this through remote solutions.

Public Services: 40-50% of public food distribution in India doesn’t reach

targeted groups. Technology can ensure transparency.

Source64: NASSCOM ‘PERSPECTIVE 2020’ Outlines Transformation Roadmap for the

Indian Technology and Business Services Industries.

63
NASSCOM Report, NASSCOM ‘PERSPECTIVE 2020’ Outlines Transformation
Roadmap for The Indian Technology and Business Services Industries,
http://www.nasscom.in/NASSCOM-PERSPECTIVE-2020-Outlines-Transformation-
Roadmap-for-The-Indian-Technology-and-Business-Services-Industries-56269, accessed on
17th January, 2016
64
NASSCOM Report, NASSCOM ‘PERSPECTIVE 2020’ Outlines Transformation
Roadmap for The Indian Technology and Business Services Industries,
http://www.nasscom.in/NASSCOM-PERSPECTIVE-2020-Outlines-Transformation-
Roadmap-for-The-Indian-Technology-and-Business-Services-Industries-56269, accessed on
17th January, 2016

32
As listed above, there is a large room for improvement in India’s healthcare,
financial services, education and public services sectors. This will require
solutions that can meet the scale and are at the same time easy to deploy and
manage. Indian software organizations are perhaps better placed to design and
implement such solutions vis-à-vis their foreign counterparts.

On the other hand, India’s consumption patterns are also changing at a rapid
pace. Ablett, Baijal, Beinhocker, Bose, Farrell, Gersch, Greenberg, Gupta
(2007)65 stated that India’s burgeoning middle class will make it world’s 5th
largest consumer economy by 2025. Article in the Hindu (2016)66 said that
with 220 million users, India has surpassed the US becoming the world’s
second largest smartphone market. This has created a huge demand for
applications and solutions to support expanding e-commerce and
Internet/mobile banking services. This trend is likely to gather pace in the
coming years, increasing competition and attracting both institutional and
direct investment in India.

Further, Aggarwal, Subramanian, Sarawgi & Rana (2013) 67 it is estimated that

there will be more than 700 “billion dollar” companies in India by 2020, as
compared to 141 such companies in 201032. All this growth is likely to fuel
demand for software solutions, creating an ecosystem which could sustain
65
Ablett, J. Baijal, A. Beinhocker, E. Bose, A. Farrell, D. Gersch, U. Greenberg, E. Gupta,
(2007), The ‘bird of gold’: The Rise of India’s Consumer market, McKinsey Global Institute
Report, http://www.mckinsey.com/global-themes/asia-pacific/the-bird-of-gold, accessed on
2nd February, 2016.
66
Mumbai Capital (2016), With 220mn users, India is now world’s second-biggest
smartphone market, The Hindu, http://www.thehindu.com/news/cities/mumbai/business/with-
220mn-users-india-is-now-worlds-secondbiggest-smartphone-market/article8186543.ece,
accessed on 15th May, 2016.
67
Aggarwal, N. Subramanian, A. Sarawgi, S. & Rana, K. (2013), BCG—CII Report on IT
Enablement of Indian Business IT for India — New Horizons, New Opportunities,
http://cii.in/WebCMS/Upload/BCG%20CII%20report%20on%20Domestic%20IT%20-
%20March%202013(final).pdf, accessed on 15th May, 2016

33
India’s Software Industry’s growth trajectory in the long term. However, it
remains to be seen if Indian Software Industry would rise to the occasion and
make most of the opportunities at hand.

1.11 Information Technology Scenario in Gujarat

Although Gujarat is not a recognized hub for information technology in India,
with its strong communication infrastructure and the reputation of being India’s
most investment friendly state, Gujarat is banking big on information
technology. The state government has ambitious plans for improving the scope
of IT sector in the state. Science and Technology Department of Gujarat
(2016)68 declared that the IT policy (2016-21) for the state of Gujarat intends to
increase the current investment in IT/ITeS sector by 10 times in next five years.
It is also expected that the state’s IT turnover would touch $15 billion while
exports would cross $2 billion mark in the same period. The government sees
promotion and development of employment opportunities in the IT and ITeS
Sector as a key priority and expects creating 10 lakh direct jobs in this sector.
The Gujarat Government is also receptive to developing opportunities in digital
entertainment, cloud, big-data and Internet-of-things.

The times of India City, published article (2016) 69 declared that the state
government is also working on a separate policy to promote start-ups in the IT,
electronics, and nanotechnology space. It plans to establish 100 incubators in
Gujarat and also act as facilitator for start-ups seeking VC funding. This policy
will support more than 2000 start-ups in the state who have received first round
of VC funding and who are further expected to gain an investment of $1 billion
via this route over the next five years.

68
Science and Technology Department, Gujarat (2016), IT / ITeS Policy (2016-21), 5.
https://dst.gujarat.gov.in/Images/pdf/it-policy-2016-21.pdf, accessed on 30th April, 2016.
69
TOI, City (2016), Gujarat set to unveil separate policy for tech-based start-ups.
http://timesofindia.indiatimes.com/city/ahmedabad/Gujarat-set-to-unveil-separate-policy-for-
tech-based-start-ups/articleshow/52474598.cms. accessed on 28th May, 2016.

34
The government of Gujarat has also played a crucial role in implementing IT
solutions across all its offices; Bhatnager (2015)70 said that the state has
received over 174 national awards in e-governance covering sectors such as
public services, hospital management, Sarvashiksha Abhiyaan and Gram Vikas
in last 14 years. The use of e-services for governance in Gujarat is next only to
the Central government in terms of numbers - over 500 of its services are
available through e-governance.

The current process in the IT software companies to select the experienced

software developers may be fulfilling the need for present scenario but whether
this process is effective or not to sustain in the competitive global market
requires detailed study. The forthcoming pages explore whether the selection
processes employed by IT companies make any difference in job satisfaction
level of experienced software developers and affects their attrition rates.

1.12 Terms Explanation

IT Companies: IT companies referred here as IT software companies.

According to Science and Technology Department of Gujarat (2016) 71, IT
software companies who “develop, produce and services related to IT products
and IT Software means any representation of instruction, data, sound, and
image including source code and object code recorded in a machine, readable
form and capable of being manipulated or providing interactivity to use by
means of automatic data processing machines.”

Employee selection process: To select the experienced software developers,

here the selection process included the selection steps are the job analysis,

70
Bhatnagar, J. (2015). eGov: Gujarat goes the e-way, Makes System Transparent. The
financial express, http://www.financialexpress.com/article/industry/companies/gujarat-goes-
the-e-way/138740/. accessed on 30th April, 2016
71
Science and Technology Department, Gujarat (2016), IT / ITeS Policy (2016-21), 5.
https://dst.gujarat.gov.in/Images/pdf/it-policy-2016-21.pdf, accessed on 30th April, 2016.

35
screening application with resume/CV or application form, interview, selection
tests, reference check, medical examination and final selection decision.

Attrition: Earlier attrition word was referred as employee turnover. Here the
attrition word is referred as employee turnover and employee intention to leave.
Attrition means decline the graph of employee numbers due to the resignation.

Experienced Software Developers: Experienced software developers are

referred here employees who have more than six months work experience in
computer application development or to provide maintenance support in IT
software companies.

Management: Management word referred here CEO or Director or project

manager or HR person working in the IT software company.

Formal selection methods: According to Zibarras and woods (2010)72

formal selection methods “mean those that have a clear methodological
underpinning in the way candidates are assessed (e.g., assessment centres,
structured interviews, aptitude/ability, and personality testing).”

Informal selection methods: : According to Zibarras and woods (2010)

formal selection methods “mean those that do not have a clear method
underpinning their execution [e.g., unstructured interviews, curriculum vitae
(CVs) and 'trial periods' on the job].”

72
Zibarras, L.D. & Woods, S. A. (2010). A Survey of UK Selection Process across Different
Organizations Sizes and Industry Sectors. Journal of Occupational and Organizational
Psychology, (83), 499-511.

36