CHAPTER 3

ITC Limited is an Indian multinational conglomerate company headquartered in Kolkata, West

Bengal. Established in 1910 as the 'Imperial Tobacco Company of India Limited', the company
was renamed as the 'India Tobacco Company Limited' in 1970 and later to 'I.T.C. Limited' in
1974. The dots in the name were removed in September 2001 for the company to be renamed
as 'ITC Limited' where 'ITC' would no longer be an initialism. The company completed 100
years in 2010 and as of 2012–13, had an annual turnover of US$8.31 billion and a market
capitalization of US$52 billion. It employs over 30,000 people at more than 60 locations across
India and is part of Forbes 2000 list.

A) HR FUNCTIONS OF THE COMPANY

With over 31,000 employees across the group, scores of manufacturing facilities and operations
spread all over the country, the Human Resources function in ITC offers very challenging career
opportunities. With a legacy of over a hundred years, management of the human resource relies
heavily on the wealth of experience of the past and simultaneously constantly reinvents itself to
remain contemporary and contribute to the achievement of our strategic objectives.
ITC's Human Resources policies and strategies seek to ensure that HR Systems and processes
focus on building a customer focused organization that further enhances the organizational
capability to compete and win the market. People are ITC's unique source of competitive
advantage and HR Systems and processes ensure that the potential of our human resources is
leveraged to enhance the wealth generating capability of the enterprise and in building a winning
organization.
ITC provides you an opportunity to experience the diversity present within the Human
Resources function ranging from Employee Relations and Employee Engagement - Negotiations,
Employee Welfare, Building Alignment, Productivity Enhancement, Process Excellence to
Salary and Wage Administration, Statutory Compliance, Corporate Social Development
initiatives. The diversity of ITC's businesses also ensures that you experience the varied
dynamics of the function that comes into play in different business scenarios.
A typical career in HR entails significant experience in each of the areas mentioned above, which
helps you develop as a holistic HR Manager. A career in ITC will lead you from being a part of
a unit to heading a unit/region, to heading various functions within HR and finally to heading the
function at the divisional or corporate level. You will be encouraged to be a part of various cross
functional teams, an experience that will enable you understand how different functions work
synergistically to produce business outcomes.

ITC, being a pioneer in the Indian business area, understands the value of people to the success
of the organization and therefore it aptly has a strategic approach to human resource
management. Human resource department at ITC follows a proactive approach to future strategic
issues instead of being just a Hire and Fire function. The vision and mission of ITC plays a
crucial role for designing the annual business strategy that serves as a framework for the year’s
targets and goals for the company s multiple divisions. The HR strategy for the coming year is
also prepared simultaneously along with the business strategy.

Business level strategies are designed with a motive to fulfill the company s long term corporate
strategies which define the direction and force of action at the various business units to realize
superior results.

At ITC, Human Resource activities such as recruitment, selection, training and rewarding
personnel are done by keeping in view the company’s goals and objectives. Alignment of the
Human Resource system with the strategic goals and objectives of the firm has facilitated ITC to
achieve its fast growth.

ITC believes that their mission to enhance value creation for the stakeholder can only be
achieved through the quality and commitment of their people. Therefore to achieve this, they
continuously strive to unleash the potential of each individual. They claim to do this by nurturing
knowledge, entrepreneurship and creativity. ITC also values ideas and gives people the space to
execute them. The ability to manage change proactively and to reinvent continuously without
compromising the ideals and values, ITC has managed to become one of the leading business
conglomerates in the country.

ITC, through its people policy, employs some of the most talented people in the country and
outside, this strategy gives it the edge over others to achieve its mission. At ITC the following
human qualities are highly respected.
 ● Integrity 

● Ability to think strategically

● High energy

● A ‘will do’ attitude

● Creativity

● Team skills 

● Leadership

The strength and weaknesses of the company’s human resource can have a determining effect on
the viability of the firm’s strategic options. Organization’s employees are its human capital as
they are assets of the company, which have one term value for the company. There should a
Strategic approach to Human Capital planning. The acquiring and developing of staff should be
according to their skills in order to meet critical needs and therefore organization culture should
be performance oriented.

Create distributed leadership within the organization by nurturing talented and focused top
management teams for each of the businesses

Nurturing talent is one of the major objectives for organizations following the SHRM approach
towards business, and this same perspective guides the corporate strategy of ITC.

To create a people centric, competitive organization ITC’s Core Values are also aimed at
developing a customer-focused, high-performance organization which creates value for all its
stakeholders. While hiring human resources for the company it is essential that the values that
define the foundation of the company are matched with the values cherished by the prospective
employee.

B) EMERGING TRENDS AND BEST PRACTICES IN HR

1. RECRUITMENT
Recruitment and selection process can easily be considered to be one of the most critical
functions of an organization. As the business environment becomes more and more competitive,
having the right people with the right skills for the right tasks becomes all the more critical.
Indeed it can be a source of competitive advantage. Today organizations have moved from
product focus to market focus to selling focus to customer focus to employee focus.

Recruitment and selection is a core function of the Human Resource department. It can be
regarded as one of the most important functions performed by the HR department. Also
commonly known as the staffing function, it involves the following phases:

• Job analysis

• Manpower planning

• Recruitment and selection

This is the phase where the actual prospective candidates are selected and hired by the company.
It is a long and arduous process. Recruitment and selection can follow only after man power
planning has ascertained the demand for new workers. Recruitment and selection process varies
from company to company however the following are steps generally common to all companies.

Application form: Usually the first step in the selection process. Details are sought about the
prospective candidates. Information is normally categorized into bio data, education, work
experience, recreation etc.

Preliminary interview: These are brief interviews conducted to quickly ascertain suitability of

candidates for the job. Its main aim is to eliminate those candidates that are unsuitable for the
job. It is an important step as it ensures that the company invests time and effort only with
prospective candidates that can perform the task.

Employment tests: These are sets of tests conducted to ascertain qualities and characteristics of
potential candidates. Many different types of employment tests can be conducted. Each test is
designed to measure a specific characteristic or capability of a prospective candidate. The main
aim is to match an individual’s physical, mental and temperamental capability with the
requirements of the job.

Employment interview: This is the most common method for hiring new recruits and is widely
used by all organizations. The main objective is to ascertain the suitability of the candidate. It
provides opportunity to the organization to know the candidate better i.e. their motivation,
ambition, outlook etc.
Physical examination: May or may not be part of selection process. In certain jobs like the
military and police physical examination is mandatory due to the requirements of the job.
However for most white collar jobs physical examination may not be required. Generally the
candidates age is a reflection of his physical ability.

Final selection: Refers to the final selection of the candidate. At this stage selected candidates
are issued employment letters. Initially all new hires are hired on probationary period. During
this time candidates are assessed for their work ethic, dedication, motivation, honesty, integrity
etc. The probationary period can last from 6 months to a year. Should the candidate successfully
meet all the requirements, they will then be hired on a permanent basis.

Placement and induction: New hires are assigned office space. Induction may be conducted of
new candidates. Induction may be a formal process of a informal process. The objectives of the
induction process is to familiarize candidates with organizational procedures, rules and
regulations. It is also aimed at boosting the confidence of the new recruits, instilling a sense of
belonging, trust, and loyalty.

EMERGING TRENDS

Currently the recruitment and selection approach is undergoing tremendous changes fueled by
technological innovations and changes in strategic outlook. The following section examines
some of the key trends impacting recruitment and selection process.

● Corporate talent network

● Building an end-to-end talent brand

● Use of applicant tracking software (ATS)

● Develop mobile recruitment strategy

● Growing emphasis on using social networks

● Increased focused on passive candidates

2. TRAINING & SKILL DEVELOPMENT

HR management takes the key responsibility of analyzing the training requirements of the firm,
employees and the work. The HR team organizes training sessions and evaluates the overall
value gained out of the training sessions.
It is also the HR manager that ensures the development in the long term with these training
programs. Their perspective is to bring forth the overall development that can benefit the
company directly or indirectly.

HR management conducts the training and development with the three levels of training,
education, and development in mind.

Employee Orientation

HR management undertakes orientations for the new hires so that their smooth ‘onboarding’
could be ensured without any hindrance. Such effective orientation saves time and brings forth
the complete productive input from the new hire.

Career Development

Career Development is an approach to training and development wherein the HR management

identifies a goal that is desired and immediate to both the employee and the firm. Training
initiatives on such goals allow the development opportunity on a personal level and at the
organizational level.

Leadership Training

Leadership training is not limited to the assigned superiors of the firm but for all employees. The
ability to lead a team, a project, other employees etc. are requirements that emerge at some point
or the other. HR management ensures that employees are able to undertake leadership
responsibilities without much thought and this they include it in the training plan.

Management Development

Employees in the management positions are expected to be adept in their dealings with planning,
organizing, implementation of the changes with the organizational methods, resource
coordination etc. Management Development ensures quality work and improvises upon the
employee’s skills for all these crucial responsibilities.
Supervisor Development

The work of supervision, be it an organization, is one that is the first major transition from a
general employee position. It involves management skills and the ability to lead teams as well.
Due to this transition, it becomes necessary for the HR management to chart training sessions
that aims at the development of supervising skills that are immediate to the job position.

EMERGING TRENDS

In today’s era employees are not keen to join an organization where their Knowledge and skills
are not upgraded. These are some of the current & expected future training trends worldwide.

● Computer based training

● Virtual reality

● Intelligent tutoring systems

● Outbound training programme

● Distance Learning

● E-Learning

3. PERFORMANCE MANAGEMENT
A large part of working in Human Resources (HR) is regulating performance management.
Creating a space where you and your employees can produce excellent work and perform to the
best of your abilities is no easy task, but with the right strategies, you can make it work. Consider
the following six strategies for effective performance management.

● Define and Communicate Company Goals and Performance Objectives

● Utilize Performance Management Software

● Offer Frequent Performance Feedback

● Use Peer Reviews

 ● Preemptive Management and Recognition

● Set Regular Meetings to Discuss Outcomes and Results

EMERGING TRENDS

The list assembled below tells about top trends to help create or refine employee performance
management strategy.

● Finding the Leverage & Developing Trust

● Continuous Performance Management Will Catch On

● Employee Experience Continues to Be a Thing

● People Analytics Will Become Essential

● Increased Focus on Individualized Employee Support

● A Streamlined Approach to Learning and Employee Development

● Rethinking Job Roles Will Increase Employee Growth and Development

4. EMPLOYEE ENGAGEMENT

Employee engagement best practices are essential to making sure that a organization is
running efficiently and productively as a whole. Employee engagement strategies include
leadership development, culture, performance, and many different areas of human resources.
So by focusing on employee engagement, it actually improves all of these other smaller areas
of the HR puzzle. This holistic approach makes improving each section easier because they
 are now all nicely lumped together.

● Inspire your employees to join your company’s mission

● Be flexible with your employees
● Create diversity of people, thought, etc
● Focus on development of everyone, not just leaders
● Offer benefits that align with your company’s values
● Create a culture of openness and honesty
● Start with your executives
● Hire employees that are most likely to be engaged
● Understand that employee engagement and happiness are two different things.

EMERGING TRENDS

The important employee engagement trends that can leverage the year and share quotes from
successful organizational leaders along the way:

● Purpose at work

● Professional development

● Employee wellness

● Diversity & inclusion

● Flexible work schedules

5. CONFLICT MANAGEMENT
Conflict in the workplace is common, so effective conflict resolution strategies for HR need to be
common as well.

Conflict is any workplace disagreement that disrupts the workflow. It is often a situation in
which people perceive a threat; they may perceive this threat as physical, emotional, or a grab for
power or status. It’s usually a gut feeling, not necessarily a specific threat that occurs. Conflict
can also occur whenever people try to make others change their actions or to gain an unfair
advantage.

Conflict management is the elimination of the conflict by arriving at a mutually beneficial

outcome. Here are 5 conflict resolution practices for HR to incorporate:

● Emphasize Clarity and Consistency in Policies and Procedures. “Make the

rationale for decisions transparent.” Sanchez explained. Ensure that the
company leaders share the thinking behind the company’s approaches and
decisions. This minimizes potential conflict that may arise from policy
changes, for example, but also is important when implementing existing
policies in a fair manner.
● Ensure Accountability for Conflict Resolution. Ensure all employees – not
just managers or HR – are accountable for resolving conflict. Managers don’t
have to take care of every issue. The employees involved need to be part of
the solution. HR and/or managers should mediate, however.
● Don’t Ignore the Conflict. While there are some cases where short-term
avoidance is part of the long-term solution (especially for minor issues), in
general, avoiding conflict won’t fix anything. It is especially important to not
avoid dealing with conflict when it could escalate to violence.
● Seek to Understand. There are underlying emotions in conflict, and HR and
managers need to understand what is going on at the root of the problem.
● Recognize Different Circumstances. Different circumstances and different
approaches to conflict can make a huge difference, and sometimes simply
recognizing what is going on is the first step towards resolution. It can also be
a great way to learn about one another.
6. COMPENSATION & REWARD MANAGEMENT
Compensation includes payments like bonuses, profit sharing, overtime pay, recognition
rewards and sales commission, etc.

Compensation can also include non-monetary perks like a company-paid car, company-paid

housing and stock opportunities. Compensation is a vital part of human resource management,
which helps in encouraging the employees and improving organizational effectiveness.

A good compensation is a must for every business organization, as it gives an employee a

reason to stick to the company.

An organization gains from a structured compensation management in the following ways −

● It tries to give proper refund to the employees for their contributions to the organization.

● It discovers a positive control on the efficiency of employees and motivates them to

perform better and achieve the specific standards.

● It creates a base for happiness and satisfaction of the workforce that limits the labor
turnover and confers a stable organization.

● It enhances the job evaluation process, which in return helps in setting up more realistic
and achievable standards.

● It is designed to abide with the various labor acts and thus does not result in conflicts
between the employee union and the management. This creates a peaceful relationship
between the employer and the employees.

● It excites an environment of morale, efficiency and cooperation among the workers and
ensures satisfaction to the workers.

EMERGING TRENDS

With the war for talent in full-effect, it’s important to look more deeply into how compensation
 factors play in an organization’s ability to attract, engage, and retain top talent. Support your
people strategy and stay competitive by keeping up with compensation trends.

● Pay to Retain

● Pay Transparency

● Increase in Variable Pay Programs

● Keep Track of Hot Job Pay Growth

● Compensation Training on the Rise

7. DIVERSITY AND INCLUSION

Diversity and inclusion is a company’s mission, strategies, and practices to support a diverse
workplace and leverage the effects of diversity to achieve a competitive business advantage.
Diversity and inclusion best practices include:

● fair treatment

● equal access to opportunity

● teamwork and collaboration

● a focus on innovation and creativity

● organizational flexibility, responsiveness, and agility

● conflict resolution processes that are collaborative

● evidence of leadership’s commitment to diversity (e.g., appointing a Chief Diversity / Equality

Officer)

● representation of diversity at all levels of the organization

● representation of diversity among internal and external stakeholders

● diversity education and training

EMERGING TRENDS

Keeping a strong pulse on the D&I trends emerging in the workplace can help a company stay a
beat ahead of the competition and prepare for the future of work.

● Deploying artificial intelligence (AI) technology to remove unconscious bias.

● Using data to assess D&I climate, identify focus areas & quantify the success of
initiatives.
● Increased leadership accountability & support for D&I programs.
● Interview standardization will continue & reduce bias.
● Diversity & inclusion will be embraced across products & services for customers.

8. STRESS MANAGEMENT
Stress doesn’t only target susceptible individuals – high-levels of office stress lower team morale
overall. Indeed, stress is as contagious – from managers to new hires, millennials to baby
boomers, no one is immune from its reach.

With this in mind, certain individuals are better at handling stress than others. In fact, certain
roles are simply not suited to certain individuals as they may struggle with the stress associated
with the work. Ensuring that an employee suits a role by doing a job fit assessment enables
managers with this knowledge in the pre-employment screening.

There are numerous ways managers can mitigate its more harmful effects in a work environment.

Flexible Work Arrangements

Although certain schedules may not work, allowing some flexibility in an employee’s schedule
may relieve a great deal of stress. For example, some people feel more efficient in the evening
and therefore won’t flourish with an early start. Similarly, some staff may not even need to work
in the office to fulfil their roles.

Show Empathy

Many employees face a multitude of pressures that extend beyond their careers. As a result, they
may not always perform to the best of their abilities and they may appear to struggle; however, it
is important to note what they are going through and to take the time to understand where they
are coming from.

Wellness Programs

While it’s pertinent to address issues as they arise, managing stress before it becomes an issue
even more important. Wellness programs include myriad strategies to promote mental health
among staff and combat toxic stress. These programs may include a gym membership,
meditation, therapy, dance classes, massages and more.

Address Issues Right Away

Some issues are not worth bringing attention to, and doing so may cause unnecessary drama
within the office. On the other hand, ignoring problems between staff or management may have
catastrophic consequences. As a matter of fact, allowing disputes between employees to fester
could create widespread toxicity. Although an issue may begin between two parties, it may lead
to said parties creating alliances with ample hostility.

Prioritize Time Management

Staff tend to feel overwhelmed when they feel like things are out of their control. Whether that
includes their daily goals, targets or projects when they feel they cannot actively control their
outcomes they begin to panic. As a result, employees who feel they cannot reach their goals in a
set time tend to break down. A good way to mitigate this crisis is to enforce a strong method of
organization in the workplace. In addition, managers should consistently check in with staff to
ensure that they are on track.

9. CSR
According to a more recent definition by the European Commission, Corporate Social
Responsibility (CSR) is a process for companies to integrate social, environmental, ethical, and
human rights concerns into their operations and core strategy, in close collaboration with their
stakeholders.

In organizations adopting a sustainability strategy— whether for business, legal or values-based

reasons— HR has an important role to play. The HR function should help formulate and achieve
environmental and social goals while also balancing these objectives with traditional financial
performance metrics. The HR function can serve as a partner in determining what is needed or
what is possible in formulating corporate values and sustainability strategy. At the same time,
HR should play a key role in ensuring that employees implement the strategy consistently across
the organization. Sustainable human resource management (HRM) can be defined as using the
tools of HR to create a workforce that has the trust, values, skills and motivation to achieve a
profitable triple bottom line.

In order to emphasize the close connection between HR and CSR the role of the Human
Resources Department, and that of HR management:

• To ensure that all employees adhere to certain values, and ethical behavior, in accordance with
the company’s policy;

• To ensure the CSR’s transparency by informing their employees with regards to internal and
external actions;

• To evaluate CSR reports;

• To adopt a recruitment strategy in accordance with the company’s values and social
responsibility principles;

• To ensure and foster the employees’ engagement with the company;

• To ensure a suitable corporate climate which can allow the business to succeed in a responsible
manner.

10. EMPLOYEE RETENTION

The way your employees feel is the way your customers will feel. And if your employees don’t
feel valued, neither will your customers.”
This line best sums up the vital role the employees play in any organization. Everyone knows
that the best assets of any organization are its employees.

Here are some quick strategies that will bring to ensure that employee retention rate only climbs
higher and higher.
● Communication Conducive Environment

● Two-way Feedback

● Inculcate Leadership

● Say Yes To Innovation & Creativity

● Employee Growth and Development

11. HR POLICIES IN ITC

ITC approach to its human resources is premised on the fundamental

belief in fostering meritocracy in the organization which promote
diversity an 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, colour, ancestry,
marital status or affiliation with a political, religious, or union
organization or minority group.

The policy is communicated to all employees through induction

programmes, policy manuals and intranet portals.

The custodian of this polic is the head of each operational unit and
divisional cheif executives of the respective business.