SITUATIONAL ANALYSIS

“Can a strong culture be too strong?” is a case study about a mid-size Chennai based IT
services firm called Parivar which is facing a huge attrition problem. Parivar has been
growing in terms of revenues, profitability and reputation but is still smaller than leading
global providers of business process outsourcing services like Infosys and HCL. This huge
turn in its story from bankruptcy to success has been brought by Parivar’s CEO – Sudhir
Gupta, in the past decade. Sudhir is a big proponent of an inclusive culture in the
organization, where attention to both professional and personal details of the employees is
given. Sudhir is also a people oriented person as he is seen encouraging Nisha, who is fresh
out of business school and wanting honest opinion of Indira. Who is the vice president of
HR. Parivar conducts an annual innovation process called the Future Vision where
employees from all over the company join senior leaders in brainstorming and designing
sessions for planning strategies about how the firm can achieve its annual goals. This year,
the Future Vision exercise has led to the creation of “People Support” idea where managers
will be dedicated solely for the purpose of listening to other employee’s grievances and
figuring out solutions. However, the People Support program has not been fully planned as
certain important details like its cost, scalability, management and applicability outside India
in case of Parivar’s expansion in US and UK, has not been decided till now. In spite of being
so much people oriented, in the recent weeks Parivar has been losing a lot of its employees,
with as many as 100 employees giving notice in a short span of time. The problems faced by
the employees, as explained by Amal in an exit interview, are the remuneration being as
lower by 30% than industry standards, too much intrusion in the employees’ lives due to the
inclusive culture and partial access to senior employees by only a select few. Judging all the
pros and cons of the People Support program, Indira now faces the dilemma of telling
Sudhir about whether to continue with the People Support program or not.

PROBLEM STATEMENT

Given the “long list of escapees” of Parivar, what measures can be taken by it to reduce its
attrition rate along with maintaining its culture, reputation and profitability
OPTIONS

Plan and implement the People Support Idea

Do not implement People Support Idea and stabilize current management practices.

Provide better employee benefits

CRITERIA FOR EVALUATION

Cost

Scalability

Alignment with company’s strategy

Feasibility-Ease of implementation

Reputation-Brand value

Productivity of labor

Relationship with the employee

EVALUATION OF OPTIONS

PLAN AND IMPLEMENT THE PEOPLE SUPPORT IDEA- Parivar can go ahead with the people support
idea if they come up with a proper plan for the structure of the People Support program and its
implementation. Training and paying the people support listeners will cost money but People
Support might pay for itself from reduced turnover and recruiting expenses. The program might also
help correct the disconnect between the employees and the leadership and is a chance to show that
the company treats everyone fairly and does not play favorites. This will reinforce parivar’s love
culture and improve the relationship with the employees. A major drawback though will be the fact
that it might take quite a lot of time of the employees, decrease productivity and hence affect
revenues and the growth prospects of the company.

DO NOT IMPLEMENT PEOPLE SUPPORT IDEA AND STABILIZE CURRENT MANAGEMENT PRACTICES –
Instead of starting a new program by spending considerable resources on it, Parivar should try to
figure out what the employees think about Parivar’s culture and what their expectations are. They
should implement better management practices such that the immediate managers are sensitive to
the needs and concerns of the employees and have an open door policy for all employees. This will
have negligible cost on the organization and at the same time help in improving the relationship with
the employees.
Communicating the company’s needs and meeting the employee’s expectations such that there is a
mutual benefit will ensure that the workforce is functioning in line with the company’s strategy.
Productivity also won’t be impacted.

PROVIDE BETTER EMPLOYEE BENEFITS-In light of the fact that Parivar is present in an extremely
competitive industry where best companies are continuously poaching for talent, it is important that
Parivar provides employee benefits more in line with industry standards. This might include better
salary, employee stock options, company cars, insurance, health club facilities, daycare facilities etc.
Although this will add significant cost to the organization, it will be compensated by the increase in
productivity and decreased attrition as the employees will truly feel that Parivar really cares for them
and realizes their importance. This will also result in establishment of a strong brand image for the
company through word of mouth which will attract best talent and help in the growth of the
organization