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W13168
WORK FROM HOME: CURSE OR BOON?
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Ashok K. Mishra and Sangeeta Shah Bharadwaj wrote this case solely to provide material for class discussion. The authors do not
intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names
and other identifying information to protect confidentiality.
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Copyright © 2013, Richard Ivey School of Business Foundation Version: 2013-05-07
Joshi Devendra, general manager of Knowledge Services Online India Ltd. (KSOIL), was busy finalizing
the details of the layout for a new delivery centre in Noida, India, required to be ready before December
2011. He was planning to present the plan at the next quarterly meeting, scheduled for July 27, 2011 with
the chief operating officer (COO). Outside his office, Devendra heard Joseph Edelman the project
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manager (PM) for the home library business project 1 arguing with Maria Jefferson, the head of human
resources (HR). “High performers on the team earn higher amounts because they perform; they put in 16
to 18 hours a day and they deserve what they are making. This is what we as a company wanted to do:
encourage working from home and reward good performers.” He glanced up and saw Edelman a little
agitated, unusual for Edelman, normally a soft-spoken person known for his consistently high
performance. Devendra could hear Edelman’s raised voice clearly say, “Due to these high performers, my
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home library business project and the business unit (BU) have both been continuously exceeding targets,
even during lean months when most of us get hit by high absenteeism. So why should working from
home be an issue for HR?”
Jefferson dropped in before lunch and brought up the details of her conversation with Edelman. She was
concerned KSOIL was facing a potentially explosive situation due to the large variation in employee
compensation for the same task and skill level. Over the past three to four months, earnings of home-
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based workers from the home library business’ project were nearly two to three times higher than those of
office-based employees. Jefferson was also worried about Edelman’s decision to potentially increase the
home-based resource team from 44 to 75 employees.
This added to Devendra’s concerns. Edelman and a few other project managers needed to add more than
200 people to their teams by July, so they could continue meeting delivery commitments. The facility at
Noida was running at almost 98 per cent capacity, with hardly any scope for expansion at the current
location. There was also the possibility the new centre would not get approved during the upcoming
review meeting. Even if it did, the centre would become functional only after six months. He could then
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hire additional space for just 100 people. Adding 200 more workers to the home library business
depended on Devendra’s strategy to move 100 employees to the home-based arrangement, while another
100 remained in the office.
1
Home library business project: The project consists of conversion, indexing and abstracting of published journal articles.
Client sells these to libraries, research institutions, individual researchers and readers as a secondary data base.
This document is authorized for educator review use only by ANOOSHA MAZHAR, Air University until Sep 2018. Copying or posting is an infringement of copyright.
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KSOIL BRIEF HISTORY
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Knowledge Services Online Inc. (KSO), founded in 1996 by Zerrudo Gillman, was headquartered in New
Jersey, USA. When the company went public in 1999, KSO had more than 2,500 employees worldwide.
Advances in telecommunications and infrastructure allowed it to establish centers of highly trained
personnel in Asia to support growth. It had six delivery centres spread across the Philippines, Sri Lanka
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and India. The company had more than 6,000 full time employees and reported revenue of US$80 million
in 2010.
KSO provided knowledge process outsourcing (KPO) (Exhibit 1), publishing and related information
technology (IT) services in the United States, Europe, Australia and a few other countries. KSO helped
many of the world’s leading companies create and manage information more effectively and
economically. All its delivery centres were ISO 27000 certified, followed common standards of
processes, hardware and software with internally developed proprietary applications. The company had
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sales and support offices in the United States, United Kingdom, Europe and Asia.
KSO’s Noida delivery center, better known as Knowledge Services Online India Pvt. Ltd., (KSOIL) (see
Exhibit 2) was established in 2001. As of June 2011, the centre in Noida provided KPO services in
engineering, sciences and law; e-book digitization, XML conversion and e-learning. KPO service
offerings included content creation, enhancement and abstracting, analytics, taxonomy and controlled
vocabulary based indexing, technical writing, copy-editing and general editorial services. As the core
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business area, publishing services constituted a significant part of business at the Noida facility. The
Noida facility had close to 1,700 employees, who had at least one degree in computers, engineering,
sciences, law, finance or accounting. About 20 per cent of employees had Masters and Ph.D. degrees.
Approximately 300 employees at the Noida center worked in support functions like HR, finance, global
technology, content engineering and facility support.
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During 2004, KSO’s facility in Manila, Philippines experimented with home-based work to allow KPO
employees flexibility and to encourage part-time workers from medical colleges and universities to work
on a medical project, where experienced doctors were needed. This was extended to legal projects in
2006. Both these efforts were successful. The facility at Noida was nearing full capacity utilization.
Working from home was considered a suitable option for current employees who undertook certain
conversion and indexing tasks. There was an overall acceptance in the company; home-based work had
become the new trend for providing higher flexibility in IT and ITES services.
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EQUITABLE COMPENSATION: BASIS OF PARITY FOR HR
As the head of HR, Jefferson was concerned about the grievances she had been receiving over the last
couple of months, especially as their significance had grown lately. These grievances were mostly from
the home library business project and a few other delivery project groups. Grievances addressed the fact
that home-based workers made as much as three times more than office-based workers. This was also
much higher than what these employees had made when they were working from the office just a few
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months earlier. Similar concerns were raised by Jefferson’s manager during the HR department’s previous
quarterly review meeting. Jefferson was concerned something was not quite right. A few home-based
workers may have found some shortcut to show a higher output, raising questions about how they could
be making much more than expected compensation. Jefferson believed the company had to rethink the
home-based policy (Exhibit 3), as the large disparity between the take-home salaries of office- and home-
based employees could not be explained satisfactorily (Exhibit 4). Jefferson felt Edelman’s claim of high
productivity and high revenue generation by home-based employees was not sustainably logical. She was
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also worried about Edelman’s desire to double the number of home-based employees. Jefferson knew this
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plan would be welcomed by the top management and employees being considered for home based
arrangement. However, the same plan was likely to increase grievances and dissatisfaction among office-
based employees. Another issue of concern was the requests received from other projects to be brought
under the home-based working plan.
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There was a time when Jefferson herself had supported the home-based working plan, strongly arguing
good performers should be provided with this kind of flexibility. It would help the company reduce
overhead costs on infrastructure expenses. She had also forecasted the scheme would help bring down
attrition by almost 5 to 7 per cent, an issue HR had been recently confronting.
However, the potential inequality in pay made Jefferson worry, as this could affect the work effort of
office-based employees, depending on the degree of inequality and a worker’s relative risk aversion.2 This
situation was likely to result in higher attrition, actively working against the original goal to reduce
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attrition.
Later that evening, Jefferson went over the issue and wondered how a project manager could justify
overproduction by home-based employees. She argued an individual can have good productivity for a
period of six to 10 hours a day, and beyond this productive period most of the additional effort reduces
efficiency and ultimately becomes nonproductive. How could somebody produce three times the normal
output, even if they worked much longer hours? How could an employee working from the office produce
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only 500 documents in a month, whereas some of the home-based employees were producing about 1,500
documents? Jefferson wondered if home workers were asking other people, such as their family members,
to work on their behalf and produce more. She also wondered how a project manager could overlook the
issue of unequal opportunities and unequal compensation for the employees working at the same skill
level on the same project, at exactly the same location. Her discussion with Edelman turned into an
argument because he was not ready to compromise on the higher quantities produced by home-based
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employees. Jefferson seriously doubted the fairness of individual effort from home-based employees.
Jefferson told Edelman, “The project manager’s goals remain maximizing revenues and increase
profitability quarter over quarter and year over year. Any other issue beyond this goal doesn’t bother them
and they easily bury other issues under profitability drive.” She further argued, “But an HR manager is
like a doctor for the organization, who needs to keep monitoring the pulse rate of individuals in the
company. If, in an organization, somebody is getting US$400/ per month and his counterpart with the
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same profile makes US$1,200/ per month for the same kind of work, then this disparity in compensation
can lead to dissatisfaction among the employees.”
OPTIMIZE RESOURCES AND MAXIMIZE PROFITS
Edelman had joined KSOIL in 2004 as a production manager for content services, specializing in editorial
and conversion services. Edelman’s previous background had given him the opportunity to be part of the
electronics manufacturing industry, where mature and well-honed processes drove productivity and
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quality, helping manufacturers compete and thrive on smaller margins. In that industry, a minor
difference of 0.1 per cent higher rejection at the assembly level could be enough to push the production
line into the red.
2
Linda A. Bell and Richard B. Freeman, “The incentive for working hard: explaining hours worked differences in the US and
Germany,” Labour Economics, 8 (1), 2001, pp. 181–202.
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During Edelman’s first year at KSOIL, he drove a number of changes based on his past knowledge and
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experience. He continued putting in an effort to hone processes and reduce error rates, using technology
to increase productivity. His customers appreciated the effort being put into their projects and many of
them started increasing the volume of work they gave to KSOIL. The top management lauded Edelman’s
efforts and, in 2008, promoted him to the position of project manager, expanding his responsibilities
across Asia for all editorial and e-book work. Home library business was his biggest and flagship project,
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employing more than 750 people across Philippines and India. The home library business project had
been his focus from the beginning of the year and he spent considerable time on the project. The
possibility of doubling the volume of the home library business over the next 12 months, along with a 15
per cent reduction in price, offered Edelman the challenge he desired.
Home-based working was one of the initiatives Edelman considered for cost reduction, which incidentally
coincided with the company’s focus on reducing attrition by providing high performers with the
flexibility to work from home. Work for the home library business was billed on output units (typically
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articles) produced, transmitted and accepted by the customer, unlike full-time equivalent (FTE) or login-
based billing, where the primary base is the time put in and not the effort (Exhibit 5).
Edelman was positive home-based employees would not be constrained by office hours and would be
able to put in additional hours, producing higher units and creating higher earnings. Edelman strongly
believed in the equity theory of compensation, which stated, “employee perceptions of what they
contribute to the organization is what they get in return.”3 He planned to enhance the prevailing office-
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based production incentive system by removing any upper limit, to motivate the home-based group to put
in more than nine hours each day.
Edelman worked with HR and shortlisted 20 willing candidates from the top 25 per cent of high
performers of the home library business team. This arrangement became effective on Jan 1, 2011.
Although there were hiccups in the beginning, most issues were resolved during the first month itself.
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Edelman ensured the 20 home-based employees were given preferential treatment and were provided with
a single point of contact for speedy resolutions of any issues they had.
During February alone, the first 20 home-based employees succeeded in generating almost twice the
normal output. This sparked Edelman’s plan to increase the size of the home-based team from 20 to 44
during March. He felt confident this group of 44 employees would be a critical force in raising
productivity, reducing the unit cost of production. When a few home-based employees started producing
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three times the normal output, Edelman decided to increase his team size from 44 to 75 by mid-year. The
work stations vacated by these home-based employees gave him the chance to increase the headcount of
his team, without adding any infrastructure cost. Edelman knew he had hit the jackpot.
On the day they argued, Edelman asked Jefferson to organize the movement of another 31 people to
home-based employee status. HR needed to authorize the movement to make the necessary changes in
attendance, connectivity, benefits and administrative rules. Edelman told Jefferson she was reaping the
real benefits of home-based working, as the HR cost for maintaining home-based employees was almost
negligible. Edelman was taken aback when Jefferson, rather than being enthusiastic, reacted adversely
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and brought up the issues of office-based employees of his home library group. Edelman tried to explain
her worries were baseless, stating, “From the HR perspective, I don’t think there is anything wrong. A
person producing a larger number of records gets higher payments, whereas a person producing a lower
3
Yolanda Ruiz and Annette Walling,” Home-based working using communication technologies,” Labour Market Trends, 113
(10), 2005, pp. 417-426.
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number earns less. I am alright with that. Employees get rewarded on the per accepted quality piece
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basis.”
Edelman tried to convince Jefferson this was beneficial for both the employees and the company.
Edelman also referred to efficiency wage models, stating, “Workers provide greater work effort and
increased productivity in return for above-market-clearing wages. As an alternative to greater work effort
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and increased productivity, workers may work additional hours with the same level of work effort in
return for higher wages.4 A home-based arrangement has been implemented by several firms in the past
few years and is the latest trend emerging in the outsourcing industry. Between 1980 and 2000, home-
based employment has grown much faster than on-site employment and the relative wage of home-based
workers has risen dramatically over the same period.”5
Jefferson smiled and asked, “If home-based working is so lucrative and profitable, then most of the
office-based employees are likely to ask for home-based working as well. How will you handle them?”
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Edelman argued, “No, I won’t do that. They cannot ask to work from home. It is a privilege given to top
performers. It’s not that everyone is allowed to work from home. We need to maintain at least half the
capacity in-house to ensure control and to continuously working on improving our tools, applications and
automation.”
“Why should office employees be dissatisfied?” Edelman continued. “Employees who have lower
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productivity need to reach to a level where they can be allowed to take up the home-based arrangement.
This is something to motivate them to the level where they can be chosen for the home based work. I
don’t see any dissatisfaction. From the production perspective, better quality, higher productivity at lower
infrastructure cost is the key. I am getting the quality and the quantity I am looking for at the moment.
These small issues do not make a difference to me. As far as I am concerned, my duty is to run the project
profitably with good quality. As long as I am full filling those objectives, I am satisfied.”
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WORKING FROM HOME MODEL
Devendra had played a prominent role in championing the concept of working from home. The benefits
were too vast to ignore. Almost all the customer agreements on KPO and e-book conversion projects were
based on units of measurable data, such as records, pages, bytes, books or journal articles delivered,
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unlike in case of BPOs and IT service providers, where customer agreements were time and material
based. Devendra felt that with rapid advancements in communication and Internet infrastructure in larger
cities of India, especially Noida and Delhi, it would be easier for home-based employees to set up work
centres at home. He verified quantity and quality could be kept exactly at the same standards as those in
the office. Devendra wanted to offer the home-based model to 25 per cent of top performers of the home
library business project because of consistent growth, a supportive delivery manager, the advantages of
savings on commuting time and cost, and to build on the success of Manila facility’s home-based model.
Devendra worked with managers from delivery, global technology and content engineering to ensure
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home workers got a work model similar to the one in the office. This was possible because KSOIL had
been testing various options like ‘Thin Client computers’, and ‘Citrix based workflow’ since 2010, and
had opted for deploying both models from the annex of KSOIL, which did not have its own data center
4
Younghwa Song, “Unpaid work at home,” Industrial Relations 48(4), 2009, pp. 578-588.
5
Gerald S. Oettinger, “The Growth in Home-based Wage and Salary Employment in the United States, 1980-2000: How
Much and Why?” Unpublished paper, Department of Economics, University of Texas at Austin, 2004.
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(see Exhibit 6). Since data security could become a concern, Devendra asked global technology’s head to
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ensure working from home would not compromise any conditions agreed upon with customers and Noida
center’s ISO 27000 certification, BS5577 data security certification, and the current SAS 70 certification.
Once he got confirmation from all concerned, Devendra launched the home working scheme in January
2011.
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Dilemma — Profit or Ethics
During the monthly review meeting of department heads at KSOIL, the issue of higher earnings by home-
based employees came up. Edelman presented comparisons of the average earnings by home-based
employees versus office-based employees from January to May 2011. The data clearly showed earnings
had a normal distribution for both groups, but the home-based group earned almost twice on average.
However, some of home-based individuals were even able to produce almost three times the average
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expected volume. Edelman was confident that the quality of the units delivered by the home-based group
was at par with that of the office-based workers. Jefferson questioned the validity of home-based workers
producing three times the expected output when none of the office-based workers could do so. No one
had a satisfactory answer. The systems manager did validate the fact that the systems provided for home-
based employees, especially for those who had produced higher units, were logged on for almost 14 to18
hours a day, including Sundays and holidays.
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Capacity Expansion Option
While working on the plan for expansion of capacity, Devendra learned the average cost of setting up one
seat was approximately Rs. 200,000 for a spacious and modern layout, while this could be lowered to
Rs.150,000, if the office specifications were reduced to a basic design and requirement. New capacity
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creation below 400 to 600 seats did not make economic sense and at least six months of lead time was
needed to set up a decent office. Unfortunately, the current location offered no possibility for expansion
and Devendra was forced to propose a new location for expansion; an option that might not get approval
as the additional projected work was limited to around 200 seats.
Unequal compensation did not worry Devendra as much as he initially thought. Home-based employees
devoted more time to their work. As the earnings of home-based employees were in direct proportion to
the units produced, higher earnings could be explained. Devendra checked with a few home-based
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employees and they expressed their satisfaction with the scheme, though they admit to missing the in-
person interaction with their office colleagues. Productivity can vary among people, as some people are
more productive and active when they are among their peer group and friends. Some people find the same
level of comfort when they are with their families, while some people are more productive when they are
alone. The ability to work from home is greatly affected by the nature of one’s work because some types
of work can be more easily performed at home than others.6 This factor alone creates a significant
difference in productivity. Employees get paid for the work they perform.7 Devendra believed the
earnings differential could result in a healthy competition, benefitting both groups.
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6
Issues in Labor Statistics, March 2009, US Bureau of Labor Statistics, www.bls.gov/opub/ils/pdf/opbils72.pdf, accessed
April 19, 2013.
7
Linda A. Bell and Richard B. Freeman, “The incentive for working hard: explaining hours worked differences in the US and
Germany,” Labour Economics, 8 (1), 2001, pp. 181–202.
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Ethics Issues
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The issue of ethical and fair practice with home-based working did disturb Devendra. What if a home-
based employee had trained his/her family member to work on the employee’s behalf on the office-
provided computer? This could explain the 14 to 18 hours of work each day. How could he uncover these
incidents and how would he handle these issues if they arose? What if a home-based employee had hired
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someone on his or her behalf, sub-contracting the work? This was a serious matter and it had to be
controlled. It was not only unethical, but highly risky. Devendra could understand why Jefferson
questioned this home-based arrangement on ethical grounds. Devendra did not know whether he could
agree with Edelman and allow another 40 to 50 people to begin working from home and accelerate
growth, or conduct a thorough inquiry into the practice(s) adopted by the home-based working group,
something that might derail the whole process. Devendra knew Edelman would be looking to increase the
number of employees working under the home-based model in the next two months.
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Devendra knew he could not expand in the existing location and next opportunity for expansion would be
at least six months away. The home library customer was not likely to wait for more than a couple of
weeks to start seeing enhanced volumes. He might opt to bring in an additional vendor, a real threat for
KSOIL.
Devendra had to make a decision soon.

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Ashok K. Mishra and Sangeeta Shah Bharadwaj are from Management Development Institute, India.
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Exhibit 1
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BPO AND KPO
BPO or back office processing is a term coined for relatively elementary and standardized processing of
administrative and support activities, voice based activities such as (inbound and outbound) call centres,
back-office process arrangements to manage finance and accounting operations, customer support,
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telemarketing, technical support, disaster recovery, and e-mail support to name a few. These call centres
provide their services in various industry verticals like insurance industry, mortgage and banking industry,
credit card industry, telecommunications industry, travel and ticketing, HR and recruiting, surveys and
questionnaires, etc. In BPO, the procedures to solve a problem are usually well known and employees
can be trained in the methodology easily as most of the work is repetitive in nature.
On the other hand, KPO or knowledge process outsourcing involves high-end processes like writing and
content development, legal services, intellectual property (IP), research, data analytics, network
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management, scientific and engineering indexing and abstracting, research and development, business
and technical analysis, learning solutions, business and market research, pharmaceuticals and
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biotechnology, medical services, training and consultancy, etc. In KPO, there may not always be a
standard method of reaching a solution or end product, as decision making and subjectivity makes the
process complex. This creates a high level of risk and uncertainty, but also the potential for high value.
Source: Falguni Sen and Michael Shiel. “From business process outsourcing (BPO) to knowledge process outsourcing
(KPO): Some issues,” Human Systems Management 25 (2), 2006, pp. 145–155.
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Exhibit 2
ORGANIZATION CHART
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No
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Source: KSOIL documents.
8
S. Raghu Raman, Pawan Budhwar and G. Balasubramanian, “People management issues in Indian KPOs,” Employee
Relations, 29 (6), 2007, pp. 696-710.
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Exhibit 3
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HOME BASED COMPENSATION POLICY
1) Scope: This Policy covers the mechanics of Home Work Assignments and all employees who enter Home
Work Assignment to work from home while performing job responsibilities.
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2) Definition of Terms:
i. HWA-Home Work Assignment Agreement
ii. HW Allowance-Home Work Allowance to be paid to the employee on monthly basis.
iii. Daily Quota- Daily quota is predefined Job volume per day, which is required to serve company’s business
requirement.
3) Objective: The Home Work Assignment Agreement amends the existing Contract of Employment between
the Company and the Employee to the extent allowed by law.
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4) Policy Statement: Effectively of the HWA commences at the date of the agreement and runs for a period of
twelve months. It can be renewed subsequently upon mutual agreement.
i. Inability to connect: If the Employee is unable to connect to the Company’s Computer Servers for any
reason, the Employee has the option to proceed to the Company’s premises or to any other location of
his/her choice where he/she is able to connect. Inability to connect to Company’s Computer Servers shall
be at Employee’s risk and account and will not give rise to any obligation from the Company to reimburse
Employee or condone Employee’s missing the Daily Quota.
ii. Attendance policy: The Company’s Attendance Policy shall remain unchanged, except that Daily
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Accepted Output shall be used to determine the number of hours work. If the Daily Accepted Output equals
the Daily Quota, then the Employee is considered as having worked a full day and recorded and reported
accordingly. If the Employee does not produce or under-produces, it will be treated as absence and under-
timing, respectively, and will be dealt with based on existing company Attendance Policy.
iii. Report to company premises: The Company will endeavor to conduct as much of such activities via
remote attendance or distance learning. However, the Company shall have the right to require the
Employee to proceed to the Company premises (or designated areas) for as many days as would be
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necessary for purposes of training, orientation and similar activities. Failure to comply will be among the
reasons for pre-termination of the HWA by the Company.
iv. Connecting to company’s designated server: The Company will provide the entire infrastructure
necessary for the Employee to be able to work. Employee can access these tools by installing Company-
provided software called RDP on the Employee’s computer. The Employee runs the RDP, which will
connect via the Internet to the Company’s Designated Server. The Employee then logs-in by entering the
User Name and Password provided by the Company to access the Company’s Designated Server thru the
RDP. All the tools needed can and will be found within this Designated Server. Upon completing work, the
Employee then logs-out of the Company’s Designated Server.
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v. Access only by employee and thru company servers: Employee warrants that they and only they
access the Company’s Designated Servers and retrieve and enter information. Employee agrees that
allowing any another person to use the Employee’s account to connect to the Company’s Designated
Servers is a terminable offense.
vi. Tools for work: All tools necessary for the Employee to work is found inside the Company’s Designated
Server. In keeping with the Company’s information security requirements, Employee agrees to use only
company-provided tools for the work and will not use or store information of any other tool not provided by
the company.
vii. Specialized equipment: In the event the work requires specialized equipment, Company will provide such
specialized equipment to the Employee. Such equipment will remains as property of the Company and
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Employee agrees to care for the equipment as if it were his/her own.

1. Company’s Policies. Employee agrees to be bound by all Employee-related policies that are in force
and that may be implemented in the future on other Employees of the Company not covered by HWA.
2. Non-diminution. Employee specifically agrees that the offer of the HWA is a privilege and that the pre-
termination or the non-renewal of the HWA by the Company does/will not constitute a diminution of
benefits nor will it give rise to claims by the Employee of reimbursement for additional costs incurred
by employee, including the cost of traveling to the Company’s premises.
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Exhibit 3 (continued)
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3. Employee Provides Equipment and Connection. The Employee will provide his/her own computer and
Internet connection and shall connect to the company-designated server at Employee’s risk and
expense. Employee shall have no claim for reimbursement for any expenses incurred.
4. Company Guidelines. The Employee agrees to follow Company guidelines and subsequent revisions
in connecting to the Company-designated Internet servers, these guidelines provide, among others,
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minimum equipment requirement, connection methods and other computer-related issues.
5. Work Outside Home. Nothing prohibits the Employee from connecting to the Company designated
servers from outside their homes like from an Internet café or any other computer in any other location.
6. Employee Warrants Ownership of Work. Employee warrants that the work done on the company
designated servers was done by the employee himself/herself and by no other. Employee agrees that
allowing another person (even if a co-employee) to work on his/her account is a terminable offense.
7. Breach of Security Safeguards. Employee agrees that any attempt to breach the safeguards of the
Company-designated server is a terminable offense and that such acts are subject to further civil and
criminal liabilities as specified in the E-Commerce Law.
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8. Prohibition from Direct Connection to Customers. For purposes of working, Employee agrees to
connect only to Company-designated servers and not attempt to connect to a customer’s site (unless
specifically instructed in writing by the Company). Attempting to connect directly to a customer site is
considered an attempt to breach the safeguards of the Company-designated server as defined above.
9. Additional Prohibited Acts. Employee agrees not to store any information obtained from the Company
Designated Servers on Employee’s computer or in any other physical or electronic form; examples of
prohibited acts are printing computer screen shots and photographing the computer screen. Employee
also agrees not to allow any other person, including fellow employees, to access the Company
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Designated Servers thru the Employee’s account.
10. Non-Compete Clause. Employee warrants that he/she will not undertake work for a competitor of the
Company or its Customers while he/she is an Employee of the Company. Violation of this is a
terminable offense.
11. Sale of Equipment to Employees. The Company will at its discretion establish a program of allowing
Employees to purchase computer equipment on an installment basis. It will be offered to Employees
who might be interested in participating in the program.
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12. Limited Workstations Available on Company Premises. The Company will provide a number of extra
workstations where Employees with an HWA can work from in the office. These computers are on a
first-come, first-served basis and the Company does not guarantee availability.
13. Transition Provisions for Selected Employees. For Employees who currently have Company-provided
equipment and connection, Company serves notice that Company will cease paying for the connection
twelve (12) months from the of commencement of HWA. Company may offer the equipment to the
Employees under terms of the program allowing employees to purchase computer equipment no later
than twelve (12) months from the of commencement of HWA If Employee declines the offer of the
program, Employee must return equipment to company premises in good order and condition.
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14. Future Modifications and Recourse. The Company may, from time to time, issue modifications to this
agreement to clarify issues. If Employee does not object in writing within seven (7) calendar days,
Employee is deemed to have understood and accepted the modifications. If Employee finds the
modification(s) unacceptable, Employee can pre-terminate the Assignment by serving written notice to
the Company and return the employment conditions that existed prior to the Assignment.
15. Exit Clause. After the lapse of the HWA including subsequent renewals, Employee shall revert back to
his/her employment conditions existing prior to the HWA.
16. All Other Terms Unchanged. The Employee remains an employee and all employment terms,
conditions, policies, requirements and obligations, remain unchanged except as expressly modified by
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this agreement or subsequent revisions. All other Employee obligations and benefits shall continue
unchanged.
5) Pre-Termination by Company: The HWA is pre-terminable by the Company with a notice period of seven
(7) days, counting from sending of written notice to the employee at the address as found in employee’s
records with the Company.
Page 11 9B13C008
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6) Pre-Termination by Employee: The assignment is pre-terminable by the Employee with a notice period of
thirty (30) days, counting from the sending of written notice to the Employee’s Manager and to the company’s
HR Manager.
7) Employee Entitlement
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i. Company-supplied computer equipment that is appropriate.
ii. Home Work Allowance of INR 3,000 per month. This allowance, which is taxable based on employee’s tax
rate, is to defray costs of DSL connection, electricity and other incidentals that may be incurred.
iii. HR will process Home Work Allowance of INR 3,000 per month to each home based employee on monthly
basis.
iv. No. of home workers for projects will be verified by HR to keep a track of exact home workers per month.
v. Verification of No. of home workers for each projects per month is to be attained from project in-charge
concerned.
vi. A summary of homework allowance will be prepared by HR department, and it will be reviewed and
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approved by Head HR. A monthly approved Home Work Allowance summary is to be sent to payroll
manager for processing purpose.
vii. Home Work Allowance processing is scheduled to be paid along with the payroll and the Home Work
Allowance amount will reflect in employee pay slip as ‘other payable (payroll) items’.
1. This is valid only while an employee is on Home Work Assignment.
2. This is withdrawn once an employee ceases being on Home Work Assignment.
3. Failure to meet quota will result in this Allowance being reduced based on the degree the quota is
missed. Company may, at its options, elect to terminate the Home Work Assignment and ask
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employee to report back to office.
8) Employee Responsibilities:
i. Employee will be responsible for picking up and returning the computer equipment from the Company
premises. In the unlikely event that computer equipment needs to be worked on or serviced, employee will
likewise be responsible for bringing the equipment to the Company premises at employee’s own time and
cost.
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ii. Employee will be responsible for ensuring that the DSL connection and electricity is available. Company’s
role is limited to providing the above allowance to help defray the costs of these services/utilities.
iii. In the event that Employee elects not to avail of the computer equipment but would like to use his/her own
computer equipment, he/she should inform the Company in writing. Company will evaluate the suitability of
the employee’s equipment as well as other circumstances relating to the work. If company allows use of
employee’s computer equipment (and thus not have to supply such computer equipment), Company will
grant employee an Additional Allowance of INR 500 per month.
iv. Allowance shall be disbursed together with the regular payroll.
v. All compensation received by the employee in connection with this Home Work arrangement shall be taxed
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as required by tax authorities.

vi. Transitory Provisions.
1. For employees with their own workstations, they may elect to seek company provided computer
equipment; else they may elect to use their own equipment and obtain benefit of the Additional
Allowance of INR 500 per month.
2. For employee with company-owned equipment, they will continue using this equipment provided it is
configured as a thin-client. Company may draw up to sell this equipment to employee at preferential
rates; once sale proceeds, equipment will be unlocked and set up as a normal computer workstation.

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Page 12 9B13C008
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Exhibit 4
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COMPENSATION OF HOME BASED AND OFFICE BASED EMPLOYEES FOR 2011
Average Monthly Production of an Individual Employee

1200
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1000
800
Units accepted
600
400
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200
0
January February March April May
Home Based 755 921 987 1052 1070
Office Based 532 534 534 533 533
Source: Data is taken from the particular process of Home Based Library, KSOIL.
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Average Monthly Income of an Individual Employee
35000
30383 31004
30000 28059
25735
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25000
20118
Income (INR)
20000
16996 17045 17057 17017 17032
15000
10000
No
5000
0
January February March April May
Home Based 20118 25735 28059 30383 31004
Office Based 16996 17045 17057 17017 17032
Source: Data is taken from the particular process of Home Based Library, KSOIL.
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Page 13 9B13C008
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Exhibit 5
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FTE VERSUS UNIT BASED WORK
Some of the key reasons why companies engage in outsourcing are cost management and improving
efficiency in managing IT and operations. In a significantly high numbers of deals, the pricing is primarily
FTE based pricing, but as home-based working comes into favour, companies often promote transaction
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based or unit based pricing. Full-time equivalent (FTE) is a way to measure a worker’s involvement in a
project. In the U.S. federal government, FTE is defined by the Government Accountability Office (GAO) as
the number of total hours worked divided by the maximum number of compensable hours in a work year
as defined by law. For example, if the work year is defined as 2,080 hours, then one worker occupying a
paid full time job all year would consume one FTE. Two employees working for 1,040 hours each would
consume one FTE between the two of them. FTE ceiling is calculated based on the total number of hours
worked by all employees throughout the year, irrespective of the total numbers employed at any point in
time. An FTE of 1.0 means that the person is equivalent to a full-time worker while an FTE of 0.5 signals
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that he is only half-time worker.
In transaction or unit based pricing model company typically pays the service provider for transactions or
per unit of work performed versus paying for FTE headcount. An employer would not be paying for 10
resources required to do a task, but for the actual number of tasks performed. In this model the employer
should not have to worry about how many people are doing the job. The driver for a service provider to
move to a transaction based pricing is when it can lower its cost of operation by either reducing the
number of people required, using a shared/platform technology to provide the services and by making
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process more efficient. Since it is difficult for the employer to keep track of number of hours worked with
home-based working, employers are now promoting unit based pricing. This motivates the home-based
workers to produce more in order to earn more.
Source: Polly Gerber Zimmerman, “Nursing management secrets,” Elsevier Health Sciences, Issue 974; Volume 13, ISBN
1-56053-529-6, 2002, p. 55; www.coreadvisor.com/globalwise/2010/01/06/pricing-offshoring-deals-fte-based-or-transaction-
based/, accessed April 22, 2013.
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Exhibit 6
DATA SECURITY SYSTEM AT KSOIL
KSOIL is using multi-level security to prevent unwanted access:

1. Demilitarized Zone security.
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2. Access Gateway security (SSL).

3. Citrix Policies.
4. Windows Server Group Policy.
5. Restricted port access between DMZ to Farm.
Demilitarized Zone:
Demilitarized Zone is a physical or logical sub network that contains and exposes an organization’s
external services to a larger non trusted network, usually the Internet. The term is normally referred to as
a DMZ by information technology professionals. It is sometimes referred to as a perimeter network. The
purpose of a DMZ is to add an additional layer of security to an organization’s local area network (LAN);
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an external attacker only has access to equipment in the DMZ, rather than any other part of the network.
Access Gateway:
Citrix Access Gateway is a secure application access solution that provides administrators granular
application-level control while empowering users with remote access from anywhere. It gives IT
administrators a single point to manage access control and limit actions within sessions based on both
user identity and the endpoint device, providing better application security, data protection
Page 14 9B13C008
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Secure Socket Layer is an open, nonproprietary protocol that provides data encryption, server
authentication, message integrity and optional client authentication for TCP/IP connection. Where SSL is
used to secure communication between Clients and servers within the server farm and KSOIL is using
Citrix Access Gateway with SSL.
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Citrix Plug-ins uses the ICA protocol to encode user input (keystrokes and mouse clicks) and address it to
a server farm for processing. Server farms use the ICA protocol to format application output (display and
audio) and return it to the client device.
Citrix Policies:
To control user access or session environments we configured XenApp policies and this is the most
efficient method of controlling connection, security and bandwidth settings.
KSOIL created policies for specific groups of users, devices or connection types. Each policy can contain
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multiple rules. They configured policies to prevent unwanted user access and as per project requirement:
 Prevent remote users from being able to save to their hard drives from a session.
 Prevent users from accessing the Windows clipboard means user cannot copy and paste text and
data from their machine to Citrix application.
 User cannot access remote and local drives.
 Applied Bandwidth policies for better performance such as visual effects and session limits.
 Restricted Client Devices access such as audio, drives and COM and LPT ports.
 Restricted client printers access like client printer mapping and print job routing.
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Policies are applied when users connect to the server farm and remain in effect for the length of the
session. Changes you make to policies do not affect users who are already connected. The changes take
effect the next time the users connect.
Windows Server Group Policy:

KSOIL is using group policy to manage an infrastructure from centralized location and applied different
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types of policies to manage and secure our infrastructure.
Restricted Port Access between DMZ to Farm:

Restricted port access between non trust to DMZ and DMZ to trust and all on different IPS.
Note: Company data will remain in company so that data theft or leakage is not possible, thus complying
with audits like ISO27001, sox or SAS 70.
Network Design
No
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WORK FROM HOME: CURSE OR BOON?

EQUITABLE COMPENSATION: BASIS OF PARITY FOR HR

OPTIMIZE RESOURCES AND MAXIMIZE PROFITS

WORKING FROM HOME MODEL

Devendra had to make a decision soon.

Source: KSOIL documents.

Employee agrees to care for the equipment as if it were his/her own.

as required by tax authorities.

Source: KSOIL documents.

Average Monthly Production of an Individual Employee

DATA SECURITY SYSTEM AT KSOIL

KSOIL is using multi-level security to prevent unwanted access:

2. Access Gateway security (SSL).

Windows Server Group Policy:

types of policies to manage and secure our infrastructure.

Restricted Port Access between DMZ to Farm:

Source: KSOIL documents.

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