CASE STUDY

DEVELOPMENT OF A MULTINATIONAL PERSONNEL SELECTION SYSTEM

PERFORMANCE APPRAISAL SYSTEM AT MITCO

IMPACT OF EMPLOYEE TRAINING ON FIRM PERFORMANCE IN SMALL AND

MEDIUM ENTERPRISES
ATTRITION ANALYSIS AT KMSR LTD

Name of the Learner:

Registration No.:
Program Name:

P O S T G R A D U ATE D I P L O M A I N
B U S I N E S S AD M I N I S T R ATI O N

Specialization:

HUMAN RESOURCE MANAGEMENT

Submitted to
SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
(2007-09)

DECLARATION

This is to declare that I have carried out this case study work myself in part fulfilment of the Post
Graduate Diploma in Business Administration Specialization in HRM Program of SCDL.

The work is original, has not been copied from anywhere else and has not been submitted to any
other University/Institute for an award of any degree/diploma.

Date:

Signature:

Place:

Name:

Case Study 1:
DEVELOPMENT OF A MULTINATIONAL PERSONNEL SELECTION SYSTEM

PROBLEM DEFINITION
The lack of understanding by the top management about the intricacies involved in the
designing of global personnel selection system and hence forcing the HR department to
come up with an ad-hoc selection system which might create problems for the organization
in future.

The HR department head, Dr. Koch believes that creating a uniform global personnel selection
system would not be feasible for ComInTec because of the economic, educational and cultural
differences among different countries. But here we see that Mr. Koenig is giving an ultimatum to
Dr. Koch and his team to come up with a detailed selection plan within a week and threatening
him that the project would be transferred to the headquarters if they failed to do so.

ENVIRONMENT ANALYSIS
As we can see from the case, the HR team working on this global selection system development
project is a highly diverse group, having a mixture of people from China, Germany and America;
there are a lot of cultural differences among the group members. During the meeting itself we see
that there are a lot of confrontations among the team members, like between MR. Mueller and
Goldmann and Goldmann had gone out crying from the room. Hence, this maybe a reason for the
slow progress of the group and the cultural diversity maybe obstructing the work of the team.

CRITICAL FACTORS CONSIDERED

THE URGENCY OF THE TOP MANAGEMENT
The top management is in a haste to come up with a new selection model because of the 25 new
middle level managerial positions that it needs to fill at moment. Hence, the top managers are
pressurizing the HR department to come up with a quick solution.
LONG TERM BENEFIT FOR THE COMPANY
One of the important factors for the company would be to develop such a system where in the
personnel selected are the best fit for the company requirements. The company is currently hiring
for middle level managerial positions which are highly significant for the companys future
performance and hence every care should be taken to develop a system that hires the best people.
TIME REQUIRED TO DEVELOP A COMPREHENSIVE PERSONNEL
SELECTION SYSTEM
The process required to develop a comprehensive personnel selection system is highly
complicated and the factors that need to be taken into consideration are plenty. Hence the team
working on the project requires a lot of time to decide on the exact factors to considered. This
process requires a thorough testing before implementation. Even though the time required is
high, the same needs to be done because of its high strategic importance.

SWOT ANALYSIS
STRENGTHS
1)
2)
3)
4)

New concept of cross-functional project teams was followed.

Human resource instruments were standardized across the world.
6 -eye method was implemented and followed.
Team members were very hard working and devoted.

WEAKNESSES
1) Poor team dynamics.
2) Prevailing bureaucratic environment resulted in low motivation among employees.
3) Only on 6 dimensions candidates were evaluated instead of 15 dimensions which was
more advantageous.
4) Thoughts processing of team members different from each other due to cultural
differences.
OPPORTUNITIES
1) Different ideas and perspectives will be generated because of cultural diversities in the
organization which will be beneficial.
2) The interviewee and the interviewer can be of the same background which will bring in
better evaluation.
THREATS
1) The Standardized test may have disadvantage of not being generally accepted.
2) Difference in culture and ideology among German and Chinese team members may lead
to disputes.
ALTERNATIVES/OPTIONS
DR. KOCH CAN TRY TO CALL FOR A BOARD MEETNG IN ORDER TO
HIGHLIGHT THE ILL-EFFECTS OF MAKING AN AD-HOC SELECTION
SYSTEM
Dr. Koch believes that there needs to be a separate selection system for all locations as
there exist a lot of differences among the economic, social, cultural and educational
system of different countries. He also knows that the development of a uniform global
selection system without considering all the factors may bear its ill-effects on the
company in the long term. He can try to call for a board meeting and try to explain the
consequences of the same to the top management.

 TOP MANAGEMENT CAN ITSELF TRY TO SLOW DOWN THE PROCESS OF

GLOBAL RECONSTRUCTION OF THE COMPANY FOR THE LONG
TERMBENEFIT OF THE COMPANY
Taking cue from the warnings of Dr. Koch, the top management can decide to delay the
implementation of cross-functional teams in Asia Pacific Region in order to provide time
to come up with a more robust recruitment strategy which could provide a competitive
edge to the company.
DR. KOCH CAN TRY TO CONTACT THE HR TEAM OF THE
HEADQUARTERS WHICH IS NOW GOING TO HANDLE THE PROJECT AND
ASK THEM TO CONSIDER THE CONCERNS OF HIS TEAM
Since the project has already been transferred to the headquarters, it would make sense
for Dr. Kochs team to ask the headquarters team to consider the concerns of his team. In
this manner, if the headquarters team feels that the concerns are reasonable and can have
a heavy bearing on the companys future, the they might ask the top management to give
some more time to Dr. Kochs team.

RECOMMENDATIONS
Given the current situation of the company, a proper global recruitment system can be developed
only if the HR team is supported by the top management. Hence, Dr. Koch should try to
convince the top management to provide some more time to his team in view of the long term
benefit of the company.

Case Study 2:
Performance Appraisal System at MITCO

A company, by the name MITCO, has its employees rated by supervisors be means of graphic
scale. The qualities taken into account are performance at work, responsibility, dependability,
community activity, initiative, regularity and punctuality and potentiality to develop. The ratings
are discussed with the employees and are used to counsel them, to make promotions and salary
adjustments and as criteria for evaluating sources, methods of selection, and training. Recently,
however, three of the Companys employees, who have not been given annual salary increment
due to their comparatively low ratings, have met the Chairman to express their dissatisfaction
with the ratings they have received. They have argued that their ratings are not true indicators of
their qualification or performance. They insist that Community activity is not properly a part of
their job and that what they do off-the-job is none of the employers business. They wanted that
employees should organize a union and demand that salary increases be automatic. The above
experience convinced the top officers that rating was a dangerous source of friction and that its
disadvantages outweighed its advantages.

Questions:
a) Placing yourself in the role of Personnel Manager, prepare Memorandum for possible submission
to the Chairman outlining the Importance of ratings and suggesting ways of handling problems
arising out of ratings.
b) Prepare a merit-rating Performa which you feel would be ideal to appraise the merit of nonsupervisory staff?

Answer a)

Memorandum
To:

The Chairman

From: Personnel Manager

Based on the recent even in the company where a group of workers made representation to you
in regard to
Their dissatisfaction from the rating that the got during the last appraisal process.
The proposal of an automatic raise for all employees through union negotiation
The rating system as established in the company presently is based on important presumptions
and is being used in a verity of ways.
The graphic rating system is a scale based in instrument which offers advantages like coverage of
important variable which constitutes performance.
It offers a objective evaluation of performance which can be converted in numeric which offers a
clear indicator.
Here due to the compulsion of evaluating all the factors there is less chance biasness.
In graphic process the supervisor also learns the difference between good to great performance.
The variables of performance are set by top management hence what the top management think
the employee should focus upon becomes clear.
The graphic rating also offers a chance to identity different weak and strong areas of employees
which helps in counselling the employees in specific areas of improvement.
But as the employee have a grievance that the rating provided to them does not really indicate
the real worth of their qualification and work and also that community work is not a dimension
which should be given significance is a matter of importance an hence require a clarification.

The way to handle this situation is that employees should be asked to give self appraisal on the
same form as this will be helpful in identifying the difference in their own perception in
comparison to their supervisors.
Secondly as the supervisors some time due to leniency, halo effect and other factors provide
biased ratings which can be solved only by offering supervisors training on the appraisal process
and on the use of this data?
There is also a need of making a broad based committee which should offer a list of key
parameters of performance so it will be more acceptable.
Answer b)
Performance Appraisal Format
Name:

Job Title:

Department:

Supervisor:

Evaluation Date
Definition of performance factors
Safety:
Demonstrates a commitment to safety by following safety rules & guidelines; follows good
housekeeping practices, takes proper care of equipment. Meets requirements of 100%
participation in safety training & 100% safety actions completed.
Attendance:
Regular & Punctual attendance at or below the 4 point threshold. Individual is at workstation
when scheduled and remains for the duration of shift.
Initiative & Energy:
Takes advantage of training opportunities and progresses through work stations at an acceptable
rate. Initiates actions without needing direction, Demonstrates a sense of urgency, Corrects

errors, Requests assistance in a timely manner; Handles unexpected situations calmly &
efficiently to minimize problems.
Quality:
Considers accuracy & the appearance of work, committed to producing a quality product and to
continuous improvement efforts. Recognizes & learns from mistakes, taking appropriate action
to reduce errors. Understands the role that quality plays in customer satisfaction
Productivity:
Properly uses materials and equipment to effectively and efficiently complete varying workload
in a timely fashion.
Problem Solving:
Demonstrates the ability to gather information, to critically evaluate options, seeking alternative
perspectives to identity root causes & develop solutions.
Accountable/Dependable:
Takes responsibility for decisions, actions and results; delivers on commitments to stakeholders.
Acts in the best interest of stakeholders; places success of the organisation ahead of personal
gain. Proactive in decisions and actions
Teamwork:
Builds trust by respecting the ideas & contribution of everyone; works well with others. Coaches
& encourages others on a regular basis; contributes to positive morale & spirit within the team;
and embraces diverse & global cultures.
Integrity:
Demonstrates a commitment by adhering to its stated values, policies & procedures and Does the
right thing, conducts business in an ethical manner in accordance with our conduct guidelines
ideas.

Potentiality to develop:
Takes interest in new learnings and tries new method and previous training.
S no

Performance criteria

Safety

Attendance

Initiative and Energy

Quality

Productivity

Problem solving

Accountable/Dependable

Teamwork

Integrity

10

Potentiality to develop

5 Shows this behavior and attribute every time he works or participates in other activities.
4 Shows this behavior and attribute Most of the time he works or participates in other
activities.
3 Shows this behavior and attribute Many times he works or participates in other activities.
2 Shows this behavior and attribute only sometime he works or participates in other activities.
1 Shows this behavior and attribute very less or not at all when he works or participates in
other activities.

Case Study 3:

Impact of Employee Training on Firm Performance in Small and Medium Enterprises

Companies today are forced to function in a world full of change and complexity, and it is more
important than ever to have the right employees in order to survive the surrounding competition.
This study aims to exploring and understanding dimensions of employee training program on job
satisfaction in Pakistan, Like Small and Medium Enterprises. As the primary focus of the study
is on exploration so the proposed study will use sequential exploratory design based on the
mixed method approach in which first phase is qualitative in, HRM Practices and job satisfaction
whereas the second phase is quantitative.
Introduction and Background
Over the past one and half decades, various arguments have been made that firms human
resource may be its sole source of sustainable competitive advantage (Ferris et al, 1999). We
extend this idea by arguing that if innovation is the education and, especially, training is the
ammunition that renders it useful and effective. Research indicate that inadequate and inefficient
management of employee in small firms has resulted in low productivity and high turn over rate
and one of the leading causes of small firm failures (Mc Evoy, 1984). The resource based
approach contends that organizations can develop a sustained competitive advantage only if its
activities create value in a unique way, one that competitors cannot easily copy (Barney, 1991;
1995).Employee Training Program increase performance of both organization & individuals.
This study will address one specific aspect of human resource management, training, to see if the
presence and type of training offered by Pakistan SMEs impact operations and profitability.
Purpose Statement
This Proposal is designed for the purpose of investigate the impact of training on firm
performance for registered, private, manufacturing SMEs. No studies currently exist on the
relationship between SME firm performance and employee training practices in Pakistan. The
results of this study should help Pakistani managers determine whether tight financial resources
should be expended on training programs or if the funds could be better utilized elsewhere within
the company.
The aim of the study is implementing HRM practices like Training Program in Small and
Medium Enterprises for the purpose of employees development as well as firm performance.
Therefore, purpose of this two phase, sequential mixed methods study will be, to explore

viewpoint about Training Program and performance of the firm using Semi-structured interview.
This will be better to understand a research problem by converging both quantitative and
qualitative data.
The main objective is to increase the understanding regarding employees training and
development in relation to firm's performance.

To explore the importance of employees training program in small and medium

enterprises and see as good, bad or acceptable performance.

To explore the perception of employers in small and medium enterprises about the
training program.

To explore the employee training contributes to their performance. To explore why

training is important for employees and firm performance.

The present study will be significant in number of ways. It will contribute to the body of
knowledge by:
1. firstly, since the present area is highly under researched. No study has been found to explore
the employees training in Small and Medium Enterprises. Therefore, the present study assumes
that the findings of the present study will help in implementing that study in SMEs Sector and
those in developing countries in general to answer the long standing question of how to enhance
employee and firm performance.
2. Secondly, no research has been found on employee training and firm performance in Small
and Medium Enterprises. Therefore, the present study will prove to be a significant contribution
in this area with the assumption that employee training program is important for the individual
and firm over all performance. Employing mix methods research which has not been used in this
area and hence this will be a significant methodological advancement.
3. Examining the applicability of the discussed Western concepts and theories in an Eastern
developing country in order to develop of these concepts.

Question
For the first phase which is qualitative in nature following are the proposed research questions.
(Main question)
Impact of Employees Training on Firm Performance in Small and Medium Enterprises
(Sub questions)
1. What are the employee experiences about relevant training and development program and how
they feel about that?
2. How do employees perceive about their own performance and what they perceive as good, bad
or acceptable performance?
3. What are the employees opinions about firm that contribute to their performance?
In a two-phase, sequential study in which second phase (quantitative) depends on the result of
the first phase (qualitative), it is difficult to specify the questions asked in second phase at the
time of proposal writing.
Answer:
Impact of training and development on firm's performance
My study is about impact of training and development on Firm's performance.. What will be
effect of training and development on employee's on Firms performance? If the organization
provides training and development to his employee's then employees will satisfy with
organization or not. This topic should be added to the pool of research knowledge available on
this topic. It will include the knowledge with more research. Purpose of the literature is actually
reviewing the other study. It will provide the stage to check the importance of the study.
This study focus on training and development organization's performance depends on training
and development. Present day companies, just like the companies in the past, strive to maximize
their profit and increase proficiency by finding the time and resources to train their workforce.
The organization shall:

a) Determine the necessary competence for personnel performing work effecting product
quality.
b) Provide training or take other action to satisfy these needs.
c) Evaluate the effectiveness of the actions taken.
d) Ensure that is personnel are aware of the relevance and importance of their activities and
how they contribute to the achievement of the quality objectives.
e) Maintain appropriate records of education, training, skills and experience. This standard

requires that the organization identify competency needs for all personnel whose
activities affect product quality. This task will include a large majority of the
organization. Assessments of the training must be conducted and records must be
maintained and easily accessed. These two elements are describing the minimum
requirements for establishing an effective training system.
The main purpose of this study was to identify a more efficient and effective way to manage the
Job Specific Training and development system. It is very important when developing a team that
everyone is committed to the issue at hand and this will be only when a organization's workforce
will be trained. Without key factors, it would have been difficult to implement the training and
development system in an organization and it may not have been as successful in an
organization.
There were many positive outcomes of training and development. Effective Implementation was
limited, as the training and development were not integrated within the culture and process of the
organization. Staffs generally rate such training as a high priority (Raynes and Sampson, 1987;
Sturmey, 1992). The main purpose is to increase the understanding regarding organization's
performance in relation to training and development. The other factors are remuneration and
elements such as participation, feedback, fairness, responsibility, the theoretical framework
includes training and development, financial as well as non-financial remuneration and research
done in later years regarding participation, feedback, fairness, responsibility, development and
Work-atmosphere connected to organization's performance.

Companies today are forced to function in a world full of change and complexity, and it is more
important than ever to have the right employees in order to survive the surrounding competition.
New companies and business are blossoming, new technologies are constantly developed and the
knowledge and perception of how much your employees actually mean to your organization is
greater for every day. Most companies are looking for the right expertise in different areas, and
human resources are therefore an important competitive factor that needs to be taken into
consideration while managing business (Ljungberg & Larsson, 2005).For this most of the
companies arrange training and developments for their employees.Organisations have to balance
both production effectiveness as well as efficient workforce to be successful. Even though a
company has managed to find the right employees, this is not enough. A crucial factor is to make
employees best and reduce the turnover rate.
Talented employees can be a source of advantage for an organization (Siegler (1999), but how to
achieve this may be a major challenge. What do employees want from their organization in order
to feel committed?
The answer is they need security of their future that is only with the training and development.
The primary reason for working is to obtain money (Jackson and Carter, 2007), but could
employers do more in order to retain their employees? Or even more important, what do
employees want from their employer in order to feel committed willing to stay? Since there may
be a difference between how employers try to give employees regarding to how employees
actually would prefer to be stay their and satisfy with the job.
Throughout research we find indications that training and development is a major element for
firm, performance. Job satisfaction is affected by the worker and the work itself (Chen, 2008). In
older literature the focus has been on the relationship between training and development and job
satisfaction as well as remuneration. In the 1940s, 1950s and 1960s several studies were made
(Ohio, Michigan and the Hi-Hi leader).Employees satisfaction builds on elements such as a
higher participation, feedback, fairness, responsibility, development and work-atmosphere
(Hytter, 2007). It is important that employers give access to relevant development. The personal
need is less important in this case and rewards is not that necessary, which is quite the contrary to
what Shields (2007) andHansson (2002) describes. They say that reward is necessary to make
development function. Could it be that way that employee thinks that development is a kind of

reward itself that Shields (2007) describes as extrinsic reward. They think that training and
development is better for job satisfaction. It is obvious that satisfaction with possible future
career development and satisfaction in current career development are of importance for
employee. The result in relation to previous research adverts at the importance in giving
employees possibility to develop (Tobia, 1999). We could see that if an employee felt satisfaction
with his or hers work, he or she was taking training and development from the company.
Mitchell etal (2001) describes the importance of satisfaction in relation to training and
development. They discovered a connection between satisfaction and training and development;
According to us companies have to improve their training and development level through
making employees feel job satisfaction. This issue must be one of their main objectives because
it increases the possibility to handle competition in the market. By having competent employees
companies may save a lot of money which also is important throughout business administration.
According to the survey there is a correlation between job satisfaction and training and
development. If the employee feels appreciation because he thought that company give training
and development for the betterment of his career he will satisfy from the job. Employee
development and training are two important elements especially if combined with performancerelated job satisfaction to create a good work group there has to be a good working environment.
This arises when group members feel trust and confidence and as a result they treat each other
with respect and this may only because of training and development.
The training and development applications should be useful to industrial personnel in preparing
them for delivering improved performance on the job. The applications will help them
understand the options and the impact of decisions. These applications have the potential to
improve industry performance by reducing the learning curves of the workforce Staffs of the
Training and Development Unit are available to assist managers or individual staff to identify
training needs and can advises on appropriate ways to meet identified needs. These include
mentoring, coaching, attendance at an internal or external course, or completion of a
qualification. Any staff member may contact TND staff directly for confidential advice, and
assistance can be provided on a one-to-one basis.
All training must be related to the mission and performance goals. The selection of employees
for training is made without regard to political preference, race, color, religion, national origin,

gender, marital status, age, disability, and with proper regard for their privacy and constitutional
rights as provided by merit system principles set forth in 5 U.S.C. 2301(b)(2) (1996).A full range
of options may be used to meet mission-related organizational and employee development needs,
such as classroom training, on-the-job training, technology-based training, distance learning,
self-development activities, coaching, mentoring, career development counseling, details,
rotational assignments, cross training, and developmental activities at retreats and conferences.
Government and non-government training facilities may be used. (Prior regulatory constraints
regarding use of non government training facilities and time restrictions such as 1 year in 10
have been eliminated. 5 U.S.C. 4107(a) (1996) prohibits training to obtain an academic degree in
order to qualify for appointment to a particular position or for the sole purpose of providing an
opportunity to an employee to obtain one or more academic degrees.
Training for employees who report to them. Training involving the acceptance of a contribution,
award, or payment (in cash or in kind) of travel, subsistence, and other expenses. Academic
degree training to relieve recruitment and retention problems in occupations in which the agency
has or anticipates a shortage of qualified personnel.
An Individual Development Plan (IDP) is a written plan used to systematically identify and
record appropriate training and development activities that enhance an employees performance
in a current or projected future assignment. All employees and supervisors must complete or
update an IDP each year within 30 days of the annual performance appraisal. The IDP should
include input from both the employee and supervisor. Using the IDP form designated by their
agency, REE employees and supervisors should record the following: identified developmental
needs, activities proposed to meet the needs, dates of the activities, and any direct costs required
to meet the needs (tuition, travel, materials, etc.).
Other research demonstrates the impact of training on outcomes other than job performance or
on variables that serve as antecedents to job performance

This study related organizations

training policies (e.g., functions assumed by the of training, and how training is valuated) with
four types of organizational-level benefits: employee satisfaction, customer satisfaction,
owner/shareholder satisfaction, Benefits of training have been documented for variables other
than organizational performance training methods. Several studies in each of these two domains
provide information on Research on training design and delivery can be categorized into two

general themes: research on new approaches to engage learners in meaningful learning processes
and research on specific how to maximize the benefits of training. Researchers are also exploring
the impact of novel training technologies on outcomes other than learning. Research on
moderators of the training transfer relationship has focused primarily on workgroup factors. The
organizations that are able to realize the benefits of training that are documented in this review
are able to move away from viewing the training function as an operational function or cost
center to one that is value driven We take the point of view that training leads to important
benefits for individuals and teams, organizations, and society Managers and other decision
makers in these organizations prefer information and data on business-related results to make
decisions about how to allocate resources, including resources for training activities (Mattson
2005). Training for the sake of training, an approach that focuses on developmental ideals and
supportive organizational environments, is not aligned with todays business realities, including
compressed career progression pathways, budgetary cuts and constraints, highly competitive
environments, and market-driven economic philosophies McGuire et al. 2005). Designing,
delivering, evaluating, and clearly documenting the benefits of training using the information
included in this review will allow the human resource management function to be a strategic,
organizational player and to move away from the negative connotations (e.g., welfare
secretaries) associated with this function in the twentieth century (Hammonds 2005, Jacoby
2004, Kraiger et al. 2004.
Mixed approach
The most important thing in the selection of approach is the nature of research problem as my
research problem is twofold in nature. So I have decided to choose mixed methods research
approach as to accommodate my first objective of exploring and understanding the complexity of
the variances in of Pakistan. The theoretical framework includes leadership and leadership style,
financial as well as non-financial remuneration and research done in later years regarding
participation, feedback, autonomy, fairness, responsibility, development and work-atmosphere
connected to training and development.
Furthermore this decision is supported by the availing the merits and overcoming the demerits of
both approaches as discussed by Creswell (2003), methodological changes that improve the
study and strengthen findings as well as collecting diverse types of data best provides an

understanding of a research problem. Abraham, Rebecca (1999) the relationship between

differential inequity, job satisfaction, intention to turnover, and self-esteem

Case Study 4:
Attrition analysis at KMSR Ltd

Ajay after his ten wonderful years in KMSR Company seems to be disturbed over the past 6
months about the recent developments in his team. He has moved through the ranks to the
current position. He was one of the top performers of the company with sound technical skills
and always had a good rapport with all the team members from his early days. Though all the
projects under his guidance were going fine, he felt a sense of dissatisfaction from quite a few of
his team members in recent times and he had already received resignations from four of his team
members.
He was sitting in his new office cabin, after finishing a customer call. He was waiting for an email from Rupa, for the short listed candidates for the weekends interview. He had raised a
request with the staffing function for new resources for his team. His team was badly hit by
attrition.
He saw the reminder flash from his outlook calendar for the scheduled meeting with Vijay and
Suma. The meeting was about to start in 5 minutes time.
He started to move towards the meeting room that was just adjacent to his cabin. To his surprise
Vijay, Rupa and Suma were already there and their concerned faces clearly suggested what was
about to follow.
Vijay and Suma said in a chorus voice. "Hi, Ajay ", Ajay nodded with a smile.
Vijay said I think everyone is already aware of what we are here for He pointed at Rupa and
said why does u think the attrition percentage has shot up suddenly?".
Rupa said in a loud and clear voice that most of the employees suggested in the exit interviews
that there were not happy about the appraisal, reward and recognition system.
Ajay replied I think we are all aware that the hike in our domain last year was 5% where as the
hike was between 10 to 12% in other domains such as Financials, Retail and Pharma. There are
also other companies like Technokraft that has been started in the last one year who has telecom
as their main domain and are paying heavily for the people who have good domain experience.
Ajay added " We cannot fool people suggesting that will be on-site opportunities for everyone
like earlier days as we are already aware that there are already a huge number of people at on-site

and many have been moved to offshore especially in our domain." Suma began again saying that
we could not promote people last year who really deserved (which would have increased their
wages) due to the HR policies that were laid out as a cost containment measure. The office is
also now shifted almost 60kms away from our earlier location which was within the heart of the
city and was easily accessible. I have already received a lot of requests from the employees
especially women for flexible working hours and work from home option. It is high time our HR
started to review the policy at least for our domain.
Rupa replied in a low tone It will be difficult to provide work from home options just for our
domain ".
Ajay was not happy with the reply from Rupa and he felt she was not even ready to consider
such an option for further discussion with her top management.
Ajay at the peak of his voice. If there is such a huge difference in the percentage increase in
wages across domains why shouldnt be a slight change in the HR policies? Ajay we need some
discretion of powers to allow our team members to work from home. Currently it is a mandate
that every employee should be in the office for at least 9 hours sign in time which is
automatically calculated from their access cards swipe timings.
Vijay realized that things were getting out of his control and decided to end the meeting as he
was sure no solution would be obtained.
Ajay went to the parking zone and picked up his car. He began to realize that things are getting
worse day by day. He noted that there is already a huge attrition with all other teams and his team
had the least. He was worried about the information Vijay provided in the morning that that his
company has lost a big share of 15% to the competitors in the telecom domain. Though all his
projects were going fine at the moment his inner sense stated that is high time he finds a new job
with a better company with flexible policies.
Vijay: Manager of Telecom Domain
Ajay: Project Manager
Suma: Project Manager.

Rupa: HR of the Telecom Domain.

QUESTIONS FOR DISCUSSION:
1.

What are the probable reasons for attrition in any industry?

2.

What will you advise to Rupa to arrest the attrition rate going forward?

There are plenty of reasons for attrition

1) Job satisfaction
2) Salary & Perks
3) Work environment
4) Co-workers relation/treatment
5) Pressure of work
6) Family situations
7) Health condition
8) Geographical location
9) competency and still go on--and this has already been discussed, we do not want to again
discuss on the same topic
I would like to discuss about manufacturing sector.
See, in mfg sector major focus is given on production rather than the efforts. Following are the
reasons for high attrition rate in mfg sector
1. There are two boundaries working in factory, one is white color & other is blue color.
There is big gap between these two levels as far as knowledge, skill & attitude.
2. Due to new MNC's arriving in industrial hub like Pune, the culture also changing &
becoming like their parent company locations like, UK/USA etc. Now here people would
like to balance their personal & work life. If company culture is not supporting to this
then there will be definitely high attrition rate.
3. As IT companies are growing faster than mfg sector, talent is moving from mfg sector to
service sector. They are basically attracting with the high salaries & extra perks.

4. Mfg sector are mostly investing into the land, machine & other capital assets, so there
budget is not allowed them to increase salary base as compare to service sector. So
employee is moving from mfg to service sector.
5. Now a days standard of living has been growing very fast, to compare with the same
people are seeking for pleasure & extra facilities and ultimately they are attracting
towards the higher salaries.
6. Of course work pressure, inadequate services, and low increments due to low growth in
mfg sector people are moving.
People don't get integrated. Most organizations have an orientation program which is more of
data-dump or focused on compliance trainings being completed. The focus should be more on
enabling employees to form networks within themselves.
Performance goals are unclear. In a fast growing team or business the focus is on getting the
thing done today, but rarely are performance goals thought through and employees told as to
which resources to approach for help.
Development is always tomorrow's job. Culturally Indians are focused on learning. If learning
adds value only to the job and not to the overall career goals of the individual then the
organizations seems too transactional for the employee
The personal touch is missing. How comfortable are managers building personal bonds with
their subordinates? A lot of managers shy away fearing a bond will make delivering hard
messages difficult. I would argue that it's the other way round! Knowing employees on personal
level makes a manager know their strengths and weaknesses. Work allocation and employee
development become easier.
Reward systems are not transparent. Most employees who get salary increases because they
have a rare skill at a particular point of time think they got their raise for excellent performance.
Can you share details about how they have been compensated?

Perceived equity of reward systems is low. Like it or not, employees discuss salary details and
if there is any perceived lack of equity then you have an issue !
Goal setting process is not scientific. Most organizations impose a normal curve fitment, but do
not train managers to set realistic goals or goals that tie up with organizational or functional
goals. This also leads to point number 6
External equity is missing too. Don't do an annual compensation survey when the market
moves every 3-4 months. If your practitioners feel that externally comparable professionals are
being valued more, then they will leave.
No communication around total value. If you offer benefits apart from only monetary terms do
you communicate that to employees too. Things like being a global or niche industry leader,
value of the brand of the organization, should also be made explicit.

No career planning. Are people aware of the ways in which they can grow in the organization?
Who are the role models within the organization? Do they know what they have to do to gain the
competencies to move to various levels? (Update: Can you be radical enough and create
an internal talent market ?)

Traditional business organizations in the guise of modern business management

Incompetent Bosses

In congenial work atmosphere

Inadequate perks

Favoritisms

Suppression of the Talent

Employment Market is wide-open to find alternate jobs easily

Head-hunting and body-shopping by other good organizations.

* Low growth of company

* better opportunity outside
* Strategies are working
* Low corporate image
* Lack of career growth prospects
* Lack of balance between job and persona life
* Lack of support to job performance
* Stagnation in job
* Lack of job satisfaction
* Dual Job responsibility
* Hire and fire accepted practice
* Low mentorship support
* Low self esteem
* Short term goals - Immediate performances

People don't get integrated

Performance goals are missing
Development is always tomorrow's job
The personal touch is missing
Reward systems are not transparent
Goal setting process is not justifiable
Organizational Environment is not people oriented
Team Poaching
Poor communication
No career planning
To curb a high attrition rate

Top management should communicate continuously with all the employees about the
vision and mission of the company.

Support HR initiatives aimed at retaining people.

Line managers or project managers should establish a connection between the lower-level
and top management.

Manage the companys growth properly.

Develop leaders at all levels.

Train leaders in the skills they need to manage effectively.

For HR managers

Consider both a persons culture-fit and job-fit.

Understand the expectations at the entry level.

Do not make false promises about benefits.