Contemporary & Best Global

HR Practices in Indian
Industry

Dr. Debashish Sengupta. Alliance Business School,

Bangalore
 ―The number has become so predictable that it
barely raises eyebrows. According to Hewitt
Associates, for the seventh year running, India will
record the highest salary increase in Asia, of
15.2% or nearly twice that of China. Such dazzling
pay hikes and India‘s continuing supremacy in the
Asian salary sweepstakes raise one question: how
long can corporate India continue with such above-
average hikes?

OLB(Oulook Business)-Hewitt
Salary Survey, 2008
Why such above-average salary
hikes?
• All sectors are keen to retain talent.

• Between 2006 and 2007 overall

attrition percentage in Indian Industry
has risen from 14.4% to 18.1%.

• In high attrition sectors, the hikes

projected are the highest.
 High attrition sectors, have seen
highest hikes!
Industry Attrition in Attrition in Projected
2006 (%) 2007 (%) Salary hike
2008 (%)
Accounting/ 14.4 17.1 16.1
Consulting
Banking 13.0 18.9 14.2
Consumer 15.2 16.2 13.4
Durables
Engineering 10.3 15.2 15.7
FMCG 15.3 14.3 14.6
ITES 21.5 28.9 14.0
Telecom 21.2 23.6 17.6
 But can this sort of salary hike
continue?
• Evidently, it can—and it probably will—for some years to
come.
• In the last quarter (January to March 2008), employee
costs of 268 companies for which data was available
increased by 73% over the corresponding quarter three
years ago (January to March 2005). Over the same
period, income of these companies was up 88%.
• Interestingly, personnel costs as a share of income for
these companies was down from 9.7% in 2005 to 9.5%
in 2008.

• In other words, productivity increases have more than

compensated for the higher wage bill, giving companies
the room to pay more.
 Few More Questions ???
• Can this sort of hike continue forever?

• Does salary hike always reward

performance?

• Is compensation the only guarantee

of talent retention?
 Can this sort of hike continue
forever?
Certainly not! They have to plateau at some
or the other point of time.
• Rising pay packets have not always
retained people.
• Recession may slowdown
• Besides India has to protect the labour
cost-advantage factor as well.
 Recession will tell…
• ―India cannot be immune to recession which has hit
US & Europe‖ – Ratan Tata, Group Chairman, Tata
Group, expressing concerns about rising input costs.
(The Hindu, Business Line, August 5, 2008)

• Wipro Chief Azim Premji took a heavy-cut in his

annual pay recently. Wipro‘s Chairman, Azim
Premji, settled for a lower pay packet for the year
ended March 2008. Details published in Wipro‘s
annual report 2007-08 show that his remuneration
for the fiscal dipped 63 per cent to Rs 1.31 crore
compared with Rs 3.58 crore he received the
previous year. Whether this is an indication for the
rest of the IT industry, only time will tell.
Does salary hike always reward
performance?
• The pressure to retain employees is breeding
mediocrity. The difference in the percentage
hike given to the best and average performers
has dropped.

• Between 2001 & 2006, employees who ‗far

exceeded expectations‘ (rank one on four) got a
hike that was twice as much in percentage
terms (or 100% more).

• In 2007, the differential dropped and ranged

from 23.8% - 68.9%
 Is compensation the only guarantee of talent
retention?
What do industry experts say…

• K. Pandia Rajan, Managing Director of Ma Foi

Management Consultants
• Uday Mohan, Director-HR Operations at Pfizer India.

• S.Y. Siddiqui, Executive Director (Hr, Finance &

Admin.) Maruti Udyog Ltd.

• Yasho V Verma, Director HR & MS, L.G. Electronics

India

• Rajeev Dubey, President HR, Mahindra & Mahindra

Ltd.
 In words of K. Pandia Rajan, Managing Director of Ma
Foi Management Consultants

―Just as it is vital for a company to attract the right talent, it

is equally important for them to retain that talent. Today's
situation is such that companies are constantly vying with
each other to offer better perks to their employees. While
the nature of these perks may differ across levels, there is
a need to offer something beyond just the pay packages.
Stock options, exposure to other markets, substantial
incentives on meeting targets, foreign trips - these are all
initiatives that have gained a lot of acceptance in the last
few years. And this does goes a long way in retaining
people..."
 In words of Uday Mohan, Director-HR
Operations at Pfizer India.

"Beyond compensation, we create a culture of

ownership—through stock options of the parent

company—for our leadership team. We look at

creating greater engagement among colleagues by

involving them in cross-functional teams and with

other initiatives,"
In words of S.Y. Siddiqui, Executive Director (Hr,
Finance & Admin.) Maruti Udyog Ltd.

"There is more to a job than money. That‘s the general

refrain across companies that manage to keep costs
down, but still retain talent. Good job content and a
learning environment coupled with career opportunities
and the brand make Maruti competitive. Self-training
and job content is made challenging enough to keep
employees excited. Job rotation is the other motivator "
In words of Yasho V Verma, Director HR &
MS, L.G. Electronics India
"At LG, there is a system to develop and plan the career of
an employee for the next five years. Family engagement is
also high on the list. A member of the HR team is appointed
as a family ambassador who earns Rs 2,000 for each visit to
an employee‘s residence. The broad philosophy is that from
the moment you leave house to when you get back,
everything is taken care of—even a concierge service is on
offer. And this costs no more than Rs 80-90 per employee,
but it increases the personalized touch "
 In words of Rajeev Dubey, President HR,
Mahindra & Mahindra Ltd.
"People are looking for engagement, empowerment, scope
for innovation and global experiences today, Capacity
building, nurturing talent and synergy are the prime issues.
Besides these, there are hygiene factors like the
workplace, the peer group, the relationship with immediate
superiors and leadership team that are intangibles in
keeping employees glued to an organisation. "
 So it takes more than just salary-
hike…doesn‘t it?
• The difference between a highly productive
workforce and a disengaged, disinterested one
can spell success or failure for an enterprise in
the long term.
• The cost of each disengaged employee per
year could be $8,000-10,000 a year, estimates
Hewitt.
• Organizations with high engagement are found
to be 78% more productive and 40% more
profitable than those with indifferent workers.
 Sneak-Peek
So we take a sneak-peek into what
some of India‘s best employers are
doing in terms of their HR practices
which have set certain standards
for other players…
 Best Employers in India-2007*
(Snapshot)
Rank Company Rank Company

1 Microsoft India 8 HCl Comnet

2 MindTree Consulting 9 Accenture
3 Johnson & Johnson 10 Dr Reddy‘s Labs
4 Sapient 11 Marriott Hotels India
5 Infosys Technologies 12 Covansys India
6 iGate 13 HCL Infosystems
7 Agilent Technologies 14 Godrej Consumer

* BT-Mercer-TNS Study- 2007

15 Honeywell Technology
 Methodology
HR Process Stakeholders
Criterion HR Metrics IEPS
& Policy Perception
What they Training to Talent Mgmt. Internal Feedback from
mean? employees, HR Closed loop Employee Alumni, New
investments, learning, Perception Recruits,
Career Velocity, progressive Score Search Firms
Attrition, Gender HR practices (opinion and campuses.
Diversity, sought on
Increments given various
to employees in aspects)
last one year.

Weightage 15% 30% 35% 20%

 1 Microsoft India
• Leadership Development:
Total Employees 5000+ Spends a large amount of time
and money to prepare them for
Average Age 30 the job ahead.
Male: Female Ratio 8:1 • Internal Transfers: Employees
can seamlessly transfer among
Average Career 4.13 years 6 business grps. If they feel
HR Cost $ 54.636 they‘re stagnating.
million • Transparent Compensation:
System of pay & appraisal are
Promotion rate 24.73% open in the company.
Training Budget $ 0.131 Expectations are clear.
million • Mentoring: Mentors & their
Training Man-days 12,270
wards meet regularly to have
an open and frank dialogue.
Revenues N.A. • Recruitment: New employees
Net Profit N.A. are given ‗buddy‘ to help them
assimilate. Also helps in finding
accommodation for the
employees and has a real-
estate consultant.
 2 MindTree Consulting
• Institutionalized Practices: Co.
Total Employees 5500 seeks feedback from employees.
Co. also identifies and adapts best-
Average Age 27.82 years in-class practices from globally
Male: Female Ratio 77:23 admired organizations.
• ‗Baby‘s Day Out‘: Launched a full-
Average Career 3.6 years fledged day care centre on-site.
HR Cost $ 3.6 Women are allowed to take 1 yr. of
leave for every 6 yrs. They work to
million balance their work & life
Promotion rate 30% commitments.
• ‗Dhriti‘: Co. has launched ‗Dhriti‘ – a
Training Budget $ 0.834 Mind Tree Women‘s Network, as a
million support system to facilitate
knowledge sharing, learning,
Training Man-days 66000 mentoring and networking.
Revenues $ 141.573 • IJPs:Mind Tree has launched
million internal job postings to help
employees align their aspirations
Net Profit $ 21.329 with available opportunities.
million • Leadership : Focus on continuously
creating leadership and see that
leadership ‗walks the talk‘.
 3 Johnson & Johnson
• Employee Welfare: Career
Total Employees 404 Counselling for employees and kids;
Average Age 38 years Confidential helpline – J&J Mitr – for
employees wanting advice on
Male: Female Ratio 4.86:1 personal problems.
Average Career 11.56 years • Spritual Development of Employees:
Employees are invloved in a lot of
HR Cost $ 0.422 community development projects. In
million addition each employee is given an
Promotion rate 18.71% additional five days leave o go and
work for an NGO of his/her choice.
Training Budget $ 0.128
million • Employee Centric: J&J‘s employee
benevolence goes beyond
Training Man-days 510 workplace and even beyond
Revenues $ 355.815 personal or the family. It attempts to
million shape every aspect of an
employee‘s personality.
Net Profit $ 31.824 • Openess: Candidness is feature at
million J&J across levels. Employees have
a strong emotional connect.
 4 Sapient
• Truly Open: Almost every
Total Employees 3500
company claims that it is open
Average Age 29 years but Sapient says it really is!
Male: Female Ratio 1:1.26 • Succession Planning: Sapient
Average Career 2.4 years has some solid practices in
HR Cost NA place whereby they gradually
ease people into new roles.
Promotion rate 7.03% • Career Counselling: The
Training Budget NA
company has constituted a
‗Career Week‘ where new-
comers are given counselling
Training Man-days 8000
by more experienced people.
Revenues NA
• New Systems: The company
Net Profit NA is introducing new systems
like telecommuting & Flexi –
hours.
 6 iGATE
• More Opportunities: Junior & Mid-
Total Employees 5945 level employees get more client-
facing opportunties.
Average Age 26 • Reward System: Meritorious
Male: Female Ratio 13:4 employees across all levels are
given restricted stock options.
Average Career 3.38 years • Easy Access: Employees have
HR Cost $ 2.284 easy access top management.
million • Multiple Exposure: Unlike
traditional IT model, iGators can
Promotion rate 13.17% leverage a single technology
Training Budget $ 1.279 platform to work with multiple
clients.
million • Innovation: iGate is less process-
Training Man-days 10 centric. This gives employees a
greater room to be innovative &
Revenues $ 193.522 individualistic.
million • Early Responsibility: Employees
Net Profit $ 11.922 with just 3 years of experience are
given management and customer-
million facing roles.
 7 Agilent Technologies
• Accent on Learning: One of the
Total Employees 1500 philosophies of the company is to
Average Age 29.7% give the right tools and resources to
employees so that they can develop
Male: Female Ratio 2.3:1 themselves.
Average Career 2.67 • Succession Planning: Company‘s
succession planning ensures
HR Cost NA employees have a go at realizing
their leadership potential.
Promotion rate 15.08% • Performance Management: All
Training Budget $ 2.395 employees are communicated what
million is expected of them and their
performance monitored through the
Training Man-days 7500 My Accountability and Performance
Revenues NA Standards (MAPS).
• Leadership: The leadership of the
Net Profit NA company spends 80% of their time
in engaging with employees –
coaching, developing and
innovating.
 8 HCl Comnet
Total Employees 5400 • Employee First Campaign: Greater
Engagement; Cross- functional move;
Average Age 25 empowerment to take quick decisions.
• SSD: The Smart Service Desk is an
Male: Female 8:1 automated trouble-ticketing tool for
Ratio employees to raise online tickets related to
transactional issues with HR, Finance or IT
Average Career 4.7 years team
HR Cost $ 7.162 • Performance Management: 3600 perf.
Appraisal; Self appraisal thru. I4Excel;
million ―My Xtra Miles‖ is a loyalty point system when
they get appreciation from their peers,
Promotion rate 4.16% subordinates, managers or customers. These
Training Budget $ 6.082 points can be redeemed for attractive gifts,
foreign trips etc.
million Company has various recognition-led
incentive awards like WYGI-WYG
Training Man-days 43000 Certificates, COO‘s Party Vouchers, Top Gun
award, TOP Gun Comnet Builder Award etc.
Revenues $ 203.145
• Natasha: Natasha is positioned as
million employees‘ personal assistant for policy and
information dissemination.
Net Profit $ 22.719
• Work-life Balance: Organizes games, b‘day &
million achiever's parties. Has ‗Little Comnetians
Club for employees‘ kids.
 9 Accenture
• Global Opportunities:
Total Employees 35000* Employees can move across
business verticals &
Training Budget $ 706 geographies globally.
million #
• Reward System: Among the
Avg. training hrs. / 152 best paymasters and
employee in FY07 compensation perceived to be
Revenues $ 19.70
better then Indian Tier I
Vendors.
billion #
• Education Initiatives: Massive
Net Profit $ 1.24 focus on education & training.
billion # 16000 online courses, offers
courses in association with MIT.
• Career Mobility: Employees can
make own career choices. No
compulsion to choose a
particularly approach.
• Empowered Employees: Allows
employees to take autonomous
decisions and gives them
budget to manage too.
 10 Dr. Reddy‘s Labs
Total Employees 7704
• Leadership development:
Promising young leaders are
Average Age 31 years
given an opportunity to share
Male: Female Ratio 10:1 their breakthrough ideas
Average Career 6 years before the management
HR Cost $ 63.288 council at its quaterly meeting.
million The company is also setting-
Promotion rate 9% up a Leadership Academy at
Training Budget $ 1.184 a cost of around $3.5 million
million near Hyderabad.
Training Man-days 25000
• Career Jumps: Outstanding
Revenues $ 1541.805 performers are given quantum
million
leaps in their careers and at
Net Profit $ 265.846
million
times even inducted in
management council.
 11 Marriott Hotels India
• Two-way communication: For new
Total Employees 2502 entrants there is an event called ‗Koffee
with GM‘. For too ‗shy to talk‘ types – an
Average Age 24 option of anonymously calling up
Integrity Hotline (24*7 toll free)
Male: Female Ratio 4:1 • Reward System: Individual as well as
group awards. Hotel-wise as well as
Average Career 3 years global awards.
HR Cost $ 0.257 • Employee Benefit Initiatives: Employees
are given 6-offs in a month & financial
million support for higher edu. Each & every
Promotion rate 37.6% employee on his/her b‘day can stay with
family or spouse in the hotel for one day
Training Budget $ 0.327 & can dine anywhere.
million • Knowledge Initiatives: Every Marriott
hotel has a learning centre that has a
Training Man-days 4337 collection of books and videos and has a
internet connection.
Revenues $ 107.686 • Defined Span of Leadership: There is a
million Leadership Performance Process
Management System which defines 9
Net Profit $ 57.689 competencies which a Marriott associate
million (employee) should develop.
 12 Covansys India
• Stress Buster Sessions: TGIF
Total Employees 5412 (Thank God Its Friday) is one such
stress buster program.
Average Age 29 years • Employee Structure Framework:
Male: Female Ratio 4:1 The co. has recently estd. ESF to
foster growth & excellence. On one
Average Career 5 years hand it encourages individuals &
HR Cost $ 3.733 teams to overcome their inhibitions
& exploit their potential to the fullest;
million on the other hand it softens those
Promotion rate 39% controls that prevent the free-flow of
creativity within the co. Six task
Training Budget $ 1.516 forces were created. The payoffs:
million 1. Booked orders worth $ 2 million
based on informal tips.
Training Man-days 27788 2. employee referral grew (8% to
Revenues $ 455.4 15%)
3. Job rotation done more sensibly.
million • ―Compass‖: a tool to detect &
Net Profit $ 53.26 leverage individual capabilities &
million aspirations. Also uses non-intrusive
methods to detect dissatisfaction
among employees & address them.
 13 HCL Infosystems
• 360-degree feedback: So employees
Total Employees 5467 also get to look at the manager‘s
performance!
Average Age 28 • Recognition for added value: Rewards
each employee whose innovation gets
Male: Female Ratio 128:8 lauded by the customer.
Average Career 4.35 • Employee Management Interface:
Employees have direct Q&A link with the
HR Cost $ 7.64 president himself, who has to answer in
a limited time-frame.
million
• Focus on learning: Lot of investments in
Promotion rate 21.64% e-learning, creating libraries for emp.
Holding workshops. Also has ESOPs.
Training Budget $ 0.264 • Innovation: Has a e-forum Innovation
million @hcl to help employees particpate in
Innovation process.
Training Man-days 52,708 • Business Continuity Plan: Company has
Revenues $ 2859.684 a comprehensive succession planning in
place.
million • Employee Engagement:
Net Profit $ 75.957 Existing Ones: Preventive health-check
– up, yoga classes, employee relief fund
million New Ones: MyPal, Wellness Program,
Three Cheers, Little Mindian, Bring a
Smile etc.
 14 Godrej Consumer
• Consumer Orientation: Employees (not
Total Employees 1259 just marketing people) are encouraged
to go to market and even at times to
Average Age 35 consumer‘s residences.
• Young Professional matter: All
Male: Female Ratio 14:1 businesses are headed by non-family
professionals. A young executive board
Average Career 12 of 10 leadership – oriented managers
HR Cost $ 0.24 has been constituted.
• Godrej Employee Management (GEM):
million an IT – enabled tool keeps track & helps
Promotion rate 16% find right people according to
competencies.
Training Budget $ 0.166 • Out-of-the-box programmes:
million 1. GALLOP: looks at recruiting Ph.Ds
2. BRACE: for hiring people immediately
Training Man-days 3042.58 after graduation.
3. IDLE: focused on internal
Revenues $ 192.157 development of leaders.
million • Stress on Communication: Chairman
regularly meets with managers;
Net Profit $ 31.767 President with managers and Officers.
million Chairman communicates with all
employees every quarter.
 15 Honeywell Tech. Solutions Lab
• Two-Way Communication: MD and
Total Employees 5500 other business leaders hold regular
meetings with employees to
Average Age 29 communicate policies, address
grievances and operational issues.
Male: Female Ratio 4:1 • Employee Benefit Initiatives: Has
counsellors to provide advice on health
Average Career 3 years and finance. Encourages employees
HR Cost $ 2.892 and their families to develop friendship
and organize various events.
million • Knowledge Initiatives: has tie-ups with
Promotion rate 20% leading educational institutions like
illinois institute of technology, Chicago &
Training Budget $ 1.22 others for advanced courses for its
employees that it partially sponsors.
million
• Defined Span of Leadership:
Training Man-days 21750 Has a structured initiative in place to
ensure adequate attention is given to
Revenues $ 140.467 every employee.
million • Reward System: Employees are
categorized into ‗Star Performers‘,
Net Profit $ 14.315 ‗Valued Contributors‘ and ‗Achievers‘
million and rewarded in an open and
transparent manner.
 The Great Fall…
• You must be wondering where did the
company ranked 5th in best employer
(India) list, go!
• We are discussing it at the end because it
is an example of how the crown can slip!
Year Rank of INFOSYS on Best
Employer list
2004 2nd
2005 1st
2006 1st
2007 5th
 5 Infosys Technologies
Why Infosys Fell?
Total Employees 80501
Average Age 25 • Growing Scale: Harder for a
Male: Female Ratio 2.4:1 company with over 80000
employees to be agile with people
Average Career 3.87 years practices as smaller rivals.
HR Cost $ 51.355 • Inadequate Communication: Slow to
million communicate emerging company
Promotion rate 8.48% philosophy to employees.
• MNC Competitors: Emergence of
Training Budget NA MNCs in India has dented its
reputation as among the best pay
Training Man-days 12 masters.
Revenues $ 3272.792 • HR Lag: Yet to put in place a
million comprehensive HR policy to deal
with a global organization.
Net Profit $ 906.949 • Slow Promotions: Yet to address
million this issue & a perceived glass wall..
 Quick View – Top HR Practices in
India
• Telecommuting & Flexi – hours
• More Growth Opportunities
• Easy access top management
• Greater room to be innovative &
individualistic
• Early Responsibility
• Accent on Learning
• Performance Management
• Greater Engagement; Cross-
functional move;
• Empowerment to take quick
decisions
• Work-life Balance
• Global Career Opportunities
• Fair & open Reward System
• Education Initiatives
• Career Mobility
• Career Jumps for outshiners
• Two-way communication
• Knowledge Initiatives
• Defined Span of Leadership
• Stress Buster Sessions
• Detecting & leveraging individual
capabilities & aspirations
• 360-degree feedback
• Recognition for added value
• Value to Young Professional
matter
 San Jose State University
• SJSU is the 12th largest employer in the Silicon Valley,
with over 5,000 faculty, staff and student assistants. We
are proud of our workforce and student body diversity.
We believe a career with SJSU is a very rewarding
experience. In 2007, SJSU celebrated its 150th year
anniversary with university commemorative events.
• HR embraces the university's shared values and Vision
2010 for becoming the University of Choice. The Vision
2010 will guide HR operations to recruit, retain and
engage a team of well-qualified employees. HR will
design a full spectrum of programs that will target
compensation, benefits, work-life balance, employee
development and performance management.
• HR invites you to explore our website and learn how HR
partners with the university to achieve its strategic goals
and Vision 2010.
 San Jose State University
• It's all about striking the best balance.
• Work-life balance means different things to different
people. There is no perfect, one-size fits all, balanced
solution that you should be striving for. The best work-life
balance is different for each of us because we all have
different priorities and different lives.
• Human Resources, along with the CSU and SJSU, have
established many programs designed to attract, retain
and engage a diversified workforce and their ever-
changing needs.
• HR invites you to explore the work-life effectiveness
programs at SJSU that may provide you with some of
the tools to self-manage your work-life balance and have
a sense of well-being and belonging at SJSU.
• BT-Mercer-TNS Study, Business Today,
Nov. 18, 2007 Issue
• OLB-Hewitt Salary Survey 2008, Outlook,
June 1-14, 2008