Вы находитесь на странице: 1из 81

CHAPTER 1: ATTRITION AND EMPLOYEE RETENTION

INTRODUCTION TO ATTRITION Attrition is a universal phenomenon and no industry is devoid of it, but the degree fluctuates from industry to industry on the basis of its capacity to manage low attrition rate. Attrition not only affects the quality of service, but also leads to increased expenditure on training and development, thereby affecting the overall organizational performance. Several companies are trying out different ways to manage low attrition rate. Be it an IT sector, or BPO, they are trying out their ways to manage lower rate of attrition by creating a healthy work environment, work-life balance, corporate brand building and so on. In the best of worlds, employees would love their jobs, like their coworkers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave. But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their coworkers, want a change, or because their spouse gets a dream job in another state. So, what does that entire turnover cost? And what employees are likely to have the highest turnover? Who is
1

likely to stay the longest? There is a famous Chinese proverb which says that If you want returns for 1 year, invest in crops. If you want returns for 10 years, invest in trees. But if you want returns for 100 years, invest in people Yes, it is the people who hold the attraction in todays highly competitive world. With increasing attrition levels, it is necessary to have creative retention strategies. EMPLOYEE ATTRITION Defining attrition: "A reduction in the number of employees through retirement, resignation or death. Defining Attrition rate: The rate of shrinkage in size or number"

Costs Due to a Person Leaving Calculate the cost of the person(s) who fill in while the position is vacant. Calculate the cost of lost productivity at a minimum of 50% of the person's compensation and benefits cost for each week the position is vacant, even if there

are people performing the work. Calculate the lost productivity at 100% if the position is completely vacant for any period of time. Recruitment Costs The cost of advertisements; agency costs; employee referral costs; internet posting costs. The cost of the internal recruiter's time to understand the position requirements, develop and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30 hours to over 100 hours per position. Training Costs Calculate the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of orientation materials. Lost Productivity Costs As the new employee is learning the new job, the company policies and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity: Upon completion of whatever training is provided, the employee is contributing at a 25% productivity level for the first 2-4 weeks. The cost therefore is 75% of the new employees full salary during that time period.

During weeks 5-12, the employee is contributing at a 50% productivity level. The cost is therefore 50% of full salary during that time period. During weeks 13-20, the employee is contributing at a 75% productivity level. The cost is therefore 25% of full salary during that time period. New Hire Costs Calculate the cost of bringing the new person on board including the cost to put the person on the payroll, establish computer and security passwords and identification cards, telephone hookups, cost of establishing email accounts, or leasing other equipment such as cell phones, automobiles. Lost Sales Costs Calculate the revenue per employee by dividing total company revenue by the average number of employees in a given year. Whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide some defined set of responsibilities that are necessary to the generation of revenue. Calculate the lost revenue by multiplying the number of weeks the position is vacant by the average weekly revenue per employee. It is clear that there are massive costs associated with attrition or turnover and, while some of these are not visible to the management reporting or budget system, they are not the real loss. The 'rule of thumb' appears to be very inaccurate indeed and, while it depends upon the category of staff, it is probably better to estimate around 80% of salary as a truer rule of thumb-and this will be on the conservative side. What does this mean? Well it means that if a company has 100 people doing a certain job paid 25,000 and that turnover or attrition is running at 10%, the cost of attrition is:
4

(Total staff x attrition rate %) x (annual salary x 80%) 100 staff at 10% attrition means 10 people leave and are replaced each year. A replacement cost of 80% of a salary of 25,000 means the cost of each replacement is 20,000 (Saving 8% of salary costs would make the average HR manager a hero.) BENEFITS OF ATTRITION/IS ATTRITION BAD? Attrition is not bad always if it happens in a controlled manner. Some attrition is always desirable and necessary for organizational growth and development. The only concern is how organizations differentiate good attrition from bad attrition. The term healthy attrition or good attrition signifies the importance of less productive employees voluntarily leaving the organization. This means if the ones who have left fall in the category of low performers, the attrition in considered being healthy. There is also a flip side to the situationthe fact that good attrition is a pointer to the failure of the existing system and processes, in the organization in hiring the right employee, grooming and training him to be a productive workerean, that a wrong choice was made at the beginning. The only plus point is that the realization has initiated action that will lead to cutting loss.

IMPACT OF ATTRITION Direct impact: A high attrition indicates the failure on the companys ability to set effective HR priorities. Clients and business get affected and the companys internal strengths and weaknesses get highlighted. New hires need to be constantly added, further costs in training them, getting them aligned to the company culture, etc.,all a challenge. Indirect impact: Difficulty in the company retaining remaining employees and to what extent? Problem for the company in attracting potential employees. Typically, high attrition also leads to a chronic or systemic cycleattrition brings decreased productivity, people leave causing others to work harder and this contributes to more attrition. All this has a significant impact on the companys strength in managing their business in a competitive environment.

ANALYZING THE IMPACT Productivity and profitability are both impacted, either negatively and positively, according to the type of attrition. Even good attrition is indicative of loss as recruitment is a time consuming and costly affair. It is tantamount to investment that has gone astray. Having said that, good attrition minimizes the adverse impact on business while bad attrition accentuates the loss, stated Nair. The cost of hiring is sometimes not less than two to three times the salary of the employee.
6

The impact on work progress is tremendous, particularly if a project is underway and one of the key people leaves. It leads to dip in entire organizational efficiency, and a lot depends on how it is able to cover the setback, pointed out Rao. Organizations should execute top of the line retention policies in the right earnest and consistency. They should be more employee-centered and look for further ways to bond employees to their companies. Company performance is optimally aligned to the skills its employees possess. High attrition implies that certain necessary skills are vulnerable or are not present due to employees being lost. This result is lower than optimal levels of business performance. If the skills are constantly not available, the situation gets compounded into a crisis with key projects, revenues, etc., getting affected. Business is then reduced to just managing crisis, added Bhardwaj. For example, a 2 percent attrition difference can make a significant difference in the ultimate business impact. THE ATTRITION PROBLEM The attrition rates and the retention have become the major threat and the biggest challenge for the human resource professionals. The top reasons for employees to leave an organization are: Monotonous work (repetitive nature of work and the average number of calls) Physical strains because of long and odd working hours No growth opportunity/lack of promotion For higher Salary For Higher education No personal life
7

INTRODUCTION TO EMPLOYEE RETENTION

Employee retention is a process in which the employees are encouraged to remain with the organization for the maximum period of time or until the completion of the project. Employee retention is beneficial for the organization as well as the employee. The top organizations are on the top because they value their employees and they know how to keep them glued to the organization. Employees stay and leave organizations for some reasons.

The picture states the latest statement that corporate believes in Love them or Lose them The reason may be personal or professional. These reasons should be understood by the employer and should be taken care of. The organizations are becoming aware of these reasons and adopting many strategies for employee retention. Corporate is facing a lot of problems in employee retention these days. Hiring knowledgeable people for the job is essential for an employer. But retention is even more important than hiring. There is no dearth of opportunities for a talented person. Employees today are different. They are not the ones who dont have good opportunities in hand. There are many organizations which are looking for such employees. If a person is not satisfied by the job hes doing, he may switch over to some other more suitable job. It is the responsibility of the employer to retain their best employees. If they dont, they would be left with no good employees. In todays environment it becomes very important for organizations to retain their employees.

Retention involves five major things:

Compensation

Environment

Growth

Relationship

Support

Employee retention would require a lot of efforts, energy, and resources but the results are worth. COMPENSATION Compensation constitutes the largest part of the employee retention process. The employees always have high expectations regarding their compensation packages. Compensation packages vary from industry to industry. So an attractive compensation package plays a critical role in retaining the employees. Compensation includes salary and wages, bonuses, benefits, prerequisites, stock options, bonuses, vacations, etc. While setting up the packages, the following components should be kept in mind:

10

Salary and monthly wage: It is the biggest component of the compensation package. It is also the most common factor of comparison among employees. It includes Basic wage House rent allowance Dearness allowance City compensatory allowance Salary and wages represent the level of skill and experience an individual has. Time to time increase in the salaries and wages of employees should be done. And this increase should be based on the employees performance and his contribution to the organization. Bonus: Bonuses are usually given to the employees at the end of the year or on Festival. Economic benefits: It includes paid holidays, leave travel concession, etc. Long-term incentives: Long term incentives include stock options or stock grants. These incentives help retain employees in the organization's startup stage. Health insurance: Health insurance is a great benefit to the employees. It saves employees money as well as gives them a peace of mind that they have somebody to take care of them in bad times. After retirement: it includes payments that an employee gets after he returns like EPF (Employee Provident fund) etc.

11

Miscellaneous compensation: It may include employee assistance programs (like psychological counseling, legal assistance etc), discounts on company products, use of a company cars, etc.

Instance of city compensatory allowance provided by Indian Sucrose Limited: If an employee earns 5lakhs annually in a city like Noida, the sugar mill may offer a 10lakhs package to attract the employee (5lakhs being the basic pay and 5lakhs as the city compensation so as to compensate for the housing and educational facilities etc available in Noida).

GROWTH AND CAREER Growth and development are the integral part of every individuals career. If an employee can not foresee his path of career development in his current organization, there are chances that hell leave the organization as soon as he gets an opportunity. Work profile: The work profile on which the employee is working should be in sync with his capabilities. The profile should not be too low or too high. Personal growth and dreams: Employees responsibilities in the organization should help him achieve his personal goals also. Organizations cannot keep aside the individual goals of employees and foster organizations goals. Training and development: Employees should be trained and given chance to improve and enhance their skills. Many employers fear that if the employees are well trained, theyll leave the organization for better jobs. Organization should not

12

limit the resources on which organizations success depends. These trainings can be given to improve many skills like:

Communications skills Technical skills In-house processes and procedures improvement related skills C or customer satisfaction related skills Special project related skills

SUPPORT Lack of support from management can sometimes serve as a reason for employee attrition. Supervisor should support his subordinates in a way so that each one of them is a success. Management should try to focus on its employees and support them not only in their difficult times at work but also through the times of personal crisis. Management can support employees by providing them recognition and appreciation. Employers can also provide valuable feedback to employees and make them feel valued to the organization. The feedback from supervisor helps the employee to feel more responsible, confident and empowered. Top management can also support its employees in their personal crisis by providing personal loans during emergencies, childcare services, employee assistance programs, counseling services; et al.

13

Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. Thus employers can support their employees in a number of ways as follows: By providing feedback By giving recognition and rewards etc

RELATIONSHIP Sometimes the relationship with the management and the peers becomes the reason for an employee to leave the organization. The management is sometimes not able to provide a supportive work culture and environment in terms of personal or professional relationships to the employee. There are times when an employee starts feeling bitterness towards the management or peers. This bitterness could be due to many reasons. This decreases employees interest and he becomes demotivated. It leads to less satisfaction and eventually attrition. A supportive work culture helps grow employee professionally and boosts employee satisfaction. To enhance good professional relationships at work, the management should keep the following points in mind: Respect for the individual: Respect for the individual is a must in the organization. Relationship with the immediate manager: A manger plays the role of a mentor and a coach. He designs end plans work for each employee. It is his duty to involve the employee in the processes of the organization. So an organization should hire managers who can make and maintain good relations with their subordinates. Relationship with colleagues: Promote team work, not only among teams but in different departments as well. This will induce competition as well as improve the relationships among colleagues.
14

Recruit whole heartedly: An employee should be recruited if there is a proper place and duties for him to perform. Otherwise hell feel useless and will be dissatisfied. Employees should know what the organization expects from them and what their expectation from the organization is. Deliver what is promised. Promote an employee based culture: The employee should know that the organization is there to support him at the time of need. Show them that the organization cares and hell show the same for the organization. An employee based culture may include decision making authority, availability of resources, open door policy, etc. Individual development: Taking proper care of employees includes acknowledgement to the employees dreams and personal goals. Create opportunities for their career growth by providing mentorship programs, certifications, educational courses, etc. Induce loyalty: Organizations should be loyal as well as they should promote loyalty in the employees too. Try to make the current employees stay instead of recruiting new ones.

ORGANIZATIONAL ENVIRONMENT It is not about managing retention. It is about managing people. If an organization manages people well, employee retention will take care of itself. Organizations should focus on managing the work environment to make better use of the available human assets. People want to work for an organization which provides Appreciation for the work done Ample opportunities to grow
15

A friendly and cooperative environment A feeling that the organization is second home to the employee. Organization environment includes

Culture Values Company reputation Quality of people in the organization Employee development and career growth Risk taking Leading technologies and trust

Types of environment the employee needs in an organization

Learning environment: It includes continuous learning and improvement of the individual, certifications and provision for higher studies, etc.

Support environment: Organization can provide support in the form of worklife balance. Work life balance includes:

Flexible hours Telecommuting Dependent care Alternate work schedules Vacations Wellness

16

Work environment: It includes efficient managers, supportive co-workers, challenging work, involvement in decision-making, clarity of work and responsibilities, and recognition. Lack or absence of such environment pushes employees to look for new opportunities. The environment should be such that the employee feels connected to the organization in every respect. RETENTION - A BIG CHALLENGE Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs become the dominant players in their respective markets. The fierce competition for qualified workers results from a number of workplace trends, including:
A robust economy Shift in how people view their careers Changes in the unspoken "contract" between employer and employee Corporate cocooning A new generation of workers Changes in social morals Life balance

17

Concurrent with these trends, the emerging work force is developing very different attitudes about their role in the workplace. Today's employees place a high priority on the following:
Family orientation Quality of life issues Autonomy

IMPORTANCE OF EMPLOYEES RETENTION Now that so much is being done by organizations to retain its employees, why is retention so important? Is it just to reduce the turnover costs? Well, the answer is a definite no. Its not only the cost incurred by a company that emphasizes the need of retaining employees but also the need to retain talented employees from getting poached. The process of employee retention will benefit an organization in the following ways: 1. The Cost of Turnover: The cost of employee turnover adds hundreds of

thousands of money to a company's expenses. 2. Loss of Company Knowledge: When an employee leaves, he takes with him

valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). 3. Interruption of Customer Service: Customers and clients do business with a

company in part because of the people. Relationships are developed that encourage continued sponsorship of the business.

18

4.

Turnover leads to more turnovers: When an employee terminates, the effect

is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff. 5. Goodwill of the company: The goodwill of a company is maintained when

the attrition rates are low. Higher retention rates motivate potential employees to join the organization. 6. Regaining efficiency: If an employee resigns, then good amount of time is

lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee. WHAT MAKES EMPLOYEE LEAVE? Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be: Job is not what the employee expected to be: Sometimes the job responsibilities dont come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction. Job and person mismatch: A candidate may be fit to do a certain type of job which matches his personality. If he is given a job which mismatches his personality, then he wont be able to perform it well and will try to find out reasons to leave the job No growth opportunities: No or less learning and growth opportunities in the current job will make candidates job and career stagnant. Lack of appreciation: If the work is not appreciated by the supervisor, the employee feels de-motivated and loses interest in job.
19

Lack of trust and support in coworkers, seniors and management: Trust is the most important factor that is required for an individual to stay in the job. Non-supportive coworkers, seniors and management can make office environment unfriendly and difficult to work in. Stress from overwork and work life imbalance: Job stress can lead to work life imbalance which ultimately many times lead to employee leaving the organization. Compensation: Better compensation packages being offered by other companies may attract employees towards themselves. New job offer: An attractive job offer which an employee thinks is good for him with respect to job responsibility, compensation, growth and learning etc. can lead an employee to leave the organization.

MANAGING EMPLOYEE RETENTION The task of managing employees can be understood as a three stage process: Identify the cost of employee turnover Understand why employee leave Implement retention strategies

Identify the cost turnover The organizations should start with identifying the employee turnover rates within a particular time period and benchmark it with the competitor organizations. This will help in assessing that whether the employee retention rates are healthy in the company. Secondly, the cost of employee turnover can be calculated. According to a survey, on an average, attrition costs companies 18 months salary for each manager or professional who leaves, and 6 months pay for each hourly employee
20

who leaves. This amounts to major organizational and financial stress, considering that one out of every three employees plans to leave his or her job in the next two years. Understand why employee leave Why employees leave often puzzles top management. Exit interviews are an ideal way of recording and analyzing the factors that have led employees to leave the organization. Implement retention strategy Once the causes of attrition are found, a strategy is to be implemented so as to reduce employee turnover. The most effective strategy is to adopt a holistic approach to deal with attrition. HOW TO INCREASE EMPLOYEE RETENTION? Companies have now realized the importance of retaining their quality workforce. Retaining quality performers contributes to productivity of the organization and increases morale among employees. Four basic factors that play an important role in increasing employee retention include salary and remuneration, providing recognition, benefits and opportunities for individual growth. But are they really positively contributing to the retention rates of a company? Basic salary, these days, hardly reduces turnover. Today, employees look beyond the money factor.

21

EMPLOYERS AND THEIR KEY DRIVERS TO ATTRACT AND RETAIN TALENT The Following table describes the Key Drivers to Attract And Retain Talent.

Employers

Key Drives To Attract And Retain Talent


Early responsibilities in career Flexible and transparent organizational culture Global opportunities through a variety of exposure and diverse experiences

Procter and Gamble India

Performance Recognition

Strong global brand American Express (India) Value-based environment Pioneer in many people practices

Learning and growth opportunities Competitive rewards Opportunity to grow, learn and implement Strong social security and employee welfare performance- oriented culture

NTPC

Strong values of trust, caring fairness, and respect within the organization

Freedom to operate at work Early responsibility in career Training and learning opportunities Visible, transparent and accessible leaders

Johnson & Johnson

22

Competitive rewards Innovative HR programs and practices

Performance-driven Rewards Its belief in Growing our own timber Comprehensive development and learning programs Glaxo Smith Kline Consumer Healthcare Flat organization, where performance could lead to very quick progression Challenging work context Competitive rewards Exhaustive induction and orientation program

Organization philosophy and culture Job stability Freedom to work and innovate Company brand Open , transparent, and caring organization Management according to the managing with respect to guiding principles

Tata Steel

Colgate Palmolive India


Training and development programs Structured career planning process Global career opportunities Companys brand as an employer Early opportunities for growth
23

Wipro

High degree of autonomy Value compatibility Innovative people program Company brand image Work ethics Learning and growth opportunities Challenging work assignments Growing organization The group brand equity Strong corporate governance and citizenship Commitment to learning and development Best in people practices Challenging assignments Opportunity to work with fortune 500 clients

Indian Oil Corporation

TCS

EMPLOYEE RETENTION STRATEGIES The basic practices which should be kept in mind in the employee retention strategies are: Hire the right people in the first place. Empower the employees: Give the employees the authority to get things done. Make employees realize that they are the most valuable asset of the organization. Have faith in them, trust them and respect them. Provide them information and knowledge.
24

Keep providing them feedback on their performance. Recognize and appreciate their achievements. Keep their morale high. Create an environment where the employees want to work and have fun. These practices can be categorized in 3 levels: Low, medium and high level.

25

RETENTION STRATEGY OF INDIAN SUCROSE LIMITED: Salary is the foremost requirement as well as demand of every employee. It is the key factor responsible for retention of employees. The Indian Sucrose Ltd are the biggest pay-masters in north India. They offer 5-10% more salary than any other organization in the north India. This attracts employees towards the same and also helps retain them. They also provide city compensatory allowance etc. the other facilities provided by the organization include: Annual increment (provided when an employee completes 1year in the organization) Production incentives Daily basis crushing incentives (crushing capacity of the sugar mill is 80000, if it is achieved and incremented then this incentive is provided) Medical facilities (above 10,000 by the company and if <10,000 then it is undertaken by Employee State Insurance Act) Welfare facilities (housing allowance etc.) The employee retention rate is quiet high in the organization, most of the employees working in the same since more than 10years. Thus, the impact of the same can be seen on the production of the company, the crushing rate of the organization being 180% which is much more than the 80-90% crushing rate attained by other sugar industries. The organization is ranked as the best organization in the Punjab.

26

10 Reasons Why Organizations Are Not Able To Retain Employees 1. 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. 2. Performance goals are unclear. In a fast growing team or business the focus is on getting the things done today, but rarely are performance goals thought through and employees told as to which resources to approach for help. 3. 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. 4. 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. However it's the other way round! 5. Reward systems are not transparent. Most employees who get salary increment 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? 6. 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 theres an issue! 7. 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.

27

8. External equity is missing too. Don't do an annual compensation survey when the market moves every 3-4 months. 9. 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. 10.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? IS ATTRITION IMPORTANT TO YOUR ORGANIZATION? Employee attrition costs 12 to 18 months salary for each leaving manager or professional, and 4 to 6 months' pay for each leaving clerical or hourly employee. According to a study by Ipsos-Reid, 30% of employees plan to change jobs in the next two years. Do the math and discover how much your company may pay for attrition. Although employee turnover can help organizations evolve and change, an American Management Association survey showed that four out of five CEOs view employee retention as a serious issue for organizational success. If managers know the real causes of attrition, managers can control attrition and retain employees. Each retained employee can save money and lead to better opportunities.

28

REDUCE ATTRITION: CLERICAL AND HOURLY EMPLOYEES We can help you communicate. Most employees want to know more about their work. We can explain each process and help employees understand the importance of their work. Your employees will become more knowledgeable about their effectiveness. Here are a few ways...

Compliments and thanks cost little but can bring great benefits Let employees know that their opinions are valuable Keep employees informed - don't let them hear important news through rumors

Update employees with technical information Address staff by their first names Publicly praise what the employee has accomplished and say why it was important

RETENTION MANTRAS Transparent work culture In todays fast paced business environments where employees are constantly striving to achieve business goals under time restrictions; open minded and transparent work culture plays a vital role in employee retention. Companies invest very many hours and money in training and educating employees. These companies are severely affected when employees check out, especially in the middle of some big company project or venture. Although employees most often prefer to stay with the same company and use their time and
29

experience for personal growth and development, they leave mainly because of work related stress and dissatisfactions. More and more companies have now realized the importance of a healthy work culture and have a gamut of people management good practices for employees to have that ideal fresh work-life. Closed doors work culture can serve as a deterrent to communication and trust within employees which are potential causes for work-related apathy and frenzy. A transparent work environment can serve as one of the primary triggers to facilitate accountability, trust, communication, responsibility, pride and so on. It is believed that in a transparent work culture employees rigorously communicate with their peers and exchange ideas and thoughts before they are finally matured into full-blown concepts. It induces responsibility among employees and accountability towards other peers, which gradually builds up trust and pride. More importantly, transparency in work environment discourages work-politics which often hinders company goals as employees start to advance their personal objectives at the expense of development of the company as a single entity. Employees comprise the most vital assets of the company. In a work place where employees are not able to use their full potential and not heard and valued, they are likely to leave because of stress and frustration. In a transparent environment while employees get a sense of achievement and belongingness from a healthy work environment, the company is benefited with a stronger, reliable work-force harboring bright new ideas for its growth.

30

Quality work The success of any organization depends on how it attracts, recruits, motivates, and retains its workforce. Organizations need to be more flexible so that they develop their talented workforce and gain their commitment. Thus, organizations are required to retain employees by addressing their work life issues. The elements that are relevant to an individuals quality of work life include the task, the physical work environment, social environment within the organization, administrative system and relationship between life on and off the job. The basic objectives of a QWL program are improved working conditions for the employee and increase organizational effectiveness. Providing quality work life involves taking care of the following aspects: Occupational health care: The safe work environment provides the basis for the person to enjoy working. The work should not pose a health hazard for the person. The employer and employee, aware of their risks and rights, could achieve a lot in their mutually beneficial dialogue. Suitable working time: Organizations are offering flexible work options to their employees wherein employees enjoy flexi-timings for dedicating their efforts at work. Appropriate salary: The appropriate as well as attractive salary has always been an important factor in retaining employees. Providing employees salary at par with the other counterparts of above that what competitors are paying motivates them to stick with the company for long.

31

QWL consists of opportunities for active involvement in group working arrangements or problem solving that are of mutual benefit to employees or employers, based on labor management cooperation. People also conceive of QWL as a set of methods, such as autonomous work groups, job enrichment, and high-involvement aimed at boosting the satisfaction and productivity of workers. It requires employee commitment to the organization and an environment in which this commitment can flourish. Providing quality at work not only reduces attrition but also helps in reducing absenteeism and improving job satisfaction. Not only does QWL contribute to a company's ability to recruit quality people, but also it enhances a company's competitiveness. Common beliefs support the contention that QWL will positively nurture more flexible, loyal, and motivated workforce, which are essential in determining the company's competitiveness. Supporting employees Organizations these days want to protect their biggest and most valuable asset and they want to do this in a way that best suits their organizational culture. Retaining employees is a difficult task. Providing support to the employees acts as a mantra for retraining them. Employers can also support their employees by creating an environment of trust and inculcating the organizational values into employees. The management can support employees directly or indirectly. Directly, they provide support in terms of personal crises, managing stress and personal development. Management can support employees, indirectly, in a number of ways as follows:
32

Manage employee turnover: Employee turnover affects the whole organization in terms of productivity. Managing the turnover, hence, becomes an important task. A proactive approach can be adopted to reduce attrition. Strategies should be framed in advance and implemented when the times arrives. Turnover costs should also be taken into consideration while framing these strategies.

Become employer of choice: What makes a company an employer of choice? Is the benefit it offers or the compensation packages it gives away to its employees? Or is it measured in terms of how they value their employees or in terms of customer satisfaction? Becoming an employer of choice involves following a road map which tells where to go as a brand.

Engage the new recruits: The newly hired employees are said to be least engaged in the organization. Keeping them engaged is an important task. The fresh talent should be utilized to maximum before they start feeling bored in the organization. Optimize employee engagement: An organizations productivity is measured not in terms of employee satisfaction but by employee engagement. Employees are said to be engaged when they show a positive attitude toward the organization and express a commitment to remain with the organization. Employee satisfaction also comes with high engagement levels. So, organizations should aim to maximize the engagement amongst the employees.

Coaching and mentoring: Employees whose work performance suffers due to poor interpersonal relationships or because of lack of interpersonal skills should be provided proper coaching by their superiors. Planned coaching sessions help an individual to work through issues, maximize his potential and return to peak performance.
33

Feedback Feedback acts as a channel of communication between the employee and his manager. The amount of information employees receive about how well or how poorly they have performed is what we call feedback. It is a dialog between a manager and an employee which acts as a way of sharing information about the performance. It suggests where the employee performance is effective and where performance has to improve. Managers can provide either positive feedback or negative feedback to employees. This feedback helps the employee assess his performance and identify the improvement areas. Positive feedback communicates managerial satisfaction. Positive recognition for good performance boosts up the morale of the employees and results in performance improvement to a higher productivity level. It is believed that positive feedback is the only type of feedback that generates performance above the minimum acceptable level. Negative feedback obviously communicates managers dissatisfaction. However, negative feedback sometimes make employee to put more efforts to improve his performance. But such times are very rare. Moreover, this improvement is short term. Some managers do not provide any kind of feedback to their employees. Due to no feedback, employees may assume that they are performing productively or they may feel that the manager is satisfied with their performance. Studies reveal the performance tends be same or even decreases if no feedback is provided. Thus, feedback is necessary because:

It builds trust and enhances communication between manager and employee.


34

It gives managers and employees a way to identify and discuss skills and strengths.

Positive feedback leads to employee retention and motivation. It helps in identifying performance areas that need improvement and specific ways to improve them.

It acts as an opportunity to enhance performance by identifying resources for skill development.

It is an opportunity for managers and employees to assess and identify career and advancement opportunities.

It helps employees to understand the effectiveness of their performance and contributes to their overall knowledge about the work

Managers have the tendency to ignore good performances of their employees. Providing no feedback may demotivate the employees and may lead to employee absenteeism. Input from managers side is necessary as it helps the employees to improve their performance and increase productivity.

35

EMPLOYEE TURNOVER Attrition rate The attrition rate has always been a sensitive issue for all organizations. Calculating employee turnover rate is not that simple as it seems to be. No common formula can be used by all the organizations. A formula has to be devised keeping in view the nature of the business and different job functions. Moreover, calculating attrition rate is not only about devising a mathematical formula. It also has to take into account the root of the problem by going back to the hiring stage.

There is no standard formula to calculate the attrition rate of a company. This is because of certain factors as:

The employee base changes each month. So if a company has 1,000 employees in April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as 1,500 (average for the year). If the number of employees who left is 300, then the attrition figure could be 15 percent or 20 percent depending on what base you take.

Many firms may not include attrition of freshers who leave because of higher studies or within three months of joining.

In some cases, attrition of poor performers may also not be treated as attrition.

36

Calculating attrition rate: Attrition rates can be calculated using a simple formula: Attrition = (No. of employees who left in the year / average employees in the year) x 100 There are various other types of attrition that should be taken into account. These are:

Fresher attrition that tells the number of freshers who left the organization within one year. It tells how many are using the company as a springboard or a launch pad.

Infant mortality that is the percentage of people who left the organization within one year. This indicates the ease with which people adapt to the company.

Critical resource attrition which tells the attrition in terms of key personnel like senior executives leaving the organization.

Low performance attrition: It tells the attrition of those who left due to poor performance.

Attrition Costs One of the best methods for calculating the cost of turnover takes into account the expenses involved to replace an employee leaving an organization. These expenses are: A. Recruitment cost The cost to the business when hiring new employees includes the following six factors plus 10 percent for incidentals such as background screening Time spent on sourcing replacement
37

Time spent on recruitment and selection Travel expenses, if any Re-location costs, if any n Training/ramp-up time Background/reference screening

B. Training and development cost To estimate the cost of training and developing new employees, cost of new hires must be taken into consideration. This will mean direct and indirect costs, and can be largely classified under the following heads:

Training materials Technology Employee benefits Trainers Time

C. Administration cost They include:


Set up communication systems Add employees to the HR system Set up the new hires workspace Set up ID-cards, access cards, etc.

Employee turnover cost calculation The following table can be helpful to calculate the cost of employee turnover per week or per month. Employee Detachment Cost Exit interview (One Hour: Preparation, interview, follow up) Cost of termination time Cost spent in administrative procedures _______ _______ _______

38

Increased unemployment (based on the Department of Labor) Cost of vacancy Overtime Labor Wages Cost of substitution Job advertising Pre-employment administration Cost of new hires interviews Staff cost Cost of training Stationary cost (Books, training manuals, etc.) Formal training sessions (Class room, lab, etc) Informal training (Mentors, etc.) Employee performance differential Difference in performance (Productivity, learning, etc.) TOTAL TURNOVER COST PER EMPLOYEE

_______

_______ _______ _______

_______ _______ _______ _______

_______ _______ _______

_______ _______

TRUTHS ABOUT TURNOVER It is difficult to accept when organizations say they have zero attrition rates. Companies may have healthier turnover rates, however, there is no such thing as zero attrition. There are other such facts about turnover, about which most of us are not aware. Some of such facts have been highlighted below: Turnover always happens: Companies who believe in zero attrition rates only fool themselves. This happens because employees keep on moving due to reasons like marriage or further education. Nothing can stop these
39

employees from moving on. So, rather than achieving zero attrition, companies should focus on identifying whom they want to keep so that they have healthy attrition rate. Some Turnover is Desirable: Zero attrition is not desirable mainly because of two reasons. Firstly, if all employees continue to stay in the same organization, most of them will be at the top of their pay scale which will result in excessive manpower costs. Secondly, new employees bring new ideas, approaches, abilities & attitudes which can keep the organization from becoming stagnant. Turnover includes costs: Turnover always includes some costs. Consider the costs of replacing the key employee who falls into the category of high performers. This includes the costs of recruitment advertisement, referral bonuses, selection testing, training costs, etc. Moreover, turnover results in loss of time and efforts, low productivity, loss of morale, loss of knowledge and so on. High salary doesnt work: Most managers assume that a high salary package is enough to keep employees loyal to their organization. Employees may face other problems like low job satisfaction, low engagement levels, no recognition, poor working conditions, less support from superiors and so on. Salaries are not always the solution to attrition. Managers should try to identify the roots of the problem and then find a feasible solution. The manager can reduce attrition: Managers should take prime responsibility for retaining their employees. Much of the employees perception of job satisfaction stems from the relationship they share with their immediate supervisor. Managers should try to support their
40

subordinates and give proper feedback on performance. HR managers should work in collaboration to make the key employees last in their organization. Reducing Turnover takes Commitment: Reducing turnover takes an investment in coaching, developing, motivating, mentoring & listening to people. There should be universal acceptance of the goal of reducing turnover along with top management commitment and dedication.

Ways to reduce turnover Let us explore some ideas to reduce employee turnover Hire the best candidate. Welcome new employees. Customize your induction program for new employees according to the requirements. Same induction program cannot be applied to all the candidates. Make them feel welcomed. Produce quality managers who can really manage employees well. Provide employees with work schedules that are flexible enough to suit their needs. Dont be too demanding. You are hiring human beings who have their own life and family commitments. Respect them. Provide career counseling and development.

41

Discuss your future plans regarding the candidate with the candidate. Let them know that the management is interested in retaining them and cares for them. Take proper feedback from employees regarding their grievances. Remember your ex-employees. They can be of help in future. It is also a part of employee retention.

42

EMPLOYEE ENGAGEMENT Attrition of employee engagement There are the 10 most important attributes which lead to better employee engagement. Let us know them in detail. Communicate: Project managers should clearly indicate their expectations from and about the employee. They should also provide feedback to the employees regarding their work and performance. Career: Management should provide meaningful work to the employees along with career growth opportunities. Confidence: Good managers should induce and boost confidence in an employee. Control: Managers should let the employees utilize the control which they have on their job and career. Clarity: Managers should have a clear vision of what job is to be done and how it is to be done. Also the managers should effectively communicate these visions and plans. Collaborate: Good coordination and relationships should be maintained within a team. Managers should motivate their employees to work in and as a team. He should also take steps to cultivate trust among the team members. Compliment: Give recognition to the employee for the job well done. Connect: Managers should make their employees feel valuable and important. Show that you care.
43

Contribute: Give opportunities to employees to contribute in the management decision making process. Ask for suggestions, new ideas, and ways of improvement. Credibility: Managers should set examples for the employee by imbibing and teach others to practice ethical standards and practices. He should maintain companys reputation. Key drivers of employee engagement The key drivers of employee engagement are: Type of job: The job should be challenging enough to motivate the employee. The employee should be interested in his/her job. Relationship between employee and organizational performance: The employee should know how he and his work are contributing to the organizations goals. Growth opportunities: The employee should have ample opportunities for his career development and growth. Brand name: The employee should feel proud of being associated with the organization. Coworkers: The nature and type of co workers also influences the employee engagement level. Skills enhancement: Employee should get ample on-the-job opportunities to develop their skill set.

44

Relationship with the boss: Employee should value his relationship with his boss. All these factors when combined help in increasing employee engagement levels. Increasing employee engagement An organizations productivity is measured not in terms of employee satisfaction but by employee engagement. Employees are said to be engaged when they show a positive attitude towards the organization and express a commitment to remain with the organization. Organizations that believe in increasing employee engagement levels focus on: Culture: It consists of a foundation of leadership, vision, values, effective communication, a strategic plan, and HR policies that are focused on the employee. Continuous Reinforcement of PeopleFocused reinforcement Policies: exists Continuous when senior

management provides staff with budgets and resources to accomplish their work, and empowers them. Meaningful Metrics: They measure the factors that are essential to the organizations performance. Because so much of the organizations performance is dependent on people, such metrics will naturally drive the people-focus of the organization and lead to beneficial change. Organizational Performance: It ultimately leads to high levels of trust, pride, satisfaction, success, and believe it or not, fun.
45

Ways to increase employee engagement Provide variety: Tedious, repetitive tasks can cause burn out and boredom over time. If the job requires repetitive tasks, look for ways to introduce variety by rotating duties, areas of responsibility, delivery of service etc. Conduct periodic meetings with employees to communicate good news, challenges and easy-to-understand company financial information. Managers and supervisors should be comfortable communicating with their staff, and able to give and receive constructive feedback. Indulge in employee deployment if he feels he is not on the right job. Provide an open environment. Communicate openly and clearly about what's expected of employees at every level - your vision, priorities, success measures, etc. Get to know employees' interests, goals, stressors, etc. Show an interest in their well-being and do what it takes enable them to feel more fulfilled and better balanced in work and life. Celebrate individual, team and organizational successes. Catch employees doing something right, and say "Thank you." Be consistent in your support for engagement initiatives. If you start one and then drop it, your efforts may backfire. There's a strong connection between employees' commitment to an initiative and management's commitment to supporting it.

46

EMPLOYEE SCHEDULING Higher employee retention rates call for innovative methods of managing workforce. Employees are leaving their workplaces at a faster pace because of which managers have to take corrective action to make employees stick to their organizations. One of the reasons why employees leave is low levels of work engagement among them. Poor scheduling of work may result in employees who either are overloaded with work or dont have any work at all. For the purpose of engaging employees effectively, managers follow the workforce scheduling process. Employee scheduling refers to the assignment of tasks between the employees. It is a difficult and a time consuming process. It involves producing detailed daily (or monthly) schedules for individual employees while taking the organizations goal into consideration. Managers often misuse workforce scheduling to refer to employee scheduling. Workforce scheduling is basically the short-term allocation of tasks in time. The people scheduled are assumed to be homogeneous in terms of their skills, that is, individual skills are not taken into account while scheduling employees. On the other hand, employee scheduling takes into account individual skills and distinguishes employees in terms of their skills and abilities. How it is done? Following points are to be taken into account while scheduling employees: Set of skills and the level of proficiency for each employee. This allows him/her to be assigned to simple tasks in a new skill, thus allowing a gradual development.
47

Employees previous assignments so as to ensure that maximum work duration does not exceed in the current month or quarter. Skill and proficiency level required for each activity type. Company skills to develop, employees designated for training in these skills Scheduling history can also be used to produce schedules that are balanced with respect to values of counters. The companies create a scheduling model which is a detailed assignment of employees to activities or skills on each day of the week. The schedule must consider the different timely (daily or weekly) constraints on work and rest duration, total work duration and total work duration per skill. Since employee scheduling is a complex process, many software are available in market which make it an easy task like VasTech's integrated workforce management tools for scheduling. It focuses on workforce scheduling and self scheduling, credentialing and expiration notification, payroll, costing, and time and attendance systems.

48

EMPLOYEE EMPOWERMENT What is employee empowerment? "An empowered organization is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organizational success." - Stephen Covey An organizations human resource is its most valuable asset. The employees are the repository of knowledge, skills and abilities that cant be imitated by the competitors. Technologies, products and processes are easily imitated by the competitors; however, at the end of the day, employees are the most strategic resource of the company. Generally, people are a firms most underutilized resource. And that is why management tries to empower the employees. But employees often are afraid of taking this responsibility. They fear the additional work pressure that they will have to bear as a part of being empowered. Besides, they also fear being held accountable for the decisions they make. But, what does employee empowerment actually mean? Does it mean absolute authority or absolute power? The answer is certainly NO. Empowerment refers to enlargement of an employees job responsibility by giving him the authority of decision making about his own job without approval of his immediate supervisor. Empowerment is the degree of responsibility and authority given to an employee. By empowerment, the employees are supported and encouraged to utilize their skills, abilities and creativity by accepting accountability for their work. Empowerment occurs when employees are adequately trained, provided with all

49

the relevant information and the best possible tools, fully involved in key decisions, and are fairly rewarded. Employee empowerment entails identifying how much responsibility and authority an individual can effectively handle without becoming over-burdened or distressed. Empowerment includes supervisors and employees working together to establish clear goals and expectations within agreed-upon boundaries. Why employee empowerment fails? Employee empowerment means that an employee has the power to take some decisions without consulting his boss or reporting manager. Employee empowerment is an essential part of employee retention. But due to many known or unknown reasons, it fails. Some of the reasons may be: Managers dont take employee empowerment seriously in the first place. It becomes more of a prestige issue to give control to others. Even if managers take it seriously, they are unable to lay down proper boundaries for the empowerment. Managers sometimes fail to provide a strategic framework. Managers sometimes dont provide the information, and growth & learning opportunities that are needed by the employ to empower himself and take good decisions. On the other hand, managers sometimes hand over all responsibilities to the employee. This may lead to misuse of powers given to the employee. Some managers act like a barrier and hamper the decision making practice of the empowered employee out of jealousy.

50

CHAPTER 2: INTRODUCTION TO INDIAN SUCROSE LIMITED


COMPANY HISTORY Indian Sucrose`s carbon credit project has successfully been registered with UNFCCC (United Nations Framework Convention on Climate Change) on March 16, 2007. With this, the company entered into the list of few successfully registered CDM projects in India and now is eligible to accrue and sell the carbon credits. The securities of the company have been delisted from the Bangalore Stock Exchange with effect from July 09, 2007. SNAPSHOT
Date of Establishment 1990 Revenue Market Cap Corporate Address Management Details 28.9902 ( USD in Millions ) 215.22835344 ( Rs. in Millions ) 8-270,Greater Kailash, Part -1New Delhi-, Delhi Chairperson - D P Singh MD - Deepak Yadav Directors - Anand Khandelwal, D P Singh, Deepak Yadav, Jitender Singh, Kunal Singh, Lalan Kumar Singh, Pawan Dewan, Sheoraj Singh Ahlawat, Sundeep Chaudhry Business Operation White crystal sugar

51

Background

Indian Sucrose was incorporated as a public

company on

December 12, 1990. It was promoted jointly by Punjab Agro Industries Corporation (PAIC) and Mukerian Papers. The company manufactures white crystal sugar in India. In 2005, Indian Sucrose acquired Cosmos Industries, Dhuri. The companys plant and registered office are located at Mukerian, Punjab and D. P. Singh is its chairman. Financials Total Income - Rs. 1076.475064 Million ( year ending Mar 2008) Net Profit - Rs. -11.288525 Million ( year ending Mar 2008) Company Secretary Bankers Auditors Lalan Kumar Singh Punjab National Bank BK Kapur & Co

BUSINESS AREAS OF THE COMPANY: The companys principal activity is to manufacture and export White Crystal Sugars and its allied by product Molasses, Bagasse, Alcohol and other Chemicals extracted from Sugar, also Manures, Breweries, Distilleries and manufacturers of all kinds of Preserved food, Sauces, Jams, Alcoholic and Non Alcoholic Drinks and Pharmaceuticals, Sugar Cane, Sugar Beet and other Agricultural Products.

52

MILESTONES:

1990 - The company was incorporated as a public limited Company on 12th December, and the Certificate of Commencement of business was obtained on 18th December. It was originally promoted jointly by Punjab Argo Industries Corporation (PAIC) and Mukerian Papers. Subsequently Mukerian Papers its nominee Companies including Malwa Cotton Spinning Mills and Punjab Wool comber took over the Control of the Company.

1992 - The Company had set up a plant for the manufacture of white crystal sugar with an installed capacity of 2500 TCD, expandable upto 3500 TCD at Punjab. The plant had also certain additional facilities like co-generation of power to the extent of 6.6 M.W. Commercial production was commenced from 1st November.

1993 - Sales amounted to Rs 37.40 crores. The production of sugar was 22,282 tonnes at an average recovery of 8.89%.

1994 - Sales decreased to Rs 29.56 crores due to low capacity utilization on account of less availability of sugarcane and market depression due to large scale import of sugar. Production during the year amounted to 23,640 tonnes at an average recovery of 8.96%. The Company proposed to increase the sugar plant capacity to3,500 TCD by modification in the existing plant and was also

53

planning for forward integration by setting up a plant for manufacturing of Ethyl Alcohol from Molasses.

1995 - Sales increased to Rs 39.57 crores. Production amounted to 36,805 tonnes in 146 crushing days. The overall performance of the Company was severely affected due to increase in input cost and decrease in selling price of finished products.

1996 - The company produced 49,998 tonnes of sugar in 209 crushing days. 2005- Delist securities from the Ahmedabad Stock Exchange (ASE) with effect from July 11, 2005.Indian Sucrose acquires Cosmos Industries Ltd, Dhuri

INFORMATION ON YADU SUGAR LIMITED - THE ACQUIRER: a. Yadu Sugar Limited is a Public Limited Company having its registered office at B - 14, Gulmohar Park, New Delhi - 49. It is promoted by Shri Dharam Pal Singh, Shri Vikas Singh and Smt. Umlesh Yadav. b. Shri Dharam Pal Singh, Smt. Umlesh Yadav and Shri Kunal Singh are Directors on the board of the Company. c. As on the date of this Public Announcement, Sh. Dharam pal Singh and Sh. Jatinder Singh represents the Acquirer on the Board of Directors of Oswal sugars limited.

54

d. The Company is not carrying on any business activity as of now. The income of the company is generated solely through the interest received on loans given to other companies. e. Yadu Sugar Limited has not promoted any company, listed or unlisted. The other companies in the same group are Yadu Overseas Limited, Yadu Resorts (India) Limited, Dharam Putra Builders Private Limited and Samridhi Buildcon Private Limited. f. Yadu Sugar limited is not a listed company. g. The Company had a total income of Rs. 1.52 lac and net loss of Rs. 1.87 lac and a net worth of Rs. 4,25,55,735 as on 31.03.2002 . INFORMATION ON SHRI DHARAM PAL SINGH, SMT. UMLESH YADAV, SHRI VIKAS SINGH AND SHRI JITENDER SINGH PACs(persons acting in concert) Shri Dharam Pal Singh, S/o Shri Tej Pal Singh, R/o of R-4/16, New Raj Nagar, Ghaziabad, (U.P.) is promoter -director of Yadu Sugar Limited. He is a sitting Member of Parliamentand is having wide experience in the sugar industry. He has promoted Yadu Overseas Ltd, Yadu Resorts (India) Ltd and Dharamputra Builders Private Ltd. and is holding directorship in the same. His personal net worth is Rs. 1,85,90,145 as on 31.03.2001 as certified by Shri

55

Manoj Kumar Gupta M.No. 89677 of Manoj-Ambuj & Associates, FC-82, Shivaji Enclave, (Beh. Shivaji College) New Delhi-27 vide his certificate dated 28.02.2002. Smt. Umlesh Yadav, W/o Shri Dharam Pal Singh, R/o of R-4/16, New Raj Nagar, Ghaziabad, (U.P.) is promoter -director of Yadu Sugar Limited. She is director in Yadu Overseas Ltd. Her personal net worth is Rs. 1,78,90,161 as on 31.03.2001 as certified by Shri Manoj Kumar Gupta M.No. 89677 of Manoj-Ambuj & Associates, FC-82, Shivaji Enclave, (Beh. Shivaji College) New Delhi-27 vide his certificate dated 28.02.2002. Shri Vikas Singh, S/o Shri Dharam Pal Singh , R/o of R-4/16, New Raj Nagar, Ghaziabad, (U..P.) is promoter -director of Yadu Sugar Limited .He is director in Yadu Overseas Limited and Samridhi Buildcon Private Ltd. His personal net worth is Rs. 1,59,49,199 as on 31.03.2001 as certified by Shri Manoj Kumar Gupta M.No.89677 of Manoj-Ambuj & Associates, FC-82, Shivaji Enclave, (Beh. Shivaji College) New Delhi-27 vide his certificate dated 09.02.2002. Shri Jatinder Singh, S/o Shri Shyam Singh, R/o of R-4/17, New Raj Nagar, Ghaziabad, (U.P.) is having wide experience in the sugar industry. He is director in Yadu Resorts (India) Ltd. His personal net worth is Rs. 56,95,948 as on 31.03.2001 as certified by Shri Manoj Kumar Gupta M.No. 89677 of
56

Manoj-Ambuj & Associates, FC-82, Shivaji Enclave, (Beh. Shivaji College) New Delhi-27 vide his certificate dated 28.02.2002. Among the PACs , Shri Dharam Pal Singh and Shri Jitender Singh are directors on the board of Oswal Sugars Limited . Smt. Umlesh Yadav is wife of Shri Dharam Pal Singh and Shri Vikas Singh is son of Shri Dharam Pal Singh. PACs are not directly participating in the offer. They are considered as PACs due to their holdings in the target company. KEY EXECUTIVES

S.No Name 1 3 2 4 5 6 7 D P Singh Deepak Yadav Lalan Kumar Singh Jitender Singh Pawan Dewan Kunal Singh Sheoraj Singh Ahlawat

Designation Chairman Managing Director Company Secretary Director Director Director Director

57

CHAPTER 3: RESEARCH METHODOLOGY


To carry out a research in systematic manner few points should always be covered. For this research following points have been strictly followed. These points are: Problem Identification Research Design Scope of Study Data Collection Source of Data Collection Sampling Design Data Analysis Technique Lets understand them one by one. Problem Identification To do any task, firstly its very important to know that why were doing it? What would be the outcome of this work? In other words, we can say that the problem has to be identified for carrying out a project. If weve no clues about the problem for which were conducting the research then the research would lead us nowhere. So, its very important to identify the problem for which were carrying out the research. Here, in this Research, the Problem identification is: Reasons of attrition of the employees because its giving a hit on the annual turnover on an organization.
58

Attrition is a big problem because as the employees attrite from the organization, the organization has to hire a new batch again, spends time & money on their training from the beginning and takes hit on the productivity till the time the batch gets certified from the client for hitting the floor. So, the above mentioned reason shows that its very important to identify the problem to carry out a research. Research Design The research done in this project is Exploratory as well as descriptive in nature. Exploratory Research: It is defined as the research which is conducted to explore the horizon of problem. For this project, it was done using the secondary data analysis. In this research, Exploratory Research Design is followed. Descriptive Research: is conducted to define the characteristics of population. This was done using survey method. For getting the responses from respondents, questionnaires were used. The study was divided into two phases. Scope of the Study The study has a very wide scope. In order to understand the factors like: Safety needs Social Recognition Monetary benefits etc. The study gives a very wider picture regarding same. The above mentioned factors are the very important for an employee and fulfillment of those factors or requirements are very important for an employer.
59

If the employer is unable to fulfill the requirements, theyll definitely lose the employees and it will give them a hit to their man power status. It helps us to understand the needs & demands of the employees and the steps taken by organization to keep their employees happy and satisfied. The Thumb rule says all the businesses are operated on Demand & Supply Chain. As more business will come, Maximum revenue will generate. Maximum revenue generation will increase demand from the internal customers i.e. employee of the organization. Data Collection The task of data collection begins after the Research problem has been defined and research design/plan worked out. Data collection is done to gather the data from the population. The data can be collected in following two types. Primary Data Secondary Data Primary Data: Primary data has been collected through Questionnaire which gives us the relevant information about the product to achieve the objectives of our market research. Here, in this research the Questionnaire has been given to the employees and they filled based on their understandings and perceptions. Secondary Data: The secondary data has been collected from: Internet Magazines Newspapers Journals
60

Here, Research studies, News articles, Literature reviews, business magazines helped us a lot to carry out this research smoothly and effectively. Sources of Data Collection Here, to carry out the research smoothly, there were different sources used. The sources are as follows: The website of Indian Sucrose Limited that gives a brief history about its Lobs (Line of Businesses), their location span, their employee strength etc. So, the basic information regarding the Company profile, location span, different Lobs (Line of Businesses) have been gathered from the websites of the organizations. Through questionnaires those were filled by the employees gives a clear idea about their expectations from the organizations. Interaction with the employees working in these organizations also provided a lot of information about the execution of the activities like: appraisal, salary hikes etc and the satisfaction level of the employees. All mentioned above are the different sources from which the data was collected. This data collection helped a lot to carry out the research smoothly and effectively. Sampling Design To carry out a research a sample is always selected. So to understand the whole process, I had to go through the sampling strategy. Sampling strategy always helps to conduct the research or study effectively and efficiently. The random sampling technique was used to carry out this research because the probability of each employee being selected is the same.
61

Generally, large sample size gives more reliable results than small samples. The samples considered here consisted of 50 respondents. Data Analysis Technique All the research conducted needs to have some data analysis technique. Here, the technique followed is: Exploratory Technique. The initial data analysis uses descriptive statistics to answer the following four questions: 1. What is the quality of the data? 2. What is the quality of the measurements? 3. Did the implementation of the study fulfill the intentions of the research design? 4. What are the characteristics of the data sample? Each step of the initial data analysis is described below. The quality of the data The quality of the data can be assessed in several ways. First of all the distribution of the variables before data cleaning is compared to the distribution of the variables after data cleaning to see whether data cleaning has had unwanted effects on the data. Second, the missing observations in the data are analyzed to see whether they are missing at random and whether some form of imputation (statistics) is needed. Third, extreme observations in the data are analyzed to see if they seem to disturb the distribution. If that is the case, robust techniques can be applied.

62

The quality of the measurements When the quality of the measurement instruments used is not the main focus of the research, the quality of the measurement instruments can be checked during initial data analysis. One way to assess the quality of a measurement instrument is to perform an analysis of homogeneity (internal consistency). A homogeneity index like Cronbach's gives an indication of the reliability of a measurement instrument. The implementation of the design In many cases, a check to see whether the randomization procedure has worked will be the starting point for analyzing the implementation of the design. This can be done by checking whether variables are equally distributed across groups. Other ways of checking the implementation of the design are manipulation checking and the analysis of no response and dropout.

63

SIGNIFICANCE OF THE STUDY


Every Study has some significance. Being an interesting and current topic prevailing in the market, the significance of the study is very important. These are as follows: It gives a clear picture from the transition of a business to an organization to the execution and further the sustenance plan. For example: The transition of business (flow from business to organization) The flow of executing the business (starting up the process) Finally, the sustenance of the business (with the help of employees) The brief idea about the Indian Sucrose Limited The working patterns & initiatives taken by the organization for employee retention. All the Reasons that lets the employee to go for another job or organizations.

64

OBJECTIVES OF STUDY
Every Research has some objectives. The same applies to this research Also. The objectives of the study are: To understand the reasons that make the employee feel insecure about his/her job. To understand the reasons that make employees quickly jump from one organization to other organization. To know the steps taken by the management to stop the attrition level of employees. To understand the techniques or policies adopted by organizations for employee retention. The reason for selecting the above mentioned points as my objectives are: Every organization always looks for Growth and Expansion, however do they really care about the employees or not actually is a major concern. Any organization can have its downfall if there is no employee satisfaction. An employee always needs: Good salary hike after their promotions. Good Carrier Planning Getting good learning curve in order to explore them with knowledge Job Security These are some basic needs that let tan employee to stick to an organization. If any of these factors are missing, the employee will never get the satisfaction & hell definitely make a move towards another organization. So, based on the above mentioned four basic needs of an employee in any organization, I have selected the objectives mentioned before.
65

CHAPTER 4: DATA ANALYSIS AND FINDINGS


ANALYSIS OF THE DATA Analysis of the data shows that what are the percentage of employees leaving the organization and the percentage of employees are being retained by the organization. The survey conducted here indicates that 90% of the employees are retained by the organization. This is basically due to the high salary offered by the company in comparison to other organizations. Indian Sucrose Ltd offers 5-10% more wages than other companies (a sweeper being paid rs.8000 per month and a driver rs.5000 per month plus incentives) and are the biggest pay master in North India. They enjoy the highest crushing capacity of 180%, though most of the other companies have a crushing capacity of only 80-90%. So, the company is ranked at the top position amongst the sugar industries in North India. The various factors that contribute to the retention along with the various facts relating to the attrition and retention of the company as well as the various policies of the company have been discussed and explained below.

66

REGARDING THE CONCERN FOR EMPLOYEE RETENTION OPTIONS YES NO CANT SAY TOTAL RESPONDANTS PERCENTAGE 5 30 14 6 50 60 28 12 100

12% Yes 28% 60% Can't say No

Interpretation: According to the survey, 60% of the employees agree that the company provides due concern to employee retention while 28% do not agree with it. However, 12% have no idea about it. This indicates due concern of the company towards retention.

67

REGARDING THE SATISFACTION OF EMPLOYEES OPTIONS YES NO CANT SAY TOTAL RESPONDANTS 33 14 3 50 PERCENTAGE 66 28 6 100

6%

Yes 28% No

66%

Can't say

Interpretation: 66% of the employees are satisfied with their jobs, while 28% are dis-satisfied. This clearly indicates that the employee satisfaction of the company is high and so the retention of the company is also high.

68

REGARDING THE SUPERVISOR OPTIONS VERY GOOD O.K BAD TOTAL RESPONDANTS 26 17 7 50 PERCENTAGE 52 34 14 100

14% Very good O.K 52% 34% Bad

Interpretation: 52% of the employees enjoy very good relations with their supervisors and 34% have o.k. relations with the supervisors. However, only 14% of the employees have bad relations with the supervisors. Since no organization is 100% perfect, the companys organization can be considered to be on the positive side.

69

REGARDING THE JOB SECURITY OPTIONS YES NO CANT SAY TOTAL RESPONDANTS 36 10 9 50 PERCENTAGE 72 20 8 100

8% Yes 20% No

Can't say 72%

Interpretation: 72% of the employees enjoy job security while only 20% do not feel secure about their jobs. Thus, the job security of the company is quite satisfactory which emphasizes the companys retention capacity.

70

REGARDING THE SALARY SATISFACTION OPTIONS YES NO CANT SAY TOTAL RESPONDANTS 40 4 6 50 PERCENTAGE 80 8 12 100

12%

8%

Yes

No
Can't say 80%

Interpretation: The survey conducted indicates that 80% of the employees are satisfied with the salary offered to them but only 8% are not satisfied with it. This emphasizes upon the companys strategy of offering better pay-scale to retain the maximum number of employees. The Indian Sucrose Ltd offers 5-10% better pay-scale to its employees. They are the biggest pay-masters in North India. This is done to retain most of its employees for a long duration.
71

REGARDING THE REASONS FOR CONTINUING EMPLOYMENT WITH THE COMPANY OPTIONS RESPONDANTS PERCENTAGE CAREER OPPORTUNITIES 11 22 SALARY 15 30 CHALLENGING WORK 4 8 EMPLOYEE BENEFITS 9 18 SUPERVISION/MANAGEMENT 9 18 OTHERS 2 4 TOTAL 50 100

Career opportunities 4% 18% 22% Salary Challenging work

Employee benefits 18%


30% 8% Supervision/ Management Others

Interpretation: The survey shows that salary is the major reason for retention of employees in the company followed by the career opportunities offered. The employee benefits and supervision cover 18% of the reasons and 8% are attracted towards the challenging work environment. The other reasons for retention include local residence, nearness to the work place etc. which attracts 4% of the employees.
72

REGARDING EMPLOYEE GROWTH OPTIONS VERY HIGH MODERATE LOW TOTAL RESPONDANTS 29 15 6 50 PERCENTAGE 58 30 12 100

12%

Very high Moderate 30% 58% Low

Interpretation: The employee growth in the company is very high. This is indicated by the survey which shows that 58% of the employees believe that the employee growth of the company is very high and 30% think that it is moderate, though 12% feel that the employee growth is low.

73

LIMITATIONS
All the studies have some limitations. This Research study also suffers from certain limitations, which are given below, so that the finding of the study may be concluded in the right perspective. The first and foremost limitation in this study was time factor. Time constraint was always a Factor to conduct this research study properly. But, still I tried my level best to get the accurate and concrete information from the market, by the surveys and possible resources The overall sample was restricted to the staff members. Since the result has been drawn on the basis of information provided by the respondents, Chance of response error might be there. The reason is especially while conducting surveys, few employees were unable to provide the information accurately and completely. Bias on the part of respondents to provide the information. Sample size is too small. So, these are the major limitations that I faced while carrying out the project.

74

SUGGESTIONS
The first suggestion would be from my end that there should be a separate HR dept. in the organization and proper working

conditions should be made available for the female employees to work in the

organization. HR who is responsible for managing the man power should always take the initiative to make sure that the internal customers (employees) are happy and satisfied. Its not always about money. We human beings are social animal. If well not get that comfort zone then there will be no reason left to stick to the same organization. So HR team will have to involve them in activities like employee motivation, employee satisfaction. They should conduct Open talk sessions in which agents can share their problems without any fear factor and also some good ideas can be generated. Management should keep on doing some events in which agents participation will be maximum. This would keep the morale of the employee high and theyll start feeling their importance in the organization. Operations should also roll out RNR (Rewards & Recognition) ceremony in which for achieving targets and meeting expectations the agents will be rewarded. Not only this, for any small good productive initiative the agent will be recognized and rewarded. This would keep the moral of the agent high.

75

Time to time, team meetings and carrier pathing should be done. This would keep on clearing their doubts if there will be any? Employee can sometimes give good innovative ideas that can be very fruitful for the organization. So, this exercise should happen on weekly basis if not possible on daily basis. Salary hike should be done in a way that the agents should not feel de motivated about the same. If salary hike is happening and were doing it on completely based on performance then the picture should be clear already into the mind of the agents. Most of the times, the agents get to know about all these filters during the period of the salary hike. Then they complain that we were never informed about it. So, if the organization implements and adopts these suggestions and works out on these suggestions, the attrition level will definitely reduce down.

76

CHAPTER 5: CONCLUSIONS
The company lacks the department of human resource. This is probably because this field is not much developed in this sector of industry though it of great importance in the textile sector. There is decrease in the no. of employees in the sugar industry because of the introduction of new machines which are replacing the manpower. 60% of the employees agree that the company is concerned about the retention of employees. Employee satisfaction of the company is quite high. The survey reveals that 66% of the employees are satisfied with their jobs while only 28% are not. 86% of the employees enjoy good relations with their supervisors. The job security of the company is quite satisfactory. According to the survey, 72% of the employees enjoy job security while only 20% do not. The survey conducted indicates that 80% of the employees are satisfied with the salary offered to them but only 8% are not satisfied with it. The survey shows that salary is the major reason for retention of employees in the company followed by the career opportunities offered. The employee growth in the company is very high. The Indian Sucrose Limited has contributed a lot towards the business and also towards the society in the following ways: Provide employment to a large no. of people. Help in increasing the living standard of the people, they are the Biggest pay masters in north India Provide the best product to the customers Help in raising the countrys gross domestic product
77

BIBLIOGRAPHY
Search Engines Wikipedia.com Google.com retention.naukrihub.com humanresources.about.com www.corporateinformation.com www.askforhrd.com

Books Krishamurthi k., human resource management Published by: Prentice-hall of India Private Limited. Sharma Anuradha, strategic human resource Published by: Sultan chand & sons. Dessler gary, human resource management Published by: Prentice-hall of India Private Limited.

78

ANNEXURE Employee Survey Form


NAME COMPANY JOINING YEAR : : :

CONTACT DETAILS : Ques 1: Do you think that the organization gives due concern to employee retention? Yes No Cant say

Ques2: Are you with your current job? Yes No Cant say

Ques 3: Your relations with your intermediate supervisor: Very good O.k. Bad

79

Ques 4: Do you think you have a job security? Yes No Cant say

Ques 5: Are you satisfied with your salary? Very much Not at all Cant say

Ques 6: Why you have chosen to remain employed with the company? Career growth Salary Challenging work Employee benefits Supervision/management Others

Ques 7: Employee growth in your company is: Very high Moderate Low

80

Ques 8: Would you recommend your friend to join this company? Yes No

Ques 9: Are there any specific suggestion to improve your job satisfaction?

Ques 10: How many extracurricular activities are done by your organization?

81

Вам также может понравиться