CASE STUDY PRESENTATION ON CULTURE AND COMPENSATION: SRF LIMITED

ABOUT THE COMPANY

SRF Ltd,is a leading industrial group, manufactures Technical Textiles, Fluorochemicals, Packaging Films and Pharma Chemicals. Commencing operations in 1974, SRF today operates from eight plant locations in India and abroad and has attained market leadership position in Nylon Tyre Cord Fabric (8th largest in the world & approx 32 per cent market share 3 in India), Belting Fabrics (3rd largest in the world & approx 60 per cent market share in India), Refrigerant Gases (approx 40 per cent market share in India) and Chloromethane. Currently, SRFs products cater to industrial customers in more than 55 countries globally.

 SRFs relentless focus on TQM techniques has resulted in the company winning the prestigious Deming Application Prize in 2004 for the erstwhile Industrial Synthetics Business of SRF (now integrated with Technical Textiles business), the first nylon tyre cord company outside Japan to be awarded this prize.

SRF Limited was listed in the 2011 Asia's Best under a Billion list by Forbes magazine

WHAT WAS THE PROBLEM:

SRF LIMITED hired a consulting firm to evaluate its status and provide strategy reccomendations for its future, as srf limited was facing significant competition especially from low-cost chinese manufacturers, in several product lines (e.g., nylon tire cord and refrigerant gases). The consulting firm provided them strategy recommendations and HR recommendations to prosper in current scenario.

Strategy Recommendations
To slow investments in technical-textiles business due to its slow-pace growth. To divert itself from packaging film market as it required major investments. To invest more in SRFs chemical business. SRF should enter in energy business,specially in electricity generation.

HR recommendations
The consultants recommended to incorporate more action values into its value system which was dominated by moral values. They recommended the concept of performancepay and variable pay. Performance pay linked exclusively to individual employeess achievments over the previous year and variable pay based on the firms or divisions overall financial performance.

Top managements point of view

The chairman Mr. Arun Bharat Ram found the recommendations regarding HR policies to be ruthless. According to him a hard working employee should not be penalized for the SRFs overall diminishing performance due to the factors totally out of his control.

Ashish Bharat Ram also shared the same opinion regarding the change in Hrs policies.
Karthik Bharat Ram supported the concept of performance pay but was not in complete favour to adopt the variable pay concept to the extent as suggested by the consultants.

OUR RECOMMENDATION
They should not adopt several wage system because it can be the cause of employee demotivation and may result in the poor performance of the employee . They should adopt incentive system for the hard working employee. They should publish photo of the best employee for the month within the premises to motivate other employee. Over time system wages should be implimented to increase productivity. They can adopt piece wage system in which employee will get wages according to the productive unit.

 Realigning the work according to the efficiency of the employee. Employee motivation through monetary and nonmonetary gifts. Optimum use of the resources to decrease the production cost per unit and hence it will increase the profit margin . Yearly bonus should be alloted to their employee from the profit generated by the company .