Summer Internship Project report

On

“To study the HR practices at HCCBL in relation to Budget and Cost Control”

By

Ankita Srivastava

A0102311114

MBA- HR Class of 2013

Under the supervision of

Dr. Jaideep Kaur

In partial fulfillment of the requirement for the Degree of

Master of Business Administration- Human Resources

At

AMITY BUISNESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH

SECTOR 125, NOIDA -201303 UTTAR PRADESH, INDIA

2012

DECLARATION

I hereby declare that the project report titled “To study the HR practices at HCCBL in

relation to Budget and Cost Control” is my own work and has been carried out under

the guidance of Dr. JAIDEEP KAUR faculty mentor, and Mrs. SAUMYA KHATI,

Human Resource Manager Hindustan Coca Cola Beverages Private Limited.

All care has been taken to keep this report error free and I sincerely regret for any

unintended discrepancies in this report. I shall be highly obliged if errors (if any) be

brought to my attention.

Thanking You.

Date:

Ankita Srivastava

A0102311114

MBA-H.R Class 2011-13

ii

CERTIFICATE

I Dr. JAIDEEP KAUR hereby certify that ANKITA SRIVASTAVA student of Masters

of Business Administration – H.R at Amity Business School, Amity University Uttar

Pradesh has completed the Project Report on “To study the HR practices at HCCBL in

relation to Budget and Cost Control”

Dr. Jaideep Kaur

(Department of Behavioral sciences)

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ACKNOWLEDGEMENT

Project work is always an occasion to learn about a various aspect of an organization, its

environment, cultural and organizational dynamics etc. It provides the student with the

opportunity to experiment and implemented practically.

I got an opportunity to work for “Hindustan Coca-Cola Beverage Pvt. Ltd.” In

Noida(U.P). It was the great pleasure to work with such an esteem organization.

First of all I express my gratitude to our most respectful director Dr. Sanjay Srivastava

First and foremost I would like to thank Hindustan Coca-Cola Beverages Pvt. Ltd.

NOIDA forgiving me an opportunity to do my training in the esteemed organization.

My special appreciation extends to the respected Mrs. Saumya Khati (H.R

Manager),Ms. Anupriya Srivastava (H.R Executive), Mr. Shivam Mathur (H.R

Team Leader), for their able guidance, and every available cooperation throughout the

project.

I would also like to thank to my family members who gave me favorable environment ,

the constant support and help in the successful completion of my project.

Ankita Srivastava

(MBA- HR)

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION

Project title 1

Purpose of Study…………………………………………………………………………..1

Context of the study……………………………………………………………………….2

Significance of Study………………………………………………………………..…….2

Limitation of the study……………………………………………………………………3

Theoretical Framework……………………………………………………………...…….4

Company Profile……………………………………………………………………..……8

CHAPTER 2: LITERATURE REVIEW …………………………….....30

CHAPTER 3: RESEARCH METHODOLOGY………………..………32

Project flow ……………………………………………………………......….................32

Data source.………………………………………………………………………..…......33

Primary source…………………………………………………………….......................33

Secondary source……………………………………………………………………..…33

Data collection………………………………………………………………………...…34

CHAPTER 4: DATA ANALYSIS AND FINDINGS……………….…..35

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CHAPTER 5: CONCLUSIONS AND RECOMMENDATION……….55

Conclusion…………………………………………………...

…………………………..55Recommendations……………………………………………

………………………….56

REFERENCES…………………………………………………………....57

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LIST OF FIGURES

Figure 1: What to put in HR budget ………………………………………………..…5

Figure2: project flow …………………………………………………………….….......32

Figure 3: variable COGS………………………………………………………………………….43

Figure 4: rent………………………………………………………………………….…………

44

Figure 5:meeting and conferences……………………………………………………………….... 45

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LIST OF TABLES

Table 1:Components of HR budget………………………………………………………………...38

Table 2:The actual expenditure vs. allocated amount……………………………………………...….42

Table3:Difference travelling allowance…………………………………………………47

Table4:Employee engagement……………………………………………………….......48

Table5:Difference in the amounts………………………………………………...……...51

Table6:Achievement percentage ………………………………………………...……....51

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ABSTRACT

A budget requires a systematic and thoughtful review of likely expenses and designated

funds and helps a business to allocate those expenditures over a designated period of

time. Comparisons of actual expenses to budgeted expenses will provide a means for

making adjustments wherever needed.

The purpose of the study is to have a comparative analysis between the budgeted amount

and the actual expenditure. The study will find out the various costs that are incurred

every month on the various HR components. The comparison of the actual expenditure

would be done with the amount that has been allocated in the business plan of the

organization. Using this comparison, the deviation would be found between the actual

and the allocated amount and the reasons for the same will be identified in the study.

This study will help in understanding the HR related bottlenecks in increasing sales force

effectiveness and to reduce recruitment cost by reduction in attrition % through means of

employee engagement initiatives.

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1

CHAPTER-1: INTRODUCTION

Project Title

“To study the HR practices at HCCBL in relation to Budget and Cost Control”

Purpose of the Study

The purpose of the study is to understand the HR practices prevailing in HCCB

like recruitments, Employee engagement programs and the cost impacts attached to each

component. Further the prime objective is to understand various cost variables of HR

budget and identify the components with cost overrun. This Project will provide HCCB

with the cost measures to control over run parameters and further will give a detailed plan

to improve employee satisfaction.

The objectives of the study are as given below:

To study the business plan and components of HR Budgeting of Hindustan

Coca-Cola Beverage Private Limited.

To do a comparative analysis between the budgeted amount and the actual

expenditure for West UP.

To analyze the deviations between the budgeted amount and actual

expenditure, and identify the reasons for variations.

To understand the HR related bottlenecks in increasing sales force

effectiveness

To reduce recruitment cost by reduction in attrition % through means of

employee engagement initiatives.

2

Context of the Study

The context of the study is to study the business plan and components of HR

Budgeting of Hindustan Coca-Cola Beverage Private Limited. There are various

parameters which are used to prepare the hr budget and there is a fixed amount of

allocation done for every month. The comparative analysis is done between the allocated

amount and the actual amount spent every month. The analysis highlights the various

parameters which are not meeting the allocated amount or the expenditure is more than

the budgeted amount. The reasons for the increase are determined and also cost control

measures have been implemented. The cost control measures involve some action plan

for employee engagement which would reduce recruitment cost by reduction in attrition

%. The sales force effectiveness is also increased by looking at the major issues which

were hampering their effectiveness, this would help in the generating more revenue.

Significance of the Study

This project will help the HCCBPL in:

a) Indentifying the variables where the cost is exceeding the expected amount

(Budget).

b) The possible reasons can be identified for the increase in the cost.

c) It would determine variables impacting sales force effectiveness and which can be

improved to increase the revenue.

d) The employee engagement program would be implemented which would help in

reducing the recruitment cost as there would be a reduction in attrition %.

e) Assistance in the various HR activities like recruitment and selection, the hr

operations and also the various training like COBC (code of business conduct).

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Limitations of Study

Although all efforts have been made to study each and every items, but due to lack of

time and other resources study has been done on the limited parameters.

The study has following limitations:-

1. Duration of study posed limitation on further intensive study.

2. Mostly stress was given on the secondary data, as it was a live project.

3. The cost control measures need time in implementation and to see the long term

results.

4. The data collected from the different sources could have some deviations which

can affect the findings and analysis.

5. There can be some unnoticed calculation errors which might affect the findings.

Theoretical Framework

When an advance salary of one month is offered to the employee at the time of

separation, it still saves the outages HR Budgeting is a powerful financial tool that can

estimate the expenditures made by the HR vertical. This strengthens and allows the HR to

control the cost rather than letting it control the HR initiative. The budget is drawn

parallel to the goals of the organization. If the organization expands and requires to

register a double digit growth in terms of its strength, it percolate to apportion funds in

different areas including recruitment, retention, up-skilling, global mobility management

and etc. The allocation of funds would be governed by the HR Strategies.

The decision makers in an organization remain the main players to approve the budget.

The recommendations and inputs are taken from different sources including operation,

marketing, logistics and every other vertical within the organization. Macro areas

including employee retention, recruitment and training and micro areas including

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programs designed for incremental benefits are all mapped into one complete budgeting

program.

It can be zero-based budget with no reference to last year’s expense. The

organization plan is drawn and the HR strategy gets aligned to it. Different expense

points are defined followed by the identification of the bottlenecks which may affect the

business. Such as sudden business ramp-up by a competitor would lead to a

compensation review to arrest attrition. Similarly, every such area which may stand a

threat within the HR systems needs to be covered. Allocation would be on the basis of

priority and necessity. Few areas such as communication may not require a big budget

but is an important and a continuous process. Correspondingly training and retention will

have a great attention for a stable organization. In case the company plans to expand,

recruitment would remain the primary focus.

Legal and statutory will require allocation and follow-up as per the administrative

guidelines. A study of the business units and products is important to identify the growth

mode. Recognize the problem areas in those units. Emphasize on the HR strategies that

can eradicate and improve productivity including time to market, profit-margins etc. This

includes increase retention through employee engagement program and the recruitment of

top performers. Implement metrics to measure these improvements. The metrics to

calculate the ROI should be clear to the HR at all levels so that everyone can ‘think

numbers’. Few measures as suggested in HR Management need to be considered.

This include average cost of recruitment per year, average cost of recruitment per

staff, average cost of training per year, percentage training cost / sales turnover or

productivity, training cost per employee, salary budget ratio / sales turnover, health safety

cost per year, human resources cost per sales turnover and compensation and benefit

cost / sales turnover per year. This helps in building up the high level report for the CFO

to deliberate on it.

The HR Budget would further require the CFO’s approval. HR Specialist suggests

certain measures which can be implemented to sell the budget to the CFO. Other than

linking it to the organizational goals and emphasizing revenue returns, every program

needs to highlight the benefit. Even an assistance package offered to an employee at the

point of retrenching, adds to the bottom line. The average or the below average employee

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is considered as ‘cost’. Hence even for forthcoming months. Hence the cost of outages

should be included as revenue. Measure the employee effectiveness program with the

increase in profitability.

Every engagement expense adds on to the productivity. Besides the training

program that amount to up-skilling therefore connected to the profitability. The Budget

needs to be in line with the current and future strategies of the organization. If the

productivity level within the organization was high last year, the focus this year might be

on the logistics and marketing. This year the spending on the human capital might shift

into that direction. Finally it needs to include certain pre-emptive measures to mitigate

any exigency including calamities such as swine flu, which may require relevant

coverage of health benefits and talent deployment. Every risk needs to be mitigated and

loop holes mended. The budgeting program needs to be industry drive

What to Put in an HR Budget:

Figure 1: What to put in HR budget

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Developing the human resources portion of your organization's budget is often

part of your job responsibilities as an HR executive. A complete budget will enable you

to meet the human resources related computer, travel, recruiting, salary, membership

and benefit requirements of your organization. As you prepare your department's

budget, include both current and projected needs to present a fiscally sound, realistic

plan to your accounting department.

Compensation and Benefits

Compensation and benefits generally comprise the majority of an HR budget, as

many organizations run employee payroll through the human resources allocation budget.

When working on the compensation and benefit portion of the budget include employee

salaries, unemployment and associated federal and state taxes. Also include the employer

portion of health insurance. Depending on your organization's insurance package, you

may need to include life, vision, health and disability insurance. If your company has a

retirement plan, also include those costs in the compensation and benefit portion of your

budget.

Human Resource Information Systems

The human resources information system is a vital part of most HR departments.

HRIS is either a specifically installed software or online system you use to input a wide

variety of information on your employees, such as employee data, applicant tracking and

payroll. The cost of your HRIS system will vary based on the features your system offers

and how your accounting department allocates your computer access. Work with the

accounting or information technology departments to determine your HRIS cost.

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Training and Development

Training and development costs are an important part of your human resources

budget. You may be responsible for training and development on an organization-wide

basis or only responsible for training and development of your human resources staff. In

either case, an article by the Society for Human Resource Management entitled, "What

Should Be Included in a Training Budget?" recommends including the cost of digital and

printed training materials, speaker honorariums or fees, online training access and rental

of off-site conference rooms, if needed. Meet with upper management to determine what

training modules they would like presented throughout the year to develop your budget.

For your own staff, include the cost of membership to human resources organizations,

conference fees and travel.

Human Resources Services

The human resources services portion of your budget encompasses the peripheral

services your department provides to support the organization. Include employment

agency fees if you occasionally use temporary workers during busy times. Allocate

money for executive search firms, if appropriate. Other costs can include the cost of pre-

employment or periodic drug testing for employees, credit check fees, employee

assistance programs or background testing. If your organization uses newspaper,

magazines or online sources to advertise open positions, include advertising costs in your

budget.

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Introduction to Company Profile

Beverage industry is one of the fastest growing industries in India. Soft drinks are

a typical consumer product purchased by individual primarily to quench their thirst and

also for refreshment. Different types of soft drinks are available in the market and more

or less content of all soft drink is same. The market of soft drink is facing a cut throat

competition and many companies are floating their product in the market with different

brand names. In such a situation different facto which influence the people’s choice for

soft drink are test, quality, image, easy availability and the product cost of advertisement.

History of Coca-Cola

Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a

glass. Early growth was impressive, but it was only when a strong bottling system

developed that Coca-Cola became the world-famous brand it is today.

1899 The first bottling agreement

Two young attorneys from Chattanooga, Tennessee believed they

could build a business around bottling Coca-Cola. In a meeting with

Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive

rights to bottle Coca-Cola across most of the United States (specifically excluding

Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton,

soon joined their venture.

1900-1909 … Rapid growth

The three pioneer bottlers divided the country into territories and sold bottling

rights to local entrepreneurs. Their efforts were boosted by major progress in bottling

technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-

Cola bottling plants were operating, most of them family-owned businesses. Some were

open only during hot-weather months when demand was high.

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1916 … Birth of the contour bottle

Bottlers worried that the straight-sided bottle for Coca-Cola was

easily confused with imitators. A group representing the

Company and bottlers asked glass manufacturers to offer ideas

for a distinctive bottle. A design from the Root Glass Company of Terre

Haute, Indiana won enthusiastic approval in 1915 and was introduced in

1916. The contour bottle became one of the few packages ever granted

trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons

in the world - even in the dark!

1920s … Bottling overtakes fountain sales

As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the

U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after

their 1923 introduction. A few years later, open-top metal coolers became the forerunners

of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola

exceeded fountain sales.

1920s and 30s … International expansion

Led by longtime Company leader Robert W. Woodruff,

chief executive officer and chairman of the Board, the Company began a major push to

establish bottling operations outside the U.S. Plants were opened in France, Guatemala,

Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time

World War II began, Coca-Cola was being bottled in 44 countries.

1940s … Post-war growth

During the war, 64 bottling plants were set up around the world to

supply the troops. This followed an urgent request for bottling

equipment and materials from General Eisenhower's base in North

Africa. Many of these war-time plants were later converted to civilian use, permanently

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enlarging the bottling system and accelerating the growth of the Company's worldwide

business.

1950s … Packaging innovations

For the first time, consumers had choices of Coca-Cola package size and type --

the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-

ounce versions. Cans were also introduced, becoming generally available in 1960.

1960s … New brands introduced

Following Fant in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand

Coca-Cola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s

brought diet Coke® and Cherry Coke, followed by POWERADE and DASANI in the

1990s. Today hundreds of other brands are offered to meet consumer preferences in local

markets around the world.

1970s and 80s … Consolidation to serve customers

As technology led to a global economy, the retailers who sold Coca-Cola merged

and evolved into international mega-chains. Such customers required a new approach. In

response, many small and medium-size bottlers consolidated to better serve giant

international customers. The Company encouraged and invested in a number of bottler

consolidations to assure that its largest bottling partners would have capacity to lead the

system in working with global retailers.

1990s … New and growing markets

Political and economic changes opened vast markets that were closed or

underdeveloped for decades. After the fall of the Berlin Wall, the Company invested

heavily to build plants in Eastern Europe. And as the century closed, more than $1.5

billion was committed to new bottling facilities in Africa.

21st Century

The Coca-Cola bottling system grew up with roots deeply planted in local

communities. This heritage serves the Company well today as people seek brands that

honor local identity and the distinctiveness of local markets. As was true a century ago,

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strong locally based relationships between Coca-Cola bottlers, customers and

communities are the foundation on which the entire business grows.

Company Background

Coca–Cola Company is the global company and has completed 122 years of

consumer service with some of the world’s most widely recognized brands , the coca-cola

business in INDIA, as in each country where they operate, is a local business . Their

beverage is produced locally employing Indian citizen, their product range and marketing

reflects Indian taste and lifestyles.

After a 16 – year’s absence, Coca-Cola returned to India in 1993. The company

presence in India was cemented in November that year in a deal that gave Coca-Cola

ownership of the nation’s top soft drinks brands and bottling network .Coca-Cola India

has made significant investment to builds and continually improve its business in India ,

including new production facilities , wastewater treatment plants , and distribution

system and marketing equipment .

Coca- cola business system directly employs approximately 6000 local people in

India.In fact, they indirectly create employment for more than 1, 25,000 people in

related industries through their vast procurement, supply and distribution systems.

Virtually all the goods and services required to be produced and marketed by coca- cola

locally are made in India.

The coca-cola system in India comprises 27 wholly owned companies -owned

bottling operations and another 17 franchise –owned bottling operations.

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Coca-Cola in India

COCA-COLA BRINGS BACK THE FIZZ TO INDIA

Coca-Cola, the corporation nourishing the global community with the world’s largest

selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus,

giving a new thumbs up to the Indian soft drink market. In the same year, the Company

took over ownership of the nation’s top soft-drink brand and bottling network. It’s no

wonder our brands have assumed an iconic status in the minds of the world’s consumers.

A Healthy Growth to The Indian Economy

Ever since, Coca-Cola India has made significant investments to build and continually

consolidate its business in the country, including new production facilities, waste water

treatment plants, distribution systems, and marketing.

Coca-Cola India is among the country’s top international investors, having invested more

than US$ 1 billion in India in the first decade, and further pledged another US$100

million in 2003 for its operations.

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A Pure Commitment to The Indian Economy

The Company has shaken up the Indian carbonated drinks market greatly, giving

consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and

nutrition needs. It has also been instrumental in giving an exponential growth to the

country’s job listings.

Creating Enormous Job Opportunities

With virtually all the goods and services required to produce and market Coca-

Cola being made in India, the business system of the Company directly employs

approximately 6,000 people, and indirectly creates employment for more than 125,000

people in related industries through its vast procurement, supply, and distribution system.

We took this opportunity to also present the Water Calendar 2007 to the Hon'ble CMThe

Golden Peacock Environment Management Award

The GPEMA is designed to encourage and recognize effective implementation of

environmental management system and this achievement has been made possible by the

plants adherence to Coca-Colas total quality program called The Coca-Cola Quality

system (TCCQS). TCCQS is all encompassing management system (Total Quality)

covering environment management and other business aspects

such as safety and loss Prevention (SLP), product quality,

packaging quality, process capability improvement and

customer satisfaction.

eKOsystem : The Coca-Cola Environmental

Management System. The Coca-Cola Company has 78

manufacturing location across 24 states of the country.

The Company has one single environmental system, eKO

system, Implemented at all its operations in 202 countries across the world. The

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eKO system is a tool that integrates environment management with business

planning cycle. The eKO system primarily comprises of two main facets namely:

Environment and

ESafety and loss Prevention (SLP)

Both the facets are aligned with international management system standards, ISO

14001 for Environment Management and OSHAS 18001 for Safety Management.

Ason June 2008, 40 manufacturing units are certified to ISO 14001 and 8 units are

certified to OSHAS 18001 standards. Company owned bottling operations at

Varanasi received prestigious Golden Peacock Award on Environment

Management for 2005. The same award was also received by the company

operations at Dasna, Ameenpur, and Baddi for 2004, 2003 and 2002 respectively.

The awards are conferred by Institute of Directors in association with World

Environment Foundation (WEF) in recognition of effective implementation of

Environmental and Quality Management System (EMS) by these units.

Some of the Prime Environmental considerations followed in business decision are:

1. Environmental due diligence before acquiring land.

2. Environmental impact assessment before commencing operations.

3. Ground water and environmental surveys before selecting sites.

4. Diligent compliance with all regulatory environmental requirements.

5. Ban on purchase of refrigeration equipment containing CFCs (known to be

Ozone depleting).

6. Installation of effluent treatment plant at each manufacturing locations.

7. Separate collection and treatment of domestic and industrial effluent as per

Company OR Local Standa

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Company Policies

The Coca-Cola eKOsystem are governed by five major policies that affirm the

environmental responsibilities of The Coca-Cola Company and serve as guidelines

for our business partners around the world. Each of these policies is supported by

specific requirements and practices that govern our daily operations and are

fundamental to achieving results consistent with environmental leadership.

Our Five Policies Are:

1. COMMITMENT

2. COMPLIANCE & BEYOND

3. ACCOUNTABILITY

4. CITIZENSHIP

5. BELIEF

Commitment to Lead

We believe that an effective environmental management system requires

involvement of employees at all levels. Our commitment to protect and preserve the

environment extends throughout the organization.

Business Planning

Operations Personnel

Operations Support

Company Support

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COMPLIANCE AND BEYOND:

Our commitment to the environment extends beyond compliance. Even in the

absence of specific regulatory requirements, we operate in an environmentally

responsible manner in accordance with the environmental standards of The Coca-

Cola Company.

ACCOUNTABILITY:

We are accountable for our actions. The Coca-Cola Company conducts audits of its

environmental, health and safety (EHS) performance and practices, documents the

findings and takes necessary improvement actions.

CITIZENSHIP:

Seeking Support Of All For Effecting Positive Environmental Contribution

We seek to cooperate with public, private and governmental organizations in

identifying solutions to environmental challenges. We direct our company's skills,

energies and resources toward activities and issues where we can make an effort.

We are stewards of brands universally recognized for quality and consistency. With

that stewardship comes the expectation of excellence in our business conduct,

which is essential if we are to continue to be trusted neighbors in the communities

where we do business.

BELIEFS:

There is much in our world to celebrate, refresh, strengthen and protect. The Coca-

Cola Company is a vibrant network of people, in over 200 countries, putting

citizenship into action. Through our actions as local citizens, we strive every day to

17

refresh the marketplace, enrich the workplace, protect the environment and

strengthen our communities.

We are a local employer, with responsibility to enable our people to tap into their

full potential; working at their innovative best and representing the diversity of the

world we serve.

And we are a local citizen, understanding our responsibility to contribute to an

improved quality of life in our communities.

Commitment to Quality: The Coca-Cola Quality System

is a worldwide initiative involving every aspect of their

business. Everyone who works for or with Coca-Cola is

empowered and expected to maintain the highest standards

of quality in products, processes and relationships. They are never content to let our

standards become static. The Coca-Cola Quality System mandates in-depth self-

assessment throughout their operations, by all their business units. This enables

them to raise their standards even higher.

In their ingredient evaluation laboratories, for example, they perform precise

analysis of fruit juices and other ingredients sent to them by their suppliers, to

ensure and to improve product quality. Their processes, too, undergo constant

scrutiny, to safe-guard the water they use in their products and the packaging that

carries them to their consumers. They inform and educate their business partners

about their standards, so that they meet the highest quality requirements. Under the

Coca-Cola Quality System, quality is their highest business objective and their

enduring obligation.

MISSION, VISION & VALUES OF COCA-COLA

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Our mission, vision and values outline who we are, what we seek to achieve, and how we

want to achieve it. They provide a clear direction for our Company and help ensure that

we are all working toward the same goals.

Mission Statement

Our mission declares our purpose as a company. It serves as the standard against which

we weigh our actions and decisions. It is the foundation of our Manifesto.

To refresh the world in body, mind and spirit.

To inspire moments of optimism through our brands and our actions.

To create value and make a difference everywhere we engage.

Vision Statement

Our vision guides every aspect of our business by describing what we need to accomplish

in order to continue achieving sustainable growth.

People: Being a great place to work where people are inspired to be the best they

can be.

Portfolio: Bringing to the world a portfolio of quality beverage brands that

anticipate and satisfy people's desires and needs.

Partners: Nurturing a winning network of customers and suppliers, together we

create mutual, enduring value.

Planet: Being a responsible citizen that makes a difference by helping build and

support sustainable communities.

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Profit: Maximizing long-term return to shareowners while being mindful of our

overall responsibilities.

Values

our values serve as a compass for our actions and describe how we behave in the

world.

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it's up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

THE WORLD OF COCA-COLA:

Now Open!

Discover the secret formula to happiness within!

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For over 120 years, they've been putting their secret formula into bottles. Now,

they've put it all in one amazing place -- The NEW World of Coca-Cola.

Atlanta's new, must see destination offers even more you must see! From a

thrilling, multi-sensory 4-D theater to a gallery dedicated to Coke and pop culture,

around every corner you'll experience something new and inviting. Meet their 7-

foot Coca-Cola® polar bear. Take your taste buds on a tantalizing tour of up to 70

different beverage products, or create your own refreshing blend!

Inside, you'll find there's a secret formula to everything we do. Visit them at

Pemberton Place to discover it all for yourself.

.

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COKE:

The world’s favorite drink. The world’s most valuable

brand. The most recognizable word across the world after OK.

Coca-Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non- alcoholic beverages in the world. In India, Coca-Cola was the leading soft drink till 1977 when govt. policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. Coca-Cola returned to India in 1993 and over the past ten years has captured the imagination of the nation, building strong associations with cricket, the thriving cinema industry, music etc. Coca-Cola has been very strongly associated with cricket, sponsoring the World Cup in 1996 and various other tournaments, including the Coca-Cola Cup in Sharjah in the late nineties. Coca-Cola’s advertising campaigns “Jo Chaho Ho Jaye” and “Life Ho ToAisi” were very popular and had entered the youth’s vocabulary. In 2002, Coca-Cola launched the campaign “ThandaMatlab Coca-Cola”

HISTORY OF BRANDS: COCA COLA

THUMS UP: Strong cola Taste, Exciting Personality

Thums Up is a leading carbonated soft drink and most trusted brand in

India. Originally introduced in 1977, Thums Up was acquired by The Coca-Cola

Company in 1993. Thums Up is known for its strong, fizzy taste and its confident,

mature and uniquely masculine attitude. This brand clearly seeks to separate the

man from the boys.

FANTA:

23

Internationally, Fanta – The orange drink of The Coca-Cola

Company, is seen as one of the favorite drinks since 1940’s. Fanta

entered the Indian market in the year 1993. Over the years Fanta has

occupied a strong market place and is identified as “The Fun

Catalyst”. Perceived as a fun youth brand, Fanta stands for its vibrant color,

tempting taste and tingling bubbles that not just uplifts feelings but also helps free

spirit thus encouraging one to indulge in the moment. This positive imagery is

associated with happy, cheerful and special times with friends.

LIMCA:

Lime n’ LemoniLimca, the drink that can cast a tangy refreshing spell on anyone,

anywhere. Born in 1971, Limca has been the original thirst choice, of millions of

consumers for over 3 decades. The brand has been displaying healthy volume

growths year on year and Limca continues to be the leading flavours soft drink in

the country. The sharp fizz and lemoni bite combined with the single minded

positioning of the brand as the ultimate refresher has continuously strengthened the

brand franchise. Limca energizes refreshes and transforms. Dive into the zingy

refreshment of Limca and walk away a new person

SPRITE:

Worldwide Sprite is ranked as the No.4 soft drink and sold in more

than 190 countries. In India, Sprite was launched in year 1999 and today it has

24

grown to be one of the fastest growing soft drinks, leading the clear lime category.

Today Sprite is perceived as a youth icon. Why?

With a strong appeal to the youth, Sprite has stood for a straight forward and honest

attitude. It’s clear crisp refresh hinge taste encourages the today’s youth to trust

their instincts, influence them to be true to who they are and to obey their thirst.

MAAZA:

Maaza was launched in 1976. Here was a drink that offered the

same real taste of fruit juices and was available throughout the year. In 1993, Maaza

was acquired by Coca-Cola India. Maaza currently dominates the fruit drink

category. Over the years, brand Maaza has become synonymous with Mango. This

has been the result of such successful campaigns like “Taaza Mango, Maaza

Mango” and “Botel Mein Aam, MaazahaiNaam”. Consumers regard Maaza as

wholesome, natural, fun drink which delivers the real experience of fruit.

KINLEY:

25

Water a thirst quencher that refreshes, a life giving force that washes all the toxins

away. A ritual purifier that cleanses, purifies, transforms. Water the most basic need

of life, the very sustenance of life, a celebration of life itself. The importance of

water can never be understated. Particularly in a nation such as India where water

governs the lives of the millions, be it as part of everyday rituals or as the monsoon

which gives life to the subcontinent.

26

ORGANIZATIONAL STRUCTURE

27

28

ABBREVIATIONS:

C.E.O- CHIEF EXECUTIVE OFFICER

V.P- VICE PRESIDENT

A.O.D- AREA OPERATION DIRECTOR

RCDM- REGIONAL CAPABILITY DEVELOPMENT MANAGER

29

RRTM- (REGIONAL ROUTE TO MARKETING HEAD)

G.S.M- (GENERAL SALES MANAGER)

A.S.M- AREA SALES MANAGER

ACDM- AREA CAPABILITY DEVELOPMENT MANAGER

CDE- CAPABILITY DEVELOPMENT MANAGER

30

CHAPTER: 2 LITERATURE REVIEW

Sandra Cohen, Sotiris Karatzimas, (2011),"The role of the human resources

department in budgeting: evidence from Greece", Journal of Human Resource Costing

& Accounting, Vol. 15 Iss: 2 pp. 147 – 166, purpose of this study is to examine the

involvement of the human resources (HR) department throughout the budgeting process

and furthermore to investigate the use of budgets for motivation, communication,

performance evaluation and control in the Greek business environment, from the

perspective of the HR department managers. Design/methodology/approach – Empirical

evidence is based on the responses received from HR department managers in 100 Greek

companies with a distinct HR department to a structured questionnaire. Results suggest

that the HR department has limited involvement in the budgeting procedures, which in

turn could explain the limited use of budgets as a means of performance evaluation and

communication from a HR management perspective. Nevertheless, both the size of the

HR department and the number of employees has a positive effect on the HR

management and budgeting interaction. The survey presented in this paper provides

corroborative evidence that HR departments in Greece do not fully exploit the wide

potential offered through budgeting as a means to achieve their goals. The study

contributes to the literature by analyzing the responses of HR department managers and

their views towards the budgeting function from a HR management perspective in Greek

companies.

Don't look at budgeting as a necessary evil but as an opportunity to demonstrate

HR's value by Ladika, Susan. HR Magazine; Aug2006, Vol. 51 Issue 8, p93-95, 3p,

article emphasizes the need for human resource (HR) managers to be knowledgeable

about the facts and figures of budgeting. Categories of budget development include

internal, operational and organizational budgeting. HR managers should consider and

expect to revise its recruiting budget if the unemployment rate declines. In addition to

external economic factors, it is essential to review financial reports that affect the budget

of HR.

31

How to... make your HR budget go further by Craig, Tara, Personnel Today;

7/8/2008, p31-31, 1/2p ,offers suggestions for human resource (HR) practitioner of an

organization to use the HR budgets wisely in view of an economic downturn in Great

Britain. It states that training should be tailored to staff needs, and should be provided to

larger groups together rather than to a single team. It mentions that retaining the existing

employees is much cheaper than recruiting replacements. It offers information on books

and articles that provide information on budgeting.

32

CHAPTER 3: RESEARCH METHODOLOGY

INTRODUCTION:

Marketing research is a process of collecting and analyzing the information and

ultimately to arrive at a certain conclusion. In the project given to me the research is

based on the secondary data. I have collected the information from the various

departments of the organization. It indicates the present future trends of industry and

points out how the company’s affairs are to be turned up.

PROJECT FLOW:

Figure2: project flow

33

DATA SOURCE:

The various source of information broadly divided in two categories.

Primary Source:-

Source from where first hand information are gathered directly are called primary

source and information thus collected is called primary data. In case of the above study

the primary data has been collected mostly by brainstorming from the people of different

departments.

Secondary source:-

The data that are collected for another purpose already exists somewhere is called

secondary data. With regards to my study the secondary sources were the business plan

provided by HCCBPL and also the monthly actual expenditure data provided by the

various departments.

34

DATA COLLECTION METHOD:

The following methods are widely used for collection data.

Survey Method.

Brainstorming sessions with the administration manager.

The data is collected from different departments of the organizations and they are

collaborated in an excel sheet for the further analysis.

The data was collected on the monthly basis from January 2012, till April 2012.

The business plan is taken for the HCCBPL West U.P. Zone from the finance

department.

35

CHAPTER: 4 DATA ANALYSIS & FINDINGS

Key Headings

Business plan and components of HR Budgeting of Hindustan Coca-Cola Beverage

Private Limited.

The human resource budget includes the following components:

1. In the maintenance of current HR activities

Current overheads for salaries, wages, allowances, and benefits;

Training to maintain and develop skills and capabilities;

Office supplies and equipments for HR Department;

Logistical overheads of the HR department such as vehicles for dispatch;

Administrative costs including maintenance of HRIS system, intranet;

Outstations duties;

Meetings, briefings, etc;

Traveling and accommodation costs;

Superannuation, provident fund contributions;

Insurance premiums for group personal accident, group life, medical consultation and

hospitalization, professional negligence liability, etc;

Safety and security costs;

Labor relations costs;

Amenities and facilities;

Contingencies.

36

2. In the improvement of the HR function

Estimated costs for recruitment plan for the coming year or next six or twelve

months;

Estimated increase in personnel overhead costs, namely, salaries, allowances,

benefits for new employees;

Estimated costs for training new employees, and training to provide serving

employees with new skills or to enhance their professionalism;

Estimated costs for conducting employee surveys for improvement purposes;

Estimated cost for salary increases including those of employees identified for

promotion;

Estimated cost for bonus payments;

Estimated costs of purchases of new office equipments whether as replacements or

not;

Estimated increases in logistical costs;

Estimated increase in superannuation contributions, provident fund, insurance

premiums, etc;

Purchase of capital items for HR department;

Contingencies

The structured format to prepare a budget followed by HCCBPL is:

37

S.no

.Item

1 Volume – Customer

  - Physical cases

  - Unit cases

2 Gross Revenue

3 Net Revenue (GR - Sales tax & discount)

4

Variable COGS (Sourcing cost &

sourcing freight)

5

Gross Contribution (net revenue -

COGS)

6 Fixed Mfg Expenses – NA

  - Comp & Benefits (Casual) Mfg-NA

7 Fixed Mfg Expenses-NA

  - Comp & Benefits (Permanent) Mfg-NA

 

- Comp & Benefits (Permanent) Mfg-

Incentive-NA

8 Gross Profit

9 Logistics & distribution Expenses

  - Comp & Benefits (Casual) S&D-NA

10 Sales Expenses

  - Comp & Benefits (Permanent) S&D

 

- Comp & Benefits (Permanent) S&D-

Incentive

  - MD/ PSR Salary

  - Travel S&D

  - Telecommunications - S&D

11 Total Sales expenses

38

12 General Admin Expenses

  - Comp & Benefits (Permanent) Admin

 

- Comp & Benefits (Permanent) Admin-

Incentive

  - Comp & Benefits (Casual) Admin

  - Recruitment, Relocation & Training

  - Travel Admin

  - Communication

  - Rent

  - IS Expenses

  - Meetings / Conferences

  - Consultancy / Services

  - Insurance

  Others Admin

13 Total General Admin Costs

14 Total Comp & Ben

   

 

Total HR Cost (Casual S&D + Sales

Expenses+General Admin)

  Total Compensation Cost

  Permanent

  Temps

 

Manpower Productivity (Total comp/Py

Cs)

  CPC Permanent

  CPC Variable

  Manpower Cost as % of NR

  manpower Cost per case

Table 1 . components of HR budget

39

1. Comparative analysis between the budgeted amount and the actual expenditure for

West UP.

The comparative analysis is done by the excel sheets below. It determines the differences

in the budgeted amount and actual amount. The highlighted depicts points of concern.

40

S.n. Item   YTD 2012Actual

YTD 2012Diff

%age

achievement

1 Volume - Customer   0 0 0  

2 - Physical cases   4668000 2378961 2289039 51.0%

3 - Unit cases   8886000 5039203 3846798 56.7%

4 Gross Revenue   982843000 1082445120 -99602120 110.1%

5

Net Revenue (GR -

Sales tax &

discount)

 

1082050000 780018015 302031985 72.1%

6

Variable COGS

(Sourcing cost &

sourcing freight)

 

451492000 600787840

-

149295840 133.1%

7

Gross Contribution

(net revenue -

COGS)

 

424575000 179230175 245344825 42.2%

8 Fixed Mfg Expenses   0 0 0  

9

- Comp & Benefits

(Casual) Mfg 

13482000 0 13482000 0.0%

10 Fixed Mfg Expenses   0 0 0  

11

- Comp & Benefits

(Permanent) Mfg 

65180000 0 65180000 0.0%

12

- Comp & Benefits

(Permanent) Mfg-

Incentive

 

1661000 0 1661000 0.0%

13 Gross Profit   279479000 177406475 102072525 63.5%

14

Logistics &

distribution

Expenses

 

0 0 0  

15

- Comp & Benefits

(Casual) S&D 

2509000 0 2509000 0.0%

16 Sales Expenses   0 0 0  

17

- Comp & Benefits

(Permanent) S&D 

24207000 22877251 1329749 94.5%

18

- Comp & Benefits

(Permanent) S&D-

Incentive

 

2843000 1541275 1301725 54.2%

19 - MD/ PSR Salary   11020000 7843516 3176484 71.2%

20 - Travel S&D   4428000 2867249 1560751 64.8%

-

41

Table 2: the actual expenditure vs. allocated amount

2. Deviations between the budgeted amount and actual expenditure, and identify the

reasons for variations.

The analysis is done using graphical method, the month wise data is represented in the

line charts and the deviation can be easily identified. The parameters which are the areas

Of concern are represented below:

(a) The variable COGS(Sourcing cost & sourcing freight)

42

Jan-12 Feb-12 Mar-12 Apr-12 -

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

5,663.09

9,777.85

22,792.82 21,845.02

3,915.80 4,857.50

14,765.30

21,610.60

ActualBudget

Month

Rs

'000

0

Variable COGS(Sourcing cost & sourcing freight)

Figure 3: variable COGS

In the above graph

43

(b) Rent

Jan-12 Feb-12 Mar-12 Apr-12 -

10.00

20.00

30.00

40.00

50.00

60.00 54.00

10.00

42.50 42.50

13.00 13.00 13.00 13.00

ActualBudget

Month

Rs

'000

0

Rent Rent

Figure 4: Rent

44

(c) Meeting and conferences

Jan-12 Feb-12 Mar-12 Apr-12

(10.00)

(5.00)

-

5.00

10.00

15.00

20.00

25.00

30.00

35.00

-

31.03

(7.62)

0.11 2.70 2.70 2.70 2.70

ActualBudget

Month

Rs

'000

0 Meetings/Conferences Meetings/Conferences

Figure 5: Meeting and conferences

The reason because of which the budgeted amount exceeded in the above parameters is:

1. RTM (Route to Market) department is responsible for the above increase. The

cost goes up mostly because of the sourcing and freighting. It was because of the

rise in the demand and the unexpected breakdowns.

2. The budgeted amount of the rent in the business plan is very less as compared to

the actual expenditure. The business plan needs to be reviewed.

3. The actual amount exceeded the budgeted amount of meetings and conferences

because there was a sales conference organized in the month of February. The

expenditure of that conference is not included in the business plan.

Apart from these parameters, all the other parameters are under control. The expenditures

are under the amount allocated to them.

45

3. HR related bottlenecks in increasing sales force effectiveness:

The sales force effectiveness was hampered because of the rise in the fuel prices.

The market developer were not travelling much, there was a resistance in there travelling

pattern. This was hampering the effectiveness of the sales force team in U.P. The

company was paying per day Rs.75 to a market developer which was not

sufficient for them. There was a survey conducted by telephonic interview from 35

market developers. The various questions were asked and a weekly analysis was done.

For example the responses of few individuals were:

After the above analysis to increase the workforce effectiveness there was an

increase in the transport allowance. The amount was increased to Rs.130 from Rs.75 per

day.

S.N

O

NAMEOF

THE

EMPLOY

EES

VISITE

D

(OUTLE

TS

P.W)

TRAVELL

ING

DIST

(P.W)

AMT

PAID(P.

W)

ACTUAL

EXPENSE(

P.W)

DIF

F(R

S.)

1

SHIV

KUMAR 210 600 Kms. 450 900 450

2 GOPAL 120 600Kms. 420 600 180

3 VIJAY 60 360Kms 420 750 330

4

BRIJESH

KUMAR 240 600Kms. 420 900 480

5

YOGEND

RA

KUMAR 80 210Kms. 450 600 150

7 HARISH

CHANDR

75 270Kms 420 600 180

46

A

8 SOFIA 150 120KMS 420 660 210

9

ARVIND

CHAUHA

N 132 120Kms 450 750 300

10

PUNEET

SINGH 240 330Kms 420 540 120

Table3: difference travelling allowance

4. To reduce recruitment cost by reduction in attrition % through means of

employee engagement initiatives.

The following action plan was followed:

AreaA reas of Impact Opportunity Area Action Plan

Communication

There has been focus around

creating health consciousness

in my unit

Review list of all Sales

Associates who need to get

Medical check up done as

per policy (every 2 yrs, 1

year). Ensure all who are

eligible to get medical check

up done complete the same

by July'12

a. Medical Bulletin-

47

Mails for 3 days

every month between

15th to 20th to all

perm associates in

Zone - theme on

Water Borne

Diseases, Obesity,

Hypertension &

Stress, AIDS, Cancer,

Hepatitis, Smoking,

Cardiac Health.

explore Quarterly

Poster campaign &

Quiz Contest on

above topics at Unit

level.

b. a. Visiting Doctor- 1

day every 2 months at

Plant/Depot -

gynecologist, general

physician, and

dietician.

c. b. Share findings of

Medical test with

resp associate and

support in treatment

and counseling by

Doctor

I'm well informed about the

hospitalization policies of

HCCB (e.g. Insurance

a. Fortnightly refresher on

Med claim policy/ coverage

48

coverage , emergency

contact)

I am well informed of my

life insurance & Group

Personal Accident Policy

through mails

b. Quarterly session by

Medicare representative.

Image At my workplace , people do

not need to compromise on

COBC guidelines to succeed

COBC training to be

imparted to all new joiners as

a process

COBC Refresher course for

100% associates.

Table4: employee engagement

The above plan action plan was implemented and the major focus was on creating

health consciousness.

The employees were informed about the health checkups. Free health checkup

camps were organized.

The mailers were made and circulated to all the employees informing them about,

Water Borne Diseases, Obesity, Hypertension & Stress, AIDS, Cancer, Hepatitis,

Smoking, and Cardiac Health.

For example the mailer circulated for heat stroke was:

49

The free helmets were distributed to the market developers.

The COBC (code of business conduct) training was conducted for new joiners.

DATA INTERPRETATION:

The data was interpreted by the followings steps:

1. The difference was taken out between the budgeted expense and the actual expense.

Example

50

S.n.

Item

Ledger

Balance

items

Budget Jan

2012

Actual Jan

2012 Diff

- Comp & Benefits (Permanent) S&D 5,591,0005,121,719.00

469,281

Table5: difference in the amounts

In the above examples the budgeted amount for the comp & benefits (permanent) S&D

expenditure is Rs. 5591000 and the actual expenditure for the month of Jan is Rs.

5121719.00. The difference between them was Rs. 469281.00.

2. In the next step the achievement percentage was calculated.

Example:

S.n

.

Item

Ledger

Balance

items

Budget Jan

2012

Actual Jan

2012 Diff % Ach

- Comp & Benefits (Permanent)

S&D5,591,000

5,121,719.00469,281 92%

Table6: achievement percentage

Achievement %= actual expense / budgeted expense ¿100

%= 5121719 / 5591000 *100

Achievement = 92%

51

The interpretation from the above example is that the achievement is 92%. Which is

acceptable as the actual expenditure is lesser than budgeted amount in the months of Jan.

3. After the calculation of the achievement%, the data is represented in the graphical form

for individual months.

4. The cumulative study was done for all the parameters from the month of Jan till April.

FINDINGS

(i) After the analysis of the achievement percentages, it was found that there are three parameters in which the actual expenditure is more than the budgeted amount. Those three parameters are:

1. Variable COGS (Sourcing cost & sourcing freight)

2. Rent

3. Meetings and conferences

52

The reason because of which the budgeted amount exceeded in the above parameters are:

RTM (Route to Market) department is responsible for the above increase.

The cost goes up mostly because of the sourcing and freighting.

The budgeted amount of the rent in the business plan is very less as

compared to the actual expenditure.

The actual amount exceeded the budgeted amount of meetings and

conferences because there was a sales conference organized in the month of

February. The expenditure of that conference is not included in the business

plan.

Apart from these parameters, all the other parameters are under control. The expenditures

are under the amount allocated to them.

After the studying the response of marketing developers it was found that the sales

force was not able to perform well as the transport allowance given to them was not

sufficient. Because of the rise in the fuel price the sales force was not traveling much,

which was the major reason, hampering their productivity. The transport allowance

was increased to Rs.130 per day from Rs.75 per day.

(iii) The employee engagement plan was implemented to increase the belongingness

amongst the employees, which would reduce the attrition rate and save the recruitment

expenditure. The major focus was on the health consciousness. The mailers were made

and circulated to all the employees informing them about, Water Borne Diseases,

Obesity, Hypertension & Stress, AIDS, Cancer, Hepatitis, Smoking, and Cardiac Health.

53

CHAPTER: 5 RECOMMENDATIONS AND CONCLUSIONS

CONCLUSION

Every organizational function and activity needs money to run and manage properly.

Availability of adequate financial allocation is needed for development and improvement

54

purposes. This is also true of HR. Continuous development of an improvement in HR is

as important as those in the business activities of your organization.

From the above study on hr budget vs. actual expenditure in Hindustan Coca-Cola

Beverage Private limited, it can be concluded that the expenditure are under control. The

expenditure is done as per the budgeted amount. There are some deviations though,

which has been identified in the above analysis. The reasons for the deviations have been

determined.

The cost control measures which have been implemented in the organization are:

1. Switching off systems when not in use. The tracker was prepared on a daily basis which

ensures the optimum use of electricity.

2. Usage of hired vehicle was reduced.

The transport allowance is increased for the sales force to facilitate them in improving

their performance. The employee engagement plan is implemented to increase the

belongingness.

SUGGESTIONS AND RECOMMENDATIONS

Some of the cost control measures which can be suggested to the company are:

1. Reduce the usage of the hired vehicle. The use of the personal vehicle should be

encouraged; this would eliminate the extra expenditure on vehicle used.

55

2. The tracker can be maintained on a daily basis which assures the optimum use of

electricity.

3. The employee engagement plan can be implemented with perfection.

REFERENCES

Cohen S, Karatzimas S, (2011),"The role of the human resources department in

budgeting: evidence from Greece", Journal of Human Resource Costing & Accounting,

Vol. 15 Issue: 2 pp. 147 – 166

56

Susan L, (Aug2006), “Don't look at budgeting as a necessary evil but as an opportunity to

demonstrate HR's value”, HR Magazine; Vol. 51 Issue 8, p93-95, 3p.

Tara C, (Aug 2008), “How to make your HR budget go further”, Personnel Today; p31-

31, 1/2p