Group6 HRMProject L&T

HRM Project Larsen & Toubro

Group 6

Submitted by

Ankit Kumar Varsaney (14PGP071)

Jaysun Antony Alumkal (14PGP083)

Kumar Prashant (14PGP085)

Nirupama Singh (14PGP088)

Shishir Kumar Sharma (14PGP098)

Akhil Yerawar (14PGP104)

Table of ContentsCompany Overview.....................................................................................................................................4

History.........................................................................................................................................................5

Early Days................................................................................................................................................5

The Journey.............................................................................................................................................6

Public Limited Company..........................................................................................................................6

Expanding Horizons.................................................................................................................................6

Vision...........................................................................................................................................................7

Corporate Governance................................................................................................................................7

Awards & Recognition.................................................................................................................................8

2015.........................................................................................................................................................8

2014.........................................................................................................................................................9

Subsidiaries & Associates............................................................................................................................9

L&T’s Business Structure.......................................................................................................................10

Nationwide Network.................................................................................................................................11

Global Presence.........................................................................................................................................12

Organisation Chart....................................................................................................................................13

Sustainability in Action..............................................................................................................................15

The Way We Work.................................................................................................................................15

Case Study.............................................................................................................................................16

Progress on our Sustainability Roadmap (2012-15)...............................................................................16

Millennium Development Goals (MDGs)...............................................................................................17

Core Values................................................................................................................................................18

Competitor analysis of different verticals of L&T......................................................................................18

Human Resource Policies at L&T...............................................................................................................20

Career Development.............................................................................................................................20

L&T In News Recently................................................................................................................................21

Job Analysis and Job Design.......................................................................................................................23

Person-Job-Organisation Fit......................................................................................................................32

Indian Institute of Management Raipur 2

Human Resource Planning at L&T.............................................................................................................34

Human Resource Demand Forecast..........................................................................................................35

Recruitment Process..................................................................................................................................39

Induction Program.................................................................................................................................43

Employee Training.....................................................................................................................................44

Fresher’s Induction program..................................................................................................................45

Employee Branding...................................................................................................................................46

Future Strategy..........................................................................................................................................47

Investment in Manufacturing and Infrastructure sectors......................................................................47

Reduction of Debt..................................................................................................................................47

Getting talent into infra companies.......................................................................................................47

Selection of Next MD for the company as A.M. is getting retired next year..........................................47

Company to restructure itself by adding young minds..........................................................................48

Company to close its SBUs which are not generating profits................................................................48

Compensation...........................................................................................................................................48

Special Facilities for Site employees are provided.................................................................................48

Special Medical Insurance Scheme........................................................................................................48

Retirement Benefits...............................................................................................................................48

Education of employees' children..........................................................................................................49

Prize Money for Academic Achievement...............................................................................................49

Additional Benefits at Managerial Levels...............................................................................................49

Salary.....................................................................................................................................................49


Company Overview1

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business. L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly. It continues to grow its global footprint, with offices and manufacturing facilities in multiple countries. The company's businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support. L&T believes that progress must be achieved in harmony with the environment. A commitment to community welfare and environmental protection are an integral part of the corporate vision. In response to changing market dynamics, L&T has gone through a phased process of redefining its organization model to facilitate growth through greater levels of empowerment. The new structure is built around multiple businesses that serve the needs of different industries:

Hydrocarbon Heavy Engineering L&T Construction Power Electrical & Automation Machinery & Industrial Products Information Technology Financial Services Shipbuilding Railway Projects

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History2

The evolution of L&T into the country's largest engineering and construction organization is among the most remarkable success stories in Indian industry. L&T was founded in Bombay (Mumbai) in 1938 by two Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro. Both of them were strongly committed to developing India's engineering capabilities to meet the demands of industry.

Henning Holck-Larsen(4.7.1907 - 27.7.2003)

Soren Kristian Toubro(27.02.1906 - 4.3.1982)

Beginning with the import of machinery from Europe, L&T rapidly took on engineering and construction assignments of increasing sophistication. Today, the company sets global engineering benchmarks in terms of scale and complexity.

75 Years of L&T

Early Days

Henning Holck-Larsen and Soren Kristian Toubro, school-mates in Denmark, would not have dreamt, as they were learning about India in history classes that they would, one day, create history in that land. In 1938, the two friends decided to forgo the comforts of working in Europe, and started their own operation in India. All they had was a dream. And the courage to dare. Their first office in Mumbai (Bombay) was so small that only one of the partners could use the office at a time! In the early years, they represented Danish manufacturers of dairy equipment for a modest retainer. But with the start of the Second World War in 1939, imports were restricted, compelling them to start a small work-shop to undertake jobs and provide service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish products. This crisis forced the partners to stand on their own feet and innovate. They started manufacturing dairy equipment indigenously. These products proved to be a success, and L&T came to be recognized as a reliable fabricator with high standards. The war-time need to repair and refit ships offered L&T an opportunity, and led to the formation of a new company, Hilda Ltd., to handle these operations. L&T also started two repair and fabrication shops - the Company had begun to expand. Again, the sudden internment of German engineers (because of the War) who were to put up a soda ash

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plant for the Tatas, gave L&T a chance to enter the field of installation - an area where their capability became well respected.

The Journey

In 1944, ECC was incorporated. Around then, L&T decided to build a portfolio of foreign collaborations. By 1945, the Company represented British manufacturers of equipment used to manufacture products such as hydrogenated oils, biscuits, soaps and glass. In 1945, L&T signed an agreement with Caterpillar Tractor Company, USA, for marketing earthmoving equipment. At the end of the war, large numbers of war-surplus Caterpillar equipment were available at attractive prices, but the finances required were beyond the capacity of the partners. This prompted them to raise additional equity capital, and on 7th February 1946, Larsen & Toubro Private Limited was born. Independence and the subsequent demand for technology and expertise offered L&T the opportunity to consolidate and expand. Offices were set up in Kolkata (Calcutta), Chennai (Madras) and New Delhi. In 1948, fifty-five acres of undeveloped marsh and jungle was acquired in Powai. Today, Powai stands as a tribute to the vision of the men who transformed this uninhabitable swamp into a manufacturing landmark.

Public Limited Company

In December 1950, L&T became a Public Company with a paid-up capital of Rs.2 million. The sales turnover in that year was Rs.10.9 million. Prestigious orders executed by the Company during this period included the Amul Dairy at Anand and Blast Furnaces at Rourkela Steel Plant. With the successful completion of these jobs, L&T emerged as the largest erection contractor in the country. In 1956, a major part of the company's Bombay office moved to ICI House in Ballard Estate. A decade later this imposing grey-stone building was purchased by L&T, and renamed as L&T House - its Corporate Office. The sixties saw a significant change at L&T - S. K. Toubro retired from active management in 1962. The sixties were also a decade of rapid growth for the company, and witnessed the formation of many new ventures: UTMAL (set up in 1960), Audco India Limited (1961), Eutectic Welding Alloys (1962) and TENGL (1963).

Expanding Horizons

By 1964, L&T had widened its capabilities to include some of the best technologies in the world. In the decade that followed, the company grew rapidly, and by 1973 had become one of the Top-25 Indian companies. In 1976, Holck-Larsen was awarded the Magsaysay Award for International Understanding in recognition of his contribution to India's industrial development. He retired as Chairman in 1978. In the decades that followed, the company grew into an engineering major under the guidance of leaders like N. M. Desai, S.R. Subramaniam, U. V. Rao, S. D. Kulkarni and A. M. Naik. Today, L&T is one of India's biggest and best known industrial organisations with a reputation for technological excellence, high quality of products and services, and strong customer orientation. It is also taking steps to grow its international presence. For an institution that has grown to legendary proportions, there cannot and must not be an 'end'. Unlike other stories, the L&T saga continues.....


VisionThe L&T vision reflects the collective goal of the company. It was drafted through a large scale interactive process which engaged employees at every level, worldwide.

Corporate GovernanceL&T’s essential character revolves around values based on transparency, integrity, professionalism and accountability.


Awards & Recognition

2015

Major Awards & Recognition won by L&T in 2015

1. Mr. A.M. Naik conferred Business India’s ‘Businessman of the Year’ recognition

Appreciating Group Executive Chairman, Mr. A.M. Naik's efforts in transforming L&T to one of the most respected Indian multinationals and his contribution to the development of infrastructure in India, Business India - India's premier business magazine - conferred on him the prestigious Businessman of the Year Award 2014.

Each year Business India recognizes excellence in business, and commends performance by an outstanding individual in the business community in India. He is chosen as a role model for our times. The pre-eminence of the selection panel and the very selection process itself, year upon year, has ensured that the Business India's Businessman of the Year distinction remains the most coveted by the business community.

2. L&T Wins Award for Excellence in Power Project Execution

L&T won the Award for Excellence in Power Project Execution from the Central Board of Irrigation and Power (CBIP), a Government of India institute, for its outstanding contribution to the development of the Power Sector in India. The award was presented by Prof. Sanwar Lal Jat, Minister of State for Water Resources, River Development & Ganga Rejuvenation, to Mr. Shailendra Roy, Whole Time Director & Sr. EVP (Power, Minerals & Metals), on January 1, 2015, at New Delhi during the CBIP Day Celebrations.


The citation lauds L&T’s execution of Nabha Power’s 2x700 MW supercritical thermal power plant at Rajpura, Punjab, in a record time. This project is India’s first full EPC job completed using indigenously manufactured supercritical Boiler–Turbine–Generator equipment.

3. HM Queen of Denmark Confers Order of Dannebrog – First Class on Mr. A.M. Naik

L&T’s Group Executive Chairman, Mr. A.M. Naik, has been conferred the Order of the Dannebrog as Knight – First Class by Her Majesty Queen Margrethe of Denmark. The knighthood is Danish Royalty’s acknowledgement of Mr. Naik’s role in fostering Indo-Danish ties in the fields of business, commerce and culture.

This honour represents a progression of the accolade that Mr. Naik received from the Queen of Denmark in 2008. The formal investiture ceremony will take place in March 2015. The Order of the Dannebrog is one of the world’s oldest Knight Orders, having been instituted in Denmark in 1671.

2014

Major Awards & Recognition won by L&T in 2014

1 Mr. K. Venkataramanan Conferred BP Godrej Lifetime Achievement Award2 L&T Wins ICICI Foundation-CNBC TV 18 ‘Inclusive India’ Award3 L&T Ranks in Top 10 Companies for CSR – The Economic Times4 L&T Power Wins National Energy Conservation Award5 F&S India Manufacturing Excellence Award for MFF-Hazira6 L&T Wins Golden Peacock Award for Excellence in Corporate Governance7 L&T Technology Services Wins Frost & Sullivan Excellence Award8 L&T Ranked Asia's 2nd Most Sustainable Company in Industrial Sector9 L&T Wins Most Attractive Employer In Infrastructure Industry from Randstad10 L&T Bags ‘Best Sustainability Report Award’ – 201411 L&T Electrical & Automation's AU-Series Wins Best Product Award at ELECRAMA 2014

Subsidiaries & AssociatesThe L&T Group comprises a large number of Subsidiaries & Associate companies spread across the world.


L&T’s Business Structure


Subsidiary Companies

134

Associate Companies

15

Nationwide Network


Global PresenceL&T has a global presence. A thrust on international business over the years has seen overseas revenues growing steadily. The company has manufacturing facilities in India, the Middle East, South East Asia, China and Australia. Customers include global majors in over 30 countries.


Organisation Chart

BOARD OF DIRECTORS

"The company that we run has a strong heritage of professionalism that places the highest value on merit and integrity. In the 7th decade of the existence of L&T, all the directors on our board are conscious of our responsibility in transforming the organization to make it truly world class, to ensure its continued long term success and growth."

- A. M. Naik, Group Executive Chairman


NON-EXECUTIVE DIRECTORS

M.M. Chitale Subodh Bhargava M.Damodaran Vikram Singh Mehta Sushobhan Sarker Adil Zainulbhai Akhilesh Krishna Gupta


Sustainability in Action

The Way We Work

We work on a sustainability strategy based on building foundations for a better future. This is translated in the way we conduct our businesses, our approach to stakeholder concerns, our transparent governance structure, develop our human assets, manage environmental resources and in our contribution towards the sustainable growth of our neighboring communities. For us, sustainability commitments mean that we remain engaged in the positive cycle of setting goals and demonstrating results across the three 'Ps': Planet, People and Profit.

Planet:

L&T is integrating environmental protection across all its operational activities. Through optimal utilization of energy sources, eliminating waste and wastage, adopting greener processes, developing greener products, adherence to best practices and compliance with emerging international standards, we are ensuring that along with a robust business performance, our planet too remains in good health.

People:

We appreciate the value of our most valuable assets, both within our operations and among our neighborhoods. Ensuring safety and providing growth opportunities for our employees, being alert to needs of the local communities, addressing healthcare and empowering the youth through training & employment are key to becoming a truly sustainable organization. This has been our philosophy for the last seven decades and will remain so in the future.

Profit:

Economic sustainability is best proven through performance. A business portfolio that covers core sectors, a rapidly growing order book and strategic investments in sunrise industries will continue to fuel our growth trajectory in the years ahead.


Case Study

CASE STUDY 1 : SAFETY INTERVENTION IN ACTIONCASE STUDY 2 : TEACHING SAFETY - THE EXPERIENTIAL WAYCASE STUDY 3 : AN OFFSHORE SAGA OF UNMATCHED SCALE & SPEEDCASE STUDY 4 : POWER MANAGEMENT SAVES MILLIONSCASE STUDY 5 : STPS IN THE RIGHT DIRECTIONCASE STUDY 6 : PUTTING WASTE TO WORKCASE STUDY 7 : OUT-OF-THE-BUCKET THINKINGCASE STUDY 8 :ENVIRONMENT CONSERVATION IN ACTIONCASE STUDY 9 :TRUE PROGRESS IS PROGRESS FOR ALLCASE STUDY 10 :SUNLIGHT AT NIGHT CASE STUDY 11 :THE POWER OF 'I' – INNOVATION CASE STUDY 12 :LOST IN TRANSMISSION? L&T OFFERS A SOLUTION.

Progress on our Sustainability Roadmap (2012-15)

In the first year of our three-year sustainability roadmap, we performed well on most parameters. In quite a few areas such as increase in energy savings, decrease in scope 2 emissions and reduction in water consumption, we surpassed the final targets.

Our ambit of social interventions grew and so did our commitment to employee wellness. While we have strengthened our focus on EHS, there is more to be done on Severity Rate front and we are committed to achieving our targets in the coming years.


Millennium Development Goals (MDGs)

The Millennium Development Goals (MDGs) incorporate global time-bound targets. These goals address poverty in its multiple dimensions encompassing income, hunger, disease, gender inequality, education and environmental sustainability. They also incorporate basic human rights like access to health, education and security. L&T undertakes a host of initiatives in alignment with the MDGs.


Core Values

Performance Driven Innovation Integrity Excellence Customer Focus Mutual Respect

Competitor analysis of different verticals of L&TL&T Construction: -

Construction and engineering industry in India is growing rapidly. The industry grew by 4.4% in 2012 to reach a value of $117.4 billion. In 2017, the Indian construction and engineering industry is forecast to have a value of $162 billion, an increase of 38% since 2012. This industry is expected to register a Compound Annual Growth Rate of (CAGR) of 6.6% over the period 2012–17. The Planning Commission of India has proposed an investment of around $1 trillion in construction sector in the 12th five-year plan (2012-2017). In 2011, Union government conferred infrastructure status to fertilizer industry, which has created conducive environment for revamping and modification of fertilizer plants. L&T is one of the largest players in the Indian construction and engineering industry. The company is well placed to leverage from the growing Indian construction and engineering industry and further enhance its business in the coming years. The engineering and construction segment faces intense competition from construction majors in the Middle East including ABB of Sweden and Bechtel of the US. These companies have substantially greater resources and superior capabilities than L&T. In the domestic market, the company primarily competes with players like Hindalco, Sundaram Fasteners, Gammon India, and Lanco Infratech among others. Stiff competition in the marketplace could erode the company's market share and reduce its profitability.


L&T InfoTech. :-

India's IT industry can be divided into five main components, viz. Software Products, IT services, Engineering and R&D services, ITES/BPO (IT-enabled services/Business Process Outsourcing) and Hardware. Export revenues, primarily on project based IT Services continue to drive growth with IT Services. This accounts for 54.2% of total revenues followed by BPO and Engineering services at 19.5%, Software Products at 15.3% and hardware at 11%. Multi-year annuity based outsourcing agreements continue to increase at a steady rate. In terms of total export and domestic revenues, Application Development and Maintenance (ADM) still continue to be the bread and butter for Indian IT companies; however traditional services have become increasingly commoditized.

Increasing competition, pressure on billing rates of traditional services and increasing commoditization of lower-end services are among the key reasons forcing the Indian software industry to make a fast move up in the software value chain. The companies are now providing higher value-added services like consulting, product development, R&D as well as new digital technologies like social media, mobility, analytics, and cloud computing (SMAC).

The new Indian government is emphasizing on better technology enabled delivery mechanisms for a multitude of government projects. Further, with the new digital India initiative being launched, the domestic market for software services looks forward to a bright future

As per NASSCOM, the Indian IT/ITES industry is expected to maintain a growth of 13-15% in FY2015. NASSCOM has also envisaged the Indian IT/ITES industry to achieve a revenue target of USD 225 bn by 2020 for which the industry needs to grow by about 13% on a YoY basis in the next six years.


Human Resource Policies at L&T

Career DevelopmentL&T InfoTech has a well-planned process for career development. The aim is to prepare and groom their employees for higher responsibilities.

It helps try to identify:a) Roles you could undertakeb) Skills you need to develop for doing justice to the rolec) L&T offer roles in Delivery, Infrastructure Management Services, Testing, Quality, Domain/ERP

Practice, Account Management and Sales. Its structured career tracks help its employee grow professionally and personally.

Performance ManagementL&T InfoTech provide employees with rewarding careers based on their performance, skills and ability to independently handle higher responsibilities. Their online performance management system, helps the employees set their individual goals and aligns the same with the organizational goals. A strong performance-oriented culture is one of the hallmarks at L&T InfoTech.

Training & DevelopmentWorld-class in-house classroom training facilities and on-the-job training builds foundation for a truly flexible career path. L&T InfoTech believe in investing in their employees as they are the architects of the company’s future.

Rewards and employee benefitsAt L&T InfoTech, rewards are performance-driven. Their policies are in sync with industry trends and are based on consistent internal benchmarking. Their reward programs are aimed at empowering their managers to appreciate excellence in performance.


Enriching Project Management ExperienceL&T InfoTech provide an enriching experience through their incisive project management that helps them implement complex projects within timelines and budgets. They provide the opportunity to work in different parts of the world in an environment that is truly multinational and multi-cultural.

L&T In News Recently



Job Analysis and Job Design

Job Analysis3 is a process to identify and determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. Analysis is conducted of the job and not the person.

Job analysis4 provides a way to develop an understanding of the nature of the job by examining the tasks performed in a job, the competencies required to perform those tasks, and the connection between the tasks and competencies.

Job analysis data is used to:

Establish and document competencies required for a job; Identify the job-relatedness of the tasks and competencies needed to successfully perform the

job; and Provide a source of legal defensibility of assessment and selection procedures.

Methods of Job Analysis

1) Observation2) Desk Audit3) Interviews

a. Interviewing the incumbentb. Interviewing the supervisor

4) Questionnaire5) Job Diary6) Recalling critical incidents that happen both frequently and infrequently

In the book Human Resource Management by P. Jyoti and D.N Venkatesh, Fine’s functional job analysis process is described, in which routine job tasks are classified into three broad categories which the tasks deal with.

Table 1: Fine's functional Job Analysis process

Data People ThingsComparing Taking instruction FeedingCopying Mentoring OperatingAnalysing Handling DrivingCoordinating Supervising ControllingSynthesizing Negotiating Setting upInnovating Persuading Manipulating

3 Human Resource Management by P. Jyoti and D.N Venkatesh4 http://www.opm.gov/policy-data-oversight/assessment-and-selection/job-analysis/


From Table 1, a particular job will call for comparing data, supervising subordinates and setting up seminars.

Critical Analysis: Job Analysis in Larsen & Toubro perspective

While primary data is most reliable for Job Analysis, we will first attempt to showcase job analysis b looking at the job descriptions and job advertisements available of L&T jobs in public domain.

Figure 1: L&T job advertisement for SPV Nabha Power Ltd, Raipur

Figure 2: Magnified view of excerpt from Table 2

As one could see, the job under Project Planning & Control is ideal for Civil or Mechanical graduates. The job involves planning, scheduling and monitoring of project related activities, including project cost control using planning software like Primavera/MS Project.


This advertisement gives a brief description of the job duties and responsibilities of the particular job. It also indicates the expected expertise required of a person for the job. For instance, he must be a graduate in Civil or Mechanical engineering, he must be adept in Primavera or MS Project and should also be able to undertake planning, scheduling and monitoring activities.

Benefits of Job Analysis (with advertisement in Table 2 as an example)

1. A detailed job analysis let us know of the areas of expertise or knowledge the employee/candidate requires and help us in designing his/her training correspondingly.

2. The more the expertise required from a person for a job, the more he has to be compensated. Thus job analysis helps us in determining the compensation for different jobs, and will also help in justifying the compensation.

3. Without having a proper job analysis done, we could not know what the job requires. This knowledge is essential for selection of candidate for any job.

4. For proper evaluation of an employee, the supervisor must know what his expected responsibilities are. Job analysis list out the criteria on which the employee must be evaluated.

According to Boston Consulting Group, Job Analysis is undertaken to collect information regarding:

a) Job work activitiesb) Human behaviorc) Performance standardsd) Human requirementse) Job context

Figure 3: L&T Job Advertisement for Diploma Engineer Trainees


In Table 4, one could find that the Job Analyst has identified that the job requires essential physical standards (Height: 155 cms, Weight: 45 kgs). It also specifies the eyesight requirement and other technical competency requirement as well as the age requirement. These requirements are identified as a result of proper job analysis.

In the coming pages, we have shown various forms used for collection of data for Job Analysis.

Figure 4: Job Analysis Data Collection Form Sample 1


Figure 5: Job Analysis Data Collection Form Sample 2


Figure 6: Detailed job description for Senior Architect at L&T


Job Design5 involves designing or engineering jobs to reduce stress, enhance motivation and satisfaction and improve performance.

Job designing could be traced back to Taylor’s task designing meant ot maximize human efficiency in jobs. In the 1950’s IBM introduced job rotation and job enlargement to motivate its employees and enhance their KSA (Knowledge, Skills and Abilities).

Four Approaches to Job Design

1. Mechanistic Approach includesa. Job specializationb. Specialization of tools and proceduresc. Job/Task simplificationd. Repetitione. Spare timef. Automation

2. Motivational approach includesa. Autonomyb. Intrinsic or extrinsic job feedbackc. Task clarityd. Task identitye. Task varietyf. Promotiong. Achievementh. Recognitioni. Security

3. Biological Approach includesa. Strengthb. Endurancec. Seatingd. Wrist movemente. Climatef. Noiseg. Shift workh. Work breaks

4. Perceptual/Motor Approach includesa. Lightingb. Displaysc. Memory requirementsd. Boredome. Stressf. Workplace layout

5 Human Resource Management by P. Jyoti and D.N Venkatesh


In the modern context Motivational Approach seems to have more significance.

Motivational Approach to Job Design involves

a) Job rotation – An alternative to boredom in workplace. Employee is rotated between jobs of similar nature to broaden his/her KSA and improve his/her competencies.

b) Job enlargement – In this, more tasks are added to the current job. It is a horizontal expansion, involving a variety of tasks. It increase KSA, reduce boredom and increase interest in work and efficiency.

c) Job enrichment – This is a vertical expansion of job by adding more responsibilities and freedom to it. It gives employees more challenging atmosphere, more opportunity and more responsibility.

Critical Analysis: Job Design in Larsen & Toubro perspective

In Figure 7, we have shown the L&T advertisement shipbuilding and ship repair professionals.

The job description given in detail indicates the use of mechanistic approach.

Biological approach is not evident in this particular job advertisement. But, with reference to Figure 3, where essential physical standards (Height: 155 cms, Weight: 45 kgs) and eyesight requirement were mentioned, it indicates the use of biological approach in job design.

Evidences for job enrichment and job enlargement, which are aspects of motivational approach, are present in Figure 7 advertisement. It also uses the L&T brand as a motivational factor. L&T rarely uses package or remuneration as a motivational factor in its advertisements.

The ‘Head’ and ‘Manager/Sr.Manager’ role involves tasks from development, designing and planning to project management and quality assurance and control. This is vertical expansion of duties, i.e. job enrichment.

The ‘Engineer’ role does not have job enrichment aspect, but have job enlargement, i.e. horizontal expansion of duties. It involves a horizontal array of duties including planning, designing, training, contract management, hull outfitting, scaffolding, estimating, buying, ship repairing etc.

The advertisement has used the picture of L&T’s shipbuilding facility and boasts about the new world-class facility. This conveys information about work place layout and nature of work to prospective candidates, which comes under perceptual or motor approach.

Thus L&T advertisements use all approaches to convey the design of the job to prospective candidates, even though it may not use all the approaches all the time.


Figure 7: L&T Shipbuilding career advertisement


Person-Job-Organisation Fit

In the recruitment and selection domain, two common forms of fit have been identified:

Person–job fit (PJ fit), or the match between an individual and the requirements of a specific job; and Person–organization fit (PO fit), or the match between an individual and broader organizational attributes.

The Person-Job Fit

PJ fit is conceptualized as the match between individual knowledge, skills, and abilities (KSA) and demands of the job or the needs/desires of an individual and what is provided by the job

The theory is based on the notion of fit between an individual's personality characteristics and his or her occupational environment. The theory argues that satisfaction is highest and turnover lowest when personality and occupation are in agreement. Social individuals should be in social jobs, conventional people in conventional jobs, and so forth. A realistic person in a realistic job is in a more congruent situation than is a realistic person in an investigative job. A realistic person in a social job is in the most incongruent situation possible. The key points of this model are that(1) there do appear to be intrinsic differences in personality among individuals,(2) there are different types of jobs(3) people in job environments congruent with their personality types should be more satisfied and less likely to voluntarily resign than should people in incongruent jobs.

The Person-Organization Fit

The attention in recent years has expanded to include matching people to organizations as well as jobs.To the degree that an organization faces a dynamic and changing environment and requires employees who are able to readily change tasks and move fluidly between teams, it's probably more important that employees' personalities fit with the overall organization's culture than with the characteristics of any specific job. The person-organization fit essentially argues that people leave jobs that are not compatible with their personalities.


For the case of L&T we take a close look at a particular opening – Manager Planning.

1. EDUCATIONAL QUALIFICATIONS: Full time engineering graduate in Mechanical discipline with relevant experience at sites of thermal power plants

2. NO OF YEARS OF EXPERIENCE : Overall 10-15 years experience

3. JOB PROFILE / ROLE DESCRIPTION: Lead planning engineers at the siteSite planning work Material Planning Highlight critical items Generation of exception reports Generation of daily, weekly and monthly reports.

4. LOCATION : Nigrie Site

The study was done on about ten applicants .Person Job fit perceptions were assessed by three items - Knowledge, skills, abilities A sample item is, ‘To what extent do your knowledge, skills, and abilities “match” or fit the requirements of the job?’. The response format for the fit scales was a 7-point Likert scale with 1 representing not at all and representing completely.

Data were collected at four time points: Time 1 – after application was received and prior to any selection procedures; Time 2 – after first selection interview; Time 3 – after all selection procedures had been completed; and Time 4 – after job acceptance decision was made. The first questionnaire (Time 1) asked for applicants’ demographic information and assessed number of expected and received alternative job offers, perceptions of PJ and PO fit and organizational attraction. The second questionnaire (Time 2) assessed number of expected and received alternative job offers, attraction to the organization, job acceptance intentions and perceptions of PJ and PO fit. The final questionnaire (Time 3) assessed job acceptance intentions.

Attraction (Time 1) Intentions to accept (Time 2)


Person Job Fit

Person Organisation

Fit

Attraction to the

organisation

Intentions to accept job

offer

Alternative job offers (T1) 0.2 0.33

Alternative job offers (T2) 0.41 0.37

PJ fit (T1) 0.41 0.18

PJ fit(T2) 0.45

From the table we conclude that the variation in person job fit on both the stages is almost the same that is 0.41 and 0.45. So the applicants who applied had thoroughly matched their knowledge, skills and abilities with the current job. This organization has low attrition rate because the employees find themselves a perfect fit with the job and the organization as a whole.

Human Resource Planning at L&TPrimary Objective The primary objective is to study, understand and analyse various aspects related to recruitment and retention procedure at Larsen & Toubro.

Scope of StudyReport will focus on study of Larsen & Toubro and it will be primarily based on the manpower planning procedure at Larsen & Toubro.

Forecasting MethodologyA Forecasting Methodology defines the purpose of the forecast, how it proceeds, how to measure progress and what constitute success with respect to the objectives determined for carrying out the forecast study. The appropriate forecast design formulated is detailed below. Exploratory Forecast: This kind of forecast has the primary objective of development of insights into the requirements. It studies the main area where the requirement lies and also tries to evaluate some appropriate recruitment of action. The forecast methodology for the present requirement has been adopted to reflect these realties and help reach the logical conclusion in an objective and scientific manner.

Forecast Design: Descriptive forecast design has been used in this report.


Data Structures: “Systemized Method to gain knowledge”. The technique deployed to analyse and interpret the data for the purpose of hitting the target objective plays a crucial role. The effective forecast technique has a significant contribution for effective objective requirement.

Nature of data:

Primary data: Data is collected through direct interviews and by raising questionnaires. The direct interview is done with the ex- employee of L&T (also a member in the group) and through one of the HR executive (kept anonymous for confidentiality) on telephone.

Secondary data: Secondary data that is already available and published. It could be internal and external sources of data.

Internal sources: which originates from the specific field or area where research iscarried out e.g. publish broachers, official reports etc. The secondary data has beencollected from various books, magazines, journals, information brochures andinternet web sites.

Human Resource Demand ForecastTechnique used for Forecasting: Statistical & Mathematical Model

Year Manpower Level/Data (in nos.)

2008(Recession year, recruited mainly through referrals)

150

2009(Recession recovery year) 350

2010 800

2011 900

2012 1000

2013 1100


Based on the data as shown above and looking at the current political and economic situation where the economy looks stable we interviewed the HR and Ex- Employee and found out that the around 7000 employees could be recruited this Fiscal year. Different job advertisements and job search sites are researched to confirm the same. We found out that the company recruits the employees every month as their requirements change every month. The decision for recruitment mainly comes through the Top management. It follows the ‘Top-Down Strategy’ and weighted average method (Here the software requirements and sales are given high priorities and HRs and IT are given low priorities). Company forecast for every year a tentative list of employees which will get recruited and then breakdowns for every month. The job is mainly advertised in company website, national newspaper, and employment newspaper and on the all e-jobs sites. Below is the snapshot of the requirement for the month of March in company website.


The demand forecasted is for long term (1 year) and it has been forecasted on the short term requirement of the company’s advertisement posted on the website.


No. of Software Engineer Required (Fresher) 700

Average Salary Per Year 3.4 Lakhs

No. of Software Engineer Required (Work Experience more than 3 years) 500

Average Salary Per year 8 Lakhs

Total Salary Payable 63.8 Crore

No. of HR’s required for the process 7 HRs

Company’s Budget and Requirement

From the data collected through interview, it was found that the company requires around 7000 employees every year as the same no. of employees leaves the company every year. The budget for the recruitment and hiring is approximately 10 crore which includes HRs staying and logistics. The Fresher, who are just the college pass out are offered a salary of around 3.4 lakhs per year. The students are recruited through off campus at the state level. Experienced employees are recruited mainly in metro cities at the company offices.

Labor Turnover Index – this index indicates the number of average employees employed in a given time period is decided by adding the employees at the beginning & end & then dividing the same by two.

No. of employees leaving 16000 – 1200 = 14800

Average no. of employees employed (16000+14800)/2 = 15400

Labor turnover = (no. of employees leaving/Average no. of (1200/15400)x100 = 9.8%


employees employed)x100

Last year 1100 people have been recruited in between during the year, then the labor turnover would be: No. leaving

16000+1100-14800 = 2300

Average nonemployees employed (16000+17000+14800)/3 = 15933

Labor turnover (2300/15933)x100 = 14%

Recruitment Process Sources of Recruitment

L&T recruit employees from two sources:

1. Internal sources

2. External sources

The Internal Recruitment

Company believes in offering opportunities for development and career progression to its employees;

hence each time a necessity emerges, internal recruitment is a favored mode. HR puts an advertisement

on the intranet. The advertisement does accompany subtle elements:

Job Profile

Educational qualifications, Skills, Experience

Last date of receiving Applications

Contact person in HR


All applications then screened for the qualification against foreordained criteria for the vacancy. HR

prepares a list of eligible applicants and seeks approval from the respective Reporting Manager and

Departmental Head. If approval is given, HR sends a notification to the eligible candidates via email.

Applicants who are not found eligible are likewise told by means of email. Eligible candidates undergo a

panel interview.

External Recruitment

Entry-level recruitment is used for fresh graduates / postgraduates who are taken as Executive Trainees

and Management Trainees or for individuals joining at entry-level positions in the Company. If candidate

possess less than one year of work experience, he/she is treated as a fresh hire (entry level recruitment).

Depending upon the requirements projected in the manpower plan, the company recruits Management

Trainees from Management institutes in the country.

Recruitment of Trainees

Management trainees are recruited from management institutes across the country. The selection

criteria for Institutes are described below:

Campus rating through publications: HR refers to the Campus ratings published in the Business

Magazines, available in the country and arrive at average campus ratings.

Campus Relationship: The Company develops close relationships with targeted campus by hiring large

numbers, conducting events, taking summer trainees, sending senior managers for lectures etc.

An attempt made to include a cross – section of Institutes across the country to ensure diversity in the

campus recruitment process. Additionally, freshly qualified persons from different areas shall be

selected as per the requirement.

Recruitment Process for Management Trainee

The recruitment process for the Management trainees will be as follows:

HR initiates the campus recruitment process by sending the company’s literature to the campus, one

month before the proposed date of recruitment. This contains brochures of the company literature

containing information about the company, the job profile and the remuneration package.

Pre Placement Talks:


HR coordinates with the Placement Cell of short listed Institutes and schedule Pre Placement talks. The

HR head and a senior line Manager form the Pre Placement Team.

Screening of Applications

The Placement Coordinator/Administrative offices short list candidates on the basis of predetermined

eligibility criteria and send the list of short listed students to the company at least one week before the

date of campus interviews. HR then screen the application blanks that are received and short list them a

second time according to the eligibility criteria. Any deviations highlighted and justified. A final list of

candidates selected for interviews has to be sent back to the Institute no later than one week before the

selection process.

Selection Process

All eligible candidates undergo the following 2 – step selection process:

Group Discussion – This will be the first step of the selection process. Two members of the Campus

Recruitment Team will observe each group discussion. Observations will be recorded in the Group

Discussion Observation Form and compared for a final rating at the end of the Group Discussion. Topics

will be a mix of economics, business and general awareness.

Candidates who are selected after the Group discussion will be called for a personal interview. Interview

Observation Forms will be used to evaluate the candidate’s performance during the interview.

Offer Letters:

Offer Letters than sent to the selected candidates within 7 days of the selection process at the Campus.

Candidates have to indicate his/her acceptance by signing and returning the copy of the letter to HR not

more than15 days after receipt of the letter. Where required blank offer letters will be carried to the

Campus and given at the time of placement itself.

Lateral Recruitment

The different modes of recruitment available are Database Hiring, Internet Hiring, Employee Referrals

and Advertisements.

Database Hiring: When any recruitment requirement arises, the internal applicant database is referred

to. Eligible applicants get selected by their qualifications, experience and training. HR forwards a copy of


the candidates list to the requesting department along with the resumes of the five highest ranked

candidates. Candidates short – listed from this list are called for an interview.

Media Advertisement

In case the number of vacancies is large, advertisements may be released based on recommendation of

the HR head and an approval from the Directors. The advertisement adheres to the prescribed

standards and contains the following details:

Brief Profile of The Company

Brief on Job Responsibilities

Employee profile- Age, experience, educational qualifications

Locations

Email ID/Postal Address for receipt of Resumes

Internet Recruitment Firms

Internet recruitment firms such as naukri.com and jobsahead.com can be used for any level of

recruitment. HR head will be the final contact.

Selection Process

Initial Screening:

HR conducts an initial screening based on the details provided in the CV, and also the pre determined

criteria. HR then establish a candidate’s list using set priorities when there is more than one qualified

applicant interested in the same position.

Preliminary Interview:

A preliminary interview with HR has to be conducted prior to the panel interview. The preliminary

interview may be conducted via telephone if it is a case of an outstation candidate.

Final Interview:

HR intimates the candidate about interview time, date and venue for the final interview.


Employee Orientation

It is imperative to provide a proper orientation to the employees when they join a new organization. It helps them understand the new environment and opens them to the work culture of the new organization. It is important for the employer to spend time planning for the new person's first days and weeks on the job. This will greatly increase the employee’s chance for a successful start.

Purpose of orientation:

Introduce employee to the work culture Provide knowledge about mission, vision, policies , organization structure, etc. Make the employee understand how he/she fits in the organization Introduce employee to his roles and responsibilities

Orientation Process: Preparation of checklist of documents to be given to/ taken from the employee Arrangement for meeting with higher officials or fellow associates Preparation of presentations to be done

Orientation at Larsen & Toubro:

Fig : A screenshot from L&T website

Induction ProgramAs part of the on-boarding process, all fresh entrants go through an Induction Programme, a 'finishing school' as it were, which gives them an overview of the breadth of work. It also helps them get acclimatized to the work ethos and start delivering from day one. The programme consists of an orientation on L&T, its businesses and projects undertaken.The trainees work on technical projects, individual assignments, product simulations, and undergo various technical as well non-technical exercises on-line.


The programme is a good mix of technical & behavioural programmes along with a lot of fun-filled activities such as In-basket exercises, Games, Contests and Cultural Programmes.”

It is a one day orientation program at L&T .The major details of the program are:

Introduction to the History and growth of the company Organizational structure and who’s who of the management Policies and benefits Important contacts

Access to Login credentials Employee i-card

Paper work

Employee TrainingThe orientation is usually followed by an employee training program for a duration that depends on the job profile.

Learning Management @ L&T Technology Services

Constant learning and skills upgradation of employees’ behavioral, functional and technical skills is the fundamental premise of the L&T Technology Services Learning Management function as one of the important pillars of Human Resource Function.

The objective of learning management is to ensure that the potential, capabilities and skills of the staff are monitored & developed in line with the Performance Oriented Development Plan (PODP) and needs of the business.

Learning Management function at L&T Technology Services aims to provide:

Behavioral Functional Leadership Learning

Fresher’s Induction program

Trainees (DETs, ETs, PGETs) are transformed into executives by a residential program of 2 months.


Customized program as per the needs of different Technology Services verticals. Practical training in design software applications included. Intensive behavioral modules, sessions on company code of conduct, processes &

structures. Constant Evaluation - Technical tests in domain related technical topics.

The orientation program for lateral new joiners provides them with a holistic view of the company, its businesses, structure, projects & processes and helps them to settle in quickly.Our employees have the opportunity to nominate themselves for any program needed to upscale their skills for current/planned projects, assignments.

Behavioral, functional & Leadership Training

Learning is a continual process at L&T Technology Services. From communication & presentation skills to leadership skills; employees at L&T Technology Services are trained and retrained continually. On the basis of competency framework; employees are trained in specific skills. Project managers & their teams are trained through certified courses in the field of project management and other managerial skills.

With the company having diversified business across the globe; Learning Management team constantly provides training on Voice & Accent neutralization, Language enhancement, global business etiquettes and cross-cultural sensitization. Employees are encouraged to take up courses in foreign languages and other behavioral skills.

E-Learning - Various e-learning programs on defined competencies, including Online certification courses on Project Management, Supply Chain Management, different e-learning resources on various behavioral areas are facilitated.

Nominations are invited for a variety of Management Development programs that employees have the opportunity to attend and hone their management skills. Employees taking up new roles are groomed by such programs to ensure the right fit for the next level position.

Employee BrandingEmployees are expected to amalgamate their identity with the brand’s identity. Employee branding refers to the alignment of employee’s behavior and often the employee’s point of view


with the image that the organization wants to project to its customers and external stakeholders. Every employee becomes a brand ambassador of the organization.

The goal is to induce employees to create a behavioral and psychological connection between their own identity and the brand’s identity. This connection should lead employees to prioritize the brand’s interests automatically and uncritically, because branded employees treat the brand’s priorities as their own.

Methods of achieving employee branding:

Selective hiring – Hire candidates whose skills and knowledge are closely aligned with job requirement

Provide adequate amount of training and motivation Keeping the employee happy so that he feels connected to the organization

Another concept is employer branding.

Employer Branding

In today’s competitive world it is very difficult for organizations to retain talented employees. Employers have to build an image in front of the prospective employees so that they are attracted to join that particular organization.

Awards like the EBA( Employer Branding Awrads)given by the Employer Branding Institute India are given to organizations for various excelling in various aspects. Some of the factors are :

Continuous innovation in HR Strategy For managing health of employees at work For innovation in recruitment For innovative retention strategy For excellence in employee training, etc.

Employer branding is the process of building a brand image for an employer. The employer branding process involves:

Research & Advisory Services - The Company needs to understand what it offers of value, as defined in the EVP, to current and prospective employees. Top Management also needs to believe and actively support the EVP. If the company is unaware or unsure of the value it offers Top Talent, the Employer Brand cannot be activated or effectively promoted.

Activation & Talent Sourcing - The activation phase requires a holistic communication, marketing and talent sourcing plan to ensure the company is getting the right kind of


talent aboard. While the talent sourcing’s role is to ensure company-candidate compatibility, marketing and communications aim for top talent in establishing the company as the employer of choice.

KPI Development & Tracking - For effective employer brand promotion, constant testing and measuring – when using different campaign techniques, messages, channels, etc. – is required. It is imperative for a company to set Key Performance Indicators (KPIs) and keep track of performance levels in order to make continuous improvements.

Future Strategy

Investment in Manufacturing and Infrastructure sectorsCompany is mainly looking for investment in manufacturing and Infrastructure sectors as there is a big scope for it in the market. As there is a reduction in the corporate tax rate from 30 percent to 25 percent over the next four years, company is looking forward to leverage this opportunity.

Reduction of DebtCurrently company’s total debt is Rs 62,000 crore. Of this, Rs 28,000 crore is in L&T Finance, which is on its own. L&T’s debt is Rs 8,000 crore; Rs 25,000 crore is in IDPL and other companies. The other priority is to make the company asset-light and bring down debt by Rs 10,000 crore in three years’ time. At the consolidated level, debt should be less than Rs 30,000 crore and net worth is Rs 40,000 crore.

Getting talent into infra companiesGetting talent into Infra sector is very tough job as people are more inclined towards Oil and IT industry. Company is facing an issue at all levels. Since L&T is much diversified, it is a recruitment haven for others but company cannot get people from other sectors to work in the infra sector.

Selection of Next MD for the company as A.M. is getting retired next yearIt is a challenging situation. For example, company is searching for a leader for the hydrocarbon business for quite some time. Though A.M. Naik started building the pipeline 10 years ago, attrition at the middle level is high, as multinationals are hiring due to a boom in the energy business. Today, a CEO gets $4-5 million in a year in the hydrocarbon sector. Also, company won’t get best talent globally, as they have reservations about working for an Indian company. And, live in India, where quality of life is an issue. So, company has decided to move their business headquarters to Dubai. Company has found an Italian who will take over one part of the hydrocarbon business.

Company to restructure itself by adding young minds The company needs to be simplified and some businesses need to be sold; the others will have their own CEOs. L&T has to act like a shareholder now and not act like management. At L&T, 21 companies are merged into one. Like other diversified conglomerates, there will be many CEOs in the times to


http://universumglobal.com/business-solutions/employer-branding-consulting/kpi-dashboard/

http://universumglobal.com/business-solutions/employer-branding-consulting/kpi-dashboard/

http://www.business-standard.com/search?type=news&q=Idpl

come. Company is looking for younger CEOs who can put their best efforts to handle 70 per cent of L&T but the balance 30 per cent needs priority.

Company to close its SBUs which are not generating profitsThe excerpts from A.M. Naik from the recent interview:

“The first thing I did was to create a new vision, a new strategy and therefore bring in one or two of the top three strategy firms to resolve issues that were inherited. That was keeping me occupied. The second strategy is to study once we had implemented this, what is the L&T score. Study the various businesses and put them in buckets. 'Small and totally non-core' like glass bottles, leather shoes. Please close if you can't sell…Second, 'too small and cannot grow' and heavily dependent on foreign technology. And 'non core but grow to sell'. That's what I did with cement.”

CompensationThe governing theme in the organization is the wellbeing of our employees. The salary and benefits offered are on par with the best available in Construction Industry. It is aimed at not only attracting but also retaining talent.

A few important perquisites & welfare schemes are highlighted below:

Special Facilities for Site employees are providedThe special facilities include subsidized accommodation, part furnishing of accommodation provided, and free transport facilities for work.

Special Medical Insurance SchemeThis scheme is in addition to other medical benefits available to employees. Employees have the option of covering their parents, aged up to 85 years under this scheme.

Retirement Benefits All staff members are covered under Provident Fund and Gratuity Scheme.


Education of employees' children

L&T Institute of Technology, Mumbai is an exclusive facility for L&T employees' children. The Institute conducts four-year industry-integrated diploma courses in Mechanical Engineering and Electronics Engineering. On successful course completion, students are awarded diplomas by the Directorate of Technical Education, Maharashtra to which LTIT is affiliated.

Prize Money for Academic Achievement

To acknowledge and motivate meritorious wards of employees, the Welfare Department of L&T presents cash awards to students who have scored high percentage marks.

Additional Benefits at Managerial LevelsSeveral attractive benefits are available including provision of company car, loans for furniture, housing & children’s higher education and purchase of Personal Computer, membership of Superannuation scheme and reimbursement of expenses on club membership.

SalaryL&T provides basic facilities to all its employees. However it pays less as compared to other competitors in the market. To compensate with this, company provides free breakfast, lunch and snacks to all its work location. It also provides to and fro cab services to all its employees. There are other basic facilities like free guest house on deputation to other locations and vacation houses in almost each and every holiday destination in India with family. We have analysed salary structure for Civil and mechanical engineers on junior and senior level. Further, we did the comparative analysis with its competitors.





Performance Management at Larsen & Toubro

Performance Management is a critical function in any organization as it involves the sophisticated exercise of performance appraisal. However, performance appraisal is only a specific part of performance management. In this section, we discuss the performance management cycle practiced at Larsen & Toubro. All the information provided here are specific to Larsen & Toubro and has been collected via multiple discussions with L&T employees, both incumbent employees as well as previous employees.

Larsen & Toubro has well defined its performance management cycle in its 19 page document titled “Framework for Linking Appraisals with Incentives and Rewards”. Baptized as FAIR, the system is designed to establish a clear linkage between given ratings and rewards. It also identifies the developmental needs of the organization’s employees and lays out a framework to meet them.

Performance Management Cycle

Step I: Performance Planning (Objective Setting)The performance management cycle starts with a Performance Planning Workshop, hereafter referred to as PPW. Each Strategic Business Group hereafter referred to as SBG, will conduct the PPW following the finalization of its annual budget. During the PPW, business objectives of the group for that year have to be cascaded to the lowest possible level.

The appraise and Immediate Supervisor, hereafter referred to as IS, decide on the objectives ensuring that they are in line with the objectives derived at PPW. The objectives have to be specific and measurable.

Performance Oriented Development Plan (PODP)PODP is a development tool for identifying the needs of the employee. It is designed for development of competencies of employees keeping the current role of the appraisee in mind. The sole propose is to enable the employee to enhance his performance level. These competencies can be from Leadership/ Behavioral, Technical/ Functional or even IT.

PODP focuses on developing depth/expertise in a few competencies. The appraise should not select more than 2 competencies for a single year.


Step 2: Mid-Year ReviewAt the end of six months, usually in the month of October, the employee has to do a self-review of his/her performance and see where he stands vis-à-vis the objectives he/she had previously set.

The IS conducts a performance feedback and development discussion with the appraisee. It is specifically instructed in the FAIR manual that the focus during this discussion should be on the development of the employee.

If the mid-year review indicates that the employee is falling short of the projected target in six months, the IS should guide the employee to make up for the shortfall in the next six months.

Step 3: Announcement of Macro View Groups (MVGs)Macro View Groups are announced in April, who presides the appraisal process on behalf of the management. It is taken care that the employees rated by a particular MVG fall under the line of sight of the members of that MVG, within 2 to 3 reporting levels. This is to make sure that MVG members are more keenly aware of the performance of the employees they are rating.

Step 4: Assessment ProcessAt the end of the year, the appraise records a self-review against the objectives set and submits to his/her IS for approval. The IS appraises the performance on a scale of 8, based on achievement vis-à-vis set objectives, the volume of work undertaken, quality of output generated, the speed with which assignments are handled etc. The IS enters comments, which gets forwarded to the Next Supervisor, hereafter referred to as NS.

NS adds his/her comments and forwards to Department Head, hereafter referred to as DH. It is instructed that NS’ comments should also involve remarks on the comments of IS.

The DH arrives at a normalized rating on a scale of 1-8 after considering the relative performance and contribution of the appraise, vis-à-vis his/her peers in the same band, across the department. It is also mentioned that if there is a difference of 2 points or more on the 1-8 scale between the ratings given by DH and that given by IS, then DH and IS discusses the rationale for the difference.

The ratings are then collated and send to the respective MVG. The MVG moderates it to arrive at relativity across the SBG so that it will fall in line with the recommended distribution percentages.


Step 5: Feedback to the employeesWe have already discussed that Larsen & Toubro uses a scale of 1-8 for appraisal. For the purpose of feedback, all appraises in a band who are rated on a 1-8 scale will be clubbed into 4 categories.

Rating 8 - Outstanding Performer

Rating 7 & 6 - Top Performer

Rating 5 & 4 - Vital Contributor

Rating 3 - Needs Improvement

Rating 2 & 1 - Below Average

The IS, while giving feedback based on this scale, will explain the process that was followed while evaluating to the appraisee. The feedback session is again meant for discussions on how to improve the ratings for the next year and how to achieve the same. Based on this discussion, the objectives set for the appraisee may be reset and suitable changes may be made to the eployee’s Performance Oriented Development Plan.

The Performance Management Cycle at Larsen & Toubro thus involves five steps, which we have broadly outlined. The FAIR System also mentions some non-standard variations.

Performance Review in case of Multi-ReportingThe engineering and construction units of L&T often follow matrix organizational structure, in which an employee may be based in a certain Department, but is a member of a Project also. In such case, where an appraise reports functionally to one person and administratively to another, the main responsibility of the performance review is upon the supervisor who is involved in objective setting.

However, it is clearly mentioned that the system recommends that both superiors (functional and administrative) are involved in the entire performance appraisal exercise.

Similarly, on cases of transfer within the organization, transferees will go through the performance appraisal in the departments where they have worked for more than 90 days, it is mentioned. The DH with whom he/she is working at the time of appraisal will decide the final ratings after taking into account the inputs from the employee’s IS and NS in the previous departments.


Figure 1 shows the standard schedule for FAIR and Performance Oriented Development Planning for the financial years 2014 and 2015.

Figure 1: Standard schedule of FAIR planned for FY 2014 and 2015.


Figure 2, in the next page, shows the sample Promotion Letter received by an L&T employee working in the Engineering division. He had been rated as a Vital Contributor for the year 2012-13. The SBU’s name is not mentioned in the title.

Figure 2: Promotion Letter of an L&T employee working in Engineering Divsion



Documents

Group6 HRMProject L&T