Hr Practices and Org Strategies in It Sector

8/3/2019 Hr Practices and Org Strategies in It Sector

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REPORT REPORT

ON

“ HR PRACTICES AND ORGANISATIONAL

STRATEGIES IN IT INDUSTRY ”

Submitted in fulfillment for the award of

Master of Business Administration

(G.B. Technical University, Lucknow)

2009-2011

Submitted To: Submitted By

MR. D.N. PANDEY POOJA SINGH

DIRECTOR GENERAL M.B.A. II Year

ROLL NO- 0920370056

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RAMESHWARAM INSTITUTE OF TECHNOLOGY & MANAGEMENT

Approved by A.I.C.T.E. (Ministry of HRD) & Affiliated to G.B. TechnicalUniversity, Lucknow

Govindpuram Sitapur Road, Lucknow. U.P. INDIA Phone : 0522-2509608 , 2734802, 2734805, 2734838

Fax No.: 0522-2734839, Website:www.ritm.in

CERTIFICATE

This is to certify that Miss pooja singh a student of MBA 4th semester, has

done her research project Report entitled “HR PRACTICES AND

ORGANISATIONAL STRATEGIES IN IT INDUSTRY” embodies the original work

done by her for the partial fulfillment of the award of MBA degree.

I wish her all the best for her future endeavor.

Dr.D.N. Pandey Monika Agarwal ,

Director General HOD

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Declaration

I hereby declare that the following dissertation report titled “ HR Practices and Organisational

Strategies in IT Industry” is an authentic work done by me.

The information and data given in this report are true and to the best of my knowledge. I also

acknowledge that I took the help of both primary and secondary data collection through

various available resources.

Pooja Singh

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PREFACE

M.B.A. is stepping-stone to Management career. In order to achieve practical, positive

and concrete results the theoretical knowledge must be supplemented with exposure to real

environment. MBA combines both theory and its practical applications as its major content of

study in the field of management .Theoretical knowledge without practical knowledge is of

little value. Theoretical studies in classroom are not sufficient to understand the functioning of

marketing concepts. Therefore, it becomes necessary to undergo any project work. Practical

project supplements the theoretical studies i.e., it covers what is left uncovered in the

classroom. It exposes a student to invaluable treasure of experiences. I took my Research

work is a part of our curriculum, which helps us to correlate our theoretical concepts with

practical experiences. The topic that I have taken for project is “.HR PRACTICES AND

ORGANISATIONAL STRATEGIES IN IT INDUSTRY”

Acknowledgement

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Exchange of ideas generates a new object to work in a better way. Whenever a person is

helped and co-operated by other, his heart is bound to pay gratitude and obligation to them.

At the successful completion of our project, we would like to express my sincere gratitude to

all the people without whose support this project would not be completed.

At the onset, I would like to thank my institute “Rameshwaram Institute of Technology &

Managemant, Lucknow” for giving us the opportunity to undergo this research project.

We would also like to acknowledge the constant help and encouragement of our project guide

Mrs. Monika Agarwal, Faculty Guide who has given his valuable suggestions and expert

guidance and support.

We would also like to thank all those who have directly or indirectly helped us in the

preparation of this report.

POOJA SINGH

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TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION

1.1 ROLE OF HR MANAGERS

1.2 LEADERSHIP AND EMPLOYEE INVOLVEMENT.

1.3 INNOVATIVE PRACTICES IN HR

1.4 LINKING PAY TO PERFORMANCE

1.5 CHANGING JOB DESIGN IN IT COMMUNITY

CHAPTER 2: HR IT SCENARIO

2.1 NNOVATION IS THE KEY

2.2 WAR FOR TALENT

2.3 4 R's of HR in IT

2.4 OUT SOURCING

CHAPTER 3:HR PROBLEMS OF INDIAN IT

PROFESSIONALS

3.0 OVERVIEW

3.1 MAIN PROBLEM AREAS3.2 LONG TERM PERSPECTIVE

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CHAPTER 4 :IT SECTOR COMPENSATION METHODS

4.0 EMPLOYEE STOCK OWNWERSHIP PLAN

4.1 STOCK OPTIONS4.2 MERIT PAY

4.3 GAIN SHARING

4.4 PROFIT SHARING

4.5 ASSESSMENT OF PLANS FOR BROAD-BASED EMPLOYEE OWNERSHIP

4.6 EMPLOYEE OWNERSHIP : COMPANIES PAY LESS FOR WORKERS'

COMPENSATION COSTS

4.7 IT COMPANIES WRITE NEW ESOP STORY

4.8 ESOPs HARDLY BENEFICIAL -

4.9 EMPLOYEE STOCK PURCHASE PLANS (ESPPS)

4.10 ESOPS AND CORPORATE GROWTH

CHAPTER 5 :

OBJECTIVES OF STUDY

RESEARCH METHODOLOGY

SURVEY ANALYSIS

CHAPTER 6 : SUMMARY AND CONCLUSION

B I B L I O G R A P H Y

ANNEXURES

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1.0 INTRODUCTION

1.0.1 Success of every business enterprise depends on its human resource. Money,

material and machines are inert factors; but man with his ability to feel, think, conscience and

plan is the most valuable resource. At the same time human elements are most difficult to be

inspired, controlled and motivated. The upcoming competition in India, will demand high

motivational level of its employees.

1.0.2 Growth of an enterprise is vital for the economic development of the country.

This is possible only by maintaining the enthusiasm and motivation of the employees, which

is vital for carrying out the operations in most efficient manner. The most successful

companies, all over the world have designed their business policies to achieve higher

productivity by using potentiality and strength of people.

1.0.3 The basic aim of human policies is the genuine concern for the people. Proper

design of human policies is based on the higher responsibilities, personal and positive

approach in the total perspective of organisational interest. The world's best companies have

established their strength with their people. The employees identify themselves with the

company they are working for. This also help in building up their spirit, morale and espirit-de-cops which becomes strength of the company. The culture of excellence thus nurtured

contribute to growth with stability and continuous improvement in productivity.

1.0.4 Finding the right man for the job and developing him into a valuable resource

is an indispensable requirement of every organisation. Human resources are capable of

enlargement i.e. capable of providing an output that is greater than the sum of the inputs.

Proper recruitment helps the line managers to work most effectively in accomplishing the

primary objective of the enterprise. In order to harness the human energies in the service or

organisational goals, every manager is expected to pay proper attention to recruitment,

selection, training, development activities in an organisation. Proper promotional avenues

must also be created so as to motivate employees to peak performance. Thus, personnel

functions such as manpower planning recruitment, selection and training, when carried out

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properly, would enable the organisation to hire and retain the services of the best brains in the

market.

1.0.5 The human resource management is very crucial in respect of information

technology services than other manufacturing or marketing enterprises. The IT services are

technical in nature and at every stage the human touch is involved. Hence it is well motivated

and devoted manpower which is very much essential for the success of IT industry.

1.1 ROLE OF HR MANAGERS

1.1.1. And Some industry commentators call the Human Resources function the last

bastion of bureaucracy. Traditionally, the role of the Human Resource professional in many

organizations has been to serve as the systematizing, policing arm of executive management.

In this role, the HR professional served executive agendas well, but was frequently viewed as

a road block by much of the rest of the organization. While some need for this role

occasionally remains you would no want every manager putting his own spin on a sexual

harassment policy, as an example—much of the HR role is transforming itself. The role of the

HR manager must parallel the needs of his changing organization. Successful organizationsare becoming more adaptable, resilient, quick to change direction, and customer-centered.

Within this environment, the HR professional, who is considered necessary by line managers,

is a strategic partner, an employee sponsor or advocate, and a change mentor.

1.1.2 Strategic Partner:-In today’s organizations, to guarantee their viability and

ability to contribute, HR managers need to think of themselves as strategic partners. In this

role, the HR person contributes to the development of and the accomplishment of the

organization-wide business plan and objectives. The HR business objectives are established to

support the attainment of the overall plan and objectives. The tactical HR representative is

deeply knowledgeable about the design of work systems in which people succeed and

contribute. This strategic partnership impacts HR services such as the design of work

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positions, hiring; reward, recognition, and strategic pay; performance development and

appraisal systems; career and succession planning; and employee development.

1.1.3 Employee Advocate:-As an employee sponsor or advocate, the HR manager

plays an integral role in organizational success via his knowledge about and advocacy of

people. This advocacy includes expertise in how to create a work environment in which

people will choose to be motivated, contributing, and happy. Fostering effective methods of

goal setting, communication, and empowerment through responsibility build employee

ownership of the enterprise. The HR professional helps establish the organizational culture

and climate in which people have the competency, concern, and commitment to serve

customers well. In this role, the HR manager provides employee development opportunities,

employee assistance programs, gain sharing and profit-sharing strategies, organizationdevelopment interventions, due process approaches to problem solving, and regularly

scheduled communication opportunities.

1.1.5 Change Champion:-The constant evaluation of the effectiveness of the

organization results in the need for the HR professional to frequently champion change. Both

knowledge about and the ability to execute successful change strategies make the HR

professional exceptionally valued. Knowing how to link change to the strategic needs of the

organization will minimize employee dissatisfaction and resistance to change. The HR

professional contributes to the organization by constantly assessing the effectiveness of the

HR function. He also sponsors change in other departments and in work practices. To promote

the overall success of his organization, he champions the identification of the organizational

mission, vision, values, goals, and action plans. Finally, he helps determine the measures that

will tell his organization how well it is succeeding in all of this.

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1.2 LEADERSHIP AND EMPLOYEE INVOLVEMENT.

1.2.1 The main role of leadership was seen as creating a participatory process for

employee involvement, to build collective wisdom. Control has given way to collaboration

and the old paradigm of promoting competition and motivating through incentives shifted to

creating co-operation and oneness amongst people. This is a marked shift to build effective

teams. Research shows that six out of every 10 employees like to work in teams. 87 per cent

of all Fortune 500 companies use parallel teams and about 100 per cent of all companies use

project teams.

1.2.2 Story telling and appreciative enquiry are emerging as a new dimension in

positive motivation. Finding out what's wrong seems to be the trend. In Walt Disney, telling

success stories is one of the important methods used to remind people of greatness and

goodness of the organisation. Leaders in Disney concentrate on quality, values and

involvement. Speaking in the plenary sessions, Tom Peters said, " We have transitioned from

an asset-based economy to a talent-based economy. The new definition of lay-off is untalented

go talented stay. Leaders must realise that talent is equal to brand". His new theory is EVPwhich means "Employee Value Proposition".

1.2.3 Rosabeth Moss Kanter said, " Human beings are good raw material, they

become assets when you train them to increase their knowledge and skills". She added that

only a few organisations really train people to make them a success. Seconding this, Mr Peters

pointed out how most organisations are not serious about developing people. They spend on

an average 26.3 hours per person per year on training. A surgeon, a pilot or an athlete on the

other hand spends 10-15 times more on training.

1.2.4 He also stated that the HRD department should be renamed TDFD (Talent

Development Fanatic Department) and wealth for this new regime will flow from innovation,

not organisation. Quoting Gary Hamel he said, only those employees will succeed who are

"certified radical". Only those companies will succeed who create a cause, not a business.

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Leaders according to him are living individuals, whom people can smell, feel and touch. Their

passion for work must be infectious.

1.2.5 Another aspect of leadership if the decision to introduce fun in the work place.

Research shows that this reduces absenteeism and builds stronger, deeper and longer lasting

relationships. It appears out of every 100 Fortune companies in the last decade, 69 are dead

and only 31 are alive. In a Forbes Magazine study of around 100 companies from '17 to '87,

only 39 companies were found to survive. Management of Change:-Research proves that

many change models don't consider the human experience during change. The overriding

concern seems to be to downsize. It was found that most change processes go through four

fundamental stages.

• People try to resist or deny change

• They adapt, participate in the change

• They attempt to add value

• The culmination or formation of a new status-quo

1.2.6 A number of presentations revealed that leaders who initiate change must do so

with one foot in the future and the other planted in past values. Forgetting tradition must can

devalue existing strengths. The success of a change process depends on the skill of thefacilitator to create a participatory process to enlist the support of people and address the issue

of grief.

1.2.7 E-Learning :- Organisations like Ford Motor, Hewlett Packard, Intel and IBM

are using e-learning to increase the knowledge of their people. Companies like Fordstar even

manage time differences between countries while conducting virtual class rooms, chats,

demos, presentations to communicate new concepts, product details, core values, issues of

governance and corporate communities.

1.2.8 CEO's are talking to their people about new ideas and enlisting their support

through forums and message boards. This is changing the way people behave and work. The

advantages of e-learning are many: It is self-paced, flexible, less expensive, modular and has a

huge reach.

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1.2.9 Universities like Cornell, MIT, Stanford, etc, have started emphasizing e-learning to

attract a worldwide audience. Web-centric universities are becoming the order of the day.

William Taylor, editor and managing partner of the Fast Pace magazine, said, "There is no

going back from back from dotcoms". He was of the opinion that there is a merger taking

place between computers and human beings.

1.3 INNOVATIVE PRACTICES IN HR

1.3.1 The Innovative Practices in Human Resources study uncovered 12 practices

that are reducing HR costs and improving service quality to employees. Key findings from

this research included the need for HR managers to streamline processes, lower overhead

costs, and enable their departments to advance from transactional organizations to strategic partners in the business.

1.3.2 Practices and technologies include:

• Internet and intranet employee services

• Strategic human resources

• Centralized HR departments and call centers

•

360-degree performance appraisals• HRIS systems

• Employee self-service

• Voice response systems (VRUs)

• Resume scanning and Internet recruitment

• Kiosks

• Automated time and attendance systems

• Team policies and development

• Outsourcing

• Business process reengineering (BPR)

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1.4 LINKING PAY TO PERFORMANCE

1.4.1 Most Human Resource professionals are familiar with the concept of strategy.

There is much more concentration and focus today on the strategic outcomes of human

resource activity than ever before. The area of compensation is no exception.

1.4.2 Pay for performance systems are becoming more and more popular as senior

managers reach beyond the use of compensation systems to deliver pay. There is far more

interest in more closely linking the reward mechanisms to the achievement of corporate

objectives. Motivation for superior performance is the goal.

1,4.3 In experience, most organizations will profess to a "pay-for-performance"

philosophy as a keystone of their compensation system. Such a system requires solid

grounding in a clear and documented link between performance and salary increases.

Unfortunately, the link between individual performance and pay is frequently nonexistent -

"merit" pay is a hollow concept in this regard.

1.4.4 A merit system demands that managers be willing to make distinctions in merit

increases based on performance. However, several factors get in the way of this happening.

First, the annual salary change is usually a small percentage. Giving the better performer 2%

more than the cost of living has little motivation or recognition attached to it. Similarly giving

the poor performers 2% less than the cost of living increase is not that much of a penalty. So

many managers don't make that distinction - it is too much hassle. So everybody gets the same

increase.

1.4.5 Second, most performance appraisal systems are after-the-fact appraisals. Inother words, at appraisal time, which is usually toward the end of the year, managers are

required to evaluate the performance of their staff. It means sitting down and trying to

reconstruct what each staff member did, capturing it in a non-threatening way, communicating

the evaluation without a fuss and finally, making a merit increase recommendation. Sound

like a familiar pattern? It is a process that repeats itself year after year.

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1.4.6 The end result is usually a lot of avoidance behavior. Managers avoid the

appraisal process like the plague. Although employees profess to want to "know where they

stand" they often take issue with the appraisal. Besides, they don't listen to the evaluation,

they wait until the penny literally "drops". "What is my rating and how much do I get?" is a

constant theme in merit systems where salary decisions are tied so closely with the appraisal

process.

1.4.7 You might well ask is there any way out of this mess? The answer is

fortunately yes. Organizations that are the best and want to separate themselves from the rest,

are turning away from the merit system and toward an annual incentive system, particularly

for middle and upper management positions but increasingly for teams and individuals lower

down in the organization as well.

1.4.8 They are adopting a system of annual incentive bonuses linked directly to the

achievement of corporate and individual objectives in three specific areas. The areas are

corporate revenues and gains, cost containment and behavioral changes. The first two areas

are quantitative and the third area, which is gaining in importance, is qualitative in nature, and

has a great deal to do with building managerial and individual competence.

1.4.9 Why Is This Transition Occurring? :-Well, there are many challenges facing businesses today and these challenges are driving them to find better ways of linking pay and

performance to the achievement of corporate results..

1.5 CHANGING JOB DESIGN IN IT COMMUNITY

1.5.1 The California State University (CSU) system is being challenged to meetincreasing demands for educational and administrative services through the innovative use of

technology and human resource systems. Even though funding levels for higher education

have been cut in recent years, public/taxpayer expectations and the demands for quality

education, access, service, and accountability have grown. Technology initiatives within the

CSU have resulted in significant advances and improved technical capabilities and efficiency.

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Human resource and organizational systems are also needed to capitalize on and thrive in this

rapidly changing work environment.

1.5.2 In 1991, the CSU began a study to look at alternative work and job design

approaches to meet these challenges. The study focused on the information technology

community and how work processes and activities could be better organized to remove

artificial barriers and improve organizational effectiveness, a process often associated with the

term "reengineering." Secondly, the study focused on developing a job design approach that

could adapt to changing skill requirements and that would promote the continuous acquisition

of skills for knowledge-based employees in information technology. The goal of improved

organizational effectiveness and an orientation towards reengineering and skills guided the

development of the proposed job design approach.

1.5.3 This article begins by identifying several trends that led to the study, then

describes the overall project within the context of an organizational effectiveness equation. A

new job design approach that was proposed as a result of the study is presented, including a

new classification structure and competency dimensions and measures for defining and

evaluating positions. Finally, other supporting systems are described for an integrated human

resources approach. The development phase of the project has been completed, and the CSU

anticipates entering into negotiations with its employee representatives in the near future.

1.5.4 Three trends have had a direct impact on the development of a strategic job

design approach for the information technology community at the CSU: (a) diversification

and convergence of technology, increased demand for educational access and (b) changes in

instructional delivery methods; and changing work place demands and priorities.

1.5.5 The technology demands within higher education lead to a complex and

dynamic computing environment. Academic and administrative computing strategies tend to

be at cross-purposes in terms of defining systems requirements. This has resulted in widely

diverse systems and technology within and across the CSU's twenty campuses. Increasingly,

however, campus systems are becoming more integrated, as data are shared across multiple

platforms on a network "highway" that is linked to external information sources. Networking

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and desktop computing have removed traditional boundaries for information access, research,

and decision-support purposes. Data, voice, and video technologies continue to be combined

in more interactive and user-friendly formats.

1.5.6 In terms of educational trends, many institutions offer distance learning using

various transmission media and are incorporating instructional technology into curriculum

development. Students expect guaranteed access to technology and to research databases, and

this access has become an issue of social responsibility.[1] Library and computing functions

are becoming increasingly interdependent in "an infrastructure of scholarly communication"

within higher education.[2] Workplace trends, as presented in Sustaining Excellence in the

21st Century: A Vision and Strategies for College and University Administration, well

represent the outlook for the CSU. Two key issues are identified:

(1) Economics. There is increasing pressure to constrain administrative costs within the "labor

intensive cost structure" that exists in higher education. Reductions in staff are occurring at

the same time as transaction volume and service expectations are growing.

(2) Decentralization of responsibility. With fewer people and greater access to information,

organizations are moving responsibility for decision-making downward to the point of

service. Work organization is shifting away from job specialization and a task/procedureorientation, to more generalized job responsibilities focused on outcome and greater

participation on cross-functional teams

(3) Another central workplace trend is the "earning and learning" environment described by

the U.S. Department of Labor in its Secretary's Commission on Achieving Necessary Skills

(SCANS) report. To quote Thomas P. Foley, Secretary of the Pennsylvania Department of

Labor and Industry:"We've changed from the idea of "one skill, one job" to the reality of a

range of skills that have to apply to a number of different kinds of professions. More to the

point, workers must possess a skill that they continually upgrade just to keep pace in the

professions they choose."

(4) The influx of new technology and applications has created a demand for continual learning

and adaptation. Due to the CSU's relatively stable workforce, maintaining skills to keep pace

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with changing technology was identified as a critical goal. Knowledge requirements are

expanding to encompass a greater breadth of technologies and subject expertise, as well as

including process-oriented capabilities such as communication and negotiation skills.

1.5.7 The implications of these technological , educational, and workplace trends point

directly to the need to reengineer organizational structures, work design, and processes. Based

on these trends and overall organizational goals, two key objectives were established for a

new job design approach for the CSU: flexibility and skill development. Fundamentally, each

campus needs the flexibility to achieve its goals by distributing work assignments in a way

that optimizes its available skill mix and promotes individual skill development and initiative.

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2.0 HR IT SCENARIO

2.0.1 The web is altering the HRD landscape beyond recognition. The key to

corporate success in the fast changing information era is ‘thinking on your knees’.

2.0.2 What is this thinking on your knees? Normally as the HR person you know

what the situation is and operate from there. A repositioning is required in your decision

process with questions like why, how and when and not just what. At this point you operate

on your knee i.e. with far more dynamism and with a lot more effectiveness than thinking on

your feet.

2.0.3 The employees are like gypsies, on the move all the time. They camp at some

location, enhance their skills, responsibility levels and move on. This is particularly true of the

professional from Software Industry. Opportunities are plenty and the next job opening is only

a mouse click away. The question is not about what else you can do to retain an employee but

it is about making him productive, while he is with you. The value addition will then happen

for both the employee as well as the employer resulting in a win-win situation. This means

that the new strategy calls for the recognition that no employee is expected to be permanentlywith you. Normal tenure in any organisation is likely to be between two to three years.

2.1 INNOVATION IS THE KEY

2.1.1 Information technology and Internet have changed several equations.

Reaching out to the world market place is no more the challenge in achieving corporate

victories. Out thinking the competition at electronic speed is the key to winning corporate

battles. The corporate success is sum total of entrepreneurship practiced by your staff.

2.1.2 The key to employee longevity :-Today’s most successful organisations

recognize that to fuel growth and sustain a competitive advantage, they must make recruiting,

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hiring and retaining top talent, as the organisation’s major thrust area. Competent people

deliver the rest don’t matter. Successful business organisations have no choice but to promote

the performers and let non-performers go.

2.1.2 Organisations recognize that that their ability to gather, manage, analyse,

distribute information and transform themselves into a learning organisation will provide

continuity and ensure for them their leadership role. Systematic organizational learning should

be central corporate philosophy. Learning, must be obviously followed by changes, which

may not necessarily be welcomed by veterans in the organisation. But ‘change is the only

Constant’ for guaranteed success.

2.1.3 Points to note: The following points are important and must be properly

understood.

· People have a great deal of informational knowledge to contribute to the organisation.

· People are responsible

· People desire opportunities to effect change, not just being expected to change.

· Organisations need to create awareness amongst their employees about their vision

and then empower them to act on that vision.

· Establishing a sense of urgency well ahead of the problem surfacing.

· Form inter-functional core group. Encourage the group to work together as a team.

· Plan and create short-term win targets – reward employees and recognise achievers.

· Consolidate improvements through a knowledge base driven system and

institutionalise proven new methodologies.

2.1.5 New Paradigms In HR

· Business plans must consider HR issues, focus and adapt.

· Corporate goals must factor in individual career growth and personal growth must be

tied to corporate growth and vice versa

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2.1.6 Job responsibilities must facilitate personal development and learning should be

institutionalized with well-established knowledge bases. Capturing experience and making it

available ‘corporate wide’ should be a permanent feature of an organizations.

2.2 WAR FOR TALENT

2.2.1 The world’s most popular people resource base seems to be falling short of

numbers to meet its own demands. With added pressures of migration and attrition, can

India’s IT industry achieve its software and services revenue target of $87 billion by 2008?

2.2.2 Country: India. Population: 1 billion-plus. If that sounds like too many people,

think again. Plug in English-speaking and low labor costs, and suddenly we can envision $50-

billion software exports target by the end of this decade. Not impossible, if we consider the

scarcity of IT manpower across the world. Take a look at the US, already with a 10- million-

strong IT workforce, which needs to fill 1.6 million new jobs in the next one year.

2.2.3 Japan is no different and estimates close to a million new jobs. Germany is

looking for 20,000 IT specialists and Italy is seeking 15,000 additional manpower. Their

choice destination—India.

2.2.4 Ironically, the country which has been such a popular people resource for the IT

industry the world over, is struggling with numbers to meet its own demand. To meet the

overall software and services (domestic and export) target of $87 billion by 2008, according to

the Nasscom-McKinsey report, the country will require a minimum of 2.2 million knowledge

workers for its domestic needs. This implies that the present strength, which stands at

12,00,000 (December 2004), has to increase about twice, not just in quantity but in quality aswell.

2.2.5 According to industry estimates, majority of the demand for manpower will be

in the area of IT-enabled services. While Nasscom puts the requirement at 11,00,000, MIT

says IT-enabled services and e-business will need 12,70,000 workers by 2007. Experts insist

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that since this sector does not require very highly skilled manpower, we can easily meet this

demand. "IT-enabled services is a wonderful opportunity for India and for such services you

don’t need highly skilled professionals. You just need smart graduates who can speak English,

all you need to do is train them. For instance, in a call center, they need to be trained on

accents and customer services,"

2.3 4 R’s of HR in IT

Table 2.1

Recruiting

Signing bonus

Finders Fee

Alumni

connections

Non-techs

Students

Interns

Retaining

Retention bonus

Project pay

Reduct FTE/same pay

Telecommuting

Externs

Job sharing

Recognition programs

Retraining

Job rotation

Team assignments

Skill inventories

Competency

development

Certification

Restructuring

Broad job descriptions

Flexible compensation

programs

Flexible jobs

Positive problem-

solving spirit

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2.3.1 OBSTACLES

· Denial (This is and long term)

· Misalignment (Ramping up/Ramping down)

· Timing

· Treating everyone the same

· Navigating the bureaucracy

· Demographics

2.3.2 WHAT OTHERS ARE DOING

· Pooling recruitment efforts

· Increasing freedom at the dept level

(on-the-spot hiring, broadbanding, etc.)

· Recruiting/retaining students

· Identifying tech skills in all jobs/people

(Skill Inventories/assessment)

· Sharing staff

2.3.3 RETENTION FACTORS

1. Quality of boss

2. Direction of department

3. Exposure to new technologies

4. Confidence in the company

5. Job security

6. Challenging work

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7. Location

8. Access to capital resources

9. Caliber of co-workers

10. Empowerment

11. Department leadership

12. Ability to influence department success

2.3.4 TAKING THE LEAD

· See ourselves as problem-solvers

· Develop critical skills and competencies in ourselves, then others

· Build compensation around results not tasks; competencies, not seniority

· Involve everyone. Constantly align and balance resources to meet changing

needs

2.3.5 SEARCH FOR TOMORROW

• Attract, retain and reward the best performers (Encourage all to be the best)

• Increase flexibility

• Reduce fixed costs

• Reduce administrative effort (Simplify, simplify, simplify)

• Utilize the full range of individual talents

2.3.6 THE CRISIS

Ø Shortage of IT workers

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2.3.6 COMPETITION

Ø Compensation stock options, profit sharing, incentives

Ø Alternatives outsourcing

2.3.7 ATTRACTING

Ø Recruiting sign on bonuses

Ø Relocation incentives

Ø Recruiters

Ø Reduced cycle time for hiring

Ø Campus/ job fairs / referrals/ internet

2.3.8 RETAINING

Ø Work environment

Ø Communication forums

Ø Telecommuting

Ø Flexible staffing

Ø Exciting projects

2.3.9 PRACTICES

Ø Focus on value

Ø Financial and human value

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Ø Commitment to core strategy

Ø Linkage between culture an system

Ø Multi dimension communication

Ø Stakeholders partnerships

Ø Mutual support and collaboration ( teamwork)

Ø Risk and innovativeness

Ø Passion

2.3.10 DEVELOPING

Ø Internship programs

Ø Training programs

Ø Career development programs

2.3.11 LONG TERM SOLUTIONS

Ø Education, government, industry partnerships

Ø Curricula: technical skills and career skills ( teamwork and communication)

2.3.12 KEY SUCCESS FACTORS

• Understand people

• What they want

29



• Long term perspective’

• Innovative

• Co ordinated approach

• Career development I

2.4 OUT SOURCING

2.4.1 In the last few years, more and more companies around the world are looking

towards India for outsourcing their software requirements. The changing

business environment is demanding new applications. In particular, the spread

of client-server computing in decentralised organisations involves the

development of applications specific to a user's business.

2.4.2 Outsourcing is becoming a strategy for forward thinking IS managers. It is no

longer just a means for reducing costs, but a tool for adding value to business.

It enables organisations to concentrate on their core business, carry out

business re-engineering and provide information that is valid, timely and

adequate to assist decision making at the management level and quality and

cost control at the middle and lower levels.

2.4.3 As a result, outsourcing has gradually grown beyond the traditional idea of

"having a third party running the data centre". It has come to mean, "any use of

an outside contractor to replace or extend in-house resources".

2.4.4 Outsourcing is closely linked with corporate strategy, since it must support the

organisation's major initiative in using IS. It should enhance and add value to

the business. A rule of thumb to start and gain experience is, "if IS is low cost

and of high value addition, keep it within the organisation, i.e. in-source. If IS

is high cost and of low value addition, consider outsourcing".

2.4.5 In the past few years, whenever organisations around the world have outsourced

to India, the Indian software companies have substantially helped to cut costs

in software development projects or MIS environments, while maintaining

30





32



3.0 OVERVIEW OF PROBLEMS

3.0.1 The IT revolution is sweeping the world, particularly the western world in for

nearly a decade now, creating enormous employment opportunities in this area.

India joined the bandwagon well in time and smoothly though it is yet to

entrench itself strongly in terms of corporate identity and significant share of

global revenues in IT.

3.0.2 Our main contribution seems to be in the less glamorous areas of value

addition, maintenance, Y2K, quality assurance and customisation of existing

packages. The sudden eruption of opportunities in this area left no time for

development of human resources in a planned manner and also software

solutions which tended to be more ad hoc than being assured of quality.

3.0.3 With the enormous opportunities for employment, entrepreneurship with low

capital investment and low gestation period for turning profitable, higher

returns per employee and large return on investment/EPS, sustained

encouragement from government, a very large number of organisations - large,

medium, small - have been established. Correspondingly a large number of

training establishments and cyber cafes have come up, most of which are in the

cities and towns to cash in on the enthusiasm of the urban middle class.

3.0.4 A number of higher level courses have also been started mainly through private

organisations besides the existing government (State/Central), university and

autonomous institutions. There are about 500 private engineering colleges besides IITs, RECs, universities, colleges offering courses such as MCA,

M.Sc., M.E., and M.Tech. In view of the apparent demand that appears to be

exaggerated, most of the programmes (barring a few by government

institutions and IITs) are very expensive, almost beyond the reach of a middle-

class student. Yet candidates and their parents strain themselves financially to

33



pursue the courses hoping to get an attractive job (financially) which remains a

mirage by and large. The problems are further compounded by a lack of proper

teaching faculty in most colleges and franchises.

3.0.5 Except in well-established institutions, job-placements are poor. Even those

trained in reputed institutions find their jobs monotonous, leading to

depression. Jobs offered by the software industry have demonstrated the above

factors as they are able to carry out the projects with persons of any

background and levels of attainment, but with a few months training either

prior to employment or a short training during probation.

3.0.6 Despite these deficiencies, students prefer software jobs mainly with an eye on

the pay-package and urban locations. The employee- retention period even in good companies

has been shrinking and is found to be three to six months. The companies also try to devise

methods to make their employees almost captive with surety bonds, bank guarantees,

employee's stock option (ESOP) and housing facilities, among others. The employees, for

their part, resort to innovative methods to wriggle out of their contracts. There does not appear

to be any respectable ethics even among companies as well as the employees in this type of

free for all market. To go abroad and become rich has become the motive of most of the

employees even if the job does not offer any intellectual satisfaction. The manufacturing and

hard-core engineering sector has also shrunk in terms of job opportunities and attractiveness.

3.0.7 Even those software professionals, who are offered good financial packages,

spend their earnings on expensive lifestyles, vehicles, and credit card syndrome

and find themselves disenchanted on all fronts including the intellectual front.

It should also be a cause for concern to project beyond the present software

boom as to what happens to all these if the opportunities decline. The scenario

appears to be quite fluid with a predominant western bias in all the activities

concerning software profession with scores of Indian boys getting lured and

sucked into the vortices created by the opportunities in this area

34



3.1 MAIN PROBLEM AREAS

3.1.1 The significant problem areas which may be contributing to the present

scenario and can be addressed can be identified as given in the succeeding

paragraphs.

3.1.2 Recruitment process :-Without going into the deficiencies of the present

practices, the following suggestions are made to improve the process in terms

of efficiency, availability of manpower and equity to all the aspirants

irrespective of the fact where they got educated. The various steps of the

proposed approach are as follows:

i. Aptitude tests could be conducted by reputed institutes like IITs/ private

organizations/HR agencies for prospective professionals preferably ``on-line''

like GRE, GMAT etc. or physically at regular intervals and scores are given. If

it is no on-line, the periodicity can be a month or two and the validity can be

for an year or so which can also be fixed based on general agreement.

ii. Based on scores and preferences of the candidates (career counselling),

companies can ask for a video clip for subsequent interview if required.

Interviews can also be conducted simultaneously either physically or over the

phone or by video conference and selections completed.

iii. Once selected and the candidate joins the organizations, all member

organizations should adopt a code of conduct such that the candidates stays atleast for a period of one year.

iv. Small companies can form some kind of a cooperative society wherein

software professionals' services can be tapped and steer clear and manpower

shortage (less than critical mass levels).

35



v. The selection can be conditional that he acquires certified skills in the required

areas either through training in house or through approved training agencies

and establishments. This will also avoid the unnecessary expenses for (which

are high) the candidates, who are presently spending lot of money with a hope

of employment. This will also ensure that there is a focus on proper training

and optimal deployment of time, effort and finances.

vi. The selection process can thus be continuous and commensurate with the

requirements thus avoiding idle inventory.

vii. There can be general norms of pay packages depending on the reputation of the

companies (classifying them as A, B, C, D by any reputed management

institute like IIM etc.) with the ratio of maximum pay within reasonable and

realistic limits.

3.1.2 Post employment care:- The companies/organizations should take adequate

interest in the career development of the employee by suitable HRD

approaches which should include the following:

i. Opportunities for creative work in the first phase particularly for those who are

bright, and have an aptitude and come with a good pedigree say from IITs.

ii. Opportunities to lessen the monotony and improve interpersonal relationship

and mixing and group activities.

iii. Periodic rotation of the rolls and jobs if possible.

iv. Opportunities for retraining and upgrading the skills.

v. Conducting effective career development programs regularly.

vi. Incentives like ESOP, lucrative assignments and challenging projects,

opportunities of higher education.

36



vii. Make the employee more versatile with wider perspective and flexible for easy

deployment in areas needing strengthening.

viii. Encouraging simplicity and excellence.

3.1.3 Advantages:- The suggested processes in 4 and 5 above can be expected to

have the following significant advantages:

i. Cost effective and efficient process.

ii. Proper deployment of skills optimally.

iii. Idle employment can be minimized.

iv. Retention can be improved.

v. Particularly useful for small firms which can also operate in the cooperative

society mode.

vi. The candidate's skills are moulded to suit the needs of the job and need not

waste time, money and efforts.

vii. Equitable opportunities to all aspirants irrespective of location, pedigree and

background.

viii. Reduces the mushrooms of training shops with inadequate faculty.

ix. This may also give the manufacturing and core engineering sector jobs

reasonable chance to attract willing and bright candidates.

x. The process is ideally suited for candidates to plan their careers with adequate

preparation in core areas.

xi. The process also enables a realistic assessments of needs and demands

regularly and meeting them even at short notices.

37



xii. The aptitude tests can become richer and more representative over a few years

and as the question bank becomes larger and random on-line questioning can

be introduced which is more objective like GRE, GMAT

3.2 LONG TERM PERSPECTIVE

3.2.1 These tests can be conducted at the end of 10+2 level or B.Sc. level also and

train the candidate with or without stipend in courses where he could get

admission for his degree. This will help in decreasing the pressure on

engineering education as otherwise the skills acquired by the candidate at a

great cost in branches other than computer sciences are wasted and lost for

good if employed by the software industry.

3.2.2 It may be a good idea to have a National Test for Software Talent similar to

science talent test which can be sponsored by NASSCOM and such other

interested groups

3.2.3 The idea of forming a cooperative society by small firms may prove to be

beneficial as the facilities and manpower can be shared optimally. While

otherwise they may face the problems of lack of adequate manpower (belowthe critical mass level) because of less attractive pay and perks they are able to

offer.

3.2.4 Renowned organizations like IITs, IIMs and MNCs, and can play a catalytic

roll in streamlining the processes for an efficient HRD in this vital area of

software manpower which is a national resource.

38



39



4.0 EMPLOYEE STOCK OWNWERSHIP PLAN

4.0.1 Employee Stock Ownership Plan(ESOP): is a defined contribution

employee benefit plan that allows employees to become owners of stock in the

company they work for.

4.0.2 How does ESOP work?

1. The ESOP operates through a trust, setup by the company, that accepts

tax deductible contributions from the company to purchase company stock

2. The contributions made by the company are distributed to individual

employee accounts within the trust.

3. The amount of stock each individual receives may vary according to pre-

established formulas based on salary, service, or position.

4. The employees may ‘cash out’ after vesting in the program or when they

leave the company. The amount they may cash out may depend on the vesting

requirements.

4.1 STOCK OPTIONS

4.1.1 Stock Options: The ‘right’ to purchase stock at a given price at some time in

the future. Stock Options come in two types:

1. Incentive stock options (ISOs) in which the employee is able to defer

taxation until the shares bought with the option are sold. The company does not

receive a tax deduction for this type of option.

2. Nonqualified stock options (NSOs) in which the employee must pay

income tax on the 'spread' between the value of the stock and the amount paid

for the option. The company may receive a tax deduction on the 'spread'.

40



4.1.2 How do Stock options work? An option is created that specifies that the owner

of the option may 'exercise' the 'right' to purchase a company’s stock at a

certain price (the 'grant' price) by a certain (expiration) date in the future.

Usually the price of the option (the 'grant' price) is set to the market price of the

stock at the time the option was sold. If the underlying stock increases in value,

the option becomes more valuable. If the underlying stock decreases below the

'grant' price or stays the same in value as the 'grant' price, then the option

becomes worthless.

4.2 MERIT PAY

4.2.1 Merit Pay is an incentive plan implemented on an institutional wide basis to giveall employees an equal opportunity for consideration, regardless of funding

source. The merit increase program is implemented when funds are designated

for that purpose by the institution's administration, dependent upon the

availability of funds and other constraints. .

4.2.2 Advantages OF Merit Pay :-

· Allows the employer to differentiate pay given to high performers.

· Allows a differentiation between individual and company performance.

· Allows the employer to satisfactorily reward an employee for

accomplishing a task that might not be repeated (such as implementation of

new systems).

4.3 GAIN SHARING

4.3.1 Gainsharing is a technique that compensates workers based on improvements in

the company's productivity.

4.3.2 How does Gainsharing work? A Company shares productivity gains with the

workforce. Workers voluntarily participate in management to accept

41



responsibility for major reforms. This type of pay is based on factors directly

under a worker’s control (i.e., productivity or costs). Gains are measured and

distributions are made frequently through a predetermined formula. Because

this pay is only implemented when gains are achieved, gainsharing plans do

not adversely affect company costs.

4.3.2 What are the 'Gains' that are measured?

· Increases in production with equal or less effort.

· Equal levels of production with less effort.

4.3.3 What are examples of Gainsharing formulas?

· Calculate gain in hours: The actual hours worked minus the expected

hours (for the given level of output) equals the gain in hours.

4.4 PROFIT SHARING

4.4.1 Profit Sharing is an incentive based compensation program to award employees

a percentage of the company's profits.

4.4.2 How does Profit sharing work? The company contributes a portion

of its pre-tax profits to a pool that will be distributed among eligible employees.

The amount distributed to each employee may be weighted by the employee's

base salary so that employees with higher base salaries receive a slightly higher

amount of the shared pool of profits. Generally this is done on an annual basis

4.4.3 How to Choose an Employee Stock Plan for Your Company:-

Many companies we encounter have a pretty good idea of what kind of

employee ownership plan they want to use, usually based on specific needs and

goals. However, sometimes they might be better served by another kind of

stock plan. And yet others say they'd like to have an employee ownership plan,

42



but they're not sure what it might be. This article will start you down the path to

choosing and implementing the plan or plans best suited to your company.

4.5 ASSESSMENT OF PLANS FOR BROAD-BASED

EMPLOYEE OWNERSHIP

4.5.1 Let us begin by quickly reviewing the main possibilities for broad-based

employee ownership. A "broad-based" plan is one in which most or all

employees can participate.

4.5.2 An employee stock ownership plan (ESOP) is a type of tax-qualified

employee benefit plan in which most or all of the assets are invested in stock of the employer. Like profit sharing and 401(k) plans, which are governed by

many of the same laws, an ESOP generally must include at least all full-time

employees meeting certain age and service requirements. Employees do not

actually buy shares in an ESOP. Instead, the company contributes its own

shares to the plan, contributes cash to buy its own stock (often from an existing

owner), or, most commonly, has the plan borrow money to buy stock, with the

company repaying the loan. All of these uses have significant tax benefits for

the company, the employees, and the sellers. Employees gradually vest in their

accounts and receive their benefits when they leave the company (although

there may be distributions prior to that). Over 8 million employees in over

11,000 companies, mostly closely held, participate in ESOPs.

4.5.3 A stock option plan grants employees the right to buy company stock at

a specified price during a specified period once the option has vested. So if an

employee gets an option on 100 shares at $10 and the stock price goes up to

$20, the employee can "exercise" the option and buy those 100 shares at $10

each, sell them on the market for $20 each, and pocket the difference. But if

the stock price never rises above the option price, the employee will simply not

exercise the option. Stock options can be given to as few or as few employees

43



as you wish. Perhaps 7 to 10 million or more employees in thousands of

companies, both public and private, presently hold stock options.

4.5.4 An employee stock purchase plan (ESPP) is a little like a stock option

plan. It gives employees the chance to buy stock, usually through payroll

deductions over a 3- to 27-month "offering period." The price is usually

discounted up to 15% from the market price. Frequently, employees can

choose to buy stock at a discount from the lower of the price either at the

beginning or the end of the ESPP offering period, which can increase the

discount still further. As with a stock option, after acquiring the stock the

employee can sell it for a quick profit or hold onto it for awhile. Unlike stock

options, the discounted price built into most ESPPs means that employees can profit even if the stock price has gone down since the grant date. Companies

usually set up ESPPs as tax-qualified "Section 423" plans, which means that

almost all full-time employees with 2 years or more of service must be allowed

to participate (although in practice, many choose not to). Many millions of

employees, almost always in public companies, are in ESPPs.

4.5.5 Section 401(k) plan is a retirement plan that, unlike an ESOP, is designed

to provide the employee with a diversified portfolio of investments. Like an

ESOP, however, a 401(k) plan is a tax-qualified plan that generally must

include all full-time employees meeting age and service requirements. The

employees can choose among several or more choices for investments, and the

company may make a matching contribution. Perhaps several million

employees in a few thousand companies participate in plans with a heavy

company stock component; company stock may be an investment choice for

the employees and/or the means by which the company makes matching

contributions. 401(k) plans may be combined with ESOPs (these are called

"KSOPs"), where the company match is an ESOP contribution.

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4.6 EMPLOYEE OWNERSHIP : COMPANIES PAY

LESS FOR WORKERS' COMPENSATION COSTS

4.6.1 A study has found that employee ownership companies have lower workers'compensation insurance rates than comparable non-employee ownership firms.

Leslie Hakala authored the study. She began the project as an NCEO research

intern and completed it for a thesis requirement at Harvard University. The

study was unable to ascribe a specific causal relationship between employee

ownership and lower workers' compensation costs, but it did find that these

costs declined as employee ownership plans matured.

45



4..6.2 Background:- In 1989, the last year for which we have data, U.S. employers

spent over $48 billion on workers' compensation costs. These costs grew at

16.9% per year in the mid-1980s. Cost increases were partly attributable to

increased benefits mandated by state workers' compensation insurance reforms.

At the same time, as employer provided health care coverage has declined,

more employees sought to cover health problems under workers'

compensation. Many people believe there has been increased fraud as well.

4.6.3 Workers' compensation programs vary from state to state, but in

most programs, insurers attempt to provide employers with an incentive to limit

safety problems by developing an experience rating. The ratings compare an

individual firm's experience with other firms of its type. If the rating is better

than average, insurance premiums will be lower; if it is worse, they will go up.

4.6.4 In this study, we looked only at California firms. In California,

employers are assigned a "manual rate," an insurance rate expressed as a

percentage of every $100 of payroll. Rates are assigned to all companies based

on their industry classification. These rates are then adjusted for companies with

a premium above a certain level according to their actual experience. This means

smaller and less risky firms are not assigned an experience modification rating.The experience modification rate is set for each year based on three years of past

experience, excluding the most recent year (because data are generally not yet

available). The experience modification rate is determined by looking at actual

experience modified by a size weighting factor. For larger firms, the adjustment

may be very small; for smaller firms, actual experience is given a lower weight

because a single incident can skew results dramatically. This weighted

experience rating now becomes the "experience modification" figure.

4.6.4 Theoretically, the average experience modification factor for any

business classification should be 100%. A company with a good record would

have a rating under 100%; a bad record would rate higher. These numbers are

46



then multiplied by the manual rate to set the premium. In practice, the average

rating is somewhat under 100.

4.7 IT COMPANIES WRITE NEW ESOP STORY

4.7.1 Will I ever get to exercise my stock options? It's the one question

haunting IT industry professionals sitting on piles of employee stock options.

All those who happily grabbed at ESOP's issued by their companies last year,

have now been left holding pieces of paper that are, in some cases, worth a

fraction of the price at which employees brought into them. Except for a few

who have benefitted from older schemes like Infosys 1994 scheme, the great

ESOPs dream is turning out to be a nightmare. Last year, if you were givenESOPs in an IT company, your friends, neighbours and everyone else went up

like a blimp, companies issued ESOPs in cartloads. And employees brought

into them, even at the higher prices that the grants came from.

4.7.2 According to a study carried out by Nasscom , there were more than

10,000 IT staff last year holding around 18 million ESOPs valued at roughly Rs

12,000 crore($3 billion) at February '00 prices. But all this was merely on paper.

4.7.3 A year later, the situation's something like this. Employees who were

given ESOPs at the prices prevailing during the IT boom, had to sit back and

watch their share prices hit the roof while they waited out the lock-in period.

Now, they can exercise their options that is sell them, and pocket the difference

between the exercise price at the time of the grant, and the current market price.

It's resulted in a situation where employees have been left holding NIIT options

which they would have to exercise at a price of Rs 1,593 or Silverline options,

which they would have to exercise at a price of $25. At VisualSoft, for instance,

all employees who were granted options have returned them to the company.

Consequently, the company has terminated the ESOP scheme.

47



4.7.4 Theoretically, an employee who exercised his option now, would have

to buy at the exercise price, sell at the current market price, and pay out the

difference.

4.8 ESOPs HARDLY BENEFICIAL -

4.8.1 At the height of the IT euphoria in the markets, those employees

saw their company's scrips scaling new heights, they could not benefit as the

ESOP's had 1-2 year lock-in periods, and could not be sold. The lock-in period,

also known as the vesting period in industry jargon, in the period during which

the employee cannot convert his or her option into shares. To make matters

worse, some companies has specified that the option had to be exercised, that isconverted into shares, within a specified time frame after the lockin period

expired. For instance, this was one year in the case of Silverline, and 10 in the

case of Aptech.

Table 4.1

ESOP IN INDIAN CONTEXT

Recent ESOPs

No of

Shares

(Lakh)

Plan Exercise Plans

(Rs)

Vesting

Period

(Yrs)

Current Price

(Rs)

NIIT 18.1 Aug '04 1,593 1 162

48



Silverline 10.0 Nov '04 425 1.5-3.5 41

Patni 5.5 Dec '04 245* 1 54

HCL Infosys 30.2 Aug '04 289 NA 72

SSI 1.5 Sep '04 555 3 164

Wipro 3.5 Oct '04 2,397 1-2 1,485

Infosys 19.6 Oct '04 6,249 5 3,532VisualSoft 0.2 Aug '04 NA 1 116

Polaris 8.5 Aug '04 480 5 120

4.9 EMPLOYEE STOCK PURCHASE PLANS (ESPPS)

4.9.1 Employee stock purchase plans (ESPPs) include both tax-qualified "423

plans," which about 2,400 companies offer, and nonqualified plans, whichabout 1,500 companies offer. Our estimates are based on data from ShareData's

Equity Compensation Trends in America (1991), Hewitt Associates' On

Employee Stock Ownership (1996), Hewitt Associates' Survey Findings:

Employee Stock Purchase Plans (1998), and the National Association for Stock

Plan Professionals' Stock Plan Design and Administration Survey (1998),

especially the more recent studies. To estimate the number of employees

covered under the plans, we took the total number of companies offering plans,

multiplied those numbers by the average number of employees in the

companies (13,207 for 423 plans and 17,790 for nonqualified plans), and

multiplied that number by the average percentage of participation in the plans

(34% for 423 plans and 17% for nonqualified ESPPs). Almost all companies

with ESPPs are public.

4.9.2 Multiple Plans: Many companies offer multiple e plans, and many

employees participate in more than one plan. For example, many ESPP

participants are also in 401(k), stock option, or other equity compensation

plans. Hence, the total number of participants in all these plans is definitely not

the total of the numbers in the "Number of participants" column.

49



4.10 ESOPS AND CORPORATE GROWTH

4.10.1. A 2000 study by Joseph Blasi and Douglas Kruse at Rutgers Univerity

found that ESOP companies grow 2.3% to 2.4% faster than would have been

expected without an ESOP for sales, employment, and sales per employee. The

study looked at all ESOP plans set up between 1988 and 1994 for which data

was available. A 1987 NCEO study of 45 ESOP and 225 non-ESOP companies

found that companies that combine employee ownership with a participative

management style grow 8% to 11% per year faster than they would otherwise

have been expected to grow based on how they had performed before these

plans.

4.10.2 Subsequent studies by the General Accounting Office and by academics in

Washington State and New York found the same relationship. A 1999 study for

Hewitt Associates by Hamid Mehran of Northwestern University found that

the returns on assets for 382 publicly traded ESOP companies was 2.7% per

year greater than what a model of their predicted performance would have

been.

4.10.3 Studies on participative management alone find a small positive impact on

performance, but not nearly enough to explain the synergy between ownershipand participation these other studies have found.

50



OBJECTIVES OF THE STUDY

Primary Objective:

51



• To know the various HR implications in IT INDUSTRY.

Secondary Objective:

• To enlist emerging HR trends in Indian IT Industry.

• To review literature and research done in this area.

• To find out lacking areas regarding the HRD in IT sector.

• To measure the perceptions of IT sector employees in respect of application of HRD in

their organisation.

• To suggest the measures to fill the gaps and improve motivation level of employees and

HR management in IT industry.

NEED FOR THE TOPIC

52



Information Technology has emerged as a key dominant sector of the Indian economy.

Various agencies have studied the issue of developing Human Resources for the IT sector. It

is just about 60 years that Information Technology has come to stay as a profession.We need

to develop quality human resources in greater numbers, in order to sustain the growth of the

IT industry. The need becomes more acute in the context of globalization and competition

from other emerging economies. The problem is quite complex since it involves multiple

stakeholders with varying needs and constraints.

Emerging HR trends of Indian It industry are quite different from the old economy industry.

India is considered one of Super Power in Information Technology and allied fields. Majority

of world leaders in IT sector are outsourcing their requirements from Indian IT Industry and

recruiting Indian IT professionals.HR managers in Indian IT Industry today keep the sensitive

nature of IT professionals and state of greater opportunities outside in mind for devising HR

policies for their organisations

Hence we have conducted a detailed study on how IT industry has become aware of the New

HR trends and applying those in their respective companies which accelerates India Inc.’s

journey toward IT supremacy. In order to measure the employees’ perceptions of emerging

HR trends in different IT organisation, the survey was undertaken. The survey was based on

structured questionnaire. The questionnaire was mainly based on objective type close-ended

question, but few open ended questions were also included.

RESEARCH METHODOLOGY

53



1.7.1 The study was exploratory in nature. All published and unpublished available

on the subject matter was consulted. Interview and discussions were held with the various

executive/ Managers/ staff employed in IT sector. The HRD functions/ activities being

undertaken in different IT organisations were also studied. Primary and secondary data

available with these organisations was also used for this project study.

1.7.2 In order to measure the employees perceptions of emerging HR trends in

different IT organisation, the survey was undertaken. The survey was based on structured

questionnaire. The questionnaire was mainly based on objective type close-ended question,

but few open ended questions were also included.

1.7.3 Firstly, the pilot survey on ten randomly selected respondents was undertaken.

Then the questionnaire was modified accordingly, if desired.

1.7.4 The final questionnaire was administered in person to the extent possible and

through mail if needed. The 100 respondents were selected among the executives and staff

working in various IT organizations. The convenient random sampling technique was used for

the selection of the respondents.

1.7.5 Finally, the results of the survey has been presented in Tabular form, analyzed

and interpreted to meet the required needs of this project study and presented in Report form.

54



SURVEY ANALYSIS

5.0 SURVEY BACKGROUND

5.0.1 HR management gets best out of its employees to meet the organisation's goals.

And employees are the best judge of the HR policies of any organisations. IT

sector is fastly growing industry in India and HR requirements of Indian ITIndustry are quit different from traditional industrial sectors.., A major

characteristic of modern socio-economic development has been the

increasingly dominant role of service sector .and IT belongs to service sector.

So, its HR needs must also be properly identified..

5.0.2 Indian IT sector is contributing a large in employment and foreign exchange.

A developing country like India can ill afford continued conflict ridden; rigid

and litigation oriented Industrial Relations. What employees perceive about theemerging HR trends of the IT organisations has been measured.

5.0.3 To measure the success and failures of emerging HR trends of Indian IT

Industry a structured questionnaire was designed for this purpose. The

questionnaire included both open ended and close ended questions. The

questionnaire used is placed at Appendix "I". The procedure adopted for

data collection was interview with the employees randomly selected from

IT organisations to the extent possible and also through mail. . The responses

given by the respondents were recorded on the questionnaire. The views

expressed by the respondents has been analysed in the succeeding paragraphs.

About 100 respondents were selected by convenient random sampling

technique.

55



5.1 RESPONDENTS PROFILE

5.1.1 The main features of the employees randomly selected sex-wise,

education-wise and type of functions wise has been provided here in the

succeeding paras. The 54 per cent of the respondents were Male and 46 per

cent of the respondents were Female

5.1.2 IT industry requires higher level of education standards, both non-

technical and technical. The education qualification wise distribution of the

employees who agreed for responding to our questionnaire has been given

below in Table 5.1.

Table 5.1

RESPONDENTS PROFILE - EDUCATION-WISE

(%age)

Respondents' Qualification Percentage Of Respondents

Non-Tech Graduate and Below 11%

Non-Tech Post Graduate 23%

B.Tech/ BCA etc. 34%

M.Tech/MCA Etc. 32%

TOTAL 100%

56



5.1.3 In the similar fashion the job wise profile of the respondents has also been

compiled and the same is tabulated below in the Figure 5.2. As per Figure theIT industry is dominated by the software professionals And next computer

hardware and marketing services of IT are sharing the other half. Only 13

percent are working in HR and Personnel Management area. Hence, the HR

needs of IT industry must look after the software professionals at priority.

5.2 WHETHER HR NEEDS OF INDIAN IT INDUSTRY ARE

DIFFERENT

5.2.1 Through the Question No.2 of the questionnaire the respondents were asked

to comment whether the HR needs of Indian IT industry are different from traditional

HR Management systems. It was a direct question in Yes/NO/No comments format

and IT professionals selected for survey were asked to tick one of the choices as

mentioned. The responses have been tabulated in Table 5.3. The majority of

respondents (69%) view that HR needs of IT industry are different from old economy

sector and HR managers in IT industry has to keep this into mind. Being highly

educated employees are very sensitive in pride and behaviour.

57



TABLE-5.3

Emerging hr trends of indian it industry are different

(%age)

Respondents' Observation Percentage Of

Respondents

Yes 69%

No 23

Can not say 08%TOTAL 100%

5.3 EFFECT OF NEW COMPENSATION METHODS

5.3.1 The IT industry has been devising newer compensation methods like Profit

Sharing/ Stock Options etc. to increase employee welfare and retentively.

Whether these new compensation techniques are positively effecting or not

was the key point in our next question. As per Figure-5.4, 46% of the

employees opined that newer compensation methods has a positive effect in IT

industry while 19% said that it has a negative effect on employee welfare.

26% view that it has no major effect and 9 percent has replied in CAN NOT

SAY. . In the initial stages when IT Industry was sunrise it was mostly

welcomed by the employees and when IT industry share prices has gone down.

It has a negative effect..

58



5.4 WHETHER IT INDUSTRY HAS POSITIVE ATTITUDE TOWARDS ITS

EMPLOYEES

5.4.1 In has been found that in many organisations the management ignores the

employees welfare for their profit sake and does not give proper attention

towards employees career and prospects. What is the state of affairs in IT

Industry in India was quizzed from our valued learned respondents. The

respondents views are given below Table 5.5. The results are mixed one.

While 48% of the respondents' replied in negative and 43% gave a positive

reply. So, there is a profit motive operating more than employees proper

welfare management in Indian IT Industry.

TABLE - 5.4

WHETHER IT INDUSTRY HAS A POSITIVE ATTITUDE TOWARDS ITS

EMPLOYEES

(%age)

Respondents'

Observation

Percentage Of

Respondents

Yes 43%

No 48%

No comments 09%

TOTAL 100%

59



5.5 STATE OF GRIEVANCES HANDLING IN INDIAN IT INDUSTRY

5.5.1 The respondents responses to the status of grievances handling mechanism was

through an indirect approach. In the Question No. 5 of the questionnaire therespondents were to comment upon the positive hypothesis that

grievance handling is done properly in the IT organisation. The five choices

provided were strongly agree, agree, no comments, disagree and strongly

disagree. The data collected is given below in Table-5.6.

TABLE - 5.6

GRIEVANCE HANDLING IN INDIAN IT INDUSTRY IS PROPER

(%age)

Respondents'

Observation

Percentage Of

Respondents

Strongly Agree 12%

Agree 39%

No Comments 14%

Disagree 26%

Strongly Disagree 09%

TOTAL 100%

5.5.2 Only 12 respondents strongly agree to the statement and similarly a small number

of 9 respondents strongly disagreed with this. Only 14 percent have nothing tocomment. 39 percent agree that The grievance handling IN Indian IT industry

is done properly and remaining 26 percent disagree with it.

5.6 TOP MANAGEMENT AWARENESS

60



5.6.1 Whether top management awareness about working conditions of the employees

and state of working conditions in the organisation was measured through

next question. Table-5.7 shows the response. 65% of the respondents view

that the top management's are not aware or little aware about the

employees working conditions in the IT organisations Only 6 percent

vouched that top management is very well aware about the nature of

working conditions and 18 percent say "Much Aware".

Table 5.7

TOP MANAGEMENT AWARENESS

(%age)

Respondents'

Observation

Percentage Of

Respondents

Not at all aware 20%

Very little aware 45%

Some what aware 11%Much aware 18%

Very much aware 06%

TOTAL 100%

5.7 EMPLOYEE EMPLOYER RELATIONSHIP IN IT INDUSTRY

5.7.1 Cordial employee employer relationship is very essential in the

upcoming highly competitive economy. The state of employee employer

relationship in Indian IT Industry was measured through the next question.

The state of employee-employer relationship is not very encouraging.

61



Table 5.8

STATE OF EMPLOYEE EMPLOYER RELATIONSHIP IN IT

INDUSTRY

(%age)

Respondents Grading Percentage Of

Respondents

Excellent 14%

Very Good 44%

Satisfactory 28%

Poor 14%

TOTAL 100%

5.7.2 58 percent of the respondents has graded it very good and above. While 42

percent consider it satisfactory and below. The employment of modern

technology requires more positive and effective relationship between

management and the employees. Indian IT Industry has very effective

employee employer relationship.

5.8 EMPLOYEES RETENTIVITY IN INDIAN IT INDUSTRY

5.8.1 The most of the employees of IT sector are highly educated and sensitive in nature.

Moreover, the opportunities outside are very attractive, Whether Indian IT

Industry is able to retain its employees was the next opinion query from the

randomly selected IT industry employees. Their opinions in this regard are

presented below in "YES/NO/NO COMMENTS" format in the Figure 5.9.

5.8.2 61% of the employees view that Indian IT companies are unable to retain its

employees due to most attractive avenues outside. Only 23% viewed that they

are able to retain the employees.

62



5.9 HOW TO INCREASE EMPLOYEES RETENTIVITY IN INDIAN IT

INDUSTRY

5.9.1 As has been observed in general and also concluded in previous paras that the IT

sector employees in India are very quickly jumping the employment. So, what

the employers has to do for retaining its professionals was asked from the

respondents. Few suggestions were listed and one column was open ended to

express their any other suggestion. The Table 5.10 list outs all the suggestions.

I

TABLE- 5.10

SUGGESTIONS FOR INCREASE RETENTIVITY

IN INDIAN IT INDUSTRY

Respondents' Suggestions Percentage Of Respondents

Increase wages to international levels 22%

Increase foreign postings 36%Increase profit sharing 10%

More promotions 11%

Others 21%

TOTAL 100%

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5.9.2 A 22% of the respondents has suggested to increase the wages to internationallevel to increase employees retentively in Indian IT industry. 36% want more

foreign postings, 10% suggest increase profit sharing and 11% suggested

more promotions. 21% of the other suggestions included lateral induction from

lower the institutes and better HR management.

5.10 APPLICABILITY OF EXISTING INDIAN LABOUR LAWS IN INDIAN

IT INDUSTRY

5.10.1 "Existing Indian labour Laws/Rules are not strictly applicable to Indian

IT Industry as IT sector employees are quite different from general factory

workers and are well educated and trained. The separate Labour to whether as

a Laws/Rules should be designed for IT Industry:. This hypothesis was presented to the respondents. They were to respond upto which extent they

agree or disagree. The employees responses have been tabulated below in the

Table 5.11. The comfortable majority of respondents (89%) strongly agree or

agree with the hypothesis that Indian IT sector requires separate labour

management system/ regulations. While only minority of 13% has given

divergent views. Low

64



TABLE-5.11

INDIAN IT INDUSTRY REQUIRE SEPARATE LABOUR LAWS/

RULES

(%age)

Respondents'

Observation

Percentage Of

RespondentsStrongly Agree 57 %

Agree 32 %

No Comments 02%

Disagree 07%

Strongly Disagree 02%

TOTAL 100%

5.11 EFFECTIVENESS OF OLD AGITATIONAL METHODS IN

IT INDUSTRY

5.11.1 Whether IT industry can afford old traditional trade union methods of agitations

like Strike or Gherao etc. was also asked from the employees. The question was direct in

nature of Yes or No. As has been listed in Figure 5.12 below, 67% of the respondents has

given their reply in No and 28% answered in affirmative. 5% has ticked No Comments

choice. So, it is concluded that old agitational techniques of trade unions are not desired in IT

industry.

65



5.12 EFFECT OF EXCESSIVE COMPETION IN INDIAN IT

INDUSTRY

5.12.1 Whether excessive competition in Indian IT sector is harming the overall long term

prospects of employees in this sector The respondents opinion is tabulated

below in Table 5.13. The table above clearly indicates that excessive

competition is observed as harmful to the employees prospects. . 53 percent of

the respondents has replied in Yes to this question. While 35% has a negative

viewpoint.

TABLE - 5.13

EXCESSIVE COMPETITION IS HARMING

EMPLOYEES LONG TERM WELFARE

(%age)

Respondents'

Observation

Percentage Of

Respondents

Yes 53%

No 35%

No Comments 12%

TOTAL 100%

66



5.13 ROLE OF TRADE UNION IN IT INDUSTRY

5.13.1 The respondents were asked to comment upon whether Indian IT Industry needs a

trade union or management's are looking after the employees interest in the

best possible manner. The Table 5.14 shows the responses in this regard.

Table 5.14

ROLE OF TRADE UNION IN IT INDUSTRY

(%age)

Respondents Grading Percentage Of

Respondents

No Trade Union 21%

Single Trade Union 13%

Multi Trade Union 09%Only welfare association 57%

Total 100%

5.13.2 The largest 57 percent of the respondents view that there should be only welfare

association in Indian IT industry. 21% need no trade union and 13% like single

trade union only.. 9 percent of the respondents opted for multi trade union.

67



5.14 OVERALL ASSESSMENT OF EMERGING HR TRENDS IN

INDIAN IT INDUSTRY

5.14.1 In the end respondents were asked to give their overall assessment/ grading of

emerging HR trends in Indian IT Industry. The overall assessment on five point

scales of excellent, very good, good, satisfactory and poor is tabulated below in

the Table 5.15. 65% of the respondents were in positive grading of excellent,

very good and good. While 35% gave a assessment of satisfactory and poor

68



CHAPTER - 6

FINDING AND CONCLUSION

6.0 OVERVIEW

6.0.1 The era of skill-based workers has arrived but if India wants to truly move to the global

arena, it has to spruce up its workforce. Small may be beautiful, but not in the IT industry. In

the knowledge era and a skill-based economy, it has become imperative that human resources

become one of the most essential ingredients of success. The growth of IT companies

worldwide depends on its people and the intellectual capital it possesses.

6.0.2 ‘Knowledge workers’ has become a buzzword in today’s IT scenario. And if we look at

the top software exporters, they have been growing phenomenally in workforce strength. To

make it big in the global software market, India needs to increase its mass of knowledge

workers. The establishment of Indian Institutes of Information Technology is definitely a step

ahead in the right direction, but what the industry needs is experts in niche areas, in other

words, persons with domain expertise. In the era of cutting-edge technologies, it is this skilled

workforce that will make all the difference.

6.0.3 The total human resource strength of the IT industry as a whole stands at 425,609. A

company-wise break-up of this figure reveals that nearly 525 companies constituting 35% of

the IT industry employ an average of 58 persons each, 750 companies constituting 50% of the

industry employ an average of 275 persons each, and 150 companies constituting 10% of the

industry employ an average of 726 persons each. At least 40 companies have more than 1,000

employees, while some very big companies like TCS, Wipro, HCL and Infosys have staffs

above 5,000 each.

6.0.4 Despite having abundant English-speaking skilled workforce, an acute shortage of

skilled workforce will affect the country’s software exports in the long run, if remedial actions

are not taken immediately.

69



6.0.5 Geometrical growth of Information Technology in the world as well as India, has

created lot of revenues for government and number of avenues for employees. The

introduction of computers has changed the way of life every where, including work places and

our homes. The life has become quite fast and speed of provisioning of different services has

also increased. But all this activities are being managed by number of well qualified

professionals. They may be from computer hardware developers, software engineers or

marketing managers. As the things are running fast, so they have to be managed fast.

6.0.6 These fastness of services and higher level of education/training standards are not easy

to manage by the organisations concerned. As we already know that Human Resource

Management of the organisation deals with the individuals putting their hardwork to meet the

organisations goals. Managing people is the toughest element of any organisation than land,machinery or finances. Every human beings has its own degree of preferences, likings and

attitude. So, HR managers has to take care of all these things in mind while dealing with the

number of people working in the organisation.

6.0.7 Different type of employees/workers recruited for different level of working has to be

managed in different styles. The hundreds years of organisational management experience has

been converted into a standard personnel management and industry and service organisations

are following these HR techniques for their organisational management. Due to availability of

written down procedures and rules by the learned managers, it was felt that HR managing

was not so typical.

6.0.8 But, emerging HR trends of Information Technology industry can not be managed

properly by the old traditional HR techniques . As it is commonly known that man learns by

experience. 50 years of introduction of computers has provided us the areas to be additionally

addressed by the HR managers in IT sector. Indian IT industry is not an exception. Moreover,

due to existence of old conservative .and protective labour laws it is not possible to meet the

ever-growing international competition in the IT services.

6.0.9 Hence, the IT industry has been devising newer Personnel Management/ HR techniques

which specifically meet the needs of IT industry. The main reason for this is high standards of

70



education and professional training required for this industry. Secondly, there is excessive job

demands for developed countries in this sector and high wage standards. So, HR managers

mainly in developing countries like India find it very difficult to retain and recruit their

manpower. HR managers worldwide has devised handsome compensation methods like Profit

Sharing, Employee Stock Option Schemes ESOP etc. Though over the period few schemes

has flopped like ESOP due to heavy fall in company share prices.

6.1 Finding

6.1.1 As given out in Chapter 1, the employees opinion survey regarding status of HR

management in Indian IT Industry and success of emerging HR trends was conducted through

the use of a structured questionnaire. The survey was conducted by randomly selecting 100

persons working in Indian IT Industry. The respondents observations in this respect are

described in brief in the following paragraphs

6.1.2 The 54% of the were Male and 46 per cent of the respondents were Female. It was

observed that IT industry is dominated by the software professionals (46%), computer

hardware and marketing services of IT are sharing the other half.

6.1.3 The respondents were asked to comment whether the HR needs of Indian IT industry aredifferent from traditional HR Management systems.. The majority of respondents (69%) view

that HR needs of IT industry are different from old economy sector and HR managers in IT

industry has to keep this into mind.

6.1.4 The IT industry has been devising newer compensation methods like Profit Sharing/

Stock Options etc. to increase employee welfare and receptivity. 46% of the employees

opined that newer compensation methods has a positive effect in IT industry while 26% said

that it has a negative effect on employee welfare.

6.1.5 As per 48% of the respondents IT organisation has more concern for profit motive than

employees welfare. While 43% were not agree to this proposition

71



6.1.6 51 percent of the respondents strongly agree/agree to the statement that grievance are

handled properly in the Indian IT industry. While 33% think otherwise.

6.1.7 Whether top management awareness about working conditions of the employees and

state of working conditions in the IT organisations, 65% of the respondents view that the top

management's are not aware or little aware about the employees working conditions in the IT

organisations . Only 4 percent vouched that top management is very well aware about the

nature of working conditions and 16 percent say "Much Aware".

6.1.8 Cordial employee employer relationship is very essential in the upcoming highly

competitive economy. The state of employee employer relationship in Indian IT Industry was

measured through the next question. The state of employee-employer relationship is very

encouraging. 58 percent of the respondents has graded it very good and above. While 42

percent consider it satisfactory and below.

6.1.9 Whether Indian IT Industry is able to retain its employees was the a query from the

randomly from IT industry employees. 61% of the employees view that Indian IT companies

are unable to retain its employees due to most attractive avenues outside . 22% of the

respondents has suggested to increase the wages to international level to increase employees

retentivity in Indian IT industry. 36% want more foreign postings, 10% suggest increase profitsharing and 11% suggested more promotions. 21% of the other suggestions included lateral

induction directly institutions and better HR management.

6.1.10 Existing Indian labour Laws/Rules are not strictly applicable to Indian IT Industry as

IT sector employees are quite different from general factory workers and are well educated

and trained. The separate Labour Laws/Rules should be designed for IT Industry:. This

hypothesis was presented to the respondents. The majority of respondents (89%) strongly

agree or agree with the hypothesis that Indian IT sector requires separate labour management

system/ regulations. While only minority of 11% has given divergent views. Further, 67% of

the respondents has opined that old agitational techniques of trade unions are not desired in IT

industry.

72



6.1.11 Whether excessive competition in Indian IT sector is harming the overall long term

prospects of employees in this sector . 53 percent of the respondents has replied in Yes to this

question. While 35 percent has a negative viewpoint..

6.1.9 The largest 57 percent of the respondents view that there should be only welfare

association in Indian IT industry. 21% need no trade union and 13% like single trade union

only.. 9 percent of the respondents opted for multi trade union.

6.1.10 In the end respondents were asked to give their overall assessment/ grading of

emerging trends of Indian IT industry. The overall assessment on five point scales of

excellent, very good, good, satisfactory and poor. 65% of the respondents were in positive

grading of excellent, very good and good. While 35% gave a assessment of satisfactory and

poor

6.2 CONCLUSION

6.2.1 Hence, it can be concluded that Emerging HR trends of Indian It industry are quite

different from the old economy industry. India is considered one of Super Power in

Information Technology and allied fields. Majority of world leaders in IT sector are

outsourcing their requirements from Indian IT Industry and recruiting Indian IT professionals.Hence, the Indian Government must allow the Industry to meet international competition and

desired environment in respect of Labour Laws and financial rules must be liberalized for this

Indian IT Industry. Moreover, HR managers in Indian IT Industry must keep the sensitive

nature of IT professionals and state of greater opportunities outside in mind for devising HR

policies for their organisations China is also entering this area vigorously and Government of

India must help Indian It industry to meet this challenge.

73



LIMITATIONS

• Some of the respondents refused to fill the questionnaires.

• The responses may vary as some respondents did not want to come up with real

answers.

• The resopondents were busy in their work so they might not have given actual

responses..

• Limitation of time.

• Small sample size.

• And like any other research the limitation of personal bias of respondents limits the

scope of the study.

74





12. Shadecor George W, " Statistical Methods" The IOWA State University Press, AMES,

IOWA, USA (6th edition)

13. Silvera, D.M., "Human Resource Development", 1988, The Indian Experience.Higher

Education and IT:

14. Ehrmann, Stephen C. "Reaching Students, Reaching Resources: Using Technologies to

Open the College." _Academic Computing_, April 1990, pp. 10-34.

15. Penrod,James I., and Michael G. Dolence"Concepts for engineering Higher Education."

_CAUSE/EFFECT_, Summer 1991,

16. 5 Mark J. Wallace, Jr., "Rewards and Renewal: Competitive Advantage throughWorkforce Effectiveness," Paper presented at American Compensation Association National

Conference, Anaheim, California, 1993.

17. Helen Murlis and David Fitt, "Job Evaluation in a Changing World," _Personnel

Management, May 1991, pp. 39-43.

76



LIST OF TABLES

2.1 4 R's OF HR IN IT

4.1 ESOP IN INDIAN CONTEXT

5.1 RESPONDENTS PROFILE - EDUCATION-WISE

5.2 WHETHER HR NEEDS OF INDIAN IT INDUSTRY ARE DIFFERENT

5.3 Emerging HR TRENDS OF INDIAN IT INDUSTRY ARE DIFFERENT

5.4 WHETHER IT INDUSTRY HAS POSITIVE ATTITUDE TOWARDS ITS

EMPLOYEES

5.6 GRIEVANCE HANDLING IN INDIAN IT INDUSTRY IS PROPER

5.7 TOP MANAGEMENT AWARENESS

5.8 STATE OF EMPLOYEE EMPLOYER RELATIONSHIP IN IT INDUSTRY

5.10 SUGGESTIONS FOR INCREASE RETENTIVITY IN INDIAN IT INDUSTRY

5.11 INDIAN IT INDUSTRY REQUIRE SEPARATE LABOUR LAWS/ RULES

5.13 EXCESSIVE COMPETITION IS HARMING EMPLOYEES LONG TERM

WELFARE

5.14 ROLE OF TRADE UNION IN IT INDUSTRY

77



78



QUESTIONNAIRE

Dear Sir/Madam,

I am a management student of RITM (Rameshwaram Institute of Technology & Management

). As part of course I am undertaking this Research study. I would a request you to kindly

answer a few questions. This questionnaire gives you the opportunity to express your opinion

regarding various aspects of HR PRACTICES AND ORGANISATIONAL

STRATEGIES IN IT SECTOR As you are all aware that Information Technology (IT)

industry is achieving a great success in Indian employment context. As you are to a part of IT

industry and must be observing that the HR trends of IT sector are quite different from the

conventional old economy sectors.

The results shall be submitted to the university in the report format for the usage of

researchers and other concerned authorities. As is the case for entire study, no individual will be identified. Only group averages will be reported.

Thanking You

Date .....

79



Personal Profile of the Respondent

1.(a) Place of survey..................................

(b) Name.............................................

(c) Address...........................................

(d) Male/Female.......................................

(e) Educational qualifications:

(i) Non Tech Graduate or below

(ii) Non-Tech Post-Graduate

(iii) B.Tech/BCA etc.

(iv) M.Tech/MCA/MBA

(f) Your Nature of Job:

(i) Computer Hardware

(ii) Computer Software

(iii) Marketing Services of IT

(iv) HR/ Personnel management

2. Whether you feel that HR needs of Indian IT sector are different from old HR

practices.(Please Tick)

(i) Yes

(ii) No

80



(iii) Can Not Say

3. Whether new compensating methods being adopted by the various IT companies are

positively effecting the employees welfare?

(i) Positive Effect

(ii) Negative Effect

(iii) No Effect

(iv) Can Not Say

4. "Indian IT sector companies has a positive attitude towards its employees and are not

neglecting their welfare and prospects for their profit sake." Do you agree with the

statement.

(i) Yes

(ii) No

(iii) No Comments

5 "The grievances of the employees in Indian IT sectors are handled properly". To what

extent do you with this statement.

(i) Strongly Agree

(ii) Agree

(iii)No Comments

(iv) Disagree

(v) Strongly Disagree

81



6. How much do you think the top management of your organisation is aware of the

working conditions of its employees?

(i) Not at all aware

(ii) Very little aware

(iii) Somewhat aware

(iv) Much aware

(v) Very much aware

7. What is the state of employee employer relationship in Your Organisation

(i) Excellent

(ii) Very Good

(iii) Satisfactory

(iv) Poor

8. The most of the employees of Indian IT sector or highly educated and sensitive in

nature. Moreover, the opportunities outside are very attractive, Whether Indian IT

Industry is able to retain its employees.(Please Tick)

(i) Yes

(ii) No

(iii) Comments

9. What the HR managers of Indian IT sector should do to increase the retentivity rate

of its employees (Please Tick)

82



(i) Increase wages to international level

ii) Increase foreign postings

iii) Increase profit sharing

(iv) More promotions

(v) Any other(please specify) __________________________

10. "Existing Indian labour Laws/Rules are not strictly applicable to Indian IT Industry

as IT sector employees are quite different from general factory workers and are well

educated and trained. The separate Labour Laws/Rules should be designed for IT

Industry:. Do you agree with this proposition.

(i) Strongly Agree

(ii) Agree

iii) No Comments

(iv) Disagree

(v) Strongly Disagree

11. Whether old methods of employees association/trade union like strike or Gherao

etc. are desirable in Indian IT Sector (Please Tick)

(i) Yes

(ii) No

(iii) No Comments

12. In your view whether excessive competition in Indian IT sector is harming the

overall long term prospects of employees in this sector.

83



(i) Yes

(ii) No

(iii) No Comments

13. Whether do you feel there is any roll of trade union in the IT Industry?

(i) No Trade Union

(ii) Single Union

(iii) Multi Union

(iv) Only welfare association

(iv) Can not say

14. Give your overall assessment of HR Management in Indian It Industry.

(i) Excellent

(ii) Very Good

(iii) Good

(iii) Satisfactory

(iv) Poor

15. Please give your comments and suggestions to bring further improvement in HR

Management in Indian IT Industry.

Thank You,

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Documents

Hr Practices and Org Strategies in It Sector