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European Journal of Business and Management www.iiste.orgISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)Vol 3, No.5, 2011

The Status and Prospects of the Licensed Pharmacist Qualification

System in China

An Fudong1,2, Yu BoYang1

1. China Pharmaceutical University, International Pharmaceutical Business School, Nanjing 210009,

E-mail:[email protected]

2. State Food and Drug Administration, Beijing 100810ChinaE-mail: [email protected]

Abstract

The Licensed Pharmacist Qualification System refers to a series of systems of Licensed Pharmacist

management. The establishment and development of the Licensed Pharmacist Qualification System plays

an unparallel role in the improvement of pharmaceutical care and the training of pharmaceuticalprofessionals. This article generally describes the Licensed Pharmacist Qualification System in China,

makes a comparison study between Chinese and American Licensed Pharmacist Qualification System and

discusses about the future development of the Licensed Pharmacist Qualification System.

Key words:licensed qualification; licensed pharmacist; pharmaceutical care

1. General introduction on the Licensed Pharmacist Qualification System in China

Licensed qualification, the measure of access control implemented by the government in specific

fields of great responsibility, social commonality or public interest, is the essential standard of knowledge,

techniques and skills for setting up independent business or working in an independent way. Licensed

Pharmacist Qualification System is universally implemented for the access of pharmaceutical professionalsin different countries around the world. The Great Britain adopted the system in 1815 and various states in

USA began to issue Pharmacy Actand Pharmaceutical Affairs Actsuccessively since 1869, formulating

that only those registered pharmacists who pass the Standardized National Examination for Licensed

Pharmacist could work in related posts.

1.1 The Development of the Licensed Pharmacist Qualification System in China

Drug Administration Law of the Peoples Republic of China issued in 1984 stipulates that a drug

manufacturer or distributor shall have qualified pharmaceutical professionals required for drug

manufacturing or distributing. Provisional Regulations on Licensed Pharmacist Qualification System

promulgated in 1994 and Provisional Regulations on Licensed Pharmacist of Chinese Medicine

Qualification System promulgated in 1995 symbolized that the Licensed Pharmacist Qualification System

started to be carried out in an all-round way. A series of supporting regulations and regulatory documents

on examination, registration and continuing education were published thereafter. Provisional Regulations

on Licensed Pharmacist Qualification System was revised in 1999 and the national unified syllabus,

examination, registration and management were enforced accordingly.

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1.2 The Management of Licensed Pharmacist Qualification System in China

Ministry of Human Resources and Social Security is responsible for the coordination and management

of the National Professional Qualification System. State Food and Drug Administration is responsible for

the implementation of Licensed Pharmacist Qualification System and the formulation of relevant policies.Licensed Pharmacist Qualification Center affiliated to State Food and Drug Administration is responsible

for the organization of the Licensed Pharmacist Examination and the coordination of the implementation of

the pharmacist registration management, continuing education and other related work. Policy formulation,

the examination proposition, the continuing education and other professional work are carried out with

technical supports from the experts and professors from Medical Colleages and the senior management

team from institutions of drug research, manufacturing, distributing and using. The drug regulatory

departments of provinces, autonomous regions and municipalities directly under the central government are

responsible for the registration management and continuing education of licensed pharmacists in their

areas. In addition, Association of Chinese Licensed Pharmacist, which was founded in 2003, plays an

important role in the development of professional norms and ethics as well as the trainings on continuingeducation and rational drug use.

1.3 The Implementation of the Licensed Pharmacist Qualification System in China

1.3.1 the Qualification Examination

In China, licensed pharmacists refer to those pharmaceutical professionals who pass the unified

national examination, obtain the Licensed Pharmacist Certificate, get registered in the local government

and work in the institutions of drug manufacturing, distributing and using. The unified national examination

of Licensed Pharmacist is held in October every year. Those who pass the examination could obtain the

Licensed Pharmacist Certificate.There are seven subjects in the qualification examination: 1. Pharmacy administration and regulations;

2. Pharmacy knowledge (1); 3. Pharmacy knowledge (2); 4. Comprehensive knowledge and skills

Pharmacy; 5. Pharmacy knowledge of Chinese Medicine (1); 6. Pharmacy knowledge of Chinese Medicine

(2); 7. Comprehensive knowledge and skills Pharmacy of Chinese Medicine. Applicants of Pharmacist

should choose subject one, two, three and four while applicants of Pharmacists of Chinese Medicine should

choose subject one, five, six and seven. All examinations of the seven subjects are composed of objective

questions which should be completed in the answer sheet. The examinations are arranged in for 4 separate

half days, each lasting for two and a half hours.

1.3.2 Registration and Continuing Education

After obtaining the Qualification Certificate, licensed pharmacists could apply for the registration in

the drug regulatory department of province, autonomous regions or municipalities directly under the

Central Government. They are allowed to work in drug related fields according to their registered category,

scope and area after they obtain the Registered Pharmacist Certificate. A licensed pharmacist could register

in only one department and work for only one organization. The registration of licensed pharmacist is valid

for 3 years. The re-registration is required upon expiration of the certificate. Applicants for re-registration

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should meet specific requirements and provide evidence of continuing education. Licensed pharmacist

should receive continuing education and abide by registration regulations.

1.3.3 Roles

Licensed Pharmacists should be responsible for the quality of drugs and ensure the basic principle of

safe and effective drug use. In practice, licensed pharmacists should abide byDrug Administration Law and

relevant regulations, be responsible for the supervision and management of drug quality, audit and monitor

the prescription deployment, provide medical advice and information, guide rational drug use and conduct

clinical works such as the monitoring of therapeutic drugs and the evaluation of the drug efficacy.

1.4 The Status of Licensed Pharmacists in China

According to statistics, China has 174,000 licensed pharmacists by the end of 2009 and around 70,000

of them are registered. As to the distribution of registered licensed pharmacists, about 86% work for drug

distributors, about 7%, work for drug manufacturers and the other 7% work in medical institutions. Interms of geographical distribution, there are great divergences between eastern China and western China

because of the unbalance economic development levels in these regions. Most registered licensed

pharmacists are employed in the eastern and middle parts of China while much less work in the western

regions.

2. The Mmain Differences between Chinese and American License Pharmacist Qualification system

Because of the great differences in social and economic development between China and the United

States, the License Pharmacist Qualification systems in these two countries are undergoing different

phrases.

2.1 Qualifications

China, as a developing country, has insufficient licensed pharmacists, which means that the scale of

pharmaceutical professionals can not fully meet the demands of the society. Therefore, the gaps in terms of

qualifications for licensed pharmacists between China and the United States still exist. In China, whoever

has a diploma higher than secondary specialized education and major in pharmacy or related disciplines

(medicine, chemistry, biology, and nursing) can apply for the Qualification Examination. Howeverthere

are requirements of working experiences according to the level of academic qualifications. Currently,

people with secondary, tertiary, Bachelors or Master's degree, could apply for the examination after

working for seven, five, three or one year respectively. There is no requirement of working experience for

candidates with the Doctors degree.

2.2 Routine Management

The Licensed Pharmacist Qualification System formulates that holders of Licensed Pharmacist

Certificate could not apply for the position of licensed pharmacists before registration. Registered Licensed

Pharmacists could work in drug manufacturers, distributors and medical institutions. The registration of

licensed pharmacists should include the information of the institutions as well as the position. Working for

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two different employers is forbidden. Licensed Pharmacists should apply for registration change if they

want to work in a different area or different field.

2.3 Continuing education

State Food and Drug Administration is responsible for the management of continuing education of

licensed pharmacist in the country and the drug regulatory departments of provinces, autonomous regions

and municipalities directly under the Central Government are responsible for specific works. In general, the

provincial drug regulatory departments hold the training courses of continuing education with the support

of accredited Medicine Collages. Continuing education adopts the credit system and mainly focuses on

laws and regulations, ethics, Pharmacy, Chinese Medicine and related professional knowledge and skills.

All courses are conducted mainly by lectures and divided into three types, compulsory, elective and self-

study. Employers of licensed pharmacists should provide them with financial support, time and other

necessary conditions for continuing education.

2.4 Responsibilities

In China, licensed pharmacists play an important role in ensuring quality, safety and efficacy of drugs.

After the implementation of Drug Classification System in China, licensed pharmacists make great

contributions to guiding the rational use of drugs for patients, reviewing prescriptions and providing

consulting services of medication. However, the licensed pharmacist is the pre-condition only for opening

the business of one drug distributor. Most of Chinese licensed pharmacists work in drug manufacturers and

distributors. In China's medical insurance system, 80% of the drug consumption is closely integrated with

medical services of medical institutions. Medication of patients is mainly carried out by doctors. Besides,

there are two types of qualification systems in China, namely the professional qualification system and the

specialized qualification system. Therefore, the vast majority of pharmacists in medical institutions(medicine persons) have the specialized qualification of Pharmacy instead of the licensed pharmacist

qualification. For example, in the end of 2009, there are 342,000 pharmacists (medicine persons) in

Chinese medical and health institutions, among which only 47,000 are licensed pharmacist.

3 The Prospect of Licensed Pharmacist Qualification System in China

Licensed pharmacists symbolize a vital and irreplaceable pharmaceutical strength in ensuring the

quality of drugs and pharmaceutical care, the safety and efficacy of medication as well as the public health.

As Chinas economy develops continuously, the living standards of people upgrade accordingly. Therefore,

the public set up higher standards for medical services and health care and licensed pharmacists will play a

more important role and rank a higher social position. There are three critical aspects for the future

development of licensed pharmacist qualification system in China. Firstly, with a view to the rising demand

of licensed pharmacists, there will be more licensed pharmacist and the licensed pharmacist qualification

system will be legally established. Secondly, as the reform of Chinas government management system

develops gradually, the licensed pharmacist qualification system should be implemented in medical

institutions. Thirdly, as the public set higher requirements for health care, there will be a shift of attention

from drug quality and safety to the quality of pharmaceutical care, and gradually to the requirements of

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licensed pharmacist. These demands and changes will evoke a reform of Medical schools. Cooperation and

support from all walks of the society will be needed for the cultivation and training of pharmaceutical

professional as well as continuing education of licensed pharmacists so as to finally improve the level of

rational use of drugs and facilitate the development of human health.

Reference

[1]Former Ministry of Personnel, State Drug Administration. " and " (Ministry of Personnel,

[1999] No. 34).

[2] The former State Drug Administration. " "

(SDA[2000] No. 156).

[3] State Food and Drug Administration " "

(SFDA[2003] No. 298).

[4] Development of Health Service, Statistical Bulletin of China. 2009.

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Attrition in SMEs: The Cause

Bibhu Prasad Kar (Corresponding author)

Indian School of Business, Hyderabad

Gachibowli, Hyderabad 500032

Tel: +91-7799889715 E-mail:bibhuprasadkar@@gmail.com

Amalesh Sharma



Email:[email protected]

Sourav Bikash Borah



Email: [email protected]

Abstract

Human Resource managers are devising ways to retain talent next year that will see companies paying

annual increments up to 30%. The average attrition in 2010 was 10% across Indian companies, a rate that

may rise to 25% in 2011-12 with improved salaries (The Economic Times, Dec 24, 2010)

The SMEs sector in India has certainly been a very prevalent are of employment in recent years but one of

the biggest encounters it is facing is a remarkable rise in attrition rate. There could be some common

attrition factor across industry but every organization need to know the reason for attrition. India's economy

is showing a healthy progress, but employers enjoying the bang have a offhand side: that of restless staff

seeking for a hotter career option leading to increasing attrition in Indian SMEs. Authors have tried to find

out the reason for attrition in SMEs, what the factors that are leading to attrition in SMEs in India? A

conceptual framework has been developed to understand the relation between the factors affecting attrition.

Our findings suggested some crucial factors affecting attrition in SMEs. This paper may be help for

entrepreneurs to dealt with attrition in the organizations.

KEYWORDS: Attrition, SMEs, Entrepreneurship, Indian Economy, India

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1. Introduction

Global staffing firm Kelly Services expects attrition levels to rise to 22% in 2011 and feels employees in

customers dealings, team management and the niche technical roles will grab the lion's share of increments

next year.

"These (attrition and salary increments) are signs of a growing and dynamic market. Sometimes HR experts

even call them hygiene factors," the official spokesperson of Kelly said adding, "Sectors hiring first will

face the monster (attrition) first, unless there are strong retention or job rotation policies".

Mr Goel of GlobalHunt however, views attrition as healthy. He says: "A balanced attrition is healthy for an

organisation as it opens the avenue for fresh talent to come and create innovations and can add lot of value

additions to an organisation".

"Low attrition will block fresh ideas and people will become too comfortable in their approach. But, high

attrition may not give an opportunity to individual and organisation to understand and to optimise strength.

Broadly speaking, quick job hoppers will have difficulty to get a good job as they are not widely accepted

for long term or larger roles," Mr Goel remarked. (The Economic Times, Dec 24, 2010).

The role and importance of Small and Medium Enterprises (SMEs) in the context of IndiasIndustrial

development can be traced to as early as Industrial Policy Resolution of 1956 which Stated : They (SSIs)

provide immediate large scale employment; they offer a method of ensuring a more equitable distribution

of the national income and they facilitate an effective mobilization of resources of capital and skill which

might otherwise remain unutilized. Some of the problems that unplanned urbanization tends to create will

be avoided by the establishment of small samples of industrial production all over the country (Planning

Commission, Second Five-Year Plan, p. 47).With relatively low capital investment, larger employment

opportunities and unstinted official support, the small-scale sector maintained its growth momentum in the

pre-reform period. In the post-liberalization era, its importance has not been undermined, and as late as the

Ninth Five-Year Plan (1997-2002) document, it has been understood that: The (small) sector has matured

and is in a position to make a much greater contribution to the national economy as well as to meet the

challenge of large industry, including multinationals.

In their nature, scope and pattern, SMEs vary from country-to-country depending upon the economic,

political and social environment, prevailing in that country. Broadly, SMEs are based either on the number

of persons employed or on the amount of investment in fixed assets or on both. For example, in many

developed countries it is the number of employees that determines the size of an enterprise, but in a

developing country like India, the major determinant happens to be the investment size in an enterprise.

Nonetheless, the limits in terms of investment and employment are directly related to the state of

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economic development of a country. As such, a small scale unit in a developed country may be considered a

large or medium-scale unit in a backward or a developing country. Time-to-time revisions in both these

limits usually indicate performance and trends of SMEs, and policies of the government and its orientation

toward the development of small-scale sector. For example, in European Union (EU), micro, small andmedium-sized enterprises are crucial and provide around 65 million jobs representing two-thirds of total

employment. In Japan, 81% of total employment is in SMEs, where on average the enterprise employs nine

persons as opposed to four in the EU. In one of the Latin American countries, i.e., Colombia, SMEs account

for 36% of all jobs and 63% of industrial jobs (Edit, 2005).

Today, attrition is one of the major problems faced by the various organizations across the globe. According

to a recent survey conducted by All India Management Association (AIMA) on CEOs and HR managers of

different IT organizations, attrition (also known as employee turnover) is the second important issue related

to HR department. The impact of attrition has received considerable attention by senior management, HR

professionals and industrial psychologists. It has proven to be one of the most costly and seemingly

intractable human resource challenges confronting organizations.

The present paper is organized as follows: It presents the literature review, data and methodology, data

analysis followed by a discussion. Subsequently, it highlights some of the major findings of the study, and

finally, offers the conclusion.

After doing a wide study on research on attrition, we found out some interesting rationales for attrition.

With an objective to find out the factors leading to attrition we did a detailed explanatory study in SMEs.

This study is both qualitative and quantitative in nature.

The objective of the paper is as follows

To understand the reasons for attrition in SMEs.

To identify the major problems faced by employees in the SMEs which lead to attrition;

To understand the problems faced by the organization due to attrition;

To suggest ways and means to check attrition.

2. Theoretical Background

Employers have a need to keep the employees from leaving the organization in a short duration. Employers

want their employees to build up a lifelong relationship with the organization, contribute to the

performance and success of the firm and become the force behind the growth in long term. But modest aim

generally ends with sorrow. Attrition is one of the most puzzling words in the management literature. It is

because; the cause and effect relationship here is not absolute. Cause and Effect relationship is affected by

multiple variables and it is difficult to build an empirical model/conceptual model on the basis of

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experience/data. The saying, good help is hard to find, is even true these days because the job market is

becoming increasingly tight (Eskildesen 2000, Hammer 2000). Employers fight to get skilled employees to

maintain the prosperity of the organization (Eskildsen and Nussler 2000). Employee satisfaction and

customer satisfaction varies proportionately (Mark Parrott 2000). Growing competitiveness in the marketprovides pressure on the employees. These pressures generally give birth to mental agony on the mind of

the employees. Mark Parrott (2000) says that todays employees pose a complete new set of challenges. As

a result, tapping of talent becomes more complex. Employees that are satisfied and happy in with their jobs

are more dedicated and functional in customer service and business operation (Hammer 2000; Marini 2000;

Denton 2000). Also it is proved that employees who are satisfied with their jobs are more productive,

creative and be more likely to be retained by the company (Eskildsen & Dahlgaad 2000, Kim 2000; Kirby;

Lee 2000; Money 2000; Wagner 2000). Again researches have proved that many environmental factors play

significant role in the retention of employees such as Pay and benefits, communication (Brewer 2000;

Wager 2000), motivation, justice (Kirby 2000; Tristram 2000) and leisure time (Rabbit 2000; Wilson 2000).

The key organizational (HR) issue being faced today by all the companies is attrition.The highest

percentage of attrition is in voice-based processing of BPO industries.Career growth, compensation and

supervision are the most important reasons which contribute to attrition. Due to monotonous nature of the

job, employees change their jobs frequently and the average period is two years. Conditions of attrition

vary from small to big companies. Here all companies felt that exit interview is the best way to control or

maintain attrition rate in companies. Marketing

departments of organizations speak on customer relationship management and their importance for the

same. No organization can survive without giving importance to its employees. They are the first customers

and their requirement should be identified and fulfilled. Like CRM, Employee Relationship Management(ERM) is the mantra an organization should follow to retain their employees. Fulfilling the reasonable

expectations of employees should be a continuous process (Anantharaja, A. 2009).

Attraction-selection-attrition (ASA) model across 5 organizations (n equals 681). Organization membership

and occupational attributes interacted with individuals' turnover intentions to predict several personality

variables. Relationships among organization membership, occupation type, and personality were partially

mediated by perceived structure. The 3-way interaction analyses indicated that occupation type may

compensate for the effects of organizational characteristics in making particular traits more suitable for a

given organization. The overall pattern of findings supports the more general ASA predictions, but the

findings also suggest a need to develop a more refined conceptualization of the trait homogenization

process (Schaubroeck, John; Ganster, Daniel C; Jones, James R, 1998)It is the talent attrition season of the

year and HR managers are scratching their heads like never before. With bonus and increments being paid

across sectors and management cadres, movement of talent has caught on big-time. While, last year,

aviation and media were the flavours of the season, this year financial services, telecom, consumer goods

and retail followed by real estate and media are expected to clock the biggest employee churn (McClatchy -

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Tribune Business News, 2006) . There is considerable homogeneity across the firms in relation to their use

of human resources (HR) practices providing support for the insights based on the new institutionalism.

The factors leading to the homogeneity HRM are discussed. It is argued that theory-based empirical

research on HRM in SMEs within the same industry enable us move towards a systematic understandingand explanation of HRM in SMEs (Tsai, Chin-Ju, 2010). SMEs align their HRM practices with their

realized strategy within three configurations, namely local, international, and world-class SMEs.

Regardless of their strategic choices, these SMEs achieve comparable levels of performance (Fabi, Bruno;

Raymond, Louis, 2000). Due to their limited size, many small and medium enterprises (SMEs) cannot

justify full-time HR professionals in their organizations. Thus, the complex and time-consuming nature of

many HR activities can result in a significant drain on existing managerial resources. Professional employer

organizations (PEOs), however, offer SMEs an alternative for handling their workforce by providing

compensation programs, regulatory compliance, and other HR-related services. This study examines the

satisfaction levels of 763 customers of one large PEO. Results show that firm growth, past HR problems,

workforce size, contractual detail, service representative-client relations, value congruence, and overallPEO usage are significantly related to managerial satisfaction with PEO services (Klaas, Brian S;

McClendon, John; Gainey, Thomas W, 2000). The existence of mission statements in the studied firms was

associated with firm performance. It is also found that organizational performance is significantly

associated with the degree of non-managerial employees' involvement in the process of mission statement

development. Finally, the presence of financial goals in the studied firms' mission statements were

negatively associated with firm performance (Karami, Azhdar, 200).

Industrial attrition literature also shows a few factors that affect the attrition which include employee

turnover, commitment, motivation, changes in work place, training and development etc. To this level, all

things are fine. These finding are valid for the employees who stay in the organization for long time.

Unfortunately, no research has attempted to see the causal relationship between the attrition during

probation and the probable reasons.

Many Researchers say that the overall culture of the organization actually causes the attrition. But here

again it is questionable that whether an employee staying only for a few months in the organization get

affected by the so called culture.

Following this puzzle, we attempted to find the probable reasons of attrition during the probation period.

We took into account different time frame, different employees who left their organization in probation

period for the research.

3. Gap

There is no co-relation between the cause of attrition in SMEs and the steps taken to retain it. Since, it is

not understood which factor makes the employee to leave the organization, measures cannot be satisfactory.

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4. Methodology & Data Collection

This research is undertaken to assess the causes of attrition in SMEs and its remedies. The main aim of such

a design is to ensure that the required data are collected objectively, accurately and economically.

Primary Data: Data regarding the causes of attrition in SMEs and its remedies was collected directly by

interacting with the employees of the organization by a structured questionnaire. Secondary Data: The

secondary data was collected from the existing data, company records, and the Internet.

5. Research Tools

Questionnaire: The questionnaire used in this study was direct and structured. The types of questions asked

in this questionnaire were both closed-ended and open-ended, and multiple choice. To test the validity and

veracity of the structure of the questionnaire and to find out whether the purpose would be fulfilled, a pilot

study was conducted where a sample of 20 questions was collected to find opinion of employees on the

causes of attrition in a company. The main objective of using these techniques was to understand thecurrent process of the company and whether the employees were satisfied.

6. Sample Size

The scope of the study was limited to employees of different SMEs. The numbers of respondents in this

were 120. The research work was carried out at Hyderabad, Ahmedabad in 25 engineering manufacturing

SMEs and 25 SMEs food processing industries,

Employees are one of the most critical stakeholders of an organization, thus understanding the behavior of

the employees is critical for organizational success. The contextual implications, which most researchers

have ignored earlier, we have tried to incorporate it our research. Researchers have taken into consideration

some of the critical factors such as lack of resources, distance from home etc.

In the first step, broadly the qualitative research has been carried out. A total of 50 respondents have been

interviewed across various organizations. The type of sampling used is mostly random. Researchers have

approached a set of organization and interviewed employees in all level of management to ensure

representation across various layers of management

Critical incidence technique is used to understand the perception of employees towards their employers.The interviews had dual purpose. The primary purpose is to understand various factors that influence

employees behaviors which might lead to attrition. Again the researchers also wanted to see whether or not

demographic variables play a role. Employees were asked to recall various instances where they felt that

the behavior shown by their employers were not fair. Most of the respondents cited similar sort of

incidences and believed that most of the commitments made during the recruitment havent been fulfilled.

The key points have been listed immediately after the interview thus the results are consistent with 24 hours

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rule by Eisenhardt and Bourgeois (1988).

The Cohen Kappa co-efficient is calculated based on coding done by two independent coders so as toidentify different themes based on the responses from the interview. High inter coder reliability (Cohen

Kappa co-efficient = 0.75) has been achieved. The research tries to find out the cause of attrition from

practical standpoint.

6. Data Analysis

In the second phase of the research, researchers concentrated on constructing a theoretical frame work

which will be useful for small scale entrepreneurs which will be useful to understand the cause of attrition

specific to SMEs.

The component matrix (Table: 3) extracted five factors. The attributes in each factor have been mentioned

below.

FACTOR1: Malleable working hours, availability of resources, working situation = WORKING

CONDITION

FACTOR2: Pressure from entrepreneur, high pressure of sales, monotonous job, vague targets,

undistinguishable responsibility, multiple bosses = NATURE OF WORK

FACTOR3: cooperative peers, cooperative supervisors, feedback mechanism, Approachable supervisor,

permissible faults, tolerance level = ORGANIZATIONAL PHILOSOPHY

FACTOR4: Remuneration at par with other company, payment on time = SALARY

FACTOR5:Scope for career growth, Scope for skill development = CAREER PROGRESSION

After identifying the factors we tried to find out the most important factors that are actually leading to

attrition in SMEs. Respondents were asked to rate the factors on a five point scale. (Refer Table no: 3)

After doing a regression analysis of the factors affecting attrition with the factors which have been obtained

after factor analysis we got the following regression equation.

Factors affecting Attrition level= 4.00+0.665* WORKING CONDITION + 0.143* NATURE OF WORK

+0.483* ORGANIZATIONAL PHILOSOPHY +.211* SALARY + 0.510* CAREER PROGRESSION

From the equation it can infer very easily that the most important factor for the respondents is the condition

of the workplace, career growth opportunity and culture. The effect of salary and benefits on the

motivational level is also small in comparison to the other 3 factors.

The regression output has been attached below for reference as table no 4.

The value of the R square is 0.972 which shows that the model able to explain 97.72% of the variance in

dependent variable. Refer Table No 5.

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Based on the equations, the theoretical frame has been developed. Refer Figure 1.

In SMEs the attrition is due to the Working condition, Organizational Philosophy and Career Progression.

From the regression equation it is clear that most important concern for a SME Employee is the Working

Condition. It is a very important finding in context of SMEs as employees are giving higher importance to

procedural justice. Again Organizational philosophy which is closely related to culture and interactive

justice is considered to be much more important than Salary that includes both tangible and intangible

benefits. To retain the employees and lowering attrition employers primary focus should be focused

towards ensuring both interactive and procedural justice. Again salary and benefit which most

entrepreneurs believe to be the most important cause of attrition seems to be less important in comparison

to many other factors.

It is clear from the research that employees are more concern about their career development as well as the

flexibility they can enjoy in workplace that help them to balance their personal and professional life.

Limitation of the study And scope for future research: Although the research has many interesting

findings it has a couple of limitations. First of all the research is carried out only in two major cities. Thus

more data may impact the findings of the study. Again research is lacking quantitative generalization. Thus

researchers in future may concentrate on addressing these two areas of research.

7. Conclusion

The key organizational (Attrition) issue being faced today by all the companies is attrition. The more

percentage of attrition is in SMEs. Due to monotonous nature of the job, employees change their jobs

frequently and the average period is two years. Conditions of attrition vary from small to big companies.

Departments of organizations speak on customer relationship management and their importance for thesame. No organization can survive without giving importance to its employees. They are the first customers

and their requirement should be identified and fulfilled. Like CRM, Employee Relationship Management

(ERM) is the mantra an organization should follow to retain their employees. Fulfilling the reasonable

expectations of employees should be a continuous process.

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Smith, M., Kendall, L. and Hulin, C. (1969), The Measurement of Satisfaction in Work and in Retirement:

A Strategy for the Study of Attitudes, Rand McNally, Chicago, IL.

Tutuncu, O. and Kozak, M. (2007), An investigation of factors affecting job satisfaction, International

Journal of Hospitality & Tourism Administration, Vol. 8 No. 1, pp. 1-19.

India inc in attrition mode (2006). . United States, Washington: McClatchy - Tribune Information Services.

Tsai, C. (2010). HRM in SMEs: Homogeneity or heterogeneity? A study of taiwanese high-tech firms. The

International Journal of Human Resource Management, 21(10), 1689.

Fabi, B., & Raymond, L. (2009). Strategic alignment of HRM practices in manufacturing SMEs: A gestalts

perspective. Journal of Small Business and Enterprise Development, 16(1), 7-7-25.

Tahir, P. R., Mohamad, M. R., & Hasan, D. B. (2011). A short review of factors leading to success of small

medium enterprises. Interdisciplinary Journal of Contemporary Research in Business, 2(11), 519-519-529.

Klaas, B. S., McClendon, J., & Gainey, T. W. (2000). Managing HR in the small and medium enterprise:

The impact of professional employer organizations. Entrepreneurship Theory and Practice, 25(1), 107-107-

124.

Anantharaja, A. (2009). Causes of attrition in BPO companies: Study of a mid-size organization in india.

IUP Journal of Management Research, 8(11), 13-13-27.

Ganesan, R., & Khan, T. F. (2010). Conceptual review on retention strategies - a practical approach. Allied

Academies International Conference.Academy of Strategic Management.Proceedings, 9 (1), 15-15-26.

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Figure 1. The theoretical framework defines the relationship among various factors effecting attrition in

SMEs.

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EMPLOYEES

SAMPLE SIZE 120

SECTOR

MANUFACTURING 30

FOOD PROCESSING 30

SERVICE 30

MEDIA & PUBLISHING 30

GENDER

MALE 80

FEMALE 40

MANAGEMENT LEVELTOP 30

MIDDLE 30

JUNIOR 60

Table 1: Demographic profiling of the Respondents

RESPONDENTS PERCENTAGE

AVAILABILITY OF

RESOURCES

13 20%

CAREER GROWTH 15 18%

SALARY 11 36%

WORKING CONDITION 4 14%

SUPPORT FROM THE

MANAGEMENT

5 9%

BEHAVIOR OF PEERS 2 5%

Table 2: Themes

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Component Matrix

Component

1 2 3 4 5

Malleablehours .668 -.315 .256 -.296 -.529

Avilibiltyresources .654 .056 .526 -.258 .129

Wrksitution .468 .145 .415 -.126 -.260

Highsalepr .045 .925 .262 -.256 .289

Monowrk .385 .686 .379 -.556 -.090

uncertatargets .356 .915 -.164 -.165 .089

undstngusalesponsibiliti .314 .917 -.160 -.165 -.096

multbos .458 .765 .013 -.006 .489

Cooperativeers .376 -.460 .689 .289 .456

Cooperativesuper .089 -.199 .989 .156 -.369

Feedbackmech .456 -.226 .869 .126 .125

permissiblfault .018 -.020 .756 -.664 -.264

tolerancelev -.366 -.389 .789 -.484 -.088

Remuerationwitcomany .189 .279 -.093 .918 .256

paymentontime -.161 -.256 -.126 .745 .656

scopeskilldev .142 -.185 .685 .248 -.658

Training -.557 .078 -.365 .256 .789

Extraction Method: Principal Component Analysis.

Table 3: Factor Analysis Output

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Model Unstandardized Coefficients StandardizedCoefficients

Sig.

B Std. Error Beta

1 (Constant) 4.000 1.000 0.007

REGRfactor score

1 foranalysis 1

.665 .000 .254 0.062

REGRfactor score

2 for

analysis 1

.143 .000 .042 0.060

REGRfactor score

3 foranalysis 1

.483 .000 .593 0.055

REGRfactor score

4 foranalysis 1

.211 .000 .583 0.082

REGRfactor score

5 foranalysis 1

.510 .000 .492 0.025

a. Dependent Variable Motivation level

Table 4: The regression output

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Model R R Square

AdjustedR Square

Std. Errorof the

Estimate

Change Statistics

R SquareChange

FChange

df1 df2 Sig. F Change

1. .986 .972 .954 .26094 .396 42.680 1 3 .007

Dependent Variable: motivation level

Table 5: Dependent Variable: motivation level

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Price-Earnings and Price-to-Book Benchmark Techniques as

Predictors of Equity Returns in India

Chatterjee Ansuman (Corresponding author)

Asst. Professor, Department of Management Studies,

Kushagra Institute of Information & Management Science,

Cuttack, Odisha, India.

Email: [email protected]

Abstract:

Among the different benchmark techniques used by investors to determine the relative merit of equities,

while the price-earnings is a favourite, recent studies report the overriding importance of the book value.

Hence this study explores the comparative ability of the two techniques namely price-earnings ratio and

price-to-book ratio, in reaping superior equity returns in India. The study considers 80 companies listed in

Bombay Stock Exchange for a period of 8 years from 2001 to 2008 and identifies an inverse association

between the benchmark ratios and the equity returns in India, which magnifies as the duration of

investment period expands. On the basis of the lowest and highest rank of benchmark ratios value and

glamour portfolios were constructed respectively. Comparing the annualised returns of these portfolios,

the study concludes that though both the benchmark techniques are capable of identifying the value stocks

that can earn significantly higher returns;the price-to-book is rather a superior technique in India.

Keywords: Benchmark Valuation Techniques, Equity Investment Strategy, Price-to-book Ratio, Price-

Earnings Ratio, Valuation Ratios.

1. Introduction:

With the ever increasing investment culture worldwide, the erstwhile rule of intuition based speculation is

replaced by the conscious demand of research based investment. Economists and financial practitioners

have sought to identify variables that predict equity returns in the market for the last two decades. After

examining various metrics as future predictors of share price performance, they have found few benchmark

techniques including size, interest rate, beta, price-to-book ratio (P/B), price-earnings ratio (P/E), and

dividend yield (DY) to be rather good indicators among many others. According to the mispricing view, the

stocks with low P/E or P/B ratios (or value stocks) earn significantly higher returns than stocks with high

P/E or P/B ratios (or glamour stocks). Thus, there is an inverse relation between the P/E or P/B ratios and

stock returns, and an investor can achieve systematically higher returns by investing the right stock having

low P/E or P/B ratio (value stocks). Apart from testing the validation of this mispricing view, the aim of this

study is to examine the comparative ability of the two popular benchmark techniques, namely the P/E and

the P/B ratios to forecast stock return in India.

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2. Relevance of the study:

While the price-multiple methods can be applied to many accounting variables, earnings have been the

most common denominator. The importance of the P/E amongst investors and empirical success of the low

P/E strategy lead naturally to the question that whether there are other measures of value that can be utilisedto predict the performance of common stocks instead of the P/E. Any summary measure that claims to

value equity accurately warrants critical examination before being accepted universally. Meanwhile any

summary measure with implications similar to the P/E deserves publicity because the P/Es reliability is

seriously limited as it cannot be applied in all situations. Recent empirical studies as well as investment

analysis report the importance of the book value. Probably the strongest argument in support of the P/B

ratio is that it can be used as a yardstick of value of firms with negative earnings whereas the P/E cannot.

Hence it is a natural extension to investigate the accuracy of P/B strategy in contrast to the popular P/E

strategy. In this respect, this study provides a test of these two valuation ratios comparative ability to

predict stock returns in India.

3. Brief literature review:

In contrast to the earlier research in 1960's and 1970's, recent studies provide evidence that medium to long

term stock returns can be explained by variables like dividend yields, price earnings ratios, price to book

ratios among others (Fama and French 1988 and 1989; Campbell and Schiller 1988). Similarly, Harvey

(1995) asserts that emerging market returns (the category that India belongs to) are more predictable than

developed market returns.

Empirical studies are flooded with the evidence that relative valuation techniques (including P/E and P/B)

are pretty useful and can help the investors in picking the value stocks rather than glamour stocks, for

reaping larger returns. Studies have identified that stocks with lowest P/E ratio (Basu 1977; Oppenheimer

1984; Basu 1983; Lakonishok et al. 1994) earn significantly larger returns than stocks with highest P/Eratio.

Studies in other countries also confirm the finding that factors other than beta can explain returns. Chan et

al. (1991) reveal a significant relationship between equity returns and book-to-market (reverse of P/B) ratio.

Pandey and Chee (2002) used yearly panel data from 1993 to 2000 and found that size, beta, E/P (reverse of

P/E) ratio, dividend yield and book-to-market (reverse of P/B) ratio play a significant role in predicting the

expected stock returns in Malaysia.

Comparing the valuation accuracy of different valuation techniques, while few studies claim that P/E

benchmark valuation method performs better than P/B valuation method (Agnes and McNamara 2000);

some other studies concluded that the P/B ratio better reflects expected future return on equity (Penman1996; Chan and Chen 1991; Fama and French 1992 and 1995).

These conflicting remarks on the superiority of P/E against P/B in predicting stock returns coupled with

dearth of studies pertaining to Indian capital market in this regard raise doubt whether popular acceptability

of P/E benchmark technique is challenged by the P/B benchmark technique in India, which is sought to be

answered in this research study.

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4. Study objectives and methodology:

The study is centred on the following research objectives;

i. To ascertain whether the price-earnings (P/E) and price-to-book (P/B) benchmark techniques

can be a basis to identify value stocks that can earn larger returns in India.

ii. To compare the ability of the P/E benchmark technique against the P/B benchmark technique

in reaping superior equity returns in India.

iii. To identify the impact, if any, of different investment periods on such benchmark technique

based equity returns in India.

Data for 80 companies comprising of 8 different industries listed in Bombay stock exchange (BSE) using

judgemental sampling technique are taken up from capitaline database for the time period of 08 years from

January 1st, 2001 to December 31st, 2008. The industries considered were capital goods industry, finance

industry, fast moving consumer goods industry, healthcare industry, housing related industry, information

technology industry, metal & mining industry and oil, gas & power industry. For the sample equities, the

P/Es and P/Bs have been calculated with half year intervals on January and July every year purposively, by

dividing the market capitalisation of the equity for the corresponding month by the previous fiscal profit

after taxes (PAT) and book values (BV) respectively (Aras and Yilmaz 2008). All the sample equities were

ranked in the ascending order of their P/E and P/B respectively. The first ten equities with lowest P/Es were

taken as P/E based equal-weighted value portfolio (value portfolio P/E) and the last ten equities with highest

P/Es were taken as P/E based equal-weighted glamour portfolio (glamour portfolio P/E). Similarly P/B based

equal-weighted value portfolio (value portfolio P/B) and P/B based equal-weighted glamour portfolio

(glamour portfolio P/B) were also constructed.

The equity returns were computed individually for multiple investment periods of 6 month, 1 year, 2 year, 3

year and 4 year durations separately with half year intervals of January and July every year in terms of

annualised changes in average market capitalisation, as it would then take care of adjustments for bonus,

rights and stock splits. Subsequently annualised portfolio returns were also calculated for different

investment periods. The statistical relationship between the financial ratios and equity returns for different

investment periods were identified with the help of Karl Pearsons correlation analysis. The study examines

the value-glamour return spread for each of the benchmark techniques and applies paired t test of

significance to detect whether each of these two techniques can be a basis to determine the level of equity

returns in India or not. Further comparison of value portfolio P/E - value portfolio P/Breturn spreadand

paired ttest is carried out to compare the ability of the benchmark technique P/E against the P/B in reaping

superior equity returns in India. Finally the investment period return spreads of Value Portfolios were alsoexamined to identify the impact of different investment periods on annualised returns of Value Portfolios.

All calculations were carried out applying SPSSsoftware.

5. Statistical relationship between the financial ratios and equity returns:

In confirmation to the mispricing view, the Karl Pearsons coefficients of correlations (Figure-1) between

the benchmark techniques and the equity returns for different investment periods reveal that there exists an

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inverse association between the benchmark techniques (both the P/E and P/B) and the annualised return %

of the equities across all the investment periods. This means that as the benchmark techniques reduces the

subsequent equity returns increases and vice versa. Moreover the declining linear trend lines hint that as the

duration of investment period expands such inverse association also levers up. During longer investmentperiods (two to four years) the negative correlation coefficients are higher than the all period average

coefficients (-0.358 in case of P/E and -0.437 in case of P/B) which is not true during relatively shorter

investment periods (six months to one year). This means that the benchmark techniques and equity returns

exhibit a stronger inverse association in case of longer investment periods (two to four years) than

comparatively shorter ones.

Further it is noticed that for all periods the P/Bs have greater negative association with subsequent equity

returns rather than what the P/Es have, resulting almost parallel linear trend lines of respective correlation

coefficients, where the correlation with P/B linear trend line lies below the linear trend line of correlation

with P/E and this difference is found to be statistically significant at 1% level. This indicates a

proportionate reduction in P/B suggests a reasonably higher proportionate increase in equity returns than

what the same proportionate reduction in P/E suggests.

6. Portfolio returns:

The annualised returns of the portfolios are summarised in Table-1. It can be observed that whether on the

basis of P/E or P/B, the value portfolios always earned more than the glamour portfolios. Across all

investment periods P/B based value portfolio (value portfolio P/B) earned more than the P/E based Value

Portfolio (value portfolio P/E). Further as the duration of investment period expands from six months to four

years the portfolio returns also scale up.

7. Value - glamour return spread:

In this section the annualised returns of P/E & P/B based value portfolios are compared with the annualised

return of P/E & P/B based glamour portfolios respectively. The comparison would facilitate in identifying

whether the P/E and P/B benchmark techniques can be a basis to determine the level of equity returns in

India and to compare the ability of the P/E benchmark technique against the P/B benchmark technique in

fetching equity returns in India.

7.1. P/E based value-glamour return spread:

The comparison of P/E based value portfolio P/E and glamour portfolio P/E as well as their linear trends

(Table-1 & Figure-2) reveal that in all the periods the P/E based value-glamour spreadis positive (i.e.

value portfolio P/E annualised returns % are rather greater than that of the glamour portfolio P/E). The all

period mean annualised return of value portfolio P/E is 480.94%, which is almost six times of the all periodmean annualised return of glamour portfolio P/E (83.29%) and accordingly in terms of annualised return, the

all period average P/E based value-glamour spread is 397.65% (the difference between all period mean

annualised returns of value portfolio P/E and glamour portfolio P/E).

But the paired t test unearth that the P/E based value-glamour spread is significant only in case of the

longest four year investment period and insignificant for all other investment periods of lesser time duration

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at 5% significance level. This suggests that the P/E benchmark technique of equity investment is

significantly successful only in case of longest investment period (four year) rather than relatively shorter

ones.

7.2. P/B based value-glamour return spread:

Similarly the comparison of P/B based value portfolio P/B and glamour portfolio P/V as well as their linear

trends (Table-1 & Figure-3) unveil that in all the periods the P/B based value-glamour spreadis positive

(i.e. value portfolio P/B annualised returns are rather higher than the annualised returns of the glamour

portfolio P/B). The all period mean annualised return of value portfolio P/B is 834.17%, which is more than

thirty-four times of the all period mean annualised return of glamour portfolio P/B (24.05%) and accordingly

in terms of annualised return, the all period average P/B based value-glamour spread is 810.12% (the

difference between all period mean annualised returns of value portfolio P/B and glamour portfolio P/B).

Further the paired ttest bring to light that the P/B based value-glamour spread is significant in case of the

longer investment periods of two to four years and insignificant for all other periods of relatively lesser

time durations at 5% significance level. This suggests that the P/B benchmark technique of equity

investment is successful only in case of longer investment period (two to four year) rather than shorter

ones.

7.3. P/E vs. P/B based value-glamour return spread:

Comparing the valueglamour spread of P/E and P/B in terms of annualised return, the all period average

P/B based value-glamour spread at 810.12% is more than twice the P/E based value-glamour spread of

397.65%. Further, it can be said that the P/B valueglamour spread becomes significant relatively earlier in

two or more years investment periods, whereas the P/E valueglamour spread becomes significant only in

case of the longest four year investment period. Hence in case the P/E benchmark technique is followed

significantly higher returns can be obtained from value portfolio rather than glamour portfolio only in case

the investment is made for the longest four year period. Whereas in case the P/B benchmark technique is

followed significantly higher returns can be obtained from value portfolio rather than glamour portfolio

even in relatively shorter investment periods (two to three years) as well.

8. Value portfolio P/E - value portfolio P/B return spread:

Subsequently the comparison of P/E based value portfolio and P/B based value portfolio as well as their

linear trends (Table-1 & Figure-4) reveal that during all investment periods, the annualised returns of the

value portfolio P/B are higher than that of value portfolio P/E. The all period mean annualised return of value

portfolio P/B (834.17%) is 73.44% higher than the all period mean annualised return of value portfolio P/E

(480.94%).

Moreover the paired t test discloses that the value portfolio P/B and value portfolio P/E return spread is

significant irrespective of the investment period time duration at 5% significance level, whereas such

spread becomes significant even at 1% level of significance in case of relatively longer investment periods

(three to four years). This suggests that no matter what is the time duration of the investment period, the

P/B benchmark technique of value stock investment is always capable of reaping significantly greater

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returns than the P/E benchmark technique of value stock investment and more so significantly during

relatively longer investment periods (three to four years).

9. Investment period return spread of value portfolios:

Next let us consider the changes in annualised returns of value portfolios based on both the bench mark

techniques as the duration of investment period changes. As is earlier observed in Table-1, the value

portfolio returns escalate as the time duration of investment periods increase from six months through four

years. Both value portfolio P/E and value portfolio P/B earn greater annualised returns during longer

investment periods (three to four years) rather than the all period average annual returns (480.94% and

834.17% respectively), as well as than what they earn during relatively shorter investment periods (six

months to two years).

Moreover the paired ttest (Table-2) suggest that during longer investment periods (three to four years) both

P/E and P/B based value portfolios earn significantly higher annualised returns than what they earn during

relatively shorter periods (six months to two years), at 95% confidence level. But during two year

investment period, while P/E based value portfolio earns significantly higher annualised returns than what

it earns during the shortest six month investment period, the P/B based value portfolio earns significantly

higher annualised returns than what it earns during all relatively shorter periods (six months to one year).

This again establishes the supremacy of P/B benchmark technique in contrast to the P/E.

Summary and conclusion:

The study identifies an inverse association between the benchmark techniques (both the P/E and P/B) and

the annualised equity returns in India. Moreover as the duration of investment period expands such inverse

association also magnifies and exhibits a stronger inverse association in case of longer investment periods

(two to four years) than comparatively shorter ones. Further it is noticed that for all investment periods, the

P/Bs have significantly greater negative association with subsequent equity returns rather than what the

P/Es have.

Across all the investment periods, in confirmation to the mispricing view both the P/E and P/B based

value-glamour spreads are found to be positive. However the comparison of the value-glamour spreads

reveal that P/B is superior with an all period average value-glamour spread of 810.12% which is more than

twice the P/E based value-glamour spread of 397.65%. Additionally the P/B based valueglamour spread

becomes significant relatively earlier in two or more years investment periods, while the P/E based value

glamour spread becomes significant only in case of the longest four year investment period. Further

irrespective of the duration of investment periods, the (lowest) P/B based value portfolios always earned

significantly larger returns than the (lowest) P/E based value portfolios. Therefore it is conclusive thatthough both the benchmark techniques are capable of identifying the value stocks that can earn

significantly higher returns;the P/B is a superior technique in India.

The study also discovers that annualised returns of both the benchmark technique based value portfolios

escalate as the duration of investment expands from six months through four years. During longer

investment periods (three to four years) both the P/E and P/B based value portfolios earn significantly

larger annualised returns than what they earn during relatively shorter periods (six months to two years).

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But during two year investment period, while the P/E based value portfolios earned significantly larger

annualised returns against only the shortest six month investment period, the P/B based value portfolios

earned significantly larger annualised returns against all relatively shorter investment periods (six months to

one year),which again confirms the superiority of P/B benchmark technique

in contrast to the P/Ebenchmark technique.

References:

Agnes, Cheng C.S, and McNamara, Ray. (2000). The valuation accuracy of the price-earnings and price-

book benchmark valuation methods.Review of Quantitative Finance and Accounting, 15, 349-370.

Aras, G. and Yilmaz, M.K. (2008). Price earnings ratio, dividend yield and market to book ratio to predict

return on stock market: evidence from emerging market. Journal of Global Business and Technology, 4, 1,

Spring, 21-30.

Basu, S. (1977). Investment performance of common stocks in relation to their price/earnings ratios: a test

of efficient market hypothesis.Journal of Finance, 32, 3, 663-682.

Basu, S. (1983). The relationship between earnings yield, market value and return for NYSE common

stocks.Journal of Financial Economics , 12, 129-156.

Campbell, John Y., and Shiller, R. J. (1988). Stock prices, earnings, and expected dividends. Journal of

Finance, 48, 661-676.

Chan K.C., Hamao Y. and Lakonishok J. (1991). Fundamentals and Stock Returns in Japan. Journal of

Finance, Vol. 46, No. 5, pp. 1739-1763.

Chan, L.K.C and Chen, N.F. (1991). Structural and return characteristics of small and large firms. Journal

of Finance, September, 46, 1457-1484.

Fama, Eugene, and French, K. R. (1988). Dividend yields and expected stock returns.Journal of Financial

Economics, 22, 3-25.

Fama, Eugene, and French, K. R. (1989). Business conditions and expected returns on stocks and bonds.

Journal of Financial Economics , 25, 23-49.

Fama, E.F. and French, K.R. (1992). The cross-section of expected stock returns. Journal of Finance, June,

47, 2, 427-465.

Fama, E.F. and French, K.R. (1995). Size and book-to-market factors in earnings and returns. Journal of

Finance, March, 50, 1, 131-155.

Harvey Campbell R., (1995). Predictable risk and returns in emerging markets. Review of Financial

Studies, 8, 3, 773-816.

Lakonishok, J., Shiller, A. and Vishny, R.W., (1994). Contrarian investment, extrapolation, and risk.

Journal of Finance, 49, 5, 1541-78.

Oppenheimer, H., (1984). A test of Ben Grahams stock selection criteria. Financial Analyst Journal,

September- October, 27-36.

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Pandey I M and Chee H K. (2002). Predictors of variation in stock returns: evidence from Malaysian

company panel data. Global Business and Finance Review, 7, 1, 61-67.

Penman, S.H., (1996). The articulation of price-earnings and market-to-book ratios and the evaluation of

growth.Journal of Accounting Research, Autumn, 235-259.

Table- 1, Annualised returns (%) of benchmark technique based value and glamour portfolios.

Investment

period

Annualised returns of P/E based

portfolios

Annualised returns of P/B based

portfolios

Value

portfolio

P/E

(A)

Glamour

portfolio

P/E

(B)

P/E based value-

glamour spread

(A-B)

Value

portfolio

P/B

(P)

Glamour

portfolio P/B

(Q)

P/B based value-

glamour spread

(P-Q)

Six month 260.76 49.56 211.20 306.92 14.69 292.23

One year 181.59 59.19 122.40 246.92 18.66 228.26

Two year 421.12 72.75 348.37 622.48 27.84 594.64

Three year 662.91 94.86 568.05 1144.33 27.7 1116.63

Four year 878.31 140.11 738.20 1850.21 31.38 1818.83

Average 480.94 83.29 397.65 834.17 24.05 810.12

This table represents the annualised returns obtained from the benchmark techniques based value and

glamour portfolios as well as the value-glamour return spread during different investment periods, Source:

Empirical Research .

Table- 2, Summarised paired t test of significance of mean differences of annualised returns of value

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portfolios.

Investment Period Pair Significance of Mean Differences of Annualised Returns of

Value Portfolios P/E Value Portfolios P/B

6 Month & 1 Year Insignificant Insignificant

6 Month & 2 Year Significant Significant



1 Year & 2 Year Insignificant Significant

1 Year & 3 Year Significant Significant




3 Year & 4 Year Insignificant Insignificant

This table summarises the results of the paired t test of significance of mean differences of annualised

returns of the benchmark techniques based value portfolios at 5% level of significance, Source: Empirical

Research.

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Figure-1, Correlation of annualised returns (%) with P/E and P/B.

The figure represents the coefficient of correlation between the annualised returns of equities and

their benchmark ratios as well as their linear trends for different investment periods, Source:

Empirical Research .

Figure-2, Comparison of annualised returns of P/E based value and glamour portfolios.

This figure represents the annualised returns of P/E based value and glamour portfolios as well as

their linear trend lines for different investment periods, Source: Empirical Research.

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Figure-3, Comparison of annualised returns of P/B based value and glamour portfolios.

This figure represents the annualised returns of P/B based value and glamour portfolios as well as

their linear trend lines for different investment periods, Source: Empirical Research.

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Figure-4, Comparison of annualised returns of P/E and P/B based value portfolios.

This figure represents the annualised returns of P/E and P/B based value and glamour portfolios as

well as their linear trend lines for different investment periods, Source: Empirical Research.

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An Empirical Analysis of Women Participation in Farm

Activities in Rural Kashmir

Bhat Arshad Hussain

Post Graduate Department of Economics, University of Kashmir.

[email protected]

Nengroo Aasif Hussain


[email protected]

W. Mohammad Yaseen


Email [email protected]

Abstract

The present paper analyses the participation of women in farm activities in Kashmir valley. Information has

been collected from 200 households with the help of multi- stage sampling. Our analysis reveals that inRice cultivation all the activities except weeding and ploughing is dominated by women in the sample area,

likewise in maize all the activities are dominated by women. Only one activity in the sample area which is

a joint venture is horticulture. It has been found that over load of work and extreme weather conditions

affect the health of women workers as majority of them reported different types of ailments related to their

work.

Keywords: Women, Rice, Maize, Apple, Health, Farm activities.

1. Introduction

Women are a vital part of any society. Over the years, there is a gradual realization of the key role of

women in agricultural development and their contribution in the field of agriculture, food securityhorticulture, processing nutrition, sericulture, fisheries and other ailed sectors. Comprising the majority of

agricultural laborers, women have been putting in labour not only in terms of physical output but also in

terms of quality and efficiency. Despite, all these strenuous efforts made by women, they are still not given

their share and position in the society. There are various issues relating to women inferiority and complexes

in the society, which need to be addressed in a proper way. This paper is devoted to highlight the

participation of women in farm activities in rural areas.

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The female participation rate in the agricultural labour force is highest in sub-Saharan Africa, Asia and the

Caribbean and lowest in Latin America. Some 70 percent of women living in rural areas of the third world

countries work on the land. Brazil shows that between 1970 and 1980 that total number of men

economically active in agriculture fell, but the number of women increased and the female proportion offarm labour force rose from 9.6 percent to 12.7 percent. Similarly in Peru, the proportion of female

population which was economically active in rural areas grew from 14 percent to 21 percent between 1971

to 1981. (Maithili 1994)

In Kenya, as much of Africa, women are the primary cultivators; managers are co-managers of farm

operations. Women are responsible to later stages of land preparation; they also plant, weed and harvest

crops. Men, on the other hand, are responsible for early stages of land preparation such as clearing or

burning bush, for plowing, and for cattle care. Yet despite womens extensive involvement in agriculture,

Kenya shows the same tendency evident elsewhere in Africa. (Maithili 1994)

The women are the backbone of agriculture work force, but worldwide her hard work has mostly been un-

paid. In India around 70 percent of population earns their livelihood from agriculture (EIU, 1997). Rural

population accounted for 71 percent (1991 census). In 1992 93 only 9.2 percent of the households were

female headed (ESCAP, 1997).

In the rural scenario, there is hardly any agricultural activity where women are not found contributing

except probably plowing field. They have to do varied field operations like tilling, manuring, weeding,

transplanting, harvesting, threshing, and storing. They also have to look after dairy animals, poultry, fuel

needs, food processing, drawing and storing water activities within house are classified as housework and

not considered as contribution to the economy and most of their work is invisible. The statistical data shows

that poor the family, the more it depends on economic productivity of its women, which is true as per the

present study as well.Women have key role to play in farming system throughout the world. In majority of the developing

countries, women play too major roles in rural areas-household responsibilities for child rearing, food

preparation and other chores; and other role they are paid or unpaid workers in agriculture of off the farm.

Most of the areas in the world women are important to agriculture. Households headed by women make up

20-25 percent of rural households in developing countries, excluding china and Islamic countries. Women

are active at every point in the food chain and are often responsible for protecting the integrity of food and

ensuring its wholesomeness and safety. Women work remains invisible in family enterprises at present in

rural India about 33 percent of cultivators and about 47 percent of agricultural labourers are women.

Female agricultural labourers are high in some states compared to other. Agriculture in most backward

districts attracts larger percentage of women than men at the same time; more prospective districts have less

number of women than men. (Babita Agarwal 2008)

It has been found that women from weaker sections of the society and possessing small or no land holding

participate in large proportion in agricultural operations than women from middle class socio-economic

status. They are actively involved in agricultural development and ailed fields including crops production

(FAO, 1999).

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The distribution of rural women by employment status (1992-93) indicates that 31.2 percent women works

for someone else, 31.6 percent women work in their own family farm business units and 2.0 percent women

are self-employed (national family health survey 1992-93). This could well, be read as almost 63 percent

rural women are employed in agriculture and ailed sections. Thus this vast majority cannot be neglected atany cost. Over the years, percentage of women in agricultural labour has increased; in 1991 census women

constituted 38 percent of agricultural labour and this figure jumped to 46 percent in 2001. Similarly women

cultivators increased from 20 percent to 32 percent in the same period (M.S. Swaminathan Research

Foundation)

Another dimension of womens wellbeing is related to the unequal distribution of work and leisure

according to gender. Women work longer hours than men and often carry a disproportionate share of the

burden of coping with poverty. Usually women spent on an average 20 percent more than men in rural area

and 6 percent in urban areas, because, of their reproductive roles, their responsibilities relating to rearing of

children and serving the aged persons in the family, their greater responsibility for agricultural work in

family owned farms and barriers to their entry in urban area markets (UNDP, 1995)

Surviving through a normal life cycle is a resource poor womens greatest challenge the practice of breast

feeding female children for shorter periods of time reflects the strong desire for sons. If women are

particularly anxious to have a male child, they may deliberately try to become pregnant again as soon as

possible after a female is born. Conversely, again women may consciously seek to avoid another pregnancy

after the birth of male child in order to give maximum attention to the new born son. A primary way that

parents discriminate the girl children is through neglect during illness. When sick, little girls are not taken

to doctors as frequently as their brothers.

2. Farm women in third world India

Women are vital and productive workers in Indias economy. They make up 1/3 of the labour force. Thefive years plans have consistently placed special emphasis on providing minimum health facilities,

integrated with family welfare nutrition and education for women and children. Various measures have

been introduced to improve living conditions of women and to increase their excess to and control over

material and social resources.

An overwhelming presence of women is manifested in the unorganized sector, both in rural and urban

areas. The national commission on self-employed women estimates that 94 percent of the total female work

force is to be found in this sector (G.D.I. 1988). They participate extensively in agriculture, animal

husbandry, dairying, social and agro-forestry fisherie

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