Retention Strategy to Reduce Attrition by Sanjay Gupta

CH.I - INTRODUCTION 1.1 ORGANIZATION PROFILE

CHAPTER 1 INTRODUCTION 1.1 ORGANIZATION PROFILE: Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company (HMC), South Korea and is the second largest and the fastest growing car manufacturer in India. HMIL presently markets 34 variants of passenger cars across segments. The Santro in the B segment, the Getz Prime and the i10 in the B+ segment, the Accent and the Verna in the C segment, the Sonata Embera in the E segment and the Tucson in the SUV segment. Hyundai Motor India, continuing its tradition of being the fastest growing passenger car manufacturer, registering total sales of 327,160 vehicles in the calendar year (CY) 2007, an increase of 9.2 percent over CY 2006. In the domestic market it clocked a growth of 7.6 percent as compared to 2006 with 200,412 units, while overseas sales grew by 11.8 percent, with exports of 126,748 units. HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts of the most advanced production, quality and testing capabilities in the country. In continuation of its commitment to provide the Indian customer with global technology, HMIL has set up its second plant, which produces an additional 300,000 units per annum, raising HMIL’s total production capacity to 600,000 units per annum.

HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts of the most advanced production, quality and testing capabilities in the country. In continuation of its commitment to provide the Indian customer with global technology, HMIL has set up its second plant, which produces an additional 300,000 units per annum, raising HMIL’s total production capacity to 600,000 units per annum. HMIL is investing to expand capacity in line with its positioning as HMC’s global export hub for compact cars. Apart from expansion of production capacity, HMIL plans to expand its dealer network, which will be increased from 232 to 260 this year. The year 2007 has been a significant year for Hyundai Motor India. It achieved a significant milestone by rolling out the fastest 400,000th export car. Hyundai exports to over 90 countries globally; even as it plans to continue its thrust in existing export markets, it is gearing up to step up its foray into new markets. The year just ended also saw Hyundai Motor India attaining other milestones with the launch of the i10 and yet another path-breaking record in its young journey by rolling out the fastest 1,500,000th car. Hyundai’s new model i10 which made its global debut here in India in October, 2007 made a clean sweep of all the ‘Car of the Year 2008’ awards from the leading automotive magazines and TV channels like BS Motoring, CNBC-TV18 AutoCar, NDTV Profit Car & Bike India and Overdrive magazine. The i10 is also the choice of the discerning automotive media of the country as they conferred the prestigious ‘Indian Car of the Year’ (ICOTY) award to the i10 as well. The i10 bagged these awards on the basis of excellence in build quality, handling, driver comfort, safety and ride quality. The Santro and the Accent also received the ‘TNS Voice of the Customer - 2008’ award for the Premium Compact Car (Santro) and the Entry Mid size Car (Accent). In March 2008 it achieved yet another milestone by rolling out the fastest 500,000th export car.

Last year, the Hyundai Verna bagged some of the most prestigious awards starting with the title of "Car of the Year 2007" by India`s leading automotive publication – Overdrive, the “Best Mid-size Car of the Year” award by the NDTV Profit Car & Bike India Awards 2007, the “Best Value for Money Car” by the CNBC Autocar Auto awards and ‘Performance Car of the Year 2007’ from Business Standard Motoring. Hyundai cars have been a favorite at all awards ceremonies and have always been winning awards. Our models like Sonata Embera won the ‘Executive Car of The Year 2006’ award from Business Standard Motoring Magazine and NDTV Profit Car & Bike India declared the Tucson as the ‘SUV of The Year 2006’. Not only this, HMIL has also been awarded the benchmark ISO 14001 certification for its sustainable environment management practices. About HYNDAI MOTOR COMPANY Established in 1967, Hyundai Motor Co. has grown into the Hyundai-Kia Automotive Group which was ranked as the World’s Fifth-Largest Automaker in 2007 and includes over two dozen auto-related subsidiaries and affiliates. Employing over 75,000 people worldwide, Hyundai Motor posted sales of US$74.9 billion in 2007 on a consolidated-basis and US$32.8 billion on a non-consolidated basis (using the average currency exchange of 929 won per US dollar). Hyundai vehicles are sold in 193 countries through some 6,000 dealerships and showrooms. Further information about Hyundai Motor Co. and its products is available at http://www.hyundai-motor.com

PRODUCT LINE-UP:

The

Santro

Xing

stunning

combination of contemporary looks and functional luxury. It also incorporates the revolutionary

EUROSAFE

Passenger

Protection System that meets the latest

European safety standards. The new Santro

Xing

combines

fresh

new

attitude, warmth and comfort Here’s

the

car

brimming

with

innovative ideas and good design that will put pleasure into every moment

you

spend

behind

the

wheels.

The first glimpse of the Sonata V-6 will always take your breath away. Your quest for automotive perfection ends with Sonata. This is a car worthy of a modern day Caesar. A dexterous combination of form & function. Rugged yet refined. Off & on the road, the Terracan is designed to rule. The luxurious & rich interiors belie the rugged exteriors.

Even though the styling of the Verna seems contemporary

you

always

end

comparing it with the Accent. The external additions of the body of the Verna seem to blend together with the shape and this sets it apart from the Accent

The Tucson 2.0 CRDi, 1991cc, 4 cylinder, 16 valve engine comes with amazing power 122ps and 245Nm of torque. This soft-roader is highly fuel economic and yet is very good at engine performance. Dual airbags provide very high level of safety. Getz's

space/comfort

and

Santro's

engine make Getz Prime. A very practical car. Fuel economy had been a concern but with 1.1L engine, it's not any more. Getz 1.3 is still available as top-end versions. never sell like Swift but in essence Getz scores over Swift This car sits between the Santro and Getz Prime presents itself as a good looking VFM family car. There are options like ABS and airbags along with features like sunroof to opt for. All this in a small-car! Won Car of the Year - 2008

HMIL presently markets 34 variants of passenger cars across segments, the Santro in the B segment, the Getz Prime and the i10 in the B+ segment, the Accent and the Verna in the C segment, the Sonata Embera in the E segment and the Tucson in the SUV segment. Hyundai Motor India, continuing its tradition of being the fastest growing passenger car manufacturer, registering total sales of 327,160 vehicles in the calendar year (CY) 2007, an increase of 9.2 percent over CY 2006. In the domestic market it clocked a growth of 7.6 percent as compared to 2006 with 200,412 units, while overseas sales grew by 11.8 percent, with exports of 126,748 units. HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts of the most advanced production, quality and testing capabilities in the country. In continuation of its commitment to provide the Indian customer with global technology, HMIL has set up its second plant, which produces an additional 300,000 units per annum, raising HMIL’s total production capacity to 600,000 units per annum. HMIL’s fully integrated state-of-the-art manufacturing plant near Chennai boasts of the most advanced production, quality and testing capabilities in the country. In continuation of its commitment to provide the Indian customer with global technology, HMIL has set up its second plant, which produces an additional 300,000 units per annum, raising HMIL’s total production capacity to 600,000 units per annum. HMIL is investing to expand capacity in line with its positioning as HMC’s global export hub for compact cars. Apart from expansion of production capacity, HMIL plans to expand its dealer network, which will be increased from 232 to 260 this year. The year 2007 has been a significant year for Hyundai Motor India. It achieved a significant milestone by rolling out the fastest 400,000th export car. Hyundai exports to over 90 countries globally; even as it plans to continue its thrust in existing export markets, it is gearing up to step up its foray into new markets. The year just ended

also saw Hyundai Motor India attaining other milestones with the launch of the i10 and yet another path-breaking record in its young journey by rolling out the fastest 1,500,000th car. Hyundai’s new model i10 which made its global debut here in India in October, 2007 made a clean sweep of all the ‘Car of the Year 2008’ awards from the leading automotive magazines and TV channels like BS Motoring, CNBC-TV18 Auto Car, NDTV Profit Car & Bike India and Overdrive magazine. The i10 is also the choice of the discerning automotive media of the country as they conferred the prestigious ‘Indian Car of the Year’ (ICOTY) award to the i10 as well. The i10 bagged these awards on the basis of excellence in build quality, handling, driver comfort, safety and ride quality. The Santro and the Accent also received the ‘TNS Voice of the Customer - 2008’ award for the Premium Compact Car (Santro) and the Entry Mid size Car (Accent). In March 2008 it achieved yet another milestone by rolling out the fastest 500,000th export car. Last year, the Hyundai Verna bagged some of the most prestigious awards starting with the title of "Car of the Year 2007" by India`s leading automotive publication – Overdrive, the “Best Mid-size Car of the Year” award by the NDTV Profit Car & Bike India Awards 2007, the “Best Value for Money Car” by the CNBC Auto car Auto awards and ‘Performance Car of the Year 2007’ from Business Standard Motoring. Hyundai cars have been a favorite at all awards ceremonies and have always been winning awards. Our models like Sonata Embera won the ‘Executive Car of The Year 2006’ award from Business Standard Motoring Magazine and NDTV Profit Car & Bike India declared the Tucson as the ‘SUV of The Year 2006’. Not only this, HMIL has also been awarded the benchmark ISO 14001 certification for its sustainable environment management practices.

The Hyundai Logo



The symbol represents an image of Car Company that produces refined cars with cutting edge technology.



Expresses the will of the management for harmony and stability



The oval shape symbolizes the earth to expresses the global nature of HMC car.



The H logo stands fort the first letter of Hyundai motor company



The slanted shape of the H represent progress and a company that will successfully face future challenges as it continues to raise its standard of quality.

Goals of HMIL:



The ultimate goal is to join the ranks of the world’s top 10 automakers.



Focus on developing advanced technology.



Hyundai cars known as world-class cars



Concentrating on building cars that are more environments conscious and further improving the quality of life for everyone in future.

Basic objectives of HMIL:



Best customer service



Best technology



Best quality products



Best value for people

This has helped the company deliver consistently producing some of the finest cars of the company.

HMIL Vision



DREAM



STRIVE



ACHIEVE TOGETHER

HMIL Mission:



INNOVATION FOR HUMANITY Vision of Hyundai is “Innovation for humanity”.

Milestones: 1996 May 06 Hyundai Motor India incorporated. December 10 Ground-breaking ceremony at the Irrungattukottai plant near Chennai. 1998 May 27 Pilot production of Santro at plant begins within a record 17 months of ground breaking. September 23 Hyundai Santro (Atos Prime) makes its world debut in India 1999 March 31 Hyundai Motor India emerges as the second largest auto-manufacturer in the country. October 14 Launch of Hyundai Accent 2000 April 27 100,000th Car rolls out from the Chennai plant in just 19 months of since commencement of operations. May 08 Launch of Santro zipDrive. June 12 Hyundai Santro crosses 100,000 car sales. July 21 First major export-shipment of 760 Accent and Santro cars roll out of the Chennai Port for Algeria.

November 01 Both Santro & Accent bag top honours in JD Power Asia Pacific 2001 “IQS” and “APEAL” studies. November 29 Roll out of the 1,50,000th car from Chennai Plant in just 25 months. 2001 June 12 Hyundai Motor India rolls out its 200,000th car in 32 months. July 11 Hyundai Motor India introduces new look Santro. July 18 Hyundai Motor India launches luxury sedan Sonata. November 22 Santro ranked No 1 in JD Power Asia Pacific 2001 “Initial Quality” study. November 26 Both Santro & Accent ranked No. 1 in JD Power Asia Pacific 2001 “APEAL” study. 2002 March 18 Global launch of 1.1 Litre E-Epsilon engine on the new Santro Zip Plus. June 26 Hyundai Motor India rolls out 3,00,000th car. August 16 Hyundai Motor India launches Accent VIVA. September 06 Hyundai Motor India launches Santro Automatic Transmission. October 10 Hyundai Motor India launches Accent CRDi. October 23 Hyundai Motor India launches Sonata 2.7 V6. November 01 11

Santro bags top honours in J D Power Asia Pacific 2002, tops both IQS & APEAL for 3rd time in a row & Accent ranked No. 1 in APEAL for 2nd time in a row. December 01 Hyundai Motor India rolls out 350,000th car in a short period of 50 months. 2003 January 14 Hyundai Motor India awarded ‘Manufacturer of the Year’ at the CNBC Autocar India Awards for the second year in a row. February 5 Hyundai Motor India declared ‘Car Maker of the Year’ at the ICICI Overdrive Awards. March 13 Hyundai Motor India commences exports to Latin America March 18 Hyundai Motor India awarded ISO 14001 for sustainable Environment Management May 08 Hyundai Motor India rolls out 400,000th car. May 22 Hyundai Motor India launches Santro Xing, the global small car. June 01 Hyundai Motor India wins the Business Standard Motoring Jury Award for the Accent CRDi. August 04 Hyundai Motor India launches its premium SUV, Terracan August 12 Export shipment of 1500 Santro Xing cars leave for Europe, HMI becomes small cars export hub for HMC. December 11 Hyundai rolls out 500,000th vehicle in India.

2004

January 15 Launch of Accent Viva CRDi March 01 Santro crossed the figure of 1,00,000 sales in terms of annual sales. The first Indian car to do so in its segment. April 15 Launch of Elantra. Sept 10 Launch of Getz. October 31 HMIL crossed the figure of 1, 00,000 vehicles in export and emerged as the largest exporter in the automobile industry. Nov 17 HMIL introduced India’s Best Warranty for the 1st time in the history of Indian Automotive Industry – 4 years/80,000 km warranty for Sonata & Elantra. Dec 01 Santro becomes India’s largest selling single brand across segments with 12,061 units. Dec 25 Getz awarded “Car of the Year” 2005 by Standard Motoring Magazine

2005 Jan 01 Santro once again becomes the largest selling brand in its segment. Jan 17 Getz awarded ‘Car of the Year 2005” by CNBC – TV 18, Auto Car Auto Awards. Jan 01 Accent Petrol – was awarded the 'No 1 Entry Midsize Car' by TNS Automotive, India. Accent CRDi – was awarded the 'No 1 Midsize Diesel Car' by TNS Automotive, India.

Feb 01 HMIL was declared the “Star Company” amongst the unlisted companies by Business Standard. April 6 Launch of SUV – Tucson ~ HMIL launches the GDMS – Global Dealer Management System , a software that will help its dealers stay connected with the company in real time. June 08 Hyundai Motor India launched three new variants of the Santro Xing with eRLX technology(XK-non AC,XK, XL) Aug 17

Launch of Sonata Embera

Aug 18 Hyundai Motor India introduced the export variant of its premium hatchback, Getz, in the Indian market,Getz-GLE. Sep 26 Sania Mirza was signed as Brand Ambassador of Hyundai Getz Oct 18 HMI exported its 200,000th car to the overseas market. Nov 01 All time high cumulative sales in October. Nov 29 HMI exports its first shipment to UK 2006 Jan 11 Tucson was awarded as “SUV of the Year 2006” by NDTV Profit-Car India awards 2006 .

Feb 09 Plant Capacity expansion announcement by Hyundai Motor Chairman, production to be enhanced by 600,000 units by 2007

March 13 HMIL rolled-out the fastest 10,00,000th car April 10 Launch of Hyundai Motor India Foundation September 25 Launch of Hyundai Verna Petrol & Diesel October 31 Hyundai Motor India rolls out the fastest 300,000th export car. November 01 Santro crosses the million mark. December 30 Verna CRDi was awarded the ‘Performance Car of The Year 2007’ by Business Standard Motoring. 2007 January 03 Verna was awarded the ‘Car of the Year 2007’ by Overdrive magazine. January 04 Verna was awarded the ‘Best Value For Money Car 2007’ by CNBC TV 18 Autocar Auto awards. January 12 Launch of Sonata CRDi. March 26 Hyundai Motor India ships out the first Getz. April 02 Launch of Getz Prime. April 19 Launch of Verna CRDi SX. June 01 Hyundai Motor India Receives EEPC(Engineering Export Promotion Council)‘Top exporter of the year’ Award for 2005-06.

June 27 Launch of Sonata CRDi Automatic. July 04 Launch of Santro CNG. Aug 06 Export of 400,000th car Sep 01 HMIL rolled out the fastest 1,500,000th car Launch of Getz CRDi Oct 31 Launch of i10 Dec 29 i10 awarded ‘Car of the Year 2008’ by Business Standard Motoring Magazine 2008 Jan 09 i10 awarded ‘Car of the Year 2008’ by CNBC TV18 Autocar Auto awards Jan 10 i10 awarded ‘Car of the Year 2008’ by NDTV Profit Car& Bike Jan 11 i10 awarded ‘Car of the Year 2008’ by Overdrive magazine Feb 02 Inauguration of 2nd plant in Chennai March 27 Export of 500,000th car April0 4 i10 awarded ‘Car of the Year 2008’ by ICOTY June 11 Fastest Export - Over One lakh units of i10 exported since its launch in Oct 31

July 01 Hyundai-Kia Automotive Group Joins Ranks of Global Top 5 Automakers (Automotive News' 2008 Global Market Data Book) July 15 i 10 Kappa launched July 15 Inauguration of the new Engine & Transmission plant. September 10 10th Anniversary celebration and flag-off of ‘i drive to Paris’ by Abhinav Bindra. September 30 Hyundai launches the dual fuel- ‘Santro Eco’. October 02 i 20 launched in Paris Motor Show and display of ‘i drive to Paris’ cars. HMI Exports: Hyundai Motor India, the global compact cars export hub of the US$47 bn Hyundai Motor Group, started export shipment to Europe with a consignment of 1,500 units of its, flagship 'Santro' bound for Italy, Spain and Netherlands. The first export shipment to Europe since the announcement of HMI as the global export hub for Hyundai compact cars, this consignment will carry 1,500 units of the New AtoS Prime, as the Santro is badged in Europe. This included 710 units bound for Italy, 690 for Spain and 100 units for Netherlands. Western Europe is globally the largest consumer of small / compact cars with the largest markets being Italy, Spain, Greece, Netherlands and Belgium. The company has scaled up its export target from 8,966 units in FY 03 to 30,000 units in FY 04. The company has already exported 6,740 units YTD.

Algeria, Morocco, Indonesia,

Colombia, Nepal and Sri Lanka are currently some of the biggest export markets for Hyundai Motor India.

HMIL is India's second largest carmaker and a clear leader in the B, C and E passenger car segments, which together account for over 70% of the Indian passenger car industry. The company has announced aggressive plans to emerge as India's leading exporter of passenger cars by CY 2004. Awards and Certifications:

For Environment

ISO 14001 Certification (EMS) in 2003 from TUV, Germany Eco First Award in 2003 from Kanchi Health & Education Society

3 Leaves Award in 2001 from CSE, New Delhi

National Energy Conservation Award in 2002 from Govt. of India

Energy Conversation & Safety Safety Appreciation Award in 2001 from National Safety Council Energy Efficient Unit Award in 2001 from CII

Car of the Year Compact Car of the Year

Car of the Year 2008

Car of the Year - Aaj Tak Viewers Choice Award

Car of the Year 2008 Small Car of the Year 2008

PM Presents “Star Company” Award to Hyundai Motor India

Hyundai Santro has topped the JD Power Asia Pacific Intial Quality Study (IQS) that measures product quality for three years in a row (Years 2000, 2001 & 2002) CNBC-TV18 Autocar Auto Awards 2007: 'Best value-for-money car' Hyundai Getz is the CNBC Autocar Car of the Year 2005 Hyundai Elantra – Best Value for Money Car of the Year 2005 Company – Awards – CNBC Autocar India – Hyundai has been the manufacturer of the year for two years in row.

Manpower: [Category wise] Executives: 309 6

Em plo yee s

Mgmt. Trainee / Grad. Engr. Trainee Asst. Mgr / Dy. Mgr Mgr / Sr. Mgr / AGM / DGM / GM

1280

Sr.GM / VP / Sr.VP / President

95 9

Jr.Executives: Engineer / Officer Technical / Business Associate Technical /Business Associate Trainees

Executives

Jr. Executives

Non Executives

Unique HR initiatives:

Non - Executives: Technician / Workman / Trainee



Morning Department Standing Meeting – done by all



My Machine and My Station concept



Music Extravaganza in the Plant – once a year at Founders day



Free Help Line services to serve employees



Employees Family Visit Program – Gift from Management thanking the family



Publicity for Outstanding Work



By display of achievement and Photograph in Department Notice Board



By distribution of Prizes in meetings attended by all employees



Annual Picnics to promote “ ONENESS ”



Birthday Greeting with flower bouquet & Plantation of trees named after them



Marriage Gift to newly married employees



Welfare benefits over and above what is prescribed by law



Meditation for Managers – and follow up



Tax Saving Gift vouchers / Gift Credit Card on Festive occasions

The Challenges were…

To manufacture and sell a global technology, global quality car reflecting Indian consumer needs at an appropriate price and attain profitability. What Hyundai Provide:



A highly Energized & Stimulating work environment



High Levels of Motivation, Empowerment & Recognition



Emphasis on Competence, Creativity and Challenge



Proactively unleashing People’s Potential that will build the future



Encourage Innovation and allow the freedom to learn from mistakes



A culture of Continuous Change & Improvement

Health:



Regular Health Camps (Eye, Cardiac and Wellness) at the adopted villages



Donated Ultra Sound Machines and Auto Refractometer to Primary Health Center

Infrastructure:



Construction of Cement Roads at Keevalur



Deepening of Ponds in Thandalam & Kattarambakkam



Drinking Water Tank construction at Irrungattukottai

Education:



Construction of High School at Thandalam (Common for Four villages)



Infrastructure Facilities like Fans, Benches for the Schools of nearest 4 villages



Distribution of Note Books and Stationery items to School Children



Picnics for all the 4 school children once a year

Social Needs & Contingency Support:



Joint participation in Social Welfare Programmes with the District Adminisitration



Support during natural calamities like Flood



Artificial Limbs, Wheel chair and Tricycles for Physically Disabled Persons in the adopted villages



Contribution for setting up Night Schools



Support being extended for functioning of Vidya Prakasam – Society for Well-being of Spastic Children

Employment:



Provided employment for all those eligible land displaced people of the 4 villages



Provided job oriented technical training to the Unemployed youth of the villages

CH.I - INTRODUCTION 1.2 CONCEPTS

1.2 CONCEPTS: Attrition: General Usage: In general usage the word attrition means 'WARE DOWN' and 'FRICTION'. Industrial Usage: Attrition in the industrial point of view is the process of employees leaving the organization because of various reasons.

In detail it is the process where in the

employee gets separated from the employer under whom he works under avoidable and unavoidable circumstances. Types of Attrition:  Death  Resignation  Retrenchment (Lay off)  Retirement Advantages of Attrition  Excess manpower can be checked  Employee movement in the industries  Job rotations  Employment generation  Reduces boredom  Fresh and innovative ideas through new people

Disadvantages of Attrition  Loss of trained manpower  Recruitment expense  Costs of training the new person  Employee may spoil the image  Costs of retaining the talent  Company information Attrition in Manufacturing Sectors “Attrition spreading to traditional sectors as well” ATTRITION is not just rampant in the BPO sector, but it is fast catching up in other traditional sectors such as manufacturing and engineering, public sector undertakings and services.

According to an Employee Vulnerable Study by NFO India, employees in the traditional sectors are most dissatisfied and would switch jobs at the first available opportunity. However, employees belonging to new-age sectors such as financial services, insurance and banking, FMCG and white-goods, IT and telecom seem to be relatively more satisfied. Mr. Gautam Nath, Director-Corporate Services for NFO, said the "possible vulnerability" of white-collar workers should ring alarm bells for HR heads. The major pitfalls for the manufacturing sector were found to be lack of growth opportunities, dissatisfaction with job content, inadequate emphasis on policies and systems and interpersonal relationships. "There is a crying need for companies to engage the employees' interest by creating a conducive environment for growth, learning, bolster ‘we-feeling’ and compensate as per industry standards," said Mr. Nath. "After all, the hidden costs incurred in attracting the right workforce and on-the-job training, is phenomenal.

Also, if we take into account client business that goes away, each time we lose a key performer," added Mr. Nath. NFO randomly polled over 200 corporate executives from some leading companies in Delhi, Mumbai and Bangalore. It is aimed at understanding motivation levels of employees, reasons for high degree of employee turnover in certain sectors and factors that keep the interest level of employees going. For many service sectors, within their aggregate attrition numbers there are hidden problem areas of attrition. Sometimes these are associated with particular products, service functions, or customer segments. Frequently, and with the greatest negative impact, these problems particularly hurt retention among the highest value customers. Retention: Retaining talented employees is one of the topmost priorities of employers today. Reasons for attrition could be the innumerable changes engulfing workplaces, like reorganization, higher performance standards and resultant high-pressure levels. The challenge is not only to attract the best talent but also to retain them. Rising opportunities for career development, lifestyle decisions, job mobility, unbalanced work life, poor mentoring and stress are some factors which influence and individual’s decision to continue or quite. Among other things, a retention strategy demands respecting employees’ concerns right from their entry into the organization till their retirement. It encompasses the organization’s ability to provide the best of work climates.

What troubles employees? An Employee expect from Employer to:  Provide induction  Create a good work environment  Motivate them to work  Train them  Provide a suitable compensation package  Implement reward strategies  Counsel them  Hold affable exit interviews Appropriate HR strategies alone can satisfy employee expectations. Retention will not be a major concern if the organization stands firm on its values and promises. Design on Retention Strategies:  Corporate image Maintaining corporate image is an effective way to attract the talented. The organization has to ensure that it is sought after for employment by cashing on its good will and reputation.  Saleable Features The organization must identify its strengths and opportunities and portray them effectively. This is almost equivalent to selling the organization to the new recruits; it helps in building positive impressions initially.  Turnover Organisations must hold strict exit interviews and review reasons for turnover. The information must be ideally used to plan strategies for retention. Those issues that might drive talent to leave should be dealt with immediately.

 Continuous development Unless organizations adapt to changes and developments, they cannot mentor their employees and new recruits. Give the new recruits every reason to work for the organization and build a long-term relationship.  Information use All information about the new recruits should be kept in mind even after the recruitment process ends. This will help in identifying their potential and setting performance targets thereby, maximizing the recruit’s performance.  Cultural Profile Matching the profile of the recruit with the cultural profile of the organization is crucial. Organisations should look for the best fit into their territory with reviews from their colleagues, customers and managers.

CH.I - INTRODUCTION 1.3 NEED FOR THE STUDY

1.3 NEED FOR THE STUDY Today's manager is really the conductor of his own orchestra. Like an orchestra, no matter how good you are, you sometimes need to stop and re-sync. Were the violins too loud?

Could you hear the flutes? How did the composer mean for the music to

be played? Top performing managers lead with a style that coordinates the talents of this diverse orchestra into a deep, rich symphonic sound or a cacophony of simultaneous musical notes. What sounds are coming out of the employees your managers are conducting? Employees today come to work with all types of skills, skill levels, attitudes and personalities. Both men and women have integrated into the workplace. The diversity of cultures and ethnicity is growing at lightening speed. But even with this economic slowdown, your best people have other offers. Employee attrition has risen by more than 25 percent in the past five years. Attrition costs are roughly 18 months' worth of salary for each manager or professional who leaves and a half year's pay for each hourly worker. Employee defections are killing the bottom line and even worse, they are killing any chances for a quick turn-around once the economic winds of fate shift direction. The Hay Group, having surveyed nearly 1 million workers in more than 330 companies over the past four years, has shown that it is important to weed out bad managers who chase workers away. Otherwise, the good people will be frustrated and leave

too. Attrition is costly and one of the direct causes of employee turnover can be attributed to the manager. Thousands of organizations spend billions of dollars on skill training for managers. Unfortunately these programs often deal exclusively with the “how-to” dimension, the result is merely educational and little or no performance gains are realized. This ritual of how-to training is referred to by Training House, Inc. as the annual “sheep dip”, where managers and employees are “herded up” and run through a program chosen because “we haven't done that one in a while” or by selecting a patchwork quilt of topics attempting to meet the needs of all participants but not the specific needs of anyone. Companies need to stop tuning into WWRN (Whatever Works Right Now) and POTY (Program of the Year) training if they ever hope to attract and retain their best people and get a return on their training investments. Training House Inc. has benchmarked 72,000 managers in 700-plus companies in dozens of industries in 17 countries. Universally they identified twelve competencies that highly effective managers have in common that the average performers do not possess. Competency based training first identifies the specific skills that are holding average performers back from top performance and then targets training time and dollars to improve only the most needed skills. The result is a greater transfer of classroom learning to on-the-job performance gains, a reduced learning curve, and a baseline by which future performance gains can be measured. Most importantly, training is focused on improving performance, not just personality changes, which translates into greater productivity and more profits. According to Scott Parry, author of “Just What Is A Competency” , a competency is "a cluster of related knowledge, attitudes and skills that affects a major part of one's

job; that correlates with performance on the job; that can be measured against wellaccepted standards; and that can be improved via training and development". These twelve competencies identified in top performers have been broken down into six major managerial activity clusters:  Task Handling  Administrative (Managing Your Job)  Cognitive (Thinking Analytically)  People Handling  Communications (Relating to Others)  Supervisory (Building the Team) A major reason training courses often don't make much difference in on-the-job performance is because most training programs do not deal with all three dimensions:  Knowledge  Behaviors/attitudes  Skills

CH.I - INTRODUCTION 1.4 PROBLEM

1.4 PROBLEM “OUR ASSEST WALK OUT OF THE DOOR EACH EVENING.WE HAVE TO MAKE SURE THAT THEY COME BACK THE NEXT MORNING “ - Mr. Narayanamurthy Chief Mentor of Infosys High attrition destroys the value of going offshore. It causes companies to lose knowledge, incur training fees, get caught up in the never-ending cycle of hiring, and fall behind on scheduled projects. Employee recruiting and retention are big issues for IT organizations, so create a work environment where the employees are involved in the development of rewards programs. Global outsourcing and the astounding amount of foreign direct investment pouring into China, Russia, and India have created tremendous opportunities and competition for talented IT professionals in those countries. The downside of this increased competition is a rising rate of attrition, particularly in India. Fiscal third-quarter 2005 (ended December 2004) results filed by Infosys, Wipro, Satyam, and TCS listed attrition rates between 7.6% and 17.7%. Vendors that we have interviewed place the numbers much higher, at 25%–60%, while an April 2005 Business Week article estimated an attrition rate of 60%, with some India service providers experiencing up to 80% turnover. To put these attrition numbers into perspective, if your company has 100 programmers and an attrition rate of 25%, then 25 of your IT staff will leave each year. Think about the time and money it took to find, interview, hire, train, and

coach those 25 people. Now think about losing them and starting the hiring and training processes anew. How do the hiring and training processes break down in terms of total costs in India? The typical time for advertising, interviewing, screening, negotiating, and hiring a new employee is about two weeks. Companies usually allot one week for programmers to become familiar with the new business, two more weeks for technical training, and one last week for customer training. Now imagine a 25% attrition rate and replacing 25 of these programmers each year. Based on a yearly salary of $15,000 for the human resource person and $25,000 for the programmer, we estimate that it would cost an additional $63,000 annually in acquisition and employee training costs. After considering these figures, it quickly becomes apparent why companies are investing in strategies to prevent attrition. Implementing the seven strategies that follow will help IT managers retain valuable offshore employees longer. While we primarily cite examples taken from India, the basic principles apply to other offshore destinations as well. First we have to identify the reasons for why an employee leaves an organization. A talented HR Manager can identify the reason and can plan retention strategy. Reasons why an employee leaves an organization  Because of BOSS (50% Main Reason)  Monetary factors  Lack of good working condition  No Flexible work schedules  Lack of respect  Very Few Supportive colleagues  Organization is more concern toward business  Increase in favoritisms  Employee needs pride in where they work & what they do  Lack of appreciation and challenges in job 32

 The job or workplace was not as expected  The Mismatch between Job and Person  Too Little Coaching and Feedback  Lack of support  Stress from Overwork and Work-Life Imbalance  Loss of Trust and Confidence in Senior Leaders  Less frequency in giving rewards Effect on Organization if it’s Employee Leave  Loss of productivity  Replacing qualified employees  Poor retention creates a “revolving door” culture within the organization lowering morale and confidence.  Cost of overtime or temporary help  Recruiting costs  Interviewing costs  Time spent in orientation

CH.I - INTRODUCTION 1.5 OBJECTIVES

1.5 OBJECTIVES  To study the existing trend, extent and impact of employee turnover.  To analyze the causes for employee Attrition.  To suggest measures to check employee turnover. One of the greatest challenges organizations face today is retaining valued staff. This is especially true in high-technology fields.

What are the major factors

influencing? Primary: -

Comprehensive approach factors:



Compensation benefits



Employee Development and Training



Organizational Identity and prestige



Organizational distinctiveness



Teamwork vs. internal competition



Work schedules



Management style



Communication & Facilities

Secondary: -

Analysis to each unique enterprise, using a combination of

individual interviews, focus groups, surveys, statistical analysis and benchmarking. Inferences from EXIT INTERVIEWS shows that, 

Opportunity for growth & development (Time-bound & unstructured)



Compensation package (Considered to be below industry standards) 34



Boss-subordinate relationship (Arising out of cultural differences and inadequate orientation)



Empowerment – as important causes for employee turnover.

The Attrition Study enables organizations in building 

Predictive Retention Practices



Employer Experience Score



Benchmarking



Strong Employers

Predictive Retention Practices This analytics based study would focus to first understand, and then, post analysis, predict employee behavior. This practice is derived from the identification of predictive attrition areas, which help organizations in identifying probable areas of attrition Identify "probable areas of attrition" and "current Retention Practices” Segmentation models help developing "Industry wise Benchmarking” Employer Experience Score Employer Experience Score

is an index that measures the "embedded cultural

commitment" of an organization towards "building the talent" of the organization. The experience score is anchored on four predictors: 

Affiliation



Development Initiatives



Employability and



Our Work Environment

Through this score, we are able to gauge the unique experience that an employer has been able to provide to his talent force, which not only acts as a powerful retention 35

management tool, but also becomes equally important for acquiring the right talent for the organization Benchmarking India Attrition Study data will not only help in developing an organizational and industry wise best practices report, but also help in identifying the "Employer Experience Score". This will enable organizations in determining the strengths and weaknesses of their HR, set up short-term and long-term targets and develop their action plan. 

Organizational and Industry wise best practices



Enable Organizations determine strengths and weaknesses of their People Processes

Strong Employers Strong Employers is a unique way to recognize the accomplishments of organizations who have successfully implemented practices that build a strong connect with the employees, thus increasing the "Association" and "Affiliation" with the organization. These would be companies who have a comparatively higher "Employee Experience Score" and have not only successfully developed, but also have successfully deployed employee "Predictive Retention Practices" 

Organizations with high experience score



Recognize Industry Leaders

CH.I - INTRODUCTION 1.6 PROCEDURE – METHODOLOGY

1.6 PROCEDURE – METHODOLOGY Research Design is the conceptual structure within which the research is conducted. It constitutes the blue print for the collection measurement and analysis of data. A good design is often categorized as flexible, appropriate, efficient, economical etc. The design used for the dissertation is a “DESCRIPTIVE RESEARCH DESIGN”. In this design there is a possibility of maximum bias and minimum reliability of data collected. It also includes attempts by the research to discover causes behind the figures. The Flow of events are enumerated below:

Defining Goals and Objectives

Design Methodology

Develop Instruments

Select Sampling Design

Conduct Research

Analyze Data

Present Finding and Recommendation

a) Design

Descriptive design

b) Data Collection :

i) Direct Interview ii) Company Records

c) Research Type :

Quantitative

d) Sampling

Structured Questionnaire containing 26

Questions under the following sub sections namely:

e) Sample size



Orientation



Interpersonal Relationship



Superior – Subordinate Relationship



Problem Management



Communication Skills



Decision Making



Risk Taking



Innovation / Change



Conflict Management

200 samples

f) Tools & Techniques: 

Chi – Square Analysis



SWOT Analysis



Ranking Average Method



Trend Analysis

g) Limitations of the study: The study has got its own Limitations,



The sample respondents may not be true representation of the total population.



There can be errors due to bias of respondents



It was observed that some of the respondents were reluctant in answering to some questions.



Due to the length of questionnaire very few respondent could answer the question genuinely.



The survey method was a convenience survey method and it has got its own limitations.

Method Of Data Collection Basically, data is of two types’ Primary data and Secondary data. So, before data collection the researcher has to decide the nature of data he wants to collect. Primary data are those which are collected a fresh and for the first time and thus happens to be original in character. The secondary data are those which have already been collected and processed through statistical process. Both ‘questionnaire method’ and ‘personal interview method’ were used to collect the data. The questionnaire was the primary tool and it was backed by the personal interview. This technique was adopted as the study required the use of a number of open-ended questions and the questionnaire method does not warrant too many of them. Hence for a meaningful and comprehensive study, this combination of methods was considered necessary.

CH.2 - ANALYSIS 2.1 ANALYSIS OF THE METHODOLOGY

CHAPTER 2 ANALYSIS 2.1 ANALYSIS OF THE METHODOLOGY CHI – SQUARE ANALYSIS: The chi-square test is one of the simplest and most widely used non-parametric tests in statistical works. The Greek letter "X" was first used by Karl Pearson in the year 1990. The quantity Chi-square describes the magnitude of the discrepancy between the theory and observation. With the help of chi-square test one can find out whether two or more attributes are associated or not. Suppose one has 'N' number of observation classified according to some attributes. It may be asked whether the attributes are related or independent. In order to test whether or not the attributes are associated, one takes the Null hypothesis that there is no association in the attributes under the study or, in other words the two attributes are independent. If the calculated value of chi-square is less than the table value at a certain level of significance (generally 5%), which infers that the results of the experiment provides no evidence for doubting the hypothesis, that the attributes are not associated hold good. On the other hand, if the calculated value of chi-square is greater than the table value at a certain level of significance, it can be inferred that the results do not 40

support the hypothesis or in other words, the attributes are associated. It should be noted that Chi-square is not a measure of the degree or form of relationship. It should be noted that Chi-square is not a measure of the degree or form of relationship. It should be noted that Chi-square is not a measure of the degree or form of relationship.

It tells us whether 2 principles of classification are not

significantly related, without reference to any assumption concerning form of relationship. The procedure for finding the independence of rows and columns, criteria of classification is summarized as follows: Ho - The rows and columns classification are independent H1 - The rows and column classification are dependent Where, Chi-Square = L (Oij - Eij )2i Eij Oij - Number of sample element observed to belong to the ith row and jth column Ri - Total observed number in the ith row. Cj - Total observed number in the jth column Eij - (Ri x Cj/ n and there are v=(r-1)(c-1) degree of freedom Acceptance region R: If calculated Chi-square lesser than or equal to table value of Chisquare, than accept Ho Rejection region R: If calculated Chi-square greater than or equal to table value of Chi-square, than reject Ho

CHI-SQUARE: ORIENTATION & CONFLICT Strongly

Agree

Neither Agree Nor Disagree

Strongly

Disagree

Total

Disagree

Orientation

146

200

Conflict

200

Total

178

400

Null Hypothesis H0 = Attributes are Independent. Degrees of Freedom (d.f.) = (r-1) (s-1) Where r  number of rows s  number of columns The number of degrees of freedom is (2-1) (5-1) = (1) (4) 

34 X 200 400

Expected frequency for 34 

Calculation of ψ 2 2

Observed Frequency (O)

Expected Frequency (E)

(O-E)

1.47

146

3249

36.51

1296

27.00

484

15.13

1.14

1.47

3249

36.51

1296

27.00

484

15.13

1.14

Sl. No.

(O-E) E

162.49 42

Calculated ψ2

∑ (O-E)2

162.49

E Tabulated value of ψ2 at 5% level (0.05) for 4 degree of freedom

9.488

Since Calculated ψ2 at 5% level (0.05) > tabulated ψ2 We reject the null hypothesis; the attributes are inter-dependent.

CHI-SQUARE : SUPERIOR SUB-ORDINATE RELATIONSHIP& COMMUNICATION Strongly Agree

Agree

Neither Agree Nor Disagree

Total

200

Communication

114

194

Total

162

210

394

Superior Subordinate Reln

Null Hypothesis H0 = Attributes are Independent. Degrees of Freedom (d.f.) = (r-1) (s-1) Where r  number of rows s  number of columns The number of degrees of freedom is (2-1) (3-1) = (1) (2)  Expected frequency for 34 

162 X 200 394

Calculation of ψ 2 (O-E)2

Observed

Expected

Frequency (O)

Frequency (E)

0.44

106.6

112.36

1.05

11.17

23.33

2.09

79.77

33.29

0.42

114

103.4

112.36

1.09

10.83

23.33

2.15

Sl. No.

(O-E)

7.24

Calculated

ψ2

= ∑ (O-E)2

= 7.24

E Tabulated value of ψ2 at 5% level (0.05) for 4 degree of freedom

5.991

Since Calculated ψ2 at 5% level (0.05) > tabulated ψ2 We reject the null hypothesis; the attributes are inter-dependent.

SWOT ANALYSIS: 45

The Indian passenger car market has experienced a total renovation, with nearly every automaker setting up shop in the sub continent. The variant offered has not only provided consumers ‘choice’ but also increased the marketability of the products. Hyundai Motor India Limited has been in the forefront of the automotive revolution sweeping the country, giving the Indian customer the power of choice, value, and truly world class quality and after sales service. All of Hyundai's brands in India, the Santro, the Accent and the Sonata, have become synonymous with superior performance and reliability and have emerged as best sellers in their segments for two years in a row. India's premium sedan segment is only about 20 months old and is estimated at about 5,000 units a year. All models in the segment are priced at over 1 million rupees. Hyundai Motor India limited dominates this premium sedan segment with 42% sales i.e. 2100 units. Today Hyundai Motor India limited is poised for its next phase of growth, to not only put Hyundai in more Indian homes than any other carmaker, but also put India on the global export map. Hyundai Motor India limited is a fine example of Indo-Korean partnership - a union that combines Indian skill and workmanship with Korean design and technology to produce world class cars - A partnership that is committed to developing the face of the Indian auto industry and its economy.

STRENGTH Unlike other competitors, HMC's unique - strategy of introducing the latest technology in India has proved it to be the II largest Car manufacturing Company in India. With - its Xing, it has introduced the latest technology in car manufacturing and style keeping other competitors at bay. Hyundai achieved 20,00,000th car on Nov 2008, in a short span of 10 Years. Santro sales accounted for 8,573 units (including exports of 1,699 units), a 40 per cent increase, while the Accent accounted for 2,551 units (including exports of 601 units), a 39 per cent growth. The company had received overwhelming response from customers in India and distributors in Europe for Santro Xing, which was launched on May 22, 2003. During the last fiscal year, April'02 to March'03 Hyundai Motor India exported 8,000 cars mainly to the South East Asian and African markets. The firm recorded combined sales of 111,051 vehicles during the last fiscal year to March 2007. The company's total production capacity was recently increased to 350,000 cars a year. During the last fiscal year Hyundai Motor India earned revenues of 40 billion rupees (850 million dollars). In 2002 HMIL clocked Rs 4,000 crore turnover which is likely to increase to Rs 5,300 crore in the current year.

OPPORTUNITIES Hyundai of Korea is planning to shift its production base for Santro to India by the middle of this year, following which India will be the global base for sourcing the vehicle. HMIL hope to export around 20,000 Santro to Europe this year against a total export target of 30,000 vehicles. The company was also considering the possibility of scaling up its research and development (R&D) initiatives in India. They have enough scope for enhancing R&D activities in India. However, at present HMIL have provision for limited R&D. HMIL has targeted a 25 per cent market share by 2005. The company also hopes to sell around 1.5 lakh passenger cars in 2003-04 against 1.12 lakh units sold in the previous year. HMIL's installed capacity stands at 3.5 lakh unit cars a year, which is being increased to 5 lakh at an investment of Rs.1000 crore by the II part of 2007. Hyundai proposed to invest $ 180 million in India within three years to enhance its plant's annual production capacity, to 350,000 cars. Their plan is to export 70,000 cars by 2005 to the Western Europe and North American markets, and make India as Global hub after Korea for Hyundai.

THREATS General Motors Corp, the world's largest auto-maker will launch two new cars in India next year (names yet to be released) to help boost its share of a market predicted to be one of the world's fastest growing this decade. Foreseeing enormous potential in the South Asian country's car market, which GM thinks will grow by eight to nine percent annually this decade plans to launch additional vehicles in 2003, at least two new cars. GM's new model will compete with other premium sedans such as the Sonata from Hyundai, the Mondeo from Ford, the Accord from Honda, the Octavia from Skoda Auto and Daimler Chrysler's Mercedes Benz C-class. Renault Nissan starting to manufacture the car from the year 2007, factory constructed near Hyundai. Ford spent Rs. 17 billion building an assembly plant near Chennai, which currently operates at only 40 per cent capacity. In January, Ford said it will begin making engines for the Ikon, the only model it now makes in India, through a tie-up with Hindustan Motors Ltd. The first Ikons with locally made engines are expected to roll out next January, boosting the share of locally made parts in the car to over 90 per cent from 75 now, which will there by decrease the cost of production. Ford could introduce new models, including the rapidly growing hatchback segment, or a sports utility vehicle or mini-van. India's largest car maker Maruti Udyog increased its market share to an impressive 60 percent in May this year after a spurt in sales of its entry level 'Maruti 800'. Even 'Omni' van overcame sluggish sales and grew 13 per cent in May 2003, Maruti's cumulative (April-May 2003) sales jumped by 39 per cent as compared to the same period last year.

Country's biggest carmaker Maruti Udyog Ltd on JUNE 15, 2003 launched two international two-door limited editions of its premium small car 'Zen'. 'Zen' is the highest selling premium car of Maruti. The company sold 4,384 units of 'Zen' in the year 2003, which contributed to over 11 per cent of the total sales Maruti at 39,178 units in May'03. Recently Tata Motors launched Rs. 1 Lakh Car ‘NANO’; it tends to reduce the car prizes of all other car manufacturing companies.

RANKING WEIGHTED AVERAGE METHOD: Overall Strongly Agree

Factors

Agree

Neither Agree Nor Disagree

Disagree

Strongly Disagree

(5)

(4)

(3)

(2)

(1)

Orientation

162

372

Interpersonal Relatioship

Superior Sub-ordinate Reln.

Problem Management

Communication

Decision Making

Risk Taking

Innovation

Conflict Management

Orientation

–

5*162 + 4*372 + 3*38 + 2*10+10= 2442

Interpersonal Reln. –

5*36 + 4*53 + 3*10

422

Sup. Subord. Reln. –

5*38 +4*56 + 3*6

432

Problem Mgmt.

–

5*35 + 4*27 + 3*5

298

Communication

–

5*41 + 4*52 + 3*7

434

Decision Making

–

5*9 + 4*45 + 3*11 + 2*2

262

Risk Taking

–

5*26 + 4*31 + 3*5 + 2*2

273

Innovation

–

5*44 + 4*39 + 3*12 + 2*3 + 1*1 =

Conflict Mgmt.

–

5*5 + 4*9 + 3*28 + 2*19 + 1*5 = 188

419

Factor

Scores

Rank

2442

Orientation Communication

434

Superior Sub-ordinate Reln.

432

III

Interpersonal Relatioship

422

Innovation

419

Problem Management

298

Risk Taking

273

VII

Decision Making

262

VIII

Conflict Management

188

Inference(s):

Orientation tops the list of motivators followed by effect

communication and relationships.

Orientation scores clearly exemplifying the

managements commitment to build nurture a working organisation.

RANKING WEIGHTED AVERAGE METHOD: EXECUTIVES Strongly Agree

Factors

Agree

Neither Agree Nor Disagree

Disagree

Strongly Disagree

(5)

(4)

(3)

(2)

(1)

Orientation

124

Interpersonal Relatioship

116

Superior Sub-ordinate Reln.

110

Problem Management

Communication

Decision Making

Risk Taking

Innovation

Conflict Management

Orientation

–

5*56 + 4*124 + 3*12 + 2*4

820

Interpersonal Reln. –

5*56 + 4*116 + 3*24

816

Sup. Subord. Reln. –

5*68 +4*110 + 3*16 + 2*2

832

5*60 + 4*58 + 3*14

574

Problem Mgmt.

–

Communication

–

5*86 + 4*96 + 3*14

856

Decision Making

–

5*20 + 4*76 + 3*34 + 2*2

510

Risk Taking

–

5*42 + 4*64 + 3*12 + 2*8

518

Innovation

–

5*80 + 4*84 + 3*20 + 2*8 + 1*2 =

814

Conflict Mgmt.

–

5*8 + 4*22 + 3*60 + 2*38 + 1*4 =

388

Factor

Scores

Rank

Communication

856

Superior Sub-ordinate Reln.

832

Orientation

820

III

Interpersonal Relatioship

816

Innovation

814

Problem Management

574

Risk Taking

518

VII

Decision Making

510

VIII

Conflict Management

388

Inference(s):

Among Executives Communication has gained pre-dominance over

relationships & Orientation; executive correspondance is a matter of pride at HMI.

Strongly Factors

Agree

Neither Agree Nor Disagree

Disagree

Strongly Disagree

(5)

(4)

(3)

(2)

(1)

Orientation

140

Interpersonal Relatioship

106

METHOD: 114

RANKING WEIGHTED Superior Sub-ordinate Reln. AVERAGE 86 Problem Management

JR. MANAGEMENT

Communication

104

Decision Making

104

Risk Taking

Innovation

Conflict Management

Orientation

–

5*34 + 4*140 + 3*18+ 2*10+10 = 814

Interpersonal Reln. –

5*78 + 4*106 + 3*20

874

Sup. Subord. Reln. –

5*86 + 4*114 + 3*4

898

Problem Mgmt.

–

5*84 + 4*44 + 3*8

620

Communication

–

5*104 + 4*94 + 3*6

914

Decision Making

–

5*12 + 4*104 + 3*14 + 2*4

526

Risk Taking

–

5*62 + 4*52 + 3*14 + 2*4

568

Innovation

–

5*92 + 4*78 + 3*26 + 2*6

862

Conflict Mgmt.

–

5*20 + 4*18 + 3*60 + 2*30 + 1*4 = 416

Factor

Scores

Rank

Communication

914

Superior Sub-ordinate Reln.

898

Interpersonal Relatioship

874

III

Innovation

862

Orientation

814

Problem Management

620

Risk Taking

568

VII

Decision Making

526

VIII

Conflict Management

416

Inference(s): The middle management (Jr. Mgmt Cadre) have also preferred effective communication followed by relationships and innovation. RANKING WEIGHTED AVERAGE METHOD: NON EXECUTIVES Strongly Agree

Agree

Neither Agree Nor Disagree

Disagree

Strongly Disagree

(5)

(4)

(3)

(2)

(1)

Orientation

118

Interpersonal Relatioship

Superior Sub-ordinate Reln.

110

Problem Management

Communication

122

Decision Making

Risk Taking

Innovation

Factors

Conflict Management

Orientation

–

5*72 + 4*118 + 3*8

856

Interpersonal Reln. –

5*82 + 4*98 + 3*16

850

Sup. Subord. Reln. –

5*72 + 4*110 + 3*16

848

Problem Mgmt.

–

5*66 + 4*58 + 3*8

586

Communication

–

5*56 + 4*122 + 3*20

828

Decision Making

–

5*20 + 4*90 + 3*16 + 2*6

520

Risk Taking

–

5*52 + 4*68 + 3*4

544

Innovation Factor

–

5*90 + 4*72 + 3*28 + 2*2+3 Scores Rank

829

Orientation Conflict Mgmt.

–

5*2 + 4*16 856 + 3*48 + 2*46 I+ 1*20= 330

Interpersonal Relatioship

850

Superior Sub-ordinate Reln.

848

III

Innovation

829

Communication

828

Problem Management

586

Risk Taking

544

VII

Decision Making

520

VIII

Conflict Management

330

Inference(s): Non Executives have ranked Orientation first followed by relationship; showing priority to continued training & exposure.

CH.2 - ANALYSIS 2.2 EXITING SYSTEM

2.2 EXISTING SYSTEM Existing Attrition Analysis system is very simple and too short. From this analysis its very tedious to take decision to retain the employees.

The attrition is calculated by using the following formula in the existing system,

Attrition Rate =

No. of employees Resigned --------------------------------Total Manpower

100

For Example:

Attrition Rate

289 ------------------ X 100 5258

5.50 %

In the existing attrition analysis system having simple Tabular column based reports. There is no graphical representation and there is no pie chart.

Designation Attrition Analysis Ratio :

Month wise , Category wise, Division wise and Location wise Attrition Ratio

CH.2 - ANALYSIS 2.3 NEED FOR THE CHANGE IN SYSTEM

2.3. NEED FOR THE CHANGE IN SYSTEM Executive Respondents Analysis: Orientation InterPer.Reln Sup-Sub Reln Prob Mgmt

Communi

Decision

Risk Taking Innovation

No.

Strongly Agree

Agree

124

116

110

N.Agree N.Disagree 12

Disagree

Consolidated

Detail

Strongly Disagree

Conflict

1. The majority of the respondents [Strongly Agree – 40% ; Agree – 42%] feel that Innovation reduces employee turnover. 2. Orientation – 62% , Interpersonal Relationship – 58%, Superior Sub-ordinate Relationship – 55%, Communication – 48% have been ranked by the respondents as important indicators in checking attrition. 3. Decision Making – 38%, Risk Taking – 32% ; respondents agree these two parameters also have an impact in bringing down attrition. 4. However the respondents feel the Conflict has minimal effect on attrition [Conflict – 11% Agree & 4% Strongly Agree]. 5. It’s also evident that the respondents have clearly correlated Orientation, Interpersonal Relationship & Superior Sub-ordinate relationship as effective tools in bringing down the level of attrition.

6. Communication resolves Conflict, helps Decision Making and thereby facilitates better relationships; the hypothesis has been validated by the respondents figured out. Jr. Management Respondents Analysis: Orientation InterPer.Reln Sup-Sub Reln Prob Mgmt

Communi

No.

Strongly Agree

104

Agree

150

106

114

N.Agree N.DisA

Disagree

Consolidated

Detail

Risk Taking

Innovation

No.

104

Strongly Disagree

Decision

Conflict

1. The majority of the respondents [Strongly Agree – 43% ; Agree –57%] feel that Superior Sub-ordinate Relationship reduces employee turnover. 2. The respondents feel that [Strongly Agree – 46% ; Agree – 39%] Innovation reduces employee turnover. 3. Orientation – 75%, Interpersonal Relationship – 53%, Communication – 47% have been ranked by the respondents as important indicators in checking attrition. 4. Decision Making – 52%, Risk Taking : Strongly Agree – 31% and Agree - 26% ; respondents agree these two parameters also have an impact bringing down attrition. 5. However the respondents feel the Conflict has minimal effect on attrition [Conflict – 9% Agree & 10% Strongly Agree]. 6. It’s also evident that the respondents have clearly correlated Orientation, Interpersonal Relationship, Superior Sub-ordinate relationship, Communication and Innovation as effective tools in bringing down the level of attrition. 7. Superior Sub-ordinate relationship resolves Conflict, helps Innovation and there by facilitates better relationships the hypothesis has been validated by the respondents figured out.

Non Executive Respondents Analysis: Orientation InterPer.Reln Sup-Sub Reln Prob Mgmt

Communi

Decision

Risk Taking Innovation

No.

Strongly Agree

Agree

118

110

122

N.Agree N.Disagree 8

Disagree

Consolidated

Detail

Strongly Disagree

Conflict

1. The majority of the respondents [Strongly Agree – 41% ; Agree – 49%] feel that Interpersonal Relationship reduces employee turnover. 2. The respondents feel that [Strongly Agree – 36% ; Agree – 55%] Superior Subordinate relationship reduces employee turnover. 3. Orientation – 59%, Communication – 61%, Problem Management – 29% have been ranked by the respondents as important indicators in checking attrition. 4. Decision Making – 45%, Risk Taking – 34% and Innovation – 36%

respondents

agree these parameters also have an impact bringing down attrition. 5. However the respondents feel the Conflict has minimal effect on attrition [Conflict – 8% Agree & 1% Strongly Agree]. 6. It’s also evident that the respondents have clearly correlated Orientation, Interpersonal Relationship, Superior Sub-ordinate relationship, Communication and Innovation as effective tools in bringing down the level of attrition. 7. Interpersonal relationship resolves Conflict, helps Better Communication, Innovation and there by facilitates better relationships the hypothesis has been validated by the respondents figured out.

Overall Respondents Summary: Orientation InterPer.Reln Sup-Sub Reln Prob Mgmt

Communi

No.

Strongly Agree

162

216

226

210

246

Agree

392

320

334

160

312

N.Agree N.DisA

Disagree

Strongly DA

Overall

Detail

Decision

Risk Taking

Innovation

Conflict

No.

156

262

270

184

234

168

114

1. Orientation [Strongly Agree – 27% & Agree – 65%] has been accorded top priority by the respondents as a sure measure to check attrition. 2. The Marketing & Sales division stands apart [Executives – 77%, Jr. Management – 71% and Non Executives – 50%]

Marketing & Sales Division (Orientation) 90%

77%

80%

71%

Percentage (%)

70% 60%

50%

40% 30% 20%

25% 17% 7%

10% 0%

4% 0

0 0

Strongly Agree

Agree

N.Agree N. Disagree

Disagree

Strongly Disagree

EXE

17%

77%

JEX

25%

71%

NEX

50%

3. Executives cadre feel Orientation [Agree – 77%] in the Marketing & Sales division Orientation has checked attrition to a great extent. Executives Cadre (Orientation) 90% 77%

80% 67%

Percentage (%)

70%

61%

60%

52%

50% 40%

40%

33%

30% 20%

17%

17% 11%

10% 0%

2% 0% 0%

0% 0% 0% 0%

Strongly Agree

Agree

N.Agree N. Disagree

Disagree

Strongly Disagree

Administration

17%

61%

11%

Production

40%

52%

Procurement

33%

67%

Mktg & Sales

17%

77%

Administration

Production

Procurement

Mktg & Sales

4. Relationships [both Interpersonal Relationship & Intra Personal Relationship] have been equally rated as both the cause and check for employee turnover. Analysis : Interpersonal Relationship - Cadre wise 70% 58%

Percentage (%)

60% 50% 40% 30%

41%

53% 49%

39%

28%

20%

12%

10% 0%

10% 8%

0% 0%

Strongly Agree

Agree

N.A gree N. Disagree

Disagree

JEX

39%

53%

10%

NEX

41%

49%

Superior Relationship Cadre 28% 58% 12%wise analysis. 0% EXESub-ordinate

0% 0%

Strongly Disagree 0%

Analysis: Superior Sub-ordinate Relationship - Cadre wise 60%

55%

57% 55%

Percentage (%)

50% 40%

34%36%

43%

30% 20% 8%

10% 0%

8% 2%

0% 0%

Strongly A gree

A gree

N.A gree N. Disagree

Disagree

Strongly Disagree

EXE

34%

55%

JEX

43%

57%

NEX

36%

55%

5. Decision Making aids in bringing down attrition.

Jr. Management and Non

Executive cadres have been attributed effective Decision Making as important to Orientation [Jr. Management – 52% Agree ; Non Executive cadre – 45% Agree] Analysis : Decision Making - Jr. Mgmt. & Non Executive cadre 60%

52% 50%

Percentage (%)

45% 40% 30% 20%

10%

6% 0%

2% 3%

Strongly Agree

Agree

N.Agree N. Disagree

Disagree

Strongly Disagree

JEX

52%

NEX

10%

45%

6. Problem Management and Risk Taking though being marked as vital parameters; are low in terms of marketability compared to Orientation, Interpersonal 65

Relationships & Communication. [Risk Taking – 31% Agree & Problem Management – 27% Agree]

Analysis: Problem Mgmt & Risk Taking 45%

42%

40% 35%

30% 30%

29%

34%

33%

31%

29% 26%

25%

Percentage (%)

32%

26%

22%

21%

20% 15% 10%

7% 6%

7% 4%

0% 0%

Strongly Agree

Agree

EXE

N.Agree N. Disagree

Strongly Disagree

Agree

JEX

N.Agree N. Disagree

4% 2%

2% 0% Strongly Disagree

Agree

NEX

0%0%

N.Agree N. Disagree

Disagree

Problem Mgmt.

30%

29%

42%

22%

33%

29%

Risk Taking

21%

32%

31%

26%

34%

7. The majority [Strongly Agree – 41%, Agree – 52%], appreciate communication where Non Executive cadre fairing better. Analysis : Communication Overall vs Non Executive cadre 70%

61% 52%

Percentage (%)

60% 50% 40%

28%

30% 20%

41%

10%

10% 0%

Strongly Agree

Agree

Overall

41%

NEX Cadre

28%

N.Agree N. Disagree

Disagree

Strongly Disagree

52%

61%

10%

8. Respondents feel Conflict at the workplace has less bearing on employee turnover [Neither Agree Nor Disagree – 28%, Disagree – 19%] Analysis : Conflict Management - Cadre wise 35%

30% 30%

30% Percentage (%)

25%

24%

19%

20%

15%

11% 10%

10% 4%

5% 0%

23%

9% 8%

10% 2%

Strongly Agree

Agree

N.Agree N. Disagree

Disagree

Strongly Disagree

EXE

11%

30%

19%

JEX

10%

30%

15%

NEX

24%

23%

10%

9. Structured Orientation aids better Relationships. Analysis : Orientation vs Interpersonal Relationship 70%

65%

60% 53%

Percentage (%)

50% 40% 30%

36% 27%

20% 10%

10%

1% 0%

N.Agree N. Disagree

Disagree

Strongly Disagree

Strongly Agree

Agree

Orientation

27%

65%

Interpersonal Relationship

36%

53%

10%

Inference(s) : Orientation – 65% Agree and Interpersonal Relationship – 53% Agree shows that Orientations aids better Interpersonal Relationship. 67

10.

Better Communication facilitates Good Relationship. Analysis : Better Communication vs Interpersonal Relationship 60%

52% 53%

Percentage (%)

50% 41% 36%

40% 30% 20% 10%

10%

N.Agree N. Disagree

Disagree

Strongly Disagree

Strongly Agree

Agree

Communication

41%

52%

Interpersonal Relationship

36%

53%

10%

Inference(s) : Better Communication – 52% Agree and Interpersonal Relationship – 53% Agree shows that Better Communication facilitates Good Interpersonal Relationship. 11.

Effective Decisions defuses Conflicts.

Analysis : Effective Decision Making defuses Conflicts

50%

45%

45% 40% Percentage (%)

35% 30% 25%

28%

20% 15% 10% 5%

19% 11%

Strongly Agree

Agree

N.Agree N. Disagree

Decision Making

45%

Conflicts

Disagree

Strongly Disagree

11%

28%

19%

Inference(s) : Decision Making – 45% Agree and Conflict Management – 9% Agree & 28% Strongly Agree shows that Effective Decisions defuses Conflicts. 68

12.

Right Decisions avoids Risks. Analysis : Right Decisions avoids Risks 50%

45%

45% Percentage (%)

40% 35% 31%

30% 25%

26%

20% 15%

11%

10% 5%

Strongly Agree

Agree

N.Agree N. Disagree

Decision Making

45%

11%

Risk Taking

26%

31%

Disagree

Strongly Disagree

Inference(s) : Decision Making – 45% Agree and Risk Taking – 31% Agree shows that Right Decisions avoids Risks. 13.

Executive Decisions are appreciated and followed by subordinates. Analysis : Executive Decision Making vs Superior Sub-ordinate Relationship 60%

56%

Percentage (%)

50% 40%

38%

30% 17%

20% 10%

10% 6%

1% 0%

Strongly Agree

Agree

N.Agree N. Disagree

Disagree

Strongly Disagree

Executive Decision Making

10%

38%

17%

Superior Sub-ordinate Relationship

38%

56%

Inference(s) : Executive Decision Making – 38% Agree and Superior Sub-ordinate Relationship – 56% Agree shows that Executive Decision Making are appreciated and followed by subordinates.

14.

Communication effects Decisions. Analysis : Communication Effects Decision Making 50% 45% 38%

45%

Percentage (%)

40% 35% 30% 25% 20% 15% 10%

17% 10% 9%

11%

Strongly Agree

Agree

N.Agree N. Disagree

Communication

10%

38%

17%

Decision Making

45%

11%

Disagree

Strongly Disagree

Inference(s) : Better Communication – 38% Agree and Decision Making - 45% Agree shows that Communication effects Decision Making. 15.

Problem Management survives on good Superior-Subordinate Relationship. Analysis : Problem Management vs Superior Sub-ordinate Relationship 60%

56%

Percentage (%)

50% 40%

38% 35% 27%

30% 20% 10%

0% 0%

Strongly Agree

Agree

N.Agree N. Disagree

Disagree

Strongly Disagree

Problem Management

35%

27%

Superior Sub-ordinate Relationship

38%

56%

Inference(s) : Problem Management – 27% Agree & 35% Strongly Agree ; Superior Subordinate Relationship – 56% Agree shows that Problem Mgmt. Survives on good Superior Sub-ordinate Relationship.

CH.2 - ANALYSIS 2.4 PROPOSED SYSTEM

2.4 PROPOSED SYSTEM Fundamental analysis is done using data collected to determine the characteristics of the sample. Analysis is the computation of certain measures along with searching patterns of relationship that exist among data groups.

The collected data are

tabulated and analysed with the help of basic statistical measures. The analysed data are then interpreted by drawing inferences from the processed facts with the help of theoretical explanation. Interpretation thus establishes explanatory concepts, which provides for better understanding of research findings. The attrition is calculated from the following formula: [No. of Employees Left during the Year*100] / [Employees on Record at the Beginning of the Year + No. of Employees Joined during the Year + No. of Employees Left during the Year + Employees on Record at the end of Year] / 100 Designation wise:

Among the Designation the Asst. Managers has the maximum Attrition followed by Technical Associates, Managers, Sr. Engineers and Business Associates . Category Wise:

Among the category the Executive category has the maximum Attrition followed by Jr. Executives & Non Executive cadre. Division Wise:

Among the Divisions the Procurement division has the maximum Attrition followed by other division. But as per Total Manpower Production division has the maximum attrition compared with other divisions.

Experience Wise:

Among the Employees, minimum 5 years experienced employees are leaving the company followed by 6 to 10 Years experienced employees. Executives cadre has the maximum attrition compare with other categories.

This could be the lack of

compensation benefits, lack of interest and too far off plant location. From the Exit interview Analysis, we can understand the reasons for leaving. Career Opportunity:

Growth Opportunity:

The growth opportunity is very slow in the present promotional process and some employees were expected the job rotation.

Job Satisfaction Level (1-5) Job Satisfaction level 13%

6% 9% Level - 1 Level - 2 Level - 3 Level - 4 Level - 5

35%

37%

According to job satisfaction level, only the 6% of relieved employees voted to the low level and maximum employees were in level three. Level – 1 is low and Level – 5 high level.

Location Wise:

Among the Locations, minimum employees are leaving the company from factory compared with other locations. North Regional Office (New Delhi) has the maximum attrition level. Month Wise:

Among the all months, minimum employees are leaving the company in April compared with other months. Most of people are relieved in the May month after the compensation revision.

Findings



Rate of attrition depends on the number of employees and it does not reveal the actual facts.

If the industry has 200 employees and 20 goes out, the rate of

attrition will be 10% where as if the same number goes out in the industry where 2000 are employed the rate will be 1 %.



The rate of attrition in Hyundai Motor India Ltd. is very low right from the commencement with an average of only 3.47%.



The rate of attrition was maximum in 1999 with 6.96% and started declining from then to reach only 0.61% in the current year.

Reasons for low rate of attrition: 1. Management initiatives centre around people; where the individual employee stands integral even to the most trivial decisions. Be it welfare, compensation or recognition;

HMI has always provided an ambience for belongingness,

growth and development. 2. The average attrition rate (3.47%) showcauses the efforts to imbibe a sense of togetherness amongst employees. 3. Hyundai gives a very sound compensation package along with its excellent welfare and other benefits, which is one of the reasons for the low rate of attrition. 4. It is not having even a single trade union till now which shows the harmonious relation between the management and the workforce.

5. Employees are very well recognized and rewarded which makes them feel proud to be HYUNDIANS. 6. Employee commitment level is too high. 7. Most of the employees are fresher who make proper utilization of the good training facilities Hyundai provides for their career development and knowledge enhancement. 8. Maximum attrition is recorded from the Production division which is at a very high demand in today's market. 9. With the increase in the years of service the attrition number is decreasing which shows the managerial excellence of Hyundai which is providing for employees faster growth in their personal and professional career. 10.Number of employees are separated in less than one year indicates the reason may be due to the location of the plant and lack of interest in learning more. 11.Most of the employees left the organisation for better opportunities outside after equipping themselves with required knowledge by working at Hyundai. 12.Among the people who left the organisation maximum are the executives followed by junior executives, which shows that professionals from Hyundai have great demand in the market. 13.Orientation [Strongly Agree – 27% & Agree – 65%] has been accorded top priority by the respondents as a sure measure to check attrition.



The Marketing & Sales division stands apart [Executives - 77%, Jr. Management – 71% and Non Executives – 50%]



Executives cadre feel Orientation [Agree – 77%] in the Marketing & Sales division Orientation has checked attrition to a great extent.

14.Relationships [both Interpersonal Relationship & Intra Personal Relationship] have been equally rated as both the cause and check for employee turnover. 15.Decision Making aids in bringing down attrition.

Jr. Management and Non

Executive cadres have been attributed effective Decision Making as important to Orientation [Jr. Management – 52% Agree ; Non Executive cadre – 45% Agree] 16. Problem Management and Risk Taking though being marked as vital parameters; are low in terms of marketability compared to Orientation, Interpersonal Relationships & Communication. [Risk Taking – 31% Agree & Problem Management – 27% Agree] 17.The majority [Strongly Agree – 41%, Agree – 52%], appreciate communication where Non Executive cadre fairing better. Better Communication – 52% Agree and Interpersonal Relationship – 53% Agree shows that Better Communication facilitates Good Interpersonal Relationship. 18.Respondents feel Conflict at the workplace has less bearing on employee turnover [Neither Agree Nor Disagree – 28%,

Disagree – 19%]

19.Problem Management – 27% Agree & 35% Strongly Agree ; Superior Sub-ordinate Relationship – 56% Agree shows that Problem Mgmt. Survives on good Superior Sub-ordinate Relationship.

Suggestions: 1. Continuous motivation in the workplace through planned programs – recreational and rewards. a) Organising periodic training programs b) Encouraging learning through sponsorship and internship c) Rewarding

performance

immediately

and

appropriately

through

recognition awards and citation. 2. Effective and clear Career Progression chart to be drawn at the time of inception itself; where both the individual employees as well as his superior is made aware of their roles and responsibilities. 3. Shift Timings and distance have been major concerns at the Executive Level. The Management may come up with flexible alternatives such as providing accommodation closer to the workplace. 4. Retention of Talent through customised progression both in future career plans and compensation (though Attrition Rate stands at 3.47%). 5. Skill development activity and job rotation/enrichment to prevent monotony and work stress.

CH 3 - PRESENT CONDITIONS WITH SPECIAL REFERENCE TO THE ORGANISATION / INDUSTRY CONCERN

CHAPTER 3 PRESENT CONDITIONS WITH SPECIAL REFERENCE TO THE ORGANISATION / INDUSTRY CONCERN

Attrition In Manufacturing And Service Sectors : “Attrition spreading to traditional sectors as well” ATTRITION is not just rampant in the BPO sector, but it is fast catching up in other traditional sectors such as manufacturing and engineering, public sector undertakings and services. According to an Employee Vulnerable Study by NFO India, employees in the traditional sectors are most dissatisfied and would switch jobs at the first available opportunity. However, employees belonging to new-age sectors such as financial services, insurance and banking, FMCG and white-goods, IT and telecom seem to be relatively more satisfied. Mr. Gautam Nath, Director-Corporate Services for NFO, said the "possible vulnerability" of white-collar workers should ring alarm bells for HR heads. The major pitfalls for the manufacturing sector were found to be lack of growth opportunities, dissatisfaction with job content, inadequate emphasis on policies and systems and interpersonal relationships.

"There is a crying need for companies to engage the employees' interest by creating a conducive environment for growth, learning, bolster ‘we-feeling’ and compensate as per industry standards," said Mr. Nath. "After all, the hidden costs incurred in attracting the right workforce and on-the-job training, is phenomenal. Also, if we take into account client business that goes away, each time we lose a key performer," added Mr. Nath. NFO randomly polled over 200 corporate executives from some leading companies in Delhi, Mumbai and Bangalore. It is aimed at understanding motivation levels of employees, reasons for high degree of employee turnover in certain sectors and factors that keep the interest level of employees going. For many service sectors, within their aggregate attrition numbers there are hidden problem areas of attrition. Sometimes these are associated with particular products, service functions, or customer segments. Frequently, and with the greatest negative impact, these problems particularly hurt retention among the highest value customers. Information Technology Sector Fast Growing Hardware and Software Company

Compelling Business Need: The organization began to experience heightened attrition among its sales force. The relationships, technical skills, and creative problem- solving methods which characterized the Field Organization became highly attractive as the marketplace for such services dramatically expanded in the mid- and late ‘90s. Mature competitors, as well as start ups, began to raid the company's top talent.

When attrition in one mission-critical field group hit 25%, customers began to complain the loss of continuity and talent was seriously affecting service levels. IT’s Integrated Solution: Result: One year later, attrition in the critical group had been reduced from 25% to 15% and overall attrition in the field workforce had been reduced from 18.5% to 11.7%. Wireless Telecom Company Compelling Business Need: Telecommunications deregulation created an explosion of competition both for market share and for the engineering, IT, and customer service talent required to make growth possible. This company's business plan called for high growth rates in the face of tough competition. In addition, the organization's primary focus was metro cities, where the talent wars of multinationals made employee retention especially difficult. IT employee retention had become a particular problem, with attrition running at 32%. IT’s Integrated Solution: Regular employee satisfaction surveys were instituted, along with a more focused Exit analysis. Departmental management teams participated together in the Retaining Top Talent TM

workshop in order to build collective ownership for follow-up on individual

retention action plans. Result: Over 24 months, IT attrition decreased by nearly half to 17%. 82

Networking Company Growing Quality Through Acquisitions Overall attrition hovered at 24% -even higher in the engineering and sales groups. Stock options were under water for many employees. 76% of those leaving were rated top performers, who often joined competitors within the first 18 months of employment. Consequently, key projects faced indeterminate delays. HR Managers & Service Heads 1. Designed an exit data analysis methodology tailored to the company. 2. Identified the top factors contributing to attrition in the organization. 3. Consulted with an internal senior team to set retention goals and accountabilities. 4. Conducted Retaining Top TalentTM interventions by business unit, including European and Asia-Pacific operations. 5. Provided a summary of data gathered during the Retaining Top Talent intervention and recommendations for further actions to the senior team. Result:

Within 12 months, overall attrition declined to 17%. In addition, the

percentage of those leaving who were top performers fell to 57%. Key engineering product development projects were back on schedule. Financial Services Company: Call Center Operations In three of the company's hardest-hit call center operations, unwanted attrition averaged more than 75% per year in 1999. The centers employed over 3,000 employees in geographies that were rapidly becoming call center spot hot spots Almost 70% of the attrition occurred within the first 10 weeks of employment.

IT’s Integrated Solution: In a drive to differentiate the company and become an "employer of choice" in the local labor market, all managers and supervisors in these three most challenging locations participated in Retaining Top Talent.

Managers focused on the factors

within their control which could make the call center a great place to work for all employees. In addition, improvements were made in selection processes and in supporting new employees as they adapted to call center requirements and practices. Result: Call center non-exempt turnover for these three locations dropped from an average of75% in 1999 to an average of 49.6% in 2000. During the same year, attrition for other non-exempt employees in locations not implementing Retaining Top Talent TM

declined only 1% to 54%.

Service Sector : Hospital Attrition DBM study of employee attrition and retention: Pharmacists, technologists/radiologists, educators/trainers, and therapists are leaving hospitals in droves. In fact, the turnover rate among these workers tops 20 percent, according to a study conducted by DBM, a global human resource consulting firm. The DBM study, "Hospital Attrition Benchmark Study 2002", was conducted with 44 medical and surgical hospitals in the U.S. to obtain voluntary attrition and retention benchmarking data for fiscal year 2001. As reported by the UPI, the extreme urgency and dramatic challenges hospitals face was also evident in a University of Pennsylvania survey showing that one in four nurses intends to quit within the next year.

"The projected workforce shortages, combined with an increased demand for healthcare services, are already at a crisis level," said Joan Luciano, Ph.D., author of the study. "Hospitals are beginning to implement retention strategies, but this will be an ongoing priority as the need for an adequate number of healthcare workers increases." Other key findings of the DBM study include:



The total attrition rates for male and female employees were close with an average male rate of 15.2 percent versus a female rate of 14.6 percent



The highest regional attrition rate in the country occurred in the Southeast where the attrition rate for males was 28.2 percent and the female rate was 24.3 percent



The lowest attrition rate in the country occurred in the Great Lakes region where the female rate was 10.5 percent and the male rate was 11.7 percent.

The "Hospital Attrition Benchmark Study 2002" is available from DBM's Retention Services Practice. Measures To Curb Attrition 1. Employee Stock Option Plans: Employee Stock Option plans has been in existence in India for over a decade. The focus on stock plans however began in the early nineties with the growth in stock prices and the IT Industry. The earliest large schemes were that of Wipro, Infosys and Mastek. It was however only since 1996 that the true value of these schemes began to be understood by both employees and companies. Hence the number of IT companies offering ESOP plans is still well below 50%. A large number of companies however are now realizing the potential of ESOP as an effective retention tool while making the market bears the costs. The success of the 85

stock plans of major companies like Infosys, Satyam, Hughes, HCL Technologies have made it possible to make total compensation inclusive of stock on par with international compensation levels. ESOP schemes as yet do not have any tax advantage for either the employer or employee in India. The government has however in the last year clarified several key aspects of stock plans in terms of SEBI guidelines for issue and administration, perceived corporate governance issues, tax clarifications and accounting guidelines. US practice in this respect has been a major guide especially since many Indian companies would like to register on US exchanges. We have summarized the existing practices on ESOP schemes and the emerging trends. Issues such as non-compete clauses have also become common as part of such schemes. However we find that most companies find the pressure to give stocks widely due to the hype on ESOP a major issue in deciding on their approach to implementing such plans. The volatility in the stock markets both domestically and the inexperience with ESOP has posed many thorny issues in recent months. Until recently most companies did not have to deal with stock plans being "under water", that is, market prices being below issue prices. Since compensation was seen to be clearly traded off by stock, employee communication has not always been clear on this aspect resulting in disappointments. The need for addressing employee communication with more care is a learning that most companies shared. The issue of dealing with complex issues such as taxation in several countries of such plans, coverage of NRIs, foreigners, repatriation issues etc have been faced by companies in implementation. The plans increasingly therefore are beginning to capture all elements of international plans. Multinational companies have extended their international stock plans to employees. These include both stock option plans and in very few cases Employee Stock purchase 86

plans. Most stock option plans implemented in India have been "cash less" exercise plans. Overall multinational plans have not been as valuable as the local plans due to the higher market increases of local IT stock in recent times. 2. Reducing Attrition Through Employee Self Esteem: Literature in HR is replete with theories on motivation, team building, and leadership to name a few of the commonly spoken jargons. Trust, openness, autonomy, strategic collaboration, pro-activity, benchmarking and career development are some other buzzwords prevalent in the field of HR. But surprisingly self-esteem or "positive self regard" seems to be referred only while studying The Maslow's Hierarchy in the subject of Organizational Behavior taught in B-schools.

But what often goes

unnoticed is that even Maslow himself has referred to the concept of "Self-Esteem" as an important step to achieving "Self-Actualization" without which the concept of "motivation" is not complete, towards which organization strategies seem to have converged. Off-late driving the "new-economy" organizations in a frenzy, is the growing malaise of the "rate of employee turnover", which I felt can be correlated to the presence of low self esteem. It thus becomes worthwhile to have a deep look on this concept and its implications in both individual and corporate contexts. Concept of Self-Esteem: "Self-Esteem" which is a positive self-regard emerges from the concept of "self' which is an important dimension of personality. It means we regard ourselves highly. If we do that we expect more out of ourselves. It is a process, which often results in more impressive achievements arising out of greater expectations out of ourselves. It is in this sense that it becomes an auspicious circle of 'expectations' and ‘achievements’ to further ‘expectations’. This growth process results in more aggressive goals, greater expectations and hence more impressive achievements. If we start believing in whatever has been said till 87

now; we cannot help but come to conclusions that those person we follow passionately, gladly and zealously have made us feel like somebody .It was not merely because they had the job (assignments) or the power…, somehow make us feel terrific to be around them . Experts have said that positive self-belief and regard seems to exert its influence by creating in others a sense of confidence and high expectations High self esteem is perhaps a common ingredient in all great personalities, and it definitely has a trickle down effect on the whole society. Let's not forget the wise words "failure is not a crime, aiming low is". According to Transactional Analysis (TA) human beings have three ego states namely, parent, adult and child. All interpersonal human behavior is sought to be explained as transactions out of these ego states of interacting individuals. Reinforcement of the adult states can make individuals more rational and balanced in behavior leading to greater effectiveness of mutual relationships. A high self esteem or positive self regard can indeed help in reinforcing the adult state in individuals. But it should be mentioned here that if not properly understood and nurtured, excessive positive self-regard could also be dysfunctional. It can lead to arrogance and therefore can result into what is known as TA parlance., a wrong kind of behavioral transaction. As Freudian psychoanalysis says it can also make one rise in his "IQ" and reinforce 'superego' and 'ego'. If degenerated high self-esteem can result in snobbish behavior, on the other hand if properly harnessed, self-esteem can help in submitting undesirable traits into useful one, and help the individual organization and society. Thus spoke the legends… Napolean observed about his soldiers that, "They are able because they think they are able".

In Indian context, Swami Vivekananda has repeatedly emphasized the importance of self-esteem. He said " Man is the infinite dreamer dreaming finite dreams " after gauging the common man's low self-esteem during the nineteenth century when the country was still reeling under the British rule. If we study the national corporate scene today, we will find an increasing number of Indian organizations are constantly trying to become and project themselves as truly "world class knowledge companies" (few have already set the benchmarks) through which they are trying to constantly enhance " the self-esteem " of their employees.

Self Esteem and Employee Turnover As the struggle for reducing the employee attrition rates in the knowledge-based organizations intensifies, the rise in methods to increase the self esteem of the employees can well be the answer for HR executives all over the world. The few measures to raise the self-esteem of the employees suggested are:



Recognizing the contributions of outstanding achievers will induce others to try hard.

 Criteria for selecting outstanding achievers should be transparent. Effective HR measures in the areas of training, career development etc, equip the workforce better on the professional front and also increases their self-esteem, confidence, morale and motivation. Excerpts from Jerry Minchinton's "52 WAYS OF RAISING YOUR SELF- ESTEEM" are also very relevant:



Focus on your strengths and not on your weakness.



Others should be treated as equals, regardless of their status in the Society.



Be positive. Master the art of positive thinking.



Don't worry much about impressing others; they are probably trying to impress you.



If you are relaxed you are more expected to come out better.



Try to accept and appreciate yourself as you are. Remember if you



Underestimate yourself others will do the same to you.

The need of the hour is not only to enable the employees to grow in the 'learning organizations' the concept of which, is fast attaining celebrity status in this age of "knowledge economy" but also to take care that the employee has substantial growth in his "self-esteem" without which, I fear, all the retention policies of the organizations will meet a sorry fate. 3. Kicking Retention Strategies In To High Gear: The new age economy, with its attendant paradigm shifts in relation to the human capital, in terms of its acquisition, utilization, development 'and retention, has placed a heavy demand on today's HR professional. Today HR is expected to comprehend, conceptualize, innovate, implement and sustain relevant strategies and contribute effectively towards giving the corporation its winning edge. With a dynamically changing and volatile demand-supply equation, especially against erratic attrition trends and cutthroat competition no longer restricted to local or regional boundaries, a need for strategizing and putting in place a robust mechanism for attracting and retaining top talent becomes vital for the company's very survival and growth. The new age workforce comprises mostly of knowledge workers, who are techno savvy, aware of market realities, are materially focused and have higher propensity to switch jobs. They prefer to experiment and explore new opportunities, are high risk takers with higher aspirations and expectations and generally have a totally different mind-set about job and careers.

HIGH

P O T E N T I A L LOW

Under

STARS

Performers (10-20 %)

(15-30 %)

Strugglers

SOLID PRO’s

(5-10 %)

(50-60 %)

Performance

HIGH

Exhibit I In the current scenario, does supply really outstrip demand? Supply of what and demand of what? What kind of people get the pink slip and whom do the companies ring fence? In any organization the employees may be broadly classified into four broad categories in terms of their performance and potential. There are people who are woefully inadequate in both dimensions, which we may call 'Strugglers' and there are the 'under-performers', whose performance falls below their potential. This constitutes about one fifth of the total human capital at our disposal and these people obviously qualify to be the first candidates for the pink slip. The other two segments comprise of the 'solid pro's and the 'stars' who are at the higher end of the performance continuum. The former may be relatively lower in their potential as compared with the latter, but contribute immensely to the company's overall performance. We could call this as the "talent" segment. This is the segment we do not want to lose. We've got to protect this group from the pull of all non-retentive forces and that needs effective retention strategies that have to be kicked into high gear.

Retention strategies have to be viewed holistically against the total systemic framework of talent management that encompasses the 'talent', the 'corporation' and the 'environment'. Attrition and retention should be seen as reciprocal phenomena, which have an inverse relationship with each other.

Recruitment and needs for

downsizing must also be considered in conjunction. An understanding of the inherent considerations of an individual who wishes to join a company and continue to stay, and potential compulsions, which push him away, would help. The company's brand image crowns the list of the priorities for the job seeker; other important considerations being; the pay package and other pecuniary benefits, the class and quality of people that work in the company, the challenges of the job and attractiveness of the position & designation, the opportunities for career growth and professional development and the kind of technology, he would be exposed to. Dissatisfaction in any of these aspects causes severe cracks to appear in the bonding. Anxieties and apprehensions arising from restructuring, movements, marginalization, power politics, change of boss, change of tasks and responsibilities, mergers and acquisitions etc. could be instrumental in taking decisions to leave. Other factors could be to explore better prospects elsewhere, to start one's own venture, to take up higher studies or certain private compulsions. From the company's perspective, its brand equity, philosophy, vision, mission, culture, values and ecology have a direct bearing on talent attraction and retention. Other company related attributes that impact employee retention include high demand on performance, need for new competencies, broader, deeper and diverse job expectations, need for re-skilling and re-deployment, career offerings and growth prospects, goal & role clarity, policies & processes and organizational communication. Putting in place an effective sensing mechanism to gauge comfort, contentment and commitment levels becomes a pre-requisite to designing and implementing any worthwhile retention strategy. Many such instruments have evolved over the years and include, 92

THE RELEVANT FORCE FIELD 

ATTRITIVE

RETENTIVE

satisfaction surveys

Compliance

Brand image

Control

Talented Top

Rigid Power

audits



one-to-one sessions

Credibility



exit interviews

Transparency



ex-employee

Empowerment

Discriminatio Unrealisticn Deadlines Lure of Lucre Poaching

organization climate open forums

caring & nurturing

Unexciting Job Unjust



Enduring Culture Environment - trusting,

Knee-Jerk

employee

Responsivenes s Recognition Compensation

interviews 

grape vines



informal social interactions

Exhibit II Whatever may be the instrument, whether used singly or in combination the success depends on collection and collation of unbiased responses, cataloguing of direct and proximate clues, their effective analysis and drawing sound inferences. In order to appreciate the push and pull effect on the individual in the context of attrition and retention a qualitative force field listing may be helpful. While on the one hand, a compelling brand image, astute leadership within the organization, an enduring culture and an environment that is trusting, caring and nurturing, credibility , transparency, empowerment, responsiveness and creative policies on compensation, recognition etc would exert a positive influence on the subject talent, on the other hand, compliance, control, rigid power structure, knee-jerk changes, unexciting and drab jobs, unjust discrimination, unrealistic deadlines, lure of lucre and poaching would be debilitating.

The retention strategies should be designed such that the retentive forces are maximized and the debilitating forces minimized. Retention strategies should not be orchestrated in isolation but must form part of the overall strategies for strengthening the pull on the talent, which in fact include sourcing, staffing and development strategies in addition. A robust sourcing strategy is crucial to the exercise since the type of people one selects should not only fit into the job in terms of skill set but should match the company culture in terms of attitude, personality and commitment. An effective selection process ensures the entry of the right kind of people into the organization, with the desired loyalty and sense of belonging that goes a long way in restricting attrition in the long run. The first step for individual companies is to develop detailed profiles of the kind of people they are after by analyzing the job profiles, career paths, background and experience of their current high performers. Once we know what we are looking for, there are a number of routes we can take. Some get what they need largely through acquisitions, which is fine if acquisitions are an intrinsic part of corporate strategy. Some "outsource" by picking up people they believe are better trained elsewhere. Those who can attract the best college graduates and excel at early development, "insource", instead. While in the first case one gets ready -made talent and benefits from their instant utilization, in the latter instance, one can shape the raw talent in the mould of one's unique culture and work ethos. A judicious mix of campus hires and lateral hires often works. Other sources could be from project trainees and interns, from business associates on contract or even through retainership of freelancers. Some strategies will be more effective for some companies than others. For example, GREAT JOB

(Product) companies having a slower growth rate, have fewer opportunities to develop people GREAT

STRONG COMPANY through rotation, so they will tend to get talent in from the outside. But while each EMPLOYEE

(Brand)

VALUE

company will gravitate naturallyPROPOSITION toward a dominant sourcing method, no company should rely exclusively on one strategy. Talent winners recruit continuously rather than strictly on as required basis just to fill up vacancies. One should continuously COMPENSATION & LIFE STYLE (Price)

STRONG EMPLOYEE GREAT VALUE GREAT & JOB COMPANYCOMPENSATION PROPOSITION Exhibit III

(Product) (Brand) LIFE STYLE (Price)

scan the environment and bring in the talent whenever one finds it. Talent scouting in fact could be a constant sourcing activity. Although the dominant strategy could be to spot talent early and develop it within, regular lateral hires is a good, way to accommodate rapid growth especially at middle or senior level, refresh the gene pool and calibrate the internal talent standard. Fitting a talent to the job is traditional but there may be a need to design a job around the talent as the nucleus. Similarly it is a conventional approach to view manpower needs as a derivative of the business needs. But when it comes to rare talent, it may be worthwhile to build and articulate one' business around the talent at one's disposal. Aggressive development strategies complement the retention strategies in a big way. Providing opportunities to the employee for both professional and career growth and giving the due priority to this important activity makes the company's position in the market for talent attractive and compelling. Well -articulated strategies in the context of sourcing and development augment the retention strategies in crafting a powerful employee value proposition that remains central to the problem of attraction and retention of top talent. At the heart of the matter remains a basic question, ‘Why would a talented person want to work here?' Organizations with superior employee value propositions have a compelling answer to this question. A McKinsey study (1998) that studied 77 companies from a variety of industries to investigate talent problems, suggests that creating a winning value proposition means tailoring a company's 'brand' and 'products’ - the jobs it has to offer -to appeal to the specific people it wants to find and keep. It also means paying what it takes to attract and retain strong performer -the 'price'. Looking at the retention problems against the perspective of enduring employee value propositions about these three dimensions, namely. Once we are clear about the talent segment that we wish to attract and retain, we would have to ensure that our brand is tailored to that segment. No brand can be transformed over night, since it is a continuous, evolutionary and slow process. But 95

there may be a need for some companies that have deep rooted beliefs, mind-sets and culture, which have not kept pace with time, to review their traditional image and perhaps shed it off in preference to a contemporary, more vibrant disposition. The objective should be to make it a compelling place for employees, customers and investors. This is intrinsically linked with its business and the products it offers: the jobs. With 'great jobs', the brand would automatically take care of itself because the top talents joining the company for the great jobs, would reinforce the values that the company is seeking to build. To the brand dimension, that qualifies the company as a 'great company' several components contribute. In order of priority these are,  values and culture  quality of management  exciting challenges  strong performance  industry leadership  talent of existing people  development opportunities  inspiring mission  enjoyable work atmosphere and  job security The attributes that were identified in the context of 'product' -'great jobs' include freedom and autonomy, exciting job challenge, career advancement and growth and fit with the boss. A rule of thumb:

' A great job is that which consists of at least 80% of things that

an employee would love doing.'

As for the 'price', money may not be the prime

determinant but it does matter. Money alone cannot make a great employee value proposition, but it can break one. Under the dimension of compensation and lifestyle, the determinants identified include differentiated compensation, high total pay packages, geographic location, respect for lifestyle and acceptable pace and stress. 96

The ability to define, develop and deliver a winning employee value proposition should be at the core of all retention strategies particularly for large companies facing challenges from a multitude of smaller companies as employers. The lure of the latter in terms of excitement, flexibility, impact (a big fish in a small pond), reward and even equity ownership has to be countered with a stronger proposition bolstered by the formers magnitude of impact (big fish in a big pool), depth (vast resources to take risks and to support big decisions) and variety (large spectrum of expertise and experience to be shared). All retention strategies must be built around a compelling, distinctive and exciting employee value proposition. For the sake of clarity we may envisage these strategies in

three

distinct

yet

overlapping

domains:

cultural,

transformational

and

transactional. First of all let us dwell upon the cultural aspects as relevant to the issues under consideration. Culture is somewhat like "the operating system" of the organization. It drives the organization and its actions.

It guides how employees think, act and feel.

It is

dynamic and fluid, and it is never static. Some aspects of culture are visible and tangible and others are intangible and unconscious.

Some of the most visible

expressions include the architecture and decor, the clothing people wear, the organizational processes and structures, and the rituals, symbols and celebrations. Other concrete manifestation of culture are found in commonly used language and jargon, logos, brochures, company slogans, as well as status symbols such as cars, window offices, titles, and of course value statements and priorities. An outsider can often spot these artifacts easily upon entering an organization.

For insiders,

however, these artifacts have often become part of the background. Essentially organizational culture is seen in two broad dimensions.

The hard

dimensions relate to the functional, technical and control aspects, while the soft aspects deal with inspiration, emotion, energy, enthusiasm, collaboration and 97

camaraderie, openness, sense of belonging, etc. A culture that is open, trusting, nurturing; authentic as well as empowering tends to attract and retain top talent. Transformational strategies that impact retention in good measure



Encompass



Mentoring



Coaching



Counseling



Competency



Performance development programmes



Retraining



Re-skilling



Redeployment



Job rotation



Challenging assignments



Job enrichment



Knowledge building



Knowledge sharing culture

Innovative, dynamic and competitive compensation strategies, various welfare initiatives, social & community activities, workload balancing, effective work-life integration, reward & recognition, establishment of good communication & feedback network, etc. form the transactional strategies. Anti poaching measures may also find their place in this category.

Although technology based defenses against an

aggressive e-recruiter like various e-security mechanisms work for some time, the real potent measures are inherent in enhanced job satisfaction and strengthened relationships within the organization. If one examines the entire life cycle of an employee within an organization, starting from recruitment till superannuation through phases of induction, settling down, contribution, growth, maturity and rise to top levels, the retention strategies have to 98

be selectively and appropriately applied to the phase to which the employee belongs. While transformational strategies like mentoring, coaching, training, etc. are eminently suitable for people in induction, settling down and growth phases, fulfilling the higher order needs, ego gratification, etc. should be predominantly successful for senior positions. Cultural strategies, however, are over pervasive across all phases. In order to be able to orchestrate and implement effective retention strategies, the first step should be to understand the scope of the retention problem that is unique to one's organization. The target group, which is crucial to the company's operations and success, should be identified and the strategies are directed appropriately. It is a paradox that the companies, which invest heavily in recruitment and development and make a good job at that, are prone to more risk of poaching. A sound sensing and tracking system to assess the volume and causes of attrition by performance level could be useful. The ability to identify good performers, who are prone to leave for any job or management, related issues and timely intervention to address these issues, could be effective. Creating and delivering a great employee value proposition is clearly the best way to retain the people. This would encompass building and sustaining a compelling brand image with an appealing culture and inspiring values, tailored to the talent segment that one seeks to attract and retain, offering great jobs and career opportunities, building an effective learning framework, investing in work place infrastructure, moving on poor performers, instituting effective reward and recognition programmes, putting in place innovative compensation schemes. But most importantly, when the organization is successfully able to convey the message that it cares for employees, retention works best.

CH.3 – SUMMARY, CONCLUSION AND SUGGESTION 4.1 SUMMARY OF THE SYSTEM

CHAPTER 4 SUMMARY, CONCLUSION AND SUGGESIONS 4.1 SUMMARY OF THE SYSTEM Employee attrition is a costly dilemma for all organizations. In today's taxing business climate, managing company's competent and skilled human capital is vital for success. Is your approach to recruiting and retention aligned with your company's strategic goals? This article explores the prime factors for employee attrition and some retention strategies and processes that will help drive long-term tangible business benefits. Companies usually turn to increasing the compensation for employees to retain them. This however is no longer helpful in solving the problem as the skilled work force has many opportunities which masses of them give predilection to. According to a study by Ipsos–Reid , 30% of employees plan to change jobs in the next two years. Most leaving employees seek opportunities that allow them to use and develop their skills. Leaving employees want more meaning in their work meaning challenging the challenges. They often indicate that they want to use their qualities and skills in challenging teamwork led by capable leaders. Managerial staff cite "career growth" and "leadership" as the major factors that influence attrition and retention, together with "opportunities for management" "ability of top management" "use of skills and abilities" and "work / family balance" Professional employees cite concerns about "supervisory coaching and counseling," "company direction" and "interesting work" Clerical employees voice concerns such as "type of work," "use of skills and abilities" and "opportunity to learn" Hourly employees

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notice whether they are treated with respect, their "management ability" and "interesting work" Employee attrition rate can be never being entirely eradicated. It can only be influenced to keep it in control. The business model on which a subsidiary operation runs is significant in achieving this. Outsourcing higher end responsibilities that offers challenging tasks to the employees goes a long way in helping.

The Exit Interviews for key performers of the organization were Analysed through language processing tools. The results were: • Overall, job dissatisfaction levels are high at all facilities, in all job classifications and among both new and lateral recruits. • Employees between 2 to 5 years of service and more than 10 years of service have higher dissatisfaction levels than those with less than 2 years of service. • Pay, work schedule, mandatory overtime, designation levels, opportunities for advancement, and benefits were most frequently cited as issues the key performer's wanted to change about their jobs. • When asked what incentives motivated them, pay and benefits was not frequently cited but majority of the respondents said that the liking for their work and the interest. • Respondents also frequently cited communication as a significant factor. Many key employees expressed a desire for more two-way flow of information and a voice in decision-making. • They wanted a forum for sharing their ideas for system improvement. Some expressed the perception that inmates have a voice in the system but the staff does not, and expressed a desire to see administrative staff make a visit the facilities during second and third shifts.

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•

Perceived lack of recognition was also cited as a contributor to low job

satisfaction. Some respondents described a climate where bad performance was recognized but good performance was not. Several employees expressed a sense that their work is not valued, nor is it considered a skilled role. Other workplace climate issues that were often cited as contributing to poor performance were lack of teamwork, back biting and favoritism. The phrase “good old boy system” came up in several narrative responses. • Though job dissatisfaction seems to be the norm, there was considerable variability among facilities in terms of the issues that were cited as contributing to job dissatisfaction, especially compensation.

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CH.4 – SUMMARY, CONCLUSION AND SUGGESTION 4.2 SCOPE OF THE SYSTEM

4.2 SCOPE OF THE SYSTEM Why do they come…? Pay, location, benefits, advancement possibilities, job security, nature of work, personal/family time. Why do they stay?



Retention ( or the Opposite ) -

Confidence

Factor-they

believe

potential

success/leadership

strategies -

Emotional Factor- (Huge) contribution, recognition, appreciation

Trust Factor- 2 ways- promises/commitments kept (strong link to loyalty)

Fit Factor- Values/ethics are a good fit

Listening Factor- Are they heard and valued?

Retention Strategies are now recognized as mandatory in many industries Leadership is critical! "Best Practices" Does Senior Management - support (with skill), hire, manage, recognize, communicate, include, reward and make people feel significant. “A strong retention strategy becomes a powerful recruitment tool! “ Retention Factors:

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Compensation & Benefits (Money can not be ignored!), Clear business goals (where do I fit in), well defined jobs, rewards & recognition, strong in communication, "Well trained" management/leaders. Does “Culture” Support: innovation-risk taking (freedom from fears to try new innovative approaches - without Put Downs) encourage creativity, supportive accountability (Culture is made up of: Organizational Values, how we define ourselves, how we interact, what is acceptable (and what is not.)) Getting employees to “fall in love” with your company: 1. Capture

the

Hearts

your

workforce

with:

Compelling

vision/Balance/Celebration- Fun 2. Open Communication:

Internal listening is a priority, multiple lines of

communication (various channels).

This is essential for managing change in a

positive way with less sabotage, anger, resistance, and fear. 3. Create partnerships: Squash status barriers/Open the books/pay for performance (not titles), share the "bad" times the "good" times. 4. Drive Learning: "Guarantee Employability", Encourage Life Long Learning (Train outside of job description).

Loyalty comes from trusting your employees to

develop their skills for the good of the company and for their needs for personal growth and satisfaction. 5. Emancipate Action: Freedom to Fail, reduce bureaucracy and challenge the "status quo". Breathe life into your organization.

Do not let your employees

stagnate. For additional information on retention or copies of the executive summaries on Hiring Winners or Keys to Retention based on information gathered from executive 104

interviews, contact L. John Mason, Ph.D. at the Stress Education Center -Dstress.com (707) 795-2228 or mason@dstress.com Dr. L. John Mason co-founded the Stress Education Center in 1978. He is the best selling author of Guide to Stress Reduction and Stress Passages: Surviving Life's Transitions Gracefully. As art Executive Coach, consultant, and trainer, John works with executive management teams to leverage their strengths and create superior performance.

WHAT IS AN EXIT INTERVIEW?

In human resource terms, an exit interview is a survey that is conducted with an employee when he or she leaves the company.

The information from each exit

interview is used to provide feedback on why employees are leaving, what they liked about their employment and what areas of the company need improvement. Exit interviews are most effective when the data is compiled and tracked over time. How are Exit Interviews conducted? The exit interview may be conducted through a variety of methods. Some of the methods include: in-person, over the telephone, on paper, and through the Internet such as with Nobscot's Web Exit, exit interview management system.

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Why Exit Interviews are essential?

“The real value of an exit interview is in the information one can obtain to protect the company and save a lot of time, trouble and expenses later” - writes E J Sarma.

Understanding why your employees leave is almost as important as understanding why they stay. Some would say it is even more important. An employee's real reasons for leaving can be revealed in exit interviews. Interviews that are conducted by the human resources department or other company employees at time of resignation may or may not produce accurate and legitimate answers. Most departing employees are reluctant to reveal important demotivators because they do not want to bum their bridges. They may not want to offend the management at that sensitive time of saying good-bye. An experienced third party, a consultant or firm that specializes in conducting these sensitive interviews and collecting a wealth of invaluable inputs, can often accomplish effective and productive exit interviews. The information gathered in this process could guide corporate management in making changes that will reduce future turnover, as well as potentially solve other problems in the organization. What is the best way to process an employee's exit? HR always recommends an exit interview. The process is predictably simple while most people think it's a big waste of time. If a person resigns, you already know why he is leaving. But mostly the stated reasons are far from true, most resignation state personal reasons or better prospects. If one is being discharged, he will be angry and won't tell anything useful anyway. Why bother then?

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There are a lot of good reasons to bother-administration; protection and good management practice are among them. From an administrative standpoint alone, an exit interview provides an opportunity to get needed information (like where to send the employee's settlement cheque, TDS certificate, retrieve company property (keys, mobile, swipe cards credit cards, laptops, etc.,), clear up any outstanding issues like expense advances and deliver required information. Administrative details are important, but the real value of an exit interview is in the information one can obtain to protect the company and save a lot of time, trouble and expense later. For example, it is not uncommon for an employee to resign, or be discharged for a reason, but when tactfully handled can reveal the real reasons in an exit interview. For instance, recently when I had handled an exit interview, a very senior executive told me that he is quitting because he is pretty annoyed with the CEO's arrogance and style. In a broader perspective, exit interviews provide information about overall management style of the company. An employee who is discharged may not be happy about it, and his or her comments will have a negative slant. But there's usually plenty of truth to be learned as well.

In one case we had observed that one

department had a high turnover and exit interviews reflected problem areas like partisan attitude of the supervisor. Consistently high turnover in certain positions can be an indicator that the job or the work is not defined properly, thus, the wrong people are being hired. Reasons for voluntarily separation may be valid, like lack of benefits or low pay or even unsatisfactory designations, improper grades, etc. Some thoughts about how you say good-bye to employees, whatever is the reason for their exit, salvage some credibility. If it's a discharge, you'll want to do damage control as much as possible. Recently, two people who were asked to go within two months of joining told me how brutal the HR general manager was in handling the exits. Depressed and victimized they felt more angry and vengeful for the simple reason that the HR was even forcing the person to interview candidates on the very morning when he was told to go. 107

Treating people as human as possible is a good management practice and that dictates he or she be treated with professional courtesy and respect. Conduct the exit meeting as privately as possible. Taking a more positive view of the exit-this is also the time when many employees are willing to point at deficiencies in the company, comments such as, "poor management or supervision", "complete lack of supervision and support", "poor communications", etc., have come quite often when I had handled exit interviews. Any company management that is honest with itself will use these responses to look into the claims and make corrections where the allegations are found or known to be true. While handling exit interviews handle the employee in simple, direct terms and discuss under what circumstances the decision has been made or try and figure out what triggered the decision to quit. It is invariable that something snapped inside. Without a debate on the merits, gather all required information and record and do paperwork and handle the exit with the final settlement check, so that whatever suspicion the person has is nullified. Whether the separation is voluntary or not, HR has to make sure that the employee leaves without any incident. Exit interview and counseling can avoid much of unpleasantness; someone who can handle the person at times of emotional disturbance is only the HR person. Exit is just as important as the procedures one uses while hiring. Handled in a professional way, exit practices can be constructive, useful and improve your work environment and above all add to retention.

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Pros and Cons of each method of Exit Interviewing: In-Person Exit Interviews With in-person exit interviews, HR representative meets individually with each terminating employee. Pros 

Can provide information regarding benefits and retrieve company property during the exit interview



Gives a personal touch to each employee



Can probe for more infom1ation on each exit interview question

Cons



Employees may be afraid to share sensitive or negative information during an in- person exit interview.



For larger companies, it may be too time consuming to exit interview every employee.



It's difficult to track information received verbally during an exit interview.

Telephone Exit Interviews

Telephone Exit Interviews are conducted over the telephone by a HR Representative or an outside third party consultant.

Pros



Can probe for more information on each exit interview question



Can enter data into a tracking system while conducting the exit interview

109



Easier to schedule than in-person exit interviews

Cons 

Time consuming if done in-house by an HR Representative



Expensive if done with an outside consultant



Employees often reluctant to verbally share sensitive or negative information

Paper and Pencil Exit Interviews Paper and Pencil Exit Interviews are usually conducted by a form that is given to the employee on their last day or mailed to the employee's home.

Pros 

Takes less time to provide an exit interview form compared with conducting an in person or phone exit interview



Employees can share information on paper that they may be reluctant to say In person

Cons 

Return rates for Exit Interview Forms average just 30-35%



Difficult and time consuming to compile and track the data from paper and pencil exit interviews

Online Exit Interview Management Systems Pros 

Employee self -service so easy for HR to administer



Employees comfortable sharing information by computer so more honest responses



Information automatically compiles and tracked Reports available at a click of a button

110



Participation rates (for Web Exit customers) double that for paper and pencil exit interviews

Exit Interviews conducted by over 90% of companies

According to a study by the Society of Human Resource Management, over 90% of companies conduct exit interviews. Exit interviews are one of the most widely used methods of gathering employee feedback. Exit Interviews Vs Employee Satisfaction Surveys One of the benefits of exit interviews over employee satisfaction surveys is that exit interviews are conducted when an employee is leaving. This difficulty the urgency in which a company must act on the feedback provided in the exit interview. With employee surveys, it's imperative to act on the results of the employee satisfaction surveys as quickly as possible. Once you provide employees the opportunity to tell you where the problems are, they expect immediate action on those problems. With exit interviews, you have a greater opportunity to review the data and look for trends over time. Employers can take action on problem areas as they see fit without causing further concern among employees. Post Employment Exit Interviews One of the newest fads is conducting the exit interview after the employee has been gone from the company for 3 or 6 months. The theory behind this exit interview strategy is that employee will have a better perspective on things once he or she has had a chance to reflect on hi-s or her employment. Therefore, the employee is expected to provide more valuable information in an exit interview if it is held six months after employment. In research that Nobscot has conducted, this theory has yet to hold up. The majority of companies that have tried these kinds of PostEmployment exit interviews found that the results were similar to the exit interviews

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conducted immediately upon termination.

Additionally, it's difficult and time

consuming to reach employees this far after employment has discontinued. Generally, you can expect to get the most valuable information by conducting the exit interview a few days before or after an employee leaves the company. The employee's employment experiences are fresh in his or her mind and the employee is usually happy to express their final thoughts before leaving the company. How to conduct In-Person Exit Interviews 1. Have exit interviews done by a third party (HR or other) and not with the supervisor in attendance. The goal is to get honest communication. The plusses AND the minuses. With the Supervisor in attendance, chances are slim that the exiting employee will speak up on any important issues. 2. Conduct exit interviews for areas/departments where you "smell" trouble. If there happens to be a lot of turnover in one area, that's a red- flag to start exit interviewing ALL departing employees from that area. (You may want to even interview non-departing employees as well). 3. Have questions pre-planned. You should have a standard list of questions that you ask on each exit interview. Find out what they liked best and least, how they would rate their supervisor, the compensation, benefits, etc. Give them the opportunity to offer suggestions for improvement. 4. Take information received seriously, but with a grain of salt. Don't allow one negative employee to disrupt your whole organization. Look for patterns in exit interview responses. Share the information tactfully with Supervisors. Make action plans to verify serious issues. Work on improving the negatives. 5. Don't let the ex-employee go on and on and on. The exit interview should take 1520 minutes. You don't get any more info by hearing the employee whine about every last detail.

Just like an employment interview, learn how to get the

information that you need, and send them on their way.

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6. Thank them for their service. One small step that you can make on behalf of your company is to think them for what they have done during their employment. Many employees are never thanked. It means a lot. Turnover Prediction Mapping You don’t have to have a crystal ball to predict future turnover. If you conduct both employee satisfaction surveys and exit interviews, you can create a customized map that tells you exactly which areas within your organization can expect future turnover and what the cause of that turnover will be. Coordinating Your Surveys and Exits The first step is identifying what items cause turnover for your organization. Turnover is unique to each organization so items that may cause turnover in one company, mayor may not cause turnover in your company. Before you can begin to identify your turnover stimulators, you need to coordinate your employee survey process with your exit interview process. You'll need a consistent set of questions that will be asked in both surveys and exits. The questions should cover all areas including Environment, Management, the Company, Compensation, etc. The questions should be quantifiable by having employees rate the items on a numerical scale

(Ex. 1-5). Be sure to

keep your rating system consistent so that one side of the scale is always the favorable side and the other side is the unfavorable side. Have employees provide demographic information such as department, location and job classification. Once you have a sufficient number of completed surveys and exit interviews you can begin the analysis process. Identifying Turnover Stimulators Identifying turnover stimulators is a simple matter of comparing your exit interview results to your employee survey results. Use the average ratings for all of the employees who have completed the exit interview thus far and the average rating of all the employees who have completed the satisfaction survey.

Go through each

question one-by-one and look for areas where the average rating on the exits is

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significantly less than the average ratings on the surveys. Tag these questions as Turnover Stimulators.

CH.4 - SUMMARY, CONCLUSION AND SUGGESIONS 4.3 SUGGESTIONS

4.3 SUGGESTIONS 1. ASSUMPTIONS: Money (including compensation, benefits and stock options) was the most frequently mentioned aspect of the retention programs. Second was the executive/management team, both in the tone they set by example and in their communication to the organization as a whole. The third was the opportunity for, growth, both through the challenge of work assignments and individual development. Two elements comprised the fourth aspect: the work environment in general, and the trust existing between people in the organization. 2. FUTURE RETENTION PROGRAMS AND PROGRAMS IN DEVELOPMENT  Future programs focused on money with benefit improvements in the lead twice as often as any element  Creating growth opportunities, including mentoring was the next element of importance  Four elements tied for the third most-often noted aspect of a future or planned retention program:

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Work environment issues

Including job customization -

Flexibility and

Team building

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Executive-management skills and team development

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Employee focus including survey follow-up and recognition programs

What excites me about coming to work!...

When executives talked about what kept them involved in their jobs, opportunity including the challenge of the work and opportunity for creating results was far and away the most engaging aspect. Developing work-related skills for success was key. Executive/management behavior, such as providing personal and professional development was second in terms of importance. Common themes were: They let Supportive executive and management behavior that allows employees to take ownership of their jobs, success and careers; and Team environment in which everyone coming to work is supported in being their best. Implicit in our survey results is the idea that successfully taking a risk which can have a significant impact on their organization is one of the core reasons our interviewees are excited about coming to work every day. Inherent in successful risk-taking are all three of the above retention concepts. Develop employees, build teams and grow your business…

Compensation systems can create barriers and disincentives, but they cannot create motivation, involvement, and continuous improvement or loyalty. In the long term even the lure of stock options alone will not create the kind of personal motivation that retains individuals, builds teams and sustains an organization over time.

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Next Steps, guiding management behavior that encourages ownership and building team environments. A strong sense of Opportunity for Growth and Development is reinforced through mapping future organizational needs, recognizing strengths, and developing a plan for skill development that meets organizational and individual needs.

Management behavior that instills a sense of ownership includes involving

employees in projects that matter (i.e., cost reductions, continuous improvement, or client satisfaction), following up on employee input and encouraging employees to take ownership of their careers. Team environments are built by accepting employees as equals, rewarding positive attitudes, communication and commitment, and providing opportunities for team success. Creating opportunities for risk taking while minimizing the risks of failure also builds team environments. Many of these retention techniques are interrelated.

For example, aligning

individual, team and organizational goals can enrich nearly every task with purpose. Ensuring that all employees have an opportunity to develop the skills crucial to their personal and professional success supports a team environment where learning is expected and risk taking is supported. Social / community building activities was the fourth element of importance to the individuals we interviewed; vision/mission/values was noted nearly as many times. Employee focus, including recognition was next, and was followed closely by Money compensation, bonus, and options. In general organization's principal retention tools are ranked order and categorized in groupings based on the levels of their employee motivation. Some of them are as follows:  Money (compensation, options, benefits)  Executive / management behavior 116

 Opportunities for growth

The aspect of their work:  Opportunities for growth & development  Executive / management behavior  Team-based Work environment It's worth noting that Money (compensation, options, bonus) was a distant seventh.

1. What is good for the Goose is good for the Gander!

Should such a gap exist between how we retain our employees and what keeps us coming to work everyday? One overriding conclusion that we draw is the need to question some of our assumptions about assumed difference between executive level and other employees. What commonalties involve everyone in the work place? 2. Top three ways to retain key employees.  Once we develop a compensation system that is fair, equitable, and competitive in the market, the attention needs to be on employees as people.  Opportunities for growth & development; STEPS FOR RETAINING KEY PERSONNEL Have you ever lost key personnel to other companies? Was it expensive to find and train replacements? Could you have prevented the loss and at the same time created a policy that actually helps to attract the best and the brightest candidates? Retention has become an essential business strategy for companies that wish to 117

remain productive into the future. The following article reflects information gathered from recently conducted executive leadership interviews that were conducted in two critical areas. What strategies and techniques do companies use to Hire Winners? and How do companies retain there key personnel? Save Money on Personnel Turnover and Increase Productivity … Retaining key personnel is critical to long term success of an organization.

Retention Strategy has become essential if your organization is to be productive over time and can become an important part of your hiring strategy by attracting the best candidates who know of your track record for caring for employees. In fact, some companies do not have to recruit because they receive so many qualified unsolicited submissions due to their history of excellence in employee retention. How do you get your employees to "Fall in Love" with your organization? This is a great question. Some recently conducted research lists these Top Ten Strategies: TOP 10 RETENTION TIPS 1. Treat your employees like you treat your most valuable clients. 

It is cheaper to keep your good employees than it is to hire and train new ones.

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Your top 20-25% should be courted as you would court and then service your top customers.

2. Get your employees to "Fall in Love"' with your organization. 

Communicate your Vision in a compelling way. Show everyone the role they have to contribute to this vision. Create opportunities for people to connect with each other for support and to improve communication in work teams.

3. Strong retention strategies become strong recruiting advantages. 4. Retention is much more effective when you put the right person into the right job. Know the job! Know the employee and their motivations.

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Half of the Fortune 500 companies are now using assessments to more fully

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understand each job and the soft skills that are required for top production within their specific company culture. These benchmarked skills are then compared against qualified applicants to help determine who will be successful in the position and fit well within their company's culture. These assessments are also used as a powerful professional development tool to enhance the training of continuous life-long learning (which is another powerful retention strategy.) Advanced Fibre Communication is beginning to use this assessment process in hiring. 5. Money is important but it is not the only reason people stay with an organization. 

If your compensation plan is in the top 20-30% of your industry, then money will often not be the reason why people leave.

6. Employee committees to help develop retention strategies is a very effective strategy. 

Get their input! Ask, what do people like about working here? What would you likechanged to make your company a better place to work? Some companies, such as Advance Fibre Communication (AFC), have recognized that the special engineers and technical experts that are the cornerstones of their business, require special attention. Victoria Perrault, VP of Administrative Services for AFC, says that her company has identified the top 25% of their staff and caters to these special people by meeting their financial requirements and looking for the best package of benefits that these people will find most positive as incentives to stay. They even have employee committees that work as "focus groups" to determine why people stay at AFC and what they might want to see changed to make AFC an even better place to work.

7. Leadership must be deeply invested in retention.

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Management must be skillful communicating company policies in a way that creates "buy-in" from their staff and be open to employee input. Help create "ownership" in your employees.

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The companies with the best retention percentages are the same companies that are actively committed to retention. They know that is costs less to keep good people than to continuously have to replace unsatisfied employees and managers.

8. Recognition, in various forms, is a powerful retention strategy.

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It does not have to cost a lot. US Dept. of Labor -46% of people leave their jobs because they feel unappreciated.

9. Remember that the "Fun Factor" is very important to many employees.

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Greg Peters, Past President and CEO of Mahi Networks in Petaluma, is one of many executives who reported that retention is often related to interpersonal connections and amount of FUN in work teams. The FUN Factor is part of the generation of workers that use activities as stress management in highly charged production environments where long hours are required. Greg has encouraged Ping-Pong tournaments and basketball leagues for interpersonal interaction, fun, and stress management. Though not everyone can participate in physical activities, this sets the tone in a culture based on competition, health/well-being, and interactions that are inclusive beyond work.

10. Know the trends in benefit packages. Do your best to offer the ones your employees need. 

Consider offering the best of the rest. 120

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Results from retention surveys bear consideration.

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This previous retention survey illuminates major factors in retention:

Conclusion: Retaining talent has always been a task every HR Manager would tread. Attrition across sectors and organisations has been an equally stressful aspect to deal with. The study was envisaged to find out the causes for employee turnover analyse the areas of concerns and provide pragmatic solutions to check it. Though the attrition rate is below industrial standards; it is impedient to check “talent drain”, since it is found that the rate of trainees and less than 2 years experience have topped in attrition. A well integrated system that aims at providing an ambient and receptive workplace, recreational activity, social space, reliable measuring and rewarding systems and adequate avenues for growth are fundamental in checking attrition. Below I am suggesting some of the measures, doing so will enable you to create a work environment that gets employees excited about the company and eager to produce results. 1. Set clear expectations. Just like the company, each employee needs a clear focus, especially during volatile or uncertain times. When employees see the economy turn sour or cutbacks occur, they naturally fear any change that could affect their own future. To keep those fears from surfacing, continually communicate with your employees and state your expectations of them. Tell them what you want, what they did right, what you expect of them, and how you will measure their progress.

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2. Show respect. These days we needs employees who can run 100 meter races rather than marathon, that means we need people who can deliver immediately. Therefore, your people may stay up all night to finish a project, but over the long term they won’t sacrifice family and friends for the sake of their jobs. To respect employees’ time, consider flexible work schedules. Be creative about building in the flexibility. When people feel respected, they’ll be more loyal over the long term. 3. Make the workday meaningful. Employees today want more than just a job. They want to contribute to the big picture and help the company sustain it through the tough times. Therefore, leaders need to provide challenging and meaningful work assignments that stimulate their employees. When employees feel bored, their motivation declines and they lose focus on how their work fits into the big picture. Delegate meaningful work whenever possible so employees can learn something new and feel challenged. Additionally, provide regular development and learning opportunities. 4. Give appropriate praise and recognition. Recognize and celebrate even the small accomplishments, as praise and recognition inspire people to increase productivity. Employees appreciate spontaneous and positive recognition along the way instead of delayed recognition during a performance review. However, as you give praise and recognition, consider the receiver. Although praise is a great motivator, some people prefer to receive praise privately, while others like it publicly. One simple way to give praise and recognition is with a simple “thank you.” It can be done in a moment in the hallway, by phone, or during a drop-in visit. “Thank you” is a powerful phrase that can make a person feel appreciated and valued. Whatever you 122

choose to do, remember that rewards and recognition are great motivators, so use them freely.

5. Continually coach. To keep morale high, coach and facilitate every day. The “I tell/you do” method of management simply does not work for motivating and retaining people. Instead, become a coach to your people and encourage them to try things their own way. Allow for mistakes to happen, as mistakes are often our greatest learning opportunities. When people know that mistakes are understood as a part of the experience, they’ll be more creative and take more risks. When you need to correct employees, do so constructively by offering information on ways they can improve, attain, and surpass desired results. Most people are grateful for constructive feedback. It shows that you’re paying attention to their progress. While the above guidelines won’t guarantee that valuable employees will stay with you through good times and bad, they do increase your chances for leading, motivating, and retaining key people when your company needs them the most. By partnering with your employees and creating a work environment that’s enjoyable, meaningful, and focused, your company can accomplish great results, even during uncertain times.

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BIBLIOGRAPHY

BIBLOGRAPHY

Books : •

Managing Human Resources, Tata McGraw

•

Human Resource and Personnel Management, Fourth edition, Tata McGraw

Bohlander, Snell, 2005

Hill Publishing K. Aswathappa, 2005

•

Managing Human Resources, Prentice Hall of India

Luis R Gomez Mejia,David Balicin, Robert L Cardy,05

•

International Human Resource Management,

2nd edition, Routledge Publishers

WebSites: 1. http://askforhrd.com/ 2. http://haripassionhr.com

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3. www.citehr.com 4. http://www.indiaattritionstudy.com 5. http://www.hyundai-motor.com/

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