Contemporary and Best Global HR Practices by gauravjindal

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									  Contemporary & Best Global
    HR Practices in Indian

Dr. Debashish Sengupta. Alliance Business School,
  ―The number has become so predictable that it
    barely raises eyebrows. According to Hewitt
 Associates, for the seventh year running, India will
    record the highest salary increase in Asia, of
 15.2% or nearly twice that of China. Such dazzling
 pay hikes and India‘s continuing supremacy in the
 Asian salary sweepstakes raise one question: how
long can corporate India continue with such above-
                   average hikes?

                                    OLB(Oulook Business)-Hewitt
                                        Salary Survey, 2008
Why such above-average salary
• All sectors are keen to retain talent.

• Between 2006 and 2007 overall
  attrition percentage in Indian Industry
  has risen from 14.4% to 18.1%.

• In high attrition sectors, the hikes
  projected are the highest.
       High attrition sectors, have seen
                 highest hikes!
Industry      Attrition in   Attrition in   Projected
              2006 (%)       2007 (%)       Salary hike
                                            2008 (%)
Accounting/   14.4           17.1           16.1
Banking       13.0           18.9           14.2
Consumer      15.2           16.2           13.4
Engineering   10.3           15.2           15.7
FMCG          15.3           14.3           14.6
ITES          21.5           28.9           14.0
Telecom       21.2           23.6           17.6
    But can this sort of salary hike
• Evidently, it can—and it probably will—for some years to
• In the last quarter (January to March 2008), employee
  costs of 268 companies for which data was available
  increased by 73% over the corresponding quarter three
  years ago (January to March 2005). Over the same
  period, income of these companies was up 88%.
• Interestingly, personnel costs as a share of income for
  these companies was down from 9.7% in 2005 to 9.5%
  in 2008.

• In other words, productivity increases have more than
  compensated for the higher wage bill, giving companies
  the room to pay more.
    Few More Questions ???
• Can this sort of hike continue forever?

• Does salary hike always reward

• Is compensation the only guarantee
  of talent retention?
  Can this sort of hike continue
Certainly not! They have to plateau at some
  or the other point of time.
• Rising pay packets have not always
  retained people.
• Recession may slowdown
• Besides India has to protect the labour
  cost-advantage factor as well.
          Recession will tell…
• ―India cannot be immune to recession which has hit
  US & Europe‖ – Ratan Tata, Group Chairman, Tata
  Group, expressing concerns about rising input costs.
  (The Hindu, Business Line, August 5, 2008)

• Wipro Chief Azim Premji took a heavy-cut in his
  annual pay recently. Wipro‘s Chairman, Azim
  Premji, settled for a lower pay packet for the year
  ended March 2008. Details published in Wipro‘s
  annual report 2007-08 show that his remuneration
  for the fiscal dipped 63 per cent to Rs 1.31 crore
  compared with Rs 3.58 crore he received the
  previous year. Whether this is an indication for the
  rest of the IT industry, only time will tell.
Does salary hike always reward
• The pressure to retain employees is breeding
  mediocrity. The difference in the percentage
  hike given to the best and average performers
  has dropped.

• Between 2001 & 2006, employees who ‗far
  exceeded expectations‘ (rank one on four) got a
  hike that was twice as much in percentage
  terms (or 100% more).

• In 2007, the differential dropped and ranged
  from 23.8% - 68.9%
 Is compensation the only guarantee of talent
What do industry experts say…

• K. Pandia Rajan, Managing Director of Ma Foi
  Management Consultants
• Uday Mohan, Director-HR Operations at Pfizer India.

• S.Y. Siddiqui, Executive Director (Hr, Finance &
  Admin.) Maruti Udyog Ltd.

• Yasho V Verma, Director HR & MS, L.G. Electronics

• Rajeev Dubey, President HR, Mahindra & Mahindra
 In words of K. Pandia Rajan, Managing Director of Ma
               Foi Management Consultants

―Just as it is vital for a company to attract the right talent, it
is equally important for them to retain that talent. Today's
situation is such that companies are constantly vying with
each other to offer better perks to their employees. While
the nature of these perks may differ across levels, there is
a need to offer something beyond just the pay packages.
Stock options, exposure to other markets, substantial
incentives on meeting targets, foreign trips - these are all
initiatives that have gained a lot of acceptance in the last
few years. And this does goes a long way in retaining
   In words of Uday Mohan, Director-HR
        Operations at Pfizer India.

"Beyond compensation, we create a culture of

ownership—through stock options of the parent

company—for our leadership team. We look at

creating greater engagement among colleagues by

involving them in cross-functional teams and with

other initiatives,"
In words of S.Y. Siddiqui, Executive Director (Hr,
     Finance & Admin.) Maruti Udyog Ltd.

"There is more to a job than money. That‘s the general
refrain across companies that manage to keep costs
down, but still retain talent. Good job content and a
learning environment coupled with career opportunities
and the brand make Maruti competitive. Self-training
and job content is made challenging enough to keep
employees excited. Job rotation is the other motivator "
In words of Yasho V Verma, Director HR &
        MS, L.G. Electronics India
"At LG, there is a system to develop and plan the career of
an employee for the next five years. Family engagement is
also high on the list. A member of the HR team is appointed
as a family ambassador who earns Rs 2,000 for each visit to
an employee‘s residence. The broad philosophy is that from
the moment you leave house to when you get back,
everything is taken care of—even a concierge service is on
offer. And this costs no more than Rs 80-90 per employee,
but it increases the personalized touch "
   In words of Rajeev Dubey, President HR,
            Mahindra & Mahindra Ltd.
"People are looking for engagement, empowerment, scope
for innovation and global experiences today, Capacity
building, nurturing talent and synergy are the prime issues.
Besides these, there are hygiene factors like the
workplace, the peer group, the relationship with immediate
superiors and leadership team that are intangibles in
keeping employees glued to an organisation. "
  So it takes more than just salary-
           hike…doesn‘t it?
• The difference between a highly productive
  workforce and a disengaged, disinterested one
  can spell success or failure for an enterprise in
  the long term.
• The cost of each disengaged employee per
  year could be $8,000-10,000 a year, estimates
• Organizations with high engagement are found
  to be 78% more productive and 40% more
  profitable than those with indifferent workers.
So we take a sneak-peek into what
some of India‘s best employers are
doing in terms of their HR practices
which have set certain standards
for other players…
       Best Employers in India-2007*
 Rank            Company        Rank         Company

   1     Microsoft India         8     HCl Comnet
   2     MindTree Consulting     9     Accenture
   3     Johnson & Johnson       10    Dr Reddy‘s Labs
   4     Sapient                 11    Marriott Hotels India
   5     Infosys Technologies    12    Covansys India
   6     iGate                   13    HCL Infosystems
   7     Agilent Technologies    14    Godrej Consumer

* BT-Mercer-TNS Study- 2007
                                 15    Honeywell Technology
                                 HR Process                  Stakeholders
 Criterion     HR Metrics                         IEPS
                                  & Policy                    Perception
What they    Training to         Talent Mgmt.   Internal     Feedback from
mean?        employees, HR       Closed loop    Employee     Alumni, New
             investments,        learning,      Perception   Recruits,
             Career Velocity,    progressive    Score        Search Firms
             Attrition, Gender   HR practices   (opinion     and campuses.
             Diversity,                         sought on
             Increments given                   various
             to employees in                    aspects)
             last one year.

Weightage          15%               30%           35%           20%
  1                         Microsoft India
                                  • Leadership Development:
Total Employees      5000+          Spends a large amount of time
                                    and money to prepare them for
Average Age          30             the job ahead.
Male: Female Ratio   8:1          • Internal Transfers: Employees
                                    can seamlessly transfer among
Average Career       4.13 years     6 business grps. If they feel
HR Cost              $ 54.636       they‘re stagnating.
                     million      • Transparent Compensation:
                                    System of pay & appraisal are
Promotion rate       24.73%         open in the company.
Training Budget      $ 0.131        Expectations are clear.
                     million      • Mentoring: Mentors & their
Training Man-days    12,270
                                    wards meet regularly to have
                                    an open and frank dialogue.
Revenues             N.A.         • Recruitment: New employees
Net Profit           N.A.           are given ‗buddy‘ to help them
                                    assimilate. Also helps in finding
                                    accommodation for the
                                    employees and has a real-
                                    estate consultant.
  2                  MindTree Consulting
                                   •   Institutionalized Practices: Co.
Total Employees      5500              seeks feedback from employees.
                                       Co. also identifies and adapts best-
Average Age          27.82 years       in-class practices from globally
Male: Female Ratio   77:23             admired organizations.
                                   •   ‗Baby‘s Day Out‘: Launched a full-
Average Career       3.6 years         fledged day care centre on-site.
HR Cost              $ 3.6             Women are allowed to take 1 yr. of
                                       leave for every 6 yrs. They work to
                     million           balance their work & life
Promotion rate       30%               commitments.
                                   •   ‗Dhriti‘: Co. has launched ‗Dhriti‘ – a
Training Budget      $ 0.834           Mind Tree Women‘s Network, as a
                     million           support system to facilitate
                                       knowledge sharing, learning,
Training Man-days    66000             mentoring and networking.
Revenues             $ 141.573     •   IJPs:Mind Tree has launched
                     million           internal job postings to help
                                       employees align their aspirations
Net Profit           $ 21.329          with available opportunities.
                     million       •   Leadership : Focus on continuously
                                       creating leadership and see that
                                       leadership ‗walks the talk‘.
  3                  Johnson & Johnson
                                   •   Employee Welfare: Career
Total Employees      404               Counselling for employees and kids;
Average Age          38 years          Confidential helpline – J&J Mitr – for
                                       employees wanting advice on
Male: Female Ratio   4.86:1            personal problems.
Average Career       11.56 years   •   Spritual Development of Employees:
                                       Employees are invloved in a lot of
HR Cost              $ 0.422           community development projects. In
                     million           addition each employee is given an
Promotion rate       18.71%            additional five days leave o go and
                                       work for an NGO of his/her choice.
Training Budget      $ 0.128
                     million       •   Employee Centric: J&J‘s employee
                                       benevolence goes beyond
Training Man-days    510               workplace and even beyond
Revenues             $ 355.815         personal or the family. It attempts to
                     million           shape every aspect of an
                                       employee‘s personality.
Net Profit           $ 31.824      •   Openess: Candidness is feature at
                     million           J&J across levels. Employees have
                                       a strong emotional connect.
  4                              Sapient
                                  • Truly Open: Almost every
Total Employees      3500
                                    company claims that it is open
Average Age          29 years       but Sapient says it really is!
Male: Female Ratio   1:1.26       • Succession Planning: Sapient
Average Career       2.4 years      has some solid practices in
HR Cost              NA             place whereby they gradually
                                    ease people into new roles.
Promotion rate       7.03%        • Career Counselling: The
Training Budget      NA
                                    company has constituted a
                                    ‗Career Week‘ where new-
                                    comers are given counselling
Training Man-days    8000
                                    by more experienced people.
Revenues             NA
                                  • New Systems: The company
Net Profit           NA             is introducing new systems
                                    like telecommuting & Flexi –
  6                               iGATE
                                  •   More Opportunities: Junior & Mid-
Total Employees      5945             level employees get more client-
                                      facing opportunties.
Average Age          26           •   Reward System: Meritorious
Male: Female Ratio   13:4             employees across all levels are
                                      given restricted stock options.
Average Career       3.38 years   •   Easy Access: Employees have
HR Cost              $ 2.284          easy access top management.
                     million      •   Multiple Exposure: Unlike
                                      traditional IT model, iGators can
Promotion rate       13.17%           leverage a single technology
Training Budget      $ 1.279          platform to work with multiple
                     million      •   Innovation: iGate is less process-
Training Man-days    10               centric. This gives employees a
                                      greater room to be innovative &
Revenues             $ 193.522        individualistic.
                     million      •   Early Responsibility: Employees
Net Profit           $ 11.922         with just 3 years of experience are
                                      given management and customer-
                     million          facing roles.
  7                  Agilent Technologies
                               •   Accent on Learning: One of the
Total Employees      1500          philosophies of the company is to
Average Age          29.7%         give the right tools and resources to
                                   employees so that they can develop
Male: Female Ratio   2.3:1         themselves.
Average Career       2.67      •   Succession Planning: Company‘s
                                   succession planning ensures
HR Cost              NA            employees have a go at realizing
                                   their leadership potential.
Promotion rate       15.08%    •   Performance Management: All
Training Budget      $ 2.395       employees are communicated what
                     million       is expected of them and their
                                   performance monitored through the
Training Man-days    7500          My Accountability and Performance
Revenues             NA            Standards (MAPS).
                               •   Leadership: The leadership of the
Net Profit           NA            company spends 80% of their time
                                   in engaging with employees –
                                   coaching, developing and
  8                           HCl Comnet
Total Employees   5400         •   Employee First Campaign: Greater
                                   Engagement; Cross- functional move;
Average Age       25               empowerment to take quick decisions.
                               •   SSD: The Smart Service Desk is an
Male: Female      8:1              automated trouble-ticketing tool for
Ratio                              employees to raise online tickets related to
                                   transactional issues with HR, Finance or IT
Average Career    4.7 years        team
HR Cost           $ 7.162      •   Performance Management: 3600 perf.
                                   Appraisal; Self appraisal thru. I4Excel;
                  million          ―My Xtra Miles‖ is a loyalty point system when
                                   they get appreciation from their peers,
Promotion rate    4.16%            subordinates, managers or customers. These
Training Budget   $ 6.082          points can be redeemed for attractive gifts,
                                   foreign trips etc.
                  million          Company has various recognition-led
                                   incentive awards like WYGI-WYG
Training Man-days 43000            Certificates, COO‘s Party Vouchers, Top Gun
                                   award, TOP Gun Comnet Builder Award etc.
Revenues          $ 203.145
                               •   Natasha: Natasha is positioned as
                  million          employees‘ personal assistant for policy and
                                   information dissemination.
Net Profit        $ 22.719
                               •   Work-life Balance: Organizes games, b‘day &
                  million          achiever's parties. Has ‗Little Comnetians
                                   Club for employees‘ kids.
  9                                Accenture
                                     • Global Opportunities:
Total Employees        35000*          Employees can move across
                                       business verticals &
Training Budget        $ 706           geographies globally.
                       million #
                                     • Reward System: Among the
Avg. training hrs. /   152             best paymasters and
employee in FY07                       compensation perceived to be
Revenues               $ 19.70
                                       better then Indian Tier I
                       billion #
                                     • Education Initiatives: Massive
Net Profit             $ 1.24          focus on education & training.
                       billion #       16000 online courses, offers
                                       courses in association with MIT.
                                     • Career Mobility: Employees can
                                       make own career choices. No
                                       compulsion to choose a
                                       particularly approach.
                                     • Empowered Employees: Allows
                                       employees to take autonomous
                                       decisions and gives them
                                       budget to manage too.
 10                    Dr. Reddy‘s Labs
Total Employees      7704
                                  • Leadership development:
                                    Promising young leaders are
Average Age          31 years
                                    given an opportunity to share
Male: Female Ratio   10:1           their breakthrough ideas
Average Career       6 years        before the management
HR Cost              $ 63.288       council at its quaterly meeting.
                     million        The company is also setting-
Promotion rate       9%             up a Leadership Academy at
Training Budget      $ 1.184        a cost of around $3.5 million
                     million        near Hyderabad.
Training Man-days    25000
                                  • Career Jumps: Outstanding
Revenues             $ 1541.805     performers are given quantum
                                    leaps in their careers and at
Net Profit           $ 265.846
                                    times even inducted in
                                    management council.
 11                  Marriott Hotels India
                                 •   Two-way communication: For new
Total Employees      2502            entrants there is an event called ‗Koffee
                                     with GM‘. For too ‗shy to talk‘ types – an
Average Age          24              option of anonymously calling up
                                     Integrity Hotline (24*7 toll free)
Male: Female Ratio   4:1         •   Reward System: Individual as well as
                                     group awards. Hotel-wise as well as
Average Career       3 years         global awards.
HR Cost              $ 0.257     •   Employee Benefit Initiatives: Employees
                                     are given 6-offs in a month & financial
                     million         support for higher edu. Each & every
Promotion rate       37.6%           employee on his/her b‘day can stay with
                                     family or spouse in the hotel for one day
Training Budget      $ 0.327         & can dine anywhere.
                     million     •   Knowledge Initiatives: Every Marriott
                                     hotel has a learning centre that has a
Training Man-days    4337            collection of books and videos and has a
                                     internet connection.
Revenues             $ 107.686   •   Defined Span of Leadership: There is a
                     million         Leadership Performance Process
                                     Management System which defines 9
Net Profit           $ 57.689        competencies which a Marriott associate
                     million         (employee) should develop.
 12                        Covansys India
                                •   Stress Buster Sessions: TGIF
Total Employees      5412           (Thank God Its Friday) is one such
                                    stress buster program.
Average Age          29 years   •   Employee Structure Framework:
Male: Female Ratio   4:1            The co. has recently estd. ESF to
                                    foster growth & excellence. On one
Average Career       5 years        hand it encourages individuals &
HR Cost              $ 3.733        teams to overcome their inhibitions
                                    & exploit their potential to the fullest;
                     million        on the other hand it softens those
Promotion rate       39%            controls that prevent the free-flow of
                                    creativity within the co. Six task
Training Budget      $ 1.516        forces were created. The payoffs:
                     million        1. Booked orders worth $ 2 million
                                    based on informal tips.
Training Man-days    27788          2. employee referral grew (8% to
Revenues             $ 455.4        15%)
                                    3. Job rotation done more sensibly.
                     million    •   ―Compass‖: a tool to detect &
Net Profit           $ 53.26        leverage individual capabilities &
                     million        aspirations. Also uses non-intrusive
                                    methods to detect dissatisfaction
                                    among employees & address them.
 13                       HCL Infosystems
                                  •   360-degree feedback: So employees
Total Employees      5467             also get to look at the manager‘s
Average Age          28           •   Recognition for added value: Rewards
                                      each employee whose innovation gets
Male: Female Ratio   128:8            lauded by the customer.
Average Career       4.35         •   Employee Management Interface:
                                      Employees have direct Q&A link with the
HR Cost              $ 7.64           president himself, who has to answer in
                                      a limited time-frame.
                                  •   Focus on learning: Lot of investments in
Promotion rate       21.64%           e-learning, creating libraries for emp.
                                      Holding workshops. Also has ESOPs.
Training Budget      $ 0.264      •   Innovation: Has a e-forum Innovation
                     million          @hcl to help employees particpate in
                                      Innovation process.
Training Man-days    52,708       •   Business Continuity Plan: Company has
Revenues             $ 2859.684       a comprehensive succession planning in
                     million      •   Employee Engagement:
Net Profit           $ 75.957         Existing Ones: Preventive health-check
                                      – up, yoga classes, employee relief fund
                     million          New Ones: MyPal, Wellness Program,
                                      Three Cheers, Little Mindian, Bring a
                                      Smile etc.
 14                    Godrej Consumer
                                 •   Consumer Orientation: Employees (not
Total Employees      1259            just marketing people) are encouraged
                                     to go to market and even at times to
Average Age          35              consumer‘s residences.
                                 •   Young Professional matter: All
Male: Female Ratio   14:1            businesses are headed by non-family
                                     professionals. A young executive board
Average Career       12              of 10 leadership – oriented managers
HR Cost              $ 0.24          has been constituted.
                                 •   Godrej Employee Management (GEM):
                     million         an IT – enabled tool keeps track & helps
Promotion rate       16%             find right people according to
Training Budget      $ 0.166     •   Out-of-the-box programmes:
                     million         1. GALLOP: looks at recruiting Ph.Ds
                                     2. BRACE: for hiring people immediately
Training Man-days    3042.58         after graduation.
                                     3. IDLE: focused on internal
Revenues             $ 192.157       development of leaders.
                     million     •   Stress on Communication: Chairman
                                     regularly meets with managers;
Net Profit           $ 31.767        President with managers and Officers.
                     million         Chairman communicates with all
                                     employees every quarter.
 15          Honeywell Tech. Solutions Lab
                                 •   Two-Way Communication: MD and
Total Employees      5500            other business leaders hold regular
                                     meetings with employees to
Average Age          29              communicate policies, address
                                     grievances and operational issues.
Male: Female Ratio   4:1         •   Employee Benefit Initiatives: Has
                                     counsellors to provide advice on health
Average Career       3 years         and finance. Encourages employees
HR Cost              $ 2.892         and their families to develop friendship
                                     and organize various events.
                     million     •   Knowledge Initiatives: has tie-ups with
Promotion rate       20%             leading educational institutions like
                                     illinois institute of technology, Chicago &
Training Budget      $ 1.22          others for advanced courses for its
                                     employees that it partially sponsors.
                                 •   Defined Span of Leadership:
Training Man-days    21750           Has a structured initiative in place to
                                     ensure adequate attention is given to
Revenues             $ 140.467       every employee.
                     million     •   Reward System: Employees are
                                     categorized into ‗Star Performers‘,
Net Profit           $ 14.315        ‗Valued Contributors‘ and ‗Achievers‘
                     million         and rewarded in an open and
                                     transparent manner.
          The Great Fall…
• You must be wondering where did the
  company ranked 5th in best employer
  (India) list, go!
• We are discussing it at the end because it
  is an example of how the crown can slip!
           Year          Rank of INFOSYS on Best
                              Employer list
           2004                    2nd
           2005                    1st
           2006                    1st
           2007                    5th
  5                  Infosys Technologies
                                              Why Infosys Fell?
Total Employees      80501
Average Age          25           •   Growing Scale: Harder for a
Male: Female Ratio   2.4:1            company with over 80000
                                      employees to be agile with people
Average Career       3.87 years       practices as smaller rivals.
HR Cost              $ 51.355     •   Inadequate Communication: Slow to
                     million          communicate emerging company
Promotion rate       8.48%            philosophy to employees.
                                  •   MNC Competitors: Emergence of
Training Budget      NA               MNCs in India has dented its
                                      reputation as among the best pay
Training Man-days    12               masters.
Revenues             $ 3272.792   •   HR Lag: Yet to put in place a
                     million          comprehensive HR policy to deal
                                      with a global organization.
Net Profit           $ 906.949    •   Slow Promotions: Yet to address
                     million          this issue & a perceived glass wall..
    Quick View – Top HR Practices in
•   Telecommuting & Flexi – hours     •   Fair & open Reward System
•   More Growth Opportunities         •   Education Initiatives
•   Easy access top management        •   Career Mobility
•   Greater room to be innovative &   •   Career Jumps for outshiners
    individualistic                   •   Two-way communication
•   Early Responsibility              •   Knowledge Initiatives
•   Accent on Learning                •   Defined Span of Leadership
•   Performance Management            •   Stress Buster Sessions
•   Greater Engagement; Cross-        •   Detecting & leveraging individual
    functional move;                      capabilities & aspirations
•   Empowerment to take quick         •   360-degree feedback
    decisions                         •   Recognition for added value
•   Work-life Balance                 •   Value to Young Professional
•   Global Career Opportunities           matter
      San Jose State University
• SJSU is the 12th largest employer in the Silicon Valley,
  with over 5,000 faculty, staff and student assistants. We
  are proud of our workforce and student body diversity.
  We believe a career with SJSU is a very rewarding
  experience. In 2007, SJSU celebrated its 150th year
  anniversary with university commemorative events.
• HR embraces the university's shared values and Vision
  2010 for becoming the University of Choice. The Vision
  2010 will guide HR operations to recruit, retain and
  engage a team of well-qualified employees. HR will
  design a full spectrum of programs that will target
  compensation, benefits, work-life balance, employee
  development and performance management.
• HR invites you to explore our website and learn how HR
  partners with the university to achieve its strategic goals
  and Vision 2010.
      San Jose State University
• It's all about striking the best balance.
• Work-life balance means different things to different
  people. There is no perfect, one-size fits all, balanced
  solution that you should be striving for. The best work-life
  balance is different for each of us because we all have
  different priorities and different lives.
• Human Resources, along with the CSU and SJSU, have
  established many programs designed to attract, retain
  and engage a diversified workforce and their ever-
  changing needs.
• HR invites you to explore the work-life effectiveness
  programs at SJSU that may provide you with some of
  the tools to self-manage your work-life balance and have
  a sense of well-being and belonging at SJSU.
• BT-Mercer-TNS Study, Business Today,
  Nov. 18, 2007 Issue
• OLB-Hewitt Salary Survey 2008, Outlook,
  June 1-14, 2008

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