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Transcript of Shiva Report
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Human resource practices at SMC insurance 1
SMC Insurance
Brokers Pvt. Ltd.A study on how HR practices can make an extraordinary
difference in todays workplace.
Submitted by:-
Shiva Kakkar (155)
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Human resource practices at SMC insurance 2
Acknowledgement
As a part of the PGDM curriculum at Birla Institute of Management
Technology, the preparation of this project report has been a
unique and rewarding experience. We would like to thank Birla
Institute of Management Technology and SMC Ltd. for providing us
with this wonderful opportunity.
We would also like to thank Dr. Manosi Chaudhuri for guiding us all
through the course of this project. We are grateful for her
direction and support which helped us prepare this extensive
project.
We are also grateful to our industry mentor, Mr. Navneet Kaushik,VP-HR, SMC Ltd. for helping and guiding us at every moment whilst
we carried out our research at the organization. We hope to
succeed in this endeavor and uphold the name of our institution.
(Prof. Manosi Chaudhuri)(Mr. Navneet Kaushik)
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Human resource practices at SMC insurance 3
- Associate Professor, BIMTECH -VP-HR, SMC Ltd.
Contents
s.
no.
Chapters Page no.
1 Executive Summary 4
2 Background of Study 5
3 Scope of the Study 6
4 Objective of the Study 7
5 Methodology
4.1 Primary Data Collection
4.2 Secondary Data Collection
8
6 Literature Review 9-33
7 Data Collection and Analysis 34-42
8 Conclusion 43
9 Recommendations and future
challenges
44
References
Appendix
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Human resource practices at SMC insurance 4
Executive Summary
20 years ago, the greatest organizations were the ones who had the most number of
arms and legs working for them. But, as the tidal wave of information took over, brawn
started getting being substituted by brain. Today, it is the people of the organization that
determine its success. Firms like Google, Apple, Tata, etc. have created a niche for
themselves in the world, and are in the true sense great organizations. To be a great
organization, one needs to have great employees, and to have such great employees,
one needs some great practices to reign over them. This is where human resource
practices take the centre stage. The objective of this research is to identify the tacit
unexpressed needs of the employees working at SMC and how the human resource
practices at the company can help satisfy these wants. Human needs and wants are themain proponents of employee motivation. It is truer in a demanding sector like Insurance
where every man gained or lost can be detrimental to the companys profit. Therefore, it
is necessary to judge the employee expectations and try to meet them to the best
possible extent. There are six best practice areas that we identified:
1. Human resource Planning: Results of the future depend on the decisions of thepresent. HRP demands the socio - technical elements to be in place for the
organization to diagnose any contingency effectively, be it recruiting or succession
planning.
2. Performance Appraisal: Every organization loves its employees but fails to express
the same. Unlike, the common perception about PA being the nemesis of many a
careers, its necessary that employees also know about its positive aspects.
3. Training and Development: Most organizations commit the cardinal sin of considering training as an expense and try to curtail it. It is necessary to know the
need or lack of training at all levels of management for effective organizational
performance.
4. Compensation and Benefits: As companies get competitive, compensation andbenefits is the hammer they use to break each other. Its essential that firms
remain competitive, and at times, set new standards in the industry.
5. Knowledge Management: Knowledge is the scalpel that decides the fate of todays
business battles. Its effective management can make or break an organization.
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Human resource practices at SMC insurance 6
enhance the financial performance of an organization manifold. In an effort
to enhance their competitiveness, some firms have instituted high
performance work practices. Firms like Google, Apple, Marriot Hotels, Tata
Group have created a niche for themselves through their humane HRpractices. It is through these practices that they have become the apple of
the eye of many prospective employees. Googles attrition rates have
rarely went beyond 2%. Thus, good HR is not a luxury, but a necessity for
organizations today.
Scope of the study
India has about 300 million people who can afford to buy life, health, and
pension plan products. Out of this, only 20% have insurance and that too
covers only 25% of their needs and financial capacity. The remaining 80%
have no insurance cover. The life insurance market of India, therefore, has
tremendous growth potential. More and more foreign companies are
setting shop in India. This directly indicates the rising job opportunities inthis sector. Large scale manpower needs possess intricate problems. As
employees get more and more aware, the levels of BATNA they possess on
the negotiating table increases. Coupled with newer and better
government regulations, rising competition and a volatile target driven
environment the challenges and opportunities are like never before. Thus,
insurance brokerages have numerous pressing issues on hand. High
Attrition rates, employee dissatisfaction, motivation, training expenses, etc
are some of the issues constantly perplexing the Insurance brokerage
companies. A careful and critical analysis of these problems would
tremendously benefit the firm, as well as generate valuable information
that can be applied not only to the insurance sector, but to other high-
attrition sectors like BPOs as well, as they tend to be a cross between IT
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Human resource practices at SMC insurance 7
and Finance sectors. The scope of this study is limited to pointing out the
golden practices needed to meet the challenges of this industry and give
suggestions over the lacunas, if any. This involves a substantial amount of
research to be conducted on the relationship between productivity and
high performance work practices, such as the use of valid staffing
procedures, organizational cultures that emphasize team orientation and
respect for people, employee involvement in decision making,
compensation linked to firm or worker performance, and training. No
organization in the world is free of errors. Our research can be taken as a
cue to undertake an organizational restructuring activity, simplify
processes. An in depth analysis of problems like high attrition and lack of employee motivation can be undertaken in the future. We hope that this
research would be a starting step for any organization that wants to make
a move towards the best employer listing in this country.
Objectives of the study
The primary objective is to study the practices being followed by SMC Ltdand their success or failure with the employees. To simplify the study, we
have divided the entire research into five specific study areas. We have
asked questions in our survey based on these five areas, as follows:
1. Human Resource Planning : HRP is today, a form of business
competition. It demands serious attention from management because
any business strategy will falter without the talent to execute it.
Insurance companies are often seen to indulge in massive hiring and
layoff practices owing to large scale attrition. Is bulk hiring the solutionto the attrition problem or the problem itself?
2. Performance Appraisal : Considered as the incarnation of Satan by
employees, performance appraisal is the quality check of whats going
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Human resource practices at SMC insurance 9
o Structured questionnaire with open ended and close ended
question.
o Random sampling
o Interviews with HR executives and other staff members
4.2 Secondary data collection:
Journals
Newspapers
Internet
Books
Company Documents
We have taken an exploratory study of SMC Ltd. Our motive is to establish
cause and affect relationships by studying the practices and policies of thecompany. The sample responses were collected from the HR executives
present in SMC Ltd. at the Pratapnagar branch. The sample selection was
random to reduce the bias in responses. In order to increase the validity
and reliability of the study, we opted to use a structured questionnaire to
collect the data.
Secondary data collection is done through various sources to support the
empirical study, which we have conducted. We have mentioned some of
the secondary data collection source like news paper, journals, company
policy documents, etc.
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Human resource practices at SMC insurance 10
Literature review
The HRM 1 function today is concerned with much more than simple filing,
record keeping and compensation disbursement. When HRM is integrated
within the organization, HRM plays a major role in clarifying the firms
human resource problems and develop solutions towards it. It is oriented
toward action, the individual, interdependence and the future. It is hard
to assume that an organization would continue to survive in the lack of
effective HRM strategies. In spite of the appealing notion of strategic HRM,
organizations find it extremely difficult to adopt new HR practices. Most
often, they are concerned with short term gains and focus only on current
performance, rather than having a comprehensive view of the future.
Hence, it can be said that HRM activities play a major role in ensuring the
prosperity and effectiveness of an organization. Effectiveness and
Ineffectiveness of an organization can be studied in terms of certain
criterias or components like performance, legal compliance, employee
satisfaction, absenteeism, turnover and attrition, training effectiveness,
return of investment, grievance rates among others. All these are
constituents of the practices followed in an organization.
There are five practices of HR at SMC Ltd. which form the focus of this
research. These five areas are Performance Appraisal, Human Resource
Planning, Benefits and Facilities, Training and Development, Organizational
learning and Knowledge Management. Dave Ulrich in his invaluable book
The HR Value Proposition cites four processes key to an organizations
success 2 namely, Flow of people i.e. how people move in, through, up and
out of the organization, Flow of performance management i.e. the strandsthat link people to their work the standards and measures, financial and
nonfinancial rewards, Flow of information i.e. the assimilation and
dissemination of information throughout the organization that ensures that
people know what is happening in the organization and why, and can take
the necessary steps to create value, and lastly, Flow of work i.e. who does
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Human resource practices at SMC insurance 11
the work and how is it done. Proper attention to work flow provides the
governance processes accountability and a physical setting that ensures
quality results. These practices are necessary to achieve a sustained
competitive advantage through people. In fact, a growing number of experts now argue that the key to a firms success is based on establishing
a set of core competencies. To achieve a competitive advantage through
the use of human resources the organization should meet the following
criteria 3 :
1. The resources must be of value : People are a source of competitive
advantage when they improve the efficiency or effectiveness of the
company. Value is increased when employees find ways to decrease
costs, provide something unique to customers, or some combination of
two. Empowerment programs, total-quality initiatives, and continuous
improvement efforts are intentionally designed to increase the value
that employees represent on the bottom line.
2. The resources must be rare : People are a source of competitive
advantage when their skills, knowledge, and abilities are not equally
available to competitors. Companies like Microsoft, Infosys, Dawnay Day
invest a great deal to hire and train the best and brightest employees in
order to gain advantage over their competitors.
3. The resources must be difficult to imitate : People are a source of
competitive advantage when employee capabilities and contributions
cannot be copied by others. Google, Southwest airlines, etc. are known
for their unique cultures that get the most from their employees and aredifficult, if not impossible, to imitate.
4. The resources must be organized : People are a source of competitive
advantage when their talents can be combined and deployed to work on
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Human resource practices at SMC insurance 14
Source: Grote Consulting Corporation
2. Human Resource Planning : The rapidly changing and ever evolving
world has put a tremendous strain on the availability of human
resources. Almost every organization suffers from a perpetual
drought of quality manpower. The severe supply and demand gap
makes it imperative for organizations to plan their course of action
well in advance. This means that traditional time bound HR practicesof hiring, selections and promotions need to be quashed and
replaced with a more robust and dynamic system. HRP 8 (Human
resource planning) is nothing but an analysis of the organizations
HRM needs in a dynamic environment and develop a course of
activities that can enable the organization to adapt to change.
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Human resource practices at SMC insurance 15
The Human Resource Planning Process 9 typically consists of 4 steps,
namely:1. Situational Analysis or Environmental Scanning: The various
social, political, economical and technical changes in thesurrounding environment affect the flow of human resources in an
organization. As an example, the spurt of the Information
Technology sector in India led to an increase in technical
institutes. In order to meet the demand, organizations like Infosys
tied up with educational institutions to provide recruitment and
training facilities. Without an effective HR plan to support the
recruitment and selection functions, Infosys or for that matter, any
other organization cannot hope to remain competitive in themarket.
2. Demand Forecasting for Human Resources: The next step in the
planning process is that of demand forecasting. Not only is it
necessary to estimate how many employees would be needed but
also what kind of employees. There are a number of ways of
demand forecasting. Of all the tools, the human judgment still
plays a crucial role in these decisions. Many managers still rely ontheir gut feeling to predict the need of manpower in their
organizations. Nevertheless, organizations are moving towards
removing the uncertainty in HR prognostics. Companies around
the world are increasingly adopting newer techniques like Expert
Estimates (Delphi Technique or Nominal Group Technique), Trend
Projections, etc. More sophisticated techniques include Modeling
and Multiple Predictive Techniques like Markov Chain Analysis.
3. Analyzing the current supply of Employees: External recruitment,
selection and training cost organizations a lot of time and money.
Add to this the cost of retaining these new yet highly skilled
employees, the figure becomes astronomical. To maximize the
use of resources in an organization the organization needs to keep
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Human resource practices at SMC insurance 16
a tap on its current resource availability. In many situations,
internal hiring and training can suffice or at least cut down the
need for external hiring. Companies are increasingly adopting
policies like moonlighting to cater to their human resource needs.A breakthrough and effective way to estimate the current supply
of manpower is Skills Inventory 10 . As the name suggests, a skills
inventory is a record of what kind of skills, abilities, experiences
and training the employees currently possess. By keeping track of
it an organization can quickly determine the availability of a
particular skill when needed. The typical contents of a skill
inventory are the name, skill, experience and in some cases, the
skill gap of employees. Skill gap knowledge is another benefit of having a skill inventory. It can help organizations in improving the
quality of training and development programs for its employees.
An employee may be interviewed or simply be given the access to
the companys HRIS system to record his skills. Today, Skill
inventories largely differ in their sophistication. An inventory may
be as simple as an index file in a file drawer to a massive Human
resource Information System (HRIS) database. Microsofts skill
inventory assessment software is shown in Fig. 1-211
below.
Fig. 1-2: Microsoft Skill Inventory Assessment System 10
4. Action Decisions in Human Resource Planning : Finally, the last
step of the HRP process is the recommended or future course of
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Human resource practices at SMC insurance 17
action. The previous two steps analyzed the supply and demand
and determine what action should be taken. There are two types
of scenarios a firm can face at this stage:
1. Shortage of employees: If the supply of employees is less than thedemand, the organization can go for counter measures like
recruitment, moonlighting, etc. A new trend being seen in
organizations today, is the rehiring of retired employees or
employees who were previously laid off. The advantage of these
employees is that they require less training than fresh ones and
know the organizations culture inside out. There has also been a
tremendous rise in the number of part-time (or contingent workers)
in firms. Contingent workers are a good alternative especially whenthe organization is facing temporary shortages. Contingent workers
may be hired directly or through subcontractors. SMC utilizes the
services of ADECCO consultancy services and SHOMUK Consultancy
for its manpower management in west and east India, respectively.
2. Employee Surplus: An effective HRP process not only helps
in dealing with shortage of employees but also in trimming down
the organization. General Motors12
became a loss making enterprisebecause of its excessive human resource costs. By the time it
decided to tone down its structure, the unions jumped into play and
the result was utter chaos and irrecoverable loss. It has been
viewed that decisions in employee surplus conditions are more
difficult to make than in shortage because it involves activities like
layoffs, demotions, retrenchment, terminations, attrition, etc. The
employee who is a surplus is seldom responsible for his being so.
Also, in countries like India, layoffs and retrenchment attract a hugepolitical and union intervention, as is evident from the recent crisis
at Jet Airways. The most preferable method to deal with this
situation is attrition. Most organizations avoid layoffs and
retrenchment, and depend on attrition i.e. by simply not replacing
the people who are leaving the organization. This has a direct
impact on the career planning of employees. Firms need to enrich
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Human resource practices at SMC insurance 18
jobs of junior employees so that they can take on the
responsibilities of their superiors. Organizations use other tools like
voluntary retirement services to reduce the organizational fat. The
government of India still uses its VRS services as the most effectiveway of laying off employees. Companies also try to go in for work
creation in such cases. A brilliant example of Job or Work Creation
has been the Mahatma Gandhi National Rural Employment
Guarantee Scheme or (MGNREGA). Another growing trend is that of
outplacements. Technically, outplacement is defined as the process
of facilitating a terminated employee's search for a new job by
provision of professional services, such as counseling, paid for by
the former employer. A shining example of successful application of VRS and outplacement services is that of Tata Steel 13 . Between the
years 1991 to 2001 Tata steel removed more than 38000
employees from its payroll in order to flatten its organizational
structure. A majority of its employees were outplaced in its own
ancillary units surrounding the Tata Steel plant at Jamshedpur. The
employees who were given VRS whose conditions were focused
more on treating it as a dignified farewell rather than as cost
cutting initiative.
HRP is a small word with big implications. An efficient plan depends
upon the optimal use of the companys HRIS and EIS (Executive
Information system.) Activities like job analysis, etc. are the stepping
stones of HRP process. Job Analysis is required to set an alignment
between the job and the type of person or skills requirement for
effective execution of the job. A written explanation of the knowledge,
skills, abilities, traits and other characteristics (KSAOs) are necessaryfor effective performance of the job.
Another important aspect of HR Planning is Succession Planning 14 .
Succession Planning is defined as a means of identifying critical
management positions, starting at the levels of project manager and
supervisor and extending up to the highest position in the organization.
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Human resource practices at SMC insurance 19
Succession planning also describes management positions to provide
maximum flexibility in lateral management moves and to ensure that as
individuals achieve greater seniority, their management skills broaden
and become more generalized in relation to total organizationalobjectives rather than purely departmental objectives. Succession
planning is today considered an internal part of the career planning of
employees and is necessary for continuous productivity of the
organization.
3. Training and Development: Recruitment, Training and Development
today form an important part of the activities and organizationperforms. As the knowledge based industries progress, the need for
training and development has increased than ever before. The
traditional mindset that Training and Development does not help in
creating value is now changing. Information Technology has made it
imperative that the company with the best candidates remains the
leader. Training 15 is nothing but a planned effort by a company to
facilitate employees learning of job related competencies. These
competencies include knowledge, skills and behaviors necessary forsuccessful completion of job tasks. Training and Development incurs
a huge cost for an organization. It is estimated that American
organizations spend $60 billion on training annually. India is having
at least 4000 industrial training institutions alone and spends 75 to
100 million dollars a year on them. If we add the compensation or
wages for the participants involved in the training, the whole cost of
training amounts to a staggering 100 200 million dollars. Not only is
training provided in the industrial sector but also the rural sector. Thegovernment of India organizes training for nearly a million village
leaders every year. Experts estimate that the total expenditure on all
types of training provided in India comes around 6 billion dollars per
year 16 . The problem begins when the results of the training are not
commensurate with the expenditure. A typical training process has 4
steps as shown below:
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Human resource practices at SMC insurance 20
Fig 1-3: The Systems Model of Training 17
1. Needs Assessment: The first step in a training program is the analysis
for the need of the training. There could be political, social, economic or
technical decisions that influence the training needs in an organization.
To diagnose these, an organizational analysis needs to be conducted.
For eg: Technological changes in the banking sector made training a
necessity in public banks like SBI, etc. Other training issues aretriggered by strategic initiatives of an organization. Mergers and
acquisitions often require employees to take on new roles and
responsibilities. Training is also needed to make employees comfortable
and adaptable to the new culture. Emphases on organizational
restructuring, globalization, downsizing, empowerment, etc are forces
that influence the T&D needs. One of the biggest factors impacting
training is the changing demographics of the workforce. India is fast
approaching its demographic dividend phase. By 2025, it is estimatedthat 68% of Indias population would be less than 35 years old. To
exploit this humongous Human Resource effective training and
development programs are required. On the other hand, countries like
America and Europe are moving towards a demographic maturity phase.
As the population gets older, training needs to be tailored to suit the
PHASE 1
Needs Assessment:
Organizationalanalysis
Task analysis
Person analysis
PHASE 2
Design:
Instructionalobjectives
Traineereadiness
LearningPrinciples
PHASE 3
Implementat ion:
On-the-jobmethods
Off-the-jobmethods
Management
PHASE 4
Evaluation
Reactions
Learning
Behavior
Results
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Human resource practices at SMC insurance 21
capabilities of the new age group. On a micro level, organizations need
to be clear about the tasks they expect to be successfully completed
through the use of training. For this a task analysis is required. Task
analysis is the process of determining what content a training programshould have, based on the tasks and duties involved in the job. Task
analysis affects the mode of delivery of the training and help trainers
choose and design effective methods. Tasks are generally assumed to
be mechanical chores, which is not the case today. The high value tasks
today demand competencies that can be taught only through skill based
coaching. The last piece of analysis is the person analysis. Organizations
need to decide who needs the training and who does not. Performance
appraisals are a good tool to help in taking such decisions. They canexpose the deficiencies of the employees and the need for training. One
pitfall in using performance appraisals for training decisions is that
though they tell who needs the training, they do not reveal why. For a
training program to be successful that the correct deficiency is spotted.
If motivation or stress is the factor responsible then training may not be
the best option.
2. Designing the training program: The second step after assessment of
needs is to design the learning environment required for training and
enhance the learning experience. Experts believe that training issues
should focus on three related issues: Instructional objectives, trainee
readiness and motivation and lastly, the principles of learning.
Instructional objectives describe the skills and knowledge to be acquired
and the attitudes that need to be changed through training. Concurring
with this, experts designed the ISD18
i.e. Instructional System Designwhich refers to the process of developing training programs satisfying
the organizational needs. Sometimes, it is also called as the ADDIE
model standing for Analysis, Design, Development, Implementation and
Evaluation. Though ISD is a systematic procedure, it only alludes the
instructor what is to be done. He or she may, at will, use or exclude
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Human resource practices at SMC insurance 23
As we move from the organization to the employee level, it becomes
necessary that we respect the psychological considerations of training.
The success and failure of training are related to certain principles of
learning, hence managers and employees should understand thedifferent training methods or techniques and utilize these principles. It is
necessary that employees grasp the new materials, make sense of it in
their own lives and transfer it to the job. Ideally, a training program
should lead to personal as well as professional development. As
mentioned above, positive reinforcement 20 and reduction in penalties
are all results of studies carried out in the field of learning and
development theories.
3. Implementation of training: Implementation refers to the effective
t ransfer of training 21 to the candidates so that they can apply it to their
jobs. Factors like environment, culture, instruction material, quality of
instructors, teaching methods affect the implementation of training.
Implementation accompanies the various methods that can be used to
train employees. The method of delivery is selected based upon the
various constraints an organization faces like, management support,
technological support, peer support, etc. Also, skill training for higher
management requires radically different approach than non managerial
functions. Some of the best training methods are listed below:
On the Job Training: It is one of the most common methods for
training non -managerial employees. OJT has the advantage of
providing hands-on experience to the employees. It also aides in
fostering relationships between the management and employees.
In fact, OJT is viewed as the most effective process of facilitating
learning in the workplace 22 . The success of OJT depends on the
relationship between the superior and the sub-ordinate. If the
relationship is not a warm one the entire module would crumble.
Also, OJT requires the two parties to create a feasible and
measurable performance goal.
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Human resource practices at SMC insurance 24
Off the job training: Off the job training itself contains a variety of
training methods. Some of them being the case method, Role
playing, In-basket technique, management games and other types
of classroom training. The primary objective is to develop
analytical skills among others in the employees. Classroom based
training often utilizes historical data. This helps in sharpening the
decision making skills of the students but poses a problem in case
the data is irrelevant or obsolete. As an organization SMC uses
both the training methods (on and off the job) to train its
candidates for positions like tele-callers, sales and marketing
professionals.
Management development training: Management training is
aimed at training the middle and higher level management
employees. MD training is important because managers form the
substrate of organizational change and strategic revitalization. MD
training gives managers the skills and perspective they need to be
successful 23 . Corporate seminars, coaching, case studies, etc. aresome of the most used methods for management training.
Training is not only restricted to job related activities. In our
research (detailed later) we found that the increasing levels of
stress and lack of self management were responsible for a high
turnover ratio in the organization. Changing economic times have
us pulled in multiple directions . The pressures and demandsbetween work and personal life are blurred. As a result, the
consequences of stress in the workplace come from what is
happening to each of us both on and off the job. Tele callers, Sales
managers, HR executives found it difficult to cope with such
scenarios. It was a vicious circle as lack of self management
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Human resource practices at SMC insurance 25
dented employee motivation resulting into high turnover among
sales personnel. This increased the load on the HR function as
primarily bulk hiring practices are used. We believe that training
sessions on stress management would help the organization dealmore effectively with this menace. NASA, GE and NOKIA are some
of the companies that have widely used stress management
training to improve productivity. 24
4. Training Evaluation: Training evaluation 25 refers to the outcomes needed
to determine whether training is effective. Experts have distributed the
evaluation into four components: Reactions, Learning, Behavior and
Results. These four components later constituted a model, now known
popularly as the Kirkpatrick Model of training evaluation 26 . The
constituents of the model are briefed below:
Reactions: The first step is to measure the reactions of the
trainees. Happy trainees are more likely to focus on the concepts
and apply them to their jobs. Reactions not only record whether
the training was liked or not but goes much beyond. It gives a
chance to trainees to critique the instructors and make
suggestions about participant interactions, feedback, etc. Happy
sheets, questionnaires, interviews are good methods to record
training reactions.
Learning: It is necessary that during the course of the training, the
firm keeps a tap on the employees learning. Learning can be
measure through written test, question and answer sessions, etc.
A more practical way of judging is through the use of control
groups. In this method, one group is provided the training and
another is not, and the difference between job performances is
seen. Alternatively, a groups behavior and performance before
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Human resource practices at SMC insurance 26
the training may be noted and then compared to its performance
after completing the training.
Behavior: Training is often given to trigger a behavior and
attitudinal change. In some cases, though the reaction and
learning show high scores, the candidates may revert back to the
original behavior on the job. Thus, behavior measurement needs
to supervise the climate of training and help candidates cope up.
Results: The ultimate objective of any training is to showincreased productivity that gets reflected on the balance sheet.
Two methods are widely used Return of Investment (ROI) and
Benchmarking 27 . ROI is meant to assess the value the training has
delivered to the company. Benchmarking is a process in which the
value addition (often, in terms of management practices,
organizational wastages, etc.) is benchmarked against industry
leaders.
Fig 1-4: Diagrammatic Representation of Training Evaluation 28
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Human resource practices at SMC insurance 27
4. Compensation Management: Compensation Management 29 is
the HRM function that deals with the reward an individual
receives in exchange of rendering his services towards theorganization. It is the biggest cost of the HRM function and the
chief reason why people seek employment. Compensation also
includes the benefits and incentives employees receive. Such
benefits/incentives are called indirect financial compensation.
In the emerging competitive scenario, indirect financial
compensation form a major part of compensation
management. The objective of compensation management is
to create a system of rewards that is equitable to the employerand employee alike. There are seven criterias 30 for a
compensation policy to be called effective:
1. Adequate: Minimum governmental, union and managerial levels
should be met. These are in accordance to the laws set by the
government like the Minimum wages Act, etc.
2. Equitable: Each person should be paid fairly, in line with his or hereffort, abilities and training. Also, it should be one that is competitive
in the industry.
3. Balanced: Pay, benefits and other rewards should provide a
reasonable total reward package.
4. Cost effective: Pay should not be excessive, considering what
organizations can afford to pay.
5. Secure: Pay should be enough to provide the employee a sense of
security and aid him in fulfilling his basic needs.
6. Incentives: Pay should be able to motivate employees towards more
productive work.
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7. Acceptability: The employee should understand the pay system and
feel it is a reasonable system for the enterprise and him or herself.
Healthy compensation is necessary to keep employees motivated.
Unhealthy practices in compensation can severely dent the companys
prospects. Unsatisfactory or uncompetitive compensation is the primary
reason for high levels of attrition. Compensation is affected by the
labour market dynamics. The compensation needed for hiring
Americans is much larger than the one needed to employ Indians or the
Chinese. This is due to the large population of India and high birth rate.
Computer consultants in United States charge $100 an hour, whereas
those in India charge barely $10 for the same work 31 . The low cost of
living in developing countries makes it possible for firms to pay workers
substantially lower. A computer analyst in Unites States warns an
average $63000 a year. In India, the same worker earns less than
$6000. Thus, labour diversity makes for an astonishing difference. This
is the reason why there is a massive off shoring/outsourcing of
processes to countries like India. Organizations are trying to cut labour
costs by shifting work overseas where labour costs are significantly
less. 32 It is estimated that worldwide spending on job relocation to
foreign countries was about $5 trillion in 2005 33 .
Many theories have linked pay with employee satisfaction and
productivity. Edward Lawler developed the equity theory 34 (model) to
explain the affect of payscales. The distinction between the amount
employees receive and the amount they think others are receiving is
the primary strata on which pay satisfaction or dissatisfaction occurs.
Herzbergs Motivation-Hygiene theory, on the contrary, suggested that
pay only keeps employees from being dissatisfied rather than wholly
satisfying them. The relation between pay and productivity has
previously been mentioned by the Fredrick W. Taylor. He suggested
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linking pay directly with measurable productivity. Workers who were
able to achieve the targets were paid 125% of base pay, whereas those
failing to do so were paid low wages. Today, Fredrick Taylors incentive
based pay model is the most widely used method all over the world.Compensation management is an intricate subject. Any organization has
to study the competition around it to determine the pay scale of its
employees. Accordingly, there are 3 types of pay strategies
organizations follow when taking the pay level decision 35 .
1. High Pay Strategy: In this strategy, managers pay at higher-than-
average levels. The underlying assumption is that you get what youpay for. Another assumption is that higher pay scales would help
retain employees and attract the best talent in the market. Google,
Apple, Microsoft, Infosys are some of the companies that are seen to
practice this strategy. These companies generally act as trendsetters
in the field for other firms to follow.
2. Low Pay Strategy: The direct antithesis of the high pay strategy is the
low pay strategy. In this case managers pay at the minimum level
just enough to hire employees. Insurance and other brokerage firms
largely use this method. This method is used in cases wherein, the
company lacks the ability to pay or the company has an extremely
large pool of talent at its disposal at all times.
3. Comparable pay Strategy: It is the most commonly used paystrategy. The wage criteria are comparable wages, perhaps modified
by the cost of living or purchasing power adjustments. To reach upon
the standards being followed in the industry firms take the help of
pay surveys. Pay surveys are the techniques and instruments used to
collect data about compensation paid to the employees by all
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employers in a geographic area, industry or occupational group. 36 Pay
surveys are conducted by professional or consulting enterprises,
trade associations, government, unions, competitors, etc.
Management Compensation, therefore, plays a very significant part
along with the working style and environment in the organizations
success strategy. While individual organizations may have differences in
their methodologies based on factors best suited to their perceived
needs, some general directions are evident. Some of these directions
and trends followed in India are discussed below:
1. Salary, Basic Salary or Consolidated Salary continues to remain as the
major component of compensation, though Salary Scales are often
discarded these days, or used only as guides. Individual Salary is
generally decided initially using the Scale, but thereafter performance,
contribution to targets or results generated determine the revisionsperiodically, which may vary widely from individual to individual.
2. Reimbursements of expenses incurred on Company work has become
limited, and in line to conform to the tax laws. However, in most cases,
they are not considered as a part of the compensation, unless it is
provided towards personal benefits.
3. Annual payments: Bonus or Commission, and Leave travel are
common features and some tax relief benefits apply for the latter.
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4. Benefits generally comprise of mostly unfurnished company owned or
leased accommodation, use of company or leased vehicles, medical
coverage, retrial benefits covering Provident Fund, Pension or
Superannuation and Gratuity, post-retrial medical assistance, easy loanschemes at low or zero interest rates for house building, cars or
vehicles, furniture or utility items, club entrance free reimbursement
etc. Minor benefits could be provision of security, driver or gardening
assistance, else of products or assets at a concessional rate, relocation
and transfer expenses including admission etc. fees for children, credit
card fees, phones etc.
5. Employee stock option schemes which has been popular in IT
industry-,is not extensively used yet, not being tax advantageous to
other industries, nor seen as being very attractive, with lesser growth
trends for their share values especially in the well-established older
companies.
6. Most companies, as against earlier visible costs, use the Total cost to
the Company concept as basis. Cost of the most benefits are averaged
or computed on actual basis, and within the system of the overall cost,
but with greater compliance to tax laws this basket concept is on the
wane.
7. Retirement benefits: Some in recognition of the past contribution of
pensioners, and to partly offset the inflation post retirement practices
periodic improvement in pensions, or a guaranteed grade minimum
pension.
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8. Performance Bonus are being given more as a recognition of results
generated. It requires transparent, balanced and fair systems and
benchmarks, and also agree to targets set by the managers in advance,
during planning and review discussions.
9. From the earlier grade oriented compensation system within
reasonable boundaries, compensation often has to be somewhat tailor
made for specialist or key contributors to retain them in the volatile job
market.
10. Compensation review periods have become annual generally, and
sometimes more often, as compared to every three to five years earlier.
11. Retention strategies employed are generally the attractive interest
free or at low rates for loans, on which market rate of interest may
apply; on early exit, renting employee owned property to set off
repayment of loans, qualifying periods or attractive service benefits
added to the retirement benefits, etc.
4. Organizational Learning and Knowledge Management: Organization
Learning and Knowledge Management 37 are some of the new
emerging concepts in the field of HR. The belief underlying these
fields is that just like human beings cannot draw upon the full
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utilization of their brains, organizations cannot fully utilize the
knowledge present with them.
Knowledge Management: KM involves a set of complementary
practices that aim at developing this capability in organizations. Today, Knowledge is the only competitive leverage a company has
against it rivals. A paradigm shift has changed the way that
knowledge is viewed. Previously, employees use to stay at a
company for their full career lives. Now, employees are switching
jobs several times. When they leave, they take their knowledge with
them. Therefore, knowledge hoarding among individuals can hurt the
company; while knowledge sharing and collaboration can benefit the
company by allowing the knowledge to stay within the company.Organizations must be able to capture the knowledge and experience
of their employees to be able to change their tacit knowledge into
organizational knowledge, so it can be used even after the employee
is no longer with them. Knowledge management deals with the
planning, organizing, motivating, and controlling of people, processes
and systems in the organization to ensure that its results and
productivity are improved and resources effectively employed.
Knowledge assets include knowledge in the form of printeddocuments such as patents and manuals, knowledge stored in
electronic repositories such as a best-practices, employee and
customer databases, employees knowledge about the best way to
do their jobs, knowledge that is held by teams who have been
working on focused problems and knowledge that is embedded in the
organizations products, processes and relationships. Many
organizations tend to misinterpret knowledge management as only
the effective use of information technology in the form of ERP andother Decision support systems. On the contrary, the art of effective
Knowledge Management is to transmit the knowledge that exists in
the mind of an individual to social groups, teams and networks
existing in the organization. Thus, Knowledge Management is more
people intensive and not technology intensive as perceived.
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One of the most important pre-requisites of knowledge management is
effective organizational communication. Organizational communication
affects the execution of any organizations strategy. Organizations rely
heavily on a strategy of employing effective communication38
in order tointegrate, coordinate, and control the information flow to all of an
organizations stakeholders, employees, suppliers, investors, and
customers. For example, in order to turn around GE, Jack Welch
announced a series of measures to clarify organizational strategies.
First, Mr. Welch revamped GEs organizational culture in order to make
employees more self-reliant, rapid in response, and change-oriented.
Second, he developed a world-class education and reeducation system
headed by GEs management training center at Croutenville, New York.Third, he restructured GEs monitoring and reward system to make it
more performance, team, and change-oriented. Excellence in
communicating an organizations strategy results, according to Jack
Welch, from a persistent effort over time to clearly articulate a firms
goals and strategies and a leaders passion in monitoring and evaluating
the effectiveness of a firms implementing structures. To increase
Organizational communication help should be sought from OD
(Organization Development) practitioners. An organization developmenteffort is related to a total organization change in the culture and the
reward system or the total managerial strategy. An Action Research
may be carried out to find where the ignorance lies in an organization.
One should note that any change can be initiated only when the top
level management supports and backs it 39 . Without the determination of
the top management, any planned change is doomed to failure. There
are some organization sub-strategies 40 required for effective Knowledge
Management, as follows:
1. Systems - creating and refining knowledge repositories and on
motivating people to provide content.
2. Process - developing and using repeatable processes that are
supported with knowledge from previously conducted processes.
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3. Commercial -the management of intellectual property such as
patents, trademarks, etc.
4. Strategic - the development of knowledge capabilities that can
form the foundation of competitive strategy.5. Cartographic - creating knowledge maps or directories and
networks to connect people.
6. Organizational - providing groupware and intranets to facilitate
communities of practice.
7. Social - socialization as a means of knowledge creation and
exchange; emphasizes the
provision of physical places to facilitate discussions and
communication.
Organizational Learning: The concept of Organizational learning (or
Learning Organizations) came around first in the book The Fifth
Discipline by Peter Senge. He described them as places where people
continually expand their capacity to create the results they truly desire,
where new and expansive patterns of thinking are nurtured, where
collective aspiration is set free and where people are continually
learning how to learn together.41
Many experts view Knowledge Management and Organizational learning as
similar concepts. Indeed, the concepts are deeply inter-related. KM can be
seen as an organizations ability to share and retain the knowledge
resources of the firm for sustained competitive advantage. Meanwhile, OL
can be considered as the process of improving business practices through
better knowledge and understanding. More specifically, OL emphasizes
how the learning process can create new knowledge for developing
business practices in a changing environment. It can be said that aLearning Organization is the ultimate result of all Knowledge management
and organization learning Initiatives. The broad perspective to study and
implement Knowledge Management and Organizational Learning is the
Socio Technical perspective. 42 The socio -technical view of KM focuses on
a firms strategy for harmonizing KM activities with technological drivers
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Human resource practices at SMC insurance 37
Fig 1-5: Relationship between Knowledge Management andOrganizational Learning 43 .
As India moves into the phase of its demographic dividend the efficient use of
its manpower becomes more a necessity than luxury. Human resource
management is a versatile contraption that can be used to achieve the
strategic objectives of the company. For an outsourcing haven like India, its
necessary that firms start using recruitment and training as a strategic
leverage to achieve competitive advantage. Here are some success strategiesnecessary for gaining the HR advantage: 44
1. Adopt a Strategic Approach to Staffing : Hiring smart today means hiring
strategically taking the time and effort to make sure that each
staffing decision matches the goals and operational needs of the
company. The traditional approach to hiring finding the one person
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who best fits the specs of a particular job is losing ground in
contemporary companies to a much more fluid and flexible model in
which the goal is to determine what the job really requires and what
combination of resources best meets that requirement.
2. Be Aggressive and Resourceful in Recruiting: No single recruiting
strategy works for all situations. In a tight labor market, one may need
to devote more resources to the recruiting efforts and become
increasingly innovative in the practices.
3. Seek to Create a Healthy Culture: Healthy, dynamic company cultures
seen at firms that rate high with employees, such as Starbucks, Google,and Apple dont evolve overnight. Nor can they be created with a
single speech or the introduction of one or two policies. Clearly,
however, such cultures, whether youre a Fortune 500 company or a
small business, take their cue from senior management.
4. Get the Most Out of Contingent Staffing: Outsourcing of staffing has
been one of the biggest activities in contemporary HRM. Its important
that there is a clearc ut distinction between contingent and full timeworkers of the firm.
5. Take a Proactive Approach to Regulatory Compliance: As employees get
more and more aware it is imperative that companies behave ethically.
Firms need to be aware of the changing employment laws and
communicate the same to the employees, else they may be held for
violations and exploitations.
6. Make Work/Family Balance a Priority: Creating family-friendly policies is
more than a simple act of company altruism. A smart policy toward
work and family has become a bottom-line-driven best practice
among some of todays most successful and respected companies.
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Correlation Matrix a
Component
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Correlation 1. 1.000 .507 .285 .043 .533 .424 .467 .498 .109 .298 .406 .530 .720 .335 .381 .533 .319 -.099 .137 .197
2. .507 1.000 -.041 .054 .561 .258 .175 .560 .255 .234 .177 .130 .241 .045 .013 .322 .101 .023 .220 .223
3. .285 -.041 1.000 .335 .189 .236 .306 .173 .339 .330 .332 .385 .368 .328 .683 .303 .471 -.100 .270 -.180
4. .043 .054 .335 1.000 .344 .155 .214 .028 .302 .229 .388 .400 .094 .501 .381 -.089 .099 .018 .136 .053
5. .533 .561 .189 .344 1.000 .398 .316 .505 .000 .119 .356 .410 .434 .350 .383 .034 .183 -.019 .253 -.027
6. .424 .258 .236 .155 .398 1.000 .466 .134 .228 .291 .178 .535 .542 .105 .125 .454 -.074 -.191 .124 .147
7. .467 .175 .306 .214 .316 .466 1.000 .241 .250 .099 .580 .247 .437 .443 .196 .299 .146 -.129 -.052 .047
8. .498 .560 .173 .028 .505 .134 .241 1.000 .103 .072 .142 .281 .470 .124 .321 .306 .319 .197 .025 .180
9. .109 .255 .339 .302 .000 .228 .250 .103 1.000 .423 .346 .298 -.023 .154 .325 .382 .327 .149 -.081 .205
10. .298 .234 .330 .229 .119 .291 .099 .072 .423 1.000 .458 .476 .249 .059 .438 .536 .122 .031 .201 .057
11. .406 .177 .332 .388 .356 .178 .580 .142 .346 .458 1.000 .381 .208 .455 .487 .240 .446 -.105 .308 .142
12. .530 .130 .385 .400 .410 .535 .247 .281 .298 .476 .381 1.000 .608 .415 .512 .375 .217 -.086 .136 .102
13. .720 .241 .368 .094 .434 .542 .437 .470 -.023 .249 .208 .608 1.000 .296 .370 .465 .054 -.017 .030 -.068
14. .335 .045 .328 .501 .350 .105 .443 .124 .154 .059 .455 .415 .296 1.000 .291 -.063 .130 -.268 -.068 -.006
15. .381 .013 .683 .381 .383 .125 .196 .321 .325 .438 .487 .512 .370 .291 1.000 .183 .602 .226 .216 .068
16. .533 .322 .303 -.089 .034 .454 .299 .306 .382 .536 .240 .375 .465 -.063 .183 1.000 .138 -.038 .025 .094
17. .319 .101 .471 .099 .183 -.074 .146 .319 .327 .122 .446 .217 .054 .130 .602 .138 1.000 .180 .248 .190
18. -.099 .023 -.100 .018 -.019 -.191 -.129 .197 .149 .031 -.105 -.086 -.017 -.268 .226 -.038 .180 1.000 -.128 .094
19. .137 .220 .270 .136 .253 .124 -.052 .025 -.081 .201 .308 .136 .030 -.068 .216 .025 .248 -.128 1.000 .115
20. .197 .223 -.180 .053 -.027 .147 .047 .180 .205 .057 .142 .102 -.068 -.006 .068 .094 .190 .094 .115 1.000
a. Determinant = 1.31E-006
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Step 2-: Kaiser-Meyer-Olkin Test (KMO- Barletts test)
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .621
Bartlett's Test of Sphericity Approx. Chi-Square 331.796
Df 190Sig. .000
After explaining the adequate use of statistical the Kaiser-Meyer-Olkin
Measure of Sampling Adequacy (KMO) value needs to be checked out. To be
acceptable, it should be .6 or above. The Barletts Test of Sphericity value
should be significant (i.e. the Sig. value should be .05 or smaller). In this
example the KMO value is .621, and the Bartletts test is significant (p=.000),
therefore factor analysis is appropriate. With this analysis we have proved
that the sampling technique and respondent selection were adequate.
Step 3-: Kaisers criterion or the eigen value rule.
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components meet this criterion the Total Variance Explained table needs to be
looked into. Scan down the values provided in the first set of columns, labeled
Initial Eigenvalues. The eigenvalues for each component are listed. In this
example only the first seven components recorded eigenvalues above 1(5.973, 2.179, 1.873, 1.656, 1.369, 1.300, and 1.108). These seven
components explain a total of 77.291 per cent of the variance.
Step 4: Scree plot
As discussed earlier,
using the Kaiser
criterion, found toomany components are
found fit for
extraction. Therefore,
it is also important to
look at the screeplot
provided by SPSS.
Here, one needs to
observe the change inthe shape of the plot.
Only components
above the particular
point are retained. In
this example there is
quite a clear break
between the second and third components. Components first, second and
third explain or capture much more of the variance than the remainingcomponents. From this plot, four components are used as they are explain
more than 50% of variability. There is also another little break after the fourth
component. Depending on the research context, this might also be worth
exploring. It needs to be clarified once again that factor analysis is used only
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as a data exploration technique and its interpretation and use depends on the
analyzer than on any hard statistical rules.
Step 5: (Varimax rotation)
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Rotated Component Matrix a
Component1 2 3 4 5 6 7
1. Is performance appraisal conducted atregular intervals of time? .709 .351 .237 -.06 1 .345 .053
2. Does the appraisal policy have anyprofound effect on you as an employee?
.668 .166 -.125 .003 -.023
.484
3. Do you think that the organization has aneffective HR Information system?
.031 .347 .694 .184 .173 -.301
4. Does the organization conduct a jobanalysis on a regular basis?
-.005
.114 .139 .882 .035 .075 .
5. Does the organization try to develop andadopt new age HR initiatives?
.754 .015 .052 .433 .094 -.016
6. Is the delegation of work jointly carried outand supervised by you and your senior? .327 .654 -.202 .132 .296 -.01 27. Does the company give you theopportunity to do something challenging andworthwhile?
.291 .184 .195 .136 .693 .125 .
8. Are any special training sessions like skilldevelopment, etc. carried out for employees atregular intervals?
.809 .022 .248 -.051
-.109
.148
9. Are there any flexi-time systems orother benefits being offered by the company?
-.140
.481 .332 .240 -.020
.521
10. Are the work relations between employeescordial?
-.035
.766 .226 .170 -.096
.151
11. Do you think the company has adequatehygiene and mess facilities?
.094 .196 .495 .325 .475 .312 .
12. Is any type of training imparted to the toplevel management functionaries?
.331 .594 .194 .429 .105 -.132
13. Is there a well defined recruitmentprocedure in the company policy?
.657 .462 .112 .040 .209 -.372
14. Does the organization conduct a humanresource planning and forecasting?
.175 -.067 .195 .612 .547 -.066
15. Does the company focus on careerplanning of its employees?
.220 .253 .777 .340 -.116
-.100
16. Hierarchical relationships are deemednecessary for running the organization?
.223 .778 .158 -.336
.134 .132
17. Is there one specific person that you report .158 -.071 .859 -.05 .013 .229 .
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Varimax rotation is used in the table labeled total variance explained. It can
be noticed that there are now only seven components listed in the right-hand
section. But as discussed above, only the first four components need to beconsidered as they are explain around 58.407% of the variation.
In the Rotated Component Matrix the loadings of each of the variables on
these factors can be seen that were re-selected. After looking to the highest
loading Variable of each of the component, these can be used to help identify
the nature of the underlying latent variable represented by each component.
In this study, the identified factors dealing deal with three major areas of
concern. These are: 1.Performance Appraisal, 2.Organizational learning and
Knowledge management and 3.Human Resource Planning. The items relatedto component first (Performance Appraisal) are 1, 2, 5, 8, and 13.
Similarly, the items related to component second (OrganizationalLearning) are 10,6,16,12. For component third (Knowledge Management)the items are 3, 15 and 17 and for Component fourth ( Human ResourcePlanning) the items are 4 and 14.
Performance Appraisal is one of the most important aspects of HR. It is a
direct representation of employee satisfaction and the means towards
0
5
10
15
20
25
30
35
Jointdelegation of
work
interpersonalrelationship
Traning formanagerial
skill
mechanisticorganization
PerformanceAppraisal
Agree Slightly Agree Series5
Neutral Slightly Disagree Disagree
Storngly Disagree
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employee growth. In our survey, we concentrated on three aspects of
appraisal: The frequency and timeframe of the appraisal, its effect on the job
and the reliability of HR information system. In the survey, 51% of the
respondents agreed that the appraisal was carried out in a regular fashion.
Though there was agreement on the frequency of appraisals, most of the
respondents (33%) refrained to comment upon the effect of appraisals on
their growth/jobs. Thus, the company needs to undertake some employee
awareness and trust building measures. There is a need to bring in
transparency in the information assimilation and dissemination. An effective
appraisal can aid the productivity only when the employees believe in its
fairness. Only then, would they accept the feedback of such appraisal. The
organization is extremely efficient with recruiting. 60% of respondents agreed
that there are well defined outlines for recruiting. On the account of OL, a lot of
work needs to be done. Joint delegation of work is rarely carried out. 60% disagreed
with this fact. Also, the company needs to work on the culture. Most people remained
0
10
20
30
40
Joint delegationof work
interpersonalrelationship
Traning formanagerial skill
mechanisticorganization
OL
Strongly Agree Agree Slightly Agree NeutralSlightly Disagree Disagree Strongly Disagree
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neutral on the fact of work relationships (48%) Also, the firm needs to impart some
skill development training at least for the high level management. Almost, 47%
people felt the need for such training.
Discriminant Classification Results
21.
Tenure
Predicted Group Membership
Total1.00 2.00 3.00
Original Count 1.00 10 0 0 10
2.00 1 14 0 15
3.00 0 1 7 8
% 1.00 100.0 .0 .0 100.02.00 6.7 93.3 .0 100.0
3.00 .0 12.5 87.5 100.0
a. 93.9% of original grouped cases correctly classified.
Conclusion, Recommendation and Future scope
From the analysis it can be concluded that the primary areas of concern for
the company are Performance Appraisal, Human Resource Planning and
Organizational Learning and Knowledge Management. Performance appraisal
is an effective method of measurement. But it starts losing its sheen if the
employees start losing faith in it. Employees should be made aware of how
the appraisal system affects their career and the gravitas it has on them.
Another important matter that should be resolved is the general perception of
Appraisal. The satanic evilness attributed to it should be dispensed away
through effective education. Employees should be informed that appraisal is
not a negative or punitive activity, but one that is aimed at increasing
organizational productivity. Appraisal is an important tool in diagnosing
employee weakness before the situation becomes grievous and its effective
resolution beforehand through training and other activities. After all,
prevention is always said to be better than cure.
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The second area of importance is HRP. HRP can decide the present and future
of a firm. It has a direct impact on the companys financials and cost
effectiveness. Firing in the dark can never yield accurate targets. Today,
newer and better methods of forecasting and HRP planning are being used.Statistical tools and expert analysis can be utilized for reaching upon accurate
manpower requirements. HRP is in direct conjunction with the training,
development and other expenses that a firm will incur in the future. Also, the
paying strategy should be rethought upon.
The last area of concern is Organizational Learning and Knowledge
Management. An effective learning organization is the culmination of all
Human Resource practices being followed in a firm. If we look at SMC as an
organization desirous of maturing to the level of a learning organization in
tandem with Herzbergs motivation theory, we would like to point out that
though it is satisfying the hygiene needs of the employees, the motivating
factors are somewhere missing. This affects employee mindset resulting into
information being withheld by some. At some levels there is a problem of job
replication and on others some members become extremely indispensible to
the company. It is important to develop and instate a new culture of trust and
confidence among employees so that the organization can build upon the
knowledge of its employees and thereby create a tremendous and everlasting
value for its stakeholders.
The scope of this study has been an extensive one. There are a lot of micro
level issues, independent studies on which may be carried out. In order to
have a better and leaner structure, it is necessary to do an Organizational
Development study to give headway into the restructuring needed to be
carried out. Many designations need to be eliminated and Job descriptions re-
written. To solve the problem of high attrition rates in the sales and marketingdepartments, an independent research may be carried out encompassing the
telemarketing executives. This would give valuable insight into their
expectations and motivation levels, etc and help SMC graduate from a good
to great organization.
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5. Grote, Dick (2002), The Performance Appraisal Q & A Book: A survival
guide for Managers, New York: Amacom Publications, pp 22.
6. Grote, Dick (2002), The Performance Appraisal Q & A Book: A survival
guide for Managers, pp 21.
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Appendix
Questionnaire
Name:
Sex:
Designation:
Years of experience at SMC:
Total Experience:
Note: We are thankful to you for helping us with our research. You need to tick the boxesaccording to the 7 point scale shown below starting from 1 (Strongly Disagree) to 7
(Strongly Agree)
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Strongly
disagree
Disagree Slightly
Disagree
Neutral Slightly
Agree
Agree Stron
Agr
1 2 3 4 5 6 7
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Questions 1 2 3 4 5 6 7
1. Do you agree that the performance appraisal is conducted at regular intervals of time?
2. Do you think that the appraisal policy has any profound effect on you asan employee?
3. Do you think that the organization has an effective HR Informationsystem?
4. Do you agree that the organization conduct a job analysis on a regular basis?
5. Does the organization try to develop and adopt new age HR initiatives?
6. Is the delegation of work jointly carried out and supervised by you andyour senior?
7. Does the company give you the opportunity to do something challengingand worthwhile?
8. Are any special training sessions like skill development, etc. carried outfor employees at regular intervals?
9. Are there any flexi-time systems or other benefits being offered by thecompany?
10. Are the work relations between employees cordial?
11. Do you think the company has adequate hygiene and mess facilities?
12. Is any type of training imparted to the top level managementfunctionaries?
13. Is there a well defined recruitment procedure in the company policy?
14. Does the organization conduct a human resource planning andforecasting?
15. Does the company focus on career planning of its employees?
16. Hierarchical relationships are deemed necessary for running theorganization?
17. . Is there one specific person that you report to in your line of work (Unityof command)?
18. Does the salary match up to what the competitors are offering?
19. . Is there a performance based pay system in the company?