A

COMPREHENSIVE PROJECT REPORT

ON

“A study on existing employee retention practices at

chemical industry in dahej”

Submitted to

SHRI MANILAL KADAKIA COLLEGE OF MANAGEMENT &

COMPUTER STUDIES, HANSOTROAD, ANKLESHWAR.

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

IN

GUJARAT TECHNOLOGICAL UNIVERSITY

UNDER THE GUIDANCE OF

Faculty Guide Company Guide

Ms. Rashmi Ghamawala

Ms. Hetal panseriya

HR Faculty, KIMCOS.

Submitted By

Navrang Vasava

[Batch 2010-2012, Enroll. No: 107710592014]

MBA SEMESTER III/IV

KIMCOS

MBA PROGRAMME

Affiliated to Gujarat Technological University

Ahmadabad

May-2012

1

Declaration

I , NAVRANG VASAVA hereby declare that the report for Comprehensive

Project entitled “A STUDY ON EXISTING EMPLOYEE RETENTION

PRACTISES” is a result of our own work and our indebtedness to other work

publications, references, if any, have been duly acknowledged.

Place:

Date NAVRANG VASAVA

(Signature)

2

ACKNOWLEDGEMENT

It gives us great ecstasy of pleasure to convey our deep and sincere thanks to

our Mr. Nimesh Joshi (I/C Director) for his kind support, which helped us to

complete the project successfully.

We have great pleasure in expressing our sincere gratitude and hearty thanks

to our beloved Faculty, Ms. Rashmi Ghamawala, Ms. Hetal Panseriya(HR

FACULTY). For consenting to be our guide. She had been a great source of

encouragement and inspired us throughout our project. We are greatly

thankful to her for everything she has done for us.

YOURS SINCERELY,

NAVRANG VASAVA

3

TABLE OF CONTENTS

SR.

NO.

PARTICULARS PAGE

NO

PART – I GENERAL INFORMATION

1. 1.1 About the Chemical Industry

1.2 Overview of World Chemical Industry

1.3 Overview of Indian / Gujarat Chemical Industry

1.4 Overview of Gujarat Chemical Industry

5

8

11

14

2 About major Companies in the Industry 15

3 Product Profile (Major Products) 22

PART – II PRIMARY STUDY

4 Introduction of the Study

4.1 Literature Review

4.2 Background of the Study

4.3 Problem Statement

4.4 Objectives of the Study

26

26

33

36

36

5 Research Methodology

5.1 Research Design

5.2 Sources of Data

5.3 Data Collection Method

5.4 Population

5.5 Sampling Method

5.6 Sampling Frame

5.7 Data Analysis

37

37

37

38

38

38

38

38

4

PART-1 GENERAL INFORMATION ABOUT THE CHEMICAL

INDUSTRY

In the 1830s and 1840s, the British had the world's dominant chemical

industry, which was focused on production of inorganic chemicals. Inorganic

compounds are those taken from the earth, such as salt and minerals, and

processed into useful products employed directly or used in further

processing. One leading set of products is the alkalis, such as lime, soda ash,

and caustic soda, used extensively in textiles, glass making, fertilizers, etc.;

another includes acids such as sulfuric and nitric, which are often used in

tanning, textiles, dyeing, and a myriad other applications. Alkalis and sulfuric

acid produced in large quantities are commonly referred to as heavy

chemicals. Currently, organic chemicals such as ethylene, benzene, and

propylene, which are produced in large quantities, are more typical examples

of heavy chemicals. [1]

The early version of the inorganic chemical industry was in some sense closer

to mining than the science-based chemistry of today. Perkin's discovery in

1856 launched the modern organic chemical industry. Since then, organic

compounds have proved the most important class of chemicals, because they

are more varied and pervasive than the inorganic compounds. Organic

chemistry begins with inputs that contain hydrocarbons (composed of

hydrogen and carbon), e.g., coal, oil, and natural gas, which form the

backbone of final organic chemical outputs. In the first stage of processing,

these raw materials are refined to produce primary outputs, such as benzene

and ethylene. In subsequent processing, chemicals such as chlorine and

oxygen are added to the hydrocarbon backbones to give the compounds their

desired characteristics. The final output may, for example, be nylon or

polyester fiber, a plastic, or a pharmaceutical product. The hydrocarbon

backbone for British dyestuffs, and for organic chemistry throughout almost all

of the nineteenth century, was provided by coal. [1]

5

Britain dominated the dyestuff industry until the 1870s. These were glory

times for England. The nation was rich. Its organic chemical industry making

dyestuffs had the technical know-how, the largest supply of basic raw material

(coal), and the largest customer base (textiles). But those advantages slipped

away, and by the end of the 1880s the Germans dominated the organic

chemical industry. By 1913, German companies produced about 140,000 tons

of dyes, Switzerland produced 10,000 tons, and Britain only 4,400 tons. The

American industry was a large producer of basic inorganic, chemicals, but for

its organic chemicals it depended mainly on German dyestuff and other

imports, except for domestic production of explosives. [1]

World War I changed the relative positions of nations in the chemical industry,

at least for a few years. The United States was cut off from German dyestuffs

and built its own organic chemical industry. The German industry, shattered

by war, fell on hard times. Both Britain and Germany sought to create

chemical companies that could be national standard bearers. In 1925,

Germany formed the IG Farben company, merging all dye firms into one

company. Britain created Imperial Chemical Industries (ICI) through a merger

of smaller entities in 1926. In the U.S. a number of consolidations took place

among private companies, forming such large and competitive entities as

DuPont, Union Carbide. Allied Chemical, and American Cyanamid. IG Farben

soon regained Germany's former dominance over the European chemical

industry and formed numerous cartels to prop up prices and limit competition.

At the same time, the U.S. chemical industry was gaining strength through the

development of a large petroleum refining base, and also building its skill in

designing large-scale continuous processing plants through the use of expert

chemical engineering tools (Landau 1997 ). [1]

World War II resulted in the physical destruction of a significant portion of the

German chemical industry. The U.S. industry was now using petrochemicals

to produce fibers, plastics, and many other products, while dyestuffs shrank in

importance. America's chemical industry grew enormously and dominated the

market at least until the 1970s. However, as world prosperity returned in the

6

decades after World War II, so did a successful chemical industry in

Germany, and in Europe more generally. Advantage at the firm level truly

came to the fore, with different companies in different countries excelling at

particular skills or products and trading extensively with one another. Japan

was an exception. Although the Japanese chemical industry grew to become

the second largest in the world by providing inputs for Japan's home market, it

has not vet become a major player in international markets for products or

technology. Note that the underlying science has been generally available for

a long time; science in itself conveys no contribution to national wealth; only

its commercialization by risk-taking investments will produce increases in

productivity and the standard of living. [1]

http://findarticles.com/p/articles/mi_m1094/is_4_34/ai_56973853/pg_3/?

tag=content;col1[1]

7

1.1 GLOBAL CHEMICAL INDUSTRY

OVERVIEW

Chemicals are essential to millions of consumer goods, enabling hi-tech

advances in industries as diverse as aerospace, computing and

telecommunications. The chemical industry comprises companies engaged in

the conversion of raw materials oil, natural gas, air, water, metals -- that are

then used to make a wide variety of consumer goods, as well as inputs for

agriculture, manufacturing and construction industry. [2]

Globally, the chemical industry is mainly concentrated in three areas of the

world: Western Europe, North America and Japan. The European community

is the largest producer, followed by the U.S. and Japan. The chemical

industry, one of the largest. [2]

The U.S. chemical industry operates through 170 major chemical companies

with international operations spanning more than 2,800 facilities outside the

U.S. and 1,700 foreign subsidiaries or affiliates. The sector generates an

annual chemical output worth $400 billion. The U.S. industry records large

trade surpluses and employs around a million people. It is also the second

largest consumer of energy in the manufacturing sector. [2]

OUTLOOK

The recession had hit the chemical industry hard. Shying from a lack of

demand, chemical companies shelved their growth strategies. With plants

idled or running at historically low rates, the companies looked for avenues to

streamline operations and increase productivity. Accordingly, they resorted to

restructurings, plant closures, and layoffs. Cost-cutting initiatives at industrial

majors -- The Dow Chemical Company (DOW) and EI DuPont de Nemours

& Co.  (DD) [2]

8

The global chemical industry is, however, recovering from the recession-hit

lows. Domestically, chemical production volumes have increased across all

regions of the United States in 2010, reversing the steep declines

experienced in 2008 and 2009. The largest gains have occurred in the Gulf

Coast and Ohio Valley regions, boosted by export demand for basic

chemicals and plastics. Output is expected to grow moderately in all regions

in 2011 and continue to improve through 2012. [2]

Growth in export markets has been driven by several factors. These include

favorable energy costs, resulting from developments in extracting natural gas

from shale; and demand from emerging markets, where recovery and

expansion have been the strongest. As per the American Chemistry Council

(ACC), U.S. exports would grow by 9.7% in 2011, outpacing the expected

7.8% growth in imports. [2]

Further, the cost-containment measures implemented by chemical

companies, such as plant shutdowns, aggressive cost cutting and production

improvements, should continue to bolster industry-wide margins. The

resultant large cash flows could then be leveraged for growthopportunities. [2]

Following a massive decline in fertilizer sales and consumption in 2009, the

speed and extent of the recovery in the first half of 2010 has been stellar,

leading to an annual increase of 13% and 7% over 2009, respectively. The

International Fertilizer Industry Association (IFA) is projecting growth in global

fertilizer consumption of 4.7% for 2010/2011 and 3.8% for 2011/12. By

2011/12, nutrient application rates would fully recover to levels seen prior to

the economic crisis of 2008. [2]

End-Market Scenario

The U.S. home building sector is a major consumer market for the chemicals

industry accounting for about 10% of chemical demand. According to the

ACC, every 100,000 group of housing starts generates $1.5 billion in chemical

sales. As per the National Association of Home Builders (NAHB), new

housing starts marginally rose 7% for 2010. However, on the plus point,

9

NAHB expects annual housing starts for single-family homes to climb a much

stronger 21% to 575,000 units in 2011. On the flipside, U.S. unemployment

will remain high in 2011; credit markets remain tight and mortgage rates will

likely increase in 2011, thus limiting any noteworthy rebound in the housing

market. We expect the housing sector to begin a slow recovery toward its pre-

recession peaks in 2011. [2]

The Auto sector accounts for 10% of the chemical industry’s demand. The

automotive industry has started showing signs of recovery. The ACC

estimates U.S automobile sales will reach 12.7 million units in 2011. The

remaining demand comes from the agriculture, architectural and industrial

coatings, paper and textile, electronics and other industries. [2]

Growing emerging markets should propel production in the paper and textile

industry while the electrical industry is expected to pick up with increased

industrial investment. Other industries, including food and agriculture, are also

likely to gain momentum with the recovering economy. [2]

http://www.zacks.com/stock/news/46513/Chemical+%26amp

%3B+Fertilizers+Industry+Outlook[2]

10

1.2 OVERVIEW OF INDIAN / GUJARAT MARKET

INTRODUCTION

Chemical Industry in India is one of the fastest growing industries under the

Indian Economy. At the same time it is also one of the oldest domestic

industry of India which started working soon after India's independence in

1947. From those early years, the Chemical Industry in India continued to

contribute to the Economic Growth of Indian Economy. At present, the

industry accounts for almost 13% of Indian GDP. [3]

The Chemical Industry in India which generates almost 13% of country's total

export is growing annually at a growth rate anywhere between 10% and 12%.

Now we can discuss the growth rates and other important things of Chemical

Industry in India sector wise. [3]

The Chemical Industry in India is based on the idea of Diversification. The

industry is a multi product and multi-faceted one. Depending on these product

categories we can divide the Chemical Industry in India in following sectors:

Inorganic Chemicals-In this sector the growth rate is near about 9%

and the chemicals produced in this sector are mainly used in alkalis,

fertilizers, detergents and glass.

Drugs and Pharmaceuticals- This sector of Indian Chemical Industry

holds the 4th place in the world in terms of volume. Export led growth is

the characteristics of this sector.

Plastics and Petrochemicals-This sector of the Indian Chemical

Industry is the fastest growing one among all the sectors. Reliance

Petrochemical is the company which dominates this sector.

Pesticides, Fertilizers and other Agro-chemical products- This

sector of the Chemical Industry in India account for almost 2.5% of the

global market. It possesses an impressive domestic market growth rate

of 10%.

11

Specialty and Fine Chemicals like Dyes and Paints- This sector is

characterized by high level of fragmentation. The sector is involved in

production of paints, dyes, inks, polymers and a lot of other chemical

products. The sector has a growth rate of near about 12%.[3]

http://www.economywatch.com/world-industries/chemical/india.html[3]

Performance

The Indian chemicals industry has shown rapid growth for more than fifty

years with the fastest growing areas being in the manufacture of synthetic

organic polymers used as plastics, fibres and elastomers. The chemicals

industry generated over USD30 billion in 2006, contributing 3% of GDP and

has been a front runner in terms of growth. The industry is highly fragmented

and widely dispersed, consisting of stockists and dealers spread all over India

addressing small segments and the retail market. Large players dominate the

bulk chemicals segment but there is a mix of both large and small players in

the life science and specialty chemicals segments. The geographical

distribution of the industry is also very skewed, with Western India accounting

for close to half of the total Indian chemical industry. [4]

The Indian chemical industry has evolved a lot over the past decade. Today,

India has a significant presence in the production of basic organic and

inorganic chemicals, pesticides, paints, dyestuffs and intermediates,

petrochemicals, fine and specialty chemicals, cosmetics and toiletry product

segments. [4]

Thus, due to its diversity, the chemical industry’s fortunes are inextricably

linked to both, the absolute domestic economic growth as well as the leading

contributors to and quality of growth. It also has strong linkages with the rest

of the world in terms of international trade, investment flows and technology

transfers. [4]

12

Growth potential

Going forward, reduced tariffs will help larger chemical companies grow even

more. Competitive advantages, like having competence in the areas of high

value added chemicals and conforming to international quality standards will

be even more highly valued. Leveraging advanced technology and strong

research capabilities and developing domestic capacity to reduce

dependence on imported raw materials are will also be key. But all of these

changes have to go hand in hand with a concerted effort to make the industry

more organized and systematic. [4]

Future prospects

Candidates with the requisite skills and qualifications can choose from a wide

range of options within the industry. Pharmacists, chemical engineers,

process managers, sales personnel and research and development are but a

few of the options that can be pursued. The growth prospects of the industry

remain very rosy, given the unrelenting demand for chemical outputs both in

consumer and industrial applications, so applicants can be assured of a large

number of opportunities with good compensation. [4]

http://info.shine.com/Industry-Information/Chemicals/926.aspx[4]

13

1.3 OVERVIEW OF GUJARAT CHEMICAL INDUSTRY

Gujarat is the chemical hub of the country, contributing around 55% of the

Indian chemical industry's annual turnover. [5]

Ahmadabad alone has around 700 chemical companies. And, the size of the

industry is set to grow further in Gujarat. [5]

SC Gupta, joint secretary, department of chemicals & petrochemicals, ministry

of chemicals & fertilizers, Government of India, said here that the industry in

Gujarat would grow to Rs5,08,750 crore by 2020, up 140% from the present

Rs2,14,000 crore. [5]

“The Indian chemicals industry currently has a turnover of Rs3,88,500 crore

($84 billion), which includes chemicals, petrochemicals, speciality chemicals

and pharmaceuticals. It is likely to grow at the rate of 9% per annum, the rate

at which the Indian economy is growing. By 2020, the Indian chemical

industry is expected to grow to Rs9,25,000 crore ($200 billion),” Gupta said.

[5]

http://www.dnaindia.com/money/report_gujarat-chemical-industry-to-grow-to-

rs5-lakh-crore_1440405[5]

14

2. ABOUT MAJOR COMPANIES IN THE INDUSTRY

LIST OF TOP CHEMICAL COMPANIES IN INDIA

Aarti Industries Ltd Alkali Metals Ltd Atul Ltd

Ciba India Ltd(BASF) DCW Ltd Deepak Nitrite Ltd

Elantas Beck India ltd English Indian Clays Ltd Foseco India Ltd

GeeCee Ventures Ltd

(Lanxess India)

GHCL Ltd India Glycols Ltd

IOL Chemicals and

Pharmaceuticals Ltd

Kanoria Chemicals and

Industries Ltd

Mawana Sugars Ltd

Meghmani Organics Ltd National Organic

Chemical Industries Ltd

(NOCIL)

National Peroxide Ltd

Navin Fluorine

International Ltd

Phillips Carbon Black

Ltd

Punjab Chemicals &

Crop Protection Ltd

SI Group India Ltd Standard Industries Ltd Sudarshan Chemicals

Industries Ltd

http://poonamdoshi.blogspot.com/2010/06/list-of-top-chemical-companies-in-

india.html[6]

15

GUJARAT ALKALIES AND CHEMICALS LIMITED (GACL) :

Gujarat Alkalies and Chemicals Limited (GACL) was incorporated on 29th

March, 1973 in the State of Gujarat by Gujarat Industrial Investment

Corporation Limited (GIIC), a wholly owned company of Govt. of Gujarat, as a

Core Promoter. [7]

GACL has two units located at Vadodara and Dahej , both in the State of

Gujarat. It has integrated manufacturing facilities for Caustic Soda, Chlorine,

Hydrogen Gas, Hydrochloric Acid, Chloromethane, Hydrogen Peroxide,

Phosphoric Acid, Potassium Hydroxide, Potassium Carbonate, Sodium

Cyanide, Sodium Ferrocyanide. The Dahej unit also has 90 MW Captive

Power Plant (CPP) for regular and economical power supply. [7]

GUJARAT ALKALIES AND CHEMICALS LIMITED (GACL), DAHEJ UNIT

commercial production commenced in August, 1998, with and installed

capacity 100000 MTA. As a whole, GACL (RANOLI) installed capacity of

153500 MTA & (DAHEJ) installed capacity of 116500 MTA is largest Caustic

Soda manufacturer in INDIA. GACL (Dahej Unit) production capacity

utilization is 130.04%. [7]

http://www.emt-india.net/eca2006/Award2006_CD/06ChlorAlkali/

GujaratAlkaliesandChemicalsLtdDahej.pdf[7]

 Products

   Caustic Soda Group

     Caustic Soda Flakes

     Caustic Soda Lye  

     Caustic Soda Prills  

     Sodium Hypo Chlorite  

     Liquid Chlorine  

     Compressed Hydrogen  

  

   Sodium Group

     Sodium Cyanide  

     Sodium Ferro Cyanide  

   Hydrogen Peroxide Group

     Hydrogen Peroxide  

     Bleachwin  

   Phosphoric Acid Group

16

Gas

     Hydrochloric Acid  

   Caustic Potash Group

     Caustic Potash Flakes  

     Caustic Potash Lye  

     Potassium Carbonate  

   Chloromethane Group

     Methyle Chloride  

     Methylene Chloride  

     Carbon Tetrachloride  

     Chloroform  

  

     Phosphoric Acid  

     Calcium Chloride Flakes  

     Calcium Chloride Powder  

   Others

     Dilute Sulphuric Acid  

     Scalewin  

     Aluminum Chloride

Anhydrous

 

   New Products

     Poly Aluminum Chloride  

     Stable Bleaching Powder  

 

http://www.gujaratalkalies.com/new/products_main.htm[8]

GUJARAT FLUOROCHEMICALS LIMITED (GFL)

17

Gujarat Fluor chemicals Limited (GFL) is a public limited company, listed on

both the leading stock exchanges of India – the Bombay Stock Exchange and

the National Stock Exchange. It was incorporated in 1987, and commenced

commercial operations in1989. [9]

GFL has a market capitalization close to US $ 1 Billion , Gross Fixed Assets

of US $ 225 million, Net Worth of US $ 250 million, and strong cash profits in

excess of US $ 100 Million per annum. GFL is rated AA- (stable) by CRISIL,

India’s largest rating agency. [9]

GFL attained a key milestone in 2007, when it commissioned India’s largest

PTFE plant. PTFE is an extremely specialized engineering plastic, and only a

select few firms the world over have the technology for PTFE manufacture.

GFL also operates India’s largest refrigerant plant, which exports refrigerants

to more than 75 countries across the globe. [9]

Chemical Business

GFL has set up, at Dahej, Gujarat, an integrated chemical complex, which

comprises of a 52,500 tpa Caustic Soda / Chlorine plant, a 40,000 tpa

Chloromethane plant, and a 30 MW gas-based captive power plant. These

facilities were set up at a total investment of Rs 500 crores, and have

commenced commercial operations in 2007. These facilities will significantly

enhance GFL’s cost competitiveness due to the advantages of backward

integration, besides adding to GFL’s product portfolio, top-line and bottom-line

from FY2008-09 onwards. These facilities also have a significant potential for

de-bottlenecking, with marginal investments, to further improve profitability

once full capacity has been reached. [9]

MAJOR PRODUCT18

http://www.gfl.co.in/chemicals_pro.htm http://www.gfl.co.in/[9]

MEGHMANI ORGANICS LIMITED

We were founded in 1986 as a partnership, under the name M/s Gujarat

Industries, to manufacture Pigments by our Executive Chairman Mr Jayanti

Patel, together with our Managing Directors, Mr Ashish Soparkar and Mr

Natwarlal Patel, as well as two of our Executive Directors Mr Ramesh Patel

and Mr Anand I Patel (collectively the "Founders"). [10]

On 2 January 1995, our Company, Meghmani Organics Limited, was

incorporated as a joint stock company with limited liability pursuant to Part IX

of the Indian Companies Act. Under Section 566 of the Indian Companies Act,

"joint stock company" means a company having a permanent paid-up or

nominal share capital of fixed amount divided into shares. Upon incorporation,

our Company acquired the business and all existing assets and liabilities of

the partnership M/s Gujarat Industries and the Founders became

shareholders of our Company. [10]

Our Company has received several awards for our outstanding export

performance and excellent performance since the date of our incorporation.

[10]

Our Pigment Products

We manufacture the following Pigment products:

Pigment Green - Pigment Green 7;

19

Pigment Blue - CPC Blue, Alpha Blue and Beta Blue. [10]

Our Agrochemical Products

Agrochemical products fall into three main categories:

Pesticide Intermediates

Technical Grade Pesticides

Pesticide Formulations

http://www.meghmani.com/prod.htm[10]

GCPTCL

20

Gujarat Chemical Port Terminal Co. Ltd. (GCPTCL) is a commercial Port

and Storage Terminal, dedicated for handling Liquid & Gaseous Chemicals

falling in "A", "B" & "General" Classes, including petroleum products. It is a

modern Port & Storage Terminal, fully computerized, with state-of-the-art

technology and added levereage of "Single-Window" Operations. GCPTCL -

an opportunity foever, for importers and exporters - is all set to revolutionize

the chemicals traffic for both domestic and International business. [11]

The Jetty can berth ships of 6,000 DWT to 60,000 DWT and the initial

capacity of the Storage Terminal is more than 3 hundred thousand cubic

metres. Additional capacities can be created to suite specific requirements of

the customer at attractive commercial terms. [11]

PRODUCT HANDING

GCPTCL mainly handles the following products, apart from other compatible

product at present and can create facilities to handle more products as per

future needs on attractive commercial terms.[11]

Propylene

Propane

Butadiene

Naphtha

n-Parafins

Benzene

Mixed-Xylene

Styrene

Methanol

Caustic Lye

LPG

21

http://www.gcptcl.com/aboutus.html[11]

3. PRODUCT PROFILE (MAJOR PRODUCTS)

The Indian chemical industry deals in products like

1. fertilizers,

2. bromine compounds,

3. catalyst,

4. sodium and sodium compounds,

5. dye intermediates,

6. inks and resins,

7. phosphorous,

8. paint chemicals,

9. coatings,

10. isobutyl,

11.zinc sulphate,

12.zinc chloride,

13.water treatment chemicals,

14.organic surfactants,

15.pigment dispersions,

16. Industrial aerosols and many more. [12]

Chemical Industry is highly heterogeneous with following major sectors:

22

 Petrochemicals

 Inorganic Chemicals

 Organic Chemicals

 Fine and specialties

 Agrochemicals [12]

Petrochemicals

Petrochemicals is one of the major category in the chemicals. It is one of the

fastest sectors at 13% plait covers :

  Basic chemicals like Ethylene, Propylene, Benzene and Xylene etc.

  Intermediates like MEG, PAN and LAB etc.

  Synthetic fibres like Nylon, PSF and PFY etc.

  Polymers like LDPE/HDP

E, PVC, Polyester and PET etc.   [12]

Major Players in Petrochemicals are as follows:

Reliance Industries Ltd

IPCL Baroda

Nagothane

Gandhar

Haldia Petrochem

GAIL   

NOCIL [12]

Inorganic Chemicals

Inorganic chemicals has US$ 2.5 Billion industry. It covers basic products like

23

Caustic, Chlorine, Sulphuric Acid etc. Inorganic chemicals are mostly used in

detergents, glass, soap, fertilizer, alkalis etc.Competition from imports are on

the rise. [12]

Major Products of Inorganic Chemicals

Installed Capacity

Soda ash

Caustic Soda

Liquid Chlorine

Carbon Black

Installed Capacity

Calcium carbide

Titanium dioxide

Aluminium fluoride

Potassium chloride

Sodium chlorate

Red phosphorous [12]

Organic Chemicals

Organic Chemicals has 1 Billion Dollar industry. It covers a wide range of

chemicals. Its units concentrated mostly in the Western India[12]

Major Organic Chemicals

Methanol

Formaldehyde

24

Acetic acid

Phenol

Acetone

Acetic anhydride

Nitrobenzene

Chloromethane

Aniline

Maleic anhydride

Pentaerithitol

PNCB

MEK

Citric acid

ONCB

Iso butyl alcohol [12]

Agrochemical

India is a large agricultural economy which is the major user. Average

Indian consumption is very low (1/20th of world average).Agrochemical

Consumption varies depending on crop and region. Cash crops like

sugarcane, tobacco etc. [12]

Major players of Agrochemicals

  India: United Phosphorus, Rallis and Excel

  MNC: Hoechst Agrevo, Novartis, Bayer etc

http://chemicals.indiabizclub.com/info/major_players [12]

25

PART – II PRIMARY STUDY

4. INTRODUCTION OF THE STUDY:

26

4.1 LITERATURE REVIEW:

According to (Harter, Schmidt and Hayes, 2002), the most important strategy

employed by various organizations, to increase employee retention is the use

of training and learning opportunities for all members. This increases

employee competence as well as making them more productive when they

realize that their employer is concerned about the future of their career.

Consequently, they will be indebted to work at their place of work for a

particular period as a sign of appreciation for the employer. The other strategy

involves the adoption of motivational measures for the employees which

increases their commitment as well as ensuring that they remain in the same

workplace for a longer period. Motivation increases employee retention in any

organization as they are accorded appropriate recognition. [13]

The second article incorporates the nature of working environment as a factor

in influencing employee retention. Working environments, which are

composed, of members portraying respect, trust and care when treating their

colleagues create a homely environment which significantly boosts employee

retention. Such an environment enables employees to feel at ease, and their

efforts are dedicated towards the creation of good working relations with their

colleagues. Similarly, employers who are friendly and understanding the

influence the rate of employee retention in an organization due to the nature

of relations exhibited by both parties.  Employees are capable of remaining at

the same workplace for prolonged periods when they understand that their

employer has set up adequate measures to ensure that their safety is

guaranteed. This makes them feel at ease hence they stick to the same

organization for quite some time (Wilkinson, 2004). [13]

http://academicwritingtips.org/component/k2/item/1076-summaries-of-articles-

published-about-employee-retention.html[13]

The retention of employees has been shown to be significant to the

development and the accomplishment of the organization’s goals and 27

objectives. Retention of employees can be a vital source of competitive

advantage for any organization. This study attempted to explore the main

factors that contribute to employee retention existing in the private sector in

Kuwait. The next paragraphs discuss the background of the study by clarifying

the theoretical framework for the main problems with employee retention. [14]

Today, changes in technology, global economics, trade agreements, and the

like are directly affecting employee/employer relationships. “Until recently,

loyalty was the cornerstone of that relationship. The loss of talented

employees may be very Detrimental to the company’s future success.

Outstanding employees may leave an organization because they become

dissatisfied, under paid or unmotivated (Coff1996), and while trying to retain

employees within the organization they may present other challenges as well.

They may demand higher wages, not comply with organization practices, and

not interact well with their coworkers or comply with their managers’

directions. [14]

Besides these problems asymmetric information or lack of information about

the employees’ performance may complicate an organization’s Endeavour to

retain productive employees. Without adequate information an organization

may not be able to distinguish productive workers from non-productive ones.

Employees often may take credit for the successes and deflect failures to

other employees. This is known as a moral hazard problem. In many in

stances companies may reward or punish employees for an organization out

come for which they had no impact (Kerr1975). Insufficient information about

employees’ performance may result in adverse selection by them (Gross man

& Hart 1986). The better employees may move to other organizations for

better opportunities. The coworkers who cannot improve their positions are

more likely to stay. This is especially possible when due to Inadequate

information outstanding performance is not rewarded. Non productive and

productive workers end up receiving the same or nearly the same

Compensation and package of perks because of management’s in ability to

distinguish talented employees from the rest of the labor force in the

28

organization. The problem of attempting to keep talented members of the

work force is further Complicated because of bounded rationality (Simon

1976). It is another result of Asymmetric in formation where both the manager

does not know the information for which to ask from the employee and the

employee does not know what to provide. Therefore, productive workers

cannot distinguish themselves from nonproductive coworkers. [14]

Even if an organization is fortunate enough to retain talented employees, the

company may still have to cope with agency costs resulting from them and

their colleagues. When information about an employee’s activities are difficult

to gather, the employee may be motivated to act in his own interest which

may diverge from the interest of the organization. This divergence of interests

results in costs to the organization in the form of excessive perquisite

consumption, shirking of job responsibilities and poor investment decision

making. Jensen and Meckling (1976) explained that it is in an employee’s

interest to over consume perks and shirk job responsibilities of the firm if they

are not sole owners of the organization.Employees may also be enticed to

make suboptimal investment decisions for the firm. Since most company

employees have their wealth tied up in the organization for which they work,

employees may attempt to make investment decisions which are less risky

than the stock holders of the firm would prefer. This is done to reduce the risk

of failure by the company, which protects the no diversified employee from

loss of wealth. This investment strategy may also reduce the return on

investment that the diversified owners of the firm desire (Murphy 1985). [14]

The employees or agents of the organization may also use a short sighted

approach in investment selection to enhance their own career chances

(Narayanan 1985).The employee can signal the labor market his superiority

through the selection of a fast starting project, which may fizzle out later for

the firm. This strategy may cause the firm to miss profitable long-term projects

or much needed research and development. Employees may also attempt to

increase the size of the firm through acquisitions and project selection regard

29

less of the effect on company profitability in order to increase their own power

base within the firm. [14]

Another area contributing to decreased employee satisfaction is that of a

company’s motivational style. For example, Weinberg (1997) states that “Most

companies relied in the past on two traditional strategies for managing

turnover. First, they raised wages until the situation stabilized. If that did not

work, they Increased training budgets for new hires and first-level supervisors.

These solutions do not work anymore. [14]

Retention defined as “an obligation to continue to do business or exchange

with a particular company on an ongoing basis” (Zineldin, 2000, p. 28). A

more detailed and recent definition for the concept of retention is “customer

liking, identification, commitment, trust, readiness to recommend, and

repurchase intentions, with the first four being emotional-cognitive retention

constructs, and the last two being behavioral intentions” (Stauss et al., 2001).

Studies have indicated that retention driven by several key factors, which

ought to be managed congruently: organizational culture, strategy, pay and

benefits philosophy, and career development systems (Fitzenz 1990). The

above mentioned definitions explain many situations in our contemporary life

while many employees are no longer having the sense of organization loyalty

once they leaved. Increasing numbers of organization mergers and

acquisitions have left employees feeling displeased from the companies that

they work and haunted by concerns of overall job security. As a result,

employees are now making strategic career moves to guarantee employment

that satisfy their need for security. On the other hand, employers have a need

to keep their stuff from leaving or going to work for other companies. This is

true because of the great expenses associated with hiring and retraining new

employees. The adage, good help is hard to find, is even truer these days

than ever before because the job market is becoming increasingly tight

(Eskildesen 2000, Hammer 2000). [14]

30

Literature of employees retaining again show that attracting existed

employees costs less than acquiring new talents as organizations know their

employees and what they want, and the initial cost of attracting the new

employees has already been expended (Davidow and Uttal, 1989).

Employees retention also attain benefits such as customers satisfaction,

better service, lower costs (Reichheld,1995), lower price sensitivity, positive

word-of-mouth, higher market share, higher productivity and higher efficiency

(Zineldin, 2000). [14]

Based on a review of the literature, many studies has investigate employees

intentions to exist, for example Eskildsen and Nussler (2000) in their research

suggested that employers are struggling to be talented employees in order to

maintain a successful business. In the same bases, Mark Parrott (2000),

Anderson and Sullivan (1993) and Rust and Zahorik (1993) believe that, there

is a straight line linking employee satisfaction and customer satisfaction.

Thus, high satisfaction has been associated to retention of both customers

and employees. The literature of employee retention clearly explain that

satisfied employees who are happy with their jobs are more devotion to doing

a good job and vigorous to improve their organizational customers satisfaction

(Hammer2000; Marini 2000; Denton 2000). Employees who are satisfied have

higher intentions of persisting with their organization, which results in

decreased turnover rate (Mobley et al., 1979). Fishbein and Ajzen’s (1975)

attest the theory of reasoned action as the heart retention of both the

employee and the customer links between satisfaction and behavior. Potter-

Brotman (1994) in his research explained how service could affect retention

and may result in improving the value of teaching employees to be service

providers, with the capability to enhance interaction with customers rather

than endanger them. In the same research, the authors recommended that

firms should focus on hearing customers unique voices as result to find out

what kind of service they consider to be extraordinary. [14]

The earlier efforts of Desai and Mahajan (1998) in examine the concepts of

acquiring customers from a rational and affective perspective provides us with

31

different approaches of how cognition and affects are implemented to

increase retention. The authors recommended that in order to retain

employees, companies must continually develop their products and services

so as to meet the evolving needs of customers. Desai and Mahajan (1998)

assumed that retained customers are in fact satisfied, and not simply retained

because of habit, indifference or inertia. Included in retention strategies are

the development of new products and services to meet and satisfy the

evolving required of the customers; thus satisfaction is a component of

retention. [14]

However, Johnston (2001) in his research negated the relationship between

customer's satisfaction and their retention clarifying that such relation is very

weak. He explain that an understanding of the two concepts cannot always be

achieved by isolating them from each other, but rather by examining the

relationship between them. Gerpott et al. (2001) in his research attest

Johnston (2001) as he mentioned that customer retention and customer

satisfaction should be treated as distinct, but causally inter-linked constructs.

Rust and Subramanian (1992), in their study, link quality to customer

satisfaction and argue that this has a direct effect on customer retention and

market share. In the same bases Athanassopoulos (2000) explain satisfaction

as an antecedent of customer retention. The authors study customer

satisfaction cues in retail banking services in Greece. The fining of his study

shows that product innovativeness, convenience, staff service, price and

business profile are dimensions of customer satisfaction. The authors also

mentioned that customers do not consider switching banks until they have

encountered a series of negative effects. [14]

Heskett et al. (1994) and Schneider and Bowen (1999) suggested that, in

some cases, service suppliers may be unable to retain even those employees

who are satisfied. Thus, satisfaction itself may not be sufficient enough to

ensure long-term workers commitment to an organization. Instead, it may be

essential to look beyond satisfaction to other variables that strengthen

retention such as conviction and trust (Hart and Johnson, 1999). This

explanation is consistent Morgan and Hunt (1994) research on marketing

32

channel, which shows that organizations often look beyond the concept of

satisfaction to developing trust and ensure long term relationships with their

employees. Further, this suggestion is based on the principle that once trust is

built into a relationship, the probability of either party ending the relationship

decreases because of high termination costs. [14]

http://www.masterstudies.net/media/pdf/MBA%20Proj/employees

%20retention%20in%20private%20sector%20an%20exploratory%20study

%20in%20the%20state%20of%20kuwait.pdf[14]

4.2 BACKGROUND OF THE STUDY

33

I am preparing my project work on Employee Retention.”The simple meaning

of Employee Retention as Organizational policies and practices designed to

meet the diverse needs of employees and create an environment that

encourages employees to remain employed. [15]

http://www.tbs-sct.gc.ca/gui/hrpg/hrpg-prh-02-eng.asp?for=execs[15]

DEFINITION OF RESEARCH CONCEPTS

EMPLOYEE RETENTION:

Effective employee retention is a systematic effort by employers to

create and foster an environment that encourages current employees

to remain employed by having policies and practices in place that

address their diverse needs. A strong retention strategy becomes a

powerful recruitment tool.[16]

http://ezinearticles.com/?Recruiting,-Retaining-and-Rewarding-the-

Right-People-Are-Challenges-the-Employers-Face!&id=1240153.[16]

Employee retention refers to the ability of an organization to retain its

employees. Employee retention can be represented by a simple

statistic (for example, a retention rate of 80% usually indicates that an

organization kept 80% of its employees in a given period).[17]

http://en.wikipedia.org/wiki/Employee_retention)[17]

THE THREE RS OF EMPLOYEE RETENTION:

34

To keep employees and keep satisfaction high, you need to implement each

of the three Rs of employee retention: respect, recognition and rewards.

Respect is esteem, special regard, or particular consideration given to

people. As the pyramid shows, respect is the foundation of keeping your

employees.

Recognition and rewards will have little effect if you don’t respect employees.

Recognition is defined as “special notice or attention” and “the act of

perceiving clearly.” Many problems with retention and morale occur because

management is not paying attention to people’s needs and reactions.

Rewards are the extra perks you offer beyond the basics of respect and

recognition that make it worth people’s while to work hard, to care, to go

beyond the call of duty. While rewards represent the smallest portion of the

retention equation, they are still an important one.

IMPORTANCE OF EMPLOYEE RETENTION

The process of employee retention will benefit an organization in the following

ways:

The Cost of Turnover: The cost of employee turnover adds hundreds

of thousands of money to a company's expenses. While it is difficult

to fully calculate the cost of turnover (including hiring costs, training

costs and productivity loss), industry experts often quote 25% of the

average employee salary as a conservative estimate.

Loss of Company Knowledge: When an employee leaves, he takes

with him valuable knowledge about the company, customers, current

projects and past history (sometimes to competitors). Often much time

35

and money has been spent on the employee in expectation of a future

return. When the employee leaves, the investment is not realized.

Interruption of Customer Service: Customers and clients do

business with a company in part because of the people. Relationships

are developed that encourage continued sponsorship of the business.

When an employee leaves, the relationships that employee built for the

company are severed, which could lead to potential customer loss.

Turnover leads to more turnovers: When an employee terminates,

the effect is felt throughout the organization. Co-workers are often

required to pick up the slack. The unspoken negativity often intensifies

for the remaining staff.

Goodwill of the company: The goodwill of a company is maintained

when the attrition rates are low. Higher retention rates motivate

potential employees to join the organization.

Regaining efficiency: If an employee resigns, then good amount of

time is lost in hiring a new employee and then training him/her and this

goes to the loss of the company directly which many a times goes

unnoticed. And even after this you cannot assure us of the same

efficiency from the new employee.

WHAT MAKES EMPLOYEE LEAVE?

Employees do not leave an organization without any significant reason.

There are certain circumstances that lead to their leaving the organization.

The most common reasons can be:

Job is not what the employee expected to be: Sometimes the

job responsibilities don’t come out to be same as expected by

the candidates. Unexpected job responsibilities lead to job

dissatisfaction.

36

Job and person mismatch: A candidate may be fit to do a

certain type of job which matches his personality. If he is given a

job which mismatches his personality, then he won’t be able to

perform it well and will try to find out reasons to leave the job.

No growth opportunities: No or less learning and growth

opportunities in the current job will make candidate’s job and

career stagnant.

Lack of appreciation: If the work is not appreciated by the

supervisor, the employee feels de-motivated and loses interest

in job.

4.3 RESEARCH TITLE: “A study on existing employee retention practices at

chemical industry”

4.4 PROBLEM STATEMENT:

In a chemical industry find out the benefit that are offered to the employees,

engagement program conducted in the company and level of satisfaction of

employees with respect to employee retention.

4.5 OBJECTIVES OF THE STUDY:

1. To explore benefits those are important for the employees retention.

2. To assess existing employee retention strategies.

3. To investigate the issues related to organizational culture which

affects employees retention.

4. To assess the effect of employee satisfaction on employee

retention.

37

5. To assess the effect of employee engagement program in

employee retention.

5. RESEARCH METHODOLOGY

The section of a research proposal in which the methods to be used are

described. The research design, the population to be studied, and the

research instruments, or tools, to be used are discussed in the methodology.

.

5.1 RESEARCH DESIGN:

The research design indicates the type of research methodology under taken

to collect the information for the study. The researcher used descriptive

research design for his research study. The main objective of using

descriptive research is to describe the state of affairs as it exists at present. It

mainly involves surveys and fact finding enquiries of different kinds.

.

5.2 SOURCES OF THE DATA:

For the purpose of the study both primary and secondary sources are use to

collect data

Primary data is the new or fresh data collected from the respondents through

structured Questionnaire.

The secondary data are collected through the structured questionnaire,

literature review and also from the past records maintained by company.

38

5.3 DATA COLLECTION METHOD:-

Data was collected using Structured Questionnaire and interview. A

questionnaire is a research instrument consisting of a series of questions

and other prompts for the purpose of gathering information from respondents.

5.4 POPULATION

Sample of the study is 100(approximately) employees.

5.5 SAMPLING METHOD

The researcher adopted simple random sampling for the study

5.6 SAMPLE FRAME:-

Sample Element/unit

Employees who work in Chemical Company in Dahej

5.7 DATA ANALYSIS:-

I am going to analyze data though content analysis and statistical method

represent finding with the use of table and charts.

39

REFERENCE

1. http://findarticles.com/p/articles/mi_m1094/is_4_34/ai_56973853/

pg_3/?tag=content;col1[1]

2. http://www.zacks.com/stock/news/46513/Chemical+%26amp

%3B+Fertilizers+Industry+Outlook[2]

3. http://www.economywatch.com/world-industries/chemical/india.html[3]

4. http://info.shine.com/Industry-Information/Chemicals/926.aspx[4]

5. http://www.dnaindia.com/money/report_gujarat-chemical-industry-to-

grow-to-rs5-lakh-crore_1440405[5]

6. http://poonamdoshi.blogspot.com/2010/06/list-of-top-chemical-

companies-in-india.html[6]

7. http://www.emt-india.net/eca2006/Award2006_CD/06ChlorAlkali/

GujaratAlkaliesandChemicalsLtdDahej.pdf[7]

8. http://www.gujaratalkalies.com/new/products_main.htm[8]

9. http://www.gfl.co.in/chemicals_pro.htm http://www.gfl.co.in/[9]

10.http://www.meghmani.com/prod.htm[10]

11.http://www.gcptcl.com/aboutus.html[11]

12.http://chemicals.indiabizclub.com/info/major_players [12]

13.http://academicwritingtips.org/component/k2/item/1076-summaries-of-

articles-published-about-employee-retention.html[13]

14.http://www.masterstudies.net/media/pdf/MBA%20Proj/employees

%20retention%20in%20private%20sector%20an%20exploratory

%20study%20in%20the%20state%20of%20kuwait.pdf[14]

15.http://www.tbs-sct.gc.ca/gui/hrpg/hrpg-prh-02-eng.asp?for=execs[15]

16.http://ezinearticles.com/?Recruiting,-Retaining-and-Rewarding-the-

Right-People-Are-Challenges-the-Employers-Face!&id=1240153.[16]

17.http://en.wikipedia.org/wiki/Employee_retention)[17]

40