INTERNAL EMPLOYEE RETENTION TOWARDS INDUSTRY

PROJECT REPORT Submitted in partial fulfillment of the Requirements for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION 2012 NAME : SYED JAVEED

ENROLMENT NO : 22510631039

Under the Supervision of PROF. M. GOWRISANKAR, M.B.A., M.Phil., PGDCA,

H.O.D. IN BUSINESS MANAGEMENT, MAHARAJA ARTS AND SCIENCE COLLEGE, COIMBATORE

LOYOLA INSTITUTE OF TECHNOLOGY CHENNAI

BONAFIDE CERTIFICATE LOYOLA INSTITUTE OF TECHNOLOGY

Certified that this is the bonafide project work done by SYED JAVEED with Enrolment Number 22510631039 of

Final year of M.B.A. Degree course in LOYOLA INSTITUTE OF TECHNOLOGY during the year 2012.

Date :

Supervisor (Signature with seal)

Examiner : 1.

Examiner : 2.

ATTENDANCE CERTIFICATE
Certified Number 22510671039 a that A.SYED JAVEED with Enrolment

student M.B.A. Degree Course in Loyola the project work in the

Institute Of Technology has undergone

INTERNAL EMPLOYEE RETENTION TOWARDS INDUSTRY from JAN 2012 to APRIL 2012. During the period of study and

observation in our organisation his/her conduct was good.

Date : 01.04.12 1. 2. 3. Name of the Head Name of the Industrial Unit/ Business Organisation Place : : :

Signature Mr. Bala Kumar Eclat Innovatire Services Chennai

Office Seal with date

DECLARATION

I ________, here by declares that this project work titled ____________ is based on the original work conducted by me under the guidance of Prof.__________. This has not been submitted earlier for the award of any other Degree from Loyola Institute of Technology or any other Institute.

Place: Chennai Date:

ACKNOWLEDGEMENT
This project work titled _________________ was successfully

completed and made possible due to the cooperation; assistance and suggestion of many persons whom I would like to express my sincere gratitude and thanks. I express my sincere gratitude to my dissertation. Last but not the least, I express my gratitude to my adorable Parents, encouraging Friends and all those who have been directly or indirectly responsible for the successful completion of this project. Above all, I thank God Almighty for his blessings showered on me to complete this work successfully. guide Prof._________ for the

valuable advice and guidance extended to me for the completion of the

Content
Page Chapter 1 INTRODUCTION 1.1 Organization Profile 1.2 Concepts 1.3 Need for this study 1.4 Problem 1.5 Objectives 1.6 Procedure methodology Chapter 2 2.1 Analysis of the situation 2.2 Existing of the system 2.3 Need for the change in system 2.4 Proposed system Chapter 3 3.1 Present conditions with special reference to the organization Chapter 4 Summary, Conclusion and Suggestion 4.1 summary of the system 4.2 scope of the system 4.3 Suggestion BIBLIOGRAPHY 89 91 92 96 80 55 60 66 75 24 8 11 15 18 19 21

Chapter 1 INTRODUCTION

INTRODUCTION
The purpose of the research is to test the applicability of three strategies which could solve the problem of employee retention in the companies, especially in Small and medium scale industry in Chennai. To find out this the researcher has approached managers of Small and Medium Scale Software companies and collected the data in a questionnaire. Three categories of employees have been identified. 1. Satisfied employees (showing the tendency to stay the company or retention). 2. Indifferent employees (Neither satisfied nor dissatisfied or indifferent). 3. Dissatisfied (showing the tendency to quit the company or attrition) To find out the applicability of the first retention strategy, the researcher has classified number of employees comes under the above three categories in to two other categories; the employees who prefer position titles when they change the company and employees who prefer all other benefits except position titles. To find out the applicability of the second retention strategy, the same three categories have been classified under the employees who prefer variable benefit structure and employees who do not prefer variable benefit structure. A questionnaire survey has been conducted and classified the respondents in to respective categories. Chi square tests (test for independence) has been conducted to find out the relation ship between satisfaction, dissatisfaction and Indifference to the perception of benefits of the employees. Applicability of the third retention strategy has been tested by using an opinion survey conducted by the researcher and verified the result using sign test ( a non parametric test). This report is not exhaustive, one can innovate many new strategies to retain employees. These are just the basics and if implemented in a proper way can give good results.

THE FACTORS AFFECTING EMPLOYEE ATTRITION Introduction and Motivation The turnover of IT workers within MIS organizations of firms has long attracted research attention (Igbaria and Greenhaus 1992., Moore 2000a, Thatcher et al. 2002) as replacing IS workers is costly. The focus of the extant research has been on explaining the turnover intentions of IS professionals with a variety of factors playing a significant role. These include job satisfaction, work exhaustion, fairness of rewards, and more recently lifecareer goal frustration (McKnight, Setia and Sambamurthy 2008). This study examines IT worker attrition in the context of offshore outsourcing. IS-professionals working within business firms primarily seek to contribute to their firms effective leverage of IT. They are motivated to make strong internal contributions, but do not typically contribute directly to revenue and are often considered to be cost centers. In contrast IS professionals working in an offshore outsourcing context, such as in the Indian IT/ITeS industry, are evaluated primarily on their ability to generate revenue. This difference in orientation calls for a closer look at factors influencing attrition and how it can be managed in the off shoring context. High attrition levels have a negative influence on firms ability to service overseas clients effectively. When an employee leaves, an offshore IT firm must incur several kinds of costs to make up for her move. To begin with the firm must incur a cost of hiring to find a suitable replacement. Once the new employee is hired, she cannot be expected to be as productive as her predecessor since she has not yet learnt the nuances of the job, nor is she informed about the offshore client specific relationships. Thus, there is an opportunity cost of losing an employee. Finally, in order to make the new hire more productive the firm may have to provide some combination of technical, domain and process oriented training, all of which are an expensive proposition. Continuous and high levels of employee churn results in a low level of firm specific knowledge and constrain sustainable organic growth for the firm. It is important to point out the sharp increases in training investments by Indian IT firms. For instance, the bellwether company, Infosys, has been increasing training expenditure by close to 16% per annum per employee.

1 Over the last five years. More broadly, survey studies by Price Water House Coopers 2 And the Center for IT and the Networked Economy at the Indian School of Business 3 Show that IT firms are increasing investments in training and they believe that controlling attrition is one of the most important reasons to spend on training. Yet, there has been precious little academic focus on rigorously measuring the effectiveness of such training on factors such as attrition and employee productivity. In this study we limit our attention to the analysis of attrition. Part of the challenge in making an identifying link between practices such as training and dependent variables such as attrition is the presence of significant potential omitted variable bias in the form of unobserved firm characteristics such as managerial culture and empathy. Given this environment and given the importance of training as a lever to mitigate attrition our specific research questions, set in the context of offshore outsourcing are: a) Can we identify the impact of training investments made by IT firms on managing attrition levels? b) Are there significant differences in attrition across locations and by seniority of employees? c) Does the organizational structure play a role in influencing IT worker attrition? Based on a dataset of 40 firms, we exploit exogenous variation in training investments across seniority levels of employees and a difference in difference based econometric estimation approach to identify a significant negative relationship between training investments and attrition. We also find that there exist significant variations in attrition across three of the four major Indian IT hubs, as well as significant variations in attrition across employee levels and organizational structure Intra organizational Factors Factors which affect the job satisfaction of the employee inside the organization for example; strained superior subordinate relationship.

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Personal reasons; These reasons are specific to each employee such as family responsibilities, personal preference for location of job etc. 2. Extra organizational factors When an employee compares his/her position with that of same position in another company, this may lead to an inequity in the mind of employees, this will result in employee attrition, for e.g. An employee comparing his salary, position, work environment, and benefits with that of same position in another company may lead to preference for the other company. The study concentrates only on extra organizational (3rd reason) reason which is conventionally perceived to be uncontrollable. The researcher has formulated three new strategies to control this perceptional gap. The strategies are based on Adams Equity theory.

1.1 Organization Profile PROFILE

A general idea of the retention measures present in the industry is important to understand the research environment. Apart from the legal and mandatory benefits such as provident-fund and gratuity, below is a list of other benefits IT professionals are entitled to the following: Group Medi-claim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family members include spouse, non-earning parents and children above three months Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. This covers total / partial disablement / death due to accident and due to accidents.

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Subsidized Food and Transportation: The organizations provide transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized. Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the IT companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance. Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities. Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset. Personal Health Care (Regular medical check-ups): Some of the IT Companys provides the facility for extensive health check-up. For employees with above 40 years of age, the medical check-up can be done once a year. Loans: Many IT companies provide loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with financial assistance at the time of their wedding. And, the new recruits are provided with interest free loans to assist them in their initial settlement at the work location.

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Educational Benefits: Many IT companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees, examination fees, and purchase of books Performance based incentives: In many IT companies they have plans for, performance based incentive scheme. The parameters for calculation are process performance i.e. speed, accuracy and productivity of each process. The Pay for Performance can be as much as 22% of the salary. Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical Reimbursement, Special Allowance Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as Cricket, football, etc and regularly play matches with the teams of other organizations and colleges. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization.

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Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization. Employee Stock Option Plan Employees will be entitled to get the shares of the company. This will make employee directly related to the profit. Now, the actual question, why people are leaving? What types of retention strategies are required? What is expected from HR Professional and how they can address this issue? RETENTION - A BIG CHALLENGE Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets. The fierce competition for qualified workers results from a number of workplace trends, including: A robust economy Shift in how people view their careers Changes in the unspoken "contract" between employer and employee Corporate cocooning A new generation of workers Changes in social mores Life balance Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following: Family orientation Quality of life issues

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Autonomy Social status of the job To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them. Division of the organization but it directly affects the Human Resource division as well. The organizations are competing each other to acquire the scarce talent pool. Internal advertisement simply meant to tell the employee that the organization which they are working is good and a company favorable comparison should be given to employees to solve the inequity they perceive. The major difference with internal advertisement is that the communication channel is different from that of marketing channels. Here the communication

1.2 THE CONCEPTS

Applicability of Unique organizational structure strategy Chart No 1.1
Employees who believe positional benefits will give job satisfaction (A)

(A) (B) (D)

Dissatisfied employees (B) Satisfied employees

Employees who believe various benefits will give job satisfaction (d)

Indifferent to satisfaction level

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The outer circle shows the number of employees who believe that various benefits provided by the company will give job satisfaction and this satisfaction will result in employee retention The top inner circle shows the number of employees who believe positional benefits will give job satisfaction. The position title shows the authorities and responsibilities in the organization structure. Employees feel that more authority and more responsibility mean more recognition from the society. This attitude triggers the employee to look for position title which represents more authority and responsibility. The small inner left and right circles represent number of dissatisfied and satisfied employees in the organization respectively. If the ratios between satisfied and dissatisfied employees inside and outside the top inner circle are different, it shows that job satisfaction level is depends on the employee belief on position title The exhibit No1.1 also shows to what extent the organizational structure contribute to the employee inequity. The unique organizational structure strategy can solve employee attrition in the shaded area. Larger shaded area in exhibit No1.1 shows greater percentage of applicability of the strategy. Applicability of Variable benefit structure strategy Chart No 1.2

Periodic change in existing benefit structure will give job satisfaction (A) (A) (B) (D) Dissatisfied employees (B) Satisfied employees (C)
Various benefit structures will give job satisfaction (D) Indifferent to satisfaction level(E)

Indifferent to satisfaction

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The outer circle shows the number of employees who believe that various benefit structures provided by the company will give job satisfaction and this satisfaction will result in employee retention

The top inner circle shows the number of employees who believe Periodic change in existing type of benefits will improve the job satisfaction and motivation to continue the job in the same company. The small inner left and right circles represent number of dissatisfied and satisfied employees in the organization respectively. If the ratios between satisfied and dissatisfied employees inside and outside the top inner circle are different, it shows that job satisfaction level is depends on the employees belief on periodic change in existing type of benefits. The exhibit No1.2 also shows to what extent the organizational structure contribute to the employee inequity. The variable benefit structure strategy can solve employee attrition in the shaded area. Larger shaded area in exhibit No1.2 shows greater percentage of applicability of the strategy. Applicability of Internal advertisement strategy The Important factors to retain the employees in an organization are; conducive organizational culture, emotional bond with organization and awareness of benefits receiving from the organization. These factors can be improved by effective communication. The important factors for implementing such an advertisement strategy are: Presence of internal communication channels Frequency of internal communication Accessibility to internal communication channels

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1.3 Need for this Study

The study encompasses small and medium scale software enterprises in Bangalore. Total population size of lower and/or middle level managers (in all organizational divisions) in small and medium scale software enterprises in Bangalore. Compared to conventional approaches, the integration of population size analysis with habitat suitability assessment on a large scale can provide more evidence to explain the mechanisms of habitat isolation and fragmentation, and thus make regional conservation plans. In this paper, we analyzed the habitat suitability for giant pandas in the Minshan Mountains, China, using the ecological-niche factor analysis (ENFA) method, and then evaluated the current conservation status of this endangered species. The results showed that (1) giant pandas were distributed in a narrow altitudinal range in which vegetation cover was dominated by coniferous forest, mixed coniferous and deciduous broadleaf forest, and deciduous broadleaf forest with scattered bamboo understory, and (2) roads and human settlements had strong negative effects on the panda habitat selection. According to habitat analysis, the total habitat area of giant panda in the Minshan Mountains was 953,173ha, which was fragmented into 12 habitat units by major roads, rivers, and human settlements. The habitat of the mid-Minshan was less fragmentized, but was seriously fragmented in the north. The panda population size estimation showed that 676 individuals inhabited the study area, and 94.53% of them were in the mid-Minshan, but small panda populations less than 30 individuals inhabited the isolated and fragmented habitat patches in the north. The nature reserves in the Minshan Mountains have formed three conservation groups, which covered 41.26% of panda habitat and protected 70.71% of panda population of the study area, but there still exists two conservation gaps, and the connectivity among these reserves is still weak. Due to habitat isolation and extensive human disturbances, giant pandas in the north (i.e., Diebu, Zhouqu, and Wudou) are facing threats of local extinction. In order to protect pandas and their habitats in this area, some effective conservation approaches, such as establishing new reserves in gap areas, creating corridors among patches, and seasonally controlling traffic flux in key roads, should be implemented in the future to link these isolated habitats together.

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n biology and ecology, a group of organisms of one species, living in a certain area. The organisms are able to interbreed. It also refers to the members of a given species in a community of living things. The area can be small. For example, one can refer to the population of duckweed (a small floating plant found on the surface of ponds) on a pond. Since the pond is a habitat, one can consider the population of duckweed in a habitat and forming part of the community of plants and animals there. However, it is also possible to use the term population for all the organisms of one species in a large geographical area, for example the elephant population in Africa. It could also be used to describe all the organisms of that species on Earth, for example the world population of humans. Population sizes in habitats change over a period of time. The timescale may be daily, seasonal, or there may be changes over the years. The success of an organism can be determined by measuring the size of a population or by measuring biomass. Measuring the size of a population is quite difficult and requires careful sampling of the habitat and careful calculation to estimate population size. It is rarely possible to count directly all the individuals in a population. Typically, sampling techniques require random sampling to get a fair estimate of the population and may use equipment such as quadrats (a way of defining a square sampling area of a certain size). However, these techniques have their limitations for example, animals move around and may also be difficult to find. Species may also be difficult to identify. There may not be time to take a large enough sample to make the estimate accurate.

1.4 Problem
STATEMENT OF THE PROBLEM A significant problem faced by the small and medium scale software enterprises is retaining employees in the organization. In the wake of globalization, Small and medium scale enterprises (SME) are losing their 80% of the valuable managerial talent pool to big multinational companies. Often aspiring managers view these firms as tavern or just a stepping stone to climb to prestigious MNC.

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The importance of the problem should receive considerable and persuasive attention [note that importance is inevitably subjective and will vary from person to person and agency to agency]. Clearly indicate why your problem is an important one by answering questions such as these: Is the problem of current interest? Is it topical? Is the problem likely to continue into the future? Will more information about the problem have practical application? Will more information about the problem have theoretical importance? How large is the population affected by the problem? How important, influential, or popular is this population? Would this study substantially revise or extend existing knowledge? Would this study create or improve an instrument of some utility? Would research findings lead to some useful change in best practice? Is there evidence or authoritative opinion from others to support the need for this research? The problem statement should persuasively indicate that major variables can be measured in some meaningful way. If you can identify likely objections to the study, identify and respond to them here. The problem statement should close with a question. Typically, the question contains two variables, a measurable relationship, and some indication of population. The purpose of the literature search that follows is to answer the research problem question. If the literature cannot answer the question, the research is needed to do so. An example question might be: "What is the relationship between the grade point average of UTK juniors and their use of the library"? The information needed is (1) grade point average and (2) some measure of library use. A bad example might be: "What is the best way to teach bibliographic instruction"? This is insufficient because: What are the variables? What will be measured?

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What relationships will be examined? What is the population? The title and the problem statement question are often nearly identical. For example, in the good example above, the title of this research project would be something like this: "Library Circulation Use by University of Tennessee Juniors and Their Grade Point Average" MANAGEMENT QUESTION Applicability of advanced employee retention strategies for middle management level in small and medium scale software enterprises in Bangalore

1.5OBJECTIVES
Validity of Unique organizational structure strategy 1 To find out whether the unique organization structure increase retention 2. To what extent the unique organizational structure strategy can solve the problem of employee attrition. Validity of Variable benefit strategy 3. To find out whether the variable benefit strategy increases retention 4. To what extent variable benefit structure strategy can solve the problem of Employee attrition Validity of Internal advertisement strategy 5. To what extent an internal advertisement strategy can be implemented in the companies. RESEARCH QUESTIONS Validity of Unique organizational structure strategy To find out whether Organizational structure is related to employee preference for staying the company

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What is the percentage of employee attrition can be solved by implementing unique organizational strategy. Validity of Variable benefit strategy To find out whether employees belief on variable benefit is related to employee preference for staying the company What percentage of employee attrition can be solved by implementing Variable benefit strategy? Validity of Internal advertisement strategy What is the opinion of employees on the success of implementation of internal advertisement strategy in small and medium scale software industry in Bangalore? HYPOTHESIS a) Applicability of Unique organizational structure strategy Research question No1 To find out whether unique Organizational structure is related to employee preference for staying the company. In this research the main factor in the unique organizational structure is position titles. The hypothesis will test whether the position title and Employees preference for staying the company are associated or Independent. Variables in the chi square test Position title Employees who believe Position title is important Employees who believe Position title is not important

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Preference for staying the company Retention Attrition Indifference The first question in the questionnaire will decide whether the respondent will prefer position title or other benefits other than position titles while planning to quit the company. The combined scores of 3, 4, 5 in the questionnaire will show the employees preference for, retention, attrition or Indifference (neither retention nor attrition) H0a: The positional benefit is not associated with employee preference for staying the company. 2 2 (critical) H1a: The positional benefit is associated with employee preference for staying the company. 2> 2 (critical) b) Applicability of Variable benefit strategy Research question No. 3 To find out whether employees belief on variable benefit is related to employee preference for staying the company. The second question in the questionnaire will decide whether the respondent will prefer variable benefit structure. Variables in the chi square test Variable benefit structure Employees who believe variable benefit structure is important Employees who believe variable benefit structure is not important Preference for staying the company Retention Attrition Indifference

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H0b: The employees belief on periodic change in benefit structure is not associated with employee preference for staying the company. 2 2 (critical) H1b: The employees belief on periodic change in benefit structure is associated with employee preference for staying the company. 2> 2 (critical) c) Applicability of Internal advertisement strategy Research question No 5 What is the opinion of employees on the success of implementation of internal advertisement strategy in small and medium scale software industry in Bangalore? H0c: Combined percentage score is 50 and above (Internal advertisement strategy is accepted) 0, 0=50% H1c: Combined percentage score is below 50 (Internal advertisement strategy is rejected) <0, 0=50%

1.6Procedure methodology
DATA COLLECTION DESIGN The intended target population of the Channeling demonstration was the elderly with severe functional limitations who required long term care services for an extended period of time and who, in the absence of Channeling, were at high risk of being institutionalized. For this group of people, the goal of Channeling was to bring about more effective and efficient provision of community-based long term care services. The basic hypothesis to be tested was that the primary problems of the long term care system were lack of information, uncoordinated services, and reverse financial incentives--rather than the lack of direct services themselves. With respect to direct service use, the objective of Channeling, through case management, was to facilitate substitution of services provided in the community--both formal services and the informal care

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provided by family and friends--for institutional care, wherever community care was appropriate. This substitution was intended, in turn, to reduce costs and to improve the quality of life of its clients. To accomplish these ends, the Channeling demonstration tested two variants of a managed system of long term care in 10 communities around the country. The two variants, called the basic case management model and the financial control model, were each tested in five sites.1 A set of core functions was common to both models, with additional features (that differed by model) intended to enhance Channeling's ability to intervene in the existing long term care system. The questionnaire for research included a combination of the following kinds of question Close-ended Direct question Responses from middle level managers of Small and medium scale software companies for each question in the questionnaire will be collected. A single questionnaire will contain 8-9 questions. Primary data will be collected through questionnaire survey of lower and/or middle level managers (in all organizational divisions) from small and medium scale software enterprises in Bangalore. In this method questionnaire was prepared and given to the sample population to fill. METHOD OF ANALYSIS Having understood the fundamental laws of circuit theory (Ohms law and Kirchhhoffs laws), we are now prepared to apply to develop two powerful techniques for circuit analysis: nodal analysis, which is based on a systematic application of Kirchhoffs current law (KCL) and mesh analysis which based on a systematic application of Kirchhoffs voltage law (KVL). The two techniques are so important that this chapter should be regarded as the most important in the book. Students are therefore encouraged to pay careful attention.

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With the two techniques to be developed in this chapter we can analyze any linear circuit by obtaining a set of simultaneous equation that are then solved to obtain the required values of current or voltage. One method of solving simultaneous equations involves Cramers rule, which allow us to calculate circuit variables as a quotient of determinants. Finally, we apply the technique learned in this chapter to analyze transistor circuits. The data collected through questionnaire and the records available was examined in detail. It was further classified and tabulated with the help of Microsoft excel software. Statistical tools Chi-square test and Sign test are used for testing the hypothesis The non-parametric tests used for the testing the hypothesis is Chi-square test (m*n tables) and Sign test It is suitable for the test for independence of attributes. Chi-square test 2 = [(O-Ej)2 Ej] O = Observed number of frequencies categorized in the category E = Expected number of frequencies in the ith category under Ho One sample Sign Test Total number of Plus signs (+) Total Number of signs (+&-) p z. z= value In the normal distribution table for normal curve = p.q/n p=1/2, (probability of getting sample value less than mean)

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q=1/2, (probability of getting sample value higher than mean) n= Number of Signs SCOPE OF THE STUDY Within the limited range of the next few pages, this report attempts to present a snapshot of developments and/or important features in the general area of product and process development. The scope of this section is broad and attempts to address soft as well as hard issues involved in the development of composites. Therefore it will address issues such as design methodologies, rapid market development approaches, people issues, and education. The report attempts to address the features of the product development process through case studies from different areas related to composites. As brought forth in the previous chapter, the underlying premise is that the Japanese do not differentiate between basic manufacturing/processing science and product development. Rather they address the entire area from an applications perspective. The reader is cautioned that although composites have been in use in the United States for decades, this area remains underdeveloped and our advances are probably shadowed by the advances made in Japan. It must however be mentioned that approaches such as total quality management (TQM) and statistical process control (SPC) following Deming and Juran, although developed in the U.S., found greater acceptance initially in Japan, to the point where they are now used as a "matter-of-fact," and the different facets of "concurrent engineering" are deeply ingrained in the thought and activity processes. At the outset, however, the reader is cautioned against making widespread comparisons between Japanese methodologies and those used in the United States for the purposes of suggesting broad changes in approach, as many of the differences have their roots in the different socio-politico-cultural systems prevalent in the two countries. Through this study the researcher is trying to probe the applicability of three new HR strategies in Small and medium scale software enterprises. This will help the SMEs to retain the talent pool.

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LIMITATION OF THE STUDY The study only concentrates on urban industrial area in Bangalore. Employees in other urban and rural areas may have different behavior pattern in terms of job preferences. So the applicability of the research is confined to Bangalore city only. The findings and conclusions drawn out of the study will reflect only existing trends in the organization. RETENTION STRATEGIES In this study the researcher is particularly interested in three retention strategies and its applicability in the industry. This is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs are different, and his emotions, his problems are different. There are many employee retention strategies are available in the industry. HR professionals all over the world, working is Call-Center or Contact Center or BPO industry are breaking their heads to formulate Retention Strategies but nothing is working in their favor. The average attrition rate in this sector is still 35-40%. No perks, no rewardsjust nothing is working. Before proceeding further, lets see why people are leaving? Why there is high attrition rate. Why people are moving? When there are so many benefits associated with BPO industry. when there are so many privileges for the BPO employees than what makes them to change the company/industry?? Is it only MONEY that matters or anything else as well?? After taking exit-interviews and analyzing the trend I am able to list out following reasons for a BPO professional to change his/her job. No growth opportunity/lack of promotion For higher Salary

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For Higher education Misguidance by the company Policies and procedures are not conducive No personal life Physical strains Uneasy relationship with peers or managers Lets also see as what are the various benefitsthat have been extended to people working in this sector. Employee Benefits Provided By Majority Of the BPO Companies A part from the legal and mandatory benefits such as provident-fund and gratuity, below is a list of other benefitsBPO professionals are entitled to the following: Group Medi-claim Insurance Scheme: This insurance scheme is to provide adequate insurance coverage of employees for expenses related to hospitalization due to illness, disease or injury or pregnancy in case of female employees or spouse of male employees. All employees and their dependent family members are eligible. Dependent family members include spouse, non-earning parents and children above three months Personal Accident Insurance Scheme: This scheme is to provide adequate insurance coverage for Hospitalization expenses arising out of injuries sustained in an accident. This covers total / partial disablement / death due to accident and due to accidents. Subsidized Food and Transportation: The organizations provide transportation facility to all the employees from home till office at subsidized rates. The lunch provided is also subsidized. Company Leased Accommodation: Some of the companies provides shared accommodation for all the out station employees, in fact some of the BPO companies also undertakes to pay electricity/water bills as well as the Society charges for the shared accommodation. The purpose is to provide to the employees to lead a more comfortable work life balance.

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Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities include pool tables, chess tables and coffee bars. Companies also have well equipped gyms, personal trainers and showers at facilities. Corporate Credit Card: The main purpose of the corporate credit card is enable the timely and efficient payment of official expenses which the employees undertake for purposes such as travel related expenses like Hotel bills, Air tickets etc Cellular Phone / Laptop: Cellular phone and / or Laptop are provided to the employees on the basis of business need. The employee is responsible for the maintenance and safeguarding of the asset. Personal Health Care (Regular medical check-ups): Some of the BPO'S provides the facility for extensive health check-up. For employees with above 40 years of age, the medical check-up can be done once a year. Loans: Many BPO companies provide loan facility on three different occasions: Employees are provided with financial assistance in case of a medical emergency. Employees are also provided with financial assistance at the time of their wedding. And, The new recruits are provided with interest free loans to assist them in their initial settlement at the work location. Educational Benefits: Many BPO companies have this policy to develop the personality and knowledge level of their employees and hence reimburses the expenses incurred towards tuition fees, examination fees, and purchase of books subject, for pursuing MBA, and/or other management qualification at India's top most Business Schools. Performance based incentives: In many BPO companies they have plans for, performance based incentive scheme. The parameters for calculation are process performance i.e. speed, accuracy and productivity of each process. The Pay for Performance can be as much as 22% of the salary.

30

Flexi-time: The main objective of the flextime policy is to provide opportunity to employees to work with flexible work schedules and set out conditions for availing this provision. Flexible work schedules are initiated by employees and approved by management to meet business commitments while supporting employee personal life needs .The factors on which Flexi time is allowed to an employee include: Child or Parent care, Health situation, Maternity, Formal education program Flexible Salary Benefits: Its main objective is to provide flexibility to the employees to plan a tax-effective compensation structure by balancing the monthly net income, yearly benefits and income tax payable. It is applicable of all the employees of the organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical Reimbursement, and Special Allowance Regular Get together and other cultural programs: The companies organizes cultural program as and when possible but most of the times, once in a quarter, in which all the employees are given an opportunity to display their talents in dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct various sports programs such as Cricket, football, etc and regularly play matches with the teams of other organizations and colleges. Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based on their level in the organization. Employee Referral Scheme: In several companies employee referral scheme is implemented to encourage employees to refer friends and relatives for employment in the organization. Employee Stock Option Plan Now, the actual question, why people are leaving? What types of retention strategies are required? What is expected from HR Professional and how they can address this issue?

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Retention - A Big Challenge Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets. The fierce competition for qualified workers results from a number of workplace trends, including: A robust economy Shift in how people view their careers Changes in the unspoken "contract" between employer and employee Corporate cocooning A new generation of workers Changes in social mores Life balance Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following: Family orientation Quality of life issues Autonomy To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them. Retention Strategies This is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs

32

are different, and his emotions, his problems are different. So, dear HR-Professionalssit down and concentrate on your basics. I have classified retention strategies into two parts: Main and Ancillary. Main retention strategies This is not an exhaustive list, one can add or delete any of the below mentioned strategies. Secondly, the need of the hour is to have "right basics". Every individual is different, his needs are different, and his emotions, his problems are different. So, dear HR-Professionalssit down and concentrate on your basics. Communications - Getting Your People to Care Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. I'm not talking about a lot of New Age stroking designed to bring out the inner person or false praise that creates a misplaced sense of security. Instead, keep your people in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address. That means that you regularly keep your people up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern. If you've got "issues," talk about them before they start making you crazy. And if they don't get resolved, figure out whether the problem stems from a couple of individuals or from your system. The point here is that you want to treat these people as your partners, which they are. They may not have to worry about covering the payroll this week, but they do have worries of their own. Treat them with at least as much respect as they give you. As the store's owner or manager, you set the tone for the entire organization. If your salespeople, for instance, enjoy their encounters

33

with you, they are much more likely to greet customers with a positive attitude. They are also much more likely to enjoy their work when they don't have a fire-breathing dragon looking to singe their butts. Listen to your employees when they have ideas for improvement. Again, the benefits extend beyond just making people feel appreciated for their contributions. These are, after all, the people who do the work every day. They may have some ideas to improve productivity, and when they do come up with one, let everybody know where it came from. Post a "brag board" in your break room, or circulate an internal newsletter that touts these contributions. The pay-off is a contagious feeling of pride and, perhaps, some new efficiency that saves the company money. Set Clear Expectations How often do you appraise your employees/team-members? What are your expectations from your employees/team-members? What are the parameters to measure their performance? Have you communicated to them? What will be the consequences, if they fail? What will be the rewards, if they exceed the expected level? If you are not having any expectations, how you are going to appraise, your employees? Yes, you are going to be biased, because you don't have set standards. The role of a CEO, HR Manager is like a director of a movie; choreographer of a stage show, where there is a defined role for each character, each participant. Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what's expected of them. Management consultant, Kenneth Philips, states that when expectations are not clear, employees may not be in sync with their job's current demands and priorities. Setting expectations is not a once and done activity. Jobs change. Priorities

34

change. Resources change. Managers need to revise and set new expectations throughout the year. Setting expectations revolves around the following three areas: Key job responsibilities Performance factors and standards Goals Why is a setting expectation important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. If your employees know what is expected of them, it allows them to focus on results and to monitor themselves against the set standards. Environments in which expectations are not clear, or change from week to week, seldom create high-performing work groups. The three principles that should drive expectations are clarity, relevance, and simplicity. Clarity Expectations should focus on outcomes, not activities. In other words, you achieve clarity when you identify the expected results rather than the method for achieving them. Managers often make the mistake of attempting to direct the process that an employee will use rather than being clear about results. The advantage of identifying the outcome is that you, the manager, focus only on the goal; after all, the employee will develop the method for achieving the desired results. Defining the objective often requires some thought on the part of the manager because it is easy to fall into the "activities trap." While developing a strategic plan for a department or division is a worthy activity, it does not represent an outcome. In the activities trap, developing a plan is the goal, rather than increasing your market share.

35

Relevance The principle of relevance helps define the "why" of the assignment. If your employees have a full understanding of the project's importance, they can make adjustments as unanticipated factors crop up within the process. They probably also will be more committed to the result because they can see more easily how it fits into the big picture and how their efforts impact the company. This understanding typically is accomplished through dialogue between the manager and subordinate, which allows for a more thorough review of the situation and for feedback and discussion. This process builds good will with the employee and sets the stage for additional responsibilities. Simplicity Simplicity creates a sense of grounding for employees as they endeavor to carry out assignments. If managers identify the work in simple, straightforward terms, employees will find it much easier to follow through on managers' wishes. To accomplish this, a manager must identify the key message in a fashion that the employee can embrace. Proper Rewarding A research reports says that in today's scenario, 70% of your employees are less motivated today than they used to be. 80% of your employees could perform significantly better if they wanted to. 50% of your employees only put enough effort into their work to keep their job. As you might be aware of Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward

36

systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship. The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in people resourcing, learning and development or employee relations. Keep following parameters in mind, while designing a reward policy: Build a high degree of recognition value into every reward you offer. Recognition is the most cost-effective motivator there is. While the high cost of other rewards forces us to give them sparingly, recognition can be given any time, at very little cost. Some very ordinary items and events can be imbued with extraordinary motivational significance, far in excess of their monetary value. I am constantly amazed at how motivating a pizza or movie tickets can be if is given with sufficient appreciation. A sincere thank you can be delivered at any place and at any time, costs absolutely nothing and can be more motivationally powerful than a substantial monetary bonus. Organizations can provide innovative recognition in an infinite number of ways. For example, (A Hypothetical Incident) a small manufacturing company made its employees feel like heroes when they attained a major safety milestone - 100 days without a single accident. On the morning of day 100, it was announced that a catered lunch would be served the next day, if they made it to the 5:30 shift without an accident. At 5:15 anticipating was building. Managers took confetti and streamers to the balcony overlooking the shop floor. When the 5:30 whistle blew, there were congratulations all around, confetti flew through the air and banners were unfurled. It was a great moment for everyone - and one that was not soon forgotten. The

37

recognition value of this celebration was extremely high, while the monetary cost was relatively low. Highly motivating organizations even celebrate small successes. A health-conscious company distributes fruit bowls to employees' work areas when key personal milestones are attained. Another company uses a more fattening approach: fresh-baked chocolate-chip cookies to say thank you. Reduce entitlements and link as many rewards as possible to performance. Clearly the traditional "pay for loyalty" systems in most organizations need to be changed. Don't let attendance be your major criterion for rewards. Most employees resent those who only put in their time and yet receive the same reward as those who go the extra mile. Today's employees have higher expectations for what work can and should be, and they want to receive rewards that reflect their personal efforts and contributions. This is why so many companies are moving toward performance-based rewards, including performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea, companies are finding that these new reward systems do allow them to give substantial rewards to those who really deserve them. Smart organizations are looking for opportunities to reduce across-the-board entitlements, and thereby find more resources for discretionary performancebased rewards, without increasing the total cost of rewards. Troubleshoot your reward system to make sure that what it is rewarding is what you really want to happen. The Law of Rewards - "What you reward is what you get" - Is extremely powerful. No matter what your orientation materials or job description might say, it is the rewards your organization gives that communicate the real expectations. The most important question to ask in evaluating the reward system in your organization is, do the rewards we are giving elicit the performance

38

we want? Start with the results you want to achieve and then pinpoint the types of behaviors needed to achieve them. For example: If you believe teamwork is going to get you the results you want, make sure you reward teamwork, and not internal competition between departments. If you want quality, make sure that productivity isn't over emphasized. And, If you want long-term solutions, don't reward quick fixes Also, don't confuse employees with too many rewards. It is better to focus rewards on the critical few behaviors and results, rather than diluting them by rewarding the trivial many. Reward promptly. Rewards should be given as soon as possible after the performance has taken place. This is why the most successful gain-sharing programs pay employees monthly, rather than quarterly or annually as in the past. There is a well-accepted law of behavioral psychology, that if you want someone to repeat a behavior, you should positively recognize it immediately. From this law, smart supervisors and managers can learn a vital lesson: Look for any employee doing something right, right now, and recognizes it. A support to this, here is my favorite reward story: "When a senior manager in one organization was trying to figure out a way to recognize an employee who had just done a great job, he spontaneously picked up a banana (which his wife had packed in his lunch), and handed it to the astonished employee with hearty congratulations. Now, one of the highest honors in that company has been dubbed the "Golden Banana Award"." Give employees a choice of rewards. Rewards are as different as the people who receive them and it doesn't make sense to give rewards that recipients don't find rewarding. For example, some people prefer more pay, while others prefer more time off. A promotion might be more

39

rewarding to one person, while a job-sharing arrangement might be more rewarding for another. Some people are excited about sports events, others about movies. Some employees would love a dinner in a romantic restaurant, others a book by their favorite author. Food, fun, education, improved work environment, gifts, travel, family-oriented activities - the options are endless. How do you know what will be rewarding to employees? Ask them. Smart organizations are also letting employees choose their own rewards from reward menus and catalogs. Personalizing rewards shows that a company cares enough to discover what "interests" each employee, rather than just distributing generic items. It also reduces the following danger: In one organization I was visiting, an employee opened a big drawer in his desk and disdainfully showed me all the "worthless trinkets" he had collected over the years. Increase the longevity of your rewards. This can be done in a number of ways: One of the keys to reward longevity is symbolism. The more symbolic an item is of the accomplishment, the more likely it is to continue reminding the employee of why it was given. For instance, a T-shirt of coffee mug with a meaningful inscription will continue rewarding those who wear it, or use it, long after its initial receipt. There are many tokens of appreciation I still keep on or near my desk that remind me of the joy of past accomplishments, while the monetary rewards I have received are long spent and long forgotten. Another way to increase the longevity of rewards in your organization is by using some kind of point system. Rather than rewarding each individual behavior or accomplishment, points can be awarded, which employees can accumulate and eventually trade for items from a reward menu or gift catalog. This keeps the anticipation of rewards fresh for longer periods of time. It also addresses the need for reward individualization. One company that designs motivational systems offers an electronic debit-card system to help larger clients cope with the complexity of distributing, tracking and redeeming employees' points. Employees can use their points to purchase virtually anything they want, from sports equipment and clothing to automobiles and overseas vacations. They only caveat for such

40

programs is to make sure that the recognition value of the rewards isn't lost because of the impersonal nature of the technology. One company uses a game it Call Safety Bingo. All employees receive a weekly bingo card. When an employee is observed working safely, a number is presented (immediate recognition). When they get "bingo", they receive a safety jacket (along with appropriate verbal reinforcement). The rewards escalate for subsequent wins. This type of program keeps employees interested for long periods of time, even though there might be weeks or months between rewards, and makes routine work more fun overall. Interestingly, when researchers have investigated the motivational dynamics of these workplace games, they have found that the major motivator is the playing, not the prize. Be continually vigilant of de-motivators that may undermine your organization's best efforts to provide power rewards, and reduce them promptly. Most de-motivators can be dramatically reduced by soliciting employee involvement in identifying highest-priority de-motivators and by enlisting top-management commitment to support their reduction. It is probably self-evident that considerable sensitivity is needed in the administration of any reward system. One de-motivator that is probably endemic in any reward system modification (especially as an organization moves from entitlements to more performance-based rewards) is a sense that something is being taken away. Employees need to be educated about the reasons that this is being done, understand the ultimate benefits to them and the organization, and should probably have some input into the change process. To avoid the perception of unfairness, it is important, first and foremost, that the process for allocating rewards is viewed by employees as being impartial. This requires an objective

41

measurement system that few organizations have. Without such objective measurement, any reward system is probably destined to failure. Ancillary Retention Strategies The quality of the supervision an employee receives is critical to employee retention. People leave managers and supervisors more often than they leave companies or jobs. It is not enough that the supervisor is well liked or a nice person, starting with clear expectations of the employee, the supervisor has a critical role to play in retention. Anything the supervisor does to make an employee feel unvalued will contribute to turnover. Frequent employee complaints center on these areas. Lack of clarity about expectations, Lack of clarity about earning potential, Lack of feedback about performance, Failure to hold scheduled meetings, and Failure to provide a framework within which the employee perceives he can succeed. The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does your organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave. Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why

42

he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search. The perception of fairness and equitable treatment is important in employee retention. In one company, a new sales rep was given the most potentially successful, commission-producing accounts. Current staff viewed these decisions as taking food off their tables. You can bet a number of them are looking for their next opportunity. In another instance, a staff person, just a year or two out of college, was given 20,000 in raises over a six month time period. Information of this type never stays secret in companies so you know, beyond any shadow of a doubt; the morale of several other employees will be affected. For example, you have a staff person who views her role as important and she brings ten years of experience, an M.B.A. and a great contribution record to the table. When she finds she is making less money than this employee, she is likely to look for a new job. Minimally, her morale and motivation will take a big hit. Did the staff person deserve the raises? Yes. But, recognize that there will be impact on others. Your best employees, those employees you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will stagnate. A career-oriented, valued employee must experience growth opportunities within your organization. A commonplace complaint or lament I hear during an exit interview is that the employee never felt senior managers knew he existed. By senior managers I refer to the president of a small company or a department or division head in a larger company. Take time to meet with new employees to learn about their talents, abilities and skills. Meet with each employee periodically. You'll have more useful information and keep your fingers on the pulse of your organization. It's a critical tool to help employees feel welcomed, acknowledged and loyal.

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No matter what the circumstances are but never, never, ever threaten an employee's job or income. Even if you know layoffs loom if you fail to meet production or sales goals, it is a mistake to foreshadow this information with employees. It makes them nervous; no matter how you phrase the information; no matter how you explain the information, even if you're absolutely correct, your best staff members will update their resumes. I'm not advocating keeping solid information away from people; however, think before you say anything that makes people feel they need to search for another job. I have classified retention strategies according to the solution offered by the strategies into three: Unique organizational structure strategy Variable benefit strategy Internal advertisement strategy Unique organizational structure strategy Creating a company-specific organization structure and position title is the crux of this theory. This will reduce the employees tendency to compare his position title and benefits with that of same in other companies. Rather than force the employee to confine his talents to structured jobs, set job titles according to the knowledge, skill and ability of the employee. If an organization possess a unique structure with position titles and its responsibilities will keep the employee concentrated in the same company rather than choosing the job in other companies. Following important factors must be present in the Unique organizational structure. a. Set Clear Expectations When people enter in a company for the first time as an employee, he/she may have many expectation regarding the salary, work environment etc. the primary need for the employee is to yearn a decent salary to live, when this objective is fulfilled the employee will look for social status such as attractive position titles and benefits structure which satisfy the egoistic needs of human being. So the company must manage this expectation by understanding the employees perception.

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What is the employees attitude to other organization and its benefit structure for the same position? What are the employees expectations from employers/team-members? What are the parameters to measure their performance? A good communication channel present in the organization. What will be the rewards, if the employees exceed the expected level? If the employees are not having any expectations, how an employer is going to appraise, the employees? This must be based on some standard. The employee must have the feeling that his role is important for the company. Also his position title must be socially acceptable. It should fulfill the egoistic needs of the employee. Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what's expected of them. When expectations are not clear, employees may not be in sync with their job's current demands and priorities. Setting expectations is not a once and done activity. Jobs change. Priorities change. Resources change. Managers need to revise and set new expectations throughout the year. Setting expectations revolves around the following three areas: Key job responsibilities Performance factors and standards Goals Why is a setting expectation important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. If your employees know what is expected of them, it allows them to focus on results and to monitor themselves against the set standards. Environments in which expectations are not clear, or change from week to week, seldom create high-performing work groups. The three principles that should drive expectations are clarity, relevance, and simplicity.

45

b. Clarity. Expectations should focus on outcomes, not activities. In other words, employee achieves clarity when the employer identifies the expected results rather than the method for achieving them. Managers often make the mistake of attempting to direct the process that an employee will use rather than being clear about results.. Defining the objective often requires some thought on the part of the manager because it is easy to fall into the "activities trap." While developing a strategic plan for a department or division is a worthy activity, it does not represent an outcome. In the activities trap, developing a plan is the goal, rather than increasing your market share. c. Relevance. The principle of relevance helps define the "why" of the assignment. If your employees have a full understanding of the project's importance, they can make adjustments as unanticipated factors crop up within the process. They probably also will be more committed to the result because they can see more easily how it fits into the big picture and how their efforts impact the company. This understanding typically is accomplished through dialogue between the manager and subordinate, which allows for a more thorough review of the situation and for feedback and discussion. This process builds good will with the employee and sets the stage for additional responsibilities. d. Simplicity. Simplicity creates a sense of grounding for employees as they endeavor to carry out assignments. If managers identify the work in simple, straightforward terms, employees will find it much easier to follow through on managers' wishes. To accomplish this, a manager must identify the key message in a fashion that the employee can embrace. e. Talent and skill utilization Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need

46

to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search. In this case the manager can easily change the position title of the employee and include the relevant job description in the position title. f. Fairness and equitable treatment The perception of fairness and equitable treatment is important in employee retention. In one company, a new sales rep was given the most potentially successful, commission-producing accounts. Current staff viewed these decisions as taking food off their tables. The employer can bet a number of them are looking for their next opportunity. In another instance, a staff person, just a year or two out of college, was given 20,000 in raises over a six month time period. Information of this type never stays secret in companies so the employer must know, beyond any shadow of a doubt; the morale of several other employees will be affected. g. Career growth The best employees, whom you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will stagnate. A career-oriented, valued employee must experience growth opportunities within your organization. Variable benefit strategy Periodical change in the benefit structure leads to increased awareness and satisfaction with the benefits. One of the purposes of benefit structure is to motivating the employee. Unfortunately continues enjoyment of the benefits leads to reduced satisfaction and motivation. This can be

47

solved by periodical change in benefit structure, i.e. periodically introduce new benefits and remove the old benefits. Following are the important factors present in the variable benefit structure. a. Proper Rewarding Proper rewarding is important for the employee to be motivated during the job. A research reports says that in today's scenario, 70% of the employees are less motivated today than they used to be. 80% of the employees could perform significantly better if they wanted to. 50% of the employees only put enough effort into their work to keep their job. Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship. b. Attracting the employees The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in learning and development or employee relations. Keep following parameters in mind, while designing a reward policy: c. Recognition of the work Recognition is the most cost-effective motivator. While the high cost of other rewards forces us to give them sparingly, recognition can be given any time, at very little cost. Some very ordinary items and events can be imbued with extraordinary motivational significance, far in excess of their monetary value, motivation of a pizza or movie tickets can be high if it is given with sufficient appreciation. A sincere thank you can be delivered at any place

48

and at any time, costs absolutely nothing and can be more motivationally powerful than a substantial monetary bonus. Organizations can provide innovative recognition in an infinite number of ways. For example, (A Hypothetical Incident) a small manufacturing company made its employees feel like heroes when they attained a major safety milestone - 100 days without a single accident. On the morning of day 100, it was announced that a catered lunch would be served the next day, if they made it to the 5:30 shift without an accident. At 5:15 anticipating was building. Managers took confetti and streamers to the balcony overlooking the shop floor. When the 5:30 whistle blew, there were congratulations all around, confetti flew through the air and banners were unfurled. It was a great moment for everyone - and one that was not soon forgotten. The recognition value of this celebration was extremely high, while the monetary cost was relatively low. Highly motivating organizations even celebrate small successes. A health-conscious company distributes fruit bowls to employees' work areas when key personal milestones are attained. Another company uses a more fattening approach: fresh-baked chocolate-chip cookies to say thank you. Clearly the traditional "pay for loyalty" systems in most organizations need to be changed. Don't let attendance be your major criterion for rewards. Most employees resent those who only put in their time and yet receive the same reward as those who go the extra mile. Today's employees have higher expectations for what work can and should be, and they want to receive rewards that reflect their personal efforts and contributions. This is why so many companies are moving toward performance-based rewards, including performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea, companies are finding that these new reward systems do allow them to give substantial rewards to those who really deserve them. Smart organizations are looking for opportunities to reduce across-the-board entitlements, and thereby find more resources for discretionary performancebased rewards, without increasing the total cost of rewards.

49

The Law of Rewards - "What you reward is what you get" - Is extremely powerful. No matter what your orientation materials or job description might say, it is the rewards your organization gives that communicate the real expectations. The most important question to ask in evaluating the reward system in your organization is, do the rewards we are giving elicit the performance we want? Start with the results you want to achieve and then pinpoint the types of behaviors needed to achieve them. For example: Also, don't confuse employees with too many rewards. It is better to focus rewards on the critical few behaviors and results, rather than diluting them by rewarding the trivial many. d. Timely action Rewards should be given as soon as possible after the performance has taken place. This is why the most successful gain-sharing programs pay employees monthly, rather than quarterly or annually as in the past. There is a well-accepted law of behavioral psychology, that if you want someone to repeat a behavior, you should positively recognize it immediately. From this law, smart supervisors and managers can learn a vital lesson: Look for any employee doing something right, right now, and recognizes it. e. Type of reward Rewards are as different as the people who receive them and it doesn't make sense to give rewards that recipients don't find rewarding. For example, some people prefer more pay, while others prefer more time off. A promotion might be more rewarding to one person, while a jobsharing arrangement might be more rewarding for another. Some people are excited about sports events, others about movies. Some employees would love a dinner in a romantic restaurant, others a book by their favorite author. Food, fun, education, improved work environment, gifts, travel, family-oriented activities - the options are endless. How do you know what will be rewarding to employees? Ask them. Smart organizations are also letting employees choose their own rewards from reward menus and catalogs. Personalizing rewards shows that a company cares enough to discover what "interests" each employee, rather

50

than just distributing generic items. It also reduces the following danger: In one organization I was visiting, an employee opened a big drawer in his desk and disdainfully showed me all the "worthless trinkets" he had collected over the years. f. Longevity of the reward Increase the longevity of rewards can be done in a number of ways: One of the keys to reward longevity is symbolism. The more symbolic an item is of the accomplishment, the more likely it is to continue reminding the employee of why it was given. For instance, a T-shirt of coffee mug with a meaningful inscription will continue rewarding those who wear it, or use it, long after its initial receipt. There are many tokens of appreciation I still keep on or near my desk that remind me of the joy of past accomplishments, while the monetary rewards I have received are long spent and long forgotten Another way to increase the longevity of rewards in your organization is by using some kind of point system. Rather than rewarding each individual behavior or accomplishment, points can be awarded, which employees can accumulate and eventually trade for items from a reward menu or gift catalog. This keeps the anticipation of rewards fresh for longer periods of time. It also addresses the need for reward individualization. One company that designs motivational systems offers an electronic debit-card system to help larger clients cope with the complexity of distributing, tracking and redeeming employees' points. Employees can use their points to purchase virtually anything they want, from sports equipment and clothing to automobiles and overseas vacations. They only caveat for such programs is to make sure that the recognition value of the rewards isn't lost because of the impersonal nature of the technology.

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g. Decrease the de-motivators Interestingly, when researchers have investigated the motivational dynamics of these workplace games, they have found that the major motivator is the playing, not the prize. Most de-motivators can be dramatically reduced by soliciting employee involvement in identifying highest-priority de-motivators and by enlisting top-management commitment to support their reduction. It is probably self-evident that considerable sensitivity is needed in the administration of any reward system. One de-motivator that is probably endemic in any reward system modification (especially as an organization moves from entitlements to more performance-based rewards) is a sense that something is being taken away. Employees need to be educated about the reasons that this is being done, understand the ultimate benefits to them and the organization, and should probably have some input into the change process. h. Avoid perception errors To avoid the perception of unfairness, it is important, first and foremost, that the process for allocating rewards is viewed by employees as being impartial. This requires an objective measurement system that few organizations have. Without such objective measurement, any reward system is probably destined to failure. Internal advertisement strategy It communicates the advantages and benefits an employee received from the company. The theory holds that an organization must extend its marketing strategies to inside the organization. Competition is not just confined to marketing division of the organization but it directly affects the Human Resource division as well. The organizations is competing each other to acquire the scarce talent pool. Internal advertisement simply meant to tell the employee that the organization which they are working is good and a company favorable comparison should be given to employees to solve the inequity they perceive. The major difference with internal advertisement is that the communication channel is different from that of marketing channels. Here the communication

52

Communications Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. Keep the employees in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address. Regularly keep the employees up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern. Listen to the employees when they have ideas for improvement. Again, the benefits extend beyond just making people feel appreciated for their contributions. These are, after all, the people who do the work every day. They may have some ideas to improve productivity, and when the employees do come up with one, let everybody know where it came from. Post a "brag board" in your break room, or circulate an internal newsletter that touts these contributions. The pay-off is a contagious feeling of pride and, perhaps, some new efficiency that saves the company money. Speak freely The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does the organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave.

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Chapter 2 ANALYSIS

54

2.1 ANALYSIS OF THE SITUATION

DATA ANALYSIS AND INTERPRETATION Data collection is the systematic recording of information; data analysis involves working to uncover patterns and trends in data sets; data interpretation involves explaining those patterns and trends. Scientists interpret data based on their background knowledge and experience, thus different scientists can interpret the same data in different ways. By publishing their data and the techniques they used to analyze and interpret that data, scientists give the community the opportunity to both review the data and use it in future research. When estimates are from a sample, caution is warranted when drawing conclusions about the size of one population estimate in comparison to another, or about whether a time series of population estimates is increasing, decreasing, or staying about the same. Although one estimate may be larger than another, a statistical test may find that there is no measurable difference between the two estimates because of the standard error associated with one or both of the estimates. Whether differences in means or percentages are statistically significant can be determined using the standard errors of the estimates. Readers who wish to compare two sample estimates to see if there is a statistical difference will need to estimate the precision of the difference between the two sample estimates. This would be necessary if one wanted to compare, for example, the mean proficiency scores between groups assessed in the National Assessment of Educational Progress (NAEP). To estimate the precision of the difference between two sample estimates, one must find the standard error of the difference between the two sample estimates (EA and EB). Expressed mathematically, the difference between the two is EA-EB. The standard error of the difference (seA-B) can be calculated by taking the square root of the sum of the two standard errors associated with each of

55

the two sample estimates (seA and seB) after each has been squared. This relationship can be expressed as seA-BseA2 + seB2 After finding the standard error of the difference, one divides the difference between the two sample estimates by this standard error to determine the "t value," or "t statistic," of the difference between the two estimates. This t statistic measures the precision of the difference between two independent sample estimates. The formula for calculating this ratio is expressed mathematically as t = EA-EB seA-B Assuming a normal distribution, the next step is to compare this t statistic to 1.96, the statistically determined value for making a decision at a 95 percent confidence level as to whether there is a statistical difference between two estimates. A 95 percent confidence level means that if a test is conducted 100 times, only 5 times out of 100 would it be expected that the difference between the two sample estimates (EA and EB) is due to chance alone. Therefore, if the t statistic is greater than 1.96, then there is evidence that a difference exists between the two populations. If the t statistic is equal to or less than 1.96, then there is less certainty that the observed difference is a real difference and is not simply due to sampling error. This level of certitude, or significance, is commonly referred to as the ".05 level of (statistical) significance." As an example of a comparison between two sample estimates to determine whether there is a statistically significant difference between the two, consider the data on the performance of 12thgrade students in the 1992 and 2005 NAEP reading assessments (see table A-12-1). The average scale score in 1992 was 292 and the average scale score in 2005 was 286. Is the difference of 6 scale points between these two different samples statistically significant? The standard errors of these estimates are 0.6 and 0.6, respectively (see table S-12-1). Using the formula above, the

56

standard error of the difference is 0.85. The t statistic of the estimated difference of 6 scale points to the standard error of the difference is 7.07. This value is greater than 1.96the critical value of the t distribution for a .05 level of significance with a large sample. Thus, one can conclude that there was a statistically significant difference in the performance of 12th-graders between 1992 and 2005 in reading and that the reading score for 12th-graders in 2005 was lower than the reading score for 12th-graders in 1992. For all indicators in The Condition of Education that report estimates based on samples, differences between estimates (including increases or decreases) are stated only when they are statistically significant. To determine whether differences reported are statistically significant, two-tailed t tests at the .05 level are typically used. The t test formula for determining statistical significance is adjusted when the samples being compared are dependent. The t test formula is not adjusted when performing multiple comparisons. When the difference between estimates is not statistically significant, tests of equivalence are often used. An equivalence test determines the probability (generally at the .15 level) that the estimates are statistically equivalent, that is, within the margin of error that the two estimates are not substantively different. When the difference is found to be equivalent, language such as "x" and "y" "were similar" or "about the same" has been used; otherwise, the data will be described as having "no measurable difference." When the variables to be tested are postulated to form a trend, the relationship may be tested using linear regression, logistic regression, or ANOVA trend analysis instead of a series of t tests. These other methods of analysis test for specific relationships (e.g., linear, quadratic, or cubic) among variables. A number of considerations influence the ultimate selection of data years featured in The Condition of Education. To make analyses as timely as possible, the latest year of data is shown if it is available during report production. The choice of comparison years is often also based on the need to show the earliest available survey year, as in the case of the NAEP and the international assessment surveys. In the case of surveys with long time frames, such as for enrollment, the decade's beginning year (e.g., 1980 or 1990) often starts the trend line. In the figures and tables of the indicators, intervening years are selected in increments in order to show

57

the general trend. The narrative for the indicators typically compares the most current year's data with those from the initial year and then with those from a more recent period. Where applicable, the narrative may also note years in which the data begin to diverge from previous trends. SAMPLE QUESTIONS AND ITS VALUATION If you look for a new Job, (in a new company) what will be your preference? (1) Position title is important (0) Position title is not important What is your opinion about replacing the old benefits with new benefits on a monthly basis in your organization? (1) Improve the job satisfaction (0) No improvement in the job satisfaction Are you satisfied with the current job (0) (1) (2) (3) (4) (0) (1) (2) (3) 1 Not at all Very less Moderately satisfied Farley satisfied Very highly satisfied Not at all Very less Moderately Farley

To what extend do you feel that quitting the present job will give you a satisfied job .

58

(4)

Very highly

To what extend you are emotionally attached to your company. (0) (1) (2) (3) (4) Not at all Very less Moderate Farley enough Very high

The total score 0f question Numbers 3, 4, 5 will be calculated and the region will be specified by the researcher on the scale given below. Result 0.4..8.12 Retention Reference table Indifference Attrition

Common internal communication channels in the organization Channels 1. E-mail/printed circulars 2. Employee meetings and celebration of special occasions of the 3. employee 4. others

Is there any internal communication channel in your organization? (0) (1) (2) (3) No channel Any one channel Any two channels Any three channels

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(4) (0) (1) (2) (3) (4) (0) (1) (2) (3) (4)

Four channels and above Nil Very less Moderate High Very high frequency No accessibility Very less Moderate High Very high

What is the frequency of the internal communication in your organization?

Do you have accessibility to the communication channels present in your organization?

What is your opinion about creating awareness on company values and Employee benefits to its own employees to retain them? (0) (1) (2) (3) (4) Result Total Not useful Very less Moderate Good Very high

2.2 Existing of the system

SAMPLING METHOD AND SAMPLE SIZE Sampling method is convenient sampling; the study was designed to be descriptive in nature..

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Sample size Calculating the sample based on critical investigative questions The formula for determining sample size is: n = S/ x x = Standard error of the mean or the standard deviation of all possible x s At 95% (0.5) confidence level z=1.96 x 2 =(0.5/1.96)2 = 0.065 S n = Standard deviation of the pilot study sample. = Sample size required

The required number of samples can be calculated by conducting a sample questionnaire survey. Here n is the minimum required sample size for each question in the questionnaire. Q3 SD xi 0 1 2 3 4 fi 4 5 6 7 8 30 d=x-2 -2 -1 0 1 2 fd -8 -5 0 7 16 10 S x = 0.065 Q4 SD xi 0 1 2 3 4 n= S/ x fd2 16 5 0 7 32 60 1.88888 9 29.0598 3

fi 2 4 10 8 6 30

d=x-2 -2 -1 0 1 2

fd -4 -4 0 8 12 12 S

fd2 8 4 0 8 24 44 1.30666 7 20.1025 6

x = 0.065

n= S/ x

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Q5 SD xi 0 1 2 3 4

fi 2 6 2 9 11 30

d=x-2 -2 -1 0 1 2

fd -4 -6 0 9 22 21 S

fd2 8 6 0 9 44 67 1.74333 3 26.8205 1

x = 0.065

n= S/ x

Q6 SD xi 0 1 2 3 4

fi 0 3 12 8 7 30

d=x-2 -2 -1 0 1 2

fd 0 -3 0 8 14 19 S

fd2 0 3 0 8 28 39 0.89888 9 13.8290 6

x = 0.065

n= S/ x

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Q7 SD xi 0 1 2 3 4

fi 0 3 10 10 7 30

d=x-2 -2 -1 0 1 2

fd 0 -3 0 10 14 21 S

fd2 0 3 0 10 28 41 0.87666 7 13.4871 8

x = 0.065

n= S/ x

Q8 SD xi 0 1 2 3 4

fi 1 9 7 10 3 30

d=x-2 -2 -1 0 1 2

fd -2 -9 0 10 6 5 S

fd2 4 9 0 10 12 35 1.13888 9 17.5213 7

x = 0.065

n= S/ x

Q9 SD xi 0 1 2 3

fi 5 6 3 3

d=x-2 -2 -1 0 1

fd -10 -6 0 3

fd2 20 6 0 3

63

13 30

26 13 S

52 81 2.51222 2 38.6495 7

x = 0.065

n= S/ x

From the analysis table it is clear that maximum sample size is required for Question number 9 (38.64, i.e. 39 samples) To get an accurate sample and to increase the number of frequencies in the Chi 2 table the sample size is 50. Sample analysis of applicability of unique organizational structure OBJECTIVE NO: 1To find out whether the unique organization structure increase retention Step 1 Finding employees position in the row of the Chi-square test table The first question in the questionnaire will decide whether the employee belongs to employees who believe Improvement in Positional benefit gives Job satisfaction (1 st row) or who believe increase in other benefits give job satisfaction ( 2nd row) employees

Step 2 Finding employees position in the column of the Chi-square test table Combined score of Question numbers 3, 4, 5, in the questioner will decide the employees position in the column (I.e. Satisfied (1 st column), Indifferent (2nd column), dissatisfied (3rd column). If the total response value of question number 3, 4, 5, is equal &/or larger than 0 and less than 4 (0 Value >4) indicate a dissatisfied employee and if the value is between 4 and 8 (4

64

Value >8) indicates an indifferent employee, but if the value is between 8 and 12 (8 Value >12) indicates a satisfied employee. Example: Table No 1 Sample Chi-squire test table Employee choice Retention of staying the C1 C2 C3 C4 company Preference for benefits (when looking for a new job) Improvement Position (Q1) R1 Not Improvement 2 in position (Q1) R2 Total R3 Assumptions There must be employees who believe positional benefits give job satisfaction (1st row) There must be dissatisfied people among employees who believe positional benefits give job satisfaction (1st row, 3rd column, exhibit No 4.1) Step3 Hypothesis testing 7 13 30 (Number of 0s) 50 3 10 (Number of 1s) See Exhibit No.7.2. Page No:76 15 in 5 (frequency) 10 20 35 Indifferent Attrition) Total

65

Test statistics Chi2 = [(O-Ej)2 Ej] O = Observed number of cases categorized in the category E (Expected number of cases in the ith category under Ho)

2.3 Need for the change in system

Possible Changes Unique organizational structure strategy will solve the dissatisfaction in the shaded area (exhibit No1.1). This in turn will improve the retention of the employee in the organization. Unique organization structure increase retention if: The chi-square table must meet all the Minimum Conditions for applying the theory in Industry The number of employees in the 1st row, 4th column must be higher than that of 2 nd row, 4th column. Number of dissatisfied in the 1st row must be higher than satisfied and indifferent employees in the same row. The hypothesis test must reject the H0: i.e. it should prove that preference for positional benefits and employee choice of staying the company are dependent. OBJECTIVE 2 To what extent the unique organizational structure can contribute to the employee retention. The exhibit No1.1 also shows to what extent the organizational structure contribute to the employee inequity. The unique organizational structure strategy can solve employee attrition in the shaded area. Larger shaded area in exhibit No1.1 shows greater percentage of applicability of the strategy. INTERPRETATIONS

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Number of employees in the 1st row, 3rd column (dissatisfied employees) as a percentage of 3rd row, 4th column (sample size) in exhibit No 4.1 will give exact size of applicability of the strategy. Graphical representation of the findings Example; Chart No 2

The number of solvable attrition by unique org. structure in SMSI as a percentage of total employees in SMSI

40% 60%

Attrition among employees who prefer positional improvement Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

Interpretation of the graph 40% of the employees in the small and medium scale software industry are dissatisfied with their current position and benefits, when they compare their position and benefits with that of other organizations.

Sample analysis of applicability of variable benefit strategy OBJECTIVE To find out whether the variable benefit strategy increases retention

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Step 1 Finding employees position in the row of the Chi-square test table The second question in the questionnaire will decide whether the respondent belongs to employees who believe Periodic change in existing type of benefits will Improve the job satisfaction (1st row ,exhibit No 4.3) or Improve the job satisfaction ( 2nd row) Step 2 Finding employees position in the column of the Chi-square test table Combined score of question numbers 3, 4, 5, in the questioner will decide the respondents position in the column (I.e. Satisfied (1 st column), Indifferent (2nd column), dissatisfied (3rd column). If the total response value of question number 3, 4, 5, is equal &/or larger than 0 and less than 4 (0 Value >4) indicate a dissatisfied employee and if the value is between 4 and 8 (4 Value >8) indicates an indifferent employee, but if the value is between 8 and 12 (8 Value >12) indicates a satisfied employee. employees who believe other benefit structures will

Sample Chi-square test table for Variable benefit structure strategy Table No 3

68

Employee of staying the company employees

choice Retention

Indifferent

Attrition

Total

belief on periodic change in existing type of benefits (Improve the job 4 satisfaction) (Q2) 6 10 19 (Number of 1s) See No.7.2. (No Improvement 3 in (Q2) Total Assumptions There must be employees who believe periodic change in existing type of benefits will Improve the job satisfaction (1st row exhibit No 4.3) There must be dissatisfied people among employees who believe Periodic change in existing type of benefits will Improve the job satisfaction (1st row, 3rd column, exhibit No 4.3) the job (Number of 0s) 7 13 30 50 satisfaction 7 20 No:76 31 Exhibit Page

Step3 Hypothesis testing

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Test statistics Chi2 = [(O-Ej)2 Ej] O = Observed frequencies categorized in the category E (Expected frequencies in the ith category under Ho) INTERPRETATIONS Variable benefit structure strategy will solve the dissatisfaction in the shaded area (exhibit No1.2). This in turn will improve the retention of the employee in the organization. Variable benefit structure will increase retention if: The chi-square table must meet all the Minimum Conditions for applying the theory in Industry The number of employees in the 1st row, 4th column must be higher than that of 2 nd row, 4th column (exhibit No 4.3). Number of dissatisfied in the 1st row (exhibit No 4.3). must be higher than satisfied and indifferent employees in the same row. The hypothesis test must reject the H0: i.e. it should prove that employee choice of staying the company and employees belief on periodic change in existing type benefits are dependent OBJECTIVE To what extent variable benefit structure strategy can solve the problem of Employee attrition. The exhibit No1.2 also shows to what extent the benefit structure contribute to the employee inequity. The variable benefit structure strategy can solve employee attrition in the shaded area. Larger shaded area (exhibit No2) shows greater percentage of applicability of the strategy.

INTERPRETATIONS

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Number of employees in the 1st row, 3rd column (dissatisfied employees) as a percentage of 3rd row, 4th column (sample size) in exhibit No 4.3 will give exact size of applicability of the strategy. Graphical representation of the findings Chart No 4.4 The number of solvable attrition by variable benefit structure In SMSI as a percentage of total employees in SMSI
17%

83% Attrition among employees who prefer variable benefit structure Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

Interpretation of the graph 17% of the employees in the small and medium scale software industry are dissatisfied with their current benefit structure. Sample analysis of applicability of internal advertisement strategy OBJECTIVE To what extent an internal advertisement strategy can be implemented in the companies. Average of the total values of question numbers 6,7,8,9 from all respondents will give the industry opinion of applicability of internal advertisement strategy.

Step NO1

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Find the total value of question number 6, 7, 8, 9 of each respondent Example Questionnaire analysis for Internal advertisement strategy

Table No 5 Question Values Is there any internal communication channel in your 2 organization? What is the frequency of the internal communication 3

channels Do you have access to the communication channels present 4 in your organization? What is your opinion about creating awareness on company 1 values and Employee benefits to its own employees to retain them? Total 10

Step NO:2 Hypothesis testing H0c: Combined percentage score is equal or above 50% (Internal advertisement strategy is accepted) 0, 0=8 (50%) H1c: Combined percentage score is below 50% (Internal advertisement strategy is rejected) <0, 0=8 (50%)

One sample Sign Test The one sample sign test is a very simple non parametric test applicable when we sample a continuous symmetrical population in which case the probability of getting a sample value less

72

than mean in .5 and the probability of getting sample value higher than mean is also .5. To test the null hypothesis = 0 against an appropriate alternative on the basis of a random size n we replace the value of each and every item of the sample with plus sign if it is greater than 0 and with a minus sign if it is less than 0. TEST STATISTICS Hypothesis will be acceptable if Total number of Plus signs (+) Total Number of signs (+&-) = p.q/n p=1/2, (probability of getting sample value less than mean) q=1/2, (probability of getting sample value higher than mean) n= Number of Signs Step2 Horizontal analysis of each of the questions 6, 7, 8, 9 This will give more insight in to the problems or barriers to implement internal advertisement strategy. > p z. z= value In the normal distribution table for normal curve

Example Horizontal analysis of each of the questions for internal advertisement Table No 6

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Questionnaire No

Is

there

any What internal

is

the Do

you to

have What the opinion

is

your about on

internal communication organization?

frequency of the access

communication in

creating

channel in your communication channels

channels present awareness organization? and

your company values Employee benefits to its own employees

C1 1 2 3 Total 2

C2 3 C3 4 120

to retain them? C4 1

INTERPRETATIONS Accepting the H0c (hypothesis) indicate that the small and medium scale software industry can implement internal advertisement strategy. Horizontal analysis of the questions in the questionnaire will give the exact percentage of availability of each of the factors such as Presence, awareness, accessibility of communication channel and the opinion of the employees on the effective ness of internal advertisement strategy.

Opinion about implimentation of Internal advertisement strategy

Sample Graphical representation Example: Chart No 7

Not useful 10% very high 35% very less 20%

Good 5%

Moderate 74 30%

Interpretation of the graph The opinion of 35 %( vey high ) of the employees in the small and medium scale software industry is the implementation of internal advertisement strategy will be useful.

2.4 Proposed system

ANALYSIS OF ACTUAL DATA Validity of Unique organizational structure strategy OBJECTIVE No 1: To find out whether the unique organization structure increases retention. Research question No 1 To find out whether positional benefit is related to employee preference for staying the company

Hypothesis testing Step 1 H0a: The positional benefit is not associated with employee preference for staying the company. 2 2 (critical)

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H1a: The positional benefit is associated with employee preference for staying the company. 2 > 2 (critical) Step 2 The level of significance is 5% Step 3 Test statistics Table No 8 Chi-squire test table for unique organizational structure Employee choice of staying the company Preference for benefits (when looking for a new job) Improvement Position Not Improvement 9 in Position Total 13 13 24 50 4 5 18 in 4 9 19 32 Retention Indifferent Attrition Total

Chi2 = [(Oij-Eij)2 Eij] O = Observed number of cases categorized in the category E (Expected number of cases in the ith category under Ho) With Yates correction factor

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The correction factor is being used because some of the values in the chi squire table are below 5 Chi2 = [(|Oij-Eij|-.5)2 Eij] Table No 9 Calculation table for chi square test (Unique organizational structure) Observed Oij 4 9 19 9 4 5 Expected |Oij|Oij-Eij| 4.32 0.68 3.64 4.32 0.68 3.64 Eij|-.5 3.82 0.18 3.14 3.82 0.18 3.14 [|OijEij|-.5] 2 14.5924 0.0324 9.8596 14.5924 0.0324 9.8596 Total [|OijEij|-.5]2 /Eij 1.753894 0.003894 0.641901 3.118034 0.006923 1.141157 6.665804 Eij 8.32 8.32 15.36 4.68 4.68 8.64 Eij) -4.32 0.68 3.64 4.32 -0.68 -3.64

frequency frequency (Oij-

Step 4 Degrees of freedom = (r-1). (c-1), here r= number of rows and c = number of columns (2-1). (3-1) = 2 Critical value = Chi2 (Probability under Ho, Degrees of freedom) Chi2 (.05,2) = 5.99 Step 5 Since Chi2 value calculated is higher than the critical value, the hypothesis has been rejected. And H1 is being accepted.

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Chi2 (calculated) > Chi2 (Critical value) 6.665804 > 5.99 Conclusion From the above test we can conclude that the unique organizational structure is associated to retention of the employee. OBJECTIVE 2 To what extent the unique organizational structure can contribute to the employee retention. Research question No.2 What is the percentage of employee attrition can be solved by implementing unique organizational strategy. ANSWER From the Chi2 table it is clear that total observed attrition in the Small and medium scale industry is 24 and in that 24 respondents 19 respondents are employees who prefer positional benefit. So 19 as a percentage of total sample population (50) is 38%. Since the Unique organization structure strategy can be applied to 38% of the population, this will increase the retention of the employees in small and medium scale software industries.

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Chapter 3 Present conditions with special reference to the organization

3.1 Validity of Variable benefit strategy of Organization

OBJECTIVE To find out whether the variable benefit strategy increases retention Research question

79

To find out whether employees belief on variable benefit is related to employee preference for staying the company Hypothesis testing Step 1 H0b: The employees belief on periodic change in benefit structure is not associated with employee preference for staying the company. . 2 2 (critical) H1b: The employees belief on periodic change in benefit structure is associated with employee preference for staying the company. 2> 2 (critical) Step 2 The level of significance is 5% Step 3 Test statistics

Table No 10 Chi-square table (Variable benefit)

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Employee choice Retention of staying the company employees belief on periodic change in existing type of benefits (Improve the job 9 satisfaction) (No Improvement 4 in the job 13 satisfaction Total

Indifferent

Attrition

Total

18

20

32

13

24

50

Chi2 = [(Oij-Eij)2 Eij] O = Observed number of cases categorized in the category E (Expected number of cases in the ith category under Ho) With Yates correction factor The correction factor is being used because some of the values in the chi square table are below 5 Chi2 = [(|Oij-Eij|-.5)2 Eij]

Table No 11 Calculation table for chi square table (Variable benefit)

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Observed Oij 9 5 4 4 8 20

Expected |Oij|Oij-Eij| 4.32 0.32 4.64 4.32 0.32 4.64 Eij|-.5 3.82 -0.18 4.14 3.82 -0.18 4.14 [|OijEij|-.5] 2 14.5924 0.0324 17.1396 14.5924 0.0324 17.1396 Total [|OijEij|-.5]2 /Eij 3.118034 0.006923 1.98375 1.753894 0.003894 1.115859 7.982355 Eij 4.68 4.68 8.64 8.32 8.32 15.36 Eij) 4.32 0.32 -4.64 -4.32 -0.32 4.64

frequency frequency (Oij-

Step 4 Degrees of freedom = (r-1). (c-1), here r= number of rows and c = number of columns (2-1). (3-1) = 2 Critical value = Chi2 (Probability under Ho, Degrees of freedom) Chi2 (.05,2) = 5.99 Step 5 Since Chi2 value calculated is higher than the critical value, the hypothesis has been rejected. And alternative hypothesis H1 is being accepted. Chi2 (calculated) > Chi2 (Critical value) 7.982355 > 5.99

Conclusion From the above test we can conclude that Variable benefit structure is associated to retention of the employee.

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OBJECTIVE To what extent variable benefit structure strategy can solve the problem of employee attrition. Research question What is the percentage of employee attrition can be solved by implementing Variable benefit strategy. ANSWER From the Chi2 table it is clear that total observed attrition in the Small and medium scale industry is 24 and in that 24 respondents only 4 respondents prefer periodic change in benefits. So 4 as a percentage of total sample population (50) is 8%. Since the Variable benefit strategy can be applied to 8% of the population, this will increase the retention of the employees in small and medium scale software industries. This strategy will not be able to solve the remaining (as 33.3% of 24) 2/3 of the attrition tendency. Validity of Internal advertisement strategy OBJECTIVE To what extent an internal advertisement strategy can be implemented in the companies.

Research question What is the opinion of employees on the success of implementation of internal advertisement strategy in small and medium scale software industry in Bangalore? Step 1 H0c: Combined percentage score is 50 and above (Internal advertisement strategy is accepted) 0, 0=8 (50%)

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H1c: Combined percentage score is below 50 (Internal advertisement strategy is rejected) <0, 0=8 (50%) Step 2 The level of significance is 5% Step 3 Test statistics Total number of Plus signs (+) Total Number of signs (+&-) (prop) = p.q/n p=1/2, (probability of getting sample value less than mean) q=1/2, (probability of getting sample value higher than mean) n= Number of Signs > p z. (prop) z= value In the normal distribution table for normal curve

Table No 12 Questionnaire analysis table for internal advertisement strategy Total Q1+ Values RESPONDNT Question NO 1 2 3 4 No Q1 4 3 3 4 Question No Q2 4 3 4 3 Question No Q3 4 3 2 4 Question No Q4 4 1 4 4 Q2+ Q4 16 10 13 15 Q3+ not equal Plus/minus to 8 16 10 13 15 sign + + + +

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5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

3 2 2 4 4 3 4 2 2 2 2 2 4 3 2 2 1 1 3 4 3 2 2 1 2 3 4 1 0 2 3 2 1 2 2 3 2 3 2 2 2 1 3 3

2 4 2 3 3 3 4 3 3 3 4 2 2 4 2 3 1 2 2 1 2 1 4 3 2 2 1 1 0 3 1 2 2 2 4 2 2 1 3 2 2 1 1 2

3 3 3 0 3 2 4 3 3 3 3 2 3 1 1 1 1 2 1 1 1 2 1 2 2 1 1 1 1 1 1 2 2 2 1 1 2 1 2 1 3 1 1 1

3 4 4 4 4 4 4 4 4 2 4 4 1 0 3 0 2 2 1 1 0 0 0 3 1 1 0 1 4 1 2 2 3 1 1 0 2 1 0 1 0 1 0 2

11 13 11 11 14 12 16 12 12 10 13 10 10 8 8 6 5 7 7 7 6 5 7 9 7 7 6 4 5 7 7 8 8 7 8 6 8 6 7 6 7 4 5 8

11 13 11 11 14 12 16 12 12 10 13 10 10 Total 6 5 7 7 7 6 5 7 9 7 7 6 4 5 7 7 7 6 6 7 6 7 4 5 6 1 Total

+ + + + + + + + + + + + + 17 26 N 43

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49 50 Totals

2 0 119

3 1 117

1 0 91

0 0 95

6 1

Table No 13 Calculation table for sign test Number Number n of values 17 + of values 26 43 0.5 0.5 p q (Prop) p.q/n 0.00581 4 Step 4 Critical value = 0.490465 Step 5 Since probability of values greater than 8 calculated is lower than the critical hypothesis has been rejected. And alternative hypothesis H1 is being accepted. Critical value 0.490465 Conclusion From the above test we can conclude that the opinion of Small and medium scale software industry employees are not favorable for the implementation of Internal advertisement strategy > Calculated value > 0.395349 (17/43) value, the 1.64 Z p z. No. of+ (prop) 0.49046 5 values/n 0.395349

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Chapter 4 Summary, Conclusion and Suggestion

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4.1 Summary
Findings from the research on Variable benefit structure strategy Chart No 4 Attrition among employees who prefer different benefit structures

17%

83%

Attrition among employees who prefer variable benefit structure Attrition among employees who prefer existing benefit structure

The chi2 test analysis confirmed that there is a relationship between employees preferences for benefit structure is related to employee preference for staying the company. The small and medium scale software industry in Bangalore shows 48% attrition and in that 48 percentage 17% (above graph) prefers periodic change in benefit structure, i.e. they prefer variable benefit structure strategy. Chart No 5

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The number of solvable attrition by variable benefit structure In SMSI as a percentage of total employees in SMSI
8%

But the

92% Attrition among employees who prefer variable benefit structure Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

employees attrition problem solvable by variable benefit structure strategy is only 8% when comparing it to the total employees in the SMSI. So the extent to which this strategy can be applied is only 8%. Applying this strategy is not economical as only 8% of the total employees can be stopped from attrition by implementing Variable benefit strategy.

Findings from the research on internal advertisement strategy From the sign test we can conclude that the opinion of Small and medium scale soft ware industry employees is not favorable for the implementation of Internal advertisement strategy The main hurdles are: Chart No 6
very high 6% Farley Enough 22% No accesibility 4%

Access to the communication channels present in the SMSI

very less 44%

Moderate 24% 89

Very less accessibility to the communication channels In small and medium scale software industry 48% of the employees have either very less or no access to the communication channels present in the organization. Chart No 7

Opinion about implimentation of Internal advertisement strategy

very high 28%

Not useful 24%

Good 8% Moderate 14%

very less 26%

Second reason is the general opinion about the implementation of internal advertisement strategy is negative. Around 50% of the employees dont agree with the implementation of the strategy.

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4.2 scope of the system

Within the limited range of the next few pages, this report attempts to present a snapshot of developments and/or important features in the general area of product and process development. The scope of this section is broad and attempts to address soft as well as hard issues involved in the development of composites. Therefore it will address issues such as design methodologies, rapid market development approaches, people issues, and education. The report attempts to address the features of the product development process through case studies from different areas related to composites. As brought forth in the previous chapter, the underlying premise is that the Japanese do not differentiate between basic manufacturing/processing science and product development. Rather they address the entire area from an applications perspective. The reader is cautioned that although composites have been in use in the United States for decades, this area remains underdeveloped and our advances are probably shadowed by the advances made in Japan. It must however be mentioned that approaches such as total quality management (TQM) and statistical process control (SPC) following Deming and Juran, although developed in the U.S., found greater acceptance initially in Japan, to the point where they are now used as a "matter-of-fact," and the different facets of "concurrent engineering" are deeply ingrained in the thought and activity processes. At the outset, however, the reader is cautioned against making widespread comparisons between Japanese methodologies and those used in the United States for the purposes of suggesting broad changes in approach, as many of the differences have their roots in the different socio-politico-cultural systems prevalent in the two countries. Through this study the researcher is trying to probe the applicability of three new HR strategies in Small and medium scale software enterprises. This will help the SME to retain the talent pool.

4.3 Suggestion
RECOMMENDATIONS Chart No 1

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Employee preference for staying the company In SMSI

26% 48% 26%

Employees prefering retention Employees prefering Attrition

Indifferent employees

The above graph shows that 48% of the employees prefer to leave the job to improve their current status. This 48% is not satisfied with their current status. 26% of the employees are indifferent to retention or attrition. Another 26 percentage are satisfied with their current job and they prefer to stay the job and the company.

Findings from the research on Unique organizational structure strategy Chart No 2 Reasons for attrition in SMSI as a percentage of total Attrition in SMSI

21%

79%

Attrition among employees who prefer positional improvement Attrition due to other reasons

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The small and medium scale software industry (SMSI) in Bangalore shows 48% attrition and in that 48 percentage 79% (above graph) is quitting the company to improve their position. All other reasons are only 21%. The chi2 test analysis confirmed that there is a relationship between position titles and employee retention. So the organizational structure is related to employee preference for staying the company. To retain the talent in the organization companies can give position titles which convey high social status and responsibility. Another benefit of applying the unique organizational structure strategy is to minimize the comparison tendency of the employee with his benefit structure with that of other employees in other companies. Chart No 3

The number of solvable attrition by unique org. structure in SMSI as a percentage of total employees in SMSI

38%

62%

Attrition among employees who prefer positional improvement Other Catogaries(Retention, Indiffrent, and attrition among other catogaries)

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This graph shows that in the total population the unique organizational structure strategy can be applied to 38% of the total Small and medium scale software industry. So the extent to which the unique organizational strategy can be applied is 38% of the total employees in the SMSI. Since the Unique organization structure strategy can be applied to 38% of the population, this will increase the retention of the employees in small and medium scale software industries. CONCLUSIONS The research shows that there is a relationship between Positional benefits and employee retention in the organization. It also concluded that internal advertisement cannot be used in the small and medium scale software enterprises. Though there is an association between benefit structure and employee preference for staying the company, the research revels that this relationship is not conducive for implementing the variable benefit structure strategy. My dissertation for retention strategies in the software industry was highly informative and supportive to my future it has helped me to gain knowledge of conducting study of human resource function in an organization. Many HR professionals feel that work performance is a contemplation of how employees feel about themselves and their work, If an employee experience a sense of pride in the job then the work quality, efficiency, and retention increases significantly. Employees who suffer from low self esteem and display lack of enthusiasm exhibits negative feelings at the work place. Protecting the self esteem of the employee will be top agenda for future organization. One of the best ways to achieve that is by providing socially acceptable positions titles to the employees.

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BIBLIOGRAPHY Bibliography Books 1. C. R. Kothari, Research Methodology methods and techniques, Second edition, Wishwa Prakashan year 1997 2. Donald R. Cooper, Pamela S. Schindler. Business Research methods,: Eight editions Tata McGraw-Hill year 2004 3. K. Aswathappa, Organizational Behavior , Fifth editions, Himalaya Publishing House year 1989 4. V.S.P Rao, The Human Resource management text and cases, second editions , Excel Books year 1992

Journals

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1. The ICFAIn Journal of management and research,Volume V No:2 Februvary 2007, ICFAI university press, Page no 65: Human resource development climate in IT companies in India. 2. HRM review, Employers brand, ICFAI university press,June 2006 Websites http://www.employeeretentionstrategies.com/bottomline.htm http://www.ioma.com/audioconferences/471.html http://www.bpoindia.org/research/retention-strategies-call-center-industry.shtml Appendix No.1 QUESTIONAIRE Name of the employee.. Designation. . Name of the company... If you look for a new Job, (in a new company) what will be your preference?

(1)Improvement in Position (0)Not improvement in position (Increase in other benefits) What is your opinion about replacing the old benefits with new benefits on a monthly basis in your organization? (1) Improve satisfaction from the benefits

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(0) No improvement in satisfaction from the benefits Are you satisfied with the current job (4) (3) (2) (1) (0) Not at all Very less Moderate Farley enough Very high

To what extend do you feel that quitting the present job will give you a satisfied job . (0) (1) (2) (3) (4) Not at all Very less Moderate Farley enough Very high

To what extend you are emotionally attached to your company. (4) (3) (2) (1) (0) Not at all Very less Moderate Farley enough Very high

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Common Internal communication channels In the organizations E-mail/printed circulars Employee meetings celebration of special occasions of the employee print media others

Is there any internal communication channel in your organization? (0) (1) (2) (3) (4) No channel Any one channel Any two channels Any Three channels Four channels and above

What is the frequency of the internal communication in your organization? (0) (1) (2) (3) (4) Nil Very less Moderate Farley enough Very high frequency

Do you have accessibility to the communication channels present in your organization?

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(0) (1) (2) (3) (4)

No accessibility Very less Moderate Farley enough Very high

What is your opinion about creating awareness on company values and Employee benefits to its own employees to retain them? (0) (1) (2) (3) (4) Not useful Very less Moderate Good Very high

Thank You

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