PROJECT REPORT

STUDY OF MERGERS AND ACQUISITION BY FACEBOOK

Submitted by: Satyabhan Singh
Class: B.Com(hons.)
Enrollment no: A7004616127
Specialization: MARKETING STRATEGY

Under guidance of: Mr. UpendraNath Shukla

Faculty Guide: Mr. UpendraNath Shukla
Sr. Lecturer
(ABS, Lucknow)

(SUMMER INTERNSHIP REPORT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF FULL TIME DEGREE

OF BECHLOR OF COMMERCE(HONS.)(2016-19))

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH LUCKNOW
 DECLARATION

I Satyabhan Singh hereby declares that the project work entitled “STUDY OF MERGERS AND
ACQUISITION BY FACEBOOK ” done under the guidance of Mr.UpemdraNath Shukla faculty of
Amity university for the award of the degree of B.COM(Hons.) & and is submitted to AMITY UNIVERSITY,
Lucknow and this work has not been submitted elsewhere.

Submitted by
Satyabhan Singh
B.COM(hons.)
 STUDENT’S CERTIFICATE

Certified that this report is prepared based on the summer internship project undertaken by me in

STUDY OF MERGERS AND ACQUISITION BY FACEBOOK from 15th January

2018 to 27th January 2018, under the able guidance of Mr. UpendraNath Shukla in partial

fulfillment of the requirement for award of degree of B.Com(hons.) from Amity University, Uttar

Pradesh.

Date--------------------

Satyabhan Singh Mr.UpendraNath Shukla DR.Harshwardhan

Sr. Lecturer (ABS) Director (ABS)
 DECLARATION

Title of project report of STUDY OF MERGERS AND ACQUISITION BY FACEBOOK

I understand what plagiarism is and am aware of the Amity University’s policy in this regard

I declare that

(a) The work submitted by me in partial fulfillment of the requirement for the award of degree B.Com(hons)
assessment in this Company report is my own; it has not previously been presented for another assessment.

(b) I declare that this Company report is my original work. Wherever work form other source has been used, all
debts (for words data, arguments and ideas) have been appropriately acknowledged and referenced in
accordance with the requirements of NTCC Regulations and Guidelines.

(c) I have not used work previously produced by another student or any other person to submit it as my own.

(d) I have not permitted, and will not permit, anybody to copy my work with the purpose of passing it off as his or
her own work.

(e) The work conforms to the guidelines for layout, content and style as set out in the Regulations and Guidelines.

Date: ------------- Satyabhan Singh

A7004616127

B.Com(hons)
 AMITY UNIVERSITY, UTTTAR PRADESH LUCKNOW CAMPUS

INTERSHIP PROGRAM AND CONFIDENTIALITY AGREEMENT

This AGREEMENT is between the office of the register Amity University Uttar Pradesh Lucknow Campus and
SATYABHAN SINGH a student presently studying at the B.COM(hons.)

The student named above desires to undertake summer internship / training program as intern in the iAmity
Business School Amity University as a part of his studies. The competent authority of the institute where the student
is presently studying has officially recommended the student, confirming his antecedents, track record and good
moral character.

CONFIDENTIALITY:

Confidential information means any information of a secret or confidential nature relating to the internship /
training workplace. Confidential information may include, but is not limited to, trade secrets, proprietary
information, customer information, customer lists, methods,plans, documents, data, drawings, manuals, notebooks,
reports, models, inventions, formulas, processes, software, information system, contracts, negotiations, strategic
planning, proposals, business, alliances, and trading materials and / or any other intellectual property of the
University.

The student / intern agrees to observe the confidentiality requirements of the Amity University, its Disciplinary
procedure in all respects and any additional requirements set out by the Amity University. Specifically, the students /
intern agrees to observe confidentiality in the following respects.

As University intern, I agree that:

1. I will use confidential information only as needed by me to perform my legitimate duties as intern. This
means, among other things that.

B. I will not seek confidential information for which I have no legitimate need to know,

C. I will not any way divulge share, copy, release sell loan revise, alter or destroy any confidential information
except as properly authorized within the scope of my internship:

D. I will not misuse confidential information or carelessly care for confidential information; and

E. I will strive to protect the privacy of all confidential information that I come into contact with.

2. I will safeguard and will not disclose my access code or any other authorization I have that allows me to
access confidential information. I accept responsibility for all activities undertaken using my access code and
other authorization.

3. I will report to my Head / supervisor activities by any individual or entity that I suspect may compromise the
confidently of confidential. Reports made in good faith about suspect activities will be held in confidence to
the extent permitted by law, including the identity of the individual reporting the
activities;

4. I will be responsible for my misuse or wrongful disclosure of confidential information and for my failure to
safeguard my access code or other authorization to access confidential information. I understand that I have
 no right or ownership interest in any confidential information referred to in this agreement. The University
may at any time revoke my access code, other authorization or access or confidential information. At all time
during my internship with AmityUniversity, I will act in the best interests of PMC.

I have read and understand the above definition of “ confidential information “ I agree that I will not at any time,
both during and after my enrollment in University Internship, communicate or disclose confidential information
to any person corporation or entity.

It is understood that any breach of confidentiality will result in immediate termination of the internship and that
a report of the breach will be made by the concerned Head of Institution.

HAVE READ THE ABOVE CONFIDENTIALITY AGREEMENT AND AGREE TO ITS TERMS.

AGREED ___________________________________ (SIGNATURE)

Satyabhan Singh
___________________________________ (DATE)

Signature of Authorized signatory of the institution

(Institution deputing the students)

ACCEPTED
PREFACE
SUMMARY
 TABLE OF CONTENT

TOPIC PAGE NO.

DECLARATION I
STUDENT CERTIFICATE II
PREFACE III
SUMMARY IV-V
Chapter -1 INTRODUCTION 1-30
Chapter -2 REVIEW OF LITERATURE 31-33
Chapter -3 OBJECTIVE,SCOPE,SIGNIFICANCE OF STUDY 34-37
& RESEARCH PROBLEB STATEMENT
Chapter -4 RESERCH DESIGN AND METHODOGOLY 38
Chapter -5 DATA ANALYSIS AND INTERPRETATION 39-51
Chapter - 6 FINDINGS AND CONCLUSION 52-53
Chapter -7 SUGGESTIONS AND LIMITATIONS 54-55
APPENDICES AND ANNXEURE 56-60
BIBLIOGRAPHY 61-62
 CHAPTER-1

INTRODUCTION
Success of every business enterprise depends on its human resource. Money, material and machines are inert
factors; but man with his ability to feel, think, conscience and plan is the most valuable resource. At the
same time, human elements are most difficult to be inspired, controlled and motivated. The upcoming
competition in India will demand high motivational level of its employees.

Growth of an enterprise is vital for the economic development of the country. This is possible only by
maintaining the enthusiasm and motivation of the employees, which is vital for carrying out the operations
in most efficient manner. The most successful companies, all over the world have designed their business
policies to achieve higher productivity by using potentiality and strength of people.

The basic aim of human policies is the genuine concern for the people. Proper design of human policies is
based on the higher responsibilities, personal and positive approach in the total perspective of organizational
interest. The world's best companies have established their strength with their people. The employees
identify themselves with the company they are working for. This also helps in building up their spirit,
morale and espirit-de-cops that becomes strength of the company.

Finding the right man for the job and developing him into a valuable resource is an indispensable
requirement of every organization. Human resources are capable of enlargement i.e. capable of providing an
output that is greater than the sum of the inputs. Proper recruitment helps the line managers to work most
effectively in accomplishing the primary objective of the enterprise. In order to harness the human energies
in the service or organizational goals, every manager is expected to pay proper attention to recruitment,
selection, training, development activities in an organization. Thus, personnel functions such as manpower
planning recruitment, selection and training, when carried out properly, would enable the organization to
hire and retain the services of the best brains in the market.

The human resource management is very crucial in respect of information technology services than other
manufacturing or marketing enterprises. The IT services are technical in nature and at every stage, the
human touch is involved. Hence, it is well-motivated and devoted manpower which is very much essential
for the success of IT industry.

ROLE OF HR MANAGERS
Traditionally, the role of the Human Resource professional in many organizations has been to serve as the
systematizing, policing arm of executive management. In this role, the HR professional served executive
agendas well, but was frequently viewed as a road block by much of the rest of the organization. While
some need for this role occasionally remains you would no want every manager putting his own spin on a
sexual harassment policy, as an example—much of the HR role is transforming itself. The role of the HR
manager must parallel the needs of his changing organization.

Strategic Partner:-In today’s organizations, to guarantee their viability and ability to contribute, HR
managers need to think of themselves as strategic partners. In this role, the HR person contributes to the
development of and the accomplishment of the organization-wide business plan and objectives. The HR
business objectives are established to support the attainment of the overall plan and objectives. This
strategic partnership impacts HR services such as the design of work positions, hiring; reward, recognition,
and strategic pay; performance development and appraisal systems; career and succession planning; and
employee development.

Employee Advocate:-As an employee sponsor or advocate, the HR manager plays an integral role in
organizational success via his knowledge about and advocacy of people. In this role, the HR manager
provides employee development opportunities, employee assistance programs, gain sharing and profit-
sharing strategies, organization development interventions, due process approaches to problem solving, and
regularly scheduled communication opportunities.

LEADERSHIP AND EMPLOYEE INVOLVEMENT.

The main role of leadership was seen as creating a participatory process for employee involvement, to build
collective wisdom this is a marked shift to build effective teams. Research shows that six out of every 10
employees like to work in teams. 87 per cent of all Fortune 500 companies use parallel teams and about 100
per cent of all companies use project teams.

Storytelling and appreciative enquiry are emerging as a new dimension in positive motivation. Finding out
what is wrong seems to be the trend. In Walt Disney, telling success stories is one of the important methods
used to remind people of greatness and goodness of the organization. Leaders in Disney concentrate on
quality, values and involvement. Speaking in the plenary sessions, Tom Peters said, “We have transitioned
from an asset-based economy to a talent-based economy. The new definition of lay-off is untalented go
talented stay. Leaders must realize that talent is equal to brand". His new theory is EVP which means
"Employee Value Proposition".

E-Learning: - Organizations’ like Ford Motor, Hewlett Packard, Intel and IBM are using e-learning to
increase the knowledge of their people. Companies like Fordstar even manage time differences between
countries while conducting virtual class rooms, chats, demos, presentations to communicate new concepts,
product details, core values, issues of governance and corporate communities.

INNOVATIVE PRACTICES IN HR
The Innovative Practices in Human Resources study uncovered 12 practices that are reducing HR costs and
improving service quality to employees. Key findings from this research included the need for HR managers
to streamline processes, lower overhead costs, and enable their departments to advance from transactional
organizations to strategic partners in the business.

Practices and technologies include:

 Internet and intranet employee services

 Strategic human resources
 Centralized HR departments and call centers
 360-degree performance appraisals
 HRIS systems
 Employee self-service
 Voice response systems (VRUs)
 Resume scanning and Internet recruitment
 Kiosks
 Automated time and attendance systems
 Team policies and development
 Outsourcing
 Business process reengineering (BPR)

LINKING PAY TO PERFORMANCE

Most Human Resource professionals are familiar with the concept of strategy. There is much more
concentration and focus today on the strategic outcomes of human resource activity than ever before. The
area of compensation is no exception.

Pay for performance systems are becoming more and more popular as senior managers reach beyond the use
of compensation systems to deliver pay.
In experience, most organizations will profess to a "pay-for-performance" philosophy as a keystone of their
compensation system. Such a system requires solid grounding in a clear and documented link between
performance and salary increases.

First, the annual salary change is usually a small percentage. Giving the better performer 2% more than the
cost of living has little motivation or recognition attached to it. Similarly giving the poor performers 2% less
than the cost of living increase is not that much of a penalty.

Second, most performance appraisal systems are after-the-fact appraisals. In other words, at appraisal time,
which is usually toward the end of the year, managers are required to evaluate the performance of their staff.

The result is usually a lot of avoidance behavior. Managers avoid the appraisal process like the plague.
Although employees profess to want to "know where they stand”, they often take issue with the appraisal.
Besides, they do not listen to the evaluation, they wait until the penny literally "drops". "What is my rating
and how much do I get?" is a constant theme in merit systems where salary decisions are tied so closely with
the appraisal process.

Why Is This Transition Occurring? :-Well, there are many challenges facing businesses today and these
challenges are driving them to find better ways of linking pay and performance to the achievement of
corporate results.

CHANGING JOB DESIGN IN IT COMMUNITY

The California State University (CSU) system is being challenged to meet increasing demands for
educational and administrative services through the innovative use of technology and human resource
systems. Even though funding levels for higher education have been cut in recent years, public/taxpayer
expectations and the demands for quality education, access, service, and accountability have grown.
Technology initiatives within the CSU have resulted in significant advances and improved technical
capabilities and efficiency. Human resource and organizational systems are also needed to capitalize on and
thrive in this rapidly changing work environment.

In 1991, the CSU began a study to look at alternative work and job design approaches to meet these
challenges.

The studies focused on the information technology community and how work processes and activities could
be better organized to remove artificial barriers and improve organizational effectiveness, a process often
associated with the term "reengineering." Secondly, the study focused on developing a job design approach
that could adapt to changing skill requirements and that would promote the continuous acquisition of skills
for knowledge-based employees in information technology. The goal of improved organizational
effectiveness and an orientation towards reengineering and skills guided the development of the proposed
job design approach.

This article begins by identifying several trends that led to the study, and then describes the overall project
within the context of an organizational effectiveness equation. A new job design approach that was proposed
as a result of the study is presented, including a new classification structure and competency dimensions and
measures for defining and evaluating positions. Finally, other supporting systems are described for an
integrated human resources approach. The development phase of the project has been completed, and the
CSU anticipates entering into negotiations with its employee representatives in the near future.

Three trends have had a direct impact on the development of a strategic job design approach for the
information technology community at the CSU: (a) diversification and convergence of technology, increased
demand for educational access and (b) changes in instructional delivery methods; and changing work place
demands and priorities.
The technology demands within higher education lead to a complex and dynamic computing environment.
Academic and administrative computing strategies tend to be at cross-purposes in terms of defining systems
requirements.

This has resulted in widely diverse systems and technology within and across the CSU's twenty campuses.
Increasingly, however, campus systems are becoming more integrated, as data are shared across multiple
platforms on a network "highway" that is linked to external information sources. Networking and desktop
computing have removed traditional boundaries for information access, research, and decision-support
purposes. Data, voice, and video technologies continue to be combined in more interactive and user-friendly
formats.

In terms of educational trends, many institutions offer distance learning using various transmission media
and are incorporating instructional technology into curriculum development. Students expect guaranteed
access to technology and to research databases, and this access has become an issue of social responsibility.

[1] Library and computing functions are becoming increasingly interdependent in "an infrastructure of
scholarly communication" within higher education.[2] Workplace trends, as presented in Sustaining
Excellence in the 21st Century: A Vision and Strategies for College and University Administration, well
represent the outlook for the CSU. Two key issues are identified:

(1) Economics. There is increasing pressure to constrain administrative costs within the "labor intensive cost
structure" that exists in higher education. Reductions in staff are occurring at the same time as transaction
volume and service expectations are growing.

(2) Decentralization of responsibility. With fewer people and greater access to information, organizations
are moving responsibility for decision-making downward to the point of service. Work organization is
shifting away from job specialization and a task/procedure orientation, to more generalized job
responsibilities focused on outcome and greater participation on cross-functional teams

(3) Another central workplace trend is the "earning and learning" environment described by the U.S.
Department of Labor in its Secretary's Commission on Achieving Necessary Skills (SCANS) report. To
quote Thomas P. Foley, Secretary of the Pennsylvania Department of Labor and Industry:"We've changed
from the idea of "one skill, one job" to the reality of a range of skills that have to apply to a number of
different kinds of professions. More to the point, workers must possess a skill that they continually upgrade
just to keep pace in the professions they choose."

(4) The influx of new technology and applications has created a demand for continual learning and
adaptation. Due to the CSU's relatively stable workforce, maintaining skills to keep pace with changing
technology was identified as a critical goal. Knowledge requirements are expanding to encompass a greater
breadth of technologies and subject expertise, as well as including process-oriented capabilities such as
communication and negotiation skills.

The implications of these technological, educational, and workplace trends point directly to the need to
reengineer organizational structures, work design, and processes. Based on these trends and overall
organizational goals, two key objectives were established for a new job design approach for the CSU:
flexibility and skill development. Fundamentally, each campus needs the flexibility to achieve its goals by
distributing work assignments in a way that optimizes its available skill mix and promotes individual skill
development and initiative.

HR TRENDS IN IT INDUSTRY
HR IT SCENARIO

The web is altering the HRD landscape beyond recognition. The key to corporate success in the fast
changing information era is ‘thinking on your knees’.
 What is this thinking on your knees? Normally as the HR person you know what the situation is and
operate from there. A repositioning is required in your decision process with questions like why, how and
when and not just what. At this point you operate on your knee i.e. with far more dynamism and with a lot
more effectiveness than thinking on your feet.
The employees are like gypsies, on the move all the time. They camp at some location, enhance their skills,
responsibility levels and move on. This is particularly true of the professional from Software Industry.
Opportunities are plenty and the next job opening is only a mouse click away. The question is not about
what else you can do to retain an employee but it is about making him productive, while he is with you. The
value addition will then happen for both the employee as well as the employer resulting in a win-win
situation. This means that the new strategy calls for the recognition that no employee is expected to be
permanently with you. Normal tenure in any organization is likely to be between two to three years.

INNOVATION IS THE KEY

Information technology and Internet have changed several equations. Reaching out to the world market
place is no more the challenge in achieving corporate victories. Out thinking the competition at electronic
speed is the key to winning corporate battles. The corporate success is sum total of entrepreneurship
practiced by your staff.
The key to employee longevity :-Today’s most successful organizations recognize that to fuel growth
and sustain a competitive advantage, they must make recruiting, hiring and retaining top talent, as the
organization’s major thrust area. Competent people deliver the rest do not matter. Successful business
organizations have no choice but to promote the performers and let non-performers go.
Organizations’ recognize that that their ability to gather, manage, analyze, distribute information and
transform themselves into a learning organization will provide continuity and ensure for them their
leadership role. Systematic organizational learning should be central corporate philosophy. Learning must be
obviously followed by changes, which may not necessarily be welcomed by veterans in the organization.
But ‘change is the only constant’ for guaranteed success.
Points to note: The following points are important and must be properly understood.
People have a great deal of informational knowledge to contribute to the organization.
People are responsible
People desire opportunities to effect change, not just being expected to change. Organizations’ need to
create awareness amongst their employees about their vision and then empower them to act on that vision.

 Establishing a sense of urgency well ahead of the problem surfacing.

 Form inter-functional core group. Encourage the group to work together as a team.

 Plan and create short-term win targets – reward employees and recognize achievers.

 Consolidate improvements through a knowledge base driven system and institutionalize

proven new methodologies.

New Paradigms in HR
 Business plans must consider HR issues, focus and adapt.

 Corporate goals must factor in individual career growth and personal growth must be tied to
corporate growth and vice versa
 Job responsibilities must facilitate personal development and learning should be institutionalized with
well-established knowledge bases. Capturing experience and making it available ‘corporate wide’ should be
a permanent feature of an organization.

WAR FOR TALENT

The world’s most popular people resource base seems to be falling short of numbers to meet its own
demands. With added pressures of migration and attrition, can India’s IT industry achieve its software and
services revenue target of $87 billion by 2008?

Country: India. Population: 1 billion-plus. If that sounds like too many people, think again. Plug in English-
speaking and low labor costs, and suddenly we can envision $50-billion software exports target by the end
of this decade. Not impossible, if we consider the scarcity of IT manpower across the world. Take a look at
the US, already with a 10- million-strong IT workforce, which needs to fill 1.6 million new jobs in the next
one year.
Japan is no different and estimates close to a million new jobs. Germany is looking for 20,000 IT specialists
and Italy is seeking 15,000 additional manpower. Their choice destination—India.
Ironically, the country which has been such a popular people resource for the IT industry the world over, is
struggling with numbers to meet its own demand. To meet the overall software and services (domestic and
export) target of $87 billion by 2008, according to the Nasscom-McKinsey report, the country will require a
minimum of 2.2 million knowledge workers for its domestic needs. This implies that the present strength,
which stands at 12,00,000 (December 2004), has to increase about twice, not just in quantity but in quality
as well.
According to industry estimates, majority of the demand for manpower will be in the area of IT-enabled
services.
While Nasscom puts the requirement at 11, 00,000, MIT says IT-enabled services and e-business will need
12, 70,000 workers by 2007. Experts insist that since this sector does not require very highly skilled
manpower, we can easily meet this demand. "IT-enabled services are a wonderful opportunity for India and
for such services you don’t need highly skilled professionals. You just need smart graduates who can speak
English; all you need to do is train them. For instance, in a call center, they need to be trained on accents and
customer services,

4 R’s of HR in IT

TABLE

Recruiting Retaining Retraining Restructuring

Signing bonus Retention bonus Job rotation Broad job
descriptions
Finder’s Fee Project pay Team
assignments Flexible
Alumni Reduct FTE/same compensation
connections pay Skill inventories programs

Non-techs Telecommuting Competency Flexible jobs

 Students Externs development Positive problem-
solving spirit
Interns Job sharing Certification

Recognition
programs
OBSTACLES
 Denial (This is and long term)
 Misalignment (Ramping up/Ramping down)
 Timing
 Treating everyone the same
 Navigating the bureaucracy
 Demographics
WHAT OTHERS ARE DOING
 Pooling recruitment efforts
 Increasing freedom at the dept level
 (On-the-spot hiring, broad banding, etc.)
 Recruiting/retaining students
 Identifying tech skills in all jobs/people
(Skill Inventories/assessment)
 Sharing staff
RETENTION FACTORS
1. Quality of boss
2. Direction of department
3. Exposure to new technologies
4. Confidence in the company
5. Job security
6. Challenging work
7. Location
8. Access to capital resources
9. Caliber of co-workers
10. Empowerment
11. Department leadership
12. Ability to influence department success.

TAKING THE LEAD

 See ourselves as problem-solvers
 Develop critical skills and competencies in ourselves, then others
 Build compensation around results not tasks; competencies, not seniority
 Involve everyone. Constantly align and balance resources to meet changing needs
SEARCH FOR TOMORROW
  Attract, retain and reward the best performers (Encourage all to be the best)
 Increase flexibility
 Reduce fixed costs
 Reduce administrative effort (Simplify, simplify, simplify)
 Utilize the full range of individual talents

THE CRISIS

Ø Shortage of IT workers

COMPETITION

Ø Compensation stock options, profit sharing, incentives

Ø Alternatives outsourcing

ATTRACTING

Ø Recruiting sign on bonuses

Ø Relocation incentives

Ø Recruiters

Ø Reduced cycle time for hiring

Ø Campus/ job fairs / referrals/ internet

RETAINING

Ø Work environment

Ø Communication forums

Ø Telecommuting

Ø Flexible staffing

Ø Exciting projects

PRACTICES

Ø Focus on value

Ø Financial and human value

Ø Commitment to core strategy

Ø Linkage between cultures an system

Ø Multi dimension communication

Ø Stakeholders partnerships

Ø Mutual support and collaboration (teamwork)

 Ø Risk and innovativeness

Ø Passion

DEVELOPING

Ø Internship programs

Ø Training programs

Ø Career development programs

LONG TERM SOLUTIONS

Ø Education, government, industry partnerships

Ø Curricula: technical skills and career skills (teamwork and communication)

KEY SUCCESS FACTORS

 Understand people
 What they want
 Long term perspective’
 Innovative
 Co ordinate approach
 Career development I

OUT SOURCING

In the last few years, more and more companies around the world are looking towards India for outsourcing
their software requirements. The changing business environment is demanding new applications. In
particular, the spread of client-server computing in decentralized organizations involves the development of
applications specific to a user's business.
Outsourcing is becoming a strategy for forward thinking IS managers. It is no longer just a means for
reducing costs, but a tool for adding value to business. It enables organisations to concentrate on their core
business, carry out business re-engineering and provide information that is valid, timely and adequate to
assist decision making at the management level and quality and cost control at the middle and lower levels.
As a result, outsourcing has gradually grown beyond the traditional idea of "having a third party running the
data centre". It has come to mean, "any use of an outside contractor to replace or extend in-house resources".
Outsourcing is closely linked with corporate strategy, since it must support the organization’s major
initiative in using IS. It should enhance and add value to the business. A rule of thumb to start and gain
experience is, "if IS low cost and of high value addition, keep it within the organization, i.e. in-source. If IS
high cost and of low value addition, consider outsourcing". In the past few years, whenever organizations’
around the world have outsourced to India, the Indian software companies have substantially helped to cut
costs in software development projects or MIS environments, while maintaining high quality. Moreover, all
these cost and quality advantages are coupled with the use of state-of-the-art technologies.
In 2004-05 more than US$ 2500 million worth of software development work was outsourced to India
(The total software exports from India during the year was US$ 4085 million). This was 56% higher than
outsourcing orders in 2003-04. It is estimated that the quantum of outsourcing may jump to US$ 5 billion
and reach as high as US$ 10 billion by 2010 A.D.
HR PROBLEMS OF INDIAN IT PROFESSIONALS

OVERVIEW OF PROBLEMS
The IT revolution is sweeping the world, particularly the western world in for nearly a decade now, creating
enormous employment opportunities in this area. India joined the bandwagon well in time and smoothly
though it is yet to entrench itself strongly in terms of corporate identity and significant share of global
revenues in IT.
Our main contribution seems to be in the less glamorous areas of value addition, maintenance, Y2K, quality
assurance and customization of existing packages. The sudden eruption of opportunities in this area left no
time for development of human resources in a planned manner and also software solutions which tended to
With the enormous opportunities for employment, entrepreneurship with low capital investment and low
gestation period for turning profitable, higher returns per employee and large return on investment/EPS,
sustained encouragement from government, a very large number of organizations’ - large, medium, small -
have been established. Correspondingly a large number of training establishments and cyber cafes have
come up, most of which are in the cities and towns to cash in on the enthusiasm of the urban middle class.
A number of higher level courses have also been started mainly through private organizations’ besides the
existing government (State/Central), university and autonomous institutions. There are about 500 private
engineering colleges besides IITs, RECs, universities, colleges offering courses such as MCA, M.Sc., M.E.,
and M.Tech. In view of the apparent demand that appears to be exaggerated, most of the programmes
(barring a few by government institutions and IITs) are very expensive, almost beyond the reach of a
middle-class student. Yet candidates and their parents strain themselves financially to pursue the courses
hoping to get an attractive job (financially) which remains a mirage by and large. The problems are further
compounded by a lack of proper teaching faculty in most colleges and
Except in well-established institutions, job-placements are poor. Even those trained in reputed institutions
find their jobs monotonous, leading to depression. Jobs offered by the software industry have demonstrated
the above factors as they are able to carry out the projects with persons of any background and levels of
attainment, but with a few months training either prior to employment or a short training during probation.
Despite these deficiencies, students prefer software jobs mainly with an eye on the pay-package and urban
locations. The employee- retention period even in good companies has been shrinking and is found to be
three to six months. The companies also try to devise methods to make their employees almost captive with
surety bonds, bank guarantees, employee's stock option (ESOP) and housing facilities, among others. The
employees, for their part, resort to innovative methods to wriggle out of their contracts. There does not
appear to be any respectable ethics even among companies as well as the employees in this type of free for
all market. To go abroad and become rich has become the motive of most of the employees even if the job
does not offer any intellectual satisfaction. The manufacturing and hard-core engineering sector has also
shrunk in terms of job opportunities and attractiveness.
Even those software professionals, who are offered good financial packages, spend their earnings on
expensive lifestyles, vehicles, and credit card syndrome and find themselves disenchanted on all fronts
including the intellectual front. It should also be a cause for concern to project beyond the present software
boom as to what happens to all these if the opportunities decline. The scenario appears to be quite fluid with
a predominant western bias in all the activities concerning software profession with scores of Indian boys
getting lured and sucked into the vortices created by the opportunities in this area.

MAIN PROBLEM AREAS

The significant problem areas which may be contributing to the present scenario and can be addressed can
be identified as given in the succeeding paragraphs.
Recruitment process:-Without going into the deficiencies of the present practices, the following suggestions
are made to improve the process in terms of efficiency, availability of manpower and equity to all the
aspirants irrespective of the fact where they got educated. The various steps of the proposed approach are as
follows:
i. Aptitude tests could be conducted by reputed institutes like IITs/ private organizations/HR agencies for
prospective professionals preferably ``on-line'' like GRE, GMAT etc. or physically at regular intervals and
scores are given. If it is no on-line, the periodicity can be a month or two and the validity can be for a year or
so which can also be fixed based on general agreement.
ii Based on scores and preferences of the candidates (career counseling), companies can ask for a video clip
for subsequent interview if required. Interviews can also be conducted simultaneously either physically or
over the phone or by video conference and selections completed.
iii Once selected and the candidate joins the organizations, all member organizations should adopt a code of
conduct such that the candidates stays at least for a period of one year.
iv. Small companies can form some kind of a cooperative society wherein software professionals' services
can be tapped and steer clear and manpower shortage (less than critical mass levels).
v. The selection can be conditional that he acquires certified skills in the required areas either through
training in house or through approved training agencies and establishments. This will also avoid the
unnecessary expenses for (which are high) the candidates, who are presently spending lot of money with a
hope of employment. This will also ensure that there is a focus on proper training and optimal deployment
of time, effort and finances.
vi. The selection process can thus be continuous and commensurate with the requirements thus avoiding idle
inventory.
Vii.There can be general norms of pay packages depending on the reputation of the companies (classifying
them as A, B, C, D by any reputed management institute like IIM etc.) with the ratio of maximum pay
within reasonable and realistic limits.

Post employment care: - The companies/organizations should take adequate interest in the career
development of the employee by suitable HRD approaches which should include the following:
i. Opportunities for creative work in the first phase particularly for those who are bright, and have an
aptitude and come with a good pedigree say from IITs.
ii. Opportunities to lessen the monotony and improve interpersonal relationship and mixing and group
activities.
iii. Periodic rotation of the rolls and jobs if possible.
iv. Opportunities for retraining and upgrading the skills.
v. Conducting
Effective career development programs regularly.
vi. Incentives like ESOP, lucrative assignments and challenging projects, opportunities of higher education.
vii. Make the employee more versatile with wider perspective and flexible for easy deployment in areas
needing strengthening.
viii. Encouraging simplicity and excellence.

Advantages:- The suggested processes in 4 and 5 above can be expected to have the following significant
advantages:
 i. Cost effective and efficient process.
ii. Proper deployment of skills optimally.
iii. Idle employment can be minimized.
iv. Retention can be improved.
v. Particularly useful for small firms which can also operate in the cooperative society mode.
vi. The candidate's skills are moulded to suit the needs of the job and need not waste time, money and
efforts.
vii. Equitable opportunities to all aspirants irrespective of location, pedigree and background.
viii. Reduces the mushrooms of training shops with inadequate faculty.
ix. This may also give the manufacturing and core engineering sector jobs reasonable chance to attract
willing and bright candidates.
x. The process is ideally suited for candidates to plan their careers with adequate preparation in core
areas.
xi. The process also enables realistic assessments of needs and demands regularly and meeting them
even at short notices.
xii. The aptitude tests can become richer and more representative over a few years and as the question
bank becomes larger and random on-line questioning can be introduced which is more objective like GRE,
GMAT

LONG TERM PERSPECTIVE

These tests can be conducted at the end of 10+2 level or B.Sc. level also and train the candidate with or
without stipend in courses where he could get admission for his degree. This will help in decreasing the
pressure on engineering education as otherwise the skills acquired by the candidate at a great cost in
branches other than computer sciences are wasted and lost for good if employed by the software industry. It
may be a good idea to have a National Test for Software Talent similar to science talent test which can be sponsored
by NASSCOM and such other interested groups the idea of forming a cooperative society by small firms may prove to
be beneficial as the facilities and manpower can be shared optimally. While otherwise they may face the problems of
lack of adequate manpower (below the critical mass level) because of less attractive pay and perks they are able to
offer. Renowned organizations like IITs, IIMs and MNCs, and can play a catalytic roll in streamlining the processes
for an efficient HRD in this vital area of software manpower which is a national resource.

IT SECTOR COMPENSATION METHODS

EMPLOYEE STOCK OWNWERSHIP PLAN Employee Stock Ownership Plan (ESOP): is a defined
contribution employee benefit plan that allows employees to become owners of stock in the company they
work for.
How does ESOP work?
1. The ESOP operates through a trust, setup by the company that accepts tax deductible contributions from
the company to purchase company stock
2. The contributions made by the company are distributed to individual employee accounts within the trust.
3. The amount of stock each individual receives may vary according to pre-established formulas based on
salary, service, or position.
4. The employees may ‘cash out’ after vesting in the program or when they leave the company. The
amount they may cash out may depend on the vesting requirements.
STOCK OPTIONS
Stock Options: The ‘right’ to purchase stock at a given price at some time in the future.
Stock Options come in two types:
1. Incentive stock options (ISOs) in which the employee is able to defer taxation until the shares bought
with the option is sold. The company does not receive a tax deduction for this type of option.
2. Nonqualified stock options (NSOs) in which the employee must pay income tax on the 'spread' between
the value of the stock and the amount paid for the option. The company may receive a tax deduction on the
'spread'.
How do Stock options work? An option is created that specifies that the owner of the option may 'exercise'
the 'right' to purchase a company’s stock at a certain price (the 'grant' price) by a certain (expiration) date in
the future. Usually the price of the option (the 'grant' price) is set to the market price of the stock at the time
the option was sold. If the underlying stock increases in value, the option becomes more valuable. If the
underlying stock decreases below the 'grant' price or stays the same in value as the 'grant' price, then the
option becomes worthless.

MERIT PAY
Merit Pay is an incentive plan implemented on an institutional wide basis to give all employees an equal
opportunity for consideration, regardless of funding source. The merit increase program is implemented
when funds are designated for that purpose by the institution's administration, dependent upon the
availability of funds and other constraints. .

Advantages OF Merit Pay:-

 Allows the employer to differentiate pay given to high performers.

 Allows a differentiation between individual and company performance.

 Allows the employer to satisfactorily reward an employee for accomplishing a task that might
not be repeated (such as implementation of new systems).

GAIN SHARING
Gain sharing is a technique that compensates workers based on improvements in the company's
productivity.
How does Gain sharing work? A Company shares productivity gains with the workforce. Workers
voluntarily participate in management to accept responsibility for major reforms.
This type of pay is based on factors directly under a worker’s control (i.e., productivity or costs). Gains are
measured and distributions are made frequently through a predetermined formula. Because this pay is only
implemented when gains are achieved, gain sharing plans do not adversely affect company costs.
What are the 'Gains' that are measured?
· Increases in production with equal or less effort.
· Equal levels of production with less effort.
What are examples of Gain sharing formulas?

· Calculate gain in hours: The actual hours worked minus the expected hours (for the given level of output)
equal the gain in hours.
PROFIT SHARING
Profit Sharing is an incentive based compensation program to award employees a percentage of the
company's profits. How does Profit sharing work? The company contributes a portion of its pre-tax profits to a pool
that will be distributed among eligible employees.

The amount distributed to each employee may be weighted by the employee's base salary so that employees with
higher base salaries receive a slightly higher amount of the shared pool of profits. Generally this is done on an annual
basis How to Choose an Employee Stock Plan for Your Company:-Many companies we encounter have a pretty good
idea of what kind of employee ownership plan they want to use, usually based on specific needs and goals.

However, sometimes they might be better served by another kind of stock plan. And yet others say they'd like to have
an employee ownership plan, but they're not sure what it might be. This article will start you down the path to
choosing and implementing the plan or plans best suited to your company.

ASSESSMENT OF PLANS FOR BROAD-BASED EMPLOYEE OWNERSHIP

Let us begin by quickly reviewing the main possibilities for broad-based employee ownership. A "broad-
based" plan is one in which most or all employees can participate.
An employee stock ownership plan (ESOP) is a type of tax-qualified employee benefit plan in which most
or all of the assets are invested in stock of the employer. Like profit sharing and 401(k) plans, which are
governed by many of the same laws, an ESOP generally must include at least all full-time employees
meeting certain age and service requirements. Employees do not actually buy shares in an ESOP.
Instead, the company contributes its own shares to the plan, contributes cash to buy its own stock (often
from an existing owner), or, most commonly, has the plan borrow money to buy stock, with the company
repaying the loan. All of these uses have significant tax benefits for the company, the employees, and the
sellers. Employees gradually vest in their accounts and receive their benefits when they leave the company
(although there may be distributions prior to that). Over 8 million employees in over 11,000 companies,
mostly closely held, participate in ESOPs.
A stock option plan grants employees the right to buy company stock at a specified price during a specified
period once the option has vested. So if an employee gets an option on 100 shares at $10 and the stock price
goes up to $20, the employee can "exercise" the option and buy those 100 shares at $10 each, sell them on
the market for $20 each, and pocket the difference. But if the stock price never rises above the option price,
the employee will simply not exercise the option. Stock options can be given to as few or as few employees
as you wish. Perhaps 7 to 10 million or more employees in thousands of companies, both public and private,
presently hold stock options.
An employee stock purchase plan (ESPP) is a little like a stock option plan. It gives employees the chance to
buy stock, usually through payroll deductions over a 3- to 27-month "offering period." The price is usually
discounted up to 15% from the market price. Frequently, employees can choose to buy stock at a discount
from the lower of the price either at the beginning or the end of the ESPP offering period, which can
increase the discount still further.
As with a stock option, after acquiring the stock the employee can sell it for a quick profit or hold onto it for
awhile. Unlike stock options, the discounted price built into most ESPPs means that employees can profit
even if the stock price has gone down since the grant date. Companies usually set up ESPPs as tax-qualified
"Section 423" plans, which means that almost all full-time employees with 2 years or more of service must
be allowed to participate (although in practice, many choose not to). Many millions of employees, almost
always in public companies, are in ESPPs.
Section 401(k) plan is a retirement plan that, unlike an ESOP, is designed to provide the employee with a
diversified portfolio of investments. Like an ESOP, however, a 401(k) plan is a tax-qualified plan that
generally must include all full-time employees meeting age and service requirements.
The employees can choose among several or more choices for investments, and the company may make a
matching contribution. Perhaps several million employees in a few thousand companies participate in plans
with a heavy company stock component; company stock may be an investment choice for the employees
and/or the means by which the company makes matching contributions. 401(k) plans may be combined with
ESOPs (these are called "KSOPs"), where the company match is an ESOP contribution.

EMPLOYEE OWNERSHIP: COMPANIES PAY LESS FOR WORKERS' COMPENSATION

COSTS
A study has found that employee ownership companies have lower workers' compensation insurance rates
than comparable non-employee ownership firms. Leslie Hakala authored the study. She began the project as
an NCEO research intern and completed it for a thesis requirement at Harvard University. The study was
unable to ascribe a specific causal relationship between employee ownership and lower workers'
compensation costs, but it did find that these costs declined as employee ownership plans matured.
Background: - In 1989, the last year for which we have data, U.S. employers spent over $48 billion on
workers' compensation costs. These costs grew at 16.9% per year in the mid-1980s. Cost increases were
partly attributable to increased benefits mandated by state workers' compensation insurance reforms. At the
same time, as employer provided health care coverage has declined, more employees sought to cover health
problems under workers' compensation. Many people believe there has been increased fraud as well.
Workers' compensation programs vary from state to state, but in most programs, insurers attempt to provide
employers with an incentive to limit safety problems by developing an experience rating. The ratings
compare an individual firm's experience with other firms of its type. If the rating is better than average,
insurance premiums will be lower; if it is worse, they will go up. In this study, we looked only at California
firms. In California, employers are assigned a "manual rate," an insurance rate expressed as a percentage of
every $100 of payroll. Rates are assigned to all companies based on their industry classification.
These rates are then adjusted for companies with a premium above a certain level according to their actual
experience. This means smaller and less risky firms are not assigned an experience modification rating. The
experience modification rate is set for each year based on three years of past experience, excluding the most
recent year (because data are generally not yet available). The experience modification rate is determined by
looking at actual experience modified by a size weighting factor. For larger firms, the adjustment may be
very small; for smaller firms, actual experience is given a lower weight because a single incident can skew
results dramatically. This weighted experience rating now becomes the "experience modification" figure.
Theoretically, the average experience modification factor for any business classification should be 100%. A
company with a good record would have a rating under 100%; a bad record would rate higher. These
numbers are then multiplied by the manual rate to set the premium. In practice, the average rating is
somewhat under 100.

IT COMPANIES WRITE NEW ESOP STORY

Will I ever get to exercise my stock options? It's the one question haunting IT industry professionals sitting
on piles of employee stock options. All those who happily grabbed at ESOP's issued by their companies last
year, have now been left holding pieces of paper that are, in some cases, worth a fraction of the price at
which employees brought into them. Except for a few who have benefitted from older schemes like Infosys
1994 scheme, the great ESOPs dream is turning out to be a nightmare. Last year, if you were given ESOPs
in an IT company, your friends, neighbors and everyone else went up like a blimp, companies issued ESOPs
in cartloads. And employees brought into them, even at the higher prices that the grants came from.
According to a study carried out by Nasscom , there were more than 10,000 IT staff last year holding around
18 million ESOPs valued at roughly Rs 12,000 crore($3 billion) at February '00 prices. But all this was
merely on paper.A year later, the situations something like this. Employees who were given ESOPs at the
prices prevailing during the IT boom, had to sit back and watch their share prices hit the roof while they
waited out the lock-in period. Now, they can exercise their options that are sell them, and pocket the
difference between the exercise price at the time of the grant, and the current market price. It's resulted in a
situation where employees have been left holding NIIT options which they would have to exercise at a price
of Rs 1,593 or Silver line options, which they would have to exercise at a price of $25. At Visual Soft, for
instance, all employees who were granted options have returned them to the company. Consequently, the
company has terminated the ESOP scheme. Theoretically, an employee who exercised his option now would
have to buy at the exercise price, sell at the current market price, and pay out the difference.

ESOPs HARDLY BENEFICIAL -

At the height of the IT euphoria in the markets, those employees saw their company's scrips scaling new
heights, they could not benefit as the ESOP's had 1-2 year lock-in periods, and could not be sold. The lock-
in period, also known as the vesting period in industry jargon, in the period during which the employee
cannot convert his or her option into shares. To make matters worse, some companies has specified that the
option had to be exercised, that is converted into shares, within a specified time frame after the locking
period expired. For instance, this was one year in the case of Silver line, and 10 in the case of Aptech.

Table
ESOP IN INDIAN CONTEXT
Recent ESOPs

No of Plan Exercise Vesting Current

Shares Plans Period Price
(Lakh)
(Rs) (Yrs) (Rs)

NIIT 18.1 Aug '04 1,593 1 162

Silver line 10.0 Nov '04 425 1.5-3.5 41

Patni 5.5 Dec '04 245* 1 54

HCL Infosys 30.2 Aug '04 289 NA 72

SSI 1.5 Sep '04 555 3 164

Wipro 3.5 Oct '04 2,397 1-2 1,485

Infosys 19.6 Oct '04 6,249 5 3,532

Visual Soft 0.2 Aug '04 NA 1 116

Polaris 8.5 Aug '04 480 5 120

EMPLOYEE STOCK PURCHASE PLANS (ESPPS)

Employee stock purchase plans (ESPPs) include both tax-qualified "423 plans," which about 2,400
companies offer, and nonqualified plans, which about 1,500 companies offer. Our estimates are based on
data from Share Data’s Equity Compensation Trends in America (1991), Hewitt Associates' On Employee
Stock Ownership (1996), Hewitt Associates' Survey Findings: Employee Stock Purchase Plans (1998), and
the National Association for Stock Plan Professionals' Stock Plan Design and Administration Survey (1998),
especially the more recent studies. To estimate the number of employees covered under the plans, we took
the total number of companies offering plans, multiplied those numbers by the average number of
employees in the companies (13,207 for 423 plans and 17,790 for nonqualified plans), and multiplied that
number by the average percentage of participation in the plans (34% for 423 plans and 17% for nonqualified
ESPPs). Almost all companies with ESPPs are public.
Multiple Plans: Many companies offer multiple e plans, and many employees participate in more than one
plan. For example, many ESPP participants are also in 401(k), stock option, or other equity compensation
plans. Hence, the total number of participants in all these plans is definitely not the total of the numbers in
the "Number of participants" column.

ESOPS AND CORPORATE GROWTH

A 2000 study by Joseph Blasi and Douglas Kruse at Rutgers University found that ESOP companies grow
2.3% to 2.4% faster than would have been expected without an ESOP for sales, employment, and sales per
employee. The study looked at all ESOP plans set up between 1988 and 1994 for which data was available.
A 1987 NCEO study of 45 ESOP and 225 non-ESOP companies found that companies that combine
employee ownership with a participative management style grow 8% to 11% per year faster than they would
otherwise have been expected to grow based on how they had performed before these plans. Subsequent
studies by the General Accounting Office and by academics in Washington State and New York found the
same relationship. A 1999 study for Hewitt Associates by Hamid Mehran of Northwestern University found
that the returns on assets for 382 publicly traded ESOP companies was 2.7% per year greater than what a
model of their predicted performance would have been. Studies on participative management alone find a
small positive impact on performance, but not nearly, enough to explain the synergy between ownership and
participation these other studies have found.
 Chapter-2

REVIEW OF
LITERATURE
Rosabeth Moss Kanter said, “Human beings are good raw material, they become assets when you train
them to increase their knowledge and skills". She added that only a few organisations really train people
to make them a success.

Seconding this, Mr Peters pointed out how most organisations are not serious about developing people.
They spend on an average 26.3 hours per person per year on training. A surgeon, a pilot or an athlete on
the other hand spends 10-15 times more on training.

Tom Peters said, “We have transitioned from an asset-based economy to a talent-based economy. The
new definition of lay-off is untalented go talented stay. Leaders must realise that talent is equal to
brand". His new theory is EVP which means "Employee Value Proposition".

Universities like Cornell, MIT, Stanford, etc, have started emphasizing e-learning to attract a worldwide
audience. Web-centric universities are becoming the order of the day.

William Taylor, editor and managing partner of the Fast Pace magazine, said, "There is no going back
from back from dotcoms". He was of the opinion that there is a merger taking place between computers
and human beings. According to a study carried out by Nasscom , there were more than 10,000 IT staff
last year holding around 18 million ESOPs valued at roughly Rs 12,000 crore($3 billion) at February '00
prices. PramaNath
India's growth story has drastically slowed down due to the cascading effect of the slow global economy.
Organisations are suffering, employees are confused and HR – the profession – has been unofficially
assigned the unenviable task of retention, higher productivity, even helping increase of sales revenue by
using a synthesis of the tools at its disposal and innovative thought leadership

People and knowledge retention during these tough times will propel the talent management domain in
the forefront and ensure it doesn't remain consigned to a folder in the laptop of the talent manager after
the annual talent review ritual. From using reliable tools in hiring and assessing employees to developing
high potential talent, creating a strong leadership bench and work on a robust succession planning
strategy, talent management will become an empirically substantiated document for the business and HR
leaders to retain people and curb knowledge transfer outside the organisation.

The role of the Human Resources Department has changed dramatically over the past 30 years and will
become increasingly more strategic in nature in the future, said a leading light of the HR community in
the recent 2006 Annual Conference and Exposition of HR practitioners in Washington, DC.

Rita Craig, president of the Craig Group and a long-time professional HR consultant, said the role of HR
has changed from a primarily administrative position to one that is more strategic. Times certainly have
change from those days when the HR department was called the "smile and file" department since in that
era, the primary qualifications for HR were simply a friendly disposition and an ability to file.

She said that the emerging trends in HR call for HR professionals to take the lead in planning for the
future and becoming strategic business partners in their organizations. She identified several other trends
in the industry, as follows:

(1) a shrinking talent pool,

(2) An increase in outsourcing,

(3) A more intense focus on work/life balance;

(4) Changing workplace demographics,

(5) Greater need for talent management,

(6)Ethics requirements, and

(7)Globalization

The key appears to be strategic planning. With the changing landscape of Human Resources
management in the years to come, strategic planning will be the key for HR to meet those needs and to
succeed. The key to HR planning for the future begins with one simple question that HR professionals
have to ask themselves, says Craig: "If we are successful in the years to come, what will our customers
and competitors be saying about us?” With the answers to this question, HR practitioners can formulate
a clear, shared vision and a sense of direction for the organization. As a possible starting point in
providing answers to the key question, Craig suggested the following: Focus resources on key goals and
strategic measures, create and sustain long-term performance, and create a living document that can
change when necessary.

In closing, Craig warned against "powerful and pervasive barriers" that prevent HR professionals from
being effective in their roles. She pinpointed these as resistance to change, failure to implement plans,
the wounds of past strategic planning failures, and failure to anticipate the impact on people, process and
organizational structure.

To quote Thomas P. Foley, Secretary of the Pennsylvania Department of Labor and Industry:” We’ve
changed from the idea of "one skill, one job" to the reality of a range of skills that have to apply to a
number of different kinds of professions. More to the point, workers must possess a skill that they
continually upgrade just to keep pace in the professions they choose."
 Chapter – 3

OBJECTIVE, SCOPE, SIGNIFICANCE

OF STUDY

& RESEARCH PROBLEM STATEMENT

OBJECTIVES OF STUDY
Following were the objectives of the study:-

1. To enlist emerging HR trends in Indian IT Industry

2. To find out lacking areas regarding the HRD in IT sector.

3. To measure the perceptions of IT sector employees in respect of application of HRD in their organization.

4. To suggest the measures to fill the gaps and improve motivation level of employees and HR management
in IT industry.

5. The goal of improved organizational effectiveness and an orientation towards reengineering and skills
guided the development of the proposed job design approach.
SCOPE OF STUDY
Following were the scope of the study:-

 To know the emerging HR trends in Indian IT Industry.

 Give information about the Indian IT Industry.
 To know about the HR problems of Indian IT Professionals.
 Give information that what’s wrong seems to be the trend.
SIGNIFICANCE OF STUDY
 Optimum Utilization of Human Resources
 Healthy work environment –Due to study of HR trends in IT Industry we find the deficiencies and
helps in creating the healthy working environment. It helps to build good employee, relationship so
that individual goals aligns with organizational goal.

 The study focused on the information technology community and how works processes and activities
could be better organized to remove artificial barriers and improve organizational effectiveness, a
process often associated with the term "reengineering.

 The study focused on developing a job design approach that could adapt to changing skill
requirements and that would promote the continuous acquisition of skills for knowledge-based
employees in information technology.

RESEARCH PROBLEM STATEMENT

Significant problem areas, which may be contributing to the present scenario and can be addressed, can be
identified as given

Post employment care - The companies/organizations should take adequate interest in the career
development of the employee by suitable HRD approaches which should include the following:
i. Opportunities for creative work in the first phase particularly for those who are bright, and have an
aptitude and come with a good pedigree say from IITs.
ii. Opportunities to lessen the monotony and improve interpersonal relationship

Recruitment process - Aptitude tests could be conducted by reputed institutes like IITs/ private
organizations/HR agencies for prospective professionals preferably ``on-line'' like GRE, GMAT etc. or
physically at regular intervals and scores are given. If it is no on-line, the periodicity can be a month or two
and the validity can be for an year or so which can also be fixed based on general agreement.

Chapter–4

RESEARCH DESIGN
AND
METHODOLOGY
RESEARCH METHODOLOGY
"A research is a careful investigation or inquiry especially through search for new facts in any branch of
knowledge; it is a systematized effort to gain more knowledge"

(A)Types of research
Types of Research selected for this project is EXPLORATARY .In exploratory research design we focused
the objective of the study, method of data collection and then select the sample. After collection the data we
analyses and at last interoperate the final result & finds the best solution of particular problem. In
Quantitative research is based on the measurement of quantity or amount. It is applicable to phenomena that
can be expressed in terms of quantity

(C)Method of data collection

Secondary data has been used from various internet sites such as motorola.com & google.com has been
used.
 Chapter–5

DATA ANALYSIS
AND
INTERPRETATION
Indian IT sector is contributing a large in employment and foreign exchange. A developing country like
India can ill afford continued conflict ridden; rigid and litigation oriented Industrial Relations.
What employees perceive about the emerging HR trends of the IT organisation has been measured.
To measure the success and failures of emerging HR trends of Indian IT Industry a structured questionnaire
is prepared for this purpose.
The questionnaire included both open ended and close-ended questions. The questionnaire used is placed at
Appendix "I".
The procedure adopted for data collection was interview with the employees randomly selected from IT
organization to the extent possible and also through mail. .
The responses given by the respondents were recorded on the questionnaire. The view expressed by the
respondents has been analyzed in the succeeding paragraphs. About 100 respondents were selected by
convenient random sampling technique.

RESPONDENTS PROFILE - EDUCATION-WISE

The main features of the employees randomly selected sex-wise, education-wise and type of functions wise
has been provided here in the succeeding paras.
The 54 per cent of the respondents were Male and 46 per cent of the respondents were Female
 Respondents' Qualification Percentage Of
Respondents
Non-Tech Graduate and Below 11%
Non-Tech Post Graduate 23%
B.Tech/ BCA etc. 34%
M.Tech/MCA Etc. 32%
TOTAL 100%

DATA ANALYSIS OF THE RESPONSES OBTAINED FROM EMPLOYEES.

1. Whether Indian IT Industry needs a trade union or management's?
Respondents grading with %: No trade union (21%) Single trade union (13%) Multi trade union
(09%) Only welfare association (57%)
Interpretation –The respondents were asked to comment upon whether Indian IT Industry needs a trade
union or managements are looking after the employee’s interest in the best possible manner. The largest 57
percent of the respondent’s view that there should be only welfare association in Indian IT industry. 21%
need no trade union and 13% like single trade union only. 9 percent of the respondents opted for multi trade
union.

2. In your view whether excessive competition in Indian IT sector is harming the overall long term
prospects of employees in this sector?
Respondent’s observations with % - Yes (53%) No (35%) No comments (12%)
 Interpretation: Whether excessive competition in Indian IT sector is harming the overall long term
prospects of employees in this sector the respondent’s opinion is that 53 percent of the respondents has
replied in Yes to this question. While 35% has a negative viewpoint & 12% Respondents no reply.

3. Whether IT industry can afford old traditional trade union methods of agitations like Strike or
Gherao etc.?
Respondent’s observations with % - Yes (67%) No (28%) No comments (05%)

Interpretation: Whether IT industry can afford old traditional trade union methods of agitations like Strike
or Gherao etc. was also asked from the employees. The question was direct in nature of Yes or No. 67% of
the respondents has given their reply in No and 28% answered in affirmative. 5% has ticked No Comments
choice. So, it is concluded that old agitational techniques of trade unions are not desired in IT industry.
4. Existing Indian labour Laws/Rules are not strictly applicable to Indian IT Industry as IT sector
employees are quite different from general factory workers and are well educated and trained. The
separate Labour Laws/Rules should be designed for IT Industry?
Respondent’s observations with % -Strongly agree (57%) agree (32%) No comments (11%)

Interpretation: Existing Indian labour Laws/Rules are not strictly applicable to Indian IT Industry as IT
sector employees are quite different from general factory workers and are well educated and trained. The
separate Labour to whether as Laws/Rules should be designed for IT Industry: This hypothesis was
presented to the respondents. They were to respond up to which extent they agree or disagree. The
comfortable majorities of respondents (89%) strongly agree or agree with the hypothesis that Indian IT
sector requires separate labour management system/ regulations. While only minority of 13% has given
divergent views.

5. What the HR managers of Indian IT sector should do to increase the retentivity rate of its
employees?

Respondents' Suggestions with %: Increase wages to international levels (22%), Increase foreign postings
(36%), Increase profit sharing (10%), More promotions (11%), Others (21%)
 Interpretation: A 22% of the respondents has suggested increasing the wages to international level to
increase employees retentively in Indian IT industry. 36% want more foreign postings, 10% suggest increase
profit sharing and 11% suggested more promotions. 21% of the other suggestions included lateral induction
from lower the institutes and better HR management.

6. The most of the employees of Indian IT sector or highly educated and sensitive in nature.
Moreover, the opportunities outside are very attractive, Whether Indian IT Industry is able to
retain its employees?
Respondent’s observations with % - Yes (61%) No (23%) No comments (16%)

Interpretation: The most of the employees of IT sector are highly educated and sensitive in nature.
Moreover, the opportunities outside are very attractive, whether Indian IT Industry is able to retain its
employees was the next opinion query from the randomly selected IT industry employees. 61% of the
employees view that Indian IT companies are unable to retain its employees due to most attractive avenues
outside. Only 23% viewed that they are able to retain the employees.

7. What is the state of employee employer relationship in Your Organisation?

Respondents grading with %: Excellent (14%) Very Good (44%) Satisfactory (28%) Poor (14%)

Interpretation: Cordial employee employer relationship is very essential in the upcoming highly
competitive economy. The state of employee employer relationship in Indian IT Industry was measured
through the next question. The state of employee-employer relationship is not very encouraging. 58 percent
of the respondents has graded it very good and above. While 42 percent consider it satisfactory and below.
The employment of modern technology requires more positive and effective relationship between
management and the employees. Indian IT Industry has very effective employee employer relationship.
8. Whether IT Industry has a Positive attitude towards its employees?
Respondent’s observations with % - Yes (43%) No (48%) No comments (9%)

Interpretation: It has been found that in many organisations the management ignores the employee’s
welfare for their profit sake and does not give proper attention towards employee’s career and prospects.
What is the state of affairs in IT Industry in India was quizzed from our valued learned respondents. The
results are mixed one. While 48% of the respondents' replied in negative and 43% gave a positive reply. So,
there is a profit motive operating more than employees proper welfare management in Indian IT Industry

9."The grievances of the employees in Indian IT sectors are handled properly". To what extent do you
with this statement.

Respondents' Observation with % : Strongly Agree (12%) Agree (39%) No Comments (14%)
Disagree Strongly (26%) Disagree (09%)
 Interpretation: The respondents responses to the status of grievances handling mechanism was through
an indirect approach. In this Question the respondents were to comment upon the positive hypothesis
that grievance handling is done properly in the IT organisation. The five choices provided were strongly
agree, agree, no comments, disagree and strongly disagree. Only 12 respondents strongly agree to the
statement and similarly a small number of 9 respondents strongly disagreed with this. Only 14 percent have
nothing to comment. 39 percent agree that the grievance handling IN Indian IT industry is done properly and
remaining 26 percent disagree with it.

10. Whether new compensating methods being adopted by the various IT companies are positively
affecting the employee’s welfare?
Respondent’s observations with % positive effect (46%) negative affect (19%) no effect (26%) Can’t
say (9%)

Interpretation: The IT industry has been devising newer compensation methods like Profit Sharing/
Stock Options etc. to increase employee welfare and retentively. Whether these new compensation
techniques are positively effecting or not was the key point in our next question. 46% of the employees
opined that newer compensation methods has a positive effect in IT industry while 19% said that it has a
negative effect on employee welfare. 26% view that it has no major effect and 9 percent has replied in CAN
NOT SAY. . In the initial stages when IT Industry was sunrise, the employees and when an IT industry share
price has gone down mostly welcomed it. It has a negative effect

11. Whether you feel that HR needs of Indian IT sector is different from old HR practices?

Respondent’s observations with % - Yes (69%) No (23%) no comments (8%)

Interpretation: Through the Question of the questionnaire, the respondents were asked to comment
whether the HR needs of Indian IT industry are different from traditional HR Management systems. It was a
direct question in Yes/NO/No comments format and IT professionals selected for survey were asked to tick
one of the choices as mentioned. The majority of respondents (69%) view that HR needs of IT industry are
different from old economy sector and HR managers in IT industry has to keep this into mind. Being
highly educated employees are very sensitive in pride and behavior.
 Chapter –6

FINDINGS
AND
CONCLUSION
FINDINGS:
 As per the Resarch result Indian IT sector feel different HR needs.
 New compensation techniques in Indian IT Industry are giving positive effect.
 Employees Grievances are not properly handled in these Industries.
 Good relationship between employee and employer in Indian IT Industry.
 Indian IT companies are unable to retain its employees due to most attractive avenues outside.
 Excessive competition in Indian IT sector is harming the overall long term prospects of employees in
this sector.
 Shortage of IT workers in India.
 More employees say that negative attitude of IT sector towards its employees.
 CONCLUSION:

 It can be concluded that Emerging HR trends of Indian It industry are quite different from the old
economy industry.
 India is considered one of Super Power in Information Technology and allied fields.
 Majority of world leaders in IT sector are outsourcing their requirements from Indian IT Industry and
recruiting Indian IT professionals.
 The Indian Government must allow the Industry to meet international competition and desired
environment in respect of Labour Laws and financial rules must be liberalized for this Indian IT
Industry.
 HR managers in Indian IT Industry must keep the sensitive nature of IT professionals and state of
greater opportunities outside in mind for devising HR policies for their organization.
 China is also entering this area vigorously and Government of India must help Indian It industry to
meet this challenge.
 Chapter –7

SUGGESTIONS
AND
LIMITATIONS
SUGESSATIONS:
 It is found that in these Industries employees grievance are not properly handled so for retaining the
employee first of all employee grievance are handled.
 Indian IT Industry want that they provide the attractive avenues to its employee for retaining good
employee.
 Provide the training & development program time to time to employee for meeting the competition.

 The main problem of Indian IT sector is hoe they retain the employee , so Indian IT sector want that
they provide the job security to employee.

LIMITATIONS:
 Employees by and large are reluctant in expressing their feelings/thoughts in the Questionnaire and
tend to be biased.
 The Organization is reluctant to openly share data/information and tend to keep sensitive
data/information confidential which is understandable.
 Some personnel in the Organization, irrespective of their seniority, cannot pay adequate attention to
the requests of such studies given the constraints of time and the work pressures prevalent in the
Industry today.
 Long term perspective
BIBLIOGRAPHY
 BOOKS REFERENCE:

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Websites Reference
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www.wikipedia.com
www.investopedia.com
www.kml.com
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www.beemadeals.com