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ORGANIZATIONAL STRUCTURE
Satyam: A customer-centric organization
At the center of the Network of Circles is the customer, whose business requirements
are the driving force. Accordingly, the Circles are categorized as:
• Communication
• Collaboration
• Competency enhancement
• Customer intimacy
• Competitive edge
Satyam has several subsidiaries and Joint Venture companies that provide solutions
in niche areas.
Subsidiaries
Joint Ventures
• Satyam Venture Engineering Services Pvt. Ltd.
• CA Satyam ASP Pvt. Ltd.
Landmarks
Advantage Satyam
• World class processes (SEI CMM® Level 5, ISO 9001: 2000, eSCM)
• Global presence (Operations in 57* countries across 6 continents)
• Long lasting customer relationships (Nearly 80 % of repeat business)
• Flexible engagement models (RightSourcing delivery model, IDCs, GDCs, JVs)
• Evolved competency and solution-based services
• Technology-led innovator
• Experience in serving top-notch customers that include four of Top 10 Fortune
500 corporations
• Strong Domain knowledge
• Highly qualified IT professionals
• State-of-the-art infrastructure
• Offshore advantage
A PROFILE OF INDIAS SOFTWARE INDUSTRY
The global IT services market is estimated to be worth around US$ 570 billion in 2003,
as per Gartner's estimates. India's market share with estimated exports of US$ 12.2 billion
stands at a mere 3.3%. As such, the growth potential for the sector continues to be
immense.
The strength of the Indian software is indicated by the fact that the Indian software and
services exports have managed to grow by around 26%-28% over the past few years
despite the economic downturn that swept worldwide markets. While cost leadership has
been the competitive edge of the Indian software sector over the years, this seems to be
threatened now by multinationals that are replicating the Indian outsourcing model and
setting up bases in the country.
The booming IT industry (including software services outsourcing and IT enabled
services) has become emblematic of the success of the liberalisation agenda in India and
of the ongoing process of globalisation. It generated about $ 23 billion worth of annual
export earnings in 2005 and has creating about 800,000 jobs in a short span of time,
drawing young people into a global industry that is very different from anything India has
seen before. The IT industry has contributed substantially to the rapid economic growth
and cultural transformations that have taken place since the 1990s, as India has become
more integrated into the global economy. Moreover, the rapid growth of this industry has
produced visible and not-so-visible social and cultural transformations in cities such as
Bangalore, altering the urban landscape and creating previously unimaginable pockets of
wealth and avenues for geographical and social mobility within the urban middle classes.
Going forward, the advantage of low employee costs could dry out and the sector could
get commoditised. Besides, India has competition from the likes of China and Southeast
Asia as other outsourcing destinations.
Increasing competition and pressure on billing rates are among the key reasons forcing
the Indian software industry to make a fast move up the software value chain, thereby
providing high-value services to its clients. With competition for talent intensifying, the
need to retain key employees has gained weight.
As a global industry with strong connections with American companies, the Indian
software services and BPO industries have introduced novel management systems and
work cultures into the Indian workplace. These ‘new workplaces’ are characterised by
‘flat’ and non-bureaucratic organisational structures, informal relationships, emphasis on
teamwork, and flexible management policies. Most IT companies, both Indian and MNC,
offer relatively non-hierarchical work cultures, employee-friendly human resource
policies, attractive working environments and high salaries. But at the same time, the
industry is known for its high-pressure work atmosphere and long working hours, which
create high levels of stress, employee dissatisfaction, and high attrition rates.
. While there is considerable variation across the different sectors of the IT and among
companies (especially between Indian companies and multinationals), there are also
common patterns that can be identified.
While software and BPO companies struggle with high attrition rates and design novel
HR policies in order to retain employees, several aspects of the work culture of the IT
industry itself promotes this pattern of high mobility. The IT work culture encourages an
ethos of individualism in which employees seek career development primarily by job-
hopping. In the software industry, employability and career growth depend on continually
improving one’s ‘skill sets’ to keep up with rapid changes in technology, and adding
value to one’s resume through work experience, certifications, and the like, thus
individuals are responsible for developing their careers, often by changing jobs. This
pattern contributes to the fluidity of the software labour market and the pattern of labour
flexibility, which in the long run benefits the IT industry.
HR Challenges in the Indian Software Industry
Software is a wealth and job creating industry, which has in just a few years, grown to
US $ 1 trillion, employing millions of professionals worldwide. The Indian software
industry has burgeoned, showing a nearly 50% compounded annual growth rate over the
recent years. Being a knowledge-based industry, a high intellectual capital lends
competitive advantage to a firm. Intellectual capital comprises human capital and
intellectual assets?the latter being any created bit of knowledge or expertise. With a
global explosion in market-opportunities in the IT sector, the shortage of manpower both
in numbers and skills is a prime challenge for HR professionals. The related issues are
varied indeed: recruitment of world-class workforce and their retention, compensation
and career planning, technological obsolescence and employee turnover.
Retention and Motivation
Retention and motivation of personnel are major HR concerns today. People?a Gartner
group company specializing in management of human capital in IT organizations?has
observed that the average tenure for an IT professional is less than three years. Further,
the use of new technologies, the support of learning and training, and a challenging
environment ranked higher than competitive pay structures as effective retention
practices. Our own recent survey of 1028 software professionals from 14 Indian software
companies, showed that while the professional gave importance to personal and cultural
job-fit, HR managers believed that the key to retention was salary and career satisfaction.
Money was a prime motivator for 'starters', but for those into their third or fourth jobs,
their value-addition to the organization was more important. Monetarily, offering 'the
best salaries in industry' is the minimum every company is doing, apart from
performance-based bonuses, long-service awards, and stock options. Many organizations
frequently conduct employee satisfaction and organization climate surveys, and are
setting up Manpower Allocation Cells (MAC) to assign 'the right project to the right
person'. In fact, some are even helping employees with their personal and domestic
responsibilities to satisfy & motivate their workforce!
Increasing demands of technology coupled with a short supply of professionals (with the
requisite expertise) has increased the costs of delivering the technology. This makes
incentive compensation a significant feature, with the result that software companies have
moved from conventional pay-for-time methods to a combination of pay-for-knowledge
and pay-for-performance plans. With the determinants of pay being profit, performance
and value-addition, emphasis is now on profit sharing (employee stock option plans) or
performance-based pay, keeping in view the long-term organizational objectives rather
than short-term production-based bonuses. Skills, competencies, and commitment
supercede loyalty, hard work and length of service. This pressurizes HR teams to devise
optimized compensation packages, although compensation is not the motivator in this
industry.
As with any other professional, what really matters to software professionals is selecting
'the best place to work with'?which is what every company is striving to be. The global
nature of this industry, and the 'project-environment' (as opposed to ?product
environment?) has added new cultural dimensions to these firms. In a value-driven
culture, values are determined and shared throughout the organization. Typically, areas in
which values are expressed are: performance, competence, competitiveness, innovation,
teamwork, quality, customer service, and care and consideration for people. Flat
structure, open and informal culture, authority based on expertise and ability rather than
position, and flexi-timings are some of the norms software firms follow. The idea is to
make the work place a 'fun place' with the hope of increasing loyalty and commitment.
Coping with the Demand-Supply Gap
Shortage of IT professionals is global in nature and not peculiar to the Indian software
industry alone. W. Strigel, founder of Software Productivity Centre Inc. (1999) has
projected the shortage of software professionals to be one million by 2006. In fact, a
survey reports that 75 per cent of US companies planned to reengineer their applications
using newer technologies, but found that 72 per cent of their existing staff lacked the
skills needed in these technologies, and 14 per cent were not even re-trainable.
For India, it is predicted that in the year 2004 itself, the IT sector will need 1,95,000
professionals. This trend will continue, and in the year 2010 almost 3,70,000 IT
professionals will be required (Strategic Review Reports, NASSCOM 1996-2001).
Consequently, recruitment managers are exploring new sources of IT manpower from
non-IT professional sectors, as well fresh, trainable science graduates.
Integrating HR strategy with Business Strategy
The strategic HR role focuses on aligning HR practices with business strategy. The HR
professional is expected to be a strategic partner contributing to the success of business
plans, which to a great extent depend on HR policies pertaining to recruitment, retention,
motivation, and reward. The other major areas of concern for HR personnel in this
context are, management of change, matching resources to future business requirements,
organizational effectiveness, and employee development
Today?s corporate culture needs to actively support quality and customer orientation.
With globalization and rapid technological change, quality is of utmost importance for
the Indian companies, which earn most of their revenues through exports. Hence, the HR
professional as a strategic partner needs to encourage a culture of superior quality to
ensure customer satisfaction?the only real measure of quality of a product or service.
To be competitive today, an organization needs to be customer responsive.
Responsiveness includes innovation, quick decision-making, leading an industry in price
or value, and effectively linking with suppliers and vendors to build a value chain for
customers. Employee attitudes correlate highly with customer attitude. The shift to a
customer focus redirects attention from the firm to the value chain in which it is
embedded. HR practices within a firm should consequently be extended to suppliers and
customers outside the firm.
Rapid and unpredictable technological changes, and the increased emphasis on quality of
services are compelling software businesses to recruit adaptable and competent
employees. Software professionals themselves expect their employers provide them with
all the training they may need in order to perform not only in their current projects, but
also in related ones that they may subsequently hold within the organization. As observed
by Watts Humphrey, Fellow of the Carnegie Mellon University, "?as software
professionals gain competence, they do not necessarily gain motivation. This is because a
creative engineer or scientist who has learned how to accomplish something has little
interest in doing it again. Once they have satisfied their curiosity, they may abruptly lose
interest and seek an immediate change". And when the rate of technological change is
high?may be higher than the time required to acquire competence in one area?
professionals could undergo psychological turbulence owing to the need to work in a new
technology throughout their career. They want to gain new knowledge, which will be
utilized by their organization. On the basis of the new learning they want to work in
higher segments of software value chain. Therefore, constant up-gradation of employee
skills poses yet another challenge for HR personnel.
In Conclusion
With the advent of a work situation where more and more companies are having to
concede that their valued employees are leaving them, a new concept of career and
human resource management is bound to emerge. The focus of this new paradigm should
not only be to attract, motivate and retain key 'knowledge workers', but also on how to
reinvent careers when the loyalty of the employees is to their 'brain ware' rather than to
the organization.
With lifetime employment in one company not on the agenda of most employees, jobs
will become short term. Today's high-tech employees desire a continuous up-gradation of
skills, and want work to be exciting and entertaining?a trend that requires designing work
systems that fulfill such expectations. As employees gain greater expertise and control
over their careers, they would reinvest their gain back into their work.
HR practitioners must also play a proactive role in software industry. As business
partners, they need to be aware of business strategies, and the opportunities and threats
facing the organization. As strategists, HR professionals require to achieve integration
and fit to an organization's business strategy. As interventionists, they need to adopt an
all-embracing approach to understanding organizational issues, and their effect on people.
Finally, as innovators, they should introduce new processes and procedures, which they
believe will increase organizational effectiveness.
NEED FOR STUDY
While India does have a large talent pool (annually 167,000 engineering students and
1.54 million graduates pass out of the country’s educational institutions), not all are
‘industry-ready’ or equipped with the necessary skill sets to become useful to the
companies. This means that while there is plenty of supply at the entry level ,there are
huge gaps in the middle management and senior management levels.
This has resulted in increased levels of poaching and attrition
cases. Presently, the average attrition rate faced by the software industry is somewhere
around 30-35 percent.In such a situation,it is important to retain the best employees.The
cost of replacing an employee is estimated as up to twice the individuals annual salary
and this does not include the cost of lost knowledge
Hence Satyam felt that a study on employee retention was needed to
understand ways in which they can improve retention
OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVE
To study the extent of Employee Retention at satyam development centre Bangalore and
identify the factors affecting the same
SECONDARY OBJECTIVE
• To collect and analyse the perceptions of the internal employees on the various
factors affecting employee job satisfaction which inturn affects retention of
employees like
Working condition
Opportunity of growth
Rewards and recognition
Sensitivity of the company to the employee needs
Team work and support from the reporting managers
Performance appraisal process
Training and development programs
• To collect and analyse the perceptions of the employees who left the company on
the reasons and factors which forced them to leave the organization
• To study about the various retention strategies adopted by different organizations
in different sectors
LIMITATIONS
Not much response was received for exit interviews
There may be a bias in the employees responses received from the internal
interviews conducted with the current employees.They felt that the negative
responses given would have an impact on their own jobs.
RESEARCH METHODOLOGY
RESEARCH DESIGN
SAMPLING DESIGN
Inthe first phase of the project exit interviews were conducted. The total
sample size taken for exit interview was 100.(employees who left the company the
previous year).But the sample size considered was 25.In the second phase survey was
done on the current employees to find their satisfaction level and to improve retention. A
sample size of around 20 employees were considered for this which included 5 senior
managers and the rest 15 employees with work experience of 1 yr or more with satyam.
SAMPLING TECHNIQUE
The sampling technique used was simple random sampling as the employees
were picked randomly who falls into a time frame of 1 year of exit, and for the internal
interviews employees who have a work experience of 1 year or more were set as the
sampling frame from which the sample population was randomly chosen.
DATA COLLECTION
PRIMARY DATA
The primary data for the exit interviews were was collected through mailers
and the data for the internal interviews on the current employees was collected through
face to face interviews
SECONDARY DATA
The secondary source of data collection was through the use of internet and
reference books.
FREQUENCY
0%
0%
VERY SATISFIED
48% SATISFIED
52% DISSATISFIED
VERY DISSATISFIED
INTERPRETATION
• From the above table we infer that around 52%employees are very
satisfied with the working conditions and around 48% employees find
the conditions just satisfactory.
• The employees feel that a more informal atmosphere should be
brought in and also the transportation timing should be more flexible
according to their working hours.
• As far as the working atmosphere of Satyam is concerned the
employees are more or less satisfied with it.
PERCEPTION OF EMPLOYEES ON THE OPPORTUNITIES FOR
CAREER GROWTH
satisfactory 13 26%
poor 0 0%
FREQUENCY
0%
26%
very good
44%
good
satisfactory
poor
30%
INTERPRETATIONS
• About 44% of employees feel that there is a very good opportunity for
growth in terms of career in satyam.Some of them could make
significant growth in their career as they got plenty of opportunites
and so they are highly satisfied
• There are around 30% of employees who feel its good and around
26% who feel its satisfactory
• The employees are highly satisfied that they have a lot of onsite
opportunities coming their way which they are very happy about
since they get a lot of exposure.
PERCEPTION OF EMPLOYEES ON THE REWARDS AND
RECOGNITION
very good 3 6%
good 25 50%
satisfactory 15 30%
poor 7 14%
6%
14%
very good
good
satisfactory
30%
50% poor
INTERPRETATIONS
More than 40% employees are not happy with the rewards and
recognitions given by the company.they feel that they are not
recognized for a good work done at the right time and the rewards are
not satisfactory
There are around 56% people who are very happy with the
recognition process and they feel that they are being rewarded by the
pat on the back awards for the good work done.They are very happy
with the present processes
PERCEPTION OF EMPLOYEES ON THE TRAINING AND
DEVELOPMENT CONDUCTED BY SATYAM
very good 3 6%
good 24 48%
satisfactory 21 42%
poor 2 4%
4% 6%
very good
good
42%
satisfactory
48% poor
INTERPRETATION
• More than 40% of employees feel that the training and development
program can be improved in the sense more programs could be
implemented which can really help their work easier and which they
can apply in their current job.They feel more knowledge sharing should
be there between the different circles within the company.They feel the
training timings should be more flexible and a need of more practical
exposure
PERCEPTION OF THE EMPLOYEES ON THE PERFORMANCE
APPRAISAL PROCESS CONDUCTED BY SATYAM
15% 10%
52%
INTERPRETATION
27
26
25 FREQUENCY
24
23
YES NO
INTERPRETATION
About 48% employees feel that the company needs to be more responsive to
their problems and needs.They feel that when they raise some requests,they don’t get
quick responses.
PERCEPTIONS OF EMPLOYEES ON THE TEAM WORK AND
THE SUPPORT FROM THE REPORTING MANAGERS
3% 0% very good
38% good
59% average
bad
INTERPRETATIONS
• Majority of the employees surveyed are very happy about the team they work
in and the support given by the project lead and the supporting managers
• They feel the reporting managers are very friendly ,understanding and guide
them very well in their project
• There were some employees who expressed dissatisfaction about their
relationship with the reporting managers,they feel that there should be more
interactions and meetings with them to increase the comfort level of
employees
FINDINGS
The main finding from the exit interviews is that majority of the
employees left the organization due to lack of recognition and
growth opportunity
Employees both the current employees as well as the employees who
left the company feel that the company should improve its annual
performance appraisal process.They feel that the normalization
process is unfair and is not consistent or uniformly applied based on
their performance
Relationship with the team mates and the support from the project
leads and the reporting managers is appreciable.All the employees are
very happy and satisfied with the team they work in and specified that
they received good support from their superiors