AMITY BUSINESS SCHOOL

AMITY UNIVERSITY
UTTAR PRADESH

PROJECT REPORT

SUBJECT: HUMAN RESOURCE MANAGEMENT

DATE OF SUBMISSION: 05/01/09

Submitted To: Submitted By:

Mrs. PARUL mam

(2010)

ACKNOWLEDGEMENT
 We want to express our heartfelt respect and gratitude to
prof. Parul Jhajharia who helped us a lot in this project and
without her guidance it would not have been possible for us to
complete this project.

Last but not least, we are indebted to all those persons, who
encouraged and helped us during the accomplishment of this
project work. Finally, we thank all who helped us during the
course of our project work.
AUTOMOBILE SECTOR
HERO HONDA
The joint venture between India's Hero Group and Honda Motor Company, Japan has not
only created the world's single largest two wheeler company but also one of the most
successful joint ventures worldwide. During the 80s, Hero Honda became the first
company in India to prove that it was possible to drive a vehicle without polluting the
roads. The company introduced new generation motorcycles that set industry benchmarks
for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign
captured the imagination of commuters across India, and Hero Honda sold millions of
bikes purely on the commitment of increased mileage.

Hero, the brand name synonymous with two-wheelers in India, is a multi-unit, multi-
product, geographically diversified, Group of Companies - the reflection of the steely
ambition and indomitable grit of the Munjal Family. Trace the saga of the "Hero" -
through more than 50 years of Enterprise and Achievements, of Vision and Planning.
Always blazing through the trails of success.
Hero Honda is currently the worlds largest motorcycle manufacturer thanks to its fuel
efficient, high quality products made in collaboration with Honda motorcycles, Japan.
Hero Honda has a wide variety of models ranging from the CD Deluxe in the value for
money market to the recently upgraded Karizma R which has set the new norm in the
performance segment.
Old favourites like the Splendor + and Passion + have been upgraded and joined by
variants such as the Splendor NXG.
In the growing 125cc segment the Super Splendor and Glamour sport the new 125cc
Quantum Core engine and are gaining popularity.
The Hero Honda CBZ Xtreme and its sibling the Hunk compete with each other in the
performance segment.

Mission
Hero Honda’s mission is to strive for synergy between technology, systems and human
resources, to produce products and services that meet the quality,performance and price
aspirations of its customers.

Vision
Hero Honda is committed to supply Indian market with superior performance clutches at
rational prices through consolidated production system, conscientious quality control and
continuous improvement of process efficiency.
Strategies

Hero Honda has worked out a major expansion strategy for the rural markets and is
planning to strengthen retail financing to support the initiative, that could lead to setting
up of its own finance arm. As part of its strategy, Hero Honda is mapping the
demographic landscape to formulate region-specific modules to tap customers at a very
local level.For example , distinct strategies are being evolved to leverage regional
festivals such as Pongal and Onam in the south, Gudi Padwa in Maharashtra, Durga Puja
in the eastern region , Dhanteras and Diwali in the north.

The company is also reaching out to ‘opinion leaders’ . Village haats and mandis are also
being targeted to reach customers.
The company is tying up with new partners, including local cooperative banks and
financing units to have a robust financial model.
The company is also expanding its distribution network to support the rural initiative. It
has grown its network by over 50% over the last two years from 2,000-3,000 ‘touch
points’, that include authorised dealerships, service and spare parts outlets, and dealer-
appointed outlets across the country. This would be further expanded to 3,500 this year.

Bajaj Auto also has an aggressive strategy for rural markets and has set up a separate
dealer structure—rural dealerships—for this purpose.

Just-in-Time Manufacturing

The Hero Group through the Hero Cycles Division was the first to introduce the concept
of just-in-time manufacturing. The Group boasts of superb operational efficiencies. Every
assembly line worker operates two machines simultaneously to save time and improve
productivity. The fact that most of the machines are either developed or fabricated in-
house, has resulted in low inventory levels.

In Hero Cycles Limited, the just-in-time inventory principle has been working since the
beginning of production in the unit. This is the Japanese style of production. In India,
Hero is probably the only company to have mastered the art of the just-in-time inventory
principle.

Ancillarisation

An integral part of the Group strategy of doing business differently was providing
support to ancillary units. There are over 300 ancillary units today, whose production is
dedicated to Hero's requirements and also a large number of other vendors, which include
some of the better known companies in the automotive segment.
 Labor relations

In Hero Group there is no organized labor union and family members of employees find
ready employment within Hero. The philosophy with regard to labor management is
"Hero is growing, grow with Hero." Hero workers receive a uniform allowance, as well
as House Rent Allowance (HRA) and Leave Travel Allowance (LTA). Extra benefits
include medical check-ups not just for workers, but also for the immediate family
members. For the majority of the production workers, who are hired through contractors,
these benefits are out of reach. This and other problems lead to a strike and factory
occupation by 4,000 temp workers in the Gurgaon plant in spring 2006.

Diversification

Throughout the years of enormous growth, the Group Chairman, Mr. Lall has actively
looked at diversification. A considerable level of vertical integration in its manufacturing
activities has been ample in the Group's growth and led to the establishment of the Hero
Cycles Cold Rolling Division, Munjal and Sunbeam Castings, Munjal Auto Components
and Munjal Showa Limited amongst other component-manufacturing units.

Then there were the expansion into the automotive segment with the setting up of
Majestic Auto Limited, where the first indigenously designed moped, Hero Majestic,
went into commercial production in 1978. Then came Hero Motors which introduced
Hero Puch, in collaboration with global technology leader Steyr Daimler Puch of Austria.
Hero Honda Motors was established in 1984 to manufacture 100 cc motorcycles.

The Hero Group also took a venture into other segments like exports, financial services,
information technology, which includes customer response services and software
development. Further expansion is expected in the areas of Insurance and
Telecommunication.

The Hero Group's phenomenal growth is the result of constant innovations, a close watch
on costs and the dynamic leadership of the Group Chairman, characterized by a culture of
entrepreneurship, of right attitudes and building stronger relationships with investors,
partners, vendors and dealers and customers

SWOT analysis
• Strengths
o Ability to understand customer’s needs and wants
o Recognized and established brand name
o Effective advertising capability
• Weaknesses
o R&D is not close to the hero manufacturing plant
o Hero is vulnerable in the joint venture because Honda Motor Company
has so much power

• Opportunities
o Global expansion into the Caribbean and Central America
o Expansion of target market (include women)
o Become India’s leader in the scooter market
• Threats
o Honda Motorcycles and Scooters India can take away market share and
cause joint venture to go sour
o Bajaj Motors is a strong competitor
HR POLICIES
OF
HERO HONDA
 HR POLICIES
HR as a function has undergone drastic changes. Both, companies that have built empires
over a period of time and those that have recently surfaced, owe their success to their
people. Hence, companies are working really hard on their human resources management
practices. Few have stuck to their age-old practices, while some others have blended
them with some modern day techniques.

Hero Honda Ltd. exemplifies an ideal blend of family values, partner values and
modern day practices. A joint venture company between Honda Japan and Hero Group
India, Hero Honda Ltd. has come a long way from being a two-wheeler manufacturer to
being synonymous with two-wheelers!

People management practices at Hero Honda are a reflection of those of their Japanese
partner, Honda Motors, although they differ in implementation. These differences could
be attributed to the diverse cultural backgrounds of their employees.

The ‘fill it, shut it, forget it ’mantra for its CD 100 model holds true for Hero Honda’s
HR practices!

Fill it  Hiring

No, not filling fuel in a bike but filling in organisational fuel-its people! The foremost
requirement for any organisation’s success is its employee fitment vis-à-vis its goals.
Filling in positions with employees that best suit the requirement governs the recruitment
policy at Hero Honda.

The recruitment process is an annual affair at Hero Honda carried out in two phases.
Phase one comprises hiring managerial and engineering recruits under the supervision of
corporate HR, in addition to a plant representative (either the HR head or a General
Manager). Campus recruitments and advertisements are main sources of hiring these
people.

Phase two involves shop floor hiring, for which the plant’s HR is solely responsible.
Hero Honda has put in considerable effort to drive its recruitment process at the plant
level. Pre-requisites have been laid down for positions at the plants. A diploma from
Industrial Training Institutes (ITIs) and experience determine a candidate’s rank in the
organisation. Prior to the interview process, a written exam is held to assess candidates’
technical / professional knowledge, IQ and general aptitude. Traits like honesty,
earnestness and integrity are assessed during the interview. The company’s internal
sources are exercised for filling in senior level hiring needs. Employees from company
competitors are also considered seriously.

Shut it  Training

Having filled the positions, it’s time to equip employees with relevant information and
training. Hero Honda has a formalised induction programme at the plant and the
corporate levels. The duration of the programme varies for different recruits. Engineering
recruits, for instance, have a month-long induction programme, unlike managerial
recruits who spend comparatively less time. The difference is largely because the
engineering hires need more time on the production floor than the managerial and other
function recruits.

The induction programme begins with classroom lectures on the company’s vision,
mission, goals, culture and values. Interspersed with these are lectures by the top
management officials about their experiences in the company. Classroom sessions lasting
a couple of days are followed up by orientation to various functional areas. During the
induction process, employees are expected to maintain a record of their learning and daily
activities. This helps while providing feedback. Apart from the knowledge of business
operations, the five golden rules of work at Hero Honda- punctuality, cleanliness, and
quality of work, maintenance of equipment and courteousness and helpfulness towards
both external and internal customers are emphasised.

The employee development programmes at Hero Honda include areas like team
building, quality control, stress management, time management etc. Star performers are
given an opportunity to pursue correspondence courses in Japanese management
techniques, like 5 Sigma, TPM, TQC Kaizen and business process management.
Employees also have an option of taking ILO sponsored courses on labour management.

Employee Policy

“Hero is growing, grow with Hero,” is the governing principle of Hero Honda’s labour
management practices. It was one of the first few companies to offer benefits like house
rent allowance (HRA), leave travel allowance (LTA) and uniform allowance to its
employees.

The company shuns unionism. Instead it has well established communication channels
across organizational levels. The company’s Quality circle facilitates quality
improvement among employee groups. This apart it has a suggestion system that seeks
employee suggestions regarding work processes, company culture and other relevant
matters. Employees providing the best and implemental solutions are rewarded suitably.
Shift meetings and morning meetings that discuss routine problems and concerns besides
recognising employee efforts are some of the managerial level communication channels
at Hero Honda.

As a recruitment practice, employment is provided to family members of employees

especially in the case of untimely death or retirement.

Forget it

Having hired the right people, and equipped them with adequate information and training,
the company gives them enough opportunities to prove themselves. Interference in daily
chores is considered “bad manners” at Hero Honda.

PRINCIPLES
Today Hero Honda has managed to achieve indigenisation of over 95 percent, a Honda
record worldwide. Hero Honda is at present the largest-selling Indian motorcycle and
the most fuel-efficient in its category - the outcome of Hero Group's foresight and
another classic example of how the Group strives to provide the customer with
excellence and satisfaction.

Customer-centric:

The Company's success has been driven by customer centric policies and teamwork to
achieve progress and productivity. The philosophy of Hero Honda emphasizes the
"Pursuit of Excellence" in designing and manufacturing technologically and qualitatively
superior products and in creating economic value for its stakeholders. It takes care of its
customers through value based competitive pricing and good after sales service.

Excellent marketing, finance and loan services, an efficient dealer network, tactical
promotion comprising of fuel conservation campaigns, mobile workshops, safety driving
courses and others, all placed Hero Honda in a league distinct from the conventional. The
Company focuses on providing "Value for Money" through its pricing strategies and
after sales services.

Excellent Collaborator Relationship:

Hero Honda is now the leading two-wheeler Company in India in terms of net sales (sales
less excise duty value, which was Rs 3171 crores. It is both the leading two wheeler
manufacturer and sales operation among Honda's worldwide operations. The
Company has maintained excellent relationship with all stakeholders including its
collaborators. Hero Honda has emerged as the most successful joint venture Company of
Honda in the world, their relationship over 116 years old now.

ERP Implementation:

The Company has successfully implemented SAP R/3 (ERP Program - "Project
Synergy") thereby enabling proper planning and company wide efficiency. The modules
were implemented and stabilized in a record 10 months period. It speaks of the
commitment of the management and the implementation team towards making it
processes accountable and efficient.
Philosophies
AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY

At Hero Honda, their goal is not only to sell a bike, but also to help you every step of the
way in making your world a better place to live in. Besides its will to provide a high-
quality service to all of its customers, Hero Honda takes a stand as a socially responsible
enterprise respectful of its environment and respectful of the important issues.

Hero Honda has been strongly committed not only to environmental conservation
programmes but also expresses the increasingly inseparable balance between the
economic concerns and the environmental and social issues faced by a business. A
business must not grow at the expense of mankind and man's future but rather must serve
mankind.

"We must do something for the community from whose land we generate our
wealth."
A famous quote from our Worthy Chairman Mr.Brijmohan Lall Munjal

Quality Policy

Excellence in quality is the core value of Hero Honda's philosophy.

They are committed at all levels to achieve high quality in whatever we do, particularly in
our products and services which will meet and exceed customer's growing aspirations
through:
• Innovation in products, processes and services.

• Continuous improvement in our total quality management systems.

• Teamwork and responsibility.

Safety Policy
Hero Honda is committed to safety and health of its employees and other persons
who may be affected by its operations. they believe that the safe work practices lead to
better business performance, motivated workforce and higher productivity.

They try to create a safety culture in the organization by:

• Integrating safety and health matters in all their activities.

• Ensuring compliance with all applicable legislative requirements.

• Empowering employees to ensure safety in their respective work places.
• Promoting safety and health awareness amongst employees, suppliers and
contractors.

• Continuous improvements in safety performance through precautions besides

participation and training of employees