A DISSERTATION REPORT

ON

STUDY ON BEST HR PRACTICES IN IT INDUSTRY

BY

RUPALI MALI

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF

PROF.UMESH GRAMOPADHAY

THROUGH

DR. VIKHE PATIL FOUNDATION’S

PRAVARA CENTRE FOR MANAGEMENT RESEARCH AND DEVELOPMENT

PUNE-411016

2017-2019
 ACKNOWLEDGEMENT

I am overwhelmed in all humbleness and gratefulness to acknowledge all those who have
helped me to put the ideas, well above the level of simplicity and into something
concrete.

I owe a great debt to my guide Prof. UmeshGramopadhaywho provided information and

support to me at every stage of this work. His wisdom, knowledge and commitment to
the highest standards inspired and motivated me. My gratitude is also due to our Director
Dr. Manoj Narwade, for his unconditional support and guidance.

Rupali Mali
 DECLARATION

I hereby declare that the project titled “Best HR practices in it industry” is an original
piece of research work carried out by me under the guidance of Prof.
UmeshGramopadhaythe information has been collected from genuine & authentic
sources. The work has been submitted in partial fulfilment of the requirement of degree
of Master of Business Administration to SavitribaiPhule Pune University.

Date:

Place: Pune RupaliMali

 INDEX

Acknowledgements

Declaration

Index

List of Tables

List of Figures

Chapter 1 Introduction

Chapter 2 Review of Literature

Chapter 3 Research Methodology

3.1 Objectives of Study

3.2 Significance of Study

3.3 Scope of Study

3.4 Data Collection

3.5 Tools of Analysis

3.6 Limitations of Study

Chapter 4 Data Analysis and Interpretation

Chapter 5 Conclusion

6.1 Findings

6.2 Suggestions

6.3 Conclusion
 References

LISTOFTABLES

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Chapter No – 1.
 Introduction
India was declared itself open to Liberalization in the year 1991. This paved the way for industrialization and
rapid transformation in the Industry and Business sector Liberalization also meant change in the working
style of the people and hence organizations needed to innovate the HRM practices in an effort to ensure
survival in an increasingly hypercompetitive environment. (Som, July 2008) (Muduli, June 2012). The key
challenges of any HR department are employee acquisition, retention, developing employees, performance
management, and talent-management according to (Ramlall, 2009).Seeking, developing and engaging and
keeping talent is a big challenge for today’s organizations because of innumerable options available outside
(Ramlall, 2009). This is especially true for the Indian IT industry. Hence, (Ramlall, 2009) argues that if
companies continue to implement or use the traditional ways of Human Resource practices, is it quite
doubtful whether the HR manager would be able to sustain the organization during an economic downturn.
1.1 HRM in India
1.2 Previous research has shown that Human Resource Management is one of the most important
determinants of organizational performance or efficiency. According to (Stephen A. Stumpf, May-June
2010) companies functioning in India create a robust human resource team by incorporating a strong
organized HR practice in place.The authors, (Stephen A. Stumpf, May-June 2010)compared the HRM
practices implemented in private and public sector in India, and found some startling facts, such as the
HR practices used in the two sectors were quite similar on parameters such as 1) the structure of the HR
department, 2) role of the HR manager in corporate change, 3) recruitment and selection process, 4)
compensation and benefits, 5) training and development, 6) employee engagement, 7) and emphasis on
key HRM Strategies. It is also found that on certain parameters such as the compensation and training
and development, the private sector seemed to have adopted a practical approach such as screening and
testing of job applicants to ascertain the applicant’s job-fitness, training need analysis, training
evaluation, etc. These authors are also of the opinion that Indian companies whether big or small
implement HRM practices such as employee involvement practices, training and development
practices, employee welfare practices, managing employee relations to manage employees. (Stephen A.
Stumpf, May-June 2010) Foreign MNC’s have also realized the potential of Indian employees, and
hence are entrusting them to take up higher responsibilities. This is especially true in the Information
technology business. For example, IBM’s Indian workforce increased from 9,000 in 2004 to 50,000 in
2007 and GE gave the Business Process outsourcing job to Genpact, which is India’s largest BPO
organization and has a head count of nearly 30,000 employees. Accenture also expects its Indian
workforce numbers to exceed its USA head count (Stephen A. Stumpf, May-June 2010). Salaries of the
Indian workforce increased 15% or more annually from 2002 to 2007. But the attrition level also
 increased with an approximate increase of 15% to 30% every year (Stephen A. Stumpf, May-June
2010). (Stephen A. Stumpf, May-June 2010) opinioned that the high attrition levels and acculturation
posed the biggest challenge to the growth of a company. It is considered that good HRM practices are
more important than ever in this industry with currency fluctuations etc in the global economy leading
to unprecedented uncertainties.Human resource practices have, evolved over the period of time due to
globalization, changing needs and requirements, privatization/deregulation, competition. These external
forces have exerted companies to implement newer HR practices for sustained and improved
organizational and employee performance (Gurbuz, Nov 2009). Employee turnover is one of the
biggest challenges of an organization. Therefore, retention of talented and skilled workforce becomes
crucial because it creates a competitive advantage for the company. Labor force is regarded the most
indispensable asset of an organization and retaining the manpower becomes imperative.Retention
becomes even more crucial because acquiring new talent becomes veexpensive;hence retaining the old
labor force becomes the smarter choice (Kiwook Kwon, 2010) (Jr., 2011). It has been researched that
the employee turnover or the attrition rate is found to be high inthe Service and the BPO or the Business
Process Outsourcing Industry (Cho, June 2010) (Chand,March 2010). It has been observed that because
of heavy industrialization and accelerated globalization, the working environment has become very
stressful. Hence, employees fail to strike a work-life balance which results in increased
turnoverabsenteeism and sickness (ThomasLange, Oct 2010).

HR practices, IT industry and India

India has 179 languages and 154 dialects, with an uneven distribution of literacy rate. Though rich in culture
and natural resources, India continues to face multiplicity of problems including, political and religious
instability; increasing population, unemployment and poverty; relatively low per-capita income;
unmanageable public sector Regional differences, caste systems, socioeconomic status, and urban-rural.
Globalization and liberalisation policies have enforced competition, fostering more creativity and innovation
among Indian organizations. In order to manage its workforce, India mostly follows global best practices to
implement HRM systems. There is a growing theoretical appreciation that HR practices are contextual and
culture specific. Given the socioeconomic and cultural diversity of India, imitating global practices could be
mired with challenges. Researchers have typically discussed Western-focused cross-country and cross-
cultural HR applications and practices. However, there is serious dearth of such studies based on Indian HR
perspectives.
With a growth reaching USD 1 trillion, the IT industry in India is among the top job creators worldwide,
with two-third of its operations and exports from North America, Western Europe, and Asia Pacific. With a
whopping 55 percent share of global market, the Indian IT services sector provides direct employment to 2.8
million people in India; moreover, with its presence in 52 countries with over 500 global delivery centres it
employs over 600,000 foreign nationals. Recruiting, retaining, and developing human intellectual talent with
a global mindset is one of the key success factors for Indian offshore service provide as global HR
management capabilities play a key role in effectively leveraging the intangible resources for successful
performance of these firms. Multinational companies usually try to keep the balance between parent and
subsidiary globally by also using standardized HR practices, In coping with the challenges coming from
operating at the worldwide level, multinational Indian organizations instead have been more reactive than
proactive in its approaches to HRM. Ignoring the HR function over decades has therefore built up pressure
on the industry.

Objectives Of The Study

While there is considerable interest in academic research in the area of iHRM or innovative Human resource
management and considerable need for the same suggested by the ever changing external environment, the
extent to which these practices have been adopted by the Indian IT industry have not been explored
understood and documented. Therefore, the objectives of the study are to understand:
1. The extent to which HR managers believe that innovation in HR practices are important for achieving
goals of the organization.
2. The major areas in which innovation is required
3. The extent to which Indian companies have succeeded in inculcating innovative HR practices
4. the major influences on the kind of HRM innovations adopted by Indian IT organization
5. The important outcomes of innovation in HR practices with reference to organizational commitment and
performance

Organization of the Chapters

In an attempt to address the various objectives set by this study a research was undertaken. The introduction
to the back ground of the study and the objectives are discussed in Chapter 1. Chapter 2 goes in to the
literature base for the study and the conceptual evolution of the research gap and need for the study. The
methodology followed is discussed in detail in Chapter 3.The results and analysis is presented in Chapter 4.
This is followed by a detailed discussion of the findings and the evolved recommendations. Chapter 5
discusses the various limitations faced by the study from the methodological and applicative perspective. It
also discusses possible future directions. Finally Chapter 6 concludes the report. After presenting the
references.
 Chapter No – 2.

REVIEW OF LITERATURE
2.1 INTRODUCTION
This research project will remain incomplete if various research studies conducted in the field of human
resource management and human resource development are not taken into account. The Researcher has
reviewed several Research Papers, Books and Theses to provide an insight into the academic endeavours
related to HRD and their impact on organizational performance. This chapter reviews the past researches on
similar or related topics and helps the researcher in providing a sound research foundation to understand the
issues on which the study is focused. In the following pages, an attempt has been made to review some of
the important studies conducted by various Researchers in India and even in foreign countries.
2.2 Review of literature -
Anupama Gupta (2010) described the challenges faced by Human resource manager in context of new
economic scenario. This paper emphasized that these challenges should seriously taken care of. Main
challenge is the shortage of skilled manpower. This paper examined the role of human resource department
to tackle the problem. It was the duty of HR department to design a possible career path to retain talent. It
was suggested that HR manager should be ready to handle the challenges, but the role of other stakeholders
should also be included in order to ensure healthy survival of the organization.
Saini R.R. (2010) in his article ―Human resource development in UCO Bank-A case study of Chandigarh
Region.‖ evaluates the Human Resources Development policies and practices. This study identified the
process and problems in designing and implementing Human Resources Development Systems. This study
was analytical in nature and consist a sample of 100 respondents to analyze their opinion about HRD
Policies and Practices. The Important findings of this study were, qualification was the most important factor
of recruitment at all level of managers and employees.

Kundu. Subhash C., DivyaMalhan (2009) in their article on "HRM Practices in Insurance Companies: A
Study of Indian and Multinational Companies" opined that Competitive advantage of a company can be
generated from human resources (HR) and company performance is influenced by a set of effective HRM
practices. The results of this study indicated that both multinational companies and Indian companies have to
significantly improve their practices regarding performance appraisal, training and financial benefits, and hr
planning and recruitment. Service sector is human resource intensive business. To gain competitive
advantage, service organizations should emphasize on human resource management practices, as has been
indicated in the results. A well-defined framework of human resource management practices benefits not
only the organization but also the employee. HR policies of an organization benefit the employee.
Tripathy(2008) observed that an organization can have competitive advantage by utilizing its human
resources. This can be achieved through sound HRD Practices. According to him HRD include three C‘s-
Competencies, commitment and culture. An optimum level of progressive climate is essential for
facilitating HRD in an organization. It was resulted that good HRD Practices can influence financial and
other performance indicators in the organization.
Singh S.K (2008) in his research entitled ― HRD Climate: Interventions and challenges‖ examined that
survival of the organizations in dynamic and complex environment require 60 employee involvement,
productivity and this can be achieved with the help of quality targets, quality circles, training and
development & suitable method of performance appraisal etc. Above these HRD interventions/practices
should be implemented in a suitable way and HRD Climate should be conductive so that cooperation of
employees can be achieved and conflicts can be sorted out which in turn increase the effectiveness of the
organization.
Patil, Kallinath S. (2007) in his study opined that, the service sector plays a vital role in the development of
the country. LIC has grown into a living saga. This transformation has not come about overnight. A
breakthrough has been achieved on the strong foundation laid by the people of this great institution, which
provided confidence and inner strength to explore new frontiers through the program of massive
decentralization, development, expansion and diversification undertaken in recent years. The organization is
today on the threshold of new vistas, striving and straining for reaching new heights and surging ahead in
quest of excellence.
Hemant Rao (2007) emphasized the changing role of HR. There was dramatic change in HR during past
five years. This study shows the significant role of human resource managers in various areas like
Empowerment of workers, Business process Reenergizing, Total Quality management, Humanization of
work, and Quality of work life. It was the challenge of HRM to balance the impact of liberalization and
globalization on productivity. Earlier the role of Personnel department was to give advice or support when
asked but the changing professional employment scenario emphasized the role of HR professional while
dealing with employees of different regions, caste, language and social backgrounds.
Sharma and jyoti (2006) in an article on "job satisfaction" concluded that job satisfaction is an effective
reaction to an individual's work situation, and has been described as a positive emotional response resulting
from appraisal of one's job. One of the aspects that can lead to 61 Dissatisfaction is one's attitude towards
one's job. job attitude can be defined as an overall feeling about one's job or career or in terms of specific
facet of the job or career and can be related to specific outcomes, such as productivity.
Subramanian, V. (2005) expressing his views regarding recruitment and selection of employees stated that
any organization which gives a fair share of attention to the recruitment and selection of its people is bound
to get good returns. Recruitment and selection should be viewed in the wider context of the organizational
future. What are the strategic objects and hence what capabilities will the enterprise need in the future? Must
be the questions the organization should always address itself to. Therefore, an important strategic issue to
consider is how the recruitment and selection activity can contribute to long term business goals.
G.V.Chalam and L. Srinivas (2005) in this paper made an attempt to explore the basic gender
disagreement with respect to HRD Climate in 20 branches of SBI at Andhra Pradesh. Findings of the study
showed that women employees have much more concern on HRD climate than men. They come up with
high level of satisfaction in respect of HRD Practices. Female Employees had higher degree of pleasure
toward HRD Climate. It was also revealed that women respondents closely observed and followed the
Human Resource development climate of the Bank and were also very loyal toward bank regarding their
commitment toward work.

Chapter No – 3.
3. RESEARCH METHODOLOGY
3.1 Instrument Development And Measures
Given the objectives of the research, instrument was developed to measure
1) the importance of innovation in HRM practices Employee acquisition strategies(areas of iHRM
evaluated included -Employee Retention strategies-Induction-Training and Development-
Leadership Development-Career Planning-Performance appraisal-Compensation and incentives-
Rewards and recognitions-Welfare measures-Organization Development-Knowledge
Management-HR strategy-Employee exist and separation management-Corporate social
responsibility)
2) the evaluation of the extend of innovation adopted in various HRM practices (areas of iHRM
evaluated included -Employee Retention strategies-Induction-Training and Development-
Leadership Development-Career Planning-Performance appraisal-Compensation and incentives-
Rewards and recognitions-Welfare measures-Organization Development-Knowledge
Management-HR strategy-Employee exist and separation management-Corporate
socialresponsibility)
3) the major reasons for /influences on the kind of HRM innovations adopted (these reasons
included -External environmental forces-Organizational Structural Characteristics-Organizational
culture-History of success with past HRM innovations-Influence of consultants-Top management
insistence-To remain competitive in the industry-Quest for continuous improvement in HR M-To
 reduce costs of HRM Services-To increase services of HRM department-To increase impact of
HRM department-To provide more satisfying work experience to the employee and
4) the impact of iHRM on organizational commitment and organizational effectiveness. This was
measures using a pre-validated scale which tried to evaluate the degree to which the employees
were likely to continue with the organization under different circumstances. It checked the
Employees willingness to change companies if the new job offered 25% pay increase, More
creative freedom, More status or Opportunity to work with friendlier people Pre-validated Scales
were not available for the first three sets of variables or were found not suitable in the Indian context.
Therefore, except for Organizational commitment, all the items for the instrument were adapted
from the various previous studies according to their relevance in the Indian context and while
ensuring that the items were as domain relevant as possible.

3.2 Objectives of study –

1. The extent to which HR managers believe that innovation in HR practices are important for achieving
goals of the organization.
2. The major areas in which innovation is required
3. The extent to which Indian companies have succeeded in inculcating innovative HR practices
4. the major influences on the kind of HRM innovations adopted by Indian IT organization
5. The important outcomes of innovation in HR practices with reference to organizational commitment and
performance

3.3 Significance of study –

• To find out appropriate candidate for right job this study gives us basics for searching any
candidate.

• This study helps in becoming more efficient in performing day to day recruitment
operations.

• This study is more important because it represents the culture of one efficient recruitment
firm.

3.4 Scope of study-

The scope of HRM is very wide:

1. Personnel aspect-This is concerned with manpower planning, selection, placement,
transfer, promotion layoff and retrenchment, remuneration, incentives, productivity
etc.
2. Welfare aspect-It deals with working conditions and amenities such as canteens, rest
and lunch rooms, assistance, and safety, recreation facilities, etc.
3. Industrial relations aspect-This covers union-management relations, joint
consultation, collective bargaining, grievance and disciplinary procedures, settlement
of disputes, etc.

Data collection: -
4. Primary Data: -
For collecting primary data, I used questionnaire technique to get appropriate
response from each respondent. I made questionnaire and distributed it among the
newly recruited office staff for getting their opinion about asked questions by
providing three to four options for each question.
5. Secondary Data: -
6. For increasing data collection, I have also used secondary data sources such as books,
websites, articles, blocks etc. from these sources secondary data is collected for
making project report more efficient.