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Human Resource Management
Term Project On
Employee Benefits at
Submitted to Prof. Manoranjan Dhal
Submitted by
Section C Group: 6
PGP/16/128- Anand Ganesh Patil
PGP/16/149- Irshad Anwar
PGP/16/150- Mohamed Anas
PGP/16/155- Prabhu P
PGP/16/159- Ram Kumar Venkatesh
PGP/16/171- Shyam Prasath B
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Acknowledgement
We would like to thank our Human Resource Management subject Professor Prof.
Manoranjan Dhal for guiding us throughout the project and providing valuable inputs.
We would also like to thank the employees and management of SAP Labs India Pvt. Ltd.,
Bangalore for extending their help to understand the organization and providing us valuable
insights about the benefits being offered to them by SAP Labs India.
.
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Executive Summary
Employee Benefits are offered to improve employee engagement and retention which helps
an organization stay competitive in global marketplace. The purpose of this group project is
to critically analyse the employee benefits being offered by SAP Labs India. This analysis
studies various benefits including fringe benefits that are offered by SAP Labs India. Based
on this study the analysis further tries to answer the questions like whether the legally
required benefits are being offered by SAP Labs India, what are the contingents and deferred
benefits being offered, what are the benefits SAP Labs India has focussed on, what is the
relation between benefits and employee productivity and how SAP tries to remain
competitive through its benefits program.
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Table of Contents Acknowledgement ..................................................................................................................... 1
Executive Summary ................................................................................................................... 2
1. An Overview of the Company ............................................................................................ 4
2. What is Employee Benefit? ................................................................................................ 4
3. Need for Employee Benefits............................................................................................... 5
4. Employee Benefits at SAP Labs India ............................................................................... 5
5. Legally Required Benefits .................................................................................................. 6
5.1 Maternity Leave .......................................................................................................... 6
5.2 Gratuity........................................................................................................................ 6
5.3 Severance Pay ............................................................................................................. 6
5.4 Flexible Compensation ................................................................................................ 6
6. Contingent and Deferred Benefits ...................................................................................... 7
6.1 Life Insurance .............................................................................................................. 7
6.2 . Health Insurance ........................................................................................................ 7
6.3 SAP Child Care ........................................................................................................... 7
6.4 Illness Leave ................................................................................................................ 7
6.5 Hospitalisation Leave .................................................................................................. 7
6.6 Medical Check-ups ...................................................................................................... 7
6.7 Rewards & Recognition .............................................................................................. 7
6.8 SMP 331 ...................................................................................................................... 8
7. Other Benefits ..................................................................................................................... 8
7.1 Travel allowance and Company Cab .......................................................................... 8
7.2 Relocation Expenses ................................................................................................... 8
7.3 Employee Meal Allowances........................................................................................ 8
7.4 Club/Gym Membership ............................................................................................... 9
7.5 Special Loans and Advances ....................................................................................... 9
8. SAP Focus .......................................................................................................................... 9
8.1 Career and Higher Education ...................................................................................... 9
8.2 Employee Interest ........................................................................................................ 9
8.3 Fostering Tech Savvy Work Culture ......................................................................... 10
9. Relation between Benefits and Workplace Productivity .................................................. 10
10. Employee Benefits-The Competitive Advantage of SAP Labs India ........................... 11
11. References and Contacts ............................................................................................... 13
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1. An Overview of the Company
SAP - Systems, Applications and Products in Data Processing is a multinational German
software organization. It was founded in Walldorf, Germany in 1972, by five IBM engineers.
It makes enterprise software to manage business operations and customer relations.
Enterprise software refers to those used in organizations primarily, and not by individuals.
SAP is a market leader in enterprise application software. It is the world's largest business
software company & 3rd
highest revenue independent software provider. Some interesting
snippets about the company are that nearly 80% of the Fortune 500 use SAP software for
processes like inventory planning, and 63% of worldwide financial transactions are processed
through SAP software at one point or another. It specializes in Customer Relationship
Management (CRM), Enterprise Resource Planning (ERP), Product Life Cycle Management
(PLM), Business Warehouse, Knowledge Warehouse solutions. There are 61,344 employees
serving the organization presently.
2. What is Employee Benefit?
Employee benefits are indirect financial and nonfinancial payments employees receive for
continuing their employment with the company. Benefits are important part of compensation.
They include things like health and life insurance, pensions, time off with pay and child care
assistance. The benefits which employees get vary distinctly from country to country.
The term perks is often used to refer to benefits. Often, perks are given to employees who are
doing notably well. Common perks are take-home vehicles, hotel stays, free refreshments,
and leisure activities on work time, stationery, allowances for lunch and vacation scheduling.
Non-cash benefits, also known as fringe benefits are taxed under fringe benefits tax (FBT).
FBT helps to restore equity and fairness between those employees who receive benefits and
those who do not receive such benefits. FBT allows government to more fairly assess
taxpayer entitlement to government benefits, or liability to government taxes.
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3. Need for Employee Benefits
Employee benefits play an important role to establish relationship between the employer and
the employee. Benefits are offered to improve employee engagement and retention which
helps an organization stay competitive in global marketplace. Employee benefits increase the
economic security of staff members. Employee benefits are integral to the goals of the
organization because they promote loyalty and can save money and time. The level of
employee benefits being offered helps recruit, manage and retain employees.
Improving employee morale as well as motivation at work is difficult to accomplish. But the
most emotional connection an organization has to its employees is one that can be impacted
directly, and that is their pocketbook. This doesnt have to necessarily happen through salary
increases and bonuses. This is where employee benefits come into picture.
Hence, the purpose of employee benefit can be as follows:
To attract and hold capable workforce
To keep up with the competition
To develop good morale
To promote loyalty
To provide opportunities for advancement
4. Employee Benefits at SAP Labs India
This report has analysed mostly the infringe benefits that are offered by SAP Labs India to its
employees. The infringe benefits are the non-financial benefits and can be categorized as:
1. Legally Required Benefits:
Legally required benefits are the benefits that organization must provide certain benefits to
each employee under legal obligation. These benefits include the employer's costs for Social
Security, Medicare, Federal and State unemployment insurance and workers' compensation.
2. Contingent and Deferred Benefits:
A contingent deferred benefits (CDB) is designed to offer protections similar to those
provided by a guaranteed lifetime withdrawal benefit (GLWB), but does not require the
purchase of an underlying variable annuity. These benefits include life insurance, health
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insurance, child care, dental care, suggestion awards, service awards and share matching
program.
3. Other Benefits:
Infringe benefits which are not legally required benefits and contingent deferred benefits are
covered in this category. These benefits include travel allowance, cab facility, relocation
expenses and club/gym membership.
Apart from these benefits SAP Labs India has designed its own benefits which give
competitive advantage to the company and help SAP Labs to be among the great places to
work for in India.
5. Legally Required Benefits
5.1 Maternity Leave
A female employee can take 84 days off in total out of which not more than 6 weeks can be
taken off prior to the date of delivery. In case of a miscarriage, 6 weeks of leave can be taken
from the date of miscarriage
5.2 Gratuity
A minimum number of 3 years of service an employee should have put in, to become eligible
for gratuity. Gratuity is given according as per the Gratuity Act 1972.On a rough estimate
calculated it comes out to be 4.81% of the Annual Basic Pay.
5.3 Severance Pay
An employee with less than 1 year service receives no severance pay, between 1-25 years
they receive 3 weeks per year of service; more than 25 years of service they will receive
none.
5.4 Flexible Compensation
The Flexible Compensation Plan defines 65% of the base salary components. An employee
has the flexibility to choose from seven components and plan the salary structure to gain
maximum tax benefit. These components would typically include components like Leave
Travel Allowance, Telephone Allowance etc.
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6. Contingent and Deferred Benefits
6.1 Life Insurance
This ensures that in case of an unforeseen incident where the employee expires, the nominee
will receive a sum equivalent to three times the Total Target Cash by the service provider.
6.2 . Health Insurance
All employees and their children are covered by for a sum of Rs. 3, 00,000 per family. For
parents, employees will need to co-pay 10% of the claim up to Rs. 3, 00,000. The insurance
provider is National Insurance.
6.3 SAP Child Care
The SAP Labs India office in Bangalore has a SAP Child Care centre to take care of the
children upto the age of 5. The facility is run by a leading child care vendor in Bangalore.
The employees can drop their kids at 9 am in the morning and pick them up at 5pm in the
evening. A nominal fee is collected for the same from the employees.
6.4 Illness Leave
10 days of illness leave can be availed in a calendar year.
6.5 Hospitalisation Leave
A maximum of 60 days of leave can be availed for hospitalisation in a calendar year.
6.6 Medical Check-ups
In a calendar year 2 eye check-ups and 2 dental check-ups are organised within the office
campus for the employees.
6.7 Rewards & Recognition
Service Awards: These awards are aimed at recognizing employees for their loyalty towards
the organization on completing 3, 5, 10 and 15 years at Labs India.
Team Awards: These awards include sub categories such as Spot Award, Vibrant Team
Player Award and Peer Award.
LoB Awards: This award too has various sub categories such as The Titan (Star of the
Quarter), Best Constellation (Best Team), Guiding Star (Best Mentor), Rising Star (Most
Promising New Comer), Pole Star (Best Innovator) and Leading Star (Line Manager).
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SAP Labs India Awards: This awards recognizes employees in the following categories:
Star Value, Star CSR Volunteers, Star Trainer, Star Innovator, SAP Leader of the Year and
SAP Star of the Year.
6.8 SMP 331
This is SAPs Share Matching Plan, in which every employee who has completed 6 months
of employment in the company can participate in this plan. Every employee can buy 3 share
of SAP at 40% discount from the market price. The condition was that they have to hold
those shares for 3 years, if they do so they will get 1 free share at the end.
7. Other Benefits
7.1 Travel allowance and Company Cab
Free Transport service is provided to the employees of SAP labs entire week.
Daily shuttle Service: pick up from pre-designated points to the various SAP Labs India
offices and drop back from the office to key city points.
Late Evening Cabs: Late Evening Cabs are provided to employees working beyond 9.30 PM
every day and every one hour thereafter
Weekend /Holiday Cabs: This service is provided to pick and drop employees working on
holidays and weekends from home to office and back.
7.2 Relocation Expenses
Relocation Policy is applicable to new employees joining Labs India who move to a new
town/city to join the company. The policy is applicable Labs India employees getting a
transfer to another city from SAP India/Global Delivery Centre into Labs India. Assistance
provided under this policy covers travel, shipment, temporary living and shifting expenses
only if the relocation is company initiated.
7.3 Employee Meal Allowances
Lunch, Snacks and Dinner is provided to all SAP Labs employees at no cost. Coffee, Tea,
Fresh Fruit Juice, healthy biscuits and soups is available on each floor at the Coffee Corner
areas in both Bangalore and Gurgaon. Snacks is served in the Bangalore and Gurgaon
campus on all weekdays between 5:30 PM to 7:00 PM. Dinner is served in both the
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Bangalore and Gurgaon campus between 8:30 PM till 9:45 PM. Midnight snacks are
available for night shift employee.
7.4 Club/Gym Membership
Gymnasium: For the fitness employees, SAP Labs has a gymnasium in the Bangalore
campus. The facility, which has state of the art equipment and offers the services of an
instructor, is available at a nominal fee.
Yoga: SAP Labs India strives relentlessly to improve the wellness of employees. To this
effect, SAP Labs India has launched Wellness Sessions under the ambit of Health for Life
including Yoga as one of the fee based programs conducted by Artistic Yoga.
7.5 Special Loans and Advances
Personal Loan can be availed by confirmed employees; interest free to the extent of Rs.
75,000 in case of emergencies.
8. SAP Focus
8.1 Career and Higher Education
Higher Education: Confirmed employees can pursue higher education that will enable them
to discharge their duties better at work. This opportunity can be availed once in every 5 years.
Executive Post Graduate Program in Management: EPGP is offered to employees
interested in pursuing management studies from IIM Kozhikode (IIMK) while working with
Labs India at a subsidized amount.
German Classes: SAP being a German company, SAP Labs India encourages its employees
to learn German as a foreign language and better their interaction with colleagues in the
corporate office.
8.2 Employee Interest
Creating Interest Groups within SAP Labs promotes creative interest and fun. It helps in
building rapport and camaraderie among employees who share the same interests. It enhances
creativity and innovation, provides a refreshing break from work and brings diverse groups
within the company together. There are sixteen different interest groups in the Bangalore
campus and ten different interest groups in Gurgaon.
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8.3 Fostering Tech Savvy Work Culture
Bring Your Own Device: This policy provides employees opportunity to bring their device
(Blackberry, iPhone, iPad, Galaxy S2/S3) to work and connect to the companys network in a
secure environment and use the same for business purpose.
Direct Access: Direct Access is available for use only on Windows 7 laptops. This service is
designed to make it quicker and easier to access SAP services remotely with the help of
secure ID VPN connection.
Mobile User Backup with TLM: All employees can do data backup from laptops and
desktops. One can schedule the backup as per his/her convenience and restore data as needed
from backups.
9. Relation between Benefits and Workplace Productivity
Study reveals that employee benefits like health and wellness programs, work-life balance
programs and financial guidance programs are significantly beneficial for employers and
employees as it leads to achieve greater workplace productivity. Some of the highlights of the
study are as follows:
77% of employees stated financial guidance programs would favourably impact their
productivity
81% stated health and wellness programs would favourably impact their productivity
82% stated that work-life balance programs would favourably impact their productivity
66% stated that the benefits received at work reduced the negative mental impact and
distraction of worrying about unexpected health and financial issues and job security.
SAP follows similar framework to achieve greater employee productivity by providing
distinguished benefits to employees.
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SAP has managed to be one of the most sought after company to work for due to its benefits
program. Few achievements of SAP include-
SAP labs India featured in top 5 Great Places to work for in 2008
SAP Labs India ranked 8th in 2007 Best Workplaces in India
SAP America listed in Glassdoors 2012: 50 Best places to work for
SAP reached the 5th rank in the Best Employer in the Hi-Tech Industry 2012 surveyed
by BDI-Coface
SAP is among 100 best companies to work for in China in 2012
10. Employee Benefits-The Competitive Advantage of SAP Labs India
The Competitive advantage that SAP enjoys when compared to its competitors like Oracle,
IBM and other competitors like Salesforce.com is clearly because of its employee friendly
culture. There have been instances where the Chief HR of SAP Labs India, quit his job and
pursued the top HR job at Yahoo only to return to SAP after 3 years bringing with him a pool
of HR professionals from Yahoo with him. There have been many instances where
employees quit SAP in the pursuit of better jobs but return within a short span of time.SAP
Employee Benefits lead to->positive emotion at work place in SAP
Helps SAP employees to achieve-
> Greater task activity and persistence
> High level of motivation to work
> Greater team work responsibility sharing
Helps SAP to achieve-
> Job enrichment and productivity
> High employee retention
> reduced absenteeism
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Labs as a company is known for its employee friendly policies. Based the experience of Mr
Sateesh Pasodi, Manager, SAP Labs who was a ex Oracle employee and we quote I find
SAP to be the place for me as it gives me the freedom I want in implementing my ideas
and the culture and people here is just amazing.
SAP Labs India indeed has a HR policy for employees to be hired back to SAP. This policy is
said to a very useful policy given that many people who quit the company have actually
joined SAP again. Such a policy could be used twice, as in if someone leaves SAP they can
again join the company and someone can do likewise twice. Here is the example of one other
SAP employee (Sheela Dominic) who has been working with SAP Labs India, Bangalore
since its inception. She says and we quote I have personally grown with the organisation
and seen it go through the highs and lows. Now it has become such a important part of
my life that I cant imagine a life without it. Also I have enjoyed the benefits be it the
Higher Education Policy that helped me do a MBA in correspondence which was my
dream. As a mother it helped me with the Benefits and the most important one being
the flexible timing which really helps me manage my kids and my job. Also when my
work was becoming too much technical I felt that it was time I changed my domain and
hence I was given the job being the executive assistant to the MD, which was a major
shift in my role. SAP has been very important at every stage of my personal life and its
various benefits have been very useful to me at every stage
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11. References and Contacts
11.1 References
1. Human Resource Management by Gary Dessler and Biju Varkkey
2. http://www.sap.com/india/about/company/saplabs/index.epx
3. http://en.wikipedia.org/wiki/SAP_Labs#Organization
4. http://www.sap.com/press.epx?pressid=12670
5. http://www.informationweek.com/global-cio/interviews
6. HR Transformation SAP Way beyond HR data and payroll from
http://www.deloitte.com
11.2 Contacts
1. Sateesh Pasodi
Quality Manager,
SAP Labs India,
Whitefield, Bengaluru, India
2. Parth Yadav
Quality Engineer,
SAP Labs India,
Whitefield, Bengaluru, India
3. Sheela Dominic
Executive Asst. to M.D.
SAP Labs India,
Whitefield, Bengaluru, India