ORGANIZATION OVERVIEW

Maruti Suzuki India Limited is a publicly listedautomaker inIndia. It is a leading four-

wheeler automobile manufacturer inSouth Asia.Suzuki Motor Corporationof Japan holds a

majority stake in the company. It was the first company in India to mass-produce andsell

more than a million cars. It is largely credited for having brought in an automobilerevolution

to India. It is the market leader in India and on17 September 2007, Maruti Udyog was

renamed Maruti Suzuki India Limited. The company headquarter is inGurgaon, Haryana(near

Delhi).

PROFILE

Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in

the car segment, both in terms of volume of vehicles sold and revenue earned. Untilrecently,

18.28% of the company was owned by the Indian government, and 54.2% bySuzuki of Japan.

The Indian government held an initial public offering of 25% of the company in June 2003.

As of May 10,2007, Govt. of India sold its complete share to Indian financial institutions.

With this, Govt. of India no longer has stake in Maruti Udyog.Maruti Udyog Limited (MUL)

was established in February 1981, though the actual production commenced in 1983 with the

Maruti 800, based on theSuzuki Alto kei car which at the time was the only modern car

available in India, its' only competitors- theHindustanAmbassador andPremier Padminiwere

both around 25 years out of date at that point. Through 2004, Maruti has produced over 5

Million vehicles. Marutis are sold in India andvarious several other countries, depending

upon export orders. Cars similar to Marutis (butnot manufactured by Maruti Udyog) are sold

by Suzuki and manufactured in Pakistan and other South Asian countries.The company

annually exports more than 50,000 cars and has an extremely large domestic market in India

selling over 730,000 cars annually.Maruti 800, till 2004, was the India's largest selling

compact car ever since it was launched in 1983. More than a million units of this car have

been sold worldwide so far. Currently, Maruti Al to tops the sales chartsand Maruti Swift is

the largest selling in A2 segment. More than half the cars sold in India are Maruti cars. The

company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of

Maruti. The rest is owned bythe public and financial institutions. It is listed on the Bombay

Stock Exchange and NationalStock Exchange in India.

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COMPANY ANALYSIS REPORT

Maruti Suzuki was born as a government company, with Suzuki as a minor partner tomake a

people's car for middle class India. Over the years, the product range has widened,ownership

has changed hands and the customer has evolved. What remains unchanged, thenand now, is

Maruti’s mission to motorise India.

Partner For The Joint Venture

Pressure started mounting on Indira and Sanjay Gandhi to share the details of the progress on

the Maruti Project. Since country's resources were made available by mother toher son's pet

project. A delegation of Indian technocrats was assigned to hunt acollaborator for the project.

Initial rounds of discussion were held with the giants of theautomobile industry

inJapanincludingToyota,NissanandHonda.SuzukiMotor Corporation was at that time a small

player in the four wheeler automobile sector and had major share in the twowheeler segment.

Suzuki's bid was considered negligible.

MARUTI SUZUKI INDIA LTD.

Maruti Suzuki India Limited (MSIL) is primarily in the business of manufacture, purchase

and sale of motor vehicles and spare parts (automobiles). The other activities of the Company

consist of facilitation of pre-owned car sales, fleet management and car financing. The

Company offers a range of cars across different segments. It offers 14 models with over 200

variants across the industry segments like Passenger cars, utility vehicles and vans. The

Company has five plants in the Gurgaon and Manesar areas of Haryana equip Maruti Suzuki

with a production capability of 1.55 million units per annum. The Company passenger car

include Alto, Alto-K10, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV

Grand Vitara, sedans SX4, Swift DZire and Kizashi. During the fiscal year ended March 31,

2012 (fiscal 2012), the Company sold over 1.13 million vehicles, including 127,379 units of

exports. The Company is a subsidiary of Suzuki Motor Corporation.

Maruti Suzuki India Limited commonly referred to as Maruti and formerly known as

Maruti Suzuki Limited, is an automobile manufacturer in India. It is a subsidiary of

Japanese automobile and motorcycle manufacturer Suzuki. As of November 2012, it had a

market share of 37% of the Indian passenger car market. Maruti Suzuki manufactures and

sells a complete range of cars from the entry level Alto, to hatchback Ritz, A-Star, Swift,

2

Wagon R, Zen and sedans DZire, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi

Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara. The company's

headquarters are on Nelson Mandela Road, New D If you’ve gone from here to there or just

about anywhere in India, chances are you’ve driven with us. For over 3 decades now, we’ve

been going places with India 1982. Gurgaon, Haryana. Little did this quiet suburb of New

Delhi know that it was to become the seat of India’s automobile revolution, at the Maruti

Suzuki factory.

In 1982, India turned out just 40,000 cars every year. The Maruti 800 rolled out and a new

chapter began. Ours was a story of an obsession with customer delight, unheard of until then.

It was about a commitment to create value. Of innovation, quality, creativity, partnerships,

openness and learning. It was a new story of leadership. Today, Maruti Suzuki alone makes

1.5 million cars every year. That’s one car every 12 seconds. Head and shoulders above the

rest, which includes every major global auto company. It was also the story of a motoring

revolution-cars that delivered great performance, efficiency and environment friendliness

with low cost of ownership. A story built on Suzuki’s belief in small cars for a big future.

One that enabled millions of Indians to make driving a way of life. Indians, and India, got

into the driver’s seat, and we were happy to drive with them in the fast lane.

So what drives us? Our relationship with the millions of Indians who drive us. Our team of

over 9000 dedicated and passionate professionals. That turn out 16 cars with over 150

variants. Backed by a nationwide service network spanning 1440 Cities & towns and Sales

network spread across 840 cities. 2 state-of-the-art factories, at Manesar and Gurgaon. A

diesel engine plant with capacity upped. To turn out 7 lakh diesel cars a year. And a

commitment to road safety that is making India’s roads safer.

But millions of miles later, our driving inspiration comes from one place. India’s hopes,

dreams and aspirations. It’s been a great journey so far. And it feels like we’ve only just

begun. In February 2012, the company sold its ten millionth vehicle in India.

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OBJECTIVES

Recruiting and Staffing.

Organizational development planning

Performance management

Organization development

Employment and compliance to regulatory concerns regarding employees.

Emplyee on boarding, development, need, assessment and training

Policy development and documentation

Employee relations

Company Wide Committee Facilation

Company employee and community communication

Compensation and benefits

Employee safety, welfare

Charitable giving

Employee Services and counseling

HISTORY

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Originally, 18.28% of the company was owned by the Indian government, and 54.2% by

Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the

company in June 2003. As of May 2007, the government of India sold its complete share to

Indian financial institutions and no longer has any stake in Maruti Suzuki.

Maruti Suzuki Limited (MUL) was established in February 1981, though the actual

production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which

at the time was the only modern car available in India, its only competitors- the Hindustan

Ambassador and Premier Padmini were both around 25 years out of date at that point.

Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold

in India and various several other countries, depending upon export orders. Models similar to

those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan

are sold by Pak Suzuki Motors in Pakistan.

The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars

annually.[citation needed] Its manufacturing facilities are located at two facilities Gurgaon and

Manesar in Haryana, south of Delhi. Maruti Suzuki’s Gurgaon facility has an installed

capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007

comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel

Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and

Gurgaon facilities have a combined capability to produce over 14,50,000 units annually.

About 35% of all cars sold in India are made by Maruti. The company is 54.2% owned by

the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is

owned by public and financial institutions. It is listed on the Bombay Stock Exchange and

National Stock Exchange of India.

During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In

all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out

on 14 December 1983. Maruti Suzuki offers 15 models, Maruti 800, Alto, Maruti Alto 800,

WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara,

Kizashi and the newly launched Ertiga. Swift, Swift DZire, A-star and SX4 are manufactured

in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built

units(CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant. The

company is believed to be moving towards introduction of a new version of Maruti 800 by

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November 2012, which will be more fuel efficient, though slightly costlier than Alto and

existing Maruti 800. The Suzuki Motor Corporation, Maruti's main stakeholder, is a global

leader in mini and compact cars for three decades. Suzuki’s strategy is to utillise light-weight,

compact engines with stronger power, fuel-efficiency and performance capabilities. Nearly

75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first

in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia

Pacific.[13] Maruti Suzuki will be introducing new 800 cc model by Diwali in 2012.The model

is supposed to be fuel efficient, hence more expensive.

INDUSTRIAL RELATIONS

Since its founding in 1983, Maruti Udyog Limited experienced few problems with its labour

force. The Indian labour it hired readily accepted Japanese work culture and the modern

manufacturing process. In 1997, there was a change in ownership, and Maruti became

predominantly government controlled. Shortly thereafter, conflict between the United Front

Government and Suzuki started. Labour unrest started under management of Indian central

government. In 2000, a major industrial relations issue began and employees of Maruti went

on an indefinite strike, demanding among other things, major revisions to their wages,

incentives and pensions.

Employees used slowdown in October 2000, to press a revision to their incentive-linked pay.

In parallel, after elections and a new central government led by NDA alliance, India pursued

a disinvestments policy. Along with many other government owned companies, the new

administration proposed to sell part of its stake in Maruti Suzuki in a public offering. The

worker's union opposed this sell-off plan on the grounds that the company will lose a major

business advantage of being subsidised by the Government, and the union has better

protection while the company remains in control of the government.

The standoff between the union and the management continued through 2001. The

management refused union demands citing increased competition and lower margins. The

central government prevailed and privatized Maruti in 2002. Suzuki became the majority

owner of Maruti Udyog Limited.

6

MANESAR VIOLENCE JULY 2012

On 18 July 2012, Maruti's Manesar plant was hit by violence as workers at one of its auto

factories attacked supervisors and started a fire that killed a company official and injured 100

managers, including two Japanese expatriates. The violent mob also injured nine policemen.

The company's General Manager of Human Resources had both arms and legs broken by his

attackers, unable to leave the building that was set ablaze, and was charred to death. The

incident is the worst-ever for Suzuki since the company began operations in India in 1983.

Since April 2012, the Manesar union had demanded a three-fold increase in basic salary, a

monthly conveyance allowance of 10,000, a laundry allowance of 3,000, a gift with every

new car launch, and a house for every worker who wants one or cheaper home loans for those

who want to build their own houses.Initial reports claimed wage dispute and a union

spokesman alleged the incident may be caste-related. According to the Maruti Suzuki

Workers Union a supervisor had abused and made discriminatory comments to a low-caste

worker. These claims were denied by the company and the police. The supervisor alleged was

found to belong to a tribal heritage and outside of Hindu caste system; further, the numerous

workers involved in violence were not affiliated with caste either. Maruti said the unrest

began, not over wage discussions, but after the workers' union demanded the reinstatement of

a worker who had been suspended for beating a supervisor.The workers claim harsh working

conditions and extensive hiring of low-paid contract workers which are paid about $126 a

month, about half the minimum wage of permanent employees. Maruti employees currently

earn allowances in addition to their base wage. Company executives denied harsh conditions

and claim they hired entry-level workers on contracts and made them permanent as they

gained experience. It was also claimed that bouncers were deployed by the company.

India Today claimed that its interviews of witnesses present at the plant confirms the dispute

was over the suspended worker. The management insisted that they must wait for completion

of inquiry underway before they can take any action on the employee suspended for beating

up his supervisor. The management was then told, "you will be beaten up after we get a

signal." Thereafter, the workers broke up into groups, went on to set the shop floor as well as

all offices afire. They searched for management officials and proceeded with a barbaric

beating of the officials at the site with iron rods.

The police, in its First Information Report (FIR), claimed on 21 July that Manesar violence

may be the result of a planned violence by a section of workers and union leaders. The report

7

claimed the worker's action was recorded on close circuit cameras installed within the

company premises. The workers took several managers and high ranked management

officials hostage. The responsible Special Investigative Team official claimed, "some union

leaders may be aware of the facts, so they burnt down the main servers and more than 700

computers." The recorded CCTV footage has been used to determine the sequence of events

and people involved. Per the FIR, police have arrested 91 people and are searching for 55

additional accused.

Maruti Suzuki in its statement on the unrest, announced that all work at the Manesar plant has

been suspended indefinitely. A Suzuki spokesman said Manesar violence won't affect the

auto maker's business plans for India. The shut down of Manesar plant is leading to a loss of

about Rs 75 crore per day. On 21 July 2012, citing safety concerns, the company announced a

lockout under The Industrial Disputes Act, 1947 pending results of an inquiry the company

has requested of the Haryana government into the causes of the disorder. Under the

provisions of The Industrial Disputes Act for wages, the report claimed, employees are

expected to be paid for the duration of the lockout. On 26 July 2012, Maruti announced

employees would not be paid for the period of lock-out in accordance with Indian labour

laws. The company further announced that it will stop using contract workers by March 2013.

The report claimed the salary difference between contract workers and permanent workers

has been much smaller than initial media reports - the contract worker at Maruti received

about 11,500 per month, while a permanent worker received about 12,500 a month at start,

which increased in three years to 21,000-22,000 per month. In a separate report, a contractor

who was providing contract employees to Maruti claimed the company gave its contract

employees the best wage, allowances and benefits package in the region.

Shinzo Nakanishi, managing director and chief executive of Maruti Suzuki India, said this

kind of violence has never happened in Suzuki Motor Corp's entire global operations spread

across Hungary, Indonesia, Spain, Pakistan, Thailand, Malaysia, China and the Philippines.

Mr. Nakanishi went to each victim apologising for the miseries inflicted on them by fellow

workers, and in press interview requested the central and Haryana state governments to help

stop such ghastly violence by legislating decisive rules to restore corporate confidence amid

emergence of this new 'militant workforce' in Indian factories. He announced, "we are going

to de-recognise Maruti Suzuki Workers’ Union and dismiss all workers named in connection

with the incident. We will not compromise at all in such instances of barbaric, unprovoked

8

violence." He also announced Maruti plans to continue manufacturing in Manesar, that

Gujarat was an expansion opportunity and not an alternative to Manesar.

Labour disputes are endemic in the auto industry of India and have affected other

manufacturers. India has strict labour laws, but their application is widely sidestepped by

hiring low-wage contract workers. Manesar violence adds to India's recent incidents of labour

disputes turning to violence. Analysts claim recent incidents like Manesar violence suggest a

need for urgent reform of archaic Indian labour laws, the rigid rules on hiring and layoffs,

which harm the formal sector and discourage investment in India. Government mandated

procedures for labour dispute resolution are currently very slow, with tens of thousands of

cases pending for years. The government of India is being asked to recognise that incidents

such as Manesar violence indicate a structural sickness which must be solved nationally.

The company dismissed 500 workers accused of causing the violence and re-opened the plant

on 21 August, saying it would produce 150 vehicles on the first day, less than 10% of its

capacity. Analysts said that the shutdown was costing the company 1 billion rupees ($18

million) a day and costing the company market share.

The previous week company officials had announced that Maruti would scrap the practice of

hiring contract workers and that the workers currently on temporary contracts would be made

permanent. It would begin the process of hiring new workers on a permanent basis from 2

September 2012.

In July 2013, the workers went on hunger strike to protest the continuing jailing of their

colleagues and launched an online campaign to support their demands.

Joint venture related issues

Relationship between the Government of India, under the United Front (India) coalition and

Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian

media until Suzuki Motor Corporation gained the controlling stake. This highly profitable

joint venture that had a near monopolistic trade in the Indian automobile market and the

nature of the partnership built up till then was the underlying reason for most issues. The

success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and

further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to

nominate their candidate for the post of Managing Director and every Managing Director will

have a tenure of five years

9

R.C. Bhargava was the initial managing director of the company since the inception of the

joint venture. Till today he is regarded as instrumental for the success of Maruti Suzuki.

Joining in 1982 he held several key positions in the company before heading the company as

Managing Director. Currently he is on the Board of Directors. After completing his five-year

tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government

nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr.

Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the Public sector

undertaking Bharat Heavy Electricals Limited as General Manager. In 1987 he was promoted

as Chief General Manager. In 1988 he was named Director, Productions and Projects. The

next year (1989) he was named Director of Materials and in 1993 he became Joint Managing

Director.

Suzuki did not attend the Annual General Meeting of the Board with the reason of it being

called on a short notice. Later Suzuki Motor Corporation went on record to state that

Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of

Industries, Government of India refuted the charges. Media stated from the Maruti Suzuki

sources that Bhaskarudu was interested to indigenise most of components for the models

including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy

for the Government and would not let it increase its stake in the venture. If Maruti Suzuki

would have been able to indigenise gear boxes then Maruti Suzuki would have been able to

manufacture all the models without the technical assistance from Suzuki. Till today the issue

of localization of gear boxes is highlighted in the press.

10

Name Designation

Ajay Seth Chief Financial Officer

Amal Ganguli Director

Davinder Singh Brar Director

I V Rao Sr. Managing Executive Officer

Kazuhiko Ayabe Managing Executive Officer

Kazuhiko Ayabe Director

Keiichi Asai Managing Executive Officer

Keiichi Asai Director

Kenichi Ayukawa CEO

Kenichi Ayukawa Managing Director & CEO

Kinji Saito Director

M M Singh Sr. Managing Executive Officer

Mayank Pareek Managing Executive Officer

O Suzuki Director

Pallavi Shroff Director

11

R C Bhargava Chairman

R P Singh Ind. Non-Executive Director

S Ravi Aiyar Exe. Officer (Legal) & Company Secretary

S Ravi Aiyar Secretary

S Y Siddiqui Sr. Managing Executive Officer

Sudam Maitra Sr. Managing Executive Officer

T Hashimoto Executive Officer

Toshiaki Hasuike Managing Director

Tsuneo Ohashi Managing Executive Officer

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ORGANIZATION STRUCTURE

BOARD OF DIRECTORS

13

1 BOARD OF DIRECTORS

2 DIVISION HEADS

3 DEPARTMENT HEADS

DIVISION HEADS

FACTS OF MARUTI SUZUKI LIMITED

Quick Facts

Year of Establishment February 1981

Vision

"The Leader in The Indian Automobile Industry, Creating

Customer Delight and Shareholder's Wealth; A pride of

India."

Industry Automotive - Four Wheelers

Listings & its codes BSE - Code: 532500

NSE - Code: MARUTI

Bloomberg: MUL@IN

Reuters: MRTI.BO

Joint Venture With Suzuki Motor Company, now Suzuki Motor

Corporation, of Japan in October 1982.

Registered & Corporate Office 11th Floor, Jeevan Prakash

25, Kasturba Gandhi Marg

New Delhi - 110001, India

Tel.: +(91)-(11)-23316831 (10 lines)

Fax: +(91)-(11)-23318754, 23713575

Telex: 031-65029 MUL IN

Works Palam Gurgaon Road

Gurgaon -122015

Haryana, India

Tel.: +(91)-(124)-2340341-5, 2341341-5

Website http://www.marutiSuzuki.com/

14

Segment and Brands

Products Brands

Four Wheelers Maruti 800 Maruti Alto Maruti Baleno

Maruti Esteem Maruti Grand Vitara XL-7 Maruti Gypsy King

Maruti Omni Maruti Suzuki SX4 Maruti Swift

Maruti Versa Maruti Vitara Maruti Wagon-R

Maruti Zen

Awards & Accolades

2005 Number one in JD Power SSI for the second consecutive year.

Number one in JD Power CSI for the sixth time in a row - the

only car to win it so many times.

M800, WagonR and Swift topped their segments in the TNS

Total Customer Satisfaction Study Leadership in the JD Power

Initial Quality Study - Alto number one in its segment for the

2nd time in a row, Esteem number one in its segment for the 3rd

year in a row, Swift number one in the premium compact

segment.

WagonR and Esteem top their segments in the JD Power APEAL

study.

TNS ranks Maruti 4th in the Corporate Reputation Strength

(CSR) study (#1 in Auto sector)-Feb 05.

15

Maruti bagged the "Manufacturer of the year" award from

Autocar-CNBC (2nd time in a row)-Feb 05.

First Indian car manufacturer to reach 5 million vehicles sales.

Business World ranks Maruti among top five most respected

companies in India-Oct 04.

Maruti ranked among top ten (Rank7) greenest companies in

India by Business Today - Sep '04

2004 Maruti Suzuki was No. 1 in Customer satisfaction, No. 1 in Sales

Satisfaction No.1 in Product Quality (Esteem and Alto) and No.

1 in Product Appeal (Esteem and Wagon R).

No. 1 in Total Customer Satisfaction (Maruti 800, Zen and Alto).

Business World ranked us among the country's five most

respected companies.

Business World ranked us the country's most respected

automobile company.

Voted Manufacturer of the year by CNBC.

Voted one of India's Greenest Companies by Business Today-AC

Nielson ORG-MARG.

16

Team Leader

Manager Sales-Bharat Salwan

Sales Consulta

nt

Sales Consulta

nt

Lobby

Manager-

Vineeta

Support staff: Drivers, Peons

etc.

Manager DSA Sales-

Sunil Arora

Manager Corporate Sales-

Sales Consultant (Corporate Sales)Sales Consultant (Corporate Sales)

Delivery Manager-

Support staff: Billing, Service Advisor etc.

Manager Accessories-Aamir M. Khan

Accessories sales staff: Counter, Channel etc.

Manager MI & Call Centre

MI staff: Field Execs, Telecallers etc.

IT

Support Staff

HR- mgnr

Mudra Mehra

GM (Sales)

CEO

CCM- Supreet Chadha

CCE

ORGANISATION CHART

17

Manager Loan

PRODUCTS AND SERVICES

CURRENT AUTOMOBILES

1. Omni (Launched 1984)

2. Gypsy (launched 1985)

3. WagonR (Launched 1999)

4. Alto (Launched 2000)

5. Swift (Launched 2005)

6. Estilo (Launched 2006)

7. SX4 (Launched 2007)

8. Swift DZire (Launched 2008)

9. A-star (Launched 2008)

10. Ritz (Launched 2009)

11. Eeco (Launched 2010)

12. Alto K10 (Launched 2010)

13. Maruti Ertiga(Launched 2012), seven seater MPV R3 designed and developed in

India, will compete with Toyota Innova, Mahindra Xylo, and Tata Sumo Grande. In

early 2012, Suzuki Ertiga will be exported first to Indonesia in Completely Knock

Down car.

14. Maruti XA Alpha based compact SUV to compete with the Ford EcoSport & Renault

Duster will be launched in the year 2014

15. Maruti Alto 800(Launched 2012), Maruti Alto 800 is finally out with a price tag of

Rs.2.44 lakh (ex-showroom New Delhi). Maruti has rolled out four Petrol variants-

Alto 800 STD, Alto 800 LX, Alto 800 LXI and Alto 800 VXI and three CNG variants

-Alto 800 CNG STD,Alto 800 CNG LX and Alto 800 CNG LXi. The 0.8 litre of

petrol engine is very fuel efficient and pushes the car to produce high class mileage of

17 to 22 km per litre. The 48 ps @ 6000 rpm (Petrol) and 41 ps @ 6000 rpm (CNG)of

peak power produced by the engine is also successful on road by delivering top-notch

performance.

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IMPORTED AUTOMOBILES

1. Grand Vitara (Launched 2007)

2. Kizashi (Launched 2011)

DISCONTINUED AUTOMOBILES

1. 1000 (1990–2000)

2. Zen (1993–2006)

3. Esteem (1994–2008)

4. Baleno (1999–2007)

5. Versa (2001–2010)

6. Grand Vitara XL7 (2003–2007)

7. 800 (1983-2012)

8. Alto (2000-2012)

MANUFACTURING FACILITIES

Maruti Suzuki has two manufacturing facilities in India. Both manufacturing facilities have a

combined production capacity of 14,50,000 vehicles annually. During a recent meeting of the

Gujarat chief minister with Suzuki Motor Corp chairman & CEO Osamu Suzuki,the

Chairman had said that the work on car manufacturing plant at Mandal near Ahmedabad

would be started soon. Maruti Suzuki to set up second plant in Gujarat; acquires 600 acres

Gurgaon manufacturing facility

The Gurgaon manufacturing facility has three fully integrated manufacturing plants and is

spread over 300 acres (1.2 km2). All three plants have an installed capacity of 350,000

vehicles annually but productivity improvements have enabled it to manufacture 900,000

vehicles annually. The Gurgaon facilities also manufacture 240,000 K-Series engines

annually. The entire facility is equipped with more than 150 robots, out of which 71 have

19

been developed in-house. The Gurgaon Facilities manufactures the 800, Alto, WagonR,

Estilo, Omni, Gypsy, and Eeco.

MANESAR MANUFACTURING FACILITY

The Manesar manufacturing plant was inaugurated in February 2007 and is spread over 600

acres (2.4 km2). Initially it had a production capacity of 100,000 vehicles annually but this

was increased to 300,000 vehicles annually in October 2008. The production capacity was

further increased by 250,000 vehicles taking total production capacity to 550,000 vehicles

annually. The Manesar Plant produces the A-star, Swift, Swift DZire, SX4, Ertiga and Ritz.

On 25 June June 2012, Haryana State Industries and Infrastructure Development Corporation

demanded Maruti Suzuki to pay an additional Rs 235 crore for enhanced land acquisition for

its Haryana plant expansion. The agency reminded Maruti that failure to pay the amount

would lead to further proceedings and vacating the enhanced land acquisition.

SALES AND SERVICE NETWORK

As of 31 March 2011 Maruti Suzuki has 933 dealerships across 666 towns and cities in all

states and union territories of India. It has 2,946 service stations (inclusive of dealer

workshops and Maruti Authorised Service Stations) in 1,395 towns and cities throughout

India. It has 30 Express Service Stations on 30 National Highways across 1,314 cities in

India.

Service is a major revenue generator of the company. Most of the service stations are

managed on franchise basis, where Maruti Suzuki trains the local staff. Other automobile

companies have not been able to match this benchmark set by Maruti Suzuki. The Express

Service stations help many stranded vehicles on the highways by sending across their repair

man to the vehicle.

MARUTI INSURANCE

Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of

the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram.

20

The service was set up the company with the inception of two subsidiaries Maruti Insurance

Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited

This service started as a benefit or value addition to customers and was able to ramp up

easily. By December 2005 they were able to sell more than two million insurance policies

since its inception.

MARUTI FINANCE

To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January 2002.

Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti

and Maruti Countrywide with Citi Group and GE Countrywide respectively to assist its client

in securing loan. Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited,

Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its

strategic partners in car finance. Again the company entered into a strategic partnership with

SBI in March 2003 Since March 2003, Maruti has sold over 12,000 vehicles through SBI-

Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.

Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti

Udyog Limited its primary business stated by the company is "hire-purchase financing of

Maruti Suzuki vehicles". Citi Finance India Limited is a wholly owned subsidiary of Citibank

Overseas Investment Corporation, Delaware, which in turn is a 100% wholly owned

subsidiary of Citibank N.A. Citi Finance India Limited holds 74% of the stake and Maruti

Suzuki holds the remaining 26%. GE Capital, HDFC and Maruti Suzuki came together in

1995 to form Maruti Countrywide. Maruti claims that its finance program offers most

competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the

market rates

MARUTI TRUEVALUE

Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used

Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti Suzuki vehicles with the

help of this service in India. As of 31 March 2010 there are 341 outlets.

N2N FLEET MANAGEMENT

21

N2N is the short form of End to End Fleet Management and provides lease and fleet

management solution to corporates. Clients who have signed up of this service include Gas

Authority of India Ltd, DuPont, Reckitt Benckiser, Sona Steering, Doordarshan, Singer India,

National Stock Exchange and Transworld. This fleet management service include end-to-end

solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience

services and Remarketing.

ACCESSORIES

Many of the auto component companies other than Maruti Suzuki started to offer components

and accessories that were compatible. This caused a serious threat and loss of revenue to

Maruti Suzuki. Maruti Suzuki started a new initiative under the brand name Maruti Genuine

Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog

lamps, stereo systems, seat covers and other car care products. These products are sold

through dealer outlets and authorized service stations throughout India.

MARUTI DRIVING SCHOOL

As part of its corporate social responsibility Maruti Suzuki launched the Maruti Driving

School in Delhi. Later the services were extended to other cities of India as well. These

schools are modelled on international standards, where learners go through classroom and

practical sessions. Many international practices like road behaviour and attitudes are also

taught in these schools. Before driving actual vehicles participants are trained on simulators.

A the launch ceremony for the school Jagdish Khattar stated "We are very concerned about

mounting deaths on Indian roads. These can be brought down if government, industry and the

voluntary sector work together in an integrated manner. But we felt that Maruti should first

do something in this regard and hence this initiative of Maruti Driving Schools."

ISSUES AND PROBLEMS

On 24 February 2010, Maruti Suzuki India announced recalling of 100,000 A-Star

hatchbacks to fix a fuel leakage problem, for which the company will replace the gaskets.

EXPORTS

Maruti Exports Limited is the subsidiary of Maruti Suzuki with its major focus on exports

and it does not operate in the domestic Indian market. The first commercial consignment of

22

480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country

Maruti Suzuki crossed the benchmark of 300,000 cars. Since its inception export was one of

the aspects government was keen to encourage. Every political party expected Maruti Suzuki

to earn foreign currency. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Nepal,

Sri Lanka, Uganda, Chile, Guatemala, Costa Rica and El Salvador are some of the markets

served by Maruti Exports.

AWARDS AND RECOGNITION

The Brand Trust Report published by Trust Research Advisory has ranked Maruti Suzuki in

the seventh position in 2011 and the sixth position in 2012 among the brands researched in

India.

Bluebytes News, a news research agency, rated Maruti Suzuki as India's Most Reputed Car

Company in their Reputation Benchmark Study conducted for the Auto (Cars) Sector which

launched in April 2012.

RAW MATERIALS

Raw materials primarily comprises steel coils , aluminum and paints.

Imported components are mainly purchased from Suzuki

Buy more parts locally to offset any adverse impact of foreign currency fluctuations

vendors work in close coordination with MSIL

MSIL has a delivery instruction system

MANPOWER

It contains 7525 employees

4,000 service technicians

730 engineers in R & D

FINANCE

As of May 10 2007, Govt. of India sold its complete share to Indian financial

institutions.

23

MSIL has a good network of internal resources to finance the company’s operations,

expansion plans as well as capital investments.

TECHNOLOGY

The IT applications of MSIL runs are mostly enterprise wide.

Systems at the shop floor is connected to the central database .

To ensure reliability, MSIL chose a meshed network.

MSIL has also implemented an enterprise management system, called Unicenter

TNG.

CRM provides centralized access to the dealers and provides the best service network.

RESEARCH AND DEVELOPMENT

24

The basic objective of the R&D facility is to provide for full vehicle development and

designing of vehicles to suit the specific needs of the Indian customer and component

durability testing and performance evaluation.

R & D centre is getting ready to develop the first dual fuel engine.

The test course would provide for high-speed evaluation and will also be used for

conducting acceleration tests.

SIZE

Maruti has half of the market share in passenger car market

It has 600 outlets spread over 393 towns and cities.

It has 500 dealers with strong network.

2,744 workshops across 1,139 cities.

Culture

Japanese culture imbibed in the employees like same uniform, common

canteen etc.,

Unique identity to its employees, equal rights for decision making.

Environment

Threats from the new players

Threat from substitutes: Low to medium

Government policies

TECHNOLOGY

Recently, the company has introduced a peppy k series engine for its new car, Maruti

Suzuki A-star.

It is planning to develop hybrid, electrical, and multi-fuel engines.

Manufacturing Global cars that is fuel-efficient and lower on CO2 emissions.

25

TRANSFORMATION PROCESS

Srategies Followed By Msil

Pricing strategy - catering to all segments

Offering one stop shop to customers or creating different revenue streams

Repositioning of maruti products

Customer centric approach

Committed to motorizing India

MANAGEMENT

The Company has a multi-tier management structure, comprising the Board of

Directors at the top and followed by Managing Executive Officers, Executive Officers

and Divisional Heads.

MSIL divided management into three levels they are

1. Division

2. Department

3. Section

• Japanese management techniques and cooperation with Suzuki motor corporation

provides a different platform and exposure altogether.

• Fun element in MSIL

TRANSFORMATION PROCESS

Marketing

Maruti’s marketing objective is

To continually offer the customer new products and services that Reduce the

customer’s cost of ownership of our cars; and

26

Anticipate and address the customer’s needs and preferences in all aspects and stages

of car ownership, to provide what MSIL refer to as the “360 degree customer

experience.”

TRANSFORMATION PROCESS

Sales network

Dealer distribution network

MSIL has the largest network of dealers amongst car manufacturers in India more

than 3,500 sales executives .

Sales network is linked through the secure extranet-based information network.

Dealers agreement

Enhancing dealer performance

After sales service network

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Creating value to each of the customers

Authorized Service Stations

Service is a major revenue generator of the company. Most of the service stations are

managed on franchise basis, where Maruti trains the local staff.

Maruti Insurance

Launched in 2002 Maruti provides vehicle insurance to its customers with the help of

the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram

Maruti Finance

Maruti had started two joint ventures Citicorp Maruti and Maruti Countrywide with

Citi Group and GE Countrywide respectively to assist its client in securing loan

Maruti True Value

One can buy, sell or exchange used Maruti vehicles with the help of this service in

India.

28

Accessories

Maruti Driving School

SOCIAL RESPONSIBILITY

National Road Safety Mission launched - a nation-wide Social responsibility (CSR)

initiative to train 500,000 people in safe driving in three years.

Targets reducing fresh water consumption and implement rain water harvesting.

The company is moving towards making its entire fleet of cars green with advanced

and efficient technologies.

Promoting energy conservation.

29

30

RESEARCH METHODOLOGY

Since the study undertaken by me is related to the study of mutual fund in India, the means

adopted for collection of various facts and data were in the form of personal observation,

officials documents, and directly interacting with the officers concerned and also directly

interacting with the existing customers as well as new customer formed. It was an exploratory

research. Work is mainly emphasized on the primary data. Primary data are gathered form

prescribed questionnaire and by personal interview and the secondary data are collected from

different books and magazines.

Research refers to the systematic method consisting of defining the problem, forming the

hypothesis, collecting the facts and reaching certain conclusion in the form of solution

towards concerned problems.

Research Methodology may be understood as a science of studying how research is done

scientifically. In this we study various steps that are taken up by the researcher in his research

problem along with the logic behind them. It has the wider scope as compared to research

methods that is we also considered the logic behind the methods we used in the research

study and explain why we are using a particular method and we are not using the other.

RESEARCH DESIGN

A research design is a framework or a blue print for conducting the research project. It gives

details of the procedure necessary to for obtaining the information needed to solve the

research problem in hand. In this way a research design lays the foundation for conducting a

research product. It involves the following tasks:

Defining the information needed.

Designing the exploratory, descriptive and casual phases of research.

Specify the measurement and scaling procedures.

Constructing and pretesting the questionnaire.

Specifying the sampling process and sample design as well as size.

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DATA COLLECTION

There are two sorts of data available:

Primary Data

Secondary Data

PRIMARY DATA

Primary data are the data collected to solve a problem or take advantage of any opportunities

on which a decision is depending. These data are basically observed and recorded by the

researcher for the first time.

SECONDARY DATA

Secondary data are those which are not originally collected by the investigator himself but are

obtained from any published or unpublished source already existing. Secondary data are

those which are already in existence and which have been collected for some other purpose

than the answering of the question in hand.

32

ROLE OF THE HUMAN RESOURCE MANAGEMENT IN COMPANY

GROWTH

"Human resource" and "Manpower"

redirect here. For other uses, see Human

resource (disambiguation) and Manpower

(disambiguation). Human Resources are the

set of individuals who make up

the workforce of an organization, business

sector or an economy. "Human capital" is

sometimes used synonymously with human

resources, although human capital typically

refers to a more narrow view; i.e., the

knowledge the individuals embody and can

contribute to an organization. Likewise, other terms sometimes used include "manpower",

"talent", "labor" or simply "people". The professional discipline and business function that

oversees an organization's human resources is called Human Resource Management (HRM,

or simply HR).

Human Resource Management (HRM or simply HR) is the management of an organization's

workforce, or human resources. It is responsible for the attraction, selection, training,

assessment, and rewarding of employees, while also overseeing organizational leadership and

culture, and ensuring compliance with employment and labor laws. In circumstances where

employees desire and are legally authorized to hold a collective bargaining agreement, HR

will typically also serve as the company's primary liaison with the employees' representatives.

HR is a product of the human relations movement of the early 20th century, when researchers

began documenting ways of creating business value through the strategic management of the

workforce. The function was initially dominated by transactional work such as payroll and

benefits administration, but due to globalization, company consolidation, technological

advancement, and further research, HR now focuses on strategic initiatives like mergers and

acquisitions, talent management, succession planning, industrial and labor relations, and

diversity and inclusion.

33

To develop a software application that supports the application specific to the HR automation

in an intranet specific to a company there by allowing the integration of all the employees

pertaining to that organization. To keep track of all the other departments related to that

organization such as marketing, development etc.

To allow the HR of an organization to update the employee details when ever there is a

change in the employee profile pertaining to that organization. To bring onto a string the

employee specific suggestions and make them free to post their requirements to the HR thus

bringing the organization more specific regarding the maintenance of the organization.

We often hear the term Human Resource Management, Employee Relations and Personnel

Management used in the popular press as well as by Industry experts. Whenever we hear these

terms, we conjure images of efficient managers busily going about their work in glitzy offices.

In this article, we look at the question “what is HRM ?” by giving a broad overview of the topic

and introducing the readers to the practice of HRM in contemporary organizations. Though as

with all popular perceptions, the above imagery has some validity, the fact remains that there is

much more to the field of HRM and despite popular depictions of the same, the “art and

science” of HRM is indeed complex. We have chosen the term “art and science” as HRM is

both the art of managing people by recourse to creative and innovative approaches; it is a

science as well because of the precision and rigorous application of theory that is required. 

As outlined above, the process of defining HRM leads us to two different definitions. The first

definition of HRM is that it is the process of managing people in organizations in a

structured and thorough manner. This covers the fields of staffing (hiring people), retention

of people, pay and perks setting and management, performance management, change

management and taking care of exits from the company to round off the activities. This is the

traditional definition of HRM which leads some experts to define it as a modern version of the

Personnel Management function that was used earlier.

The second definition of HRM encompasses the management of people in organizations

from a macro perspective i.e. managing people in the form of a collective relationship

between management and employees. This approach focuses on the objectives and outcomes

of the HRM function. What this means is that the HR function in contemporary organizations

is concerned with the notions of people enabling, people development and a focus on making

the “employment relationship” fulfilling for both the management and employees.

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These definitions emphasize the difference between Personnel Management as defined in the

second paragraph and human resource management as described in the third paragraph. To

put it in one sentence, personnel management is essentially “workforce” centered

whereas human resource management is “resource” centered. The key difference is

HRM in recent times is about fulfilling management objectives of providing and deploying

people and a greater emphasis on planning, monitoring and control.

Whatever the definition we use the answer to the question as to “what is HRM?” is that it is

all about people in organizations. No wonder that some MNC’s (Multinationals) call the HR

managers as People Managers, People Enablers and the practice as people management. In

the 21st century organizations, the HR manager or the people manager is no longer seen as

someone who takes care of the activities described in the traditional way. In fact, most

organizations have different departments dealing with Staffing, Payroll, and Retention etc.

Instead, the HR manager is responsible for managing employee expectations vis-à-vis the

management objectives and reconciling both to ensure employee fulfillment and realization

of management objectives.

In conclusion, this article has briefly touched upon the topic of HRM and served as an

introduction to HRM. We shall touch upon the other topics that this field covers in other

articles.

35

PROCESSES IN HUMAN RESOURCE MANAGEMENT

Each organization works towards the realization of one vision. The same is achieved by

formulation of certain strategies and execution of the same, which is done by the HR

department. At the base of this strategy formulation lie various processes and the

effectiveness of the former lies in the meticulous design of these processes. But what exactly

are and entails these processes? Let’s read further and explore.

The following are the various HR processes:

1. Human resource planning (Recruitment, Selecting, Hiring, Training, Induction,

Orientation, Evaluation, Promotion and Layoff).

2. Employee remuneration and Benefits Administration

3. Performance Management.

4. Employee Relations.

The efficient designing of these processes apart from other things depends upon the degree of

correspondence of each of these. This means that each process is subservient to other. You

start from Human resource Planning and there is a continual value addition at each step. To

exemplify, the PMS (performance Management System) of an organization like Infosys

would different from an organization like Walmart. Lets study each process separately.

TYPICAL FUNCTIONS OF A HUMAN RESOURCE MANAGER

Introduction: The Typical Functions of a HR Manager Until now, we have discussed how the

HRM function in organizations works and the role of the function in organizational

processes. We have also discussed the changing nature of the HRM function in recent years

and how with the introduction of enterprise software, an entirely new dimension has been

added to these functions. This article discusses the typical functions of a HR manager and

analyzes how he or she can make a positive contribution to the organization and add

value to the process. First, the HR manager has to juggle between hiring, training,

appraisals, and payroll among other things. This means that a typical function of the HR

manager would encompass the end to end management of the employee people lifecycle

which means that the HR manager would have to take care of everything that is concerned

with the people aspect right from the time the employee enters the organization till the time

36

the employee quits or retires from the organization. Hence, the lifecycle of an employee’s

time in an organization has to be managed and this means that the HR manager is responsible

for the hiring, training, appraisals, payroll, and exit interviews.

ENTRY TO EXIT: MANAGING THE EMPLOYEE LIFECYCLE

If we take each of these activities in turn, we find that hiring is done in conjunction with the

line managers who put out their requirements periodically on the kind of recruits they want

and the number of recruits they want. Once the request reaches the HR manager, he or she

has to scour the market for potential recruits. Usually, the HR manager does not personally

do this and outsources this function to a placement consultancy. The next step is the interview

stage after the shortlists are done and this is an activity where the HR manager either

delegates the task of assessing the potential recruits to the staffing team or does the job

personally. In large organizations like Fidelity and Microsoft, there are dedicated teams for

each of these activities and this is something we would be discussing in detail in subsequent

articles. After the interview stage is over, the important task of fixing the salary and benefits

of the successful candidates has to be done. This is usually the time when the HR manager

plays a critical role as he or she has to determine the fit between the role and the candidate

and decide on the quantum of salary and benefits that is appropriate to the role and after

examining the budgets for the same.

After these activities, the HR manager is also involved in conducting the last stage of

appraisals or evaluating the appraisals. In recent years, the trend is more towards the latter

where the HR manager in charge of the business unit evaluates the appraisals instead of

participating in the process directly. This is done in a manner to determine the quantum of

pay hike or bonuses keeping in mind the same principles that were discussed in the hiring

activity. What this means is that the HR manager has to work closely with the line managers

to get this done. In many organizations, employees can take their grievances to the HR

managers in case they are not satisfied with their pay hikes or the quantum of benefits. They

can also complain against their managers in a confidential and private manner. The last

activity that the HR manager is involved in is conducting the exit interviews when employees

leave the organizations. This is usually done on the last day of the employee’s stay in the

organization and this process consist of a free and frank discussion on what the employee

feels about the organization and why he or she is leaving the organization. The exit

37

interviews offer valuable sources of insights into organizational behavior as the employees

can vent their feelings on what works and what does not work in organizations.

STAFFING ROLE OF THE HR MANAGER: STRATEGIC

WORKFORCE PLANNING

Staffing and Recruiting during the Boom Years One of the key areas that the HRM unit

works with is the staffing function. Hiring and on boarding of employees’ remains a critical

activity that many HR managers are yet to master. This is mainly because of the unevenness

of the demand and supply in the market for talent. For instance, during the heady years of the

IT boom in the early years of the last decade, it was common for many division heads and

line managers to walk into the HR manager’s office and give him or her target of employees

to be recruited over the next three months in the quarter. In the US, the situation was that

many HR managers were asked to take in as many H1B or temporary workers to the country

on board to meet the critical shortage in staff. In Asia, because of this very reason where

many techies had headed to the US and Europe, hiring became a challenge for even the most

seasoned HR professionals. The implications for the HR manager are many as his or her

appraisal depends on a number of targets including how many they have recruited over the

last quarter or the year.

THE APPRAISAL PROCESS AND THE EXIT INTERVIEWS

Strategies to Deal with Shortage of Talent during the Boom Years

The way to deal with such a situation was to ensure that the number of people being taken in

was based on current and future demand scenarios and identify gaps and surpluses in key

skill sets. For instance, in the US, the shortage of those with Java skills was so huge that

anyone with an elementary knowledge of the skill was immediately taken in the companies.

This meant that the HR unit was simply filling up positions without any strategic planning.

Hence, many organizations realized that hiring people without the requisite skills just to fill

up positions would do more harm than good to the companies and hence, a conscious

decision was taken by the HR managers in conjunction with the line managers to have

forecasts of how many employees they would need over a quarter. The point here is that the

constant bickering between the HR managers and the line managers took a toll on

organizational efficiency and hence, this compromise was arrived at wherein the demand for

specific skill sets had to be forecasted by the line managers and the HR managers would then

38

deal with hiring accordingly. The third aspect of the staffing and hiring activity is that many

HR managers during the boom years advised the line managers to find employees from other

divisions who wanted a change in their job profiles and roles. This internal filling up of

positions by inter-division and intra company movement was effective in many companies

like Fidelity. Further, overtime by key resources and hiring temporary workers were the norm

in many companies. Of course, the overtime work was adequately compensated and

employees who were doing so were given additional benefits.

STAFFING STRATEGIES DURING THE ONGOING RECESSION

With the boom years over, the HR managers in recent years are breathing easy as they no

longer have to run around trying to meet recruitment targets. Of course, the current challenge

before the HR managers to manage the downturn and smoothen the downsizing underway in

many organizations. To ensure these objectives in these economically harsh times, HR

managers are resorting to passive measures as the first line of action wherein they indicate to

the employees that they are on PIP or Performance Improvement Plans and this usually

results in natural attrition. Next, instead of downsizing, the HR managers are reducing

recruitment so that they do not have to fire employees and instead, these employees can be

accommodated elsewhere in the organization. These are some of the aspects of the strategic

workplace planning within the hiring and staffing activity that some respected companies

follow.

39

ROLE OF HUMAN RESOURCE MANAGEMENT (HRM) IN

LEADERSHIP DEVELOPMENT

LEADERSHIP DEVELOPMENT IN SUCCESSFUL COMPANIES

The previous articles have discussed how the HRM function is now seen as a critical and

crucial component of the organizational support functions. In particular, we have analyzed

how effective people management goes a long way in ensuring better economic performance.

Among the components of people, management that the HRM function does is the aspect

related to leadership development. Research into the HRM practices of successful companies

has shown that these companies significantly outperform their peers in terms of economic

profitability by following the leadership development practices discussed in this article. By

successful companies, we mean those companies in the Fortune 100 list that have managed to

retain their position in the firms over a decade. To put this in perspective, it needs to be

remembered that many companies that were in the Fortune 100 list for a few years failed to

retain their positions in subsequent years and hence, the fact that these companies have

managed to stay in the hunt means that they have outperformed their peers and competitors.

THE COMPONENTS OF LEADERSHIP DEVELOPMENT

The leadership development programs in these companies follow the philosophy of

grounding them in value, the expected contributions from the leaders are defined, and the

organizational culture geared towards inspiring leaders. Next, the performance management

system in these companies is tied to the company’s business strategy and it includes talent

development activities and leadership objectives that are articulated clearly and succinctly. In

other words, promotions are based on individual performance as well as people development

activities and these in turn are linked to the business strategy and objectives. These

companies also have a leadership pipeline, which means that the leadership development is

embedded in their strategic workforce planning which is comprehensive, and longer term

oriented. These companies also ensure that they divide their workforce into job families and

the potential leaders are identified and groomed for higher roles and responsibilities. In many

of these companies, it is common to find lists of potential leaders known as high potentials

who are earmarked for fast track career progression based on the organizational assessment of

the skills and capabilities of these leaders. Further, the recruitment and training of new

employees is based on longer-term analysis of demand and supply patterns, which ensure that

40

newer generation of leaders, are hired into the company to replace those who have made it to

the higher levels.

Collaboration between the HRM Function and Senior Management

The HRM functions in these companies work on a collaborative model with their potential

leaders which means that the job of people development is not left to the HRM function or

the leaders alone. Instead, the potential leaders are identified and then their performance is

linked to the enabling and empowerment of others to move up the chain. In other words, the

ability to spot talent and identify leaders for the future is done by both the HRM function and

the senior management who work in tandem in this effort. Research into these successful

companies has shown that the people management in these companies is world class and the

contributing factor that differentiates these companies from others is that the HRM function

plays a critical role throughout the employee lifecycle and not at the recruitment and training

phase alone. The other factor is that the leaders in these companies are expected to have skill

sets that match the need for adapting to the challenges of the 21st century business landscape.

In other words, these companies groom the leaders of the future right from the middle

management level.

Closing Thoughts

Finally, leadership is a combination of natural abilities and the organizational nurturing of the

employees with those skills. Hence, this interplay between nature and nurture is what

determines the success or otherwise of the HRM function and the senior management efforts

to develop leadership in these companies.

41

ROLE OF HR MANAGER IN PEOPLE ENABLING AND PEOPLE

EMPOWERMENT

People Enabling and People Empowerment

Until now, we have discussed the role of an HR manager in various processes related to the

HR function. The emphasis was on a general overview and a description of the various

activities instead of specific details. This article discusses a couple of the crucial functions

that an HR manager has to perform and those are related to enabling employees to perform to

their potential and empowering the employees to lead fulfilling careers. In the earlier

decades, organizational theory and practice limited itself to ensuring that employees are well

paid and their benefits and other perks taken care of. There was little by way of ensuring

personal fulfillment and job satisfaction. This was because of the predominance of

manufacturing in the economies of the 1970s and the 1980s which meant that the workforce

was to be treated as cogs in the machine instead of assets that the modern day HRM theory

and practice follows. With the advent of the services sector, a branch of HRM known as

SHRM or Strategic Human Resource Management grew in response to the changing profiles

of employees and this approach when combined with the systems approach of management

thought meant that the enabling of employees and the empowerment of employees were the

buzzwords for HR managers.

Specific Aspects of the Twin Objectives

Concomitant with this trend, the HR managers in most firms these days focus on these

aspects by constantly seeking feedback, suggesting improvements, and providing people

support to the employees. in multinational companies, it is usually the case that the

employees above the team leader level have one-on-ones with the HR staff where all the

issues concerning them are discussed threadbare. These meetings also provide the employees

with an opportunity to articulate concerns and point to any grievances that they might have

with regards to their jobs, work, or the organization in general. The team members are usually

assigned a people manager who performs these tasks and ensures that the employees are

performing to their potential. Moreover, the HR function in conjunction with the line

managers conduct periodic trainings in soft skills like communication, personal relations, and

leadership. Indeed, many organizations like Fidelity have established a set protocol for

employees to attend leadership development trainings that bring out the leaders in them and

groom them as future managers and future CEO’s. Hence, the twin objectives of people

empowerment and people enabling are thus met in this paradigm.

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How this works in the Real World

Of course, this does not mean that the whole situation resembles utopia where employees and

the managers along with the HR staff are one big happy family. On the contrary, in most real

world settings, the HR managers have a tough time convincing the employees that the

organization means well for them and that they ought to look on the bright side of things

instead of complaining and being bitter about issues and grievances all the time. This is

where the HR managers skills and personality come into the picture as the ability to persuade,

enlighten, and if necessary wield the stick play a crucial role in people management. in other

words, the HR manager has to tread a fine line between giving in to the employees and

following the organizational mandate. This means that a variety of strategies are usually

employed by the HR managers that include some of the skills listed above in addition to the

personal equations that the HR manager has with the employees.

TALENT MANAGEMENT BY SUCCESSFUL COMPANIES: INSIGHTS

FROM RECENT RESEARCH

Talent Management by Successful Companies

The previous articles discussed how successful companies develop and nurture leaders and

groom them for higher roles as their career progresses. The role of the HRM function is

critical, as there needs to be excellence all around and not just in one area. In other words, it

is not enough if a company has a brand image in the market that attracts top quality talent but

is not doing well once this talent starts working in the company. Take for instance, the Indian

IT behemoth, Infosys. Though working there is a dream come true for many graduates, in

recent months, the company has been hit with astounding attrition, as the company is not

doing well in terms of retaining and nurturing talent. On the other hand, companies like

Microsoft, Google, and Apple not only attract the best talent in the market but also manage

them well leading to their practices becoming a model for other companies to follow. This

article analyzes the best talent management practices of successful companies and the

role of the HRM function in nurturing and grooming talent.

Some Aspects in Talent Management

The first aspect for global companies is to not be parochial in their hiring practices and

instead, welcome diversity by recruiting international talent, employees from different

backgrounds, and in general diversify the employee base. Next, is the identification and

grooming of high potentials that would give the organization a pool of leaders from which

43

they can draw upon when faced with a situation where leaders are needed. Though this is a

practice that is followed in many companies, the successful companies also identify emerging

leaders and not only those who have established themselves. The point here is that successful

talent management needs the HRM staff and the senior management to draw up a list of

potential leaders at both ends of the talent development chain. In other words, these

companies start from the lower levels and go on till the middle and senior management

levels. The third aspect of successful talent management is the provision of both vertical and

horizontal job opportunities for the existing employees. This means that the employees are

provided with a menu of career options that would enable them to shift role and find

fulfillment in the role of their choice. The reason why this aspect is very important is that

often many companies stifle their employees by not providing change of job functions or

roles leading to widespread dissatisfaction among the employees.

Creating a Fulfilling Work Culture

The fourth aspect of successful talent management is that these companies provide their

employees with a change of work location where the reason for such a move is not to simply

move talent to locations where there are shortfalls but also the need for the employee’s

personal development is taken into consideration. The point here is that successful talent

management requires that employees feel privileged working for the company and their needs

for self-actualization and fulfillment be taken care of by the company. Indeed, successful

companies often have people first policies where the focus is on creating a stimulated and

fast-paced environment that encourages and fosters individual growth and the work

environment is much more engaging than a workplace that is solely concerned with profits.

MANAGEMENT OF CONTRACTORS

In recent times, there has been a marked movement towards outsourcing positions within the

organization to vendors who would supply resources for the said jobs. These positions and roles

are deemed to be those that can be done by resources from outside. And it is here that the

contractors step in to do the job that has been outsourced. The phenomenon of using contractors

for regular positions is gaining traction by the day and it is common to see many of these

temporary workers doing the work that would have otherwise been done by resources employed

full time by the organization. The examples of organizations using contractors as a significant

portion of their workforce range from the US Defense Department to Microsoft and in India,

44

many IT organizations like IBM employ contractors to get the job done.

Historical Precedent for Temps

Till recently, the practice of hiring contractors or “temps” was restricted to the Administrative

and Support functions like HR and Infrastructure management. However, it now encompasses

the areas of regular work like project delivery and execution.

The reasons for using contractors range from less overheads to filling a temporary demand

that does not need hiring permanent employees. The organization need not provide health

benefits and pension benefits to the contractors and hence these costs can be saved. Further,

on completion of the project, the contractors can be reverted to their parent organization or

the vendor. This means that the hiring organization is not burdened with excess staff.

Issues with Hiring Contractors

There are several issues that pertain to hiring and management of contractors. Many IT

companies hold significant “bench” strength as a means of having a buffer when new projects

come their way. However, for many mid-sized and small-sized organizations, maintaining

bench strength is often a luxury. So, if they anticipate new projects being entrusted to them,

they immediately ask the vendor to supply them with the resources that are needed for the

new projects. Of course, in reality, there is often a lag between the request for new resources

and the resources actually coming on board because of the time taken to screen the

contractors and time taken to bring them up to speed regarding the work that needs to be

done.

Managing the Vendors

Some issues that need to be considered before going in for contractors pertain to the way in

which the liability arising out of non-performance of the contractors is handled, the extent of

control that the managers have over vendors and the payment terms and conditions that

organizations have with the vendors. It has been found in studies and surveys that contractors

and vendors operate in the “grey” areas of the employer-employee relationship and hence

managers need to be on their guard when dealing with vendors. Liabilities and punitive

actions aimed at vendors usually end up being unresolved because of the way in which the

contracts are worded. Hence, it becomes imperative for the organizations to do their “due

diligence” before hiring vendors.

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To conclude, the practice of hiring vendors is expected to increase and hence there is a need

for both sides to sit down and discuss the modalities of the contractual relationship before

committing themselves to the same. In this way, disputes over responsibility and

accountability can be amicably resolved if the contracts are worded in such a way that there is

little room for ambiguity.

MANAGING EMPLOYEE PERFORMANCE

Introduction

Managing employee performance is one of the key drivers for organizational success in the

present context of firms trying to adopt a resource centered view of the organizational. We

have seen elsewhere that integrating HRM practices with those of organizational goals and

strategy increases the competitive advantages for the firm. Similarly, managing employee

performance within the larger framework of organizational goals is critical for organizations

that count people among their key assets. As we have been mentioning throughout, firms in

the service sector that lay a lot of emphasis on people need to ensure that employee

performance is managed in a holistic manner.

A Two Way Street

When we talk about employee performance, we need to remember that it is a two way

process that tie in the manager and the employee with the HR manager playing the role of a

mediator. For instance, any discussion about employee performance has to include the

manager and the employee or the manager and the managed. Hence, it is imperative that both

parties to this transaction realize their responsibilities and work together to ensure that the

process is smoothened. In the succeeding sections, we discuss the role of the manager and the

employee and how organizational focus on managing employee performance can play a role

as well.

The Role of the Manager

The manager has a duty to ensure that his or her management of the employees is free of

biases and prejudices. It’s been the case across industries and verticals where the employees

feel discriminated against leading to attrition, lower employee morale and in the extreme

cases, lawsuits against the company. Hence, the manager has to “walk the talk” and not

simply pay lip service to the company’s policies on employee performance. During the

course of working together as a team, there are bound to be instances where friction between

46

the manager and the team and within the team manifests itself. It is incumbent upon the

manager to ensure that this does not morph into a corrosive effect that threatens the very

existence of the team.

The Role of the Employee

The above section looked at the role of the manager. The manager has a duty to manage the

team effectively and so does the employee have corresponding responsibilities as well.

Absenteeism, Shirking Work, A negative attitude and a blasé approach to work are some

things that the employee must avoid. It is helpful to the employee to know that once he or she

is categorized as having an attitude problem, then it would be difficult for the employee to

break the perception and perform effectively. This does not mean that the employee has to

take whatever comes his or her way. The point here is that the employee must use the

channels available for redressal instead of sulking at work if he or she has grievances about

the manager.

Organizational Focus

Though the role of the HR manager and the organization seems to be relatively small, it is a

fact that organizational goals and culture play a very important part in ensuring that employee

performance is managed to the benefit of the organization. Most of us have read about or

heard the benefits of working for MNC’s (Multinational Companies) in India. The reason

why they are highly talked about is the perception among potential and aspiring employees

that these companies treat their people well. Though the point here is not to belittle Indian

companies, the objective of this section is to highlight the ways in which organizations can

shape the treatment of people in theory and practice.

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THE HRM FUNCTION AND ITS ROLE IN RECESSIONARY TIMES

The Case for the Importance of the HRM Function even in Recessionary Times

In these recessionary times, it is tempting for the companies to cut the budgets of the HRM

function and focus on cost control and trimming as a means of profitability. Further, with the

squeeze on hiring by many companies, one of the key activities of the HRM function, which

is the hiring, and on boarding activity remains frozen. Therefore, there is more the case for

pruning the HR budgets. However, companies need to realize that there is a strong correlation

between people management and economic performance that has been conclusively proved in

recent research by the consulting firm, Boston Consulting Group or BCG. The research that

focused on how companies that do well on talent management, leadership development, and

performance management have been shown to have significantly higher economic

performance. What adds to this research is the anecdotal evidence from many multinationals

that seems to prove the hypothesis that excellent HR policies makes for a well-motivated

workforce that can ramp up their performance to match the increased expectations of

companies during recessions. The implications are that in case organizations want to do more

at the same cost, they must focus on Processual cost cutting instead of on HR budgets alone.

Handling Laid off Employee Separations

The second aspect of the HRM function during recessionary times is that it is often the case

that the HRM staff are asked to handle the involuntary separations. These exits that are

otherwise known colloquially as “pink slips” have to be handled with grace and respect for

the employee instead of condescension and arrogance. The point here is that when employees

are asked to leave, the HR managers and the HR staff have the unenviable task of making

sure that the message is communicated to those employees who are being asked to leave and

to handle their exits in a structured manner. With the pressure on the HR staff growing with

the increased incidence of layoffs, it is not easy for the HR managers not to get affected and

take things personally. However, the key aspect here is that the HR managers have to perform

well under pressure and ensure that the outgoing employees are offered assistance with their

job hunts for alternative jobs by giving them the use of the office space and the facilities for a

week or so after their last day at work. The point here is that gestures like these go a long way

in convincing the other employees that the company is not an opportunistic employer who is

a fair-weather friend to them.

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Managing the Motivation Levels of Employees

Talking about the impact of layoffs on the employees who have remained in the organization,

the HR staff also has the challenging task of keeping these employees motivated and not

making them look over their shoulders periodically to check whether they are next in line to

be laid off. Indeed, this is a delicate and often-diplomatic exercises that must be carried out

with finesse in the same manner exits are handled. The other aspect of the recessionary times

is that more often than not, companies do not hand out pay hikes and bonuses and hence,

there tends to be a slack in morale among the employees. This is another of those tasks that

the HRM function has to manage in recessionary times. Given the fact that many companies

are struggling to stay afloat and which leads to resignations from key employees who do not

see a future for themselves in the companies, it is important to remember that the HRM

function must be bolstered rather than cut down to handle these unpleasant tasks.

IMPORTANCE OF HRM FOR ORGANIZATIONAL SUCCESS

We have discussed the basic concept of HRM and the ways in which it helps the organization

meet its goals. In this article, we discuss the reasons for organizations to have a HRM

strategy as well as the business drivers that make the strategy imperative for organizational

success. It is a fact that to thrive in the chaotic and turbulent business environment, firms

need to constantly innovate and be “ahead of the curve” in terms of business practices and

strategies. It is from this motivation to be at the top of the pack that HRM becomes a valuable

tool for management to ensure success.

The Evolving Business Paradigm

One of the factors behind organizations giving a lot of attention to their people is the nature

of the firms in the current business environment. Given the fact that there has been a steady

movement towards an economy based on services, it becomes important for firms engaged in

the service sector to keep their employees motivated and productive. Even in the

manufacturing and the traditional sectors, the need to remain competitive has meant that

firms in these sectors deploy strategies that make effective use of their resources. This

changed business landscape has come about as a result of a paradigm shift in the way

businesses and firms view their employees as more than just resources and instead adopt a

“people first” approach.

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Strategic Management and HRM

As discussed in the articles on modern day HRM practices, there is a need to align

organizational goals with that of the HR strategy to ensure that there is alignment of the

people policies with that of the management objectives. This means that the HR department

can no longer be viewed as an appendage of the firm but instead is a vital organ in ensuring

organizational success. The aims of strategic management are to provide the organization

with a sense of direction and a feeling of purpose. The days when the HR manager was

concerned with administrative duties is over and the current HRM practices in many

industries are taken as seriously as say, the marketing and production functions.

Importance of HRM for Organizational Success

The practice of HRM must be viewed through the prism of overall strategic goals for the

organization instead of a standalone tint that takes a unit based or a micro approach. The idea

here is to adopt a holistic perspective towards HRM that ensures that there are no piecemeal

strategies and the HRM policy enmeshes itself fully with those of the organizational goals.

For instance, if the training needs of the employees are simply met with perfunctory trainings

on omnibus topics, the firm stands to lose not only from the time that the employees spend in

training but also a loss of direction. Hence, the organization that takes its HRM policies

seriously will ensure that training is based on focused and topical methods.

In conclusion, the practice of HRM needs to be integrated with the overall strategy to ensure

effective use of people and provide better returns to the organizations in terms of ROI

(Return on Investment) for every rupee or dollar spent on them. Unless the HRM practice is

designed in this way, the firms stand to lose from not utilizing people fully. And this does not

bode well for the success of the organization.

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SCOPE OF HUMAN RESOURCE MANAGEMENT

Human resources are undoubtedly the key resources in an organization, the easiest and the

most difficult to manage! The objectives of the HRM span right from the manpower needs

assessment to management and retention of the same. To this effect Human resource

management is responsible for effective designing and implementation of various policies,

procedures and programs. It is all about developing and managing knowledge, skills, creativity,

aptitude and talent and using them optimally.

Human Resource Management is not just limited to manage and optimally exploit human

intellect. It also focuses on managing physical and emotional capital of employees.

Considering the intricacies involved, the scope of HRM is widening with every passing day. It

covers but is not limited to HR planning, hiring (recruitment and selection), training and

development, payroll management, rewards and recognitions, Industrial relations, grievance

handling, legal procedures etc. In other words, we can say that it’s about developing and

managing harmonious relationships at workplace and striking a balance between organizational

goals and individual goals.

The scope of HRM is extensive and far-reaching. Therefore, it is very difficult to define it

concisely. However, we may classify the same under following heads:

HRM in Personnel Management: This is typically direct manpower management

that involves manpower planning, hiring (recruitment and selection), training and

development, induction and orientation, transfer, promotion, compensation, layoff

and retrenchment, employee productivity. The overall objective here is to

ascertain individual growth, development and effectiveness which indirectly

contribute to organizational development.

It also includes performance appraisal, developing new skills, disbursement of

wages, incentives, allowances, traveling policies and procedures and other related

courses of actions.

HRM in Employee Welfare: This particular aspect of HRM deals with working

conditions and amenities at workplace. This includes a wide array of

responsibilities and services such as safety services, health services, welfare

funds, social security and medical services. It also covers appointment of safety

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officers, making the environment worth working, eliminating workplace hazards,

support by top management, job safety, safeguarding machinery, cleanliness,

proper ventilation and lighting, sanitation, medical care, sickness benefits,

employment injury benefits, personal injury benefits, maternity benefits,

unemployment benefits and family benefits.

It also relates to supervision, employee counseling, establishing harmonious

relationships with employees, education and training. Employee welfare is about

determining employees’ real needs and fulfilling them with active participation of

both management and employees. In addition to this, it also takes care of canteen

facilities, crèches, rest and lunch rooms, housing, transport, medical assistance,

education, health and safety, recreation facilities, etc.

HRM in Industrial Relations: Since it is a highly sensitive area, it needs careful

interactions with labor or employee unions, addressing their grievances and

settling the disputes effectively in order to maintain peace and harmony in the

organization. It is the art and science of understanding the employment (union-

management) relations, joint consultation, disciplinary procedures, solving

problems with mutual efforts, understanding human behavior and maintaining

work relations, collective bargaining and settlement of disputes.

The main aim is to safeguarding the interest of employees by securing the highest

level of understanding to the extent that does not leave a negative impact on

organization. It is about establishing, growing and promoting industrial

democracy to safeguard the interests of both employees and management.

The scope of HRM is extremely wide, thus, can not be written concisely. However, for the

sake of convenience and developing understanding about the subject, we divide it in three

categories mentioned above.

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THE DIFFERENCE BETWEEN A PEOPLE MANAGER AND A

PROJECT MANAGER

In recent times, there has been a trend in multinational companies to have a people manager

apart from the project manager for employees in teams and units. This division of

responsibilities between the people manager and the project manager has been necessitated

because of the importance being given to employee enabling and employee empowering

strategies. The key aspect here is that the people manager is responsible for the personal

and professional development of the employee and the project manager is responsible

for work and project related activities. Further, the appointment of a people manager

distinct from the project manager is being done because of the need felt by the organizations

to develop the employees in a more rounded manner and to let them actualize their potential.

For instance, while the project manager looks after the project deliverables and associated

work related aspects, the people manager concentrates on the personal development of skills,

soft attributes, and how far the employee is fulfilled in his or her current role. The post of

people manager is akin to the HR manager who is responsible for the unit but differs in the

respects of having a functional individual be the people manager who can understand the

functional and operational aspects as well as contribute to the personality development of the

employee.

How the Different Roles work in Practice

In many multinational organizations like Fidelity and IBM, the people manager is designated

from the pool of project managers and is usually responsible for two or three project teams.

The additional responsibilities vested in the people manager run concurrent to their core

responsibilities of looking after their own teams’ project deliverables. The idea here is to

have an independent individual separate and distinct from the project manager to introduce

objectivity and to provide an unbiased perspective to the employee and his or her needs for

personal development and actualization. Further, some multinationals have also experimented

with having a people manager who does not have any project related responsibilities so that

the person can fully focus and concentrate on the people side of project management. The key

aspect here is that the people manager would conduct one-one meetings with the employees

to find out if they have any issues with the project teams and their role in it and to elicit

feedback from them about how the organization and the project managers are letting them

fulfill their potential. At appraisal time, it is usually the case that the review would be

conducted by both the project manager and the people manager. Of course, the inputs of the

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project manager are more important as they pertain to the core reason for the organization’s

existence namely that of project deliverables but the people manager has a significant role to

play in determining the personal development and the progress made by the employee

towards his or her personal development goals as set forth at the start of the review period.

The Emergence of SHRM and the Need for People Enabling and People Empowerment

The reason why many organizations are keen to have the post of a people manager is mainly

because of the need felt by the organizations to treat people as key assets and sources of

competitive advantage as opposed to treating them as yet another factor of production. This

shift in emphasis or paradigm shift is known as the strategic human resource management

perspective wherein employees are considered the chief asset and sources of sustainable

advantage to the organizations. When compared to the earlier paradigms where employees

were treated as yet another factor of production and the intervening paradigm where

employees were considered important but not to the level that is being witnessed in the

SHRM view. The reason for this is the rise in the services sector wherein technology and

financial services firms have taken center stage in the economy and where people make the

difference between success and failure. This is the key aspect of multinationals having a

people manager distinct from a project manager.

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THE INCREASING USE OF CONTRACT STAFF AND TEMP

WORKERS IN THE CORPORATE WORLD

Hiring Temps and Contract Staff

Of late, a trend that has been noticeable in the corporate world pertains to the

increasing use of contract staff and temporary workers or temps as part of the

organization’s operations. The trend that started a couple of decades earlier has now

accelerated into a phenomenon where nearly 25 to 30 percent of the workforce in major

companies is made up of contract staff and temporary workers. What was hitherto reserved

for the peripheral functions like HR, Admin, Finance, and services has now spread to the core

functions like project management, testing, and even whole teams being contracted out to

outsourcing providers. There are many implications of having contract staff and the key

reason why many companies go in for contract workers and temps is the cost factor which is

primary and the secondary factors like hiring at short notice, reducing overheads, and finding

the right skills which the outsourcing providers can supply to the companies. We shall

examine each of these factors in subsequent sections. It would suffice to state here that the

ongoing recession has also contributed to hiring more temporary workers as the convergence

of cost and other factors combined with the fact that once the project is over, the temporary

workers can be made redundant all are reasons for the upswing in hiring contract workers.

Advantages of Hiring Temps

Given the fact that cost is a key consideration for hiring temporary workers, it is natural that

companies are tempted to hire them. The companies need to worry about paying for their

healthcare or social security nor do they have to worry about contributing to pension funds

and other benefits. Added to this is the fact that hiring at short notice is often difficult for

many companies because there is a lead-time to onboard new employees and by hiring

temporary workers, the lead-time can be done away with. Further, sometimes companies

might not find employees with desired skills who can be hired at short notice. With

outsourcing providers ready to step in such situations, it becomes easier for companies to rely

on temporary workers who can ramp up quickly. Apart from this, they can be made

redundant once the project is over which cannot be done in the case of permanent employees.

Moreover, some functions like testing and quality control require niche expertise that might

not be available in-house and therefore, temporary workers can fill in this scenario.

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Disadvantages of Hiring Temps

Of course, this does not mean to say that contract workers represent a magic bullet for the

factors listed above. On the contrary, there are many downsides with hiring temps and these

include accountability, adherence to policies, vague contracts leading to disputes, and overall

responsibility and control over the resources. For instance, in many companies, managers

find that though the temporary workers work better than permanent employees because of the

need to please the employer to get more work for their companies, the issue of overall control

and accountability apart from responsibility needs to be addressed. The point here is that

temporary workers are after all part of another company and hence, critical functions and jobs

cannot be assigned to them because of these aspects. Apart from this, disputes arise in case

the temporary workers do not perform according to expectations and when they leave

midway between projects. There are many examples in the corporate world where the

temporary workers have failed to fulfill their contractual obligations leading to protracted

disputes between the companies and the outsourcing providers. Next, many temporary

workers do not have a sense of ownership with the project because they know that they are

just in-between employees and this can lead to dicey situations as well.

Why Managers Must Practice Astute Vacation Planning for Their Teams

Planned Vacations

Contemporary organizational theories talk about the need to reduce person dependence and

ensure that the show goes on even in the absence of key resources. In this context, it is

important for managers to actualize effective vacation planning as they deal with planned and

unplanned vacations and time outs taken by their team members. What this means is that

when employees go on vacation, the managers have to ensure that the work does not suffer

and their teams do not delay the deliverables. In other words,managers have to plan for

vacations that their employees take effectively and in accordance with organizational

policies. For instance, many multinationals like Fidelity ask their employees to declare their

planned vacations well in advance and the time of a quarter is usually the case where

employees need to announce their planned vacations. This means that the team members

must enter their planned vacations into the people management system or software at the

beginning of each quarter so that managers can budget for the vacations keeping in mind the

delivery dates and the project schedule. Indeed, this practice of asking the employees to

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declare their planned vacations well in advance leads to minimization of conflict between the

team members’ vacations and results in a smooth functioning of the teams.

Unplanned Vacations

The previous section dealt with planned vacations. However, managers have to be ready

for unplanned vacations as well that result from personal emergencies and sudden and

unexpected events like the employee falling sick or meeting with an accident . The key

aspect here is that planned vacations are easier to manage than unplanned vacations because

the sudden absence of the employee leads to disruption in work schedules and affects the

delivery of key deliverables. This is where the manager’s skills at people management,

project management, and risk management are tested. This is because the manager has to

convince other team members to finish the tasks that the absent employee was performing,

budget fort disruptions in the project management plan, and actualize the risk management

plan, which details the steps to be taken in such a scenario. Indeed, unplanned absences are

potentially damaging to the prospects of organizations and especially so, when the absent

employee was performing a critical or a crucial task. Therefore, person dependence must be

kept a minimum and this is the requirement of all capability maturity models that certify

process and organizational maturity.

Ways to Manage Absences

Having said that, it needs to be mentioned that both planned and unplanned vacations pose

challenges to the managers as budgeting for conflicts in planned vacations and having to deal

with emergency situations in case of unplanned leave of absence need astute project

management skills. Therefore, it is better if the managers approve the planned vacations well

in advance and convince the employees who want to go on vacation at the same time that

another employee wants to do to alter the vacation plans so that there is minimal impact on

project delivery. The best way to deal with unplanned vacations is to identify backup

employees for each employee and once the employee is absent, a smooth transition to the

backup employee(s) must be actualized. This process is followed in organizations like IBM

where each employee has a backup employee to take care of the work in case of disruptions.

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Human Resource Management: Context,

THE CONCEPT AND FUNCTIONS OF HUMAN RESOURCE

MANAGEMENT

CONCEPT OF HRM

HRM is a strategic approach to the acquisition, motivation, development and management

of the organisation’s human resources. It is a specialised field that attempts to devd .ng an

appropriate corporate culture, and introducing programmes which reflect and support the

core values of the enterprise and ensure its success. HRM is proactive rather than reactive,

i.e., always looking forward to what needs to be done and then doing it, rather than waiting

to be told what to do about recruiting, paying or training people, or dealing with employee

relations problems as they arise. The techniques for the application of HRM will include

many familiar functions of personnel managers, such as manpower planning, selection,

performance appraisal,salary administration, training and management development. These

will be overlaid

By special programs designed to improve communication systems, involvement,

commitment, and productivity. Broadly, there are three meanings attached to the concept of

HRM. In the first place, persons working in an organization are regarded as a valuable

source, implying that there is a need to invest time and effort in their development. Secondly,

they are human resources which means that they have their own special characteristics and,

therefore, cannot be treated like material resources. The approach focuses on the need to

humanise organisational life and introduce human values in the organisation. Andthirdly,

human resources do not merely focus on employees as individuals, but also on other social

realities, units and processes in the organisation. These include the role or the job a person

has in the organisation, the dydadic unit, (consisting of the person and his superior), the

various teams in which people work, inter-team processes, and the entity of the total

organisation.

In its essence, HRM is the qualitative improvement of human beings who are considered

the most valuable assets of an organization-the sources, resources, and end-users of all

products and services. HRM is, no doubt, an outgrowth of the older process and approach.

But it is much more than its parent disciplines, viz., personnel management, and

behavioural science. HRM is also more comprehensive and deep- rooted than training and

58

development. Its approach is multi-disciplinary from the beginning to the end. It is a

scientific process of continuously enabling the employees to improve their competency and

capability to play their present as well as future expected roles so that the goals of the

organization are achieved more fully and at the same time the needs of the employees are

also met to an adequate extent.

HRM is a production model approach to personnel management. The HRM model is

characterised as being employee-oriented with an emphasis on the maximisation of

individual skills and motivation through consultation with the workforce so as to produce

high levels of commitment to company strategic goals. It is a resource to be used to its

fullest capacity. It is an asset to be invested in. HRM is concerned with both the structure of

work in a firm and with all the related employment practices that are needed to carry out the

work. HRM is not simply about HR or ‘people practices’, it is about the management of

work and people in the firm. Managing people includes both individual and collective

dimensions. The traditional personnel management is non-strategic, separate from the

business, reactive, short-term, and constrained by a limited definition of its role as dealing

with mostly unionised and low level employees. The major attention of traditional

personnel function is on personnel administration or management while the major attention

of HRM is on developing people and their competencies. If personnel management is

curative, HRM is preventive. The key distinguishing feature of HRM is its evolving

strategic role.

HRM essentially emphasises and incorporates those expectations which are not being

fulfilled through the traditional personnel management. It integrates in a meaningful way the

various sub-systems like performance appraisal, potentiality appraisal and development,

career planning, training and development, organisation development, research and systems

development, rewards, employee welfare and quality of work life, industrial relations, and

human resource information. Under the HRM approach, some basic assumptions about

human resources are also different from the traditional approach. The important assumptions

of HRM are as follows:

1) The members of an organisation are reservoirs of untapped resources.

2) There is scope for unlimited development of these resources.

3) It is more in the nature of self-development than development thrust from outside.

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4) The organisation also undergoes development with the overall benefits along with

the development of its members.

Human Resource Management: Context, Concept and Doundaries

The organisation further develops a culture in which utmost emphasis is placed on

harmonious superior-subordinate relations, teamwork, collaboration among different

groups of individuals, open communication, and above all, integration of the goals of the

organisation with the needs of the employees.

Top management takes the initiative for HRM, formulates necessary plans and strategies,

and creates an overall climate and support for its implementation.

The management of human resources is more of an art than a science. In practice it is an

“art” full of pitfalls, judgment calls, and learning from past mistakes.

Table 1: Some Basic Assumptions Underlying Traditional Personnel Function and

Human Resources System

Traditional Personnel Function (TPF) Human Resource Development (HRD)

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1. TPF is an independent function2. There are several sub-functions

under TPF3. The main task of TPF is to respond

effectively to the demands(coping role)

4. TPF has the main responsibilities for their personnel matters

5. The main responsibilities of TPFrelate to salary and job administration, and management of people and their development6. The major attention of TPF is on

personnel administration or management

7. Personnel system and procedures should be designed to achieve maximum efficiency

8. People in an organisation are motivated mainly by salary and rewards

1. HRD is a sub-system of a larger system (organisation)

2. HRD is an organic whole: All the parts are interlinked

3. The main task of HRD is to develop enabling capabilities (proactive role)

4. All managers irrespective of functions share the responsibility of human resource functions

5. The responsibilities of HRS relate to HRS, people, systems, and the process of the total organisation

6. The major attention of HRS is on developing people and their competencies

7. HR systems and procedures should be designed on the basis of process values to reduce human wastage

8. People are primarily motivated by challenges and opportunities for development and creativity

OBJECTIVES OF HRM

The primary objective of HRM is to ensure the availability of competent and willing

workforce to an organisation. Apart from this, there are other objectives too. Specifically,

HRM objectives are four fold: societal, organisational, functional, and personal.

Societal Objectives

The societal objectives are socially and ethically responsible for the needs and challenges of

society. While doing so, they have to minimize the negative impact of such demands upon

the organisation. The failure of organisations to use their resources for society’s benefit in

ethical ways may lead to restrictions. For example, the society may limit human resource

decisions to laws that enforce reservation in hiring and laws that address discrimination,

safety or other such areas of societal concern.

Organisational Objectives

The organisational objectives recognise the role of human resource management in bringing

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about organisational effectiveness. Human resource management is not an end in itself; it is

only a means to assist the organisation with its primary objectives. Simply stated the human

resource department exists to serve the rest of the organisation.

Functional Objectives

Functional objectives try to maintain the department’s contribution at a level appropriate to

the organisation’s needs. Human resources are to be adjusted to suit the organisation’s

demands. The department’s level of service must be tailored to fit the organisation it serves.

Personal Objectives

Personal objectives assist employees in achieving their personal goals, at least insofar as

these goals enhance the individual’s contribution to the organisation. Personal objectives of

employees must be met if they are to be maintained, retained and motivated. Otherwise,

employee performance and satisfaction may decline giving rise to employee turnover.

Table 2: HRM Objectives and Functions

The Concept and Functions of Human Resource Management

HRM Objectives Supporting Functions

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1. Societal Objectives

2. Organisational Objectives

3. Functional Objectives

1. Legal compliance

2. Benefits

3. Union-management relations

1. Human resource planning

2. Employee relations

3. Selection

4. Training and development

5. Appraisal

6. Placement

Source: William B. Werther, Jr., and Keith Davis, Human Resources and Personnel

Management, p. 15.

HUMAN RESOURCE FUNCTIONS

The role of human resource management is to plan, develop, and administer policies and

programmes designed to make expeditious use of an organisation’s human resources. It is

that part of management which is concerned with the people at work and with their

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relationship within an enterprise. Its objectives are:

(1) the effective utilisation of human resources;

(2) desirable working relationships among all members of the organisation; and

(3) maximum individual development.

The major functional areas in human resource management are:

(1) planning, (2) staffing,

(3) employee development, and (4) employee maintenance. These four areas and

their related functions share the common objective of an adequate number of competent

employees with the skills, abilities, knowledge, and experience needed for further

organisational goals. Although each human resource function can be assigned to one of the

four areas of personnel responsibility, some functions serve a variety of purposes. For

example, performance appraisal measures serve to stimulate and guide employee

development as well as salary administration purposes. The compensation function facilitates

retention of employees and also serves to attract potential employees to the organisation. A

brief description of usual human resource functions is given below:

Human Resource Planning: In the human resource planning function, the number and type

of employees needed to accomplish organisational goals are determined. Research is an

important part of this function because planning requires the collection and analysis of

information in order to forecast human resources supplies and to predict future human

resources needs. The basic human resource planning strategy is staffing and employee

development.

Job Analysis: Job analysis is the process of describing the nature of a job and specifying

the human requirements, such as skills, and experience needed to perform it. The end

product of the job analysis process is the job description. A job description spells out work

duties and activities of employees. Job descriptions are a vital source of information to

employees, managers, and personnel people because job content has a great influence on

personnel programmes and practices.

Staffing: Staffing emphasises the recruitment and selection of the human resources for an

organisation. Human resources planning and recruiting precede the actual selection of

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people for positions in an organisation. Recruiting is the personnel function that attracts

qualified applicants to fill job vacancies.

In the selection function, the most qualified applicants are selected for hiring from among

those attracted to the organisation by the recruiting function. On selection, human resource

functionaries are involved in developing and administering methods that enable managers

to decide which applicants to select and which to reject for the given jobs.

Orientation: Orientation is the first step toward helping a new employee adjust himself

to the new job and the employer. It is a method to acquaint new employees with

particular aspects of their new job, including pay and benefit programmes, working

hours, and company rules and expectations.

Training and Development: The training and development function gives employees the

skills and knowledge to perform their jobs effectively. In addition to providing training for

new or inexperienced employees, organisations often provide training programmes for

experienced employees whose jobs are undergoing change. Large organisations often have

development programmes which prepare employees for higher level responsibilities within

the organisation. Training and development programmes provide useful means of assuring

that employees are capable of performing their jobs at acceptable levels.

Performance Appraisal: This function monitors employee performance to ensure that it is

at acceptable levels. Human resource professionals are usually responsible for developing

and administering performance appraisal systems, although the actual appraisal of employee

performance is the responsibility of supervisors and managers. Besides providing a basis for

pay, promotion, and disciplinary action, performance appraisal information is essential for

employee development since knowledge ofresults (feedback) is necessary to motivate and

guide performance improvements.

Career Planning: Career planning has developed partly as a result of the desire of many

employees to grow in their jobs and to advance in their career. Career planning activities

include assessing an individual employee’s potential for growth and advancement in the

organisation.

Compensation: Human resource personnel provide a rational method for determining how

much employees should be paid for performing certain jobs. Pay is obviously related to the

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maintenance of human resources. Since compensation is a major cost to many

organisations, it is a major consideration in human resource planning. Compensation affects

staffing in that people are generally attracted to organisations offering a higher level of pay

in exchange for the work performed. It is related to employee development in that it

provides an important incentive in motivating employees to higher levels of job

performance and to higher paying jobs in the organisation.

Benefits: Benefits are another form of compensation to employees other than direct pay for

work performed. As such, the human resource function of administering employee benefits

shares many characteristics of the compensation function. Benefits include both the legally

required items and those offered at employer’s discretion. The cost of benefits has risen to

such a point that they have become a major consideration in human resources planning.

However, benefits are primarily related to the maintenance area, since they provide for

many basic employee needs.

Labour Relations: The term “labour relations” refers to interaction with employees who

are represented by a trade union. Unions are organisation of employees who join together

to obtain more voice in decisions affecting wages, benefits, working conditions, and other

aspects of employment. With regard to labour relations, the personnel responsibility

primarily involves negotiating with the unions regarding wages, service conditions, and

resolving disputes and grievances.

Record-keeping: The oldest and most basic personnel function is employee record-

keeping. This function involves recording, maintaining, and retrieving employee- related

information for a variety of purposes. Records which must be maintained include

application forms, health and medical records, employment history (jobs held, promotions,

transfers, lay-offs), seniority lists, earnings and hours of work, absences, turnover, tardiness,

and other employee data. Complete and up-to-date employee records are essential for most

personnel functions. More than ever employees today have a great interest in their personnel

records. They want to know what is in them, why certain statements have been made, and

why records may or may not have been updated.

Personnel records provide the following:

i) A store of up-to-date and accurate information about the company’s employees. ii) A

guide to the action to be taken regarding an employee, particularly by

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comparing him with other employees.

iii) A guide when recruiting a new employee, e.g. by showing the rates of pay

received by comparable employees.

iv) A historical record of previous action taken regarding employees.

v) The raw material for statistics which check and guide personnel policies. vi) The

means to comply with certain statutory requirements.

Personnel Research: All personnel people engage in some form of research activities. In a

good research approach, the object is to get facts and information about personnel specifics

in order to develop and maintain a programme that works. It is impossible to run a personnel

programme without some pre-planning and post-reviewing. For that matter, any survey is, in

a sense, research. There is a wide scope for research in the areas of recruitment, employee

turnover, terminations, training, and so on. Through a well-designed attitude survey,

employee opinions can be gathered on wages, promotions, welfare services, working

conditions, job security, leadership, industrial relations, and the like. Inspite of its

importance, however, in most companies, research is the most neglected area because

personnel people are too busy putting out fires. Research is not done to put out fires but to

prevent them.

Research is not the sole responsibility of any one particular group or department in an

organisation. The initial responsibility is that of the human resource department,

which however should be assisted by line supervisors and executives at all levels of

management. The assistance that can be rendered by trade unions and other organisations

should not be ignored, but should be properly made use of.

Apart from the above, the HR function involves managing change, technology, innovation,

and diversity. It is no longer confined to the culture or ethos of any single organisation; its

keynote is a cross-fertilisation of ideas from different organisations. Periodic social audits

of HR functions are considered essential.

HR professionals have an all-encompassing role. They are required to have a thorough

knowledge of the organisation and its intricacies and complexities. The ultimate goal

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of every HR person should be to develop a linkage between the employee and the

organisation because the employee’s commitment to the organisation is crucial. The first and

foremost role of HR functionary is to impart continuous education to employees about the

changes and challenges facing the country in general, and their organisation in particular.

The employees should know about their balance sheet, sales progress, diversification plans,

restructuring plans, sharp price movements, turnover and all such details. The HR

professionals should impart education to all employees through small booklets, video films,

and lectures.

The primary responsibilities of a human resource manager are:

To develop a thorough knowledge of corporate culture, plans and policies.

To act as an internal change agent and consultant.

To initiate change and act as an expert and facilitator.

To actively involve himself in company’s strategy formulation.

To keep communication lines open between the HRD function and individuals

and groups both within and outside the organisation.

To identify and evolve HRD strategies in consonance with overall business

strategy.

To facilitate the development of various organisational teams and their working

relationship with other teams and individuals.

To try and relate people and work so that the organisation objectives are

achieved effectively and efficiently.

To diagnose problems and to determine appropriate solution particularly in the

human resources areas.

To provide co-ordination and support services for the delivery of HRD

programmes and services.

To evaluate the impact of an HRD intervention or to conduct research so as to

identify, develop or test how HRD in general has improved individual or

organisational performance.

THE FOLLOWING ARE THE NINE NEW ROLES OF HR

PRACTITIONER AS SUGGESTED BY PAT MCLEGAN

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1) To bring the issues and trends concerning an organisation’s external and internal people

to the attention of strategic decision-makers, and to recommend long-term strategies to

support organisational excellence and endurance.

2) To design and prepare HR systems and actions for implementation so that they

can produce maximum impact on organisational performance and development.

3) To facilitate the development and implementation of strategies for transforming one’s

own organisation by pursuing values and visions.

4) To create the smoothest flow of products and services to customers; to ensure the best

and most flexible use of resources and competencies; and to create commitment among

the people who help us to meet customers’ needs whether those people work directly

for the organisation or not.

5) To identify learning needs and then design and develop structured learning programmes

and materials to help accelerate learning for individuals and groups.

6) To help individuals and groups work in new situations and to expand and change their

views so that people in power move from authoritarian to participative models of

leadership.

7) To help people assess their competencies, values, and goals so that they can

identify, plan, and implement development actions.

8) To assist individuals to add value in the workplace and to focus on the

interventions and interpersonal skills for helping people change and sustain

change.

9) To assess HRD practices and programmes and their impact and to communicate results

so that the organisation and its people accelerate their change and development.

There are four roles which HR play, according to Dave Ulrich. The first, strategic partner

role-turning strategy into results by building organisations that create value; the second, a

change agent role-making change happen and, in particular, help it happen fast; the third,

an employee champion role-managing the talent or the intellectual capital within a firm;

and the fourth, an administrative role-trying to get things to happen better, faster and

69

cheaper.

Human resource management has received tremendous attention in recent years. Its role in

organisations has also undergone a substantial change and many organisations have

gradually oriented themselves from the traditional personnel management to a human

resource management approach, although many see it as the “old wine in a

new bottle.” The basic approach of HRM is to perceive the organisation in its totality. Its

emphasis is not only on production and productivity but also on the quality of life. It seeks

to achieve the fullest development of human resources and the fullest possible socio-

economic development.

Activity A

With business going global and competition becoming intense today HR has travelled a

long way from its conventional role as a support function to being a strategic business

partner in the present technology leveraged era. Discuss this statement by citing suitable

examples from your own organisation.

HR VISION

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Lead and Facilitate continuous change towards organizational excellence ; create a learning

and vibrant organization with high sense of pride amongst its members.

HR INITIATIVES

• Prepare MUL Strategic Business Plan-2000-2003; To achieve the Vision & Goal

• Improve the performance Appraisal system - it’s process, skill & usage

• Introduce a Potential Appraisal System

• Improvements in internal & external Training & it’s effective utilization. Training

need identification

• Systematic career planning ; Job Rotation ; Empowerment; Job enrichment

• Periodic communication meeting at various level; Roll out of Vision

• Raise cost consciousness for cost control and reduction

• Exposure on Brand Strategy to all non- marketing staff

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• Retention of Talent

CULTURE BUILDING INITIATIVES SINCE INCEPTION

Japanese Management philosophy of Team Spirit

• Common uniform

• Open office

• Common Canteen

• Open Office – Easy accessibility, Speedy

• Communication and decision making

• Morning Meetings

• Morning Exercises

FOCUS OF EFFECTIVE MANAGEMENT PROCESS SINCE

INCEPTION

• Management Committee Meetings – every Tuesday

• ·Single unaffiliated Union

• Excellent Industrial Relation scenario

• No loss of monday due to strike/lockout etc. in past 5 yrs.

• Maruti Udyog Sahyog Samiti – a forum for non unionized staff.

• Declared organization structure Workers (Technical / Assistant.), Supervisors,

Executives, Managers

• Top Driven HR – MD is also Director HR

• HR’s role of a facilitator

• Line managers as HR Managers

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• Year of the Customer –

• HR Internal Customer Focus

• Focus on Internal & External Customer.

INDUCTION AND SUCCESSION

• Transparent Recruitment & Selection process

• Recruitment on an All India Basis – no sector or region specific.

• Engineers – CAMPUS - IITs/RECs/Rorkee /HBTI

• ALL-INDIA TEST

• MBAs – IIMs/XLRI

• CAs - Rank Holders

• India Exam & Apprenticeship In MUL

• Lateral Entry for Experienced Professionals.

MATTER USUALLY DISCUSSED IN THE MARUTI INDUCTION

•  Overview of Maruti and Suzuki

• Building understanding of the car market in India and various segments

• Understand MUL’s product range and positioning in each segment

• Understanding the basics in the automobile industry

• Role of financing as a sales tool and the various financing options available

• Ensuring personal effectiveness

• Understand the attributes of a good DSE

• Overview of each Maruti model and the MUL ‘Advantage’

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• Overview of the selling process and how to uncover needs of a customer to do need

based selling

Induction program

Objective: The objective of this program is to facilitate smooth induction of the new DSEs

into their place of work i.e. Maruti dealerships. This program attempts to orient the new

DSEs on a few important parameters, which are listed below:

Overview of Maruti and Suzuki

Building understanding of the car market in India and various segments

Understand MUL’s product range and positioning in each segment

Understanding the basics in the automobile industry

Overview of each Maruti model and the MUL ‘Advantage’

Overview of the selling process and how to uncover needs of a customer to do need

based selling

Role of financing as a sales tool and the various financing options available

Ensuring personal effectiveness

Understand the attributes of a good DSE

MEANING OF RECRUITMENT

It is the process of searching the potential candidate and offers him or her the job. It is

positive in nature in the Indian context.

Process of identifying and hiring best-qualified candidate (from within or outside of an

organization) for a job vacancy, in a most timely and cost effective manner

RECRUITMENT PROCESS OF MARUTI SUZUKI LTD

74

The recruiting procedure at a Maruti dealership is as follows:

For a particular city

For a particular Dealership

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RO will consolidate requirement of dealerships of the region.

On this basis, a joint advertisement would be released in that city

Applicants would be asked to appear for the test. The test would be available both on CD and as a paper and pen test. (The CD is available with the RO regional officer)

RO person should be present during test

The Candidates who pass the test will be short listed for interview

The dealership should release an advertisement.

Depending on availability of infrastructure

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Test would be conducted for

applicants on a fixed date.

Interview of shortlisted/ qualified personnel

MEANING OF SELECTION

77

The software would automatically generate the lists of qualified candidates

1

1 Interview to be conducted jointly by

RO personnel and the dealership

executive.

2RO will then consolidate the list of candidates recruited

in the region and send it to the Sales

Training Department for registration.

3An Induction program will then be fixed for the region.

4 After Induction, candidate is eligible

to join the dealership.

It is the process of searching the potential candidate. It is negative in nature in the Indian

context. But it is positive in the US context.

Steps in Selection Process of Maruti udyog ltd

Selection process consists of a series of steps, at each stage, facts may come light which may

lead to the rejection of the applicant. It is a series of successive hurdles or barriers which an

applicant must cross. These hurdles or screens are designed to eliminate an

unqualified candidate at any point in the selection process There is no standards

selection procedure to be used in all organizations or for all jobs. The

complexity of selection procedures increases with the level and responsibility of the

position to be filled.

.

1 Preliminary Interview (screening applications)

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FOLLOW

UP

INDUCTION

EMPLOYMENT

TEST

FINAL APPROVAL

REFERENCE TEST

MEDICAL T

EST

EMPLOYMENT INTERVIEW

SELECTION TEST

Application

For

mPreliminar

y Interview (screening applications

)

Initial screening is done to weed out totally undesirable/unqualified candidates at the

outset. It is essentially a sorting process in which prospective candidates are given

the necessary information about the nature of the job and the organization, at the

same time, the necessary information is also elicited from the candidates about their

education, skills, experience, salary expected and the like. It helps to determine

whether it is worthwhile for a candidate to fill up the application form.

2 Application Form

Application form is a traditional and widely used device for collecting information from

candidates. It should provide all the information relevant to selection, where reference

for caste, religion, birth place, may be avoided as it may be regarded an evidence of

discrimination.

3 Selection Test

Psychological tests are being increasingly used in employee selection, where a test may

involve some aspect of an individual’s attitudes, behavior and performance. Tests are

useful when the number of applicants is large, as at best it reveals that the

candidates who scored above the predetermined cutoff points are likely to be more

successful than those scoring below the cutoff point.

4} Employment Interview

Interview is an essential element of selection and no selection procedure is complete

without one or more personal interviews, where the information collected through

application letter or application forms and tests can be cross-checked in the interview,

where candidates demonstrates their capabilities and strength in relevant to their

academic credentials. selection in interview serves three purposes:

obtaining information about the background, education, training, work history and

interests of candidate

giving information to candidates about the company, the specific job and human

resource policies; and

establishing a friendly relationship between the employer and the candidate so as to

motivate the successful applicant to work for the organization.

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However, in practice interview becomes a one-sided affair serving only the first purpose.

5} Medical Examination

Applicants who have crossed the above stages are sent for a physical examination either

to the company’s physician or to a medical officer approved for the purpose. Such

examination serves the following purposes:-

It determines whether the candidate is physically fit to perform the job,

where those who are physically unfit are rejected.

It reveals existing disabilities and provides a record of the employee’s health at

the time of selection. This record will help in settling company’s liability

under the workmen compensation Act for claim for any injury.

It prevents the employment of people suffering from contagious diseases.

It identifies candidates who are otherwise suitable but require specific jobs due to

physical handicaps and allergies.

6} Reference Checks

The applicant is asked to mention in his application form, the names and addresses of two or

more persons who know him well. These may be his previous employers, heads of education

institutions or public figures. These people are requested to provide their frank

opinion about the candidate without incurring any liability. In government and public

sector organizations, candidates are generally required to route their applications through

their present employers, if any. The opinion of referees can be useful in judging the future

behavior and performance of candidate, but is not advisable to rely exclusively on the

referees because they are generally biased in favor of the candidate.

Most candidates are employed at the time of their application, and do not wish their

employers to know they are looking elsewhere.

Because of a prospective employer would be breaking a confidence if

he or she asked for a reference before an offer of a job had been made and accepted.

(By the time an offer has been accepted, selection is over and the reference is too late

to affect it.

An offer may be made ‘subject to satisfactory references’, but as most references

are received after the candidate has started work, they can only be used to warn

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managers of possible faults in the candidate which in serious cases may eventually

lead to warnings followed by dismissal.

Employers giving references are usually extremely cautious; many references merely

state the job title, the date of employment, and reasons for leaving.

References are occasionally biased, giving a good reference to hasten an

employee’s departure or a poor one because of a grudge. Therefore, the best

references are obtained in person, where there is a chance to see whether nonverbal

behavior matches what is said. If such a meeting cannot be arranged,

telephoning is the next best alternative.

7} Final Approval

In most of the organizations, selection process is carried out by the human resource

department, where the decisions of the department are recommendatory. The candidates

shortlisted by the department are finally approved by the executive of concerned departments

or units.

8} Employment.

Employment is offered in the form of an appointment letter mentioning the post,

the rank, the salary grade, the date by which the candidate should join and other terms and

conditions in brief. In some organizations, a contract of service is signed by both the

candidate and the representative of the organization. It is at his point where a selected

applicant is handled with a letter of offer for a job:

a) The wage or salary offered must not only be appropriate to the job and attractive to the

candidate but consistent with the earnings of present employees.

b) The job must be named and any special conditions stated, for instance, the first

year you will be under training at the head office, then you will be transferred to up-country

branches.

c) The candidate must know the essential conditions of employment, such as hours of work,

holidays, bonuses and fringe benefits.

d) Any provisos must be clearly stated, for example, your employment will be subject to

satisfactory references and medical examinations.Appointment is generally made on

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probation of one or two years, where upon satisfactory performance during this period, the

candidate is finally confirmed in the job on the terms employed with, whether permanent or

contractual basis.

9} Induction.

The process of receiving employees when they begin work, introducing them to the

company and to their colleagues, and informing them of the activities, customs and

traditions of the company is called induction. At this juncture various induction

courses are done to new recruit in order to acclimatize them with the new working

environment.

10} Follow – up (Evaluation)

All selection should be validated by follow-up, it a stage where employee is asked how

he or she feels about progress to date and the worker’s immediate supervisor is

asked for comments, which are compared with the notes taken at the selection

interview. If a follow-up is unfavourable it is probable that selection has been a fault; the

whole process from job specification to interview is then reviewed to see if a better choice

can be made next time.

TRAINING

Maruti arranges the training at several intervals. The training is mandatory for all the

employees. The training schedule of all employees is maintained by the HR manager.

EDP

Post Sale Process is managed.

Sales Analysis is done.

Backup is taken time to time.

IMPORTANCE OF TRAINING

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Optimum Utilization of Human Resources – Training and Development helps in

optimizing the utilization of human resource that further helps the employee to

achieve the organizational goals as well as their individual goals.

Development of Human Resources – Training and Development helps to provide an

opportunity and broad structure for the development of human resources’ technical

and behavioral skills in an organization. It also helps the employees in attaining

personal growth.

Development of skills of employees – Training and Development helps in increasing

the job knowledge and skills of employees at each level. It helps to expand the

horizons of human intellect and an overall personality of the employees

Productivity – Training and Development helps in increasing the productivity of the

employees that helps the organization further to achieve its long-term goal.

Team spirit – Training and Development helps in inculcating the sense of team work,

team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn

within the employees.

Organization Culture – Training and Development helps to develop and improve the

organizational health culture and effectiveness. It helps in creating the learning culture

within the organization.

Organization Climate – Training and Development helps building the positive

perception and feeling about the organization. The employees get these feelings from

leaders, subordinates, and peers.

Quality – Training and Development helps in improving upon the quality of work

and work-life.

Healthy work-environment – Training and Development helps in creating the

healthy working environment. It helps to build good employee, relationship so that

individual goals aligns with organizational goal.

Health and Safety – Training and Development helps in improving the health and

safety of the organization thus preventing obsolescence.

Morale – Training and Development helps in improving the morale of the work force.

Image – Training and Development helps in creating a better corporate image.

Profitability – Training and Development leads to improved profitability and more

positive attitudes towards profit orientation.

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Training and Development aids in organizational development i.e. Organization gets

more effective decision making and problem solving. It helps in understanding and

carrying out organizational policies

Training and Development helps in developing leadership skills, motivation, loyalty,

better attitudes, and other aspects that successful workers and managers usually

display.

TRAINING DETAILS

The strength of any organization is its manpower. Each organization would like to have

executives who are well trained so that they can be more productive. The vehicle

manufacturers conduct several trainings so that they can achieve their goals. In the

Training master form, you can enter the information about the training, which have

been conducted during a particular time period. We are also maintaining the

information regarding the attendance of the executives in a specific training. That is,

how many executives out of the given list have attended the training? With the help of

these training details we are generating various MIS reports. The details provided here

can help the management to find out an efficient person for a special task. Searching

facility is also available, so you can find out the total information of a particular

training with just one click over there.

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SALES AND TRAINING DEPARTMENT OF MARUTI UDYOG

Vision

“Equipping MUL and Dealer Sales Fraternity with the requisite mindset, knowledge and

skills, and enhance the business value of our associates to sustain our position of leadership

and build customer loyalty to MUL”

Objectives

To ensure multiple knowledge and skill development of DSEs required selling cars

and handling competition

Consultative Selling Approach.

Continuous Feedback and Performance monitoring.

To employ training as a tool to achieve customer delight and customer loyalty

Make DSEs as Car Advisors and be a single window interface with the customer

THE VARIOUS TRAINING PROGRAMS ARE AS FOLLOWS:

TRAINING PROCESS FOR SALES EXECUTIVES:

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1.Induction - Aims to provide an understanding of the automobile industry, MUL, its

policies and products. (2 Days)

2.Product programs- Imparts complete knowledge on MUL product vis-à-vis competition.

Various programs are Segment A1, Segment A2, Segment A3 and Versa, Grand Vitara XL 7.

(2 Days)

3.Selling Skills/ Consultative Selling Process- Enables executives to understand customer

needs, sales processes etc and enables them to apply learning in actual selling. (2 Days)

4. Customer care - A positive attitude and the ability to motivate oneself is a pre-requisite

for excellent performance in any work area. The program aims at helping one to build a

positive attitude and better interpersonal skills and to enable better customer handling. (3

Days)

5.Advisor for life program: In this changed competitive environment the role of Dealer

Sales Executive is seen more than a person who is selling cars to the customers. He is

expected to be the Customer's ' Car Advisor for life' and make that one-time customer into his

'Customer for life'. He has to be Single Window Interface with his customers on all matters

related to cars i.e. finance, insurance, Extended warranty, MGP, MGA, service etc. (2

Days)This training trains the Sales Executives on the concept of 'Advisor for Life' and helps

them become a Single Point Contact with the customer.

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INDUCTI

ON

PRODUCT

PROGRA

SELLING SKILLS

CUSTOMER CARE

AVISORS FOR LIFE PROGRA

M

PROGRAM FOR

DEALING SALES

EXECUTIVES

HANDLING

CORPORATE AND INSTITUTIONAL SALES

DELIVERY

PROCESS

6. Delivery Process : The training program on 'Delivery Process' has been developed as

delivery now has the maximum weight age in the new factor structure for SSI. It not only

focuses on the processes to be followed for delivery but also makes the DSE realize the

importance of a good delivery (delivery is not the end of a sale but a beginning of a

relationship)

TRAINING PROCESS FOR SALES MANAGERS /GENERAL

MANGERS/ BRANCH HEADS

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DEALERSHIP MANAGEMENT PROGRAM

SALES MANAGERS/TEAM LEADERS PROGRAM

BRANCH MANAGER PROGRAM

1.Dealership Management Program: for second-generation dealers, and GM’s and RO

executives on how to manage entire Dealership Operations. Financial Management, staff

management, motivation, time management, planning are covered. (2 Days)

2.Sales Managers/Team Leaders Program: The Training covers issues like Sales

Management (target setting and achievement, enquiry management, resource and time

management etc), Supervisory skills (Performance management, leadership etc), Practical

Coaching skills, knowledge of Maruti Finance, Maruti Insurance Extended warranty, MGA,

True Value etc and Car Advisor for life concept. (2 Days)

3.Branch Managers Program: Many of our dealers have multiple outlets. While the owners

sit at any one outlet and control the others from there, different branch heads that manages

the day-to-day operations of the outlets manages the other outlets. In order to ensure that they

run their respective outlets effectively we train them on the various aspects of dealership.

The training covers topics like -Making a business plan (for the dealership as a whole- Not

only for sales but also for other revenue streams), Fundamentals of DBP, HR Management,

Team Building and Supervision skills, Ability to motivate the team and get a buy in on the

business plan, Time management/Prioritizing etc

Training and Development of dealer Sales Executives

DEVELOPMENT AND UPDATION OF TRAINING MODULES

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CONDUCTING TRAINING Development and Updation of Training Modules

The Sales Training Department develops new modules along with training agencies

based on market requirements, specific needs identified and feedback received

1. Conducting Training

Annual Training Calendar is fixed based on:

Number of Sales Executives in the sales network

Training path requirement of Sales Executives

Review of training programs done in the previous year

Market Share/ Market situation/Focus areas and new product launches

Training conducted regionally based on fixed monthly calendar.

Training Path /Norms for all Dealer Sales persons are as follows:

All Dealer Sales Executives need to attend Induction Training before or within a

month of joining the dealership (depending on when the program is scheduled in

the region)

After Induction then the Sales executives needs to attend a segment B program.

They also should attend ‘ Car Advisor for life Program’ which trains him to be a

one point contact with the customers handling all his car related needs like

finance, insurance, extended warranty, MGA etc and how to develop and maintain

relationship with customers

After gaining experience, he can attend other courses like segment C etc.

2. Monitoring and feedback:

Monitoring and Evaluation of Sales force is done on a continuous basis. Pre-

tests and post-tests are conducted during training. Feedback is taken from

participants on trainers and from trainers on participants. Monitoring is also

done through tests and audits at the dealerships.

3. Communication:

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Sales Training Department sends monthly Newsletter “Creating Winners” to all

DSE’s. It is a monthly communication containing articles on various aspects of

product knowledge, selling skills, market etc .It is a forum for effective

communication of new ideas and strategies. It also provides two-way

communication.

An Annual Selling Skill Contest is organized to test the selling skills of the sales

executives. It is conducted at regional levels and culminates in an all India level

contest.

RECRUITMENT OF SALES EXECUTIVES:

SAT has developed a CD based Test for recruitment as a part of Maruti Recruitment System

(MARS). The test checks sales aptitude and reasoning and is a pre- interview shortlist device.

It helps dealers recruit the right profile of people for their dealership. The Regional Office

will be involved throughout the implementation of the MARS while recruiting Sales Persons.

All Sales Executives need to be registered with Maruti after recruitment through extranet. A

unique ‘Maruti Suzuki Personal Identification Number (MSPIN) is being issued which the

DSEs have to remember and use in all communications like Trainings, reward schemes etc

Maruti adopts `360 degree' appraisal system

Employee to be evaluated not just by superiors, but also by peers, subordinates

It would seem that there is no corporate human resources policy that has not had its share of

controversies for being biased. With an increasing number of qualitative factors that affect

employees at the workplace, the performance appraisal process to make it as fair as possible

has been the dream of every HR manager.

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And now qualitative factors are not just at play in the services sector, but also in

manufacturing. With cubicles giving way to open offices, the top-down approach to

employee performance appraisal is also on its way out.

One company that has set itself on course to further demonstrating and opening up its

employee evaluation process is car market leader Maruti Udyog.

The company has introduced a unique 360-degree feedback system, starting with its senior

leadership. The new system has been co-developed with Ernst & Young and has been put in

place recently.

Under the 360-degree feedback system, the employee is rated not just by his superiors, but

also by his peers and subordinates.

"We are starting the 360-degree feedback process with employees in the top management

such as chief general managers and general managers, whose performance will now be

assessed based on feedback from their peers and junior management employees within the

same department. Till last year, their performance was being appraised only by the Directors

and the Managing Director," says Maruti's Chief General Manager (HR), Mr S.Y. Siddiqui.

Ernst & Young, in consultation with Maruti, has listed a set of leadership competencies that

are expected in a general manager. Based on that, it has prepared a questionnaire to which

peers and subordinates can respond online.

Although acknowledged as an effective tool for leadership development in the West, Indian

companies have been shy of introducing such a feedback system for fear of disturbing

traditional hierarchical structures.

HR consultants feel that the critical issues in implementing such a system include assuring

respondents that their feedback will remain confidential and convincing the person receiving

the feedback that this is a development tool and not an appraisal tool. Maruti has handled this

by getting E&Y and other consultants to make detailed presentations to the senior

management personnel before the process got under way. The company has a committee of

general managers, called Human Resource Inter Divisional Committee (HRIDC), which is

consulted on all major HR issues.

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The initiative has been unveiled with an e-mail by Maruti's Managing Director, Mr Jagdish

Khattar, asking people to support the online questionnaire process. The 360-degree feedback

system will also include a self-appraisal by the general manager. At the end of the process, he

can compare his self-appraisal with the assessment of his subordinates and peers.

One of the benefits that Maruti is hoping to get out of the 360-degree feedback process is the

sense of empowerment and importance felt by subordinates, when they are asked to offer

their feedback about their superiors. Maruti currently has over 4,000 employees on its rolls.

RECOMMENDATIONS AND SUGGESTIONS

Provide a user-friendly mechanism for registering customer complaints (complaints

that are not registered with the companycannot be resolved, and are a major source of

customer dissatisfaction).

Provide a fast mechanism for handling problems and complaints(complaints that are

resolved quickly can increase customer satisfaction).

Provide a fast mechanism for correcting service deficiencies(correct the problem

before other customers experience thesame dissatisfaction).

Use internet cookies to track customer interests and personalizeproduct offerings

accordingly.

Use the Internet to engage in collaborative customization or real-time customization.

Provide a fast mechanism for managing and schedulingmaintenance, repair, and on-

going support (improve efficiencyand effectiveness).

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FINDINGS

1) They treat all the employees equally

2) They tries there best to increase the efficiency of the employees by providing them

different motivation programs.

3) They make new recruits aware about the company and working pattern of the

company.

4) They focus on each and every department of the organization.

5) Having different recruitment process for different departments of the organization.

6) They provide different types of training to the different departments according to the

need of the people.

7) They take feedback from there employees on regular basis.

8) They adopts 360 degree method of performance appraisal for there employees.

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CONCLUSION

While preparing this project report i learnt many concepts of “Human resource management”

like recruitment, selection, training, motivation, etc.

I have done this project with reference to MARUTI UDYOG LIMITED & i find out that

many facts while working on this project which has added a valuable experience in my life.

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BIBLIOGRAPHY

www.google.com

www.wikipedia.com

http://www.career-manage.com.au/

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