CHANGING HRM PRACTICES WITH SPECIAL REFERENCE TO RETENTION POLICIES AT TCS Ms. Ruchita Petkar Asst. Professor ATSS CBSCA, Chinchwad, Pune Dr. Suhas Sahasrabudhe Principal CSIT, Shahu Nagar, Pune Abstract: Globalization has made the world very small. It makes national culture an increasingly strategic issue that has to be faced and properly managed. We have to cast people in a tune with newer requirements to remain in this competitive world. The problem is the balancing of the global trends in human resource management and the various changes in the policies made accordingly by the company which affects the people working in the organization. Thus there is a great challenge in front of HR manager to retain its present employees and to satisfy them as well. This paper thus is an attempt to examine the various functions and HRM practices adopted at TCS with the main focus on its retention management. And it is a purely secondary data based paper. Keywords: HRM Functions, HR Policies, HRM Practices, Retention. Introduction: India embarked on globalization since July 1991 & as a part of which most of the Indian companies switched over to policy changes with regard to HR in particular. This was necessitated by the growing competition faced by the Indian companies both in the country & at the International level. The challenges of the globalization were taken up by some corporate firms in the right spirit & with a focused on short, medium & long term policy changes. TCS is one of the most successful IT Company & is having a presence across the boundaries of the nation. The present paper is an attempt to examine the Human Resource Management practices adopted at TCS with a focus on the employee retention management & the policies of various kinds of benefits arranged for the employees. Objectives: The major objective of this research paper is to find out the Human Resource Management practices at TCS in the recent times with regard to retention management. The paper also aims at crystallizing the best Human Resource Management practices that could be learnt as a lesson from the TCS experience. 1
Methodology: The paper is based on the secondary data available through published reports, case studies & the literature available website. Thus it is a purely secondary data based paper which can be further supported by primary data desired to be collected. Human Resource Management Practices - The challenges of Globalization: Globalization is a movement generally considered to be initiated by the international institutions like IMF & facilitated by the communication revolution because of internet connectivity. The other major pillar of globalization has been the establishment of TCS in 1995. In fact the ICT revolution coupled with WTO providing the institutional setup smoothened the process of globalization particularly with the developing countries. The Asian giants & dragons launched upon the market reforms with the growing competition being aimed at encompassing practically all the sectors of the economy. In the last decade of the 20 th century & the first decade of present century the world has practically become small mainly because of trade liberalization effectively implemented by the most of the countries of the world. Thus the changing scenario of the business world resulted in posing a variety of challenges with regard to most of the HR functions. HR Functions Reviewed The paper seeks to examine the recent HR practices at TCS with special focus on some of the major HR functions. It would not be out of place therefore to review the major HR functions & the challenges posed by the globalization in respect of each of them. The purpose is to provide a conceptual clarity and some background for the review of best HR practices being followed at TCS in respect of retention policies. A] HR Planning: The Human Resource Management ideally has to begin with planning of human resources. This can be done always with some time reference in the sense that the current human resources and the future requirements both have to be considered. The major challenges in respect of planning function can be described as follows:- 1. Planning HR in a dynamic set up It implies that in a constantly changing business world, the features of the human resources used by any corporate firm also go on changing. Keeping this in mind the present resources have to be oriented for the essential skill formation. Along with this it is also necessary to keep a futuristic plan ready so that the requisite human resource can be employed at the right time. 2. Managing the change The attitude in a change needs to be brought among the existing employees obviously because outright retrenchment is not possible. This is the crooks of 2
change management & it is the most difficult job to be performed by any Human Resource manager. B] Recruitment & Selection: Once the plan of Human Resource required by the corporate firm is prepared, the next function is the actual recruitment & selection. In the modern management parlance it is called as talent identification & acquisition. Most of the modern companies have stopped the traditional recruitment & selection practices & have shifted to the online mode including telephonic interviews. The fact however remains that at the time of actual recruitment the HR department conducts a personal interview where the compensation packages & many other aspects are discussed. The major challenges of his function are as discussed below :- 1. Customization of modern methods of recruitment- The corporate leaders performing HR functions are required to adopt and get customized the modern techniques of recruitment & selection. This is quite challenging because the senior HR managers may not be in a position to quickly adopt the new methods of recruitment. 2. Locating the talent & workforce diversity With the advent of globalization, it has become obviously necessary for almost every organization to find out the talent at the world level. It is also to be noted that there is a huge workplace diversity already experienced. E.g.: HR manager sitting in Japan may require a talent of the Indian local market to be employed by his company in India. This requires deeper knowledge on a wide scale of the talent available in various countries. C] Training & Development: The orthodox approach conceived as the task to be done by training & development function of the modern day organization is already replaced by moulding the existing talent with suitable training & development capsules both at the work & off the work. The major challenges in this regard are: 1. Training by whom? In a competitive market, large number of trainers & training institutes are available. Therefore, selecting the most appropriate and effective training vendor is challenging. 2. Methods of Training - The modern methods of training & development also present a lot of challenges because the most suitable methods in view of the existing employees & their characteristic feature have to be chosen. If this is accomplished training & development function may be delivered in the best possible manner. D] Performance Appraisal: Any global firm has to carry out the Performance Appraisal at the right time of the important employees in various departments of the firm. It crosses even the geographical country limits & when the firm is globally operating. The feedbacks and systematized reports have become 3
historical old being replaced by periodic self assessment. In this regard the major challenges include the following: 1. Preparing self appraisal format which can be system based and can be filled online by any employee at any given time. This will require a certain given set of skills including computer education for the employees. 2. Keeping a track of such self appraisals and measuring the effectiveness of the Human Resource is indeed challenging. E] Retention: Perhaps the most important of all the HR functions today is of the retention of the talent with a focus on leadership development. Retention management in today s world requires a completely new approach that should be most flexible rather than rigid. A globally present and managed firm, the HR manager of such a firm will have to constantly monitor the best talent available in the firm at different work places. He will have to consider the changing needs of his talented resources so as to provide those appropriate opportunities. This requires thinking ahead of time and considering career development path of the concerned talent. The most talked about methods of retention include employee delight at an appropriate stage of his career. The most successful organization has already surmounted these challenges in respect of retention. On this background we now switch over to a case study of Human Resource practices at TCS: Tata Consultancy Services Limited (TCS) software services and consulting company headquartered in Mumbai, India. It is the largest provider of information technology and business process outsourcing services. It is part of one of India's largest and oldest conglomerates, the group TATA. One of TCS' first assignments was to provide punch card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India TCS is proud of their heritage as part of the Tata Group, founded by Jamsetji Tata in1868 and one of India s most respected institutions today. Their mission reflects the Tata Group's longstanding commitment to providing excellence: to help customers achieve their business objectives by providing innovative, best-in-class consulting, IT solutions and services, and to actively engage all stakeholders in a productive, collaborative, and mutually beneficial relationship. TCS also provides product and industrial engineering services, as well as strategic consulting and project management. The company is controlled by textiles and manufacturing conglomerate Tata Group.TCS vision is to be one of the top 10 global companies by the year 2010.TCS values integrity, leading change, excellence, respect for the individual, and fostering an environment of learning and sharing will get us there. The Human Resource (HR) function is closely linked to the business strategy and plan by being aligned to the TCS structure through HR support (including resource management 4
through the Resource Deployment Manager (RDM) to each Industry Practice/Service Practice/Geography and innovative workforce practices. Present scenario of Attrition and Retention rates in IT sector: As already pointed out retention of the best talent is a major problem for most of the software service sector organization. The major players in India in this sector include Wipro, Cognizant, TCS, Infosys and HCL. The recent data available relating to the rates of attrition of some of such companies are depicted in the following diagram: The graph relating to the rate of attrition is for the period of October to December 2010. It is evident from the above graph that TCS has the lowest rate of attrition next only to Cognizant ending December 2010. While Cognizant had registered a rate of 12.1%, TCS 13.1%, Wipro 18.4%, Infosys 20.5% with HCL having highest rate of 25.3% during that quarter. It is worth noting that Cognizant had a slightly higher rate compare to TCS in September 2010. The rates were 21.8% & 20.5% for the two companies respectively. It clearly indicates thet Cognizant has adopted may be some better methods of controlling attrition. But since the difference in between two is not very significant and also considering the fact that TCS has greater manpower employed we will take up a more detailed review of TCS and its retention policies. Among the domestic IT companies, TCS has the lowest employee turnover rate. Employees stay with the company not for the size of the pay packet alone. There are several other factors including job security. The company has a performance improvement plan that takes into account any personal problem the employee may be facing. Company s HR practices have the ability to absorb people, to manage them from sourcing to deployment, and what it means in terms of scalability and scalability is something that the group evolves with respect to its practices. TCS tries to retain its associates through: * Career Development * Rewards and Recognition 5
* Associate friendly HR policies * Career Development * Performance Based Incentives TCS believes that career and personal development of all associates are vital for organizational success and initiates activities to encourage associates to participate whole heartedly in the same. Personal Development Planning forms a central part of their annual appraisal and objective setting process. Personal Development is also encouraged through online e-learning initiatives that help develop a wide variety of skills, including languages, cultures, sciences, business, technical and the arts subjects. Associates aspiring for higher roles undergo assessment of current capabilities in order to identify the competency gap to reach the aspired role. The gap in competency is addressed with structured training and orientation. Findings: We have noted above that the globally operating firms particularly in the IT sector are required to adopt cutting edge HR practices in respect of all the major functions of Human Resource Management. We can thus put up the major findings in the following way. 1. HRM for a global firm has become extremely challenging. 2. Challenges loom over right from the planning stage of Human Resource Management down to retention. 3. Among all the functions, talent management and retention appears to be the most significant function of Human Resource Management. 4. A brief case study of retention policy at TCS reveals that the dynamic and employee oriented flexible retention policy based on its own values is a clear X factor for the success of TCS in retention. References: 1. www.google.com 2. www.infosys, Wipro lag in employee retention - Livemint.htm 3. www.tcs.com 6