AMITY SCHOOL OF BUSINESS

Summer Internship Report

On

“Role of Executive HR Services (EHS) in the

Exiting Management
Of
HCL Technologies Business Services”

Report To: Report By:

Ms. Ranjana Sharma Saad

Subbooh
G-23
Date: 29.07.2010

Acknowledgement

I would like to express my gratitude to all those who gave me the possibility to complete
this project. I would like to thank Ms. Priya Nair for providing me her valuable time as
well as great deal of information. I have further more to thank Ms. Anjali Joshi for her
time as well as her valuable advice regarding my way forward.

I am deeply indebted to my faculty guide Ms. Ranjana Sharma whose help, suggestions
and encouragement helped me in the time of the training and writing of this project.

I also have to thank Mr. Hardik Sharma, Ms. Pramila Kumari, Mr. Raj Kishore Prasad,
Ms. Nivedita Singh and Ms. Aparna Banerjee for teaching and assisting me in my work
and for making these few a weeks a great learning experience.

Mr. Gaurav Mathur for giving me the internship in the company

At last but not the least I would like to thank my parents who provided me will all their
love, support and means to carry out my studies of which this project is a part..
Abstract

Employee exit management is the process used within many businesses organizations
to relieve its employees in a professional manner. It applies to employees who have
resigned and those that have been terminated by the company.

When an employee leaves an organization there are a number of considerations that an

organization needs to make in order to cleanly end the relationship between the
company and the employee. The company as a legal entity has a responsibility to the
employee which may extend beyond the period of employment and this is the primary
focus of the exit procedure.

The service industry, from fast food to business consulting, has long lived by the mantra
that serving the customer is the only thing that matters. As a result, customer need is
placed above all others – often at the sacrifice of employees, managers and
administrators. HCL Technologies, one of India’s fastest growing IT services companies,
which is also rated as No. 1 employer in India, has embraced a new strategy –
Employee First

This approach places the needs of employees before the needs of customers. This
seemingly unreasonable strategy has provoked a sea-change at the company, and
surprisingly, greater customer loyalty, better engagements and higher revenues.

To make the Employee First concept work, HCL has launched a variety of internal
initiatives designed to give employees more personal responsibility for the company’s
service offerings and also a voice with upper management. HCL’s enlightened approach
to employee development focuses on giving people whatever they need to succeed.
One of these initiatives is the Employee HR services or ‘EHS’.

For this project, I have worked with the EHS team in the exiting management of the
company. I worked on a day-to-day basis assisting, learning and analyzing various
exiting formalities and processes carried out by the team. I also looked into the team’s
role and impact in exit management in this project.

ACKNOWLEDGEMENT........................................................................................................................................2
ABSTRACT......................................................................................................................................................3
PREFACE.......................................................................................................................................................1
INTRODUCTION.........................................................................................................................................5
EHS – AN INTRODUCTION...............................................................................................................................6
PURPOSE........................................................................................................................................................7
MATERIALS AND METHODS..................................................................................................................9
RESULTS AND FINDINGS.......................................................................................................................10
ATTRITION IN THE BPO INDUSTRY...................................................................................................................10
EXITING PROCESS AT HCL.............................................................................................................................12
Exiting Process....................................................................................................................................12
Employee Separation in HCL..............................................................................................................15
FULL AND FINAL PROCESS..............................................................................................................................18
About....................................................................................................................................................18
Full & Final Components
..............................................................................................................................................................19
Full and Final Process in HCL............................................................................................................20
Resignation....................................................................................................................................................20
Absconding....................................................................................................................................................23
Termination....................................................................................................................................................24
PROVIDENT FUND...........................................................................................................................................27
Provident Fund as per Government of India.......................................................................................28
Advantages...........................................................................................................................................32
Disadvantages .....................................................................................................................................34
Provident Fund in HCL.......................................................................................................................34
PF Process in HCL..............................................................................................................................35
Reject Forms........................................................................................................................................40
PF Loan...............................................................................................................................................41
Condition for PF LOAN.......................................................................................................................41
EX-EMPLOYEE VERIFICATION..........................................................................................................................45
VOUCHERS...................................................................................................................................................46
CONCLUSION AND RECOMMENDATIONS.......................................................................................46
According to my observation at HCL BPO, the exiting employees have cited all the previous reasons
mentioned above. Therefore, as I was training under the exit process I felt the need to address the
issue of attrition. Some recommendations for addressing attrition in the organization are as follows:
..............................................................................................................................................................48
HOW TO SMOOTHEN THE EXIT PROCESS .............................................................................................................51
PROBLEMS FACED IN THE EXITING PROCESS OF EMPLOYEES AT HCL......................................................................51
RECOMMENDATIONS ......................................................................................................................................53
FUTURE PROSPECTS..............................................................................................................................54
REFERENCES.............................................................................................................................................55
APPENDICES..............................................................................................................................................56
Preface

Business Process Outsourcing (BPO) is a form of business process which involves the
contracting of operations and responsibilities of specific business functions or processes
to a third-party.

Originally, this was associated with manufacturing firms, such as Coca Cola that
outsourced large segments of its supply chain. In the contemporary context, it is
primarily used to refer to the outsourcing of services.

Given the proximity of BPO to the information technology industry, it is categorized as

an Information Technology Enabled Service or ITES. Knowledge Process Outsourcing
(KPO) and Legal Process Outsourcing (LPO) are some of the sub-segments of BPO
industry.

BPO or Business Process Outsourcing is one of the sunshine sectors in India.

According to statistics by World Bank and Goldman Sachs, an investment banking firm
in India will attract about 80% of the world’s BPO industry by 2020. BPO is one of the
most outperforming sectors in the Indian economy. Services, which account for almost
35% in India’s productivity has BPO at the heart of the growth.

Over the last ten years, Business Process Outsourcing (BPO) has proven to be a
sunrise industry in India due to its talented, skilled personnel and its geographically
strategic location. India has drawn attention and investment from multiple international
stakeholders who are looking to hive off their business processes.

Recent times have witnessed a dramatic change in the country’s economic environment
owing to the presence of fierce competitors like Vietnam and the Philippines as well as
factors such as recession and hike in salaries. Despite this, the BPO industry appears to
be churning out “better-than-expected” performances, all the same growing at the
steady pace. This is evident in a recent survey conducted by the National Association of
Software and Service Companies (NASSCOM), which has estimated a 4–7% rise in IT-

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BPO export revenues for Financial Year 2009–10, thereby reaching US$ 50 billion,
approximately.

Other factors contributing to sustained growth include continued domestic demand,

recessionary trends in the West and the inevitable cost savings that BPO still gives
enterprises. Moreover, some BPOs in India have expanded to other countries in order to
leverage cost savings. The domestic BPO segment in India is estimated to increase to
65 billion US dollars by the end of 2010. India hosts around 200 call centres that have a
turnover of 2 billion USD and a workforce of 150,000 skilled personnel.

1. GENPACT: Founded in 1997, Genpact—the erstwhile-outsourcing wing of GE

Capital—leads the pact. Having formed an independent entity in 2005, Genpact
has a network in 13 countries of more than 30 operations centers, including
leading enterprises such as Nissan, Wachovia, Hyatt and GE. It offers a wide
range of services including finance, IT infrastructure, supply chain management
and analytics and hence is guaranteed to stay at the top of the list for years to
come. With a workforce of more than 37,000 employees, Genpact’s revenue for
the year 2008 stood at $1040 million.

2. WNS Services: Principally distinguished by its deep domain expertise and end-
to-end service offerings, WNS Global Services occupies the second place in this
list. Based in Mumbai, Warburg Pincus is its main investor firm. WNS boasts of
215 plus global clients. Established in 1996, this Nasdaq-listed company has
been serving numerous industries such as healthcare, manufacturing, retail,
distribution, insurance and travel. At present, WNS has more than 21,000
persons working for it and has clocked revenues of about $539 million as of
2008.

3. IBM DAKSH: The brainchild of four ambitious and talented professionals, IBM
Daksh grew from a relatively small enterprise to a global hub that employs more
than 30,000 people today. Celebrated for its excellent leadership and
empowering vision, IBM Daksh has been effortlessly managing business
processes for its international clientele over the past 5 years. As a result, it has
won accolades for its outstanding performance, including the “Most Respected
BPO Company in India” by Business World. The company has 25 service

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 delivery centers in India and the Philippines. While IBM Daksh is primarily a
solutions provider for various industries such as financial services,
communication and distribution, it also offers its expertise to the hospitality and
travel sectors.

4. WIPRO BPO: Spectramind was acquired by Wipro in 2002 and renamed as

Wipro BPO Solutions, which has since then carved a niche for itself in the
outsourcing industry. The company has been rated one of the “Best Employers
in India” by the Best Employers Hewitt Survey in 2007. The HQ of Wipro BPO is
based in Bangalore, with over 19,000 employees committed to providing high
quality services to its customers. As of 2008, the company generated revenue of
approximately $395 million, thus giving it recognition as one of the top 10 BPOs
in India. Wipro BPO offers financial and accounting services, HR services and
knowledge services to industries including insurance, healthcare, telecom, travel
and hospitality, among others.

5. TCS BPO: One of the key players in the present-day outsourcing industry, TCS
BPO offers various services in the realm of healthcare, telecom, travel, media,
KPO and banking, among others. TCS BPO has won accolades for its services
and performances as a result of which it was named one of the world’s top BPO
providers by the International Association of Outsourcing Professionals, in 2006.
Although its headquarters is based in Bangalore, it is spread across the heart of
the country with branches in Goa, Pune, Mumbai, Lucknow, Gurgaon and
Hyderabad. TCS BPO Its clientele includes 132 entities that span over 32
countries. At the end of fiscal year 2008-09, the BPO contributed around Rs
1,900 crores to the company’s revenues.

6. FIRSTSOURCE SOLUTIONS: Firstsource was established in 2001 and was

formerly known as ICICI Onesource. Ranked among the top 10 ITES companies
in 2007 (by Nasscom), it is a leading player in global business process
management. It is commendable to note that Firstsource is the first pure play
BPO company in the world to secure ISO 20000 and ISO 27001 certifications. It
has numerous leading global clients to whom it offers BPO services spanning
customer care, billing and collections, business research and analytics and
customer acquisition. Among several notable clients, Firstsource boasts of a

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 clientele subsuming FTSE 100 media companies, 3 of the 5 largest US banks,
top 5 UK banks and 2 of the world’s largest telecom companies.

7. ADITYA BIRLA MINACS: A global IT business solutions company and

subsidiary of Aditya Birla Nuvo, Aditya Birla Minacs has over 26 years of
experience in offering BPO solutions to over 15 Fortune 500 companies.
Nasscom 2006-07 ranked the company as India’s third largest BPO, by export
revenues. With a primary focus on three areas, namely contact centre solutions,
integrated marketing services, and knowledge process outsourcing, Aditya Birla
Minacs has employed over 13,000 employees across its facilities in the world.

8. AEGIS: A leading player in customer care and acquisition for over thirty years,
Aegis has numerable Fortune 500 clients to whom it provides immeasurable
support by way of customer interaction, back office and other routine business
processes. Aegis has been recognized as eighth among the top 15 BPO
exporters for 2008-09 by Nasscom. It operates out of 40 locations spread across
the globe with complete support from a 39,000-strong staff strength. Its
headquarters are based in Mumbai. Essar Global Limited, its parent company, is
an $18 billion group well established in 130 countries.

9. Infosys Technologies: Infosys Technologies set up Infosys BPO in April 2002

as its business process outsourcing subsidiary. With a focus on integrated end-
to-end outsourcing through lesser costs, Infosys BPO holds high ranking among
the top BPO companies of India. It clocked revenues of $250 million for fiscal
year 2007-08 and has its operation centres in Mexico, Bangkok, India, Poland,
China, and the Philippines, among others. Backed by over 16,295 employees,
Infosys BPO Ltd. is bound to stay put in the slot for top 10 BPOs in India for
many years to come.

10. HCL BPO: Founded in 2001, HCL BPO is a subsidiary of HCL

Technologies Ltd. It offers services in various realms of operations such
as customer relationship management, finance and accounting services,
supply chain management, knowledge and legal services to diverse
industries including retail, telecom, media, insurance, and publishing and
entertainment sectors. Even before the IT industry had recognized the

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 potential and opportunity in the BPO sector, HCL was one of the first IT
companies to penetrate into this area. Financial year 2008 witnessed a
revenue generation of about $232.15 million by this fast emerging BPO

Introduction

Employee Separation is one of the very important and crucial function / process of HR
Department. This process, if not handled in an efficient manner, can lead to various
legal complications.

Let’s understand the term employee. According to various definitions an employee can
be defined as:

1. A worker who is hired to perform a job

2. An individual who provides labor to a company or another person
3. An individual who provides services for compensation to an employer and whose
duties are under the control of the employer.

An employee works for an employer and gets paid for his work and nothing else. The
relation of an employer and employee has a beginning; they stay together for a while
and then they separate. Beginning of the relation is called as recruitment process or
talent acquisition that passes through selection phase and followed by induction.
Staying together in the relation comprises the various phases such has performance
management; career management; professional growth; development and etc. And the
final stage of the relation is the separation.

Broadly speaking, in normal scenarios the separation between employer and employee
can be due to any of the following three (this will be discussed in detail in subsequently):

1) Resignation – Employee decides to leave the organization.

2) Termination – Employer decides to break the contract of employment

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3) Absconding – When the employee decides to leave the organization without
tendering his resignation or following the proper process of separation.

Apart from the above mentioned, the relation between employer and employee can also
be terminated during the lay-offs (Financial or economic crisis); during the process of
mergers, acquisitions and take-over; or any other legal intervention by the state or
central government. Based on the type of employee that has been hired by the
company, if local or an expatriate or a national of other country or if an employee is
hired through outsourcing agencies, the process of separation and the documents
involved in it also differs.

Later in this report we will discuss these things in more detail.

EHS – An Introduction

EHS stands for Executive HR Services

It is a corporate function at par with other support functions like HR, Finance, and S&M
etc. In HCL, keeping in mind the “Employee first initiative” instead of a per say ‘HR’
department an EHS Team was formed to streamline and resolve issues of employees
expeditiously at a more interactive level. The EHS team takes care of employees from
the point they join till they exit.

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 JOINING
VERIFICATION
SAP HIRING

F&F STATUTORY

EXIT FORMALITIES
PAYROLL

EMPLOYEE WELFARE

Purpose

• To provide a Single Window to employees to take care of majority of their day-to-

day HR related queries with a “WE CARE” attitude.

• There were certain duplication of efforts at HR, Finance and Administration.

• There was a need to optimize the resource utilization from the company point of
view.
• There was a need for a single group focusing on policy implementation and
independent group for creating the policies.

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• There was a need to create a team with multi discipline expertise to handle the
employee transactions

HR
Resource Management
Policy Formulation
Performance Management Day to day Employee Transactions
Career & Succession Planning Joining
Employee Grievance Mgmt. Uniform Policy Implementation
Reward & Recognition Feedback/input collection on policies
Employee Engagement Payroll Processing
Exit Management
SLA Driven SwS
Statutory & Regulatory Compliance

EHS Mission

To provide efficient and high quality services to employees while adhering to internal
control norms by consistently achieving

a. Pre-defined benchmarks for Service Level in respect of each type of service; and

b. Zero defect in adhering to pre-defined internal norms and regulatory requirements

In this report contains the role played by EHS in the exit management of the company.

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Materials and Methods

Most of the data I collected and included in my report was through secondary sources
provided to me by the company. Primary data included in the project was in the form of
my first hand experience, understanding and analysis of the working within the
organization and my interaction with the employees and my guide.
I’ve made use of flowcharts in order to make the understanding of the processes easy
and presentable

I also included some documents regarding various exit procedures to help clarify the
process in the project.

I have started with explaining about the organization and the general terminologies in
terms of general business practices, then relating these to the company and highlighting
its own practices, then moving into individual component and processes of the working
of the organization with regard to my topic.

My personal challenge would not just be to analyze and understand the current
processes and policies followed by the company, but also to come up with possible
recommendations and suggestions for the company to help improve its current working
state or to help achieve its desired working state.

The suggestions and analysis in the project is personal and entirely based on my
experience and observation within the organization.

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Results and Findings

Attrition in the BPO industry

“Unpredictable and uncontrollable, but normal, reduction of work force due to

resignations, retirement, sickness, or death"

Staff attrition rate and workers' absenteeism means significant costs to the
organizations. In many organizations, workers are leaving even after the organization is
spending huge amount of money for the benefits of the workers. Many organizations
accept workers' mobility as part of doing their business, but it is a matter to be regretted.
In these circumstances, the HR Department has got a significant role to play

The IT enabled services (BPO) industry is looked upon as a big employment generator.
It is however no easy task for HR in this sector to bridge the ever increasing demand
and supply gap of professionals. Unlike his software industry counterpart, the BPO HR
is not only required to fulfill this responsibility, but also find the right kind of people who
can keep pace with the unique work patterns in this industry. Adding to this is the issue
of maintaining consistency in performance and keeping the motivation levels high,
despite the monotonous work. The toughest concern for HR is however the high attrition
rate.

The much hyped "work for fun" tag normally associated with the industry has in fact
backfired, as many individuals (mostly fresh graduates), take it as a pas-time job. Once
they join the sector and understand its requirements, they are taken aback by the long
working hours and later monotony of the job starts setting in. This is the reason for the
high attrition rate as many individuals are not able to take the pressures of work.

The toughness of the job and timings is not adequately conveyed. Besides the induction
and project training, not much investment has been done to evolve a continuous training
program for the agents.

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Motivational training is still to evolve in this industry. But, in all this, it is the HR who is
expected to straighten things out and help individuals adjust to the real world. I believe
that the new entrant needs to be made aware of the realistic situation from day-one
itself, with the training session conducted in the nights, so that they get accustomed to
things right at the beginning.

The high percentage of females in the workforce (constituting 30-35 percent of the total),
adds to the high attrition rate. Most women leave their job either after marriage or
because of social pressures caused by irregular working hours in the industry. All this
translates into huge losses for the company, which invests a lot of money in training
them.

Many experts are of believe that all these challenges can turn out to be a real dampener
in the growth of this industry. This only raises the responsibility of finding the right
candidate and building a conducive work environment, which will be beneficial for the
organization. The need is for those individuals who can make a career out of this.
All this has induced the companies to take necessary steps, both internally and
externally.

At HCL Technologies BPO as of last quarter of 2009 the attrition rate was at 21% with
total employee strength of 55688 and net addition of 1691 employees against an
industry attrition rate average of 30% prevailing in the industry.

Attrition Rate is good for the organization as long as the rate is at normal level. This will
help the organization to get new blood into the organization and for the organization to
develop. But it becomes a problem when the attrition rate is abnormal. Therefore, HR
Department has the most crucial role to play

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Exiting process at HCL

Exiting Process

Exit
Formalities

F&F

PF

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 Types of
Separation

Resignation Absconding Termination

Resignation - This is the most common way of separation. Employee leaves his job
and employment with his employer to pursue better opportunities; a better position at a
better compensation package in a branded company (or better known company) in a
same city and country or in a different city or different country. So, an employee resigns
for:

1) Better compensation and benefits

2) Higher position / level

3) Challenging role

4) To move from an unknown or lowly branded company to a highly branded and

reputed company (Top 10 or 25 companies in the world etc) or his ‘Dream’ company

5) For foreign or international assignments etc.

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Termination - Usually, this process is perceived negatively by employees. In
termination, an employer uses his right to terminate the contract of an employment.
There can be many reasons for an employer to terminate the contract of employment
but some of the common reasons are:

1) Non-Performance 2) Indiscipline 3) Misconduct 4) Insubordination 5) Theft and etc

Absconding - This is one of the most unethical, unexpected and unprofessional way to
terminate the contract of an employment. In this, on one fine day an employee decides
not to go to work. He does not care to hand-over his stuff. In case an employee decides
to abscond (or run-away), it becomes very important to understand his motives and
intentions. Employees can abscond in either or all of the below mentioned
circumstances / situations:

1) After stealing the confidential information or documents or database from the

company.

2) If the intentions of an individual is to commit a crime.

3) If there is a work-pressure and stress and the individual is not able to cope-up with
it (as it happens in call-centers, BPO and other high-stress industries).

4) If the employee has committed any crime outside the office and after working hours
(such as murder or getting involved in terrorist activities or theft or any other civil crime).

5) Then, when priorities are different. Employee has asked for leave due to some
urgency at his home (or might be he is trying to escape from his work responsibilities)
and at the same time his team also needs him in the office and his leaves are not
approved.

6) If he has got some exceptionally good opportunity that requires him to join
immediately and he feels that the process of separation in his company is a bit too
complicated. He assumes few things and do not really try to face the challenge.

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7) Lastly, it is a personality issue. Employees that abscond have different
personalities. They are low in confidence. They are too weak to face the reality and
challenges of life. They feel that running away from the problem is as good as solving
the problem. They are cowards to take the problems head-on.

Once an employee decides to resign and leave the organization, whatever one may do
but he will leave; if not today then tomorrow. On the other hand, if the employer decides
to terminate the contract, he might change his mind, provided the case against the
employee is not very severe.

Absconding, as mentioned above is in itself is a crime; something that only coward

people do; such people just give-up without even making an attempt. These people run
away from the reality of life and from the challenges that life offers to get the best out of
you and to make you the master.

As an employee whenever one decides to leave the company, one should do it in a

more professional and acceptable manner.

As an employer, whenever you decide to terminate the contract of employment of any

employee, make sure that you document all the incidents in a chronological manner and
have in your possession, all the required evidences. Unfortunately, decision of
resignation cannot be challenged in any court and it is considered as a right of an
employee but decision of termination can be challenged.

Employee separation is a big process and does not involve unilateral decisions.
Accuracy and professionalism is the key

Employee Separation in HCL

In India, the average attrition rate in the BPO sector is approximately 25%-30%percent
(2010). Now it is apparent with such a rate of attrition the company must have an
efficient HR that can handle the exit process of such high numbers of exits. In the HCL,
this task is dedicated to the EHS team.

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The employee separation in HCL is just a 4 step process involving the resignation, exit
interview, F&F and Relieving letter along with the coordination of the EHS Team and the
various centers (N1 & N2, N3, N4, and N5).

The process is similar to the general norms of exit in corporate organization. However,
there is a slight difference in the exiting process of HCL.

In a normal exit situation this is how the process follows:

Need to leave the organization

Reporting Manager

Retained

Line HR

Retained

Resignation is accepted and

notice period begins

Employee fills MoT and initiates

F&F

EHS team completes F&F

formalities

Finance completes settlements

with company

Relieving Letter

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1. Firstly, the employee recognizes his need to leave the company after which he
submits his resignation letter to his immediate superior or manager.

2. The reporting manager before accepting the resignation has a 1-on-1 interview with
the employee to see if there is any scope of retaining the employee. If he is able to
convince the employee to stay then the employee withdraws his resignation and
resumes work as decided.

3. However, even after the session the employee still insists on leaving then his
resignation is accepted by the reporting manager and forwarded to Line HR(which is
the HR in his respective center)

4. The Line HR again has a 1-on-1 with the employee on a second attempt to retain
him and gain feedback from the employee.

5. If the employee still wants to leave, his resignation is accepted and depending on
the nature of the resignation (with notice / without notice) his full and final formalities
as initiated at the centre and his salary is put on hold. Notice period of the employee
varies with his designation.

6. Before the employee starts with his F&F formalities at the centre he has to fill up the
MoT (Moment of Truth) it is somewhat like an online exit interview where the
employee fills up the form providing feedback and reasons to the company.

7. Then, the employee fills the F&F form at the centre and submits it to his HR.

8. The center then forwards the form to the EHS team for final clearing and separation.

9. The EHS team processes the form, updates the SAP and makes the payroll
clearance. It also calculates the necessary recoveries and payables and forwards
them to finance.

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10. The finance team then works on the settlement provided by EHS, they segregate the
form centre wise and processes them, after which they are sent to a signing
authority who authorizes the issuing of cheque for the settlement of the employee or
if there is a recovery then the employee has to give a demand draft of the amount to
be recovered to the EHS team before receiving his resignation letter.

11. Finally, once the F&F is done the employee is handed over his relieving letter and
his cheque (if applicable).

Full and Final Process

About

Full and Final Settlement is a process wherein you settle all financial transactions with
the employee who is leaving with respect to his salary, leave encashment, bonus(if
applicable) etc. It is a part of separation formalities to be completed to pay the legal
dues of any resigned employees. At the end of the process, the company doesn’t owe
anything to the employee and the employee doesn’t owe anything to the company as
well....that's the whole purpose of F&F.

Also, F&F also includes settlement of all assets, equipment, electronics and other
tangible items belonging to the company that is provided to the employee during his
tenure in the organization and vice-versa.

So, even if you terminate the employee, you still need to do his F&F settlement. It’s not
something you 'ask from' the employee. Its something you need to do as part of the exit
process for each and every employee whether resigned or terminated.

A formal resignation letter (duly signed) should be obtained from the resigned employee.
Please note SMS / phone call are not formal ways of resignation.

When any employee resigns, they are required to serve a notice period on completion of

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which a No Dues Clearance Certificate required to be obtained from all the Dept
concerned stating that he has no dues / issues pending with the Company.

On completion of the above procedure, his full and final settlement dues can be issued.
The F&F consists of payment of,

• Unpaid Salary (if any)

• Balance Leave Encashment (Annual Leave)
• LTA / Medical or other Reimbursement pending
• Notice Period Payment (in case of planned /mutual agreed resignation)
• Administration recovery
• Company lease
• Bonds / Agreements / Commitments.
• Car Lease
• Gratuity - Applicable only if employee has completed minimum 5 years in the
Company or for a death case.

An experience letter / relieving letter can be issued to the resigned employee mentioning
the Last working date.

Full & Final Components

Before we understand the process, we should look at what the F&F settlement form
contains. In HCL, a typical F&F clearance form contains:

1. Part A: Clearance from Reporting manager

2. Part B: Clearance from Line HR
3. Part C: Clearance from Technology/I.T
4. Part D: Clearance from Administration
5. Part E: Clearance from Transport Dept.
6. Part F: Clearance from Finance Dept.

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 7. Part G: Employee Clearance
8. Part H: Clearance from Corporate HR

Full and Final Process in HCL

Full & Final process varies with 3 types of cases:

Resignation
Absconding
ATL (Asked To Leave)/Termination

Resignation

A normal exit procedure begins with the submission of the resignation letter by the
employee to his reporting manager. After his resignation is accepted by the reporting
manager and Line HR he can then start his F&F process at the centre.

• As we saw earlier in order to complete F&F formalities the employee has to get a
clearance of dues from various departments. The employee starts his F&F
procedure with his reporting manager. The manager fills part A of the form where he
verifies the date of resignation, acceptance of resignation, notice served, notice to
be recovered, his last working day, if he is given a waiver or not, and deactivation of
his email id.

• Once he is cleared by the reporting manager he moves to his centre HR department

or Line HR. The HR SPOC checks for his date of resignation, acceptance of
resignation, notice served, Date of joining, separation from PRU, covered under
bond or not and reason of leaving.

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• He then goes to his IT department to deactivate his internet access account, email
id, administrator password, Nortel phone etc Also, the department checks for any
dues on laptop that is provided by the company or any other company asset.

• He also has to go to the administration department to return the id card/smart card

and access card provided to him by the company failing to do so the company can
charge a recovery of Rs.1100/- from the exiting employee. Those employees who
have availed locker services have to return their locker keys before exiting as well.

• If the employee is availing the company transport services he has to get a clearance
from them by removing his name from the transport roster.

• Finally, he goes to his center’s finance department for settlement of dues like notice
recovery; advance salary, vendor balance etc.

• In part G, of the form the employee fills in his own details like his employee code,
name, address, contact information, and provides his name and signatures at the
end.

• After all this, the employee is separated from SAP and he submits this form to his
center’s HR who collect other forms from other employees and send them to the
EHS team in Corporate HR at EOD (End of Day).

• Now the final processing is done by the EHS SPOC in Corporate HR, where he
checks for the employee’s separation from SAP, his LWD, his resignation date,
DOJ, the last day of salary transfer and the day the salary was put on hold. Now, his
PL encashment is calculated using the formula –

Balance Leaves x Basic Salary / 26

• His absences are checked and matched with the SAP. They also check if the
employee has an incomplete bond. In that case a recovery is put for the bond
amount which is calculated using –

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 Bond amount x No. of days not worked / 274

Now, in resignation cases we have 3 cases based on his notice period served.
Notice period varies with different levels of the organization.

I0 (Internee) 7 days
E0 (e.g. Executives) 1 month
E1 (e.g. Senior Executives) 1 month
E2 (e.g. Managers) 2 months
E3 (e.g. Assistant Manager) 2 months
E4 (e.g. Senior Managers) 3 months
E5 (e.g. Deputy General Manager) 3 months
E6 (e.g. General Manager) 6 months
E7 (e.g. Associate Vice President) 6 months
E8 (e.g. Vice President) 6 months

In case of,

• Notice period served – In this case his notice period recovery is waived off as he has
served his notice period.

• Notice period partially served – Then the company makes recovery from the exiting
employee after calculating his due using his basic salary –

Basic Salary x No. of days not served / 30

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• Notice period not served – When the employee leaves immediately without serving
his notice period the employee has to give the company his basic salary equal to the
notice period.

The EHS SPOC then makes the entries for all these components into SAP, makes the
payroll clearance, and changes his salary transfer from hold to cheque.

After this final part of F&F is complete, the employees form is sent to the corporate
finance department who make a settlement of the employee.

If the employee has a recovery then a recovery letter is sent to him informing him about
his dues and asking him to personally come and meet an EHS SPOC with a demand
draft of the amount due before his relieving letter can be given to him. If there is a
payable to the employee then the company gives him his cheque settling the dues and
his relieving letter.

Absconding

When the employee decides to leave the organization without tendering his resignation
or following the proper process of separation he is considered absconding in other
words, one fine day the employee just stops coming to work without informing the
company or taking permission of his superior.

When the company realizes his absence a DAF in sent to the employees contact after
3-4 days. The employee is given a period of time within which he should report to work
or else he will be considered absconding, this period of time given is called the
intimation period. If the employee fails to return after this period, he is then separated
from the company.

There are two scenarios in this case, firstly, the employee can comeback later to
complete his F&F himself, or the centre where the employee worked initiates the F&F
process where the employee fails to return.

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HCL is an employee friendly company hence it allows the absconding employees to
rejoin or finish their exiting formalities.

F&F process remains the same when the employee comes back to fill his F&F form. He
goes through all the processes mentioned above. But he is charged his entire basic
salary as recovery because he ahs failed to serve the notice period.
In the other case where the employee hasn’t returned there administration charges its
administration fees of Rs.1100/- and his entire notice recovery.

HCL does not disclose or show in the relieving letter that the employee has or had
absconded. However, the company doesn’t mention “wishes for his future endeavors“
while relieving him of his services.

Termination

HCL can ask the employees to leave on two grounds:

Performance:

When an employee performance poorly which is at the NI (needs improvement) rating.

The employee is put to a PIP (Performance Improvement Program) where he
undergoes various exercises to help him improve his performance if again he performs
poorly then he is put into another PIP and if he again fails to perform and continues to
be a hindrance to the team he is asked to leave. Another method that is followed is that
the employee is moved to another process so that he is able to perform in a different
process. This is done assuming the fact that a person who may not be good at one type
of work can be good at some other work. However, when all this fails and the employee
does not deliver he becomes a liability not only to the company and his team but
personally as well. Hence, the company can ask him to leave.

Behavioral:

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HCL has a ZTP (zero-tolerance policy) laid down and signed by all employees in the
organization. If any employee is found violating this ZTP he can be terminated. The
general guidelines of the policy are as follows:

1.1 Demonstrate non-professional behavior/attitude towards customer.

1.2 Usage of profane or vulgar or abusive language.
1.3 Offensive or inappropriate references to Race, Ethnicity, Religion, Gender,
Lifestyle, Sexual Orientation, Disability and Age.
1.4 Consistent interruptions in a rude and sarcastic manner with a customer.
1.5 Unauthorized release of confidential information. This refers to the
customer’s/organizational information such as account information etc.
1.6 Inappropriate fraternization with customers.
1.7 Exchange of personal e-mail addresses, flirting or making dates with customers.
1.8 Coming to work intoxicated or any disciplinary issues on the floor.
1.9 Refused to escalate to a supervisor at the customer's request.
1.10 Indiscipline while on production: sleeping extended wrap time (applicable for
agents), taking unscheduled breaks, unapproved/ unscheduled leaves, reporting
late to work etc.
1.11 Insubordination with the customers or its representatives. This may be on the
floor/off the floor or with any of the HCL Management Representative.
1.12 Disparaging remarks about HCL or customers, its affiliates, and products.
1.13 Using any of the Process Level Transactions for personal purposes.
1.14 Call avoidance (for Voice Processes): Agent intentionally disconnects the
customer during the call (Intentionally transferring a call back into the Queue)
1.15 Usage of Cell-Phone on the floor.

• Prematurely transferring a call to another department for them to do the

troubleshooting. Intentionally giving inaccurate information or
• Placing a customer on hold deliberately until they hang up.

1.16 Transaction Avoidance (For Data Processes): Agent intentionally does not
accept/respond to the customer through a data transaction.

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• Intentionally transfers a Transaction back into the Queue.
• Prematurely transferring his/her volumes to another person/department to work for
them.
• Intentionally giving inaccurate information or steps in order to release his/her
workload without assisting the customer. Beside the above mentioned clauses there
are few process specific clauses which are defined and available with respective
Process Managers. It is the responsibility of the Process Manager to ensure that all
employees covered under mentioned scope are aware about the process specific
clauses and they are practiced across the scope.

The procedure on ZTP

2.1 A ZTP undertaking covering the above mentioned clauses is signed by every
employee joining the organization and the same is maintained in their respective
personal file.
2.2 In the instance of an employee violating any of the aforementioned clauses and
or any of the process specific clauses, the same is escalated to Line HR by the
Team Leader/ Process Manager/ Function Head.
2.3 After receiving the escalation the Line HR Head forms a ZTP Committee in order
to give an opportunity to the concerned employee to be heard freely and fairly.
2.4 In a case of an agent the ZTP committee comprises of the Line HR Head,
Concerned Process Manager, Concerned SDL and another SDL of other
process. In all other cases the ZTP committee will comprise of the Line HR
Head, Reporting Manager, Function Head, Center Head/ Sr. Management.
2.5 Based on the observations of the committee members a ZTP Letter with the
details of the case and action taken is given to the concerned employee.
2.6 The receipt of the letter and a copy is documented in his/her personal file.
2.7 If the ZTP Committee decided to terminate the concerned employee, then the
standard full and final procedures are followed.

Now, in the case of termination on either ground the F&F remains the same the
employee is asked to submit his resignation to keep his integrity and the rest of the F&F
remains the same.

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However, in termination cases no recovery is taken from the employee as the company
is asking him to leave so hence he is not liable for a notice recovery.

These cases are given priority when the EHS team processes the F&F forms over the
other F&F cases.

Provident fund

It is the fund which comprises of the contributions made by the employee service period
with an equal contribution by his employers. It is calculated as a percentage of his
salary, says 10%, and is returned to him on his retirement or his exit from the company.
The provident fund was originally set by an act of parliament known as Employees
Provident Fund Act, 1952 in a bid to provide monetary security to employees when they
retire. Too often, people find that the twilight years of their life are years marked by
financial inadequacy and dependency on relatives or children. The provident fund is
designed to provide the retiring individual with dignity and security. However, it has, over
the years, developed into a broad plan for social security which covers the retirement,
buying houses, medical expenses and related expenses.

There are different types of provident funds. They are:-

Statutory Provident Fund - All industries and establishments that employ more than 20
or more people are bound to contribute towards this fund. This fund covers those whose
income is below a certain limit prescribed by the government.

Voluntary Provident Fund: - The contributions to this fund are voluntary. This is
applicable for all those whose salary is beyond the limit specified by the government.
This is applicable if the employee covered under EPF is willing to increase his
contribution towards PF.

Recognized Provident Fund: - This is a fund wherein the contributions are recognized
for income tax calculations.

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Unrecognized Provident Fund: - As the name suggests, contribution to these funds
are not recognized by the by the Commissioner of Income tax in accordance with the
rules contained there in the Act unlike a statutory provident fund, recognized provident
fund or public provident fund.

Public Provident Fund: - The Central Government has established the Public
Provident Fund for the benefit of general public to mobilize personal savings. A salaried
employee can simultaneously become a member of employees’ provident fund and the
public provident fund. This kind the provident fund is designed for self-employed people
like doctors, lawyers, engineers, businessmen etc

A person who is a member of a provident fund can withdraw money from fund up to a
maximum ceiling set a by the government after attaining a certain age, say 54, or at
actual retirement. In addition there are, generally, provisions for withdrawal of the
amount, such as, acquisition or construction of property or repayment of loans taken for
the same, treatment of illness, for marriage expenses, for purchase to alleviate the
hardship caused by handicap etc.

Provident Fund as per Government of India

Employee’s Provident Fund Scheme 1952 defines the rules, definitions and working of
EPF in India. The schemes of provident funds act as a social security measure and are
meant to induce employees to save a portion from their present earning for their future.
This scheme comes under the Employee’s Provident Funds Act, 1952.

It states the following:

Employee Definition:

"Employee" as defined in Section 2(f) of the Act means:

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Any person who is employee for wages in any kind of work manual or otherwise, in or in
connection with the work of an establishment and who gets wages directly or indirectly
from the employer, and includes any person employed by or through a contractor in or in
connection with the work of the establishment.

Membership:
All the employees (including casual, part time, Daily wage contract etc.) other then an
excluded employee are required to be enrolled as members of the fund the day, the Act
comes into force in such establishment.

Basic Wages:

"Basic Wages" means all emoluments which are earned by employee while on duty or
on leave or holiday with wages in either case in accordance with the terms of the
contract of employment and witch are paid or payable in cash, but dose not include

a. The cash value of any food concession;

b. Any dearness allowance (that is to say, all cash payment by whatever name
called paid to an employee on account of a rise in the cost of living), house rent
allowance, overtime allowance, bonus, commission or any other allowance
payable to the employee in respect of employment or of work done in such
employment.
c. Any present made by the employer.

Excluded Employee:

"Exclude Employee" as defined under pare 2(f) of the Employees' Provident Fund
Scheme means an employee who having been a member of the fund has withdraw the
full amount of accumulation in the fund on retirement from service after attaining the age
of 55 years; Or An employee, whose pay exceeds Rs.5000 per month at the time,
otherwise entitled to become a member of the fund.

Explanation:
'Pay' includes basic wages with dearness allowance, retaining allowance, (if any) and
cash value of food concessions admissible thereon.

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Employee Provident Fund Scheme:

Employees' Provident Fund Scheme takes care of following needs of the members:
(i) Retirement (ii) Medical Care (iii) Housing
(iv) Family obligation (v) Education of Children
(vi) Financing of Insurance Polices

How the Employees' Provident Fund Scheme works:

As per amendment-dated 22.9.1997 in the Act, both the employees and employer
contribute to the fund at the rate of 12% of the basic wages, dearness allowance and
retaining allowance, if any, payable to employees per month. The rate of contribution is
10% in the case of following establishments:

• Any covered establishment with less then 20 employees, for establishments

cover prior to 22.9.97.
• Any sick industrial company as defined in clause (O) of Sub-Section (1) of
Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and
which has been declared as such by the Board for Industrial and Financial
Reconstruction,
• Any establishment which has at the end of any financial year accumulated
losses equal to or exceeding its entire net worth and
• Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir
and (e) Guar gum Industries/ Factories. The contribution under the Employees'
Provident Fund Scheme by the employee and employer will be as under with
effect from 22.9.1997.

Employees' Provident Fund Interest rate:

The rate of interest is fixed by the Central Government in consultation with the Central
Board of trustees, Employees' Provident Fund every year during March/April. The
current interest rates for the Employee Provident Fund (EPF) is at 8.5% p.a. This rate
has been maintained since 2005-06. As we know that, every year the rate is reviewed
and if possible it will be revised. But, the current rate is maintained for the past six years
in a row. It is expected to be the same interest rates for the following financial year
2010-11. It will be decided on the coming Feb 26, 2010 meeting. They have a plan to

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increase the rate to 8.75%, but would face a deficit of Rs 426.53 crore if it paid out a
return of 8.75%. So, there won’t be any changes in the rates.

Benefits:
A) A member of the provident fund can withdraw full amount at the credit in the fund on
retirement from service after attaining the age of 55 year. Full amount in provident fund
can also be withdrawn by the member under the following circumstance:

• A member who has not attained the age of 55 year at the time of termination of
service.
• A member is retired on account of permanent and total disablement due to bodily
or mental infirmity.
• On migration from India for permanent settlement abroad or for taking
employment abroad.
• In the case of mass or individual retrenchment.

B) In the case of the following contingencies, the payment of provident fund be made
after complementing a continuous period of not less than two months immediately
preceding the date on which the application for withdrawal is made by the member:

• Where employees of close establishment are transferred to other establishment,

which is not covered under the Act:
• Where a member is discharged and is given retrenchment compensation under
the Industrial Dispute Act, 1947.

Withdrawal before retirement:

A member can withdraw up to 90% of the amount of provident fund at credit after
attaining the age of 54 years or within one year before actual retirement on
superannuation whichever is later. Claim application in form 19 may be submitted to the
concerned Provident Fund Office.

Accumulations of a deceased member:

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Amount of Provident Fund at the credit of the deceased member is payable to
nominees/ legal heirs. Claim application in form 20 may be submitted to the concerned
Provident Fund Office.

Transfer of Provident Fund account:

Transfer of Provident Fund account from one region to other, from Exempted Provident
Fund Trust to Unexampled Fund in a region and vice-versa can be done as per
Scheme. Transfer Application in form 13 may be submitted to the concerned Provident
Fund Office.

Nomination:
The member of Provident Fund shall make a declaration in Form 2, a nomination
conferring the right to receive the amount that may stand to the credit in the fund in the
event of death. The member may furnish the particulars concerning himself and his
family. These particulars furnished by the member of Provident Fund in Form 2 will help
the Organization in the building up the data bank for use in event of death of the
member.

Annual Statement of account:

As soon as possible and after the close of each period of currency of contribution,
annual statements of accounts will de sent to each member through of the factory or
other establishment where the member was last employed. The statement of accounts
in the fund will show the opening balance at the beginning of the period, amount
contribution during the year, the total amount of interest credited at the end of the period
or any withdrawal during the period and the closing balance at the end of the period.
Member should satisfy themselves as to the correctness f the annual statement of
accounts and any error should be brought through employer to the notice of the
correctness Provident Fund Office within 6 months of the receipt of the statement.

----------------------------------------------------------------------------------------------------------

Advantages

Broadly we may categorize the benefits into three:

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Provident Fund Benefits | Pension Benefits | Death Benefits

1. Provident Fund benefits

o Employer also contributes to Members PF @ 3.67% (1.67% in case of sick
industry - e.g.: beedi)
o EPFO guarantees the Employer contribution and Govt. gives a decent interest to
PF accumulations
o Member can withdraw from this accumulations to cater financial exigencies in life -
No need to refund unless misused
o On resignation, the member can settle the account. i.e., the member gets his PF
contribution, Employer Contribution and Interest.

2. Pension Benefits
o Pension to Member
o Pension to Family (on death of member)
o Scheme Certificate
 This Certificate shows the service & family details of a member
 This is issued if the member has not attained the age of 58 while leaving an
establishment and he applies for this certificate
 Member can surrender this certificate while joining another establishment and
the service stated in the certificate is added with the service he is gaining from
the new establishment.
 After attaining the age of 50 or above, the member can apply for Pension by
surrendering this scheme certificate (if total service is atleast 10 years)
 This is a better choice than Withdrawal Benefit, as a member dies holding a
valid scheme certificate, his family will get pension (Death when NOT in
service)
o Withdrawal Benefit
 if not eligible for pension, member may withdraw the amount accumulated in
his pension account
 the calculation of this amount is based only on (i) Last average salary and (ii)
Service (Not based on actual amount available in Pension Fund Account)

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 o No amount is taken from Member to give Pension to the Member. Employer and
Govt. contributes to Pension fund @8.33% and @1.16% respectively
o EPFO guarantees pension to members, even if the Employer has not contributed
to Pension Fund.
o Pension calculation is similar to that of Govt. Employee.

3. Death Benefits
o Provident Fund Amount to Family (or to Nominee)
o Pension to Family (or to Parent / Nominee)
o Capital Return of Pension
o Insurance (EDLI) amount to Family (or to Nominee)
 No amount is taken from Member for this facility. Employer contributes for this.
o Nominee is basically determined as per the information submitted by the member
at this office through FORM-2

Disadvantages

There are practically no disadvantages to the Employee Provident Fund. The rate of
return is not as high as what you would get from high-risk investments such as shares
and mutual funds. These investments may give you big money but the returns are not
steady or guaranteed. With EPF the returns may be lower but are definite.

Provident Fund in HCL

Provident Fund is the fund which is composed of the contributions made by the
employee during the time he has worked along with an equal contribution made by
his/her employers. Employer contributes 12% out of which 8.33% goes to Pension fund
& 3.67% to PF fund, subject to maximum of Rs.541/-. Employee can contribute a
minimum of 12% & maximum rate of 20% of the basic wages, dearness allowance and
the retaining allowance. This amount can be withdrawn by the employee at the time of
retirement, in case of termination of services

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Once the employee becomes a part of HCL BPO he/she can avail the benefit of PF &
for Pension the employee need to have tenure of minimum 6 months with the company.

PF can be of 3 types:
• Withdrawal
• Transfer In
• Transfer Out

PF Process in HCL

In HCL, for the employee to begin his PF process he must go through all his exiting
formalities and complete his full and final formalities. Once the employee is separated
from the company he can begin his PF process.

After an employee leaves the organization he can either choose to withdraw his PF
amount or transfer it to his new company’s PF account.

Firstly, based on whether the employee wants to withdraw or transfer his PF amount he
fills up the respective forms. (Form 19 or Form 13)
Form 10C is for withdrawing his pension amount.

Form details are filled by the employee who then hands it over to the EHS SPOCs. They
are Special Points of Contact through which the employees can interact with the EHS
team.

As the forms are received by the SPOCs, they are checked for discrepancies after
which they are put for processing. The necessary details in the form are matched with
the SAP server that is a common intranet server between the HIL Trust and HCL.

In case of,

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 Withdrawal of PF

Form 13 is filled to get the PF transferred and Form 19 for withdrawal. An employee can
withdraw the PF amount after 60 days from resignation. The employee has to fill up form
10C along with form 19 in case of withdrawal tto withdraw the entire amount. To
withdraw the same a cancelled cheque, 2 revenue stamps, relieving letter & pan card
(photocopy) should be submitted to Corp EHS team.

The EHS team processes form 19 on the following parameters:

1. Name
2. Father’s Name
3. PF account number
4. PAN card number
5. Date of leaving
6. Reason of leaving*
7. Bank Details
8. Date of join and
9. Date of birth

* Reason for leaving is very important component if reasons other than personal, family,
education etc. are given like job change, better opportunity etc. or any other professional
reason than the forms will not be accepted.

And the pension form (10C) on the following parameters:

1. Name
2. Father’s Name
3. Date of Birth
4. Pension account number
5. Date of leaving and joining
6. Reason of leaving
7. Bank Details

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5 signatures of the employee are required, 3 on the withdrawal form and 2 on the
pension form.

Steps for processing withdrawal of PF

1. The executive logs on to the SAP PF server. Not all employees of HCL have access
to this server, based on the designation and nature of work the employee is given
access to the SAP server i.e. an executive looking after F&F procedures will not
have access to the PF server in SAP database, also finance department will have its
own data and access in the SAP server which cannot be seen or modified by the HR
department.

2. Since all HCL employee are provided with an employee code that is unique to all
employees. Hence, this makes identification and access of employee data easy. The
executive enters his code on the server which allows him access to the employee’s
details.

The executive matches the details on the form with those on the SAP server like HR
full & final details PF & Pension a/c no & fathers name from personal details.

3. He/she then updates the bank details like a/c number, bank name, bank address in
the PF SAP server from the cancelled cheque provided by the employee, also the
reason for leaving should be the same mentioned in the form before the details are
saved on the SAP server.

Note: Reason for leaving should not be better prospect.

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4. Once the details are saved, a checklist is attached on top of the form, and company
stamps are put on the designated spaces on the form, the form is sent to the
concerned manager for final signatures.

5. The entries are made into a tracker and the forms are then couriered to the PF trust
office.

Final processing of the forms is then done by the trust and in case of withdrawal the PF
amount is transferred to the employee’s bank account in 1-2 months.

Form 10C is sent to the government pension trust for processing. Also, in case of
withdrawal there is a 33% tax cut if his PF amount unless the employee is withdrawing
after 5 years. The Pension amount takes 3-6 months to be processed and transferred as
it is a government trust and not run by the company.

Transfer Out

When an employee moves out of the company and joins elsewhere his company
requests HCL to start his PF process by filling form 13 with the employers stamp and
request letter. The PF process for transfer can be made at anytime after the employee is
separated from the company.

The EHS processes form 13 on the following parameters:

1. Name
2. Father’s Name
3. PF account number of previous & present employer
4. Pension account number of previous & present employer
5. Name of previous employer
6. Date of leaving
7. Date of joining present employer
8. Address of previous employer
9. Address of present employer

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Any discrepancies in these details; the form gets rejected immediately.

Steps for processing Transfer out of PF

1. Again, just like in the previous case the executive logs on to the SAP PF server with
his unique username and password.

2. He/She again verifies the details of the employee like his HR F&F, PF and
Pension a/c no. & fathers name from personal details.

3. He/She then updates the Name of the new employer, Name of the new trust of
RPFC & Reason for Leaving before saving it.

4. Once the details are saved, a checklist is attached on top of the form, and company
stamps are put on the designated spaces on the form, the form is sent to the
concerned manager for final signatures.

6. The entries are made into a tracker and the forms are then couriered to the PF trust
office.

Forms 13 and 19 are processed by the company’s PF trust.

For PF, once, the form is accepted by the trust it takes 1-2 months for the amount to be
transferred, as this is HCL’s own trust.

Transfer In

Transfer In is when an employee joins HCL from another company and wants to transfer
his PF amount from the previous employer to HCL’s. In that case, HCL requests the
previous company to transfer the amount to HCL’s own trust by sending the form 13
filled by the employee along with company stamp and letter

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Steps for processing Transfer in of PF

1. The steps are almost similar except in this case the employee has joined the
organization hence his transfer amount needs to be transferred to the company PF
trust from his previous PF trust

2. After the executive has logged on to the SAP PF server he uses the employee’s
code to see the details of the employee.

3. In these details he updates the employee’s previous employment details.

4. After the data is updated, Fathers name, DOJ, PF a/c numbers etc. are checked and
the data is saved in SAP.

5. The entries are made into a tracker and the forms are then couriered to the PF trust
office

The executive looks for discrepancies in the same parameters given above for form 13
before processing the forms.

Reject Forms

After, the employee submits his PF form; the EHS team screens the form for
discrepancies.
If any of these necessary details mentioned in the previous parameters are incorrect,
missing, overwritten without signatures, don’t match with the SAP server or if the
necessary verification documents are missing then the form is rejected. When
discrepancies are found in the form it gets rejected here itself and is not sent to the trust
but there are cases where the forms despite the clearance from the EHS team, gets
rejected by the trust.

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In that case, all rejected forms are sent back to the centre, where the PF executive then
informs the candidates about the status and reasons.
Database of the rejected forms are maintained by the PF department and they are
couriered to the employee or destroyed and the employee is asked to initiate the
process again.

PF Loan
During the tenure of the employee with the organization he cannot withdraw his PF
amount. As we saw earlier, the concept of PF is to saving for the employee’s for social
security purposes with equal contribution of the employer and employee. However, in
certain cases and after a certain eligibility criteria the company allows the employee to
take a loan from his PF a/c.

Condition for PF LOAN

Annexure to Loan Request

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 Purpose of
Eligibility Criteria
Loan
For purchase of
5 Years of membership of
site for
the Fund (Minimum balance
construction of
in member’s a/c should be
house
Rs. 1000/-)
* The purchase should be in
favour of member or
member & spouse
5 Years of membership of
the Fund
(Minimum balance in
For construction of
member’s a/c should be Rs.
house
1000/-)
* The purchase should be in
favour of member or
member & spouse
For purchase of a 5 Year of membership of the
dwelling flat Fund
(Minimum balance in
member’s a/c should be Rs.
1000/-)
* The purchase should be in
favour of member or
member & spouse
Eligibility-Amount Documents Required HR-Remarks
1) A declaration from the
member that, dwelling site
24 months wages or dwelling house/flat or the
(Basic & DA) house under construction is
OR free from encumbrances
90% of ( Member’s own and the same is under the
share of contribution + title of the member or the
Company’s share of spouse 2) copy of the title
contribution with deed of seller. 3) copy of
interest thereon ) agreement to sell. 4) Copy
of title deed in the name of
member to be submitted
with in six months from
date of loan availed.
1)A declaration from the
36 months wages
member that, dwelling site
(Basic+DA)
or dwelling house/flat or the
OR
house under construction is
90% OF ( Members
free from encumbrances
own share of
and the same is under the
contribution +
title of the member or the
Company’s share of
spouse. 2) Copy of the title
contribution with
deed in the name of
interest thereon)
member or member and
spouse 3) An estimate from
contractor
36 months wages 1) A declaration from the
(Basic+DA) member that, dwelling site
OR or dwelling house/flat or the
l Members own share of house under construction is
contribution + free from encumbrances
Company’s share of and the same is under the
contribution with interest title of the member or the
thereon spouse 2) copy of the title
deed of seller. 3) copy of
- 42 -

5 years from the date of
completion of dwelling
For additions, house
alterations or
improvements to *The property should in the
the dwelling house name of member or member
and spouse
Advance from the
10 years membership of the
fund for
fund & member should have
repayment of
taken loan from Govt. Body /
housing loan
Financial Institutions as
specified under PF Rules
Advance from the
fund for Marriage 7 years membership of the
of fund & minimum balance in
self/son/daughter/ member’s account should be
sister/brother etc. Rs. 1000/-
7 years membership of the
Advance from the
fund & minimum balance in
fund for education
member’s account should be
of Son/Daughter
Rs. 1000/-
Note:
(1) For calculation/ computing the period of membership total service exclusive of
periods of break under the same employer before the scheme is applied to him, as well
as period of membership of the fund is always included.
(2) In case the loan is availed for construction of house the cheque can be drawn in
favor of Member. In case of purchase of land/ flat/ dwelling house from some individual
agreement to sell. 4) Copy
of title deed in the name of
member to be submitted
with in six months from
date of loan availed.
12 months basic or
members own share of
Copy of title deed and
contribution with interest
estimate from the
thereon.
contractor
36 month wages (Basic
+ DA)
OR A certificate from the
Members own share of lending authority furnishing
contribution + the details of loan and
Company’s share of outstanding amount
Contribution with interest
thereon
Declaration by the member
50% of member’s own
which is attested by the
share of contribution
employer along with copy
including interest
of marriage invitation
Declaration by the member
50% of member’s own which is attested by the
share of contribution employer and copy of the
including interest registration documents and
fees paid
- 43 -
the amount can be paid to Member but in case the land/flat/dwelling house is
purchased or to be purchased other than individual then the payment has to be made
to the vendor

Points to remember

1. Form 19 – PF withdrawal
2. Form 10C – Pension withdrawal (Tenure need to be more than 6 months)
3. Form 13 – Transfer of PF to another trust
4. PF loan form – Marriage, reconstruction of house or reasons in word document need
to be referred
5. Form 10 D& Form 20 – Death case
6. Voluntary Provident fund form – limit up to 20% only
7. Reason for leaving cannot be better prospect for withdrawal of PF form. It needs to
be same as mentioned in the form.
8. Current PF contribution can be checked for employee not separated by PF server->
ZCST Current statement
9. For pension query office address: RPFC Gurgoan, Plot no 43, Sector 44. Employee
tenure needs to be for more than 6 months for the same.
10. PF a/c need to be for more than 5 yrs in continuity (i.e. employee need to contribute
for continuous 5 yrs for PF) other wise 33% of tax deduction will be there.
11. Verification form need to be sent to Chennai on everyday basis (if required)
12. In case PAN card & PF form signature of the employee do not match, inform HR
manager & take suggestion.
13. Check the date of relieving letter & DOL mentioned by employee on form. Incase of
mismatch don’t send the form, correct the same.
14. Cancelled cheque need to be of employee & not of his family members
15. Status of PF amount need to be updated in tracker with help from PF trust via mail
on regular basis.
16. If employee needs clarification of PF amount mail PFtrust@hcl.in & ask for
Annexure K.

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17. Status of PF form updated in PF server in SAP can be checked by downloading the
report.

Ex-Employee Verification

This is post exit function of the EHS Team for ex-employees who have joined other
organizations. After an employee is relieved of his services from HCL, when an
employee joins another organization, they conduct a background verification of the
employee. As the ex-employee shows the relieving letter of HCL as his previous
employer the organization contacts the EHS SPOC in HCL to verify the details relating
to the ex-employee.

There are many things questioned by the recruiter during verification from the previous
company, e.g.:

1. Reasons for leaving

2. Attitude
3. Technical Skills and performance
4. If terminated
5. Salary Package
6. Possibility of rehiring: No or Yes with Reasons.
7. Special Remark for the employee.

For responding the queries of the recruiter; one has to frame certain policies:
1. Mode of communication: Email or through the telephone
2. Disclosure of information regarding the Ex Employee, these will cover points 1-7
above or any of 1-7.
3. Rehiring policies
4. Public Information Policy: Policy for the public statements that can be issued on
company behalf.

Therefore, at HCL we provide the following details as far as verification is concerned:

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1. Date of Joining
2. Last working day
3. His last designation
4. F&F status

All verification queries are handled through mail, no verification is done through any
other mode e.g. Telephone, SMS, Personal visit etc.

Vouchers

When an employee resigns from the company from that day on his salary is put on hold
i.e. his salary is stopped from being transferred to his bank account. Also, there are
cases where the employee’s salary is put on hold without receiving his resignation later
e.g. If an employee takes unscheduled leaves during the time of his payroll then his
reporting manager may put his salary on hold fearing that the employee may abscond
after receiving his salary.

An exiting employee who is serving his notice period has to be paid his salary for the
number of days he is reporting for work hence to transfer the release amount to his
account he has to fill a hold salary release voucher with the EHS SPOC.

Also, there are times where an employee may want his salary in advance; in that case
as well the person has to fill an advance salary release voucher which will allow him to
avail this service.

Conclusion and Recommendations

It is interesting to note that the attrition rates in India - and the costs associated - are so
high that they can override the benefits of lower wage costs. A Nasscom-Hewitt
Associates Survey says that the cost of attrition in the industry is 1.5 times the annual
salary.

- 46 -
On an average, companies today lose 25% of their annual revenue as a result of
attrition. Thus, even an 8-10% decrease in the attrition rate can have a major spin-off
effect on the bottom line of a company.

The specific reasons for attrition are varied in nature. A list of issues, some very
prominent and some even trivial, are identified below: -

1. No growth opportunity / lack of promotion: Only one in 10 people will ever make
consultant; one in 100 will make it to line / practice manager.

2. Organizational matters: The knowledge employees always assess the management

values, work culture, work practices and credibility of the organization. The Indian BPO’s
do have difficulties in getting the businesses and retain it for a long time. When there is
no focus, and in the absence of business plans, non-availability of the campaigns make
people to quickly move out of the organization.

3. Work environment: In the Indian BPO industry, rigid rules and strict monitoring are
the norm. Employees often feel that they are being constantly spied upon. Sometimes, it
even infringes on the employee's private space, thereby forcing them to look for other
opportunities.

4. Job matters: A number of job related reasons contribute to the high attrition levels in
this industry. These are given below: -
(a). Stress Levels: These jobs bring lots of pressure and the stress levels are high.
Hence, employees leaving the job due to too much pressure on performance or any
work related pressure are quite common.

(b). Adjustment problems: Often employees are moved from one process to another.
They take time to get adjusted with the new campaigns, and few employees find it
difficult to get adjusted and they leave immediately. Many a time, the employees move
out if there are strained relations with the superiors or with the subordinates or any
slightest discontent.
(c). Nature of the job: Monotony sets in very quickly and this is one of the main reasons
for attrition. Besides the induction and project training, not much investment has been
done to evolve a "continuous training program" for the employees.

- 47 -
(d). Attitude of employees: Youngsters look at call center jobs as temporary and they
quickly change the job once they get in to their own field.

5. Salary and other benefits: Moving from one job to another for higher salary, better
positions and better benefits are among the most important reasons for attrition.

6. Personal reasons: The personal reasons are many and only few are visible to us.
The foremost personal reasons are getting married or change of place. The next
important personal reason is going for higher education. Health is another aspect, which
contributes to attrition. Employees do get affected with health problems like sleep
disturbances, indigestion, headache, and throat infection and lose interest in work.

7. Poaching: Poaching of trained and competent manpower from rival companies is

very high. Most of the BPO organizations have employee referral schemes and this
makes people spread message and refer known candidates from their previous
companies, and earn too in the bargain.

It is not easy to find out as to who contributes and who has the control on the attrition of
employees. A pin-pointing of the prominent causes is the first step towards addressing
the issue of attrition

According to my observation at HCL BPO, the exiting employees have cited all the
previous reasons mentioned above. Therefore, as I was training under the exit
process I felt the need to address the issue of attrition. Some recommendations
for addressing attrition in the organization are as follows:

1. Proper Hiring

There is need for a higher degree of due diligence at the hiring stage. At the hiring stage
itself, Recruitment team needs to make the prospective employee aware of what the job
exactly entails, what is the performance standards expected, the career path for the

- 48 -
candidate, etc. Recruitment team needs to check the background and other factors
particular to the candidate that might be a potential source of early exit.

However, under the tight labor scenario and resource crunch, it is very difficult for
companies to be very selective. One solution can be to look beyond the present
workforce alternatives. Sections like housewives, students, physically-handicapped
people and retired persons can be explored. In fact, Datamatics Technologies Limited
(DTL) has already implemented a unique model wherein it employs part-time workers
whom the company dubs 'knowledge associate'. These associates could be
housewives, students or retired folk. By hiring part-time workers, the company is able to
manage fluctuations in customer projects.

2. Clear Communication & Expectations Management

There is a view that a communication strategy with intention of honoring commitments

would go a long way in managing attrition.

The role of communication does not end with hiring. Once recruited, proper
communication to employees is the primary step towards creating a conducive work
environment. It should be the management's endeavor to provide employees with a
good idea of how business has been the potential issues and the important events
affecting the company. Greater involvement in the affairs of the company breeds
motivation and loyalty.

The organization should not only act as a paymaster but should adopt the role of a
'counselor' for its career-oriented workforce. This role of nurturing the talent and guiding
them uplifts the motivational environment. This strategy is followed in HCL; the company
follows the ‘Employee First’ initiative under which internal initiatives designed to both
give employees more personal responsibility for the company’s service offerings and a
voice with upper management.

3. Compensation & Reward Management

Having employee reward policies and practices in the organization can help to attract,
retain and motivate high-quality people. Rewards can be both financial and non-
financial. Recognition is perhaps the most cost-effective way of motivating employees.

- 49 -
While the high cost of other rewards forces companies to give them sparingly,
recognition can be given any time, at very little cost. Thus, companies should strive to
build in a high value of recognition into every reward. Movie-tickets, a coffee-mug or a T-
shirt can have far more motivational power than what their prices would suggest, if they
are given with the right kind of appreciation.

As far as possible, rewards should be linked to the performance of the employees.

Today's employees have higher expectations for what work can and should be, and they
want to receive rewards that reflect their personal efforts and contributions. Also,
rewards need to be given as soon as possible after the performance has taken place.
Immediate recognition of an effort most often ensures a better performance the next
time. If delayed, the reward loses most of its motivational aspect.

4. Role of the Team Leader

The quality of the team leader an employee receives is critical to employee retention.
People leave managers and supervisors more often than they leave companies or jobs.
Anything the team leader does to make an employee feel unvalued will contribute to
turnover. Therefore, companies should look at ensuring proper competencies in their
managers through training.

5. Providing Growth Opportunities & Career Options

The information age employee is very career conscious. It should be the company's
endeavor to devise means of adding to their employees' skills. This symbiotic
relationship of nurturing and utilizing talent and skills is a great competency in fighting
against attrition. A few initiatives in this regard are worth mentioning. HCL’s i-Shine
initiative offers various programs for post graduation, diploma, training courses etc. with
tie ups in top B-schools (e.g. IIM-C).

6. Tackling Poaching

Poaching is a constant problem that high growth industries face. The scenario for BPOs
is no different. It is not possible for the industry to have an all encompassing agreement
on poaching. Mutual understanding, cooperation and responsible behavior from
companies are the only way.

- 50 -
BPO industry is leading the Indian IT industry growth. The projections for future are
encouraging but the challenges facing the industry are no less daunting. A shortfall of
talented workforce coupled with a high attrition rate may have a crippling effect on the
industry. Ability to arrest attrition, therefore, assumes strategic significance and can be
used as a competitive advantage for long-term survival in the industry.

How to smoothen the exit process

During my training I worked under different processes in the exiting, primary being the
F&F process. Through out my tenure I was able to observe different aspects of the
exiting process. My conclusion of the entire process of exit process in HCL remains
positive. With such high rates of attrition the EHS executives are always on a run to get
the tasks done, attend and resolve queries, entertain and interact with ex employees
and present employees, process bulk forms and perform effective management
techniques in their work and communication. The exit process in HCL has a lot of
dependency with other departments and centres, coordination between the centres and
EHS, and coordination between the EHS and finance is the key requirement for
effectiveness, efficiency and accuracy of the exiting process.

The exiting process in HCL is very similar to its competitors as the processes remain
same in all companies the only difference comes in the delivery or implementation of the
processes. Like for example, in one organization the entire F&F process is done online
through the intranet and the employee does not have to go to each department
physically. In another company, the employees do not get to interact with the HR SPOC
instead the employee initiates the F&F after his resignation and once the form is
submitted he is given a date at which he can collect the cheque and relieving letter from
a window in the office during the entire process there is no employee interaction.

Problems faced in the exiting process of employees at HCL

According to me there are no major problems in the exiting management of HCL BPO in
fact the process has been more streamlined and EHS SPOCs have been placed at the

- 51 -
processes where they are most efficient in handling the workload. Also, there is good
coordination within the EHS team due to the efficient management of the team
managers.
However, like everything else nothing in the real world is perfect. Even though my
tenure of training has not been long enough for me to discover all the problems or
discrepancies in the system but I have made observation which are as follows:

- One of the major problems being faced by the organization is that a lot of employees
leave the company without any prior intimation, in other words they abscond or they
leave the company without serving the notice periods. Now both the cases affect the
company in a negative way. This behavior of employees hinders the smooth
functioning of various departments. The company has a very friendly attitude
towards the employees and hence they have made liberal policies on dealing with
such employees so as to not give of a wrong message to the employee. Due this
there are employees who tend to take advantage of this situation and misuse these
liberties that are given to them by the company.
- There is a lot of dependency between the centers, corp. HR and finance. This
despite being inevitability it does hamper the performance of the EHS team at the
corporate level. Therefore, turnaround time is officially not met due to this.
- During the processing of forms I came across various forms where the employee
was not been separated from SAP. Even though the separation can be done by the
corporate EHS it is still the responsibility of the centers to make sure the employee
is separated from SAP before his form is sent for separation to the EHS SPOC.
Also, this again only delays the processing of forms and increases workload.
- Also, though this problem is not significant but may be of concern often centre
SPOCs submit the F&F forms at the end of the day. Hence, the forms remain
unprocessed till the next day thus causing a day gap in processing and receiving
which delays the form before it is given to finance.
- Also, there is wastage of resources in the finance end where there are individual
persons processing for different centres. Yet, there are delays beyond the estimated
time of processing which is 1 week rather than faster processing.
- There are occasions where the employee who has a bond agreement resigns before
its maturity due to ignorance. Hence, the line HR should ensure that the exiting

- 52 -
 employee is reminded about his bond agreement before his resignation is accepted.
By informing at the right time the employee may reconsider his resignation if the
bond maturity is due or else he as to pay the recovery. This tactic can indirectly be
used as a retention strategy. This also applies to gratuity cases, if an employee is
resigning near the completion of his gratuity tenure, the line HR should inform him
so that he can reconsider his resignation.
- Resignation letter are not given in a professional manner though according to the
company policy the letter should be submitted by email to the reporting manager but
employees submit them in handwritten and at times even on rough sheets of torn
paper.
- In PF, there is lack of coordination between the HCL PF Trust and the Govt. Pension
Fund hence there are times when the information or status on 10C form is wrongly
provided.
- The trust often does not provide with reason for rejection when sending back the
rejected forms making it difficult for the EHS SPOC to reprocess the forms.
- The employees fill the wrong addresses and contact details making it difficult to
provide them with information or status.

Recommendations

Sighting all these problems I have come up with recommendation that I hope will be
relevant in the improvement of the exiting process in HCL.

- Absconding employees are one of the most prominent problems facing the exiting
process according to me they not only cause problems to their respective process
but also to line HR and corporate HR, I believe that HCL despite being an employee
friendly should remain friendly towards only those who are loyal to the company.
Absconding is seen as a cowardly act by the entire corporate world and like the
other HCL too should have strict policy on absconding employees.
- One way is that rejoining bonus should not be given to absconding employee, in
fact if they want to rejoin they should first settle their previous dues and recovery
before being allowed to rejoin. Also, he should not be given any reimbursement or
AL encashment.

- 53 -
- Another way is to retain documents of the new joining employees or by making new
joinees sign bonds for a specific maturity period. This will not only hold the employee
from absconding in the future but will also filter the new joinees as only those person
would be willing to join who will be serious about making it in the company.
- We can also redesign salary structures; include a variable component, which can be
retained by the company as and when the situation arises. Variable payouts could
include bonus, to be considered only after completion of a specific period of service
- The company can also ask for a certain amount for security purposes at the time of
joining which will be duly returned to him when he leaves the organization through
formal channels
- Improving coordination between Line HR and Corporate EHS is the key as there is
high dependability and large volumes of processing required hence accuracy and
timing becomes important. In my opinion a monthly meeting should be held by the
Corporate EHS team with the Line HR SPOCs to discuss progress and problems
with full disclosure and frankness.
- Same should be done with the finance department as there is dependability between
the departments they should be accountable for delays on their part which results in
finger being pointed at the EHS department.
- The concept of ‘harmony, not discord’ should be applied here.

Future Prospects

The drop from 4th position to the 10th position is a worrying sign for HCL BPO. However,
as the forthcoming merger with HCL Technologies takes place there will be changes
made in the running and all the issues concerning the BPO will be tackled. Only time will
how the merger affects the BPO Company.

This project was my best effort to give back something to the company that has given
me such a learning experience in the last few weeks.

- 54 -
I hope this project will be of purpose to the company in the future and my insight. This
project highlights the problems facing the exiting process and my suggestions to cope
with those problems as well. I believe this document can be used as a reference at a
future time for other training and learning purposes by other people. I believe my
recommendations can be discussed further at the policy making level where my
observations can provide insight to the decision making process

References

1. Form 13,19 & 10C

2. Employees Provident Fund Scheme, 1952
3. Employees Provident Fund Act, 1952
4. www.citehr.com
5. www.scribd.com
6. www.epfindia.com
7. www.chrmglobal.com
8. Standard Operating Procedure – PF HCL
9. http://www.bpoindia.org/research/bpo-in-india.shtml
10. www.chillibreeze.com/articles/top-BPO-companies

- 55 -
11. www.articlesbase.com › Business › Outsourcing
12. wordnet.princeton.edu/Perl/webwn
13. en.wiktionary.org/wiki/Employees
14. aspa.org/resources/res_news_glossary.htm
15. http://hrlink.in/news/employee-separation-resignation-termination-and-
absconding
16. http://www.bpoindia.org/research/attrition-rate-big-challenge.shtml

Appendices

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- 57 -