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ROLL NO.- 10-MIB-35
ENROLMENT NO : 08-4667


Jamia Millia islamia, New Delhi-110025


I would like to take an opportunity to thank all the people who helped me in
collecting necessary information and making of the report. I am grateful to all of
them for their time, energy and wisdom.
Getting a project ready requires the work and effort of many people. I would like
all those who have contributed in completing this project. First of all, I would like
to send my sincere thanks to MS. MADHULIKAM (DEPUTY MANAGER) for her
helpful hand in the completion of my project.




I, POOJA a bonafide student of MIB (Full Time) Programme at the Centre for
Management Studies, Jamia Millia Islamia, New Delhi, hereby declare that I have
undergone the Summer Training at MMTC INDIA LTD., Lodhi Road New Delhi110003 under the supervision of Ms. Madhulikam on and from 20th June 2011 to 01st
August 2011.

I also declare that the present project report is based on the above summer training
and is my original work. The content of this project report has not been submitted to
any other university or institute either in part or in full for the award of any degree,
diploma or fellowship.

Further, I assign the right to the university, subject to the permission from the
organization concerned, use the information and contents of this project to develop
cases, caselets, case leads, and papers for publication and/or for use in teaching.

Signature of Student
Name of Student
Roll No
Place: New Delhi



1. Introduction to the Industry ...........................................................................
2. Introduction to the Company .........................................................................

Genesis Vision, Mission, and Objectives.


Form of Organisation, Main Activities, Market Share,



Analysis of Financial statement for the past three



Organizational Structure.


Recent Maagement Initiatives in the Area of HR.

3. Research Methodology..................................................................................
a. Title ...........................................................................................................

Title Justification ............................................................................

b. Objective...................................................................................................
i. Objective One......................................................................................
ii. Objective Two......................................................................................
c. Scope of the Study....................................................................................
d. Significance of the study ..........................................................................
e. Research Design.......................................................................................
f. Sampling Methodology ............................................................................
g. Limitation ..................................................................................................
4. Facts and Findings.........................................................................................
5. Data Analysis and Interpretation ...................................................................
6. Conclusion and Recommendation.................................................................


7. Bibliography ...................................................................................................
a. Books........................................................................................................
b. Journals
c. Magazines.................................................................................................
d. Internet .....................................................................................................



Search Engines .............................................................................

8. Annexure........................................................................................................
a. Questionnaire.............................................................................................
b. Supporting Documents..............................................................................



As the largest trading company of India and a major trading company of Asia, MMTC
aims at improving its position further by achieving sustainable and viable growth rate
through excellence in all its activities, generating optimum profits through total
satisfaction of shareholders, customers, suppliers, employees and society.

1. To be a leading International Trading House in India operating in the

competitive global trading environment, with focus on "bulk" as core
competency and to improve returns on capital
2. To retain the position of single largest trader in the
country for product lines like minerals, metals and
precious metals.
3. To promote development of trade-related infrastructure.
4. To provide support services to the medium and small
scale sectors.
5. To render high quality of service to all categories of
customers with professionalism and efficiency.
6. To streamline system within the company for settlement of commercial disputes.


7. To upgrade employee skills for achieving higher productivity.

State Trading Corporation

After Independence the government decided to authorize the mining of scarce mineral
resources to the public sector rather than private sector, although India's National
Mineral Policy clearly states that it does not "preclude the State from securing the cooperation of private enterprise in the larger interest of the State or with a view to
accelerating the pace of development"
Under the Constitution of India, mineral rights and authority of mining laws remain
vested with the state governments. On the other hand, Central government regulates
the development of minerals under the Mines and Minerals (Regulation) Act of 1957.
The MMTC has its origins in the 1950s, when the Indian government, with the interest
of boosting agricultural and industrial development, determined to earn valuable
foreign currency through the export of canalized mineral ores, which the country had
huge deposits of. As a consequence of the government's decision to earn foreign
currency, the State Trading Corporation of India Ltd. was founded in 1956, as a wholly
owned government subsidiary, to handle the export and import of selected
The Company had commenced its operation on 1 October 1963. With the rapid growth
of the State Trading Corporation (STC) in its direct trading activities and in view of the
importance given to the exports of mineral ores in the country's Five Year Plans, a
decision was taken by the Government of India to split the STC and establish another
corporation to deal exclusively with the trade in minerals and metals.
Japan and South Korea continued to be the major markets till the year of 1994. Then it


made a foray into European market with the exports of one lakh tonnes of iron ore to
Slovakia and Romania. Also in the same year, the company had commenced import of
gold and silver against special import license for supply to the customers in the
domestic area. Imports worth 20 metric tonnes of gold and silver worth 270 tonnes was
made and the company opened new gold vaults at Hyderabad and Vizag to offer its
services to the customers in these areas. However, manganese ore exports remained
depressed due to recession in the steel industry.
The wholly owned subsidiary MMTC Transnational Pte Ltd, Singapore was
incorporated under the control of company in the year 1994 itself. During the year
1995, MMTC opened a duty-free jewellery show room at Chhatrapati Shivaji
International Airport and a Memorandum of understanding was signed with the
government of Orissa for development of existing Gopalpur minor port into a allweather, deep water and direct berthing port. In the same year, Board for Industrial &
Financial Reconstruction (BIFR) had approved the scheme of merger-cumamalgamation of Mica Trading Corporation of India Limited (MITCO) with MMTC. From
the year 1996 onwards, the company started to import the Chemical items and
MMTC had signed a MoU with the Department of Commerce under Ministry of
Commerce and Industry during the year 2001 for its various applications. The
Company had opened a new outlet at Thiruvananthapuram as a duty free business in
the year of 2002 and also in the same year unveiled a new line of silverware, SanchiSilver in Style. During the year 2003, MMTC had acquired Rs.800 crore deals from
Japanese and South Korean companies for the supply of iron ore. In the identical year
of 2003, the joint venture with the Orissa government namely Neelchal Ispat Nigam Ltd
was emerged as the second largest exporter of pig iron from the country.
The Company was ranked in Trading Sector by Business Standard in their publication
BS 1000 'India's Corporate Giants' released in December 2006 and also noted as Top
Company in the trading sector for the D&B by coveted American Express Corporate
Award 2006. MMTC bagged a gold trophy for top Exporter for the Year 2006-07 in
Merchant Exporter category by Engineering Export Promotion Council of India (EEPC)


and also CAPEXIL highest export award for highest export of minerals for the year
2006-07, (16th time in a row). The 15 MW wind farms of the company were
commissioned in March of the year 2007 at Karnataka. In The year 2007, MMTC had
received government approval for acquiring an equity stake in the consortium, which
has undertaken the project for construction of a permanent iron ore-loading berth at
Ennore to decongest Chennai port.
Today MMTC has the distinction of being:

Largest exporter of minerals from India

India's Largest Bullion Trader

One of India's biggest importer of Non Ferrous Metals

India's largest importer of Steel-Coal

One of India's leading importer of fertilizers

One of India's largest trader of Agro Products



MMTC (A Govt. of India Enterprise) - India's Single Largest Trader of metals. It's
metals division imports and exports Non-Ferrous metals, Industrial raw materials, Steel
items, Pig Iron, Non Ferrous metals scrap and Iron and Steel scrap etc. MMTC's share
of import in India's import of refined base non-ferrous metals in terms of value is about


~ 10 ~

MMTC imports following metals as per LME deliverable specifications and also Non
LME grade material according to the requirements of our customers:

Base Non-Ferrous Metals: Copper (min. 99.90% purity) in the form of Wire bars,
Cathodes, CC rods Aluminium (min. 99.70%) Zinc Ingots High grade (min.
99.95%) Zinc Ingots Spl. HG (min. 99.995%) Lead Ingots (min. 99.97%) Tin
(min. 99.85% purity) Nickel (min. 99.80% purity ) (Squares
4''x4'' ,uncut,Briquettes, Ferro Nickel etc.)

Minor Metals : Antimony (min. 99.65% purity) Silicon (Grade 4-4-1 and 5-5-3)
Magnesium (min. 99.9% purity) Mercury (min. 99.9% purity)

Industrial Raw Materials, Noble metals and ferro alloys

Pig Iron, Slag, Steel scrap, HR Coils, CRGO and Steel items

MMTC Limited, Indias first Super Star Trading House, continues to be the country's
leader in mineral exports for four decades now. During the last decade, MMTC could
withstand the stiff competition in the world market by its continuous and persistent
efforts in diversifying its markets, enlarging its product range, expanding extensively its
infrastructure facilities and expertise in mineral operations, and by attaching utmost

~ 11 ~

care and importance to its trade commitments as also the quality of service and
MMTC has been consistently striving to enhance its competitiveness in the area of
value addition. It has set up a crushing and screening plant at Banehatti in Bellary
Hospet Sector not only to source higher value realization in the international market but
also to compete with the international suppliers like Australia and Brazil in the markets
like Japan and South Korea.
has provided further fillip to value addition to minerals. The 1.1 million ton Steel Plant
consumes about 2 million tons of various types of minerals annually being supplied by
MMTC. The company has also taken an initiative to link import of capital equipments
required for modernizing mining activities in the country to promote export of minerals.
The import of the earthmoving equipments was linked to export of Iron Ore under
EPCG scheme.

(Mud Chemicals, Barytes, Bentonite, Bauxite, Talc, Gypsum, Feldspar, Quartz/Silica
Sand, Garnet Sand, Kaolin (China Clay), Vermiculite)


MMTC Limited, (A Govt. of India Enterprise) is Indias Premier bullion trader, handling
more than 185 MTs of Gold & 690 MTs of Silver during 2009-10. The Precious Metals
Division has consistently contributed considerable proportion of the total turnover of
the Company.

~ 12 ~

MMTCs Precious Metals Division is in to a range of activities covering imports,

exports and domestic retail trade. It helps in promoting exports from India by holding
exclusive foreign exhibitions of gold and studded jewellery at chosen overseas

MMTC is an authorized agency of the Government of India for import of gold, silver,
platinum, palladium, rough diamonds, emeralds, rubies and other semi-precious
stones and supplies these items to jewellers in India for domestic sales and exports.
It is one of the custodians of the Diamond Plaza Customs Clearance Center in
Mumbai. MMTC is also the custodian for import & export of precious cargo at SEEPZ,
SEZ Mumbai.

The company also operates an in-house assaying and hallmarking unit at New Delhi,
Jaipur, Ahmedabad and Kolkatta for testing purity of gold and gold articles duly
accredited with Bureau of Indian Standards.

MMTC has a unit in New Delhi for manufacturing its own brand of gold and silver
medallions since the year 1996. Customized requirements for corporate/institutional
orders are serviced from here throughout the year. MMTC has retail jewellery & its
own branded Sterling Silverware (Sanchi) showrooms in all the major metro cities of
India. MMTC also supplies branded hallmarked gold and studded jewellery.


~ 13 ~

Coal and Hydrocarbon is identified as one of the core areas of business for MMTC
and Steam coal is identified as a thrust product for import. The coal and
hydrocarbons business has achieved a turnover of Rs 18390 million in 2004-05. The
above turn over is comprised of mainly LAM COKE, Coking Coal and steam coal.
During 2004-05 MMTC transacted a business of around 1.10 million tons of Coking
Coal, 0.50 million tons of LAM COKE and 1.39 million tons of steam coal. A
quantum jump both in value and quantity of coking coal and non-coking steam coal
total 6 million tons valued at Rs.2500 Million - is expected during 2005-06.
MMTC withstood the stiff competition due to its continuous and persistent efforts in
diversifying its markets, offering value added products and services to its existing
customers, enlarging its product range and customer base, expanding extensively its
infrastructure facilities, using its expertise in trading by attaching utmost care and
importance to its trade commitments as also the quality service and product.
Certain specific strengths of MMTC, which make it a strong player in this sector are :

Strong business relationship with the leading coal mines and reputed suppliers
of various coal and hydrocarbon products. A list of suppliers whose
credentials are established are also updated from time to time. They are
retained by MMTC for sourcing.

Elaborate infrastructure facilities for bulk handling with arrangements for rail
and road transport, warehousing, port and shipping operations, which gives
MMTC complete control over trade logistics.

One of the biggest International traders in bulk in the country.

Importing non-coking steam coal continuously for the power plants under longterm contracts.

~ 14 ~

MMTC Limited (A Govt. of India Enterprise) is one of the largest importers of
Fertilizers in India. It imports both finished fertilizers, fertilizer intermediaries and
fertilizer raw materials. The volume of trade in fertilizers today stands over one million
tonnes. MMTC has established itself as a trusted and reliable supplier of fertilizers with
major consumers in India. This is result of a very high level of reliability and the
resultant reputation that MMTC has so assiduosly built over the last four decades.

MMTC has remained one of the largest institutional buyers of fertilizers across the
globe. MMTC has built this unique position through its continued presence for about
four decades in the fertilizer arena internationally. MMTC has been successful in
building confidence both amongst its suppliers as well as its buyers in India and abroad
through its unstinted transparency in dealings and commitments to contractual terms of
international trade. MMTC, through these four decades of buying, selling and networking, has created a strong leverage for itself, benefiting both the suppliers as well
as the buyers. It thereby adds value in the supply chain with its reliable sourcing ability.
Thus, MMTC remains the single unique window for buying and selling of all fertilizer
products globally. We re-assure all our valued business associates the most
transparent, efficient and effective trading experience in fertilizers.

~ 15 ~

MMTC Limited (A Govt. of India Enterprise) is a global player in the Agro trade, with its
comprehensive infrastructural expertise to handle agro products. MMTC Limited
provides full logistic support from procurement, quality control to guaranteed timely
deliveries of agro products from different parts of India through a wide network of
regional and port offices in India and its contacts abroad.
Reliable established supplier/buyer having over 3 decades of experience in the trade.
Exporting/Importing in bulk.
Sourcing from established suppliers.
Securing competitive prices through bulk buying.
Strong links with government & state marketing agencies.
Recognized as the best quality supplier of Agro products.
Large warehousing facilities having proximity to rail-heads and ports.
Well controlled logistics for movement of goods.

1) Wheat
2) Rice
3) Maize
4) Soyabean Meal
5) Sugar
6) Edible Oil

~ 16 ~

7) Pulses

USPs Information
MMTC which is a State-run trading firm on the 29th of June reported a 54.21 per cent
rise in its net profit at Rs 216.24 crore for the year ended March 2010.
The company in a release said that it had clocked a net profit of Rs 140.22 crore in the
last fiscal. The company had also recorded an increase in the turnover to Rs 46,263.91
crore during the year against Rs 37,017.44 crore in the previous year 2008-09.
The MMTC board has recommended the final dividend of 90 per cent on every share of
Rs 10 face value and a 1:1 bonus share issue besides share split of 1:10.
MMTC is eyeing to achieve a turnover of Rs. 1 lakh crore during the next 3 years which
would mean increasing from its current level of Rs. 45,000 crore. The turnover that it is
trying to achieve is mainly on the back of its strategy of diversification and synergy in
allied trading activities through consolidation.
MMTC Ltds Chairman and MD Mr. Sanjiv Batra, has earlier said that as the company
deals with a large array of products, and in any given situation if some products of the
company were not doing well, some others would do.
Due to the economic slowdown in the year 2009, people had more faith in gold and the
country's gold import had surge by more than 20 % as compared to the previous
financial year 2008-09 due to which, MMTC's share of gold imports also increased over
25 % from 16-17 %, which had helped the company to increase its top line.

~ 17 ~

Mr. Batra had said that MMTC has been following a policy of forward and backward
integration and is into infrastructure too.
He further said that until and unless one has some USP or core competence, survival
becomes very miserable. Moreover, MMTC has formed a Joint Venture with Sical
Logistics Ltd. and L&T Infrastructure for setting up a permanent berth for handling iron
ore exports at Ennore port which would be operational by July this year.


Balance Sheet of MMTC Ltd
Mar '10

Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Revaluation Reserves
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

Application Of Funds
Gross Block
Less: Accum. Depreciation

------------------- in Rs. Cr. ------------------Mar '09

Mar '08 Mar '07
Mar '06

12 mths

12 mths

Mar '10

Mar '09

12 mths

12 mths

12 mths

12 mths

12 mths






~ 18 ~

12 mths

12 mths

12 mths

3,198.35 1,127.01
3,201.63 1,129.80
4,231.59 2,011.93 1,340.35
Mar '08 Mar '07 Mar '06

Net Block
Capital Work in Progress
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deffered Credit
Current Liabilities
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)





~ 19 ~




1,200.38 1,048.52 1,626.12



In MMTC we focus on fashioning our HR policies towards providing more nonmonetary incentives stemming from job satisfaction, diverse learning opportunities and
wider exposure to ever-changing global business environment. MMTC Ltd., which is a
global trading organization and one of Asia's leading trading companies, has been the
first corporate in the public sector to realize the vital role which online trading has come
to occupy in today's global business.
HR mantra in MMTC is to provide more and more job enrichment opportunities to all so
as to ensure that employees remain motivated to realize their full potential for
organizational goals and self-development. Opportunities are also provided to all to
enrich their knowledge base and technical skills through in-house training programmes
and through trainings/seminars organized by reputed outside agencies. Human
resource development in MMTC, therefore, is a continuous exercise compatible with
the change in business patterns and technological innovations in an era of
diversification and search for new business opportunities. Notwithstanding the culture
of a public sector organization, we in MMTC realize that our most important asset is the
employee. We design our HR policies to meet the above objective. Following are some
of the HR policies followed in MMTC.

In an IT driven culture, computer literacy

is imparted to all employees


Non-graduate employees are encouraged

through various incentive schemes to
become graduates. Likewise, postgraduate qualifications are encouraged through incentives for promotion to
higher levels.


Graduate employees are encouraged to obtain professional qualifications

through corporate sponsorships.

~ 20 ~


Through job rotation employees are constantly motivated to acquire knowledge

and operational skills in different areas of company's operations. This exercise
obviously prepares employees for managing higher positions more competently.


As an incentive to better performers, merit based promotions are considered.


Regular training programmes for upgrading employee skills, knowledge and

attitudes, in areas like IT, ERP, e-commerce, international trading practices,
general management techniques etc. are organized in an effort to keep
employee morale and commitment high.


Specialization is encouraged in higher management positions through

specialized management development programmes arranged within India and
outside India. LME training, hedging in metals, global bullion pricing, third
country trading, offshore trading are some of such specialized trainings.


General management training programmes for all categories of managers are

periodically organized through reputed institutions like IIM, ASCI, IIFT, MDI etc.


Periodical training programmes are also organized for the development of

SC/ST/OBC employees and women employees.

In short, corporate philosophy at MMTC towards HR is to ensure continuous

development of human resource for fast changing global business through individual
freedom and flexibility.

~ 21 ~

Performance appraisal is the process of obtaining, analyzing and recording information
about the relative worth of an employee. The focus of the performance appraisal is
measuring and improving the actual performance of the employee and also the future
potential of the employee. Its aim is to measure what an employee does. According to
Flippo, a prominent personality in the field of Human resources, performance appraisal
is the systematic, periodic and an impartial rating of an employees excellence in the
matters pertaining to his present job and his potential for a better job." Performance
appraisal is a systematic way of reviewing and assessing the performance of an
employee during a given period of time and planning for his future.
It is a powerful tool to calibrate, refine and reward the performance of the employee. It
helps to analyze his achievements and evaluate his contribution towards the
achievements of the overall organizational goals. By focusing the attention on
performance, performance appraisal goes to the heart of personnel management and
reflects the managements interest in the progress of the employees.
Managements basic job is the effective utilization of human resources for
achievements of organizational objectives. The personnel management is concerned
with organizing human resources in such a way to get maximum output to the
enterprise and to develop the talent of people at work to the fullest satisfaction.
Motivation implies that one person, in organization context a manager, includes
another, say an employee, to engage in action by ensuring that a channel to satisfy
those needs and aspirations becomes available to the person. In addition to this, the
strong needs in a direction that is satisfying to the latent needs in employees and
harness them in a manner that would be functional for the organization.
Employee motivation is one of the major issues faced by every organization. It is the
major task of every manager to motivate his subordinates or to create the will to work
among the subordinates. It should also be remembered that a worker may be
immensely capable of doing some work; nothing can be achieved if he is not willing to

~ 22 ~

work. A manager has to make appropriate use of motivation to enthuse the employees
to follow them. Hence this studies also focusing on the employee motivation among the
employees of Reliance Infrastructure.


While good people are hard to find, great people are much harder to replace. Michael
Organization is the strength of any business. The more organized and efficient the
different components in the business are, the better it functions and produces. Breaking
down tasks associated with each component in the system has led to the concept of
job design. Job design came about with rapid technological advancements at the turn
of the 20th century when mass production and assembly line operations emerged. As
jobs continue to become more sophisticated and specialized, the need for an educated
and motivated workforce has become indispensable.
The nature of work and its organization has interested managers, economists and
social scientists for as long as people have been employed by others to engage in
productive activity. Managers have largely been interested in maximizing output from
available resources. Economists and social scientists have raised questions about the
organization of work in relation to issues of the individual and society in general.
Workers today are motivated by many different intentions. Some of these causes are
considered as a needed entity or as a desired. Many organizations all over the globe
throughout the past hundred years have focused on theories that motivate the workers
to be the best they can be. Many of the theories of motivation have proven to be true.
In this day of age most workers are well educated to a very high standard and for that
they demand a reasonable salary and good working conditions. Motivation has
conventionally been assumed to be an individual phenomenon. Each individual is
unique in which each individual have different needs, potential, values, strengthening
history, attitudes and goals. The most important aspect that most workers are
concerned about is their wants and desires. "It is important to identify employees' wants
and desires which includes:

~ 23 ~

1) Praise and recognition-often employees feel that they get noticed only for the
things they do wrong, not for the things they do right;
2) Job security;
3) Opportunity to advance and gain new experiences;
4) Communication-to know where they stand in the eyes of their employers and
what is done right or wrong;
5) To feel involved in the company-to take part in making decisions.
Job design and work organization is the specification of the contents, method and
relationships of jobs to satisfy technological and organizational requirements as well as
the personal needs of jobholders. The main purpose of job design (or re-design) is to
increase both employee motivation and productivity (Rush, 1971). Increased
productivity can manifest itself in various forms. For example, the focus can be that of
improving quality and quantity of goods and services, reduce operation costs, and/or
reduce turnover and training costs.
Managers have the opportunity to influence the motivation of employees through
design of their jobs. Well-designed jobs help accomplish two important goals: getting
the necessary work done in a timely and competent manner, and motivating and
challenging employees. Both the business and the employee benefit from successful
job design. Poorly designed jobs leave to chance whether the expected tasks will get
done in a timely and competent manner. Poorly designed jobs, moreover, are likely to
be discouraging, boring and frustrating to employees. Even if employees would
otherwise be enthused, competent and productive, poorly designed jobs almost
certainly lead to employee disappointment.

~ 24 ~


ESTABLISHING PERFORMANCE STANDARDS: The first step in the process of

performance appraisal is the setting up of the standards which will be used to as the
base to compare the actual performance of the employees. This step requires setting
the criteria to judge the performance of the employees as successful or unsuccessful
and the degrees of their contribution to the organizational goals and objectives. The
standards set should be clear, easily understandable and in measurable terms. In case

~ 25 ~

the performance of the employee cannot be measured, great care should be taken to
describe the standards.

COMMUNICATING THE STANDARDS :Once set, it is the responsibility of the

management to communicate the standards to all the employees of the
organization. The employees should be informed and the standards should be
clearly explained to the. This will help them to understand their roles and to know
what exactly is expected from them. The standards should also be
communicated to the appraisers or the evaluators and if required, the standards
can also be modified at this stage itself according to the relevant feedback from
the employees or the evaluators.

MEASURING THE ACTUAL PERFORMANCE: The most difficult part of the

Performance appraisal process is measuring the actual performance of the
employees that is the work done by the employees during the specified period of
time. It is a continuous process which involves monitoring the performance
throughout the year. This stage requires the careful selection of the appropriate
techniques of measurement, taking care that personal bias does not affect the
outcome of the process and providing assistance rather than interfering in an
employees work.


actual performance is compared with the desired or the standard performance.
The comparison tells the deviations in the performance of the employees from
the standards set. The result can show the actual performance being more than
the desired performance or, the actual performance being less than the desired
performance depicting a negative deviation in the organizational performance. It
includes recalling, evaluating and analysis of data related to the employees

DISCUSSING RESULTS: The result of the appraisal is communicated and

discussed with the employees on one-to-one basis. The focus of this discussion
is on communication and listening. The results, the problems and the possible

~ 26 ~

solutions are discussed with the aim of problem solving and reaching
consensus. The feedback should be given with a positive attitude as this can
have an effect on the employees future performance. The purpose of the
meeting should be to solve the problems faced and motivate the employees to
perform better.

DECISION MAKING: The last step of the process is to take decisions which can
be taken either to improve the performance of the employees, take the required
corrective actions, or the related HR decisions like rewards, promotions,
demotions, transfers etc.

~ 27 ~

Pre-requisites for Effective & Successful Performance

The essentials of an effective performance system are as follows:

Documentation means continuous noting and documenting the performance.

It also helps the evaluators to give a proof and the basis of their ratings.

Standards / Goals the standards set should be clear, easy to understand,

achievable, motivating, time bound and measurable.

Practical and simple format - The appraisal format should be simple, clear, fair
and objective. Long and complicated formats are time consuming, difficult to
understand, and do not elicit much useful information.

Evaluation technique An appropriate evaluation technique should be

selected; the appraisal system should be performance based and uniform. The
criteria for evaluation should be based on observable and measurable
characteristics of the behavior of the employee.

Communication Communication is an indispensable part of the Performance

appraisal process. The desired behavior or the expected results should be
communicated to the employees as well as the evaluators. Communication also
plays an important role in the review or feedback meeting. Open communication
system motivates the employees to actively participate in the appraisal process.

Feedback The purpose of the feedback should be developmental rather than

judgmental. To maintain its utility, timely feedback should be provided to the
employees and the manner of giving feedback should be such that it should
have a motivating effect on the employees future performance.

Personal Bias Interpersonal relationships can influence the evaluation and

the decisions in the performance appraisal process. Therefore, the evaluators
should be trained to carry out the processes of appraisals without personal bias
and effectively.

~ 28 ~

Challenges Of Performance Appraisal

In order to make a performance appraisal system effective and successful, an
organization comes across various challenges and problems. The main challenges
involved in the performance appraisal process are:

Determining the evaluation criteria: Identification of the appraisal criteria is

one of the biggest problems faced by the top management. The performance
data to be considered for evaluation should be carefully selected. For the
purpose of evaluation, the criteria selected should be in quantifiable or
measurable terms

Create a rating instrument: The purpose of the Performance appraisal

process is to judge the performance of the employees rather than the
employee. The focus of the system should be on the development of the
employees of the organization.

Lack of competence: Top management should choose the raters or the

evaluators carefully. They should have the required expertise and the
knowledge to decide the criteria accurately. They should have the experience
and the necessary training to carry out the appraisal process objectively.

Errors in rating and evaluation: Many errors based on the personal bias like
stereotyping, halo effect (i.e. one trait influencing the evaluators rating for all
other traits) etc. may creep in the appraisal process. Therefore the rater should
exercise objectivity and fairness in evaluating and rating the performance of the

Resistance: The appraisal process may face resistance from the employees
and the trade unions for the fear of negative ratings. Therefore, the employees
should be communicated and clearly explained the purpose as well the process
of appraisal. The standards should be clearly communicated and every
employee should be made aware that what exactly is expected from him/her.

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Purpose of Performance Appraisal

Performance Appraisal is being practiced in 90% of the organizations worldwide. Selfappraisal and potential appraisal also form a part of the performance appraisal
processes. Typically, Performance Appraisal is aimed at:

To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

To diagnose the training and development needs of the future.

Provide information to assist in the HR decisions like promotions, transfers etc.

Provide clarity of the expectations and responsibilities of the functions to be

performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

~ 30 ~

Helps to strengthen the relationship and communication between superior

subordinates and management employees.

The most significant reasons of using Performance appraisal are:

Making payroll and compensation decisions 80%

Training and development needs 71%

Identifying the gaps in desired and actual performance and its cause 76%

Deciding future goals and course of action 42%

Promotions, demotions and transfers 49%

Other purposes 6% (including job analysis and providing superior support,

assistance and counseling).

The Balanced Scorecard

To evaluate the organizational and employee performance in Performance appraisal
management processes, the conventional approach measures the performance only on
a few parameters like the action processes, results achieved or the financial measures
etc. The Balanced scorecard an approach given by Kaplan and Norton- provides a
framework of various measures to ensure the complete and balanced view of the
performance of the employees. Balanced scorecard focuses on the measures that
drive performance. The balanced scorecard provides a list of measures that balance
the organizations internal and process measures with results, achievements and
financial measures. The two basic features of the balanced scorecard are:

A balanced set of measures based on. the four perspectives of balanced


Linking the measures to Employee Performance

The four Perspectives recommended by Kaplan and Norton for the managers to collect
information are:

The financial measures The financial measures include the results like profits,
increase in the market share, return on investments and other economic
measures as a result of the actions taken.

The customers measures - These measures help to get on customer

satisfaction, the customers perspective about the organisation, customer loyalty,
acquiring new customers. The data can be collected from the frequency and

~ 31 ~

number of customer complaints, the time taken to deliver the products and
services, improvement in quality etc.

The internal business measures These are the measures related to the
organizations internal processes which help to achieve the customer
satisfaction. It includes the infrastructure, the long term and short term goals and
objectives, organisational processes and procedures, systems and the human

The innovation and learning perspective. The innovation and learning measures
cover the organisations ability to learn, innovate and improve. They can be
judged by employee skills matrix, key competencies, value added and the
revenue per employee.


The benefits of the balanced scorecard approach in measuring performance are:

Gives the complete picture of the employee as well as the organisational


It guides users in determining the critical success factors and performance


Strategic review or analysis of the organisational capabilities and performance.

Focusing the whole organisation on the few key things needed to create
breakthrough performance.

Integrating and directing the performance and efforts from the lowest levels in
the organisation to achieve excellent overall performance.

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Techniques Of Performance Appraisal

~ 33 ~

Traditionally, performance appraisal has been used as just a method for determining
and justifying the salaries of the employees. Than it began to be used a tool for
determining rewards (a rise in the pay) and punishments (a cut in the pay) for the past
performance of the employees. This approach was a past oriented approach which
focused only on the past performance of the employees i.e. during a past specified
period of time. This approach did not consider the developmental aspects of the







needs or career

developmental possibilities. The primary concern of the traditional approach is to judge

the performance of the organization as a whole by the past performances of its
Therefore, this approach is also called as the overall approach. In 1950s the
performance appraisal was recognized as a complete system in itself and the Modern
Approach to performance appraisal was developed.
The modern approach to performance development has made the performance
appraisal process more formal and structured. Now, the performance appraisal is taken
as a tool to identify better performing employees from others, employees training
needs, career development paths, rewards and bonuses and their promotions to the
next levels. Appraisals have become a continuous and periodic activity in the
organizations. The results of performance appraisals are used to take various other HR
decisions like promotions, demotions, transfers, training and development, reward
outcomes. The modern approach to performance appraisals includes a feedback
process that helps to strengthen the relationships between superiors and subordinates
and improve communication throughout the organization. The modern approach to
Performance appraisal is a future oriented approach and is developmental in nature.
This recognizes employees as individuals and focuses on their development.
This traditional form of appraisal, also known as Free Form method involves a
description of the performance of an employee by his superior. The description is an
evaluation of the performance of any individual based on the facts and often includes

~ 34 ~

examples and evidences to support the information. A major drawback of the method is
the inseparability of the bias of the evaluator.


This is one of the oldest and simplest techniques of performance appraisal. In this
method, the appraiser ranks the employees from the best to the poorest on the basis of
their overall performance. It is quite useful for a comparative evaluation.
A better technique of comparison than the straight ranking method, this method
compares each employee with all others in the group, one at a time. After all the
comparisons on the basis of the overall comparisons, the employees are given the final
In this method of Performance appraisal, the evaluator rates the employee on the basis
of critical events and how the employee behaved during those incidents. It includes
both negative and positive points. The drawback of this method is that the supervisor
has to note down the critical incidents and the employee behaviour as and when they
In this method, a senior member of the HR department or a training officer discusses
and interviews the supervisors to evaluate and rate their respective subordinates. A
major drawback of this method is that it is a very time consuming method. But this
method helps to reduce the superiors personal bias.
The rater is given a checklist of the descriptions of the behaviour of the employees on
job. The checklist contains a list of statements on the basis of which the rater describes
the on the job performance of the employees.
In this method, an employees quality and quantity of work is assessed in a graphic
scale indicating different degrees of a particular trait. The factors taken into

~ 35 ~

consideration include both the personal characteristics and characteristics related to

the on-the-job performance of the employees. For example a trait like Job Knowledge
may be judged on the range of average, above average, outstanding or unsatisfactory.
To eliminate the element of bias from the raters ratings, the evaluator is asked to
distribute the employees in some fixed categories of ratings like on a normal
distribution curve. The rater chooses the appropriate fit for the categories on his own

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees performance comes from all the
sources that come in contact with the employee on his job. 360 degree respondents
for an employee can be his/her peers, managers (i.e. superior), subordinates, team
members, customers, suppliers/ vendors - anyone who comes into contact with the
employee and can provide valuable insights and information or feedback regarding the
on-the-job performance of the employee.
360 degree appraisal has four integral components:
1. Self appraisal
2. Superiors appraisal
3. Subordinates appraisal
4. Peer appraisal.
Self appraisal gives a chance to the employee to look at his/her strengths and
weaknesses, his achievements, and judge his own performance. Superiors
appraisal forms the traditional part of the 360 degree appraisal where the
employees responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters

like communication and motivating abilities, superiors ability to delegate the
work, leadership qualities etc. Also known as internal customers, the correct
feedback given by peers can help to find employees abilities to work in a team,
co-operation and sensitivity towards others.

~ 36 ~

Self assessment is an indispensable part of 360 degree appraisals and therefore

360 degree Performance appraisal have high employee involvement and also
have the strongest impact on behavior and performance. It provides a "360degree review" of the employees performance and is considered to be one of
the most credible performance appraisal methods.

360 degree appraisal is also a powerful developmental tool because when conducted
at regular intervals (say yearly) it helps to keep a track of the changes others
perceptions about the employees. A 360 degree appraisal is generally found more
suitable for the managers as it helps to assess their leadership and managing styles.
This technique is being effectively used across the globe for performance appraisals.
Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.
The concept of Management by Objectives (MBO) was first given by Peter Drucker in
1954. It can be defined as a process whereby the employees and the superiors come
together to identify common goals, the employees set their goals to be achieved, the
standards to be taken as the criteria for measurement of their performance and
contribution and deciding the course of action to be followed. The essence of MBO is
participative goal setting, choosing course of actions and decision making. An important
part of the MBO is the measurement and the comparison of the employees actual
performance with the standards set. Ideally, when employees themselves have been
involved with the goal setting and the choosing the course of action to be followed by
them, they are more likely to fulfill their responsibilities.
The principle behind Management by Objectives (MBO) is to create empowered
employees who have clarity of the roles and responsibilities expected from them,
understand their objectives to be achieved and thus help in the achievement of
organizational as well as personal goals.
Some of the important features and advantages of MBO are:
Clarity of goals With MBO, came the concept of SMART goals i.e. goals that
Realistic, and
Time bound.
The goals thus set are clear, motivating and there is a linkage between
organizational goals and performance targets of the employees.

~ 37 ~

The focus is on future rather than on past. Goals and standards are set for the
performance for the future with periodic reviews and feedback.
Motivation Involving employees in the whole process of goal setting and
increasing employee empowerment increases employee job satisfaction and
Better communication and Coordination Frequent reviews and interactions
between superiors and subordinates helps to maintain harmonious relationships
within the enterprise and also solve many problems faced during the period

3. Assessment Centres
Assessment centre refers to a method to objectively observe and assess the people in
action by experts or HR professionals with the help of various assessment tools and
instruments. Assessment centers simulate the employees on-the-job environment and
facilitate the assessment of their on-the-job performance. An assessment centre
typically involves the use of methods like social/informal events, tests and exercises,
assignments being given to a group of employees to assess their competencies and
on-the-job behaviour and potential to take higher responsibilities in the future.
Generally, employees are given an assignment similar to the job they would be
expected to perform if promoted. The trained evaluators observe and evaluate
employees as they perform the assigned jobs and are evaluated on job related
An assessment centre for Performance appraisal of an employee typically includes:
Social/Informal Events An assessment centre has a group of participants and
also a few assessors which gives a chance to the employees to socialize with a
variety of people and also to share information and know more about the
Information Sessions information sessions are also a part of the assessment
centres. They provide information to the employees about the organisation, their
roles and responsibilities, the activities and the procedures etc.
Assignments- assignments in assessment centers include various tests and
exercises which are specially designed to assess the competencies and the
potential of the employees. These include various interviews, psychometric
tests, management games etc. all these assignments are focused at the target
The following are the common features of all assessment centers:
The final results is based on the pass/fail criteria
All the activities are carried out to fill the targeted job.
Each session lasts from 1 to 5 days.
The results are based on the assessment of the assessors with less emphasis
on self-assessment
Immediate review or feedbacks are not provided to the employees.

~ 38 ~

An organizations human resources can be a vital competitive advantage and

assessment centre helps in getting the right people in right places. The major
competencies that are judged in assessment centres are interpersonal skills,
intellectual capability, planning and organizing capabilities, motivation, career
orientation etc. assessment centres are also an effective way to determine the training
and development needs of the targeted employees.
Behaviorally Anchored Rating Scales (BARS) is a relatively new technique which
combines the graphic rating scale and critical incidents method. It consists of
predetermined critical areas of job performance or sets of behavioral statements
describing important job performance qualities as good or bad (for eg. the qualities like
inter-personal relationships, adaptability and reliability, job knowledge etc). These
statements are developed from critical incidents.
In this method, an employees actual job behaviour is judged against the desired
behaviour by recording and comparing the behaviour with BARS. Developing and
practicing BARS requires expert knowledge.
Human resources are valuable assets for every organization. Human resource
accounting method tries to find the relative worth of these assets in the terms of money.
In this method the Performance appraisal of the employees is judged in terms of cost
and contribution of the employees. The cost of employees include all the expenses
incurred on them like their compensation, recruitment and selection costs, induction
and training costs etc whereas their contribution includes the total value added (in
monetary terms). The difference between the cost and the contribution will be the
performance of the employees. Ideally, the contribution of the employees should be
greater than the cost incurred on them.
360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive
appraisal where the feedback about the employees performance comes from all the
sources that come in contact with the employee on his job.
360 degree respondents for an employee can be his/her peers, managers (i.e.
superior), subordinates, team members, customers, suppliers/ vendors - anyone who
comes into contact with the employee and can provide valuable insights and
information or feedback regarding the on-the-job performance of the employee.

~ 39 ~

TQM and Performance Appraisal

According to Sashkin and Kiser, Total Quality Management (TQM) may be defined as
creating an organisational culture committed to the continuous improvement of skills,
teamwork, processes, product and service quality and customer satisfaction. TQM
refers to the continuous improvement in the quality of work of all employees with the
focus on satisfaction of the customers.
Elements of TQM are:

Meeting customers requirements,

Continuous improvement

Empowerment of employees.

Both TQM and Performance appraisal/ evaluation are focused on increasing the
productivity of the organisation through continuous improvement. They both facilitate
the systematic management of all the processes, actions and practices at all levels in
the organisation. Some of the benefits of both the performance appraisal and TQM

Improvement in the performance of the employees

Brings quality consciousness

Better utilization of resources

Commitment to higher quality.

But there also exists a few other schools of thought which refute the compatibility of the
TQM and performance appraisal. According to them, both TQM and Performance
appraisals differ in their fundamental nature, characteristics and requirements making it
impossible to combine them.
Some fundamental differences between the two are as follows:

TQM is team based whereas performance appraisals are designed for

individuals i.e. it undermines teamwork.

TQM focuses on customer satisfaction whereas performance appraisal focuses

on the improving the performance of the employees.

~ 40 ~

Performance appraisal generally results in some rewards like increased pay etc.
whereas TQM may or may not yield visible results.

Performance appraisal can sometimes, encourage an employee to focus on his

personal goals (like his promotion) rather than the organisational goals.


The performance appraisal process provides an opportunity for introducing
organizational change. It facilitates the process of change in the organizational culture.
The interactive sessions between the management and the employees, the mutual goal
setting and the efforts towards the career development of the employees help the
organization to become a learning organization. Conducting performance appraisals on
a regular basis helps it to become an ongoing part of everyday practice and helps
employees to take the responsibility of their work and boosts their professional
development. Various studies in the field of human resources have already proved that
performance appraisal process can affect the individual performance (in a negative or
positive way), thus having an impact on the collective performance.

Performance appraisal: An opportunity for an organisational culture shift

Performance appraisal process focuses on the goal setting approach throughout

the organisation.

Performance appraisal helps the clarity and understanding of the roles and
responsibilities of the employees.

The performance appraisal processes have the potential positive effects on


It increases organisational effectiveness i.e. what to do and how to do through a

formal and structured approach.

Some evidence of the beneficial effects of team rewards

Therefore, performance appraisal is also an important link in the process of change in

organization culture. Managers have the responsibility of designing jobs. If they ignore
this responsibility, employees will design their own jobs. Not surprisingly, the jobs
designed by employees are more likely to be attuned to employee experiences and

~ 41 ~

preferences than to the goals of the business. Neither the business nor the employees
are long-term winners from managers defaulting job design to employees.
In designing the work group activity one of the basic principles is that of 'minimum
critical specification' of the tasks and the 'minimum critical specification of tasks to jobs.
Specification of objectives remains essential but the means for obtaining them in many
instances can be decided by the task performer. In designing the work system it will
often be the case that some overriding factor limits the application of all these
principles. Nevertheless they can form the basis for questioning the assumptions being
made in the design process and lead to discussion about the possible consequences of
ignoring them. Criteria applied when making decisions about jobs and work
organization were criticized by Louis Davis, in the 1950's, for more or less ignoring the
social and psychological needs of job holders. Whilst there is now a much greater
awareness of these aspects, those responsible for designing systems often are forced
to operate within narrow parameters. Decisions made earlier by designers of
manufacturing equipment often impose constraints on the choices available at the later
stage. However, whilst recognizing these constraints it would appear that those
responsible for job design are still dominated in their decisions by those factors
criticized by Davis. The challenge facing managers now and in the future is that of
employing the new technology with all its opportunities in ways which not only meet the
organization's needs but also the expectations and aspirations of employees. In order
to achieve this more effectively there is the need to further develop these approaches
to job and work organization design which facilitates these broader criteria being
incorporated into the design process as well as the tools with which to achieve the task.
Job design serves to improve performance and motivation. Job-design analysis starts
by looking at a job with a broad perspective and swiftly moves toward identifying the
specific activities required to do the job. This is done for the purpose of identifying and
correcting any deficiencies that affect performance and motivation. In this study we
intend to explore which features of job design are motivating for employees working in
banking sector in Pakistan so that they can perform at their best.

~ 42 ~

1.2 Operational Definitions

1.2.1 Job
A job is a regular activity performed in exchange for payment, especially as one's
occupation. A person usually begins a job by becoming an employee, volunteering, or
starting a business. The duration of a job may range from an hour (in the case of odd
jobs) to a lifetime (in the case of some judges). If a person is trained for a certain type
of job, they may have a profession. The series of jobs a person holds in their life is their
1.2.2 Job Design
It refers to the process of determining exactly what an employee does on the job: the
tasks, duties, responsibilities, decision-making and the level of authority
1.2.3 Motivation
Motivation is goal directed behavior. Factors, which energize, direct and sustain
employee behavior.
1.2.4 Job Performance
Job performance is a commonly used, yet poorly defined concept in industrial and
organizational psychology, the branch of psychology that deals with the workplace. It
most commonly refers to whether a person performs their job well. Despite the
confusion over how it should be exactly defined, performance is an extremely important
criterion that relates to organizational outcomes and success.
The government is encouraging the listing of public sector enterprises (PSEs), as this
unlocks the true value of a company, improves its corporate governance standards and
also helps it in raising resources for funding future expansion plans Prime Minister
Manmohan Singh said on September 2009.

~ 43 ~

In accordance with this, the commerce ministry on 1 October 2009 has consented to
10% disinvestment in MMTC, which can fetch the government Rs 17,000 crore at
present valuation. The government holds 99.33% of five crore shares in MMTC, which
has major interests in global trading of minerals and metals, including gold and silver.
The official said the timing of the MMTC follow-on-offer would be decided by the
department of disinvestment, depending on the market conditions. Despite repeated
attempts, the MMTC top management could not be reached. With boom time returning
to the stock market, corporates are making a beeline before the Securities and
Exchange Board of India for initial public offers or follow-on offers. The National
Hydroelectric Power Corporation and Oil India Ltd have recently been listed in the
marketplace. REC, NTPC, Satluj Jal Vidyut Nigam Ltd and NMDC are few other
companies expected to go for Follow-on Public Offers (FPO) in the coming months.
Aiming at diversification and with a view to add value to its existing trading operations,
the company has undertaken various strategic initiatives during the year 2007-08
following public private partnership route, effectively integrating vertically, both
backwards and forwards, to encompass the entire gamut of the product process
starting from the stage of manufacture and ending with distribution to the ultimate
consumer. The Company had inked an agreement with Swiss metal company PAMP to
set up a gold refinery in Sohna during March of the year 2008

~ 44 ~


is a process in which the employees are

encouraged to remain with the organization for the maximum period of time or until the
completion of the project. Employee engagement is beneficial for the organization as
well as the employee. Employees today are different. They are not the ones who dont
have good opportunities in hand. As soon as they feel dissatisfied with the current
employer or the job, they switch over to the next job. It is the responsibility of the
employer to retain their best employees. If they dont, they would be left with no good
employees. A good employer should know how to attract and retain its employees.
Engagement involves five major things:
Compensation constitutes the largest part of the employee engagement process. The
employees always have high expectations regarding their compensation packages.
Compensation packages vary from industry to industry. So an attractive compensation
package plays a critical role in retaining the employees.
Compensation includes salary and wages, bonuses, benefits, prerequisites, stock
options, bonuses, vacations, etc. While setting up the packages, the following
components should be kept in mind:
Salary and monthly wage: It is the biggest component of the compensation package. It
is also the most common factor of comparison among employees. It includes
Basic wage
House rent allowance
Dearness allowance
City compensatory allowance

~ 45 ~

Salary and wages represent the level of skill and experience an individual has. Time to
time increase in the salaries and wages of employees should be done. And this
increase should be based on the employees performance and his contribution to the
o Bonus: Bonuses are usually given to the employees at the end of the year or on
a festival.
o Economic benefits: It includes paid holidays, leave travel concession, etc.
o Long-term incentives: Long term incentives include stock options or stock
grants. These incentives help retain employees in the organization's startup
o Health insurance: Health insurance is a great benefit to the employees. It
saves employees money as well as gives them a peace of mind that they have
somebody to take care of them in bad times. It also shows the employee that the
organization cares about the employee and its family.
o After retirement: It includes payments that an Employee gets after he retires
like EPF (Employee Provident Fund) etc.
o Miscellaneous compensation: It may include employee assistance programs
(like psychological counseling, legal assistance etc), discounts on company
products, use of a company cars, etc.

One of the latest strategies being followed in all sectors through out the world for
engagement and Employee engagement is linking compensation to performance.
Commonly known as Performance pay or Performance based pay, it links the
compensation of the employees to their performance and their contribution to the
organizational goals. Therefore, periodic performance reviews play a vital role and

~ 46 ~

provide the basis of performance related pay. Commissions, incentives and bonuses,
piece rate pay help the employer to pay the employee according to their productivity
and hard work.
The process of performance based pay involves:
Deciding and clearly defining the performance goals and the performance
Setting the target bonus for different levels of performances
Measuring the performance of the employee
Giving rewards and bonus according to performance
Organizations are also designing variable compensation plans for various roles
and positions in the organization.
Types of Performance Pay
Merit pay The first step to performance pay, merit pay means setting some basic
salary according to the position and the rank of the employee and the variable part of
the salary is based on the periodic performance reviews. Profit Sharing Sharing the
profits of the enterprise with the employees as bonus. Incentives and Performance
Bonus Rewards for special accomplishments or fulfillment of the targets set such as
sales commission.
Gain sharing - Sharing of gains as a result of the increased performance of the
employees with them. Although performance related pay has always been a topic of
discussions and controversies with many arguments against it, but it has also been
proved that performance based pay motivates employees to perform better and earn,
and encourages learning, innovation, creativity, problem solving and empowerment
which can be facilitated through proper performance measurement and reviews.
Growth and Career
Growth and development are the integral part of every individuals career. If an
employee can not foresee his path of career development in his current organization,
there are chances that hell leave the organization as soon as he gets an opportunity.
The important factors in employee growth that an employee looks for himself are: Work

~ 47 ~

profile: The work profile on which the employee is working should be in sync with his
capabilities. The profile should not be too low or too high.
Personal growth and dreams: Employees responsibilities in the organization should
help him achieve his personal goals also. Organizations can not keep aside the
individual goals of employees and foster organizations goals. Employees priority is to
work for themselves and later on comes the organization. If hes not satisfied with his
growth, hell not be able to contribute in organization growth. Training and
development: Employees should be trained and given chance to improve and enhance
their skills. Many employers fear that if the employees are well rained, theyll leave the
organization for better jobs. Organization should not limit the resources on which
organizations success depends. These trainings can be given to improve many skills

Communications skills
Technical skills
In-house processes and procedures improvement related skills
C or customer satisfaction related skills
Special project related skills
Need for such trainings can be recognized from individual performance reviews,
individual meetings, employee satisfaction surveys and by being in constant touch with
the employees. Lack of support from management can sometimes serve as a reason
for employee engagement . Supervisor should support his subordinates in a way so
that each one of them is a success. Management should try to focus on its employees
and support them not only in their difficult times at work but also through the times of
personal crisis. Management can support employees by providing them recognition and
appreciation. Employers can also provide valuable feedback to employees and make
them feel valused to the organization. The feedback from supervisor helps the
employee to feel more responsible, confident and empowered. Top management can
also support its employees in their personal crisis by providing personal loans during
emergencies, childcare services, employee assistance programs, counseling services,
et al. Employers can also support their employees by creating an environment of trust

~ 48 ~

and inculcating the organizational values into employees. Thus employers can support
their employees in a number of ways as follows:
By providing feedback
By giving recognition and rewards
By counseling them
By providing emotional support
Sometimes the relationship with the management and the peers becomes the reason
for an employee to leave the organization. The management is sometimes not able to
provide an employee a supportive work culture and environment in terms of personal or
professional relationships. There are times when an employee starts feeling bitterness
towards the management or peers. This bitterness could be due to many reasons. This
decreases employees interest and he becomes de-motivated. It leads to less
satisfaction and eventually attrition.

A supportive work culture helps grow employee

professionally and boosts employee satisfaction. To enhance good professional

relationships at work, the management should keep the following points in mind.
Respect for the individual: Respect for the individual is the must in the organization.
Relationship with the immediate manager: A manger plays the role of a mentor and a
coach. He designs and plans work for each employee. It is his duty to involve the
employee in the processes of the organization. So an organization should hire
managers who can make and maintain good relations with their subordinates.
Relationship with colleagues: Promote team work, not only among teams but in
different departments as well. This will induce competition as well as improve the
relationships among colleagues.
Recruit whole heartedly: An employee should be recruited if there is a proper place and
duties for him to perform. Otherwise hell feel useless and will be dissatisfied.
Employees should know what the organization expects from them and what their
expectation from the organization is. Deliver what is promised. Promote an employee
based culture: The employee should know that the organization is there to support him
at the time of need. Show them that the organization cares and hell show the same for
the organization. An employee based culture may include decision making authority,
availability of resources, open door policy, etc. Individual development: Taking proper

~ 49 ~

care of employees includes acknowledgement to the employees dreams and personal

goals. Create opportunities for their career growth by providing mentorship programs,
certifications, educational courses, etc. Induce loyalty: Organizations should be loyal as
well as they should promote loyalty in the employees too. Try to make the current
employees stay instead of recruiting new ones.
Organization Environment
It is not about managing engagement . It is about managing people. If an organization
manages people well, employee engagement will take care of itself. Organizations
should focus on managing the work environment to make better use of the available
human assets.
People want to work for an organization which provides
Appreciation for the work done
Ample opportunities to grow
A friendly and cooperative environment
A feeling that the organization is second home to the employee
Organization environment includes
Company reputation
Quality of people in the organization
Employee development and career growth
Risk taking
Leading technologies
Types of environment the employee needs in an organization
Learning environment: It includes continuous learning and improvement of the
individual, certifications and provision for higher studies, etc.
Support environment: Organization can provide support in the form of work-life
balance. Work life balance includes:

~ 50 ~

Flexible hours
Dependent care
Alternate work schedules
Work environment: It includes efficient managers, supportive co-workers, challenging
work, involvement in decision-making, clarity of work and responsibilities, and
recognition. Lack or absence of such environment pushes employees to look for new
opportunities. The environment should be such that the employee feels connected to
the organization in every respect.
1. Gallup Research
2. Categories of Employee Engagement.
3. Aspects of Employee Engagement
4. Factors leading to employee Engagement
GALL UP RESEARCH The Gallup study is based on positive Psychology and
emotions. Having a best friend at work or receiving recognition every week makes one
feel cared for and proud respectively. If one wants to keep recreating those positive
emotions, then one should keep coming back to work. Borden-and Build theory is about
evolutionary significance of positive emotions which are better observed over the long
haul. Their effects accumulate and compound overtime and the adaptive benefits are
evident from later, when people face new challenges. The Gallup research has
contributed an additional P to the 4Ps of marketing i.e. product, price, and promotion
place and now people to the mix.
The Gallup defines a great workplace as one where employees were satisfied with their
jobs which help produce positive business outcomes. CATEGORIES OF EMPLOYEE
ENGAGEMENT According to the Gallup there are different types of people- Engaged:
They want to meet and exceed desired expectations.
Keen to know about the company and their place in it.
Perform at consistently high levels using their strengths at work every day.
Work with passion, drive innovation and move their organization forward.
Not Engaged:
Concentrate on tasks rather than the goals and outcomes.

~ 51 ~

Tend to feel their contributions are being overlooked, and their potential is not being
They often feel this way because they dont have productive relationship with their
managers or with their co-workers.
Actively Disengaged:
Cave dwellers. Consistently against Virtually Everything.
Theyre not just unhappy at work; theyre busy acting out their unhappiness.
Sow seeds of negativity at every opportunity. Every day, actively disengaged workers
undetermined what their engaged co-worker accomplish.
As worker increasingly rely on each other to generate product and services, the
problems and tensions that are fostered by actively disengaged workers can cause
great damage to an organizations functioning
Employees and their own psychological makeup and experience.
Employers and their ability to create conditions that promote engagement.
Interaction between employees at all level.
Thus it is organizations responsibility to create environment and culture that is
conducive to this partnership and win-win equation.
Career Development Opportunities to develop their skills and realize their potential.
Clarity in core values of company
Respectful treatment of employees
Empowerment, involvement in decision-making
Image-Perception about quality of the companys product and willingness to
Equal opportunities and fair treatment.
Pay and benefits
Health and safety
Job-satisfaction whether job matches career goals which makes work enjoyable.
Open Communication
Friendliness culture and cooperation.

~ 52 ~

The strong driver is the feeling of being valued.

Effect of Employee Engagement Employee Engagement has a variety of effects.
These effects may be seen in the context of an individuals physical and mental health,
productivity, absenteeism, and turnover.
Physical and Mental Health:
The degree of Employee Engagement affects an individuals physical and mental
health. Since Employee Engagement is a type of mental feeling, its favourableness or
unfavourablesness affects the individual psychologically which ultimately affects his
physical health. For example,
Lawler has pointed out that drug abuse, alcoholism and mental and physical health
result from psychologically harmful jobs. Further, since a job is an important part of life,
Employee Engagement. Influences general life satisfaction. The result is that there is
spillover effect which occurs in both directions between job and life satisfaction.
There are two views about the relationship between Employee Engagement and
productivity: 1. A happy worker is a productive worker, 2. A happy worker is not
necessarily a productive worker. The first view establishes a direct cause-effect
relationship between Employee Engagement and productivity; when Employee







productivity decreases. The basic logic behind this is that a happy worker will put more
efforts for job performance. However, this may not be true in all cases. For example, a
worker having low expectations from his jobs may feel satisfied but he may not put his
efforts more vigorously because of his low expectations from the job. Therefore, this
view does not explain fully the complex relationship between Employee Engagement
and productivity.
The another view:
That is a satisfied worker is not necessarily a productive worker explains the
relationship between Employee Engagement and productivity. Various research studies
also support this view. This relationship may be explained in terms of the operation of
two factors: effect of job performance on satisfaction and organizational expectations
from individuals for job performance.

~ 53 ~

1. Job performance leads to job satisfaction and not the other way round. The basic
factor for this phenomenon is the rewards (a source of satisfaction) attached with
There are two types of rewards-intrinsic and extrinsic. The intrinsic reward stems from
the job itself which may be in the form of growth potential, challenging job, etc. The
satisfaction on such a type of reward may help to increase productivity. The extrinsic
reward is subject to control by management such as salary, bonus, etc. Any increase in
these factors does not hep to increase productivity though these factors increase
Employee Engagement. 2. A happy worker does not necessarily contribute to higher
productivity because he has to operate under certain technological constraints and,
therefore, he cannot go beyond certain output. Further, this constraint affects the
managements expectations from the individual in the form of lower output. Thus, the
work situation is pegged to minimally acceptable level of performance. However, it does
not mean that the Employee Engagement has no impact o productivity. A satisfied
worker may not necessarily lead to increased productivity but a dis-satisfied worker
leads to lower productivity.
Absenteeism refers to the frequency of absence of job holder from the workplace
either unexcused absence due to some avoidable reasons or long absence due to
some unavoidable reasons. It is the former type of absence which is a matter of
concern. This absence is due to lack of satisfaction from the job which produces a lack
of will to work and alienate a worker form work as for as possible. Thus, job
satisfaction is related to absenteeism.
Employee turnover:
Turnover of employees is the rate at which employees leave the organization within a
given period of time. When an individual feels dissatisfaction in the organization, he
tries to overcome this through the various ways of defense mechanism. If he is not able
to do so, he opts to leave the organization. Thus, in general case, employee turnover is
related to Employee Engagement. However, Employee Engagement is not the only
cause of employee turnover, the other cause being better opportunity elsewhere. For
example, in the present context, the rate of turnover of computer software professionals
is very high in India. However, these professionals leave their organizations not simply

~ 54 ~

because they are not satisfied but because of the opportunities offered from other
sources particularly from foreign companies located abroad.
The credit card industry in India has registered an encouraging growth in recent times,
but the usage pattern of credit cards remains a point of concern, those in the industry
say. Seven years back, India had a base of around five lakh credit cards. There has
been a seven-fold increase, with the number of cardholders touching over 38 lakh.
These figures point towards the fact that the credit card industry in India is growing at a
brisk annual rate of 30 per cent and is expected to grow at a similar rate in the coming
years. This fortifies the view that conservative purchasing ideas are giving way to the
big in-thing. But it is the usability that raises doubts. According to a survey by the
Credit Card & Management Consultancy (CCMC), 71 per cent of first time credit card
applicants in the country have expressed the need for advice on appropriate card
selection despite the plethora of cards available in the market. Through this survey it
has come to realise a long felt need of potential and existing cardholders for advice on
suitable selection of a credit cards. The whole idea behind the introduction of the credit
cards was to increase the purchasing capacity of the cardholder. With this in mind, the
foreign banks launched a credit car d blitzkrieg on the Indian customer.


innovations have already begun to show their effect. The Standard Chartered Bank has
seen its credit card base shoot up after the launch of its Global Rupee Card in March
last year.
It has seen the fresh issuance of global card increase by more than one lakh, and the
bank now has a base of more than half a billion. But the real challenge for the banks is
to make the holder spend more on the card. Going by estimates, India has a long way
to be anywhere near the matured markets. The markets like the United States and
England have an average annual card spend of 1,300 and 3,600 dollars respectively.
The credit card players will have to think about simplifying the foreign exchange
transactions. When one uses the card, it is entirely his responsibility to make sure that
exchange controls have been complied with. The banks that issue the cards, have
made it abundantly clear that one has to look out for himself. It is upto him to find out
the facts of regulatory life. The real point of worry is the spending on the credit cards.
According to estimates, the average card spending in India is even less than that in
Indonesia. Those in the credit card business say that per capita credit card spending in
India is about five hundred dollars (Rs 21,500), whereas in Indonesia, it is about 678

~ 55 ~

dollars (Rs 29,154). At present there are over a dozen players in the credit card market
in India, and the fact is the foreign banks are clearly the leaders. The leaders will surely
be identified by the innovations for the card users.
But the alarm has been raised for the banks by the figures that show that while the
average usage in Malaysia is 27 times annually, in India it is only 11 times. Some of the
key factors impacting the cards business in India are limited credit, wide geographical
spread, limited telecommunication infrastructure and emerging regulatory controls. The
other players feel that the card acceptance base in India has to be widened.
Suggestions include credit card usage at petrol pumps and railway bookings.
They also point out that though the cards business has been in the country for long, but
even today the insurance premium cannot be paid by card. Though LIC is talking about
the introduction of this facility to customers, but its turning into reality may take time.
There is talk of widening the card business with new features, but the present scenario
does not paint a positive picture, with many loopholes remaining to be plugged.
Of the twenty million tax payers in India, more than ten per cent of them are
cardholders. Those in the industry point out that this figure is not bad, considering the
fact that, the cards business is still in its initial stages. However, the players feel that the
business has not reached an optimum level to say that they are making money. Even
the largest player in the Indian market does not still have the economies to make the
card business really profitable in India, despite the fact that it has more than one million
credit card holders. Less than two per cent of private consumption spending in India is
done on cards.
While issuing the cards may seem to be easy, the challenge for the banks lies in being
able to manage their portfolios by keeping the delinquency levels at the lowest. Huge
investments in systems and infrastructure are, therefore, a necessity. The increase is
being attributed to new ideas such as round-the-clock functioning of card issuing banks
and pulling out all stops even at a loss, to grab a sizeable share of the expanding pie.
Not to be left behind in this race, even the big brother, the State Bank of India in
association with GE Capital entered the card business.
The spurt in the card business has gathered momentum during the past couple of
years. For instance, the HongKong & Shanghai Banking Corporation (HSBC), was in
the credit cards business since seven years, but from 50,000 card holders in 1997, it
has about three lakh card holders now.

~ 56 ~

Indias fastest growing credit card company - SBI Cards 2.5 lakh credit cards25
cities16 months. The joint venture between Indias largest bank State Bank of India
and one of the worlds leading financial services companies GE Capital, SBI Cards &
Payment Services (SBI Cards) has issued 2.5 lakh credit cards across 25 cities (the
largest distribution network in the payment card industry) within 16 months. Thereby
achieving the target in the fastest period seen in Indias payment card industry.
SBI Cards & Payments Services attributed this success to SBIs enormous brand
equity, and unparalleled retail branch network coupled with GE Capitals payment card
process and technology expertise. He also highlighted Speed, Simplicity and Service
as the key drivers of growth for the SBI Card. Speed Unique and exclusive 14-day
average turnaround time, coupled with availability of the SBI Card in 25 cities in just 16
months. Simplicity Simple application process with minimum documentation. Service
24 hours a day/7 days a week local call access to the SBI Card Helpline across 25
cities. As a result of the focus on the Speed, Simplicity and Service growth platform,
SBI Cards today offers the largest distribution and widest cash advance network for
Indias middle class customers. SBI Cardholders can access cash for emergency
purposes from over 158 SBI branches across 68 locations in India.

In their attempt to increase their market share, credit card companies are opting for
Direct Sales Agents. These DSAs are paid a flat rate against the approved applications.
They are also provided with bonuses either in cash or in kind at regular interval or if
they cross a certain minimum limit. The DSA team comprises aggressive salesmen who
visit different organisations and professionals. They collect filled forms and produce
them to the bank for approval. After cards are issued they also deliver the same to the
The changing trends in the payment systems are global and even in India revolve
around the change in customer needs and the evolution of financial markets.
Traditionally Indians like to pay in cash or at the most avail the services of a bank. As a
result credit card companies had to educate the consumers and spread awareness of

~ 57 ~

the uses of its products. The companies have tried to address this issue through
promotional campaigns:
1. Placing of take away firms of credit card at more than a thousand merchant
2. Appointing of DSAs
3. Using business magazines and news papers for advertisement.
4. Mailing of forms along with contests to professionals and middle management
executives etc.
5. Tapping the get member route
6. Reducing their minimum eligibility criteria and changing income documentation
7. Introduction of photocards.
8. Tying up with durable consumer goods manufacturer ( e.g. Onida, Philips ) to sell
their products.
9. Providing ATM facility to their card holders
10. Travel assistance via telebanking.

Talbros Employee Engagement

Attrition is the biggest problem faced by TALBROSs these days. Attrition rate in
TALBROSs is more than the attrition rate in any other sector. It is very important to
control this attrition rate. Many engagement schemes are applied in TALBROSs for
engagement .
A single tool like training alone is not sufficient for employee engagement . The best
results for employee engagement

can be achieved by applying different tools

strategically. Let us now learn about various strategies which can boost successful
employee engagement in TALBROSs. First know the cost. This is the most basic and
initial part of the engagement process. A good engagement plan needs all the facts.

~ 58 ~

The turnover cost includes cost of selection process, hiring, induction, training, lost
productivity, etc. Hire from known sources like employee referrals through trustworthy
employees. Hire the right people. Engagement starts with recruitment itself. Identify
the characteristics of the people you want to hire who fit in organizations culture. To
retain employees, the people who are productive and are likely to stay for a longer time
should be hired. Focus on employee orientation. It is the first impression that the
employee takes home with him. A proper welcome form the management will
encourage the employee to stay with the organization. Individual development. Develop
career plans for employees. Initiate mentorship and higher education programs to keep
the learning and development moving. Training for managers. An important factor that
keeps the employee in the organization is the manager. Employees need a manager
who manages them well. A manager should be a good listener and motivator. Proper
training should be given to the managers. Find the reason why employees are leaving.
Conduct exit interviews with the employees after 3-4 months of leaving the job. This is
because most of the employees would not like to reveal the true reason of quitting the
job as long as they are in the organization and are associated with the job. The exit
interviews can be conducted online. Then the employees can talk straight-from-theshoulder. Employee recognition. Star of the month, top performer, picture on bulletin
boards, appreciation cards and certificates, etc, increase employee moral and
confidence. This is a great way to retain employees of a call center.
The human resources are the most important assets of an organization. The success or
failure of an organization is largely dependent on the caliber of the people working
therein. Without positive and creative contributions from people, organizations cannot
progress and prosper. In order to achieve the goals or the activities of an organization,
therefore, they need to recruit people with requisite skills, qualifications and experience.
While doing so, they have to keep the present as well as the future requirements of the
organization in mind. Recruitment is distinct from Employment and Selection. Once the
required number and kind of human resources are determined, the management has to
find the places where the required human resources are/will be available and also find
the means of attracting them towards the organization before selecting suitable
candidates for jobs. All this process is generally known as recruitment. Some people
use the term Recruitment for employment. These two are not one and the same.
Recruitment is only one of the steps in the entire employment process. Some others

~ 59 ~

use the term recruitment for selection. These are not the same either. Technically
speaking, the function of recruitment precedes the selection function and it includes
only finding, developing the sources of prospective employees and attracting them to
apply for jobs in an organization, whereas the selection is the process of finding out the
most suitable candidate to the job out of the candidates attracted (i.e.,
recruited).Formal definition of recruitment would give clear cut idea about the function
of recruitment.
Recruitment is defined as, a process to discover the sources of manpower to meet the
requirements of the staffing schedule and to employ effective measures for attracting
that manpower in adequate numbers to facilitate effective selection of an efficient
workforce. Edwin B. Flippo defined recruitment as the process of searching for
prospective employees and stimulating them to apply for jobs in the organization.

~ 60 ~

Importance Of Employee Engagement

Now that so much is being done by organizations to retain its employees, why is
engagement so important? Is it just to reduce the turnover costs? Well, the answer is a
definite no. Its not only the cost incurred by a company that emphasizes the need of
retaining employees but also the need to retain talented employees from getting
poached. The process of employee engagement will benefit an organization in the
following ways:
1. The Cost of Turnover: The cost of employee turnover adds hundreds of thousands of
money to a company's expenses. While it is difficult to fully calculate the cost of
turnover (including hiring costs, training costs and productivity loss), industry experts
often quote 25% of the average employee salary as a conservative estimate.
Loss of Company Knowledge: When an employee leaves, he takes with him valuable
knowledge about the company, customers, current projects and past history
(sometimes to competitors). Often much time and money has been spent on the
employee in expectation of a future return. When the employee leaves, the investment
is not realized. Interruption of Customer Service: Customers and clients do business
with a company in part because of the people. Relationships are developed that
encourage continued sponsorship of the business. When an employee leaves, the
relationships that employee built for the company are severed, which could lead to
potential customer loss.

Turnover leads to more turnovers: When an employee

terminates, the effect is felt throughout the organization. Co-workers are often required
to pick up the slack. The unspoken negativity often intensifies for the remaining staff.
Goodwill of the company: The goodwill of a company is maintained when the attrition
rates are low. Higher engagement

rates motivate potential employees to join the

organization. Regaining efficiency: If an employee resigns, then good amount of time is

lost in hiring a new employee and then training him/her and this goes to the loss of the

~ 61 ~

company directly which many a times goes unnoticed. And even after this you cannot
assure us of the same efficiency from the new employee

What makes employee leave

Communication mediums

There are 3 categories of employees:

A: Who will leave their current employer in 3 years of their employment

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B: Who have a probability of leaving their current employer in next 3 years

C: Who will stay with their current employer in the next 3 years
Category A: These are the employees who lack communication with their employers.
Category C: These are the employees who have proper, well structured communication
with their employers.
Communication is also the way to win the employees trust in the organization.
Employees trust the employers who are friendly and open to them. This trust leads to
employee loyalty and finally engagement . Employers also feel that the immediate
supervisors are the most authenticated and trusted source of information for them. So
the organizations should hire managers who are active communicators.

Employees do not leave an organization without any significant reason. There are
certain circumstances that lead to their leaving the organization. The most common
reasons can be: Job is not what the employee expected to be: Sometimes the job
responsibilities dont come out to be same as expected by the candidates. Unexpected
job responsibilities lead to job dissatisfaction. Job and person mismatch: A candidate
may be fit to do a certain type of job which matches his personality. If he is given a job
which mismatches his personality, then he wont be able to perform it well and will try to
find out reasons to leave the job. No growth opportunities: No or less learning and
growth opportunities in the current job will make candidates job and career stagnant.
Lack of appreciation: If the work is not appreciated by the supervisor, the employee
feels de-motivated and loses interest in job.Lack of trust and support in coworkers,
seniors and management: Trust is the most important factor that is required for an
individual to stay in the job. Non-supportive coworkers, seniors and management can
make office environment unfriendly and difficult to work in. Stress from overwork and
work life imbalance: Job stress can lead to work life imbalance which ultimately many
times lead to employee leaving the organization. Compensation: Better compensation
packages being offered by other companies may attract employees towards
themselves. New job offer: An attractive job offer which an employee thinks is good for
him with respect to job responsibility, compensation, growth and learning etc. can lead
an employee to leave the organization.

~ 63 ~

Employee Engagement Strategies

~ 64 ~

The basic practices which should be kept in mind in the employee engagement
strategies are:
1. Hire the right people in the first place.
2. Empower the employees: Give the employees the authority to get things done.
3. Make employees realize that they are the most valuable asset of the organization.
4. Have faith in them, trust them and respect them.
5. Provide them information and knowledge.
6. Keep providing them feedback on their performance.

~ 65 ~

7. Recognize and appreciate their achievements.

8. Keep their morale high.
9. Create an environment where the employees want to work and have fun.
These practices can be categorized in 3 levels: Low, medium and high level.

Engagement Myths
The process of engagement is not as easy at it seems. There are so many tactics and
strategies used in engagement of employees by the organizations. The basic purpose
of these strategies should be to increase employee satisfaction, boost employee

~ 66 ~

morale hence achieve engagement . But some times these strategies are not used
properly or even worse, wrong strategies are used. Because of which these strategies
fail to achieve the desired results.There are many myths related to the employee
engagement process. These myths exist because the strategies being used are either
wrong or are being used from a long time. These myths prevent the employer from
successfully implementing the engagement strategies. Let us learn about some of
these myths.
Employees leave an organization for more pay: Money may be the motivating factor for
some but for many people it is not the most important factor. Money matters more to
the low-income-employees for whom its a survival issue. Money can make an
employee stay in an organization but not for long. The factors more important than
money are job satisfaction, job responsibilities, and individuals skill development. The
employers should understand this and work out some other ways to make employees
feel satisfied. When employees leave, management tries to retain them by offering
more money. But instead they should try to figure out the main reason behind it. Issues
that are mainly the cause of dissatisfaction are organizations policies and procedures,
working conditions, relationship with the supervisor and salary, etc. For such
employees, achievement, growth, respect, recognition, is the main concern.
Incentives can increase productivity: Incentives can surely increase productivity but not
for long term. Cash incentives, volume work targets and speed awards are old
management beliefs. They can generate work speedily and in volumes but cant boost
employee commitment. Rather speed can hamper the quality of work produced. What
really glues employees to their work and organization is quality work, meaningful
responsibilities, recognition, respect, growth opportunities and friendly supervisors.
Employees run away from responsibilities: It is a myth that employees run from
responsibilities. In-fact employees feel more responsible if they are given extra
responsibilities apart from their regular job. Employees look for variety, greater control
on the processes and authority to take decisions in their present job. They want
opportunities to learn and grow. Management can assign extra responsibilities to their
employees and appreciate them on the completion of these tasks. This will induce a
sense of pride in the employee and will improve the relationship between the
management and the employee.

~ 67 ~

Loyalty is a thing of the past: Employees can be loyal but what they need is an
employer for whom they can be loyal. There is no reason for the employee to hop jobs
if hes satisfied with the employer.
Taking measures to increase employee satisfaction will be expensive for the
organizations: The things actually required to improve employee satisfaction like
respect, career growth and development, appreciation, etc. cant be bought. They are
free of cost. An employer or management that reacts well to the employees ideas and
suggestions is enough for the employees to be retained.
Managing employee performance is an integral part of the work that all managers and
rating officials perform throughout the year. It is as important as managing financial
resources and program outcomes because employee performance, or the lack thereof,
has a profound effect on both the financial and program components of any
organization. The Department of the Interiors performance management policy is
designed to document the expectations of individual and organizational performance,
provide a meaningful process by which employees can be rewarded for noteworthy









individual/organizational performance as necessary. To accomplish these objectives,

managers need to identify organizational goals to be accomplished, communicate
individual and organizational goals to employees that support the overall strategic
mission and Government Performance and Results Act (GPRA) goals of the
Department, monitor and evaluate employee performance, and use performance as a
basis for appropriate personnel actions, including rewarding noteworthy performance
and taking action to improve less than successful performance. The Office of Personnel
Management defines performance management as the systematic process of:
planning work and setting expectations continually monitoring performance
developing the capacity to perform periodically rating performance in a summary
fashion; and rewarding good performance
Performance appraisal is the process of obtaining, analyzing and recording information
about the relative worth of an employee. The focus of the performance appraisal is
measuring and improving the actual performance of the employee and also the future
potential of the employee. Its aim is to measure what an employee does. According to
Flippo, a prominent personality in the field of Human resources, performance appraisal
is the systematic, periodic and an impartial rating of an employees excellence in the

~ 68 ~

matters pertaining to his present job and his potential for a better job." Performance
appraisal is a systematic way of reviewing and assessing the performance of an
employee during a given period of time and planning for his future.
It is a powerful tool to calibrate, refine and reward the performance of the employee. It
helps to analyze his achievements and evaluate his contribution towards the
achievements of the overall organizational goals. By focusing the attention on
performance, performance appraisal goes to the heart of personnel management and
reflects the managements interest in the progress of the employees.


~ 69 ~

Performance appraisal is a part of career development. The latest mantra being

followed by organizations across the world being get paid according to what you
contribute the focus of the organizations is turning to performance management and
specifically to individual performance. Performance appraisal helps to rate the
performance of the employees and evaluate their contribution towards the
organizational goals. Performance appraisal leads to the recognition of the work done
by the employees, many a times by the means of rewards and appreciation etc. It plays
the role of the link between the organization and the employees personal career goals.
Potential appraisal, a part of Performance appraisal, helps to identify the hidden talents
and potential of the individuals. Identifying these potential talents can help in preparing
the individuals for higher responsibilities and positions in the future. The performance
appraisal process in itself is developmental in nature.
Performance appraisal is also closely linked to other HR processes like helps to identify
the training and development needs, promotions, demotions, Appraisals in the
compensation etc. A feedback communicated in a positive manner goes a long way to
motivate the employees and helps to identify individual career developmental plans.

~ 70 ~

Secondary Data:
I will collect the secondary data from the Internet, Book and from the library.
I will collect the primary data from the employees of the company and also include HR
people to understand the function.

Tool Used:

Bar Graph, Pie Diagram , ms-excel ,mean, sd, qd, md, frequency distibution


Random Sampling chosen by the gathering of data

Limitation (if any)

This study involves a number of problem and short comings during the conduct of the
study which are given below:
1. They are unwilling to provide sufficient primary data to us to prepare the report.


1) Talented people need to be constantly challenged and stretched.

~ 71 ~

4th Qtr; 9%
3rd Qtr; 10%

1st Qtr; 59%

2nd Qtr; 23%

In the above pie chart it is clearly shown that on the given sample size they are
generally Agree with the question but it is very difficult to make any assumption that in
all organizations think like above, it may be different. So, on the basis of sample size
we can see that there is very tiny difference between Agree and strongly agree. So we
are concluding that statement with Agree.

2) Two ingredients essential to enhance a talent are stimulation and freedom to

explore and initiate a passion

~ 72 ~

Strongly Disagree; 5%

Neutral; 5%

Disagree; 10%

Strongly Agree; 55%

Agree; 25%

Here we can easily see that maximum number of people are Strongly agree with two
essential ingredients to enhance a talent are 55% and again it is depend upon
organization to organization but according to our sample there are very less amount of
people are Neutral, Strongly Disagree and Disagree, majority is in the favor of those
essential ingredients. So, we are concluding it with organization has to support to these
ingredients to enhance the talent.

3) Deep interest is the most important tool to encourage a talent and prevent them
from discouragement.

~ 73 ~

Strongly Agree; 8%
Neutral; 25%

Agree; 12%

Strongly Disagree; 15%

Disagree; 40%

Above pie chart is clearly show that Deep interest with employee is not a
important tool to encourage their talent but accept this there are so many
another tools to encourage their talent. According to interest of responded
towards this question was not a likely good; they think that Deep interest may be
kill the hard work of employee. So, we can conclude this without think beyond.

4) Diversity in talents and personalities means a blend of cross cultured talents and
the best of the productivity.

~ 74 ~

Nuetral; 5%
Disagree; 15%
Strongly Agree; 35%

Strongly Disagree; 20%

Agree; 25%

According to our survey and some comments by the responded, they said that meaning
of talent and personality of employee is being intermingled of cross culture talents and
the productivity. They are believed that both are the same but synonyms of each other.
Our sample are strongly agree with that statement and very few are neutral about that,
neutrality is shows that they are unaware about the intermingle. So, we can conclude
with this in an organization Diversity in talent and personalitys means a blend of cross
culture talents and the best of the productivity.

5) Employing best practices leads optimum productivity.

~ 75 ~

Disagree; 10%
Strongly Disagree; 5%

Strongly Agree; 30%

Agree; 55%

Of course employee best work and hard work is lead to the organization optimum
productivity but on the other hand we know that without proper guidance no one can
perform well. So it is say that optimum productivity is not only generated by employee
but behind this there are some another hand to support it like managers and Board of
Directors. But again according to our survey it is clear that around 55% people are
strongly agree with the employee hard work or give the support to the employee and
anothers 30% are give support to the employee but not 100%.and amount of neutral
are 0% that means everybody in any organization are know that who gives a best.

~ 76 ~

6) The term Human Resource Management will be supplanted by Employee

engagement, signifying that Employee engagement is more of retaining employees
than acquiring them.

Neutral ; 10% Strongly Agree; 5%

Agree; 15%

Disagree; 25%

Strongly Disagree; 45%

Our survey shows that strongly disagree percentage are very huge and also on the
other hand Disagree percentage is not tolerable. Around 70% are disagree with that
Employee engagement is more retaining employee than acquiring them.

~ 77 ~

7 Knowledge Management is being used to pass on the expertise to juniors.

Neutral; 5%
Disagree; 8%
Strongly Disagree; 5%
Strongly Agree; 47%

Agree; 35%

According to our knowledge we knew that Knowledge Management is the process to

pass the expertise to new employee but still we had to believe over that because
teachers taught us and Books tells to us but after that research we came to know
reality, and this time we are not getting insist by any theory but here we have done
practical and know that from where teachers and books tells to us that Knowledge
Management is process to pass knowledge to the junior. And above pie chart is nothing
but proof of that by sample a vast majority of people are strongly to say that Knowledge
Management is being used to pass on the expertise to juniors.

8) How often leadership development program takes place in an organization?

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Every week; 5%
Every Month; 10%

Every 6 Months; 45%

Every 3 Months; 10%

Quarter of year; 30%

Here we saw during the research all organization has different thinking towards the
Leadership Development program. Before this research we did not know and even we
had not any idea about duration of that program but know really specially after
completing the this research we came to know about as more as about the Leadership
Development program and also at what time they have need of or at what time
managers came to think about this program should to be given to the employee of that
organization. Here we can see in pie chart 45% organization says that Leadership
Development program is should be given every 6 months or two times in the year but
interval should be same. 30% organization says that every 4 months in the year is
necessary to give leadership development program to juniors.

9) Talent in the organization is mostly nurtured

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Yes; 35%

No; 65%

Actually our sample has little bit confliction or can say that their answers are blended at
some point. Here a vast majority of sample said that No talent is never been nurtured it
is depend upon person to person we can only say that we are just a pathfinder not
more than this, but talent is stay in mind of the person we cannot nurture it. On the
other hand 35% of the sample are agreeing with that and also say that we are also a
pathfinder as well as foster.

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10)How often training programs are being conducted in the organization?

When new technology is adopted; 20%

A year; 30%

6 months; 5%
With new commers ; 45%

Her we can see that very few people are state that training should be give in a half year
but majority i.e. 45% people says that it should be give when new employees are join
the organization. And another majority i.e. 30% people are stated that in a year one at
least one time training should to be give to the all active employees. And another
majority stated that whenever new technology is adopted by the organization training is
become necessity there.

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Employee engagement is all about putting the right people in the right
The organization will be successful, if the jobs are being handled by the right
kind of peoples.
Employee engagement is much more than succession management.
The succession planning is obviously important, our belief is that Employee
engagement must encompass a far broader portion of the employee population.
One major reason for thinking more expansively is the reality that value creation
does not come from senior leadership alone. The ability of an organization to
compete depends upon the performance of all its key Talent.

Start with the End in mind- the current and future needs.
Effective Employee engagement requires that the business goals and strategies
drive the quality and quantity of the Talent needed.

Applying a system approach to Personnel approach.

Aligned talent systems can be used to validate and reinforce each other. For
Example, performance appraisal data can be used to validate the impact of
training Program or selection system.
Finally, integrated systems lead to a reduction in the time devoted to
communication, Training, and administration, as all employees and leaders are
using a single, common Vocabulary for key roles or positions.

First, let us look at some of the reasons for the importance of Employee engagement.

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Globalization: Now for any jobseeker the whole world is the potential place to find
employment. One can know the opportunities available in any part of the world easily
and the number of talent seekers has also increased.
Increased Competition: Increased competition in the market place has necessitated
the need for consistently good performance on the side of organizations. These have
made the companies to put in all efforts to hire and retain the best talent in the
respective field of operation.
Increasing Knowledge: The knowledge era has necessitated the retaining of those
talents which have the ability to assimilate new technologies and knowledge, which are
growing at a pace never seen before.

The Challenge
The challenge of Employee engagement has two facets to it. First is how to find new
people and second is how to retain the present workforce. Each of the challenges has
to be tackled in the most efficient way possible so that the organization can achieve its
The First Challenge - Where to find new talent?
All the organizations are finding loads of business opportunities and consequently, their
revenues are growing at a rapid pace. The increasing business opportunities has
necessitated that these organizations go in for massive recruitment. But, the question is
where to find the best talent which is able to fit the job description and also adjust to the
organizations values and norms. If we scan the environment, we find there is a
shortage of skilled workforce that can be employed.
Some of the possible reasons that have led to the shortage are: Demographic Constraints: This is a common problem faced by many of the
developed countries, where a large chunk of its population is nearing the age of
retirement or is over 50 years. USA, Germany and Japan are facing the same problem.

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All these countries will see a decline in their workforce and talent. In the coming years,
they will see a great shortage in their skilled professionals.
Existing Educational System: The graduates and the postgraduates that are being
churned out of the universities are found to be ill-equipped to handle the challenges of
the workplace. They are mostly equipped with only the theoretical aspects of the issues
and lack the application part. The educational system is faulty and does not take
industry needs into consideration, resulting in a mismatch between industry
requirements and educational preparation.
Cost Factor: Recruiting new employees is becoming tougher and tougher in the
developing countries, where the HR department has to sort out thousands of
applications for a handful of jobs. Finding right person for the right job becomes a very
difficult process. It also involves very high cost to conduct the recruitment and selection
process for such a large population of applicants.
Attracting the Best Talent: This is another challenge. As was the case in the past, the
best available talent is not just motivated by the name and fame of the organization.
Not any more. They have a new set of motivators like - challenging work, conducive
work environment and freedom from bureaucratic structure.
The Second Challenge - How to retain the existing employees?
Gone are the days when a person would join an organization in his mid-20s and would
work till his retirement in the late-50s. Today the young professionals hop jobs,
especially during the first 4-5 years of their work life. Though the Indian service industry
is basking in the light of outsourced jobs from the developed countries, they also
cannot ignore the fact that the BPO industry is also facing one of the highest attrition
rates, infact never heard before in India, of around 35%.
It is a fact that its the people that add value to organizations. It is also a fact that
humans are a restless species who, unlike the immovable Banyan Tree, cannot stay
rooted in one place. People need to move on for one reason or another, and the
organization stands to lose. Let us look at some of the reasons behind the massive
attrition rates: -

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Gap between organizational values and goals and the personal values and goals is one
of the major reasons of the attrition rates. If they go parallel, there is no way both would
be satisfied and inevitably, the organization would lose out on a talented employee.

Working environment is another major factor. Employees in the knowledge era

demand creative and a democratic work environment. Failure on the part of the
management to provide such an environment will result in a talented employee leaving
the organization.

The competitive world has made sure that there is high work pressure on the

employees of any organization. This has led to psychological problems like stress, and
in extreme situations, total burnouts. It also leads to other health related problems.

Movement for higher salary is also common among the younger professionals.

There is no shortage for organizations who are looking for talented employees and who
are ready to shell out a hefty salary for a talented person. Other lures like better job
opportunities, higher posts and overseas assignments are also major factors in the
attrition rates.
Not taking proper care during the recruitment and selection process and not taking
proper care to fit the right person to the right job also breeds dissatisfaction among the
Bad or opaque policies from management on issues of succession planning and
promotion, appointments for senior positions also is a major factor which makes the
organization lose out on the talented employees.
The professionals have different aspirations at different times of their career. During
the initial years, they have good salary and foreign assignments. Next on the list is
working on cutting edge technology. More seasoned professionals look for learning
opportunities. So employees tend to move to those organizations which provide them
with means to fulfill their aspirations.
Retaining the present employees is of the foremost importance to the organizations
because; the company would have already incurred heavy costs in the form of training

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and development. Now if the organization has to look for a replacement for the
employee who has left, it involves a lot of costs like - hiring costs, training costs and the
induction costs.
some time for the new employee to adjust to the new work environment. During this
time the productivity of the employee will be low. The HR department will have to fit the
new employee into a proper role in the organization. Apart from causing the company a
monetary loss and breaks in their day-to-day operations, attrition contributes to
knowledge transfer, which is a great loss and adversely affects business.

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It is now proved beyond doubt that, in the era of technology and knowledge, talent is in
the driving seat. One who possesses it dictates. Not he who pays for it. It is the
demand of the time that business leaders elevate management of talent to a burning
corporate priority. It is not a walk in the park for the talent market. Quality people are no
longer available in plenty, easily replaceable and relatively inexpensive.
These are some of the measures that should be taken into account to hire and retain
talent in the organization, to be efficient and competitive in this highly competitive world:
Hire the Right People: Proper care must be taken while hiring the people itself. It
would be beneficial for an organization to recruit young people and nurture them, than
to substitute by hiring from other organizations. Questions to be asked at this stage are:
Whether the person has the requisite skills needed for the job? Whether the person's
values and goals match with those of organization's? In short, care must be taken to fit
the right person to the right job.
Keep the Promises: Good talent cannot be motivated by fake platitudes, half-truths
and broken promises. Unfulfilled expectations can breed dissatisfaction among the
employees and make them either leave the organization or work below their productive
level. Promises made during the hiring stage must be kept to build loyalty among the
employees, so that they are satisfied and work to their fullest capability.
Good Working Environment: It has to be accepted by the organizations that highly
talented persons make their own rules. They have to be provided with a democratic and
a stimulating work environment. The organizational rules must be flexible enough to
provide them with freedom to carry out their part of task to their liking, as long as the
task is achieved. Opportunities should also be provided to the employees to achieve
their personal goals.
Recognition of Merit: It is highly motivating for any person if his talent is recognized
and is suitably rewarded. One way is providing them with salary commensurate with

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their performance. Promotions and incentives based on performance are another way
of doing it. Another way is by providing them with challenging projects. This will achieve
two objectives - it makes employee feel that he is considered important (a highly
motivating factor) and gets the work done in a efficient manner and brings out the best
in the employee.
Providing Learning Opportunities: Employees must be provided with continuous
learning opportunities on and off work field through management development
programmes and distance learning programmes. This will also benefit the organization
in the form of highly talented workforce.
Shielding from High Work Pressure: If an organization has to make the most of the
available talent, they should be provided with adequate time to relax, so that they can
di-stress themselves. It is very important to provide them with holidays and allexpenses-paid trips, so that they can come back refreshed to work and with increased
energy. They must also be encouraged to pursue their interests which are also a good
way of reducing work environment stress. Recreation clubs, entertain programmes, fun
activities with in the work area will also reduce the work life stress of the employees
and develop camaraderie among the workers and result in a good working
Highly demanding business environment makes it imperative for the organizations to
build competence in the form of superior intellectual capital. It is agreed by almost all
CEOs of big companies that it is the human resource - a talented one - that can provide
them competitiveness in the long run. duty of the HR department to nurture a brigade of
talented workforce, which can win them the war in the business field. The talent has to
be spotted, carefully nurtured and most importantly preserved. Right person for the
right job - is the new mantra.

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Employee engagement implies recognizing a person's inherent skills, traits, personality

and offering him a matching job. Every person has a unique talent that suits a particular
job profile and any other position will cause discomfort. It is the job of the Management,
particularly the HR Department, to place candidates with prudence and caution. A
wrong fit will result in further hiring, re-training and other wasteful activities.
Employee engagement is beneficial to both the organization and the employees. The
organization benefits from: Increased productivity and capability; a better linkage
between individuals' efforts and business goals; commitment of valued employees;
reduced turnover; increased bench strength and a better fit between people's jobs and









development; increased knowledge about and contribution to company goals;

sustained motivation and job satisfaction.
In these days of highly competitive world, where change is the only constant factor, it is
important for an organization to develop the most important resource of all - the Human
Resource. In this globalized world, it is only the Human Resource that can provide an
organization the competitive edge because under the new trade agreements,
technology can be easily transferred from one country to another and there is no dearth
for sources of cheap finance. But it is the talented workforce that is very hard to find.
The biggest problem is how to retain the present workforce and stop them from

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Search Engine : Google

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