Business Research Project

Can the use of Motivational theories

reduce MIND’s Attrition rate in order to
increase their labor productivity?

Name: Catherina Dass

Session: May 2009
Research Proposal: 292 Words
Executive Summary: 194 Words
Essay: 1932 Words
Session Number: 001121 - 016
Candidate Number: cqt057

Acknowledgements

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Ack

I owe my gratitude to the people mentioned below for helping me finish

my Business and Management IA with much help and support.

Mrs. Priya Anand: Department of Business and Management

Mr Manohar Patel: Assistant Vice President (MIND)

Mr Vivek Avasthi: Director (MSSL)

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Contents Page

Content Page No
Title Page 1
Acknowledgements 2
Contents Page 3
Executive Summary 4
Introduction 5.. 7
1.1 Research Proposal 5
1.2 Rationale for Study 5
1.3 Theoretical Framework 5
1.4 Methodology 5
1.5 Action Plan 6
1.6 Possible Issues 6
1.7 Company Overview 7
1.8 Problem 7
1.9 Global It Scenario 8
1.10 Major Factors Contributing to Attrition 8
2.0 Result and Discussion 9.. 15
2.1 SWOT Analysis 9
2.2 Findings from Questionaiire 10.. 12
2.3 Communication 13
2.4 Leadership 13
2.5 Lack of Motivation 14
2.6 Delegation 14
3.0 Conclusion 15
3.1 Step by Step Conclusion 15
3.1.1 Communication 15
3.1.2 Leadership 15
3.1.3 Lack of motivation 15
3.1.4 Delegation 15
4.0 Recommendations 15.. 16
4.1 Communication 15
4.2 Leadership 16
4.3 Lack of motivation 16
4.4 Delegation 17
5.0 Bibliography 17
6.0 Appendix 18
6.1 Interview with Senior Management 18 - 19
6.2 Questionnaire 19 - 20

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Executive Summary

Mind the IT based company with the help of motivational theories;

leadership concepts along with a new communication system will be able
to achieve its goals. They will see their attrition rate reducing to a more
acceptable level. With the use of the above mentioned techniques mind
will be able to solve its problems with its employees, leaders and the
current attrition rate which is 22%. Mind employs over 400 people, and
with 22 % of the personnel leavening each year, the cost to retrain new
employees is very high as it has to be repeated each year.

With the use of a SWOT, Interviews with the management and a

questionnaire given to the employees, I was able to determine the
strengths and weaknesses of MIND.

Mind is advised to:

1. Introduce Monetary methods of rewards instead of non
monetary methods
2. Introduce Groups and teams as a method of working on a
project
3. Begin the introduction of a new communication system
4. Leaders should keep a watch on how much work they are
delegating to the employees and should appoint group leaders
to make the communication easier.

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1.0 Introduction

1.1 Research Proposal

Research Question:

Can the use of Motivational theories reduce MIND’s Attrition rate

in order to increase their labor productivity?

1.2 Rationale for Study: As a new company in the IT industry MIND has
a small workforce with a high attrition rate of 22 % that is the reason why
I would like to find out how a company retain its employees using
Motivational Theories. I will analyze the company’s workforce and use my
business knowledge to identify where the motivation should come from
and suggest a framework of the motivational theory for the company to
use.

1.3 Theoretical framework

Analytical Tools

a. SWOT
b. Motivational Theories
c. Leadership Style theories

1.4 Methodology

Primary Data

1. Interview: Interview with the Director of the company and the

Program manager will give an understanding about the company’s
internal environment.
2. Questionnaires: Questionnaires will be given to the top level
management and the employees to gain data about their satisfaction at
the workplace and management techniques.

Secondary Data

1. The Company Website: This will provide the necessary background

information about the company.

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1.5 Action Plan

1. 18th October – 20th October 2006 – Background Information

Collection
2. 8th November – Meeting with the Program Manager
3. 9th November – Meeting with the Director
4. 13th November – Analysis of collected data and preparation of
Relevant Questionnaire
5. 6th December – Writing of first Draft
6. 10th January – Write Conclusion and recommendation
7. 13th January – Submission of Second Draft
8. 18th January – Submission of Final draft

1.6 Possible Issues/Problems

1. Directors do not have time for long discussions

2. The managers usually don’t accept their mistakes and are hesitant
to talk about them to a student
3. The managers do not give out correct data at times

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1.7 Company Overview

Motherson Sumi INfotech and Design (MIND) is a Joint Venture

between Motherson Sumi Systems Ltd. and Sumitomo Wiring
Systems Ltd. Japan.

MIND a SEI CMM Level 5 Company, is an IT services provider

specialising in Engineering Design & Software Development owned
by Sumitomo wiring Systems Ltd. Japan

MIND delivers solutions using a distributed model in which key

project activities can be distributed at multiple locations and yet
synchronised seamlessly. MIND serves clients in more than 20
countries around the world and has presence in all of the key
markets that include: India, Europe, USA and Japan.

MIND is technology partner with Microsoft (Gold Partner for E-

Commerce Solutions), Oracle and IBM.

1.8 The Problem

Attrition has been a biggest challenge in the IT Industry. Managing

attrition in the industry is of utmost importance because skilled
professionals form the crux of this knowledge-intensive industry.

Attrition
Company Manpower Company Manpower Attrition %
%
TCS 78028 11% Birlasoft 3500 17%
Infosys 66150 13% HCL 6500 31%
Satyam 24500 19% R Systems 1000 30%
JK Techno
1000 25%
soft
Nucleus 1000 26%
MIND 440 22%

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1.9 Global IT Scenario

 People centric industry

 Candidates opting for branded organizations
 Plenty of opportunities available – leading to low retention
 Fast changing technologies
 Objectivity in evaluation of the skills
 Flexi hours
 Demand supply gap still exists in the IT manpower market

1.10 Major Factors Contributing to Attrition

 Switching to New Technology / Skill Development

 Switching to New Domain
 Higher Salaries
 Higher Brand
 Overseas Opportunity
 Others (personal/relocation/moving to home town, higher
education etc.)

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2.0 Results and Discussion of Collected Data

2.1 SWOT Analysis

Strengths’:

• Multi-lingual language development: Mind comprises of

expertise in developing software applications for a number
of countries in various languages.

• Relationships with software OEMs: They have a good IT

background as they have relationships with OEMS like IBM ,
Oracle and Microsoft.

• The Quality Process’s: They have a tested quality

management system in place. They have been assessed at
CMM (Capability Maturity Model) Level 5.

Weaknesses’:

• They have a smaller workforce compared to their

competitors and can handle only a few projects at a time.

• A few underestimated projects in the past , causing a lack

of motivation and nervousness.

Opportunities’:

• The corporate background: The Company is owned by

Sumitomo wiring systems and Sumi Motherson group; both
these companies have a strong financial background.

• Off shoring Specialization: MIND’s main business is abroad;

more than 90 % of the business is off shore. They have
experience in delivering complex services to their clients
across the globe. They serve at 18 different locations
across the globe.

• Opportunities from the parent company: Customers to the

parent companies Sumitomo Wiring Systems and the Sumi
Motherson Group are also offered MIND’s software
solutions.

Threats’:

• High attrition rate of 22 %

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 • Major competition in the IT industry

2.2 Findings from the questionnaire

Awareness of Attrition at Mind

Awareness of Attrition

No
10%

Yes
90%

Satisfaction with the Communication Network

Satisfaction with the Communication Network

Yes
15%
Partially
40%

No
45%

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Satisfaction with Current Leadership

Satisfaction with Current leadership

Yes
No
44%
49%

Partially
7%

Levels of Motivation Felt by Employees

Level Of Motivation

High
34%

Low
61% Medium
5%

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Salary Satisfaction Levels

Salary Satisfaction Levels

No
17%
Partially
6%

Yes
77%

Job Satisfaction Levels

Job Satisfaction Levels

Yes
No
15%
26%

Partially
59%

Work Delegation Satisfaction Levels

Delegation Satisfaction

Yes
5% Partially
23%

No
72%

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From the above data and interviews the following
conclusions could be made about the four most important
factors regarding attrition

1. Communication
2. Leadership
3. Motivation
4. Delegation

2.3 Communication

With only 40 % of the workforce being satisfied with the

communication system, employees feel as if they are not informed
about what is happening to the company they are working for. A
problem like this can cause problems especially in an IT company,
where team work is of the utmost importance. If there is lack of
communication within the company, this can result in

1. Major Mistakes
2. Confusion of Objectives
3. Conflicts
4. Failure to reach deadlines

The above four listed results are something that the company
cannot afford to make. As an IT company, time is of the essence and
a job well done is the job that is appreciated. This can also result in
conflict between the leadership and the workforce, as the work that
needs to be done is not communicated properly within the
company. The important information is lost while being sent to the
person who has to carry out the orders.

Criticism is not accepted positively as people working in the

company are highly skilled and know that their talent can be hired
as soon as it is available. The consequence of not completing a job
properly is redundancy.
This can be summarized by the fact that there is no formal
communication network. It was felt that with a small workforce,
there would be no need for a formal method of communication.

2.4 Leadership

From the conducted interview, it can be noticed that the leaders of

the business, even though in a democratic style of leadership focus
their techniques on autocratic methods of direct orders and no
feedback. Employees are kept in the dark when it comes to deciding
which project has to be undertaken. This results in lack of
motivation. Employees don’t feel as if they are a part of the
business; they feel as if they are just being told what to do. This is

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mainly due to the fact that the business is relatively new and all the
needed procedures are not in place. The leaders have immense
pressure from the owners and shareholders to perform, or stock will
be lost. Due to that, the leaders need to make decisions fast and
they can’t make mistakes. This results in the employees being told
what to do directly without any consultation.

There are no group leaders present and the employees work as

equals in a project, they do not report to anyone but the leader’s
they. This causes delays, unnecessary mistakes during the project
duration and lack of planning. Due to the above mentioned reasons
the employees feel the lack of motivation and a sense of direction
and trust as they are just following orders.

2.5 Lack of Motivation

MIND believes that monetary rewards are not always needed to

motivate employees. This is not true, as non monetary rewards do
not always return job satisfaction. Employees think, once they have
gained the non monetary reward they don’t want the same kind of
reward anymore.

According to Maslow’s Hierarchy of needs and Herzberg’s Hygiene

Theory, there are several things that need to be covered to keep the
employees motivated. In MIND’s case, most employees do not move
to the third level of Maslow’s Hierarchy of needs. This is supported
by the fact that, the environment that the employees work in is void
of proper leadership, trust and relations between the employer and
the employees.

When compared to Herzberg’s Hygiene theory many factors such as

1. Relation between employees

2. Status of the employees
3. Relationship with leaders
4. Working environment

These factors are below the employee satisfaction levels as 60 %

are partially satisfied with their job. These are very important
factors that need to be corrected.

2.6 Delegation

72 % of the workforce is not satisfied with the Delegated work, they

feel as if they are overworked and certain people get more work
than other people. This intensifies the problem that the employees
already feel. The managers, have to be careful with the amount of
work they delegate to the employees and to which employee they
are giving this work to. Making groups and enforcing a single task to

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the whole group equally divides the work at hand. Due to the fact
that there were projects that were not completed properly, the
managers had to give more work to the employees that worked
harder, but this created the inequality that the employees faced.

3.0 Conclusion

3.1 Steps By Step Conclusion

3.1.1 Communication

Due to the lack of a formal communication network, the employees

feel as if they have no idea what is going on in the business. This
causes lack of motivation and also creates problems for the leaders
as they have no option but to still delegate work.

3.1.2 Leadership

The current leadership is new and is not able to pass the correct
amount of work to the employees. This demotivates the employees
as they feel the amount of work is not distributed equally.

3.1.3 Lack of motivation

The main issue here is the fact that the company doesn’t offer any
kinds of monetary rewards. This doesn’t help the employee’s
motivation, as most people work for money, especially in IT
companies where a higher salary will attract more employees.

3.1.4 Delegation

The current amount of work that is delegated to the employees isn’t

satisfactory, there are no teams or groups and this leads to in equal
distribution of delegated work.

4.0 Recommendations

4.1 Communication
To improve the communication problems faced by the company a
formal communication network should be set up. This can be done
by setting up a computer networking system known as intranet. This
will allow the employees to access information no matter which
level they are at. An internal E-mail and notification system can also
be set up with the help of the intranet

This provides

1. Fast Access to needed data.

2. Reduces time needed to transfer the data.

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 3. An internal Email system reduces the amount of people the
data has to pass through before reaching its final destination.
This reduces the amount of data lost.
4. This also eliminates biased views as all the data/information
that has to be sent, is sent directly to the person concerned.

4.2 Leadership

The leaders should

1. Appreciate the employees work to keep them motivated and

to make them feel proud about the work they have
completed.

2. Appoint Teams, each team with a team leader who is

responsible for the teams work.

3. The leaders should make decisions about new projects after a

discussion with the employees to have a better picture about
how the employees feel about the project.

4. To bridge gaps between the employees and leadership , the

leadership should appoint informal leaders who can act as
motivators to the employees.

All the above steps that the leaders should take should be in
accordance with the Hawthorne effect which comprises of
recognition, appreciation and rewards.

4.3 Lack of Motivation

The lack of motivation can be solved with the introduction of more

financial methods of motivation and also the introduction of
different non financial methods of motivation.

Financial Methods

1. The employees should be given stock options within the

company as this makes them feel as if they are a part of the
business and treat it as their own. This makes the employees
work harder.
2. If a project is completed before its deadlines, the employees
should be given a bonus.
3. Top level employees should be given the option to use
company cars as bonuses.

Non – Financial Methods

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Quality Circles:-

1. This improves communication.

2. Provides a boost in motivation as all problems faced by the
employees will be heard.
3. It aids development of employee relations.

4.4 Delegation

The leaders of the business should be aware of the amount of work

they are delegating to the employees and also to the group leaders.
This can be done with support from the group leaders.

This will result in the employees not getting overworked if given a

lot of work to finish. The leaders can have a good idea of what is
going on after discussion with the group leaders.

This motivates the employees as they are given the correct amount
of work to deal with.

5.0 Bibliography

Employees, MIND (Motherson InfoTech and Design), Questionnaires.

13th November 2008

Jewell, Bruce R. An integrated approach to Business Studies. 4th

edition. Singapore: Pearson education limited, 2003. Page 1 – 588.

Patel, Manohar. Personal Interview. 9th November 2008

Avasthi, Vivek. Personal Interview. 10th November 2008

Company Website, www.Motherson.com

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6.0 Appendix

6.1 Interview with Senior Level Management

Name: Mr. Manohar Patel

Position: AVP (Assistant Vice President)

1. Why is human resource the most important part of the

business?

The Human resource part of the company is what forms the crux
of this company , each and every person we employ counts
toward the development of the company and the general moving
forward of the company. As it is an IT based solution provider, it
is the human resource capital that we depend on the most,
without them there would be no company. There is almost total
dependence on human resources here at MIND

2. Is obtaining and retaining this human capital a difficult

process?

Obtaining the human capital is less difficult that the retaining

part, since this is a fairly new industry with young workers, once
a worker gets trained how to do the job and gets a few years of
experience, a higher salary package can easily attract them, this
is the main reason why most of the employees in IT based
companies leave for better job opportunities. Obtaining them is
as easy as loosing them , it’s a game , the loss is the employers
as a whole new round of training has to be undertaken once
again

3. How has competition affected the recruitment as well as

retaining of staff at MIND?

MIND is a fairly new player in the market for IT bases solutions;

we have a very small workforce of around 440 people. Even with
this workforce we have a very high attrition rate of 22 %,
competitors like TCS (tata consultancy services) have an attrition
rate of 11% and they employ close to 78000 people. Which adds
up to a very large number? But since we are a small company in
comparison to the others, high costs of retraining employees

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 each year can add up to a lot of money spent. Better salaries
offered elsewhere attract employees from other companies
which lead to a lot of money being spent when that cost can be
avoided

4. What has been the attrition rate over the past 3 years
a. 2004 - 24 %
b. 2005 - 21 %
c. 2006 - 22 %

5. What steps has the company taken to deal with these issues
a. Employee retreat during weekends
b. Company meet , when all the employees get together
once a year for vacations
c.

6. What do you feel about the communication network at MIND

The current communication network is not organized and

informal methods of communication are being used. Since the
workforce is small, we did not think this would be a problem in
the short run, but it has been one of the major problems faced by
MIND.

6.2 Questionnaire

The following questionnaire was given to 200 employees at MIND

Business and Management: Internal Assessment

Dear employees, the following questionnaire is a part of my

Research conducted on your company to solve the current problem
faced by the company i.e. Attrition. Kindly fill in the following
questions to the best of your ability.

Question 1: Are you aware of the current attrition problem faced by

the company
• Yes
• No

Question 2: Are you satisfied with the organizational structure at

MIND
• Yes
• Partially
• No

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Question 3: Are you satisfied with the communication
methods/networks at MIND
• Yes
• Partially
• No

Question 4: Are you satisfied with the current leadership

• Yes
• Partially
• No

Question 5: What is the level of motivation felt by you?

• High
• Medium
• Low

Question 6: Are you satisfied with you current salary?

• Yes
• Partially
• No

Question 7: Are you happy with your job in most aspects?

• Yes
• Partially
• No

Question 8: Are you happy with the amount of work that is

delegated to you?
• Yes
• Partially
• No

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