INCON13-HR-010
CHANGING HRM PRACTICES WITH SPECIAL REFERENCE TO
RETENTION POLICIES AT TCS
Ms. Ruchita Petkar
Dr. Suhas Sahasrabudhe
Asst. Professor
Principal
ATSS CBSCA, Chinchwad, Pune
CSIT, Shahu Nagar, Pune
Abstract:
Globalization has made the world very small. It makes national culture an increasingly
strategic issue that has to be faced and properly managed. We have to cast people in a tune
with newer requirements to remain in this competitive world. The problem is the balancing
of the global trends in human resource management and the various changes in the policies
made accordingly by the company which affects the people working in the organization. Thus
there is a great challenge in front of HR manager to retain its present employees and to
satisfy them as well. This paper thus is an attempt to examine the various functions and HRM
practices adopted at TCS with the main focus on its retention management. And it is a purely
secondary data based paper.
Keywords: HRM Functions, HR Policies, HRM Practices, Retention.
Introduction:
India embarked on globalization since July 1991 & as a part of which most of the Indian
companies switched over to policy changes with regard to HR in particular. This was
necessitated by the growing competition faced by the Indian companies both in the country &
at the International level. The challenges of the globalization were taken up by some
corporate firms in the right spirit & with a focused on short, medium & long term policy
changes. TCS is one of the most successful IT Company & is having a presence across the
boundaries of the nation. The present paper is an attempt to examine the Human Resource
Management practices adopted at TCS with a focus on the employee retention management
& the policies of various kinds of benefits arranged for the employees.
Objectives:
The major objective of this research paper is to find out the Human Resource Management
practices at TCS in the recent times with regard to retention management. The paper also
aims at crystallizing the best Human Resource Management practices that could be learnt as a
lesson from the TCS experience.
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Methodology:
The paper is based on the secondary data available through published reports, case studies &
the literature available website. Thus it is a purely secondary data based paper which can be
further supported by primary data desired to be collected.
Human Resource Management Practices - The challenges of Globalization:
Globalization is a movement generally considered to be initiated by the international
institutions like IMF & facilitated by the communication revolution because of internet
connectivity. The other major pillar of globalization has been the establishment of TCS in
1995. In fact the ICT revolution coupled with WTO providing the institutional setup
smoothened the process of globalization particularly with the developing countries. The
Asian giants & dragons launched upon the market reforms with the growing competition
being aimed at encompassing practically all the sectors of the economy. In the last decade of
the 20th century & the first decade of present century the world has practically become small
mainly because of trade liberalization effectively implemented by the most of the countries of
the world. Thus the changing scenario of the business world resulted in posing a variety of
challenges with regard to most of the HR functions.
HR Functions Reviewed –
The paper seeks to examine the recent HR practices at TCS with special focus on some of the
major HR functions. It would not be out of place therefore to review the major HR functions
& the challenges posed by the globalization in respect of each of them. The purpose is to
provide a conceptual clarity and some background for the review of best HR practices being
followed at TCS in respect of retention policies.
A] HR Planning:
The Human Resource Management ideally has to begin with planning of human resources.
This can be done always with some time reference in the sense that the current human
resources and the future requirements both have to be considered. The major challenges in
respect of planning function can be described as follows:1. Planning HR in a dynamic set up – It implies that in a constantly changing business world,
the features of the human resources used by any corporate firm also go on changing. Keeping
this in mind the present resources have to be oriented for the essential skill formation. Along
with this it is also necessary to keep a futuristic plan ready so that the requisite human
resource can be employed at the right time.
2. Managing the change – The attitude in a change needs to be brought among the existing
employees obviously because outright retrenchment is not possible. This is the crooks of
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change management & it is the most difficult job to be performed by any Human Resource
manager.
B] Recruitment & Selection:
Once the plan of Human Resource required by the corporate firm is prepared, the next
function is the actual recruitment & selection. In the modern management parlance it is called
as talent identification & acquisition. Most of the modern companies have stopped the
traditional recruitment & selection practices & have shifted to the online mode including
telephonic interviews. The fact however remains that at the time of actual recruitment the HR
department conducts a personal interview where the compensation packages & many other
aspects are discussed. The major challenges of his function are as discussed below :1. Customization of modern methods of recruitment- The corporate leaders performing
HR functions are required to adopt and get customized the modern techniques of
recruitment & selection. This is quite challenging because the senior HR managers
may not be in a position to quickly adopt the new methods of recruitment.
2. Locating the talent & workforce diversity – With the advent of globalization, it has
become obviously necessary for almost every organization to find out the talent at the
world level. It is also to be noted that there is a huge workplace diversity already
experienced.
E.g.: HR manager sitting in Japan may require a talent of the Indian local market to be
employed by his company in India. This requires deeper knowledge on a wide scale
of the talent available in various countries.
C] Training & Development:
The orthodox approach conceived as the task to be done by training & development function
of the modern day organization is already replaced by moulding the existing talent with
suitable training & development capsules both at the work & off the work. The major
challenges in this regard are:
1. Training by whom? – In a competitive market, large number of trainers & training
institutes are available. Therefore, selecting the most appropriate and effective
training vendor is challenging.
2. Methods of Training - The modern methods of training & development also present a
lot of challenges because the most suitable methods in view of the existing employees
& their characteristic feature have to be chosen. If this is accomplished training &
development function may be delivered in the best possible manner.
D] Performance Appraisal:
Any global firm has to carry out the Performance Appraisal at the right time of the important
employees in various departments of the firm. It crosses even the geographical country limits
& when the firm is globally operating. The feedbacks and systematized reports have become
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historical old being replaced by periodic self assessment. In this regard the major challenges
include the following:
1. Preparing self appraisal format which can be system based and can be filled online by
any employee at any given time. This will require a certain given set of skills
including computer education for the employees.
2. Keeping a track of such self appraisals and measuring the effectiveness of the Human
Resource is indeed challenging.
E] Retention:
Perhaps the most important of all the HR functions today is of the retention of the talent with
a focus on leadership development. Retention management in today’s world requires a
completely new approach that should be most flexible rather than rigid. A globally present
and managed firm, the HR manager of such a firm will have to constantly monitor the best
talent available in the firm at different work places. He will have to consider the changing
needs of his talented resources so as to provide those appropriate opportunities. This requires
thinking ahead of time and considering career development path of the concerned talent. The
most talked about methods of retention include employee delight at an appropriate stage of
his career. The most successful organization has already surmounted these challenges in
respect of retention.
On this background we now switch over to a case study of Human Resource practices at
TCS:
Tata Consultancy Services Limited (TCS) software services and consulting company
headquartered in Mumbai, India. It is the largest provider of information technology and
business process outsourcing services. It is part of one of India's largest and oldest
conglomerates, the group TATA. One of TCS' first assignments was to provide punch card
services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first
software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of
India
TCS is proud of their heritage as part of the Tata Group, founded by Jamsetji Tata in1868 and
one of India’s most respected institutions today. Their mission reflects the Tata Group's
longstanding commitment to providing excellence: to help customers achieve their business
objectives by providing innovative, best-in-class consulting, IT solutions and services, and to
actively engage all stakeholders in a productive, collaborative, and mutually beneficial
relationship. TCS also provides product and industrial engineering services, as well as
strategic consulting and project management. The company is controlled by textiles and
manufacturing conglomerate Tata Group.TCS vision is to be one of the top 10 global
companies by the year 2010.TCS values – integrity, leading change, excellence, respect for
the individual, and fostering an environment of learning and sharing – will get us there.
The Human Resource (HR) function is closely linked to the business strategy and plan by
being aligned to the TCS structure through HR support (including resource management
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through the Resource Deployment Manager (RDM) to each Industry Practice/Service
Practice/Geography and innovative workforce practices.
Present scenario of Attrition and Retention rates in IT sector:
As already pointed out retention of the best talent is a major problem for most of the software
service sector organization. The major players in India in this sector include Wipro,
Cognizant, TCS, Infosys and HCL. The recent data available relating to the rates of attrition
of some of such companies are depicted in the following diagram:
The graph relating to the rate of attrition is for the period of October to December 2010. It is
evident from the above graph that TCS has the lowest rate of attrition next only to Cognizant
ending December 2010. While Cognizant had registered a rate of 12.1%, TCS 13.1%, Wipro
18.4%, Infosys 20.5% with HCL having highest rate of 25.3% during that quarter. It is worth
noting that Cognizant had a slightly higher rate compare to TCS in September 2010. The
rates were 21.8% & 20.5% for the two companies respectively. It clearly indicates thet
Cognizant has adopted may be some better methods of controlling attrition. But since the
difference in between two is not very significant and also considering the fact that TCS has
greater manpower employed we will take up a more detailed review of TCS and its retention
policies.
Among the domestic IT companies, TCS has the lowest employee turnover rate. Employees
stay with the company not for the size of the pay packet alone. There are several other factors
including job security. The company has a performance improvement plan that takes into
account any personal problem the employee may be facing. Company’s HR practices have
the ability to absorb people, to manage them from sourcing to deployment, and what it means
in terms of scalability and scalability is something that the group evolves with respect to its
practices.
TCS tries to retain its associates through:
* Career Development
* Rewards and Recognition
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* Associate friendly HR policies
* Career Development
* Performance Based Incentives
TCS believes that career and personal development of all associates are vital
for organizational success and initiates activities to encourage associates to participate whole
heartedly in the same. Personal Development Planning forms a central part of their annual
appraisal and objective setting process. Personal Development is also encouraged through online e-learning initiatives that help develop a wide variety of skills, including languages,
cultures, sciences, business, technical and the arts subjects. Associates aspiring for higher
roles undergo assessment of current capabilities in order to identify the competency gap to
reach the aspired role. The gap in competency is addressed with structured training and
orientation.
Findings:
We have noted above that the globally operating firms particularly in the IT sector are
required to adopt cutting edge HR practices in respect of all the major functions of Human
Resource Management. We can thus put up the major findings in the following way.
1. HRM for a global firm has become extremely challenging.
2. Challenges loom over right from the planning stage of Human Resource Management
down to retention.
3. Among all the functions, talent management and retention appears to be the most
significant function of Human Resource Management.
4. A brief case study of retention policy at TCS reveals that the dynamic and employee
oriented flexible retention policy based on its own values is a clear ‘X’ factor for the
success of TCS in retention.
References:
1. www.google.com
2. www.Infosys, Wipro lag in employee retention - Livemint.htm
3. www.tcs.com
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