coca cola
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hr budgetTRANSCRIPT
Summer Internship Project report
On
“To study the HR practices at HCCBL in relation to Budget and Cost Control”
By
Ankita Srivastava
A0102311114
MBA- HR Class of 2013
Under the supervision of
Dr. Jaideep Kaur
In partial fulfillment of the requirement for the Degree of
Master of Business Administration- Human Resources
At
AMITY BUISNESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESH
SECTOR 125, NOIDA -201303 UTTAR PRADESH, INDIA
2012
DECLARATION
I hereby declare that the project report titled “To study the HR practices at HCCBL in
relation to Budget and Cost Control” is my own work and has been carried out under
the guidance of Dr. JAIDEEP KAUR faculty mentor, and Mrs. SAUMYA KHATI,
Human Resource Manager Hindustan Coca Cola Beverages Private Limited.
All care has been taken to keep this report error free and I sincerely regret for any
unintended discrepancies in this report. I shall be highly obliged if errors (if any) be
brought to my attention.
Thanking You.
Date:
Ankita Srivastava
A0102311114
MBA-H.R Class 2011-13
ii
CERTIFICATE
I Dr. JAIDEEP KAUR hereby certify that ANKITA SRIVASTAVA student of Masters
of Business Administration – H.R at Amity Business School, Amity University Uttar
Pradesh has completed the Project Report on “To study the HR practices at HCCBL in
relation to Budget and Cost Control”
Dr. Jaideep Kaur
(Department of Behavioral sciences)
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ACKNOWLEDGEMENT
Project work is always an occasion to learn about a various aspect of an organization, its
environment, cultural and organizational dynamics etc. It provides the student with the
opportunity to experiment and implemented practically.
I got an opportunity to work for “Hindustan Coca-Cola Beverage Pvt. Ltd.” In
Noida(U.P). It was the great pleasure to work with such an esteem organization.
First of all I express my gratitude to our most respectful director Dr. Sanjay Srivastava
First and foremost I would like to thank Hindustan Coca-Cola Beverages Pvt. Ltd.
NOIDA forgiving me an opportunity to do my training in the esteemed organization.
My special appreciation extends to the respected Mrs. Saumya Khati (H.R
Manager),Ms. Anupriya Srivastava (H.R Executive), Mr. Shivam Mathur (H.R
Team Leader), for their able guidance, and every available cooperation throughout the
project.
I would also like to thank to my family members who gave me favorable environment ,
the constant support and help in the successful completion of my project.
Ankita Srivastava
(MBA- HR)
iv
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION
Project title 1
Purpose of Study…………………………………………………………………………..1
Context of the study……………………………………………………………………….2
Significance of Study………………………………………………………………..…….2
Limitation of the study……………………………………………………………………3
Theoretical Framework……………………………………………………………...…….4
Company Profile……………………………………………………………………..……8
CHAPTER 2: LITERATURE REVIEW …………………………….....30
CHAPTER 3: RESEARCH METHODOLOGY………………..………32
Project flow ……………………………………………………………......….................32
Data source.………………………………………………………………………..…......33
Primary source…………………………………………………………….......................33
Secondary source……………………………………………………………………..…33
Data collection………………………………………………………………………...…34
CHAPTER 4: DATA ANALYSIS AND FINDINGS……………….…..35
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CHAPTER 5: CONCLUSIONS AND RECOMMENDATION……….55
Conclusion…………………………………………………...
…………………………..55Recommendations……………………………………………
………………………….56
REFERENCES…………………………………………………………....57
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LIST OF FIGURES
Figure 1: What to put in HR budget ………………………………………………..…5
Figure2: project flow …………………………………………………………….….......32
Figure 3: variable COGS………………………………………………………………………….43
Figure 4: rent………………………………………………………………………….…………
44
Figure 5:meeting and conferences……………………………………………………………….... 45
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LIST OF TABLES
Table 1:Components of HR budget………………………………………………………………...38
Table 2:The actual expenditure vs. allocated amount……………………………………………...….42
Table3:Difference travelling allowance…………………………………………………47
Table4:Employee engagement……………………………………………………….......48
Table5:Difference in the amounts………………………………………………...……...51
Table6:Achievement percentage ………………………………………………...……....51
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ABSTRACT
A budget requires a systematic and thoughtful review of likely expenses and designated
funds and helps a business to allocate those expenditures over a designated period of
time. Comparisons of actual expenses to budgeted expenses will provide a means for
making adjustments wherever needed.
The purpose of the study is to have a comparative analysis between the budgeted amount
and the actual expenditure. The study will find out the various costs that are incurred
every month on the various HR components. The comparison of the actual expenditure
would be done with the amount that has been allocated in the business plan of the
organization. Using this comparison, the deviation would be found between the actual
and the allocated amount and the reasons for the same will be identified in the study.
This study will help in understanding the HR related bottlenecks in increasing sales force
effectiveness and to reduce recruitment cost by reduction in attrition % through means of
employee engagement initiatives.
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CHAPTER-1: INTRODUCTION
Project Title
“To study the HR practices at HCCBL in relation to Budget and Cost Control”
Purpose of the Study
The purpose of the study is to understand the HR practices prevailing in HCCB
like recruitments, Employee engagement programs and the cost impacts attached to each
component. Further the prime objective is to understand various cost variables of HR
budget and identify the components with cost overrun. This Project will provide HCCB
with the cost measures to control over run parameters and further will give a detailed plan
to improve employee satisfaction.
The objectives of the study are as given below:
To study the business plan and components of HR Budgeting of Hindustan
Coca-Cola Beverage Private Limited.
To do a comparative analysis between the budgeted amount and the actual
expenditure for West UP.
To analyze the deviations between the budgeted amount and actual
expenditure, and identify the reasons for variations.
To understand the HR related bottlenecks in increasing sales force
effectiveness
To reduce recruitment cost by reduction in attrition % through means of
employee engagement initiatives.
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Context of the Study
The context of the study is to study the business plan and components of HR
Budgeting of Hindustan Coca-Cola Beverage Private Limited. There are various
parameters which are used to prepare the hr budget and there is a fixed amount of
allocation done for every month. The comparative analysis is done between the allocated
amount and the actual amount spent every month. The analysis highlights the various
parameters which are not meeting the allocated amount or the expenditure is more than
the budgeted amount. The reasons for the increase are determined and also cost control
measures have been implemented. The cost control measures involve some action plan
for employee engagement which would reduce recruitment cost by reduction in attrition
%. The sales force effectiveness is also increased by looking at the major issues which
were hampering their effectiveness, this would help in the generating more revenue.
Significance of the Study
This project will help the HCCBPL in:
a) Indentifying the variables where the cost is exceeding the expected amount
(Budget).
b) The possible reasons can be identified for the increase in the cost.
c) It would determine variables impacting sales force effectiveness and which can be
improved to increase the revenue.
d) The employee engagement program would be implemented which would help in
reducing the recruitment cost as there would be a reduction in attrition %.
e) Assistance in the various HR activities like recruitment and selection, the hr
operations and also the various training like COBC (code of business conduct).
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Limitations of Study
Although all efforts have been made to study each and every items, but due to lack of
time and other resources study has been done on the limited parameters.
The study has following limitations:-
1. Duration of study posed limitation on further intensive study.
2. Mostly stress was given on the secondary data, as it was a live project.
3. The cost control measures need time in implementation and to see the long term
results.
4. The data collected from the different sources could have some deviations which
can affect the findings and analysis.
5. There can be some unnoticed calculation errors which might affect the findings.
Theoretical Framework
When an advance salary of one month is offered to the employee at the time of
separation, it still saves the outages HR Budgeting is a powerful financial tool that can
estimate the expenditures made by the HR vertical. This strengthens and allows the HR to
control the cost rather than letting it control the HR initiative. The budget is drawn
parallel to the goals of the organization. If the organization expands and requires to
register a double digit growth in terms of its strength, it percolate to apportion funds in
different areas including recruitment, retention, up-skilling, global mobility management
and etc. The allocation of funds would be governed by the HR Strategies.
The decision makers in an organization remain the main players to approve the budget.
The recommendations and inputs are taken from different sources including operation,
marketing, logistics and every other vertical within the organization. Macro areas
including employee retention, recruitment and training and micro areas including
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programs designed for incremental benefits are all mapped into one complete budgeting
program.
It can be zero-based budget with no reference to last year’s expense. The
organization plan is drawn and the HR strategy gets aligned to it. Different expense
points are defined followed by the identification of the bottlenecks which may affect the
business. Such as sudden business ramp-up by a competitor would lead to a
compensation review to arrest attrition. Similarly, every such area which may stand a
threat within the HR systems needs to be covered. Allocation would be on the basis of
priority and necessity. Few areas such as communication may not require a big budget
but is an important and a continuous process. Correspondingly training and retention will
have a great attention for a stable organization. In case the company plans to expand,
recruitment would remain the primary focus.
Legal and statutory will require allocation and follow-up as per the administrative
guidelines. A study of the business units and products is important to identify the growth
mode. Recognize the problem areas in those units. Emphasize on the HR strategies that
can eradicate and improve productivity including time to market, profit-margins etc. This
includes increase retention through employee engagement program and the recruitment of
top performers. Implement metrics to measure these improvements. The metrics to
calculate the ROI should be clear to the HR at all levels so that everyone can ‘think
numbers’. Few measures as suggested in HR Management need to be considered.
This include average cost of recruitment per year, average cost of recruitment per
staff, average cost of training per year, percentage training cost / sales turnover or
productivity, training cost per employee, salary budget ratio / sales turnover, health safety
cost per year, human resources cost per sales turnover and compensation and benefit
cost / sales turnover per year. This helps in building up the high level report for the CFO
to deliberate on it.
The HR Budget would further require the CFO’s approval. HR Specialist suggests
certain measures which can be implemented to sell the budget to the CFO. Other than
linking it to the organizational goals and emphasizing revenue returns, every program
needs to highlight the benefit. Even an assistance package offered to an employee at the
point of retrenching, adds to the bottom line. The average or the below average employee
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is considered as ‘cost’. Hence even for forthcoming months. Hence the cost of outages
should be included as revenue. Measure the employee effectiveness program with the
increase in profitability.
Every engagement expense adds on to the productivity. Besides the training
program that amount to up-skilling therefore connected to the profitability. The Budget
needs to be in line with the current and future strategies of the organization. If the
productivity level within the organization was high last year, the focus this year might be
on the logistics and marketing. This year the spending on the human capital might shift
into that direction. Finally it needs to include certain pre-emptive measures to mitigate
any exigency including calamities such as swine flu, which may require relevant
coverage of health benefits and talent deployment. Every risk needs to be mitigated and
loop holes mended. The budgeting program needs to be industry drive
What to Put in an HR Budget:
Figure 1: What to put in HR budget
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Developing the human resources portion of your organization's budget is often
part of your job responsibilities as an HR executive. A complete budget will enable you
to meet the human resources related computer, travel, recruiting, salary, membership
and benefit requirements of your organization. As you prepare your department's
budget, include both current and projected needs to present a fiscally sound, realistic
plan to your accounting department.
Compensation and Benefits
Compensation and benefits generally comprise the majority of an HR budget, as
many organizations run employee payroll through the human resources allocation budget.
When working on the compensation and benefit portion of the budget include employee
salaries, unemployment and associated federal and state taxes. Also include the employer
portion of health insurance. Depending on your organization's insurance package, you
may need to include life, vision, health and disability insurance. If your company has a
retirement plan, also include those costs in the compensation and benefit portion of your
budget.
Human Resource Information Systems
The human resources information system is a vital part of most HR departments.
HRIS is either a specifically installed software or online system you use to input a wide
variety of information on your employees, such as employee data, applicant tracking and
payroll. The cost of your HRIS system will vary based on the features your system offers
and how your accounting department allocates your computer access. Work with the
accounting or information technology departments to determine your HRIS cost.
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Training and Development
Training and development costs are an important part of your human resources
budget. You may be responsible for training and development on an organization-wide
basis or only responsible for training and development of your human resources staff. In
either case, an article by the Society for Human Resource Management entitled, "What
Should Be Included in a Training Budget?" recommends including the cost of digital and
printed training materials, speaker honorariums or fees, online training access and rental
of off-site conference rooms, if needed. Meet with upper management to determine what
training modules they would like presented throughout the year to develop your budget.
For your own staff, include the cost of membership to human resources organizations,
conference fees and travel.
Human Resources Services
The human resources services portion of your budget encompasses the peripheral
services your department provides to support the organization. Include employment
agency fees if you occasionally use temporary workers during busy times. Allocate
money for executive search firms, if appropriate. Other costs can include the cost of pre-
employment or periodic drug testing for employees, credit check fees, employee
assistance programs or background testing. If your organization uses newspaper,
magazines or online sources to advertise open positions, include advertising costs in your
budget.
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Introduction to Company Profile
Beverage industry is one of the fastest growing industries in India. Soft drinks are
a typical consumer product purchased by individual primarily to quench their thirst and
also for refreshment. Different types of soft drinks are available in the market and more
or less content of all soft drink is same. The market of soft drink is facing a cut throat
competition and many companies are floating their product in the market with different
brand names. In such a situation different facto which influence the people’s choice for
soft drink are test, quality, image, easy availability and the product cost of advertisement.
History of Coca-Cola
Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a
glass. Early growth was impressive, but it was only when a strong bottling system
developed that Coca-Cola became the world-famous brand it is today.
1899 The first bottling agreement
Two young attorneys from Chattanooga, Tennessee believed they
could build a business around bottling Coca-Cola. In a meeting with
Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive
rights to bottle Coca-Cola across most of the United States (specifically excluding
Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton,
soon joined their venture.
1900-1909 … Rapid growth
The three pioneer bottlers divided the country into territories and sold bottling
rights to local entrepreneurs. Their efforts were boosted by major progress in bottling
technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-
Cola bottling plants were operating, most of them family-owned businesses. Some were
open only during hot-weather months when demand was high.
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1916 … Birth of the contour bottle
Bottlers worried that the straight-sided bottle for Coca-Cola was
easily confused with imitators. A group representing the
Company and bottlers asked glass manufacturers to offer ideas
for a distinctive bottle. A design from the Root Glass Company of Terre
Haute, Indiana won enthusiastic approval in 1915 and was introduced in
1916. The contour bottle became one of the few packages ever granted
trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons
in the world - even in the dark!
1920s … Bottling overtakes fountain sales
As the 1920s dawned, more than 1,000 Coca-Cola bottlers were operating in the
U.S. Their ideas and zeal fueled steady growth. Six-bottle cartons were a huge hit after
their 1923 introduction. A few years later, open-top metal coolers became the forerunners
of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola
exceeded fountain sales.
1920s and 30s … International expansion
Led by longtime Company leader Robert W. Woodruff,
chief executive officer and chairman of the Board, the Company began a major push to
establish bottling operations outside the U.S. Plants were opened in France, Guatemala,
Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time
World War II began, Coca-Cola was being bottled in 44 countries.
1940s … Post-war growth
During the war, 64 bottling plants were set up around the world to
supply the troops. This followed an urgent request for bottling
equipment and materials from General Eisenhower's base in North
Africa. Many of these war-time plants were later converted to civilian use, permanently
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enlarging the bottling system and accelerating the growth of the Company's worldwide
business.
1950s … Packaging innovations
For the first time, consumers had choices of Coca-Cola package size and type --
the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-
ounce versions. Cans were also introduced, becoming generally available in 1960.
1960s … New brands introduced
Following Fant in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand
Coca-Cola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s
brought diet Coke® and Cherry Coke, followed by POWERADE and DASANI in the
1990s. Today hundreds of other brands are offered to meet consumer preferences in local
markets around the world.
1970s and 80s … Consolidation to serve customers
As technology led to a global economy, the retailers who sold Coca-Cola merged
and evolved into international mega-chains. Such customers required a new approach. In
response, many small and medium-size bottlers consolidated to better serve giant
international customers. The Company encouraged and invested in a number of bottler
consolidations to assure that its largest bottling partners would have capacity to lead the
system in working with global retailers.
1990s … New and growing markets
Political and economic changes opened vast markets that were closed or
underdeveloped for decades. After the fall of the Berlin Wall, the Company invested
heavily to build plants in Eastern Europe. And as the century closed, more than $1.5
billion was committed to new bottling facilities in Africa.
21st Century
The Coca-Cola bottling system grew up with roots deeply planted in local
communities. This heritage serves the Company well today as people seek brands that
honor local identity and the distinctiveness of local markets. As was true a century ago,
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strong locally based relationships between Coca-Cola bottlers, customers and
communities are the foundation on which the entire business grows.
Company Background
Coca–Cola Company is the global company and has completed 122 years of
consumer service with some of the world’s most widely recognized brands , the coca-cola
business in INDIA, as in each country where they operate, is a local business . Their
beverage is produced locally employing Indian citizen, their product range and marketing
reflects Indian taste and lifestyles.
After a 16 – year’s absence, Coca-Cola returned to India in 1993. The company
presence in India was cemented in November that year in a deal that gave Coca-Cola
ownership of the nation’s top soft drinks brands and bottling network .Coca-Cola India
has made significant investment to builds and continually improve its business in India ,
including new production facilities , wastewater treatment plants , and distribution
system and marketing equipment .
Coca- cola business system directly employs approximately 6000 local people in
India.In fact, they indirectly create employment for more than 1, 25,000 people in
related industries through their vast procurement, supply and distribution systems.
Virtually all the goods and services required to be produced and marketed by coca- cola
locally are made in India.
The coca-cola system in India comprises 27 wholly owned companies -owned
bottling operations and another 17 franchise –owned bottling operations.
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Coca-Cola in India
COCA-COLA BRINGS BACK THE FIZZ TO INDIA
Coca-Cola, the corporation nourishing the global community with the world’s largest
selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus,
giving a new thumbs up to the Indian soft drink market. In the same year, the Company
took over ownership of the nation’s top soft-drink brand and bottling network. It’s no
wonder our brands have assumed an iconic status in the minds of the world’s consumers.
A Healthy Growth to The Indian Economy
Ever since, Coca-Cola India has made significant investments to build and continually
consolidate its business in the country, including new production facilities, waste water
treatment plants, distribution systems, and marketing.
Coca-Cola India is among the country’s top international investors, having invested more
than US$ 1 billion in India in the first decade, and further pledged another US$100
million in 2003 for its operations.
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A Pure Commitment to The Indian Economy
The Company has shaken up the Indian carbonated drinks market greatly, giving
consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and
nutrition needs. It has also been instrumental in giving an exponential growth to the
country’s job listings.
Creating Enormous Job Opportunities
With virtually all the goods and services required to produce and market Coca-
Cola being made in India, the business system of the Company directly employs
approximately 6,000 people, and indirectly creates employment for more than 125,000
people in related industries through its vast procurement, supply, and distribution system.
We took this opportunity to also present the Water Calendar 2007 to the Hon'ble CMThe
Golden Peacock Environment Management Award
The GPEMA is designed to encourage and recognize effective implementation of
environmental management system and this achievement has been made possible by the
plants adherence to Coca-Colas total quality program called The Coca-Cola Quality
system (TCCQS). TCCQS is all encompassing management system (Total Quality)
covering environment management and other business aspects
such as safety and loss Prevention (SLP), product quality,
packaging quality, process capability improvement and
customer satisfaction.
eKOsystem : The Coca-Cola Environmental
Management System. The Coca-Cola Company has 78
manufacturing location across 24 states of the country.
The Company has one single environmental system, eKO
system, Implemented at all its operations in 202 countries across the world. The
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eKO system is a tool that integrates environment management with business
planning cycle. The eKO system primarily comprises of two main facets namely:
Environment and
ESafety and loss Prevention (SLP)
Both the facets are aligned with international management system standards, ISO
14001 for Environment Management and OSHAS 18001 for Safety Management.
Ason June 2008, 40 manufacturing units are certified to ISO 14001 and 8 units are
certified to OSHAS 18001 standards. Company owned bottling operations at
Varanasi received prestigious Golden Peacock Award on Environment
Management for 2005. The same award was also received by the company
operations at Dasna, Ameenpur, and Baddi for 2004, 2003 and 2002 respectively.
The awards are conferred by Institute of Directors in association with World
Environment Foundation (WEF) in recognition of effective implementation of
Environmental and Quality Management System (EMS) by these units.
Some of the Prime Environmental considerations followed in business decision are:
1. Environmental due diligence before acquiring land.
2. Environmental impact assessment before commencing operations.
3. Ground water and environmental surveys before selecting sites.
4. Diligent compliance with all regulatory environmental requirements.
5. Ban on purchase of refrigeration equipment containing CFCs (known to be
Ozone depleting).
6. Installation of effluent treatment plant at each manufacturing locations.
7. Separate collection and treatment of domestic and industrial effluent as per
Company OR Local Standa
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Company Policies
The Coca-Cola eKOsystem are governed by five major policies that affirm the
environmental responsibilities of The Coca-Cola Company and serve as guidelines
for our business partners around the world. Each of these policies is supported by
specific requirements and practices that govern our daily operations and are
fundamental to achieving results consistent with environmental leadership.
Our Five Policies Are:
1. COMMITMENT
2. COMPLIANCE & BEYOND
3. ACCOUNTABILITY
4. CITIZENSHIP
5. BELIEF
Commitment to Lead
We believe that an effective environmental management system requires
involvement of employees at all levels. Our commitment to protect and preserve the
environment extends throughout the organization.
Business Planning
Operations Personnel
Operations Support
Company Support
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COMPLIANCE AND BEYOND:
Our commitment to the environment extends beyond compliance. Even in the
absence of specific regulatory requirements, we operate in an environmentally
responsible manner in accordance with the environmental standards of The Coca-
Cola Company.
ACCOUNTABILITY:
We are accountable for our actions. The Coca-Cola Company conducts audits of its
environmental, health and safety (EHS) performance and practices, documents the
findings and takes necessary improvement actions.
CITIZENSHIP:
Seeking Support Of All For Effecting Positive Environmental Contribution
We seek to cooperate with public, private and governmental organizations in
identifying solutions to environmental challenges. We direct our company's skills,
energies and resources toward activities and issues where we can make an effort.
We are stewards of brands universally recognized for quality and consistency. With
that stewardship comes the expectation of excellence in our business conduct,
which is essential if we are to continue to be trusted neighbors in the communities
where we do business.
BELIEFS:
There is much in our world to celebrate, refresh, strengthen and protect. The Coca-
Cola Company is a vibrant network of people, in over 200 countries, putting
citizenship into action. Through our actions as local citizens, we strive every day to
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refresh the marketplace, enrich the workplace, protect the environment and
strengthen our communities.
We are a local employer, with responsibility to enable our people to tap into their
full potential; working at their innovative best and representing the diversity of the
world we serve.
And we are a local citizen, understanding our responsibility to contribute to an
improved quality of life in our communities.
Commitment to Quality: The Coca-Cola Quality System
is a worldwide initiative involving every aspect of their
business. Everyone who works for or with Coca-Cola is
empowered and expected to maintain the highest standards
of quality in products, processes and relationships. They are never content to let our
standards become static. The Coca-Cola Quality System mandates in-depth self-
assessment throughout their operations, by all their business units. This enables
them to raise their standards even higher.
In their ingredient evaluation laboratories, for example, they perform precise
analysis of fruit juices and other ingredients sent to them by their suppliers, to
ensure and to improve product quality. Their processes, too, undergo constant
scrutiny, to safe-guard the water they use in their products and the packaging that
carries them to their consumers. They inform and educate their business partners
about their standards, so that they meet the highest quality requirements. Under the
Coca-Cola Quality System, quality is their highest business objective and their
enduring obligation.
MISSION, VISION & VALUES OF COCA-COLA
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Our mission, vision and values outline who we are, what we seek to achieve, and how we
want to achieve it. They provide a clear direction for our Company and help ensure that
we are all working toward the same goals.
Mission Statement
Our mission declares our purpose as a company. It serves as the standard against which
we weigh our actions and decisions. It is the foundation of our Manifesto.
To refresh the world in body, mind and spirit.
To inspire moments of optimism through our brands and our actions.
To create value and make a difference everywhere we engage.
Vision Statement
Our vision guides every aspect of our business by describing what we need to accomplish
in order to continue achieving sustainable growth.
People: Being a great place to work where people are inspired to be the best they
can be.
Portfolio: Bringing to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
Partners: Nurturing a winning network of customers and suppliers, together we
create mutual, enduring value.
Planet: Being a responsible citizen that makes a difference by helping build and
support sustainable communities.
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Profit: Maximizing long-term return to shareowners while being mindful of our
overall responsibilities.
Values
our values serve as a compass for our actions and describe how we behave in the
world.
Leadership: The courage to shape a better future
Collaboration: Leverage collective genius
Integrity: Be real
Accountability: If it is to be, it's up to me
Passion: Committed in heart and mind
Diversity: As inclusive as our brands
Quality: What we do, we do well
THE WORLD OF COCA-COLA:
Now Open!
Discover the secret formula to happiness within!
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For over 120 years, they've been putting their secret formula into bottles. Now,
they've put it all in one amazing place -- The NEW World of Coca-Cola.
Atlanta's new, must see destination offers even more you must see! From a
thrilling, multi-sensory 4-D theater to a gallery dedicated to Coke and pop culture,
around every corner you'll experience something new and inviting. Meet their 7-
foot Coca-Cola® polar bear. Take your taste buds on a tantalizing tour of up to 70
different beverage products, or create your own refreshing blend!
Inside, you'll find there's a secret formula to everything we do. Visit them at
Pemberton Place to discover it all for yourself.
.
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COKE:
The world’s favorite drink. The world’s most valuable
brand. The most recognizable word across the world after OK.
Coca-Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non- alcoholic beverages in the world. In India, Coca-Cola was the leading soft drink till 1977 when govt. policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. Coca-Cola returned to India in 1993 and over the past ten years has captured the imagination of the nation, building strong associations with cricket, the thriving cinema industry, music etc. Coca-Cola has been very strongly associated with cricket, sponsoring the World Cup in 1996 and various other tournaments, including the Coca-Cola Cup in Sharjah in the late nineties. Coca-Cola’s advertising campaigns “Jo Chaho Ho Jaye” and “Life Ho ToAisi” were very popular and had entered the youth’s vocabulary. In 2002, Coca-Cola launched the campaign “ThandaMatlab Coca-Cola”
HISTORY OF BRANDS: COCA COLA
THUMS UP: Strong cola Taste, Exciting Personality
Thums Up is a leading carbonated soft drink and most trusted brand in
India. Originally introduced in 1977, Thums Up was acquired by The Coca-Cola
Company in 1993. Thums Up is known for its strong, fizzy taste and its confident,
mature and uniquely masculine attitude. This brand clearly seeks to separate the
man from the boys.
FANTA:
23
Internationally, Fanta – The orange drink of The Coca-Cola
Company, is seen as one of the favorite drinks since 1940’s. Fanta
entered the Indian market in the year 1993. Over the years Fanta has
occupied a strong market place and is identified as “The Fun
Catalyst”. Perceived as a fun youth brand, Fanta stands for its vibrant color,
tempting taste and tingling bubbles that not just uplifts feelings but also helps free
spirit thus encouraging one to indulge in the moment. This positive imagery is
associated with happy, cheerful and special times with friends.
LIMCA:
Lime n’ LemoniLimca, the drink that can cast a tangy refreshing spell on anyone,
anywhere. Born in 1971, Limca has been the original thirst choice, of millions of
consumers for over 3 decades. The brand has been displaying healthy volume
growths year on year and Limca continues to be the leading flavours soft drink in
the country. The sharp fizz and lemoni bite combined with the single minded
positioning of the brand as the ultimate refresher has continuously strengthened the
brand franchise. Limca energizes refreshes and transforms. Dive into the zingy
refreshment of Limca and walk away a new person
SPRITE:
Worldwide Sprite is ranked as the No.4 soft drink and sold in more
than 190 countries. In India, Sprite was launched in year 1999 and today it has
24
grown to be one of the fastest growing soft drinks, leading the clear lime category.
Today Sprite is perceived as a youth icon. Why?
With a strong appeal to the youth, Sprite has stood for a straight forward and honest
attitude. It’s clear crisp refresh hinge taste encourages the today’s youth to trust
their instincts, influence them to be true to who they are and to obey their thirst.
MAAZA:
Maaza was launched in 1976. Here was a drink that offered the
same real taste of fruit juices and was available throughout the year. In 1993, Maaza
was acquired by Coca-Cola India. Maaza currently dominates the fruit drink
category. Over the years, brand Maaza has become synonymous with Mango. This
has been the result of such successful campaigns like “Taaza Mango, Maaza
Mango” and “Botel Mein Aam, MaazahaiNaam”. Consumers regard Maaza as
wholesome, natural, fun drink which delivers the real experience of fruit.
KINLEY:
25
Water a thirst quencher that refreshes, a life giving force that washes all the toxins
away. A ritual purifier that cleanses, purifies, transforms. Water the most basic need
of life, the very sustenance of life, a celebration of life itself. The importance of
water can never be understated. Particularly in a nation such as India where water
governs the lives of the millions, be it as part of everyday rituals or as the monsoon
which gives life to the subcontinent.
26
ORGANIZATIONAL STRUCTURE
27
28
ABBREVIATIONS:
C.E.O- CHIEF EXECUTIVE OFFICER
V.P- VICE PRESIDENT
A.O.D- AREA OPERATION DIRECTOR
RCDM- REGIONAL CAPABILITY DEVELOPMENT MANAGER
29
RRTM- (REGIONAL ROUTE TO MARKETING HEAD)
G.S.M- (GENERAL SALES MANAGER)
A.S.M- AREA SALES MANAGER
ACDM- AREA CAPABILITY DEVELOPMENT MANAGER
CDE- CAPABILITY DEVELOPMENT MANAGER
30
CHAPTER: 2 LITERATURE REVIEW
Sandra Cohen, Sotiris Karatzimas, (2011),"The role of the human resources
department in budgeting: evidence from Greece", Journal of Human Resource Costing
& Accounting, Vol. 15 Iss: 2 pp. 147 – 166, purpose of this study is to examine the
involvement of the human resources (HR) department throughout the budgeting process
and furthermore to investigate the use of budgets for motivation, communication,
performance evaluation and control in the Greek business environment, from the
perspective of the HR department managers. Design/methodology/approach – Empirical
evidence is based on the responses received from HR department managers in 100 Greek
companies with a distinct HR department to a structured questionnaire. Results suggest
that the HR department has limited involvement in the budgeting procedures, which in
turn could explain the limited use of budgets as a means of performance evaluation and
communication from a HR management perspective. Nevertheless, both the size of the
HR department and the number of employees has a positive effect on the HR
management and budgeting interaction. The survey presented in this paper provides
corroborative evidence that HR departments in Greece do not fully exploit the wide
potential offered through budgeting as a means to achieve their goals. The study
contributes to the literature by analyzing the responses of HR department managers and
their views towards the budgeting function from a HR management perspective in Greek
companies.
Don't look at budgeting as a necessary evil but as an opportunity to demonstrate
HR's value by Ladika, Susan. HR Magazine; Aug2006, Vol. 51 Issue 8, p93-95, 3p,
article emphasizes the need for human resource (HR) managers to be knowledgeable
about the facts and figures of budgeting. Categories of budget development include
internal, operational and organizational budgeting. HR managers should consider and
expect to revise its recruiting budget if the unemployment rate declines. In addition to
external economic factors, it is essential to review financial reports that affect the budget
of HR.
31
How to... make your HR budget go further by Craig, Tara, Personnel Today;
7/8/2008, p31-31, 1/2p ,offers suggestions for human resource (HR) practitioner of an
organization to use the HR budgets wisely in view of an economic downturn in Great
Britain. It states that training should be tailored to staff needs, and should be provided to
larger groups together rather than to a single team. It mentions that retaining the existing
employees is much cheaper than recruiting replacements. It offers information on books
and articles that provide information on budgeting.
32
CHAPTER 3: RESEARCH METHODOLOGY
INTRODUCTION:
Marketing research is a process of collecting and analyzing the information and
ultimately to arrive at a certain conclusion. In the project given to me the research is
based on the secondary data. I have collected the information from the various
departments of the organization. It indicates the present future trends of industry and
points out how the company’s affairs are to be turned up.
PROJECT FLOW:
Figure2: project flow
33
DATA SOURCE:
The various source of information broadly divided in two categories.
Primary Source:-
Source from where first hand information are gathered directly are called primary
source and information thus collected is called primary data. In case of the above study
the primary data has been collected mostly by brainstorming from the people of different
departments.
Secondary source:-
The data that are collected for another purpose already exists somewhere is called
secondary data. With regards to my study the secondary sources were the business plan
provided by HCCBPL and also the monthly actual expenditure data provided by the
various departments.
34
DATA COLLECTION METHOD:
The following methods are widely used for collection data.
Survey Method.
Brainstorming sessions with the administration manager.
The data is collected from different departments of the organizations and they are
collaborated in an excel sheet for the further analysis.
The data was collected on the monthly basis from January 2012, till April 2012.
The business plan is taken for the HCCBPL West U.P. Zone from the finance
department.
35
CHAPTER: 4 DATA ANALYSIS & FINDINGS
Key Headings
Business plan and components of HR Budgeting of Hindustan Coca-Cola Beverage
Private Limited.
The human resource budget includes the following components:
1. In the maintenance of current HR activities
Current overheads for salaries, wages, allowances, and benefits;
Training to maintain and develop skills and capabilities;
Office supplies and equipments for HR Department;
Logistical overheads of the HR department such as vehicles for dispatch;
Administrative costs including maintenance of HRIS system, intranet;
Outstations duties;
Meetings, briefings, etc;
Traveling and accommodation costs;
Superannuation, provident fund contributions;
Insurance premiums for group personal accident, group life, medical consultation and
hospitalization, professional negligence liability, etc;
Safety and security costs;
Labor relations costs;
Amenities and facilities;
Contingencies.
36
2. In the improvement of the HR function
Estimated costs for recruitment plan for the coming year or next six or twelve
months;
Estimated increase in personnel overhead costs, namely, salaries, allowances,
benefits for new employees;
Estimated costs for training new employees, and training to provide serving
employees with new skills or to enhance their professionalism;
Estimated costs for conducting employee surveys for improvement purposes;
Estimated cost for salary increases including those of employees identified for
promotion;
Estimated cost for bonus payments;
Estimated costs of purchases of new office equipments whether as replacements or
not;
Estimated increases in logistical costs;
Estimated increase in superannuation contributions, provident fund, insurance
premiums, etc;
Purchase of capital items for HR department;
Contingencies
The structured format to prepare a budget followed by HCCBPL is:
37
S.no
.Item
1 Volume – Customer
- Physical cases
- Unit cases
2 Gross Revenue
3 Net Revenue (GR - Sales tax & discount)
4
Variable COGS (Sourcing cost &
sourcing freight)
5
Gross Contribution (net revenue -
COGS)
6 Fixed Mfg Expenses – NA
- Comp & Benefits (Casual) Mfg-NA
7 Fixed Mfg Expenses-NA
- Comp & Benefits (Permanent) Mfg-NA
- Comp & Benefits (Permanent) Mfg-
Incentive-NA
8 Gross Profit
9 Logistics & distribution Expenses
- Comp & Benefits (Casual) S&D-NA
10 Sales Expenses
- Comp & Benefits (Permanent) S&D
- Comp & Benefits (Permanent) S&D-
Incentive
- MD/ PSR Salary
- Travel S&D
- Telecommunications - S&D
11 Total Sales expenses
38
12 General Admin Expenses
- Comp & Benefits (Permanent) Admin
- Comp & Benefits (Permanent) Admin-
Incentive
- Comp & Benefits (Casual) Admin
- Recruitment, Relocation & Training
- Travel Admin
- Communication
- Rent
- IS Expenses
- Meetings / Conferences
- Consultancy / Services
- Insurance
Others Admin
13 Total General Admin Costs
14 Total Comp & Ben
Total HR Cost (Casual S&D + Sales
Expenses+General Admin)
Total Compensation Cost
Permanent
Temps
Manpower Productivity (Total comp/Py
Cs)
CPC Permanent
CPC Variable
Manpower Cost as % of NR
manpower Cost per case
Table 1 . components of HR budget
39
1. Comparative analysis between the budgeted amount and the actual expenditure for
West UP.
The comparative analysis is done by the excel sheets below. It determines the differences
in the budgeted amount and actual amount. The highlighted depicts points of concern.
40
S.n. Item YTD 2012Actual
YTD 2012Diff
%age
achievement
1 Volume - Customer 0 0 0
2 - Physical cases 4668000 2378961 2289039 51.0%
3 - Unit cases 8886000 5039203 3846798 56.7%
4 Gross Revenue 982843000 1082445120 -99602120 110.1%
5
Net Revenue (GR -
Sales tax &
discount)
1082050000 780018015 302031985 72.1%
6
Variable COGS
(Sourcing cost &
sourcing freight)
451492000 600787840
-
149295840 133.1%
7
Gross Contribution
(net revenue -
COGS)
424575000 179230175 245344825 42.2%
8 Fixed Mfg Expenses 0 0 0
9
- Comp & Benefits
(Casual) Mfg
13482000 0 13482000 0.0%
10 Fixed Mfg Expenses 0 0 0
11
- Comp & Benefits
(Permanent) Mfg
65180000 0 65180000 0.0%
12
- Comp & Benefits
(Permanent) Mfg-
Incentive
1661000 0 1661000 0.0%
13 Gross Profit 279479000 177406475 102072525 63.5%
14
Logistics &
distribution
Expenses
0 0 0
15
- Comp & Benefits
(Casual) S&D
2509000 0 2509000 0.0%
16 Sales Expenses 0 0 0
17
- Comp & Benefits
(Permanent) S&D
24207000 22877251 1329749 94.5%
18
- Comp & Benefits
(Permanent) S&D-
Incentive
2843000 1541275 1301725 54.2%
19 - MD/ PSR Salary 11020000 7843516 3176484 71.2%
20 - Travel S&D 4428000 2867249 1560751 64.8%
-
41
Table 2: the actual expenditure vs. allocated amount
2. Deviations between the budgeted amount and actual expenditure, and identify the
reasons for variations.
The analysis is done using graphical method, the month wise data is represented in the
line charts and the deviation can be easily identified. The parameters which are the areas
Of concern are represented below:
(a) The variable COGS(Sourcing cost & sourcing freight)
42
Jan-12 Feb-12 Mar-12 Apr-12 -
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
5,663.09
9,777.85
22,792.82 21,845.02
3,915.80 4,857.50
14,765.30
21,610.60
ActualBudget
Month
Rs
'000
0
Variable COGS(Sourcing cost & sourcing freight)
Figure 3: variable COGS
In the above graph
43
(b) Rent
Jan-12 Feb-12 Mar-12 Apr-12 -
10.00
20.00
30.00
40.00
50.00
60.00 54.00
10.00
42.50 42.50
13.00 13.00 13.00 13.00
ActualBudget
Month
Rs
'000
0
Rent Rent
Figure 4: Rent
44
(c) Meeting and conferences
Jan-12 Feb-12 Mar-12 Apr-12
(10.00)
(5.00)
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
-
31.03
(7.62)
0.11 2.70 2.70 2.70 2.70
ActualBudget
Month
Rs
'000
0 Meetings/Conferences Meetings/Conferences
Figure 5: Meeting and conferences
The reason because of which the budgeted amount exceeded in the above parameters is:
1. RTM (Route to Market) department is responsible for the above increase. The
cost goes up mostly because of the sourcing and freighting. It was because of the
rise in the demand and the unexpected breakdowns.
2. The budgeted amount of the rent in the business plan is very less as compared to
the actual expenditure. The business plan needs to be reviewed.
3. The actual amount exceeded the budgeted amount of meetings and conferences
because there was a sales conference organized in the month of February. The
expenditure of that conference is not included in the business plan.
Apart from these parameters, all the other parameters are under control. The expenditures
are under the amount allocated to them.
45
3. HR related bottlenecks in increasing sales force effectiveness:
The sales force effectiveness was hampered because of the rise in the fuel prices.
The market developer were not travelling much, there was a resistance in there travelling
pattern. This was hampering the effectiveness of the sales force team in U.P. The
company was paying per day Rs.75 to a market developer which was not
sufficient for them. There was a survey conducted by telephonic interview from 35
market developers. The various questions were asked and a weekly analysis was done.
For example the responses of few individuals were:
After the above analysis to increase the workforce effectiveness there was an
increase in the transport allowance. The amount was increased to Rs.130 from Rs.75 per
day.
S.N
O
NAMEOF
THE
EMPLOY
EES
VISITE
D
(OUTLE
TS
P.W)
TRAVELL
ING
DIST
(P.W)
AMT
PAID(P.
W)
ACTUAL
EXPENSE(
P.W)
DIF
F(R
S.)
1
SHIV
KUMAR 210 600 Kms. 450 900 450
2 GOPAL 120 600Kms. 420 600 180
3 VIJAY 60 360Kms 420 750 330
4
BRIJESH
KUMAR 240 600Kms. 420 900 480
5
YOGEND
RA
KUMAR 80 210Kms. 450 600 150
7 HARISH
CHANDR
75 270Kms 420 600 180
46
A
8 SOFIA 150 120KMS 420 660 210
9
ARVIND
CHAUHA
N 132 120Kms 450 750 300
10
PUNEET
SINGH 240 330Kms 420 540 120
Table3: difference travelling allowance
4. To reduce recruitment cost by reduction in attrition % through means of
employee engagement initiatives.
The following action plan was followed:
AreaA reas of Impact Opportunity Area Action Plan
Communication
There has been focus around
creating health consciousness
in my unit
Review list of all Sales
Associates who need to get
Medical check up done as
per policy (every 2 yrs, 1
year). Ensure all who are
eligible to get medical check
up done complete the same
by July'12
a. Medical Bulletin-
47
Mails for 3 days
every month between
15th to 20th to all
perm associates in
Zone - theme on
Water Borne
Diseases, Obesity,
Hypertension &
Stress, AIDS, Cancer,
Hepatitis, Smoking,
Cardiac Health.
explore Quarterly
Poster campaign &
Quiz Contest on
above topics at Unit
level.
b. a. Visiting Doctor- 1
day every 2 months at
Plant/Depot -
gynecologist, general
physician, and
dietician.
c. b. Share findings of
Medical test with
resp associate and
support in treatment
and counseling by
Doctor
I'm well informed about the
hospitalization policies of
HCCB (e.g. Insurance
a. Fortnightly refresher on
Med claim policy/ coverage
48
coverage , emergency
contact)
I am well informed of my
life insurance & Group
Personal Accident Policy
through mails
b. Quarterly session by
Medicare representative.
Image At my workplace , people do
not need to compromise on
COBC guidelines to succeed
COBC training to be
imparted to all new joiners as
a process
COBC Refresher course for
100% associates.
Table4: employee engagement
The above plan action plan was implemented and the major focus was on creating
health consciousness.
The employees were informed about the health checkups. Free health checkup
camps were organized.
The mailers were made and circulated to all the employees informing them about,
Water Borne Diseases, Obesity, Hypertension & Stress, AIDS, Cancer, Hepatitis,
Smoking, and Cardiac Health.
For example the mailer circulated for heat stroke was:
49
The free helmets were distributed to the market developers.
The COBC (code of business conduct) training was conducted for new joiners.
DATA INTERPRETATION:
The data was interpreted by the followings steps:
1. The difference was taken out between the budgeted expense and the actual expense.
Example
50
S.n.
Item
Ledger
Balance
items
Budget Jan
2012
Actual Jan
2012 Diff
- Comp & Benefits (Permanent) S&D 5,591,0005,121,719.00
469,281
Table5: difference in the amounts
In the above examples the budgeted amount for the comp & benefits (permanent) S&D
expenditure is Rs. 5591000 and the actual expenditure for the month of Jan is Rs.
5121719.00. The difference between them was Rs. 469281.00.
2. In the next step the achievement percentage was calculated.
Example:
S.n
.
Item
Ledger
Balance
items
Budget Jan
2012
Actual Jan
2012 Diff % Ach
- Comp & Benefits (Permanent)
S&D5,591,000
5,121,719.00469,281 92%
Table6: achievement percentage
Achievement %= actual expense / budgeted expense ¿100
%= 5121719 / 5591000 *100
Achievement = 92%
51
The interpretation from the above example is that the achievement is 92%. Which is
acceptable as the actual expenditure is lesser than budgeted amount in the months of Jan.
3. After the calculation of the achievement%, the data is represented in the graphical form
for individual months.
4. The cumulative study was done for all the parameters from the month of Jan till April.
FINDINGS
(i) After the analysis of the achievement percentages, it was found that there are three parameters in which the actual expenditure is more than the budgeted amount. Those three parameters are:
1. Variable COGS (Sourcing cost & sourcing freight)
2. Rent
3. Meetings and conferences
52
The reason because of which the budgeted amount exceeded in the above parameters are:
RTM (Route to Market) department is responsible for the above increase.
The cost goes up mostly because of the sourcing and freighting.
The budgeted amount of the rent in the business plan is very less as
compared to the actual expenditure.
The actual amount exceeded the budgeted amount of meetings and
conferences because there was a sales conference organized in the month of
February. The expenditure of that conference is not included in the business
plan.
Apart from these parameters, all the other parameters are under control. The expenditures
are under the amount allocated to them.
After the studying the response of marketing developers it was found that the sales
force was not able to perform well as the transport allowance given to them was not
sufficient. Because of the rise in the fuel price the sales force was not traveling much,
which was the major reason, hampering their productivity. The transport allowance
was increased to Rs.130 per day from Rs.75 per day.
(iii) The employee engagement plan was implemented to increase the belongingness
amongst the employees, which would reduce the attrition rate and save the recruitment
expenditure. The major focus was on the health consciousness. The mailers were made
and circulated to all the employees informing them about, Water Borne Diseases,
Obesity, Hypertension & Stress, AIDS, Cancer, Hepatitis, Smoking, and Cardiac Health.
53
CHAPTER: 5 RECOMMENDATIONS AND CONCLUSIONS
CONCLUSION
Every organizational function and activity needs money to run and manage properly.
Availability of adequate financial allocation is needed for development and improvement
54
purposes. This is also true of HR. Continuous development of an improvement in HR is
as important as those in the business activities of your organization.
From the above study on hr budget vs. actual expenditure in Hindustan Coca-Cola
Beverage Private limited, it can be concluded that the expenditure are under control. The
expenditure is done as per the budgeted amount. There are some deviations though,
which has been identified in the above analysis. The reasons for the deviations have been
determined.
The cost control measures which have been implemented in the organization are:
1. Switching off systems when not in use. The tracker was prepared on a daily basis which
ensures the optimum use of electricity.
2. Usage of hired vehicle was reduced.
The transport allowance is increased for the sales force to facilitate them in improving
their performance. The employee engagement plan is implemented to increase the
belongingness.
SUGGESTIONS AND RECOMMENDATIONS
Some of the cost control measures which can be suggested to the company are:
1. Reduce the usage of the hired vehicle. The use of the personal vehicle should be
encouraged; this would eliminate the extra expenditure on vehicle used.
55
2. The tracker can be maintained on a daily basis which assures the optimum use of
electricity.
3. The employee engagement plan can be implemented with perfection.
REFERENCES
Cohen S, Karatzimas S, (2011),"The role of the human resources department in
budgeting: evidence from Greece", Journal of Human Resource Costing & Accounting,
Vol. 15 Issue: 2 pp. 147 – 166
56
Susan L, (Aug2006), “Don't look at budgeting as a necessary evil but as an opportunity to
demonstrate HR's value”, HR Magazine; Vol. 51 Issue 8, p93-95, 3p.
Tara C, (Aug 2008), “How to make your HR budget go further”, Personnel Today; p31-
31, 1/2p