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INNOVATIVE HR PRACTICES IN
IT INDUSTRY IN INDIA -
AN EMPHIRICAL STUDY
MINOR RESEARCH PROJECT
UGC SPONSORED
2013-15
by
Mrs. B.VIJAYALAKSHMI MURTHY
DEPARTMENT OF COMMERCE
V.E.S.COLLEGE OF ARTS SCIENCE & COMMERCE
(UNIVERSITY OF MUMBAI)
CHEMBUR, MUMBAI-400071.
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ACKNOWLWDGEMENT
"I am a success today because I had a friend who believed in me and I did not have the heart to let
him down" - Abraham Lincoln
There are many people who believed in me and I hope I have not let them down. I extend my
gratitude to Principal -Dr J K Phadnis for all her moral support in completing this project. I wish to
thank Prof Gayatri Balasubramaniam and Prof Umesh Chauhan for persuading me to take up this
project. My heartfelt thanks are due to Prof (Dr) Barhate whom I kept consulting for guidance on
how to go about dealing with non-technical aspects of doing a minor research project right from the
beginning. I also thank my colleague Prof Aarohi Khar, Prof Lekha Nambiar and Prof Riddhi for
helping with documentation work.
I gratefully record my thanks to HR Managers of IT Companies surveyed who whole heartedly
cooperated in answering the questionaire. My special thanks Prof (Dr) Shelja Kuruvilla of ITM ,
Kharghar,Navi Mumbai for her valuable guidance and support for data analysis.
Truly I owe my sincere thanks to my husband Mr B.V.R.Murty who stood by me on all accounts ; be
it assisting me on all matters of consultation regarding the project work or the home front. His silent
and calm support kept me going.
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FINAL REPORT OF THE WORK DONE
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Contents
Executive Summary ........................................................................................................................................ 6
1. INTRODUCTION ...................................................................................................................................... 8
1.1 HRM in India ........................................................................................................................................ 8
1.2 Objectives Of The Study ..................................................................................................................... 11
1.3 Organization of the Chapters .............................................................................................................. 11
2. LITERATURE REVIEW ......................................................................................................................... 12
2.1 Innovative Human Resource Management Practices (iHRM) ............................................................ 12
2.2 Need for adoption of iHRM practices ................................................................................................. 13
2.3 Innovative Human Resource Initiatives in various functions of the HR ............................................. 13
2.4 Innovative HRM Practices in some of the Well-known and Established Companies in India ........... 14
2.5 Innovative HRM Practices in the IT and ITES Industry ..................................................................... 16
3. RESEARCH METHODOLOGY .............................................................................................................. 19
3.1 Instrument Development And Measures ............................................................................................. 19
3.2 Operational Definitions and Measurement ......................................................................................... 24
3.3 Validity and Reliability ....................................................................................................................... 29
3.4 Sample Design and Data Collection ................................................................................................... 32
3.5 Statistical Analysis .............................................................................................................................. 33
3. Analysis and Findings ............................................................................................................................... 36
3.1 Description of the sample ................................................................................................................... 36
3.2 Need for innovation and areas of HR .................................................................................................. 37
3.3 iHRM and its adoption in Indian IT organizations ............................................................................. 39
3.4 Importance ascribed to iHRM and extend of Adoption ...................................................................... 40
3.5 iHRM strategies in selected HR functions .......................................................................................... 42
3.6 Reasons/Influence on iHRM ............................................................................................................... 44
3.7 Impact of iHRM practices ................................................................................................................... 46
3.8 Organizational commitment and iHRM .............................................................................................. 47
3.9 Importance of iHRM for organizational commitment ........................................................................ 48
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3.10 Organizational commitment and organization size 49
3.11 Outcomes of iHRM and size of the organizations ............................................................................ 49
4.Discussion, Recommendations and Conclusion ........................................................................................ 52
5. Limitations and Future Scope .................................................................................................................. 56
References ..................................................................................................................................................... 57
Annexure :EXHIBIT 1 60
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EXECUTIVE SUMMARY Executive Summary
Information Technology Industry in India has come of age and the competition between the
various players have intensified. The main resource based on which IT companies define their
core competencies have always been “manpower”. Therefore attracting capable employees,
developing them in the organization, retaining them and maintaining the knowledge they create is
a major strategic objective for all the organizations in the sector. To do so the Human resource
departments in these companies has to evolve and take on a more central role in the organization.
With the top management support, the HR function in IT organizations has taken to the new
challenges posed by the business environment by bringing in innovation in the Human Resource
practices. While trade papers intermittently record these efforts, research efforts have not been
undertaken to understand the extent and impact of iHRM practices in India especially in the
Information technology context. Therefore this study attempts to understand:
1. The extent to which HR managers believe that innovation in HR practices are important
for achieving goals of the organization
2. The major areas in which innovation is required
3. The extent to which Indian companies have succeeded in inculcating innovative HR
practices
4. the major influences on the kind of HRM innovations adopted by Indian IT organization
5. The important outcomes of innovation in HR practices with reference to organizational
commitment and performance
In order to do so, HR managers at twenty large, medium and small IT companies were
interviewed in the city of Mumbai with Headquarters in Bengalure. The results of the study
indicate that HR mangers agree that including innovative HR practices is extremely important
especially in the process of attracting and rewarding employees which are two of the largest
challenges they face. The areas in which these mangers are currently seeing extensive use of
iHRM practices include the Compensation, Rewards and employee acquisition strategies. In
Employee acquisition use of referral bonus and the social media is increasingly common while
use of a blend of financial and non-financial rewards in addition to “Best employee” etc. is also
finding more takers. Virtual working has also become increasingly acceptable to organizations if
it means that they can retain talent. These innovative practices according to HR mangers of these
companies help organizations to remain competitive in the job market; moreover their clients also
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audit them to ensure that their HR practices are as per acceptable international standards. With
these and the employee satisfaction in view, top managements have also been pushing their HR
departments to bring in innovative HR strategies. But on the flip side, these HR managers feel
that in spite of the efforts the industry is making, the employee commitment levels are low and
they will shift for higher pay or status.
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CHAPTER 1
Introduction
1. INTRODUCTION
India was declared itself open to Liberalization in the year 1991. This paved the way for
industrialization and rapid transformation in the Industry and Business sector. Liberalization also
meant change in the working style of the people and hence organizations needed to innovate the
HRM practices in an effort to ensure survival in an increasingly hypercompetitive environment.
(Som, July 2008) (Muduli, June 2012).
The key challenges of any HR department are employee acquisition, retention, developing
employees, performance management, and talent-management according to (Ramlall, 2009).
Seeking, developing and engaging and keeping talent is a big challenge for today’s organizations
because of innumerable options available outside (Ramlall, 2009). This is especially true for the
Indian IT industry. Hence, (Ramlall, 2009) argues that if companies continue to implement or use
the traditional ways of Human Resource practices, is it quite doubtful whether the HR manager
would be able to sustain the organization during an economic downturn.
1.1 HRM in India
Previous research has shown that Human Resource Management is one of the most important
determinants of organizational performance or efficiency. According to (Stephen A. Stumpf,
May-June 2010) companies functioning in India create a robust human resource team by
incorporating a strong organized HR practice in place.
The authors, (Stephen A. Stumpf, May-June 2010)compared the HRM practices implemented in
private and public sector in India, and found some startling facts, such as the HR practices used in
the two sectors were quite similar on parameters such as 1) the structure of the HR department, 2)
role of the HR manager in corporate change, 3) recruitment and selection process, 4)
compensation and benefits, 5) training and development, 6) employee engagement, 7) and
emphasis on key HRM Strategies. It is also found that on certain parameters such as the
compensation and training and development, the private sector seemed to have adopted a practical
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approach such as screening and testing of job applicants to ascertain the applicant’s job-fitness,
training need analysis, training evaluation, etc. These authors are also of the opinion that Indian
companies whether big or small implement HRM practices such as employee involvement
practices, training and development practices, employee welfare practices, managing employee
relations to manage employees. (Stephen A. Stumpf, May-June 2010)
Foreign MNC’s have also realized the potential of Indian employees, and hence are entrusting
them to take up higher responsibilities. This is especially true in the Information technology
business. For example, IBM’s Indian workforce increased from 9,000 in 2004 to 50,000 in 2007
and GE gave the Business Process outsourcing job to Genpact, which is India’s largest BPO
organization and has a head count of nearly 30,000 employees. Accenture also expects its Indian
workforce numbers to exceed its USA head count (Stephen A. Stumpf, May-June 2010). Salaries
of the Indian workforce increased 15% or more annually from 2002 to 2007. But the attrition
level also increased with an approximate increase of 15% to 30% every year (Stephen A. Stumpf,
May-June 2010). (Stephen A. Stumpf, May-June 2010) opinioned that the high attrition levels
and acculturation posed the biggest challenge to the growth of a company. It is considered that
good HRM practices are more important than ever in this industry with currency fluctuations etc
in the global economy leading to unprecedented uncertainties.
Human resource practices have, evolved over the period of time due to globalization, changing
needs and requirements, privatization/deregulation, competition. These external forces have
exerted companies to implement newer HR practices for sustained and improved organizational
and employee performance (Gurbuz, Nov 2009). Employee turnover is one of the biggest
challenges of an organization. Therefore, retention of talented and skilled workforce becomes
crucial because it creates a competitive advantage for the company. Labor force is regarded the
most indispensable asset of an organization and retaining the manpower becomes imperative.
Retention becomes even more crucial because acquiring new talent becomes very expensive;
hence retaining the old labor force becomes the smarter choice (Kiwook Kwon, 2010) (Jr., 2011).
It has been researched that the employee turnover or the attrition rate is found to be very high in
the Service and the BPO or the Business Process Outsourcing Industry (Cho, June 2010) (Chand,
March 2010). It has been observed that because of heavy industrialization and accelerated
globalization, the working environment has become very stressful. Hence, employees fail to strike
a work-life balance which results in increased turnover, absenteeism and sickness (Thomas
Lange, Oct 2010).
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In these turbulent times, Human Resource function is considered an indispensable part of every
organization in the world. Previous research has also suggested that there exists a positive
relationship between HRM practices and organizational performance. It is considered to be the
heart and soul of an organization, and the organizational efficiency or performance is dependent
on the Human Resource function. Human resource management is therefore a very important and
crucial task of an organization. Tasks significant to the success of a company are talent
acquisition in terms of recruiting the right manpower with the right skill sets, employee retention,
Training and development, employee health schemes, enable a work-life balance, and encourage a
free, open work environment. (Gurbuz, Nov 2009).
Today, when there is so much competition around, Innovating HR practices has become the need
of the hour. Previous research and literature made it clear to academicians and practitioners alike
that there exists a relationship between human resource practices and organizational effectiveness,
since the HR practices influence employee behavior, productivity, and consequently affect the
organizational effectiveness (Agarwala, March 2003).But soon organizations realized that most
organizations incorporated the traditional practices in HRM as a norm and therefore it in search
for competitive advantage in the HR space, organizations sought to ‘think outside the box’ and
come out with an innovative approach to HRM. The traditional set of practices or standards had
become redundant with limited application. (Agarwala, March 2003). According to the
(Agarwala, March 2003) there is a need to constantly develop and innovative Human Resource
practices to remain competitive in the industry. Indian practitioners and Academicians too are
gradually understanding the need to investigate the key HR issues and Innovate HR practices to
resolve them (Solanki, 2009).
Innovative Human Resource Practices has been explored by its many facets in research. Some
authors have referred to these as ‘high performance’, ‘high commitment’, or ‘high involvement
practices’ (Agarwala, March 2003) (Williams, Feb 2003). Trust is recognized as a critical factor
for organizational performance in the workplace. Therefore, ‘High commitment’ HR practices are
expected to show the employees, the extent to which the organization trusts them (Williams, Feb
2003) (Rosalind Searlea, Mar 2011) (Tzafrir, Sep 2005). (Williams, Feb 2003) states that
organizations that implement ‘High Commitment’ HR practices are rather successful in building
up a team of employee’s who can be trusted in matters important to the organizational
effectiveness. The author lists down the “High commitment HR Practices such as employment
security, selective hiring, team-working, performance-related pay, Training and development,
egalitarianism, information sharing”. (Williams, Feb 2003).
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Research also indicates that the outcome of innovative HRM practices can be important towards
retaining employees and employee performance. In addition to a positive relationship between
age and duration of service in the organization and between clear job description and
performance, it is also found that the longer the duration the employee has served in the
organization, more loyal he tends to be and less keen he tends to be to shift to any other
organization. Similarly, if an employee is guided properly with proper training and development
and clear job description, he tends to perform better than those who are not guided appropriately.
(Williams, Feb 2003).
1.2 Objectives Of The Study
While there is considerable interest in academic research in the area of iHRM or innovative
Human resource management and considerable need for the same suggested by the ever changing
external environment, the extent to which these practices have been adopted by the Indian IT
industry have not been explored understood and documented. Therefore, the objectives of the
study are to understand:
1. The extent to which HR managers believe that innovation in HR practices are important
for achieving goals of the organization
2. The major areas in which innovation is required
3. The extent to which Indian companies have succeeded in inculcating innovative HR
practices
4. the major influences on the kind of HRM innovations adopted by Indian IT organization
5. The important outcomes of innovation in HR practices with reference to organizational
commitment and performance
1.3 Organization of the Chapters
In an attempt to address the various objectives set by this study a research was undertaken. The
introduction to the back ground of the study and the objectives are discussed in Chapter 1.
Chapter 2 goes in to the literature base for the study and the conceptual evolution of the research
gap and need for the study. The methodology followed is discussed in detail in Chapter 3.The
results and analysis is presented in Chapter 4. This is followed by a detailed discussion of the
findings and the evolved recommendations. Chapter 5 discusses the various limitations faced by
the study from the methodological and applicative perspective. It also discusses possible future
directions. Finally Chapter 6 concludes the report. After presenting the References, the survey
format used is exhibited as an Annexure.
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CHAPTER 2
LITERATURE REVIEW
2. LITERATURE REVIEW
2.1 Innovative Human Resource Management Practices (iHRM)
Human Resource Management Research has always been a very hot topic and has been discussed
and researched by several researchers all over the world. There have been several developments
in the Human Resource field and the Human resource department has eventually evolved over the
years (Paauwe, Nov 2001) (Harvey, Dec 2001). Because of rapid industrialization and
globalization, the need for trained and skilled manpower becomes imperative. Companies have
started recognizing the importance of the HR Department and are aligning the HR function to the
strategic business goals and objectives (Srimannarayana, Oct - Dec 2010). HR Department would
be accountable for the strategic decisions and the overall performance of the organization
(Harvey, Dec 2001). A lot of Researchers have emphasized that employees that work in teams or
team work has resulted in productive performance of the organization (Carmen Camelo Ordaz,
April 2008). Nowadays, there are many companies which have also adopted newer technologies
like internet services in an effort to undertake their HR responsibilities. There are many social
networking websites available which connect people from the farthest corner of the world.
Websites such as naukri.com, timesjobs.com and LinkedIn are very popular websites for
recruitments in India. (Bing, 2011).
While a few research efforts have been made in this area,a definition for it is sparce. Som in the
article titled “What drives adoption of innovation in SHRM practices in Indian Organizations”,
(May 2007) and in “Bracing for MNC Competition through Innovative HRM Practices : The way
ahead for Indian Firms”, (March-April 2006) defines innovative HRM practices as “Any
intentional introduction of HRM programme, policy, practice or system designed to influence or
adapt employee the skills, behaviors, and interactions of employees and have the potential to
provide both the foundation for strategy formulation and the means of strategy implementation
that is perceived to be new and creates current capabilities and competencies”.
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2.2 Need for adoption of iHRM practices
The dynamic and changing business environment of India, that started off with liberalization in
the first phase, then moved on to privatization/deregulation (second phase), and the third or the
current phase of globalization, has made it imperative for modern organizations to adopt iHRM
practices (Som, May 2007). Previous research has also indicated and shown that organizations
adopt iHRM practices to improve their organizational performance According to authors who
have worked in this area, organizations adopt iHRM practices to remain competitive and save
their business. Several Indian organizations have adopted iHRM practices to remain competitive
and improve their organizational performance (Singh, June 2003). Companies such as Hero
Honda, Tata Motors, Bharat Forge, Hindustan Inks, Sundaram Clayton, BPCL, Maruti Suzuki,
Infosys, and Wipro were able to successfully adopt iHRM practices in their organizations to
withstand the blow of liberalization, privatization, FDI, and the threat of MNC’s (Som, May
2007). Sung-Choon, (2013) and Conway, (2011) suggests that organizations are inclined to adopt
IHRM practices to improve or augment their organizational efficiency and employee productivity.
It also suggests that organizations now face severe competition or regulatory pressures which
again makes iHRM practices inevitable. A previous research interviewed some HR professionals
in the U.S, who named some 40 innovative HR practices that were executed or implemented in
their organizations. Some of these innovations that were named were human resource information
system, 360-degree appraisals, internet or online recruiting, Six-sigma, outsourcing, competency-
based compensation, etc.
(Som, May 2007) argues that the Human Resource Department in India is poorly managed and
staffed and is very unorganized and unstructured. Hence, the HRM department was under intense
pressure to adapt and adopt new practices to grow a new breed of skilled, well-trained and
motivated manpower. Therefore, more and more companies are adopting innovative HRM
practices (Som, May 2007) (Vernon, Jan-Feb 2008). These innovations are not limited to a few
factions. HR managers have been successful in bringing in innovations to almost all activities
they undertake.
2.3 Innovative Human Resource Initiatives in various functions of the HR
According to (Som, May 2007) the HR Department is changing and embracing new innovative
HRM practices. The HR department is no more known as a support or a secondary function, but is
given equal importance as to the other functions in the organization. (Som, 2007) suggests the
various innovative initiatives taken by the HR department. According to the author, the
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recruitment initiatives included “fair and open systems, free flow of discussion,
induction/orientation”. Promotion and compensation were thus now done only on merit and
competency basis, and employees who are efficient, productive and competent were promoted
faster. The author also claims that “Organizations are practicing job rotation, re-training, re-
deployment to build the employees skills and knowledge in all areas of work”. Career
Development is another initiative which is introduced to help build, manage and grow an
employee’s career in the organization. Majority of the researchers are of the opinion that it is
imperative that an organization adopts innovative HR practices, which helps in breaking the
monotony and motivates the employees to work hard and be more productive. It improves the
quality of the organization’s performance (Som, 2007). (Mahal, 2012) emphasized that innovative
HRM practices in training, compensation and reward lead to reduction in employee turnover,
absenteeism, better productivity and motivation and improved financial performance.
According to (Som, March-April 2006) the motive or the purpose of introducing iHRM practices
in an organization is to enable HR synergize with the organizational strategies, keeping in mind
the dynamic Business environment. HR has to act as a Change agent or a Strategic partner and
work in sync with the organization’s objectives and goals. iHRM’s aim is to provide
“professionalized recruitment, selection and career development initiatives to build a skilled,
committed manpower. It also aims to build an efficient performance management system that
develops, retains, retrains and redeploys talent” (Som, March-April 2006). Further the concept
involves rightsizing or downsizing and decentralizing for augmenting organizational
effectiveness.
2.4 Innovative HRM Practices in some of the Well-known and Established Companies in
India
Som, (March-April 2006) and Harish Jaina, (March 2012) has put forth some examples of
companies that have implemented iHRM practices in their organization and reaped the benefits of
the same. Maruti Udyog Ltd, is a name to reckon Trust, Belief and Care. It truly revolutionized
the automobile industry in India. It faced intense competition from MNC’s such as Ford,
Mitsubishi, Hyundai and Honda. Initially, Maruti did not acknowledge the importance of the HR
Department and thought of it as an unnecessary burden. But soon it realized the HR Department’s
importance because of the mounting pressure and the threat from the MNC’s. It decided to re-
activate the HR function and link the HR strategies with that of the organization or business
strategy. The HR department was entrusted to manage the whole and soul of the organization and
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was held responsible for the employee and organizational effectiveness. Soon, the HR department
of Maruti was successful in developing a productive team, and its compensation practices became
the best in the industry (Malji, July-Dec 2013).
Similarly, Mahindra & Mahindra were also facing an similar problem. The factories were not
functioning properly, and were resulting into huge losses for the company. This was due to
insufficient manpower and influence of union labors. Earlier, the HR department was not part of
any important strategic decisions. Gradually, the HR started working towards the betterment of
the organization and introduced several innovative human resource practices. Firstly, the HR
function emphasized on building team work, that encouraged employees to share their
experiences and acquire knowledge from their fellow counterparts. It also encouraged regular
meeting to update the management on the progress of the work and to have free flow of
discussion. Interestingly, it did not believe in hiring very qualified people, since they were of the
opinion that qualified people switchover quickly for an opportunity with MNCs. Instead they
recruited professional consultants. They also allowed employees to work as part-timers or
consultants. The introduction of innovative HR practices led to steady and increased profits, and
increase in the productivity of the manufacturing facility (Som, March-April 2006).
TISCO again a very reputed and established Indian organization has embraced innovative HRM
practices in its organization. It wanted to embark on a journey to be a high performance, high
growth organization. It partnered with McKinsey to help establish key strategic areas. It
introduced a program known as the PEP or the Performance Ethic Program, which encourages
young employees to grow up the corporate ladder swiftly, as against the traditional way of
promoting employees. It has also introduced a revised Performance Management System, which
is purely competency based and depends on the fulfillment of the KRA’s of the employee (Som,
March-April 2006).
Another Innovative company that has adopted innovative HRM practices is Ranbaxy. Ranbaxy
was in the export business of pharmaceuticals for the last 18 years. But somehow, Ranbaxy felt
that it was not doing good business, and that something was pulling it back. It realized that
Globalization was playing its role, and the need for global players was felt badly. Hence, it
decided to adopt innovative HRM practices to re-establish its presence in the foreign market. It
decided to encourage cross-border exchange of knowledge, so that the in-house employees can
learn about the techniques from the fellow counterparts based out of the foreign market (Som,
March-April 2006).
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Similarly, there are many other reputed Companies such as BPCL, Clariant, SBI, Arvind Mills,
Motorola and the Mehta Group that have adopted and implemented Innovative HR Practices in
their organizations (Som, Bracing for MNC Competition through Innovative HRM Practices : The
way ahead for Indian Firms, March-April 2006) (Bhatnagar, Jan-Mar 2008).
2.5 Innovative HRM Practices in the IT and ITES Industry
The Information Technology Industry has gradually evolved over the period of years. The
progression has been rapid from IT to BPO (Business Process Outsourcing) and to the newer
terminology known as KPO or Knowledge Process Outsourcing. According to the Daintith,
(2009), , “Information technology (IT) industry involves in the application of computers and
telecommunications equipment to store, retrieve, transmit and manipulate data, often in the
context of a business or other enterprise”. ITES (Information technology enabled industry) took
shape because of the increasing need of IT in every aspect of business. Small to large scale
businesses requires IT in their business. Working in ITES sector means to work within a business
setting using information technology. A major part of ITES in India is through Business process
outsourcing (BPO) which is a subset of outsourcing that involves the contracting of the operations
and responsibilities of specific business functions (or processes) to a third-party service provider.
Often the business processes are information technology-based, and are referred to as ITES-BPO,
where ITES stands for Information Technology Enabled Service.(Nellis & Parker 2006).
Knowledge process outsourcing (KPO) is a sub-segment of business process outsourcing
industry. Sachdeva, (2009) defines KPO as “The outsourcing of high-end knowledge intensive
processes requiring considerable domain expertise which necessitates a shift of execution from
standardized processes to processes that demand superior analytical and technical skills as well
as decisive judgment”. People or employees are the most important success factors that contribute
to the massive growth of the Indian IT and Business Outsourcing Industry (Disha Sachdeva,
2009).
Since IT and especially, BPOs and KPOs are a People-centric Industry, it becomes even more
imperative for it to focus and concentrate on the Human Resource management area, to acquire,
retain talented knowledge workers and to provide them a comfortable and peaceful working
environment. Picking and choosing the right talent or manpower in the BPO and IT is very
crucial. Hence, people management issues are the top most priority of the industry since the job
involves the application of the necessary job skills of the knowledge workers (Disha Sachdeva,
2009) (Naresh Khatria, Dec 2010).
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There are various challenges faced by the industry in respect to the HR function. This includes
right talent recruitment, manpower management, work-life balance, autonomy, good working
conditions (Solanki, 2009). As per (Disha Sachdeva, 2009) ‘a report prepared by the Price
Waterhouse Coopers / Confederation of Indian Industries (2005)’ “views that in KPO’s the
emphasis will be talent than on physical infrastructure and human resource management tools
and methods for recruitment, retention and motivation will have to be special because work
oriented professionals are motivated by stimulating work content and learning opportunities
rather than by parties and prizes”.
Major IT companies are at the forefront of innovation in HRM. This includes the leaders in the
industry including Infosys and Wipro. Infosys – The name of the company reminds us of the great
leadership skills of the founder Mr. Narayan Murthy. Mr. Narayan Murthy started Infosys with
his sheer determination and hard-work. He values and considers his employee workforce the most
important asset of his organization. He believes in nurturing them and providing the right skill
sets to be able to face the harsh realities of the dynamic corporate world. He believes that
knowledgeable and talented workforce is the top priority of a company and that it creates a
competitive factor for the company. Hence, the demand for talented and skilled labor force is
increasing rapidly. From a mere number of 42 employees in 1987 to 23,000 in 2003, the increase
in the number of workforce rose drastically. Mr. Narayan Murthy realized that the traditional
ways of recruiting and selecting employees had become redundant, and that the company required
to adopt innovative human resource practices to be able to attract and retain the best possible
talent in the market. In Infosys the recruitment process was interesting as well as a difficult nut to
crack. It involved a lot of puzzles, problem-solving equations, that tests the analytical, logical and
problem-solving skills of the candidate. The only selection criterion in Infosys is to test the ability
or capacity to learn of the candidate. These tests helped the company to gauge the skills and
capacity of the candidate to be able to survive in the dynamic Corporate Culture. Mr. Narayan
Murthy believes that as long as the company continues to innovate, Infosys would continue to
succeed, flourish and grow. Infosys built a training centre in Mysore, especially for its employees
for building their skills and competencies (Som, March-April 2006).
Likewise, there was another big IT company which also implemented a similar model of HR
processes. Wipro Systems is one of the most promising companies of India, embarking its
footprints in the international market as well. The Chairman Mr. Azim Premji believes that the
employees of the organization are its biggest assets. The author quotes Mr.Premji as saying, “The
key to success in all our efforts, as always, is our people” (Som, March-April 2006).
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Foreign MNC’s have also realized the potential of Indian employees, and hence are entrusting
them to take up higher responsibilities. For example, IBM’s Indian workforce increased from
9,000 in 2004 to 50,000 in 2007 and GE gave the Business Process outsourcing job to Genpact,
which is India’s largest BPO organization and has a head count of nearly 30,000 employees.
Accenture also expects its Indian workforce numbers to exceed its USA head count (Stephen A.
Stumpf, May-June 2010). Salaries of the Indian workforce increased 15% or more annually from
2002 to 2007. But the attrition level also increased with an approximate increase of 15% to 30%
every year ( Stumpf, May-June 2010). Stumpf, (May-June 2010), opinioned that the high attrition
levels and acculturation posed the biggest challenges to growth. It is considered that good HRM
practices are more important than ever in this industry with currency fluctuations etc in the
globaleconomy leading to unprecedented uncertainties.
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CHAPTER 3
METHODOLOGY
3. RESEARCH METHODOLOGY
3.1 Instrument Development And Measures
Given the objectives of the research, instrument was developed to measure
1) the importance of innovation in HRM practices Employee acquisition strategies(areas of iHRM
evaluated included -Employee Retention strategies-Induction-Training and Development-
Leadership Development-Career Planning-Performance appraisal-Compensation and incentives-
Rewards and recognitions-Welfare measures-Organization Development-Knowledge
Management-HR strategy-Employee exist and separation management-Corporate social
responsibility)
2) the evaluation of the extend of innovation adopted in various HRM practices (areas of iHRM
evaluated included -Employee Retention strategies-Induction-Training and Development-
Leadership Development-Career Planning-Performance appraisal-Compensation and incentives-
Rewards and recognitions-Welfare measures-Organization Development-Knowledge
Management-HR strategy-Employee exist and separation management-Corporate social
responsibility)
3)the major reasons for /influences on the kind of HRM innovations adopted (these reasons
included -External environmental forces-Organizational Structural Characteristics-Organizational
culture-History of success with past HRM innovations-Influence of consultants-Top management
insistence-To remain competitive in the industry-Quest for continuous improvement in HR M-To
reduce costs of HRM Services-To increase services of HRM department-To increase impact of
HRM department-To provide more satisfying work experience to the employee and
4) the impact of iHRM on organizational commitment and organizational effectiveness. This was
measures using a pre-validated scale which tried to evaluate the degree to which the employees
were likely to continue with the organization under different circumstances. It checked the
20
Employees willingness to change companies if the new job offered 25% pay increase, More creative
freedom, More status or Opportunity to work with friendlier people
Pre-validated Scales were not available for the first three sets of variables or were found not
suitable in the Indian context. Therefore, except for Organizational commitment, all the items for
the instrument were adapted from the various previous studies according to their relevance in the
Indian context and while ensuring that the items were as domain relevant as possible. Table 3.1
gives a description of the items used to measure the variables used in this study along with the
reliability measures calculated for each.
TABLE 3.1: Research Measures
Variable Reliability
scores(Cron
bach alpha)
Items Scale
Size of the
organization
NA - Category Scale
The importance of
innovation in
HRM practices
0.927 importance of innovation in HRM
practices in the following
-Employee acquisition strategies
-Employee Retention strategies
-Induction
-Training and Development
-Leadership Development
-Career Planning
-Performance appraisal
-Compensation and incentives
-Rewards and recognitions
Likert Scale
1-Completely
Unimportant………
…
5-Extremely
important
21
-Welfare measures
-Organization Development
-Knowledge Management
-HR strategy
-Employee exist and separation
management
-Corporate social responsibility
The evaluation of
the extend of
innovation
adopted in various
HRM practices
0.920 the extend of innovation adopted in
the following
-Employee acquisition strategies
-Employee Retention strategies
-Induction
-Training and Development
-Leadership Development
-Career Planning
-Performance appraisal
-Compensation and incentives
-Rewards and recognitions
-Welfare measures
-Organization Development
-Knowledge Management
-HR strategy
-Employee exist and separation
Likert Scale
1-completely
disagree……………
…
5- Completely Agree
22
management
-Corporate social responsibility
Reasons
for/influences on
for iHRM
0.867 External environmental forces
Organizational Structural
Characteristics
Organizational culture
History of success with past HRM
innovations
Influence of consultants
Top management insistence
To remain competitive in the
industry
Quest for continuous improvement
in HR M
To reduce costs of HRM Services
To increase services of HRM
department
To increase impact of HRM
department
To provide more satisfying work
experience to the employees
Likert Scale
1-Completely
agree………………
….
5- Completely agree
23
Organizational
Commitment
0.626 Employees would be willing to
change companies if the new job
offered:
1. 25% pay increase
2. More creative freedom
3. More status
4. Opportunity to work with
friendlier people
Likert Scale
1-very
likely………….
5-very unlikely
Organizational
effectiveness
0.879 -Sales Growth
-Profitability within Industry
-Market Share within Industry
-ROI
-People orientation of the
management philosophy
-Employee attitude and behavior
-Employee Productivity
-Employee Satisfaction
-Customer satisfaction
-Ability to attract and retain talent
Likert Scale
1-Completely
agree………………
….
5- Completely agree
iHRM
implemented in
Employee
acquisition
strategies
NA Social media utilization
Second career internship
Referral bonus
Industry academia interface
Checklist-
dichotomous scale
iHRM
implemented in
NA Performance linked awards
Cash awards for extra ordinary
Checklist-
dichotomous scale
24
Rewards and
Recognitions
performance
Best employee awards
Blend of financial and non-financial
awards
iHRM
implemented in
Welfare Measures
NA Focus on long term benefits for
employees through alternative
insurance and health management
systems
Benefits directed at employees
families
Recreational facilities
Child/elder care programs
Virtual working
Checklist-
dichotomous scale
3.2 Operational Definitions and Measurement
Size of the organization
The size of the organization was measured using a multiple choice question with large,
medium and small as the items. Large was operationalized as organizations with more than 500
employees, Medium as having 51- 500 employees and small as having less than 50 employees.
The name of the IT organization was collected as an open ended question.
Importance of iHRM practices
15 “importance of innovation HRM practices” questions were included asking respondents to
indicate their agreement on a five point Likert scale (5-extremely important and 1-completely
disagree). Principal component analysis with varimax rotation was conducted on the questions,
using a minimum eigen value of one as a criterion for the factors extracted. Statements that
loaded .50 or above on a single factor was included and used for further analysis. In case of a
double loading, the factor on which the item loaded higher was considered. (Refer Table 3.2).
25
TABLE 3.2: Results of Factor analysis of “importance of innovation HRM practices” items
The principal component analysis yielded three factors which were named: “Employee
Acquisition and Retention Strategies” (11.32% variance explained), “Employee Performance
management” (53.79% variance explained), and “other HR initiatives” (18.86 % variance
explained).
26
Evaluation of iHRM practices
TABLE 3.3: Results of Factor analysis of evaluation of innovation in HRM practices items
15 “evaluation of innovation HRM practices” questions were included asking respondents to
indicate their agreement on a five point Likert scale (5-completely agree and 1-completely
disagree). Principal component analysis with varimax rotation was conducted on the questions,
using a minimum eigen value of one as a criterion for the factors extracted. Statements that
27
loaded .50 or above on a single factor was included and used for further analysis. In case of a
double loading, the factor on which the item loaded higher was considered. (Refer Table 3.3).
The principal component analysis yielded three factors which were named: “Employee
Acquisition and Reward Strategies” (48.79% variance explained), “Employee Growth
management” (6.85% variance explained), and “other HR initiatives” (21.5% variance
explained).
Reasons for/influences on for iHRM
12 “Reasons for/influences on for iHRM” questions were included asking respondents to
indicate their agreement on a five point Likert scale (5-completely agree and 1-completely
disagree). Principal component analysis with varimax rotation was conducted on the questions,
using a minimum eigen value of one as a criterion for the factors extracted. Statements that
loaded .50 or above on a single factor was included and used for further analysis. In case of a
double loading, the factor on which the item loaded higher was considered. (Refer Table 3.4).
TABLE 3.4: Results of Factor analysis of “Reasons for/influences on for iHRM items
28
The principal component analysis yielded three factors which were named: “Environment and
top management influence” (9.8% variance explained), “To provide relevant HR strategies”
(16.51% variance explained), and “To provide strategic advantage through HR” (43.54%
variance explained).
Organizational effectiveness
10 “Organizational effectiveness” questions were included asking respondents to indicate their
agreement on a five point Likert scale (5-completely agree and 1-completely disagree).
Principal component analysis with varimax rotation was conducted on the questions, using a
minimum eigen value of one as a criterion for the factors extracted. Statements that loaded .50
or above on a single factor was included and used for further analysis. In case of a double
loading, the factor on which the item loaded higher was considered. (Refer Table 3.5).
The principal component analysis yielded three factors which were named: “Organizational
effectiveness-Macro” (48.79% variance explained), “Organization effectiveness-Micro”
(22.55% variance explained), and “Ability to attract and retain talent” (10.18% variance
explained).
29
TABLE 3.5: Results of Factor analysis of “Organizational effectiveness” items
3.3 Validity and Reliability
Based on literature Valid items were generated to operationalise the variables under study. A
measure is considered valid to the degree that it really does measure what it is intended to
measure. The internal validity can be discussed under: 1) Face Validity or content validity, 2)
Construct validity and 3) Criterion Validity (Cooper and Schindler, 2003)
Face validity
30
The face validity or content validity of a measuring instrument is the extend to which it provides
adequate coverage of the investigative questions guiding the study. Determination of content
validity is judgmental and can be approached in several ways (Cooper and Schindler,2003). In
this study, the first step involved a careful definition of iHRM and the items to be scaled and the
scales to be used. Further, these items were evaluated through conducting a screening exercise or
Judgment method (Litwin, 1995; Sekaran, 1992). The aim of the exercise was to determine the
extent to which each item reflected dimensions to be measured. The screening exercise involved 4
judges, including HR and research methodology professors. They were asked to compare and
evaluate the items included in the questionnaire with the research objectives. The judges
supported the items used to test the research hypotheses (Hair et al).
Construct Validity
In measuring construct validity, both theory and the measuring instrument are considered. Once it
is established that the constructs are meaningful in a theoretical sense, the adequacy of the
instrument is investigated. In order to ensure that items measure hypothetical concepts, iHRM
dimensions studied in previous research were used.
The adequacy of an instrument can be tested either through convergent validity or discriminant
validity. Convergent validity involves correlating the results of the present study with pre-existing
validated scales. In their absence or of they have not been used, the construct validity of a
measure is shown by showing that it relates to other variables to which it should be related
(Campbell and Friske, 1959; Green and Tull, 1980). Internal consistency therefore is a good test
for construct validity. Beyond internal consistency, evidence for new scales is difficult to find.
The most general practice is to assume, unless there is evidence to the contrary that the
respondent is responding accurately. Much stronger evidence on construct validity can come from
item by item and scale by scale convergent and discriminant validity. Discriminant validity
involves separating it from other constructs in theory or related theories. While these have not
been attempted, here factor analysis has been used to establish the construct adequacy of the
measuring device (Cooper and Schindler, 2003).
Criterion Validity
Criterion related validity reflects the success of measures used for prediction or estimation.
Cooper and Schindler (2003), suggests that any criterion measure must be judged in terms of four
qualities: 1) Relevance 2) Freedom from bias 3) Reliability and 4) Availability. A criterion is
relevant if it is defined and scored in terms we judge to be a proper measure. Freedom from bias
31
is attained when the criterion gives each respondent an equal opportunity. A reliable criterion is
stable or reproducible. Finally, information specified by the criterion should be available. (Cooper
and Schindler , 2003; Wells,1975).
TABLE 3.6: Summery of Internal Validity Methods
No. Type What is measured? Methods used
1 Content Validity Degree to which the content of
the items adequately represents
the universe of all relevant items
under study
Choice of relevant
dimensions from existing
literature
Researcher judgment
Panel evaluation
2 Construct
Validity
Attempts to identify the
underlying constructs being
measured and determine how
well the test represents them
Internal consistency
Factor Analysis
3 Criterion
Validity
Degree to which the predictor is
adequate in capturing the
relevant aspects of the criterion
Correlations
Multiple Regression
Reliability
Reliability of a scale measures how consistent or stable the ratings generated by the scale are
likely to be. Reliability focuses on whether the scale consistently measures the construct or not.
(Parashuraman, Grewal and Krishnan, 2007). Reliability is therefore concerned with the estimates
of the degree to which a measurement is free of random or unstable error. Reliable instruments
can be used with confidence that transient and situational factors do not interfere. Mathematically,
reliability is defined as the proportion of the variability in the responses to the survey that is the
result of differences in the respondents. That is, answers to a reliable survey will differ because
respondents have different opinions, not because the survey is confusing or has multiple
interpretations Reliable instruments are robust and; they work well at different times and under
different conditions. This distinction of time and condition is the basis for frequently used
32
perspectives on reliability: Stability, Equivalence and Internal consistency. While stability of a
scale measures the reliability whether consistent results can be secured with repeated measures of
the same person with the same instrument, equivalence is concerned with variations at one point
in time among observers and samples of items. Ideally, in order to obtain a good estimate of the
reliability of a survey, we would like to administer the survey twice to the same group of people
and then correlate the two sets of results. However, this is often impractical because bias may be
introduced in the second set of answers or because respondents may be unwilling or unable to
take the survey a second time. . One solution is to compute Cronbach's alpha (Cooper and
Schindler, 2006)
Cronbach's alpha is the most common form of internal consistency reliability coefficient.
Cronbach's alpha is a lower bound for the true reliability of the survey. Alpha equals zero when
the true score is not measured at all and there is only an error component. Alpha equals 1.0 when
all items measure only the true score and there is no error component. The computation of
Cronbach's alpha is based on the number of items on the survey and the ratio of the average inter-
item covariance to the average item variance. (Cooper and Schindler, 2006; Bryman and Bell,
2008)
Cronbach's alpha can be interpreted, as the percent of variance the observed scale would explain
in the hypothetical true scale composed of all possible items in the universe. Alternatively, it can
be interpreted as the correlation of the observed scale with all possible other scales measuring the
same thing and using the same number of items. (Cooper and Schindler,2006) By convention, a
lenient cut-off of .60 is common in exploratory research; alpha should be at least .70 or higher to
retain an item in an "adequate" scale; and many researchers require a cut-off of .80 for a "good
scale." (Hair et al)
3.4 Sample Design and Data Collection
The survey process was conducted in Bangalore since it is considered the silicon valley of the
country and since many IT companies have the Head office or major business centres there.
Since getting permission to conduct the survey was difficult, Convenience sampling a non-
probability sampling technique was applied. Attempt was made to include representation from
large, small and medium size IT organizations. Please find details of sample representation and
organization size in table 3.7. Majority of the companies interviewed were large firms. In each
organization the head of the human resources department or his representative was
interviewed. The various firms in that participated in this study are showcased in table 3.8.
33
Table 3.7: Sample size by size of the organization
Frequency Percent Valid Percent Cumulative
Percent
Valid
Small(<50 emp) 3 15.0 15.0 15.0
medium(50-500 emp) 5 25.0 25.0 40.0
Large (>500 emp) 12 60.0 60.0 100.0
Total 20 100.0 100.0
Table 3.8: Names of the companies and size of the organizations
Name of Company Size
Talent Bridge Small
Metor Labs Small
Adept Sys Small
Confidential Medium
Pinaka Tech Medium
Allied Medium
Ampersand Technologies Medium
Artera Systems Medium
Sap Large
Invensys Operations Management/ Invensys Skelta Large
Oracle Large
Dell Large
Accenture Large
IBM Large
TCS Large
Tech Mahindra Large
Confidential Large
HCL Large
iGate Large
SLK software Large
SAP Large
3.5 Statistical Analysis
Data were analyzed with the Statistical Package for Social Sciences (SPSS) version 20.0.
34
Descriptive statistics, bivariate analysis and multivariate analysis were adopted.
Descriptive
Descriptives have been used by studying means or frequencies to construct various chats
presented in the report
Factor Analysis
Principal component analysis with varimax rotation was used on the questionnaire items to reduce
the data. Principal component analysis is a model of factor analysis that considers total variance
and derives factors that include small proportions of unique variance. It is appropriate when the
primary concern is a minimum number of factors that are needed to account for maximum amount
of variance. Factor analysis is a generic name given to a class of multivariate statistical methods
whose primary function is to define underlying structure in the data matrix. With factor analysis,
the researcher can first identify the separate dimensions of the structure and then determine the
extent to which each variable is explained by each dimension. These dimensions or factors when
interpreted and understood describe the data in a much smaller number of concepts than the
original individual variables. Data reduction can be achieved by calculating scores for each
underlying dimension. (Hair et al, 2003)
To identify the optimum number of factors to be extracted two methods have been used. For the
data reduction, the latent root criterion was used. Only factors that having latent root greater than
one were considered for further analysis. (Hair et al, 2003) In case of multiple high loading, the
higher loaded item was considered.
ANOVA
The statistical method for testing null hypothesis that the means of several populations are equal
is analysis of variance. One-way analysis of variance uses a single factor, fixed effects model to
compare the effects of one treatment or factor on a continuous dependent variable. ANOVA uses
squared deviations of variance so that computations of distances of the individual data points
from their own mean or from the grand mean can be summed. In ANOVA the test statistic is the
F-value, which checks whether the variability attributable to the treatment exceeds variability
arising from random fluctuations. To test the Hypotheses, ANOVA was used to check for
significant differences between the three categories of interest i.e., the large, medium and small
35
size compaies. The degrees of freedom, F-value, p and the mean values for the factors of
importance of IHRM, adoption of iHRM, the reasons for iHRM and the outcome of iHRM have
been calculated for this purpose. Null hypothesis framed for the factors of all the variables were
rejected for p values less than the significance level .05 and conclude that there is statistically
significant differences between the segments. (Cooper and Schindler, 2006)
Paired sample T-test
The paired sample t-test (SPSS version 20.0) procedure compares the means of two variables for
a single group. It computes the differences between values of the two variables for each case and
tests whether the average differs from zero. The test is a technique used to test the hypotheses
that means are significantly different for the importance ascribed to iHRM and their perception of
their adoption (Cooper and Schindler, 2006).
Multiple regression
A multivariate analysis can further our understanding because we can simultaneously estimate the
relative impact of the independent variables on the dependent variable. Multiple regression
analysis is a statistical technique that can be used to analyze the relationship between a single
dependent variable and multiple predictor variables. The objective of the multiple regressions is
to use the independent variables whose values are known to predict the dependent variable. The
weights denote the relative contribution of the dependent variable to the overall prediction and
facilitate interpretation as to the influence of each variable in making the prediction. The set of
weighted independent variables forms the regression variate, the regression model or the
regression equation, a linear combination of independent variables that best predict the dependent
variable the weighted .The variables hypothesized to influence organizational commitment was
entered into the multiple regression analysis using the step wise method. The stepping method
criteria used the probability of F for entry as .05 and .10 for removal. The regression coefficients
and the model fit were estimated as well. (Hair et al, 2003).
36
CHAPTER 4
ANALYSIS and FINDINGS
4. Analysis and Findings
3.1 Description of the sample
The survey was conducted in Mumbai and Bengaluru as many of IT companies have their head
offices there. Majority of the companies interviewed were large firms(60%), followed by
medium sized companies (25%) and small companies (15%). In each organization the head of
the human resources department or his representative was interviewed.
Table 3.1: Sample size by size of the organization
Frequency Percent Valid Percent Cumulative
Percent
Valid
Small(<50 emp) 3 15.0 15.0 15.0
medium(50-500 emp) 5 25.0 25.0 40.0
Large (>500 emp) 12 60.0 60.0 100.0
Total 20 100.0 100.0
37
3.2 Need for innovation and areas of HR
Figure 3.1: Importance of innovation in various areas of HR
From the senior Human resource representatives the study attempted to understand the major
areas in the Human resource function in which they felt that innovation was necessary. The
data was collected on a likert scale. The mean value for the importance ascribed to each of the
areas is represented in figure 1. in a descending order. Employee Retention strategies were
considered the most crucial area in which innovative practices is required followed by Rewards
and Recognition, Compensation and incentives and employee retention strategies.
The areas which have been rated as least important for Indian IT companies while investing in
innovative practices are Knowledge management and CSR
38
Importance of iHRM and size of organization
Table3.2: Importance of iHRM and size of organization:
Mean Minimum Maximum
Employee Acquisition and
Retention strategies
Small(<50 emp) 4.8333 4.50 5.00
medium(50-500 emp) 4.8000 4.00 5.00
Large (>500 emp) 4.6250 2.50 5.00
Total 4.7000 2.50 5.00
Employee Performance
Management
Small(<50 emp) 4.2222 3.00 5.00
medium(50-500 emp) 4.5333 3.33 5.00
Large (>500 emp) 4.7778 4.00 5.00
Total 4.6333 3.00 5.00
Other HR initiatives
Small(<50 emp) 3.3000 1.60 5.00
medium(50-500 emp) 4.0800 2.80 4.80
Large (>500 emp) 4.2167 2.90 5.00
Total 4.0450 1.60 5.00
Table3.2.1: Importance of iHRM and size of organization:
Sum of Squares df Mean Square F Sig.
Employee Acquisition and
Retention strategies Between Groups .171 2 .085 .193 .826
Employee Performance
Management Between Groups .807 2 .404 1.176 .332
Other HR initiatives Between Groups 2.025 2 1.012 1.172 .334
Total 16.710 19
The areas important for innovation in HR practices were subject to factor analysis and the three
factors thus evolved used to compare between IT organizations of different sizes.
Ho: There is no significant difference between large, medium and small IT organizations in the
importance given to Employee acquisition and retention strategies, Employee performance
management strategies and other HR initiatives
Ha: There is significant difference between large, medium and small IT organizations in the
importance given to Employee acquisition and retention strategies, Employee performance
management strategies and other HR initiatives
39
Based on the results of the analysis of variance and the acceptance of the null hypothesis, it is
evident that there is no difference to the level of importance given to these initiatives by the
HR managers in IT organizations of different sizes
3.3 iHRM and its adoption in Indian IT organizations
The mean value for the extent to which the HR managers of IT companies felt that companies
have adopted iHRM ineach of the areas is represented in figure 3.2 in a descending order.
Figure 3.2: Extent to which Indian IT companies have adopted iHRM
Reward and Recognition strategies, compensation and incentives were considered the most
common areas in which innovative practices is adopted followed by employee acquisition
strategies and performance appraisal. The areas which have been rated as least prevalent are
Employee exit and separation management, welfare measures and knowledge management in
Indian IT companies
40
3.4 Importance ascribed to iHRM and extent of Adoption
Table 3.3: Importance ascribed to iHRM and extent of Adoption- Paired sample statistics
Paired Samples Statistics
Mean N Std. Deviation Std. Error Mean
Pair 1 Employee acquisition strategies (imp) 4.55 20 .887 .198
Employee acquisition strategies (adoption) 3.95 20 1.050 .235
Pair 2 Employee Retention strategies(imp) 4.85 20 .489 .109
Employee Retention strategies(adoption) 3.85 20 1.089 .244
Pair 3 Induction(imp) 3.90 20 1.165 .261
Induction(adoption) 3.45 20 .759 .170
Pair 4 Training and Development (imp) 4.25 20 .967 .216
Training and Development (adoption) 3.80 20 .834 .186
Pair 5 Leadership Development(imp) 4.45 20 .826 .185
Leadership Development(adoption) 3.60 20 1.046 .234
Pair 6 Career Planning(imp) 4.55 20 .759 .170
Career Planning(adoption) 3.65 20 1.040 .233
Pair 7 Performance appraisal(imp) 4.50 20 .688 .154
Performance appraisal(adoption) 3.90 20 .852 .191
Pair 8 Compensation and incentives(imp) 4.65 20 .671 .150
Compensation and incentives(adoption) 4.10 20 .788 .176
Pair 9 Rewards and recognition(imp) 4.75 20 .550 .123
Rewards and recognition (adoption) 4.10 20 .852 .191
Pair 10 Welfare measures(imp) 3.90 20 1.294 .289
Welfare measures(adoption) 2.90 20 1.021 .228
Pair 11 Organization Development(imp) 4.10 20 .968 .216
Organization Development(adoption) 3.10 20 .852 .191
Pair 12 Knowledge Management(imp) 3.70 20 1.129 .252
Knowledge Management (adoption) 2.95 20 .826 .185
Pair 13 HR strategy(imp) 4.30 20 .979 .219
HR strategy(adoption) 3.10 20 .912 .204
Pair 14 Employee exist and separation management(imp) 3.70 20 1.129 .252
Employee exist and separation management(adoption) 2.85 20 .933 .209
Pair 15 Corporate social responsibility(imp) 3.60 20 1.429 .320
Corporate social responsibility(adoption) 3.20 20 .951 .213
Table 3.3.1: Importance ascribed to iHRM and extent of Adoption(paired sample t-test
t df Sig.
Pair 1 Employee acquisition strategies (Imp) - Employee acquisition
strategies(adoption) 2.449 19 .024
Pair 2 Employee Retention strategies(Imp) - Employee Retention strategies(adoption) 3.684 19 .002
Pair 3 Induction(Imp) - Induction(adoption) 1.528 19 .143
Pair 4 Training and Development (Imp) - Training and Development(adoption) 1.484 19 .154
Pair 5 Leadership Development(Imp) - Leadership Development(adoption) 2.819 19 .011
41
Pair 6 Career Planning (Imp) - Career Planning(adoption) 3.327 19 .004
Pair 7 Performance appraisal (Imp) - Performance appraisal(adoption) 2.565 19 .019
Pair 8 Compensation and incentives(Imp) - Compensation and incentives (adoption) 2.773 19 .012
Pair 9 Rewards and recognition's (Imp) - Rewards and recognition (adoption) 2.942 19 .008
Pair 10 Welfare measures (Imp) - Welfare measures(adoption) 3.343 19 .003
Pair 11 Organization Development(Imp) - Organization Development(adoption) 4.359 19 .000
Pair 12 Knowledge Management (Imp) - Knowledge Management(adoption) 2.881 19 .010
Pair 13 HR strategy (Imp) - HR strategy(adoption) 3.835 19 .001
Pair 14 Employee exist and separation management (Imp) - Employee exist and
separation management(adoption) 2.819 19 .011
Pair 15 Corporate social responsibility (Imp) - Corporate social responsibility(adoption) 1.035 19 .314
Ho: There is no significant difference between the importance ascribed to iHRM and the extent
of adoption of iHRM in the Indian IT Industry
Ha: There is significant difference between the importance ascribed to iHRM and the extent of
adoption of iHRM in the Indian IT Industry
Based on the paired sample t-test, it is evident that iHRM practices match up to the
expectations of the HR managers or the importance given to it only in the case of practices
associated with induction, training and development and corporate social responsibility.
Adoption of iHRM and size of organizations
The areas adoption for innovation in HR practices of the Indian IT industry were subject to
factor analysis and the three factors thus evolved were used to compare between IT
organizations of different sizes.
Ho: There is no significant difference between large, medium and small IT organizations in the
adoption of Employee acquisition and reward strategies, Employee growth management
strategies and other HR initiatives
Ha: There is significant difference between large, medium and small IT organizations in the
adoption of Employee acquisition and reward strategies, Employee growth management
strategies and other HR initiatives
Based on the results of the analysis of variance and the acceptance of the null hypothesis, it is
evident that there is no difference adoption of these initiatives by the HR managers in IT
organizations of different sizes.
42
Table3.4: Adoption of iHRM and size of organizations -Descriptives
Mean Minimum Maximum
Employee Acquisition and Reward
Small(<50 emp) 3.8667 2.20 5.00
medium(50-500 emp) 4.1200 3.00 4.80
Large (>500 emp) 3.9500 3.00 5.00
Total 3.9800 2.20 5.00
Employee Growth Management
Small(<50 emp) 3.2500 2.00 4.00
medium(50-500 emp) 3.6500 2.75 4.75
Large (>500 emp) 3.7083 3.00 5.00
Total 3.6250 2.00 5.00
Other HR initiatives
Small(<50 emp) 3.2222 2.50 4.00
medium(50-500 emp) 2.4000 2.00 2.67
Large (>500 emp) 3.2222 2.17 4.83
Total 3.0167 2.00 4.83
Table3.4.1: Adoption of iHRM and size of organizations -ANOVA
Sum of Squares df Mean Square F Sig.
Employee Acquisition and
Reward Between Groups .147 2 .074 .099 .906
Employee Growth Management Between Groups .508 2 .254 .370 .696
Other HR initiatives Between Groups 2.535 2 1.268 2.564 .106
Total 10.939 19
3.5 iHRM strategies in selected HR functions
Attempt was made to understand the extent of iHRM practices in select areas.
Employee acquisition strategies
43
Figure 3.3: Employee acquisition strategies
In the case of Employee acquisition strategies 90% companies use “Referral bonus”, 80% use
the social media and 85 % claim to have industry academia initiatives in place. But only 15%
of the companies have initiated “second career initiatives”.
Rewards and Recognitions
Figure 3.4: Rewards and Recognition strategies
90% of the organizations suveyed believed in a blend of Financial and non financial awards
and performance linked incentives. And a majority of them (95%) gave “Best Employee
wards“ to motivate the good performaers. But only 50% companies think it wise to give cash
awards for extraordinary performance.
44
Welfare measures
While 80% of the surveyed companies allowed their employees to practice “virtual working”,
when this was needed, only 20% of them have any child /elder care program in place. Most of
the organizations (55%)also admitted that they do not have any benefits directed at the
employee’s families. But 70% of them offer their employees recreational facilities on-site or
through tie-ups. 75% of them also focus on long term benefits for their employees through
alternative insurance and health management systems.
Figure 3.5: Welfare measures
3.6 Reasons/Influence on iHRM The main motivation for organizations to adopt iHRM is to remain competitive in the market
according to the HR managers interviewed in this study. Moreover the external environmental
factors including competition and the customers compel organization to incorporate innovate
practices. The other major reasons include attempt to provide a satisfying work environment,
Top management insistence, already inculcated organizational culture and structural
characteristics.
45
Figure 3.6: Major reasons or influences on iHRM
Table 3.5: Major reasons or influences on iHRM and size of organization-Descriptives
Mean Minimum Maximum
Environment and Top mgt
influence
Small(<50 emp) 4.6667 4.00 5.00
medium(50-500 emp) 4.2000 3.00 5.00
Large (>500 emp) 4.4167 3.33 5.00
Total 4.4000 3.00 5.00
To provide relevant HR service in
the System
Small(<50 emp) 17.3333 13.00 25.00
medium(50-500 emp) 16.8000 15.00 19.00
Large (>500 emp) 20.0000 16.00 25.00
Total 18.8000 13.00 25.00
To provide Strategic advantages
through HR
Small(<50 emp) 3.6667 2.75 4.75
medium(50-500 emp) 3.2500 2.50 4.25
Large (>500 emp) 3.6250 3.00 5.00
Total 3.5375 2.50 5.00
46
Table 3.5.1: Major reasons or influences on iHRM and size of organization-ANOVA
Sum of Squares df Mean Square F Sig.
Environment and Top mgt
influence Between Groups .417 2 .208 .555 .584
To provide relevant HR service
in the System Between Groups 43.733 2 21.867 1.983 .168
To provide Strategic advantages
through HR
Between Groups .555 2 .278 .548 .588
Total 9.159 19
The reasons or influence on iHRM practices of the Indian IT industry were subject to factor
analysis and the three factors thus evolved were used to compare between IT organizations of
different sizes.
Ho: There is no significant difference between large, medium and small IT organizations in
their reasons/influences for adopting iHRM
Ha: There is significant difference between large, medium and small IT organizations in their
reasons/influences for adopting iHRM
Based on the results of the analysis of variance and the acceptance of the null hypothesis, it is
evident that there is no difference the reasons/influences for adoption of iHRM according to
HR managers in IT organizations of different sizes.
3.7 Impact of iHRM practices
The respondents were very positive about the impact of innovative practices in HRM. They
said that the most visible impact is on the ability of the organization to attact and retain talent.
This first may also be because of the increased employee satisfaction which is also a outcome
of iHRM. The third area in which the impact of iHRM can be felt is Employee productivity.
Other areas in which the managers felt that iHRM practices can have apositive effect are:
Employee attitude and Behavior, Sales growth and People orientation of the management.
While ROI , market share and customer satisfaction are according to them positively impacted
47
too. These have been rated the least since these iHRM may not have a direct or immediate
impact on these.
Figure 3.7:Outcomes of iHRM practices
3.8 Organizational commitment and iHRM
But in spite of this belief that iHRM is useful for attracting employees to the organization and
keeping them happy, these HR managers feel that organizational commitment is low in their
industry.
48
Figure 3.8: Circumstances in which employees will leave (1-very likely…5-very unlikely)
They feel that even with some of the efforts being made by the industry to bring in innovative
HR practices, employees would leave if the completion offers 25% hike in salary or if more
status were offered. It is also quite common in the industry for people to shift organizations in
the event of opportunities for creative freedom or opportunity to work with friendlier people.
3.9 Importance of iHRM for organizational commitment
In order to understand which among the various iHRM activities is a good predictor of
organizational commitment an multiple regression using the step wise method was used. The
results indicate that iHRM is most crucial in Performance Appraisal measures to ensure
organizational commitment of employees. With an adjusted Rsquare value of .462, a significant
F value and t value, the analysis chose performance appraisal measures as the one variable that
affects organizational commitment.
Table 3.6: Importance of iHRM and organizational commitment: Regression analysis
Table 3.6.1 Model Summary
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .700a .490 .462 .52071
a. Predictors: (Constant), Performance appraisal
Table 3.6.2 ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 4.694 1 4.694 17.314 .001b
Residual 4.881 18 .271
Total 9.575 19
a. Dependent Variable: Organizational commitment
b. Predictors: (Constant), Performance appraisal
Table 3.6.3 Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1 (Constant) 5.050 .790 6.395 .000
Performance appraisal -.722 .174 -.700 -4.161 .001
a. Dependent Variable: Organizational commitment
49
3.10 Organizational commitment and organizational size
Table 3.7: Organizational commitment and organizational size-Descriptives
Mean Minimum Maximum
Small(<50 emp) 2.4167 1.50 3.75
medium(50-500 emp) 1.6500 1.00 2.25
Large (>500 emp) 1.7083 1.00 3.00
Total 1.8000 1.00 3.75
Table 3.7.1: Organizational commitment and organizational size-ANOVA
Sum of Squares df Mean Square F Sig.
Between Groups 1.354 2 .677 1.400 .274
Total 9.575 19
In order to test whether organizational commitment differed between organizations of different
sizes, and ANOVA was used.
Ho: There is no significant difference between large, medium and small IT organizations in the
organizational commitment of employees
Ha: There is significant difference between large, medium and small IT organizations in
organizations in the organizational commitment of employees
Based on the results of the analysis of variance and the acceptance of the null hypothesis, it is
evident that there is no difference in the organizational commitment of employees according to
HR managers in IT organizations of different sizes.
3.11 Outcomes of iHRM and size of the organizations
The outcome variables for iHRM for the Indian IT industry were subject to factor analysis and
the three factors thus evolved were used to compare between IT organizations of different
sizes.
Ho: There is no significant difference between large, medium and small IT organizations in the
outcomes of iHRM including Macro-organizational effectiveness, micro-organizational
effectiveness, ability to attract talent and overall organizational effectiveness
50
Ha: There is significant difference between large, medium and small IT organizations in the
outcomes of iHRM including Marco-organizational effectiveness, micro-organizational
effectiveness, ability to attract talent and overall organizational effectiveness
Based on the results of the analysis of variance and the acceptance of the null hypothesis, it is
evident that there is no difference organizational effectiveness at a macro level, overall or in
the ability to attract talent outcome of iHRM according to HR managers in IT organizations of
different sizes. But at a micro level organization effectiveness variable, the data indicates
significant difference. An examination of the mean values shows that the impact of the iHRM
initiatives is significantly higher for larger organizations than for smaller ones. To clarify this
further, the data was subject to a Duncan test. The results indicate that along the variable
impact of organizational effectiveness at the micro level, the smaller firms are similar t the
medium sized firms but larger firms have higher impact.
Table 3.8: Organizational effectiveness and organization size- Descriptives
Mean Minimum Maximum
Organizational Effectiveness-
Macro
Small(<50 emp) 4.0833 3.25 5.00
medium(50-500 emp) 3.7000 3.00 4.25
Large (>500 emp) 3.9792 2.25 5.00
Total 3.9250 2.25 5.00
Organizational Effectiveness-
Micro
Small(<50 emp) 4.6667 4.50 5.00
medium(50-500 emp) 4.5000 3.50 5.25
Large (>500 emp) 5.6667 4.00 6.25
Total 5.2250 3.50 6.25
Ability to attract talent
Small(<50 emp) 4.6667 4.00 5.00
medium(50-500 emp) 4.8000 4.00 5.00
Large (>500 emp) 4.7500 4.00 5.00
Total 4.7500 4.00 5.00
Overall organizational
effectiveness
Small(<50 emp) 3.9667 3.60 4.40
medium(50-500 emp) 3.7600 3.30 4.30
Large (>500 emp) 4.3333 3.00 5.00
Total 4.1350 3.00 5.00
51
Table 3.8: Organizational effectiveness and organization size- Descriptives ANOVA
Sum of Squares df Mean Square F Sig.
Organizational Effictiveness-
Macro
Between Groups .364 2 .182 .231 .796
Within Groups 13.399 17 .788
Total 13.763 19
Organizational Effectiveness-
Micro
Between Groups 5.904 2 2.952 7.771 .004
Within Groups 6.458 17 .380
Total 12.363 19
Ability to attract talent
Between Groups .033 2 .017 .076 .927
Within Groups 3.717 17 .219
Total 3.750 19
Overall organizational
effectiveness
Between Groups 1.260 2 .630 2.011 .164
Within Groups 5.325 17 .313
Total 6.585 19
Table 3.8.2: Organizational effectiveness (Organizational Effectiveness-Micro ) and organization
size- Duncan test
Size of the organization N Subset for alpha = 0.05
1 2
medium(50-500 emp) 5 4.5000
Small(<50 emp) 3 4.6667
Large (>500 emp) 12 5.6667
Sig. .679 1.000
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 4.865.
b. The group sizes are unequal. The harmonic mean of the group sizes is
used. Type I error levels are not guaranteed.
52
CHAPTER 5
Discussion, Recommendations and Conclusion
5. Discussion, Recommendations and Conclusion
Information Technology Industry in India has come of age and the competition between the various
players have intensified. The main resource based on which IT companies define their core competencies
have always been “manpower”. Therefore attracting capable employees, developing them in the
organization, retaining them and maintaining the knowledge they crate is a major strategic objective for all
the organizations in the sector.
To do so the Human resource departments in these companies has had to evolve and take on a more
relevant role in the organization. With the top management support, the HR function in IT organizations
has taken to the new challenges posed by the business environment by bringing in innovation in the
Human Resource practices.
While trade papers intermittently record these efforts, research efforts have not been hither to undertaken
to understand the extent and impact of iHRM practices in India especially in the Information technology
context. Therefore this study attempts to understand:-he extent to which HR managers believe that
innovation in HR practices are important for achieving goals of the organization, the major areas in which
innovation is required, the extent to which Indian companies have succeeded in inculcating innovative HR
practices, the major influences on the kind of HRM innovations adopted by Indian IT organization,
and the important outcomes of innovation in HR practices with reference to organizational commitment
and performance
In order to do so, HR managers at twenty large, medium and small IT companies were interviewed in the
city of Mumbai with head quarters in Bengaluru.. The data collection instrument was tested for reliability
and validity before proceeding. The data thus collected was subjected to empirical analysis using
descriptive analysis, Factor analysis and Analysis of variance.
The results of the study indicate that HR mangers agree that including innovative HR practices is
extremely important especially in the process of attracting and rewarding employees which are
two of the largest challenges they face. Of all the major areas in which the function oversees,
Employee Retention strategies were considered the most crucial area in which innovative
practices is required followed by Rewards and Recognition, Compensation and incentives and
53
employee retention strategies. The areas which have they been rated as least important for Indian
IT companies while investing in innovative practices are Knowledge management and CSR
The areas in which these mangers are currently seeing extensive use of iHRM practices include
the Compensation, Rewards and Employee acquisition strategies. In Employee acquisition use of
referral bonus and the social media is increasingly common while in use of a blend of financial
and non-financial rewards in addition to “Best employee” ect. is finding more takers. Virtual
working has also become increasingly acceptable to organizations if it means that they can retain
talent.
The main motivation for organizations to adopt iHRM is to remain competitive in the market
according to the HR managers interviewed in this study. Moreover the external environmental
factors including competition and the customers compel organization to incorporate innovate
practices. The other major reasons include attempt to provide a satisfying work environment, Top
management insistence, already inculcated organizational culture and structural characteristics.
The respondents were very positive about the impact of innovative practices in HRM. They said
that the most visible impact is on the ability of the organization to attact and retain talent. This
first may also be because of the increased employee satisfaction which is also a outcome of
iHRM. The third area in which the impact of iHRM can be felt is Employee productivity. Other
areas in which the managers felt that iHRM practices can have apositive effect are: Employee
attitude and Behavior, Sales growth and People orientation of the management. While ROI,
market share and customer satisfaction are according to them positively impacted too. These have
been rated the least since these iHRM may not have a direct or immediate impact on these.
An organization investing in iHRM naturally would do so only if the outcomes gave them
strategic advantages. These innovative practices according to HR mangers of these companies
help organizations to remain competitive in the job market; moreover their clients also audit them
to ensure that their HR practices as per acceptable international standards. With these and the
employee satisfaction in view, top managements have also been pushing their HR departments to
bring in innovative HR strategies. But at the same time it’s interesting to note that the impact of
the iHRM initiatives is significantly higher for larger organizations than for smaller ones. In
Impact of organizational effectiveness at the micro level including Employee satisfaction,
employee productivity, attitude and behavior and on people orientation of the management, the
54
smaller firms are similar to the medium sized firms but larger firms have higher impact. This may
be because the larger firms are able to implement these initiatives more fully and have the costs
spread over a larger group of people.
But the bad news is that these HR managers feel that in spite of the efforts the industry is making,
the employee commitment levels are low and they will shift for higher pay or status. Solving this
issue is the holy grail as far as HR managers are concerned. It is well known that when employees
are committed to their employer, they will deliver higher levels of performance. Highly
committed employees can also help an organization achieve much more each year than employees
with average or low commitment.
IT Organizations can use different innovative HR and leadership strategies to increase the level of
commitment of their employees. For this it’s important that the iHRM practices are tailored to
induvidual workplace culture and objectives of the companies. This begins with recruitment.
Hiring well-qualified employees who match clearly-defined job descriptions is important. Induct
them successfully into the organizational culture is also important.
Since in the IT industry it is quite prevalent to find employees shift for larger packages its
important to hold people within in its culture through informal bonding as well. While this brings
with it the fear of large chunks of an organization together, this occurrence is rare. Initiatives to
build the teams into cohesive wholes have to be initiated by HR. It seems likely that, as
employees become more embedded in a social identity, changing organizations would become
less attractive.
It is also important to develop employees as assets by giving them increasingly challenging tasks,
allowing them to become more influential and derive intrinsic benefits. Effort could also be made
to keep an ongoing dialog with employees to understand what motivates them and adjust their
development plans to help them achieve their goals inside the organization. Therefore one of the
goals of iHRM has to be to move decision making rights from mangers to lower levels. This will
help make decisions by tapping into a much larger knowledge base and simultaneously develop
problem solving skills down the line.
It is also important that firms stay committed to iHRM practices though it may not show
immediate visible results. There is increasing body of evidence that iHRM improves employee
55
productivity. But the advantages of using iHRM practices can go beyond employee productivity
and performance. An emotionally committed employee is a loyal employee.
56
CHAPTER 6
Limitations and Future Scope
6. Limitations and Future Scope
This study is limited in many ways:
1. Sample size: While attempt was made to include different kinds of IT companies in
the sample, the generalizability of the study is limited by the fact that it has used a
small sample
2. Data collection: The data for the study has been collected from Mumbai but other
cities like Hyderabad, Thiruvanthapuram, Pune etc. have also become established IT
hubs. Future studies can cover HR mangers in firms in these cities.
3. Cross Sectional study: While a cross sectional study has its uses, it would be ideal to
garner better depth of information on the topic if the study could access longitudinal
data gathered from deep within the firms over a period of time.
4. Analytical tools used: Normal distribution of data has been assumed for data
analysis. Further the Bartlett test was used to check ensure the applicability of
techniques like factor analysis but ideally a larger sample would be suited to conduct
these tests
Future studies should look at larger samples in terms of larger participation of IT managers
and larger participation of IT companies. Attempt can also be made to look at differences
between different companies and different sub-divisions like IT and ITES or companies that
cater to the US markets vis-à-vis the European or the other markets in differences in
adoption. While this study indicates that the size of the organization in itself has limited
impact a more detailed study into actual practices instead of the reports by the IT managers
would give better insights.
57
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60
Annexure :EXHIBIT 1
Questionnaire for
Study on “Innovative HR practices in the IT Industry: An empirical study”
Dear HR manager,
This survey on innovative Human Resource practices is a study undertaken by Prof. Mrs.
B.V.Murty, Vivekanand Education Society's College of Arts, Science and Commerce, Mumbai,
as part of an academic research project. Kindly give ten minutes of your time to answer the
following questions. It will be much appreciated. Thank you
1. In which of the following areas in Human Resource Management is it important for
an organization in the IT business to innovate continuously? Please rate on the five
point scale wherein 1- Completely unimportant…………….. 5-extremely important
a) Employee acquisition strategies
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
b) Employee Retention strategies
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
c) Induction
1. Completely unimportant
2. Unimportant
3. Neither
61
4. Important
5. Extremely important
d) Training and Development
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
e) Leadership Development
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
f) Career Planning
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
g) Performance appraisal
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
h) Compensation and incentives
1. Completely unimportant
2. Unimportant
62
3. Neither
4. Important
5. Extremely important
i) Rewards and recognitions
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
j) Welfare measures
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
k) Organization Development
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
l) Knowledge Management
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
m) HR strategy
1. Completely unimportant
63
2. Unimportant
3. Neither
4. Important
5. Extremely important
n) Employee exist and separation management
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
o) Corporate social responsibility
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
p) Others (pls specify)
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
2. Rate the following areas based on your agreement regarding the extent to which
Indian IT organizations have adopted innovation in their HR practices. Please rate on
the five point scale wherein 5-completely agree…….…. 1-completely disagree
a) Employee acquisition strategies
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
64
5. Extremely important
b) Employee Retention strategies
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
c) Induction
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
d) Training and Development
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
e) Leadership Development
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
f) Career Planning
1. Completely unimportant
2. Unimportant
3. Neither
65
4. Important
5. Extremely important
g) Performance appraisal
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
h) Compensation and incentives
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
i) Rewards and recognitions
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
j) Welfare measures
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
k) Organization Development
1. Completely unimportant
2. Unimportant
66
3. Neither
4. Important
5. Extremely important
l)Knowledge Management
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
m) HR strategy
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
n) Employee exist and separation management
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
o) Corporate social responsibility
1. Completely unimportant
2. Unimportant
3. Neither
4. Important
5. Extremely important
p) Others (pls specify)
1. Completely unimportant
67
2. Unimportant
3. Neither
4. Important
5. Extremely important
3. Rate the following based on what you believe are the major reasons for/ influences on
the kind of HRM innovations adopted by Indian IT organizations? Please rate on the
five point scale wherein 5-completely agree …. 1-completely disagree
a) External environmental forces
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
b) Organizational Structural Characteristics
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
c) Organizational culture
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
d) History of success with past HRM innovations
1. Completely disagree
2. Disagree
3. Neither
4. Agree
68
5. Completely agree
e) Influence of consultants
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
f) Top management insistence
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
g) To remain competitive in the industry
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
a) Quest for continuous improvement in HR M
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
b) To reduce costs of HRM Services
1. Completely disagree
2. Disagree
3. Neither
69
4. Agree
5. Completely agree
c) To increase services of HRM department
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
d) To increase impact of HRM department
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
e) To provide more satisfying work experience to the employees
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
f) Others (pls specify)
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
4. Rate the likelihood of the following to be true for employees in an organization which
is considered “innovative”vis-a-vis “traditional” its HR practices by the industry
wherein 1- very likely and 5-very unlikely
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Employees would be willing to change companies if the new job offered:
A. 25% pay increase
1. Very likely
2. Likely
3. Neither
4. Unlikely
5. Very unlikely
B. More creative freedom
1. Very likely
2. Likely
3. Neither
4. Unlikely
5. Very unlikely
C. More status
1. Very likely
2. Likely
3. Neither
4. Unlikely
5. Very unlikely
D. Opportunity to work with friendlier people
1. Very likely
2. Likely
3. Neither
4. Unlikely
5. Very unlikely
5. Rate to what extend the following will be positively impacted by innovations in HR
wherein 1-completely disagree …………………..5-Completely agree
a) Sales Growth
1. Completely disagree
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2. Disagree
3. Neither
4. Agree
5. Completely agree
b) Profitability within Industry
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
c) Market Share within Industry
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
d) ROI
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
e) People orientation of the management philosophy
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
f) Employee attitude and behavior
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g) Completely disagree
h) Disagree
i) Neither
j) Agree
k) Completely agree
l) Employee Productivity
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
Employee Satisfaction
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
m) Customer satisfaction
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
n) Ability to attract and retain talent
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
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o) Contribution to society
1. Completely disagree
2. Disagree
3. Neither
4. Agree
5. Completely agree
6. Kindly indicate which of the following are implemented by your organization in area of
Employee acquisition strategies (Please tick ( √ )all that is applicable)
a. Social media utilization
b. Second career internship
c. Referral bonus
d. Industry academia interface
e. Others (pls specify)………………………………………………………………………...
7. Kindly indicate which of the following are implemented by your organization in area of
Rewards and recognitions (Please tick ( √ )all that is applicable)
a. Performance linked awards
b. Cash awards for extra ordinary performance
c. Best employee awards
d. Blend of financial and non-financial awards
e. Others (pls specify)………………………………………………………………………...
8. Kindly indicate which of the following are implemented by your organization in area of
Welfare Measures (Please tick ( √ )all that is applicable)
a. Focus on long term benefits for employees through alternative insurance and health
management systems
b. Benefits directed at employees families
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c. Recreational facilities
d. Child/elder care programs
e. Virtual working
Others (pls specify)………………………………………………………………………...
9. Kindly discuss any other innovative HR practices that your company has initiated
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9. Name of the organization: ……………………………………………………………………
10. Size of the organization:
a. Small (less than 50 employees)
b. medium(51- 500 employees)
c. Large (More than 500 employees)