H R Forecasting and Planning - 1 -
Strategic Human Resource
• A New Paradigm for HR
• What are Strategy, Planning and Forecasting?
• The Importance Of People To Organizational Success
• Michael Porter’s View Of Strategy
Human Resource Planning
• A Successful Approach To Human Resource Planning
• Strategy, Planning And Forecasting For Hr Professionals
• The Process Of Forecasting
• Creating Hr Scenarios
• Assessing The Demand For The People
• Assessing The Supply Of The People In The Organisations
• Culture In The Strategy Process
• Gap Analysis
• Community Development And Environmental Protection
• Voltas HRD Center
• Annual Strategic Business Plan
• Autonomous Teams
• Recruitment Plan
• Selection Plan
• Orientation And Placement
• Training And Development
H R Forecasting and Planning - 2 -
• Performance Appraisal
• High Potential Scheme In Voltas
• Retention Scheme In Voltas
• Employee Communication
• Employee Remuneration
• Public Approach
• Vision Statement
• Corporate Statement
• Research And Development
• Human Resource Initiatives
• Human Resource Management In Onida
Conclusion - “Strategic Human Resource Management”
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I wish to express my heartfelt gratitude to MR. RAKESH KUMAR, General
Manager (water cooler business) of Voltas Limited for providing detailed
information regarding the Human Resource Forecasting and Planning in his
I am grateful to MRS. PRIYANKA AJAY, Hr Executive of Onida Limited, for
giving me necessary details of Human Resource Forecasting and Planning in
I thank B.M.S Coordinator of my college MRS. BHANU KRISHNAN and my
guide MISS. DIPTI SONI for her help and guidance.
I sincerely thank to my parents who have played a crucial role in the research of
H R Forecasting and Planning - 4 -
Indian industry is waking up to the challenges thrown in by the market economy.
To survive in this highly competitive scenario, Managers are being pressurised to
improve quality, increase productivity, cut down waste and eliminate
inefficiency. The collective efforts of the employer and the employee assume
relevance in this context. And this is where Human Resource Forecasting And
Planning Plays a Crucial Role.
This project on Strategic Human Resource Forecasting (SHRF) and Human
Resource Planning (HRP) is a modest attempt towards the understanding of
human resource in its proper perspective in the huge corporates like Voltas
Limited and Onida Limited. The contents have been logically stated according to
the actual Human Resource Management. The report is replete with the planning
and management followed by contemporary business organisations Voltas and
In all, the report provides rewarding insight into the true Strategic Management
and Development of Human Resource Present In Two Big Corporates!
H R Forecasting and Planning - 5 -
The learning objective:
• Understanding the nature, scope and objectives of Human Resource
• Understanding the nature and importance of Strategic Management and
• Understanding the nature and appreciate the role of recruitment, selection,
induction programmes in organisational effectiveness.
• Understand the nature and importance of training and development,
performance appraisal and identify various inputs that should go into any
• Identify different components of employee remuneration and incentive
• Appreciate the role of employee benefits and retention policy in attracting
and retaining competent people.
• Understand the nature of motivation and draw a model which helps know
motivation process in the company better.
• Understand communication process and methods used in it.
• Realise the need for employee welfare.
• The promotion, transfer and retirement policy of the company.
• Understand the nature of industrial relations and stress the need for
peaceful employer and employee relationship.
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SHRF, HRP AND ORGANISATIONAL STRATEGY
H R Forecasting and Planning - 7 -
H R Forecasting and Planning - 8 -
“Those who work in the HR nowadays need the imagination of Steven
Spielberg, the incisiveness of Jeremy Paxman, the interviewing skills of
Oprah Winfrey and the skin of a rhinoceros tiptoeing between the political
sensitivities of managers, the skill of Darcey Bussell is hardly less
essential. An organisation’s tendency to demand so much from HR
professional requires broad range of competencies, more than more
functions in the organisation.”
Two of the attributes that do not get nearly enough, though, are
SRATEGY & PLANNING. One thing we can do is contribute to strategy-setting in
a way that is seen is adding value.
STRATEGIC HUMAN RESOURCE FORECASTING (SHRF) – in which
we look at the radar of organisation and start joining up the dots as they
appear on the screen.
HUMAN RESOURCE PLANNING (HRP) -- in which we take these
patterns and convert them into meaningful activity.
The demand for HR input at strategic level is there: chief executive officers
increasingly see people issues as critical to competitive advantage.
And the supply is there: there is the basis for the methodology for HR to
excel at strategy and planning. What we have to do is to pull everything
together in a consistent and professional way.
Among the most important of these are performance management,
knowledge management, individual and organisational learning, and how
to manage change. All of these elements are within the domain of HR, and
dealing with them will determine how successful those responsible for HR
will become. Taking a strategic view across the organisation is essential.
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(I) STRATEGIC HUMAN RESOURCE
What decides whether infact the human resource of an organisation is
used strategically is how much the people of the organisation- their
attributes, motivation, development, priorities and performance – directly
supports the company’s strategic goals.
How, then, can human resources be used strategically?
Firstly, the people of the business must be genuinely recognized as
critical to it.
Secondly the human resources functions has to be and integral part of the
strategic planning and thinking within the business, and business
managers need to incorporate people issues into their strategic and
Thirdly, the HR strategy must not only support current business
requirements but must also prepare the business and its people for the
growing demand for talent, and the competition for the best human
Human resources (with the talent it incorporates) is likely to
become the key differentiator for innovation, for understanding customers,
for managing human relationships and for developing the business.
A great deal is expected of people who work in HR. not only are we
asked to deliver six-sigma quality in recruitment and training, reward,
industrial relations, employee communications and organisation design,
we also have to be strategists, employee champions and business
HR is a very diverse, challenging and satisfying profession. The
management of strong effort combined with investment in new technology
is a significant contributor to growth and prosperity.
A New Paradigm for HR:
HR is becoming multi-disciplinary and has to embrace new
concepts as it strives to succeed in its overall “strategic” direction. The US
journal of ‘Cost Management’ contained an article about skills-based
human capital budgeting. The article forecasts that human capital planning
would become a strategic driver because a key issue facing organisations
was ‘ensuring that the right people with the right skills are in the right jobs
in the right time’.
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HR cannot afford to have a restricted view of the future. It has to be
expansive in its outlook. Right now, imagination is as important as
knowledge for HR professionals. The role of HR is to make sure that
people receive all the considerations possible in times of organisational
In the new business paradigm by which people are the enablers of
long-term organisational success, HR professionals play an important role.
They have to deliver not only operational excellence in our traditional roles
of personnel and training, but also strategic value added through our
unique knowledge of people dynamics. This is a combination of practical
efficiency and professional insight.
What is Strategy, Planning and Forecasting?
Strategy, planning and forecasting is the ability to use evidence in
order to predict outcomes. It is the value derived from being able to
assess the implication of the environment and how that informs the
actions that need to be taken. A step before that is to be initiated is to use
an analysis of the environment to determine, to some extent, what the
objective ought to be.
The all-pervasive sense that strategy-planning and forecasting is a
necessary part of ‘knowing where you are going and knowing how to get
there’ seems more dominant today than ever before. It is that strategy-
planning and forecasting arise from much more fundamental in human
nature: the need for security and the need for reassurance that the right
choices are made. This is much less analytical, and centres strongly on
the values and desires of the individual (or enterprise).
The Importance Of People To Organisational Success
In the new business paradigm by which the people are the enablers
of the long term organisational success, HR professionals play an
important role. There is an acceptance that organisation has to get the
people things right. If they fail to, people will walk away, there is customer
dissatisfaction, the organisation suffers, the shareholder’s value falls. This
raised profile of people in organisations is something of double-edged
sword for the HR profession. At long last they are getting the recognition
that has long been denied- but now they also have to deliver on the
strategic stage and come up with more contribution than the excellent
transactional activity for which they are respected. They have to deliver
not only operational excellence in our traditional role of personnel and
training, but also strategic value added through our unique knowledge of
H R Forecasting and Planning - 11 -
people dynamics. This is a combination of practical efficiency and
Today there is a greater recognition for forecasting and planning,
which has been precipitated by the economic adjustment that came about
when the new economy turned out to be different than expected.
Michael Porter’s View of Strategy
Michael Porter has been one of the foremost experts on business
strategy during the past twenty years. He defined the strategy-setting
process as ‘the search for a favourable competitive position in an
industry… competitive strategy aims to establish a profitable and
sustainable position against the forces that determine industry
The six principles on which the fundamentals of strategy can be
achieved are given as:
1. Start with the right goal.
2. A company’s strategy must enable it to deliver a value proposition
or set of benefits.
3. Strategy needs to be reflected in a distinctive value chain.
4. Robust strategies must involve trade-offs.
5. Strategy defines how all elements of what the company does fit
6. Strategy involves continuity of direction.
In porter’s terms an organisation has to take a clear strategic position,
and then make sure that its activities along the value chain (sales,
marketing, production, HR. etc.) are aimed at achieving or enhancing
the strategy. Porter gave three potential positions as ‘GENERIC
Cost leadership, as the name implies, involves an
organisation’s becoming the lowest cost provider in its
industry sector, and competing on that basis in a broad
Differentiation means achieving a position that has different
or unique characteristics in relation to the competition in a
Focus means achieving competitive advantage in narrow
H R Forecasting and Planning - 12 -
Which strategy to choose?
HR professionals have an opinion about which is the right way to
set the strategy. The most important thing for them is to find out exactly
how the organisation is undertaking its strategy-setting, and to ensure that
they conform to it by gaining admittance. It is incumbent on those directing
an organisation to take the responsibility for evaluating strategic choices
on behalf of the employees, shareholders, other stakeholders and
themselves. The role of the people responsible for human resources in an
organisation is to provide rationally-derived information in respect of the
people implications of strategy, and to combine it with their own unique
insight into people aspects.
It is the requirement of strategic human resource forecasting that
some basic questions are answered:
1. How many people do the organisation need to achieve its business
or organisational strategy?
2. What kind of skills those people need?
3. What kind of management culture should prevail in the quest for
sustained organisational success?
4. How leaders can provide direction in prevailing culture or, indeed,
how culture should be changed?
5. How employees can be engaged in the organisation’s mission?
H R Forecasting and Planning - 13 -
(II) HUMAN RESOURCE PLANNING
“Human resource planning” was born as different approach. Il was an
attempt to make the process a more dynamic and iterative one. Human resource
plan ‘consists of a range of tasks designed to ensure that a appropriate
number of right people are in the right place at the right time. In essence it
involves assessing the current levels and utilization of staff and skills,
relating the internal elements to the market demand for the organisation’s
products, and providing alternative to match human resources with
But most importantly it is ‘fundamentally a dynamic process that
endeavors to monitor and manage the flow of people into, through, and out of
A Successful Approach To Human Resource Planning
The key considerations for successful Human resource planning can be
HR planning must always be seen within the strategy making context.
Human resource planning can most usefully be defined as ‘the relatively
specific element of HR making that proposes appropriate action with
regard to human resourcing’.
HR planning involves creation of formal and explicit sets of proposals
intended to achieve actions that will help achieve long-term organisational
The challenge is to propose actions that contribute to the long-term
corporate success, not only by being prepared to take into account
surprise circumstances but also by introducing new ways of thinking.
This requires sufficient flexibility or openness about the direction
It also requires that there are opportunities for variety of individuals and
groups that make up an organisation to have an input into both the
thinking and the action implicit in the planning.
The systems and processual perspective provides two different ways of
viewing the relationship between and organisation and individuals who
constitute that organisation.
HR planning involves a combination of thinking and acting. This involves
incorporation of continual experimentation, revision and rethinking in
H R Forecasting and Planning - 14 -
which processes of argument, debate and conflict between different
managers and interest groups play a part.
Strategy, Planning And Forecasting For HR Professionals
The main reasons for the use of strategic human resource forecasting and
human resource planning are:
To ensure that organisation takes into account of “people as contributors
to its success by recognizing their unique contribution to strategic direction
To align and integrate people strategies with organisational strategies.
To ensure that the demand of people numbers, knowledge, skills, attitudes
and values are matched with the supply of these attributes.
To provide a process by which people considerations are raised early in
The Process of Forecasting
The SHRF is based on the iterative process that takes its initial feed from the
business or the organisational strategy and works through the strategic
dialogue to the HRP, the people output of strategic planning.
The component parts of the SHRF are summerised as follows:
1. Establishing business or organisational strategy or strategic options:
This requires a good understanding of the business implications of
the strategies that are being proposed. The involvement of HR at this point
is increasingly accepted part of business planning cycle because of the
recognition that inappropriate skill sets, organisation design or culture can
impair the chances of strategic success.
2. Creating HR scenarios:
H R Forecasting and Planning - 15 -
Scenario planning means trying to anticipate people implications of
the possible strategic options. For each of the strategic options that are
identified, a series of HR scenarios can be created.
3. Assessing demand:
This step includes the process to assess the number of people
needed for the HR plan. The various other factors that are critical to
the aspect of strategy that relates to demand for skills. The demand
forecast will stem directly from the financial, sales or production
4. Assessing the supply:
Supply factor include an internal analysis of potential, but have a
particular focus on the external variables such as demographics,
overall country or regional skill levels, and so on.
(1) Creating Hr Scenarios
Scenario planning is preparing for the unexpected. It is a way of
building a mindset aimed at anticipation. It represents, ‘an attempt to
sidestep or circumvent the hazards predicting, and in process to reap
certain mental and practical gains that are commonly sacrificed in a single
The second aspect of the strategic human resource forecasting
process is to look at scenario-planning as a way of addressing critical
issues. Scenario planning is inexorably linked with creative thinking.
Imaginative solutions to the problems created by expanding targets in
competitive world can be enhanced by instituting creativity as part of the
intrinsic make-up of the organisation.
In some organisations Scenario planning is a ‘Blue-Sky’ type of
activity, in which those involved in strategy setting process think the
unthinkable or dream up ‘left-field’ options for the organisation.
It is thus summerised as a way of anticipating changes in the
external environment that will impact positively or adversely on both the
organisation’s goals and the means of achieving them. Scenario-thinking
is response to fallibility of prediction-making in the business or
organisational environment. The strategic human resource forecast
represents an ideal opportunity to incorporate some scenario planning into
the people aspects of the strategy.
H R Forecasting and Planning - 16 -
In its purist sense scenario-planning tries to imagine the future at its most
The following are the steps involved in creating a scenario:
1. Consider possible scenarios: after having looked at the possible
options that might arise from the business strategy, it might be possible
to plan out some scenarios in advance and be prepared to face the
possible contingencies that will arise from the situation.
2. For each scenario identify a range of HR outcomes: the next stage will
be after formulating an input to the scenario to identify a range of
possible outcomes. This is an exercise in broadening the vision
beyond the organic and incremental. it is certainly an exercise in
moving out of box.
3. Identify success and disaster possibilities: once the possible outcomes
from the various scenarios have been identified, two important
questions should be raised:
What would success look like?
What are the risks to and the possible show-stoppers of these
4. Identify difference between current position of the organisation and
desired future position: Once the scenario has been created, once the
HR outcomes have been identified, once the plan is beginning to
emerge, then gap analysis should start. As in HR outcomes aspect of
scenario, gap analysis will facilitate action-planning once one projected
scenario becomes firm.
5. Identify successful actions and measure of success: At this point there
will be several inputs to the scenario. It is worth sanity-checking the
whole process with those responsible for establishing the scenario, to
evaluate what the outcomes have been and how beneficial they are.
One of the important aspect of this part of scenario-planning process is
time and timing.
(2) Assessing The Demand For The People
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Attracting, development and retaining the right personnel for
business today is what lies at the root of the corporate success or their
failure. The alignment of corporate and personal values should lie at the
root of any recruitment exercise, whether recruiting a CEO or manual
There is a responsibility on everyone who is recruiting to devote
sufficient time and understand and clarify exactly what is required. One
should also look forward to the development and retention of each
recruited individual both in personal terms and in developing the business.
The result then will not be a repetition of the recruitment process and a
static or decreasing business.
The demand for the people
The demand and supply are the ‘yin and yang’ of the SHRF: two
complementary activities- not of Chinese philosophy but of very real
challenge of getting enough people to fill the posts created by strategy.
Attaining equilibrium is very desirable objective by having good
understanding of the labour market.
In theory, demand forecasting should be more straightforward than
supply forecasting as demand forecasting is based on the interpretation of
the organisation’s business plans. The outputs of the demand forecast are
likely to be:
An estimate of the numbers required to achieve the business
strategy in one to three to five year’s time.
An understanding of how will these employees will work, by division
or by location.
An understanding of the types of skills required, including an
estimate of how many skilled people will be required within each
The process for deriving a demand forecast
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1. The business or organisational strategy determines the likely people
requirements in terms of numbers, location, skills, etc.
2. Quantify people requirements by total numbers
3. Quantify requirements by business unit or division
4. Quantify requirements by location
5. Quantify requirements by skill types
6. Prepare an initial demand forecast
7. Feedback to business managers
8. Feed results into a quantified HRP.
(3) Assessing the Supply Of The People In The Organisations
HR would not be HR without its essential raw material- PEOPLE. A
forward look at the number and quality of the people available in the jobs
market is therefore necessary prerequisite of strategic HR. people supply – in
particular external supply – is an important determinant of whether an
organisation will be able to deliver its required levels of performance. Supply if
generated by internal and external sources f labour and includes supply of
The process for deriving a supply forecast
1. The business or organisational strategy informs internal supply of people.
2. Environmental analysis used to inform likely external sources of supply.
3. Quantity of supply analysed by total numbers.
4. Quantity of supply analysed by location.
H R Forecasting and Planning - 19 -
5. Quantity of supply analysed by skill types.
6. Quantity of supply analysed by business unit.
7. Feedback to business managers.
8. Input to the HRP.
9. Measures of the implementation set.
Culture In The Strategy Process
‘Culture’ is the context within which the individuals and the groups
operate. For an organisation, it comprises a set of beliefs, values and emotions
that enable its members to work effectively. In most companies, the cultural
context is assumed: newcomers absorb the unwritten rules through a process of
observation, trial and error-otherwise, they face rejection. Successful companies
establish a culture that fits their operating models.
In the era of gradual change, the culture of the company adjusts over time
to new market requirements and opportunities. Today, however, the pace of
change in the economy- driven by the interlocking forces of the globalization,
technological innovation, deregulation and government intervention – is such that
the company is forced to adapt their operating models far more quickly to remain
With the acceleration of the changes in the competitive environment, it
becomes vital to synchronise changes in business processes, organisational
changes and reward systems with the appropriate shifts in the culture.
Changing culture is therefore not about building a company – it is
necessary to create an organisation that can deliver hard results.
The cultural implications of strategy
The cultural implications of business strategy continue to be serious matters of
the HR personnel. And there is evidence that cultural issues, always important,
are now becoming more appreciated. Understanding the culture of an
organisation is a prerequisite to managing any sort of change. HR personnel
have a major role to play as ‘the voice of the culture in the organisation’ –
analysing and articulating what it is, and doing something about it.
H R Forecasting and Planning - 20 -
The importance of understanding culture
Assessing the culture and style of the organisation – and how appropriate
they are to the future direction and strategy – is critical. It is an era that is one of
the softer aspects of HRM…. and as the result of often ‘parked’.
When organisation fails to recognize cultural issues during the strategy
setting process, it has an impact on the ultimate success or failure of the
strategy. The possibility of building a culture that values difference in the race,
gender and ability should enthuse everyone in the organisation. An
organisation’s culture is pervasive. It can also stifle the change or innovation if
mismanaged or misunderstood. Organisational culture is a powerful force – and
now there is a growing recognition that its management is important facet of
Every organisation has a culture, and the way the human behaviour
expresses itself - in both speech and action – defines that culture.
The ways in which culture shows itself in organisation are illustrated below:
• The way in which people interact, their forms of address, and language
• The dress code.
• The way in which work is organised and conducted.
• The organisation’s self-image and the dominant values it espouses, often
through its mission statements, company and product literature.
• The way in which it treats its employees and responds to its customers –
this is often reflected in the physical facilities provided in the organisation.
• The rules for ‘playing the organisational game’ – e.g. the types of
behaviour associated with being a good employee or effective manager.
The process of assessing the cultural implications of strategy
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1. Highlight the possible changes to strategy from the overall strategic plan.
2. Conduct a cultural audit for the existing organisation
3. Assess the cultural implications of the new business strategy
4. Identify culture gaps
5. Communication, education and HR practices to develop required culture
6. identifying measures of success
7. Monitor the cultural change
A gap is an opening, an opening is a space between barriers, a space between
barriers makes for tremendous vulnerability. At first sign of gap, it should be
shored up, or repelled, or stopped, or hidden, or overwhelmed. These are called
the principles of stopping gaps.
In traditional manpower planning, gap analysis was the means of
contrasting the current ‘numerical size of the workforce against the size predicted
in the strategic plan. It is now necessary to extend this simple but effective
balancing act to include other factors, such as:
• Succession management
These elements are increasingly of high profile because of the war of talent
and its implications for recruitment and retention, and because of the need to
keep a firm grip on cost management.
Gap analysis in a people context
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In people context there are four critical areas in which the gap may be
identified as part of SHRF process. These are:
• In the supply and demand for labour- either as excesses of supply between
current and proposed strategy (downsizing) or as excesses of demand (the
war for talent)
• In the difference between the current cultural make-up of the organisation and
that desired for future
• In the difference between the current organisational structure and that
indicated by strategy debate
• In all aspects of organisational development, such as learning, reward, and
H R Forecasting and Planning - 23 -
Voltas Limited is India's premier air conditioning and engineering services
provider. It offers engineering solutions for a wide spectrum of industries in areas
such as heating, ventilation and air conditioning, refrigeration, climate control,
electro-mechanical projects, textile machinery, machine tools, mining and
construction, materials handling, water management, building management
systems, pollution control and chemicals.
The Company's strengths lie principally in the design and manufacture of
industrial equipment; management and execution of air conditioning and public
work projects; sourcing, installation and servicing of technology-based systems;
and representation of global technology leaders, serving diverse industrial
sectors and applications.
Voltas' operations have been organized into four independent business-specific
clusters, namely the Air Conditioning and Refrigeration Business Group, Unitary
Products Business Group, Engineering Products Business Group and
International Operations Business Group. Each of these has its own facilities for
market coverage and service to customers.
• Air conditioning and Refrigeration Business Group
Central Plant Equipment
Packaged / Ductable Split Units
HVAC Turnkey Projects and Services
• International Operations Business Group
Pumps and Projects
• Unitary Products Business Group
Room Air Conditioners
• Engineering Products Business Group
Mining & Construction Equipment
H R Forecasting and Planning - 24 -
• United Nations' Grand Award for Excellence in Public Service Worldwide,
• International Public Relations Associations' Golden Trophy for Excellence
in Customer Service, 1994-95.
• Mumbai Chamber of Commerce and Industry's Good Corporate
Citizenship Award, 1995-96.
COMMUNITY DEVELOPMENT AND ENVIRONMENTAL PROTECTION
The Company has consciously laid emphasis on corporate social responsibility
and also on ecology and environment protection. Exemplary corporate
citizenship is demonstrated in numerous social upliftment projects, whether
independently undertaken or in support of the Tata Council for Community
H R Forecasting and Planning - 25 -
Voltas HRD Centre, inaugurated on June 7, 1995, was designed by a group
of architects, engineers, behavioural scientists and HRD executives to
provide the right environment for Training and Development. Set amidst
idyllic sylvan surroundings, the Centre has an auditorium and a conference
hall, as well as a number of syndicate rooms of varying seating capacities,
backed by modern training aids and accessories.
VOLTAS is one of India’s oldest companies embarking its true existence for
almost 5 decades. It is one of the few Multi-National Company’s who had evolved
importance of HUMAN RESOURCE DEVELOPMENT 3 decades ago.
Says VOLTAS General Manager Mr. Rakesh Kumar, “Our Company has
constantly framed the plans and policies so as to attract the best talent towards
our empire and satisfy and nurture our most valuable assets - our employees.”
H R Forecasting and Planning - 26 -
ANNUAL STRATEGIC BUSINESS PLAN
The Strategic Business Plan in VOLTAS is formulated every year keeping in
view the need of the entire firm, its employees and most importantly the
H R Forecasting and Planning - 27 -
customers. The company has an HR department who is responsible completely
in designing the whole working plan effectively and efficiently. Like every
successful organisation today, VOLTAS too lays more emphasis on providing
maximum customer satisfaction through value-added services and quality
In the world of intense competition, every firm’s true objective is to have a
competitive edge through technologically advanced products and services at the
most competitive prices. A team of expert personnel is very essential in achieving
the corporate objectives. The core contributors is the internal strength of the
company i.e. the employees and to build up that strong force is the team of HR
The main frame of this Strategic Business Plan includes the following:
1. The human resource requirement.
2. The training programmes to be initiated.
3. Implementing various motivational techniques and give incentives to the
4. Annually conducting an overall assessment of the working of the
5. And how to meet the competition.
Every year the HR department in consent with the top level of
management prepares a list of goals and objectives to be fulfilled by every
employee. They are also delegated with the required responsibility and
authority for their efficient and smooth working. The goals and objectives are
formulated in such a way that they are aligned with the Strategic Business
Plan as the ultimate target of the organisation.
The bottom line for the company is ultimately providing its customers the
best of value added services and quality appliances. The main role of the HR
H R Forecasting and Planning - 28 -
department in this concern is to initiate a plan where the internal customers
i.e. the employees are motivated to provide complete satisfaction to the
external customers. The HR department considers the past records of the
assessment which is conducted by the Employee Agencies appointed by the
company to carry out satisfaction survey.
The formulation of the goals for the company is not only done by the top
level of the management but also by the cross divisional functional team, typically
consisting of the personnel from every functions and departments. After a clear
view of the entire picture framed by the management, the job of distributing the
respective tasks rests with the HR department.
The most interesting technique which the VOLTAS follow is the process of
discussing the goals and objectives between the head of the department and his
subordinates. They thoroughly discuss the ways and the order in which one will
attain its respective goal. Every employee participates equally to help and
suggest pathways by which they can achieve their target. This shows the team
work culture that the company follows which gives every one a chance to present
his/her view and thus result into a successful master plan.
H R Forecasting and Planning - 29 -
Every company has its own recruitment plan designed to suit the specifications
and requirements that a job demands. The HR department keeps a track of the
employees in various departments in the organisation.
The Company considers two ways to recruit an employee i.e. either
internally or externally. Internally it fulfills the place of the job by transferring or
promoting the existing capable employee. In case of external recruitment, it
considers two ways according to the job specification.
The 2 levels of the external recruitment are:
1. Entry level:
At this level, the recruitment is done by Campus interviews.
The company considers mainly the MBA’s and Engineer
graduates from a well recognized institution. The leading
institutions which cover the company’s preference are
Weginkars, Somaiya, Symbiosis, Nagpur engineering
college. It invites the job- profile of the potential prospects
suitable for their organisation through or direct contact with
these institutions. This is a proactive method of recruitment.
Basically, the need for an employee is anticipated by the HR
department and the best prospects are attracted much
before the actual need for the employee.
2. Experienced level:
“It is the process of finding and attracting capable applicants for
employment. The process begins when the new recruits are sought and
ends when their applications are submitted. The result is the pool of
applicants’ form which the new employees are selected.”
And Selection needs
H R Forecasting and Planning - 30 -
The level is need-based i.e. the recruitment is only done
when there is no chance of internal placement. It usually is in
the case of top and middle level management. The company
as far as possible considers promotion to be the ideal way
but in case of any contingency, external recruitment is opted.
The specification for the job includes requisite experience of
with high degree qualification and work experience from a
reputed firm. The company places advertisement in leading
newspaper with job specifications to target the right
Recruitment on contractual basis:
The company hires consultants for getting applications. The job
description is provided to the consultant. According to the specification of the job,
he sends resume of eligible applicant to the company. From the received bio-
data, the HR department shortlists the applicants pertaining to job demand for
The role of selection in an organisation’s effectiveness is crucial for atleast two
Improving Work performance by hiring the people who have the
competence and the willingness to work.
Cost incurred in recruiting and hiring the personnel speaks volumes
about the role of selection.
“It is the process of differentiating between applicants in order to identify (and hire)
those with greater likelihood of success in the job.”
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OUTCOMES OF THE SELECTION DECISION
The company selects the applicants on the basis of their academic records
depending upon the post levels.
STEP 1: Selection criteria
1. Cut off – 60 %
STEP 2: Selection tests
Job seekers who are shortlisted in the first step are called for a written test
which assesses the applicant’s mental ability and I.Q. level. The test is based on
Basic, Logic and Reasoning questions. The test is conducted to evaluate and
select only those individual who are able to score maximum. This is next
elimination step from which the applicants are called for Group Discussion.
STEP 3: Group Discussion
The applicants who pass the test are called for Group Discussion. Here all
the prospects are made to sit together and are given a topic to discuss. The
panel members closely watch the move of every individual and are allotted
points. Those who score the maximum are then interviewed for final selection.
STEP 3: Employment Interview
The next step in the selection process is employment interview. Interview
is a formal, in-depth conversation conducted to evaluate the applicant’s
False Negative True Positive
Error (“High Hit”)
True Negative False Positive
(“Low Hit”) Error
H R Forecasting and Planning - 32 -
acceptability. The panel interview consists of two or more interviewers. Here the
panel consists of the HR department entirely involved with the senior members
from all other departments.
After obtaining information through the preceding steps, selection
decision-the most critical of all steps-is made. The other stages in the selection
process have been made to narrow the number of candidates. The final decision
has to be made from the pool of individuals who pass the tests, interviews and
group discussion and interview.
The views of all the panel member is considered in the final selection
as it is he/she responsible for the performance of the new employee.
STEP 4: Job offer
The next step in the company selection process is job offer to those
applicants who have crossed all the steps of screening and testing. Job offer is
made through letter of offer which contains the date by which the appointee must
accept the offer and inform the date of joining, whom to report, his designation,
ORIENTATION AND PLACEMENT
Also called induction, is designed to provide a new employee with the information he or
she needs to function comfortably and effectively in the organisation.
It is a planned introduction of employees to their jobs, their co-workers and the
After an employee has been hired and oriented, he or she must be placed in the respective
right job. Placement is understood as the allocation of people to jobs. It is the assignment
and re-assignment of an employee to a new job.
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The Voltas company conducts orientation/ induction program for a week. It is a
formal induction done by the company. The idea is to make the new employees
feel ‘at home’ in the new environment. The ease with which employees adjust to
a new job and work environment is, often, a function of the expectations they
bring to the job.
There are two ways in which the new employee is oriented:
1. Classroom induction where there is formal induction program
2. C.D. - here a compact disc projects visual display of the entire
organisation and its people.
The probation period is 1 year. The employee is given the letter of appointment
on joining. After the completion of the tenure, letter of confirmation is issued to
the employee with 100% consent of the top level management.
TRAINING AND DEVELOPMENT
“YOU TRAIN BEST ON OUR TERRAIN”
The training and development program in the company starts from the entry level
and is continuous thereafter.
Steps in training programme
TRAINING AND DEVELOPMENT
It is any attempt to improve current or future employee performance by increasing an
employee’s ability to perform through learning, usually by changing the employee’s attitude
or increasing his or her skills and knowledge. The need for training and development is
determined by the employee’s performance deficiency, computed as follows:
Training and development need = Standard performance – Actual performance.
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• Entry Level Training: The new employee undergoes training in two ways:
In-house training where the basic training is imparted in the organisation by
respective person who acknowledges the employee about the job requirement.
Through a trainer who is hired by the company for 1-4 days depending upon
the length of the training program. The trainer provides complete information
about the job to be performed and how to be done.
• General Training:
There is on-going training programmes conducted every year on various
aspects. These programmes are organised for all the employees in the
company. Each employee undergoes training for 12-15 days every year.
The basic knowledge regarding the latest trends and ways for performing
tasks is the course content of the training program.
Mentoring system of training:
Every new employee is placed under the guidance of a senior employee
who undertakes the responsibility of coaching and teaching. This is an effective
way to learn as the experience of the mentor is passed to the new employee who
adapts to the corporate culture of working. Mentoring a usually done by the
employees immediate boss or by an elderly person who assess the new recruite
problems and difficulties.
Who Are The
Where to conduct
What should be the
level of Training?
What Methods &
Who Are The
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OJT is an ongoing training program facilitated to the employees
throughout their association with the company. It is the most effective
method as the trainee learns by experience, making him/her highly
Executive training programme:
The VOLTAS company holds specials training programmes for the
executives which is for a duration of 3-6 days. It is organised at the TATA
MANAGEMENT TRAINING CENTRE (PUNE). It is a residential training
programme where training is given to the senior level executives.
Training Aids available
• Overhead projector
• Slide projector ( 35 mm )
• Direct projector
• Electronic Pan Board (PANA)
• White board
• Motorized projection screen
• Video scope
• Microphone systems
• Computer available
• L C D
H R Forecasting and Planning - 36 -
The performance appraisal process
• In Voltas, the appraisal programme is held every year. The programme
highlights the company’s goals and objectives to be accomplished in that
year. These targets to be achieved are given to the respective department
and each employee. The head of that department, with his subordinates,
discuss the way in which the targets are to be met
It may be understood as the assessment of an individual’s performance in the systematic
way, the performance being measured against such factors as job knowledge, quality and
quantity of output, initiative, leadership abilities, supervision, dependability, co-operation,
judgement, versatility, health, and the like. Assessment should not be confined to past
performance alone. Potentials of the employee for future performance must also be
Performance appraisal is a formal, structured system of measuring and evaluating
employee’s job related behaviours and outcomes to discover how and why an employee is
presently performing on the job and how an employee can perform more effectively in the
future so that the employee, organisation and society all benefit.
Design an Appraisal
Use Appraisal Data For
H R Forecasting and Planning - 37 -
The appraisal programme process of the company is done in the following steps:
1. The strength and weaknesses analysis of the employee as perceived by
2. The rating of the employee is done on the predetermined parameters.
3. On the job performance evaluation is assessed.
4. The training requirements are evaluated.
5. All the information relating to the appraisal is forwarded to the HR
6. The HR department analyses the performance level, whether increased or
decreased, whether the said target has been achieved or not.
7. The result of the data is compared with the past data. On the basis of the
evaluation the employee is allotted grades.
8. All the information thus assessed is discussed by the company. The goals
of the next year is simultaneously set and duly signed.
The performance appraisal is recorded and maintained for the following reasons:
1. To determine the immediate or future training and development needs.
2. To effect promotions based on competence and performance.
3. To confirm the services of the probationary employees upon their
completing the probationary period satisfactorily
4. To set the goals and targets next year.
5. To use the data for comparing the performance of the employee.
6. To let the employees know where they stand insofar as their performance
is concerned and to assist them with constructive criticism and guidance
for the purpose of their development.
7. Performance appraisal is used to determine whether HR programmes such
as selection, training, and transfers have been effective or not.
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A basic principle is that the performance of an individual depends on his or her
ability backed by motivation. Stated algebraically the principle is:
Performance= f (Ability x Motivation)
-Ability refers to the skill and competence of the person to complete a given
-Motivation in simple terms may be understood as a set of forces that cause
people to behave in certain ways.
HIGH POTENTIAL SCHEME IN VOLTAS
The company runs from time to time a unique programme High Potential
Scheme. This programme is specifically designed to assess the competency of
those employees who exhibit high level of capability and progress at much faster
pace than other employees in short span of time.
These employees are selected by the company for a Grooming training
programme which trains and develops the skill of the employee to enable them
to take a higher post in future. It is a kind of internal recruitment wherein the
company identifies the potential employees who will be able to resume position
at the middle or top level of management. This scheme is a fast track grooming
programme done by the HR department to develop a competent employee.
2.Searches for ways
to satisfy needs.
3. Engages in goal-
rewards or punishment.
H R Forecasting and Planning - 39 -
People join organisations expecting rewards. Firms distribute money and other
benefits in exchange for employee’s ability, competencies and behaviours.
Membership and Seniority-based Rewards
Benefits an employee receives depend on the firm joined. In VOLTAS, MBA and
Engineer taking up a job gets more benefits than a graduate. The MBAs and
Engineer reach middle level and top level of management faster.
Job Status-based Rewards
The firm uses job evaluation system which helps establish differentials in status
of job. A job that requires more skills and efforts have more responsibility and
have difficult working conditions is given more value and consequently places in
higher pay grades. The pay scale and reward increases from lower level to top
level of management and according to the job expectation achieved.
Employees who reflect their competencies through skills, knowledge and traits
leading to desirable behaviour are given skill-based pay. In skill based pay the
company pays employee on the basis of number of jobs discharged, or the depth
of their knowledge. VOLTAS uses skill-based system of rewarding to motivate
employees to acquire additional skills so that they become more useful to the
The Rewards are given to the employees in the following forms:
1. Monetary rewards where the employee receives reward in kind over and
above his normal pay-scale.
2. Reward in intangible form like appreciation and recognition. Announcement
of the employees who show exceptional and outstanding achievement is
done in the company meeting or formal function.
3. Appreciation to the employee, as the G.M. of the company Mr.Rakesh calls, a
pat on the back serves as a motivational tool.
H R Forecasting and Planning - 40 -
Just as every company has a strong motivational reward system, the
punishment concept too is required to arrest mismanagement and undisciplined
behaviour. The company follows the strategy of punishing the employees only
as a last resort. The following are the steps involved for curbing the undesirable
behaviour of the employee:
1. Any complaints received or misbehaviour observed is handled by the
senior executive of the respective department and the HR department.
This is in case of middle and low hierarchy employees.
2. Counseling is given to the employee to change his attitude and behaviour.
3. Further, if no positive response is received, the report of the same is made
by the HR personnel to the top level executive. More stringent action is
taken to solve the problem.
4. Final warning is given to the employee.
5. At last, if no alternative is left, the respective employee is asked to resign
the post. This is the most rigorous action taken after the consent of the
entire concerned personnel department and the HR team.
6. The application of all the steps involved lies with the HR department.
RETENTION SCHEME IN VOLTAS
In Voltas, several special programmes are initiated by the company to
manage the use of its human resource effectively and to the optimum level.
One of the unique schemes being the Retention scheme. The following are
the steps involved:
1. This programme is conducted at a spaced interval annually as a
powerful motivational technique.
H R Forecasting and Planning - 41 -
2. Nominations from all the department is invited by the HR department.
These nominations are referred by the senior executive of the
3. From the nominations received, say 20, 5 employee names are
selected according to their database and capability observed.
4. All the selected employees are taken to a programmed venue which is
their assessment center.
5. The entire scheduling and planning is done by the HR department with
the approval form the top level management.
6. The programme involves rigorous tests which the employees are
supposed to give in the assessment center.
7. These tests involves written test, Group Discussion and Individual
Exercises to ascertain individual capability.
8. The results which are recorded by the selected panel members from all
the departments are evaluated by the Senior Executives.
9. After thorough evaluation, the Panel shortlists the employees who are
selected on the basis of the evaluation done.
10.These employees are added to the category of “Fast Trackers”.
11.The “Fast Trackers” are trained and groomed for high positions.
12.This is done by further rigorous tasks such as giving them challenging
assignments to complete.
13.The assignments are allotted to develop the personal attributes of the
employee and to validate whether he/she possess high potential or
14.The employees who are able to pass through the tough training
programme are given “Accelerated Promotion”.
15.It is an employee based promotion technique.
16.Once the employees are identified as “Fast Trackers”, they are washed
with training and development programme on a regular basis.
H R Forecasting and Planning - 42 -
Thus, the Retention scheme truly caters as an effective too to retain those
potential and competent employees who are identified as future valuable
asset to the company. Such schemes help the company to make optimum
utilization of the Human Resource. The entire programme is carried
successfully by the HR department of the Voltas company.
Employee satisfaction survey
Every year, the company conducts employee satisfaction survey to assess
the requirement of employee individually. This also helps the company to
implement any modification or changes to suit the employee needs. The
information thus collected is maintained as database for future reference. This
task is conducted by HR personnel.
The communication process of the company is formal and involves the use of
‘Intranet’ and circulars. The communication channel is both horizontal and
vertical. Meetings and conferences are held once every quarterly between the
executives vertically and general meeting is held between all the department
heads and the employees monthly to discuss the corporate progress and
The communication process
“Communication may be understood as the process of exchanging
information, and understanding among the people”
H R Forecasting and Planning - 43 -
• E-Mail: “LOTUS NOTES”
The information to be imparted is transferred to the employees through E-mail
system. The information through e-mailing system is general and is fast to
communicate. This system is most popular among companies as it can be
readily accessed anytime and saved for future reference. This system is
known as “Lotus Notes”.
Circulars are one of the ways in which the information is transmitted from
department-to-department or from one department to the concerned department.
In some cases, the circulars are circulated to get the consent of the respective
department concerning certain specific issues.
Letters are issued in case of individual employees concerning with important
issues. It is mostly used in case of promotion, appointment or award letter. The
letters are also issued in case of resignation or transfer.
Remuneration is the compensation an employee receives in return for his/her
contribution to the organisation. His/her standard of living, status in the society,
motivation, loyalty and productivity depend upon the remuneration he/she
The remuneration in the company is fixed according to the job evaluation. The
applicant has no say in matter of salary fixation. The HR department
evaluates the job and presents the final salary structure to the employee as
per his job requirement.
The salary is negotiated for the MBA professionals and it is fixed
according to the goals to be achieved for the engineers.
H R Forecasting and Planning - 44 -
+ House rent allowance/reimbursement.
+ traveling allowance.
+ leave travel allowance in a year.
+ Medical reimbursement.
+ Annual limit fixed to claim the expenditure for
+ Provident Fund contributed by the company.
+ contribution to Super Annuation fund.
Incentives are monetary benefits paid to employees in recognition of their
outstanding performance. They are defined as “Variable rewards granted
according to variations in the achievement of specific results”
Variable Incentive scheme:
The scheme is entitled to employees on achieving the set targets. The
primary advantage of this scheme is the inducement and motivation of
workers for higher efficiency and greater output.
Formula for Variable Incentive scheme
• Basic salary
• Gets Variable Incentive if the employee meets 120% of the set target.
• Gets Maximum preset Variable Incentive if the employee meets
100% of the set target.
• Gets 80% Variable Incentive if the employee meets 90% of the set
• Gets 50% Variable Incentive if the employee meets 80% of the set
Employee benefits and services include any benefit that the employee receives in
addition to direct remuneration. “Fringes embrace a broad range of benefits and services
that employee receives as a part of their total compensation package… pay or direct…is
based on critical job factors and performance. Benefits and services, however, are
indirect compensation because they are usually extended as a condition of employment
and are not directly related to performance”
H R Forecasting and Planning - 45 -
• Gets no Variable Incentive if the employee meets less than 50% of
the set target.
There are two types of leave facilitated to the employees:
1. 7 days Need-Based leave.
2. 30 days Privileged leave.
It is mandatory for the employees to provide written intimation of leave to the
concern person. In case where the employee takes more than the permitted
leave then the computed amount of the leave is deducted from the salary.
Employee Benefits and services
The following listed below are the employee benefits and services that the
Voltas Company facilitates to its every employee.
1. Legally required payments:
• Old age, survivors, disability, and health insurance.
• Worker’s compensation
2. Contingent and deferred benefits:
• Pension plans
• Medical expenses (hospitalisation and surgical)
• Maternity leave
• Sick leave
Promotion means an improvement in pay, prestige, position and responsibilities of an
employee within his/her organisation
H R Forecasting and Planning - 46 -
• Medical officer at every branch of the company
• Medical reimbursement schemes which vary from department.
• Provident fund as per the government rules and regulations
• Gratuity provided as per the government rules and regulations after
completing 10 years of service.
3. Other benefits:
• Travel allowance
• Company car and subsidies
• Car allowance – reimbursement for vehicle at high level of
• House rent allowance as a part of salary structure.
The employees get compensation according to the framed legal rules and
regulations of the industries. Every department has different compensation
structure according to their function.
The promotion in the company is done mainly to fill up higher positions
internally. The promotion is also done to motivate employees to higher
A transfer involves a change in the job (accompanied by a change in the place of the
job) of an employee without the change in responsibilities or remuneration.
H R Forecasting and Planning - 47 -
productivity. It is done in case of fast trackers to attract and retain services of
competent and qualified people.
The transfer in the Voltas company is need based. It is done in the following
1. Shortage of employees in one department.
2. To remove the incompatibilities between the worker and his/her senior
or peer or subordinate.
3. To reduce monotony of the employee.
Layoffs, resignations, retirements and dismissals separate employees from
the company.The separation is done only as an extreme measure against the
employee in case of any unsuitability.
Resignation refers to the termination of employment at the instance of the
employee. The employee resigns for personal reasons or when he secures
better job elsewhere. Resignation in case of female employees is mainly due
to marriage and has to quit for personal reason.
The employee must furnish intimation 3 months prior leaving. The employee
is provided Super Annuation. The company contributes every month 15% of
the basic salary of the employee in the Super Annuation account. This Super
Annuation is given to Life Insurance Corporation of India which then gives
income to the employee after retirement annually.
The age for retirement is 58 years. Further extension is considered if required
on contractual basis. The employee is given superannuation scheme after
H R Forecasting and Planning - 48 -
There are 3 after retirement benefit provided to the employee:
1. Provident Fund :
Every year 12% of the Basic salary of the employee is deducted
and transferred to the Provident Fund account. Additional 12% of the
Basic salary of the employee is contributed by the company to the
Provident Fund account. At the time of retirement the employee is entitled
to the entire accumulated amount of the Provident Fund.
2. Super Annuation :
The company contributes every month 15% of the basic salary of
the employee in the Super Annuation account. This Super Annuation is
given to Life Insurance Corporation of India which then gives income to
the employee after retirement annually.
The gratuity is given to those retiring employees who have
completed atleast 10 years of service in the company. the
proportion of the gratuity is pre-decided which is usually half of the
basic salary of the employee. This amount is given to the retired
employee in lump sum.
Voluntary retirement scheme (VRS)
The company offers VRS to the employee when it wishes to downsize. The
company computes VRS on last 5 years pay. It gives VRS to office level or
Grievance Redressal Machinery
The company has a special cell for handling the problems and complaints of
the employees. The rule of the company is to solve the problem within a
month’s time. This is done by the HR department with the consent of the
concerned department. The person handling the matter refers to the appraisal
record of 5 years for reference and to study the nature and performance of
H R Forecasting and Planning - 49 -
Employee record planning:
Employee record planning is a computerized database which consists of
all the information relating to the employee. This database is maintained by
the HR department at spaced interval. It is a centralized system as the HR
department handles all the matters concerning the database.
Voltas limited company has a strong union presence which comprises of the
labours, sub-ordinate workers and clerical staff. There is an Industrial
relations department which is part of Human resource department of Voltas
company. The company does not conduct any recruitment programme at the
Union level as it is not cost beneficial for the company. The Union is
registered as Voltas Employee Union (Mumbai). The company has 12 major
branches all over India. Every branch has its individual Union establishment.
It is known as “All India Federation (Mumbai)” of which all the workers and the
clerical staff are the members. The leadership is internal i.e. it is within the
company and not associated with any other Union. The purpose of the Union
is to do Collective bargaining for the benefit of the workers.
The approach of the Voltas Company towards the customers has been a
major focus. The company strives hard in its best way to provide best
services to its people. There is call center established at every branch to
receive complaints from the customers. It ensures that the complaints are
looked up at as fast as possible to avoid any delay in solving the problem of
The complaints are forwarded to the respective department immediately and
are assigned the responsibility to provide optimum solution in shortest span.
The company advertises in the leading newspaper information of the call
centres situated nearest to their discretion.
Every department, through the use of computers, keeps track of the customer
H R Forecasting and Planning - 50 -
“HR goes through the cultural implication”
Culture refers to the complex whole which includes knowledge, belief, art,
morals, laws, customs, and other capabilities and habits acquired by an
individual as a member of society. In the first place, culture creates the type of
people who become members of the organisation. Culture trains people on
particular lines in certain way.
When people with different cultural backgrounds promote, own and
manage organisations, they themselves tend to acquire distinct cultures.
The attitude of the workers towards the work is the result of their cultural
background. The time dimension, which influences HRM, has its roots in
culture. Time orientation refers to the people’s orientation-past, present or
future. Finally, the work ethics, achievement needs and the effort-reward
expectations, which are significant inputs determining behaviour, are the
result of culture. It is too well known that a perfect match between effort-
reward will produce better performance from and individual. When an
employee perceives that he/she has been treated unfairly, the performance
suffers. This phenomenon is the result of culture.
The Voltas company believes in change management i.e. cultural change.
All the people in the organisation are explained the prospects of the cultural
change that needs to be initiated. HR department facilitates the task of
cultural change to the people so that they absorb the change. The mindset of
the employees is diverted to accept the cultural change as rightly said by
Mr.Rakesh,”Unlearning is difficult than learning”. Therefore change
management is very crucial for the company.
A plan is prepared by the HR department and the divisional head to
implement the cultural change. The plan is thus put to practice after receiving
approval from the head of the department.
H R Forecasting and Planning - 51 -
CHALLENGES OF HUMAN RESOURCE MANAGEMENT
The 1990s have brought a revolutionary change in the business environment.
Post-liberalisation is marked by a shift from command economy to market
driven economy, from sheltered market to competitive market, from monopoly
to competition, from domestic trade to global trade. Such a shift calls for a
different approach to HR problems. The need of the hour is pro-active
approach to HR problems. Proactive strategies call for awareness about the
likely challenges the HR manager will face in the time to come.
The major challenges are:
2. Corporate reorganisations,
3. New organisational forms,
4. Changing demographics of workforce,
5. Changed employee expectations,
6. New industrial relations approach,
7. Managing the managers,
8. Interest of the weaker sections of the society.
Such being the challenges and the role of the HR manager, it is strange that
the status of the HR function is not realised and respected in our country. In
most organisations, the HR function receives the attention of the top
management only when there is breakdown in industrial relations. During
other times too training and development programmes are organised not
out of genuine concern for employee development but to comply with
statutory requirements or to patronize training schools or consultancy firms.
Position wise, it is sad that HRM personnel seldom rise to the top echelons
of organisation. The head of an HR function may hope to glide up to board
level and never beyond. For decades, the HR activity has remained a staff
function (advisory) as opposed to a line (decision making) function. This
makes all the difference between the department which enjoys a clout in an
organisation and which does not. To be specific, the HR department does
not enjoy the status or wield power equal to that of production department or
a finance department.
H R Forecasting and Planning - 52 -
Though the stakes are too high, the present status of the HR managers is
less satisfactory. The HR function does not figure in any discussion on
H R Forecasting and Planning - 53 -
Onida’s principal assembly operations are conducted in a state-of-the-art plant at
Wada, 80 kms from Mumbai. The plant in Delhi caters to the production
requirements for the Northern region. Our network of 29 branch offices, 140
service centres and 35 godowns across India, enable products to be always
available on retail shelves.
At Onida, we recognize that we can strengthen our competitive edge if we
produce as much as possible from a given capacity at the lowest possible cost.
We reduced the time it takes for a single colour television to be produced from 20
seconds to 12 seconds and increased the capacity from 0.5 million to 1.2 million
sets during the year under review.
In 2002-3, we extended our manufacturing excellence a decisive step forward: by
entering into the manufacture of washing machines and air conditioners at the
Wada factory, using our existing infrastructure.
To be the number one brand in our chosen fields and to be recognized as one of
the most prestigious organizations evoking pride of ownership by offering
unmatched quality products through Innovation, Speed, Flexibility and
The vision is the guiding principle: a dream that is realistic, credible and
achievable. Successful leadership that results in quality performance begins with
the vision of what a leader and his/her followers intend to accomplish.
To benefit society at large - through innovation, quality, productivity, human
development, and growth, and to generate sustained surpluses, always striving
for excellence, within the framework of the law and with pride in ethical values.
H R Forecasting and Planning - 54 -
RESEARCH AND DEVELOPMENT
At Onida, we recognize that a vigorously intelligent research initiative works at
two ends: cost reduction through effective process improvement, and value-
addition through a sustained ability to put innovative and customised products in
line with customer needs.
We have team strength of 64 Engineers, working from our R&D centers in
Mumbai, Delhi and JVC collaborative development center in Japan.
The team conducts research in the areas of:
• Embedded Software
• Industrial Design
• Mechanical Engineering
• Electrical Engineering
• Model Shop
Some of Onida’s Achievements
• Launched 16 new models compared to 14 in Year 2001-2002
• Movie-like experience to TV Programs with Onida KY Theatre, a home
theatre built into a television, the first such launch in the Indian television
The product provides a 5.1 Channel output, independent of whether the
source was a mono, stereo or 5.1 channel Dolby stereo recording, done
for the first time anywhere in the world.
• High picture clarity with DVMC (Digital Velocity Modulation Circuit)
technology, one of the best in the world, ensures uniform scanning at the
centre and corners - the ultimate in flat TV technology with Onida Black.
• Awesome digital sound with (((KY Inside)))
The indigenous efforts of the inhouse R & D team helped create the `KY
Inside` technology which has become an industry benchmark in acoustic
engineering for televisions.
• Product extension: Sustained efforts by the team has helped Onida
to create a strong presence in technology-heavy product
categories including presentation products, plasmas & LCDs among
H R Forecasting and Planning - 55 -
HUMAN RESOURCE INITIATIVES
Mr. A.C. Augustine (Vice President HRM)
Initiatives for a performance-driven work culture
To ensure a robust performance-driven work culture, the HR team at Onida
undertook the following initiatives:
1. A role clarity exercise was carried out for the entire Mirc team through one-to-
one sessions. Competencies required for each position were identified and
linked to performance and training. Based on performance, individuals were
either retained or redeployed.
2. Through a senior management workshop, the company revisited its vision,
mission and values statements and the result was re-articulated.
3. To link values and performance, employees were required to explain how they
planned to align their performance with the corporate value system.
4. The company engaged Gallup to identify engaged (take the organisation
ahead), disengaged (seize the first alternative job opportunity) and highly
disengaged (no point in staying on) individuals.
5. Talent management programmes and capability development studies were
conducted to convert the ‘disengaged’ into ‘engaged’ individuals.
6. A nationwide MIS transmitted recruitment-attrition data with speed and helped
individuals vocalise problems.
7. An online induction programme shrank the absorption process, resulting in a
shorter learning curve. A week-long flagship MDP programme for middle-
management executives was conducted by the IIM Ahmedabad faculty to
focus on strategic thinking, people skills and finance.
8. A ‘lateral thinking’ workshop conducted by trainers certified by Edward de
Bono helped encourage a culture of thinking ‘out of the box’ among the
strategic planning cell, R&D and production teams.
9. An NLP programme for factory, corporate office and branch employees helped
energise and maximise peak performance.
10. Attitude-building programmes were conducted for all factory workmen. A
four-day, holistic personal growth lab for the top management by Dr. Girish
Shankar focused on the ‘self’ balancing the professional and personal life.
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Workshops in skills, project, and stress and negotiation management were
11. Quantifiable KRAs, relating salaries to the multiplication of KRA scores
helped the company migrate to a performance-oriented culture.
12. Star performers were identified and their competencies were reinforced
through relevant responsibility-enhancing programmes.
13. The company recruited 15 management trainees from the IIMs for its
marketing and strategic planning cells and 15 MTechs from the IITs for its
R&D and production departments.
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HUMAN RESOURCE MANAGEMENT IN ONIDA.
1. Strategic Planning
• The strategic planning known differently as “Strategic Stair casing
Exercise” is framed by ONIDA.
• It is planned every 3 years.
• The last plan was commenced in the year 2001-2004.
• The plan comprises of all the factors relating to the corporate matters
concerning products and Human resource.
• ‘Manpower plan’ is prepared by the HR department to assess the supply
and demand of the human resource.
• The entire department conducts brainstorming session in the company
and decides on the necessity of recruitment.
2. Goal setting
• The goals and targets are formulated by the top level management as a
whole as an overall objective of the company.
• Further, these goals are cascaded according to the functions of the
company by the senior executives and the HR team.
• The goals are again segregated into departmental goals by the HR team
and the middle level executives.
• And finally into individual goal by departmental head to its subordinates.
3. Job Analysis and Design(technique used-work simplification, job
rotation, job enlargement, job enrichment, autonomous teams,
high performance work design)
• Job analysis is done periodically of every post and position in the
• Reviewing is done in interval to assess the validity and to make necessary
modifications if required.
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• The latest reviewing of Job analysis was done in year 2003.
4. Recruitment plan
• The company provides Application blank to the applicants.
• The recruitment is conducted by ONIDA by considering 3 categories:
Job fit: this specifies the minimum qualification, work
experience required, job compatibility.
Culture fit: specifies the background of the applicant, cultural
factors, and person is aligning with the corporate culture.
Value fit: assessing the relative worth of the individual through
probing in interview.
• The company contacts placement agencies for acquiring required
• The placement agency sends bio-data of the suitable applicants.
5. Selection plan
• The company sends Application blanks to the applicants whose résumé
has been selected.
• The HR department sorts the eligible applicants form the data received
from the placement agency.
• The short listing is done on the basis of Job fit Criteria.
• Then the applicants are called for screening test.
• Further the applicants selected in the screening test are called for
preliminary interview. This is done by the HR team and the head of each
• Next step involves filtering of the selected applicants from the interview.
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• The applicants chosen from filtration are assessed by the senior level
management with the functional head concerning the respective
6. Placement Programs : Orientation/Induction
The orientation programme is for 2 categories of people recruited:
The employees recruited from campus and institutions, have 3
month induction programme.
--Classroom training is provided for 1 week.
--2 months on assignments, projects to ascertain interpersonal
--15 days in the branch.
The employees who have considerable years of work
experience has a formal induction programme where he/she is
introduced to the company people by the CEO or the Manager.
They are also taken to a days visit to the Factory premises.
7. Training and Development
Every year the company publishes “Competence Development Calendar”
which includes all the training and development programmes to be held
throughout the year.
20% of training is given by the company personnel to
the new entrant. The in-house training could be
conducted within the company or in any hotel/resort. It
could be in form of workshops or seminars.
80% of the training is imparted by the hired trainers.
They train the employees according to job description.
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8. Performance Appraisals and Evaluation.
• The company does performance appraisal annually along with job
• The technique used is to set parameters, corporate objectives, and
measures and rank the employee according to set target achieved by him
• This is compared with the previous appraisals to record the growth in
performance and to assess the need for training.
• The appraisal reviewing is done every 6 months by the HR department to
keep the records updated with the performance of the employee.
9. Remuneration plan services
• The remuneration plan is unanimous for every employee.
• It differs from designation of the employee.
• The communication channel is both vertical and horizontal.
• The company uses internet for communication.
• Newsletters to provide general information about the happenings in the
organisation in and around the industry.
• Annual magazine is published by the company named, “ONIDIAN”.
• The other modes of communication are conferences, meetings between
the executives vertically and between employees horizontally.
11.Reward and Punishment system
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• The company rewards on monetary terms to the employees for their
outstanding work efforts.
• No intangible reward like appreciation or recognition is promoted.
• There is no direct punishment system. But only indirect by way of
counseling and warning to the employee is punished.
12.Employee Satisfaction result
• The ONIDA company initiates employee satisfaction survey periodically.
• The technique used by the HR department is, “Galobs Employee
Engagement” theory of satisfaction.
• Here, the employees are graded into 4 slots according to satisfaction
survey conducted by the HR personnel,
Highly Engaged Excellent
Medium Engaged Good
Only Engaged Satisfactory
• The results of the survey are presented to the top level management.
• Employees falling in the “Disengaged” category are given vigorous training
• The compensation policy of the company is equal for every employee.
• The compensation policy covers all the items specified under the law.
• Every employee is covered under Medical Policy.
• The employees are also covered under ESIC.
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• The employees are also given Mediclaim.
• The company uses the “Differential payment” strategy.
• Here, the employees are segregated in to different categories according to
their work efforts. The technique used is “A,B,C analysis”:
“ A “ category 10 % employees
“ B ” category 20 % employees
“ C ” category 60 % employees
“ D ” category 10 % employees
• The employees falling into the “ D” category i.e. 10 % employees are
dispelled form the company.
• This system enables the company to keep a track on the potential
• The employees falling in the “A and B” categories are given monetary
incentives in the form of kind.
• The “C” category employees are provided training and development
sessions to help improve their performance.
15.Employee benefits and development
• The employees are provided various developmental facilities like 1-2 days
of outbound sessions.
• They are provided with counseling programmes.
• The employees are given Medical facility for his/her spouse and two
• They are also given Educational Facility for their two children.
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• The company provides conveyance facility and Car facility to the
employees at certain designation.
• In case where individuals are identified as prospect employees, the
company implements retention policy.
• According to the policy, the employees are directed towards career
progression path and are given training and development programmes to
groom their skills and ability.
• These employees are then considered for internal recruitment as a
• ONIDA has a strong union presence.
• There is separate department, ‘Industrial relation’ department which
handles the union matters.
• Recently there was dispute between the company and the Union because
the company had closed down one of its Service Sectors.
• There was a case filed in the same case where the company won the
• The labourers where given compensation and the wage due to them by
• The grievance of the employees is managed by the HR department.
• There is no separate cell.
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• Every employee is allowed 135 days leave in a year excluding public
• Every second Saturday is granted as holiday.
• They are compensated for the extra working hour put by them during
• The employees have to compulsorily submit leave application to his
20. Exit Interview
• The employees who wish to leave the company are required to give a two
month’s intimation to the company.
• The company conducts Exit Interview to know the reason behind the
• The HR personnel, Mrs. Priyanka Ajay, are of the opinion that usually the
employees do not reveal the true reason behind the decision.
• They generally assess the reason through probing by asking them to
narrate any incidence which was unpleasant to their experience.
• There is no serious problem such as absenteeism in the company.
• This problem is usually faced in the Sales department as the employees
stop coming to work only when they intend to leave and they have fear of
• Here, the HR department traces the person to know exactly the reason for
their absence to curb the problem.
• The company has a turnover rate of 12 % to 15% annually.
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• The company tries to evaluate the reason for separation by way of probing
and negotiating terms with the employees who are identified as potential
for the company.
• The company considers this keeping into mind the interest and wellbeing
of other employees in the company so as to not to disturb their
• The retirement age like in every organisation is 58 years of age.
• They are facilitated Super Annuation after retirement.
24.Promotion, Transfers and Separations(VRS system)
• The company promotes executive who have been under the training and
grooming programme conducted by the company who are selected as
• The promotion is a part of employee retention policy and motivation
• The transfers are done as a part of job enrichment and job rotation
• The employees are transferred interdepartmentally or within the same
department as a policy of job rotation.
• The employee is given projects, assignment, OJT, Competency level
training as a part of Job enlargement policy. This creates a pool of talent
for the company.
• The company gives VRS in case of downsizing. The employees are given
5 years computed VRS.
• In some cases, the company makes compulsory for the employee to opt
for VRS where the company wants to separate its employee.
25.Employee record planning
• The HR department has the responsibility to maintain employee database.
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• It is done with the help of computers.
• All the surveys reports and appraisal reports are saved in the hard disc.
• The HR department does periodic review of the reports to keep them
• The company does not indulge into much of public and social welfare
• Last social approach was ‘Blood donation camp’ organised by the
27.Stress management programs
• ONIDA initiates a very effective stress management programmes for the
employees for their mental and physical relaxation.
• The employees are taken to 2-3 days in any yoga or stress management
programmes sponsored by the company especially.
• There, various sessions of yoga, meditation, and stress busters are
undertaken by the experts and employees are trained under them.
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“Strategic Human Resource Management”
Today’s intensely competitive and globalized marketplace, maintaining a
competitive advantage by becoming a low cost leader or a differentiator puts a
heavy premium on having a highly committed competent or workforce.
Competitive advantage lies not just in differentiating a product or service or in
becoming the low cost leader but in also being able to tap the company’s special
skills or core competencies and rapidly respond to customer’s needs and
competitor’s moves. In other words competitive advantage lies in management’s
ability to consolidate corporate-wide technologies and production skills into
competencies that empower in individual businesses to adapt quickly to changing
In a growing number of organizations human resources are now viewed as a
source of competitive advantage. There is greater recognition that distinctive
competencies are obtained through highly developed employee skills, distinctive
organizational cultures, management processes and systems. This is in contrast
to the traditional emphasis on transferable resources such as equipment.
Increasingly it is being recognized that competitive advantage can be obtained
with a high quality workforce that enables organizations to compete on the basis
of market responsiveness, product and service quality, differentiated products
and technological innovation.
Strategic human resource management has been defined as ‘the linking of
human resources with strategic goals and objectives in order to improve
business performance and develop organizational culture that foster innovation
and flexibility ‘. Strategic HR means accepting the HR function as a strategic
partner in the formulation of the company’s strategies as well as in the
implementation of those strategies through HR activities such as recruiting,
selecting, training and rewarding personnel. Whereas strategic HR recognizes
HR’s partnership role in the strategizing process, the term HR Strategies refers to
specific HR courses of action the company plans to pursue to achieve its aims.
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HR management can play a role in environmental scanning i.e. identifying and
analyzing external opportunities and threats that may be crucial to the company’s
success. Similarly HR management is in a unique position to supply competitive
intelligence that may be useful in the strategic planning process. HR also
participates in the strategy formulation process by supplying information
regarding the company’s internal strengths and weaknesses. The strengths and
weaknesses of a company’s human resources can have a determining effect on
the viability of the firm’s strategic options.
By design the perspective demands that HR managers become strategic
partners in business operations playing prospective roles rather than are being
passive administrators reacting to the requirements of other seeing themselves
as relationship managers to resource managers knowing how to utilize the full
potential of their human resources.
The new breed of HR managers needs to understand and know how to measure
the monetary impact of their actions, so as to be able to demonstrate the value
added contributions of their functions. HR professionals become strategic
partners when they participate in the process of defining business strategy, when
they ask questions that move strategy to action and when they design HR
practices that align with the business strategy. By fulfilling this role, HR
professionals increase the capacity of a business to execute its strategies.
The primary actions of the strategic human resource manager translate business
strategies into HR priorities. In any business setting, whether corporate,
functional, business unit or product line a strategy exists either explicitly in the
formal process or document or implicitly through a shared agenda on priorities.
As strategic partners, HR professionals should be to identify the HR practices
that make the strategy happen. The process of identifying these HR priorities is
called organizational diagnosis, a process through which an organization is
audited to determine its strengths and weaknesses.
Translating business strategies into HR practices helps a business in three ways.
First, the business can adapt to change because the time from the conception to
the execution of a strategy is shortened. Second, the business can better meet
customer demands because its customer service strategies have been translated
into specific policies and practices. Third, the business can achieve financial
performance through its more effective execution of strategy.
In brief, a strategic perspective of HRM that requires simultaneous consideration
of both external (business strategy) and internal (consistency) requirement leads
to superior performance of the firm. This performance advantage is achieved by:
• Marshalling resources that support the business strategy and
implementing the chosen strategy, efficiently and effectively.
• Utilizing the full potential of the human resources to the firm’s advantage.
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• Leveraging other resources such as physical assets and capital to
complement and augment the human resources based advantage.
THE MODERN MBA
Gautam Mukharjee is the general manager (HR) of ANZee bank, which is one
of the larger foreign banks doing business in India. Every year Gautam visits the
campuses of various leading management institutes and picks up bright MBAs to
work for his bank. Every year since 1998, he has been recruiting 5 to 6 MBAs
to work for his bank. Gautam’s selection is excellent as none of their MBAs have
yet switched jobs and most of them have been doing quite well.
Vijay Basudev is one such bright MBA that Gautam has recruited in 1999. Like
most of the other people Gautam has recruited, Vijay too has been doing very
well and his product (he is in the consumer services division) has been a grand
success. Due to the success of this product Vijay has come in the limelight and a
few competitors have already made him job offers. One of these offers has
come from Case Tanhattan, one of the leading foreign banks in India. Besides a
handsome salary, he has been offered a furnished house, an air conditioned car
and frequent foreign travel. Vijay is finding it extremely difficult to refuse this offer.
Gautam gets word of this. As Vijay is a great asset to the bank, he calls him
over for a chat. When he get to hear the details of the offer, and of Vijay’s
demand of a matching counter-offer from ANZee bank (if they want to retain
him), Gautam is in a fix. If he does make a counter-offer to Vijay, it will involve 3
promotions and superseding of 8 others who are senior to Vijay and doing as
well as he. If he refuses, he loses Vijay, who is definitely worth what he is
demanding. Vijay walking out would mean he would take all his clients with him,
which would lead to a loss for the bank. At the same time a promotion to Vijay
could mean the loss of 8 employees, who are as good as Vijay, but have been
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1. Gautam Mukharjee, General Manager (HR) of ANZee bank, recruited
bright MBA’s from leading management institutes every year to work for
2. Every year, since 1998, 5 to 6 MBAs were recruited.
3. Gautam’s selection was undoubtful as none of the employees he selected
left the bank and they all were doing exceptionally well.
4. Vijay Basudev one such MBA recruited in 1999, designated in Consumer
Services division, was good at his work as his product was a grand
5. Vijay gets few offers from the competitors’ one of them being Case
Tanhattan which offered him attractive salary and perks.
6. Vijay, identified as potential employee, leaving the bank would mean
losing good clients which would be considerable lose to the bank.
7. If Gautam makes Counter offer to Vijay it would disturb the internal
The case holds three dimensions to judge the solution. The bank must do Cost
benefit analysis to ascertain the value.
1. If the bank lets Vijay go:
• The clients that Vijay has made probably would discontinue their
relationship with the bank.
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• Gautam’s reputation would be at stake.
• The cost in recruiting new employee, immediately, would be high.
• The cost of training the employee to take up Vijay’s job will too increase.
• In future, such incidence would possibly repeat and the bank would lose
its competent employees.
• The confidentiality of the bank would be affected.
2. If the bank gives Vijay promotion:
• No loss of clients and reputation.
• 3 promotions over 8 senior employees would create disturbance in the
• The demand of other employees would also increase.
• Other employees would be insecure and demotivated as they will feel
invaluable and less important than Vijay.
3. Negotiation between Vijay and bank
• The bank agrees to work out the matter on negotiation.
• It negotiates on the incentives that Vijay would get on the expected level
of performance exhibited.
• The bank does job enrichment.
• The bank keeps a condition to provide all the benefits and extra incentives
to Vijay if he gives assurance of not leaving in future.
• If does so he will have to compensate the bank for the lose.
• The negotiation will prove beneficial to the bank and Vijay without creating
any imbalance in the internal working environment.
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1. HR FORECASTING AND PLANNING by PAUL TURNER
(HR Business Director for LLOYDS TSB and VICE PRESIDENT of the
CHARTERED INSTITUTE OF PERSONNEL AND DEVELOPMENT)
Published by Chartered Institute of Personnel and Development.
2. HUMAN RESOURCE AND PERSONNEL MANAGEMENT by K
ASWATHAPPA (Director of CANARA BANK SCHOOL of MANAGEMENT
STUDIES, Bangalore University)
Published by Tata McGraw-Hill Publishing Limited.