HR Practices for Attracting and Retaining Talent in IT Organizations in Bangalore: The Employee Perspective

 

Sonia Singh¹, Dr. Biswajit Satpathy²

¹Research Scholar, Department of Business Administration, Sambalpur University, Odisha, India

²Professor, Department of Business Administration, Sambalpur University, Odisha, India

 

ABSTRACT:

Any organization desires to have highly skilled and potential people on rolls who can become the competitive advantage for the company. Engaging such people requires a lot of motivation in terms of work, workplace culture, supervisors and of course compensation. There are many HR practices that an organization implements to engage people because engagement leads to productivity. The only way HR dept can sustain the competitive advantage is by continuously reinventing the fundamentals of people management. This paper is a part of a larger study on HR Practices and its relationship with employee retention. It attempts to explore the employees’ perspective of HR practices in the organization. The objective of this research paper is to understand what employees think about organizational practices. In order to carry out the study Focus group discussions were conducted with thirty IT employees of different levels in Bangalore. Analysis of responses is done using the software Nvivo10. Themes have been drawn and discussed in detail. It emphasizes the need for organizations to adapt employee friendly practices to attract and retain the top talent.

 

 

 

INTRODUCTION:

Today’s organizations are increasingly realizing the importance of creating an engaged workforce with commitment towards organizations .Engagement can only be fostered when people do what they love doing. HR needs to create Employee Value Proposition that reflects the true culture of the organization. If the existing employees are not experiencing the value proposition then attracting people to the organization is a challenge because of word of mouth communication current workforce is more focused than ever on quality of work and quality of life. Apart from compensation they expect a lot of benefits (monetary as well as non-monetary) from their organizations.  

 

Benefits are found to be one of the most important tool for retaining talent but companies overlook this aspect due to their cost reduction strategy. In the age of consumerization, HR professionals need to think in terms of providing a consumer-style experience to their employees in order to enhance the employee experience because they are the ones who helps the organization serve the end customer. Employees are an integral part of the value chain.

 

OBJECTIVES:

·         To find the factors that influence the decision making process of people to join an organization

·         To understand the employees’ perspective of different retention measures taken by IT organizations

 

LITERATURE REVIEW:

Human resources practices are strategic in nature. In order to develop a sound HRM system, the organization should have effective Human Resource Management practices. Storey (1995) defines HRM as a distinctive approach to employment management which seeks to obtain competitive advantage through the deployment of a highly committed and skilled workforce, using an array of techniques. HRM practices refer to organizational activities directed at managing the pool of human resources and ensuring that the resources are employed towards the fulfillment of organizational goals (Schuler and Jackson, 1987; Schuler and MacMillan, 1984; Wright and Snell, 1991). HR Practices should be designed in the backdrop of business objectives in order to achieve the maximum productivity. According to Khatri (1999), people are one of the most important factors providing flexibility and adaptability to organizations. Rundle (1997) stated that one needs to bear in mind that people (managers), not the firm, are the adaptive mechanism in determining how the firm will respond to the competitive environment. In a study conducted on the essential guide to driving employee engagement in Europe, the following four employee survey statements were found to have the biggest influence on engagement and commitment (Arne Barends, 2015) -My manager motivates me in my work, The work of my team contributes to the success of the organization, I feel that I fit in at my organization, I feel that I am appreciated by my organization.

 

Five different perspectives of human resource management has been found in literature - the normative perspective, the critical perspective, behavioral perspective, systems perspective, and agency or transaction cost perspective.(Nayab,2011)

 

Normative Perspective:

Hard HRM and Soft HRM are two basic concepts outlined in this approach. The concept of “Hard HRM" is the basis for the traditional approach toward human resource management. This concept traces its origins to the Harvard model that links workforce management to organizational strategy. Hard HRM stresses the linkage of functional areas such as manpower planning, job analysis, recruitment, compensation and benefits, performance evaluations, contract negotiations, and labor legislations to corporate strategy. "Soft" HRM will tend to favour flexibility, negotiation, performance, quality, recognition of environments and rights in employment relations. It is more strategic and long term.

 

Critical Perspective:

The critical perspective of HRM is an outcome of normative perception. It proposes that organizations maintain their soft HRM approach only to show in their policies but in reality they practice hard HRM to extend management control. Organizational interests are more important than individual employee interests (Hope-Hailey et al. (1997)).They pretend to be concerned for workers and exploit them through work intensification and downsizing. It argues that HRM uses a unitary, soft HRM rhetoric to obscure hard reality characterized by increased management control and diminished job security for employees. The Critical Perspective argues that HRM has inherent contradictions derived from its foundations in two different US models. It is proposed that this leads to a gap between rhetoric and reality. This gap has been interpreted in two ways. Firstly, it proposes that HRM is ineffectual and has only been implemented in rhetoric. Secondly it proposes that HRM is manipulative and uses soft rhetoric to disguise and even gain employee commitment to a hard reality.

 

Behavioural Perspective:

The behavioral perspective of human resource management has its roots in the contingency theory that considers employee behavior as the mediator between strategy and organizational performance. This theory holds that the purpose of human resource intervention is to control employee attitudes and behaviors to suit the various strategies adopted to attain the desired performance. This perspective thus bases itself on the role behavior of employees instead of their skills, knowledge, and abilities. For instance, an organization aiming to innovate will require a workforce that demonstrates a high degree of innovative behavior such as long-term focus, cooperation, concern for quality, creativity, propensity for risk taking, and similar qualities. The role of human resource management in such a context is to inculcate and reinforce such behavioral patterns in the workforce. Organizations’ policies and practices help in bringing desired employee behaviour and that increases its effectiveness.

 

Systems Perspective:

The systems perspective describes an organization in terms of input, throughput, and output, with all these systems involved in transactions with a surrounding environment. The organized activities of employees constitute the input, the transformation of energies within the system at throughput, and the resulting product or service the output. A negative feedback loop provides communications on discrepancies.

 

Transaction cost Perspective:

The agency or transaction cost perspective holds the view that the strong natural inclination of people working in groups is to reduce their performance and rely on the efforts of others in the group. When one person delegates responsibility to another person, conflicts of interests invariably arise. To reduce the effects of such conflicts and minimize the cost to the organization. HR can provide employees with incentives such as rewards, motivation, and job satisfaction to increase their individual performance. The human resource department needs to adopt the approach that minimizes transaction cost to the organization.

 

As environments, organizations and people vary tremendously it is safer to think in holistic terms when designing HRM frameworks and policies so as to achieve vertical and horizontal integration, cohesion, and organisational learning which make elements of an effective organisation (Becker et al, 2001). This is only possible, if policy makers are choice makers (Analoui, 2002) designing HRM using emerging ideas like total contribution to the firm, innovative and creative behaviour, high concern for customer value, cross functional integration, using labour as critical investment and managing diversity (Bagshaw, 2004).

 

This paper attempts to understand the employee perspective of HR practices because most often its designed through the organizational perspective as evident from the literature. Its not employee driven. Hence, this study explores employees’ expectations from their organization.

 

METHODOLOGY:

Data was collected through Focus group discussions (FGD) conducted among IT employees of both associate level as well as mid- managerial level of various IT organizations. Five FGDs were conducted with thirty IT employees of different organizations in Bangalore to understand their perspective of HR practices in their respective organizations. Employees of both large and small, product based and services based, multinational and transnational IT organizations were contacted. Though Bangalore being the hub of Multinational and transnational companies and people radically embracing western culture, having a strong presence online, but when it comes to sharing their opinion and views about their workplace they are unwilling and hesitant to talk about it. They have clearly demarcated gradient lines for professional and personal space. Here, people do not talk about their employers or employment practices in an open forum as it is considered to be confidential. Hence, it was a herculean task to get people together for such a discussion. Therefore, five groups of six participants each was formed and the discussions were conducted on call as well as in person. The approach for discussions was mostly formal but in few groups it was informal to elicit honest responses. Verbatim transcription of FGD data was integral to the analysis and interpretation of data. The data was processed using NVivo10. It is a qualitative data analysis tool that helps in organizing and managing data to derive themes for analysis with the help of Nodes creation through coding. Coding is one of several techniques used for making sense of the data. Coding the content contributes to data analysis by gathering all the material about a topic in one place .This helps us to see patterns and contradictions by visualization and allows us to look for connections between themes and test the understanding.

 

Participants’ demographic background:

Participants were selected on the basis of personal contacts and references. They belonged to the age group between 22-35 years comprising of eight females and twenty-two males. The representation of females is less in the study but this was unavoidable as the sampling was done on the basis of convenience as otherwise it would be difficult to conduct the study. Positions held by participants included Associates, Software engineers, Senior software engineers and Project managers. They belonged to both large and small, product based and services based, multinational and transnational IT organizations. The distribution is as follows:

 

Table1:Demographic characteristics of participants

 

FINDINGS AND DISCUSSION:

The following themes were derived from the discussions. Each one of them is discussed in detail below:

1.        Factors that influence decision making to join organization

2.        Retention measures taken by the organization

3.        Experiences (Positive and Negative) encountered with the organization

 

Node creation- The table below depicts the references coded at each source i.e., FGD transcripts. A total of 26 references were coded for Retention measures, 20 references for experiences encountered with the organization and 23 references were coded as nodes for factors that attract people to join the organization.

 

 

Table2: Reference count for Nodes

Nodes	Sources	References
Factors affecting decision making to join an organization	5	23
Retention measures by the organization	5	26
Positive and Negative Experiences	5	20

 

The detailed coverage of references at each source is shown in the table3 below. The coverage percentage indicates how much of the source content is coded at this node.

 

 

 

Table3: % coverage of references at each source

 

A run of the Word frequency query on respective nodes yielded Word clouds that are presented below in each respective section. The query run on the software results in the outcome of a list of the most frequently occurring words or concepts in the sources. It helps in identifying and substantiating the possible themes and sub themes that are drawn from the qualitative data. These nodes are analyzed further below:

 

Factors that influence decision making to join organization

 

Fig-1 Word frequency query results for Factors that attract people to join organization

 

The factors are summarized as follows: People are attracted by Brand, compensation, benefits, referred by friends or get through campus (FG1). Money, Incentives, cabs, Perks, Brand, Transportation (being in a metro city its becomes really important), job security, Night shifts (its convenient for me), Word of mouth makes a difference (FG2) .Brand, compensation, Work location and package, Got through campus, shift timings, allowances (FG3).

 

We have heard of ‘Employee First’ all this while but the study had brought forth a step ahead the ‘Family First’ aspect. There are companies who emphasize on work-life balance aspect more than anything else and probably that’s the reason they are the worlds biggest brand and are able to sustain their competitive advantage for years together due to employee friendly practices.

 

They are very supportive for your family. So the primary motto is they tell in the company is that Family First then the office work. thats the main reason I am in this organization for last twelve years(FG4)

 

Giving a free hand and ownership to employees attracts and engages people at work the most.

More important you have the ownership of whatever you are doing whether it is right or wrong you are responsible for it so you have to take care as a child your own baby, you have to take care of application. When you are the owner you do things in a proper way.

 

That is one thing about this organization that because of which people come here and stay for a longer time. It gives empowerment (FG4)

 

At associate level the decision to join the organization is mostly influenced by friends. It is also most of the times through campus recruitment wherein friends become a comfort factor in the new corporate world. I got through campus so that was the option I had and I stayed for eleven years because of friends (FG4)

 

At mid-senior level, Its basically the flexible working hours that the company provides with no restrictions on login and log off time. Also work from home is a very lucrative factor which helps retain people in organization. Because at this level people have responsibilities of their family which is very well taken care of by availing this option. Flexi hours was also found to be a very important factor influencing the working mothers’ decision to join organization. You get to do what you want to. You are not behind with respect to technology. You still have work life balance, family and work. Being a working women that’s the reason I am here for last ten years (FG5)

 

Also, for creative people product based start up organization attracts attention because of risk taking and experimenting culture. The freedom and ownership of doing things attract people towards these companies. I don’t like that nine to five job. I wanted something to experiment on, wanted more responsibility, you have like your work. You go to a bigger company things will be like a factory churning out the same thing again and again. Freedom is what I get here (FG5).

 

Retention measures taken by the Organization

 

Fig-2 Word frequency query results for Retention factors

 

Bonus, allowances, incentives and fringe benefits are something which was found to be a retaining factor for employees at all levels. One noteworthy finding was that reputed product based companies do not directly do anything to retain people. Instead they indirectly provide the right working environment, huge benefits (monetary as well as non-monetary) and enriching career development opportunities for people to flourish. Their working culture is so transparent and open that the employee can have a candid discussion with his/her respective manager regarding his/her aspirations which is most of the times taken care of. But once an employee puts down his paper there is no effort from the organization side to retain him. Even for the top performers or critical resources this is applicable. They are never behind people to retain them. Because retaining through giving extra compensation after the employee has put down his resignation triggers a wrong signal among other employees to repeat the same. If you say what the company is doing..company never does something special. If you say I want to go then they may not come back and say that you hold on. Not even for the top performers also. But on the other hand what company tries to do is that its extending the kind of culture and it already encourages that if you have a problem you discuss with your manager clearly so that it can be addressed earlier(FG4).

 

They do not force anyone to stay. if someone is interested to move they will not stop. For critical resources also this is applicable (FG4) The good point is I have been hearing it from the HR that when somebody is telling that I am going to quit and by paying something extra you want to retain somebody. That actually tempts others next time to do the same practice. Rather before quitting why not they say open up that this is what I need and the company gives so this situation might not occur (FG4).

 

There was a general observation among the employees that companies do not fill positions vacant through internal employees. Even though there are skilled people in the company, the organization looks for hiring it through campus. Whenever there is a position vacant in the company. Instead of hiring it from outside, if we can promote people internally that will motivate the existing employees (FG2).

 

What I would want to say is whenever companies have openings they look for people outside of the company. They are conducting interviews in colleges and all. (FG3)

 

My own colleagues, they are well trained in storage skill but no one approaches them. We cannot apply also because there are no IJPs (FG3).

 

One possible explanation of this could be hiring skilled resources come with a higher cost to company compared to hiring a fresher from a college and training them. Thats the reason companies do not open up IJPs to fill positions.

 

When employees do not find opportunities for growth internally they start looking for desired work profile and compensation outside. In service based IT industry the work that comes to India is mostly of testing and maintenance which do not require specialized skills. A fresher can also be trained and deputed for support function. Thats the reason there is a general trend among IT companies in Bangalore to go for campus hiring to engineering colleges where they can do bulk hiring. In our sector it is easy to get people. Even if the company loses, they’ll get one. So it doesn’t really make any difference. That could be one of the reason why companies do not care about retaining people and internal job postings and all (FG2).

 

A very important and interesting perspective was brought out by two focus groups (FG2) and (FG4) which is not much talked about is the salary revision of existing employees. The difference in salary that occurs between the new and existing employees is not taken care of by most of the IT organizations. The package at which the employee is hired for a given position differs every year due to economic reasons. Salary correction is hardly done to bring people at par with the new hires. Among all the focus groups participants, only one participant stated that salary correction happens round the year in his company. This shows that how many companies are really doing this and thinking in these terms to retain people.

 

Mostly people leave because of compensation. You’ve been working in a company for 2 years, now a new person comes in the same position there is a difference in the package. The old employee gets less than the newer one. This demotivates the existing employee because both of them are working for the same profile. The HR tries to hide it. (FG2)I would give a 3 rating because being a long term employee who was a part of the hiring process, so always people who come in were on a higher price compared to the older people. If you compare with people who were in the organization for ten years, you could clearly see a difference in the salary. But while hiring new people it was practically impossible to hire at a lower rate. so they were given more. Sometimes people whom I hired were payed more than me. So it takes time to get normalized (FG4).

 

One participant emphasized saying that its human tendency to desire for more. See its basically psychological perception. Whatever the company will give we will not satisfy. If I get 5lakhs I will aim for 7 lakhs (FG4). On the other hand, two FGs brought out a positive perspective about retention in their companies. In my company they do not calculate attrition percentage. Because people who join they do not leave. Lot of benefits our company provide. We have Service anniversaries for three, five and ten years. Recently an employee completed thirty years in the organization. Award for him was eleven lakhs (FG4).

 

The attrition in my company is 3-4 percent.HR is not worried about it. People want to stay here. Average tenure is 10-15 yrs. Company takes care of the employee. I still rate it high in terms of people (FG5).

 

These statements reinforce the belief that if you take care of your employees, your employees will in turn take care of the productivity. Big brand names are not made in a day. It’s the effort of people who stick on to the company and treat it as their child and nuture it. This kind of feeling can only be brought by positive reinforcements at emotional level and providing physical comforts to the employees.

 

FG5 brought out the importance of managers role in retention by citing her example. The rapport that the manager establishes with his employees create a larger impact in retaining people. Biggest example is mine. I had put down my papers two years back because I got an opportunity elsewhere but just because I had a very good rapport with the manager he convinced me to stay back. These kind of things happen a lot in our company. Managers have a very good rapport with their employees. This was the second time when I had withdrawn my resignation. I just couldn’t say No to him. I am glad that people are doing that.(FG5)

 

Experiences (Positive and Negative) encountered with the organization

 

Fig-3 Word frequency query results for factors leading to Positive or Negative Experiences

 

Out of 22, only 5 references can be classified as positive nodes rest 17 were found to be negative. This shows the level of satisfaction of employees with their work and workplace. Focus groups 4 and 5 brought about the positive experiences related to reward and recognition in their company and interaction with HR.

 

How much ever employers claim that employees are the assets of the company but in reality their attitude towards employee is reflected when they treat them as a cost by going ahead with cost reduction strategies. Transportation, food/snacks are basic ameneties which an employee expects from the employers. There is also a tendency to compare because global organizations provide them. This kind of cost reduction strategy is found in Indian organizations as per the study. Most of the times shift allowances and incentives are also cut down. Recently there was a huge move which was demonetization, so we were hit by it. They basically cut down on our incentives. This was a good escape for them. They increased cab fares which we had to pay from our salary. We get free snacks which was also stopped and further they introduced a new policy called severities. Because of those severities, they sacked 50-100 people. So the company didn’t do it directly, but they found a way to either make the employee leave on their own or just tell them to leave the company. We felt like we were hit by recession. (FG2)

 

Managerial issues faced by employees: Two important aspects brought out by one focus group was Favoritism by managers. Earlier my manager was a north Indian so I had a good rapport. He used to listen to us. Now the manager I have is a localite so I don’t have much interaction with him. Even I hesitate to talk to him because if I say anything that I am not liking, he might take it in a wrong way that I am not supportive, I am not a team member and all. So thats an issue (FG3).

 

The aspect of Groupism in a large MNC is not to be expected but such kind of incidents do occur especially when the manager and the employee belongs to different region of the country. In such cases it’s the managers responsibility to clear the misconception if any with the employees because the employee always have the fear of negative feedback and rating by the manager during appraisal. So they will not open up. Hence communication becomes significant in such scenarios. And if at all the manager is really biased in terms of person belonging to a particular caste or geography then this is a very unfortunate situation. There should be a check on it.

 

A similar incident related to biasness has been quoted below:

Was leading my team in absence of my TL. Team really performed well under me. I was expecting a good rating during performance appraisal, which I didn’t get. I was rated met expectation whereas my colleagues got better ratings than me. This is disappointing. Am looking for a change in job. I don’t feel connected anywhere with my company (FG1)

 

When supervisors are supportive the employees attachment to work and organization is doubled. Relationship building matters. Managers need to develop that informal rapport with employees because that is what connects people. Managers need to understand employees’ psychological perceptions because it will be different for different people in a team. They need to act sensitively.

When it comes to working mother I felt little difference the way how people treat you. Eg- Its quite common that the manager will support and put those people who are not hesistant to stay back and work for long hours, who don’t mind working in different shifts, night shifts. but for people who are like working mothers, obviously its impossible for us to work in night shifts and also sometimes it so happens that you cannot extend your time because your kids are not well (FG5)

 

The above mentioned issue is a perceptional problem with managers. There is a general perception that people those who stretch post working hours are more committed to work. The flip side to it is if a person is really competent they can finish the work in the allocated time. Instead the organization should try to leverage the competency of such employees in the best possible way by not letting the employee morale down.

 

The following statement is a testimony to the perception that People leave managers and not organizations. In my previous company leadership was not supportive to me. So at the end of the day you know an employee leaves the company because of boss or manager, I heard it, experienced it, Now I believe in it. So all three things were there .because I have seen managers becoming biased (FG5).

 

CONCLUSION:

To sum it up, the study supports the critical perspective of HRM to some extent. There is a general observation among employees that company doesn’t do anything special to retain people. Product based reputed organizations do not try to retain people once the person has resigned. Rather they believe in creating the right environment at workplace as well as emphasize on benefits. Managers rapport with the employees also plays a major role in retaining people. Due to the presence of a strong labour market, service based IT companies which emphasize on cost cutting and cost effectiveness are able to hire a fresh graduate on less cost and train them. Because the kind of work which is outsourced to Indian IT companies do not require specialized skills. Factors that are found to be common across all focus groups that affect candidates’ decision to join a particular organization are Brand, Flexible working hours and compensation and benefits. Transportation and work location is also a crucial influencing factor as IT companies are located in metro cities and IT parks in outskirts of the city, distance and traffic becomes a crucial criteria. Therefore, companies’ cab service free of cost comes as a boon to employees. At associate level the decision to join the organization is mostly influenced by friends whereas at mid-senior level, its basically the flexible working hours and ownership of work. Also, for creative people product based start up organization draws attention because of risk taking and experimenting culture. Experiences of the employees included issues related to supervisors and cost reduction. Since, service based IT companies are more customer oriented, because of their business model, retaining customers become more important to them than their employees.

 

REFERENCES:

1.        Analoui, F. (2002) The changing patterns of HRM pp. 30, Ashgate, UK

2.        Bagshaw M (2004) “Is diversity divisive? A positive training approach”, Industrial and Commercial Training 36, 4, 153-157

3.        Becker, B.E., Huselid, M.A., and Ulrich, D. 2001. The HR scorecard: Linking people, strategy, and performance. Boston, MA: Harvard Business School Press

4.        Gill, Carol (2007) A review of the critical perspective of Human resource management, Melbourne Business School.

5.        Gratton L, Hope-Hailey V, Stiles P and Truss C (1999) Strategic Human Resource Management. New York: Oxford University Press, 40-58

6.        Khatri N., (1999),”Emerging issues in Strategic HRM IN Singapore “, International Journal of Manpower, Vol. 20, No.8, pp. 516-529.

7.        Rundle, S.J.(1997), “Flexibility , adaptiveness and responsiveness (FAR-ness) as the key success factors in market entry in the south east Asian growth wedge “, PhD thesis, Department of Management, Monash University, Victoria.

8.        Schuler, R.S. and Jackson, S.E. (1987) “Linking competitive strategies with human resource management practices”, Academy of Management Executive, Vol. 1, No.3,pp. 207-19.

9.        Schuler Randall S. and MacMillan Ian C. (1984), “Gaining Competitive Advantage through Human Resource Management Practices”, Human Resource Management, Fall 1984, Vol. 23, No. 3, pp. 241-25

10.     Storey, J. (ed.) (1995). ‘Human Resource Management: A Critical Text’. London: Routledge

11.     Wright P and McMahan G (1992) Theoretical perspectives for strategic management, Journal of Management 18(2): 295-320

 

 

 

 

Accepted on 24.05.2017          © A&V Publications all right reserved