A study on

EMPLOYEES’ ABSENTEEISM

With reference to

ITC LIMITED – ABD- ILTD DIVISION

A project report

submitted in partial fulfillment

of

the requirements for the award of degree

MASTER OF BUSINESS ADMINISTRATION

CHAPTER – I

INTRODUCTION

TOPIC OF THE STUDY

In almost all organizations, management is

confronted with the day-to-day problem of employee absenteeism.

Employee absenteeism, scheduled or unscheduled, for short or long

periods, legitimate or without acceptable reasons, remains a

problem in most organizations. Approximately one third of

organizations keep proper records of absenteeism. The impact of

absenteeism on an organization (the cost, measurement, managing

and control, as well as benchmarking absenteeism against other

similar organizations) is not always considered or established. Many

organizations do not have adequate absenteeism policies.

Management are not always aware of the impact of absenteeism on

their organizations, despite the fact that absenteeism can have a

major impact on an organization’s productivity, profits and

employee morale.

Absenteeism can have many reasons but has

only one result. It destroys the family income and the company’s

Economy. It is suicidal for the worker in the long run.

Every industrial organization strives hard to

maintainable and willing labour force. Modern industrial worker

expects a meaningful, satisfying and challenging job and job

environment. In this regard, industries should aim at creating a

conductive and congenial working environment, which would go a

long way in attracting, recruiting, developing, utilizing and retaining

competent workforce to achieve three vital objectives-improving

productivity and worker efficiency, improving quality of goods and

services and reducing and controlling costs of operations.

Concept:

By absence we mean failure of a worker to report for a work

when he is scheduled to work i.e when the employer Authorised

absence is also treated as absence, while presence even a part of a

day or shift is non-considered absence. Absence on account of

strikes, lockout or lay-off is not taken into account. Weekly and

scheduled holidays are not included. A worker is taken to be a

person who is “regular” employee and is not a “badly” or a “casual”.

It will be appropriate to maintain that it makes little difference

whether we speak of term “absence of works”, “absenteeism” or

“non-attendance”. All these can be used as if they are

interchangeable.

We may define absenteeism to be the manifestation of a

decision by an employee not to present himself at his place of work

at a time when it is planned by management that he should be in

attendance, and when he has been notified of such expectation.

Absenteeism has been defined by different authors and agencies.

Some of the definitions ate give below:-

DEFINITIONS:

1) U.S. Department of Labour defines “absenteeism” as the

failure of worker to report on the job, when they are scheduled

to work.

2) Mr. K. C. Fenelong has defined – “ Absenteeism is absence

from work, when work is available.”

3) Absenteeism refers to workers absence from his regular task

when he is normally Absenteeism.

A general definition of absenteeism includes time

lost, because of illness and accident and time away from the job

due to personal reasons whether authorized or unauthorized.

Authorized absence on leave with pay is also treated as absence.

AIM OF THE STUDY

The aim of this study is to undertake a theoretical study

on absenteeism and to conduct an empirical investigation into the

cause of absenteeism and identify job factors that may have an

influence on absenteeism in organizations.

NEED FOR THE STUDY

The study on the “ABSENTEEISM” at ITC

LIMITED – AGRI BUSINESS DIVISION-ILTD. Human resources are key

to the organization & are heterogeneous in natures Absenteeism

has great importance on the performance of the organization .

Increased in absenteeism results decrease in productivity through a

loss of man hours .Management of ITC Ltd –ABD-ILTD felt the need

to investigate the case of absenteeism.

OBJECTIVES OF THE STUDY

To study the rate of absenteeism & the factors influencing

absenteeism.

To study the economic benefits of the employee in the

organization

To study various causes of absenteeism in ITC LTD - AGRI

BUSINESS DIVISION-ILTD.

To find out the external factors for absenteeism.

To suggest feasible measure to reduce the rate of

absenteeism.

METHODOLOGY OF THE STUDY

To study the absenteeism of employee in ITC LTD -

AGRI BUSINESS DIVISION-ILTD the following methodology is used

the data collection. The study is confined to ILTD is based on both

primary data & secondary data.

SOURCES OF PRIMARY DATA:

The main sources of primary data are collected

through structured questionnaires followed by personnel interview

from employee at various levels.

SOURCES OF SECONDARY DATA:

The sources of secondary data pertaining to the study are:

Attendance registers of ITC LTD - AGRI BUSINESS DIVISION-

ILTD.

Synopsis from various sections of personnel department.

Annual\monthly report of ILTD.

Journals, books, internet website.

METHOD OF SAMPLING:

A population of 132 technicians is taken for

administering random questionnaire. Out of it 90 were the data

responded. The sample size is 90 employees.

LIMITATIONS OF THE STUDY

The researcher could collect only 90 employee responses to

the questionnaire.

The sample does not cover all the workers in the organization

due to logistical constraints.

The accurate of the information is not granted although care

has been taken to cross check information through separate

question.

Some employee were not able to share their options &

feelings freely while interviewing them. so it was the

disadvantages to gather correct information.

The study is limited to period of 30 days.

CHAPTER – Ii

Industry & company profiles

INDUSTRY PROFILE

INTRODUCTION:-

ITC is one of India’s foremost private sector

companies that has a diversified presence in cigarettes, hotels,

paper boards & specially papers, packaging, Agri- business, branded

apparel, packaged foods and confectionary, greeting cards and

other FMCG products.

ITC’s Agri Business Division is one of the India’s

largest exporters of agricultural products. ILTD Division, part of Agri

business, is the largest buyer, processor and exporter of cigarette

tobacco’s in India. The efforts of ILTD in tobacco development and

export marketing have enable India to become the fifth largest

producer and eighth largest exporter of cigarette tobaccos in the

world. The division has successfully leveraged technology up

gradation at the farm and processing ends to meet the

requirements of customers for quality and grades.

The Chirala Green leaf threshing factory has state

of the art processing lines that have reached optimum productivity

levels in through put and yields. Besides ensuring superior product

quality. These processing lines represent the global benchmark for

green leaf threshing plants.

Looking back in history British American

Tobacco Company had set up Indian leaf tobacco Development

Company to handle the procurement of tobacco in India and actively

encourage its growth by farmers. ILTD had discovered a promising

tobacco growing area in Andhra Pradesh called the south India leaf

area (SILA). Having established growing and buying points, the

important mile stone in ILTD history was establishment of the

processing facility at Chirala in 1922. From hand stemming

operations during 1922-80, today the GLT has grown into a state of

the art green leaf threshing factory with a capacity of 430 tones of

green leaf per a day. From an subsidiary to cigarette factories of

ITC, The division has grown with targets set to exports 50% of its

processed Tobacco in year, due to its continually improving

processing capabilities And expanding customer base.

TOBACCO INDUSTRY:

Tobacco grown in India for over centuries, contributes

significantly to the well being of the country. From the marginal

farmer growing tobacco on unirrigated, small land holdings to

retailers in remote corners of India, over 26 million people benefit

from their direct or indirect association with the tobacco industry.

Grown on a commercial scale in over 100 countries

world wide, tobacco forn1s a major part of the socio-economic

lifeline of over ,15 developing countries. Besides creating economic

prosperity for rural populations, it generates substantial revenues

for those governments and boosts agro-exports.

The global production and consumption of tobacco

continue to grow at an estimated rate of 1.95 and the total market

in tobacco products is valued at US $275 billion-about 78%of India's

GDP. Tobacco and export of tobacco products are a major source of

income of developing countries- over 70% of Malawi's and 40% of

Zimbabwe's exports earnings come from tobacco. Brazil and china

also depend on tobacco export incomes, which are in the region of

US $1.5 billion.

In India, tobacco is a major contributor to agrarian

economy, the exchequer and to agro-exports. Six million farm

laborers find gainful employment in tobacco farming. The tobacco

industry provides almost 10% of governments excise collections and

4% 0f all agro-exports. While 85% of tobacco consumption

worldwide is in the form of cigarettes, in India it is less than 20%. A

skewered taxation policy has restricted cigarette volumes but

ensured that cigarettes account for 87% of revenue generated by

the tobacco sector. So, modest volumes have limited the

tremendous revenue potential of cigarettes and cigarette tobacco.

The global import-export trade in tobacco was worth $30 billion in

1994 of which 25% billion was genet\rated by cigarettes. With 78%

of Indian tobacco being non-cigarette types, exports have been

correspondingly modest-less than 1 % of the global trade. What

emerges clearly is the opportunity that cigarettes and cigarette

tobaccos offer in tem1S of revenue, improving quality of

employment, developing the rural economy and increasing foreign

earnings.

THE FARMERS FRIEND

Among commercial crops, tobacco occupies a unique

and distinct positsm. Tobacco uses just 0.3% of arable land to yield

it of agricultural value nearly 4o/t of India's agro-exports. No other

crop provides such value to the farmer under similar conditions in

India. It is grown in a large number of states with Andhra Pradesh,

Karnataka, west Bengal, TamilNadu, Bihar, Utter Pradesh, Orissa

and Maharashtra being the major tobacco providing areas. Andhra

Pradesh and Karnataka are the two states growing the cured

Virginia tobacco used in making cigarettes and also the exportable

variety.

Tobacco is drought resistant crop grown

substantially on non-irrigated soils. More than 50% of tobacco

cultivation takes place in areas without irrigation. This is significant

in a country like India where 70_ of arable land lacks irrigation. At

the same time it is the only hardly crop that withstood the residual

moisture and organic matter during three consecutive cyclones in

Andhra Pradesh and gave the farmer well yields.

It is short-term cash crop compared to other main

crops of the region and takes between four to six months to grow.

The tobacco farmer to cultivate other crops for the rest of the year

can use the land. Growing tobacco improves soil fertility there by

increasing the yield of other crops on the same soil.

The cigarette tobacco grower receives regular

scientific inputs on improving yield and quality, and developing new

varieties from the private sector as well as the b\government. The

central tobacco research institute in Rajahmundry, Andhra Pradesh,

has played an important part in agricultural research project that

spans six state agricultural universities and six centers under the

Indian council for agricultural research.

CREATING WEALTH FOR THE NATION

Though tobacco is a significant contribute to the

Indian exchequer, revenue generation from the segments restricted

by the nature of tobacco consumption. Despite being only 19% of

tobacco consumption, Rs 3500 crores out if the Rs 4036 crores

(nearly 87%) that accounted at tobacco excise in 1996 was x-

accounted by the cigarettes. If all tobacco consumption was in the

form of cigarettes, excise collections would theoretically have been

in the range of Rs 18000crores and would account fit 30% of the

government excise revenues instead of 10% if provides now. More

cigarettes b\generation mean a giant leap in revenue generation.

Cigarette excise is determines by length and type.

Therefore, the Kingsize segment (cigarettes longer than 75mm)

pays the highest excise Rs 1100 per 1000 cigarettes-and also has

the smallest market share only about 15% Excise rates in India have

increased annually. Volumes in the conventional length segment of

cigarettes has shown a small growth of 2.7% since 1993-94 while in

sharp contrast the excise revenues have grown at compound a\rate

if 10.7%. This volume and revenue growth must be seen in contrast

with the impressive performance of the micro segment (non-filter

cigarettes not exceeding 60mm in length) after duly reduction in

March 1994, even though this reduction was sustained for a brief

period of two years. But in India, only 5% of all types of smoked

tobacco products are in the form of filter cigarettes. This share is

likely to shrink further with the budget proposals of a 16% hike in

the 70mm filter cigarette segment, which accounts for 44% of the

cigarette industry,

The golden leaf in India yields tremendous

promise. It is capable of not only making a much larger socio-

economic contribution at home, but had the ability to make India

emerge as a major player in the world tobacco market. India has the

infrastructural facilities, trained and experienced workforce

spanning all stages of tobacco production, and favorable agro-

climate conditions-factors, which undoubtedly augur well. It needs a

progressive tobacco policy to harness these advantages.

In order to attain the stated objectives, the

government needs to focus on these fundamentals.

The specific duty structure in 1987 should be retained in view

of enhanced revenues it provides and in order to achieve

litigation free tax collections.

The rate of duty of micro segment should be restored to Rs 60

per 1000 cigarettes, which has not affected the existing level

of industry and fetches major benefits to excise revenue.

Retain single point taxation for cigarettes and discourage levy

of luxury and entry tax by state governments, which

contravene the Act of 1957.

Excise duty should be reduced by 5%, the weighted average

impact of sales taxes on cigarettes, till the Supreme Court

pronounces a judgment on pending cases.

Give due consideration to premium segment which provide

impetus to the high quality, exportable tobacco. This will also

protect excise erosion on account of increased smuggling of

foreign brands.

The cigarette industry should be allowed the benefits of

bringing back damaged or defective goods for reprocessing.

Denial of this benefit has caused substantial loses to the

industry.

If it is not possible to bring down rates, current rates should be

maintained for at least two or three years to stabilize the

market and encourage cigarette volume expansion.

Today's world increasingly relies on a. common

agenda, particularly in the context of commerce. In globalize

environment, all nations flow with the main stream of internal

trends. India is no exception. It has to convert its threats into

competitive advantage to emerge as a dominant player. Tobacco

offers this opportunity to India.

AREAS IN OPERATIONS AND VARIETIES OF TOBACCO

Variety Areas

FCV - Traditional – Guntur - Prakasam - Nellore- Krishna

–

Khammam Dist.

FCV - NLS-East & West Godavari Dist.

FCV - Mysore-Assam-Chick Mangalore- Shimoga.

VAC - Yeleswaram Burely- East Godavari Dist.

VAC - Vinukonda Burely-Guntur Dist.

VAC - Light Soil Burely-Orissa State-North Coastal

Agency

Areas in A.P.

FAC - WAF-Kurnool Dist (White Ash frill)

LAC - EAC- West Godavari

Rustic - Gujarat

Lalchapadia- Gujarat

Laljudy - Gujarat

TYPES OF TOBACCO GROWN IN INDIA

1. FCV TOBACCO

a. Traditional Black Cotton : Andhra

b. Northern light soil tobaccos : Andhra

c. Southern light soil tobaccos : Andhra

d. Monsoon crop : Mysore

e. Monsoon crop : Orissa-Development

2. ACV VARIETIES

a. Monsoon Burely : Andhra

b. HDGRB : Andhra

c. SCN : Andhra

d. Rustica : Gujarat

e. Cigar tobacco : Madras

f. Bidi tobacco : Gujarat, Maharashtra and Madhya

TOP TOBACCO COMPANIES RANKED BY SALES:

1) Altria Group, Inc.(MO)

2) British American Tobacco p.l.c.(BAT)

3) Japan Tobacco Inc.

4) R.J.Reynolds Tobacco Holdings, Inc.(RJR)

5) Altadis, S.A.

6) Gallaher Group Plc(GLH)

7) Carolina Group (CG)

8) Reemtsma Cigarettenfabriken GmbH

9) Imperial Tobacco Group PLC (ITY)

10) UST Inc. (UST)

1) Altria Group, Inc. (MO): The house the Marlboro Man

built, Altria Group ( formerly Philip Morris Companies ),is

the world’s largest tobacco firm . Altria operates its

cigarette business through subsidiaries Philip Morris USA

and Philip Morris International, borh of which sell

Marlboro – the world’s largest-selleing cigarette brand

since 1972 .The company controls about half of the US

tobacco market. However, tobacco is only part of the

story. The company owns 84% of Kragt Foods, the

world’s #2 food company (after Nestle), which makes

Jell-O,Kool-Aid, Maxwell House, Oscar Mayer, and Post

cereals. The tobacco giant bought Nabisco in late 2000,

folding it into Kraft’s food portfolio. Altria owns 36% of

SAB Miller plc.

2) British American Tobacco p.l.c.(BAT): When people

pick up smoking, British American Tobacco (BAT) picks

up steam. Spun off in the reorganization of B.A.T.

Industries, BAT is the world’s #2 tobacco firm ( behind

Altria Group ) with about 15% of the market. It sells

nearly 780 billion cigarettes in about 180 countries.

BAT’s international cigarettee brands include Dunhill,

Kent, Lucky Strike, and Pall Mall; it also makes loose

tobacco and regional cigarette brands. Its US unit,

Brown & Williamson (Kool and GPC cigarettes), is

merging with the US tobacco business of R.J.Reynolds

Tobacco (RJRT).Companies controlled by South African

billionaire Anton Rupert own about 28% of BAT.

3) Japan Tobacco Inc.: Japan Tobacco has plenty to puff

about. It controls more than 70% of the cigarette market

in a country where half the men smoke and warning

labels suggest,” there’s a risk of damage to your health ,

so let’s be careful not to smoke too much.”A state

monopoly until 1985 , Japan Tobacco company, after

Altria and British American Tobacco. Its JT International

unit (acquired from R.J.Reynolds )sells Camel, Salem,and

Winston brands outside the US . The company also

operates in foods, pharmaceuticals, agribusiness,

engineering, and real estate.

4) R.J.Reynolds Tobacco Holdings, Inc.(RJR): Give it

up? R.J. Reynolds Tobacco Holdings (RJR)has been

smoking for more than 120 years , but increasing taxes

and court costs have encouraged competition from

cheaper discount brands. Although RJR has been forced

to cut costs to maintain profits, the firm’s R.J.Reynolds

Tobacco company subsidiary (RJRT)continues to be the

#2 US cigarette maker , with a market share of about

23% --compared with the 49% share of the Altria Group

(formerly Philip Morris).RJRT’s Camel, Doral, Salem, and

Winston brands are among the best-selling cigarettes in

the US . RJR is merging its US tobacco business with

Brown & Williamson, the third largest US tobacco

company.

5) Altadis, S.A.: When the smoke finally settles over

London , Gallaher Group helps kick it up again .The #2

UK cigarette company, Gallaher makes tobacco products

and sells them in Asia, continental Europe,Ireland,Russia

and other former Soviet republics, and K. Its premium

cigarettes include top UK brands Benson & Hedges and

Silk Cut;mid-priced brands include Berkeley; and low-

priced brands include Dorchester and Mayfair. Gallaher

also makes Hamlet cigars, Amber Leaf hand-rolled

tobacco, and Condor pipe tobacco.

6) Gallaher Group Plc (GLH): When the smoke finally

settles over London , Gallaher Group helps kick it up

again. The #2 UK cigarette company, Gallaher makes

tobacco products and sells them in Asia, cintinintal

Europe, Ireland, Russia and other Soviet republics, and

the UK. Its premium cigarettes include top UK brands

Binsom & Hedges and Silk Cut; mid-priced brands

include Berkeley; and low-priced brands include

Dorchester and Mayfair. Gallaher also makes Hamlet

cigars, Amber Leaf hand-rolled tobacco, and Condor

pipe tobacco.

7) Carolina Group (CG): Newport news provides the

best read on Carolina Group’s Lorillard Tobacco, the #4

cigarette maker in the US. Lorillard accounts for about

25% of parent company Loews’ sales, but more than

85% of the profits. Newport, Lorillard’s top brand, is the

#2 cigarette brand in the US and brings in nearly 90% of

Lorillard’s sales; its other brands include Kint, Maverick,

Old Gold, and True . The company has joined the rest of

the tobacco industry in reaching legal settlements with

all 50 states. A Florida appeals court overturned a $16

billion verdict against the company in May 2003.Loews

established Carolina Group in 2002 as a tracking stock

for its tobacco holdings.

8) Reentsma Cigarettenfabriken GmbH: Cigarette

maker Reemtsma Cigaretten fabriken has rolled tobacco

since 1910. The German company controls about 29% of

its home market and is one of the largest tobacco

companies in Europe. The company produces more than

60 brands, including Davidoff, Peter Stuyvesant, R1,

West. It sells its cigarettes through affiliated operations

in about 100 countries in Asia, Europe, and the

Americas. The UK’s Imperial Tobacco owns Reemtsma.

9) Imperial Tobacco Group PLC (ITY): The UK’s #1

cigarette maker (ahead of Gallaher Group), Imperial

Tobacco Group has traded up to an even bigger throne.

The company’s purchase of German tobacco firm

Reemtsma (Davidoff and West cigarettes ) nearly

doubled its size and made it the world’s #4 tobacco

company. Imperial’s brands include Lambert & Butler,

the UK’s #1 cigarette, as well as Castella cigars, and

Amphora and St Brunopipe tobacco. Its Drum brand is

the #1 hand- rolling tobacco worldwide, and Rizla is a

top cigarette paper. Acquisitions in Australia and New

Zealand have assured Imperial’s presence in emerging

markets.

10) UST Inc.(UST): for UST, the best part of a

baseball game is watching the players spit.A holding

company primarily for U.S. Smokeless Tobacco

Company, UST is the US’s largest manufacturer and

distributor of snuff and chewing tobacco. Its brands

include Copenhagen, Skoal, Red Seal, and Rooster. The

company’s International Wine & Spirits unit brings in

12% of sales by producing California wines under the

Conn Creek and Villa Mt. Eden labels and premium and

sparkling wines grom Washington under the Chateau

Ste. Michelle and Columbia Crest brands. UST also

produces premium cigars (Dom Tomas, Asteal and

Helix). Subsidiary UST International sells the firm’s

products outside the US, primarily in Canada.

ABOUT ITC COMPANY

LEADERS FOR OVER 90 YEARS:

ITC is the market leader in cigarettes in India. Its

India Tobacco Division (ITD) Pioneers the marketing of

cigarettes in India way back in 1910. ITC. Today is one of the

world's finest cigarettes manufacturing and marketing companies.

Backed by state-of- the-art technology and a portfolio of valuable

brands, ITC produces over 65 billion cigarettes a year.

ITC also pioneered the cultivation and

development of cigarette leaf tobaccos in India. With a 90 years

history of working closely with tobacco farmers, its Indian Leaf

Tobacco Development (ILTD) Division is the country's largest

buyer, processor and exporter of cigarette tobaccos. ILTD is

credited with bringing about the economic transformation of the

tobacco farmer in Andhra Pradesh where it is fondly referred to as

the "Talli Company" (Mother Company in Telugu).

HISTORY AND EVOLUTION:

ITC was incorporated on August 24, 1910 under

the name of 'Imperial Tobacco Company of India Limited'. Its

beginnings were humble. A leased office on Radha Bazaar Lane,

Kolkata, was the center of the company's existence. The company

celebrated its 16the birthday on August 24, 1926, by purchasing the

plot of land situated at 37, Chowringhee, (now renames J.L. Nehru

Road) Kolkata, for the Sum of Rs 310,000. This decision of the

company was historic in more ways than one. It was to mark the

beginning of a long and eventful journey into India's future. The

company's headquarter building, 'Virginia House', which came up on

that plot of land two years later, would go on, to become one of

Kolkata’s most venerated landmarks. The company's ownership

progressively indianised, and the name of the company was

changed to I.T.C Limited in 1974. In recognition of the company's

multi-business portfolio encompassing a wide rage of business -

Cigarettes & Tobacco, Hotels, Information Technology, Packing,

Special1y papers, Paperboards, Agri-Exports and Lifestyle Retailing -

the full stops in the company's name were removed effective

September 18, 2001. The company now. Stands rechristened 'ITC

Limited'.

Though the first six decades of the company's

existence were primarily devoted to the growth and consolidation of

the cigarettes and Leaf Tobacco businesses, the Seventies

witnessed the beginnings of a corporate transformation that would

usher in momentous changes in the life of the company.

In 1975 the company launched its Hotels business

with the acquisition of a hotel in Chennai, which was rechristened

ITC-Welcome group Hotel Cho1a'. The objective of lTC's entry into

the hotels business was rooted in the concept of creating value for

the nation ITC chose the hotels business for it's potential to earn

high levels of foreign exchange, create tourism infrastructure and

generate large-scale direct and indirect employment. Since then

lTC's Hotels business has grown to occupy a position of leadership,

with 44 owned and managed properties spread across India. It also

has a marketing and reservation arrangement with the Sheraton

Corporation, the reputed international hotel chain.

In 1979, ITC entered the Paperboards business by

promoting ITC Bhadrachalam Paperboards Limited, which today has

become the market leader in India. Bhadrachalam Paperboards

amalgamated with the company effective March 13, 2002 and

became a Division of the Company, Bhadrachalam Paperboards

Division. In November, 2002, this division merged with the

company's Tribeni Tissues Division to form the Paperboards &

Specialty Papers Division. ITC's paperboards' technology,

productivity, quality and manufacturing processes are comparable

to the best in the world. IT has also made an immense contribution

to the development of Sarapaka, an economically backward area in

the state of Andhra Pradesh. It is directly involved in education,

environmental protection and community development.

In 1985, ITC set up Surya Tobacco Co. in Nepal

as a joint venture with the reputed Soaltee group. In August 2002,

Surya Tobacco became a subsidiary of ITC Limited. Its name was

changed to Surya Nepal Private Limited (Surya Nepal).

In 1990, ITC acquired Tribeni Tissues Limited, a

specialty paper manufacturing company and a major supplier of

tissue paper to the cigarette industry. The merged entity was

nan1ed the Tribeni Tissues Division (TTD). To harness strategic and

operational synergies, TTD was merged with the Bhadrachalam

Paperboards Division to form the Paperboards & Specialty

Papers Division in November 2002.

Also in 1990, leveraging its Agri-sourcing

competency, ITC set up the international Business Division (IBD) for

export of Agri-commodities. The Division is today one of India's

largest exporters.

Recently, ITC's Packaging & Printing business

has launched a line of high quality greeting cards under the brand

name "Expression". ITC has also entered the Lifestyle Retailing

business with the Wills Sport range of international quality relaxed

wears for men and women. ITC has spun off its information

technology business into a wholly owned subsidy. ITC InfoTech India

Limited, to more aggressively pursue emerging opportunities in this

area.

THE ITC WAY:

ITC is a board-managed professional company,

committed to creating enduring value for the shareholder and for

the nation. It has rich organizational culture rooted in its core value

pf respect for people and belief in empowerment. Strong corporate

governance policies and systems back its philosophy of all-round

value creation.

ITC's corporate strategies are aimed at

matching its core capabilities with market opportunities to produce

superior shareholder value.

The key corporate strategies are:

Continue to focus on the core businesses of Cigarettes &

Tobacco, Hotels, and Packaging & Paperboard.

Ensure that each of its businesses meets the three

criteria of sustainability, namely Market Standing,

Profitability and Internal Vitality. Exit from businesses,

which do not meet these criteria within an agreed time

frame.

Ensure that each business is internationally competitive

in the Indian global market,

Create distributed leadership within the organization by

nurturing talented and focused top management teams

for each of the businesses.

Institute and practice a system of corporate governance

appropriate to ITC's character and constitution. Such a

system of governance must achieve a wholesome

balance between the need for executive freedom for

management and the requirement of a framework for

effective accountability.

Secure the future growth of the company by creating

new businesses, which leverage the strength of its core

competencies, residing in various businesses.

NO STOPS FOR ITC:

No stops to our commitment beyond the market

No stops to our vision of contributing to the nation

No stops to our endeavor to become world-class

No stops to our creation of sustained shareholder value

We have pulled out all the stops.

ORGANIZATION ENVIRONMENT

MAIN PRODUCTS:

The main products from the green leaf threshing

factory at Chirala are Un- manufactured tobaccos…

Lamina

Stem

AVR/export scrap

The services that are assured with the product

Improved shelf life

Elimination of non tobacco related material (NTRM)

Pest and mould free

Storage and handling/cool stores

ORGANIZATIONAL CULTURE:

ITC’s core values are aimed at developing a

customer- focused high performance organization which creates

values for all its stake holders.

TRUSTEESHIP:

As professional managers, we are conscious that ITC has

been given us in “Trust” by all our stake holders. We will redeem

the trust reposed in us by continuously adding value to ITC.

Unmanufactured tobaccos

ILTD

Domestic customers

Export and users

MerchantsOther and users

GLT at

Chirala

CUSTOMER FOCUS:

We will always be customer focused. We will deliver

what the customer needs in terms of value, quality and satisfaction.

RESPECT FOR PEOPLE:

We will respect and value people and uphold

humanness and human dignity. We will value difference in individual

perspectives. We want individuals to dream, create, experiment in

pursuit of opportunities and achieve leader ship through teamwork.

EXCELLENCE:

We will strive for excellence in whatever we do. We will

do what is right, do it well and win.

INNOVATION:

We will constantly innovate and strive to better our

processes, products, services and management practices.

ETHICAL CORPORATE CITIZENSHIP:

We will pursue exemplary standard of ethical behavior.

We will at all times comply with the laws of the land.

ILTD DIVISION VISION STATEMENT:

Build and sustain ILTD as a world class business

organization.

ILTD DIVISION MISSION STATEMENT:

Achieve international competitiveness in cost, quality

and services.

ILTD DIVISION OBJECTIVE:

To continuously enhance product and process quality

through contemporary technology and operational excellence. The

factory management efforts are to harness the loyalty and sense of

belonging of the employees for alignment with the vision, mission

and objectives leading to a culture of stretch and innovation, there

by enhancing contribution.

ORGANIZATIONAL CHALLENGES:

There are many proprietary green leaf processing

units who are their main competitors in India.

Company Exports-Mkgs

(in 2002-03)

ILTD 24 (total 76)

PSSH 11

BBL 8

ML 4

MA 4

DECCAN 10

DELTA 7

The volumes of the competitors are smaller than ILTD

volume. Although they are competitors to ILTD,( Considering a

larger perspective) they are partners in promotion of exports from

India. ILTD shares information and provides them a part of their

volumes for processing for both developing their capabilities and

having alternate capacity for contingencies.

In the changing market scenario, some of them are in

the process of establishing cigarettes factories and entering into a

tie up with international merchants.

Strength off ILTD is the largest state of the art

processing facility, professional management and world wide

network apart from established internal communication system and

corporate monitoring systems.

Factors Chirala Average competition

Costs

Manpower 1.13 0.47

Power 1.04 1.52

Coal 0.22 0.60

Maintenance 0.53 0.78

Total 2.92 3.37

Productivity

Kg/man-day

200 116

The labour costs and standards of safety at Chirala are

much higher than competition and this is more than offset by higher

productivity and lower energy, maintenance costs. The advantage

of Chirala factory has over competition are long term strategy and

goals, implementation of systems such as ISO 9000 for product

quality, external audits and caliber of professionals engaged and

close association with end users.

STRATEGIC CHALLENGE:

Large number of illiterate employees

Growing percentage of young employees who have greater

aspirations & requirements

To align new employee aspirations with the organization goals

and vision.

Greater requirement for social responsibility initiatives

Product traceability and integrity and value chain integration

Demand for higher yields

More stringent product quality tolerances

AWARDS:

ITC's Packaging business has won numerous awards for

its quality, environmental management systems and product

excellence:

First in India to be assessed at Level 6 on the International

Quality Rating Systems (IQRS).

Both the Chennai and Munger factories have obtained ISO

9002 certification. The Tinivottiyur and Munger factories have

also received the ISO 14001 Environment Management

Systems certification.

Quality Improvement Benchmark Awards for 1997 and 1998.

British Safety Council Swords of Ron or in 1999 for both the

Chennai and Munger factories.

CAPEXIL Special Export Award for 1999 and Top Export Award

for 2000/01.

The World Star award for Aashirvaad Select 2-kg pack in the

Consumer Pack category in 2002, Wills Natural Lights in 1999,

Royal Velvet & Passport whisky cartons in1998 and Nargis

lined tea cartons and Vacupack bulk packaging for tea in

1997.

Asia star awards for packaging excellence in 1999, 2000 and

in 2001 we have received 3 Asia star awards for Surya lOs,

Royal Stag 750ml and No.1 Gift Pack.

India Star Awards for unique, innovative and visually

appealing packaging in 2002 for the Aashirvaad Select 2-kg

pack and for Bagpiper Gold, Royal Challenge and Sara lee

Celebration packs in 2000.

BOARD OF DIRECTORS:

Chairman

Y. C. Deveshwar

Executive Directors

S. S. H. Lehman

Non-executive Directors

C.R. Green

Y.P. Gupta

P.B. Ramanujam

B. Sen

J.B. Stevens

Ram S. Tameja

T.M. Nagarajan

B. Vijayaraghavan

A.Prasad.

PROFILE OF ITC LTD – AGRI BUSINESS

DIVISION-ILTD IN A.P

Plant was also considered as "The largest tobacco

threshing in Asian continent". In ITC Limited, ILTD Division has a

history of 85years of partnership with formers and leadership in the

cultivation of Cigarette Tobacco. ITC introduced natured and

developed Virginia and purely Tobacco in India. There are Six

Chronological events in ILTD starting from 1980- 1990.

In ILTD Division there are Two Factories in A.P. one is at

Anaparthi and another is at Chirala. Guntur is the Head Office for

these two factories. Chirala is located at distance of 350K.M. from

Chennai and south east of Hyderabad.

The first activity in Chirala was in the year 1918, started

with leaf buying, redrying factory was setup in the year 1926 at

Chirala over the period with changes in the environment and

business needs, green leaf threshing plant was setup in the year

1985 with increase in customer demands. Second line was added in

the year 1990 - 91 to enhance the production capacity. The plant is

with state of art and technology and was considered as one of the

best plants in India in turns of products quality and this division is

located in Perala village outskirts of Chirala, which is providing

agricultural commodity, as it deals with agricultural commodity, the

operational phase in each and every year, varies with seasonal and

non-seasonal periods.

Modernization has been a continuous process at Chirala

factory keeping customer needs as the guiding post. In 1984 the

factory switched over from hand stripping to mechanize threshing

with an initial installed capacity of 4 Tons per hour. Today the

factory has 2 threshing lines capable of threshing 13 Tones per

hour. Both the threshing lines are designed for soft threshing with

abundant classification area to achieve a high product quality.

The factory has a quality control laboratory of

international standards with facilities for online monitoring and infra

analyzer to analyze chemistry of Tobacco. The factory has also a 33

KV sub-station of 5MVA capacity from the State Electricity Board and

have a standby captive generation power plant for 100% power

requirement of the factory. The leaf storage capacity is of 7.5 million

Kgs. With facilities for mechanized unloading and loading operation.

The quality of the product supplied to the domestic and overseas

customers is a true reflection of the morale and commitment of the

employees of the factory continuous improvement in various

aspects of the quality of the Product.

ILTD BUSINESS AND ORGANIZATION MISSION

STATEMENT:

“To enhance the wealth generating capacity of the enterprise

in globalizing environment, delivering superior and sustainable

stake holder value"

ILTD DIVISION LONG TERM BUSINESS OBJECTIVES:

1. To be dominating player in every field in which, we choose to

operate.

2. To attain and maintain the leadership position in exports

among private sector companies in India.

3. To become one of the foremost institutions in the world for

plant material based formulation/ products commercial scale

to make this world safer place to live.

4. To reestablished and strength in over image as a friend of the

farmer as an institution contributing. Significantly to rural

prosperity through improving the economics of the farming

community and tribal population.

INTERNATIONAL RECOGNITION:

Quality: Chirala green leaf-threshing facility is the world’s first ISO

9002 certified tobacco-processing plant

Safety: The factory is the one of the safest factories, a fast

confirmed by the awards of the British Safety council for the years

1993 & 1994 and sword of honor for 1994.

ENVIRONMENTAL CERTIFICATION:

ILTD’s Green leaf threshing plant at Chirala

has been awarded the BS 7550 certification, a British environmental

system standard, by the Bureau Verities Quality International

(BVQI). Chirala becomes the first ITC unit to get the Environment

Management System (EMS) certification and joins a select brand of

companies in India to have this distinction.

PROGRESSING STAGES IN ILTD:

1. Feeding

2. Conditioning

3. Band reeling

4. Dividing

5. Picking

6. Threshing

7. Classification

8. Redrying

9. Processing packing

10. Prizing Marking

The first activity in Chirala was in the year 1918,

started with leaf buying, redrying factory was setup in the year 1926

at Chirala over the period with changes in the environment and

business needs, green leaf threshing plant was setup in the year

1985 with increase in customer demands. Second line was added in

the year 1990/91 to enhance the production capacity. The plant is

with state-of-art- and technology and was considered as one of the

best plants in India in terms of product quality and this plant was

also considered as "The largest tobacco threshing plant in Asian

continent". This division is located in Perala village outskirts of

Chira1a adjacent of industry in Chirala, which is providing

agricultural commodity, as it deals with agricultural commodity; the

operational phase in each and every year varies with seasonal and

non-seasonal periods.

Seasonal Period: - It starts from November and ends with July with

a gap of one or two months.

Non-seasonal period: - It starts from august and ends in October.

During seasonal period, the plant is engaged with threshing green

leaf tobacco with full utilization. On the contrary during the seasonal

periods spread over four months in the year i.e., during monsoon

period in the area of plant shutdown. During the above period the

seasonal workers are discharged. The engineering and essential

service personnel will be carrying out the maintenance and of the

plant.

EMPLOYEE PROFILE:

MANPOWER CLASSIFICATION:

The unionized employees are of three distinct

categories viz.,

1. Clerical/class' A'

2. Technicians

3. Class 'B' workers

1. Clerical/class' A':

This category comprises of all

Clerical staff members,

Watch & ward,

Compounders,

Pharmacists,

Male nurse and

Quality inspectors

In the scale of S-1, S-2, S-3.

There are both Non-seasonal and seasonal employees with in

this category. All clerical class 'A' employees are monthly

rated/monthly paid employees.

Except those working in the watch & ward all other clerical

staff are under the functional control of the Factory Accountant and

therefore the matters pertaining to their transfer, allocation of

duties department wise etc., are required to be dealt with by the

Factory Accountant/ Management accountant.

Technicians:

This category consists only Non-seasonal employees in the

following scales VIZ.,

T-1

T-2

T-3

T-4 &

T-5

Technicians don't consist of seasonal employees. This is

because the machines that are to be used while threshing the

tobacco must be maintained for the' good quality of output. So this

work will be there for the entire year.

This category is a pool of technically qualified employees

catering to the needs of production and Engineering Departments.

By virtue of their allocation to different Departments, they perform

the duties in respective departments but are interchangeable from

one Department to another depending upon the need. Technicians

are monthly rated/monthly paid employees.

Class 'B' workers:

This category of employees consists of both Non-seasonal

and seasonal components. The scales in this category are as

follows:

Non-seasonal

1. Monthly Rated (MRB-I)

2. Monthly Rated (MRB-2)

3. Monthly Rated (MRB-3)

Seasonal

1. Daily Rated (DR-I)

2. Daily Rated (DR-2)

3. Daily Rated (DR-3) se of the study.

The Non-seasonal class 'B' workers are monthly

rated/monthly paid and the seasonal class 'B' workers are daily

rated/weekly paid.

All class 'B' employees posted in the plant are in scale 2

either daily rated or monthly rated. Identified jobs specified below

are in scale3 either daily rated or monthly rated:

A. Maistry

B. Cylinder operator

C. FL truck Driver

D. Quality control laboratory

E. Boiler Home

F. Markers

G. BOPT operators

The remaining employees posted in Departments other than

the plant or the jobs specified above shall be in scale 1.

THE NON-UNIONIZED CATEGORY:

These employees are not members of any union but for the

purpose of working out the establishment, they shall be counted

against the vacancies of unionized staff of clerical/class' A' or

tec1micians as the case may be.

The terms of appointment and other service conditions to the

senior grade are specific and differ from other members of

unionized cadre.

Non unionized

Category Numbers

Managers 31

Staff y 11

Sr. Grade 12

Managers are qualified degree/diploma holders in

different fields of specialization as required for their role. Staff Y is

junior managers and Sr Grade is Supervisors who have grown from

unionized cadre.

Unionized Seasonal Non-

Seasonal

Total

Technicians Nil 158 158

Class A 140 34 174

Class B 1516 125 1641

Badli 313

Technicians category are a pool of technically qualified

employees who cadre to the needs of production and engineering

departments. Clerical are primarily those who maintain the accounts

and capture data at different locations in the factory. Class B are

those engaged for mostly manual tasks in the factory and the

majority are illiterates.

Each of the unionized categories of employees has their

own democratically elected union and the elections are held once in

two years. These office bearers are elected by their category of

employees across the ILTD Division with representatives for the

division for the operating units.

LEAVES AND HOLIDAYS:

Employees in different categories are entitled to

different types of leaves. The details are as follows:

TYPES OF LEAVES:

Annual leave

Sick leave

Casual leave

Seasonal clerical/ class ' A':

1. Annual leave:-

The actual working days of the season are taken and the

annual leave is calculated at the rate of one day for every 20 days,

if the actual leave thus calculated is less than 7 days. 7 days

minimum is credited to the account of the employee where the

number is excess of 7 days, actual number of days is credited.

All the other rules as per non-seasonal clerical/class' A'

where the employee report for the duty again during the year, the 7

days leave shall be adjusted against the yearly entitlement based

on actual working days during the year.

There is no provision for accumulation. Annual leave as

due is en cashed at the closure of any seasonal paid along with

the .season's final payments.

2. Sick leave:

As per non-seasonal clerical/class' A' with full wages. No

accumulation.

3. Casual leave:

14 days wages on a flat rate. The rates applicable at any

given tome are communicated by DHQ.

Non-seasonal clerical/class ' A':

1. Annual leave:

All clerical class' A' employees are entitled to annual

leave at the rate of one day for ever 20 immediately preceding year.

Leave shall be credited on the 1st January every year

considering the working days of the previous year. For the purpose

of calculating the working days of the previous 'year, only days on

which the employee is physically present shall be taken.

In other words, leave availed during the-previous year

shall not be counted as working days.

The leave calculated as above should be subject to a

minimum of26 working days for those who have put in 240 days or

more working days, for others shall be in proportion to the actual

working days.

While calculating the actual working days any fraction

of20 in excess of 10; days shall be treated as 20 days.

FOR EXAMPLE:

Working days leave

20 1 Day

29 1 Day

31 2 Days

40 2 Days

49 2 Days

51 3 Days

60 3 Days

69 3 Days

71 4 Days

Annual leave shall be allowed to be accumulated up to a

maximum of 90 days.

2. Sick leave:

On 1st January of every year 14 days sick leave is

credited to the leave account of the employee. Sick leave can be

accumulation up to a maximum of 90 days.

Sick leave shall be sanctioned only on the

recommendation of the company medical retainer.

3. Casual leave:

On 1st January every year, 10 days casual leave shall be

credited to the account of the employee. No accumulation of casual

leave is permitted. Unused leave at the end of the year shall lapse.

In case an employee is confirmed in the middle of the

year, annual leave shall be. Calculated as per details given in the

class of Non-seasonal employees. Leave shall however be credited

to his account on the first of January of the next year along with

other non-seasonal employee. For the period he has worked as a

seasonal and no leave pay shall be payable to him since he would

'not be discharged from service along with other seasonal due to

confirmation. Similar treatment shall be given to sick leave also.

Technicians:

1. Annual leave:

All rules pertaining to Non-seasonal clerical/class 'A' are

applicable to technicians except the accumulation limit.

Accumulation limit in the case of technicians is 180 days.

2. Sick leave:

On 1st January of each year 14 days leave is credited to

the leave account of the employee. Sick leave can be accumulated

up to a maximum of 90 days.

Sick leave shall be sanctioned only on the

recommendation of the company medical retainer.

3. Casual leave:

On l5th January each year, 10 days casual leave shall be

credited to the account of the employee. No accumulation of casual

leave is permitted. Unused leave at the end of the year shall lapse.

Non-seasonal class 'B':

1. Annual leave:

All rules pertaining to non-seasonal clerical/class 'A' are

applicable to non- seasonal class 'B' except the accumulation limit.

Accumulation limit is 60 days.

2. Sick leave:

In 1st January of each year 14 days sick leave is credited

to the 'leave account of the employee. Sick leave can be

accumulated up to a maximum of 90 days. Sick leave shall be

sanctioned only on the recommendation of the company medical

retainer.

3. Casual leave:

On 1st January of each year, 10 days of casual leave

shall be credited to the account of the employee. No accumulation

of casual leave is permitted. Unused leave at the end of the year

shall lapse.

Seasonal class 'B':

1. Annual leave:

Annual leave is calculated at the rate of one day for

every 20 of work put in. There is no maximum in case of seasonal

class 'B'. The actual days arrived at; as per the above calculation is

the annual leave. Annual leave is encashed at the time of closure of

season. No accumulation is permitted.

2. Sick leave:

14 days with full wages for a calendar year. No

accumulation.

3. Casual leave:

14 days with wages at a flat rate. No accumulation.

4. Extra-ordinary sick leave:

In certain cases where employees suffer from prolonged

sickness. Extra ordinary sick leave is granted depending upon the

length of service of the employee whenever such case is come up

the application along with the details of the sickness and necessary

recommendation of the company's medical officers are required to

be sent to Guntur. Employee Relations Manager only is authorizes to

sanction extra-ordinary leave.

5. Quarantine leave :

Quarantine leave is a special kind of leave granted to

the employee in the event of one of his family member confronting

communicable disease. The intention of Quarantine leave is to see

that the employee in the factory do no (confront such

communicable disease through the employee in whose family one of

the members is suffering from communicable disease. The treating

doctor certifies that the employee who is otherwise healthy is

capable of passing on this disease to the employers in the Factory.

Such leave that is permissible is 14 days quarantine leave is in

addition to all other types of leave that the employee is entitled to

this 14 days shall not be dedicated only leave.

6. Half day leave:

If an employee is required to leave the work spot due to

personal emergency is entitled to apply for half-day casual leave.

CHAPTER – Iii Literature review

ABSENTEEISM

Absenteeism has been variously defined by different authorities .

According to Webster’s dictionary:-

,”Absenteeism is the practice or habit of being an

‘absentee’, and an ‘absantee’is one who habitually stays away.”

According to labour bureau, simla ,

’ Absenteeism is the total manshifts lost because of

absences as a percentage of the total number of manshifts

schedules to work .”

In other words,it signifies the absence of an employee

from work when he is scheduled to be at work ;it is

unauthorized ,unexpected , avoidable, and willful absence from

work . For calculating the rate of absenteeism, two facts are taken

into consideration -----the number of persons scheduled to work and

the number actually present. A worker who reports for any part of a

shift is to considered present. An employee is to be considered

scheduled to work when the employer has work available and the

employee is aware of it, and when the employer has no reason to

expect, well in advance, that the employee will not be available for

work at the specialized time. Any employee may stay away from

work if he has taken leave to which he is entitled, or on the ground

of sickness or some accident, or without any previous sanction of

leave. Thus, absence may be authorized or unauthorized, willful or

caused by circumstances beyond one’s control.

MAGNITUDE OF ABSENTEEISM:

Management of absenteeism has been observed that

the phenomenon of absenteeism does not exist only in Indian

industry; it is a universal fact. The difference is only in terms of

magnitude. the rate of absenteeism from 7 percent to 30 percent .

In some occupations, it has risen to abnormal level of 40 per cent in

some seasons. The extent of absenteeism may differ from industry

to industry ,place to place and occupation to occupation, it may also

differ according to the make-up of the work force.

There have been many systematic studies of

absenteeism in Western industrialized countries. For example, it has

been observed that absenteeism among the younger workmen is

extensive on Mondays after the week end , particularly among

unmarried men who, after a late night on Sunday perhaps with their

girl friends , find it difficult to get up and come on time and

concentrate on work; and it is the lowest on pay day.

In the USA, I have been observed that curiously

enough, the extent of absenteeism is greater among youngsters

than among the older employees, greater among women than men.

Young men general found to be absent for a variety of reasons,

including restlessness and a sense irresponsibility. In some cases,

absenteeism of particular workers is due to reasons connected with

the job; a worker, for example, may be absent because he does not

like his job for some reason, or because he has unsatisfactory

relations with his supervisor with other employees. Absenteeism

may also be due to sickness, real or feigned.

There has been a phenomenal rise in absenteeism in

some industries. In the cotton textile industry in madras, it shot up

from 8.9 % in 1951 to 16.0% in 1980. Increased from 12.7% to

22.0% in Bombay, 8.3% to 14.9% in Ahmadabad; and 12% to 24.8%

in Kanpur. In the engineering industry, it increased from 13.9% to

19.1% in Maharashtra; in west Bengal from 10.1% to 17.3%; and in

Karnataka from 9.7% to 15.7% during the same period. A similar

trend was noticed in woolen industry, where in the same period, the

percentage of absenteeism went up from 10.6 to 18.8 in Dhariwal;

in gold mining in Karnataka from 10.2 to 18.0; in the plantations

industries in Karnataka from 18.3 to 20.7. In the coal mines, the

increase ranged between 13.5 to 20.4 per cent.

These figures are of unauthorized absenteeism. If to

these are added the liberal provisions in awards and settlements

for privilege leave, casual leave, sick leave and maternity leave, it

would be found that the number of non-working days in the year in

the industries in India is very large.

Absenteeism in Indian industry is not new phenomenon.

The royal commission on labour reported that “high absenteeism

prevails among industrial labor mainly due to their rural

orientation.”since then , a number of individual researchers have

investigated the problem, and have pointed out that absenteeism in

our industries varies from 7 per cent to 15 per cent .its incidence is

high in plantations and in mines; and it is higher in northern India

than in southern India.

PECULIOUR FEATURES OF ABSENTEEISM:

On the basis of micro studies undertaken in different

parts of the country, certain observations may be made.

a) The rate of absenteeism is the lowest on pay day; it

increases considerably on the days following the

payment of wages and bonus.

“The level of absenteeism is comparatively high

immediately after pay day, when workers either feel like

having good time, or in some other cases return home to

their village to make purchases for the family and to

meet them.”The incident of absenteeism, both before

and after a holiday, has also been found to be higher

than that on normal days.

b) Absenteeism is generally high among the workers below

15 years of age and those above 40. “The younger

employees are not regular and punctual,”presumably

because of the employment of a large number of new

comers among the younger age groups; while the other

people are not able to with stand the strenuous nature of

the work.

c) The rate of absenteeism varies from department to

department with in the unit .for example ,in mixing and

blow room ,and in the bundling and the baling jobs in

which only a few workers are employed and the physical

condition are better than in other departments ,the rate

of absenteeism is comparatively low .as the size of a

group increase, the rate absenteeism goes up .this

difference in the rate of absenteeism is believed to be

due to the peculiar style and practices of management ,

the composition of the labor force and the culture of the

organization .

d) The percentage of absenteeism is generally higher in

night shifts than in the day shift s. This is so because

workers in the night shifts experiences greater

discomfort and uneasiness in the course of their work

than they do during day time .

e) The percentage of absenteeism is much higher in the

coal and mica mining industries than in organized

industries . this high percentage of absenteeism is due to

the engagement of labourers in the fields,marriagies

and festivals ,which together are estimated to account

for about 75 percent of the cases of

withdrawals ,drunkenness, relaxation or sickness .

f) Absenteeism in India is seasonal character .it is the

highest during March–April-may ,when land has to ready

to monsoon sowing ,and also in harvest season ,when

the rate goes as high as 40 percent .

RESONS FOR ABSENTEEISM:

The phenomenon of absenteeism has been explained in

various ways. According to one line of thought ,absenteeism is due

to lack of “commitment” on the part of the opinion that since “the

degree of commitment varies with the degree of a country’s

industrial growth or maturity ,absenteeism is inversely related to

industrial development …. The worker in progress of the early

stages on industrialization is more prone to absenteeism, prolonged

and sporadic withdrawal from industrial work. Wild cat stoppages,

naked violence, and destructions of machines and property.

Absenteeism is due to the factors that influence a worker’s

commitment”.

Hone the other hand ,refutes this contention ,and is of

view that “absenteeism is related to new values and norms which

are developing among the work force as a result of technological

developments .work and leisure are now cherished by the

worker ,and these he wants to enjoy along with the monetary

benefits he gets to his services. The economic condition, therefore,

decides whether one would like to be absent form work.”

The royal commission on labor observed that “high

absenteeism among Indian labor is due to its rural orientation and

its frequent urge for rural exodus. “According to Acharya:”in modern

industrial establishments, expect, perhaps, in very small ones, the

individual personality is more or less irretrievably submerged in the

general mass through the sheer incidence of being throw together

with other individuals for a certain purpose , during a good bit of

each day’s life .the individual has no elbow-room and is hammered

into a set pattern, while the human sprit clamours for open spaces

and unfettered air so that it may kick its legs about for a change .”

The incidence of industrial fatigue, trying climate, universal

malnutrition and appallingly bad working conditions aggravate the

feeling for change among industrial workers and sometimes impel

them to visit their village homes frequently for rest and relaxation.

American authors hold the view that absenteeism due to

the “internal administration of an organization.”According to

them,”the work milieu is very important since a large part of the

worker’s daily life is spent there.” The atmosphere obtaining in a

plant, therefore, affects his attitude to his work, and either

persuades him top attend regularly or keep him away .Irritating

uncertainty, irregularly, and confusion in the factory are likely to be

important causes of absenteeism .

The attitude and practice of the management also

contribute to absenteeism. A traditional management treat workers

as hirelings, while an enlightened management treats them as

human beings. This difference is behavior leads, in the former

situation, to high absenteeism, and in the later situation to a close

affinity in the organization, the result being lower absenteeism.

Various empirical studies on the micro level in the India

have been undertaken to find out the cause which have contribute

to a high percentage of absenteeism. A few of these illustrative

studies may be quoted here .

Unsuitable working conditions.

Unfavorable mental attitude arising out of boredom,

disconnect with wages, resentment against supervisor;

Lack of provision for general welfare.

Inadequate medical facility for minor injuries.

Increase distance between management and workers.

Sinha analysis twenty variables in relation to absenteeism under the

three heads

In_plant causes

Personal causes and

Community and social causes.

The general causes of absenteeism may be discussed:

MALADJUSTMENT WITH FACTORY CONDITIONS :

As a worker continues to live in the city, urban life

becomes distasteful to him because of his insanitary conditions

prevailing there. He finds himself caught with in great factory walls;

he is bewildered by heavy traffic, by jostling, by stringer speaking in

different languages; he confusion by different religions and tastes;

and he is weary of the misery of slums and of toiling for long hours.

He is subject to strict discipline and is ordered by complete stringers

to the things which he cannot understand. As a result, he under

constant strain, which causes him serious distress and impairs his

efficiency. All these factors tends to persuade him to maintain his

contacts with his village.

SOCIAL AND RELIGIOUS CEREMONIES:

Social and religious functions divert workers from work

to social activities. In large number of cases, the proportion of

absenteeism due to sickness, accident or maternity is not as it is

due to other causes, including social and religious causes. For

example, the absenteeism in the textile industry due to sickness,

accident or maternity amounted to an average of 4.9 percent; due

to social or religious and other cause, it was 5.1 percent. The report

of the study group on iron and steel industry points out:”some

religious considerations account for absenteeism to a certain extent.

UNSATISFACTORY HOUSING CONDITIONS:

The workers who comes to towns usually find that they

are not wanted and they swell the number of unemployed and

casual workers. They also experience housing difficulties. Not less

than 95 percent of the houses occupied by industrial workers in

India are unsatisfactory for healthful habitation. A room of about

10’x10’ accommodates a large family and occasionally two families;

often ten to fifteen persons sleep in one room. The housing of

migrants combines the worst characteristics of both rural and urban

slums. Not only are the sites most insanitary but the material used

for erecting huts are also very filthy. Forsaken places like the slopes

along the railway lines, banks of open drainages streams, waste

land adjoining dirty locations in towns, open space earmarked for

dumping the town refuse are chosen by them. Health conditions are

naturally bad, leading to high morbidity and consequent ill_health.

They, therefore, make frequent visits to their village homes to get

relief from such insanitary and unhealthy surroundings.

INDUSTRIAL FATIGUE:

Low wages compel a worker to seek some part-time job

to earn some side income. But this often results in constant fatigue,

which compels him to remain absent for the next day; and if fatigue

affects him seriously, his absence may continue for quite some time.

UNHEALTH WORKING CONDITIONS:

Irritating and intolerable working conditions exit in

factories. Heat and moisture, noise and vibrations in the factory,

bad lighting conditions, dust, fumes and over_crowding---all of these

affect the worker’s health, causing him to remain absent for a long

time.

ALCOHOLISM:

It has been observed that most of the absentees are

alcoholics. Also, the present system of disbursing wages for

employees at the end of week is also enhancing the absenteeism

percentage. These employees, after receiving their wage either an

Saturday or Monday, going to cheap liquor shops and spending their

money. It is taking a day or two to recover from that effect, Hence

absenting from duty.

ADDITIONAL SOURCES OF INCOME:

As the employees are depending upon additional

sources of income like, agriculture, business daily labor etc. Some of

the employees are giving more importance to these jobs than

employment in industries.

Company is also offering various types of loans to the

employees, which are mostly misused by the workers these loans

are given to be workers without proper verification of reasons

stated. Taking this as an advantage, workers, mostly alcoholics, are

quoting silly and not genuine reasons for sanctioning loan . Amounts

drawn from these loans are mostly used for alcohol, only in few

cases: the actual purpose of the loan is served.

INADEQUATE LEAVE FACILITIES:

Most of the employees are of the opinion that absence

can be changed as leave by obtaining the respective supervisor / in-

charge, even without prior intimation to them.

Having this opinion and the practice of sanctioning

leaves, employees are absenting without prior permission. This is

affecting planning of work. Supervisors with work oriented rather

than man oriented approach are also a factor which compels

workers to absent themselves on an E.S.I certificate rather than

avail of leave on bonafide grounds.

MEASURES FOR CONTROL ABSENTEEISM:

“Absenteeism is a serious problem for a management

because it involves heavy additional expenses. Reserves and

understudies are kept in readiness to take the place of the

absentees, failing which the overhead cost of idle equipment has to

be faced .Industrial employees do not usually ask for leave of

absence in advance or even give notice during their the probable

duration of an employee’s absence and cannot take appropriate

measures to fill the gap”.

As regards measures to be adopted to remedy the

situation, the labour investigation committee, 1946, was of the

opinion that “proper conditions of work in the factory, adequate

wages, protection from accidents and sickness, and facilities for

obtaining leave for rest and recreation constitute the most effective

means of reducing absenteeism.”

The Encyclopedia of social sciences suggests the

measures to reduce the rate of absenteeism:

The personnel management should encourage notification,

especially in cases of sickness when the duration of absences

is likely to be long.

The case of personal and family circumstances, e.g., illness of

children in the case of married women employees which make

absence unavoidable, leave should be grant liberally.

To reduce unavoidable absence due to sickness and industrial

and industrial accidents, programmes of industrial hygiene

and safety should be strengthened.

It should be noted no single measure can be effective in

controlling absenteeism; but a skilful combination of various

measures would measures would definitely lead to the desired

results. These measures are:

ADOPTION OF WELL DEFINED RECRUITMENT PROCEDURE:

The selection of employees on the basis of communal,

linguistic and family consideration should be discouraged or

avoided. The management should look for aptitude and ability in the

prospective employees and no easily yield to pressure or personal

likes and dislikes. Application blanks should invariably be used for a

preliminary selection and as tools for interviews. The personnel

officer should play a more effective role as a coordinator of

information, provided that he has acquired job knowledge in the

function of selection. Employers also should take into account the

fact that selection should be for employees’ development; their

reliance, therefore, on intermediaries for the recruitment of

employees should be entirely done away with. They should, as far

as possible, rely on employment exchanges.

PROVISION OF HEALTHFUL AND HYGIENIC WORKING

CONDITIONS:

In India, where the climate is warm and most of the

work involves manual labor, it is essential that workers should be

provided with proper and healthy working conditions. The facilities

of drinking water, canteen, lavatories, rest rooms, lighting and

ventilation, need to be improved. Where any one of these facilities

is not available, it should be provided. All these help in keeping the

employee cheerful and increase productivity and the efficiency of

operations throughout the plant.

PROVISION OF REASONABLE WAGES AND ALLOWANCES AND

JOB SECURITY FOR WORKERS:

Some of the wages of an employee determine his as

well as his family’s standard of living, this single factor is important

for him than any other. The management should, therefore, pay

reasonable wages and allowances, taking into account the capacity

of the industry to pay, the level of wages prevailing in different units

of the same industry in the same area in neighboring industries. The

allowances that may be paid to workers should include old age

allowances, length_of_service allowances, position allowances,

special job allowances, good attendance allowances, transportation

allowances, position allowances and housing allowances, so that the

worker may have and know security of employment.

MOTIVATION OF WORKERS: WELFARE AND SOCIAL

MEASURES:

The management should recognize the needs of workers

and offer them adequate and cheap housing facilities, free or

subsidized food, free medical aid and transportation facilities to and

from their residence, free educational facilities for their children,

and other monetary and nonmonetary benefit.

IMPROVED COMMUNICATION AND PROMPT REDRESSAL OF

GRIEVANCES:

Since a majority of workers are illiterate, bulletins and

written notices, journals and booklets are not understood by them.

Therefore, timely illustrations and instructions, meetings and

counseling, are called for. Written communication becomes

meaningful only when workers can read and understand. As regards

notice boards, too many notices should be avoided; only the

essential one should be put on the board, which should be placed

near the entrance, inside the canteen and in areas which are

frequently visited.

As for the grievances settlement, the management

should recognize that a delayed grievances may become a

complicated case. A procedure for fair and prompt redressal of

grievances is, therefore, essential. It would be better if the various

units adopt the model grievances procedure. Supervisors should be

trained to handle a worker’s grievance in an informal and humane

manner.

LIBERAL GRANT OR LEAVE:

The management’s strict attitude in granting leave and

holidays, even when the need for them is genuine, tempts workers

to go on E.S.I. leave for under the scheme, they can have 56 days

in a year on half pay. An effective way of dealing with absenteeism

is to liberalize leave rules.

DEVELOPMENT OF WORKER’S ENDUCATION:

The system of workers’ education should be so designed

as to take into account their educational needs as individuals for

their personal evaluation: as operatives for their efficiency and

advancement; as citizens for a happy integrated life in the

community; as members of a trade union for the protection of their

interests. This educational programme, according to the national

commission on labor, should be to make a worker:

A responsible, committed and disciplined operative;

Understand the basic economic and technical aspects of the

industry and the plant where he is employed so that he may

take an intelligent interest in its affairs;

Aware of his rights and obligations;

A responsible and alert citizen;

OTHER MEASURES:

There should be clear and definite rules and regulation on

authorized and unauthorized leave.

The rules and regulations relating to attendance must be

explained to workers.

A proper records of each worker’s attendance should be

maintained on a special daily attendance card.

The employer, employee and the state have a definite

role to play. If each performs it properly harmoniously, the problems

of inefficiency, undesired conflict, low productivity, dissatisfaction

on the part of workers and their low morale resulting in frequent

absenteeism can be largely eliminated. Industrial relations in a

democracy should be based on an integrated approach aiming at

individual satisfaction and group satisfaction, and achievements of

the goals of the community and of the nation as a whole.

CHAPTER – IV DATA ANALYSIS

& INTERPRETATION

A sample of 90 respondents we selected at random

from Technicians only in ITC, ILTD Division, Chirala, A survey was

conducted by way of questionnaire to find out why the employees

are absenting for scheduled work .

The questionnaires are analyzed in both Table format

and graphically.

Table – 1

Sl. No Age Group No of

Respondents

Percentage

%

1. Below 25 10 11.2

2. 30 – 35 40 44.5

3. 35 – 40 25 27.8

4. Above 40 15 16.7

Total 90 100

INTERPRETATION:-

From the above table it is found that 11.2% respondents

are belongs to below 25 years age,44.5% respondents are belongs to

30-35 years age, 27.8% respondents are belongs to 35-40 years age,

16.7% respondents are belongs to above 40.

Table – 2

Sl. No FAMILY BACK

GROUNDS

No of

respondents

Percentage %

1. Agriculture 35 38.9

2. Business 10 11.2

3. Employee 40 44.5

4. Others 5 5.6

Total 90 100

INTERPRETATION:-

From the above table it is found that 38.9% respondents

are belongs to Agriculture, 11.2% respondents are belongs to

Business, 44.5% respondents are belongs to Employee, 5.6%

respondents are belongs to Other back grounds.

Table – 3

Sl. No Category No of

respondents

Percentage

1. YES 60 66.7%

2. NO 30 33.3%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 66.7% respondents

are Alone source of Income to their family.

Table – 4

Sl. No Category No of

respondents

Percentage

1. Yes 45 50%

2. No 25 27.8%

3. Trying 20 22.3%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 50% respondents

are Regular For Work, 27.8% respondents are Not Regular For

Work, & remaining 22.3% respondents are Trying To Regular For

Work.

Table -5

Sl. No Category No of

respondents

Percentage

1. Yes 20 22.3%

2. No 70 77.7%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 22.3% Employees

are ready to leave their present job & remaining 77.7% employees

are not ready.

Table – 6

Sl. No Category No of

respondents

Percentage

1. HS 5 5.6%

2. Satisfied 30 33.4%

3. Normal 40 44.4%

4. NS 15 16.6%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 5.6% respondents

are Highly Satisfied (HS), 33.4% respondents are Satisfied, 44.4%

respondents are Normal Satisfied & remaining 16.6% respondents

are Not Satisfied (NS).

Table – 7

Sl. No Category No of

respondents

Percentage

1. Family 25 27.7%

2. Habits 5 5.6%

3. Health 10 11.2%

4. Activities 50 55.6%

Total 90 100%

INTERPRETATION:-

From the above table it is found that reasons for

absenteeism 27.7% respondents are absenting from their Family

Problems, 5.6% respondents are absenting form their Bad Habits,

11.2% respondents are absenting form their Health Problems &

remaining 55.6% respondents are absenting from their other

Activities.

Table -8

Sl. No Category No of

respondents

Percentage

1. Regular 20 22.3%

2. Often 30 33.3%

3. Not at all 40 44.4%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 22.3% respondents

are take Alcohol Regularly, 33.3% respondents are take alcohol

Often, & remaining 44.4% respondents are Not Take Alcohol .

Table – 9

Sl. No Category No of

respondents

Percentage

1. Full 80 88.9%

2. Part 10 11.1%

3. Not aware 0 0%

4. No need 0 0%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 88.9% respondents

are fully aware of the consequences of absenteeism, and remaining

11.1%respondents are partly aware of the consequences of

absenteeism.

Table – 11

Sl. No Category No of

respondents

Percentage

1. Full Salary 5 5.6%

2. Welfare Facilities 5 5.6%

3. Work Practices 15 16.7%

4. All The Above 65 72.2%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 72.2% respondents

are says that Fully Salary, Welfare Facilities, Work Practices make

them work regular, 16.7% respondents says that Work Practices

make them work regular, 5.6% says that Welfare Facilities make

them work regular & remaining are says that Fully Salary make

them work regular .

Table – 12

Sl. No Category No of Percentage

respondents

1. Yes 30 33.4%

2. No 60 66.6%

Total 90 100%

INTERPRETATION:-

From the above table it is found that 66.6% respondents

says that organization didn’t punish them due to absenteeism &

remaining 33.4% respondents are punished by organization due to

absenteeism.

CHAPTER-VFINDINGS

&SUGGESTIONS

FINDINGS

It is found that 50% respondents are Regular For Work, 27.8% respondents are Not Regular For Work, & remaining 22.3% respondents are Trying To Regular For Work.

It is found that 22.3% respondents are take Alcohol

Regularly, 33.3% respondents are take alcohol Often, &

remaining 44.4% respondents are Not Take Alcohol .

It is found that 72.2% respondents are says that Fully

Salary, Welfare Facilities, Work Practices make them work

regular, 16.7% respondents says that Work Practices make

them work regular, 5.6% says that Welfare Facilities make

them work regular & remaining are says that Fully Salary

make them work regular.

It is found that 66.6% respondents say that organization didn’t punish them due to absenteeism & remaining 33.4% respondents are punished by organization due to absenteeism.

It is found that reasons for absenteeism 27.7%

respondents are absenting from their Family Problems, 5.6%

respondents are absenting form their Bad Habits, 11.2%

respondents are absenting form their Health Problems &

remaining 55.6% respondents are absenting from their other

Activities.

It is found that 38.9% respondents are belongs to

Agriculture, 11.2% respondents are belongs to Business,

44.5% respondents are belongs to Employee, 5.6%

respondents are belongs to Other back grounds.

SUGGESTIONS

From the analytical observation the following alternatives are suggestions in the organizations to control absenteeism.

It is recommended to link the compensation with attendance of employees to work.

It is suggested for penalty style of punishment in case of alcoholic employees.

The interpersonal relationships & work environment should be employees favor in order to control absenteeism.

The process of leave sanctioning should be streamline in the organization in order to control absenteeism.

To award the best employee in terms of absenteeism. either financial or non financial style of motivation to control absenteeism.

The seasonal service computations are to be linked with absenteeism.

QUESTIONAIR

ITC LIMITED – AGRI BUSINESS DIVISION-ILTD, CHIRALA

QUESTIONNAIR

NAME : DEPARTMENT :

CATEGORY : Technicians / Non – Seasonal Class A / Seasonal Class A /

Non – Seasonal Class B / Seasonal Class B

(Tick mark the relevant category & strike off others)

1) You fall under the age group of :(a) Below 25 (b) 20-35 (c) 35-40 (d) 40-45 (e) Above 45

2) How many members are there in your family (including you)(a) (4 members) small (b) (5 members) medium (c) large (above 6)

3) Can you specify your family background

(a) Agricultural (b) Business (c) Employee (d) other

4) Are you alone the earning income in your family? (a) Yes (b) No

5) What is your contribution to your family (a) Fully (b) Partially (c) Need fully

6) Do you have any additional source of income? (a) No (b) Yes (What is the source?)

7) Are you regular to work (a) Yes (b) No (c) Trying to be regular

8) Are you satisfied with your job? (a) Yes / highly (b) Normal (c) Not satisfied

9) Planning to leave the present job? (a) No (b) Yes (why?)

10) How do you feel your working conditions are?

(a) Very good (b) Satisfactory (c) Not good

11) What is your favorite pass time (a) Being at home (b) With friends outside (c) Alone (d) Peers

12) What is your Financial position (a) Satisfactory (b) Borrowing (c) leadings (d) more than sufficient

13) How did you spend your wage

(a) Pre-planed (b) Luxuries (c) Expensive (d) unplanned

14) Are you satisfied with your salary?(a) Highly satisfied (b) Satisfied (c) Normal (d) Not satisfied

15) Dose the relationship with other employees motivate to attend regularly(a) yes (b) no

16) Do you have debts(a) Yes (b) Not at all (c) Planning for it

17) What makes you to absent?(a) Family problems (b) Bad habits (c) Ill health (d) Extra activities

18) Do you take Alcohol(a) Regularly (b) Often (c) Not at all

19) Do you know that Alcohol causes ill health(a) Fully aware (b) Partially aware (c) not aware (d) no need of awareness

20) If you are an Alcoholic, do you really wants to quit Alcohol (a) Yes (b) No

21) Are you aware of the consequences of absenteeism?(a) Fully aware (b) Partially aware (c) not aware (d) no need of awareness

22) How do you feel about this organization (a) Great (b) Safe (c) very strict (d) friendly

23) Do you know the Factory Standing Orders(a) All of them (b) Some of them (c) None of them

24) Which shift do you like to work(a) ES (b) LS (c) MS (d) FH

25) Are you happy with shifts Rotations (a) Yes (b) No

26) Every time when you apply for leave, leave is sanctioned?(a) some times (b) every time (c) need fully (d) never

27) What makes you to work Regular?(a)Full salary (b)Welfare facilities (c)Safe & Healthy work practices (d) All the above

28) How long you have been associated with the organization?(a) 0 to 5 years (b) 6 to 10 years (c) 11 to 15 years (d) above 16 years

29) Were you suspended from the organization due to absenteeism?(a) Yes (b) No.

30) Specify the reason for absenteeism

ANNEXURE