RESEARCH REPORT

ON

IMPACT OF OUTSOURCING HR ACTIVITIES ON PRODUCTIVITY OF MAHINDRA AND MAHINDRA LTD.

Acknowledgement

Expression of sincere gratitude is just a partial acknowledgement. My vocabulary

falls short of word to express my sincere gratitude to All faculty members of

PGDM under whose guidance I had the opportunity to carry out the present

work.

The objective of research report is to provide us with an opportunity to

experience the practical aspects of management and its functioning.

This project report not be possible without the guidance of My All faculty

members (PGDM),who inspired& gave their valuable suggestion.

Thanks are due to my learned faculty member’s professor for their constant

encouragement and giving me this opportunity of doing summer training.

VIKAS ARORA

PREFACE

The project prepared gave me an opportunity of learning the impact of outsourcing HR activities. I learned and discussed important points that are related to my report. I learned and study on different topics of P&A like HRD ,performance appraisal, job evaluation , industrial relation.

The purpose of this report is to provide an accessible account of the key issues currently confirming the industries. The report looks at a couple of the basic function of personnel department and the perception of worker and management regarding “IMPACT OF OUTSOURCING HR ACTIVITIES ON PRODUCTIVITY”.

I studied about the Mahindra & Mahindra’s history, functions, products, performance appraisal , departments like recruitment and selection and many more.

CONTENTS

Executivesummary

About the topic

Outsourcing is subcontracting a process, such as product design or

manufacturing, to a third-party company. The decision to outsource is often made

in the interest of lowering firm or making better use of time and energy costs,

redirecting or conserving energy directed at the competencies of a particular

business, or to make more efficient use of land, labor, capital, (information)

technology and resources

Types of Outsourcing

Business Process Outsourcing

Information Technology - 28%

Human Resources – 16%

Sales & Marketing – 15%

Finance – 11%

Administrative – 9%

Least Commonly Outsourced Functions

Performance Management 3%

Strategic Business Planning – 4%

Policy Development/Implementation – 4%

Employee Communication Plans – 10%

The objectives of study are:

To realize economies of scale and achieve standardization of services.

To define the concept of hire on contract policies& promotion.

To describe the various procedure followed by Mahindra & Mahindra.

To assess the views of the worker and management in context of these

scheme.

Why Outsource?

● Allow HR to focus on core competencies

● Creates strategic opportunities for HR professionals

● Improve quality, efficiency, and effectiveness

● Relief from administrative burdens

● Reduce operating costs

Impact on Companies

●Employee reactions

● HR executives taking part in operational and strategic decisions

●Elimination of bureaucracy

●Customer service improvements

●Growth of self-service platform

●Slimming down staff

●Cost savings

INTRODUCTION

What is Outsourcing?

The performance by outside parties, on a recurring basis, of tasks that would

otherwise be performed in-house.

Outsourcing is subcontracting a process, such as product design or

manufacturing, to a third-party company. The decision to outsource is often made

in the interest of lowering firm or making better use of time and energy costs,

redirecting or conserving energy directed at the competencies of a particular

business, or to make more efficient use of land, labor, capital, (information)

technology and resources

Human Resource Outsourcing

One very important trend in the recent times has been the growth of human

resource outsourcing. HR outsourcing is the outsourcing of peripheral but

necessary administrative tasks such as payroll, benefits, education/training,

recruiting personnel, administration, to realize economies of scale and achieve

standardization of services.

Rapidly changing market dynamics and global competitive pressures have

caused organizations to spend more time focusing on their core business.

Organizations are fast realizing that they can't be all things to all people. So

companies now, be it a software company, a service provider or a manufacturing

firm, decide what they are good at and outsource everything else, i.e., focus on

their core competency, and let someone else do the rest in a more efficient and

cost-effective manner.

As a result, human resources outsourcing is becoming increasingly prevalent.

The number of companies outsourcing HR activities continues to rise, and the

scope of outsourced HR activities continues to expand. HR outsourcing can

happen in HR functions, like payroll administration (producing checks, handling

taxes, dealing with sick-time and vacations), employee benefits (Health, Medical,

Life insurance, Cafeteria, etc), human resource management (hiring and firing,

background interviews, exit interviews and wage reviews), risk management, etc.

Outsourcing has become a common response to manage people and technology

resources strategically, enhance services, and manage costs more effectively.

Outsourcing noncore activities allows HR professionals to move away from

routine administration to a more strategic role. The organization can focus on

higher value-added activities while the outsourcing provider takes care of the

day-to-day administration. Critical internal resources, such as technology and

talent, can be devoted to company's core business. Outsourcing reduces the

need for large capital expenditures in noncore functions. Thus, outsourcing

becomes a strategy for reducing the capital intensity of the business. This

strategy has gained popularity as companies aim to become more nimble and

gain the speed and flexibility necessary to compete in today's business

environment. A growing number of executives understand the benefits it can

bring in terms of not only cost savings, but also heightened strategic focus. Many

recognize outsourcing relationships as long-term partnerships created to further

the strategic goals of the organization

The HR outsourcing business opportunity is large and India is likely to garner a

larger and larger piece of this pie in the future. India, with its intrinsic advantages

such as low cost, ready pool of English speaking manpower and geographic

positioning, is emerging as a viable destination for HR outsourcing companies to

set up their businesses.

But still here people are not very clear about what exactly is manpower

outsourcing all about, and issues like quality and trust needs to be addressed

properly. Experts say the basic reasons hampering the growth of HR outsourcing

in India are confidentiality and cost factors. Moreover, the fear of losing jobs,

losing control over confidential data, ethics and quality of outsourcing vendors,

security breaches and overall confidence in the vendors deters many

organizations. The biggest problem - and this is why the HR outsourcing industry

in India is on the back foot - is the government and the industry's failure to tackle

issues like data security and data privacy. This is where Indian HR outsourcing

companies face a major handicap. The Indian government is still grappling with

drafting a data protection law designed to quell growing privacy concerns from

their offshore clients.

However, the future seems to be very promising. It's set to become a $ 51 billion

market worldwide in 2005, representing 39 per cent of the total business process

outsourcing revenue. Estimates show that the latent size of HR outsourcing in

India is about $ 2 billion with a current market of $ 27 million and it is growing at

an alarming rate of about 50 per cent. India has immense potential as more than

80% of fortune 1,000 companies are discussing HR outsourcing as a way to cut

costs and increase productivity.

Right now, India is barely skimming the surface of the HR outsourcing market

potential. Indian life Hewitt (ILH), FIDELITY, EXULT and MAFOI are some of the

prominent HR outsourcing services providers in India and the clients include

giants of manufacturing, software and service industries like GE Capital, Ford

Motors, Hyundai Motors, Satyam Group, Infosys, Enron, Haldia Petrochemicals

and HSBC, to name a few, but many more needs to be added to that list.

HR outsourcing has a huge potential for employment also. Nasscom numbers

are a million software jobs by 2005; HRO would be about a 25 per cent of that.

Experts believe that in present times HR outsourcing is undergoing a transition

phase, it would still be sometime before we see increased levels of HR activities

being outsourced to India as lack of domain knowledge and quality are some of

the critical issues.

ACTIVITIES TO OUTSOURCED

– Payroll

– Benefits

– Recruiting, Staffing, & Search

– Training

– HRIS & Web-based services

: How many of you outsource all of your HR function?

: What led to the decision to consider outsourcing?

Why Outsource?

: Allow HR to focus on core competencies

: Creates strategic opportunities for HR professionals

: Improve quality, efficiency, and effectiveness

: Relief from administrative burdens

: Reduce operating costs

Other Benefits to HRO

: Access to outside HR expertise

: Greater diversity of HR services

: Leverage vendor investments in technology rarely available to HR organization

: Limit fiduciary, audit, and litigation risks and liabilities

: Upgrade level of customer service

: Ease time pressure demands

:“Better, faster, cheaper”

Risks

: Over promise and under deliver

: Nonperformance of key function

: Cost

: Loss of institutional knowledge

: Difficulty managing vendor relationship

: Change in provider’s business or financial stability

: Lack of fit with company culture

: Organizational resistance or unreadiness

Considerations

: Core Competency?

: Best in Class?

1. What is your vision for your HRM business?

2. What metrics will measure progress toward vision?

3. What business outcomes are needed from the HRM aspects of the

business?

Outsourcing Myths

: Outsourcing is just a fad

: Outsourcing can be kept secret from employees

: Outsourcing is only for the largest companies

: Messes must be fixed before outsourcing

: Outsourcing is for everyone

Trends in HR Outsourcing Market

: Specialization

: Globalization

: Standardization

: Regionalization

: Consortia Buying

: Mid-market Mania

: Utility Model Evolution

: Consolidation and Partnering

The Future of HRO

1. Growth-Maturation of HRO market

2. Increasing weight of non-cost drivers

3. “Commodization” of HR functions

4. New roles for internal HR departments

5. New career opportunities for HR professionals

6. Expansion of small/mid-sized HRO markets

7. Demographic changes

8. Improved HRO metrics

9. Reshaping of industry

Impact on Companies

: Employee reactions

: HR executives taking part in operational and strategic decisions

: Elimination of bureaucracy

: Customer service improvements

: Growth of self-service platform

: Slimming down staff

: Cost savings

: Model will serve to guide other organizational functions (IT, accounting)

Impact on HR Profession

: Internal HR at significant disadvantage in cost per transaction

: Loss of control of key processes

: Enhanced credibility

: Strategic focus

: Decentralized structure

: Internal politics – HR as business partner

: Move to customer service culture

: Management and Organizational Development – big picture view

: New roles – consultant and HR strategist

: Develop competencies to remain valuable

: HR is exposed and more visible as organizational function

: HR is far more measurable

: Align HR strategy with corporate goals

Definitions

OUTSOURCING

The transfer of the provision of services previously performed by in-house

personnel to an external organization, usually under a contract with

agreed standards, costs, and conditions. Areas traditionally outsourced

include legal services, transport, catering, and security. An increasing

variety of activities, including IT services, training, and public relations are

now being outsourced. Outsourcing, or contracting out, is often introduced

with the goal of increasing efficiency and reducing costs, or to enable the

organization to develop greater flexibility or to concentrate on core

business activities. The term subcontracting is sometimes used to refer to

outsourcing.

PRODUCTIVITY

Maintaining a high productivity is the life of a successful business all around the

world. No matter how much money you invest in your business without

productivity implementation strategies your business would not progress and

would eventually collapse.

Productivity in an industrial context is output of an aspect of

production per unit of input.

It is a method used to measure the quantity of output of worker, machine, or an

entire national economy in the making of good, services, or commodities to

produce income.

Other Definitions

In-sourcing

Off-shoring

Co-sourcing

Geo-sourcing

Outplacement

BENEFITS OF PRODUCTIVITY

In improving the productivity of a company, the business will gain many benefits.

These can include:

Increase in income/profitability.

Lowering running costs/operational costs.

Maximizing the use of all of the company’s resources such as land,

equipments/machineries, factory, workers, and etc.

Gaining a greater share of the market.

More cash flows mean more opportunity for the company to expand and

grow.

WHY THE OUTSOURCING RUSH?

What are the reasons for the growth in HR outsourcing? How do

companies gain by outsourcing their HR activities? HR outsourcing is

considered a viable option, if a company lacks internal expertise and

confidentiality and requires unbiased opinion on human resources.

Outsourcing is also gaining importance as most companies do not have

the time or the expertise to deal with situations.

Outsourcing has become popular because companies are finding that

external vendors-through technology and economies of scale-can

provide more efficient and cost-effective HR services than in-house

departments. The best example of a firm that has reaped early

benefits from outsourcing is BP. In 1999, it outsourced its activities to

Exult in the USA and UK for services like payroll, recruiting,

expatriation, records management, vendor management and

relocation services for 63, 000 employees.

The only function that remained in-house was BP’s learning and

development program in the United States. Over the last two years,

the company has reaped many benefits from this arrangement. Payroll

processing became more timely and accurate. Employees got their

benefits questions answered sooner. HR processes have been

standardized across the company. And for the first time, BP has

measurable data on which HR activities are effective.

As a result, its core HR staff has been slashed by 65 percent-from 100

to 35 people. Such success stories have propelled companies like

Sony, AT&T and American Express to outsource HR activities. One of

the main reasons for HR outsourcing that most companies quote is that

such outsourcing helps them to get rid of routine transactional HR

work. Some of the companies which have gone ahead with even

manpower hiring outsourcing practices are Cisco, GE, Honeywell, Sun.

BENEFITS OF OUTSOURCING

When a number of companies are outsourcing their HR activities, there

must be certain benefits associated with it. The major advantage is the

cost and the time factor. According to India Life Hewitt, Vice-President,

Leo Fernandes, “For large organizations to service their mammoth

payroll by themselves is a huge drain on their resources. Outsourcing

this one activity alone is huge direct cost saving for large legacy

companies which could be in the range of 20 to 40 per cent." 2

The major benefits of HR outsourcing are as follows:

• Fosters Innovation

• Increased speed to market

• Improved quality

• Focus on core competence

• Cost reduction

• Reduced administrative costs

• Improved customer service

• Insufficient staff

• Conserve Capital

THE INDIAN SCENARIO

Indian companies are also not lagging behind in outsourcing their HR

activities. LG Soft India has outsourced its PF management, Escosoft

has outsourced payroll processing, execution of training programmes

and survey conduction. Depending on their need, outsourcing can be

transactional or HR Consulting. In India transactional outsourcing is

more prevalent .

In the value chain, it falls at the lower-end compared to HR

consultancy, although it happens to be an essential function. According

to Harish Chopra, whose firm Harish Chopra & Associates has garnered

a large chunk of financial sector HRO over the years: “An investment

bank would prefer to recruit investment bankers rather than HR

specialists. And given their minimum salaries and establishment costs,

HR administration would cost them twice as much 4.”

The HR outsourcing fever has not only spread to large companies but

many small and medium sized companies are also welcoming this

trend. Salary and Benefits Processing, Benefits Administration, and

Compensation Benchmarking & Design are the most frequently

outsourced HR activities in India. According to a study conducted by

the Institute of Management Accountants (IMA) in mid 1990s, mid-

sized companies spent more on the routine transactional work in

finance and accounting services than large companies and maintain 79

percent more headcount .

This kind of cost is felt even more in the routing HR work. According to

the survey more that 87 percent of the funds mid-sized companies’

budget for finance and HR go towards routine processing transactions,

rather than policy making strategies and analysis that

could move their business forward. This is clearly counterproductive for

organizations set on high productive model

INDIA AS AN HR OUTSOURCING DESTINATION

India is emerging as a major player in HR outsourcing. Though there

are hardly five to six names in this market, they are trying to make a

mark for themselves and tap the potential of providing HR outsourcing

services. Companies like Mahindra and mahindra are expanding their

horizons by extending their services to the indian region. However,

overseas HR servicing companies are beginning to view the Indian

market as a viable investment destination, where they can set up their

operations and cater to the rest of the international market.

The $450-million Exult Inc. started a 70-people outfit in Mumbai. From

the tactical and straightforward handling of payroll and benefits, HR

services providers are moving into the strategic world of BPO. HR-

enablers are helping HR managers free themselves from the routine

jobs and work towards taking employee services to a higher level.

India, with its intrinsic advantages such as low cost, ready pool of

English speaking manpower and geographic positioning is emerging as

a viable destination for HR outsourcing companies to set up their

businesses. The HR outsourcing business opportunity is large and India

is likely to emerge as a major player in this market. Patni Computer

Systems is looking to leverage its work done on 401K pension plans to

get into HR. Daksh has started payroll processing. The $5-billion

payroll processor, Automatic Data Processing is also planning to start

operations in Hyderabad.

The various HR processes that companies are venturing into include

data entry, payroll processing, staffing, training, resume management,

compensation, employee communications, pension plans, leave

administration and HR data analytics. The popular delivery models for

HR services outsourcing are self service, call center back up or shared

services involving high caliber HR professionals who play a

consultative role to line managers.

When compared to other regions, India holds an advantage in HR

outsourcing because of cost factor and education of the workers.

IS THE MARKET STILL UNEXPLOITED IN INDIA?

Despite all these figures and numbers mentioned above, HR

outsourcing is still considered to be unexploited. There are a number of

deterrents that are keeping companies from moving to HR outsourcing.

The basic reasons hampering the growth of HR outsourcing in India are

confidentiality and cost factors. Many companies outsource only a bit

of their requirements because of the above two factors.

Besides, the fear of losing jobs, losing control over confidential data,

ethics and quality of outsourcing vendors, security breaches and

overall confidence in the vendor deter many organizations. According

to V. Kartikeyan, the director-human resources of Texas

Instruments India,

“Some companies can also be reluctant because they may not have an

adequate grip over the cost-benefit equation of outsourcing.

Companies need to be convinced before they can outsource select HR

activities.”6 The basic cultural mindset and the acceptance at the

psychological level add to the deterrents. An in-house HR person

handles certain situations that an outsourcing agency cannot handle

well (things like building employee incentive programmes, taking care

of recognition for employees).

At times, many employees would want someone in-house to resolve

their work-related problems or disputes. All this is only possible if there

is an in-house HR team, which interacts with the employees on a daily

basis. Quality at times forms another roadblock. The issues of pricing

also play an important role as there is no standards benchmark for

pricing and it varies from vendor to vendor. Doing reference check

helps a lot in this case.

THE FUTURE AHEAD

The future of HR outsourcing in India is poised to be very effective

because of its intrinsic advantages such as low cost, ready pool of

English speaking manpower and geographic positioning is emerging as

a viable destination for HR outsourcing companies to set up their

businesses. While currently there are only a few major players the

trend seems to be catching up as companies are showing marked

interest to improve on services such as pay roll benefits as well as

complete HR delivery.

Companies are looking to outsourcing the complete range of HR

delivery and designing products on policies, compensation, structure,

and recruitment. Indian companies are not only providing services for

the clients abroad but are also catering to the local market. Moreover

these players are moving up the value chain.

Mafoi has emerged as a major HR outsourcing center (Refer exhibit on

HR outsourcing at Mafoi consultants). It is estimated that currently the

organized sector of HR is catering to only two percent of the whole

market . This is the right time for the players to tap this emerging

market.

Contract-To-Hire And Recruiting Agencies

You may be wondering how staffing companies recruit applicants. They can

recruit in a number of ways. They may advertise in newspapers, through job

fairs, virtual communities, and online job boards.

You may have seen ads in newspapers for contract-to-hire positions. A majority

of these ads are placed by staffing companies to recruit applicants or contractors.

They normally don’t reveal the name of the hiring company until they set you up

with an interview.

Job fairs are a second method used to find potential applicants. If you’re

interested in attending a job fair, you normally find them advertised in

newspapers. You may even do a search on the Internet for job fairs in your area.

Online job forums are an effective recruiting method. The service is generally

free and does not take very much time to post. The recruiter normally posts the

job description, requirements, and the contact information. Applicants generally

are asked to send a copy of their resume and a cover letter explaining why they

think they are a good fit.

The fourth recruiting method is online job boards. These are similar to newspaper

ads, but are placed online at employment sites. You can expect the ads to read

much like a newspaper ad.

Contract-To-Hire: Why Use A Staffing Agency?

There are many benefits to using the services of a staffing company. Staffing

companies have staffing and recruiting teams. Their job is to recruit, pre-screen,

and test individuals. By the time an applicant is sent on an interview, that person

has already been tested thoroughly and his skills have been assessed. Staffing

companies are interested in keeping their clients; therefore, they work hard at

matching an individual with the company or position that best suits him. Everyone

wins in this case. The staffing company keeps the client happy; the applicant

thrives on his job because he’s capable of performing the duties well, and the

hiring company gets a capable, productive potential employee.

Another benefit to using a staffing company’s services is that they are

responsible for conducting credit and background checks. Especially if your

business deals with sensitive, confidential information, you can feel confident that

contractors sent to you have already gone through all the screening checks.

Still another benefit, if for whatever reason you decide that things are not working

out, you simply terminate the contract. There is no legal obligation to keep the

contractor any longer than you need or wish to keep him. If you are the

contractor, using a staffing company benefits you, because if you decide that you

don’t want to continue with a certain company, you too can terminate the contract

without any legal obligations.

Contract-To-Hire Employment

This type of position is becoming more popular and easy to find. If you prefer to

seek employment on your own rather than through a staffing company, you can

still succeed. You would proceed the same way as with a direct hire position.

Look in newspapers. Make sure that the contact information is for the hiring

company and not for a staffing agency. Go to online employment sites and enter

a search for the term “contract-to-hire” in your area. Larger companies

sometimes have job fairs. You can do a search for job fairs in your area as well,

and make sure you attend.

Having your resume ready, your work history, and references along with a cover

letter increases your chances of finding a position. Resumes and cover letters

take time to put together. If you have these items ready, you can forward them as

soon as you see an ad. All you will need to do is update the position on the

resume. The cover letter may require a few more updates such as the position,

contact person, and maybe their address. Make sure you have the correct date.

RESEARCH ANALYSIS

OVERVIEW

Payroll

The term 'payroll' encompasses every employee of a company who receives a regular wage or other compensation. Some employees may be paid a steady salary while others are paid for hours worked or the number of items produced. A payroll specialist calculates all of these different payment methods and the appropriate paychecks are issued. Companies often use objective measuring tools such as timecards or timesheets completed by supervisors to determine the total amount of payroll due each pay period.Setting up an effective payroll system is not especially difficult for trained accountants, but it can be very time consuming. Some smaller businesses rely on user-friendly computer software to set up a simple payroll system complete with check printers and file storage. Larger companies may assign trained accountants to handle payroll issues as part of their overall duties. But many businesses without the means to maintain their own payroll systems choose to farm out this task to outside specialists. 

HR Consultation services 

Personnel Policies Records Retention Consultation Compensation/Benefits Analysis and Planning Employee Training and Orientations Succession Planning Strategic Planning Wage and Hour consultation FMLA/OFLA Consultation Employee Relations Consultation Team Building and Issue Resolution Facilitation

TRAINING

FEATURES

Increases knowledge and skills for doing a job.

Bridges the gap between job neegs and employee skills / knowledge and

behavior.

Job-oriented process, vocational in nature.

Short-term activity, desinged essentially for operative.

IMPORTANCE OF EMPLOYEE TRAINING

REDUCTION IN COST OF PRODUCTION: Efficient workers do their works in

the best possible manner. they make the maximum utilization of materials and

machines. thus, the cost of production is reduced.

MAXIMUM UTILIZATION OF MATERIALS AND MACHINES: Training teaches

the employees of the enterprise the method of doing their job in the best possible

manner.

MINIMUM POSSIBILITY OF ACCIDENT: Trained worker know the methods of

doing their jobs in the required manner. the know-how to use the machines in the

best possible manner. it reduces the possibility of accidents to the minimum.

STABILITY IN ORGANIZATION: Training brings stability in organization,

because it reduces the rate of absenteeism and labor turnover. it enables the

worker to do their works in the absence of any supervision.

HIGH MORALE: As the trained workers are capable in doing their jobs in most

suitable manner and can understand the procedures and methods easily, it

increases their morale. it gives them satisfaction in their work.

IMPROVEMENT IN THE QUALITY AND QUANTITY OF PRODUCTION:

Training increase the efficiency of employee which increases the quantity of

production and improves its quality.

MINIMUM NEED OF SUPERVISION: A trained worker can do his work himself

efficiently. thus, the training reduces the need of supervision to minimum.

HELPFUL TO MANAGERS: As there is minimum need of supervision, it helps

the managers of the enterprise to concentrate upon the important problems of

enterprise. they have not to waste their valuable time on supervising the workes.

Types of Outsourcing

: Business Process Outsourcing

: Information Technology - 28%

: Human Resources – 16%

: Sales & Marketing – 15%

: Finance – 11%

: Administrative – 9%

: All Others – 22%

How Common is HRO?

58% of companies outsource some HR function2

: 91% of companies with $1 billion+ annual revenues are now considering HRO3

: HRO grew 28% from second half of 2004 to first half of 20054

Other Types of HR Outsourcing

: Pension Benefits Administration – 55%

: Temporary Staffing – 54%

: Retirement Benefits Administration – 47%

: Payroll & Software Services – 48%

: Recruiting, Staffing & Search

– Non-executives - 30%

– Executives - 29%

: Employee Relocation – 29%

: Training and Development – 21%

: Incentives – 19%

: HRIS & Web-based Services – 15%

: Reference Checks

: PEOs and ASOs

: Sourcing Consultants & Legal Services

: Screening & Workplace Security

: Process, Project, and Systems Management

Least Commonly Outsourced Functions

: Performance Management 3%

: Strategic Business Planning – 4%

: Policy Development/Implementation – 4%

: Employee Communication Plans – 10%

0 2 4 6 8 10

Employee CommunicationPlans

PolicyDevelopment/Implementation

Strategic Business Planning

Performance Management

Series1

Audience Survey

: How many of you outsource part of your HR function?

– Payroll

– Benefits

– Recruiting, Staffing, & Search

– Training

– HRIS & Web-based services

: How many of you outsource all of your HR function?

: What led to the decision to consider outsourcing?

Why Outsource?

: Allow HR to focus on core competencies

: Creates strategic opportunities for HR professionals

: Improve quality, efficiency, and effectiveness

: Relief from administrative burdens

: Reduce operating costs

Other Benefits to HRO

: Access to outside HR expertise

: Greater diversity of HR services

: Leverage vendor investments in technology rarely available to HR organization

: Limit fiduciary, audit, and litigation risks and liabilities

: Upgrade level of customer service

: Ease time pressure demands

:“Better, faster, cheaper”

Impact on Your Career

: Transformation – from transactional administrator to business partner that sets

strategy

: Develop competencies to negotiate and manage vendor relationships

: Demonstrate ability to provide business solutions for employee and customer

problems

: Change bureaucratic culture

: Develop strategic expertise necessary to manage human capital

: Deliver exceptional customer service

: Sharpen your skills

: Build/Develop your network

: Stay on top of trends and their implications

: Utilize vendors now so that they can help

you later

Satisfaction

Recent survey of 129 large companies representing 2 million employees9:

: 89% satisfied with outsourcing arrangement

: 85% achieved hoped-for benefits

: Additional 20% achieved unexpected benefits

0 20 40 60 80 100

achieved unexpectedbenefits

achieved hoped-forbenefits

satisfied

Series1

Overview of Process

1. Planning

2. Exploring strategic initiatives

3. Analyzing costs/performance

4. Selecting providers

5. Negotiating terms

6. Transitioning resources

7. Managing relationships

: Prepare HR

– Develop and communicate new HR strategy

– Define new roles and responsibilities

– Restructure HR

– Hire new employees to fill skill gaps

– Provide training for employees in new roles

: Prepare Organization

– Develop HR strategy within overall organizational strategy

– Communication plan

– : Resolve issue of whose payroll individuals

are now on

– Are HR employees actually employees

of provider?

– Does head of HR work for company or provider

: Assessment

– Self examination

– SWOT of department

– Organizational scan

: Define opportunities and benefits

: Build the business case – consider all costs and impacts on organization

: All functions that are not core competencies should be considered for HRO

– nothing is sacred

: Consider the driver behind HRO decision

Analyzing Cost/Performance

: Understand market trends and competitive position

: Identify goals and objectives

: Determine added value

: Gather baseline HR costs and metrics

: Compare current HR operations to benchmarks

: Determine which processes have highest strategic importance and add most

value

Negotiating Terms

:“Good contracts make good partners”

: Maintain heat of competition during negotiation

: Reasonable, but clearly established, expectations

: Well-documented deliverables regarding every aspect of deal

: Attorney involvement

Specifications of Contract

Contract Duration

– Exact beginning and ending dates

– Financial penalties for early termination

: Parties to the Contract

– Allow for additions or deletions (in case of acquisitions or

divestitures)

– Require vendor to name all subcontractors and give you right of

approval for those introduced later

Services Performed

– Specify all functions to be provided

– Outline all support services

– Ensure escalation process and dispute governance included

: Performance Standards

– Tweak standard performance guarantees

– Reinforce performance guarantees through at-risk fees

:Hold-Harmless Statement

: Fees

: Data Security

: Communication Review

: Contingency Plans

: Audits

: Final Contract Review

RESEARCH

METHODOLOGY

RESEARCH PROBLEM

I have selected that IS PRODUCTIVITY INCREASE THROUGH HR

Outsourcing as research problem for my research report.

As a research problem is the situation that causes the researcher to feel

apprehensive, confused and ill at ease.  It is the demarcation of a problem area

within a certain context involving the WHO or WHAT, the WHERE, the WHEN

and the WHY of the problem situation.

RESEARCH OBJECTIVE

How productivity relates with performance appraisal. In addition, the

major factors of performance appraisal, which have taken a part in

increasing productivity of the organization.

RESEARCH DESIGN USED

As research design is simply the framework or plan for a study i.e. used

as a guide in collecting and analyzing the data. Research design can be

grouped into three categories-exploratory research, descriptive research and

casual research.

I have used exploratory research design in my project.

EXPLORATORY RESEARCH

Exploratory research studies are also termed as formulating studies. The

main purpose of such studies that of formulating of the problem for more

precise investigation or of developing the working hypotheses from an

operational point of view. An Exploratory Research focuses on the discovery

of ideas and is generally based on secondary data. It consists;

Search of secondary data and literature

Survey

Case study

SEARCH OF SECONDARY DATA AND LITERATURE :-

The quickest and most economical way is to find possible hypotheses from

the available literature. The past researcher may be suitable sources of

information to develop new hypotheses. The researcher can search them for

his research purposes.

SURVEY:-

Survey means the survey of people who have had practical experience with

the problem to be study. These individual can be top executives, sales

manager, wholesaler and retailer processing valuable knowledge and

information about the problem environment.

CASE STUDY: -

The case study method is a technique by which individual factor weather it

be an institution or just an episode in the life of an individual or a group in

its relationship to any other in the group.

RESEARCH INSTRUMENT USED

I have used the following research instruments in my project:-

QUESTIONNAIRE: -

The term questionnaire usually refers to a self-administered process

where by the respondent himself read the question and records without

the assistance of an interviewer.

OBSERVATION METHOD: -

The observation method is useful to know the reaction of

handicapped information.

INTERVIEW: -

The interview method of collection data involves presentation of oral-

verbal stimuli and reply in terms of oral- verbal response.

SAMPLING TECHNIQUE USED

When field studies are under taken in practical life, consideration of time

cost and some other factors almost invariably lead to a selection of

respondents. The selected respondents constitute a sample and the selection

process is called sampling technique.

A sample design is definite plan determined before any data are actually

collected for obtaining a sample from a given population. Samples can be

either probability sample or non-probability sample.

I have selected simple random sampling in my project,

SIMPLE RANDOM SAMPLING

This type of sampling is also known as chance sampling or probability

sampling where each item in the population has an equal chance of being

selected in the sample.

SAMPLE SIZE

When a survey is undertaken and when it is not possible to cover the entire

population the researcher has to answer the basic question – how large

should be sample be? The sample size decision is related directly to research

cost.

The intended sample size is the number of participants planned to be

included in the trial, usually determined by using a statistical power

calculation. The achieved sample size is the number of participants enrolled,

treated, or analyzed in the study.

I have taken 50 people in my sample size, as the sample size should be

neither so small nor so large.

METHOD USED FOR DATA COLLECTION

The task of data collection begins after a research problem has been defined

and research design chalked out. While deciding about the method of data

collection to be used for the study the researcher should keep in mind two

types of data-

1. Primary data

2. Secondary data

1. PRIMARY DATA -

Those data that have been observed and recorded by the researchers for

the first time in their knowledge.

Sources;

Questionnaire

Interview method

2. SECONDARY DATA-

Those data that have been compile by some agency other than user.

Sources;

Case study

ANALYTICAL TOOLS USED The term analysis refers to the computation of certain measures along with

searching for patterns of relationship that exists among data group. Analysis

is essential for a scientific study and for ensuring that we have all relevant

data for making contemplated comparisons. Therefore, I have used

Tabulation, Graphs & Charts in my project.

ANALYSIS

1. Induction training is of sufficient duration?

(a)Yes 60% (b) no 35% (c) can’t say 05%

InterpretationAccording to the study 60 % employee are satisfy duration of training & 35% employee

are not satisfy & 5% say can’t say

2. Induction training is given adequate importance in your organization?

(a) Yes 23 (b) no 70 (c)can’t say07

InterpretationAccording to the study 23% employee are training adequate important in organization but 70% employee are not important for organization & 7% say can’t say

3. Induction training provides an excellent opportunity for newcomers to learn comprehensively about the organization?

(a)Yes 70 (b)no 28 (c)can’t say2

InterpretationAccording to the study 70% training an excellent opportunity for new employee & 28%

employee say no & 2% say can’t say

4. Senior management takes interest and spends time with the new staff during induction training?

(a)Yes20 (b)no75 (c)can’t say5

Interpretation

According to study 20% employee takes interest to spend time with the new employee but 75% are not & 5 % say can’t say

5. The new recruits find induction training very useful in your organization?

(a)yes 35 (b)no 55 (c)can’t say10

Interpretation

According to study 35% recruitment are useful for organization but 55% say no & 10 % say can’t say

6. The induction training is periodically evaluated and improved?

(a)yes 65 (b)no 25 (c)can’t say 10

InterpretationAccording to study 65% training is periodically evaluated & improved but 25 % say no % 10 % say can’t say.

7. The employees are helped to acquire technical knowledge and skills through training?

(a)yes49 (b)no 42 (c)can’t say9

InterpretationAccording to study 49% employee are help to acquire technical knowledge & skills but 42 % say no & 9 % say can’t say

8. There is adequate emphasis on developing managerial capabilities of the managerial staff through training?

(a)yes60 (b)no 35 (c)can’t say5

InterpretationAccording to study 60 % say to develop employee capabilities but 35 % say no & 5 % say can’t say.

9. Human relations competencies are adequately developed in your organization through training in human skills?

(a)yes 44 (b)no 50 (c)can’t say6

InterpretationAccording to study 44 % say human relation competencies are important for organization but 50 % say no & 6 % say can’t say

10. Training of workers is given adequate importance in your organization?

(a)yes 50 (b)no 45 (c)can’t say5

InterpretationAccording to study 50% say training of worker is given adequate important in organization but 50% say no & 5 % say can’t say

Findings

Problem which associated with the program are that many employee are not

aware to the HR policy of the organization.

Many employee have no complete knowledge about the Training & Induction

process

Many employee are not satisfied the process of the Training & Induction program

Many employee are not know the organization policy & practices

Conclusions

India, with its intrinsic advantages such as low cost, ready pool of English

speaking manpower and geographic positioning is emerging as a viable

destination for HR outsourcing companies to set up their businesses.

Till that time, HR outsourcing in India remains to be a gold mine waiting to be

unearthed...

1. Cost-benefit advantage - lower cost of outsourcing viz-a-viz

outsourced

content/processes

2. Confidentiality of processes - away from in-house leaks

3. External expertise as compared to existing in-house expertise

4. Time advantage - timely process completion commitments and

easier

time-to-market processes/products/services.

5. Focus internally on innovative/creative/strategic work and to do

away

with in-house with mundane, time consuming processes

6. Greater objectivity/credibility gain amongst employees

7. Confidence of top management on external professionalism and

proven expertise

8. Strategic intent of doing away with high, permanent salary/pay loads

9. Client preference, especially overseas clients

10.Branding/credibility enhancement by associating globally renowned

outsourcing Companies

11.Keep organizational headcount and reporting structure flat and

flexible.

Suggestions

If employee are clear knowledge about their practice & policy they are development of fair relationship between employee ,employer & management

To development skills of their employee

They provide full information about their work

To improvement their Training & Induction process

To develop good relationship between new employee & old employee

Internal & external employee support the Training & Induction process

Each level of employee should be formally inducted and introduced to the

Departmental Head. If not all levels, at least Asst. Manager and above category of

employees.

External source should be given equal importance with internal source. By which

New brain the in company with skill, talent, efficiency etc.

BIBLIOGRAPHY

DESIGNING AND MANAGING HUMAN RESOURCE SYSTEM

……….Udai Parek & T.V.Rao

PERSONNEL MANAGEMENT

………..C. B. MAMORIA

Audit report of M&M

outsoursing magazine of HR exposoure

INTERNET

Questionnaire

1. Induction training is of sufficient duration?

(a)Yes 60% (b) no 35% (c) can’t say 05%

2. Induction training is given adequate importance in your organization?

(a) Yes 23 (b) no 70 (c)can’t say07

3. Induction training provides an excellent opportunity for newcomers to learn comprehensively about the organization?

(a)Yes 70 (b)no 28 (c)can’t say2

4. Senior management takes interest and spends time with the new staff during induction training?

(a)Yes20 (b)no75 (c)can’t say5

5. The new recruits find induction training very useful in your organization?

(a)yes 35 (b)no 55 (c)can’t say10

6. The induction training is periodically evaluated and improved?

(a)yes 65 (b)no 25 (c)can’t say 10

7. The employees are helped to acquire technical knowledge and skills through training?

(a)yes49 (b)no 42 (c)can’t say9

8. There is adequate emphasis on developing managerial capabilities of the managerial staff through training?

(a)yes60 (b)no 35 (c)can’t say5

9. Human relations competencies are adequately developed in your organization through training in human skills?

(a)yes 44 (b)no 50 (c)can’t say6

10. Training of workers is given adequate importance in your organization?

(a)yes 50 (b)no 45 (c)can’t say5