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CHAPTER 1

INTRODUCTION

Employee Wellness Programs (EWPs) is a new buzzword which came into existence in

the post globalization era after the progress of IT and ITeS sector in India. Employee

Welfare programs already existed in different companies in India. The workplace has

changed due to globalization and technology advancement which is making a great

impact on the lives of the employees.

1.1 BACKGROUND:

Jobs in IT and ITeS industry are knowledge driven and stress is existent in reality. The

reason can be pressure from seniors, target oriented approach, relationship with co-

workers, lack of personal time, spouse stress, children stress and the list goes on. This

stress can create many mental and health weaknesses which would affect the performance

and productivity of the employee. The personal weaknesses of the employees due to

stress may lead to lack of time management, poor relationships, low assertiveness,

deviation from the goals, lack of confidence etc. Employees can face many chronic health

diseases.

These above physiological and psychological problems created the need for EWPs. These

EWPs help the employees to understand the stress reasons, health problems and ways to

overcome it.

Employees are assets and human capital of the organization as all the jobs are knowledge

based, so organizations have to take care of the employees. In this fast and globalization

era, helping employees to be healthy and productive is necessary for the organization to

achieve their objectives.

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After the advent of globalization, the service sector, retail sector and IT & ITeS sectors

are in boom and employee is a very important factor in these organizations. Hence,

organizations also started considering the ―Human‖ factor of human resources at work.

The IT and ITeS employees are involved in less physical work and more of the

psychological work. There are many challenges employees face like competition, target

oriented jobs, 24/7 work culture, dual career, organization politics etc.

Reasons for the paradigm shift from welfare to wellness:

Consideration of the Human Element of Human Resources.

Evolution of Human Resources Management to Strategic Human Resource

Management.

Knowledge based jobs where human beings are more important.

24/7 work culture wherein employees are working in the company for longer time

so the company should be a fun place so that the employees can relax for some

period of time.

Generation Y workforce have a lot of expectation from the employers.

Dual Career couples in an organization.

More number of female employees in IT and ITeS companies.

Organizations growth is mainly dependent on star employees at the workplace.

To take care of meritorious employees.

For employee engagement and employee retention.

To foster innovation and creativity in employees.

To provide social life to the employees at the workplace.

To help employees to tackle the stress at the workplace.

Boom in the IT and ITeS sector has given birth to new challenges to HR manager‘s i.e.

high turnover of employees. Generation Y workforce want to earn more money and jump

into higher positions in the hierarchy in a fast manner. It is of utmost importance for the

companies to take care of employees in a special way not just by providing basic welfare

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facilities. Hence, organizations have shifted from just welfare to wellness. The difference

between Labour welfare and EWP is discussed in Chapter IV.

1.2 PURPOSE OF THE STUDY:

As the IT and ITES companies workforce constitutes of the knowledge workers who face

stress, this leads to physiological and psychological health problems. Employee Wellness

(EW) is a boon in disguise for employee illness. Wellness programs are defined as the

programs designed to maintain or improve employee health before health problem arises.

EWP is a simple and effective way for most of the companies to increase fitness of their

workforce and reduce cost, helping to reduce stress and increase the quality of life for

valued employees along with being a recruiting and retention tool. Employee wellness

helps employees to manage and maintain good health. Mental and physical health

problems create an impact on the productivity and work-life balance.

After the review of literature, the researcher quotes EWPs definition as below:

―Employee health and wellness programs attempt to improve the overall health status of

employees and sometimes even employees‘ family members through prevention,

education and health interventions‖.[1]

As per The Factories Act, 1948 and The Maternity Benefit Law 1961 there are certain

norms already available regarding health and safety of the employee in any organization.

Contemporary organizations are taking care of employees not just because of legal

implications but also to make their employees loyal towards the organization. Taking

care of the employee‘s health has now become the HR manager‘s responsibility.

1. Johnson, R. E. and Johnson, P. G. Are H & P programs for you?, Strategic Finance vol. 85 no. (6) (2003).

pp.1–6

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Women workforce is also growing in IT organizations and special issues regarding the

women health are also included in EWPs. This fast ‗Global Village‘ is helping employees

to be healthy and productive which is necessary for the organization to achieve the

organization‘s objective.

EWPs may include the awareness and training related to:

Stress management and fun at work.

Physical fitness.

Nutrition.

Health education.

The research work related to this study is quoted herein - ―A study of 23,000 General

Motors employees in the May 2004 Journal of Occupational and Environmental

Medicine found that encouraging obese employees to engage in physical activity as little

as once or twice a week reduce health care cost by $400 to $ 500 per year per employee

resulting in a total estimated savings of about $ 790,000 or 1.5 % of healthcare cost for

the whole group.‖

Another example - ―NASA found that while the productivity of non-exercising office

workers decreased 50% during the final two hours of the work day, exercisers worked at

full efficiency all throughout the day. This amounts to a 12.5% difference in productivity

between the two groups.‖

Looking at work-life balance over the past few years, there has been an extensive

increase in work due to globalization and competitive work environment. According to a

recent study for the Centre for Work-Life Policy; 1.7 million people consider their jobs

and work hours excessive because of globalization. The employee‘s stress level is

increasing everyday which is creating impact on their work-life. Symptoms of stress are

manifested both physiologically and psychologically. Constant stress can result in

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cardiovascular diseases, sexual health problems, a weaker immune system and frequent

headache etc. These problems may leads to imbalance in the work-life of the employees.

Employee Engagement is the level at which employees are aligned with and working

towards the employer‘s goals. Employee Engagement is persuaded by a wide range of

factors that include internal communications, employer structure, benefits and

recognition. Organizations that have high levels of employee engagement advance from

greater productivity, retention and achievement than peers with disengaged workers.

EWPs may increase employee engagement in several ways. When EWP is communicated

properly, it confirms to the employees that the company cares about their wellbeing. This

can improve retention and turnover as well as an increase in discretionary effort from the

employees. In addition, the health improvements will lower absenteeism, allowing for

more time which can be invested for full productivity. Lastly, healthier employees are

more likely to have increased morale, which translates into a more enjoyable and more

effective work environment.

Employee wellness is an integral part of any organization and the topic which the

researcher has chosen would study the overall employee wellness in IT & ITeS industry

and its impact on employee engagement and work life Balance. It also studies the EWPs

and suggests improvement for the same by understanding the views of the employees and

employers. Effectively designed, implemented and managed EWPs can significantly

reduce the cost of employee healthcare and reduce absenteeism rate.

In this study the researcher attempts to suggest a model which will help the organization

to manage the EWP effectively. This study highlights the practices of EWPs in IT and

ITeS companies.

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1.3 REASONS FOR SELECTION OF THE TOPIC:

The face of the workplace has drastically changed over the past decade. An increasingly

empowered and diverse workforce, technological advancements, increased competition

and globalization have created a new workplace reality that is totally different from the

past workplace. Helping employees to take care of their health has become the moral and

business need for the organization. The researcher herein having Social Responsibility

towards the society decided to take up this issue for the research. In this section, the

researcher attempts to enlist the factors which motivated the researcher to choose this

topic. They are as listed below:

A. CHANGES IN WORKFORCE & BOOM IN ‘IT & ITeS’ COMPANIES IN

INDIA:

IT and ITeS boom in India has created a revolution in Indian market and Indian

Economy. It has provided an ample employment opportunity in India. Employees in IT

and ITeS companies are much younger in age than their counterparts in other sectors of

business and getting handsome pay packages. Their lifestyles have also become lavish

and luxurious. Though employees are getting good pay, the stress exists in the job. Stress

has invited many mental and physical health problems for the employees.

The 24 X 7 work culture came in to existence in India by the IT and ITeS Sector. The

night shifts are called as ―Grave Yard Shifts‖. Following are some of the comments

which act as an evidence of the health problems faced by the employees.

According to Matlhape,[2]

two phenomena have profound effect on management and

industry in the 21st century.

2. Matlhape, M.G. (2003) strategic positioning of EAP in South African Workplaces, Acta Commercii, Vol,

29-38

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The first one is the increased rate and depth of competition locally, regionally and the

consequent increase by companies in the focus of achieving competitiveness. The second

phenomenon is the increasing appreciation of importance of the employees in assisting

the company to gain competitive advantages over its competitors.

B. NEED FOR EMPLOYEE CARE:

―Employee First Customer Second‖ the book by Mr. Vineet Nayar conveys the need and

importance of employee care. Taking care of employees is the utmost important issue in

front of the companies.

Matlhape [3]

states that the connection between business success and customer care has

been acknowledged for many years but very few organizations have so far had the vision

to apply this caring philosophy holistically to include employees and other stakeholders

equally.

C. INCREASING STRESS OF EMPLOYEES :

There are many reasons which have given rise to employee stress. Some of the indicators

are as below which have been published in magazines and news papers.

―A recent ASSOCHAM survey lists construction, shipping banks, trading houses,

electronic and print media, courier companies, SSI, retail, card franchise companies and

even government hospitals as high stress prone zones …. Akin to chart toppers like

BPO‘s, Call Centers and IT companies. The pressure is truly spreading everywhere.‖ [4]

3. Matlhape, M.G. (2003) strategic positioning of EAP in South African Workplaces, Acta Commercii, Vol

, 29-38

4. Arva Shikhari, 1 June 2008, ―Stress survival‖, Human Capital Magazine, Vol. 12, Pg. No. 16

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―So far, we were hearing about stress in the IT sector, but I am getting reports of health

disease, skin problems and mental disorders in this sector. The sector is booming and we

need to take care of it‖ Ramadoss said as per the article published - ―Soon, a health policy

for the IT sector‖ - Indian Times News Network on Sept. 14, 2007.

D. INCREASE IN HEALTH PROBLEMS OF IT AND ITES EMPLOYEES:

Stress is leading to many health problems. There are many evidences which show the

increase in health problems of IT and ITeS employees.

―A study by the Associate Chamber of Commerce and Industry of India (ASSOCHAM),

said 54 % of the workforce in the IT and ITeS sectors were afflicted with depression,

severe headaches, obesity, chronic backache, spondylesis, diabetes and hypertension‖ -

April 7, 2009, 1006 hrs. IST, IANS ―50% IT Employees Unwell: ASSOCHAM‖

D. EWPs ARE THE BUSINESS NEED FOR ORGANIZATIONS:

IT and ITeS companies have also understood the need of wellness of employees and are

providing on-site wellness programs in the organization itself. Employee‘s health matters

to the organization too. Many employers are taking steps toward wellness of the

employees as healthy employees build healthy organization. The corporate have realized

that human resource is an asset of the organization. Corporate has unique and vital role in

improving wellness.

Following are the some of the programs provided by the organizations

Employee Assistance Programs.

Gymnasiums and walking tracks.

Fitness club.

Mentoring.

Counseling.

Insurance.

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Yoga and Meditation classes.

Employee Help Call Centre etc.

Some of the organizations have well established wellness programs and some of the

organizations are in the process of establishing the wellness programs.

In the world of globalization, there are many challenges organizations and employees are

facing. Wellness of employees is a big challenge for employees and employers both. IT

and ITeS jobs are 24 X 7 and highly stressful and organizations are striving for wellness

of the employees. This is a very upcoming and important problem in front of India‘s

booming economy also.

The above comments make it important to study the status of EWP in IT and ITeS

companies.

F. NEED FOR RESEARCH ON EWPs:

There is ample research conducted in European countries and in India still research on

EWP is at the inception stage. There is need for research to understand the need,

purpose, benefits of EWP. Employee Engagement and work-life balance are important

factors which lead to better performance.

In India except some contemporary organizations, mostly traditional employee welfare is

used to take care of employees. India‘s economy is in boom and companies have to

survive in the competitive scenario, organizations have to create competitive workforce.

To create such workforce organizations have to keep employees engaged with their work.

Employees can be engaged when they trust the organization and they are motivated.

There are many measures organizations can take to motivate and engage employees.

EWP is one of the measures which organization can take to engage employees.

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IT and ITeS companies are already providing the EWP but much research and details are

not available about EWPs in India.

The study area, Hinjewadi and Aundh IT park in Pune is the area where most of the

multinational IT and ITeS companies are located which provides the suitable information

about research from employees and HR Managers.

1.4 GLOBALIZATION:

Since 1991, India has taken a series of measures to liberalize and structure its economy.

This liberalization was specifically done by the Indian Government to increase the

volume of trade. The new economic policy has lead to privatization. Public sector was

made to compete directly with the private sector sending clear indication that public

sector enterprise either to perform or perish. The main beneficial factors were boom in

sectors like retail, telecom, insurance, banking, finance and of course IT and ITeS

companies. The FDI was permitted and enhanced and strict government control was

relaxed.

A) FEATURES OF GLOBALIZATION:

There are four most important features of globalization which are given below:

1. Mobility: The key business ingredient such as capital, labour and ideas are

increasingly becoming mobile.

2. Simultaneity: The goods and services are increasingly available in many places

at the same time.

3. Bypass: It tells about easier international travel, deregulations and Privatization

of government monopolies all of which increase alternatives.

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4. Pluralism: Throughout the world the business centers are being decentralized.

B) IMPACT OF GLOBALIZATION ON INDIAN INDUSTRIAL UNITS:

Disinvestment.

Privatization.

Merger.

Re-structuring and Re-engineering.

Technological up gradation, outsourcing, subcontracting and downsizing.

1.5 SCENARIO OF IT AND ITeS INDUSTRY IN INDIA:

In this research, as the researcher attempts to study EWPs, the researcher herein feels that

this study is most appropriate and applicable to the current IT and ITeS sectors in India.

1.5.1 MEANING OF IT AND ITeS:

Information Technology (IT) in a broad sense connotes that technology which is

connected with information. More particularly it connotes that technology which has

taken shape during the last five decades or so involving electronics. The Indian IT

industry is among the country‘s fastest growing sectors. India has been able to establish

itself as a competitive and quality destination for outsourcing IT & IT enabled services.

The Information Technology Enabled Services (ITeS) – The BPO sector is spreading

in India fast, and over five lakh workers and technicians are employed in it. We welcome

the development of this sector as it is providing gainful employment to educated persons

in India. Several centers in India have developed a large number of call centers and

consultancy offices, which are earning enormous profits. Their number is likely to swell

very fast in the near future. Accordingly to uphold the network of information technology

in India, the IT Act came into force in 2000.

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1.5.2 IT AND ITeS COMPANIES IN INDIA:

In the present era of globalization, the worldwide technology industry, comprising

hardware, software, information technology, BPO had aggregate revenue of $ 1685

billion in 2007, with the growth of 7.3 percent over the previous year.

The use of such technology for the storage, retrieval and dissemination of information has

given rise to several legal, social and ethical problems.

Over the past few years, the Indian information technology (IT) and IT enabled Services

(ITeS) industry has been on a steady growth trajectory. The IT industry, alone, has played

a pivotal role in placing India on the world map as a major knowledge-based economy

and outsourcing hub. The major sub-segment, that entails Business Process Outsourcing

(BPO), is re-inventing itself and experiencing a paradigm shift from being a volume-

oriented proposition to a value-oriented proposition by expanding its scope of services

and providing substantial high-end solutions in the areas of Data Analytics, Legal Process

Outsourcing, etc.

The first software company in India was Tata Consulting Services (TCS), which

began operations in 1968. Fortunately, after executing a few local orders, TCS

obtained its first big export assignment in 1973–1974, when it was asked to build

an inventory control software solution for an electricity generation unit in Iran.

During this period, TCS also developed a hospital information system in the U.K.

in cooperation with Burroughs Corporation (at that time the second-largest

hardware company in the world). Through its software exports and

collaborations, TCS became a role model for other Indian IT companies later.

Also, during the late 1970s, the Indian government lowered import duties on all

IT equipment but there was a catch. Importers had to recover in exports twice the

value of the foreign exchange they spent on importing computers. Partly as a

result, by the early 1980s, India was the only developing nation to have any

significant software exports with 30 companies that were beginning to export IT

services. If we now look back at the 1970–1980 era, it is clear that the following four

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unrelated incidents contributed heavily in shaping the Indian IT industry:

In the late 1970s, the Indian government passed a controversial law (only

repealed in 1992) that forced all multinational companies to reduce their

equity share in their Indian subsidiaries to less than 50%. Since IBM did not

want to comply, it decided to leave India. This opened the market for local IT

competitors and made Indian companies generally less reliant on mainframe

computers.

The advent of personal computers in the 1980s reduced the cost of importing

hardware substantially, thereby, spawning an industry that has more than 50,000

companies today.

Realizing that the Indian college system was unable to provide much IT training,

three Indian entrepreneurs took it upon themselves in 1982 to provide IT

tutorials and training classes. Their early days were often marked with one of

them driving a motorcycle and the other riding behind with a PC in his lap so

that they could impart this training in some rented school space (in evenings

and on weekends). Today, their institute (NIIT) is a multinational company that

has helped to build a substantial base of IT skills in India.

Across all parts of Indian IT, the synergistic impact of globalization.

Globalization helps Indian IT companies to grow, while Indian IT is

becoming a digital foundation for many globalizing firms. As the Indian

economy becomes more integrated into the global economy, there is another

two-way effect—more opportunity for global IT firms to sell to Indian

clients. And, of course, more opportunity for Indian IT firms to sell

globally.

Direct Contribution of IT and ITeS Sector to Indian Economy: Since India‘s

GDP is expected to be $1,100 billion in 2007–2008 and since this GDP is growing

annually at an average of 8.5% in real terms and 14% in nominal terms, this GDP is

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likely to be $2,400 billion in 2015–2016. Consequently, if the forecasts provided

by Evalueserve regarding the Indian IT industry turn out to be true, then by

2015–2016, the number of professionals working in the IT industry would have

grown tenfold (from 2001–2002 to 2015–2016), and, in nominal terms, the total

revenue would have grown by 22 times, which would end up being approximately

8% of India‘s GDP.

Table 1.1: Annual Revenue and Number of IT Professionals Employed by India

IT Service Industry

The revenue numbers given in the first four columns have been sourced from the

National Association of Software and Services Companies NASSCOM;

(www.nasscom.org); all other figures have been copied from evalueserve.com a

global research and analytical firm.

Indirect Contribution of IT/ITeS sector to the Indian Economy:

As per the report - Indian IT and ITeS Industry: Impacting Economy and Society 2007 -

2008 published by NASSCOM and Deloitt, following is the Indirect contribution of IT

and ITeS to the Indian Economy.

2001-02 2003-04 2005-06 2007-08* 2009-10* 2011-12* 2013-14* 2015 -16*

IT Services

Exports 4.5;150 7.3;220 13.2;345 23.1;510 36.7;720 54.5;975 76.9;1225 101.7;1,490

Domestic 2.1;160 2.7;190 3.9;250 7.9;400 14.3;615 24.0;870 37.5;1,155 54.0;1,485

Engineering

Services,

R & D

Software

Products

Exports 16;55 2.5;75 3.9;105 6.3;145 10.0;205 15.1;280 21.0;365 27.8;430

Domestic 0.5;40 0.8;60 1.3;85 2.2;115 3.2;135 5.1;165 6.7;200 9.6;240

Total IT

Industry

(excluding

hardware

and BPO

Sector)

8.7;405 13.3;545 22.3;785 39.5;1,170 64.2;1,675 98.7;2,290 142.1;2,945 193.1;3645

USD (Billion); Number of IT Professional (‗000) * Expected

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o Additional employment generation: The indirect employment generated, at

the rate of 4 additional jobs created in the economy for every 1 job created in

the sector, is even more socially relevant as nearly 75% of the workforce

employed in those additional jobs are SSC/HSC or less educated.

Fig 1.1: Indirect Contribution of IT and ITeS Companies to the Indian Economy

o Driving growth of other sectors of the economy: Apart from contributing to

the growing income of its direct stakeholders (promoters, shareholders and

employees), the IT/ITeS industry has a multiplier effect on other sectors of the

economy with an output multiplier of almost 2 through its non-wage operating

expenses, capital expenditure and consumption spending by professionals.

Study show that USD 15.85 billion spent by the IT/ITeS industry in the

domestic economy in FY06 generates an additional output of USD 15.5

billion.

o Encouraging balanced regional development: By gradually spreading their

business operations to smaller Tier II/III cities, the IT sector (besides

generating revenue and employment) is also assisting in improving the supply

of talent pool and development of physical and social infrastructure, either

directly by themselves or by spurring the Government to action.

o Employment: Supply of IT professionals, which was higher than demand till

2004, now have a shortfall of 62,697. Demand for IT professionals is

expected to reach 430,000 by 2011-12 with the corresponding figures on

indirect employment being 1,720,000.

Indirect

Contribution of IT/ITES sector to the Indian

economy

Employment Generation

Growth In Other Sectors

Balanced Regional Development

Growth In PE/VC

Funding

Spurring First Generation Entrepreneurship

Improving Product & Service Quality

Front Runner In Corporate Governance

Boost To Country’s Image Globally

Indirect

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o Education: While building and expanding capacity of educational institutes

are underway, IT majors are undertaking training initiatives to improve

student quality. At least 5 new educational institutions (including IIIT and IIT

Kharagpur campus) by both Government and private players are also being set

up.

o Infrastructure and other amenities: Keeping in line with the expansion/entry

plans of major IT/ITeS companies, IT parks and townships are being built

with a corresponding improvement in other amenities like roads, housing,

retail and entertainment facilities.

o Fuelling the growth of PE/VC funding: The worldwide dot com boom and

growth in the IT sector kick-started VC activity in India which led to the

creation of first generation of Indiacentric VC funds. Other sectors, such as

healthcare, manufacturing and financial services have also benefitted from this

phenomenon as these sectors are now also being able to access this source of

funding. While IT/ITES continues to be the favourite sector with the largest

share (28%) of PE/VC funding, other sectors now account for 72% share as

compared to 34% in 2000.

o Spurring first generation entrepreneurship: As per information available with

Software Technology Parks of India (STPI), 1,905 new units were registered

during the period FY01 to FY05, most of which are likely to be set up by first

generation entrepreneurs. While many first-generation entrepreneurs became

billionaires in the process, the wealth created was not restricted among the

founders alone. The practice of Employee Stock Option Plan (ESOP), first

started by the IT/ITeS industry before it was adopted by many other industries

as well, shared this wealth among employees as well thereby creating many

salaried millionaires.

o Improving the product/service quality level: The fact that IT/ITeS companies

cater to and compete with global players has led to their adopting the highest

quality standards. This high quality of services and products has been the

driver and sustainer of growth which has helped move India out of the

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―mediocrity‖, low quality image and has in fact raised the bar for other

industries as well.

o Front runner in practicing good corporate governance: The industry has been a

front runner in practicing good corporate governance and their commitment to

infuse it in their business activities have led to a creating a positive pressure

within the industry, as well as in other industries, with more and more

companies adopting global standards in corporate governance practices.

o Boosting the image of India in the global market: Widely travelled Indians

have watched with ride as different countries and people look at India and

Indians with hitherto unknown respect and admiration. The India IT/ITeS

industry has contributed to what brand ‗India‘ stands for in today‘s global

market.

While India Inc. has been witnessing an acquisition spree of overseas

companies in recent years, the IT/ITeS sector has led this phenomenon

with the highest share (23%) of outbound M&A deals in 2006.

Listing of Indian IT/ITeS companies in global stock exchanges, which

requires adherence to stringent global accounting norms, has helped

build a strong brand of the companies and the sector outside India.

Made in India software products have found widespread use across the

world while several Indian IT/ITeS firms have been partnering with

high profile global brands and events.

1.5.3 IMPACT OF IT AND ITES SECTOR ON INDIA’S GROWTH:

IT/ITeS sector has become one of the most significant growth catalysts for the Indian

economy. In addition to fuelling India‘s economy, this industry is also positively

influencing the lives of its people through an active direct and indirect contribution to the

various socio-economic parameters such as employment, standard of living and diversity

among others. The industry has played a significant role in transforming India‘s image

from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a

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global player in providing world class technology solutions and business services. The

industry has helped India transform from a rural and agriculture-based economy to a

knowledge based economy.

Key Highlights:

Economic Development of country.

Fast emerging as a growth story driven by a growing middle class, consumer

spending, and technology innovation.

Increasing adoption of technology and Telecom by consumers and focused

Government initiatives – leading to increased ICT adoption.

Fig 1.2: Impact of IT and BPO Sector on India’s Growth

IT AND

ITeS

SECTOR

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1.5.4 DIVERSITY IN EMPLOYMENT AT IT AND ITeS COMPANIES:

As per the report - Indian IT and ITeS Industry: Impacting Economy and Society 2007 -

2008 published by NASSCOM and Deloitt , besides being the largest employer in the

organized private sector, the IT/ITeS industry also consciously follows a diverse

employment practice and encourages diversity in the work place in terms of qualification,

abilities, gender, skill sets. Large IT/ITeS companies often have 33 to 50% of their

employees coming from non-metro/rural areas. The growing trend in the number of

women employed in this sector indicates that not only does the industry offer equal

opportunity to women but also has in place proactive and sensitive mechanisms which

counter the common causes that discourage women from pursuing employment in the

corporate sector. Women employment in the industry is set to rise to 45% by 2010 from

the current 30%.

1.5.5 HUMAN RESOURCE DEVELOPMENT AT IT AND ITeS COMPANIES:

The fast growing IT/ITeS industry has been struggling with several issues concerning

availability and quality of talent. The industry has responded to this issue by evolving

sustainable and innovative solutions. Since the educational institutes lagged behind in

supplying the requisite number of trained people required for the industry and their

curriculum could not keep pace with the changing trends in technology, the IT/ITeS

industry themselves came forward and made massive in house training investments,

which helped them power their growth and compete at par with international giants in the

global market. The industry has also gone beyond and collaborated with the government,

private educational institutions as well as industry associations to contribute towards

capacity building, skill development and continual training of existing and potential

employees to enhance their capabilities and competitive skills. The industry is also

making efforts to ensure that employees are provided a stimulating and healthy working

environment for improving their level of satisfaction and productivity. Following are the

initiatives taken by IT and ITeS industry:

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A. Training of workforce: The industry has played a pioneering and pro-active role

in developing the talent pool in the country by forging links with the academia

and the Government. It has not restricted its efforts to developing its own

employees but is also investing in raising the overall standard of education. The

industry has collaborated with academic institutions for the bridging the gap

between the education imparted to students and the actual requirements in the job

scenario. Collaborations have been in the areas of curriculum development and

course design, training for students. NASSCOM has been involved in developing

standards for training and recruitment at entry level to make students more

employable. These training address both the technical and soft skills training

needs .The top 5 software companies are investing close to USD 430 million in

FY08 to train around 100,000 engineers hired during this period. Companies on

an average conduct 163 training programmes annually, with almost 80% spend on

training entry level hires.

B. Promoting higher education: The industry has emphasized upon developing its

workforce by encouraging and aiding upgradation of skills and abilities. It has

done so through various means including provision of scholarships as well as

training and development activities. Many companies have tie-ups with

educational institutes for supporting the higher education needs of their

employees and provide full/partial scholarships thus supporting their career goals.

NASSCOM has been involved in building the talent base for high end skills in

areas like multimedia convergence and bio-informatics while working with the

Ministry to develop institutes that produce highly specialized professionals. 68%

of the companies surveyed offer scholarships for their employees

C. Improving the work environment: Improving the work environment: IT/ITeS

companies have been taking the lead in providing a conducive work environment

to employees leading to increased productivity and better morale. The facilities

provide focus on health of employees by providing gymnasium, yoga/meditation

facilities as well as their safety through pick and drop facilities. To cater to the

21

need of providing a work-life balance, particularly to women employees, 90% of

the companies surveyed offer flexible working hours while 59% offer a work

from home option.

1.5.6 LOCATION OF IT AND ITeS COMPANIES IN INDIA AND PUNE:

The Indian IT / ITeS industry has been one of the great success stories of modern India.

An industry that barely existed 2 decades ago is now the toast of the nation and the envy

of the world. It is arguably the most global of any Indian industry and has created

international benchmarks for quality, proving to the world and to ourselves that Indian

companies can compete globally and win on quality. It has also demonstrated what can

be achieved by unleashing the power of middle class, first generation entrepreneurship in

India. The overwhelming majority of companies in this sector were started by

entrepreneurs with modest backgrounds and very limited access to capital. In many ways,

this industry has helped create the brand of ―New India‖ and served as an inspiration for

everyone else.

Though the growth of Indian IT and ITeS companies has been fast and broad, the

development of these companies is limited to a few cities in India. The growth is

restricted to around the cities which offer plenty of skilled human resources along with

adequate infrastructure which is utmost important for the survival and growth of IT and

ITeS companies. These IT and ITeS companies are concentrated around Bangalore,

Mumbai, Pune, Chennai, Delhi, National Capital regions (Gurgaon and Noida), and

Kolkata etc. These cities have large pool of the trained and skilled manpower as presence

of engineering and management colleges is ample. Another reason to concentration of

these companies is attractiveness of these locations for young and mobile professionals as

these cities are cosmopolitan cities.

Pune is being education hub, major IT and ITeS companies are located are located in and

around Pune city. In Pune major IT and ITeS –BPOs are located Hinjewadi IT Park,

Koreagon, Senapati Bapat Road, Aundh IT Park and Magarpatta city. Near about more

than 100 IT and ITeS MNCs are located in Pune. Hinjewadi was a small village on the

22

NH4 bypass around the city of Pune. Completely rural locales until the construction of

the Rajiv Gandhi Infotech Park, two phases have been completed amidst rapid

urbanization of surrounding areas. The third phase of the infotech park is under

construction, with further phases planned. Hinjewadi is the second most upcoming town

in Maharashtra state.

Fig. 1.3: Geographical Map - Pune

The technology park at Hinjawadi houses many software companies. Some of them are:

IBM India, AtoS, Synechron, Mahindra Engineering (located at the remotest corner of

phase 2), Idea Cellular, KPIT Cummins, Tata Technologies, Infosys, Wipro, Credit

Suisse (located inside Wipro), Tata Consultancy Services, Geometric Limited, Tech

Mahindra, Cognizant Technology Solutions, Persistent Systems (under construction),

Honeywell, Mindtree, 3DPLM Software Solutions, CECsoft, Compulink, Pesh-Infotech

and Digital Group InfoTech. It also houses product companies such as Compulink and

CISCO. Phase 1 & 2 of the Hinjewadi IT Park are completed. Currently, phase 3 is under

construction. Aundh area in Pune is also developed area near to Hinjewadi, many IT

firms are established like Sungard, Syntel and Convergys.

Location of Major IT and

ITeS companies

23

Pune city was the first city to be selected as a location for IT Industry by Ministry of

Communications and information technology during early nineties. Pune is first city to

have Software Technology Park (STP) in the Country located at Hinjewadi with soft

exports to the tune of Rs. 6,500 crores employing over 54,000 professionals. Hence major

IT and ITeS companies are located in Pune that is the reason the researcher has chosen

Hinjewadi IT Park and Aundh area in Pune for this study.

1.5.7 CHALLENGES FACED BY IT & ITES SECTOR:

Though there is slowdown expected due to US recession, Indian IT companies are taking

a hard look at their strategies to prepare for uncertain future.

There are many challenges faced by IT Industry:

Unstable currency.

Slowdown in US economy.

Fallout of sub prime and credit crisis on banking, retail services.

Wage inflation.

Inflationary pressure.

Fall in operating margins.

Shortage of employable talent.

Protectionism threats ahead of the US presidential election.

IT industries are planning to overcome on these challenges in the following ideas:

Reduce dependence of US economy.

Increase exposure to European region.

Focus on domestic market.

Focus on region like Australia, Canada etc.

24

Expand service lines, also newer services within core focus areas.

Move away from linear growth path.

Look at increasing revenue per worker and retaining them.

1.6. CHALLENGES OF HUMAN RESOURCE MANAGEMENT:

HUMAN RESOURCE MANAGEMENT AND COMPETITIVE CHALLENGES:

Managing human resources has become more complex and competitive and it is due to

Globalization. The relationship between employer and employee has changed; it‘s not

the same as it was in 19th

century. The organization is expecting more and the same way

employee‘s expectation from the organizations are high. The Briner and N. Convey

(2004) have mentioned the psychological contracts in between the employer and

employee.

Figure 1.4: The Content of Psychological Contract

The psychological contracts mentioned in Fig 1.4 mean a lot to the employer and

employees and it‘s highly competitive and challenging.

The Content of the Psychological Contract

Examples of the implicit or explicit mutual promises

Made by employees and organizations

Employees promise to

Work hard.

Uphold the company reputation.

Maintain high levels of attendance and punctuality.

Show loyalty to the organization.

Work extra hours when required.

Develop new skills and update new ones.

Be flexible – e.g. by taking on a colleague‘s work.

Be courteous to clients and colleagues.

Be honest.

Organization Promise To

Pay commensurate with performance.

Opportunities for training and development.

Opportunities for promotion.

Recognition for innovation or new ideas.

Feedback on performance.

Interesting tasks/

An attractive benefit packages.

Respectful treatment.

Reasonable job security.

A pleasant and safe working environment.

Source : R. Briner and N. Convey (2004) promises, promises, People Management, 25 November

People

Management

25

There are many challenges for HR managers as below :

GOING GLOBAL

Liberalization policy of India has changed the economic scenario of India and many

foreign investors came to India for business.

Globalization – The trend of opening up foreign markets to international trade and

investment. Globalization is the biggest challenge; it has created competitors for the

monopoly market.

To grow strategically companies are striving to find opportunities globally. Mainly two

issues on focus like competition and cooperating with the foreign organization are very

important. The examples are like many Indian origin MNC having offshore office in

European countries. Globally managing competitive workforce is a big challenge for the

organization and HR Managers both.

EMBRACING NEW TECHNOLOGY

Advancement in information technology has enabled organizations to go for information

explosion. With internet, websites and computer networks, knowledge explosion has

happened which has provided easy access to information, simple ways of recordkeeping

and faster ways of production.

Organization are now virtually connected and employees too. Managing employees

virtually is a challenge for the HR Managers.

Knowledge workers: ―Workers whose responsibilities extend beyond the physical

execution of work to include planning, decision making and problem solving.‖

Knowledge workers are existent in reality and due to changing and advancing technology

all these workers need continuous learning.

HRIS (Human Resource Information System) is the result of technology revolution.

HRIS is a computerized system which provides current and accurate data for purpose of

26

control and decision making. Organizations can determine the productivity of the

organization and the individual as well.

Managing the data as per HRIS is again a challenge for the HR managers.

MANAGING CHANGE

Globalization is bringing many changes in business due to global competition of

business. Innovation and creativity is the need in the current era.

The only constant thing in business is ―Change‖. The changes may be proactive or

reactive. Proactive changes to take the advantages of opportunities and reactive changes

are adopted by the organization due to external driving process. Changes in business

strategy and business directly affect the human resources in the organization. HR

managers should know how to control those changes and how to control the behavior of

the employees.

MANAGING TALENT OR HUMAN CAPITAL

As shown in above figure 1.1 the contractual agreement between the employees and

employer which makes both very demanding. Competition in the outside market is threat

to the employer. The managing of this human capital and talent is really difficult as the

organizations are investing so much.

Developing the human capital and retaining the developed human resource is important

challenges for the HR Managers. As the attrition rate is high in the organization, to

maintain these talented employees organizations have to work strategically.

RESPONDING TO THE MARKET

The market is changing everyday and customer‘s expectations are high. To match the

customer‘s expectation, organization has to train employees to speed up the quality work

27

and services. The organization should adopt the concepts like Total Quality management,

Quality circles and Six Sigma etc.

HRM has important challenges to increase the productivity by reengineering.

―Reengineering is fundamental rethinking and radical redesign of business process to

achieve dramatic improvements in cost, quality, service and speed.‖ Reengineering

creates the need for HR managers to create environment in the organization to objectives

very fast.

COST ISSUES

Adopting new technology, training employees and advertising are some of the

components which involve cost for survival of the business in competition. Organizations

should control this cost. HR Managers have to control the cost of employee turnover and

cost like –

Retention and rehiring cost.

Sick day payouts.

Pensions and benefits to the employees.

Development cost etc.

These are major cost factors to be controlled. Taking care of all the employees is very

important to control the attitude and behavior of the employees. The above mentioned

challenges are difficult to tackle and there are many issues are arising for managing

tomorrow‘s human resources.

28

Fig. 1.5 HR beyond Today

Source: Managing People Tomorrow – “Aneeta Madhoka – Indian Management Journal October

2006

The above mentioned measures for managing Human Resources show the priorities for

managing resources and taking care of resources.

As discussed above, Talent Retention is the most important challenge especially for IT

and ITeS companies. HR Managers are striving for talent retention by providing different

programs of talent retention like T & D, attractive incentives, transparent HR policy,

open communication system at workplace etc. EWP is one of the talent retention tools.

If we look at the IT workforce most of the employees are below thirties and most of them

have just passed out from the colleges and universities. Inculcating discipline, ethics and

healthcare are important elements which organizations strive to provide through EWP.

Providing EWP at the workplace is one which most of the researchers proved that healthy

employees create healthy organization. So making employees healthy for organization‘s

growth is necessary.

Talent

Retention

Compensating

knowledge

workers

Recruiting

In today’

Context

Creating high

performing

culture

Training for

growth

Human capital

practices

HR systems

implementation

Managing

Mindsets

Building

interpersonal

Relationships

Going Global

HR

Beyond

Today

29

Now days, most of the HR Managers discuss on professional networking websites and

most of them agree with the fact that providing EWP at workplace is ―BUSINESS

NEED‖ for retaining and engaging workforce. Globalization has created above

challenges and HR professionals have to lay more emphasis on the key areas as below:

Compensation fair and equitable pay pattern: The level of pay assigned to

various jobs is important to an organization because of its impact on morale,

retention and the ability to attract capable employees. Compensation level

determines employee‘s life style, status, self-worth and attitude towards the

organization.

Working Conditions - Suitable sophisticated and hygienic working

conditions : This leads towards reducing fatigue, boredom and ultimately affect

the health of the worker and to avoid decline in productivity which is detrimental

to the success of organizational improvement system

Job enrichment - Challenging, innovative and interesting jobs: Vertical job

loading with innovativeness generates interest among employees for better

performance and motivated efforts.

Training & Development - continuous upgrading of skills, career

development, individual and group development: The process of training and

development must be tied to overall strategic objectives of the organization. Every

organization follows the up-to-date scientific methods to impart training to their

employees. It not only emphasized on improvement of skill but also on

personality development, teamwork, leadership etc.

Human Resource Planning - See the future and plan the requirement: This

should be the best process for attracting, utilizing and maintaining best manpower

in an organization for best performance. The HR professionals should make plans

for future manpower requirement in the competitive age by keeping their eye on

production schedule, market condition, demand forecast, etc.

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Career Planning - See the career goals and show the career path integrated

with organizational goals: The career development activities are to integrate the

needs of employee with the goals of the organization. The persona has need for

challenge, Job satisfaction and growth. Career Development is an important way

to utilize the vast supply of untapped human resource potential.

Communication, transparency, involvement and understanding: In recent

years, management has given much more attention to communicate business

information to their concerned employees. The more communication the better

understanding. Organizations use various effective communication systems such

as upward and downward communication, all channel networks, grapevines for

avoiding the conflicting situation. This sound communication system hones the

employees and make them loyal to their management.

Involvement and Empowerment: more democracy and more

decentralization: The employee participation in day to day organizational

matters which indicate success of industrial democracy is a must. The employee

have every right to participate in the decision making process by giving the

appropriate and reasonable suggestions. The employee involvement process has

been designed for various reasons which include i) increasing employees trust

and commitment to organization ii) To provide a forum through which employees

can express their beliefs and attitudes about daily operations. iii) To enable

employees to identify and solve problem so that they can improve their own

performance.

Outsourcing: Using specialist / expert services: For proper growth and

development, outsourcing helps by hiring external services on contractual basis in

required situation. This helps in cost-effectiveness and service-effectiveness

which is required for the organization.

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Downsizing: Reducing the surplus manpower and rightsizing the

organization: In today‘s competitive economic environment, the organizations

are going for restructuring themselves by rightsizing their existing manpower or

workforce. In order to survive in competitive situation, the labour redundancy

process is going on by adopting the systems like VRS, ESS (early separation

scheme) and CRS (Compulsory retirement scheme). Presently this is adversely

affecting the scenario, but in the long run it will enhance the product gain and

growth process.

The researcher analyzed the above challenges and measures taken by the HR managers

and attempts to highlight the importance of EWPs in the current situation.

1.7 GLOBALIZATION AND EWPS:

Globalization has also given birth to changes in workforce and workplace as below:

24 x 7 Work culture.

Cross Cultural Interaction.

Target oriented jobs and competition.

Diversity at workplace.

In US and other European countries there is lot of research and importance given to

EWP. Many multinational companies started their business in India and Indian

companies going global. It has definitely created impact on the scenario of EWPs in

India.

The IT and ITeS companies in Western countries have already understood the

importance of employees in this knowledge economy and started taking care of

employees in different ways through EWPs. Most of the companies have developed

wellness models too.

Companies like Google, IBM, Microsoft and Johnson and Johnson have developed their

unique EWPs which are suitable for their individual organization. There are evidences of

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increase in productivity, reduced absenteeism and reduced medical insurance cost which

the researcher has discussed in next chapter.

Hence in this section, the researcher attempts to find the link between globalization and

EWPs and feels that globalization has definitely provided improvement in EWPs in India.

This research basically aims at studying the current scenario of management EWP in IT

and ITeS companies in the study area i.e. Hinjewadi and Aundh IT Park in Pune for the

period 2004 – 2009. The researcher attempts to analyze the need and awareness of EWPs,

contribution of EWPs towards work-life balance and relationship between EWP and

Employee engagement. The researcher tries to study the challenges faced by HR

Managers during management of EWP, contribution of globalization on EWP and

attempts to suggest EWP model for IT and ITeS companies. Without any prejudice the

researcher has taken due care to keep this study unbiased and representative in character.