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+80$15(6285&(,668(6$1'&+$//(1*(6
,162)7:$5(,1'8675
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DECLARATION
I hereby declare that the dissertation entitled Human Resource and
Challenges in Software Industry in Bangalore is the result of research
work undertaken by me under the guidance and supervision of
Dr.K.V.Prabhakar, Adjunct Professor, M.P.Birla Institute of
Management, Bangalore.
I also declare that this dissertation has not been submitted to
any other University/Institution for the award of any Degree or
Diploma.
Place: Bangalore
Date: 15th
June 2005 (Amit Sharma)
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Certificate
I hereby certify that the research work embodied in this
dissertation entitled Human issues and challenges in software
industry in Bangalore, has been undertaken and completed by
Mr. Amit Sharma under the guidance and supervision of
Dr. K. V. Prabhakar, Adjunct professor, MPBIM, Bangalore.
Place: Bangalore
Date: 15/06/2005 (Dr. N. S.
Malavalli)
Principal MPBIM,
Bangalore
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Certificate
I hereby declare that the research work embodied in this
dissertation entitled Human issues and challenges in software
industry in Bangalore, has been undertaken and completed by
Mr. Amit Sharma under my guidance and supervision
Place: Bangalore
Date: 15/06/2005 (DR.K.V.PRABHAKAR)
Adjunct Professor
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Acknowledgement
I take this opportunity to sincerely thanks Dr. K.V. Prabhakar , Adjunct
Professor M. P. Birla Institute of Management , Bangalore who guidedme to complete this research work which is going to be instrumental inshaping my career in HR field.
I thank Dr. Nagesh. Malavalli, Principal M. P. Birla Institute ofManagement for providing a congenial atmosphere to facilitate the
completion of this research work
My sincere thanks to my parents and friends for helping me in
completing this research work.
Place: Bangalore
Date: 15th
June 2005 (Amit
Sharma)
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CONTENTS
SERIAL
NO
PARTICULARS PAGE
NO
EXECUTIVE SUMMARY
Chapter-1 Background of the Study 1
Chapter-2 Review of Literature 5
Chapter-3 Problem Statement,
Research objectives,
Research Limitations.
13
Chapter- 4 Research Methodology 15
Chapter- 5 Data Analysis and Interpretation 17
Chapter- 6 Major Finding of Research 51
Chapter-7 Recommendations 52
Chapter-8 Directions For Further Research 58
ANNEXURE
Select Bibliography
including and
Websites used
59
Interview Schedule 62
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LIST OF CHARTS
CCHHAARRTT NNOO:: PPAARRTTIICCUULLAARRSS PPAAGGEE NNOO..
1 Growth of Indian IT Industry 17
2 Software Export to total Export 18
3 Software and Service Exports Vs Software
Industry20
4 Indian Software Industry 21
5 Growth of IT-ES 22
6 Pressure on Software Professional 28
7 Stress suffered by Software Professionals 29
8 Effect on working for long hours 30
9 Working in Teams 31
10 Traditional versus Managerial growth 32
11 Problem of Attrition 33
12 Short Supply of Professionals 34
13 Difficulty to attract the best talent 35
14 Effects on Compensation
3615 Annual Demand of IT professionals 49
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EXECUTIVE SUMMARY
Software organizations are becoming more important for the developing
economy. Bangalore software industry had a phenomenal growth in the
last decade and is expected to play a much bigger role in the coming
years. This growth has been due to availability of highly competent and
cost competitive software professionals.
The aspiration of software professionals have been increasing on
continues basis and they are becoming more demanding. At the sametime IT industry is facing various problems.
This study sought to explore and examine the HR issues and
challenges in Bangalore software industry. During the Research it was
found that the software organizations are facing a number of HR issues
such as difficulty in attracting the best talent, high attrition rate,
unrealistic demand of software professionals, shortage of workforce,
employees suffering from Stress and work life balance.
The software Industry in Bangalore has been a success story till
date, but if it has to continue ensuring robust growth and development it
has to take initiatives such as more adequate rewards, flexi-timings,
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continues training for up gradation of employees, growth opportunities
for employees and such other initiative.
Chapter 1
Background scenario
India the world largest democracy and home of more than one
billion people is quickly emerging as a leader in the field of software
engineering and development. Indian PMs National Task force On IT
& Software Development has set a target of 50 billion U.S. dollars of
annual software exports by the year 2008.During financial year 2005-
2005 Indian software and services exports clock revenue of 17.2 billion
U.S. dollars, registering a growth of 34.7% with total revenue of 22
billion U.S. dollars.
Due to increased government spending towards IT in domestic
market the domestic market revenue has grown up by 24 %(
NASSCOM, 2005).Government of India has directed that 1-3 % of the
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budget of every government department would be towards IT hardware
and software. Microsoft chairman Bill Gates in his visit to India stated
that India will emerge as a software superpower in the coming few
years.
Everybody is projecting and anticipating that India software
industry will play a very vital role in the growth of Indian economy.
However, the projected growth of Indian software industry ability to
manage human resource issues and challenges being experienced by it.
The cost of Indian software professional is increasing by 25-30 percent
per annum. As a consequence, software industries from China,
Philippines, and Singapore are emerging as competitors to Indian
software industry.
Presently, Indian software organizations have been working on
the lower end of the value chain such as providing business solution,
programming and body shopping. For retaining its competitive edge,
Indian software industry has been striving to move up the value chain.
However, moving up the value chain implies working on technology
and product development. In turn, these initiatives require availability of
experienced and more competent software professionals for sufficiently
long period of time. Software professionals with 3 years or more
experience are in short supply in USA" Europe and literally every part
of the world. Indians software professionals having proved their
competence and capabilities are increasingly in demand in USA and
other developed countries. As a consequence, large number of Indian
software professionals has been moving to USA and Europe. US
Government is seriously contemplating to increase the visa-quota for
Indian software professionals.
Projects on the lower end of value chain require many times
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working on legacy systems and technologies of the earlier era. Indian
software professionals aspire to work on the latest technology and
platforms. It is leading to a situation whereby software organizations
exclusively working on lower levels of value chain increasingly find it
difficult to attract and retain competent software professionals.
Thus the growth of Indian software organization in the next
decade will substantially depend upon the ability of the industry to
resolve conflicts emerging from the requirements of the market and the
aspirations of software professionals who can make the growth a reality.
It is in this context that this study explores and strives to explain human
issues and challenges experienced by the Indian software industry
Software Professionals: Some Common Characteristics
Based on the interviews conducted with software professionals andthe way they were described by senior managers, project managers and
HR professionals in software organizations, some common
characteristics of software professionals have emerged and these
characteristics are as follow:
Software professionals invest substantial time, efforts and
resources to acquire relevant and valid knowledge. Over time, the
knowledge acquired by them becomes their self-concept.
Software professionals look forward to use their existing
knowledge and acquire new knowledge on a continuous basis.
This is significant for software professionals to experience a sense
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of growth and nurture their concept of growth.
Software professionals tend to be highly analytical and hence they
expect rationale for every activity. They expect that they should
be involved in defining and planning every organizational change
affecting them.
Software professionals tend to be high achievers and hence they
expect periodical and tangible feed back and recognition for
performance. Since reward system is perceived, as a part of the
feed back system, linking performance with reward and
experiencing equity in reward becomes very important issues with
them.
Software professionals want to work on new technologies, new
platforms and with new organizations to improve their learning
and curriculum vitae.
Software professionals are more committed to their profession
than the organization they work for.
Due to existing demand and supply situation, software
professionals are able to move from their existing organizations to
new organizations in India or abroad rather fast.
Software professionals value autonomy, professionalism and
innovativeness,
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Chapter 2
Review of Literature
PURPOSE OF THE REVIEW OF LITERATURE
The purpose of the literature review is to identify the problem
statement, understand the secondary data that has been gathered in the
field of study and to make new finding on the problem statement
Title : Employees stress and performance
Author : David lee
Creating a high performance organization requires understanding
what factors influence performance. One of the most significance factors
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is workplace stress. Initiatives like the learning organization, process
reengineering, collaboration team work
Title: Developing Human Capital for Sustaining the Growth of
Software Industry
Authors: Narendra M. Agarwal (IIM-Bangalore)
M.R.Rao(IIM-Bangalore)
The growth of software industry till date has been mainly due to
the availability of highly competent and cost competitive software
professional in India. The paper examines the initiatives taken by
various software organizations, central and state government, corporate
private training institutes etc and suggests further measure to be taken
by different agencies.
Title : Innovative Retention strategies for Indian IT industry.
Website: www.google.com
Source : Part One - Articles by Forum Member
Retention of Key employees is critical to the long term health and
success of any organization. It is a known fact that retaining your best
employees ensures customer satisfaction, increased product sales,
satisfied colleagues and reporting staff, effective succession planning
and deeply imbedded organizational knowledge and learning.
Employee retention matters as organizational issues such as
training time and investment; lost knowledge; insecure employees and a
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costly candidate search are involved. Hence failing to retain a key
employee is a costly proposition for an organization. Various estimates
' suggest that losing a middle manager in most organizations costs up to
five times of his salary. The IT industry in India face an enormous
challenge in reducing attrition rate and this being a nascent industry
needs to draw parallels.
Conclusion
It is HR' s job, though not HR' s job alone, to champion and
shepherd effective human resource management practices at both the
strategic and day-to-day levels. That is, to be effective, human resource
management practices must be grounded in two ways. First, they must
reflect company wide commitments as to how it will manage and relate
to its employees. Secondly, HR must implement these commitments so
that the ideals of the enterprise and deeds of its agents are congruent.
HR to play a key role in the development and execution of the
Business Strategy of an Organization. It should evolve from a
transactional support role to partnering in the organization' s business
strategy.
Title: Performance management
Author: Frances Neale
Performance management helps organizations to strengthen their
working relationship with there staff and will be able to maximize there
joint contribution to the long term success of the company. This leads to
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a pattern of growth and achievement, providing good results for the
company and a rewarding and satisfying life for the workers.
Title: When Teams Work Best
Author: Frank Lafasto
Carl Larson
Teams are there every where, in business and industry. The
trouble is that that in a real life, sometimes teams work effectively, but
often they dont. Clarity, confidence and commitment can only
encourage team work and help teams function more effectively.
Title: Managing Employee Retention as a Strategy for Increasing
OrganizationalCompetitiveness
Author: Sunil Ramlall
The author conducted the research at a large, complex
organization using a stratified random sample to select employees from
all departments of the organization and to include non-supervisory
employees, mid-level management, and senior management employees
and came up with the following findings
Potential Factors that could cause the Employee to Leave the
Company
Salary, lack of challenge and opportunities in ones position, and
the inability to advance in ones career were the most significant factors
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for people to leave the company. Other factors identified by the
respondents included lack of recognition, ineffective leadership, and a
work environment that lacked teamwork.
Reward and Recognition
The three forms of recognition and reward most frequently cited
by the respondents were verbal praise from supervisor and other leaders,
salary increases and gift certificates
CONCLUSION
The major conclusion of this study is, if given an option the
employees would leave the company because of low satisfaction level
inter related with salary, work culture and many more things
Title : MAJOR HR CHALLENGES IN THE IT INDUSTRY
Author : R.NELSON
Source : www.humalinks.com
We are at the dawn of the next millennium. The challenges that
we will face in the next millennium can only be anticipated. But the
direction that we will tread is quite clear now.
The IT boom has brought with it, its own set of challenges to
organisations. How to put in place systems and process that are in tune
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with the IT revolution, how to strategise and compete in the IT era?
etc.But a major challenge that the IT industry per se has been facing is
in the field of Human Resource Management.
The IT industry is a service industry. How well are you able to
offer quality service to individuals and organisations will determine the
success of your organisation. This leads us to the fact that the creativity,
innovativeness, knowledge and skill of your employees are your
important assets .How you are able to manage these assets is the
challenge that the IT industry is facing. It is not capital or finance or
marketing management that gives the competitive edge but rather how
well you are able to manage your human resources whose intellectual
applications drive your business.
Some of the HR challenges that the IT industry faces are in Recruitment,
Performance Management, Training & Development, Compensation Management
and HRM as whole.
Title: Balancing Work and Family
Website:www.familiesandwork.org
Family life and work life take on new meanings once a baby is
introduced into the family. Schedules need to be rearranged and in all
likelihood, the division of household duties will come up for
renegotiation more than once. Parenting becomes a team effort.
Achieving balance will mean different things to different families.However, experts offer this advice on managing the dual responsibilities
of being a working mother.
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Get in touch with your values. What do you want from life for
you and your family? How does work fit into this? Is work important for
your sense of self, or is it important primarily for financial reasons?
Set priorities. Based on your values, decide what is important to you.
Be realistic. The mythical "superwoman," a working mother excelling
100% on the job and 100% in caring for her family, is just that a myth.
For most of us, there is always more to do than time allows. Focus on
what you can do. Give up whats not essential. Let a f ew things slide. If
children and work are your most important priorities, stop trying to
maintain a "House Beautiful" home.
Develop a transition ritual. It can take time to shift gears from work to
family. Establish a ritual that helps to mark the end of the workday and
the beginning of family time. Use the commute home to listen to music
or a book on tape. When you get home, change clothes before cuddling
with your baby, or engaging with your toddler. Be consistent in these
routines. The ritual will automatically signal the end of one thing and
the beginning of another.
Investigate your options. More than ever, businesses recognize the
value of being family-friendly. Your company may offer work options
such as flextime, telecommuting, compressed work weeks, or job
sharing arrangements. Check with your Human Resources department
for availability and details, or click to the article Family-Friendly Work
Schedules: A Work/Family Balance Solution listed below in the
Reference Sources. It offers an excellent overview of the most common
full-time and part-time flexible work arrangements. Understanding the
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pros and cons of each will help you decide if any are suitable for you
and if so, how to approach your immediate supervisor about them.
Take care of your physical health. Healthy people have stamina. They
are better able to withstand emotional and physical stress. Dont neglect
your health. Eat properly and get as much sleep as you can. Find time to
do the things that nourish your whole being.
Talk to other working mothers. Other working moms will gladly share
with you how they navigated the passage from working-before-baby to
working-after-baby. They will tell you what worked for them, what
didnt and how they found alternative solutions.
Learn about work and family. Read as much as possible on work and
family issues in magazines, newspapers and on the Internet, and look for
tips you can use. When using Internet search engines, use keywords and
phrases like family, work and family, parenting, work family balance,
career. Youll gain valuable information and find guidance on
developing a plan that works for you, your spouse and your child.
Learn the impact that certain stressors and influences have on work life
and home life. It can help you gain a different perspective on many of
the issues and challenges youll face as a working mother. Parenting at
any stage requires a sense of humor and the ability to juggle many tasks.
Look at all the things going on in your family in a positive light,
have faith that there are ways to make a household run
smoothly; and dont forget to ask for help when you really
need it. Grandparents and extended family are usually
delighted to offer a helping hand. In all probability theyre
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tickled pink to be able to spend time with your oh - so-cute
baby or toddler.
Methodology
Reviews are acquired through websites as secondary data. Also
with the help of professors through interviews and lectures, data has
been furnished. Various publications are also included.
Conclusion
With the help of reviews it has been possible to relate work life balance
with Job stress and the early retirement. Also reviews have given a deep
insight of how employer can influence the lives of employees.
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Chapter 3
Problem statement, Research Objective and Research
Limitations
Problem Statement:
To identify various human resources issues and challenges in the
Bangalore IT industry.
Research Objectives:
This study is positioned as an exploratory study to understand human
issues and challenges in Indian Software Organizations. Specifically, the
study will focus on following specific objectives:
To find what are the human resource problems experienced by the
top management in software organizations.
What are the factors that affect software professionals
professional performance and contributions.
To find the factors that inspires and motivates software
professionals
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Research Limitations
This study suffers from the following limitations:
The research is limited to Bangalore
Since the period of the study is limited, the researcher could not
make an in-depth study
The research is based on the response of the employees
Chapter 4
Research methodology
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Descriptive research design has been used for the purpose of the study.
The ideology of using this research design is that the researcher can
known more about the problem being studied and new ideas can be
generated
Sampling techniques
Random sampling has been used for the purpose of the study so that the
sample could be split into different groups based on the convenience of
the researcher
Sample size
Large, medium and small organizations might have different types of
human issues and challenges .Hence, the study has covered total of 6
organization (total 90 employees) consisting of large, medium and small
organization
Sample procedure
Sample have been selected using random sampling method
Contact method
In-depth interview
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Statistical tools used for analysis
Percentage Analysis
Percentage analysis refers to a specific kind of ratio used in making the
comparison between two or more series of data. Percentage is used to
describe relationship and can also be used to compare the relative terms,
the distribution of two or more series in data
Percentage of respondent= (no. of respondent/total no. of respondent)
*100
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Chapter 5
Data Analysis and Interpretation
Increasingly, Indias vast human, industrial and technological resourcesare being utilised at the global level making India a key player in the
international IT arena.
The advantages and value addition that IT can bring to the industry and
the Government are now becoming self-evident. There has been a
gradual shift towards the use of IT in the Government, Public sector and
Private sector as also in public services and education. One of the major
factors that led to the emergence of this sector was the unrivalled
success of Indias export led software industry.
Contribution to the Economy
The IT industry in India has witnessed a phenomenal growth in the last
eight years, with revenues exhibiting a Compounded Annual Growth
Rate (CAGR) of 42.3%. The Industry has now attained a level of
maturity, wherein, the revenues generated can be viewed as a
dependable source of national income. In terms of contribution towards
GDP, the IT industry constituted 0.59% in 1994-95, which increased to
2.87% in 2001-02, and as per NASSCOM projections, is expected to
grow to 7% by 2008.
SOURCE: NASSCOM
Growth of Indian IT Industry
0
20,000
40,000
60,000
80,000
Rs.
Crore
-0.5
0.5
1.5
2.5
3.5
Percentag
Size 5,450 8,600 13,350 18,650 25,300 36,200 55,550 64,200
Share of GDP 0.59 0.81 1.08 1.35 1.57 2.03 2.81 2.87
1994-
95
1995-
96
1996-
97
1997-
98
1998-
99
1999-
00
2000-
01
2001-
02
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Export Orientation
The Indian IT industry is highly export oriented with export revenues
constituting approximately 76% of the total earnings (year 2001-02). As
per recent estimates, the IT industry has become the largest contributorto Indian exports with a share of 16.5%, which is expected to rise further
to 18.6% in the current fiscal year (2002-03) as highlighted by the
exhibit overleaf.
Source: NASSCOM
IT Industry Segmentation
The IT industry can be broadly defined under two categories:
1) Software and Services - This category can be further divided into
two key segments
a. Software - including Projects (both offshore and onsite),
Professional Services and Consulting, Generic Software
Products (the most successful example being the accounting
Software Exports to Total Exports
18.6
16.5
13.8
10.5
7.72
0
5
10
15
20
1998-99 1999-00 2000-01 2001-02 2002-03*
Percentage
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software - Tally), Training & Development and Support &
Maintenance.
b. IT Enabled Services (ITES) - including back office operations,
data processing, medical transcription, customer contact
centres, digital/ website content management, disaster
recovery storages, HR/ payroll services, insurance and
financial claims management amongst others.
2) Hardware and Peripherals - including manufacturing and assembly of
computer hardware components and peripheral device.
The Indian IT industry is dominated by the Software and Services
category which solitarily accounted for more than 79% of the revenues
generated in the year 2001-02 while the hardware and peripherals
category contributed 21%.
Software and Services
For the year 2001-2002, the Indian software and services industry has
been estimated at Rs.48,134 cr., which is in stark comparison to Rs.300
cr., where it stood a decade back. This fleeting growth is also reflected
in the export earnings that have grown to Rs.36, 500 cr. in 2001-2002
(up from a base of Rs.30 cr. in 1985) exhibiting a CAGR of 56%.
Within the Software and Services category, ITES accounted for 20% of
the revenues generated, whereas, 80% of the earnings originated from
the software segment. To get a keener understanding of the exhibited
market dynamics, it is imperative to enumerate the divergent
characteristics of Software and ITES segments separately.
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The following exhibit traces the growth of software and services over
the years:
SOURCE: NASSCOM
Software SegmentAs mentioned earlier, the software activity in India is a mix of projects,
professional services such as consulting, enterprise resource planning,
software development (products), support & maintenance and training.
Amongst these service categories, majority of the IT units are focused
towards customized software solution development (with 41% of the
firms registered with NASSCOM operating under this segment)
followed by communication and networking software development such
as wireless application protocol (WAP) as highlighted in the exhibit
overleaf:
Software and Services Exports vs Software Industry
0
15,000
30,000
45,000
60,000
Rs.
Cror
Exports 1,53 5 2,52 0 3,90 0 6,530 10,940 17,150 28,350 36,500
Total Industry 2,47 1 4,18 6 6,52 8 11,177 17,122 24,288 38,241 48,134
1994 -95 1995 -96 1996 -97 1997 -98 1998 -99 1999-00 2000 -01 2001-02*
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Source: NASSCOM
Recent times have witnessed emergence of new service lines such as
package software implementation, systems integration, information
systems outsourcing and network management.
IT Enabled Services
Stemming from Indias sustainable value proposition, in the last four
years, the ITES segment has witnessed an impressive growth of 69.5%
(CAGR). Despite the general economic slowdown, this segment
exhibited a growth of 71% in the fiscal year 2001-02. In addition, a
healthy growth of 65% is forecasted for the current year (2002-2003).
As per a Nasscom study, the ITES sector is expected to grow at an
average annual growth rate of 45% in the period 2002-2008 and will
contribute an annual revenue of US $21-$24 billion (Rs 105-120
thousand crores) by 2008.
Indian S oftware Indust ry : Development F ocus
41%
14%6%
14%
10%
15% Application S oftware
Development
Web S olutions
S ys tems Integration
Cons ultancy
S ys tems S oftwareDevelopment
Communication
Networking Software
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Consequently, the ITES exports from India have witnessed a faster rate
of growth in comparison to the exports from the software segment. The
following exhibit traces the growth of ITES exports over the last few
years:
Source: NASSCOM
Growth of IT Enabled Services
0
10,000
20,000
30,000
40,000
Rs.
Crore
ITES 2,400 4,100 7 ,100 11,700
Software Exports 14,750 24,250 29,400 35,800
1999-00 2000-01 2001-02 2002-03*
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IT result for 2004-2005
Indian Software and Services Exports clock revenues of USD
17.2 billion, registering growth of 34.5 % in FY 2004-05
Total software and services revenues were USD 22 billion in
2004-05
Domestic market revenues grow by 24% in FY 04-05
Indian Software and Services exports industry forecast to register
strong growth of around 30-32% in FY 05-06
Sector-wise break-up
USD 2003 - 04 2004 - 05 2005 -
06E
IT software and services Export 9.2 12.0 15.0
ITES-BPO Exports 3.6 5.2 7.3
Domestic Market 3.9 4.8 6.0
Total IT-ITES(IT software and
services +ITES - BPO
16.7 22.0 28.5
Source: NASSCOM
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I.T. Scenario Bangalore
In the last few years, Bangalore has transformed itself from being a
Pensioners Paradise to the Silicon Valleyof India. From mere 13
software units in 1991-92, the units have increased to 1154 companies
as on April 2003.
Reasons for the growth of IT industry in Bangalore
(A) Government Initiatives:
The Karnataka Government offers special assistance, incentives and
concessions for the Information Technology industries which have
investments in fixed assets up to Rs.100 Cr. The explosive growth of IT
in 8Bangalore has been helped in no small measure by the progressive
policies of the Government. Some of the benefits that the Government
offers investors in the Information Technology sector in Karnataka are
listed below.
(B)Entry Tax Exemption
Information Technology industries will be exempt from payment of
Entry Tax on computer hardware, computer peripherals and other capital
goods including captive power generation sets, during implementation
stage which can be extended up to 5 years from the date of
commencement of implementations.
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(C)Power Tariff Concessions
Software industries will be treated as industrial (and not
commercial) consumers and electricity tariff applicable to the
industrial consumers will be levied on such industries.
Software industries, which need electrical power up to 5 KVA,
will be permitted to be established without any local restrictions
and will be made eligible for all incentives and concessions.
As continuous uninterrupted and quality power supply is one of
the prime requirements of sustenance and growth of Information
Technology industries, these industries will be given priority in
the sanctioning and servicing of power. The IT industries will also
be exempt from power-cuts without any time limit.
Captive power generation sets installed by the Information
Technology industry will be eligible for the following incentives:
Total exemption from payment of electricity tax without any time
limit.
(D) Quick Clearances from Pollution Control Board
Karnataka State Pollution Control Board has simplified the procedurefor seeking clearances under the Air Act and the Water Act for the
software companies that use captive DG Sets.
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(E)Concessions on Company Registration Charges
IT companies taking up expansion, diversification, and modernization
get concessions on registration charges.
Other Reasons:
Institution Readily available world class IT infrastructure
Ample of specialized human resources
Pleasant and comfortable climatic condition
Cosmopolitan environment in the city and
High concentration of IT companies and quality research and
Development.
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Contribution of Bangalore IT Industry
Bangalore, the forth-largest technology hub in the world, is continuing
to lead from the front in software export. All the giants in IT sectors
operate from Bangalore.
Leading the pack
Software exports from Bangalore constitute around 36 percent of
the total software technology parks of Indian export 2003-04
Bangalore is fast catching up in the BPO/ITES space and this
segment has registered a 126 per cent growth to touch Rs.2, 237
cr.
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1. Which of the following puts the maximum pressure onsoftware professional?
Pressures on Software Professionals
A
15%
B
34%C
33%
D
18%
Source: personal enquiry notes
INTERPRETATION
A-Organizational Expectations creating Pressures and Pulls on
Software Professionals is 15%
B- Family Expectation creating Pressures and Pulls on Software
Professionals is 34%
C- Peer Expectation creating Pressures and Pulls on Software
Professionals is 33%
D- Self Expectation creating Pressures and Pulls on Software
Professionals is 18%
The above chart clearly depicts that family and Peer Expectations puts
the maximum pressure on the Software Professionals.
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2. The Proportion of Stress suffered by Software Professionals
Suffer from Stress
6%
28%
66%
Never
Rarely
Very Often
Source: personal enquiry notes
INTERPRETATION
The above chart indicates that most of the software professionals
suffer from work place Stress.
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3. Does working for long hours effect on your personal life
Effect on personal Life
67%
22%
11%
Yes
No
Can't Say
Source: personal enquiry notes
INTERPRETATION
The chart depicts that most of the software professionals feel the load
of their professional life on their personal life.
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4. Do you like to work in Teams?
Team Work
22%
61%
17%
Yes
NoCan't Say
Source: personal enquiry notes
INTERPRETATION
The chart indicates that software professionals prefer to work
individually than in team
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5. Traditional versus Managerial growth Path for Software
Professionals
A
67%
B
22%
C
11%
Source: personal enquiry notes
INTERPRETATION
A- 67% of Software professional prefer to work in technical field
B- 22% of Software professional prefer to work in Administrative
field
C- 11% of Software professionals are undecided.
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6. Is you company facing the problem of Attrition?
INTERPRETATION
The chart indicates that most of the software industries are facing theproblem of attrition.
67%
33%
yes
no
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7. Does Your Company suffer from Shortage of Man-Power?
67%
33%
Yes
No
INTERPRETATION
The chart it is observed that about 67% of companies suffer due to
shortage of Man-Power while 33% do not suffer from Man-Power
Shortage.
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8. Do you find it difficult to attract the best talent?
83%
17%
Yes
No
INTERPRETATION
The chart it is observed that about 83% of companies find it difficult toattract the best talent, while 17% of companies do not face this
difficulty.
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9. Has increased in demand if technology coupled with shortage of
professionals has increased the cost of delivering technology?
67%
33%
Yes
No
INTERPRETATION:
From the above Chart it is observed that 67% of the companies feel
that increased in demand of technology coupled with shortage of
professionals has increased the cost of delivering technology, while
33% of companies do not feel so.
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IMPLICATIONS OF DATA ANALYSIS
1. Managing Multiple Expectations
Each one of us can have and do have multiple expectations from the job
and career that we choose. However, in case of software professionals,
the expectations from the job seem to be too many and many times these
expectations are in conflict with each other. Chief Executive of a small
software company employing about 200 employees said that software
professionals when interviewed for job invariably say that they want to
learn and be technical leaders in their respective chosen fields. However,after joining the organization, they tend to use yard sticks to measure
their success that tends to be different from their stated objectives of
learning and be technical leaders in their chosen field. These yardsticks
tend to be tangible and invariably are derived from the expectations
experienced by software professionals from their family members and
their peers, in addition, organizations have their own expectations from
software professionals. These multiple expectations create pulls and
pressures on software professional.
As shown in Figure 1 and described earlier, software professionals hold
certain images about self as a professional. As a consequence, they
expect to nurture the image of themselves as
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Figure 1: Multiple Expectations Creating Pressures and Pulls on Software
Professionals
professionals by learning on a continuous basis and becoming technical
leaders in their chosen field, Organizations create very different kind of
pulls based on the requirement of markets and customers, They want to
deliver what customers require in the defined time and budget. The
customers from developed countries sub-contract many of the activities
Peer Expectations
Work withtechnologies and
software using
latest software
No. of visits
abroad
Family Expectations:
Big Money Big title
Self Expectations
Continuous learning Being a technical
leader in the chosen
field.
Equity in reward
Organizational Expectations
Work on assignments and
technologies required by
customers
Software
Professional
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to Indian software organizations because software professionals in those
countries want to work only on projects involving latest technologies
and software, This means that in many projects, Indian software
professional have to work on technologies and languages of yesteryear .
Due to Internet and e-mail facilities, Indian software professionals are in
touch with their peers in India and abroad on a continuous basis. They
are aware of the kind of projects and technologies their peers in India as
well as abroad are working with. This awareness creates pressures on
software professionals to aspire to work on similar platforms and
technologies, In the informal settings, peers tend to ask each other about
pay, perks and about their foreign visits. All this awareness creates
expectations and pressures to expect all these in one' s own organisation,
Software professionals further increase pressure on themselves and their
organisation by selectively picking up what are best pay, perks and other
facilities in different software organisations. Interestingly, the
benchmarking organisations do not remain same for long and software
professionals keep suggesting new organisations for benchmarking to
their top management and HR professionals.
In addition, due to hype about software industry, parents in Indian
society make lot of investment and sacrifices to ensure that their wards
are able to study software courses, Media keeps publishing about the
growth of software industry and how people working in software
industry have become millionaires, These leads to building expectationsof parents that their wards, should earn lot of money and support the
family. In India, being software professional and having visited abroad
gets perceived as status symbol in one' s family as well as in one' s
reference group. In many castes in India, number of visits to foreign
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countries made by a boy substantially defines the amount of dowry he
can command in his marriage. These pulls and pressures being
experienced by software professionals are real and are experienced on a
continuous basis. These multiple expectations lead to software
professionals being confused, tense and not being comfortable with
oneself.
A senior executive mentioned that intellectual capabilities of software
professionals are not necessarily superior as compared to professionals
working in other fields, However, due to media hype and the imbalance
between the demand and supply of software professionals, they tend to
build an aura around themselves, They tend to believe that they are cut
above the others and hence they must be treated differently and all their
expectations should be simultaneously satisfied.
2. Workplace Stress
Stress is a normal component of the bodys response to demands that
are placed on it. Work place stress can have a harmful effect on our
overall health.
Stress has become an inventible part of everyday life specially for the
people working in the I.T. sector, it is so because I.T. jobs are very
demanding in nature, the result is that due stress people are not able to
perform there job efficiently which reduces the productivity.
Reasons that cause stress:
Work overload
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Unreasonable job demand
Unrealistic expectation (Personal/Management/Peer/Family)
Role ambiguity
Job security
Performance monitoring
Low moral among workers
To save its employee from the stress has become one of the biggest
challenge for the I.T. companies.
3. Work life Balance
Software professionals enjoy being with their computers and in turn
computers tend to be highly addictive. Particularly; software
professionals when they are working on a project, they tend to and they
are expected to work long hours. Working for 12 to 14 hours per day for
long period of time seems to be quiet common. Long working hours is
valued by organisations, but more importantly software professionals
tend to believe that they matter for the organisation when they worklong hours. However, over time, the process of working long hours
disturbs the balance between work and non-work life and software
professionals tend to experience burnout.
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A person is expected to perform many roles related to work and non-
work life however, since software professionals tend to spend so much
of time on work related activities that all the other roles tend to become
irrelevant for them. In an extreme situation, for software professionals
only role-identity remains and personal-identity tends to get merged
with the role-identity. Professionals operating at self actualization
level tend to define their self-concept in terms of their work and hence
they may not feel bad when work becomes all encompassing. However,
in case of many software professionals work continues to be
instrumental in getting tangible rewards from the organisations. Hence,
consciously and a number of time sub-consciously, software
professionals exchange their free time and non-work life roles for
Organisational performance and tangible rewards associated with them.
However, the vacuum due to lack of non-work life activities leads to
emptiness with in and annoyance with the organisation.
4. Team Work
Software professionals seem to be reluctant to work in teams and they
prefer to be with their computers preferably working from their home
itself. Programming and coding work requires thinking and working by
oneself. Since software professionals in their initial phase of career
substantially work on programming and coding, it becomes their
preference and nature to work by oneself. Working in teams requires
that the team members should be prepared to learn from each other.
Software professionals seem to enjoy learning by themselves. They
possibly enjoy the joy of exploration and the excitement of finding out
something by oneself. Another possible' reason for lack of team learning
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and sharing may be that software professionals seem to be reluctant to
accept their ignorance in front of their colleague and superior, and
sometime in front of one' s subordinates. However, from organizations
point of view, reluctance to learn from one' s team members and the
desire to learn only by oneself is an expensive way of learning.
Many members of a project team are of similar' age and
experience. Since they are at same level, they struggle to define their
status and position in the group vis--vis their team members. One way
to have a higher position in one' s group is to get positioned as a more
knowledgeable professional. This in turn leads to a game with in a team
where by every body tries to prove oneself superior to others and a
politics of knowledge becomes part of work setting. These processes
adversely affect the team work and team processes in the organisation.
Software professionals also seem to be reluctant to teach and train
their team members. Software professionals are - often part of
temporary project teams. Since the relationship is temporary, leaders are
reluctant to make an investment of their time teaching their team
members new technologies, The attempt is to have team members with
requisite skills rather than investing time in educating them. In extreme
situations where the success of a project depends upon a number of team
members being able to work with new technologies, a project leader
shows willingness to invest some of one' s time to educate one's team
members.
The technology in software industry is evolving very fast, Hence,
every body including senior executives feels very insecure, One way to
manage ones insecurity is to have some exclusive knowledge and try to
be unique in the group. Secondly, senior people may like to use their
time to acquire further new knowledge rather than teach their team
members. Organisations are also not very sensitive to the efforts put by
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a manager to educate one' s team members, The focus is on what is
tangible and what is visible, Since mentoring contributions are difficult
to quantify and often their impact may not be noticed immediately,
managers and leaders are reluctant to make investment of time and
effort to educate their team members.
Selecting members for a new team is also a very difficult task.
Software professionals are either interested to work on projects
involving technology of their choice or location of their choice, If it is
posting abroad, software professionals are much more willing as
compared to a temporary posting in India, Software professionals who
are not picked up for projects of their choice or foreign assignments tend
to crib and complain of lack of fairness in the selection process,
Lack of teamwork in software organisations possibly has its
roots in processes of selection, training and rewarding; Software
organisation tends to give much greater importance to software
knowledge and skills than interpersonal skills at the time of recruitment.
Software knowledge can be more easily assessed as compared to
interpersonal and team working skills, Senior managers, part of the
selection team, themselves being software professionals, tend to value
software knowledge and skills more than team working skills at the time
of selection, This becomes another reason for due importance not being
given to team working skills at the time of recruitment.
In response to the above issue, HR managers had said that
partly these observations are true, But they said that today demand for
superior software professionais is much greater than the supply. In
addition, these days a number of multinational software companies are
recruiting software professionals/management graduates from Indian
Institutes of Technologies and Management (IITs/IIMs). Due to heavy
competition, organisations aspiring to recruit graduates from national
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institutes of repute have to use selection processes that are not very
elaborate and time consuming. Many organisations have deleted group
discussions and other processes, which use to provide some useful data
about team behavior of interviewees.
It has also emerged that neither the software professionals nor the
organisations tend to give the same level of importance to training for
teamwork as they tend to value training for software skills. By nature it
seems software professionals are not very keen to acquire soft skills of
team working. It was also seen in some organisations that while
software training was arranged from Monday to Friday, soft skills
training programmes were usually arranged on Saturdays, This creates
an impression amongst young software professionals that soft skills are
given iess importance by the organisation as compared to software
skills, However, it was reported that when training programmes for soft
skills are arranged on weekdays, even then the response in terms of
registration forthe programmes remains lukewarm,The lack of teamwork can ' also be ' contributed to' lack of
substantial team-rewards. While team members are encouraged to go for
picnic and have other fun activities together, organizational rewards
continue to be substantially individual based. This is possibly another
reason for lack of motivation for teamwork.
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5. Technical versus Managerial Growth Path for Software
Professionals
Traditional growth path for software professionals in Indian
organisations involves moving from being software professional to amodule leader to a project leader. Further a project leader is promoted as
a project manager and finally a business manager. The initial change to
a module/project leader may be only functional. It means that in a given
project, software professional may act as a module leader. But in
another project s/he may become a project leader or may remain only a
team member.
Why do Indian software organisations need so many positions of project
leaders and project managers? Presently in a large number of Indian
organisations, most projects are outsourced work from foreign clients.
Some of the key responsibilities of project leaders' in software
organisations are:
Interfacing with potential customers, understanding their
requirements, getting their orders and then ensuring that orders
are delivered in time.
Assigning roles and responsibilities and coordinate activities
amongst different team members with in the organisation.
Informing a customer about the progress of the project on a daily
basis.
Submitting a weekly project status report to the customer.
These activities may take anywhere between 25 to 40 percent of the time
of software professionals on a daily basis. Since these activities are
perceived merely as administrative chore, cutting down the
opportunities to work on programming activities. Software professionals
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do not like the role of a project leader.
However, from organizational perspective, it is a very important role.
Project leader is a very important link between customers' and
organisation, the project leader facilitates customers to feel confident
that the work is progressing as planned on their assignments A revenue
perspective also exists to the position of project leaders, The project
leader is usually billed at substantially higher rate as compared to
software professionals. Hence, organisations feel the need for promoting
software professionals as project leaders very soon in their career.
Number of senior managers had said that software professionals were
not interested in performing the role of a project manager. Software
professional prefers to learn and grow through a technical career. They
only want to work on technical work such as flow diagramming,
programming and coding. These tasks provide software professionals
opportunities to learn and use new tools and techniques. The technical
learning is specific, tangible and becomes part of the curriculum vitae of
software professional. Most importantly, many of the Indian software
professionals aspire to work in U.S.A. What get valued for such foreign
assignments are their technical knowledge and not their managerial
knowledge and expertise. Hence, from the perspective of software
professionals, they would like to spend most of their time doing
programming and related activities
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6. Attrition
The biggest problem that the HR managers in the software
Industry are facing now days is to control the attrition rate in
there companies. The standard rate is 26 percent in the IT
industry but it is going as high as 60-70 percent in many
companies. Small companies experience more attrition in
comparison to medium or large organizations.
The following are the reasons for the high attrition rate:
Company environment
Number of job opportunities
Work overload
Unreasonable job demand
Unrealistic expectation (Personal/Management/Peer/Family)
Low moral among workers
Lack of growth opportunities
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7. Short supply of professionals
IT industry suffers with the shortage of professional which is affecting
the growth of the IT industry .due to this the the companies are setting
there plants in new places. This tends to continue in future also and in
the year 2010 almost 3,70,000 IT professionals will be
require(NASSCOM)
SOURCE: NASSCOM
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8. Attracting the Best Talent
In a tight job market, many organizations often experience
precipitous and simultaneous demands for the same kinds of
professionals. In their quest for manpower, they are cajoling talent
around the world. In such a seller' s market, software companies are
striving to understand which organizational, job, and reward factors
contribute to attracting the best talentone having the right blend of
technical and person-bound skills. This would mean a knowledge of
' the tools of the trade' combined with conceptualization and
communication skills, capacity for analytical and logical thinking,
leadership and team building, creativity and innovation. The
Bangalore software industry suffers from a shortage of experienced
people such as systems analysts and project managers, and attracting
them is a key HR challenge
9. Compensation
Increasing demands of technology coupled with a short
supply of professionals (with the requisite expertise) has increased the
costs of delivering the technology. On an average there is 25-40
percent increase in the compensation of the IT professional due to this
software industry is losing its cost advantage.
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Chapter 6
Major Findings of Research
During the research investigation it was found that there are a number
of HR issues and Challenges which Software Industry in Bangalore is
facing. The future of the software industry will depend upon how they
tackle these problems.
FINDINGS
Attrition rate is very high. It was observed that the attrition rate is
higher in small organizations than in large ones.
As software profession is very demanding due to which most of
the software professionals suffer from the workplace stress
Software professionals prefer to work alone than in teams. This is
incredible.
Software professionals prefer technical work to administrative
work
Sometimes there demands are unrealistic
Software professionals prefer to work at a place which can provide
them maximum exposure and challenge their knowledge.
The professional life of the software people affects their personal
life.
Software people encounters multiple expectations i.e. from family,
peers etc. which affects there personal life
The Software Industry is facing shortage of software professionals
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Chapter 7
RECOMMENDATION
1. Creating a learning organization:
The software companies should become learning
organizations to ensures top-of-the line growth
2. Flexible working:
A flexi time schedule allow people to vary their start and finish time
around pre-determined core-hours
Flexible working will help organizations to retain skilled staff and
reduce recruitment cost; raise staff morale and decrease absenteeism
and react to changing market condition effectively
3. Job sharing:
A job sharing is an agreement usually involves dividing the workload
of a full time position between two people. It is great way for IT
people to keep on the fast career tracks while allowing them to spend
more time with there family.
4. Telecommuting/House working
It enables an individual to work from a location other than office or
project site.
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5. Anti-poaching agreements:
Under this agreement companies come under the mutual contact
which states that they would not entertain employees of each other.
This will discourage employees to change jobs frequently.
6. Compensation Philosophy:
Since compensation is an important retention criterion, it is good to
start by defining and understanding the compensation philosophy to
pursue. Most development organizations feel that they need to pay
in the top 25% of what similar companies pay to attract and retain
the top talent. Reward management continues to be a talent
magnet
(A)Creative Benefits:
Creative benefits include anything that does not fall into the
traditional benefits category. This is an area where companies may
provide significant retention incentives, often at a lower cost than
more traditional benefits. Six-digit salaries and lucrative stock
options are not the only things software development team
members want .Example Onsite or nearby subsidized health clubs
is a common benefit at many Silicon Valley software development
companies. Besides simply a retention aid, the side effects of better
employee health, lower stress, and reduced medical costs commonlyassociated with individuals who exercise regularly greatly benefit
the company.
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(b)Short-Term Incentives:
Short-term incentives are typically bonuses tied to meeting project
or group-specific milestones. Such incentives help motivate
employees to do "the best thing" for the current projects.
(c)Long-Term Incentives:
The most common long-term incentive in most software
development organizations is stock options that vest over multiple
years. This sort of incentives make employees feel a part of the
company and make them stay with the company for the longer
period.
(d) Market driven approach to retaining talent is quiet useful. This
approach focuses on Recruiting for Retention
7. Training and Development
Competitive compensation is certainly one part of the retention
picture, but it' s only a starting point. Software developers are
valuable for their technical knowledge, which quickly goes out of
date. Developers thus tend to value positions that provide ample
opportunities for training. So organizations should make proper
arrangements to update them on new techniques. Re-skilling is the
hallmark of an effective training and development.
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8.Job Rotation and Job Sculpting
The most successful type of job rotation is approximately eight
weeks in length, with software engineers typically rotating out to a
non-development organization, such as sales, marketing, IT
operations, or finance that will provide software professional a
change from daily work. Rotation to another development
organization is possible, but typically this is useful only if there is a
prototyping or other short-term development opportunity available.
Software professionals do require appropriate nutrients in there
jobs. The following charts highlights this :
Recognizes what
is important to
business
Communicates
recognition
criteria
TimelyMatches
recognition to
achievement
Creative
customized varied
Reason for
reco nition
Re-launch
periodically
Publicized and
visible
Recognizes
reco nizer
Personalized
Relevant to the
organization
Involves
teams
It is culture
Is frequent
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9. Mentoring
Mentoring programs are a useful retention aid for many
reasons. One of the best retention tools is good hiring. Somesoftware development organizations now assign a mentor to all job
applicants who are being seriously considered for a position. Job
applicants are matched with an employee who performs similar job
skills, if possible within the same development organization. This
gives the applicant a chance to talk to a peer and get honest feedback
on what it is really like to work for the company. Most applicants
are more likely to trust the opinion of an individual contributor on
this type of topic than a manager.
10. Companies can support and provide venture support to its
employees to become entrepreneurs/intrapreneurs.
11. Organization can facilitate software professional to generate
wealth for them ex. Employee Stock Option Plan.
12. Companies should create a workplace full of fun, excitement and
passion. Otherwise software professional tends to get bored very soon.
Various fun activities for software professional and there family
members should be organized from time to time. I.e. fancy dress,
music show
13.Employees Assistance Program:
To help software professional cope with a wide variety of problem,
the companies should monitor the employees assistance program
which provides diagnosis, counseling and referral for advice in respect
of problem related to work or family.
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15. To tackle stress at workplace, the following are the I,pereratives:
Arranging, yoga. Meditation sessions for software professionals
reduces stress
Varied tasks to employees for rectifying monotonous jobs
Outing /get together should be arranged once in 2 months, so that
software professionals can relax and enjoy.
Intensification of Employee Wellness Program
16. Software industry should use more of outbound learning to help
Software professional to learn the skill of team work.
17.Increasing the number of performance linked awards/rewards isquite helpful
18. Employees should be empowered substantially through
Employee Engagement Programs
19. We also recommend the prescription of Bob Nelson (Guru of
Reward Management) for encouraging the software professionals
Our research investigation calls for nothing less and nothing more
than a comprehensive, adaptive HR policy to tackle the problem of
software professional in the IT sector
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Chapter 8
Directions for further Research
Following are the fertile areas for further research:
1. Business Continuity planning in Software Industry An
analytical study
2. Behavioral traits of Software Professional
3. Multi -utility Job Description in Software Industry -A
Diagnostic study
4. Acclimatization of overseas Software Professional
5. Employee Engagement Programs in Software Industry
6. Career Anchor for Software Professionals
In our view, the afore-said areas constitute green pasture for
contemplating on going research in this important field
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ANNEXURE
SELECT BIBLIOGRAPHY
BOOKS:
1. Training and Development Concept and Cases
Edited By: V.V. Raman
(ICFAI publications)
2. Effective Talent Management
Edited By: V.V. Raman
(ICFAI publications)
3. Human Resour ce Management
By: John.M.Ivancevich
Tata McGraw-Hill Publications
4. Dealing with People
By: Robert Heller
D.K. publishing Inc. New York
5. Applied Human Relations
By: Douglas A. Benton
Sixth Edition (N.J. publication)
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6. (A) Six Sigma for Managers By: Greg Brue
(B) Managing teams By: Lawarence holpp
(C) Empowering Employees By; Kenneth