HR Practices Of TATA

Name of the student ANJUL SINGH PRIYANKA MUNJAL SARIKA DHAR BIKAS SHARMA JYOTI PUNJ PRAKASH

PG Roll No: PG20112141 PG20112244 PG20112064 PG20111078 PG 20112004

Submitted to Subject Submitted on Marks Allotted Remarks(if any)

Sanyukta Jolly Employee O7-01-2012 For use of Faculty For use of Faculty

INTRODUCTION
TATA groups beginning can be tracked back to 1868. It was when Jamshedji Tata established a trading company in Bombay which dealt in cotton. This was followed with the establishment of Empress Mills in Nagpur and Taj Mahal hotels in Mumbai. The TATA group ventured into steel production hydroelectric power under the leadership of Sir Dorabji Tata ,the eldest son of Jamshed ji Tata. TATA is an Indian multinational company. It has its headquarters in Mumbai. Tata group has its businesses spread around 80 countries in six continents. The Tata group has its businesses in the following fields: y Chemicals y Consumer Products y Energy y Engineering y Information Systems and communications y Services y Steel The TATA companies operate independently. All have different and their own set of board of directors and shareholders. The major Tata companies are: y TATA motors y TATA Steel y TATA Consultancy services y TATA power y TATA Global Beverages y Titan y TATA Chemicals y TATA Teleservices y TATA Communications y Indian Hotels

WHY TATA ?
Our group chose TATA as our project work because TATA is one of the biggest companies in the world today with an origin in India. TATA is a company which is in almost all the sectors of the business world. It is a very big name in itself. Doing a research on the practices of such a company was an interesting work and a good learning process. It helped us understand the HR practices in a better way.

HR PRACTICES
TATA HR practices are a strong HR model which focuses on the following parameters: y Alignment y Assignment y Engagement y Empowerment y Pride of workforce There are many HR practices which are being followed at TATA as an essential an important part of employee development and employee satisfaction as at TATA they believe that employee satisfaction leads to customer satisfaction. TATA is called the EMPLOYER OF CHOICE because of its range of initiatives for employee encouragement , employee motivation and employee engagement. TATA also has an annual engagement survey-DARPAN which promotes customer-centric and performance driven culture at the organization. The culture of the organization is defined under the acronym CRISP which says C- Customer focus R- Responsibility for result I- Initiative with speed S- Self-confidence with consciousness P- Passion for achievement

Some of the practices which they follow are listed below:

Performance management scheme: The performance management

system at Tata ensures a top down cascade of the goals of business. There are basically five key indicators that determine and help in judging the performance of the employees. The employee is aligned to any one or multiples of five key indicators which are- revenue, profir maximization/cost optimization, cash flows, customer satisfaction, employee engagement. These indicators align the employees towards the vision, mission and the business plans of the organization.

A reward and recognition policy: A reward and recognition policy is

implemented to motivate the employees in the organization. The employees are rewarded for their good performance and contribution to the organization.

Career progression policy: This scheme basically revolves around the

career growth of the employees in connection with the performance , merit and potential of the employee. It involves many schemes such as job rotations, internal postings

Employee development: TATA encourages the employees to develop their

personalities and skills and also provides many opportunities for the same. There is a portal called GYAN JYOTI which helps the employees to enhance their skills through e-learning. Employees are made to list their areas of expertise and interests and there are workshops conducted to enhance their skills.

Employee engagement: There are many activities that are conducted to

engage the employees some of which are annual celebration, employee town hall, the success matrix, sports tournament, world of work, recharge zone, online library service. Community development centers have also been developed to establish and encourage family values in the employees.

TATA CODE OF CONDUCT

TATA is committed to abide by the code of conduct and expects this from all its employees. It is the five TATA values that it draws its strengths from:

y y y y y

Integrity Understanding Excellence Unity Responsibility

COMPENSATION
The compensation package comprises of monetary and non-monetary benefits that includes salary, special allowances, house rent allowance, travel allowance, mobile allowance, employee stock options, club memberships, accommodations, retirement benefits and other benefits. It may include a number of other benefits, including insurance, extended leaves and retirement programs. But why do companies need to give monetary benefits to employees? What will they get in return? Will it have a positive effect on the organizations performance? Compensation in monetary and non- monetary form is considered to be important by the organization and employees for various reasons such as:           Increasing employee morale and motivation Improving performance of the employees Increasing productivity Enhancing employee efficiency Reducing employee turnover Commitment Retaining best employee Loyalty gained Helps dealing with union issues Organizational citizenship behavior

Compensation can be divided into 2 components: FIXED This component takes care of Basic pay, per hr allowance(hra) and dearness allowance (DA). FLEXIBLE Under flexible/ variable compensation we have the following:     City compensatory allowance(CCA) Other allowance Mobile reimbursement/month Educational allowance

      

Travel allowance Gross per month = sum of all above Gross per annum = 12* gross/ month PF contribution = 12% of basic / Annum Gratuity ESI contribution (ESIC) = 4.75% of gross/ Annum Medical= the mediclaim facility provided to an employee who are not covered under employee state insurance(ESI).  Ex- gratia/ bonus

The total cost hence is as follows; Annual fixed gross cost (AFGC)= Gross/annum+ ex- gratia Annual total cost= AFGC+PF+ESIC The annual total cost is also known as CTC and the compensation of the would be gathered by the organization. These are the various compensation which are used by the company:

GRATUITY
The company has an obligation inclining towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The company makes annual contributions to gratuity fund established as trust. The company accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation.

SUPERANNUATION
The company has two superannuation plans, a defined plan and a defined contribution plan. An eligible employee on april 1, 1996 could elect to be a member of either plan. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn. The monthly pension benefits after retirement range from 0.75% to 2% of the annual basic salary for each year of service. The company accounts for the liability for superannuation benefits payable in future under the

plan based on an independent actuarial valuation. With effect from april, 2003, this plan was amended and benefits earned by covered employees have been protected as at march 31, 2003. Employees covered by this plan are prospectively entitled to benefits computed on a basis that ensures that the annual cost of providing the pension benefits would not exceed 15%of salary. The company maintains a separate irrevocable trust for employees covered and entitled to benefits. The company contributes up to 15% of the eligible employees salary to the trust every year. the company recognizes such contribution as an expense when incurred. The company has no further obligation beyond this contribution.

BHAVISHYA KALYAN YOJANA( BKY )

BKY is an unfunded defined benefit plan. The benefits of the plan accrue to an eligible employee at the time of death or permanent disablement, while in service, either as a result of an injury or as certified by the companys medical board. The monthly payment to dependents of the decreased/ disabled employee under the plan equals 50% of the salary drawn at the time of death or accident or a specified amount, whichever is higher. The company accounts for the liability for BKY benefits payable in future based on an independent actuarial valuation. Post-retirement medical scheme Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. Employees separated from the company as part early separation scheme, on medical grounds or due to permanent disablement are also covered under the scheme. The liability for postretirement medical scheme is based on an independent actuarial valuation.

PROVIDENT FUND
The eligible employees of the company are entitled to receive benefits under the provident fund, a defined contribution plan, in which both employees and the company make monthly contributions at a specified percentage of the covered employees salary ( currently 12% of employees; salary ). The contributions as specified under the law are paid to the provident fund and pension fund set up as irrevocable trust by the company or to respective Regional Provident Fund

Commissioner and the Central Provident Fund under the State Pension scheme. The company is generally liable for annual contributions and any shortfall in the assets based on the government specified minimum rates of return or pension and recognizes such contributions and shortfall, if any, as an expense in the year incurred.

COMPENSATED ABSENCES
The company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on the basis of an independent actuarial valuation. Apart from these Allowance like transport allowance, education allowance, sanitation, leave travel allowance etc. Annual performance linked payment Free medical facility for family Company loans & advances

REWARDS AND RECOGNITION

The Rewards and Recognition (R&R) policy at TATA basically focuses on creating such a framework that provides recognition and rewards to the contributions made by the employees. TATA believes that employees are the driving force of an organization and it is very important to attract , motivate and retain employees for reaping the benefits of increased and high productivity. The major rewards and recognition that employees get at TATA are :      Spotlight (on-the-spot recognition) Star of the month Super stars for achievers Customer first reward and valuable award Long service award (after 5 and 10 years)

There is also a GEMS reward and recognition program in TATA. It is designed to encourage the employees so that they make a performance difference individually as well as in a team. Exemplary performance over and above the call of duty is recognized and rewarded in the company annual function.

ANALYSIS
Tata motors have evolved from the traditional fixes pay and more and more variable pay is introduced by the company. Nowadays we find that the variable component is quite large as compared to the fixed one. There are huge advantages due to variable pay compensation which are as follows.     Employee accountability Motivation to perform more Performance leading to rewards and recognition High self-motivation to perform

However, critics have argued that such a pay structure would always put huge loads of pressure on the employees and hence an employee is looked merely as a machine with no emotion. Some of the disadvantages may be as follows:  Increased stress levels due to heavy expectations  Performance anxiety  Employee worn-out At last we can say that Tata motors is doing well in compensating the employees but a heavy variable pay at M&M is a case of concern. There should be some innovative ideas taken in to consideration like a tour holiday fully sponsored such practice would not only give the employee a much needed break and also motivate everyone to work. It should be noted that by giving only monetary benefits would not suffice the needs of the employees as not everyone is motivated by the money. Thus, the company should look after the overall growth of the individual, match his career aims with the goals of the company.