International Journal of Advanced Research in

Management and Social Sciences ISSN: 2278-6236

HR PRACTICES IN IT SECTOR – AN OVERVIEW

Dr. (Mrs) K. Malar Mathi*
Mrs. G. Malathi**

INTRODUCTION
Human Resource Management (HRM) is a planned approach to managing people effectively
for performance. It aims to establish a more open, flexible and caring management style so
that staff will be motivated, developed and managed in a way that they can give of their
best to support departments missions. Good HRM practices are instrumental in helping
achieve departmental objectives and enhance productivity.
HR PRACTICES
The success of any business depends as much on appropriate effective, well communicated,
HR and business practices as it's depends upon meeting the requirement of mandated
laws and regulations. In fact good planning and the development of effective
practices make regulatory compliance much easier.

*Associate Professor, BSMED Department, Bharathiar University, Coimbatore

**Research scholar, BSMED Department, Bharathiar University, Coimbatore
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 International Journal of Advanced Research in
Management and Social Sciences ISSN: 2278-6236

HR practices helps in increasing in productivity and quality and to gain the competitive
advantage of a workforce strategically aligned with the organization goals and objective.
Over the years, some of the traditional HR practices have been revisited and analyzed
to evaluate their suitability in today's world. One such major practice is the concept of
Human Resource accounting (HRA). Initially, one might hesitate to accept a concept which
tries to put a monetary value to human beings. How does one attach a number to a
person's capabilities? However, HRA represents a way to gauge how strong and profitable
an organization’s workforce is. Organizations have been claiming that their employees are
their most valuable assets. The spate of downsizings and increasing job insecurity
notwithstanding, the resurgence of interest in the area of HRA is perhaps testimony to this
approach, where investments in human resources are now included as assets in a
company's balance sheet, rather than expense heads in their profit and loss statements. The
signals are clear — the employee is an asset who can be groomed to bring in future
profitability — an asset which can define the company's image in the market today. HRA
also involves accounting for investment in people and their replacement costs, as also the
economic value of people in an organisation. A trend yet to catch up in the Indian industry,
with a few exceptions such as BHEL, Infosys, SBI and Reliance industries, it has been
extensively embraced in the West.
PATNI a leading global IT and BPO services provider, today announced that it has received
the award for “Innovative Retention Strategies” at the World HRD Congress 2010. The
prestigious global HRD event, which honors organizational transformation and
development, saw a congregation of 189 companies from over 25 countries.
The present day economy has been titled as “Knowledge economy”. In such an economy, it
is people who make all the difference. In political economy capital or market was
important. Talent occupies centre stage in the Indian workplace. In view of this, managing
and retaining manpower is becoming crucial to an organization’s success. To achieve this,
companies across sectors are focusing on some of the more critical HR practices. Some of
the trends that have been noticed are:
1. Cash Bonuses – According to a recent Accountemps survey, 46 percent of (1,400) CFOs
cite cash bonuses as the most effective way to acknowledge a job well done by the
accounting team after a major project. Be it an IT firm, or a non-IT firm, cash bonuses based

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 International Journal of Advanced Research in
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on performance has always been a favourite among employees and employers alike. The
satisfaction that comes from being recognized as an important and valued associate is an
extremely powerful motivator for employees.
2. Employee Stock Option Plans (Esops) – ESOPs enable workers to earn a retirement nest
egg, which will grow as the company’s business prospers. This also allowed employees to
help the company succeed. An ESOP can also be a great deal for the owner of a business.
The owner can sell some of his stock in the company to the ESOP, reinvest the proceeds in
publicly-held securities, and not pay any tax on the gain until the stock is sold. Hence, it is a
win-win situation.
3. Project completion lunch – This is another popular incentive that employees look forward
to. Today project completion lunches have become the norm in most mid tier and top IT
firms. According to Prashant Honnavar, HR Manager at Next Bit Computing, “These days
project teams, work hard to meet the deadlines to release a particular product without any
delays. During this phase, the team members put all their efforts for which they need some
kind of relaxation. Having a lunch together with the team will enhance the team rapport,
refresh them, and will get the team to be more cohesive and will reduce the personal
clashes within them.”
4. Joining bonus – This is a great incentive that works well in employing the right candidate
in a short amount of time. It allows an employer in attracting and retaining a talent that is
critical for niche areas of technology, and hence not losing out to rival firms. Many
candidates are lured by this incentive in a bid to make some extra bucks. The bonus
depends on the size of the firm, and can range from Rs.30, 000 to Rs.50, 000 in India.
However, a lot of big IT firms also practice awarding bonuses on special occasions. For
instance, on the occasion of the silver jubilee of Infosys, the IT giant offered a princely sum
of Rs. 126 crore to be distributed among its 58,000 employees.
5. Tax Saving Incentives – Tax saving incentives that include food coupons, HRA (Health
Reimbursement Account), transportation allowance, are some of the most popular and
sought after incentives. Additionally, companies allow employees to reimburse their
children’s education bill and telephone bills, which are non taxable and hence allows
maximum savings. This becomes a big boost for an employee to join a company.

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6. Corporate discounts – Company products and services offered at a discount to staff or

negotiated corporate discounts with certain retailers, recreational facilities or
hotels/airlines. Today employees around the world can benefit from substantial discounts at
nearly all the top retailers, when purchasing holidays, household appliances or everyday
items like CDs or magazines, whether it is online, over the phone or in-store.
7. Rewards and Recognition – One of the most valued of all employee incentives includes
the peer programs, or in other words awarding performance through recognition. In 2008,
one of India’s top IT firms, Infosys doled out iPods and Xbox players to its top performers as
an incentive.
8. Holiday Sponsorship – “But it is the ‘Employee of the Year Award’ that is the most sought
after incentive – A two nights and three days package tour to Dubai,” adds Honnavar. This
serves not only as a reward for the good performers, but also becomes a motivation for
others to perform well and get rewarded. One can also offer staff members flexible
scheduling for the holidays, if feasible. If work coverage is critical, companies can post a
calendar so that people can balance their time off with that of their coworkers.
9. Point System – This is especially for hourly employees, who can be offered a point system
that is tied to prizes. This re-energizes the first-tier employees, and creates a more
competitive working environment. For workers on salary, several companies offer large
prizes based on a ‘points lottery’ or simply allow for extra days off or an extra 15-minute
break or two.
10. Insurance – Whether it is health insurance or life insurance, this is an incentive that
most employees look for when joining an organization. According to a survey by Hewitt
Associates, a human resources consulting and outsourcing company, of nearly 600 large U.S.
companies representing more than 10 million employees, almost two-thirds (65 percent)
say that they currently invest in long-term solutions to improve the overall health and
productivity of their workforce.
11. Motivational employee recognition – “Informal recognition, like saying thank you or
please, can make a huge difference,” says Abhay Kumar Dubey, a software engineer working
with a startup in Delhi. Supervisors, have enough opportunity to praise and encourage best
efforts daily. These help in providing recognition that is valued by the employee and also a
motivational factor. With time, incentives have gained importance, and are now the prime

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motivational weapon used by employers around the world. According to most experts,
incentives can push performance and productivity far beyond what you expect. Do let us
know, what are the most popular incentives that your firm offers, or you would like your
firm to offer?
12. Leadership development – Creating a pipeline of leadership talent is key to a business’
future growth. It is imperative for the top level of an organization to make leadership talent
management a priority, and put its money into long-term plans, as opposed to short-term
ones. If companies are worried about their talent pipeline, they have to develop their
people.
13. Work-life balance – No company or employee has found the Holy Grail of balancing
work and life, but that is a work in progress. However, multinationals, information
technology (IT) and IT enabled services (ITeS) companies have been able to promote the
balance between career, family and leisure-time better. Other sectors have also been
increasingly promoting a work-life balance. Interestingly, most companies in India use
benefits such as flexible timings, telecommuting, crèche facilities and concierge services as
an attraction and retention strategy. Experts say companies should see the work-life
balance as a business proposition since progressive companies carry business forward with
employees and families.
14. Inclusion and diversity – With higher numbers of Gen Yers joining the workforce in India
at a time when companies across the world have an ageing workforce on their rolls, conflicts
are to be expected. Therefore, companies are investing both time and resources in ensuring
that all age groups are comfortable working together. Organizations in India have also been
focusing on making workplaces more representative. For companies such as ICICI Bank Ltd,
Hindustan Unilever Ltd, Vedanta Resources, PepsiCo India, Shell Companies in India and
Bharti Airtel Ltd, gender diversity has become a critical area of focus.
15. Health and wellness – The work culture at globalized workplaces involves long working
hours, frequent travel, multitasking and tight deadlines - and all this often leaves employees
mentally and physically stressed. Companies have begun to realize that healthy employees
contribute to higher efficiency and productivity. Apart from medical benefits, companies are
also offering yoga classes and health camps and have doctors on campus.HCL Technologies
Ltd, for instance, like many other IT companies, has 24/7 medical facilities in all its centres.

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DuPont has an Intranet-based tool, which assesses an employee’s health through a

questionnaire and makes recommendations based on the scores.
16. Right skilling – Right skilling, or matching jobs with a particular level of training rather
than hiring over skilled workers, is gaining currency. Companies use this strategy to tide over
a manpower supply crunch and to broaden their talent baseApart from IT and ITeS firms,
organizations in the banking and financial services sector, too, have been increasingly hiring
graduates and training them. The upside? Lower attrition rates and wage costs. Pai explains
that when you have an over-qualified employee, it is very difficult to meet her aspiration
levels and, therefore, the chances of the employee moving on to something more
challenging are higher.
17. Managing ‘solid citizens – Organizations which neglect their solid citizens are doing this
at their own peril, say experts. Unlike star performers who are potential leaders, and
therefore more likely to move out of an organization faster, this group provides stability and
bench strength to an organization. Experts say companies need to take a fresh look at solid
citizens and invest time and resources in managing and developing this group.
18. Managing aspirations – As aspirations of organizations grow, so do those of employees.
And, with the changing lifestyles and profiles of the workforce, personal and professional
aspirations of employees are not just varied, but are increasingly on the rise. Experts say
people as well as organizations have aspirations, and when the two get aligned, achieving
business goals becomes easier. Companies should be clear about goals of individuals as well
as of the organization, and the role each needs to play. The firm should also communicate
the goals, and have robust and reliable processes to execute them.
19. 360 degrees feedback – Finally, recognizing the need to make performance appraisal
systems more effective, an increasing number of companies are using the 360 degrees or
multi-rater feedback process. Unlike the traditional appraisal system, which gives one-
dimensional feedback, this one allows an employee to give feedback to her reporting
manager, peers, direct reports and others. While most companies started using this system
as a means for performance appraisal, most of them now use the 360 degrees feedback
system to identify the learning and development needs of employees.

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