A Project Study Report On

Study of HR Practices and Policy

INDIA TOBACCO COMPANY LTD.

Submitted In Partial Fulfillment For The Award of Degree Of Master of Business Administration
Submitted To: Prof. Pallavi Agarwal HOD AIET, Sitapura (Jaipur) Submitted By: Virendra Singh Sankhla MBA 3rd SEM (II Year)

Apex Institute of Engineering & Technology, Jaipur

(Approved by AICTE, New Delhi & Affiliated to Rajasthan Technical University, Kota)

PREFACE

This report is on the study done by me at ITC LTD. to know the Practices and Policies of the company. Recruitment, Selection, Promotion, Appraisals are some practices of the organization. For the employees, incentives play an important role to motivate and committed high quality performance.

It involves introduction of recruitment, selection, promotion, performance appraisal. It also includes a general introduction to the company, its products and services and various awards which it has achieved.

This report reveals study of HR practices and policies with respect to the answers provided to me in turn of the questions asked by me on components of policies and practices of ITC.

The report with the scope and objectives of the study also has the conclusion of the study.

ACKNOWLEDGEMENT

I would like to thank Professor Pallavi Agarwal, Head of Department, Apex Institute of Engineering & Technology for giving me the opportunity of making a project report on a subject related to my post graduation subjects and also for providing minute details related to the format. I am thankful to Mrs. Roopa Prabhu (HR Manager), ITC LTD, Jaipur for allowing me conduct survey and collect information from the employees of the company.

VIRENDRA SINGH SANKHLA

CONTENTS S. No.
Certificate Preface Acknowledgement Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Company Profile Research Methodology Recruitment & Selection Data Analysis & Interpretation Findings and Suggestions Conclusion Bibliography Annexure 1-20 21-24 25-58 59-72 73 74

Topic

Page No.

EXECUTIVE SUMMARY

Indian Tobacco Ltd. (ITC) is one of India's foremost private sector companies. ITC is rated among the World's Best Big Companies. ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, etc. ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies. Learning takes place outside the classroom. I stand witness to this statement. That in sight of knowledge that I acquired in the 45 days of internship with ITC was quite impressive. The opportunity I received to apply my knowledge and skills in the organization gave me a practical view point to the whole system of learning. The main objective of the training was to imbibe a practical approach in the students towards the knowledge gained at the classroom level. This internship at ITC has given me the right perception and has had a positive effect on the kind of learning.

CHAPTER-1 COMPANY PROFILE INDIAN TOBACCO COMPANY (ITC)

INTRODUCTION
ITC is one of India's foremost private sector companies with a market capitalization of US $ 35 billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine and among India's Most Valuable Companies by Business Today. ITC ranks among India's '10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in FMCG, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in hoteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India.

ITC's Agri-Business is one of India's largest exporters of agricultural products. The ITC group's contribution to foreign exchange earnings over the last ten years amounted to nearly US$ 4.9 billion, of which agri exports constituted 56%. The Company's 'eChoupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Ltd, provides IT services and solutions to leading global customers. ITC Infotech has carved a niche for itself by addressing customer challenges through innovative IT solutions. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC group directly employs 29,000 people and the Company's Businesses and their value-chains generate over 5 million sustainable livelihoods. The Company continuously endeavours to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 4,06,000 shareholders, fulfil the aspirations of its stakeholders and meet societal expectations. This over-arching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the Nation. For the Shareholder.

HISTORY AND EVOLUTION

ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company's ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology - the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'. The Company's beginnings were humble. A leased office on Radha Bazar Lane, Kolkata, was the centre of the Company's existence. The Company celebrated its 16th birthday on August 24, 1926, by purchasing the plot of land situated at 37, Chowringhee, (now renamed J.L. Nehru Road) Kolkata, for the sum of Rs 310,000. This decision of the Company was historic in more ways than one. It was to mark the beginning of a long and eventful journey into India's future. The Company's headquarter building, 'Virginia House', which came up on that plot of land two years later, would go on to become one of Kolkata's most venerated landmarks. Though the first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that would usher in momentous changes in the life of the Company. ITC's Packaging & Printing Business was set up in 1925 as a strategic backward integration for ITC's Cigarettes business. It is today India's most sophisticated packaging house. In 1975, the Company launched its Hotels business with the acquisition of a hotel in Chennai which was rechristened 'ITC-Welcomgroup Hotel Chola' (now renamed My Fortune, Chennai). The objective of ITC's entry into the hotels business was rooted in the concept of creating value for the nation. ITC chose the Hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India under four brands namely, ITC Hotels - Luxury Collection, WelcomHotels, Fortune Hotels and WelcomHeritage. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited. Bhadrachalam Paperboards amalgamated with the Company effective March 13, 2002 and became a Division of the Company, Bhadrachalam Paperboards Division. In November 2002, this division merged with the Company's Tribeni Tissues Division to form the Paperboards & Specialty Papers Division. ITC's
9

paperboards' technology, productivity, quality and manufacturing processes are comparable to the best in the world. It has also made an immense contribution to the development of Sarapaka, an economically backward area in the state of Andhra Pradesh. It is directly involved in education, environmental protection and community development. In 2004, ITC acquired the paperboard manufacturing facility of BILT Industrial Packaging Co. Ltd (BIPCO), near Coimbatore, Tamil Nadu. The Kovai Unit allows ITC to improve customer service with reduced lead time and a wider product range. In 1985, ITC set up Surya Tobacco Co. in Nepal as an Indo-Nepal and British joint venture. In August 2002, Surya Tobacco became a subsidiary of ITC Limited and its name was changed to Surya Nepal Private Limited (Surya Nepal). In 2004, the company diversified into manufacturing and exports of garments. In 1990, ITC acquired Tribeni Tissues Limited, a Specialty paper manufacturing company and a major supplier of tissue paper to the cigarette industry. The merged entity was named the Tribeni Tissues Division (TTD). To harness strategic and operational synergies, TTD was merged with the Bhadrachalam Paperboards Division to form the Paperboards & Specialty Papers Division in November 2002. Also in 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. The Division is today one of India's largest exporters. ITC's unique and now widely acknowledged e-Choupal initiative began in 2000 with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. Also, through the 'Choupal Pradarshan Khet' initiative, the agri services vertical has been focusing on improving productivity of crops while deepening relationship with the farming community. ITC launched line of premium range of notebooks under brand Paperkraft in 2002. To augment its offering and to reach a wider student population, the Classmate range of notebooks was launched in 2003. Classmate over the years has grown to become India's largest notebook brand and has also increased its portfolio to occupy a greater share of the school bag. Years 2007- 2009 saw the launch of Practical Books, Drawing Books, Geometry Boxes, Pens and Pencils under the 'Classmate' brand. In 2008, ITC positioned the business as the Education and Stationery Products Business and launched India's first environment friendly premium business paper under the 'Paperkraft' Brand. 'Paperkraft' offers a diverse portfolio in the premium executive stationery and office consumables segment. In 2010, Colour Crew was launched as a new brand of art stationery. ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women in 2000. The Wills Lifestyle chain of exclusive stores later expanded its range to include Wills Classic formal wear (2002) and Wills Clublife evening wear (2003). ITC also initiated a foray into the popular segment with its men's wear brand, John Players, in 2002. In 2006, Wills Lifestyle became title partner of the country's most premier fashion event - Wills Lifestyle India
10

Fashion Week - that has gained recognition from buyers and retailers as the single largest B-2-B platform for the Fashion Design industry. To mark the occasion, ITC launched a special 'Wills Signature', taking the event forward to consumers. In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited, to more aggressively pursue emerging opportunities in this area. Today ITC Infotech is one of India's fastest growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals - Banking Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering Services, Media & Entertainment, Travel, Hospitality, Life Sciences and Transportation & Logistics. ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). 2003 witnessed the introduction of Sunfeast as the Company entered the biscuits segment. ITC entered the fast growing branded snacks category with Bingo! in 2007. In 2010, ITC launched Sunfeast Yippee! to enter the Indian instant noodles market. In just over a decade, the Foods business has grown to a significant size under seven distinctive brands, with an enviable distribution reach, a rapidly growing market share and a solid market standing. In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep and Aim. ITC's foray into the marketing of Agarbattis (incense sticks) in 2003 marked the manifestation of its partnership with the cottage sector. Mangaldeep is a highly established national brand and is available across a range of fragrances like Rose, Jasmine, Bouquet, Sandalwood, Madhur, Sambrani and Nagchampa. ITC entered the Personal Care Business in 2005. In seven years, the Personal Care portfolio has grown under 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel' and 'Superia' brands which have received encouraging consumer response and are also being progressively extended nationally. In 2010, ITC launched its handrolled cigar, Armenteros, in the Indian market. Armenteros cigars are available exclusively at tobacco selling outlets in select hotels, fine dining restaurants and exclusive clubs.

11

THE ITC WAY

ITC is a board-managed professional company, committed to creating enduring value for the shareholder and for the nation. It has a rich organizational culture rooted in its core values of respect for people and belief in empowerment. Its philosophy of all-round value creation is backed by strong corporate governance policies and systems.

ITCs corporate strategies are:

Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets.

Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology.

Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality.

Ensure that each of its businesses is world class and internationally competitive.

Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITCs various businesses.

Create distributed leadership within the organization by nurturing talented and focused top management teams for each of the businesses.

Continuously strengthen and refine Corporate Governance processes and systems to catalyse the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

12

INDIAN LEAF TOBACCO DEVELOPMENT (ILTD) DIVISION The leaf & tobacco arm of ITC Ltd. For over 9 decades, has pioneered the cultivation and development of cigarette tobacco in India. It is instrumental in making India succeed in the global cigarette tobacco market. ITC-ILTD is head quartered (HQ) at Guntur, in the state of Andhra Pradesh, the biggest agro-commercial center for tobacco. Mysore is the gateway to cigarette tobacco in the state of Karnataka. Sustaining ILTD leadership in the leaf business by combining the virtues of tradition with modernity, and delivering goods and services efficiently with a personal touch. ITLD give one key to superior business performance, it is his ability to turn the perceptions capabilities, and relationships of our people into the building blocks of the organization. His track record, so far, stands testimony to this recognition and the future will be no different

TOBACCO AND ITS PROCESSING ITLD is controlling from tobacco seed to finally tobacco. ITLD give a d o p t i o n of contemporary Agro - techniques and the enterprising sprit of the tobacco farmer have led to India being acknowledged as one o f t h e m o s t important tobacco producing countries in the world. Topical climate Coupled with two monsoons facilitates the Indian farmer to grow tobacco throughout the gear. Tobacco cultivation in India is spread over a large geographical area covering a wide range of Soils, each growing area producing a unique style of tobacco .The southern states of India, Andhra Pradesh an d Karnataka are the Prime cigarette t y p e t o b a c c o g r o w i n g r e g i o n s w i t h 4 , 0 0 , 0 0 0 h e c t a r e s l a n d u n d e r T o b a c c o cultivation. India is recognized as an ideal source for a variety of tobacco, offering sustainable quality produce at competitive prices throughout the Year .ITLDs green leaf threshing (GLT) plants with a total capacity to process 520 metric Tons per day are comparable with the best in the world. They are fully automated with the latest equipment to process and deliver 100 million Kgs of high quality tobacco every year. It is no surprise that they enjoy ISO9002 and ISO14001 accreditations. He have two processing lines in the southern state of Andhra parades chirala with 3 processing lines and antipathy with 1 processing line. Chirala unit is first unit in India who has received the Coveted Social Accountability Standard Certification (SA 8000).This unit ware housing facilities are benchmarked to international standard for hygiene and infestation control. ILTD have large wear housing capacity to stock around 100M.Kg of finishes produce (Tobacco)

13

ITC BOARD OF DIRECTORS Chairman

Y C Deveshwar

Executive Directors

Nakul Anand

P V Dhobale

K N Grant

Non-Executive Directors
A Baijal S H Khan H G Powell Anthony Ruys S Banerjee S B Mathur P B Ramanujam Basudeb Sen AV Girija Kumar D K Mehrotra S S H Rehman Meera Shankar

K Vaidyanath

B Vijayaraghavan

14

DIVISIONAL MANAGEMENT COMMITTEES

Indian Tobacco Division Food Division Lifestyle Retailing Business Division Personal Care Products Strategic Business Unit Education And Stationery Products Strategic Unit Matches And Agarbatti Strategic Business Unit Hotel Division Paperboards And Specialty Papers Division Packaging And Printing Strategic Business Unit Agri Business Division Agri Business Division - ILTD

THE ITC VISION

Sustain ITCs position as one of Indians most valuable corporations through world class performance, creating growing value for the Indian economy and the companys stakeholders.

THE ITC MISSION

To enhance the wealth generating capability of the enterprise in a globalising environment, delivering superior and sustainable stakeholder value.

Core Values
ITC's Core Values are aimed at developing a customer-focused, high-performance organization which creates value for all its stakeholders: Trusteeship As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis.

15

Customer Focus We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction. Respect for People We are result oriented, setting high performance standards for ourselves as individuals and teams. We will simultaneously respect and value people and uphold humanness and human dignity. We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives. We want individuals to dream, value differences, create and experiment in pursuit of opportunities and achieve leadership through teamwork. Excellence We do what is right, do it well and win. We will strive for excellence in whatever we do. Innovation We will constantly pursue newer and better processes, products, services and management practices. Nation Orientation We are aware of our responsibility to generate economic value for the Nation. In pursuit of our goals, we will make no compromise in complying with applicable laws and regulations at all levels.

CORPORATE GOVERNANCE Preamble

Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole.
16

Since the commencement of the liberalisation process, India's economic scenario has begun to alter radically. Globalisation will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance. Equally, in the resultant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors. ITC's governance policy recognises the challenge of this new business reality in India. Definition and Purpose ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, we believe that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations. Core Principles ITC's Corporate Governance initiative is based on two core principles. These are : i. ii. Management must have the executive freedom to drive the enterprise forward without undue restraints; and This freedom of management should be exercised within a framework of effective accountability. ITC believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a mechanism of checks and balances which ensures that the decision making powers vested in the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations. Cornerstones From the above definition and core principles of Corporate Governance emerge the cornerstones of ITC's governance philosophy, namely trusteeship, transparency, empowerment and accountability, control and ethical corporate citizenship. ITC believes that the practice of each of these leads to the creation of the right corporate culture in which the company is managed in a manner that fulfils the purpose of Corporate Governance. Trusteeship ITC believes that large corporations like itself have both a social and economic purpose. They represent a coalition of interests, namely those of the shareholders, other providers of capital, business associates and employees. This belief therefore casts a
17

responsibility of trusteeship on the Company's Board of Directors. They are to act as trustees to protect and enhance shareholder value, as well as to ensure that the Company fulfils its obligations and responsibilities to its other stakeholders. Inherent in the concept of trusteeship is the responsibility to ensure equity, namely, that the rights of all shareholders, large or small, are protected. Transparency ITC believes that transparency means explaining Company's policies and actions to those to whom it has responsibilities. Therefore transparency must lead to maximum appropriate disclosures without jeopardising the Company's strategic interests. Internally, transparency means openness in Company's relationship with its employees, as well as the conduct of its business in a manner that will bear scrutiny. We believe transparency enhances accountability. Empowerment and Accountability Empowerment is an essential concomitant of ITC's first core principle of governance that management must have the freedom to drive the enterprise forward. ITC believes that empowerment is a process of actualising the potential of its employees. Empowerment unleashes creativity and innovation throughout the organisation by truly vesting decision-making powers at the most appropriate levels in the organisational hierarchy. ITC believes that the Board of Directors are accountable to the shareholders, and the management is accountable to the Board of Directors. We believe that empowerment, combined with accountability, provides an impetus to performance and improves effectiveness, thereby enhancing shareholder value. Control ITC believes that control is a necessary concomitant of its second core principle of governance that the freedom of management should be exercised within a framework of appropriate checks and balances. Control should prevent misuse of power, facilitate timely management response to change, and ensure that business risks are preemptively and effectively managed. Ethical Corporate Citizenship ITC believes that corporations like itself have a responsibility to set exemplary standards of ethical behaviour, both internally within the organisation, as well as in their external relationships. We believe that unethical behaviour corrupts organisational culture and undermines stakeholder value.

18

Working Area of ITC Ltd

ITC is now a days doing eight (8) major area of production, distribution and servicing. These are as follows Cigarettes and Tobacco H o t e l s Packaging Paper board & Specialty paper Information Technology (IT) Life style retailing Agro-Exports Group Companies etc.

A. Cigarettes and Tobacco: ITC buys nearly 50% of all cigarettes types tobacco grown in India. It has been India single largest integrated sources of quality tobacco for customer in 37 countries over the last 6 decades. ITCs Comprehensive andsophist6icated R&D facilities cover all aspects of cultivation. Processing and packaging. ITC to process and deliver 100 million Kgs of high quality tobacco. ITC also co-operates with government agencies to develop new varieties of tobacco and to develop new areas for tobacco cultivation. B. H o t e l s : ITC entered into hotels field in 1975. He is giving best hospitality services in some field. ITC have 46 hotels across 42 destinations all over India. C.Packaging:ITC also producing packaging items like Flip top Boxes Card board outers Shells and slides Soft cup and strap labels Bundle wraps Flap boxes Inner frames Coupon inserts and variety Folding crotons The major unit (factory) which is producing packaging items- one is Munger (Bihar) and other is Tiruvottiyar near Chennai.
19

D. Paper Board & Specialty paper : ITC has now integrates sits paperboard &specialty paper business into its newly created (PSPD), to how new strategic &operational synergies. ITC is one of the world most modern and contemn porary manufactures of packaging (paper board) boards, with a manufacturing capacity of over 2,00,000 tones par year (1) packaging board coasted folding box boards, solid bleached sulphates board, white unit chipboard, liquid packaging board (2) cast coated papers and boards. The division also produced quality(a). Printing & Writing papers (b). Eco- friendly papers (c). Photo copier papers

E. Information Technology (IT): ITC has recently spun off its 20 year old information system division into a wholly owned subsidiary to aggressively pursue growth opportunities in this sector. ITC InfoTech India Ltd offer a powerful customer value proposition based on its in depth domains know ledge gained from the experience of servicing a range of internal & external customers across diverse domains. Hoteliring P a c k a g i n g Paper boards Specialty papers International Trading FMCG Etc.

F. Lifestyle Retailling:ITC also manufacturing readymade garments range of international quality of relaxed wear under the brand name wills sport. It has 48retail out across 38 cities in the country. Recently he also lunched another brand name john players offers complete range of contemn porary mens wear- like shirts, Trousers, t-shirts & denims. It also lunches in Nov. 2002 under brand name the classes collection. G. Agro-Exports: ITC international business division (IBD) is doing Exports activities of Agriculture products and processed foods Etc. he exports following items to UK, US and Another European countries20

Soya meal. Rice Aqua products. P e a n u t s C o f f e e W h e a t Sesame Seeds. Black pepper Processed & frozen fruits & vegetables.

H. Group Companies: Main Group Companies ITC Hotels. Surya Nepal Private Limited. International Travel House Land Base Associate Companies ITC Filtrona.

21

ORGANISATION STRUCTURE

BRANCH MANAGER

Assistant Manager Finance

Assistance manager marketing

Finance Executive

Area Manager

Office Associates (OA)

Area Executive

Sales Trainee (ST)

Eligibility Criteria for Finance Executive

1. Minimum graduate / post graduate / + MBA in Finance 2 to 3 years experience in finance field. 2. Age less than 28 years.

3. 50% throughout education career. 4. Should be able to read, write and speak Hindi and English.

22

Eligibility Criteria for Area Executive

1. Minimum graduation / + 2 to 3 Experience in sales, preferable in FMCG Sector. 2. Age less than 28 years 3. 50% throughout education career. 4. Should be able to read, write and speak Hindi and English and local language.

Eligibility Criteria for Sales Trainee

1. Qualification Fresher MBA, who completed MBA in current year. 2. Age at least 21-22 years. 3. Should be able to read, write and speak Hindi and English.

They are recruited through campus or can be recruited through interns who meet the eligibility criteria.

Eligibility Criteria for Office Associates

1. Minimum Qualification graduation or post graduation in finance / operation / 2 to 3 experience (fresher). 2. Age maximum 28 years.

3. 50% throughout education career. 4. Only females are eligible for this post. 5. Should be able to read, write and speak Hindi and English.
23

CHAPTER2 RECRUITMENT & SELECTION OF EMPLOYEES

Recruitment
Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and appointment. Recruitment is understood as the process of searching for and obtaining applicants for the jobs, from among whom the right people can be selected. A formal definition states, It is the process of finding and attracting capable applicants for the employment. The process begins when new recruits are sought and ends when their applicants are submitted. The result is a pool of applicants from which new employees are selected. In this, the available vacancies are given wide publicity and suitable candidates are encouraged to submit applications so as to have a pool of eligible candidates for scientific selection. In recruitment, information is collected from interested candidates. For this different source such as newspaper advertisement, employment exchanges, internal promotion, etc. are used. In the recruitment, a pool of eligible and interested candidates is created for selection of most suitable candidates. Recruitment represents the first contact that a company makes with potential employees. 1.1.1 Definition: According to EDWIN B. FLIPPO, Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. 1.1.2 Purpose and Importance of Recruitment: 1. Determine the present and future requirements of the organization on conjunction with its personnel-planning and job analysis activities. 2. Increase the pool of job candidates at minimum cost.

24

3. Help increase the success rate of the selection process by reducing the number of visibly under qualified or overqualified job applicants. 4. Help reduce the probability that job applicants, once recruited and selected, will leave the organization only after a short period of time. 5. Meet the organizations legal and social obligations regarding the composition of its work force. 6. Begin identifying and preparing potential job applicants who will be appropriate candidates. 7. Increase organizational and individual effectiveness in the short term and long term. 8. Evaluate the effectiveness of various recruiting techniques and sources for all types of job applicants.

Recruitment is a positive function in which publicity is given to the jobs available in the organization and interested candidates are encouraged to submit applications for the purpose of selection. Recruitment represents the first contact that a company makes with potential employees. It is through recruitment that many individuals will come to know a company, and eventually decided whether they wish to work for it. A well-planned and well-managed recruiting effort will result in high quality applicants, whereas, a haphazard and piecemeal efforts will result in mediocre ones.

1.1.3 Recruitment Process: Manpower Planning: Manpower Planning which is also called as Human Resource Planning consists of putting right number of people, right kind of people at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization. Human Resource Planning has got an important place in the arena of industrialization. Human Resource Planning has to be a systems approach and is carried out in a set procedure. The procedure is as follows: Analyzing the current manpower inventory Making future manpower forecasts Developing employment programs Design training programs

25

Analyzing the current manpower inventory: Before a manager makes forecast of future manpower, the current manpower status has to be analyzed. For this the following things have to be noted1. Type of organization 2. Number of departments 3. Number and quantity of such departments 4. Employees in these work units Once these factors are registered by a manager, he goes for the future forecasting. Making future manpower forecasts: Once the factors affecting the future manpower forecasts are known, planning can be done for the future manpower requirements in several work units. The Manpower forecasting techniques commonly employed by the organizations are as follows: i. Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique. ii. Trend Analysis: Manpower needs can be projected through extrapolation (Projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure). iii. Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division. iv. Work Force Analysis: Whenever production and time period has to be analyzed, due allowances have to be made for getting net manpower requirements. v. Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, and new venture analysis. Developing employment programs- Once the current inventory is compared with future forecasts, the employment programs can be framed and developed accordingly, which will include recruitment, selection procedures and placement plans. Design training programs- These will be based upon extent of diversification, expansion plans, development programs, etc. Training programs depend upon the extent of improvement in technology and advancement to take place. It is also done to improve upon the skills, capabilities, knowledge of the workers.

26

SOURCES OF MANPOWER SUPPLY An organization can fill up its vacancies either through promotion of people available in the organization or through the selection of people from outside. Thus, there can be two sources of manpower external and internal. For all recruitment, a preliminary question of policy considers the extent to which it will emphasize external and internal sources. Vacancies through internal sources can be filled up either through promotion or transfer; recruiters tend to focus their attention on outside sources. Therefore, the first problem is to identify outside sources. Normally, following outside sources are utilized for different positions. 1). Advertisement -: Advertisement is the most effective means to search potential employees from outside the organization. Employment advertisement in journals, newspaper, bulletins, etc, is quite common in our country. An advertisement contains brief statement of the nature of jobs, the type of people required, and procedure for applying for these jobs. 2). Employment Agencies -: Many organizations get the information about the prospective candidates through employment agencies. In our country, two types of agencies are operating: public employment agencies and private employment agencies. Public Employment Agencies: There are employment exchanges run by the government almost in all districts. The employment seekers get themselves registered with these agencies. Normally, such exchanges provide candidates for lower position like semi-skilled and skilled workers, and lower-level operations like clerks, junior supervisors, etc. Private Employment Agencies : There are many consultancy and employment agencies like ABC consultants, Personnel and productivity services, etc., which provide employment services particularly for selecting higher level and middle level executives. These agencies also undertake total functions personnel on behalf of various organizations. They charge fees for this purpose. 3). On Campus Recruitment -: Many organizations conduct preliminary search of prospective employees by conducting interviews at the campuses of various institutes, universities and colleges. This source is quite useful for selecting people to the posts of management trainees, technical supervisor, scientist, and technicians. The organizations hold preliminary interviews on the campus on the predetermined date and candidates found suitable are called for further interviews at specified. 4). Employee Recommendations -: Employee recommendation can be considered to the lower levels. The idea behind employee recommendations as a source of potential applicants is that the present employees may have specific knowledge of the individuals
27

who may be their friends, relatives, or acquaintances. If the present employees are reasonably satisfied with their jobs, they communicate these feelings to many persons in their communities. 5). E-Hiring -: Many organizations conduct preliminary search of prospective employees through the internet service. There are many job portals available on internet like Naukri.com, Monster.com etc. Candidates register their CVs on the different job portals which are searched by the recruiters who are looking for the candidates. The candidates whose profiles match with the recruiters requirement are contacted through email or by telephone for further interview process. 6). Gate Hiring -: The concept of gate hiring is to select people who approach on their own for employment in the organization. Gate hiring is quite useful and convenient method at the initial stage of the organization when large number of such people may be required by the organization. It can be made effective by prompt disposal of applications, by providing information about the organizations policy and procedures regarding such hiring and providing facilities to +such gate callers. It is not necessary that a particular organization will utilize all sources to employ people of all types. Some of the sources are more useful for a particular category of employees.

28

SELECTION
Selection is defined as the process of differentiating between applicants in order to identify (and hire) those with a greater likelihood of success in a job. Selection is basically picking an applicant from (a pool of applicants) who has the appropriate qualification and competency to do the job. The Difference between Recruitment and Selection: Recruitment is identifying and encouraging prospective employees to apply for a job. And Selection is selecting the right candidate from the pool of applicants. GOALS OF SELECTION To systematically collect information about to meet the requirements of the advertised position. To select a candidate that will be successful in performing the tasks and meeting the responsibilities of the position. To engage in hiring activities that will result in eliminating the under utilization of women and minorities in particular departments. To emphasize active recruitment of traditionally underrepresented groups, i.e. individuals with disabilities, minority group members, women, and veterans.

Selection Process A selection process involves a number of steps. The basic idea is to solicit maximum possible information about the candidates to ascertain their suitability for employment. Since the type of information required for various positions may vary, it is possible that selection process may have different steps for various positions. For example, more information is required for the selection of managerial personnel as compared to workers. A standard selection process has the following steps:

1).Screening of Applications -: Prospective employees have to fill up some sort of application forms. These forms have variety of information about the applicants like their personal bio-data, achievements, experience, etc. Such information is used to screen the applicants who are found to be qualified for the consideration of employment. Based on the screening of applications, only those candidates are called for further process of selection that is found to be meeting the job standards of the organization. 2). Selection Tests -: Many organizations hold different kinds of selection tests to know more about the candidates or to reject the candidates who cannot be called for
29

interview, etc. Selection tests normally supplement the information provided in the application forms. Such forms may contain factual information about candidates. Selection tests may give information about their aptitude, interest, personality, etc., which cannot be known by application forms. Types of selection tests are as follows: Achievement test, Intelligence test, Personality test, Aptitude test, Interest test. 3). Interview -: Selection tests are normally followed by personnel interview of the candidates. The basic idea here is to find out overall suitability of candidates for the jobs. It also provides opportunity to give relevant information about the organization to the candidates. In many cases, interview of preliminary nature can be conducted before the selection the selection tests. For example, in the case of campus selection, preliminary interview is held for short listing the candidates process of selection. 4). Checking of References -: Many organizations ask the candidate to provide the names from whom more information about the candidates can be solicited. Such information may be related to character, working, etc. The usual referees may be previous employers, persons associated with the educational institutions from where the candidates have received education, or other persons of prominence who may be aware of the candidates behavior and ability. 5). Physical Examination -: Physical examination is carried out to ascertain the physical standards and fitness of prospective employees. The practice of physical examination varies a great deal both in terms of coverage and timings. Some organizations only have general check up of applicants to find out the major physical problems which may come in the way of effective discharge of duties. In the context of timings also, some organizations locate the physical examination near the end of the selection process, others place it relatively early in the process. This latter course is generally followed when there is high demand for physical fitness. 6). Approval by Appropriate Authority -: On the basis of the above steps, suitable candidates are recommended for selection by the selection committee or personnel department. Organizations may designate the various authorities for approval of final selection of candidates for different categories of candidates, Thus, for top level managers, Board of directors may be approving authority; for lower levels, even functional heads concerned may be approving authority. When the approval is received, the candidates are informed about their selection and asked to report for duty to specified persons. 7). Placement -: After all the formalities are completed, the candidates are placed on their jobs initially on probation period may range from three months to two years. During this period, they are observed keenly, and when they complete this period successfully, they become the permanent employees of the organization.

30

PROMOTION
A promotion is the advancement of an employee's rank or position in an organizational hierarchy system. Promotion may be an employee's reward for good performance, i.e., positive appraisal. Before a company promotes an employee to a particular position it ensures that the person is able to handle the added responsibilities by screening the employee with interviews and tests and giving them training or on-the-job experience. A promotion can involve advancement in terms of designation, salary and benefits, and in some organizations the type of job activities may change a great deal. The opposite of a promotion is a demotion. Promotion is the element of the marketing mix which is entirely responsible for communicating the marketing proposition. Marketers work hard to create a unique marketing proposition for their product or service. McDonald's is about community, food and enjoyment. Audi is about the driver experience and technology. Think of it like a cake mix, the basic ingredients are always the same. However if you vary the amounts of one of the ingredients, the final outcome is different. It is the same with promotions. You can integrate different aspects of the promotions mix to deliver a unique campaign. Now let's look at the different elements of the promotions mix. The elements of the promotions mix are:

Personal Selling. Sales Promotion. Public Relations. Direct Mail. Trade Fairs and Exhibitions. Advertising. Sponsorship. Online Promotions.

31

The elements of the promotions mix are integrated to form a coherent campaign. As with all forms of communication, the message from the marketer follows the 'communications process' as illustrated above. For example, a radio advert is made for a car manufacturer. The car manufacturer (sender) pays for a specific advert with contains a message specific to a target audience (encoding). It is transmitted during a set of commercials from a radio station (message/medium). The message is decoded by a car radio (decoding) and the target consumer interprets the message (receiver). He or she might visit a dealership or seek further information from a web site (Response). The consumer might buy a car or express an interest or dislike (feedback). This information will inform future elements of an integrated promotional campaign. Perhaps a direct mail campaign would push the consumer to the point of purchase. Noise represents the thousands of marketing communications that a consumer is exposed to everyday, all competing for attention. Promotion is one of the market mix elements. The specification of five promotional mix or promotional plan of these elements are personal selling, advertising, sales promotion, direct marketing, and publicity. Promotional mix specifies how much attention to pay to each of the five subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Fundamentally, however there are three basic objectives of promotion. These are: 1. To present information to consumers as well as others. 2. To increase demand. 3. To differentiate a product.
32

Performance Appraisal
Once the employee has been selected, trained and motivated, he is then appraised for his performance. Performance Appraisal is the step where the Management finds out how effective it has been at hiring and placing employees. If any problems are identified, steps are taken to communicate with the employee and remedy them. Performance Appraisal is a process of evaluating an employees performance in terms of its requirements. Performance Appraisal can also be defined as the process of evaluating the performance and qualifications of the employees in terms of the requirements of the job for which he is employed, for purposes of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from actions affecting all members equally.

IMPORTANCE AND PURPOSE Performance Appraisal has been considered as the most significant an indispensable tool for an organization, for an organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increases. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel subdivisions such as recruiting, selection, training and compensation. Accurate information plays a vital role in the organization as a whole. They help in finding out the weaknesses in the primary areas. Formal Performance Appraisal plans are designed to meet three Needs, one of the organization and the other two of the individual namely: They provides systematic judgments to back up salary increases,transfers, demotions or terminations.

They are the means of telling a subordinate how he is doing and suggesting needed changes in his behavior, attitudes, skills or job knowledge. They let him know where he stands with the Boss.

Superior uses them as a base for coaching and counseling the individual.
33

On the basis of merit rating or appraisal procedures, the main objectives of Employee Appraisal is:

O To enable an organization to maintain an inventory of the number and managers and to identify and meet their training needs and aspirations.

quality of all

O To determine increment rewards and to provide reliable index for promotions and transfers to positions of greater responsibility.

O To suggest ways of improving the employee s performance when he is not found to be up to mark during the review period.

O To identify training and development need and to evaluate effectiveness of training and development programs.

O To plan career development, human resource planning based potentials.

34

Methods of Performance Appraisal

35

PROCESS OF PERFORMANCE APPRAISAL

A performance management process sets the platform for rewarding excellence by aligning individual employee accomplishments with the organizations mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear performance expectations which includes results, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.

36

Setting performance standards, observing and providing feedback, and conducting appraisals enables the Team Leader to achieve the best results through managing employee performance. To begin the process, the Team Leader and the employee collaborates on the development of performance standards. The Team Leader then develops a performance plan that directs the employee's efforts toward achieving specific results, to support organizational growth as well as the employee's professional growth. Discussion of goals and objectives throughout the year provides a framework to ensure that employees achieve results through One on One and mutual feedback. At the end of the rating period, the Team Leader appraises the employee's performance against existing standards, and establishes new goals together for the next rating period. As the immediate supervisor, the Team Leader plays an important role; his closest interaction with the employee occurs at this level.

There are four key elements in the appraisal system:

1. Set objectives - Decide what the Team Leader wants from the employees agree these objectives with them.

and

2. Manage performance - Give employees the tools, resources and training they need to perform well.

3. Carry out the appraisal - monitor and assess the employees' performance, discuss those assessments with them and agree on future objectives. 4. Provide rewards/remedies - Consider pay awards and/or promotion based on the appraisal and decide how to tackle poor performance.

37

Performance Standards

How does the Team Leader decide what's acceptable and what's unacceptable performance? The answer to this question is the first step in establishing written standards. Performance expectations are the basis for appraising employee performance. Written performance standards let the Team Leader to compare the employee's performance with mutually understood expectations and minimize ambiguity in providing feedback.

Having performance standards is not a new concept; standards exist whether or not they are discussed or put in writing. When the Team Leader observes an employee's performance, he usually makes a judgment about whether that performance is acceptable. Standards identify a baseline for measuring performance. From performance standards, the Team Leader can provide specific feedback describing the gap between expected and actual performance.

Guiding Principles Effective performance standards: 1. Serve as an objective basis for communicating about performance. 2. Enables the employee to differentiate between acceptable and results. unacceptable

3. Increase job satisfaction because employees know when tasks are performed well. 4. Inform new employees of your expectations about job performance.

Expressing Standards The terms for expressing performance standards are outlined below:

o Quantity: Specifies how much work must be completed within a certain period overtime.
38

o Quality: Describes how well the work must be accomplished. Specifies accuracy, precision, appearance, or effectiveness. o Timeliness: Answers the questions, by when? , How soon? , Or within what period? o Effective Use of Resources: Used when performance can be assessed in terms of utilization of resources: money saved, waste reduced. o Effects of Effort: Addresses the ultimate effect to be obtained; expands Statements of effectiveness by using phrases such as: so that, in order to, or as shown by. o Manner of Performance: Describes conditions in which an individual's personal behavior has an effect on performance, e.g., assists other employees in the work unit in accomplishing assignments. o Method of Performing Assignments: Describes requirements; used when only the officially prescribed policy, procedure, or rule for accomplishing the work is acceptable. Performance Measurements Since one of the characteristics of a performance standard is that it can be measured, the Team Leader identifies how and where evidence about the employee's performance will be gathered. Specifying the performance measurements when the responsibility is assigned will help the employee keep track of his progress, as well as helping the Team Leader in the future performance discussions

Observation and Feedback (One on One) Once performance objectives and standards are established, the Team Leader observes the employees' performance and provides feedback. The Team Leader has a responsibility to recognize and reinforce strong performance by an employee, and identify and encourage improvement where it is needed. The Team Leader provides informal feedback almost every day. By observing and providing detailed feedback, the Team Leader plays a critical role in the employee's continued success and motivation to meet performance expectations.
39

Key Elements of One on One To make One on One sessions effective, the Team Leader keeps the following key elements of One on One in mind while conducting such a session: 1. Observe the employee's work and solicit feedback from others. 2. When performance is successful, take the time to understand why. 3. Advise the employee ahead of time on issues to be discussed. 4. Discuss alternative solutions. 5. Agree on action to be taken. 6. Schedule follow-up meeting(s) to measure results. 7. Recognize successes and improvements. 8. Document key elements of One on One session.

Questions to Consider during One on One

To provide effective feedback the Team Leader must understand the elements of performance and analyze marginal performance. These questions are kept in mind: Q. How is the employee expected to perform? Q. Does the employee understand these expectations? If not, why not? Q. Does the employee know what successful results look like? How does the Leader know? Team

Q. Does the employee know the performance is marginal? How does the Team Leader know? Q. Are there obstacles beyond the employee's control? Can the Team Leader remove them? Q. Has the employee ever performed this task satisfactorily? Q. Is the employee willing and able to learn? Q. Does satisfactory performance result in excessive work being assigned?

40

Follow-Up Discussion
During a follow-up discussion, the following steps are followed: o o o o o o Review the previous discussion(s). Discuss insufficient improvement and ask for reasons why. Indicate consequence of continued lack of improvement. Agree on action to be taken and set a follow-up date, if appropriate. Convey confidence in the employee. Document the discussion.

41

CHAPTER-2 RESEARCH METHODOLOGY

Meaning of Research Research is the process of collecting, analysis, and interpretation data and information to answer the questions. According to Clifford Woody, Research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis.

Meaning of Research Methodology Research Methodology is a way to systematically solve the research problems. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology.

Aim of the Research To ascertain the effectiveness of practices and policy used by the company.

Objectives of the study The following are the objectives of the study

To develop my understanding of the subject. Practices and policies implemented in various Organizations varies according to the need and suitability. Through my research, I have tried to study the kind of method used in the Organization and the various pros and cons of this type of system.
42

 To conduct a study on social behavior. Social behavior is a very unpredictable aspect of human life but social research is an attempt to acquire knowledge and to use the same for social development.

To enhance the welfare of employees. The policies and practices is conceived by the Management but mostly does not take into consideration the opinion of the employees. This can lead to adverse problems in the Organization. Therefore by this study I have attempted to put forth the opinion of the employees.

To exercise social control and predict changes in behavior. The ultimate object of my research is to make it possible to predict the behaviors of individuals by studying the factors that govern and guide them.

Research Design A research design is a type of blueprint prepared on various types of blueprints available for the collection, measurement and analysis of data. A research design calls for developing the most efficient plan of gathering the needed information. The design of a research study is based on the purpose of the study. A research design is the specification of methods and procedures for acquiring the information needed. It is the overall pattern or framework of the project that stipulates what information is to be collected from which source and by what procedures.

Sampling An integral component of a research design is the sampling plan. Specifically, it addresses three questions Whom to survey (The Sample Unit), How Many to Survey (The Sample Size) & How to select them (The Sampling Procedure) Making a census
43

study of the whole universe will be impossible on the account of limitations of time. Hence sampling becomes inevitable. A sample is only a portion of the total employee strength. According to Yule, a famous statistician, the object of sampling is to get maximum information about the parent population with minimum effort.

Methods of Sampling Probability Sampling is also known as random sampling or chance sampling. Under this sampling design every individual in the organization has an equal chance, or probability, of being chosen as a sample. This implies that the section of sample items is independent of he persons making the study that is, the sampling operation is controlled objectively so that the items will be chosen strictly at random. Non Probability Sampling is also known as deliberate sampling, purposeful and judgmental sampling. Non-Probability Sampling is that which does not provide every individual in the Organization with a known chance of being included in the sample.

Data Collection Method Collection of data is the first step in statistics. The data collection process follows the formulation for research design including the sample plan. The data can be secondary or primary. Collection of Primary Data during the course of the study or research can be through observations or through direct communication with respondents on one form or another or through personal interviews. I have collected primary data by the means of a Questionnaire. The Questionnaire was formulated keeping in mind the objectives of the research study. Secondary Data means data that is already available i.e., they refer to data, which has already been collected and analyzed by someone else. When a secondary data is used, the researcher has to look into various sources from where he can obtain data. This includes information from various books, periodicals, magazines etc.

44

Sampling Design Convenience Sampling, as the name implies, is based on the convenience of the researcher who is to select a sample. Respondents in the sample are included in it merely on account of their being available on the spot where the survey was in progress.

Source of Data a) Primary Data b) Secondary Data : : Structured Questionnaire Journals, Booklets, Company Data, etc.

Sample Size The sample size of my study is being taken as 50. That is, 50 employees have been inquired regarding the HR policies & practices of employees in ITC.

45

RECRUITMENT SOURCES OF ITC

The sources of recruitment may be broadly divided into two categories: internal sources and external sources. On receipt of the Manpower Requisition (MPR) form HR department will initiate action of sourcing the candidates as under:

1. INTERNAL SOURCES: As a matter of policy, the organization will encourage to fill up thevacancies from within the existing people if they are fulfilling thecriteria and found suitable. In order to invite application from internal sources, notice/circular for all such vacancies will be put up on the notice board. In case any permanent employee dies in harness due to accident or any other reason, one depend son of deceased employee may be given preference in employment with the company subject to his f u l f i l l i n g t h e e l i g i b i l i t y c r i t e r i a b a s e d o n q u a l i f i c a t i o n a n d experience as well as suitable vacancy in the company at that time. The conditions fulfilling the requirement may apply a g a i n s t internal notification to HR department through their department. 2. OTHER SOURCES: Other sources can be tapped for recruitment only when suitable candidates are not available internally. Other sources may include the following:

internal data bank local employment exchange advertisement through newspaper Placement agencies

46

Methods of Recruitment
The following are the most commonly used method of recruiting people. Internal Method Direct Method Indirect Method

1. I N T E R N A L M E T H O D : Promotion And Transfers ITC Prefer to fill vacancies through promotion or transfers from within wherever possible. Promotion involves movement of an employee from a lower level position to higher level position accompanied by changes in duties, responsibilities, status and value and value .It may lead to changes in duties and responsibility, working conditions, etc., but not necessarily salary. Internal promotions and transfers certainly allow people greater scope to experiment with their career, kindling ambitions and motivating them to take a shot at something they might otherwise never have considered. The system, of course, works best for young executives who are willing to take risks. Employee Referrals Employee referral means using personal contacts to locate job opportunities. It is commendation from a current employee regarding a job a p p l i c a n t . T h e l o g i c b e h i n d employee referral is that it takes one to know one employee working in the organization i n t h i s c a s e , a r e encouraged to recommend the name of their friends worki ng in o t h e r organization for a possible vacancy in the near future. In fact, this has become a popular way of recruiting people in the highly competitive information technology industry now a day. Companies offer rich rewards also to employees whose recommendation are accepted after the routine screening and examining process is over- and job offers extended to the suggested candidates 2. DIRECT METHOD: Campus Recruitment It is a method of recruiting by visiting and participating in college campuses and their placement centers. Here the recruiters visits reputed educational institutions such as I ITs, IIMs colleges and universities with a view to pickup job aspirants having a requisite technical of professional skills. Job seekers are provided information about the jobs and the r e c r u i t e r s i n t e r n
47

get a snap shot of job seekers through constant i n t e r c h a n g e o f information with respective institutions. A preliminary screening is done within the campus and the short listed students are then subjected to the reminder of the selection process. Inv i t e o f t h e g r o w i n g demand for young managers, most reputed organizations visit regularly and even sponsor certain popular activities with a view to earn goodwill in the job market. Advantage of this method include: the placement centre helps locate applicants and provides resumes to organization; applicants can be prescreened; applicants will not have to be lured away from a current job and lower salary expectation. 3. INDIRECT METHOD Advertisement This includes advertisement in news papers; trade, professionals and technical journals; r a d i o a n d T V e t c . I n r e c e n t t i m e t h i s m e d i u m b e c a m e j u s t a s c o l o r f u l l i v e l y a n d imaginative as consumer advertising. The ad generally gives a brief outline of t h e j o b responsibilities, compensation package, prospects in the organization etc. This method is appropriate when (a) the organization intends to reach a large target group and (b) the organization wants a fairly good no. of talented people who are geographically spread out. Head Hunters There is an influx of executive search agencies also known as head hunters who specialize in selection of professionals for very senior or top posts, where applicants are in short s u p p l y a n d e m p l o y e r s h a v e n o time to go round in search of the best talents. Such vacancies are fewer and far between and organizations prefer hiring a head hunter who maintains confidentiality of the employer and are specialize in recruiting the best talent strictly as per the job specification. But, these specialists bodies charges hefty professional f e e s . H o w e v e r , t h e high cost is outweighed by the benefit of recrui ting the best t a l e n t without going through the cumbersome and time consuming process of internal recruitment system.

48

SELECTION PROCEDURE IN ITC Ltd.

1. Preliminary Test: Numerical ability Logical Reasoning Case study Computer test

2. Preliminary Interview: Conferencing)

Interview through HR either through VC (Video

3. Interview by Assistant Manager. 4. Interview by Branch Manager. 5. Final selection.

Pre Joining Formalities

Pre joining medical test After approval of pre-joining medical test, pre- reference check forms are filled by employees. Candidate need to give 3 reference of his previous company. Reference must not be of blood relations or friends

Verification of all education certificates. Previous company releaving letter.

Post Joining Formalities

Employee record form Personal data Photograph Language known Number(PAN, Passport no., Election ID no., Driving license)
49

 Family Data: Fathers name- occupation, address etc. Mothers name- occupation, address etc Marital status- single, married Spouses name- Date of birth, country, nationality. Qualification- occupation, blood group. Educational background Work experience Organization Designation held Position Nature of work Reason for change etc.

Reference Check Questions

Q- What is your relationship with the applicant? Q- For how long you know him/her? Q- How would you rate his or her technical job knowledge? Q- How would you describe his or her personality?

Joining Fill Forms

DOCUMENTS: Banking details Receipt of gratuity and leave encashment The employee pension scheme Forms of nomination for PF ESP Form for nomination Guidelines with suppliers and customers
50

Employee record forms New employee form and appointment letter One passport size photograph for HURES Database\ Royal Sundaram enrolment Form to be filled and submitted in the unit within the photograph of self, spouse and two children. Any access control form along with the photograph should be submitted to the unit. All these forms are send to the head department.

PROMOTIONS
ELIGIBLITY: ALL MANAGERS DESCRIPTION Promotions are based on merit and against a vacancy in the organizational structure. The individual should fulfill the requirement for higher responsibility in terms of academic and professional qualification, experience, job knowledge, track record, personality and personal aptitudes such as intelligence, maturity, leadership, integrity and team work capabilities. Merit in respect of the above factors shall be on the basis of the individuals service record and annual appraisals, reinforced by assessment of the ITDMC.

Internal Promotees (from non management to management cadres) PROBATION:There is no probation period for internal promotes to management cadres. ANNUAL LEAVE:The accumulated unavailed leave balance of those managers / staff promoted from non management cadres will continue to be carried forward and accumulated. However, in case of promotion from the unionized cadres to management / staff the unavailed annual leave balance will be encashed and annual leave eligibility will commence afresh. LOANS:Promotees are entitled to avail of applicable loan facilities any time after promotion
51

 EVIDENCE OF DATE OF BIRTH:The document showing evidence of DOB submitted by internal promotees at the time of joining of the company shall be taken as evidence of birth date. Unit should therefore send these service records to the assistant manager, administration.

APPRAISALS AND INCREMENTS

Appraisals Managers are to be appraised formally at the end of each year, ending on 31 of March on his or her performance for the preceding year. An appraisal is not required for managers who have worked for less than 3 months in a unit. The unit head shall then forward the complete appraisal document to the divisional manager-OD The quantified performance objectives for the following year should accompany the appraisal documents. For manager transferred after having spent minimum of 3 months in a unit, the appraisal for a tenure spent in that unit should be completed prior to departure and is to be submitted to the divisional manager- OD by the unit head. Managers who are on transfer must complete the appraisal, key focus areas and future objectives of their subordinates prior to their departure from the unit.

Salary Increments
Salary increments take place annually on the 1st of July. The amount of increment is linked to performance and is structured according to the following scale PERFOMANCE Outstanding Good Satisfactory Barely Adequate/poor INCREMENTS 3 Increments 2 Increments 1 Increments NIL

52

Performance Linked Increment

Managers confirmed between the 1st of July and the 31st of December is eligible for appraisal and increments on the 1st of July of the subsequent year. for example- a manager confirmed on the 15th September ,2011 shall be appraised and accordingly given an increment on the 1st of July 2012. Managers confirmed between the 1st of January and the 31st of June shall not be eligible for a performance appraisal and increment on the 1st of July 2012.

A manager promoted from level 8 to level 7/6 between 1 st of January and the 31st of June shall not be eligible for performance increment calculates at level 7/6 with effect from the 1st of July of the current year. Managers promoted from level 8 to level 7/6 between the 1st of July and the 31st of December shall be eligible for performance increment calculated at level 7/6 with effect from the 1st of July of the subsequent year.

SAMPLING REIMBURSEMENT
Personal care product Atta Matches Aggarbati Notebooks etc.

All ITC product can be reimburse at some limit by producing the bill. Sales trainee 15000 Area executive 20,000 Area manager 25,000 Assistance manager 30,000

The purpose of sampling is to enable employees and their families use ITCs product/services and provide feedback to the company on the quality of the product and services. It will also enable them to gift ITC product and services to their friend and associates.

53

 POLICIES FOLLOWED IN ITC Leave Policy

Minimum Limit A minimum of 15 days annual leave must be availed every year, failing which the 15 days shall be treated as lapsed. A maximum of 15 days un- availed annual leave may be carried forward to the next year. Maximum Limit A maximum of 30 days leave may be availed in a year. In exceptional circumstances, this may be extended to maximum 45 days with a prior approval of divisional chief executive of the division. Benefits Leave may be accumulated up to a maximum of 300 days as on the 31 st of March every year. Leave over and above this number of days shall be treated as lapsed.

Leave Encashment
Criteria A maximum of 7 days leave may be encashed per year. Intimation of this must be sent by the manager through the respective unit HR department to the private salaries department by the end of February with a copy to the HR department head office. This encashment is possible from the balance of 15 days which can be carried forward and not from the 15 days which need to be compulsorily availed. Encashment shall be calculated on the last drawn basic salary.

Tax Implications
Encashment of annual leave upon retirement/resignation is permitted up to a maximum of 300 days only. Tax deductions on the encashed value of the unavailed leave shall be carried out according to income tax rules in force. The same tax treatment is applicable in case of resignations. For tax exemption under the applicable income tax rules, refer to the latest tax rules in a private salaries department.
54

Medical Policy
Coverage self, spouse, and two depended children up to the age of 24. Process flow Individual to use the ITC claim form For domiciliary expenses and Hospitalization reimbursement as the case may be. Guidelines and Timeliness One claim to be submitted per week Turnaround time between HR department to process the claims and finance department to make disbursement of payment will be between 15-20 days from the end of the week Domiciliary claims amount should be minimum Rs.500 and maximum 20,000 for cash reimbursement only.

Payment Process
Employee may like to take the reimbursement in the following ways: Cash Cheque Direct to HDFC Bank A/C Direct to other bank A/C General Guidelines All medical claims must be in a prescribed format The individuals employee code must be mentioned on all medical claims. Claims must be counter signed by the heads of the department managers Nature of illness must be stated clearly No bills/ receipts more than 3 months old can be submitted Full details of patient, ailments and other relevant details must be mentioned.

55

STATUTORY COMPLIANCE

Contract Labour Act

Applicability 20 or more contract workmen Categories of contract workmen in ITC Housekeeping Security Any time when contract workmen>20 ensure compliance Document to be mentioned Attendance Register Leave Register ESIC Accident book Inspector visit book Register under shops and establishment act

Maternity Benefit Act

Objective- to ensure women are given leave with wages for 12 weeks ITC Scenario Leave with wages for 12 weeks Reimbursement of medicals To a maximum of 2 children Facility provided by company is better than the act, hence nil return has to be submitted.

ESIC Act
Declaration form To be submitted within 10 days New employee with salary less than Rs 10,000 ITC Scenario- SPOs 21st of next month date for payment ESIC advice comes from Asit/Vijayamblla It has to be sent to finance resource DO Cheque is received from DO Submit the same along with the Challan
56

EHS Policy
To contribute to sustainable development through the establishment and implementation of environment standards that is scientifically tested and meets the requirement of relevant laws, regulations and codes of practice. To take account of environment, occupational health and safety in planning and decision-making.

To provide appropriate training and disseminate information to enable all employees to accept individual responsibility for Environment, Health and Safety, implement best practices, and work in partnership to create a culture of continuous improvement. To instill a sense of duty in every employee towards personal safety, as well as that of others who may be affected by the employees actions.

To provide and maintain facilities, equipment, operations and working conditions which are safe for employees, visitors and contractors at the Companys premises. To ensure safe handling, storage, use and disposal of all substances and materials that is classified as hazardous to health and environment. To reduce waste, conserve energy, and promote recycling of materials wherever possible.

57

SWOT ANALYSIS
Strengths
Management: Experienced, broad base of interests and knowledge Product Line: Unique, tastes good, competitive price, and convenient Marketing: Diverse and global awareness Personnel: International, diverse positions International, diverse positions: High sales revenue, high sale growth, large capital base Manufacturing: Low costs and liabilities due to outsourcing of bottling Research & Development: Continuous efforts to research trends an reinforce creativity Consumer/Social: Huge market in the healthy products and growing market for specialized foods for ethnic groups Competitive: Distinctive name, product and packaging in with regards to its markets Technological: Internet promotion such as banner ads and keywords can increase their sales, and more computerized manufacturing and ordering processes can increase their efficiency

Weaknesses
Management: Large size may lead to conflicting interests Product Line: New one calorie products have no existing customer base, generic brands can make similar product cheaper

Consumer /Social: More expensive products than Hul. Such a high price may limit lower income families from buying an ITC product. Competitive: Not entirely patentable, constant reliability by competitors
58

Technological: Computer breakdowns, viruses and hackers can reduce efficiency, and must constantly update products or other competitors will be more advanced. Economic: Very elastic demand, almost pure competition.

Opportunities
Expected 30% CAGR in organized market to result in better footfall a n d conversion rates. Entry into Tier 2 and Tier 3 cities. Collaboration with foreign players because of a national brand. An opportunity to diversify its operations in e-retailing. As big company of India can go globally.

Threats
Employee shortage and attrition due to rapid growth in the holl market . Impact of slowdown in consumer spends to be felt in FMCG market. Opening up of economy for free entry of foreign players

59

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION

1. Years of experience within the organization.

Data 1) Less than a Year 5 2) One Year 19 3) Two Years 14 Interpretation Most of the employees in the company are relatively new because a majority of them (i.e. 66%) have between one and two years of experience in the company. This is mainly due to the fact that the company is in a constant mode of growth and is therefore recruiting in a big way. The expansion plans are done keeping in mind the proposed growth in the near future. Another reason is the fact that finding new talent for the required skills is a tough task because market awareness about the career growth in this sector is very limited. Due to this, ITC has inducted a lot of employees after providing them with training to ensure that their Human resource requirements are met. 4) Three Years 5 5) Four + Years 7

60

2. Transparency rating of the Performance Appraisal System.

Data 1) 4Points10 4) 7 Points 8 2) 5Points16 5) 8 Points 5 3) 6Points9 6) 9 Points 2

Interpretation This question is an attempt to analyze the perceived transparency of the rating among the employees of the Organization. A majority of the employees have given a transparency rating of 5. The perception of the employees is since the appraisal is done on a quarterly basis, the employee is not in a position to actually evaluate the basis of the rating he / she have received. This causes a lot of ambiguity in the ratings. This is the primary concern due which almost 70 % have given a rating of 6 and below. The respondents who have given a rating of 7 and above have mostly given this rating because they have got good ratings in the past and feel that there is not much required in terms of transparency as long as they get good ratings themselves.

61

3. Method that ITC follows to recruit it employees in the organization.

40 35 30 25 20 15 10 5 0

35

cy

ts

m en

re n

ta n

ef e

ve rti

Data SL.NO RESPONSE NO. OF PECENTAGE RESPONDENTS % 3 5 35 7 50 6 10 70 14 100

1 2 3 4 Total

References Advertisements Consultancy Walk-ins

Interpretation: The hiring process in this company is done by consultancy of 35 respondents and next is through walk-ins.

Ad

on s

62

W al

se

ul

kin s

ce

4. The range on scale of getting maximum & good quality profiles of employees.

40 35 35 30 25 20 15 10 10 5 5 0 0 Average Good Very good excellent

Data
SL.NO RESPONSE NO OF RESPONDENTS Average Good Very good excellent 35 10 5 0 50 PECENTAGE % 70 20 10 0 100

1 2 3 4 Total

Interpretation:

The above graph shows that the range of getting good quality profiles are average are 70%,and good are 20% and very good is shown by 10%.so no excellent are there.

63

5. Experience required for HR position in ITC.

30 30 25 20 15 15 10 5 5 0 0 3 years 4 years 2 years 5 years

Data:
SL.NO RESPONSE NO OF RESPONDENTS 3 years 4 years 2 years 5 years 5 15 0 30 50 PECENTAGE % 10 30 0 60 100

1 2 3 4 Total

Interpretation: The experience required for HR position in ITC is 5 years and accepted by 30 members.

64

6. Time period for recruiting employees in the organization. Data

SL.NO RESPONSE NO OF PECENTAGE RESPONDENTS % 6 months 1 year Every month 3 month 5 0 5 10 0 10

1 2 3

4 Total

40 50

80 100

ANALYSIS:

40 20 0 6 month 1 year Every month

3 month

Interpretation: In this company the employees are recruited frequently for 3 month for this the respondents are 80%, after this every months and 6 months are 20%.

65

7. Criteria ITC consider while screening the profile of the candidate.

SL.NO 1 2 3 RESPONSE Age Qualification Work experience References if any NO OF RESPONDENTS 5 7 38 PECENTAGE % 10 14 76

Total

50

100

Data
40 35 30 25 20 15 10 5 5 0 0 Age Qualification Work experience References if any 7 38

Interpretation The above graph shows while screening the profile work experience is given more importance by 76%, and next by qualification by 14%.

66

8. Joining period of employees once they have been selected in selection process after completion of all formalities.
SL.NO RESPONSE NO. OF RESPONDENTS Same day 3-5 days 1-2 days 7 days 0 37 10 3 50 PECENTAGE % 0 74 20 6 100

1 2 3 4 total

Data
40 35 30 25 20 15 10 5 0 Same day 3-5 days 1-2 days 7 days 3 0 10 37

Interpretation The above graph shows after selection the offer letter is given to the selected candidate in 3-5 days and if the candidate is good then 1-2 days.

67

9. Employment rate of ITC in a year.

SL.NO RESPONSE NO OF RESPONDENTS 70 80 90 100 5 35 10 0 50 PECENTAGE % 10 70 20 0 100

1 2 3 4 total

Data
120 100 80 60 40 20 0 1 2 3 4 5 35 10 0 70 80 90 100

Interpretation The above graph shows the employment rate in ITC is 70% in a year and 35 are accepted.

68

10. Skill development training given to new recruits. SL.NO RESPONSE NO OF RESPONDENTS Yes No 42 8 50 PECENTAGE % 84 16 100

1 2 Total

Data
45 40 35 30 25 20 15 10 5 0 yes no 8 42

Interpretation The above graph shows the training provided to new recruits is yes by 84% and no by 16%.so training is provided to some extent.

69

CHAPTER 5 FINDINGS AND SUGGESTIONS

Findings

The following are the findings during the course of the study There is no concrete basis to prove the response given is a true measure of the opinion of all the employees as a whole. Convenient sampling was used as the mode of conducting the research. The questionnaire contained mostly multiple-choice questions; therefore many respondents may not have given a proper thought before answering the questions. The response of the respondents may not be accurate thinking that the management might misuse the data. Sensitive company information cannot be displayed in the project report. Most respondents might be influenced by their peers in answering the questions. Due to the fact that most of the respondents were young, the questions might not have been answered with due sincerity.

70

Suggestions
Organization should keep the eyes on the recruitment process they should recruit the employees from outside as well means from where they get the employees they should recruit them. As the organization is growing faster they should emphasis on the training programs even though their training programs are quite good. Organization should regularly give the increment on the salary so that who are not satisfied they would become also satisfied. Organization should analyze the training methods and should adopt those methods which are good for the employees and promotion activities should be good so that employees are satisfied as we know this is the basic requirement of success.

71

CHAPTER 6 CONCLUSIONS
There are the following conclusions come up after the research of the project by filling the questionnaire:

The working environment of the organization is excellent this is reason why employees are doing the work there and they are stable there. Generally organization appointed the employees through the recommendations that is references even though other sources are there.

The employees are satisfied with the recruitment process of the organization.

Most of the employees consider that the salary increment policy is good.

Generally ranking method is used in the organization for the performance appraisal system and with the promotion activities.

As they accept that the working environment is really good this shows they are satisfied and the satisfaction of the employees of the organization is very necessary.

And at last I would like to say that satisfied employees contribute more to the organization this is the reason why ITC is growing faster.

72

BIBLIOGRAPHY

BOOKS:
Kothari CR, Research Methodology, Rajasthan new age international Limited publisher, Second Revised Edition 2004. Gupta CB, Human Resource Management, Sultan Chand and Sons, Second Edition Reprint 2006. Gomez Mejia LR, Balkin DB, Managing Human Resources, prentice hall of India, 3rd Edition Pearson Education. Aswathappa k., Human Resource Personnel Management, Tata McGraw Hill Publishing Company Limited, New Delhi, 4th Edition. David A. Decenzo/Stephen P. Robins (2004) Personal and Human Resource Management. A. Monappa (2004), Personal Management.

Allan Pepper (1999), A Handbook on Training and Development.

JOURNALS/MAGAZINES:
o o o o IRDA journal Business today Business world Journal of Indian Management Studies

73

WEBLIOGRAPHY

www.google.com www.economictimes.com www.managementparadise.com www.itcportocal.com www.wikipedia.org

74

QUESTIONNAIRE

NAME: AGE: ADDRESS: MOBILE NUMBER: SEX: E-MAIL ID (if any):

Q1. What is your experience period in the organization? Less than a year One year Two year Four + Year Three year

Q2. What point you give to the Transparency rating of the Performance Appraisal system? 4 point 7 point 5 point 8 point 6 point 9 point

Q3. How do you recruit employees in ITC? Reference Consultancy Advertisement walk-ins

Q4. What is the range on scale of getting maximum and good quality profile? Average Very good Good Excellent

75

Q5. What is the experience required for HR position in ITC? 3 years 2 year 4 years 5 year

Q6. How frequently you recruit employees? 6 month Every month 1 year 3 month

Q7. Under what criteria do you consider while screening the profile? Age Work experience Qualification Reference

Q8. After Selection of candidates what is the time for offer release? Same day 1-2 days 3-5 days 7 days

Q9. What is the employment rate of ITC? 10% 20% 70% 0%

Q10. On what skills candidates are selected in your organization? Qualification Soft skill Capabilities All the above

76