LOTUS INSTITUTE OF MANAGEMENT

PROJECT
OF
HUMAN RESOURCE MANAGEMENT

ON

MARUTI UDYOG LIMITED

Submitted to Submitted by:

Mr.Gaurav Saxena TANVI AGARWAL
HR FACULTY PGDM_08_56

1
 ACKNOWLEDGEMENT

The goal was fixed, moves were calculated and I moved with full of enthusiasm, vigor
and keen interest.
There was a time when it proved to be on up hill task, the goal seeming beyond my reach.
But as work progressed my determination and will power grew stronger and completion
of this work further confined my belief that, “WHERE THERE IS A WILL THERE IS
A WAY”.
It’s a sheer pleasure for me to state with candidly that this entire project is a heartily
attempt to reach maximum accuracy. I therefore take this opportunity top express my
utmost gratitude and indebtness to all who have contributed in some way.
I highly express my sincere thanks to MR. MANOJ MITTAL who helped me
throughout the project.

Last but not least I would like to pleasure a word of appreciation to my family & friends
who supported & helped me to make this project a success.

CONTENT

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1) Acknowledgement
2) Objective of the study
3) Organization structure
4) Quick facts of MUL
5) Some successful stories of MUL
6) Vision ,values
7) Division and Departments
8) Organization chart
9) HR vision
10) HR initiative
11) Culture building initiative since Inception
12) Focus of effective management process since Inception
13) Induction and Succession
14) Matter usually discussed in the Induction program of MUL
15) Induction program
16) Meaning of Recruitment
17) Process of recruitment
a) for a particular city
b) for a particular dealership
c) depending on the availability of infrastructure
d) for a particular qualified person
18) Selection meaning
19) Selection process of MUL
20) Meaning of training
21) Importance of training
22) Sales and training department of MUL
23) Training process for sales executives
24) Training process for sales manager/general manager/branch manager
25) Training and Development of Dealers sales executives
26) Performance Appraisal in MUL
27) Major findings
28) Conclusion
29)Appendices
30) Bibliography
31) webliog

OBJECTIVES

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➢ To enhance my knowledge about Recruitment and Selection.
➢ To enhance my knowledge about Training & Development.

➢ To convert my theoretical knowledge into practical knowledge.

➢ To prepare myself as a H.R. person who can easily identify the training need
through his experience which is very essential quality of a H.R. Person & for the
organization as well.

Organization structure

4
 FACTS OF MARUTI UDYOG LIMITED

Quick Facts
Year of Establishment February 1981
"The Leader in The Indian Automobile Industry,
Vision Creating Customer Delight and Shareholder's Wealth; A
pride of India."
Industry Automotive - Four Wheelers
Listings & its codes BSE - Code: 532500
NSE - Code: MARUTI
Bloomberg: MUL@IN
Reuters: MRTI.BO
Joint Venture With Suzuki Motor Company, now Suzuki Motor

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 Corporation, of Japan in October 1982.
Registered & Corporate 11th Floor, Jeevan Prakash
Office 25, Kasturba Gandhi Marg
New Delhi - 110001, India
Tel.: +(91)-(11)-23316831 (10 lines)
Fax: +(91)-(11)-23318754, 23713575
Telex: 031-65029 MUL IN
Works Palam Gurgaon Road
Gurgaon -122015
Haryana, India
Tel.: +(91)-(124)-2340341-5, 2341341-5
Website http://www.marutiudyog.com/

Segment and Brands

Products Brands
Four Wheelers Maruti 800 Maruti Alto Maruti Baleno
Maruti Esteem Maruti Grand Vitara XL-7 Maruti Gypsy King
Maruti Omni Maruti Suzuki SX4 Maruti Swift
Maruti Versa Maruti Vitara Maruti Wagon-R
Maruti Zen

Awards & Accolades

2005 • Number one in JD Power SSI for the second consecutive
year.
• Number one in JD Power CSI for the sixth time in a row - the
only car to win it so many times.
• M800, WagonR and Swift topped their segments in the TNS
Total Customer Satisfaction Study Leadership in the JD
Power Initial Quality Study - Alto number one in its segment
for the 2nd time in a row, Esteem number one in its segment

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 for the 3rd year in a row, Swift number one in the premium
compact segment.
• WagonR and Esteem top their segments in the JD Power
APEAL study.
• TNS ranks Maruti 4th in the Corporate Reputation Strength
(CSR) study (#1 in Auto sector)-Feb 05.
• Maruti bagged the "Manufacturer of the year" award from
Autocar-CNBC (2nd time in a row)-Feb 05.
• First Indian car manufacturer to reach 5 million vehicles
sales.
• Business World ranks Maruti among top five most respected
companies in India-Oct 04.
• Maruti ranked among top ten (Rank7) greenest companies in
India by Business Today - Sep '04
2004 • Maruti Suzuki was No. 1 in Customer satisfaction, No. 1 in
Sales Satisfaction No.1 in Product Quality (Esteem and Alto)
and No. 1 in Product Appeal (Esteem and Wagon R).
• No. 1 in Total Customer Satisfaction (Maruti 800, Zen and
Alto).
• Business World ranked us among the country's five most
respected companies.
• Business World ranked us the country's most respected
automobile company.
• Voted Manufacturer of the year by CNBC.
• Voted one of India's Greenest Companies by Business Today-
AC Nielson ORG-MARG.

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RGANISATION CHART

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MI
Support
Manager
Sales
Manager
staff:
M-CCE
Delivery
Manager
Support Consultant
Team
staff:
Accessories
CC
Lobby
Manager Field
Corporate
Manag
staff:
Manager
HR- GM
MI
mgnr Sales-
Leader
Billing,
CEO
Execs,
er-
sales staff:Service
Drivers,
&(Sales)
DSA Peons etc.
IT
Advisor Support
(Corporate
Bharat
Sales-
etc.
Salwan
Sales)
Call
Mudra ger-
Telecallers
(Corporate
Mana etc.
Accessories
Counter, Centre
Channel
Sales-Sunil
Supreet
Vineeta Mehra
Staff
-
Sales) etc.
Arora Manager
Aamir
Chadha M. Loan
Khan

Manage
r Auto
Loan

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HR VISION
Lead and Facilitate continuous change towards organizational excellence ; create a
learning and vibrant organization with high sense of pride amongst its members.

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HR INITIATIVES
• Prepare MUL Strategic Business Plan-2000-2003; To achieve the Vision &
Goal
• Improve the performance Appraisal system - it’s process, skill & usage
• Introduce a Potential Appraisal System
• Improvements in internal & external Training & it’s effective utilization.
Training need identification
• Systematic career planning ; Job Rotation ; Empowerment; Job enrichment
• Periodic communication meeting at various level; Roll out of Vision
• Raise cost consciousness for cost control and reduction
• Exposure on Brand Strategy to all non- marketing staff
• Retention of Talent

CULTURE BUILDING INITIATIVES SINCE INCEPTION

Japanese Management philosophy of Team Spirit
• Common uniform
• Open office
• Common Canteen
• Open Office – Easy accessibility, Speedy
• Communication and decision making
• Morning Meetings
• Morning Exercises

FOCUS OF EFFECTIVE MANAGEMENT PROCESS SINCE

INCEPTION

• Management Committee Meetings – every Tuesday

• ·Single unaffiliated Union
• Excellent Industrial Relation scenario
• No loss of monday due to strike/lockout etc. in past 5 yrs.
• Maruti Udyog Sahyog Samiti – a forum for non unionized staff.
• Declared organization structure Workers (Technical / Assistant.),
Supervisors, Executives, Managers
• Top Driven HR – MD is also Director HR
• HR’s role of a facilitator
• Line managers as HR Managers

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• Year of the Customer –
• HR Internal Customer Focus
• Focus on Internal & External Customer.

INDUCTION AND SUCCESSION

• Transparent Recruitment & Selection process
• Recruitment on an All India Basis – no sector or region specific.
• Engineers – CAMPUS - IITs/RECs/Rorkee /HBTI
• ALL-INDIA TEST
• MBAs – IIMs/XLRI
• CAs - Rank Holders
• India Exam & Apprenticeship In MUL
• Lateral Entry for Experienced Professionals.

MATTER USUALLY DISCUSSED IN THE MARUTI

INDUCTION
• Overview of Maruti and Suzuki
• Building understanding of the car market in India and various segments
• Understand MUL’s product range and positioning in each segment
• Understanding the basics in the automobile industry
• Role of financing as a sales tool and the various financing options available
• Ensuring personal effectiveness
• Understand the attributes of a good DSE
• Overview of each Maruti model and the MUL ‘Advantage’
• Overview of the selling process and how to uncover needs of a customer to do
need based selling

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Induction program
Objective: The objective of this program is to facilitate smooth induction of the new
DSEs into their place of work i.e. Maruti dealerships. This program attempts to orient the
new DSEs on a few important parameters, which are listed below:

 Overview of Maruti and Suzuki

 Building understanding of the car market in India and various segments
 Understand MUL’s product range and positioning in each segment
 Understanding the basics in the automobile industry
 Overview of each Maruti model and the MUL ‘Advantage’
 Overview of the selling process and how to uncover needs of a customer to do
need based selling

 Role of financing as a sales tool and the various financing options available
 Ensuring personal effectiveness
 Understand the attributes of a good DSE

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MEANING OF RECRUITMENT
It is the process of searching the potential candidate and offers him or her the job. It is
positive in nature in the Indian context.
Process of identifying and hiring best-qualified candidate (from within or outside of an
organization) for a job vacancy, in a most timely and cost effective manner

RECRUITMENT PROCESS OF MARUTI UDYOG LTD

The recruiting procedure at a Maruti dealership is as follows:
For a particular city

For a particular Dealership

The dealership should release an advertisement.

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Depending on availability of infrastructure

Interview of shortlisted/ qualified personnel

MEANING OF SELECTION
It is the process of searching the potential candidate. It is negative in nature in the Indian
context. But it is positive in the US context.

Steps in Selection Process of Maruti udyog ltd

Selection process consists of a series of steps, at each stage, facts

15
may come light which may lead to the rejection of the applicant. It is a
series of successive hurdles or barriers which an applicant must cross.
These hurdles or screens are designed to eliminate an unqualified candidate at
any point in the selection process
There is no standards selection procedure to be used in all
organizations or for all jobs. The complexity of selection procedures increases
with the level and responsibility of the position to be filled.
.

1} Preliminary Interview (screening applications)

Initial screening is done to weed out totally
undesirable/unqualified candidates at the outset. It is essentially a
sorting process in which prospective candidates are given the
necessary information about the nature of the job and the
organization, at the same time, the necessary information is also
elicited from the candidates about their education, skills,
experience, salary expected and the like. It helps to determine
whether it is worthwhile for a candidate to fill up the application
form.

2} Application Form
Application form is a traditional and widely used device for
collecting information from candidates. It should provide all the information
relevant to selection, where reference for caste, religion,
birth place, may be avoided as it may be regarded an evidence of
discrimination.

3}Selection Test
Psychological tests are being increasingly used in employee
selection, where a test may involve some aspect of an individual’s
attitudes, behavior and performance. Tests are useful when the
number of applicants is large, as at best it reveals that the
candidates who scored above the predetermined cutoff points are
likely to be more successful than those scoring below the cutoff
point.

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4} Employment Interview
Interview is an essential element of selection and no selection
procedure is complete without one or more personal interviews,
where the information collected through application letter or
application forms and tests can be cross-checked in the interview,
where candidates demonstrates their capabilities and strength in
relevant to their academic credentials. selection in interview serves three purposes:

a) obtaining information about the background, education, training,

work history and interests of candidate

b) giving information to candidates about the company, the specific

job and human resource policies; and

c) establishing a friendly relationship between the employer and the

candidate so as to motivate the successful applicant to work for
the organization.

However, in practice interview becomes a one-sided affair serving

only the first purpose.

5} Medical Examination

Applicants who have crossed the above stages are sent for a
physical examination either to the company’s physician or to a medical officer
approved for the purpose. Such examination serves
the following purposes:-

a) It determines whether the candidate is physically fit to

perform the job, where those who are physically unfit are
rejected.

b) It reveals existing disabilities and provides a record of the

employee’s health at the time of selection. This record will
help in settling company’s liability under the workmen
compensation Act for claim for any injury.

c) It prevents the employment of people suffering from

contagious diseases.

d) It identifies candidates who are otherwise suitable but require

specific jobs due to physical handicaps and allergies.

6} Reference Checks
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The applicant is asked to mention in his application form, the names
and addresses of two or more persons who know him well. These may be his previous
employers, heads of education institutions or public figures. These people are
requested to provide their frank opinion about the candidate without incurring
any liability. In government and public sector organizations, candidates are generally
required to route their applications
through their present employers, if any. The opinion of referees can be useful in
judging the future behavior and performance of candidate, but is not advisable to rely
exclusively on the referees because they are generally biased in favor of the
candidate.
(a) Most candidates are employed at the time of their application, and do not wish
their employers to know they are looking elsewhere.

(b) Because of
(a) a prospective employer would be breaking a confidence if he or
she asked for a reference before an offer of a job
had been made and accepted.

(c) By the time an offer has been accepted, selection is over and the
reference is too late to affect it.

(d) An offer may be made ‘subject to satisfactory references’, but as

most references are received after the candidate has started work,
they can only be used to warn managers of possible faults in the
candidate which in serious cases may eventually lead to warnings
followed by dismissal.

(e) Employers giving references are usually extremely cautious; many

references merely state the job title, the date of employment, and
reasons for leaving.

(f) References are occasionally biased, giving a good reference to hasten an

employee’s departure or a poor one because of a grudge.
Therefore, the best references are obtained in person, where there
is a chance to see whether nonverbal behavior matches what is said. If
such a meeting cannot be arranged, telephoning is the next best alternative.

7} Final Approval
In most of the organizations, selection process is carried out by the
human resource department, where the decisions of the department are
recommendatory. The candidates shortlisted by the department are finally approved by
the executive of concerned departments or units.

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8} Employment.
Employment is offered in the form of an appointment letter
mentioning the post, the rank, the salary grade, the date by which the
candidate should join and other terms and conditions in brief. In some organizations,
a contract of service is signed by both the candidate and the representative of the
organization. It is at this point where a selected applicant is handled with a letter of offer
for a job:

a) The wage or salary offered must not only be appropriate to the job
and attractive to the candidate but consistent with the earnings of
present employees.

b) The job must be named and any special conditions stated, for instance, the
first year you will be under training at the head office,
then you will be transferred to up-country branches.

c) The candidate must know the essential conditions of employment,

such as hours of work, holidays, bonuses and fringe benefits.

d) Any provisos must be clearly stated, for example, your employment

will be subject to satisfactory references and medical examinations.
Appointment is generally made on probation of one or two years, where
upon satisfactory performance during this period, the candidate is finally
confirmed in the job on the terms employed with, whether permanent or
contractual basis.

9} Induction.
The process of receiving employees when they begin work,
introducing them to the company and to their colleagues, and informing
them of the activities, customs and traditions of the company is called induction. At
this juncture various induction
courses are done to new recruit in order to acclimatize them with the new working
environment.

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10} Follow – up (Evaluation)
All selection should be validated by follow-up, it a stage where employee is asked
how he or she feels about progress to date and the worker’s immediate
supervisor is asked for
comments, which are compared with the notes taken at the selection
interview. If a follow-up is unfavourable it is probable that selection has been a fault;
the whole process from job specification to interview is then reviewed to see if a better
choice can be made next time.

Training
Maruti arranges the training at several intervals. The training is mandatory for all the
employees. The training schedule of all employees is maintained by the HR manager.

EDP
In the EDP Department following are managed:

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 ➢ Post Sale Process is managed.
➢ Sales Analysis is done.
➢ Backup is taken time to time.

IMPORTANCE OF TRAINING
Optimum Utilization of Human Resources – Training and Development helps in
optimizing the utilization of human resource that further helps the employee to achieve
the organizational goals as well as their individual goals.

• Development of Human Resources – Training and Development helps to provide an

opportunity and broad structure for the development of human resources’ technical and
behavioral skills in an organization. It also helps the employees in attaining personal
growth.

• Development of skills of employees – Training and Development helps in increasing

the job knowledge and skills of employees at each level. It helps to expand the horizons
of human intellect and an overall personality of the employees
.
• Productivity – Training and Development helps in increasing the productivity of the
employees that helps the organization further to achieve its long-term goal.

• Team spirit – Training and Development helps in inculcating the sense of team work,
team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within
the employees.

• Organization Culture – Training and Development helps to develop and improve the
organizational health culture and effectiveness. It helps in creating the learning culture
within the organization.

• Organization Climate – Training and Development helps building the positive

perception and feeling about the organization. The employees get these feelings from
leaders, subordinates, and peers.

• Quality – Training and Development helps in improving upon the quality of work and
work-life.

• Healthy work-environment – Training and Development helps in creating the healthy

working environment. It helps to build good employee, relationship so that individual

21
goals aligns with organizational goal.

• Health and Safety – Training and Development helps in improving the health and safety
of the organization thus preventing obsolescence.

• Morale – Training and Development helps in improving the morale of the work force.

• Image – Training and Development helps in creating a better corporate image.

• Profitability – Training and Development leads to improved profitability and more

positive attitudes towards profit orientation.

• Training and Development aids in organizational development i.e. Organization gets

more effective decision making and problem solving. It helps in understanding and
carrying out organizational policies

• Training and Development helps in developing leadership skills, motivation, loyalty,

better attitudes, and other aspects that successful workers and managers usually display.

Training Details
The strength of any organization is its manpower. Each organization would like to have
executives who are well trained so that they can be more productive. The vehicle
manufacturers conduct several trainings so that they can achieve their goals. In the
Training master form, you can enter the information about the training, which have been
conducted during a particular time period. We are also maintaining the information
regarding the attendance of the executives in a specific training. That is, how many
executives out of the given list have attended the training? With the help of these training
details we are generating various MIS reports. The details provided here can help the
management to find out an efficient person for a special task. Searching facility is also
available, so you can find out the total information of a particular training with just one
click over there.

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SALES AND TRAINING DEPARTMENT OF MARUTI UDYOG

Vision
“Equipping MUL and Dealer Sales Fraternity with the requisite mindset, knowledge and

skills, and enhance the business value of our associates to sustain our position of

leadership and build customer loyalty to MUL”

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Objectives

 To ensure multiple knowledge and skill development of DSEs required selling

cars and handling competition
 Consultative Selling Approach.
 Continuous Feedback and Performance monitoring.
 To employ training as a tool to achieve customer delight and customer loyalty
 Make DSEs as Car Advisors and be a single window interface with the customer

The various training Programs are as follows:

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TRAINING PROCESS For Sales Executives:

1.Induction - Aims to provide an understanding of the automobile industry, MUL, its

policies and products. (2 Days)

2.Product programs- Imparts complete knowledge on MUL product vis-à-vis

competition. Various programs are Segment A1, Segment A2, Segment A3 and Versa,
Grand Vitara XL 7. (2 Days)

3.Selling Skills/ Consultative Selling Process- Enables executives to understand customer

needs, sales processes etc and enables them to apply learning in actual selling. (2 Days)

4. Customer care - A positive attitude and the ability to motivate oneself is a pre-requisite
for excellent performance in any work area. The program aims at helping one to build a
positive attitude and better interpersonal skills and to enable better customer handling. (3
Days)

5.Advisor for life program: In this changed competitive environment the role of Dealer
Sales Executive is seen more than a person who is selling cars to the customers. He is
expected to be the Customer's ' Car Advisor for life' and make that one-time customer
into his 'Customer for life'. He has to be Single Window Interface with his customers
on all matters related to cars i.e. finance, insurance, Extended warranty, MGP, MGA,
service etc. (2 Days)This training trains the Sales Executives on the concept of 'Advisor
for Life' and helps them become a Single Point Contact with the customer.

6.Program for Dealer sales Executives handling Corporate and Institutional Sales. (2
Days)

7.Delivery Process : The training program on 'Delivery Process' has been developed as
delivery now has the maximum weight age in the new factor structure for SSI. It not
only focuses on the processes to be followed for delivery but also makes the DSE realize
the importance of a good delivery (delivery is not the end of a sale but a beginning of a
relationship)

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Training process for Sales Managers /General mangers/ Branch Heads

1.Dealership Management Program: for second-generation dealers, and GM’s and RO

executives on how to manage entire Dealership Operations. Financial Management, staff
management, motivation, time management, planning are covered. (2 Days)

2.Sales Managers/Team Leaders Program: The Training covers issues like Sales
Management (target setting and achievement, enquiry management, resource and time
management etc), Supervisory skills (Performance management, leadership etc), Practical
Coaching skills, knowledge of Maruti Finance, Maruti Insurance Extended warranty,
MGA, True Value etc and Car Advisor for life concept. (2 Days)

3.Branch Managers Program: Many of our dealers have multiple outlets. While the
owners sit at any one outlet and control the others from there, different branch heads that
manages the day-to-day operations of the outlets manages the other outlets. In order to
ensure that they run their respective outlets effectively we train them on the various
aspects of dealership.

The training covers topics like -Making a business plan (for the dealership as a whole-
Not only for sales but also for other revenue streams), Fundamentals of DBP, HR
Management, Team Building and Supervision skills, Ability to motivate the team and get
a buy in on the business plan, Time management/Prioritizing etc

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Training and Development of dealer Sales Executives

Development and Updation of Training Modules

The Sales Training Department develops new modules along with training
agencies based on market requirements, specific needs identified and
feedback received

1. Conducting Training
• Annual Training Calendar is fixed based on:

➢ Number of Sales Executives in the sales network

➢ Training path requirement of Sales Executives
➢ Review of training programs done in the previous year
➢ Market Share/ Market situation/Focus areas and new product launches

27
• Training conducted regionally based on fixed monthly calendar.
• Training Path /Norms for all Dealer Sales persons are as follows:

➢ All Dealer Sales Executives need to attend Induction Training before or

within a month of joining the dealership (depending on when the program is
scheduled in the region)
➢ After Induction then the Sales executives needs to attend a segment B
program.
➢ They also should attend ‘ Car Advisor for life Program’ which trains him to
be a one point contact with the customers handling all his car related needs
like finance, insurance, extended warranty, MGA etc and how to develop and
maintain relationship with customers
➢ After gaining experience, he can attend other courses like segment C etc.

Monitoring and Evaluation of Sales force is done on a continuous basis. Pre-tests and

post-tests are conducted during training. Feedback is taken from participants on

trainers and from trainers on participants. Monitoring is also done through tests and

audits at the dealerships.

1. Communication:
➢ Sales Training Department sends monthly Newsletter “Creating Winners” to
all DSE’s. It is a monthly communication containing articles on various
aspects of product knowledge, selling skills, market etc .It is a forum for
effective communication of new ideas and strategies. It also provides two-way
communication.
➢ An Annual Selling Skill Contest is organized to test the selling skills of the
sales executives. It is conducted at regional levels and culminates in an all
India level contest.

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 Recruitment of Sales Executives:

SAT has developed a CD based Test for recruitment as a part of Maruti

Recruitment System (MARS). The test checks sales aptitude and reasoning and is a
pre- interview shortlist device. It helps dealers recruit the right profile of people for
their dealership. The Regional Office will be involved throughout the
implementation of the MARS while recruiting Sales Persons. All Sales Executives
need to be registered with Maruti after recruitment through extranet. A unique
‘Maruti Suzuki Personal Identification Number (MSPIN) is being issued which the
DSEs have to remember and use in all communications like Trainings, reward
schemes etc

Maruti adopts `360 degree' appraisal system

Employee to be evaluated not just by superiors, but also by peers, subordinates
It would seem that
there is no
corporate human
resources policy
that has not had its
share of controversies for being biased. With an increasing number of qualitative factors

29
that affect employees at the workplace, the performance appraisal process to make it as
fair as possible has been the dream of every HR manager.
And now qualitative factors are not just at play in the services sector, but also in
manufacturing. With cubicles giving way to open offices, the top-down approach to
employee performance appraisal is also on its way out.
One company that has set itself on course to further demonstrating and opening up its
employee evaluation process is car market leader Maruti Udyog.
The company has introduced a unique 360-degree feedback system, starting with its
senior leadership. The new system has been co-developed with Ernst & Young and has
been put in place recently.
Under the 360-degree feedback system, the employee is rated not just by his superiors,
but also by his peers and subordinates.
"We are starting the 360-degree feedback process with employees in the top management
such as chief general managers and general managers, whose performance will now be
assessed based on feedback from their peers and junior management employees within
the same department. Till last year, their performance was being appraised only by the
Directors and the Managing Director," says Maruti's Chief General Manager (HR), Mr
S.Y. Siddiqui.
Ernst & Young, in consultation with Maruti, has listed a set of leadership competencies
that are expected in a general manager. Based on that, it has prepared a questionnaire to
which peers and subordinates can respond online.
Although acknowledged as an effective tool for leadership development in the West,
Indian companies have been shy of introducing such a feedback system for fear of
disturbing traditional hierarchical structures.
HR consultants feel that the critical issues in implementing such a system include
assuring respondents that their feedback will remain confidential and convincing the
person receiving the feedback that this is a development tool and not an appraisal tool.
Maruti has handled this by getting E&Y and other consultants to make detailed
presentations to the senior management personnel before the process got under way. The
company has a committee of general managers, called Human Resource Inter Divisional
Committee (HRIDC), which is consulted on all major HR issues.
The initiative has been unveiled with an e-mail by Maruti's Managing Director, Mr
Jagdish Khattar, asking people to support the online questionnaire process. The 360-
degree feedback system will also include a self-appraisal by the general manager. At the
end of the process, he can compare his self-appraisal with the assessment of his
subordinates and peers.
One of the benefits that Maruti is hoping to get out of the 360-degree feedback process is
the sense of empowerment and importance felt by subordinates, when they are asked to
offer their feedback about their superiors. Maruti currently has over 4,000 employees on
its rolls.
Performance appraisal

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Performance appraisal, also known as employee appraisal, is a method by which the job
performance of an employee is evaluated (generally in terms of quality, quantity, cost and
time). Performance appraisal is a part of career development.
Performance appraisals are regular reviews of employee performance within
organizations
Generally, the aims of a performance appraisal are to:
1) Give feedback on performance to employees.
2) Identify employee training needs.
3) Document criteria used to allocate organizational rewards.
4) Form a basis for personnel decisions: salary increases, promotions, disciplinary
actions, etc.
5) Provide the opportunity for organizational diagnosis and development.
6) Facilitate communication between employee and administrator.
7) Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.
A common approach to assessing performance is to use a numerical or scalar rating
system whereby managers are asked to score an individual against a number of
objectives/attributes. In some companies, employees receive assessments from their
manager, peers, subordinates and customers while also performing a self assessment.
This is known as 360° appraisal.
The most popular methods that are being used as performance appraisal process are:
1) Management by objectives
2) 360 degree appraisal
3) Behavioral Observation Scale
4) Behaviorally Anchored Rating Scale
Trait based systems, which rely on factors such as integrity and conscientiousness, are
also commonly used by businesses. The scientific literature on the subject provides
evidence that assessing employees on factors such as these should be avoided. The
reasons for this are two-fold:
1) Because trait based systems are by definition based on personality traits, they make it
difficult for a manager to provide feedback that can cause positive change in employee
performance
2) Trait based systems, because they are vague, are more easily influenced by office
politics, causing them to be less reliable as a source of information on an employee's true
performance.
Effective performance appraisal
A tricky issue facing most organizations is the carrying out of effective and fair
performance appraisal. Far too often companies find that many employees are left
grumbling about “unfairness” and bias.
While first accepting that there is probably no system which is close to perfect, let us
look at some key criteria that an appraisal system must satisfy.
At a macro-level, the aim of the performance appraisal from the company’s point of view
cannot be to just determine increments or promotions. Yes, that is how it affects the
individuals, but it cannot be the organization’s aim. The organization’s aim has to be to
put in place a system that actually improves performance.

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Let us now look at the specific criteria for the system.
The first step must be to understand clearly what is expected from each employee /
position in the organization. And this must be done well before appraisal time, even
before the appraisal year starts, in fact.
For instance, if the job of the Corporate Communications manager is to ensure that all
mass communication about the brands and about the company is effective and in
cohesion, then these should be laid out as her primary performance appraisal criteria.
Once the criteria are clearly laid out, they should be communicated to her in
unambiguous fashion so that she knows what to work towards and how she is going to be
evaluated.
It is useful if these goals can be quantified. For example, one goal for a brand manager
could be that his brand must have at least X per cent awareness in the market
Making the goals quantitative in nature makes evaluation easier and less subjective; and
therefore less susceptible to suspicions of “unfairness”.
However, it is not a good idea to get caught up in making all goals quantitative. It is a
fact of life that not all things can be measured or quantified; for instance, courtesy. If a
front desk’s performance is to be evaluated on the level of courtesy shown to visitors,
then this cannot be quantified very easily but certain pointers can be got from the number
of complaints about discourtesy and general observations about the person’s deportment,
among others.
Such non-quantifiable measures will involve a certain amount of subjectivity.
Subjectivity need not automatically mean bias. There are steps that ensure that
subjectivity does not degenerate to bias in the performance appraisal context
One such step is periodicity. It is useful if some form of appraisal can be done every three
months. This would tell the person whether he / she is going in the right direction, and
what extra efforts / course correction are required to improve the performance.
Another crucial requirement is transparency. Too often, people are told something like
“your performance has been good, but I wouldn’t say excellent” and that they need to try
harder. Such feedback is little better than useless as it offers no direction whatsoever to
the individual. The individual needs to know what scores he / she is being given and why.
One of the main reasons why transparency is a casualty in most appraisals is that most
managers are not comfortable giving negative feedback.
Maybe it is a cultural issue, but pointing out problems or giving negative feedback in a
one-on-one face-to-face setting and in a calm matter-of-fact manner is not something
most managers are comfortable doing. For that matter, most individuals are not
comfortable receiving this either.
This can only be tackled through extensive counseling and this too needs to start well
before appraisal time.
Employees also need to be counseled that the amount of increment given is dependent on
the appraisal score, but is equally dependent on the company’s financial performance and
outlook. This again has to be handled with a certain degree of tact.
In many companies, such decisions are veiled in secrecy and there is talk of
“normalization” which no one really understands. Transparency is again crucial to dispel
lingering doubts of bias.

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Effective performance appraisal clearly needs a lot more than the few points outlined
here, but attention given to these points will go a long way indeed.

FINDINGS
1) They treat all the employees equally
2) They tries there best to increase the efficiency of the employees by providing
them different motivation programs.
3) They make new recruits aware about the company and working pattern of the
company.
4) They focus on each and every department of the organization.
5) Having different recruitment process for different departments of the
organization.

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 6) They provide different types of training to the different departments according to
the need of the people.
7) They take feedback from there employees on regular basis.
8) They adopts 360 degree method of performance appraisal for there employees.

CONCLUSION

While preparing this project report i learnt many concepts of “Human resource
management” like recruitment, selection, training, motivation, etc.
I have done this project with reference to MARUTI UDYOG LIMITED & i find out that
many facts while working on this project which has added a valuable experience in my
life.

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35
THE STATEMENTS MADE BY CHIEF GENERAL MANAGER OF
MARUTI UDYOG LIMITED IN THE NEWS

Maruti Udyog, India's largest carmaker has been making key investments in several
human resource initiatives. The company is currently working on a five-year people-
oriented strategy, apart from initiatives that are being taken to make young recruits
understand the philosophy, culture and best practices within the company. Special
emphasis has also been placed on training.

The company believes it is worthwhile being in a position, where people are in fact,
envious of the corporate world outside and its employees in high demand, rather than
merely having high retention levels. We spoke to Chief General Manager (Human
Resources Development), SY Siddiqui on a host of HR related issues.

As the head of HR in the country's largest automaker, what are your main challenges?

For us there are two to three key areas. One of the biggest is to bring about a change,
where we are acceptable to a dynamic global business scenario. The second big challenge
is to bring in the best HR practices, policies and systems from the global perspectives,
while being attuned to local requirements. We, at Maruti, are very clear that we need to
have a proper balance of global and local best practices.

The third big challenge is about the young people, on whom our future is going to
depend. They are very strong in terms of career aspirations. Understanding their
aspirations and blending that with the company's aspirations, where talent management
and retention comes in, constitutes this challenge.

APPENDICES

Young people today do have high expectations, How do you address

that?
They are competent and very confident. So, obviously they are strong in their career
aspirations. What earlier was a benchmark of say 15-20 years, today's younger crowd

36
wants to achieve in, may be 10 years. They are very aggressive and patience is almost
irrelevant to them. We are consciously aware of such a change. For Maruti, which is
expanding rapidly and has been in the leadership position for over two decades, these are
big challenges. You will have competent and confident people and as a company, one has
to keep them happy and engaged.

How do you do it in Maruti?

It is not a single factor theory. It is a kind of policy perspective on which a whole lot of
initiatives have come into play. One most important things we do when we do on campus
recruit is to make sure we offer a relationship. This is a relationship that is built on
confidence and a way that signifies that we care.

In our case, the induction phase is the most critical. We do several things to make them
feel special. We even pick them up from railway stations or airports, from wherever they
are coming in. There will be very senior people to receive them at these places. That is
the first touch.

Secondly, most people find it difficult to find a place to stay. They will be put up in a
hostel for a year supported by the company. They should have all the facilities, including
food, Internet, phone, doctor, gymnasium and should be close to the factory. Even the
security will be managed by us, and not the owner.

Third, the Managing Director of the company throws a welcome dinner party for the new
recruits. While it gives them an opportunity to interact with the MD, it also acts as a
tremendous

confidence booster for young people. The other important initiative is that of a buddy and
a mentor. A three-year-old employee in the company will be a buddy to a new employee
for the first three months.

Is this buddy system unique to Maruti? How did this evolve?

Yes, this is unique to Maruti. It evolved from the feedback we have been receiving for
the past 4-5 years from the youngsters. The buddy will always be a link between us and
the boys for the first three months. After the completion of three months, a senior person
of the level of a functional head becomes the mentor for three to four youngsters, who
can guide them on matters related to their progress. The mentor has to prepare the
youngster to settle into an executive role in Maruti. We began this initiative three years
ago and the feedback has been very good.

Is this system helping you improve your retention level?

I am not looking at everything to give a statistical result. I am looking at building
relationships and establishing a bond between employees and this more than just typical

37
numbers. We at Maruti, led by our MD look at the qualitative aspects of our inputs rather
than quantitative. The number of man-days is not important, but quality of training is
more important. Moreover, post-training feedback is important.

We are clear in our minds that this is helping retention. In many corporations, workers in
the first three to six months tend to be the highest casualties. Youngsters are mostly
unsure of a lot of things - like all typical youngsters- and are often need help to take the
correct decisions.

We also have initiatives for employees who have spent two to three years in the
company. Instead of making the Human Resources department the sole policy maker, we
have decentralized HR into different people forums. We have tremendous support
coming from corporate communications, for example, in order to strengthen internal
communications. We have a senior level HR consulting group and a junior level HR
consulting group. Policies are formulated based on the interactions with these two groups
and we try to give shape to a policy that can impact lives.

We also have a cross-functional team of young managers, who come to say how that
particular policy can be put in perspective. People orientation has got top priority in the
past seven years or so.

What is Maruti's training philosophy?

We see to investment in both our business and people. We have a training budget, which
stands at about Rs 12 crores today. Recently, we took a decision to establish a world-
class Maruti training centre in two years' time. This might come up at the Manesar
facility on a 6-8 acre plot. The idea has been conceptually cleared and we are in the final
phase of planning. This centre will have a kind of infrastructure for a central umbrella for
training but will operate in a decentralized manner. We will have a residential facility, an
e-learning facility and will look at perspectives of developing our own technician level
guys for which campus recruitment can take place.

How do you normally go about recruiting them?

At the moment, we are going to different ITIs. We also give preference to people who
may have worked with us temporarily in the past three years or may have done their
apprenticeship with us. They stand to gain a slight preference over fresh ITI graduates.
There will also be a slight preference for those from Haryana.

Has there ever been an issue with finding the right quality of people?
No, we have never faced such a situation. One is, we have professional enablers in place
and have relationships with engineering colleges, good MBA institutes, ITIs and external
environment. We also participate in various kinds of activities they organize in their
institutes. So, we involve ourselves into relationship building all through the year.

38
Can you describe any specific initiative you are taking this year?
One initiative is to empower young people in terms of free and frank feedback to their
seniors, to the people who manage them. We have a 360 degree feedback exercise. Each
senior person gets a sample feedback from a group of 12-14 people, out of which 5-6
would be juniors, 5-6 colleagues and 2-3 their superiors. This is done through an online
process to maintain confidentiality. The person also evaluates himself. After that, profiles
would emerge. Based on this, there would be aggregate profiles versus self-profiles.
These are on defined leadership competencies. Structured designs emerge. The plan is to
have a workshop where we give them the methods to initiate self-development action.

Would this be done in-house?

For the first year, we have picked up Ernst & Young to do it for us. There has to be a
feeling of confidentiality. We can start doing it ourselves once the system mature.

Have you taken initiatives from Suzuki of Japan and adapted them for India?

We used to get graduate engineers and place them in various functional divisions as per
the manpower requirement of that particular functional division. However, there was a
gap in the expectations of the young guy as to where he wanted to be placed. This could
lead to de-motivation, lack of interest and in fact, the person may leave the organization.

At Suzuki Japan, young recruits are never put in the shop floor straightaway to handle
production and workers because this is a job they would be least fit to do with their level
of maturity. On the other hand, they would be fit to do technical related work because
they would have just come out of engineering colleges. They come with fresh minds and
they are given fresh projects. After six months, they assess the guy and then decide where
he is best suited to work.

They also suggested a routing as to how a person is put into an area first and then
gradually inducted into other areas. This routing process was professionally thought
about after several years of experiments. We adopted these changes in 2005. Earlier, we
used to put all fresh recruits in the shop floor. The worst feedback used to come from
those 28-30 year old guys, out of the 100 or so we recruit every year.

Have you recruited from the two ITIs you adopted in January?

The first group will be maturing in July this year where our semi-contribution can be
seen. We have looked at a temporary change in the layout of machines and equipment in

39
four of them- two managed by us directly and the other two by our JV partners Jay
Bharat Maruti and Sona Koyo. We manage two ITIs at Gurgaon and Rohtak. A lot of
expensive machineries in these ITIs have been left unused for many years and have been
pressed into use now.

A new course curriculum has already been put in place. The NTTF is an excellent agency
down south in Bangalore, who manage these ITI. They call it the model ITI. We have
hired them to run the ITIs for us. They are the consultants. A senior person each is
heading the management councils at both the Gurgaon and Rohtak ITIs.

Our first complete contribution will be realised in July 2008, when all our initiatives will
be out in place. A centre for excellence model can be seen in July 2008 in all the four
ITIs.

Has Suzuki picked up any HR initiative from Maruti?

Not really. We are two very distinct countries. The moment I talk of people perspectives,
it will have a backdrop of the social ethos, culture and other factors. We are poles apart in
that sense. However, whatever we do is quite global in HR perspective. In that sense,
Suzuki is trying to open up very fast. One good complement for us here is that Suzuki is
very keen on understanding the changes that have been brought into Maruti in the last 6-7
years, ore specifically on the leadership and HR fronts.

Is there any other initiative you plan this year?

When we talk of connect with people, there are formal channels of internal
communication like newsletters or quarterly communication meetings, which is
addressed by the MD. There are meetings where I, as the head of HR, talk to people.

There is another very powerful initiative we have started called 'Tea with MD'. A small
group of 18-20 people interact with the managing director over some tea and cookies. It
is an open forum for all. This is a monthly exercise and selection is random. Feedback
can be drawn from such meetings and worked accordingly.

What is the attrition rate at Maruti today?

We are currently experiencing an attrition rate of 9.5 percent, as against the industry
(manufacturing sector) rate of 19.5 percent. In the young population, we are touching 12
percent, which is about 22 percent in the industry. Young here means in terms of age,
experience, and his stay in the company. These young employees constitute about 30
percent of the total workforce.

40
Is there a Suzuki culture today? How will you define it?
The Suzuki culture has been a tremendous gain for Maruti for the last 25 years. It was a
judicious mix in the JV relationship. The typical capabilities were with Suzuki Japan, not
with us. Similarly, facets of marketing, sales and HR were with the locals. Contributions
from both the partners were used to the optimum levels.

Lastly, what is Maruti's policy on employing women?

There were jobs in the automotive industry that were historically considered tough for
women, especially in the shop floor, marketing, sales, and engineering. Over the last four
years, we have taken a call in the HR consulting group that recruitments will be made
based on competencies and attitudes, and not based on gender. We go to engineering
colleges that are specifically for girls. We have made it very clear in our presentations to
all educational institutes that if a girl is willing to make a career with us, we will provide
her that with that opportunity, provided she is found competent. We are not keeping a tab
on numbers; we recruit based on professional competencies. We broke that barrier
consciously four years ago.

PROJECT VISTAAR RELATED WITH SELECTION AND

ORIENTATION
Maruti has been the market leader in the passenger car segment for the past several years
and has been reaping the benefits of being the single player in Indian Passenger Car
Industry. This situation also led to having good margins in the product sale and full
capacity utilization of the plant facilities. The market size also had been increasing

41
continuously with two digit percentage growths. However, with the Competition coming
in, and with the passenger car market itself not increasing in size, Maruti’s market share,
and margins and hence the profits from manufacturing activity alone are under severe
pressure. This is the typical scenario globally also, wherein mature markets like USA and
Japan the manufacturing business, on a stand-alone business, is undergoing severe
pressures on bottom lines.
In this kind of a background, in order to maintain its supremacy in the passenger car
market and to increase its revenues and profits, Maruti decided to venture into new
service oriented businesses, which could be developed as natural spin off from its core
business of manufacturing. It would also strengthen its brand image as a provider of
complete mobility solution for its customers.

To develop this idea, Maruti engaged M/s A.T. Kearney as consultants (Phase I).
Preliminary analysis by A.T. Kearney, with support from Maruti, indicated that Maruti
captures a limited portion of the vehicle life cycle spend towards only sale of car, with a
potential to capture another almost equivalent portion. It found that global auto majors
successfully tap this potential in different ways in various markets. A number of business
options were generated and examined, leading to selection four potential businesses for
Maruti to venture into viz.

• Auto Finance
• Insurance Distribution
• Corporate Leasing and Fleet Management
• Pre-owned Cars Business

BIBLIOGRAPHY

1} Aswahthappa
2}VSP RAO

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1]

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