PowerTech India Case Analysis

FAS S2

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 Situation Analysis SWOT Analysis
• Neil Malhotra VP, HR of PowerTech India needs to design a HR policy adequate for
at least upcoming five years regarding redesigning of workforce composition. Strengths Opportunities
1. Skilled and experienced 1. Public-private
• The industry is fluctuating and the market is dynamic. The company is required to workforce relationships with focus
be prepared to face any scenario. 2. 100% on-time project delivery on rural electrification
• The important things to be considered while making decision are- 3. Up-to-date technological 2. Foreign direct
facilities investment of 13
1. Clients provide sufficient projects based on skills and experience of workers. 4. Strong vendor relationships trillion Rs. in FY 2013
Thus workforce is a very important resource.
5. Unique worker-friendly work. 3. Investment in solar
2. The key HR policies of the company had become the hallmark of the 6. Low absenteeism and attrition power generation in
organization. rate Western India
7. Favourable relations with local
3. Interest of investors has been reduced after the coal scam controversy.
community due to hiring of
4. The company has 11 projects in progress and 7 in bidding stage thus, engineers local labourers
are to be retained and layoff only possible on shop floor workers. 8. Competitive advantage by
specializing in delivering
Possible projects in complex terrains
Outcomes
Weakness Threats
1. Non recognition of good 1. Slowdown of core
Consistent Industrial performance for shop- industries affecting power
Future growth Slump floor staff generation industry.
situations 2. Reduced interest among
(expansion) (reduction) 2. Trainees not getting
absorbed into workforce investors (coal scam)
Cost cutting 3. Fall in number of projects
Same HR strategy
Action needed can be followed
solutions and 4. Layoffs causing protest
change in HR policy from workers’ union

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 Critical success factors of the Key decision criteria
organization
• Expert project management by skilled and experienced • Maintaining the worker-friendly identity among clients
workforce
• Recruiting and training workforce adequate in a fluctuating
• 100% on-time project delivery market scenario.
• Up-to-date technological facilities • Maintaining the skilled and experienced workforce composition
so that clients feel confident to allocate projects to the company
• Strong vendor relationships
• Maintaining the ratio of 1 to 3 for engineers to shop floor workers
• Unique worker-friendly work environment for in attracting sufficient for satisfying company’s expansion plans.
and retention and at of skilled employees.
• Keeping the attrition rate low.
• Low absenteeism and attrition rate
• Favourable relations with local community due to hiring of
local labourers
• Wide client base across varied sectors
• Competitive advantage by specializing in delivering
projects in complex terrains

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 Problem Identification
Surface Causes
• Decline in the Income from Projects
for the Company
• Fall in number of projects, thus
PowerTech facing heavy
competition, with lower bids
• Large number of workers on bench
at times
• 8 Clients provide 90% of income
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Root Causes
• Low growth in economy due to sharp
decline in industrial growth rate, which
fell to a 3 year low of 4.4 per cent
• Lack of Projects and all shop floor
trainees promoted without checking for
their performance
• Engineers and shop floor workers not as
per the 1:3 ratio
• Not sufficient projects, lack of proper
sales team to pitch and get projects
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Alternatives Evaluation based on decision criteria
While recruiting new employees, PowerTech India should reduce fixed This will maintain company’s image of employee-
income of the shop floor employees and add the 20% performance friendly organization.
bonus for them. Thus only high performing will get bonus. This would This will ensure that only talented workforce will be
save company’s costs on compensation and there will be appropriate selected.
recognition of good performance.
Layoffs of shop-floor staff for cost reduction. This is against company’s worker-friendly approach.
The company won’t be able to maintain 1 to 3 ratio
of engineers and shop-floor staff which will have
negative repercussions in case of happy market
scenario and more projects in hand.
Rather than offering full pay to the workers engaged in training This will not affect company’s worker-friendly
programs, they can be given 85% of the regular wage which is still 10% image as it is paying 10% above the industrial norm.
higher than the industry practice. This can be a cost-cutting option. However, this may increase attrition rate.
Since the absenteeism is only 2% and attrition rate is 30 workers per In accordance with the expansion plans of the
year, the 10% buffer of the employees can be lowered to 5% in further company as the company is maintaining a buffer of
recruitment and more focus should be given on making them employees.
competent to handle more projects. This will make sure that that the
available workforce is prepared enough if there is a growth in projects.
Open up referrals for shop floor workers. This will reduce the attrition Increases the worker friendly image of the company.
rate as workers would have acquaintances in the same company. Also Ensure the entry of more skilled workforce. Will
brings in additional skilled work force that the company could not reduce the attrition rate.
achieve otherwise.
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Recommendation & Action Plan
Reduce the no of shop-floor employees in the new intake so that the 1:3 ratio of total engineers to total shop-floor employees is
maintained(To be put to action in 2013)
Reduce the payment of new Engineers and new shop-floor workers (2013)

Introduce variable pay to shop-floor workers with a reduction in the fixed income (2013)

In hand salary provided to employees can be reduced by 5 %, and it can be returned, as income of company increases.(2013)

Compensation for buffer employees to be reduced to 85%(2013)

Depending on the yearly requirements the buffer can be made variable, with a min of 5% and it can be done by reducing the intake
and also by selecting only qualified persons after shop-floor employee training
Open up the option of employee referrals for recruitment for shop-floor staff

If the industry shows rapid growth in future, the fixed income of the shop-floor staff can be increased along with the buffer.

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