OBJECTIVES OF THE STUDY
This chapter consists of a brief description of the title of the project, the objective of the study and the scope of the study.
TITLE OF THE PROJECT: Title: Analysis of Attrition rate in Max Retails
OBJECTIVES OF THE STUDY: Following is the objective of the study:The title of the project report suggests that the research intends to study the Analysis of Attrition Rate in Max Retail Division
SCOPE OF THE STUDY: o To determine effect of attrition on the business. o Determination of solutions to avoid or to control attrition in the stores. o To understand the extent of job satisfaction among the employees. o To suggest proper measures.
METHODOLOGY:
Keeping in mind the overall objectives it is necessary to adopt primary as well as secondary sources.
The primary source will be by taking the actual facts and figures from the Head HR of the company ?MAX? that is from the Regional Office (RO). By analyzing the data we can arrive at a proper pictorial representation in the form of chart diagrams.
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RATIONALE FOR THE STUDY
Generally it has been seen that employees who work in organisations, expect the management to realise their full potential. In spite of this, there are situations when either the employers ask his employees to leave, or employees themselves leave the organisation. The problem of attrition of employees bothers both-the employer and the employees. At the same time employees attrition is unavoidable. This is a very big challenge for all the sectors of the economy. Analysts say that attrition rates vary between 20-40% in some organisations. In India, the average attrition rate in the BPO sector is approximately 30-35%. This is far less than the prevalent attrition rate in the US market (around 70%). One of the reasons for high attrition rate in this sector is, individuals are not able to take the pressure of work, the toughness of the job and timing is not adequately conveyed. Motivational training is still to evolve in this industry. Indian Pharmaceutical industry is one of the fastest growing knowledge based sector with annual attrition rate of near about 30-35% compared to the global Pharmaceutical attrition rate of 10-12% per annum. Current statistics show that higher attrition rate problem exists in Marketing and R$D department. Major reasons for high attrition
rate stated by employees are poor management, uninterested job, and lack of motivation, job lacking opportunity for future advancement and inadequate salary or compensation plan. The Indian FMCG sector demonstrated a steady rise in the attrition rate over the past three years. The attrition rate was 9.8% in 2004. It moved to 10.8% in the 2005. In 2006, the attrition rate became 17%. The major companies in FMCG sector are Asian paints, Britannia, Colgate, Cadbury, ITC, Marico, Nestle, P&G, Palmolive, Pepsi, etc. In view of the above, this study has been conducted for one sector of the economy-Retail sector. Currently India is the fifth largest retail market in the world. The market size in 2008 was estimated at US $ 511. Retailing has played a major role the world over increasing productivity across a wide range of customer goods services. 2
From the Table: 1, below, it is clear that most of the sectors have an attrition rate of less than 50%, whereas in the case of retail and voice based BPO it is 50%. High attrition rate increases the training cost, increases human resources, recruiting and productivity costs. They also increase the prospect of customer service complaints or quality problems. Employees leave their jobs for a number of reasons including: wanting more money, poor working conditions, irregular working hours, lack of advancement, opportunities etc.
Table:-1 Attrition rate in different sectors
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Attrition rate is good as long as the rate is at normal level. This will help the organisation to get new blood into the organisation and for the organisation to develop. But it becomes a problem when the attrition rate is abnormal. Therefore, HR Department has the most crucial role to play in any organisation. At the time of conducting interviews, HR personnel try to bring candidate to the right job. Similar is true when the attrition rate is abnormal, so they have a very crucial role to play.
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WHAT IS RETAIL SECTOR? The Retail Sector of Indian Economy is going through the phase of tremendous transformation. The retail sector of Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector with the latter holding the larger share of the retail market. At present the organized retail sector is catching up very fast. The impact of the alterations in the format of the retail sector changed the lifestyle of the Indian consumers drastically. The evident increase in consumerist activity is colossal which has already chipped out a money making recess for the retail sector of Indian economy. With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about quality of products and services. These demands are the visible impacts of the Retail Sector of Indian Economy. Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national & international products, with the help of print and electronic media. The social change with the rapid economic growth due to trained personnel, fast modernization, and enhanced availableness of retail space is the positive effects of liberalization. The growth factors of the retail sector of Indian economy:
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Increase in per capita income which in turn increases the household consumption
? ?
Demographical changes and improvements in the standard of living Change in patterns of consumption and availability of low-cost consumer credit
? ?
Improvements in infrastructure and enhanced availability of retail space Entry to various sources of financing The infrastructure of the retail sector will evolve radically. The emergences of shopping malls are going steady in the metros and there are further plans of expansion which would lead to 150 new ones 5
coming up by the year 2008. As the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lions share in food trade. The non-food sector, segments comprising apparel, accessories, fashion, and lifestyle felt the significant change with the emergence of new stores formats like convenience stores, mini marts, mini supermarkets, large supermarkets, and hyper marts. Even food retailing has became an important retail business in the national arena, with large format retail stores, establishing stores all over India. With the entry of packaged foods like MTR, ITC Ashirwaad, fast foods chains like McDonald's, KFC, beverage parlors like Nescafe, Tata Tea, Cafe Coffee and Barista, the Indian food habits has been altered. These stores have earned the reputation of being 'super saver locations'. With the arrival of the Transnational Companies (TNC), the Indian retail sector will confront the following round of alterations. At present the Foreign Direct Investments (FDI) is not encouraged in the Indian organized retail sector but once the TNC'S get in they would try to muscle out their Indian counterparts. This would be challenging to the retail sector in India. The future trends of the retail sector of Indian economy:
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The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.
? ? ? ?
No one single format can be assumed as there is a huge difference in Cultures regionally. The most encouraging format now would be the hyper marts The hyper mart format would be further encouraged with the entry of the TNC's Retailing consists of the sale of goods or merchandise, from a fixed location such as a department store or kiosk, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a 6
wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. Shops may be on residential streets, shopping streets with few or no houses, or in a shopping centre or mall, but are mostly found in the central business district. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Retailers often provided boardwalks in front of their stores to protect customers from the mud. Online retailing, also known as e-commerce is the latest form of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase. Most retailers have employees learn facing, a hyper real tool used to create the look of a perfectly-stocked store even when it is not.
Retail-industry Retail industry has brought in phenomenal changes in the whole process of production, distribution and consumption of consumer goods all over the world. In the present world most of the developed economies are using the retail industry as their vital growth instrument. At present, among all the industries of U.S.A the retail industry holds the second place in terms of employment generation. In fact, the strength of the retail industry lies in its ability to generate large volume of employment. Not only U.S but also the other developed countries like U.K, Canada, France, and Germany are experiencing tremendous growth in their retail sectors. This boom in the global retail industry was in many ways accelerated by the liberalization of retail sector. Observing this global upward trend of retail industry, now the developing countries like India are also planning to tap the enormous potential of the retail sector. Wal-Mart, the world's largest Retailer has 7
been invited to India. Other popular brands like Pantaloons, Big Bazaar; Archie‘s are rapidly increasing their market share in the retail sector. According to a survey, within 5 years, the Indian retail industry is expected to generate 10 to 15 million jobs by direct and indirect effects. This huge employment generation can be possible because of the fact that being dependent on the retail sector shares a lot of forward and backward linkages. Emergence of a strong retail sector can contribute immensely to the economic development of any country. With a dominant retail sector, the farmers and other suppliers can sell their produce directly to the major retail companies and can ensure stable profit. On the other hand, to ensure steady supply of goods, the retail companies can inject cash into the production system.
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COMPANY PROFILE
Land Mark Group:
Micky Jagtiani Founder and Chairman of the Land Mark Group
The Landmark group is one of the largest retailers in Middle East, India & China. It was started in the year 1973, in Dubai with the 9
mission of becoming the foremost retailer in the Middle East, by providing customers with a large variety of high quality products. From a single children‘s store in Bahrain, the Landmark group has expanded exponentially to 600 stores across 10 countries with retail staff strength of 20,000 & a turnover of 1 billion USD. The highlights of the Landmark Group are its product & constant innovation. Today the Business Model is focused on to:
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Core Business : 5 fully developed Business including fashion, footwear, children, home, health & beauty
? ? ? ?
Value Business : Family value stores including Apparel & Electronics Brand Business : A portfolio of International brands Hospitality Business : Budget hotels Support Business : Leisure, pharmacy, spa, fitness centre & restaurants
Lifestyle:
In India it has revolutionized the concept of retailing by offering a truly international shopping experience for discerning shoppers‘ with a youthful & vibrant – LIFESTYLE. Launched in Chennai in 1999 Lifestyle today is one of India‘s largest department store chains with over 4, 50,000 sq.ft of shopping space & 11 stores across Chennai, Hyderabad, Bangalore, Delhi, Mumbai, Ahmedabad & Pune with a total team size of over 2400. The entire retail experience revolves around its core business ?Concepts? which has been designed & engineered to suit evolving customer needs & lifestyle. The five concepts of Lifestyle stores are:
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Infant basics, clothing, toiletries, toys & nursery products
Furniture & household products
Footwear & Leather accessories
Fashion Apparel Brand
Value department store encompassing apparel, footwear, household & accessories
Cosmetics, Fashion accessories & gifts
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Max:
‘Look good, Feel good’
Max is a fashion and footwear retailer in the Value segment. It retails its own label clothing for men, women and children, as well as footwear and house ware. Max is opening around 100 stores across India, a division of Lifestyle International Pvt Ltd., which is a part of US $ 1 billion Landmark Group. Stores are already opened in Indore, Ahmedabad, Bangalore, Delhi, Agra, Hyderabad, Lucknow, Mumbai and Noida. The Max India proposition is:
? ? ?
Core & contemporary merchandise at value pricing Wide range in mid segment-apparel Quality retail ambience & service The Product Mix of Max India consists of: Men, Women, Ethnic, Inner, Kids, Footwear, and Accessories & Home Décor
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The Price Segment of Max India falls between Economy & mid- price. A good shopping experience and a great value at Max translate into making customers ?Look good and Feel good‘ to the maximum.
The core values:
Passion for Excellence: We are committed to setting industry benchmarks-be it our product or practices. Our doctrine is to strive and maintain the lead in whatever we do, with strict adherence to quality and delivering value for money. Integrity in everything we do: Our business is driven by trust, strong ethics and mutual respect. Empowering people to strive and deliver: Our core strength is our employees. We believe in giving our personnel the opportunity and responsibility that are integral to their professional development and our Group‘s success. Adapting to changing market and customer needs: We keep ourselves abreast with industry trends and dynamic consumer preferences. Our offerings keep evolving to address changing and discerning consumer needs. Micky Jagtiani, Chairman
Statement of purpose:
Creating exceptional value for all those whose lives we touch. To be recognized as an international, diversified retail conglomerate that encourages entrepreneurship and which consistently delivers exceptional value to our customers and business partners. We believe in delivering unmatched values- tangible and intangible-for all those whose lives we touch. Micky Jagtiani, Chairman
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Envisioned statement:
To be among the top 100 retailers worldwide, with a top 20 ranking in profitability by 2015. Micky Jagtiani, Chairman
Vision:
To become the leading Retail Group in the Middle East and India; maintaining our constant growth through our core values and international business.
Mission:
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DEPARTMENTS AND SUB DEPARTMENTS
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REVIEW OF LITERATURE
INTRODUCTION TO H.R.M Human resource management (HRM) usually means managing men or people. HRM involves all managerial decisions, policies & practices that influence human resource directly. Let us understand it by dividing the term into its subparts. • Human – people, us • Resource – assets/cost of organizations • Management – co-ordination & control to achieve set goals.
DEFINITIONS OF H.R.M According to Wendell L French ?HRM refer to the philosophy, policies procedures & practices related to the management of people within the organization?. According to Leon C Megginson ?the term human resources can be thought of as the total knowledge skill, creative abilities, talents & aptitudes of an organization, workforce as well as the value, attitudes & beliefs of the individuals involved.?
EVOLUTION OF H.R.M HRM is relatively a new term, emerged during the 1970s. Many people continue to refer to the discipline by its order, more traditional titles, such as personnel management or personnel administration. Experts of HRM in our country have tried to chronicle the growth of the subject only since the 1920s. This was the period when state intervention to protect the interests of the workers was felt necessary because of the difficult condition which followed the First World War, & the emergence of the trade unions. The Royal Commission (1931) recommended the appointment of the labour welfare officers to deal with the selection of the workers & settle their grievances.
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The Factories Act, 1948, made appointment of welfare officers compulsory in the industrial establishments employing 500 or more workers each. In 1990s, the emphasis shifted to human values & productivity through people. Thus, beginning in the 1920s, the subject of HRM has grown into a matured profession. Nature of H.R.M HRM is concerned with the people dimension in organizations. o Organizations are not mere bricks, mortar, machineries or inventories. They are Peoples. o HRM involves the application of management functions & principles such as developing, maintaining & remunerating employees in organization. o Decision made must influence the effectiveness of an organization.
OBJECTIVES OF H.R.M HRM objective are four fold- societal, organizations, functional & personal. o Societal Objective: To be ethically & socially responsible to the needs & challenges of the society while minimizing the negative impact of such demands upon the organization. o Organizational Objectives: To recognize the role of HRM in bringing about organizational effectiveness. o Functional Objective: To maintain the department‘s contribution at a level appropriate to the organization‘s needs. o Personal Objective: To assist employees to achieve their personal goals. At least insofar as these goals enhance the individual‘s contribution to the organization.
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CONCEPT OF ATTRITION
To understand attrition analysis, one has to understand what attrition is. Attrition, in simple industry terms is the number of people who quit the services of an organization voluntarily. Attrition analysis, therefore, is a method of finding out reasons as to why employees quit, what are the contributing factors to it, what could have been done by the organization to retain them, what can be done to prevent future attrition for similar reasons, etc. To do attrition analysis, there has to be an exit interview or discussions (either formally or informally, but most organizations have a formal process to do it). During exit interview/discussions, every employee who is quitting the organization is asked about the reasons of his leaving, what did go well and what did not, what the organization should have done to retain him/her. When you compile the data of every employee who quit the organization over a period of time, you compile the reasons and see what the major reasons are. Based on that, you can do your analysis and recommend corrective and preventive actions.
ATTRITION ANALYSIS CALCULATION Attrition analysis is a study in which an analysis gives the data on what is the current attrition trend in the company. It‘s an analysis done by taking time, manpower strength & no. of people resigned into consideration to derive the final outcome. i.e., Attrition % = (No. of separations/Total employees) *100
THE VALIDITY OF ATTRITION DATA In order to understand this, it is important to question the very validity of the data that is given by the employees – it is only common sense that an employee would not reveal the correct reason for leaving the 20
company at some point of time – thus any action taken by the organization to prevent attrition by altering the factors does not have any effect, because perhaps the data itself is not valid.
CALCULATING EMPLOYEE ATTRITION
Sudipta Dev reasons out why the rate of employee turnover in an organisation does not always show the whole truth. The high attrition rate in the IT industry has always been its greatest concern and a subject of much analysis and debate. Organisations use different methodologies for calculating their turnover rate. It is a known fact that turnover calculation is a grey area which does not always depict the true picture. While a few techniques are common, there are no proven theories. Further, the approach to this calculation might vary from organisation to organisation. Disclosure of the figure not only has a direct impact on the business but also affects employee morale and productivity. Significantly, it might also trigger a chain reaction - a high attrition rate will lead to more people leaving the organisation, while a lower rate will act as a retention strategy. It is therefore not surprising that most industry observers are sceptical when organisations ?disclose‘ their employee turnover. A high attrition reflects poorly on an organisation‘s ability to hold on to its people. Monisha Advani, CEO, Emmay HR, says that attrition is unfortunately viewed as a management flaw when in fact it could well be a recruitment error. In some cases it can be simply seen as an organisation‘s competitor appreciating its quality of hires, and its output, post-training - almost a backhanded compliment. ?Ideally, attrition should be calculated on a monthly basis for companies that have over 50 employees for the first five years of its business. Subsequently, a quarterly index should be applied till a company‘s 10th anniversary. After this, annual attrition figures should be measured and 21
accounted for. This is the optimum within the services industry as companies tend to have different challenges at different stages of their business lifecycle; also, maturity achieves stability around a company‘s 10th anniversary,? opines Advani. Different theories The attrition rate remains a debatable area as there is no standard formula to calculate it. This can be described to many factors.
?
The employee base changes each month. So if a company has 1,000 employees in April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as 1,500 (average for the year). If the number of employees who left is 300, then the attrition figure could be 15 percent or 20 percent depending on what base you take.
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Many firms may not include attrition of fresher‘s who leave because of higher studies or within three months of joining.
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In some cases, attrition of poor performers may also not be treated as attrition.
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Essentially, the attrition number is also a PR or stock/analyst statement and is prone to dressing up.
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Companies do not realise that hiding their attrition rate is never a solution for reducing the same Bijayinee Patnaik HR Head Mahindra Special Services Group
It is imperative to evolve the science of measurement before the measure itself Harish Bhattiprolu Director,Sales Kenexa Technologies
Unfortunate ly, attrition is viewed as a managemen t flaw when in fact it could well be a recruitment error Monisha Advani CEO Emmay HR
Varied theories are also applied as organisations like to brand themselves differently as far as their HR and recruitment strategies are concerned. Explains Advani, ?Each company positions itself uniquely in a common market place by claiming to have exceptional HR policies, procedures and management styles that directly impact retention or attrition; hence the absence of a homogenous system. Also, in situations where a common attrition measurement formula is applied, companies find a way to justify their results to position their statistics differently from their peers on account of having ?different‘ operating practices.? However, Anil Noronha, Director, HR, Indian Subcontinent, Onward Novell Software (I) states that most companies use a fairly standard method - the number of employees who left during the year divided by the average number employed for that year.
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THE TRUE PICTURE The attrition rate that is generally disclosed by most organisations does not always show the correct picture. Nerurkar acknowledges this to be true. ?I agree that the figure has a direct impact on stock markets, employee morale and customer confidence. There is too much at stake and neither the US GAAP (Generally Accepted Accounting Principles) or SEBI requires that this be calculated in a particular way.? The attrition rate has always been a sensitive issue for all organisations as it can have major fallout on the bottom-line. Kranti Munje, Senior Manager, HR, Bristlecone India furthers, ?This is because the attrition rate is an indicator of many things intrinsic to the organisation, and revealing it may affect it negatively. In fact at times disclosing this data can be like a self-fulfilling prophecy—if you reveal that the attrition is high, it may actually become higher.?
Attrition rate is an indicator to many things intrinsic to the organisation, and revealing it may affect it negatively Kranti Munje Senior Manager, HR Bristlecone India
Attrition figure has direct impact on stock markets, employee morale and customer confidence. Suhas Nerurkar President TVA Infotech
It is also not uncommon to find companies proclaiming an attrition rate that is much less than that of others in the industry. Remarks Bijayinee
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Patnaik, HR Head at Mahindra Special Services Group (MSSG), ?Companies must be projecting their attrition rate incorrectly because it tends to affect their brand image both internally and externally. Internally, it sends a wrong signal to their employees and the board of members; externally, it can affect the company in various ways such as developing a bad image or dissuading fresh talent from joining.? She regrets that companies do not realise that hiding their attrition rate is never a solution for reducing the same
TURNOVER COST
While there are many techniques for calculating the cost of turnover, the following is one of the best. It takes into account expenses involved to replace an employee leaving an organization. A. Recruitment cost The cost to your business when hiring new employees includes the following six factors plus 10 percent for incidentals such as background screening:
? ? ? ? ?
Time spent on sourcing replacement Time spent on recruitment and selection Travel expenses, if any Re-location costs, if any n Training/ramp-up time Background/Reference Screening Additionally, for the positions that are billable, there is a lost opportunity cost. This can be done using the revenue factor. B. Training and development cost To estimate the cost of training and developing new employees, start off by looking at the cost of new hire orientation. This will mean direct and indirect costs, and can be largely classified under the following heads:
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? ? ? ?
Training materials Technology Employee benefits Trainers‘ time. C. Administration cost Additionally, you may want to measure the per-employee cost to:
? ? ? ?
Set up communication systems Add employees to the HR system Set up the new hire‘s workspace Set up ID-cards, access cards, etc. On the softer side, to estimate the learning curve or
productivity cost, estimate the average amount of time it takes an employee in a new position to get up to speed and produce at the average rate for the organization. If it takes a new employee six months to reach average productivity, the average productivity loss is 50 percent. Use your annual revenue factor result and multiply it by the productivity loss. The result of these costs (and an additional 10 percent to cover other hiring costs such as background checks, credit checks, drug screening, and other administrative costs) can give you fairly accurate calculation of turnover cost.
RETENTION STRATEGIES Hiring individuals who are truly fit to succeed in the position for which they are hired will dramatically increase the chances of that employee being satisfied with his or her work, and remaining with the company for an extended period of time. Communication of employee‘s roles, job description and the responsibilities within the organisation, new policies will help to retain employees. 26
Participative Decision Making - It is incredibly important to include employees in the decision making process, especially when decision are related to employees. This can help to generate new ideas and perspectives management might never have thought of. Sharing of knowledge with others - Allow the members to share their knowledge with others. This helps in retention of information. This also lets a team member know that he is valuable member of the organisation. Pay Package - Any employee wants to be appropriately paid and fairly for the work he or she does. For, this conducts a research to find out the pay package in other similar type of organisation at regional as well as at national levels. Balance Work and Personal Life - No doubt family is exceptionally important to employees. When work begins to put pressure on one family, no pay package will keep an employee in the organisation. Therefore, there should be a balance between work and personal life. Small gestures like allowing an employee to take an extended lunch once a week to watch his son‘s cricket game will result in loyalty and helps to retain the employee. Organisation Culture - Try to select the candidates who believe in the organization culture and adopt with ease to organisation culture. Exit Interview with the employees who are leaving the organisation will help the organisation to find out the reasons why employees are leaving the organisation. This will also help to find out any drawbacks in the organisation
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RESEARCH METHODOLOGY
This chapter deals with research design and the description of methods used to obtain primary and secondary data.
RESEARCH DESIGN The research design for the present study has the following steps o Based on the needs of the organization and procedure a list of excel sheet was provided for the data to be analyzed. o The excel sheet consisted the data of the employees who has resigned. o The data was of the employees who left the organization in between April 2010 to February 2011. o The data was then analyzed by using the present figures and reasons. o The tabulated data was then represented using various styles of graphs. o Based on data analysis and its interpretation finding conclusions were arrived. o Based on this findings and conclusions recommendations and suggestions were made.
METHOD OF DATA COLLECTION PRIMARY DATA Following are the sources used to obtain primary data. o Excel Data Sheet directly from the Head HR of the Company
SECONDARY DATA The secondary data required for the research consisted of literature that composed the theoretical background necessary for the research. Following are the secondary data used in the research. o Company profile - for this the main source was LIFE STYLE website and company manual. o Review of literature – the main source was books and websites. For books libraries were visited and books referred. o Books o Internet 28
DATA ANALYSIS AND INTERPRETATION
This chapter deals with data presentation and analysis.
GRADEWISE
200 180 160 140 120 100 80 60 40 20 0 R2 R3 R4 R5 R5-1 R5-2 R6-1 R6-2 No of employees
DATA INTERPRETATION:
From the above graph it is being seen that from the grade R3 highest number of employees has left the job. The reason behind it was mostly either because of their personal reasons; further education, better prospects or some of the reasons were that they went absconding. The least removal of employees is from R6-1 grade, so comparatively with the other groups in the grade compared with grade R3 the employees in the other grade are satisfied with their job.
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DESIGNATION WISE
45 40 35 30 25 20 15 10 5 0
Series 1
DATA INTERPRETATION:
From the above graph it can been seen that the highest number of employees leaving their job are from Customer Relationship Executive position and the next is from Senior CRE and Trainee CRE position so the firm needs to take more consideration on these 3 positions because these are the people who interact between customer and company. Therefore, the company needs to focus more on attrition control and also suggestion made by the employees for the betterment and to control the attrition. This may be the case, since retail sector is booming these days and there are huge competitors are entering into the competitive market and it is being a growing sector. Therefore, prospects and better salary package are being offered by the competitors. The competitors poach employees from the same market and want more experienced people and it may be one of the very strong reasons behind attrition.
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LOCATIONWISE
140 120 100 80 60 40 20 0 No of employees
DATA INTERPRETATION:
From the above graph it can been seen that from Mumbai location most of the employees have left the job since in Mumbai lot of retail stores have been launched so employees take experience from one company, leave the job and go away to another so satisfaction level of an employee should be also considered and the following location is Indore where there is high attrition.
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STOREWISE
45 40 35 30 25 20 15 10 5 0
Series 1
DATA INTERPRETATION: From the graph it can be seen that from Inorbit store has highest number of employee leaving the job and the reason behind it is that employees go absconding. The second reason is for further studies and lastly for better prospects and the next store is from Indore so from these two very important stores of Max Retail as per my knowledge the highest number of employees leaving the job. Highest concentration should be on these three stores so that the attrition rate does not affect the sales and profitability of the company.
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MONTHWISE
30 25 20 15 No of employees 10 5 0
DATA INTERPRETATION:
From the above graph it can been seen that the highest number of employees have left in the months like Jan, May, September and December these shows that they have worked mostly in the gap period of 4 to 5 months and then they have left so mostly in the job of customer relationship it is found that mostly employees are not that highly dedicated to take this as their career because of looking into salary issue and the designation increment issue. Since it is been done at a very huge gap. But the growth opportunity is there in this sector but the employees should be taken into belief that depending on their performance they would have a better opportunity further so that their attrition rate would decrease.
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REASONS FOR LEAVING
60 50 40 30 20 10 0 Series 1
DATA INTERPRETATION:
From the above graph it is been that the highest reason is because the employees have gone absconding and the next highest reasons are because of the relocation and for better prospects so the reason behind the absconding should be analyzed like either the employees were not performing properly or they may be there just to take some kind of experience.
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FINDINGS
o Communication channel is effective in this organisation; if there is any problem, the employee can openly discuss with the seniors to find a solution. o Newly joined employees are not satisfied with induction and orientation programme. o Employees are not satisfied with reward system because there is no consistency in rewarding the staff. o Some of the employees feel that there is no growth in the organisation. o Floor staff feels that the daily meetings which are target oriented is unnecessary and only increases stress in their life. o Main reasons for employees leaving the organisation is inadequate remuneration, working conditions like more working hours for the same salary as compared to other organisations. o Employees are not satisfied with leave policies because many times their weekly offs are cancelled. o There is no sufficient space for conducting meetings, eating food, training and orientation program
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SUGGESTIONS & RECOMMENDATIONS
o Attrition rate is good only when it is balanced. Attrition rate should be maintained by providing adequate and competitive remuneration and proper working hours to the employees.
o Stay-in interviews and regular counselling and mentoring help to find out, whether the employee is satisfied with the working condition. o Continuous development of the employees by way of trainings should be implemented to retain the employees. o Proper performance appraisal techniques should be implemented in the organisation so that employee‘s good performance is duly recognised and rewarded. This motivates others to perform better. o Proper training and orientation programs must be provided to the employees about the product whenever needed so that they feel confident in doing their job and customer o There should be proper working hours for the employees and adequate space should be provided to have their lunch, conduct meetings and training programs. o The employers need to handle employees in such a manner that they don‘t get frustrated and over burdened by the work. o Employee engagement is one of the options to reduce their stress and to make them feel as a part of the organisation, also better training and development can be provided. This can be done by way of conducting cultural programs every week, sports, celebrating birthday‘s etc be able to communicate to the
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CONCLUSION
At the end the conclusion says that attrition rate is observed almost everywhere. The only main thing is that we should know the proper tactics how to tackle it in a proper way.
For this we can engage the employees in a very good working environment so that there will be very good human touch i.e. good relations between the employee and the company.
Attrition rate is an indicator of many things intrinsic to the organisation, and revealing it may affect negatively. So proper and utmost care should be taken in order to avoid such situations in future.
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BIBLIOGRAPHY:
o Human Resource Management – K. Aswathappa. o Personnel and Human Resource Management – P. Subbarao
WEBLIOGRAPHY: o www.googlesearch.com o o http://en.wikipedia.com www.citehr.com
o http://business.mapsofindia.com/sectors/retail.html
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doc_325432781.docx
This chapter consists of a brief description of the title of the project, the objective of the study and the scope of the study.
TITLE OF THE PROJECT: Title: Analysis of Attrition rate in Max Retails
OBJECTIVES OF THE STUDY: Following is the objective of the study:The title of the project report suggests that the research intends to study the Analysis of Attrition Rate in Max Retail Division
SCOPE OF THE STUDY: o To determine effect of attrition on the business. o Determination of solutions to avoid or to control attrition in the stores. o To understand the extent of job satisfaction among the employees. o To suggest proper measures.
METHODOLOGY:
Keeping in mind the overall objectives it is necessary to adopt primary as well as secondary sources.
The primary source will be by taking the actual facts and figures from the Head HR of the company ?MAX? that is from the Regional Office (RO). By analyzing the data we can arrive at a proper pictorial representation in the form of chart diagrams.
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RATIONALE FOR THE STUDY
Generally it has been seen that employees who work in organisations, expect the management to realise their full potential. In spite of this, there are situations when either the employers ask his employees to leave, or employees themselves leave the organisation. The problem of attrition of employees bothers both-the employer and the employees. At the same time employees attrition is unavoidable. This is a very big challenge for all the sectors of the economy. Analysts say that attrition rates vary between 20-40% in some organisations. In India, the average attrition rate in the BPO sector is approximately 30-35%. This is far less than the prevalent attrition rate in the US market (around 70%). One of the reasons for high attrition rate in this sector is, individuals are not able to take the pressure of work, the toughness of the job and timing is not adequately conveyed. Motivational training is still to evolve in this industry. Indian Pharmaceutical industry is one of the fastest growing knowledge based sector with annual attrition rate of near about 30-35% compared to the global Pharmaceutical attrition rate of 10-12% per annum. Current statistics show that higher attrition rate problem exists in Marketing and R$D department. Major reasons for high attrition
rate stated by employees are poor management, uninterested job, and lack of motivation, job lacking opportunity for future advancement and inadequate salary or compensation plan. The Indian FMCG sector demonstrated a steady rise in the attrition rate over the past three years. The attrition rate was 9.8% in 2004. It moved to 10.8% in the 2005. In 2006, the attrition rate became 17%. The major companies in FMCG sector are Asian paints, Britannia, Colgate, Cadbury, ITC, Marico, Nestle, P&G, Palmolive, Pepsi, etc. In view of the above, this study has been conducted for one sector of the economy-Retail sector. Currently India is the fifth largest retail market in the world. The market size in 2008 was estimated at US $ 511. Retailing has played a major role the world over increasing productivity across a wide range of customer goods services. 2
From the Table: 1, below, it is clear that most of the sectors have an attrition rate of less than 50%, whereas in the case of retail and voice based BPO it is 50%. High attrition rate increases the training cost, increases human resources, recruiting and productivity costs. They also increase the prospect of customer service complaints or quality problems. Employees leave their jobs for a number of reasons including: wanting more money, poor working conditions, irregular working hours, lack of advancement, opportunities etc.
Table:-1 Attrition rate in different sectors
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Attrition rate is good as long as the rate is at normal level. This will help the organisation to get new blood into the organisation and for the organisation to develop. But it becomes a problem when the attrition rate is abnormal. Therefore, HR Department has the most crucial role to play in any organisation. At the time of conducting interviews, HR personnel try to bring candidate to the right job. Similar is true when the attrition rate is abnormal, so they have a very crucial role to play.
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WHAT IS RETAIL SECTOR? The Retail Sector of Indian Economy is going through the phase of tremendous transformation. The retail sector of Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector with the latter holding the larger share of the retail market. At present the organized retail sector is catching up very fast. The impact of the alterations in the format of the retail sector changed the lifestyle of the Indian consumers drastically. The evident increase in consumerist activity is colossal which has already chipped out a money making recess for the retail sector of Indian economy. With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about quality of products and services. These demands are the visible impacts of the Retail Sector of Indian Economy. Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national & international products, with the help of print and electronic media. The social change with the rapid economic growth due to trained personnel, fast modernization, and enhanced availableness of retail space is the positive effects of liberalization. The growth factors of the retail sector of Indian economy:
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Increase in per capita income which in turn increases the household consumption
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Demographical changes and improvements in the standard of living Change in patterns of consumption and availability of low-cost consumer credit
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Improvements in infrastructure and enhanced availability of retail space Entry to various sources of financing The infrastructure of the retail sector will evolve radically. The emergences of shopping malls are going steady in the metros and there are further plans of expansion which would lead to 150 new ones 5
coming up by the year 2008. As the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lions share in food trade. The non-food sector, segments comprising apparel, accessories, fashion, and lifestyle felt the significant change with the emergence of new stores formats like convenience stores, mini marts, mini supermarkets, large supermarkets, and hyper marts. Even food retailing has became an important retail business in the national arena, with large format retail stores, establishing stores all over India. With the entry of packaged foods like MTR, ITC Ashirwaad, fast foods chains like McDonald's, KFC, beverage parlors like Nescafe, Tata Tea, Cafe Coffee and Barista, the Indian food habits has been altered. These stores have earned the reputation of being 'super saver locations'. With the arrival of the Transnational Companies (TNC), the Indian retail sector will confront the following round of alterations. At present the Foreign Direct Investments (FDI) is not encouraged in the Indian organized retail sector but once the TNC'S get in they would try to muscle out their Indian counterparts. This would be challenging to the retail sector in India. The future trends of the retail sector of Indian economy:
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The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.
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No one single format can be assumed as there is a huge difference in Cultures regionally. The most encouraging format now would be the hyper marts The hyper mart format would be further encouraged with the entry of the TNC's Retailing consists of the sale of goods or merchandise, from a fixed location such as a department store or kiosk, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a 6
wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. Shops may be on residential streets, shopping streets with few or no houses, or in a shopping centre or mall, but are mostly found in the central business district. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Retailers often provided boardwalks in front of their stores to protect customers from the mud. Online retailing, also known as e-commerce is the latest form of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase. Most retailers have employees learn facing, a hyper real tool used to create the look of a perfectly-stocked store even when it is not.
Retail-industry Retail industry has brought in phenomenal changes in the whole process of production, distribution and consumption of consumer goods all over the world. In the present world most of the developed economies are using the retail industry as their vital growth instrument. At present, among all the industries of U.S.A the retail industry holds the second place in terms of employment generation. In fact, the strength of the retail industry lies in its ability to generate large volume of employment. Not only U.S but also the other developed countries like U.K, Canada, France, and Germany are experiencing tremendous growth in their retail sectors. This boom in the global retail industry was in many ways accelerated by the liberalization of retail sector. Observing this global upward trend of retail industry, now the developing countries like India are also planning to tap the enormous potential of the retail sector. Wal-Mart, the world's largest Retailer has 7
been invited to India. Other popular brands like Pantaloons, Big Bazaar; Archie‘s are rapidly increasing their market share in the retail sector. According to a survey, within 5 years, the Indian retail industry is expected to generate 10 to 15 million jobs by direct and indirect effects. This huge employment generation can be possible because of the fact that being dependent on the retail sector shares a lot of forward and backward linkages. Emergence of a strong retail sector can contribute immensely to the economic development of any country. With a dominant retail sector, the farmers and other suppliers can sell their produce directly to the major retail companies and can ensure stable profit. On the other hand, to ensure steady supply of goods, the retail companies can inject cash into the production system.
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COMPANY PROFILE
Land Mark Group:
Micky Jagtiani Founder and Chairman of the Land Mark Group
The Landmark group is one of the largest retailers in Middle East, India & China. It was started in the year 1973, in Dubai with the 9
mission of becoming the foremost retailer in the Middle East, by providing customers with a large variety of high quality products. From a single children‘s store in Bahrain, the Landmark group has expanded exponentially to 600 stores across 10 countries with retail staff strength of 20,000 & a turnover of 1 billion USD. The highlights of the Landmark Group are its product & constant innovation. Today the Business Model is focused on to:
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Core Business : 5 fully developed Business including fashion, footwear, children, home, health & beauty
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Value Business : Family value stores including Apparel & Electronics Brand Business : A portfolio of International brands Hospitality Business : Budget hotels Support Business : Leisure, pharmacy, spa, fitness centre & restaurants
Lifestyle:
In India it has revolutionized the concept of retailing by offering a truly international shopping experience for discerning shoppers‘ with a youthful & vibrant – LIFESTYLE. Launched in Chennai in 1999 Lifestyle today is one of India‘s largest department store chains with over 4, 50,000 sq.ft of shopping space & 11 stores across Chennai, Hyderabad, Bangalore, Delhi, Mumbai, Ahmedabad & Pune with a total team size of over 2400. The entire retail experience revolves around its core business ?Concepts? which has been designed & engineered to suit evolving customer needs & lifestyle. The five concepts of Lifestyle stores are:
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Infant basics, clothing, toiletries, toys & nursery products
Furniture & household products
Footwear & Leather accessories
Fashion Apparel Brand
Value department store encompassing apparel, footwear, household & accessories
Cosmetics, Fashion accessories & gifts
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Max:
‘Look good, Feel good’
Max is a fashion and footwear retailer in the Value segment. It retails its own label clothing for men, women and children, as well as footwear and house ware. Max is opening around 100 stores across India, a division of Lifestyle International Pvt Ltd., which is a part of US $ 1 billion Landmark Group. Stores are already opened in Indore, Ahmedabad, Bangalore, Delhi, Agra, Hyderabad, Lucknow, Mumbai and Noida. The Max India proposition is:
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Core & contemporary merchandise at value pricing Wide range in mid segment-apparel Quality retail ambience & service The Product Mix of Max India consists of: Men, Women, Ethnic, Inner, Kids, Footwear, and Accessories & Home Décor
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The Price Segment of Max India falls between Economy & mid- price. A good shopping experience and a great value at Max translate into making customers ?Look good and Feel good‘ to the maximum.
The core values:
Passion for Excellence: We are committed to setting industry benchmarks-be it our product or practices. Our doctrine is to strive and maintain the lead in whatever we do, with strict adherence to quality and delivering value for money. Integrity in everything we do: Our business is driven by trust, strong ethics and mutual respect. Empowering people to strive and deliver: Our core strength is our employees. We believe in giving our personnel the opportunity and responsibility that are integral to their professional development and our Group‘s success. Adapting to changing market and customer needs: We keep ourselves abreast with industry trends and dynamic consumer preferences. Our offerings keep evolving to address changing and discerning consumer needs. Micky Jagtiani, Chairman
Statement of purpose:
Creating exceptional value for all those whose lives we touch. To be recognized as an international, diversified retail conglomerate that encourages entrepreneurship and which consistently delivers exceptional value to our customers and business partners. We believe in delivering unmatched values- tangible and intangible-for all those whose lives we touch. Micky Jagtiani, Chairman
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Envisioned statement:
To be among the top 100 retailers worldwide, with a top 20 ranking in profitability by 2015. Micky Jagtiani, Chairman
Vision:
To become the leading Retail Group in the Middle East and India; maintaining our constant growth through our core values and international business.
Mission:
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DEPARTMENTS AND SUB DEPARTMENTS
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REVIEW OF LITERATURE
INTRODUCTION TO H.R.M Human resource management (HRM) usually means managing men or people. HRM involves all managerial decisions, policies & practices that influence human resource directly. Let us understand it by dividing the term into its subparts. • Human – people, us • Resource – assets/cost of organizations • Management – co-ordination & control to achieve set goals.
DEFINITIONS OF H.R.M According to Wendell L French ?HRM refer to the philosophy, policies procedures & practices related to the management of people within the organization?. According to Leon C Megginson ?the term human resources can be thought of as the total knowledge skill, creative abilities, talents & aptitudes of an organization, workforce as well as the value, attitudes & beliefs of the individuals involved.?
EVOLUTION OF H.R.M HRM is relatively a new term, emerged during the 1970s. Many people continue to refer to the discipline by its order, more traditional titles, such as personnel management or personnel administration. Experts of HRM in our country have tried to chronicle the growth of the subject only since the 1920s. This was the period when state intervention to protect the interests of the workers was felt necessary because of the difficult condition which followed the First World War, & the emergence of the trade unions. The Royal Commission (1931) recommended the appointment of the labour welfare officers to deal with the selection of the workers & settle their grievances.
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The Factories Act, 1948, made appointment of welfare officers compulsory in the industrial establishments employing 500 or more workers each. In 1990s, the emphasis shifted to human values & productivity through people. Thus, beginning in the 1920s, the subject of HRM has grown into a matured profession. Nature of H.R.M HRM is concerned with the people dimension in organizations. o Organizations are not mere bricks, mortar, machineries or inventories. They are Peoples. o HRM involves the application of management functions & principles such as developing, maintaining & remunerating employees in organization. o Decision made must influence the effectiveness of an organization.
OBJECTIVES OF H.R.M HRM objective are four fold- societal, organizations, functional & personal. o Societal Objective: To be ethically & socially responsible to the needs & challenges of the society while minimizing the negative impact of such demands upon the organization. o Organizational Objectives: To recognize the role of HRM in bringing about organizational effectiveness. o Functional Objective: To maintain the department‘s contribution at a level appropriate to the organization‘s needs. o Personal Objective: To assist employees to achieve their personal goals. At least insofar as these goals enhance the individual‘s contribution to the organization.
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CONCEPT OF ATTRITION
To understand attrition analysis, one has to understand what attrition is. Attrition, in simple industry terms is the number of people who quit the services of an organization voluntarily. Attrition analysis, therefore, is a method of finding out reasons as to why employees quit, what are the contributing factors to it, what could have been done by the organization to retain them, what can be done to prevent future attrition for similar reasons, etc. To do attrition analysis, there has to be an exit interview or discussions (either formally or informally, but most organizations have a formal process to do it). During exit interview/discussions, every employee who is quitting the organization is asked about the reasons of his leaving, what did go well and what did not, what the organization should have done to retain him/her. When you compile the data of every employee who quit the organization over a period of time, you compile the reasons and see what the major reasons are. Based on that, you can do your analysis and recommend corrective and preventive actions.
ATTRITION ANALYSIS CALCULATION Attrition analysis is a study in which an analysis gives the data on what is the current attrition trend in the company. It‘s an analysis done by taking time, manpower strength & no. of people resigned into consideration to derive the final outcome. i.e., Attrition % = (No. of separations/Total employees) *100
THE VALIDITY OF ATTRITION DATA In order to understand this, it is important to question the very validity of the data that is given by the employees – it is only common sense that an employee would not reveal the correct reason for leaving the 20
company at some point of time – thus any action taken by the organization to prevent attrition by altering the factors does not have any effect, because perhaps the data itself is not valid.
CALCULATING EMPLOYEE ATTRITION
Sudipta Dev reasons out why the rate of employee turnover in an organisation does not always show the whole truth. The high attrition rate in the IT industry has always been its greatest concern and a subject of much analysis and debate. Organisations use different methodologies for calculating their turnover rate. It is a known fact that turnover calculation is a grey area which does not always depict the true picture. While a few techniques are common, there are no proven theories. Further, the approach to this calculation might vary from organisation to organisation. Disclosure of the figure not only has a direct impact on the business but also affects employee morale and productivity. Significantly, it might also trigger a chain reaction - a high attrition rate will lead to more people leaving the organisation, while a lower rate will act as a retention strategy. It is therefore not surprising that most industry observers are sceptical when organisations ?disclose‘ their employee turnover. A high attrition reflects poorly on an organisation‘s ability to hold on to its people. Monisha Advani, CEO, Emmay HR, says that attrition is unfortunately viewed as a management flaw when in fact it could well be a recruitment error. In some cases it can be simply seen as an organisation‘s competitor appreciating its quality of hires, and its output, post-training - almost a backhanded compliment. ?Ideally, attrition should be calculated on a monthly basis for companies that have over 50 employees for the first five years of its business. Subsequently, a quarterly index should be applied till a company‘s 10th anniversary. After this, annual attrition figures should be measured and 21
accounted for. This is the optimum within the services industry as companies tend to have different challenges at different stages of their business lifecycle; also, maturity achieves stability around a company‘s 10th anniversary,? opines Advani. Different theories The attrition rate remains a debatable area as there is no standard formula to calculate it. This can be described to many factors.
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The employee base changes each month. So if a company has 1,000 employees in April 2004 and 2,000 in March 2005, then they may take their base as 2,000 or as 1,500 (average for the year). If the number of employees who left is 300, then the attrition figure could be 15 percent or 20 percent depending on what base you take.
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Many firms may not include attrition of fresher‘s who leave because of higher studies or within three months of joining.
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In some cases, attrition of poor performers may also not be treated as attrition.
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Essentially, the attrition number is also a PR or stock/analyst statement and is prone to dressing up.
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Companies do not realise that hiding their attrition rate is never a solution for reducing the same Bijayinee Patnaik HR Head Mahindra Special Services Group
It is imperative to evolve the science of measurement before the measure itself Harish Bhattiprolu Director,Sales Kenexa Technologies
Unfortunate ly, attrition is viewed as a managemen t flaw when in fact it could well be a recruitment error Monisha Advani CEO Emmay HR
Varied theories are also applied as organisations like to brand themselves differently as far as their HR and recruitment strategies are concerned. Explains Advani, ?Each company positions itself uniquely in a common market place by claiming to have exceptional HR policies, procedures and management styles that directly impact retention or attrition; hence the absence of a homogenous system. Also, in situations where a common attrition measurement formula is applied, companies find a way to justify their results to position their statistics differently from their peers on account of having ?different‘ operating practices.? However, Anil Noronha, Director, HR, Indian Subcontinent, Onward Novell Software (I) states that most companies use a fairly standard method - the number of employees who left during the year divided by the average number employed for that year.
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THE TRUE PICTURE The attrition rate that is generally disclosed by most organisations does not always show the correct picture. Nerurkar acknowledges this to be true. ?I agree that the figure has a direct impact on stock markets, employee morale and customer confidence. There is too much at stake and neither the US GAAP (Generally Accepted Accounting Principles) or SEBI requires that this be calculated in a particular way.? The attrition rate has always been a sensitive issue for all organisations as it can have major fallout on the bottom-line. Kranti Munje, Senior Manager, HR, Bristlecone India furthers, ?This is because the attrition rate is an indicator of many things intrinsic to the organisation, and revealing it may affect it negatively. In fact at times disclosing this data can be like a self-fulfilling prophecy—if you reveal that the attrition is high, it may actually become higher.?
Attrition rate is an indicator to many things intrinsic to the organisation, and revealing it may affect it negatively Kranti Munje Senior Manager, HR Bristlecone India
Attrition figure has direct impact on stock markets, employee morale and customer confidence. Suhas Nerurkar President TVA Infotech
It is also not uncommon to find companies proclaiming an attrition rate that is much less than that of others in the industry. Remarks Bijayinee
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Patnaik, HR Head at Mahindra Special Services Group (MSSG), ?Companies must be projecting their attrition rate incorrectly because it tends to affect their brand image both internally and externally. Internally, it sends a wrong signal to their employees and the board of members; externally, it can affect the company in various ways such as developing a bad image or dissuading fresh talent from joining.? She regrets that companies do not realise that hiding their attrition rate is never a solution for reducing the same
TURNOVER COST
While there are many techniques for calculating the cost of turnover, the following is one of the best. It takes into account expenses involved to replace an employee leaving an organization. A. Recruitment cost The cost to your business when hiring new employees includes the following six factors plus 10 percent for incidentals such as background screening:
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Time spent on sourcing replacement Time spent on recruitment and selection Travel expenses, if any Re-location costs, if any n Training/ramp-up time Background/Reference Screening Additionally, for the positions that are billable, there is a lost opportunity cost. This can be done using the revenue factor. B. Training and development cost To estimate the cost of training and developing new employees, start off by looking at the cost of new hire orientation. This will mean direct and indirect costs, and can be largely classified under the following heads:
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Training materials Technology Employee benefits Trainers‘ time. C. Administration cost Additionally, you may want to measure the per-employee cost to:
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Set up communication systems Add employees to the HR system Set up the new hire‘s workspace Set up ID-cards, access cards, etc. On the softer side, to estimate the learning curve or
productivity cost, estimate the average amount of time it takes an employee in a new position to get up to speed and produce at the average rate for the organization. If it takes a new employee six months to reach average productivity, the average productivity loss is 50 percent. Use your annual revenue factor result and multiply it by the productivity loss. The result of these costs (and an additional 10 percent to cover other hiring costs such as background checks, credit checks, drug screening, and other administrative costs) can give you fairly accurate calculation of turnover cost.
RETENTION STRATEGIES Hiring individuals who are truly fit to succeed in the position for which they are hired will dramatically increase the chances of that employee being satisfied with his or her work, and remaining with the company for an extended period of time. Communication of employee‘s roles, job description and the responsibilities within the organisation, new policies will help to retain employees. 26
Participative Decision Making - It is incredibly important to include employees in the decision making process, especially when decision are related to employees. This can help to generate new ideas and perspectives management might never have thought of. Sharing of knowledge with others - Allow the members to share their knowledge with others. This helps in retention of information. This also lets a team member know that he is valuable member of the organisation. Pay Package - Any employee wants to be appropriately paid and fairly for the work he or she does. For, this conducts a research to find out the pay package in other similar type of organisation at regional as well as at national levels. Balance Work and Personal Life - No doubt family is exceptionally important to employees. When work begins to put pressure on one family, no pay package will keep an employee in the organisation. Therefore, there should be a balance between work and personal life. Small gestures like allowing an employee to take an extended lunch once a week to watch his son‘s cricket game will result in loyalty and helps to retain the employee. Organisation Culture - Try to select the candidates who believe in the organization culture and adopt with ease to organisation culture. Exit Interview with the employees who are leaving the organisation will help the organisation to find out the reasons why employees are leaving the organisation. This will also help to find out any drawbacks in the organisation
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RESEARCH METHODOLOGY
This chapter deals with research design and the description of methods used to obtain primary and secondary data.
RESEARCH DESIGN The research design for the present study has the following steps o Based on the needs of the organization and procedure a list of excel sheet was provided for the data to be analyzed. o The excel sheet consisted the data of the employees who has resigned. o The data was of the employees who left the organization in between April 2010 to February 2011. o The data was then analyzed by using the present figures and reasons. o The tabulated data was then represented using various styles of graphs. o Based on data analysis and its interpretation finding conclusions were arrived. o Based on this findings and conclusions recommendations and suggestions were made.
METHOD OF DATA COLLECTION PRIMARY DATA Following are the sources used to obtain primary data. o Excel Data Sheet directly from the Head HR of the Company
SECONDARY DATA The secondary data required for the research consisted of literature that composed the theoretical background necessary for the research. Following are the secondary data used in the research. o Company profile - for this the main source was LIFE STYLE website and company manual. o Review of literature – the main source was books and websites. For books libraries were visited and books referred. o Books o Internet 28
DATA ANALYSIS AND INTERPRETATION
This chapter deals with data presentation and analysis.
GRADEWISE
200 180 160 140 120 100 80 60 40 20 0 R2 R3 R4 R5 R5-1 R5-2 R6-1 R6-2 No of employees
DATA INTERPRETATION:
From the above graph it is being seen that from the grade R3 highest number of employees has left the job. The reason behind it was mostly either because of their personal reasons; further education, better prospects or some of the reasons were that they went absconding. The least removal of employees is from R6-1 grade, so comparatively with the other groups in the grade compared with grade R3 the employees in the other grade are satisfied with their job.
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DESIGNATION WISE
45 40 35 30 25 20 15 10 5 0
Series 1
DATA INTERPRETATION:
From the above graph it can been seen that the highest number of employees leaving their job are from Customer Relationship Executive position and the next is from Senior CRE and Trainee CRE position so the firm needs to take more consideration on these 3 positions because these are the people who interact between customer and company. Therefore, the company needs to focus more on attrition control and also suggestion made by the employees for the betterment and to control the attrition. This may be the case, since retail sector is booming these days and there are huge competitors are entering into the competitive market and it is being a growing sector. Therefore, prospects and better salary package are being offered by the competitors. The competitors poach employees from the same market and want more experienced people and it may be one of the very strong reasons behind attrition.
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LOCATIONWISE
140 120 100 80 60 40 20 0 No of employees
DATA INTERPRETATION:
From the above graph it can been seen that from Mumbai location most of the employees have left the job since in Mumbai lot of retail stores have been launched so employees take experience from one company, leave the job and go away to another so satisfaction level of an employee should be also considered and the following location is Indore where there is high attrition.
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STOREWISE
45 40 35 30 25 20 15 10 5 0
Series 1
DATA INTERPRETATION: From the graph it can be seen that from Inorbit store has highest number of employee leaving the job and the reason behind it is that employees go absconding. The second reason is for further studies and lastly for better prospects and the next store is from Indore so from these two very important stores of Max Retail as per my knowledge the highest number of employees leaving the job. Highest concentration should be on these three stores so that the attrition rate does not affect the sales and profitability of the company.
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MONTHWISE
30 25 20 15 No of employees 10 5 0
DATA INTERPRETATION:
From the above graph it can been seen that the highest number of employees have left in the months like Jan, May, September and December these shows that they have worked mostly in the gap period of 4 to 5 months and then they have left so mostly in the job of customer relationship it is found that mostly employees are not that highly dedicated to take this as their career because of looking into salary issue and the designation increment issue. Since it is been done at a very huge gap. But the growth opportunity is there in this sector but the employees should be taken into belief that depending on their performance they would have a better opportunity further so that their attrition rate would decrease.
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REASONS FOR LEAVING
60 50 40 30 20 10 0 Series 1
DATA INTERPRETATION:
From the above graph it is been that the highest reason is because the employees have gone absconding and the next highest reasons are because of the relocation and for better prospects so the reason behind the absconding should be analyzed like either the employees were not performing properly or they may be there just to take some kind of experience.
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FINDINGS
o Communication channel is effective in this organisation; if there is any problem, the employee can openly discuss with the seniors to find a solution. o Newly joined employees are not satisfied with induction and orientation programme. o Employees are not satisfied with reward system because there is no consistency in rewarding the staff. o Some of the employees feel that there is no growth in the organisation. o Floor staff feels that the daily meetings which are target oriented is unnecessary and only increases stress in their life. o Main reasons for employees leaving the organisation is inadequate remuneration, working conditions like more working hours for the same salary as compared to other organisations. o Employees are not satisfied with leave policies because many times their weekly offs are cancelled. o There is no sufficient space for conducting meetings, eating food, training and orientation program
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SUGGESTIONS & RECOMMENDATIONS
o Attrition rate is good only when it is balanced. Attrition rate should be maintained by providing adequate and competitive remuneration and proper working hours to the employees.
o Stay-in interviews and regular counselling and mentoring help to find out, whether the employee is satisfied with the working condition. o Continuous development of the employees by way of trainings should be implemented to retain the employees. o Proper performance appraisal techniques should be implemented in the organisation so that employee‘s good performance is duly recognised and rewarded. This motivates others to perform better. o Proper training and orientation programs must be provided to the employees about the product whenever needed so that they feel confident in doing their job and customer o There should be proper working hours for the employees and adequate space should be provided to have their lunch, conduct meetings and training programs. o The employers need to handle employees in such a manner that they don‘t get frustrated and over burdened by the work. o Employee engagement is one of the options to reduce their stress and to make them feel as a part of the organisation, also better training and development can be provided. This can be done by way of conducting cultural programs every week, sports, celebrating birthday‘s etc be able to communicate to the
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CONCLUSION
At the end the conclusion says that attrition rate is observed almost everywhere. The only main thing is that we should know the proper tactics how to tackle it in a proper way.
For this we can engage the employees in a very good working environment so that there will be very good human touch i.e. good relations between the employee and the company.
Attrition rate is an indicator of many things intrinsic to the organisation, and revealing it may affect negatively. So proper and utmost care should be taken in order to avoid such situations in future.
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BIBLIOGRAPHY:
o Human Resource Management – K. Aswathappa. o Personnel and Human Resource Management – P. Subbarao
WEBLIOGRAPHY: o www.googlesearch.com o o http://en.wikipedia.com www.citehr.com
o http://business.mapsofindia.com/sectors/retail.html
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