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Chapter 2 & 3: "Industry Overview, Literature Review & Research Methodology"
Chapter 2 & 3: "Industry Overview, Literature Review & Research Methodology"
their service offerings and enter new geographical markets. Several third party and captive BPO units are likely to increasingly acquire small size companies to ramp up revenue, acquire clients, and expand business segments and geographical reach. Consolidation will also be driven by international M&A deals, propelled by robustness of the Indian players. The Indian IT-BPO industry has been seeing a spurt in consolidation in recent times, with deals such as Sutherland Global Services acquisition of Adventity Global services, Hinduja Global Solutions acquisition of a UK based customer relationship management company, Careline Services, and this trend is expected to continue in the near future. Cloud computing will be the next big wave for Indian IT-BPO industry Cloud computing is expected to reshape the Indian IT market by generating new opportunities for the IT vendors and driving changes in traditional IT offerings. This service offers immense opportunity to penetrate the SMB sector and offer innovative solutions by providing them an equivalent IT infrastructure, which they could otherwise not be able to afford. Several big hightech companies such as Microsoft are now adopting the cloud computing technology to widen their market share. TCS has also launched various models within cloud computing services targeting the large number of SMB`s in India. Remote Infrastructure Management Services (RIMS) is set to emerge as a promising opportunity RIMS is touted to be a big market for Indian IT companies in the near future. The IMS segment is progressively moving towards a remote delivery model where services are delivered by vendors and captives from low-cost locations. As per the comprehensive study conducted by NASSCOM and McKinsey, the global RIMS market is estimated to be USD 96-104 billion, out of which nearly 70-75% of the infrastructure management roles can be off shored. Given its strength in offshore delivery of services, India is well positioned to capture a substantial share of this RIMS opportunity. Small and Medium Business`s (SMB) are expected to emerge as a significant market Indian SMB`s have realised the long-term benefits of IT implementation in terms of increased productivity and are increasingly adopting IT solutions. During 2009, expenditure on IT by SMB segment was about 30% of the total IT spends valued at over Rs. 300 billion. IT vendors have identified SMBs as the growth driver of the future and are taking steps to address them more effectively. They are offering tailored-made easy to implement IT solutions and delivery models to SMB`s. For instance Increased government IT spending will spur growth in the domestic market Service providers are also expected to sharpen their focus on the domestic market to tap the imminent growth opportunities offered by the booming Indian economy. The rapid growth in the domestic market is likely to be driven by major government initiatives such as increased spending on e-Governance and increased thrust on technology adoption/up-gradation across various government departments to bridge the gap of digital divide. The Government of India has enacted a National E-Governance Plan (NeGP) which creates a big opportunity for the IT vendors to create an effective partnership. It has separately allocated USD9 billion for investment in National E-Governance Plan (NeGP) projects till FY14. Shift in focus from BFSI vertical to other emerging verticals The BFSI vertical has been the mainstay of the Indian IT-BPO industry. However, it was one of the worst hit segments due to the impact of global financial crisis. In 2009, the BFSI sector observed a decline of around 5% after witnessing a below average growth rate of 3.6% in 2008.
Consequently, IT vendors, in order to de-risk their business model, have increased their focus on other verticals such as government, healthcare, retail and utilities. In the last few years, these sectors have shown signs of increasing IT expenditure. Growth in these emerging verticals is expected to be substantially faster than the core verticals. Diversifying from core geographic markets Indian IT-BPO companies are expected to diversify their business from core markets such as the US and UK as these markets were adversely affected by the global financial crisis leading to a decline in their overall IT spends. Over the last couple of years, India`s export share to the US has declined sharply from around 68% in FY04 to 61% in FY10. On the other hand, the Indian IT companies have begun to explore opportunities offered by other growing markets such as Mexico, Ireland, Netherlands, Philippines and Brazil. Though these flourishing markets are presently small, they are expected to the drive growth in future. In addition, by concentrating on these markets, businesses can diversify their risks across regions. Ceasing of tax benefits for STPI (Software Technology Parks of India) impacts small players STPI have played a vital role in fostering growth of the Indian IT-BPO industry. The uncertainty ruling over continuation of tax holiday after Mar 2011 could slow down future expansion proposals. Large companies would be able to alleviate the tax burden arising from the expiry of tax holiday by moving into SEZs. However, small companies, which form the bulk of the companies registered with STPI, will find it hard to survive, as they are still struggling postglobal recession and do not have the financial resources to face this challenge. Rural BPOs will make their presence felt Indian BPO companies are slowly moving towards rural areas to set up delivery centres due to rising attrition rates in urban areas and lower cost of operations in rural areas - which is also supported by growing real estate construction in rural area. As per NASSCOM, as on Feb 2010, about 35 rural BPO centres employed more than 5,000 people across the country. Rural BPO`s are also gradually moving up the value chain in terms of service offerings from basic data management tasks to content creation and validation. 2011 could well be the year in which rural BPO operations come of age. IT-BPO sector in India aggregated revenues of USD 88.1 billion in FY2011, generating direct employment for over 2.5 million people, as the industry continued its journey on the core themes identified for the next decade Diversification, Transformation, Innovation and Inclusion. The industry focused on emerging verticals, markets and customer segments, driving innovation-led transformation in client organisations and transforming its internal operations. The domestic ITBPO market witnessed the Indian consumers going up the IT maturity curve, return of economic growth, efforts by organisations and the government to increase technology adoption, and emergence of new delivery platforms thus driving growth.
The IT-BPO sector in India is estimated to aggregate revenues of USD 88.1 billion in FY2011, with the IT software and services sector (excluding hardware) accounting for USD 76.1 billion of revenues. During FY 2011 direct employment is expected to reach nearly 2.5 million, an addition of 240,000 employees, while indirect job creation is estimated at 8.3 million. As a proportion of national GDP, the sector revenues have grown from 1.2 per cent in FY1998 to an estimated 6.4 per cent in FY 2011. The share of IT-BPO industry in the total Indian exports (merchandise plus services) increased from less than 4 per cent in FY1998 to 26 per cent in FY2011. Export revenues (including Hardware) estimated to reach USD 59.4 billion in FY2011; Domestic revenues (including Hardware) of about USD 28.8 billion; total industry estimated to reach USD 88.1 billion Software and services revenues (excluding Hardware), comprising over 86 per cent of the total industry revenues, expected to post USD 76.1 billion in FY2011; estimated growth of about 19.1 per cent over FY2010 The upbeat domestic IT-BPO spending trend will continue in FY2012 as the industry is expected to grow at 16 per cent to reach USD 20 billion. IT spending expected to significantly increase in verticals like automotive and healthcare while the government, with its focus on e-governance, will continue to be a major spender.
Literature Overview
Meaning of HUMAN RESOURCE Management
Human Resource plays a crucial role in the development process of the modern economics.
ARTHUR LEWIS observed There are great differences in development between countries which seem to have roughly equal resources, so it is necessary to enquire into the difference in human behaviours Human resource management is the management of employees skill, knowledge abilities, talent, aptitude, creativity, ability etc. different terms are used for denoting Human Resource Management. They are labour management, labour administration, labour management relationship, employee employer relationship, industrial relationship, human capital management, human assent management etc. Though these terms can be used differently widely, the basic nature of distinction lies in the scope or coverage and evolutionary stage. In simple sense, human resource management means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirements.
Importance of Training
The importance of human resource management to a large extent depends on human resource development. Training is the most important technique of human resource development. No organization can get candidates who exactly match with the job and the organizational requirements. Hence training is important to develop the employees and make him suitable to the job. Job and organizational requirement are not static they are changed from time to time in view of technology advancement and change in the awareness of total quality and productivity
management (TQPM) the objectives of the TQPM can be achieved only through training as training develops human skills and efficiency. Trained employees would be valuable assets to an organization. Organization efficiency, productivity, progress and development to a grater extent depend on training. Organization objective like viability, stability and growth can also be achieved through training. Training is important as it constitute significant part of management control.
Benefits of Training
For Organization: Leads to improved profitability and or more positive attitude towards profits orientation Improves the job knowledge and skills at all level of the organization Improves the morale of the workforce Helps people to identity the organizational goal Helps to create a better corporate image Faster authenticity, openness and trust improves the relationship between boss and subordinate Aids in understanding and carrying out organizational policies Benefits to Individual: Helps the individual in making better decision and effective problem solving. Through training and development, motivational, variables of recognition, achievement, growth, responsibility and advancement and internalized and operationalized Aids in encouraging and achieving and self development and self confidence Helps to handle stress, tension, frustration and conflict Increase job satisfaction and recognition Move a person towards personnel goal and development of skills. Benefits in Personnel and Human Relationship Improves communication between groups and individual. Aids in orientation for new employee and those taking new job through transfer and promotion. Improves interpersonal skills. Improves morale Builds cohesiveness Provide a good climate for learning growth and coordination Makes organization better place to work and live
1: To match the employee specification with the job requirement and organizational needs 2: For organizational viability and transformation process 3: It is good for technological advancement. 4: Decreases organizational complexity. 5: Improves human relations
Types of Training
Training is required for several purposes. Accordingly training programmes may be of the following types: * Orientation training: Induction or orientation training seeks to adjust newly appointed employees to the work environment. Every new employee needs to be made fully familiar with his job, his superiors and subordinates and with the rules and regulations of the organization. Induction training creates self-confidence in the employees. It is also knows as pre-job training. It is brief and informative. * Job training: It refers to the training provided with a view to increase the knowledge and skills of an employee for performance on the job. Employees may be taught the correct methods of handling equipment and machines used in a job. Such training helps to reduce accidents, waste and inefficiency in the performance of the job. * Safety training: Training provided to minimize accidents and damage to machinery is known as safety training. It involves instruction in the use of safety devices and in safety consciousness. * Promotional training: It involves training of existing employees to enable them to perform higher-level jobs. Employees with potential are selected and they are given training before their promotion, so that they do not find it difficult to shoulder the higher responsibilities of the new positions to which they are promoted. * Refresher training: When existing techniques become obsolete due to the development of better techniques, employees have to be trained in the use of new methods and techniques. With the passage of time employee may forget some of the methods of doing work. Refresher training is designed to revive and refresh the knowledge and to update the skills of the existing employees. Short-term refresher courses have become popular on account of rapid changes in technology and work methods. Refresher or retraining programmes are conducted to avoid obsolescence of knowledge and skills. * Remedial training: Such training is arranged to overcome the shortcoming in the behaviour and performance of old employees. Some of the experienced employees
might have picked up appropriate methods and styles of working. Such employees are identified and correct work methods and procedures are taught to them. Psychological experts should conduct remedial training.
Methods of Training
Fig 3.2- Methods of Training ON-THE-JOB TECHNIQUES On the job techniques enables managers to practice management skills, make mistakes and learn from their mistakes under the guidance of an experienced, competent manager. Some of the methods are as: Job Rotation: It is also referred to as cross straining. It involves placing an employee on different jobs for periods of time ranging from a few hours to several weeks. At lower job levels, it normally consumes a short period, such as few hours or one or two days. At higher job levels, it may consume much larger periods because staff trainees may be learning complex functions and responsibilities. Job rotation for managers usually involves temporary assignments that may range from several months to one or more years in various departments, plants and offices. Job rotation for trainees involves several short-term assignments, that touch a variety of skills and gives the trainees a greater understanding of how various work areas function. For middle and upper level management, it serves a slightly different function. At this stage, it involves lateral promotions, which last for one or more years. It involves a move to different work environment so that manager may develop competence in general management decision-making skills. Enlarged and enriched job responsibilities: By giving an employee added job duties, and increasing the autonomy and responsibilities associated with the job, the firm allows an employee to learn a lot about the job, department and organization. Job instruction training: It is also known as step-by-step training. Here, the trainer explains the trainee the way of doing the jobs, job knowledge and skills and allows him to do the job. The trainer appraises the performance of the trainee, provides feedback information and corrects the trainee. In simple words, it involves preparation,
presentation, performance, and tryout and follow up. Coaching: The trainee is placed under a particular supervisor who functions as a coach in training the individual. The supervisor provides the feedback to the trainee on his performance and offers him some suggestions for improvement. Often the trainee shares some duties and responsibilities of the coach and relives him of his burden. A drawback is that the trainee may not have the freedom or opportunity to express his own ideas. Committee assignments: Here in, a group of trainees are given and asked to solve an actual organizational problem. The trainees solve the problem jointly. This develops team work and group cohesiveness feelings amongst the trainees.
OFF THE JOB TRAINING It includes anything performed away from the employees job area or immediate work area. Two broad categories of it are: In house programmes These are conducted within the organizations own training facility; either by training specialists from HR department or by external consultant or a combination of both. Off-site programmes It is held elsewhere and sponsored by an educational institution, a professional association, a government agency or an independent training and development firm.
The various off- the- job-training programmes are as follows: Vestibule training: Herein, actual work conditions are simulated in a classroom. Material, files and equipment those are used in actual job performance are also used in training. This type of training is commonly used for training personnel for clerical and semiskilled jobs. The duration of this training ranges from few days to a few weeks. Theory can be related to practice in this method. Role-playing: It is defined as a method of human interaction that involves realistic behaviour in imaginary situations. This method involves action doing and practice. The participants play the role of certain characters, such as production manager, HR manager, foreman, workers etc. This method is mostly used for developing interpersonal interactions and relations. Lecture method: The lecture is a traditional and direct method of instruction. The instruction organizes the material and gives it to the group of trainees in the form of a talk. To be effective, the lecture must motivate and create interest among the trainees. An advantage of this method is that it is direct and can be used for a large group of trainees. Conference or discussion: It is a method in training the clerical, professional and supervisory personnel. It involves a group of people who pose ideas, examine and share facts and data, test assumptions and draw conclusions, all of which contribute to the improvement of job performance. It has an advantage that it involves two-way communication and hence feedback is provided. The participants feel free to speak in small groups. Success depends upon the leadership qualities of the person who leads the group.
Programmed instruction: This method has become popular in recent years. The subject matter to be learned is presented in a series of carefully planned sequential units. These units are arranged from simple to mere complex levels of instructions. The trainee goes through these units by answering questions or filling the blanks. This method is expensive and time consuming.
Process of Training
Difference between Training & Development:Training:1. Training means learning skills and knowledge for doing a particular job. It increases job skills. 2. The term training is generally used to denote imparting specific skills among operative workers and employees.
3. Training is concern with maintaining and improving current job performance. Thus, it has short-term perspective. 4. Training is job centered in nature. 5. The role of trainer or supervisor is very important in training
TRAINING Technical skills and knowledge Specific job related Short term Mostly technical and non-managerial Personnel
DEVLOPMENT Managerial and Behavioural skills and knowledge Conceptual and general knowledge Long term Mostly for managerial Personnel
Development:1. Development means the growth of an employee in all respects. It shapes attitudes. 2. The term development is associated with the overall growth of the executives. 3. Executive development seeks to develop competence and skill for future performance. Thus it has a long-term perspective. 4. Development is career centered in nature. 5. All development is self development. The executives have to be internally motivated for selfdevelopment.
2. Ensure that training contributes to competitive strategies of the firm. Different strategies need different HR skills for implementation. Let training helps employees at all levels acquire the needed skills. 3. Ensure that a comprehensive and a systematic approach to training exist, and training and retraining are done at all levels on a continuous and ongoing basis. 4. Make learning one of the fundamental values of the company. Let this philosophy percolate down to all employees in the organization. 5. Ensure that there is proper linkage among organizational, operational and individual training needs. 6. Create a system to evaluate the effectiveness of training.
badly caught out when a rigorous analysis of all the functions of the organizations business is called for. A desirable, if not essential, characteristic of all training programmes is a built-in provision for evaluation. The four main dimensions of evaluation are:
Evaluation of Contextual Factors Training effectiveness depends not only on what happens during training, but also on what happens before the actual training and what happens after the training has formally ended. Evaluation should, therefore, be done of both the pre-training and post-training work. Pretraining work includes proper identification of training needs, developing criteria of who should be sent for training, how many at a time and in what sequence, helping people to volunteer for training, building expectations of prospective participants from training etc. Post- training work includes helping the concerned managers to plan to utilize the participants training, and provide the needed support to them, building linkages between the training section and the line departments and so on.
Evaluation of Training Inputs This involves the evaluation of the training curriculum and its sequencing. Evaluation of the Training Process The climate of the training organization, the relationship between participants and trainers, the general attitude, and approaches of the trainers, training methods, etc are some of the important elements of the training process which also needs to be evaluated. Evaluation of Training Outcomes Measuring the carry-home value of a training programme in terms of what has been achieved and how much is the main task of evaluation. This, however, is a complex technical and professional task. Benefits of a training programme are not obvious and they are not readily measurable. Payoffs from training are intangible and rather slow to become apparent. A central problem is the absence of objective criteria and specific definitions of relevant variables by which to measure the effectiveness either of specific programmes or changes in employee behaviour. Nevertheless, the good personnel managers do make an effort to systematically appraise the benefits and results of their programmes. In job-related training, the objective is to train people for specific job skills so that their productivity may increase. Evaluation can be done either to the direct criterion of increase in output or to the indirect criteria of decrease in cost, breakage or rejects. Even more indirect are measures that point out changes in absenteeism or turnover. The most difficult problems of evaluation lie in the area of human relations skill training, which is given to the supervisors and middle- level managers. Supervisory and managerial training programmes are, for this reason, less amenable to objective review procedures. Much subjectivity enters into evaluations of these programmes, since exact standards and criteria are hard to devise.
The process of evaluating the training effectiveness involves the consideration of various constraints. Many researchers have developed various methods and models in order to facilitate this process. Some of the models are described as below: -
labour turnover etc, studies of organizational climate and human resource accounting are taken as the ultimate results achieved by the trainee.
HAMBLINS Model
Hamblin (1974) said, The purpose of evaluation is control. A well controlled training program is one in which the weakness and failures are identified and corrected by means of the negative feedback and strengths and successes and corrected by means of the positive feedback. The processes, which occur as a result of a successful training programme, can be divided into 4 levels. The evaluation can be carried out at any of the following levels: Reaction Level: It measures the reactions of the trainees to the content and methods of the training, not the trainer, and to any other factors perceived as relevant. It determines what the trainee thought about the training. Learning Level: It measures the learning attitude of the trainees during the learning period. It collects information that did the trainees learn what was intended. Job Behaviour Level: The job behaviour of the trainees in the work environment at the end of the training period i.e. did the training got transferred to the job? Effect on the Department: Has the training helped the trainees in improving the departments performance? The Ultimate Level: It measures that has the training affected the ultimate well being of the organization in terms of the business objectives.
Research Methodology
The study will be conducted to achieve the objectives including both exploratory and descriptive in nature and involve personal interviews which will be based on the questionnaire format. A Research Methodology defines the purpose of the research, how it proceeds, how to measure progress and what constitute success with respect to the objectives determined for carrying out the research study.
Research Design
Type of Research: - Descriptive research Descriptive research includes Surveys and fact-finding enquiries of different kinds Data Sources Primary Sources:The data required for the study is going to be collected from Personal interviews with the company representatives regarding training and development. Personal interviews with employees to whom training is imparted were based on predecided format of structure and undisguised questionnaire which were administered to the respondent. Interviews with trainers, to obtain information about employees interest and feedback. Secondary Sources:The secondary data has been collected from Websites, Annual report of companies, Business magazines, Books, Trade guides and Journals on BPO Industry.
Questionnaire Technique
The questionnaire will comprise of Open Ended questions - To bring out ideas and pertinent thinking of the respondents. Multiple choice questions - Questions made answering procedure more convenient for respondent.
Objectives of Questionnaire
To study the effectiveness of the training imparted by IBM Daksh and its result in the
performance of the employees. To know the perception of the employees regarding training methods in IBM Daksh. To identify how training assists the employees to acquire knowledge, skills and attitude and also enhance the same.
To study whether training helps to motivate employees and helps in avoiding mistakes.