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BPO AND CALL CENTER INDUSTIES RETENTION STRATEGY TO REDUCE

EMPLOYEE TURN OVER

Article · April 2012

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SAJMMR Volume 2, Issue 4 (April, 2012) ISSN 2249-877X

Pu b l i s h ed b y : S o u th As i a n Aca d e m i c Re s ea r ch J o u rn a l s

SAJMMR:
South Asian Journal of
Marketing & Management
Research

BPO AND CALL CENTER INDUSTIES RETENTION STRATEGY TO

REDUCE EMPLOYEE TURN OVER
G. SRI DEVI*; DR. N. PANCHANATHAM**

*Associate Professor,
Department of Management Studies,
A.V.C.College of Engineering,
Mayiladuthurai, Mannampandal - 609305.
**Professor & Head,
Department of Business Administration,
Annamalai University, Chidambaram.

ABSTRACT

Business Process Outsourcing (BPO) is likely to be the next big thing for services in
this decade. The industry is very diverse, with several sub-segments, each displaying
its own unique characteristics. The BPO players need to be excellent in every facet
of operations as the market is highly competitive at every level and re-defining itself
every day. Being a People-Centric industry what are the people issues that, the HR
will have to handle?

In today's economy, more so in knowledge based industry…IT, ITES/BPO, the

biggest task in front of a HR Manager is to motivate and retain employees. All the
attempts made in this direction are big failure and no one knows what a route to
employees’ heart is. Here in this article, I have made an attempt to list some of the
innovative ways to motivate an employee. Applying or implementing the below
mentioned ideas is not an assurance that an employee will stick to you but still if
done in a proper way…in a long run…these will surely be of benefit to the
organization. The Innovative strategy here the author identified as – Employee
Motivation. Motivation is an organization's life-blood; yet "motivation," as a
business subject, is largely ignored. Even when not ignored, it certainly is not a focal
point for strategic thinking. In this paper we are going to see the various innovative
practices used by the BPO firms.

KEYWORDS: Attrition, Employee motivation, innovative strategies.

______________________________________________________________________________

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INTRODUCTION

Business Process Outsourcing (BPO) is likely to be the next big thing for services in this decade.
The industry is very diverse, with several sub-segments, each displaying its own unique
characteristics. The BPO players need to be excellent in every facet of operations as the market
is highly competitive at every level and re-defining itself every day. Being a People-Centric
industry what are the people issues that, the HR will have to handle?

In today's economy, more so in knowledge based industry…IT, ITES/BPO, the biggest

task in front of a HR Manager is to motivate and retain employees. All the attempts made in this
direction are big failure and no one knows what a route to employees’ heart is. Here in this
article, I have made an attempt to list some of the innovative ways to motivate an employee.
Applying or implementing the below mentioned ideas is not an assurance that an employee will
stick to you but still if done in a proper way…in a long run…these will surely be of benefit for
the organization.

INNOVATION STRATEGY – EMPLOYEE MOTIVATION

Motivation is an organization's life-blood; yet "motivation," as a business subject, is

largely ignored. Even when not ignored, it certainly is not a focal point for strategic thinking.
Seldom is a clear, coherent, and overall approach taken to the challenge of motivating people.
Most organizations don't give it much thought until something starts to go wrong. Pain gets
people's attention.

Four reasons explain this fact of life

 Motivation is intangible.

 Motivation drives all human action. It is the energy source. Those seeking to shape the
behavior ultimately wrestle with motivation.

 With a bit of work, we can intuit our own motivation and monitories shifting nature and
intensity. But we can only observe and measure the motivation of others indirectly.

 Motivation is lost in a twilight zone.

Like a pop-up fly ball which drops to the ground between a couple of confused fielders,
motivation can fall into cracks. Everyone has an interest in motivation, but few, if any, know
who is responsible for mapping the overall game plan. .

WHY DO WE NEED MOTIVATED EMPLOYEES?

Motivated employees are needed in our rapidly changing workplaces.

Motivated employees help organizations survive.

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Motivated employees are more productive.

To be effective, managers need to understand what motivates employees within the context
of the roles they perform. Of all the functions a manager performs, motivating employees is
arguably the most complex. This is due, in part, to the fact that what motivates employees
changes constantly (Bowen & Radhakrishna, 1991).

Research suggests that as employees' income increases, money becomes less of a

motivator (Kovach, 1987). Also, as employees get older, interesting work becomes more of a
motivator.

THEORIES ON MOTIVATION

Understanding what motivated employees and how they were motivated was the focus of many
researchers following the publication of the Hawthorne Study results (Terpstra, 1979). Five
major approaches that have led to our understanding of motivation are:

Maslow's need-hierarchy theory,

Herzberg's two- factor theory,

Vroom's expectancy theory,

Adams' equity theory, and

Skinner's reinforcement theory

Maslow's Theory states that employees have five levels of needs (Maslow, 1943): physiological,
safety, social, ego, and self- actualizing. Maslow argued that lower level needs had to be satisfied
before the next higher level need would motivate employees.

Herzberg's theory categorized motivation into two factors: motivators and hygienes (Herzberg,
Mausner, & Snyderman, 1959). Motivator or intrinsic factors, such as achievement and
recognition, produce job satisfaction. Hygiene or extrinsic factors, such as pay and job security,
produce job dissatisfaction.

Vroom's theory is based on the belief that employee effort will lead to performance and
performance will lead to rewards (Vroom, 1964). Rewards may be either positive or negative.
The more positive the reward the more likely the employee will be highly motivated.
Conversely, the more negative the reward the less likely the employee will be motivated.

Adams' theory states that employees strive for equity between themselves and other workers.
Equity is achieved when the ratio of employee outcomes over inputs is equal to other employee
outcomes over inputs (Adams, 1965).

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Skinner's theory simply states those employees' behaviors that lead to positive outcomes will be
repeated and behaviors that lead to negative outcomes will not be repeated (Skinner, 1953).
Managers should positively reinforce employee behaviors that lead to positive outcomes.
Managers should negatively reinforce employee behavior that leads to negative outcomes.

BENEFITS PROVIDED BY THE BPO COMPANIES AND CALL CENTERS TO

RETAIN THE MAN POWER

1. GROUP MEDI-CLAIM INSURANCE SCHEME: This insurance scheme is to provide

adequate insurance coverage of employees for expenses related to hospitalization due to
illness, disease or injury or pregnancy in case of female employees or spouse of male
employees. All employees and their dependent family members are eligible. Dependent
family members include spouse, non-earning parents and children above three months

2. PERSONAL ACCIDENT INSURANCE SCHEME: This scheme is to provide adequate

insurance coverage for Hospitalization expenses arising out of injuries sustained in an
accident. This covers total / partial disablement / death due to accident and due to accidents.

3. SUBSIDIZED FOOD AND TRANSPORTATION: The organizations provide

transportation facility to all the employees from home till office at subsidized rates. The
lunch provided is also subsidized.

4. COMPANY LEASED ACCOMMODATION: Some of the companies provides shared

accommodation for all the out station employees, in fact some of the BPO companies also
undertakes to pay electricity/water bills as well as the Society charges for the shared
accommodation. The purpose is to provide to the employees to lead a more comfortable work
life balance.

5. RECREATION, CAFETERIA, ATM AND CONCIERGE FACILITIES: The recreation

facilities include pool tables, chess tables and coffee bars. Companies also have well
equipped gyms, personal trainers and showers at facilities.

6. CORPORATE CREDIT CARD: The main purpose of the corporate credit card is enable
the timely and efficient payment of official expenses which the employees undertake for
purposes such as travel related expenses like Hotel bills, Air tickets etc

7. CELLULAR PHONE / LAPTOP: Cellular phone and / or Laptop are provided to the
employees on the basis of business need. The employee is responsible for the maintenance
and safeguarding of the asset.

8. PERSONAL HEALTH CARE (REGULAR MEDICAL CHECK-UPS): Some of the

BPO'S provides the facility for extensive health check-up. For employees with above 40
years of age, the medical check-up can be done once a year.

9. LOANS: Many BPO companies provide loan facility on three different occasions:
Employees are provided with financial assistance in case of a medical emergency.
Employees are also provided with financial assistance at the time of their wedding. And, The
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new recruits are provided with interest free loans to assist them in their initial settlement at
the work location.

10. EDUCATIONAL BENEFITS: Many BPO companies have this policy to develop the
personality and knowledge level of their employees and hence reimburses the expenses
incurred towards tuition fees, examination fees, and purchase of books subject, for pursuing
MBA, and/or other management qualification at India's top most Business Schools.

11. PERFORMANCE BASED INCENTIVES: In many BPO companies they have plans for,
performance based incentive scheme. The parameters for calculation are process
performance i.e. speed, accuracy and productivity of each process. The Pay for Performance
can be as much as 22% of the salary.

12. FLEXI-TIME: The main objective of the flextime policy is to provide opportunity to
employees to work with flexible work schedules and set out conditions for availing this
provision. Flexible work schedules are initiated by employees and approved by management
to meet business commitments while supporting employee personal life needs .The factors on
which Flexi time is allowed to an employee include: Child or Parent care, Health situation,
Maternity, Formal education program

13. FLEXIBLE SALARY BENEFITS: Its main objective is to provide flexibility to the
employees to plan a tax-effective compensation structure by balancing the monthly net
income, yearly benefits and income tax payable. It is applicable of all the employees of the
organization. The Salary consists of Basic, DA and Conveyance Allowance. The Flexible
Benefit Plan consists of: House Rent Allowance, Leave Travel Assistance, Medical
Reimbursement, Special Allowance

14. REGULAR GET TOGETHER AND OTHER CULTURAL PROGRAMS: The

companies organizes cultural program as and when possible but most of the times, once in a
quarter, in which all the employees are given an opportunity to display their talents in
dramatics, singing, acting, dancing etc. Apart from that the organizations also conduct
various sports programs such as Cricket, football, etc and regularly play matches with the
teams of other organizations and colleges.

15. WEDDING DAY GIFT: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/- based
on their level in the organization.

16. EMPLOYEE REFERRAL SCHEME: In several companies employee referral scheme is

implemented to encourage employees to refer friends and relatives for employment in the
organization.

17. ECONOMIC REWARDS: Money is a primary motivator. While base salary remains the
largest share of the total cash pie, cash incentive plans continue to grow in popularity.
Special achievement incentive rewards, spot bonuses, and cash-equivalent rewards all play a
role in the economic reward package. In many companies, stock-based incentive plans, once
limited to top executives, are offered to all employees. We are seeing an explosion of

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creative ideas in the realm of economic rewards, although not all approaches motivate
people.

18. PROMOTIONS AND TRANSFERS: While having economic value, promotions also
carry crucial social and psychological meaning (recognition and sense of accomplishment)
that, for many, far outweigh additional money or perquisites.

19. OPPORTUNITY TO GROW: The chance to improve one's self is an enormously

important source of motivation. Organizations that offer this advantage are in a win-win
partnership with their employees. The company creates and maintains a talented workforce to
use as a competitive weapon, and the employees sharpen their own competitive edge as they
self-actualize. Talk about synergy.

The following are the some of the motivational strategies followed by the IT Giants to retain
their young talent pool.

EXAMPLES OF INNOVATIVE STRATEGIES FOR YOUNG PROFESSIONALS IN

CHENNAI’S BPO & CALL CENTER INDUSTRY

Name of the
Strategy Impact
Company

A choice of working in over 170 offices

across 40 countries in a variety of areas.
Tata Consulting Significant impact on
Paternity leave for adoption of a girl
Services(TCS) job hopping achieved
child

Discounts on group parties

‘Wings Within’ programme where

existing employees get a chance to quit Has led to a higher
WIPRO
their current job role and join a different retention rate
firm within WIPRO

Fostering a sense of belongingness,

creative artistic and social activities for
the employees and their families. Moderate Retentions
INFOSYS
rate increase achieved
Initiating one of the best ‘corporate
universities’ in the world

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CONCLUSION

The World Competitiveness Report rated India’s human resource capabilities as being
comparatively weaker than most Asian nations. The recognition of world class human resource
capability as being pivotal to global success has changed Indian HRM cultures in recent years.
While the historical and traditional roots remain deeply embedded in the subjective world of
managers, emphasis on objective global concepts and practices are becoming more common.
Two very different perspectives in HRM especially in BPO are evident. Firstly, Indian firms with
a global outlook; secondly, global firms seeking to adapt to the Indian context; these two
perspectives will move increasingly towards a cross verging and strengthening the BPO jobs.
Interestingly, within the national context, India itself is not a homogenous entity. Regional
variations in terms of industry size, provincial business culture, and political issues play very
relevant roles. The nature of hierarchy, status, authority, responsibility and similar other concepts
vary widely across the nations in this ITES maintenance. Indeed, organizational performance and
personal success are critical in the new era.

REFERENCES

1. Business Week. (2007). A Red-HA Big Blue in India, Sept 3. Available:

http://businessweek.com/magazine/content/07_36/b4048052.htm

2. Chatterjee, S.R. (2006). Human resource management in India. In A. Nankervis,

Chatterjee, S.R. & J. Coffey (Eds.), Perspectives of human resource management in
the Asia Pacific (41-62). Pearson Prentice Hall: Malaysia.

3. Chatterjee, S.R., & Pearson, C.A.L. (2000). Indian managers in transition: Orientations,
work goals, values and ethics. Management International Review, 40(1), 81-95.

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