TABLE OF CONTENTS

Introduction..............................................................................................................................................................3

Recruitment and selection.......................................................................................................................................3

Hiring process.......................................................................................................................................................4

Trends...................................................................................................................................................................4

Training and Development.......................................................................................................................................5

The Training Process............................................................................................................................................5

Models of Training...............................................................................................................................................6

Systematic Model of Training..........................................................................................................................6

Transitional Model of Training.........................................................................................................................7

Instructional System Development Model of Training....................................................................................8

Variation across Verticals.....................................................................................................................................9

Performance Management....................................................................................................................................10

Performance management system....................................................................................................................10

Differences in goal setting..................................................................................................................................11

Differences in appraisals....................................................................................................................................11

Differences in performance feedback................................................................................................................12

Compensation........................................................................................................................................................12

Trends and how they differ across verticals......................................................................................................12

Conclusion..............................................................................................................................................................13

Recruitment and selection.............................................................................................................................13

Training and Development.............................................................................................................................13

Performance Management............................................................................................................................13

Reward and compensation............................................................................................................................13

INTRODUCTION

Human Resources (HR) department of an organization deals with the human aspect/needs of
workers. It provides a broad range of services to its employees such as employee safety, wellness,
benefits, employee motivation, communication, administration, organization development.

We can broadly classify the HR system into the following:

HR Planning
Career &
Succession Job Analysis
Planning

Reward & Human Resource Recruitment &

Compensation Management Selection

Performance Training &

Management Development

In this project we have studied how HR practices differ across different verticals of the same
organization. Our study focused on the following 4 HR practices and it is based primarily on the
interviews that we conducted with the present and ex employees of organizations such as Infosys
and TCS.

Recruitment and Selection

Training and Development

Performance Management

Reward and Compensation

RECRUITMENT AND SELECTION

HIRING PROCESS

Hiring process means finding and attracting the applicants for the employer’s current open positions
and then screening them as per the job description and job requirements to finally select the right
candidate.

It consists of two phases:

1. Recruitment phase, which consist of following steps

a. Identifying the possible vacancy
b. Drawing job description and job requirements
c. Source of the process i.e., on campus, off campus, online, etc
d. Processing and notifying targeted applicants
2. Selection, which consists of following steps
a. Short listing candidates
b. Interviews/ GD/ Tests
c. Assessment of the candidates
d. Offering the employment letter

The hiring process in an organization can vary across verticals. The reason behind that can be any
particular skill requirement for a specific vertical. During our study we tried to analyze the various
hiring process in the companies like TCS, Infosys and IBM and various differences across their
different verticals.

TRENDS

Earlier for recruitment most of the Indian organization had a centralized process but as some of
them have grown in revenue as well as size it becomes very difficult to handle recruitment from a
single location. In the case of Indian IT industry companies like Wipro, TCS, Infosys, etc they have
setup their development centers across the country and abroad and they have location specific
recruitment teams making it a decentralized process.

Independent Resource Management Groups (RMG) are vertically aligned as per the Industry
Operating Unit (IOU) in TCS. These IOU’s (Retail, pharmaceuticals, automobile, etc) serves as the
business verticals in TCS. Recruitment team gets the job description from RMG of each vertical.

In TCS, during the on campus recruitment there are no vertical specific rounds, making it identical for
all the business verticals. Fresher's selection doesn’t depend over their technical competency
required for IT professional. Candidates with Electronic Engineering background are preferred for EIS
(Engineering Industry services) vertical. But for experienced professionals, technical competency in
the most important parameter for selection and thus they can have special round during selection
process.
Internal recruitment in IT companies varies a lot across different verticals. The candidates are chosen
from the same verticals and transfer to a different vertical is difficult. Verticals like Hi-Tech and EIS
needs high technical competency and thus have many rounds of interviews. Also, project/vertical
related training can be given before an employee is absorbed into a project.

Another example of such differences can be seen in BPOs. In the BPO vertical of firms like IBM they
recruit visually impaired people as their trainers.

TRAINING AND DEVELOPMENT

Learning at an organization is more of a self-conducted activity, and is a continuous process that

lasts the entire cycle of the organization and the tenure of the employee. Nevertheless, each
organization must effectively employ certain training and development activities for new as well as
seasoned employees in order to accomplish different objectives:-

 Orientation of new employees

 Role Change / Responsibility Change
 Career Planning
 Succession Planning
 Soft Skills Training
 Skill Transfer
 Performance Management and Career Growth

As a part of our study, we tried to understand the training method adopted by various organizations
for different classes of employees under different verticals. In essence, unlike the other facets of HR,
training and development methodologies do not differ much across verticals in an organization.
However, the methodologies vary as per the type of employee who is undergoing the program.

Before we discuss the findings in the light of an example, let us look at certain models followed by
organizations at different levels in the industry.

THE TRAINING PROCESS

In essence, every training and development cycle needs to consist of certain stages. It needs to be
noted that this process is a recursive one, with a continuous effort being put in to revise the cycle as
the organization progresses. Following are the major stages of a generic training process:-
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Each of the stages is self-explanatory. Apart from this generic structure, certain models have been
proposed, which cater to specific training & development needs in organizations. Some of these
models are listed in the next section.

MODELS OF TRAINING

We identified 3 models of training commonly used across organizations after customizing the various
stages as per their requirements:

SYSTEMATIC MODEL OF TRAINING

The system model consists of five phases and should be repeated on a regular basis to make
further improvements. The training should achieve the purpose of helping employees to
 perform their work to required standards. The steps involved in System Model of training
are as follows:

1. Analyze and identify the training needs i.e. to analyze the department, job, employees
requirement, who needs training, what do they need to learn, estimating training cost, etc

2. Design and provide training to meet identified needs.

3. Develop- This phase requires listing the activities in the training program that will assist
the participants to learn, selecting delivery method, examining the training material,
validating information to be imparted to make sure it accomplishes all the goals &
objectives.

4. Implementing is the hardest part of the system because one wrong step can lead to the
failure of whole training program.

5. Evaluating each phase so as to make sure it has achieved its aim in terms of subsequent
work performance.

TRANSITIONAL MODEL OF TRAINING

Transitional model focuses on the organization as a whole. The outer loop describes the
vision, mission and values of the organization on the basis of which training model i.e. inner
loop is executed.

1. Vision – focuses on the milestones that the organization would like to achieve after the
defined point of time. A vision statement tells that where the organization sees itself few
years down the line.
 2. Mission – explain the reason of organizational existence. It identifies the position in the
community. The reason of developing a mission statement is to motivate, inspire, and
inform the employees regarding the organization

3. Values – is the translation of vision and mission into communicable ideals. It reflects the
deeply held values of the organization and is independent of current industry environment.

The mission, vision, and values precede the objective in the inner loop. This model considers
the organization as a whole.

INSTRUCTIONAL SYSTEM DEVELOPMENT MODEL OF TRAINING

Instructional System Development model or ISD training model is widely used now-a-days
in the organization because it is concerned with training needs vis-à-vis job performance.
Training objectives are defined on the basis of job responsibilities and job description and on
the basis of the defined objectives individual progress is measured. This model also helps in
determining and developing the favorable strategies, sequencing the content, and delivering
media for the types of training objectives to be achieved.

The ISD model is a continuous process that lasts throughout the training program. It also
highlights that feedback is an important phase throughout the entire training program. In
this model, the output of one phase is an input to the next phase. The phases are shown in
sequence in the diagram above, and are self-explanatory.

As an outcome of these training models, we were able to establish that there are 3 primary activities
which are involved in every training cycle – Need Identification, Training, and Evaluation
VARIATION ACROSS VERTICALS

After the identification of various training models generally employed by organizations, we

examined the variations that these models underwent across verticals and across employee groups.
It was observed that while there are mere technical differences in the models across verticals
(pertaining to the specific requirements of the vertical), a substantial variation was observed across
employee classes. Specifically, we observed that most organizations have training and development
programs tailored for 3 types of employees:

 New Employees / Fresh Recruits

 Unskilled Employees / Existing Employees ready for a role change
 Potential Managers for Career planning and Succession planning purposes

The following flow explains this differentiation in training programmes, and the expected outcomes:-

For instance, let us consider the Training & Development programme of Infosys Technologies Ltd.,
which is widely recognized as one of the most robust programmes across the world. Following is the
differentiation followed in the Infosys Training Programme:-
 New Employees: New recruits at Infosys are generally put through an intensive 3-6 month
training programme at a specialized training campus. Training consists of a generic module
followed by a stream specific module. No vertical specific training is generally imparted at this
point of time. However, minor variations may occur during the recruitment of laterals, where
the training programme duration may be cut down, and modified to include more of vertical
specific training.

 Unskilled Employees: Unskilled Employees refers to that class of employees who are looking for
a role change, or a shift in verticals. Such a training programme focuses on domain specific
training, and includes the technicalities required by the vertical in which the employee is to be
shifted. Training methods such as self-applied certifications, e-learnings and some mandatory
classroom programmes are employed for this purpose.

 Potential Managers: This is the class of employees who are being nurtured to take up important
roles in the middle and higher management of the organization. Again, this training programme
consists of a generic training, which focuses on the soft skills required by managers, and is
conducted by a specialized Infosys Leadership Institute (ILI). A process / methodology specific
training follows, which includes training for the various tools and techniques a manager needs to
apply as per daily routine. Several Management Development Programmes (MDPs) are
conducted for this purpose.

PERFORMANCE MANAGEMENT

Performance management is a process that consolidates goal setting, performance appraisal, and
development into a single, common system, the aim of which is to ensure that the employees’
performance is supporting the company’s strategic aims.

Performance management includes practices through which the manager defines the employees’
goals and work, develops the employees’ capabilities, and evaluates and rewards the person’s effort.
This is then a very important function of HR department and most of the times a consistent
approach is required to deal in this.

When HR department comes out with performance management process or policy or for that matter
any of the HR planning process, it is generally assumed that the same will be implemented across
the whole organization. However, our work experience (mainly in service industry) has forced us to
think about this issue in detail and the issue is whether it is safe to assume that the same HR policies
will be implemented across the organization.

And hence, in this subsection we will look at how performance management differs across different
departments and/or verticals in the same organization. For the sake of convenience we will analyze
this subsection from Tata Consultancy Services perspective and see how policies can take different
shape in the same organization.

PERFORMANCE MANAGEMENT SYSTEM

Following figure shows the performance management system in TCS:

Performance Performance Outcome

Enablers Process

Create Goal Setting Performance Pay

Opportunities Self Evaluation Performance
Continuous Periodic Improvement
Learning Appraisals Program
Competency and Performance High Potential
Learning Feedback Management
Management Rationalization

This system consists of performance enablers which are directed towards improving performance of
individuals; performance process which is the core of the system and where in we will concentrating
our efforts since differences among different verticals in TCS are more prominent here; and finally
outcome which is a direct result of performance evaluation.

This performance system is not valid for new joinees of TCS who have not completed one year
probation period in TCS. For them, there is altogether a different system which consists of four
appraisal cycle in a year unlike two in this system. However, this system is valid for BPO employees
of TCS and for contractual employees.

DIFFERENCES IN GOAL SETTING

Goal setting usually happens in between employee and appraiser who is the first level supervisor.
The goals set are then reviewed by reviewer who is the second level supervisor. This practice is
followed almost in every vertical but in EIS (Embedded and Industrial Services). Since this vertical is a
bit new for TCS, reviewer is usually the client itself. TCS believes that in order to gauge the
expectations of new clients it is important to involve client as well. Other verticals in comparison are
more or less stable and matured and hence the standard practice is followed and no digression is
required.

Goal Setting mainly consists of setting ‘goals’ and ‘attributes’. ‘Goals’ are specific job duties that an
individual needs to perform. This can be related to job specification for a job. But ‘attributes’ mainly
consists of traits of human nature and are more concerned with human behavior rather than output.
Both constitute more or less equal parts; maybe balance weighs in a bit more in favour of ‘goals’ in
almost all verticals but TCS R&D department (Research and Development) put a lot more focus on
‘goals’ only and not on ‘attributes’. Maybe no interaction with client in R&D department discounts
the importance of having human attributes.
DIFFERENCES IN APPRAISALS

Appraisals are quarterly for new joiners, half yearly for most of the other employees excluding
managers and yearly for managers. However, since BFS (Banking and Financial Services) vertical is
very important and contributes around 44% of the total revenue, some important project do have
half yearly appraisal cycle for managers as well.

For new business units and for non critical business units, the trend is reverse and appraisal cycle is
yearly for most of the employees.

Appraisal methods are simple point rating method but then all employees in a particular business
unit are fitted into a bell curve which is considered as a very opaque process and nobody seems to
have any idea about how final band (out of A, B, C, D) is allocated to each. This then depends on
discretion of managers.

In some critical verticals like BFS, an individual is appraised on the performance of his module or
team he is part of. In most cases (but in critical verticals and not in non critical verticals) if team or
module has not performed up to the standards then it is highly unlikely that an employee will get
good band even if he was up to the standards expected of him.

DIFFERENCES IN PERFORMANCE FEEDBACK

There are monthly feedbacks apart from feedback in every cycle. But these feedbacks are observed
only in BFS vertical since it is the most important vertical and not in any other vertical. Other
verticals might have informal feedback once in a while but then that does depend on individual
manager.

COMPENSATION

Compensation refers to all forms of payment going to the employees from the organization. It is
primarily used for some of these functions:

 Recruit and retain qualified employees.

 Increase or maintain morale/satisfaction.
 Reward and encourage peak performance.
 Achieve internal and external equity.
 Reduce turnover and encourage company loyalty.
 Modify (through negotiations) practices of unions.

Compensation is classified into two basic categories

1. Direct Financial Payments ( Wages, incentives, commissions and Bonus)

2. Indirect Financial Payments ( Benefits and Perquisites )

In addition there also exist incentives. Incentives are compensation used to motivate and to reward
employees for exceeding performance or productivity goals. These are either Short- Term ( for a
duration of one year) or Long-Term ( for any duration over one year, usually 3-5 years )

TRENDS AND HOW THEY DIFFER ACROSS VERTICALS

After understanding the various modes of compensation we will now discuss the various ways in
which these differ across verticals in an organization.

Short- Term Incentive plans are designed to motivate short-term performance of managers and are
tied to company profitability.

 Eligibility basis - job level, base salary, and impact on profitability

 Fund size basis - nondeductible formula (net income) or deductible formula (profitability)
 Individual awards - personal performance/contribution
 Existing company practice
 Compensation committee discretion

Some of the differences are as follows:

 Varies across division in terms of goal setting Eg : Sales commission v/s Direct ROI
 Ties Individual performance, corporate performance or both.
 In Adobe referral bonus is different across different verticals
 Employees of EIS vertical in TCS get skill based pay and incentives depending upon how unique
their skills are
 Bonus from clients in e-governance vertical goes directly to employees

Long Term Cash Incentive Pay is a performance driven award that pays compensation based on a
three to five year performance period and calculated as a multiple of base salary. Performance can
be measured against an industry peer group of companies and the projected long term growth of
the company, just to name a few. Awards are based on a multiple of base salary

 Job Level ( Manager/ director)

 Location
 Company policies
 Future growth of the company

Some different LTI practices:

 Stock Options vs. Restricted Stock for Directors and Managers

 Performance Units/shares for Executives
 Phantom Stock/ Cash based LTI for Junior Manager

CONCLUSION

RECRUITMENT AND SELECTION

Processes during the recruitment phase seem to be common across the different verticals within an
organization, while job specific / vertical specific procedures are followed during selection.

TRAINING AND DEVELOPMENT

As far as training and development is concerned, the differentiation is more across the classes of
employees under scrutiny, rather than a particular domain or vertical in which the organization
operates.

PERFORMANCE MANAGEMENT

Processes like performance management can be different in different verticals in the same
organization. Sometimes this comes out of the necessity; other times this is how the tradition gets
developed in a particular vertical as we saw above. Whatever the case may be, it is very difficult to
think about same HR policies being implemented across an organization; even more difficult in a
diverse and geographic expanse company.

REWARD AND COMPENSATION

Compensation is a way to hire and retain the important resource of the company- the Human
resource. Hence it is very important to understand how to make strategic pay plans. For any
organization to succeed it must know what to pay for each level of its employees. The Executives
have compensation that has a large share in the Long term Incentives while junior managers have
more performance Shares/ units. This report does not contain all the possible methods practiced
across industries and region but just briefs over the basics of compensation differentiation.