Subah Dissertation

DISSERTATION

ON

“EMPLOYEE ENGAGEMENT AT

ASHOK LEYLAND”

POST GRADUATE DIPLOMA INBUSINESS MANAGEMENT

(Approved by AICTE, Govt.of India)

Academic session(2008-2010)

Under The Guidance of: By:

Mrs. Shweta Mittal Subha AroraProf. HR ( BM08-197)IMS, Ghaziabad

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TO WHOM SO EVER IT MAY CONCERN

This is to certify that Ms. Subah Arora, student of PGDM (Fulltime) 2008-2010 batch, IMS Ghaziabad, has done her dissertation under my supervision and guidance.

During her project, she was found to be very sincere and attentive small details whatsoever was told to her.

I wish her good luck and success in her future.

Mrs. Shweta MittalProf. H.RIMS Ghaziabad.

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ACKNOWLEDGEMENT

It would be prudent to commence this report with an expression of gratitude towards all those who played an indispensable role in the accomplishment of this project y providing their valuable guidance.

I take here great opportunity to express my sincere and deep sense of gratitude Sales Department at Ashok Leyland’ for giving me an opportunity to do a project in their esteemed organization.

I would also like to extend my sincere gratitude to Mrs. Shweta Mittal, Pof. HR at IMS Ghaziabad, for her guidance and support.

SUBHA ARORA

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TABLE OF CONTENT

S. NO. TOPIC PAGE NO:

1 Introduction1.1 Industry Overview 1.2 Company Overview

678

2 Review of Literature 9

3 Objectives 12

4 Research methodology 13

5 HR Policies5.1 Manpower Planning Process5.2 Recruitment & Selection5.3 Training Process5.4 Performance Appraisal

18222730

6 Best Practices Ashok Leyland 32

7 Analysis6.1 Department Wise Analysis6.2 Age-wise Analysis6.3 Factor Analysis

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394345

8 Results & Findings 48

9 Conclusion 49

10 Recommendation 50

11 Limitation 51

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12 Annexure 53

LIST OF FIGURES

1. Organization Chart 16

2. Functional Distribution of executives 17

3. Recruitment Process Flowchart 18

4. Development Linked Career Plan diagram 27

5. Training Process Flowchart 30

6. Analysis Graphs 32

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INTRODUCTION

Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. It is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 28% (2007-08).

The company was established in 1948 as Ashok Motors, with an aim to assemble 1955 with equity contribution from the British company, Leyland Motors. Today the Company is the flagship of the Hinduja Group, a British-based and Indian originated transnational conglomerate. Being in existence from 60 years, this company has very loyal employees. Ashok Leyland considers their employees have their asset. To manage around 7000- 8000 employees, they have the best but traditional Human Resource practices. It is an important phase in the company’s life as they are working hard to modernize the HR processes. By analyzing the exit interview, it was clear that the satisfaction of the employees is quite high. The employees very soon build a relationship with the company. Even during the recession, the company has not laid off employees.

My project was to measure the engagement level among the employees and the factors, which have affected the engagement level. Engagement is a very new HR topic, which is talked a lot in recent times. As this company is on its process of bringing new HR processes, I got an opportunity to work on this topic. Analyzing employees from various departments across the company, the results where surprising. The employee’s job satisfaction level is high, but the engagement level is high only for those employees who have been working in this company for more than a decade. The young executives have less engagement level.

The face factor was that the young executives face cultural differences and are not satisfied with the culture of the company. By bringing in few weekly activities and special process, would make the is place lively. Otherwise the company has the best of the compensation package and benefits in the industry and every one are satisfied with it.

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OVERVIEW OF THE INDUSTRY

The automobile industry in India —the tenth largest in the world with an annual production of approximately 2 million units—is expected to become one of the major global automotive industries in the coming years A number of domestic companies produce automobiles in India and the growing presence of multinational investment, too, has led to an increase in overall growth. Following the economic reforms of 1991 the Indian automotive industry has demonstrated sustained growth as a result of increased competitiveness and relaxed restrictions.

The Automobile Industry of India has come a long way. During its early stages the auto industry was overlooked by the then Government and the policies were also not favorable. The liberalization policy and various tax relieves by the Govt. of India in recent years has made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18% per annum, has become a hot destination for global auto players like Volvo, General Motors and Ford. A well developed transportation system plays a key role in the development of an economy, and India is no exception to it. With the growth of transportation system the Automotive Industry of India is also growing at rapid speed, occupying an important place on the 'canvas' of Indian economy. Today Indian automotive industry is fully capable of producing various kinds of vehicles and can be divided into 03 broad categories: Cars, two-wheelers and heavy vehicles. In 1953, the government of India and the Indian private sector initiated manufacturing processes to help develop the automobile industry, which had emerged by the 1940s in a nascent form. Between 1970 to the economic liberalization of 1991, the automobile industry continued to grow at a slow pace due to the many government restrictions. A number of Indian manufactures appeared between the years 1970-1980.Japanese manufacturers entered the Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated joint ventures with Indian companies.

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COMPANY OVERVIEW

Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. It is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 28% (2007-08). Eight out of ten metro state transport buses in India are from Ashok Leyland In the trucks segment Ashok Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However AL has presence in all truck ranges from 7.5 tons to 49 tons and of late, it has been trying to improve its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons) through a joint venture with Nissan Motors of Japan.

The company was established in 1948 as Ashok Motors, with an aim to assemble Austin cars. Manufacturing of commercial vehicles was started in 1955 with equity contribution from the British company, Leyland Motors. Today the Company is the flagship of the Hinduja Group, a British-based and Indian originated transnational conglomerate. Early products included the Leyland Comet bus chassis, which sold in large numbers to many operators, including Hyderabad Road Transport, Ahmedabad Municipality. By 1963 the Comet was operated by every State Transport undertaking in India, and over 8,000 were in service. The Comet was soon joined in production by a version of the Leyland Tiger. In 1968 production of the Leyland Titan ceased in Britain, but was restarted by Ashok Leyland in India.

In the journey towards global standards of quality, Ashok Leyland reached a major milestone in 1993 when it became the first in India's automobile history to win the ISO 9002 certification. The more comprehensive ISO 9001 certification came in 1994, QS 9000 in 1998 and ISO 14001 certification for all vehicle manufacturing units in 2002. In 2006, Ashok Leyland became the first automobile company in India to receive the TS16949 Corporate Certification. Ashok Leyland is a technology leader in the commercial vehicles sector of India.

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REVIEW OF LITERATURE

Article From : Gallup Management Journal Date: March 21, 2009

Gallup's employee engagement work is based on more than 30 years of in-depth behavioral economic research involving more than 12 million employees. This research has appeared in prestigious business and scientific publications, including the Journal of Applied Psychology and the Harvard Business Review, and in our bestselling books First, Break All the Rules and 12: The Elements of Great Managing. Increasing employee engagement correlates directly with a positive impact on key business metrics. A partnership with Gallup enables your organization to design, implement, and execute an employee engagement strategy. At the same time, your organization will gain concrete evidence of the impact of this strategy on the bottom line. Gallup's proof of ROI goes beyond the case-study level. By continually validating the effect of increasing employee engagement through meta-analyses and business impact studies, we can observe trends across hundreds of clients.

Article from: Journal of Organizational Culture, Communications and Conflict January 1, 2006

The authors of this article explore the construct of employee engagement, which has received considerable press recently in management literature and practice. The research explores questions concerning how the construct employee engagement is defined and how it compares and contrasts with other existing, well-validated constructs. It discusses positives and negatives of employee engagement research and the application of the construct to organizational outcomes. Many organizations now measure their employees' level of engagement and to attempt to increase those levels of engagement because they believe that doing so will improve productivity, profitability, turnover.

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Article From: People Performance Management Journal October 22, 2007

The Forum for People Performance Management and Measurement at Northwestern University released their report in November 2004, The Impact of Employee Attitudes on Market Response and Financial Performance, which also links employee satisfaction to customer satisfaction and a company's financial success. This finding is true even if employees have no direct contact with customers. 110,000 surveys were mailed to media companies, with a 34% response rate. The study consisted of an analysis 45 existing scientific studies which was also compared to current practices through surveys of 145 U.S. organizations that use incentive programs.

Title: Employee engagement and manager self-efficacy Author(s): Fred Luthans, Suzanne J. Peterson Journal: Journal of Management Development, November 22, 2005

The study examined the theoretical understanding of employee engagement. Then an empirical investigation is made of the role that a wide variety of managers’ (n = 170) psychological state of self-efficacy plays in the relationship between their employees’ (average of about 16 per manager) measured engagement and a multiple measure (self, subordinates and peers) of the managers’ effectiveness. Results of the statistical analysis indicated that the manager’s self-efficacy is a partial mediator of the relationship between his or her employees’ engagement and the manager’s rated effectiveness. Overall, the findings suggested that both employee engagement and manager self-efficacy are important antecedents that together may more positively influence manager effectiveness than either predictor by itself. Implications for effective management development and practice were discussed.

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Article From: Authors: Harter, James K.; Schmidt, Frank L.; Hayes, Theodore L. Journal of Applied Psychology. Vol 87(2), Apr 2002

Based on 7,939 business units in 36 companies, the study used meta-analysis to examine the relationship at the business-unit level between employee satisfaction-engagement and the business-unit outcomes of customer satisfaction, productivity, profit, employee turnover, and accidents. Generalizable relationships large enough to have substantial practical value were found between unit-level employee satisfaction-engagement and these business-unit outcomes. One implication is that changes in management practices that increase employee satisfaction may increase business-unit outcomes, including profit.

OBJECTIVE

Understand the HR practices of Ashok Leyland.

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Understanding the competency mapping designed for the Development Linked Career Program process.

Measure the Employee Engagement level in the company.

Analyze the factors influencing Employee Engagement and suggest methods to improve the engagement level.

During this Recession period companies following the best HR practices can survive and perform better than others. Employee Engagement is a new practice followed by only few companies. Analyzing the exit interview helped me get a picture about the commitment level of the employee in AL.

Therefore, I decided to measure the engagement level of the employees and analyze the factors influencing it.

RESEARCH METHODOLOGY

RESEARCH OBJECTIVE

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To measure the employee engagement level and find the factors affecting the engagement level of the employees.

RESEARCH DESIGN

The research design adopted was descriptive design. This would help to measure the job satisfaction and organizational commitment level (OCB) of the employees.

SCOPE OF THE STUDY

This project aims to measure the employee engagement level of marketing department .

DESIGNING DATA COLLECTION FORMS

The data was gathered with the help of a close-ended and open-ended questionnaire. It was based on likert scaling.

SAMPLING DESIGN

Sample Frame

Sample frame included of the employees of Ashok Leyland in marketing, Strategic sourcing, PSB, and Exports departments who attended the mentioned training programs.

Sampling Plan

The type of sampling design used was Convenient Sampling.

Sample Size:

The sample size was 72 employees from the above mentionedDepartments.

EMPLOYEE ENGAGEMENT

Employee engagement has been defined in many different ways and the

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definitions and measures often sound like organizational commitment and organizational citizenship behavior. Most often it has been defined as emotional and intellectual commitment to the organization or the amount of discretion and effort exhibited by employees in their jobs.

In the academic literature, a number of definitions have been provided. Kahn defines the harnessing of organization members selves to their personal engagement as work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances. Personal disengagement refers to‚ the uncoupling of selves from work roles; in disengagement, people withdraw and defend themselves physically, cognitively, or emotionally during role performances.

Thus, according to Kahn, engagement means to be psychologically present when occupying and performing an organizational role.

Rothbard also defines “engagement as psychological presence but goes further to state that it involves two critical components”:

Attention and Absorption

Attention:It refers to‚ cognitive availability and the amount of time one spends thinking about a role while,

Absorption:It means being engrossed in a role and refers to the intensity of one’s focus on a role Burnout researchers define engagement as the opposite or positive antithesis of burnout. According to Maslach et al. engagement is characterized by energy, involvement, and efficacy, the direct opposite of the three burnout dimensions of exhaustion, cynicism, and inefficacy. We can define engagement ‚as a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption Engagement is not a momentary and specific state but rather it is ‚a more persistent and pervasive affective-cognitive state that is not focused on any particular object, event, individual or behavior. Robinson states that:

Employee engagement contains many of the elements of both commitment and OCB, but is by no means a perfect match with either. In addition, neither

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commitment nor OCB reflect sufficiently two aspects of engagement – its two-way nature, and the extent to which engaged employees are expected to have an element of business awareness.

Organizational commitment also differs from engagement in that it refers to a person’s attitude and attachment towards their organization. Engagement is not an attitude; it is the degree to which an individual is attentive and absorbed in the performance of their roles. And while OCB involves voluntary and informal behaviors that can help co-workers and the organization the focus of engagement is one’s formal role performance rather than extra-role and voluntary behavior. Engagement also differs from job involvement. Job involvement is the result of a cognitive judgment about the need satisfying abilities of the job and is tied to one’s self - image. Engagement has to do with how individuals employ themselves in the performance of their job.

ORGANIZATION STRUCTURE

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The company is majorly divided into seven departments. All the departments are interlinked and dependent on each other. The strategic sourcing department plans with the top executives about the business and the strategy to be used for the year. They decided on the number of vehicles to be sold and the sales strategy. Based on the planning, order of the number of vehicles to be manufactured in the year is given to the plant unit. They strategies and design per month and per day units of manufacturing.

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The marketing departments are also given their targets to sell the vehicles. These targets are evaluated and revised in the mid year. Every department is interlinked and based on the requirements the process is modified. The marketing product development group analyzes the need of the customer and interacts with the R&D department. R&D department design or modify the old models based on the customer needs. Exports and imports department handles the foreign association of the company. Ashok Leyland has its reach across the global. The recent Nissar collaboration is a very good example. Power solutions are a different business of engines run by the Ashok Leyland. They supply only engines to marine and other generator making companies.

FUNCTIONAL DISTRIBUTION OF EXECUTIVES AT AL

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1) MANPOWER PLANNING PROCESS

Manpower planning is concerned with the flow of people into, through and out of an organization. HR planning involves anticipating the need for the labor and supply of labor and then planning the programs necessary to ensure that the organization will have right mix of employees and skills when and where they are needed. Ashok Leyland has a very organized manpower planning process. The corporate HR at Chennai is the sole body responsible for making ultimate decisions regarding human resources planning. All the HR departments found in other units report to it and function as per the broad strategies formulated by the corporate HR. The manpower needs for any given department in any unit is assessed by the respective department for both short term (one year) and long term (five years). The forecast is then forwarded to the corporate HR at Chennai through the personnel department of the respective units The corporate HR makes a careful analysis of the projected need of al departments and units and the already available

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manpower in all units.

Based on the analysis, it decides whether manpower should be recruited for any new activity or not. This process does not stop here. They also do manpower deployment. It this process they scientifically try to measure the number of executives required in a department keeping various factors. This method helps them to deploy the required number of employees in the department. As of in the marketing department sales, service and parts executives are calculated. For example to calculate the sales executives required for a particular region, they consider the factors such as TIV (total industry volume), the market share of the company in the region and the area of the region. Scientifically they formulate a formula and cross check if right number of employees has been deployed or not. It there is a huge difference between the manpower required in the region and the current number of employees, appropriate action is taken and the selected employees have a job rotation.

2) RECRUITMENT & SELECTION PROCESS:

Recruitment and Selection aim to search and hire suitable candidate to fill vacancies in the view to satisfying human resources needs. The search may be internal and/or external. The many objective of recruitment process is -To ensure the availability of required resources as identified from the Manpower planning process within the set time period and limiting to the allocated Budget

* Strategic Plans of Organization* Availability of Internal Resource* Attrition trend for past years* Prepare the consolidated Manpower requirement* Annual MPPR Statement* Factor in the attrition rates & Tentative recruitment schedule approximate separations* Campus & laterals* Working of the Breakup of Campus & laterals*Prepare Monthly recruitment schedule* Monthly Report*Organize for resumes as per* Interview feedback guides Manpower Requisition forms*Shortlisting of candidates

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*Organizing for the interviews* Analysis of the positions summary for depts.* Final No. of Joinees Vs selection* Joining Formalities for new joinees

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PROCEDURE

Based on the manpower planning the recruitment is conducted. Recruitment is mainly done through three main sources as follows:

1) Direct Method2) Campus Selection3) Internal Selection.

Recruitment takes place for the following positions:a) Workersb) Staffc) Junior Executive-Foreman & Supervisord) Executives- CA’s, Engineers, M Tech’s, and M B A’se) Middle management andf) Top management.

The company analyzes many factors before recruiting the candidate. Based on the requirement, attrition rate and number of employees retiring the job vacancy is anticipated. Based on the grade and position the recruitment process is decided. The company maintains the database of the employees attending the interview. The primary requirements of the candidate is cross verified and if the candidate is filling those parameters they are called for the next round of interview. Every candidate is assessed on the parameter mentioned in the interview guide. This guide has pre-designed questions and a ranking. If the candidates qualifies and scores good in the interview, he is called for another round of interview. After all the process if the candidate selected the joining formalities is carried out.

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3) PERFORMANCE APPRAISAL PROCESS

Performance management is the integration of performance of appraisal systems with broader human resource system as a means of aligning employees work behavior with organization’s goals.

Performance appraisal process is a very important function/ process in Ashok Leyland. The company has a well thought about process of evaluating the performance of its employees. This process is ongoing, interactive process designed to enhance employee capability and facilitate productivity. This process takes place once a year. There are different aspects a employee is been assessed, these are:

-Performance in the current year-Work behavior-Abilities-Strengths and weakness

PROCEDURE

The performance appraisal form is designed and circulated to all the employees across the region. The employees attach their KRA sheets with the form and fill in few personal details. KRA (Key Resulting Areas) consists of the goals and responsibilities set during the beginning of financial year The Company first decides its current year’s goals, targets and strategy. These targets are passed to the regions and KRA for the region head is set The targets for areas is set based on the region KRA’s Therefore every individual’s targets are set The employees also mention their achievements and the areas of performance have fallen short.

The Line manager evaluates the employee by rating him/her on various aspects in the scale of 1-5 .The manager firstly asses the performance based on the KRA’s

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PART 1 - KRA’s

KRA’s /Goals/Achievements for the review period Managers fill in all these details based on the KRA of an employee. The managers fill in the employees job development input planned for the current year. In this section the managers are also asked to fill in the areas of performance the employee has fallen short and the future plan for improving performance. The employees are rated in these aspects; If employee has done an extra ordinary work and achieved more than 125% of his targets, he is been rated 5. If he has achieved his targets 100%, he is been rewarded 4 henceforth 3. Employees should be able to quantify their achievements to get good ratings. The next aspects employees are evaluated is on work behavior The employee’s behavior with his superior, customer and subordinate is ranked and a consolidated rating is given. This is a 180-degree evaluation process, where the superior and customers rate them based on their interactions.

PART II- WORK BEHAVIOR

The factors for assessment indicated in the form are directly related to achievements or results obtained by the appraise. Apprise him on each factor in relation to his present position for work behavior. Five levels of performance have been laid down as a detailed below:

5- Exception Consistently outstanding performance

4 – Superior Performance which is consistently and significantly beyond job requirements. Contributes in related areas also

3- Good Performance which adequately meets job requirements and occasionally produces work over and above job requirements.

2- barely satisfactory Just meets minimum job requirements

1 – Unsatisfactory Does not meets job requirements

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PART III- ABILITIES

In this section the appraiser evaluates the employee based on his job knowledge, whether he is aware about his primary and secondary duties. The next factor is the commitment level of the employee. The effort he puts in to achieve his targets and the desire to be the best. Employee is also measured on his stability under pressure situation and position. The appraiser closely monitors his subordinates and knows the pressure handling ability. If there are other factors, which the appraiser feels is important, he mentions and ranks the employee on that. All this rating is again given in the scale of one to five; where five is the highest and 1 being the lowest.

PART IV- POTENTIAL

An assessment of the individual’s potential taking into account areas of interest personality traits, strengths/ weaknesses etc. Here the appraiser mentions the strength and weakness of the employees, which will help to give appropriate training and development needs.

PART V: OVERALL PERFORMANCE RATING:

Based on the assessment in Part II, Part III, and I.

Based on all the above-mentioned factors and assessment an overall rating is given to the employees. The appraiser after discussing with the employee, rates him in the scale of five. The review cross verifies all the aspects and gives a final rating. This cross verification is to check if there is no bias in rating the employee and a fair rating is given to the employee. After the rating is given, it is cross-verified with the HR team. They rate the employees based on the KRA’s and see if the employee is over rated or underrated.

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PART VI: TRAINING NEED

The appraiser fills is in the training required for the employees to improve is competency keeping in mind his career development. Ashok Leyland a well designed training program. They have both in house training centre and the company has also tied up with external top management schools. Every year the top performing employees are identified and are given the opportunity to undergo training with external institutes.

PART VII: DEVELOPMENT PLAN

Every grade has a career graph designed. The employees past records are evaluated and the required development plan is suggested by the appraiser. There is no bias in this system because, if the appraiser have not mentioned any development plan the HR team have the complete record of the employees past performance and they take the required action. Last personal comments on the employee’s performance are given both by the appraiser and the reviewer. After the rating these forms are returned to the HR team.

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REGION WISE REVIEW:

Every region is rated based on the targets achieved by the top management and the HR team. Even the region is rated in the scale of one to five. Every region is ranked based on their ratings. The region’s rating helps the HR team to decide the bell curve percentage. If a region has performed extremely well, the 45% of the employees in that region can be rated 4 and 55% can be rated 3 and below. If the region has really performed poorly, then 70% is rated 3 and 30% is rated 4. The HR team analyzes consolidate rating data. The HR team distributes the employees based on the bell curve. If the region has rated the employees more, the HR team then sends the forms back to the reviewer and the employee in the border of 3 and 4 is evaluated again and the rating is changed. The bell curve helps to identify good performing employees. This helps to keep the system unbiased.

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DEVELOPMENT LINKED CAREER PLAN

Development linked career plan (DLCP) is the HR process to identify the future leaders of the company and train and design a development program

PROCEDURE

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The employees are evaluated based on their performance and potential. The employees are distributed in the 3*3 matrix. Every grid is named from A1 to C3. The employees scoring high in both potential and performance are called quad 1 employee. There is predecided parameter based on which the employees are evaluated. The parameter for the performance is getting rated 4 for continuously 2 or 3 times. Parameter to rate the potential is the KSA’s This process is called performance improvement plan (PIP). The selected employees have to sign a five year agreement with the company, if he/she has to continue with the development program.

Once the quad 1 employee is identified their current job and competencies are identified. Succession planning is done after conducting GAP analysis in the competencies. This will help know the weakness and strength of the quad 1 employee. This analysis will help the HR team to decide the next development step. The employees can go for on the job training, job rotation or by giving special assignment. The quad 1 employee is also send to special executive program from the top management institutes like IIM’s The quad 1 employee is constantly evaluated and has a quicker growth in the company. They have guaranteed two promotions in five years.

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AL is implementing its new competency mapping for the DLCP process. Where the competency required by the future leader is identified. The Quad 1 employee will be identified with the competencies and will be trained accordingly. The identified competencies are attached in annexure 2.

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TRAINING PROCESS

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Training process is the most important HR process in any company. Ashok Leyland strongly believes that a well-trained and efficient workforce is crucial for the development of any organization.

AL recruits employees from all levels strictly on merit. Based on the performance and need employees are further provided with opportunities to advance skills and professional expertise as well as give them adequate exposure. The main objective of the training program is to make the employees competent enough to benefit the company, by doing their best job. The company equally distributes the training budget in all departments ensuring equal opportunities to all employees. To create an environment that is conducive to self-development and career advancement of its employees.

AL mostly handles staff training as an integral part of its organization development. It will endeavor to train its staff continuously and impart them with new skills. Training or development program shall only be offered after a through need assessment by the Human Resources team is identified. AL places a high premium on human resources training and development. Hence, nominees are obliged to attend courses nominated for and agreed upon.

Training need is identified from the performance appraisal forms. Every supervisor assesses the training need for every employee and mentions it to the HR team. HR team consolidates all the training need from all the departments and training schedule is formed. AL has a very well thought about training programs designed. AL has both in internal and external training program. Internal training is conducted by the higher-grade executives and external training is outsourced by consultants and institutes.

Development program is carried out with DLCP process as mentioned before. Training program does not stop here, the employees undergone a training program is consistently assessed for his post training performance and behavior. This way the company also calculates the ROI of the training program. Only effective training program is included in the training schedule.

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BEST HR PRACTICES IN ASHOK LEYLAND

MISSION GEMBA

Launched in June 2005 as a Company-wide initiative Mission Gemba’s objective is to provide information, develop skills and empower employees to reach world-class levels of quality, cost and delivery. The logic is simple and undisputable: value is created at the Gemba and the Gemba knows its work best. The first task was to divide the whole of ‘manufacturing’ into function -based ‘Gembas’ An identified Core Group went about the mapping and came up with the final figure of 62 across all Units The ‘Gemba Unit Leaders’ (GULs) were next chosen, based on their performance track record.

The ‘first wave’ - as partner consultants on the Mission, McKinsey would term it -involved the rolling out of the four primary themes: information, skills, empowerment and rewards & recognition. All these components were approached simultaneously. To increase communication and information sharing, Gemba Communication Centers (GCC) was set up. The GCC has a set of six boards: Our Company, Our family, Our Gemba, Our Strength, Our Performance and a Problem Solving board. Company performance, market scenario and other issues of importance are displayed, apart from providing a platform for voicing thoughts. The issues jotted down on the Problem Solving board are debated upon at ‘Daily Morning Meetings’ (that last about 10 minutes) and other members post suggestions. The GCC is basically a forum for interaction –and hence, in some Gemba Units, is also the venue for watching an exclusive film called ‘Change Story’ put together to emphasize the need to change - and the part each of us can play in this transformation.

With regard to skills development, the GULs have been put through a training program first. Followed by a well thought-out training schedule for all the members. Each Gemba unit has been asked to identify a set of five skills that will be relevant for the area. Over a four to six month period, the training on these identified skills would be rolled out. To encourage Gembas to come up with ideas, a budgetary outlay of Rs 50,000 per Gemba was made. This would fund improvement features in a Gemba– ranging from workplace layout to low-cost automation, from easy access to tools and safety measures that the GULs identify. GULs also decide on the RISEi award recipients based on their contribution. (This newly introduced scheme gives monetary awards to associates for initiative taken or impact created.) In

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every way, GULs are encouraged to think like the CEOs of their Gembas. Another breakthrough idea for recognizing Gemba unit contribution comes in the form of a unique ‘Passport Scheme’ This is a single window mechanism to reward employees for involvement, participation, commitment and contribution in/to the business performance of their units. Individual initiatives like attending Gemba Unit meetings, making improvement suggestions; developing and using new skills are taken into account. Attending training programs and using the new learning in a practical manner are also fetch points. Working like an airline loyalty program ‘associates’ earns a pre-decided number of points for various activities/outcomes, which can be redeemed for non-monetary gifts- from Tupperware to cell phones.

While the ‘first wave’ continues with its momentum seven crucial areas of production were specially chosen for a ‘deep dive’ in order to achieve high impact Associates in these identified Gembas underwent a rigorous 4-month program identifying every pocket with high potential to improve Quality, Cost and Delivery. The results are already showing, with 40-50% improvements in benchmark levels for these areas!

YE S PROGRAM

Ashok Leyland had taken initiative to solve high attrition rate of young executives by introducing YE’S program YE’S program is especially designed for the executives below 35 yrs of age. Newly hired executives were leaving the company even after being paid 10%-15% more than the market price. AL being a very old company had many old loyal employees still working. Young generations could not cope with the system. YE’S program was a cultural transformational program which helped the young executives to share and pour out their liking and disliking of the system. This program also helped them to share new idea and enjoy their work life.

YE’S program consists of three E’s

Enable Engagement Empowerment

This program also consists of many sub functions, such as the general meeting. Young executives get a chance to meet the HR and discuss their major issues at their work place. The mentor in charge of the executives takes

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necessary effort to implement the changes. This improved the engagement level and the loyalty among the young executives.

FUN @ WORK

This is another program which was a part of the YE’S program The young executives had to team up with the workmen at the plant and design a new project. The best project would be rewarded. This improved the relationship between the executives and the workmen. Monthly games, contest and entertainment programs were also designed by the YE coordinators.

PORTAL

The Company had also designed a website which is accessed only by the young executives. The website there is forums, where they can raise concerns and issues. Executives would directly write to MD through a soap box and the issue would be taken seriously into consideration.

BANNER PROJECT

Young executives form a team of 20-25 from various departments and design the dummy budget of the company, which is seriously looked into while preparing the company’s budget The best performer executive is selected by the supervisor for all the departments and regions. This team would work for 6-7ths to prepare the budget.

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YE MENTORSHIP PROGRAM

Every year Ashok Leyland recruits young engineers through our GET/DET schemes as well as large numbers through lateral recruitments. Having a caring mentor for a smooth transition into the organization goes a long way in their formative years. Through this program, mentees will:

Be introduced to the positive aspects of Ashok Leyland culture, traditions and values Develop their capability to understand and cope with organizational issues in the early stages of work life Get guidance on career and development opportunities in the organization Gain from the knowledge and expertise of their mentors Mentor offers friendship, guidance and opportunities to young executives (mentees) to express themselves. They try to bring in positive attitude towards work and life.

Mentors also brief about the availing opportunities to mentees. In this manner mentors guide them in their career objectives and goals. Mentors also identify mentees training and development needs and bring it to the management. Their ultimate objective is to make mentees work life fun filled and comfortable.

Mentor program does not end here. The Mentor assessment form has to be filled in after every session and given to HR. every executives can meet their mentor any number of times or at least times in a month.

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ANALYSIS

To measure the engagement level among the employees of Ashok Leyland I have designed 29 questions. Questions were designed keeping in mind the 10 C’s and job characteristics which help to measure the job satisfaction which has a positive effect on the job engagement level. The questionnaire also included Gallup’s 12 questions designed for measuring the engagement level. The employees have to respond on a likert-type scale with anchors (1) strongly disagree to (5) strongly agree. Job characteristics were measured by five items from Hackman and Oldham with each item corresponding to core job characteristics (autonomy, task identity, skill variety, task significance and feedback). The employees indicated the extent or amount of each characteristic in their job using the five Point Likert-type scales.

Similarly job satisfaction were measure by the 10 C’s such as career growth compensation, congratulate, commitment towards the organization, connect, condition and communication.

Engaged employees is result of efforts from the company, supervisor and the individual himself. The Gallup questions are further subcategorized into company level, supervisor level and individual level.



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Based on the company policies, transparency and the communication process 10% of employees are highly engaged, 46% are engaged, 33 % are partially engaged, 9% are disengaged and only 2 % is highly disengaged. Ashok Leyland has a very high percentage of engaged employees.

Looking at supervisor level to engage employees, we got the following results.



The supervisor’s of AL are extremely co-oporative and understanding The figure shows 14% of employees are highly engaged, 52% of employees are engaged, 28% of employees are partially engaged, 5% are disengaged and only 1 % is highly disengaged.

From the above two graphs we can see that the company and the supervisors are putting lot of efforts to keep their workforce engaged.

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Looking at the individual effort to engage themselves for the company’s progress is as shown in the graph.



Even the executives equally engage themselves. Looking at the figure we can say 18% of employees are highly engaged, 45% of employees are engaged, 26% of employees are partially engaged, 10% are disengaged and only 1 % is highly disengaged.

As seen in the below table even the Job satisfaction level and the commitment level is very high. The employees are very proud to be associated with the company. Employees are also very satisfied with the environment and infrastructure of the company. AL had recently shifted into its new office, and the HR team could feel an increase in the productivity by around 25%. Highlighting the factors which are deviating from the mean, we can say that employees are not very satisfied with the job characters. Roughly 50% employees feel they are doing repetitive work.

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Looking at the company’s practices they follow the best of the compensation package in the industry and the employees are satisfied with their salary and benefits offered.

The career development program is also good. AL provides a very steady and fast growth opportunity to the young performing executives. It also gives other benefits which many company do not provide in the industry. The company has really thought well about the policies before designing it. The table will show all these and it does not changes much across the departments and different age group.

DEPARTMENT WISE ANALYSIS

I have majorly analyzed marketing, strategically sourcing and PSB departments. I am similarly comparing the company’s supervisors and individual’s effort to keep the employees engaged for marketing and other departments.



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Looking at the graph we can say that 7% of employees are highly engaged, 49% of employees are engaged, 34% of employees are partially engaged, 8% of employees are disengaged and only 2% of employee are highly disengaged. Analyzing the other department’s graph we can say that 14% of employees are highly engaged 43% are engaged, 33% of employees are partially engaged, 10% of employees are disengaged and 0% of employees are highly disengaged.



This engagement level is based on the company’s effort Looking at the supervisor’s effort to engage the employees we can find that in marketing department.

12% of employees are highly engaged, 57% are engaged, 23% are partially engaged, 7% are disengaged and only 1% employees are highly disengaged. If we analyze other departments 16% of employees are highly engaged and 45% of employees are engaged.

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Based on the analysis, marketing department has comparatively higher engagement level to other departments. As seen in the pie chart 69% of employees are engaged in the marketing department. The percentage is decided by the same method as mentioned before, by considering the employees giving majority rating to four and five as engaged employee and once giving rating to one and two as disengaged employees.

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18% of employees are highly engaged, 51% are engaged, 21% of employees are partially engaged, and 9% of employees are disengaged in marketing department. The marketing employees have high engagement level because of their job variety and flexible work timings. Marketing executives also earn from outside sources. By analyzing the other factors, we can say that marketing department is very satisfied with the compensation. The marketing department consists of more young executives and the benefit’s the company has designed is keeping in mind the middle aged employees. After interacting with these young executives, it is clear that they want some benefits which they would use shortly.

Other departments are comparatively less engaged than marketing. This is because of the repetitive job profile which they have. This is the reason they are not inclined to work extra or work to improve their quality of the work. The employees also feel that they are not recognized or appreciated for their good performance. Where as in the marketing department, employees are recognized, because marketing and sales is the main functions from where the company earns its revenue. The engagement level also various based on the importance of the department. Marketing and manufacturing are considered the main and very important departments. Even top management is bond to give major attention and funds to these departments. One of the non financial methods to increase the engagement level is tomotivate the employees and give appreciation and recognition for their good performance, which can help to improve the engagement level in other departments.

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AGE WISE ANALYSIS

To measure the engagement level better, I have divided the employees in three major age groups. They are:

- 21- 30 years- 31-40 years- 41- 60 + years

I have individually analyzed all these age groups to get a better picture of the engagement level. The engagement level is low in the age group of 21- 30 years. If you can see only 14% of employees are highly engaged, 48% of the employee is engaged, whereas 28% of the employees are partially engaged. Where as in the 31- 40 yrs age group, there is equal distribution of engaged and disengaged employee and 0% of highly disengaged employee. Surprisingly the senior employees of the company are highly engaged. These employees are associated with this company for more than 15 years. They have seen the good and bad times with this company so the loyalty is high. Working with such experienced people, I have learned a lot of things. The senior employees are much disciplined and do not take advantage of the company items.



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As shown in the graph, employee engagement level is really high in the age group of 41- 60+ yrs. Only 4% of employees are disengaged in this age category. Even the commitment level is very high. But this age group is not very satisfied with the salary. Many senior grade employees feel they could have been given better benefits. The table below gives a clear picture of all the factors.

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FACTOR ANALYSIS

Discussing with the supervisors, I decided to keep seven major factors which could affect the engagement level of the employees. The employees were asked to score these factors in the scale of 1 to 5. After analyzing the factors in SPSS software, it was found that, employees are extremely satisfied with the work environment. This is basically because of the new office. After moving into the new office, the productivity of employees has gone up. One factor which majority of the employees is not satisfied is the culture of the company. The employees between the age groups 21- 30 years are the least engaged employees and these young executives are not very happy about the culture. The senior employees are very focused in their jobs, and do not appreciate much of disturbance and entertainment in their work time.

The young executives face lot of cultural gap. Young executives wish to work with fun around. This was the prime reason that the company had a high attrition rate, and most of employees leaving the company where young. The average age group of the company was also very high. The company soon proposed few programs for the young executive, so that they could retain and reduce the average age of the employees.

The programs like YE, mentor program etc. helped the company to reduce the attrition rate. The company has yet to take many actions to bring in liveliness in the company.

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Figure 1: Factor analysis- score %




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The employees have given fewer score to the factor- company policy and practices. Only 5 % of the employees are given 5 score. Around 48% of the employees have given 4 score, which means they are satisfied.




The next factor, which has surprised is that not many employees feel they are giving challenging job. The main reason an employee can become engaged, if he feels that his job is very important. An employee gets motivated if he is given any responsible or important job. The company has to clear mention his job, and emphasis on the importance of the job. At any time employee should not be de-motivated with there work. These are the major factors the company should work on and make changes to increase the engagement level.

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FINDINGS

1. 45% of the employees are engaged and only 16 % of employees are disengaged.

2.The engagement level is high among the senior employees and low among the young executives.

3. Marketing department is comparatively has higher engaged employees.

4. The commitment level towards the company is high among all the departments and age groups.

5.The young executives are very satisfied with the compensation and benefits but senior executives are not very satisfied.

6. Culture is the main factor, which is affecting the engagement level among the young executives.

7. Other factors affecting engagement level is the compensation policy and challenging jobs.

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CONCLUSION

Practitioners and academics have argued that competitive advantage can be gained by creating an engaged workforce. Companies need to make employee engagement one of their priorities. They should actively try to identify the level of engagement in their organization, find the reasons behind the lack of full engagement, strive to eliminate those reasons, and implement behavioral strategies that will facilitate full engagement. This analysis has helped to measure the engagement level in Ashok Leyland. Analysis has also helped to figure out keep factors influencing the engagement level. By applying small strategies, would help to increase the engagement level. As known, an engaged employee is directly proportion to the growth of the company.

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RECOMMENDATIONS

1. Make the work place livelier

- By appreciating the good work of the employees. For example, keep a wall of fame – put the picture of the best performing employee.

- By organizing fun activities and games.

- By celebrating employees special days.

- By placing motivating captions in front of the department.

- By organizing group family outing.

2. Diversity in workforce composition.

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LIMITATIONS

The study was only for Ashok Leyland at Chennai and cannot be generalized for the industry.

This study was conducted only for the employees working in the marketing department. Therefore it cannot be held true for other departments.

Finally the reply to the questionnaire prepared by me for the employees might not be free from biases.

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BIBLIOGRAPHY

WEBSITES:

www.scribd.com www.gallup.com www.hrsurveys.com

BOOKS & JOURNALS:

Schoenfeldt Fisher Shaw Human Resource management, (2008)

Judge Robbins Sanghi, Organizational Behavior (Edition12)

HR Special Survey, Business World, May 5, 2008, India

Gerard H. Seijts and Dan Crim The Ten C’s.

Hackman, J.R. and Oldham, Employee Engagement Ivey business journal,

Kahn, W.A. (1990) ‚Psychological conditions of personal engagement andDisengagement at work Academy of Management Journal.

Richman, A. (2006)‚ everyone wants an engaged workforce how can you create it?

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http://www.gallup.com/

http://www.scribd.com/

Annexure:

EMPLOYEE ENGAGEMENT SURVEY

Name……………………………

Age: 1:20-30 2: 31-40 3: 41-50 5:51-60

Gender : 1: Female 2: Male

Marital Status: : 1 Married 2: Single

Educational Qualification:

Diploma Engineer Graduate PG/MBA

Grade: 21 22 23 24 24A 25 M2

Department :

Sales Service PMGParts Marketing FinanceHR Corporate Functions ExportsPSB Strategic SourcingOthers

Total Years of service in Ashok Leyland……………………………………

Annual Income: 3-5L 5-7L 7-10L above 10 L

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QUESTIONNAIRE

S.L. Description 1 StronglyDisagree

2 Disagree

3Neutral

4Agree

5Strongly Agree

1 I know what is expected out of me in my job.

2 I am aware about company’s long term goals.

3 My opinions seem to count in taking decisions.

4 My team members are committed to do quality work.

5 The mission & vision helps me feel the importance of my work.

6. I prefer coming to office rather than taking an off.

7 I go out of my & take initiatives that benefits the company.

8 I am satisfied with my salary.

9 The benefits offered here are fair & reasonable.

10 I am appreciated & recognized for my work.

11 Company provides us with all the required support.

12 We have excellent infrastructure.

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13 Employees can maintain a proper work life balance.

14 I would recommend my company as one of the best places to work for.

15 I am proud to say, “ I work for ashok Leyland.”

16 I have received recognition for doing good job.

17 The people here are pleasant to work with.

18 My supervisor cares about me & encourages me.

19 I work extra hours to improve quality of work.

20 My managers help with my development needs.

21 I get to explore most of my skills at work.

22 I am satisfied with the quality of my work.

23 I have autonomy to design my work.

24 I get challenging & meaningful work.

25 Constant feedback for my work is given.

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Factors 1 2 3 4 5Work

EnvironmentPerks &

Compensation system

Challenging JobsWork

FlexibilityCo-employees

Career growth

Culture of the companyCompany policy & practice

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Documents

Subah Dissertation