Employee Turnover Project 6n4i4a

A STUDY ON

EMPLOYEE TURNOVER With reference to

NAVABHARAT VENTURES LIMITED SAMALKOT

A project report submitted to ADIKAVI NANNAYA UNIVERSITY, Rajahmundry in partial fulfillment for the requirement of the award of the degree of

MASTER OF BUSINESS ISTRATION SUBMITTED BY

V.KRANTHI (Regd No: 1684110043)

Under the Guidance of

Mr. S. MANOJ, MBA., B.Ed. Assistant Professor.

Department of Management Studies

ADITYA INSTITUTE OF PG STUDIES (Approved by AICTE,d to Adikavi Nannaya University) Aditya Nagar, ADB Road, Surampalem 2016-2018

ADITYA INSTITUTE OF P.G.STUDIES Department of management studies (Approved by AICTE, d To Andhra University) Aditya Nagar, ADB Road,SURAMPALEM-533437,E.G.Dt Phone:(08852)252243,252250,cell:9866576662

CERTIFICATE This is to certify that the project entitled “EMPLOYEE TURNOVER” with reference to “NAVABHARAT VENTURES LIMITED SAMALKOT” is the bonafide work done by with V.KRANTHI Regd.No:1684110043 during the project period of the academic year 20162018 in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ISTRATION in ADITYA INSTITUTE OF P.G. STUDIES d to Adikavi Nannaya University, Rajamahendravaram is a record work carried out by him under my guidance and supervision.

Project Guide

Head of the Department

Mr.S.Manoj

Dr. G.SrinivasaRao

M.B.A., B.Ed.

M.Sc., M.B.A, M.Phil., Ph.D

EXTERNAL EXAMINER

DECLARATION I

hereby

declare

that

the

project

work

entitled “A

STUDY

ON

EMPLOYEE TURN OVER” from “NAVABHARAT VENTURES LIMITED SAMALKOT” has been prepared by me during May - June 2017 in partial fulfillment of the requirements for the award of the degree of Master of Business istration, Adikavi Nannaya University, Rajamahendravaram. I also declare that this project work is the result of my own effort and that is not been submitted to any other university for the award of the degree

Date:

(V.KRANTHI)

Place:

Reg no:1684110043

ACKNOWLEDGEMENT I hereby take the opportunity to express my sincere gratitude to the following eminent personalities, without aid and advice, the successful completion of my project work. I extend my heart full thanks to Dr. G. Srinivasa Rao, Principal, Aditya Institute of PG Studies, Head of the Department for his kind help during my MBA programme. First of all heart full thanks to my project guide Mr. S. Manoj, Assistant Professor of Management Studies for being a sources of inspiration on encouragement, and enlighten and his valuable suggestions in bringing up the project work truthfully I extend my sincere thanks to Nava Bharat Ventures Limited, Sugar Division (Deccan Sugars) SAMALKOT. Who has guided me and encouraged me throughout the project. I am very grateful for his entire valuable guidance. Finally I would like to express my deep sense of gratitude to my beloved Parents as without their and encouragement, I would not have finished this work. I also express my since thanks to my friends and well wishers too.

Date:

(V.KRANTHI)

Place:

Reg No: 1684110043

CONTENTS

CHAPTER-1     

    

Introduction of the study Need for the study Scope of the Study Objective of the study Methodology of the study



Limitations of the study

  

63-78

Data analysis & Interpretation

CHAPTER-6   

33-62

Theoretical Framework

CHAPTER-5 

22-32

Company Profile

CHAPTER-4 

10-21

Industry Profile

CHAPTER-3 

1-9



CHAPTER-2 

Pg.no

79-82

Findings Suggestions Conclusion

BIBLIOGRAPHY ANNEXURE    Questionnaire  Bio-data

84

CHAPTER-1 INTRODUCTION

HUMAN RESOURCE MANAGEMENT INTRODUCTION This is a function within an organization concentrated on recruiting, managing and directing people who work in it. Human Resource Management deals with issues related to compensation, performance management, organization development, safety, wellness, benefits, employee motivation, training and others. HRM plays a strategic role in managing people and the workplace culture and environment. If effective, it can contribute greatly to the overall company direction and the accomplishment of its goals and objectives. The New Role in Human Resource Management More and more companies seek the outsourcing services of HR recruitment companies. The focus on HRM is now moved to the strategic utilization of employees and the measurable impact of employee programs over business. Nowadays successful companies need to be adaptive, resilient, quick to change direction and customer-centered. Within such an environment the effectiveness of HRM is crucial to business success. HR professionals establish systems for performance development, career succession planning and employee development. This keeps people motivated, happy, personally engaged and contributing to company success. Furthermore the HR professional helps the development of organizational culture and climate in which employees have the competency, concern and commitment to serve customers well.

Meaning Human Resource Management is defined by Scott as that branch of management, which is responsible on a staff basis for connection on those aspects of relationship of management to employees and with the development of individual and group. Human Resource management [HRM] through a new no men clature as field of study in today‟s context in some from with evolution of human organization.

1

CONCEPT OF HUMAN RESOURCE MANAGEMENT: (a)Milkovichand Boudreau have defined HRM as follows: “HUMANRESOURCEMANAGEMENT is as series of integrated decisions that form the employment relationships; their quality contributes to the ability of the organization and the employees to achieve their objectives.” (b )Human Resource Management is defined in of its pro-active approach to managing people in the organization. For example, KareLn Legge has specified 3 elements of HRM. 1. Human Resource policies should be integrated with strategic business planning and used to reinforces appropriate (or change an in appropriate) culture. 2. Human Resources are valuable and a source of competitive advantages. 3. Human Resource can be tapped most effectively by mutually consistent policies which promote commitment and foster a willingness in employees to act flexibly in the interest of the adaptive organization pursuit of excellences. EMPLOYEE TURNOVER In today‟s most of the India business organization are facing a paradoxical problem so far as employment of their of their human resource is concerned. On the one hand, they are facing the problem of overstaffing and are busy to pruning the surplus staff through voluntary retirement and other schemes. On the hand, they are facing the problem of employee turnover and are busy in developing retention strategies. The problem of employee turnover is more acute in new economy business. Employee turnover is defined as the rate of change in the working personnel of an organization during a specified period. It signifies the extent to which old employees leave and new employees enter in to service in a given period. It means number of incoming and outgoing workers forms an organization or company. In other words we can say when an employee takes place of old employee it is called employee turnover in a period of time. Turnover employee can create due to the some internal factors of companies like excessive work load, not giving the sufficient authority, low salaries; organization does not providing proper facilities .

2

As the paradigm of lifetime employment becomes unrealistic, the question „who stays with you?‟ has assumed great importance in organizations today. Simultaneously, there has been an increasing tendency to „buy in‟ the talents of professionals with cross functional skills in order to create a competitive advantage. One visible effect of this has been a consistent rise in the pay packages of most organizations so as to attract and retain the most desirable employees. Such a trend over the last few years has resulted in an unstable labour market, especially for industries such as marketing, advertising, finance and software where the skills are by and large transferable, from one work environment to another. .The Importance of Employee Turnover to an Organization Turnover has such an impact on companies that executive bonuses are being conditioned on retaining a certain percentage of employees. "The Wall Street Journal" reported in June 2008 that the executive officer of a global car dealership was paid 8 percent of his bonus for keeping overall turnover below 31 percent, and one technology executive found half his bonus was dependent on "undesirable attrition." The cost of turnover to the bottom line, in addition to the impact of turnover on the workforce and operations make it essential for employers to manage the process effectively. Cost of Turnover Turnover represents a significant cost to the organization. One study by Harvard Business School researchers, published in the January-February 2008 issue of the journal "Organization Science," estimates that the turnover costs from just one departing employee -- earning approximately minimum wage -- could amount to as much as $25,000. These figures are primarily based on direct costs, including any severance costs plus the expense to recruit and train a new employee, but can also incorporate indirect costs such as a resulting decline in productivity or employee morale. According to Michael Watkins, in his 2003 book "The First 90 Days: Critical Strategies for New Leaders at All Levels," it takes more than six months before a new employee begins to provide as much value to the organization as the company is expending to train the employee. Combine this with another finding from George Bradt, Jayme Check and Jorge Pedraza, in their 2006 book "The New Leader‟s 100-Day Action Plan" that says 40 percent of leaders will fail before 18 months in the job -- and more than 60 percent if the leader came from the outside, according to 1999 findings by Dan Ciampa and Michael Watkins in the book "Right From the Start: Taking Charge in a New Leadership Role" -- and it becomes obvious that turnover represents a significant expense.

3

Turnover, Performance and Productivity The report published in "Organization Science" also indicates that the effect of turnover on the organization's overall performance and productivity will be "pronounced" when operational processes are fairly standard and routine. This might be explained with the theory that fresh ideas from people new to the organization can add value more quickly to a company that has complex, non-standard processes; whereas an organization in which the procedure must be learned and repeated will suffer a greater loss in efficiency until the new employee is fully trained and a cohesive member of the team. Turnover as a Symptom Turnover itself can be a symptom of a deeper problem within the organization. A 2003 study conducted by the U.S. General ing Office titled "Child Welfare: HHS Could Play a Greater Role in Helping Child Welfare Agencies Recruit and Retain Staff," found that ineffective supervision, unmanageable workloads and inadequate salaries were the primary cause of most turnover amongst Child Protective Services workers. If the organization identifies an unusually high rate of turnover in a particular job classification or from a specific division of the company, this indicates a problem that needs further investigation. Exit interviews, surveying current staff or a workload analysis might all shed light on the potential issues. Positive Effects of Turnover Employers welcome and actually encourage some turnover -- particularly involuntary turnover. Involuntary turnover is important to the organization in a different way: It refers to employees who have been dismissed from the company, generally due to a failure on probation, poor performance or misconduct. It is extremely damaging to an organization to leave poor-performing employees on the books, or fail to deal with misconduct appropriately and in a timely fashion. Inaction is not only detrimental to morale and work group relations, but could cost far more in of employer liability -

- for example, allowing a sexual harasser to remain employed -- than the cost of replacing the employee. Employers should distinguish between voluntary and involuntary turnover and monitor the separate percentages on a regular basis. If involuntary turnover is unusually low, there are probably some poor performers being allowed to slide by, and if it is extremely high, this could possibly indicate issues with the recruitment process -- the right candidates are not being selected -- or signify a change in management tolerance levels.

4

NEED FOR THE STUDY The need for employee turnover is organization is realized for the following reasons





The success of any manufacturing organization depends largely on the workers, the employees.



The study was mainly undertaken to identify the level of employee‟s attitude, the dissatisfaction factors they face in the organization and for what reason they prefer to change their job.

 

Once the level of employee‟s attitude is identified, it would be possible for the management to take necessary action to reduce attrition level.



The company, their progression will lead to the success of the company for the long run.



This study can be helpful in knowing, why the employees prefer to change their job and which factors make employee dissatisfy



The organization in order to assess the overall interest and feeling of the employees towards their nature of job and organization



The need of this study can be recognized when the result of the related study need suggestion and recommendations to the similar situation

 





5

SCOPE OF THE STUDY The scope of the present study is applicable only for the sugar division in Samalkot. This study is limited to only employee turnover and its impact on the employees in company. Employee‟s response towards the employee turnover in company can also be derived from this study. The topic chosen performance was aimed for the betterment of organization in of employee turnover. The scope of employee turnover in Nava Bharat Ventures Limited includes identification of the level of employee's attitude; dissatisfaction factors leading to the change of the job. It also includes identification of ways to reduce attrition levels in the company. The study also covers the working environment of the organization as it is one of the factors which leads to employee turnover. The study also tries to understand the interests of the employees towards the job in the organization.

6

OBJECTIVES OF THE STUDY The main objective of the study is to find out the effectiveness of employee turnover in Nava Bharat Ventures Limited Samalkot, Sugar Division Besides this the few objectives are:





To understand the level of employee turnover in Nava Bharat Ventures Limited Samalkot.



To study the impact of employee turnover on the productivity in Nava Bharat Ventures Limited Samalkot



To examine the determinate factors of employee turnover.



To Identify the dissatisfaction leading to effects of turnover on the performance of the company.



To suggest measures to reduce attrition levels in Nava Bharat Ventures Limited.

  

7

METHODOLOGY OF THE STUDY Methodology is scientific and systematic search for pertinent information on specific research area. The reliability of management decisions depend upon the quality of data. Collection of data is the first step in statistics. The data collection process follows the formulation for research design including the sample plan. Basically there are two types of data 1. Primary data 2. Secondary data PRIMARY DATA: Collection of Primary Data during the course of the study or research can be through observations or through direct communication with respondents on one form or another or through personal interviews. I have collected primary data by the means of a Questionnaire. The Questionnaire was formulated keeping in mind the objectives of the research study. The questionnaire for the present study consists of a set of 15 questions which are closed ended questions. SECONDARY DATA: Secondary data means data that is already available i.e., the data been collected and analysed by someone else. When a secondary data is used, the researcher has to look into various sources from where he can obtain data. It is collected for the secondary sources. The secondary sources of data includes, (a)Reports, journals published by the company. (b) Various books, periodicals, magazines. (c) websites. Sample size: The sample size for the present study is 50 respondents. Sampling technique: The sampling technique used for collecting data for the present study is random sampling. Sampling area: The sampling area for the present study is confined to kakinada only.

8

LIMITATIONS OF THE STUDY The present study is conducted in order to evaluate the opinion about the employee turnover NAVABHARAT VENTURES LIMITED. While conducting the study following were the limitations in collecting the data. 1.

Time is limited factor because 45 days duration is not enough for in depth study. The study

is limited to particular area, i.e., NBVL. 2.

Collection of current data is also a limiting factor because of confidentiality. The company

has not traveled the data due to confidential issues. 3.

As the managers of the organizations are busy with the work schedule, it is difficult to collect

the detailed data from the employees. There may be bias in the information because of confidentiality. 4.

The sample size in the present study is restricted to the area of kakinada and limited

same employees due to their job profile.

9

CHAPTER-2 INDUSTRY PROFILE

10

INDUSTRY PROFILE INTRODUCTION: The sugar industry is the most advanced processing industry in the agricultural sector in India. In fact, it is the second largest agro based industry in the country. HISTORY: From a modest beginning in 1930-31 when traffic protection was granted to it. the industry has made rapid strides against a mere 29 sugar mills in 1930-31. The number has gone up to 416 in 1992-93 with 200 are in co-operative sector, 75 in public sector and rest in the private sector. The industry has sured the targets set for it in the various plan periods and out of 160 lakh tones per annum has been targeted for the year 2002. Sugar industry was initially concentrated the subtropical states of Utter Pradesh and Bihar. But since the second plan it has dispersed in to the Deccan area and Southern states. About 35 million farmers (including their families) constitution about 7% of the rural absorbs a sizable portion of the cane crop and provides the former with resources to meet commitments. Each sugar factory deals with thousands. The southern states and Maharashtra to 40000-45000 in Northern India. The Buy-production of the industry, especially Molasses and be gases have opened up fresh areas of utilizes. Molasses is utilized for production of alcohol and downstream chemicals. Be gases, another important and by product besides meeting the fuel requirement of industry also the potential to attain self-sufficiency in the production of paper and news print. Sugar cane production For almost 605 of the cost of production of sugar. Sugar industry is an important agro based industry. It fortunes largely depend upon the adequate availability of sugar cane. By the year 2002 the country may require 350 million tons of sugar cane. During the last four decades, the yield per hector increased at an annual rate of 1.30% the average cane productivity in the sub tropical region is low at 50 tons per hector, while it is high at 84 tons per hector in tropical region.

11

The strategy for increasing sugar cane production includes. •

Production and Distribution of quality seed cane.

•

Better water management.

•

Judicial and timely used for fertilizer application.

•

Training of sugar cane production personal.

•

Greater participation of sugar cane factories in cane development.

LOCATION: The sugar industries mostly oriented to a single material namely sugarcane which forms 60% of the total cost of production. Therefore, the industry of sugar is naturally conditioned by the availability of sugarcane and facilities of transporting raw material is essential because the sucrose content of the sugar cane begins to decrease soon after the cane is cut. Biogases obtained as a byproduct during the production is used by the factories for generating power. Therefore power is not at all a nominating factor in determination the location of sugar industry. In recent times Technical feasibility and economic availability of sugar projects have been given importance in the location of sugar industry. Sugarcane grows both on tropical & sub-tropical regions. In India AP, Tamilnadu, Mysore, Kerala & Maharashtra come under tropical regions. UP, Bihar Punjab, Haryana West Bengal, Orissa, Rajasthan & MP come under sub-tropical regions. There were only 29 factories in India during the year 1931. Protection granted to the sugar Industry in 1931 brought tremendous growth in the no. of locations. The no. of factories in operation has grown from 29 to 140 in 1950-51 out of which 110 factories were in northern parts of India. During the next decade the no. of factories increased to 174 out of which 116 factories were in the sub-tropical region in the northern India. Finally the no. of factories has grown from 200 in 1965-66 to 338 in 1984-85 of which nearly 75% of the factories are located in the northern India. The industry is pre – dominantly localized in MP next to up the industry is mainly connected in Maharashtra, Bihar and in the eastern coastal districts of AP. The average per day crushing capacity of the industry increased tremendous from 482 tons per day in 1932 to 1365 tons per day crushing capacity in the industry increased to 1365

12

tonnes it has been found by the planning commission that the cane crushing capacity of sugar factories working in our country various from 220 tons to 3200 tons per day. In UP and Bihar, majority of the sugar mills have a cane crushing capacity ranging from 700 tons to 1000 tons per day. A factory with a crushing capacity of 1000 tones for sugar cane per day is considered to be an economical unit, under the present day working conditions. THE GLOBAL SCENARIO: The Global sugar production is on a rise and along with the rising demand, the prices of sugar is expected to remain firm. China, India and Brazil, the largest producers of sugar have already showing descent production and with good carryover stocks from previous years produce. China's output of sugar reached 6.8449 million tons by the end of January of this year in the 2008-2009 sugar production season, rising 14 per cent over the same period of the previous season, according to the China Sugar Industry Association. The sugar output was 6.0085 million tons in the previous season. According to Dow Jones‟s report, the global demand would be more than the supply in 2009/2010 by 1.6 million tone. The International Sugar Organization (ISO) said that early indications show 2009/2010 marketing year could either be in balance or have a small deficit of less than 1-million tons. The ISO will release its second revision to its 2008/2009 balance sheet in the second half of February, but currently doesn‟t anticipate any significant changes. The main expectation of deficit is due to the lower than expectation of sugar cane harvest in India. The Indian sugar production is expected to go down to 26 million from the last year‟s production of 28 million. Along with this it is expected that Brazil would stay focused in its production of Ethanol from sugar, as crude oil makes new highs and demand for alternative fuel rises. THE INDIAN SCENARIO: India is the largest consumer and second largest producer of sugar in the world (Source: USDA Foreign Agricultural Service). In Sugar Year 2007/08 India produced 28.5 million tons and consumed 20 million tons of sugar. India has exported around 1.5 million tons of sugar after the ban on sugar exports was lifted in January, 2008. With an opening stock of 4 million tons in 2006-07, India has ended the year with stocks of more than 11 million tons. There is a possibility that overall sugar production in the country might fall to 26 million metric tons because of low yields as farmers didn't care much about their

13

Standing crop. Earlier, most industry players and the government were expecting India's sugar production to be at least 30 million tons, 2 million tons more than last year.

Though production is expected to be lower on the year, it won't affect supply as the large carryover stocks from last year will be sufficient to meet any additional demand. STATE WISE SPREAD: Sugar cane is grown in India, in 15 out of 23 states and in 2 out of the 9 union territories. Utter Pradesh tops the list with 93 factories and 17 lakh hectors under sugar cane. Maharashtra ranks next with 78 factories and 31 lakh hectors under sugar cane. Andhra Pradesh ranks 3rd in respect of number of factories but 5th in respect of area under sugar cane. A note worthy future of the original spread is, while the northern and eastern states viz. Assam, Bihar, Haryana, Punjab, Rajasthan, Utter Pradesh and West Bengal together ed for 68% of the area sugar cane in the country, their share in the number of factories was 43%. The central and Southern states which ed for 32% of the area had 57% of the factories.

14

PROBLEMS: The worst handicap crippling the industry is the low level of productivity. This is attributing to in adequate irrigation facilities, untimely supply of quality seed etc.. One factory, which is of a crucial important to the growth of sugar industry in the yield of sugar cane acre. Percentage recovery of sucrose is the second factory. Which determines the production in India, both the yield of sugar cane per acre percentage recovery of sucrose is low. Competition: Manufacture of sugar consumes 33% of the sugar cane production, while the Khandsari and guru producers consume about 55% and 12% goes for chewing and seeding purpose. There are about 8000 Khandsari producers is a real cause of worry to the sugar manufacture because they procure more can by paying prices and making prompt payment. Under the plea that recovery of Khandsari is lower than that of sugar, a section of the sugar industry demand some restrictions on Khandsari producers. But rural masses that khandsari producers ensure utilization of usage cane where setting up a sugar factory is not feasible. The sugar industry will have to live with competition of Khandsari producers. Sugar Machinery: At present there are 27 units in India to manufacture sugar plant and components thereof. The industry is in a position of manufacture and supplies 21 complete sugar plants per annum. The existing installed capacity has been estimated at 57.05 c per annum. NEW SUGAR POLICY: The policy envisages an additional 30 lakh tones capacity in areas specified as industrially backward. Licensing of new sugar factories in the co-operative and public sectors would be allowed with an initial capacity of 1750 tones cane per day. But this would be subjected to the condition that is would expanded to 2500 tones crush capacity per day within 5 years of going into production. The policy the distance criterion 25km with could be 15km is special bases where cane availability justified it.

15

According to the 1991 policy all new licenses would be kept in view. Licenses for down stairs would also be readily given. Priority would be given to proposals for new units from the co-operative operations; priority would be given to the one received carrier. The government taking not of the problem of the industry has agreed and announced that buffer stocks of 5 lakh tones should be created. It has been decided to rise statutory minimum price for cane to Rs.20/- a quintal for the current season and Rs.32.50/- a quintal for the 1993-1994 season. With a view to improving profitability of operations. It has been decided that the quota for free sugar would be raised ta a 60% from 55% and that for level of sugar reduced to 40% from 45%. The issue price for levy sugar has been increased by Rs.140/- a K.G. With a view to facilitating. The fixation of higher retention prices for levy sugar to offset an increase in cot of cane and conversion charges. Also with the higher price for level sugary, the government will not be incurring any subsidy on its sale. SUGAR INDUSTRY IN INDIAN ECONOMY The sugar industry is the second largest agro based processing industry in India, having certain unique feature perishable raw material namely sugar cane. The buy products of the industry have open up fresh areas of enterprise in diverse dissections. Molasses is an important buy product apart from meeting the fuel requirements of the industry, offers the potential to generate additional power of supply to the grid. Further if offers tremendous potential to make the country step sufficient in its requirements of paper and new print. There is now 4/6 sugar factories, 200 in the co-operative sector. The annual production of these units is around 95,00,000 tones. The 6 decades old history of the industry has however, been characterized by cyclical fluctuations in product due to a lakh of coherence the pricing policies for cane and sugar. Sugar industry holds the pride of place as an instrument of rural reconstruction and development. The extension of sugar cultivation and setting up new sugar factories since independence have greatly contributed to the social economic development of some rural tracts in the country with an investment of about Rs.1500 crore, the sugar industry provides employment to nearly 3.61 lakh workers about 35 million formers are engaged in cane cultivation in India.

16

Development: In the beginning there was no progress in the sugar industry protection was granted to this industry since 1923. Since then the industry is making worthwhile progress. Efforts to establish a modern sugar industry however data back only to the beginning of the present century. Little head way would made in the earlier years, as the varieties of the cane grown did not posses good milling qualities and the yield per acre was low on of which is cost or production of sugar was high. Sugar cane is grown nearly small parts of India. Sugar cane growing areas in the country may be broadly divided into two typical belts, the sub-tropical and tropical. The sub tropical part mainly comprises Bihar, Madhya Pradesh, Gujarat, Andhra Pradesh, Tamilnadu, Karnataka and Kerala. The 2 belts are characterized by market in differences in climate and agricultural conditions. The subtropical area is a flat, plain soil which elevation between 300 and 900 feet above the sea level. Cane here is grown under the extreme climate. Irrigation facilities are not adequate. But cane survives in the dry season because of the sub soil moisture. In the tropical areas sugar cane is grown in the delta areas of the east coast and at irrigated plains of Deccan plateau etc., the climate and soil difference between the tropical and subtropical areas have their effect not only the average output turn of cane per acre. But also on the quality of the per acre but also on the quality of the cane protection have the desired fill up within about 2 years after their grant of protection, the number of factories have rise from 29-111 and production from 1.21 lakh tones to 4.61 lakh tones. At the end of world war two there were 136 sugar factories and their products 9.57 lakh tones. There after no further noticeable development took till the beginning of the following year. In 1950-1951 through the number of factories renamed at 139; production of sugar went up to 11.34 lakh tones. More than half of these factories were located in the sub-tropical belt of Utter Pradesh and Bihar. The progress of the industry during the 5 years this has been phenomenal. The numbers of factories were up to from 139 in 1950-51 to 110 lakh tones 1978-88 and production from lakh tones to 91.91 lakh tones in 1987-88. For 1988-89 the output estimated to be higher at 102 lakh tones, representing an increase pf more than 10 lakh tones, representing an increase of more than 10 lakh tones last year.

17

SUGAR INDUSTRY IN ANDHRA PRADESH In AP there are 34 sugar factories of which are under co-operative sector, 8 are under private sector. Sugar Industry continuous to play a dominant role in the economy of the state as sugar cane in one of the important commercial crops. The installed capacity of the sugar factories in the state is 54000 tonnes of cane crushing per day (T.C.D). this include the capacity of 23000 T.C.D in 18 cooperative mills 10700 T.C.D in public sector units and 20250 T.C.D in 7 private units. During the 1993-94 season the sugar factory state crushing 56 lakh tones of sugar cane with an average recovery of 9.34%. About 5.28 lakh tones sugar was produced by these factories. The co-operative sugar mills also crushed 25.07 lakh tones oh sugar cane and produced 2.22 lakh tones. AP occupies 4th place in respect of sugar cane growing. This is one of the largest growing sugar cane in the country sugar cane is cultivated in the district of Srikakulam, Vishakhapatnam, East Godavari, West Godavari, Nizamabad, Medak, Chittore and Guntur. The biggest in Asia 3 more units were setup under the same management. These three units used to pay more remunerative price to can growers of when compared to others because of those remunerative price, formers had restored too much plan under cultivation and this was 2, 40,000 acre against its previous year acre of 3,79,000. In our country a total land on the sugar cane on 5th belong to AP and this occupies 9th place in the country. Average cane yield per acre in India is 20 tones and in AP is 30 tones. The crossing capacity of all the AP is 30 tones. The crushing capacity of all the sugar mills in the state is 57,00,000 tones. Private Mills could utilized 70% of the crushing capacity where as the other mills could just manage. SWOT Analysis of the Sugar Industry: Strengths: 

Indian sugar industry is the second largest producer of sugar in the world after Brazil. The sector has a potential to make the country to be self reliant in this highly sensitive essential commodity of mass consumption.

 

The sugar industry paid well over Rs. 122.69 billion to the sugarcane growers in the financial year 2006.



Annual tax contribution to exchequer Rs. 17 billion annually.



18

   



Provides direct employment including ancillary activities to near about 0.5 million workers



It also s the downstream industries by providing the raw material.



Sugarcane farming is more profitable than any other cash crop in India.



This sector have been the focal point of socioeconomic development of the rural India



Strong government policies as it come under essential commodity of mass consumption.

Weaknesses:





Capacity leads to the decrease in production and losses.



Lack of Most of the Co-operative sugar industries in India e. g. in Maharashtra find difficult to pay for the sugar cane supplied by the farmers.



Most of the sugar factories are more than 30 years old and still using the old technology low installed production professionalism



Opportunities:  



High value of by-products for downstream industries.



Huge potential to increase the productivity of cane and sugar recovery rate.



Technology up gradation, new advanced technology available for the byproduct utilization.

Threats: 



Sugar sector is vulnerable to political interest.



Ground water availability for irrigation.



Quality of soil deteriorates due to overuse of fertilizer and pesticides to increase sugarcane yield.



The union government announces every year a uniform sugarcane price (Statutory minimum price), on the basis of the recommendations of the commission agriculture cost and price (CA). The government announced the SMP which is linked to the sugar recovery of 9.00% fixed as a minimum level to be achieved by the sugar units. The actual price paid to sugarcane farmers is then fixed on the basis of the State Advised Price (SAP) announced by the state government which are usually higher than the SMP. The SMP and the SAP guide the sugarcane prices in the market.

19

Under the dual pricing system levy sugar and free sale sugar priced differently. The levy price which is defined by the essential commodities act is equal to or lowers than the cost of production. The cost of production determine by the bureau of the industrial costs and prices. Levy prices are fixed by the government of India on the advice of the BI. At present, the quota is fixed at a ratio of 20:80 for levy and free sugar which means that 20% of the production will be procured from the sugar factories at a fixed levy prices and factories will be free to sell 80% at the market price and to compensate the loss that they have incurred on the levy quota. However, the central government indirectly It controls the free sale sugar prices through sugar releases each month. The price of sugar in the market has always been a sensitive political issue. Whenever sugar is in short supply, the government of India imposed conditions on sugar units to protect the interests of the common man. Profitability in the sugar industry is dependent on the sugarcane price paid by companies and sugar prices and the state imposed dual pricing system. The government‟s sugar policy was announced in November 1991, retained. The minimum economic capacity 2500tones of cane crushed per day for issuing of fresh licenses. The government has no proposal for new units from the co-operative and public sector. The government has permitted existing mills to raise their capacity. Export of Sugar: India‟s first started exporting of sugar from the year 1957. Since 1990-91 the quantitative that were exported steadily raise. Whenever food there has been higher sugar production, efforts were made by the industry to more export quota sanction from the international sugar organization. The government policy is to encourage exports from agro-based industries and the time has come to fix a minimum export quota for sugar every year, so that permanent buyer-seller relations could be established and also better prices released. Industry sources feel that, at least a minimum Quota of 1 million tons for the export of the sugar could be released in the beginning of every season, so that export commitment would be entered into an appropriate time.

20

According to food industry sources, at a present the two major buyers in the international market are Pakistan which needs 3 lakh tones, and Bangladesh which needs 1 lakh tones. As India now cannot fulfill its s Thailand and Brazil will grab the opportunity. As the industry made contracts based on the government‟s decisions, India has become a logging stock among the international community because of its apathetic attitude towards exports. In 1995 export of 4.34 lakh tones of sugar i.e. value Rs. 597.34 crores. Now in 2008-09 export sugar quantity is 33.32 lakh tones i.e. value of Rs. 4448.74 crores. SUGAR PRODUCTION IN EAST GODAVARI Before going to know the history and date of Nava Bharat Ventures Limited Sugar Division, It is essential to know the development of East Godavari District, AP and the helpful for their development. The district is situated in the fertile deltas of the river Godavari which is supposed to be the biggest rivers in South India. The main occupation of the people is agriculture as there are number of fertile lands. As an effect of this the district is economically forward and the population too is economically richer when compared with the people of the other districts in AP state. The people of the area are very much interested in the cultivation. The land as it as go favorable conditions for its development. As this is situation the minds of the people were dragged to industrial field which was filled with difficulties during British regime. Since the drawn of India independence industrialization was started as a large scale throughout the country. The minds of some petty land lords and Jamindars were drawn towards industries. As the district of the East Godavari is surrounded by a fertile land of the deltas of river Godavari which give rice to commercial crops like sugar cane.

21

CHAPTER-3 COMPANY PROFILE

22

COMPANY PROFILE SUGAR DIVISION: History of the company: Samalkot sugar factory was established in the year 1898 as a Gur refinery and a distillery unit was added in 1902.The Sugar unit was converted into cane sugar manufacture in the year 1943-44 and gradually expanded to 1500 t.c.d crushing capacity in 1997-78. The distillery unit was originally of 700 g.p.d capacity and was supplying barrack for a vast area in the Madras presidency before the introduction of prohibition in 1947. After the introduction of prohibition, the only outlet for alcohol and for industrial use and the distillery unit could hardly work for 10 days in a month. Due to the uneconomic size and frequent closure for want of off take. Severe losses were sustained on of this unit. With a view to make it viable and as more and more industrial units based on alcohol as raw material were coming up, modernization and increase in capacity to 7000 l.p.d was taken up in the year 1974. Also prohibition was lifted in the year 1969 and the Government of Andhra Pradesh took up issue of arrack for potable use from the distilleries. The Samalkot Sugar factory was granted license for expansion to crush 1500 l.c.d as early as 1971. The expansion to the licensed capacity was carried in stages during 1975 to 1977. Unfortunately, successive cyclones and severe drought conditions that prevailed in the coastal areas of Andhra Pradesh during the years 1976 and 1977 affected the cane cultivation to a great extent. The incidence of scare infection further aggravated the situation, resulting in cane growers switching over the other crops. Consequent to the above, the plant utilization capacity was as low as 50% only. Added to the above, the Government of India also changed the methodology of fixing the levy sugar price. The Government took into only statutory cane price paid for computation of levy price and also fixed the levy price taking into assumed free share sugar price. Due to the above losses, the financial position of the company became very bad, resulting in acute liquidity problems. The company approached ICICI, the lead institution which had extended term loan for expansion, of rehabilitation finance. At this time, M/s. Nava Bharat Ferro Alloys Ltd., NBFA, a Hyderabad – based company examined the overall position of this company both in of technical and financial viability and submitted a revival policy

23

program to ICICI. ICICI, NBFA and this company entered into a Memorandum of Understanding (MOU) by which NBFA provided this company a sum of Rs.100 lakes initially to modernize the plant and machinery and to meet a part of its cash losses. NBFA, after took over of the control of the company. Modernized the sugar factory and increased the capacity of the distillery from 7,000 LPD to 20,000 LPD. The irrigation facility in upland area was improved by providing bore well vans to the growers and the area under cane has been increased to roughly 10,000 acres at present with adequate supply of cane and efficient operation of the sugar unit and distillery the Samalkot sugar complex has become a viable unit today. Regularly by improving the efficiencies of the equipments by modifying the equipments wherever necessary, the company could improve the crushing capacity by 100 % and also because of this increase in capacity company could crush 425,261 tones during the season 19911992.and 2009-2010 crushing QT in lakhs 2059955.820 VALUE in lakhs 490039016058 and turnover in lakh 8600744041555.and crushing QT in lakhs 3078010 and VALUE in lakhs 71008219000 and turnover in lakhs 880091010762.and 2011-2012 crushing QT in lakhs 405097514 and value 80076012276.60 and turnover in lakhs129006110920. Company expected to crush 4 lakh tones of cane during the next season company could also improve the recovery % cane by advancing the planning the earlier marks of December, January and February and also encouraging the growers to plant Sugar rich varieties. Organization Review:

24

AWARDS OF NAVABHARAT VENTURES LTD: Excellence in performance is a goal pursued constantly by our Company. The Company is honored with the following awards and rankings in 2009 - 2010 for excellence in maintaining Industrial Relations, Labour Welfare & Productivity; Net Sales; Energy Management; Value Creation; Innovation, Cost Optimization & Intelligent Marketing; Exports and Rural Development. •

CII Environmental best Practice Award 2012 for Most Innovative Environmental project

(Ferro Alloy plant, Paloncha received this award).from Confederation of Indian industry. •

5-s Excellence Award 2011(sugar division received this Award) from confederation of

Indian Industry(south region). •

National Award for excellence in Water Management as Water Efficient Unit (power plant

at Kharag Prasad received this Award) from confederation of Indian industry. •

National Award for Excellence in Energy Management as Energy Efficient Unit (power

plant Paloncha received this award) from confederation of Indian industry. •

National Award for Excellence in Energy Management as Excellent Energy Efficient Unit

(sugar division received this Award the 5th consecutive year) from confederation of Indian industry.

25

•

Prakruti Mitra Puraskar for being Excellent in the field of conservation of Nature and

Protection of Environment in the Block level, village/Organization from Forest and Environment Department, Government of Odisha. BEST MANAGEMENT AWARDS •

Outstanding contribution in maintenance of Industrial Relations, Labor Welfare &

Productivity from Department of Labor, Govt. of Andhra Pradesh •

Super Rank 20 and Rank 297 among 1000 Corporate Giants in India

•

Net Sales from Business Standard magazine

•

National Award for Excellence in Energy Management

•

Excellent Energy Efficient Unit from Confederation of Indian Industry

•

Best Value Creator Award in the Small Cap Category

•

Continuous increase in profitability and high growth resulting in spurt in the equity share

price on the Stock Exchanges from Outlook Money NDTV Profit •

Sixth Rank among Top 500 Indian Manufacturing Companies

•

Innovative thinking, cost optimization strategies, intelligent marketing, quality products

and services and hard work. From INDUSTRY 2.0 Magazine •

State Award for Energy Conservation (1st position) under Iron & Steel Sector

•

From Non-Conventional Energy Development Corporation of A.P. Limited

•

Silver Trophy for Outstanding export performance

•

From The Federation of Andhra Pradesh Chambers of Commerce & Industry, Hyderabad

•

Silver Trophy for Excellence in Rural Development

•

Multifarious rural development activities from The Federation of Andhra Pradesh Chambers

of Commerce& Industry, Hyderabad •

6th Best Performer in the Top 10 on BSE 500 Index in the decade

26

•

Stock price in 2009 was 103 times the price in early

•

Silver Trophy- Top Exporter as Large Enterprise from EEPC India

Highlights of Achievements: •

The Company‟s Sugar Plant is one of the most energy efficient sugar plants,

operating with an electrical energy consumption of 23 kWh per tonne of cane crushed and 31% steam consumption on cane. •

Zero discharge of effluents achieved by installation of a reverse osmosis plant and spent wash

evaporation plant and 100% utilization of the product received from the evaporation plant for composting filter cake and producing organic manure. PRODUCTS OF THE COMPANY: This company‟s main product is sugar and the substitute product is molasses from which Spirit, ENA and Co2 (carbon dioxide) are obtained. The main product sugar proceed (yield) by the company is basically of two types. 1.

Levy Sugar

2.

Free Sugar

These two types of sugars produced by the company differ in prices, one decided by the company and the other decided by the Government. The essential substitute product by the company is the molasses which intern yields two other products i.e. Spirit and Co2 (carbon dioxide). The spirit from the molasses is of three types. 1. Rectified spirit 2. Denatured spirit 3. Extra Neutral Alcohol Rectified spirit is used for the production of alcohol, and denatured spirit is used by doctors in Medical surgeries. The other products carbon dioxide (Co2) molasses is used for cooling purpose and also used for making sodas. Extra Neutral Alcohol is used for manufacturing of Brava rages for market use.

27

THE SUGAR FACTORY AND ITS PRODUCTS: The factory started with a spirit of co-operation with a concept of “each for all and all for each” selfhelp& mutual help. The factory main product is sugar and it‟s by products are molasses, Spirit, ENA and Co2. SUGAR: Sugar is the essential consumer product which starts our daily life with a cup of tea, milk or coffee. Every family is consuming the sugar widely; its consumption is same as other consumer‟s commodities like salt, rice, dal etc. Even the small families consume on an average 120 grams of sugar per day. So we can imagine the importance of sugar in our daily life. Sugar also included in public distribution system by our Central & State Government to control rate as well as other indiscriminately practices of market people. MOLASSES: Molasses is a byproduct of the sugar industry. Which is widely used in distilleries, chocolate industry and cattle feed using plants. SPIRIT: Spirit derived from molasses is two types. 1.

Rectified spirit

2.

Denatured Spirit

3.

Extra Neutral Alcohol (ENA)

Rectified Spirit is used for the production of alcohol, and denature spirit is used by doctor‟s for medical purpose.CO2: Carbon dioxide yield by the molasses is used for cooling purpose and also used for making sodas ENA: ENA is used for the production of Brava rages for market.

28

ORGANIZATION & STAFF OF THE DECCAN SUGARS: The Sugar Factory has a democratically elected body to organize the factory activities, marketing and welfare activities. The body elected by the shareholders or the of general body who are the suppliers of sugar cane. The body is headed by a chairperson with a Board of Directors. The Managing Director / General Manager and his staff Chef Engineer – in-charge of plant, Chief Manager (Agricultural) officer-in-charge of sugar cane development and chief chemist-in-charge of processing and quality control, are responsible for day to day activities of the sugar factory. The remaining staff working is shown in the organizational chart. PROCESS AND QUALITY SYSTEM: The quality system of the sugar factory takes place in various stages; mainly the factory is producing three types of sugar as per the Indian sugar standards 1994-95 specified by National Sugar Institute, Kanpur. The types of sugar large grain (L), Small grain (S), medium grain (M). The quality system chart is indicating the various stages of its products and by products.

ENVIRONMENTAL INFLUENCE: Due to the new industrial policy the new sugar factories are coming into the picture which retain free village also in the area of operations of the factory. So it will affect sugarcane supply to the factory to expanded capacity. The jiggery market is nearer to the factory so that it may also effect for inadequate supply of sugarcane. Sugar manufacturing process: •

Procurement of Sugarcane from the ed areas through Zonal Offices.

•

Weighment of Sugarcane in the Weigh Bridge.

•

Feeding of sugarcane in the Cane Carrier.

•

Preparation of Sugarcane into fine fibers through leveler units.

•

Feeding of prepared Sugarcane into the mills.

•

Extraction of 72% of Juice from the prepared Sugarcane in the first mill.

29

•

Juice Imbibitions to extract maximum juice in the remaining Fibers.

•

Juice is taken for boiling purpose.

•

Excess bagasse is sold.

•

The Juice extracted from the Mills is measured.

•

Treating of Juice in the Juice heaters.

•

Addition of liquid lime and sulphur-dioxide in juice Sulphitor.

•

Separation of Clear Juice and muddy juice in the clarifier.

•

Clear Juice is sent for evaporation in the semi-kestners and Evaporators. Extraction

of juice from muddy residue through Vacuum Filters. •

The extraction juice is reduced into Syrup after evaporation of water particles. Addition of Sulphur di-oxide to the syrup in order to improve the color of the sugar.

•

Syrup is sent to pans for massecuite boiling.

•

Production of massecuites by adding of various types of molasses & syrup.

•

Preparation of A, B & C massecuite.

•

A massecuite is improved from B massecuite.

•

B massecuite is improved from C massecuite.

•

Separation of C massecuite into C Seed and Final Molasses in the centrifugals.

•

Separation of B massecuite into B heavy and B Seed in the centrifugals.

•

Separation of A massecuite into Whiter Crystal sugar and a heavy and a light in the Centrifugals.

•

The White crystal sugar is dried in the Sugar Hoppers.

30

Board of Directors Mr. D. Ashok

Chairman

Mr. P. Trivikrama Prasad

Managing Director

Mr. C.V. Durga Prasad

Director (Business Development)

Mr.G.R.K.Prasad

Director (Finance & Corporate Affairs)

Dr. E.R.C. Shaker Dr. M.V.G. Rao Mr. K. BalaramaReddi Dr. D. NageswaraRao Mr. S.V. Satyanarayana IDBI Nominee Mr. M. Subrahmanyam

Company Secretary and Vice President

Auditors

ed Office

Mr.Brahmayya& Co. Chartered ants

„Nava Bharat Chambers‟

Flat No. 403, Golden Green Apartments IrrumManzil Colony, Somajiguda Hyderabad - 500 082 Cost Auditors Works Messrs.Narasimha Murthy & C o.

Ferro Alloy Division

Power Division

Cost ants

Ferro Alloy Plant (A.P.)

Power Plant (A.P.)

104, Pavani Estates

P loncha –507 154

Paloncha –507 154

3-6-365, Himayat Nagar

Khammam District

Khammam District

Hyderabad - 500 029

Andhra Pradesh

Andhra Pradesh

31

Registrars& Share Transfer Agents Sugar Division Machine Building Division Messrs.Karvy Computershare Private Limited

Samalkot – 533 440

Nacharam

Plot No. 17 to 24, Near Image Hospital

East Godavari District

Hyderabad - 500

076 Vittalrao Nagar, Madhapur,

Andhra Pradesh

32

Andhra Pradesh

CHAPTER-4 THEORETICAL FRAMEWORK

33

THEORETICAL FRAMEWORK INTRODUCTION: All business large and small, have some way of keeping track of their finances. Business is constantly looking for more ways to keep expenses low. One factor that is often overlooked, however, it is cost of employee turnover. High employee turnover can cost a company more than they might realize in the long run. This report explains some causes of high employee turnover, who it affects the most common and aware companies can decrease employee turnover in order to cut hidden cost. Employee turnover occurs voluntarily leave their jobs and must be replaced. Turnover is expressed as an annual percentage of the total workforce. Turnover should not be confused with layoffs, which involve the termination of employees at the employer‟s discretion in response to business conditions such as reduced sales or a merger with another company. The severity of turnover varies widely by type of business and the economic health of the region where the companies are located. Innovative high-tech companies and the most successful manufactures frequently experience low turnover rates while fast-food restaurant managers expect turnover to be as high as 50 to 75 percent. Employee turnover is technically and mathematically as – the ratio of the number of workers that had to be replaced in a given time period the average number of workers. Put simply, it is an instance when an employee leaves their position at their work place and needs to be replaced. Employee turnover is a ratio comparison of the number of employees a company must replace in a given time period to the average number of total employees. A huge concern to most companies, employee turnover is a costly expense especially in lower, paying job roles, for which the employee turnover s highest. Many factors play a role in the employee turnover rate of any company, and these can stem from both the employers and the employees. Wages, benefits, employee attendance and job performance are all factors that play a role of employee turnover. In a human resources, turnover on labour is the rare at which an employer gains and losses employees. Simple ways to describe it or “how long employees tend to stay” or “the rate of traffic through the revolving door”. Turnover is measured for individual companies and for their industry as a whole. If an employer is said to have a high turnover relative to its competitors, it means that employees of that company have a shorter average tenure than those of other companies in the same industry. High turnover can be harmful to a company‟s productivity if skilled workers are often leaving and 34

the worker population contains a high percentage of novice workers.

Employees who are not satisfied with their career in the present organization may see suitable employment in other organizations. Similarly, organizations may also prefer candidates from external sources, if the internal candidates are not found suitable. This situation in career development of both the individuals and the organization result in external mobility or employee turnover. External mobility is also known as „external career‟ or employee turnover. External mobility means shifting of employees into and out of an organization it is defined as the rate of change in the employees of an organization during a definite period. It measures the extent to which old employees leave and new employees enter into an organization. Definition: 1. Employee turnover is defined as the rate of change in the working personnel of an organization during a specified period. It signifies the extent to which old employees leave and new employees enter in to service in a given period. 2. In human resource , employee turnover is a measurement of how long your employees stay with your company and how often you have to replace them. Anytime an employee leaves your company for any reason, they are called a turnover or separation. Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees. Measuring employee turnover can be helpful to employees that want to examine reasons for turnover or estimate the cost to hire. TYPES OF TURNOVER: There are four types of employee turnover 

Voluntary turnover: A turnover is initiated by employee. When employee choice or intended to leave the organization. There are several possible causes a) Re location b) Starting a family c) Taking care of an elderly relative d) General job dis satisfaction such as low pay, lack of benefits, poor management.



In voluntary turnover: 35

When employee has no choice in the termination process. It can result from different situation like dismissal retirement, physical, disability, relocation..,etc. It could be because the company is trying to cut costs or the employee has violated company policy.

 



Functional turnover:A turnover in which poor performers leave is called as functional turnover



Dysfunctional turnover: A turnover in which good performance leave is called as dysfunctional turnover.

 



A turnover that happens in avoidable circumstances is called as avoidable turnover.

 

Avoidable turnover:



Unavoidable turnover: A turnover that happens in unavoidable circumstances is called as unavoidable turnover .for eg. Employee‟s death or spouse‟s relocation.

 



Internal turnover: It involves employees leaving their current position and taking a new position with the same organization. Internal turnover might be moderated and controlled by typical HR mechanism such as an internal recruitment policy or formal succession planning.

Mostly it is said that employee turnover is not good for the organization. But employers should that turnover is not that bad either. What is required is an optimum mix of turnover, not too high-not low. An optimum mix of employee turnover can help in many ways

36

A little rate of employee turnover may result into: 1. Bringing in new ideas and skills from new hires. 2. Better employee-job matches. 3. More staffing flexibility. 4. Facilitate change and innovation. High rate of turnover may lead to decrease in: 1. Productivity 2. Service delivery 3. Spread of organizational Knowledge Measurement of Employee Turnover Quantitatively, employee turnover can be measured in different ways. These are accession. Separation method, combined method, and replacement method. Accession Method: In this method, employee turnover is expressed in the form of relationship between total number of employees acquired during a year and the average number of employees during the year. This relationship is expressed in the following form: Turnover rate = Total number of employees acquired/Average number of employees during the year *100 Separation Method: In this method, employee turnover is measured in of number of employees separated from the organization and the average number of employees employed during a year and is expressed is follows. Turnover rate =Total separation during the year/Average number of employees*100 This method gives better idea about the employee turnover which can be used for deg retention strategy.

37

Combined Method: This method is a combination of accession and separation methods. The basic idea behind combining both methods is to ascertain the exact mobility of employees eliminating seasonal and cyclical impact on employee mobility. For example, during prosperity, her may be more acquisitions and lesser separations while in depression, the reverse may be ture.This method calculates employee turnover as follows Turnover rate =(Accessions +separations)/2/Average number of employees*100 Replacement Method: In this method, net amount of employee mobility is taken into consideration which is obtained by difference between total number of employees acquired and total number of employees separated and is expressed as follows Turnover rate = Total accessions-total separations/Average number of employees*100 The above methods express employee turnover in quantities form and a high turnover is considered as bad for the organization. However, in today‟s context, it is not merely the number of employee turnover that is relevant but the quality of personnel who leave the organization is a matter of concern. Such personnel may be in managerial or technical cadre whose replacement is quite a costly affair. Therefore, organizations have to take care of this qualitative aspect too while measuring employee turnover. Similarly the rates can be computed separately for different types of separations likes voluntary quit or lay-off. The difference between accession rate and separation rates indicates the strength of employees and the need for fresh employment. Measures to reduce the rate of Turnover 1. Benefits Offering employees an affordable medical, dental, and vision package in this day and age is a great way to keep employees happy. Healthy employees are happy employees, and being able to provide affordable health care for their spouses and families as well is something every company should offer.

38

2. An added bonus could be vacation time, sick leave. On-site child care would be extremely helpful for parents who have to work long or late hours especially single parents. 3. Higher Pay Giving employees regular raises and paying well over minimum wage would be an incentive from them to stay. 4. A set schedule In food service and retail, and most service industries as well as health care, employees are forced to work six or more even up to ten days in row without a day off. Days off may even be split up, so the employees never really get a chance to rest. Giving them the opportunity to choose which days off they want, or at least giving them two in a row and not working them more than five, would be extremely beneficial in employee retention. This would also increase productivity and would be beneficial to be the company. 5.Job variation Employees get burned out on performing the same job every hour of every day, day in and day out for years, even months. Cross training should be done, especially in food service and retail, in order to avoid burnout. 6. A positive attitude from superiors Most employees don‟t like negativity from their superiors. Instead of always being told what they‟re doing wrong, they need positive reinforcement as well as constructive criticism. Managers and supervisors should always have a positive attitude toward their employees and never insult, criticize, or berate them. Causes of employee turnover: In order to know the cause of excessive employee turnover, the causes of dysfunctional and avoidable turnover should be known. Few reasons for dysfunctional turnover may be





Compensation package difference



Job and employee skill mismatch: the job may be less or more satisfying and challenging according to the employee.



Inferior facilities, tools, etc



39

   



Less recognition



Less growth opportunities



Poor training



Poor supervision



Less work and life balance

practices Factors of employee Turnover Employee-related Factors: Employee-related factors responsible for turnover are of the following     



.Job hopping tendency among individuals particularly at the initial stage of the career.



Too much ambition among individuals leading to a state of never being satisfied.



Dissatisfaction from the present job and the organization



Better career opportunities particulars in new economy sectors.



Tendency of home sickness.



Tendency to start own

business. Organization-related Factors: Besides the individual factors, there are many organizational factors which are not conducive resulting in to high employee turnover. 

Incongruent organizational culture resulting into conflict between the individuals and the organization.



Faulty human resource police and practices particular related to compensation, promotion, and training and development.



Poor leadership and supervision.



Poor working conditions.



Unrealistic job preview raising high expectations.

   

There are some other factors that contribute to employee turnover to explore some of these factors in more detail below: 1. The economy: in exit interviews one of the most common reasons given for leaving is the availability of higher paying jobs. Some minimum wage workers report leaving one job for another that pays only 50 cents an hour more. Obviously, in a better economy the 40

availability of alternative jobs play a role in turnover, but this tends to be overstated in exit interviews. 2. The preference of the organization: An organization perceived to be economic difficulty will also raise the spectre of impending layoffs. Workers believe that it is rational to seek other employment 3.The organizational culture: much has been written about organizational culture it is sufficient to note here that the reward system, the strength of leadership, the ability of the organizations to elicit a sense of commitment on other part of workers, and its development of a sense of shared goals, among other factors will influence such indices of job satisfaction as turnover intentions and turnover rate. 4.The characteristics of the job: some jobs are intrinsically more attractive than others. A job‟s attractiveness will be affected by many characteristics, including its repetitiveness, challenge, danger, perceived importance and capacity to elicit a sense of accomplishment. A job‟s status is also important as are many other factors 5. Unrealistic expectations: Another factor is the unrealistic expectation and general lack of knowledge that many job applicants has about the job at the time that they receive an offer. 6. Demographics: Empirical studies have demonstrated that turnover is associated in particular situation with demographic and biographical characteristics of workers. 7.The person: The individual that can influence turnover rates. These include both personal and trait-based factors. Personal factors include things such as changes in family situation, a desire to learn a new skill or trade or an unsolicited job offer. 8. Lack of opportunity for advancement: If the job is basically a dead-end proposition, this should be explained before hiring so as not to mislead the employee. The job should be described precisely, without raising false hopes for growth and advancement in the position. 9. Inadequate: Employees need guidance and direction. New employees may need extra help in learning an unfamiliar job. Similarly, the absence of a training program may cause workers to fall behind in their level of performance and feel that their abilities are lacking.

41

10. Substandard wages structures: In equity in pay structures or low pay is great causes of dissatisfaction and can drive some employees to quite. Again, a new worker may wonder why the person next to him is receiving a higher wages for what is perceived to be the same work. Effects of employee Turnover: High employee turnover is a costly affair for both employees as well as organization. It indicates that there is something wrong in the organization and unless this is corrected, the organization cannot flourish. In the same way, unless an employee sticks to an organization for a fairly long time, he cannot make significant contributions. Thus, organization and employees both suffer because of high turnover. Cost to organization: High employee turnover is a huge cost to an organization. For example, rain Friedman, an HR consultant, views that “what is the cost of replacing, say a middle ranking executive in your organization? It is not just the cost of replacing the person, or paying a higher salary. We have found that the transactional cost of replacing a person is about 1.5 to 2 times the current salary paid in that position. Companies tend not to factors .An organization has to bear the following types of cost because of high employee turnover.    



Hiring cost involved in recruitment, selection, and placement of new employees.



Cost of production in the intervening period in which the position remains vacant.



Socialization cost of new employees.



Adverse impact on the existing employees „morale.



Loss of prestige of the organization in human resource market and other relevant environmental factors.



Disturbed teamwork and team spirit in the



organization Cost to Employees High employee turnover is costly to employees too which is in the following forms.

42



Frequent job changes resulting into loss of long-term benefits like provident fund, pension, gratuity, etc., to employees.



Socialization process with the new work environment resulting into lower productivity.



Frequent dislocations affecting personal and family life adversely.



Loss of employee‟s creditability because of frequent job changes

  

REDUCING TURNOVER Let us explore some ideas to reduce employee turnover





Hire the best candidate.



Welcome new employees. Customize your induction program for new employees according to the requirements. Same inductions program cannot be applied to all the candidates. Make them feel welcomed.

  



Produce quality managers who can really manage employees well.



Provide employees with work schedules that are flexible enough to suit their needs.



Don‟t be too demanding. You are hiring human beings who have their own life and family commitments. Respect them.



Provide career counseling and development.



Discuss your future plans regarding the candidate with the candidate. Let them know that the management is interested in retaining them and cares for them‟



Take proper from employees regarding their grievances.



your ex-employees. They can be of help in future. It is also a part of retention.

   

TRUTHS ABOUT EMPLOYEE TURNOVER It is difficult to accept when organization say they have zero attrition rates. Companies may have healthier turnover rates, however, there is no such thing as zero attrition There are other such facts about turnover, about which most of us are not aware. Some of such fact shave have been highlighted below: 

Turnover always happens:

Companies who believe in zero attrition rates only fool themselves. This happens because employees keep on moving due to reasons like marriage r further education. Nothing can top these employees from moving on so, rather than achieving zero attrition companies should focus on identifying whom they want to keep so that they healthy attrition rate. 43



Some Turnover is Desirable:

Zero attrition is not desirable mainly because of two reasons. Firstly, if all employees continue to stay in the same organization, most of them will be at top of their pay scale which will result in excessive manpower costs. Secondly, new employees bring new ideas, approaches, abilities & attitude which can keep the organization from becoming stagnant. 



Turnover includes costs: Turnover always includes some costs. Consider the costs of replacing the key employee who falls in to the category of high performers. This includes the costs of recruitment ment, referral bonuses,



Selection testing, training costs, etc. Moreover, turnover result in loss of time and efforts, low productivity, loss of morale, loss of knowledge and so on.

 

High salary doesn‟t work: Most managers assume that a high salary package is enough to keep employees loyal to their organization. Employees may face other problems like low job satisfaction, low engagement levels, no recognition, poor working conditions, less from superiors and so on. Salaries are not always the solution to attrition. Managers should try to identify the roots of the problems and then find a feasible solution.





The manager can reduce attrition: Employee‟s perception of job satisfaction stem from the relationship they share with their immediate supervisor. Managers should try to their subordinates and give proper on performance.HR manager work in collaboration to make the Manager should take primary responsibility for retaining their employees. Much of the key employees last in their organization.

 



Reducing Turnover takes commitment: Reducing turnover takes an investment in coaching, developing, motivating, mentoring & listening to people. There should be universal acceptance of the goal of reducing turnover along with top management commitment and dedication.

44

Problems Related to Employee Turnover 

Increased Work load The loss of employees can result in increased work load to the other employees in the company. Employees suggest that the employee turnover in their company leads to increased work load.





Training and development Training and development in each of the company cost more as compared to the salary increment of the current employees. The new employees need training to do job effectively.

 



Low Morale Morale in high turnover firms is usually weak. Company culture is that the shared norms and value of a group of workers who work along. Motivating your workers to share the vision of your business and perform at high levels is tough once colleagues and colleagues are vanishing all around them. Workplace relationships are key to an employee‟s satisfaction with work.

 



Productivity High rates of employee turnover will causes lower employee productivity. Employee who have additional expertise at a definite company are additional aware of the company‟s policies, goals and the way meet their roles within the company.

 



Management Frustration Manager quickly gets frustrated with the constantly revolving of employees. The employees contributed to longer term employees getting upset and leaving. This takes away from his decision making and supervisory duties.

 



Customer Service High turnover will damage a business ability to retain clients and supply high quality customer‟s service. Customers might feel more comfortable talking to a similar staff and client services representative‟s overtime.

 



Poor Performance High turnover the basic the fundamental level of expertise across your organization is below it otherwise would be Workers with less information and less expertise in your business and with their jobs will not produce moreover as people who apprehend additional regarding what they are doing. During a production job, the efficiency of production is probably going lower.

45



Costs High prices are one of the additional mentioned negatives of high turnover. When a worker leaves and is replaced, there are prices related to the method of losing the primary worker and hiring and coaching the new one. It will value regarding half of an unskilled workers remuneration to switch as a lost worker‟s.

Control of Employee turnover Through a reasonable degree of employee turnover is desirable even for the organizations. High Level of turnover is detrimental. Therefore, most of the organizations make attempts to control high employee turnover. In order to control employee turnover attempts can be taken in two directionsholding exit interview to identify the reasons for turnover and developing retention strategy to retain employees in the organization. Exit interview Exit interview is held with an employee who is due to leave an organization. Its basic obj4ective is to identify the reasons for which the employee is leaving the organization and to take corrective actions to overcome those reasons. Because of high employee tur4nover, many companies have taken exit interview compulsory. In conducting exit interview an organization must take up the following issues – 1.

It must decide the person who will conduct exit interview. Generally, exit interview is

conducted either by HR personnel or direct superior of the employee concern. Sometimes, both persons conduct exit interview and their assessment is compared 2.

Another issue related to exit interview is the timing of conducting it .some companies prefer to

conduct it at the last day of the employees tenure while many others prefer to conduct it earlier as they find last day to be very hectic for the employee 3.

The third issue related to exit interview is its formal, that is whether it should be a structured

one and in depth or unstructured. Some companies have developed structured questionnaires which exiting employees are required to fill. Some companies prefer to use unstructured form as they feel that exiting employees tend to fill in reasons without much thinking, and it is only through in depth interviews through which reality can be known 4.

The last issue in exit interview is the analysis of result and to design action plans based on

such as analysis. 46

There are two major problems in exit interviews. First , many organizations do not take it seriously. Either they do not conduct exit interview at all or conduct it as a formality. With the result, they are not in o pposition to know the truth. Second exiting employees do not disclose all negative factors. Thus, the inadequacies of job are rarely highlighted. In order to solve both these problems. Organizations should take certain steps. These steps may be of the following. 1. Organization should realize that exit interviews are as important as selection interviews. Therefore, proper emphasis should be placed on exit interviews. 2. Like selection interviews, exit interviews should be conducted by specially ,qualified and skilled personnel. 3. An existing employee should not be treated as a foe of organization‟ HR policies and practices. Therefore, an exit interviews should be conducted in most conducive and cooperative way not in hostile way. This will increase the image of the organization in the mind of exiting employee which may be projected by him later. 4. At the end of the exit interviews, the interviewers should convey their good wishes to the exiting employee. This also helps in creating favorable image. Strategies to overcome employee turnover: 



Recognize accomplishments For some employees, acknowledgment of a job well done can mean almost as much as a pay increase. When employees do a good job, praise them in front of their peers.

 



Treat people fairly An employee, who perceives unfairness, is highly likely to resign. Do not discriminate against employees and treat them at all times.

 



Job Security If people feel secure within their role, they are less likely to feel the need to look elsewhere for employment. Security and stability are greatly valued by most employees.

 



Communicate Good communication is vital within any business. If communicate regularly with employees, they are more likely to feel like a true member of the team. Open

47

communicate channels such as consultative bodies, performance appraisals, attitude survey and grievance systems will give your staff the opportunity to raise any issues . 



Promote Engagement Keep employees engaged to prevent them from becoming bored and losing interest in their work. Seek their input to determine ways you can keep the job interesting and fresh and provide new challenges by creating special projects that make use f their particular skills and interests.

 



People Management Skills for Line Managers Ensure that all line managers are fully trained in people management and development skills. Re-training may be required for any line manager who has a high level of staff turnover.

 



Be Flexible If people are forced to work hours which do not suit them, they may well look for a job which fulfils their requirements, therefore, it may be needed to accommodate flexible working hours.

RETENTION STRATEGY In order to control excess employee turnover, organization should chalk out retention strategy and implement it. Retention strategy involves taking actions having both long-term and short-term impact in retaining desired employees. Research studies indicate that both high and low achievers have higher quit rates than average performers. While quitting by low performers may not have adverse impact on an organization, quitting by high performers is a matter of serious concern for the organization. Therefore, the organization has to adopt strategy to retain high performers. This is known as selective retention strategy that is retaining those who are needed and letting to go those who are not needed. An organization can take a number of measures to retain its employees. These measures may be package for long-term stay, retention bonus, intangible benefits, matching jobs and individuals, and employee relationship management .Some of this measure have financial implications while others are related to work environment. Package for Long –term stay An employee leaves the organization because he feels that his market value is more somewhere else. This feeling can be overcome by deg suitable long-term package for employees which may include stock option with provision of higher benefits for longer duration of stay in the organisation as discussed ,increasing financial incentives over the period o time, and increasing emphasis on deferred payment of financial incentives in the long run like superannuation allowance or long term stay bonus .The provision may be made that if employees leave earlier than stipulated time, they will forgo certain long term benefits. 48

Retention Bonus Retention bonus is a kind of ad hoc payment to essential employees to retain them in the organization The retention bonus, once compensation tool reserved largely for top executives , is increasingly being used to retain essential mid-level and rank and file employees. The measure of paying retention bonus is used when any change in an organization take place such as merger and acquisition or organization restructuring and employees tend to leave the organization because of such exchange. There are several issues involved in paying retention bonus. These are paying one lump sum or over several times ,paying on the basis of length of service or other measures , uniform payment to all employees or discriminate payment to them depending on some criteria , and basis of calculation of amount of retention bonus These issues can be solved by an organization taking its own needs and those of employees. Intangible Benefits Companies are offering many intangible benefits‟ to their employees for developing belongingness with the organization. Such intangible are in the form o developing training . Overseas employment in case f companies having branches in foreign countries, holiday trips for employees and their families, dinner meetings in posh hotels with employees and their families , meeting in posh hotel with employee and their families, etc. In fact, many companies, particularly MNCS operating in India use overseas training and employment as carrots to their employees. Matching jobs and Individual IN, fact many employees change their organization because mismatch between them and their jobs. Career planning, career development and promotion can take case of this problem. Many companies offer choice to their employees to switch from line function to staff function and vice versa from fast track project to slow track project, and soon . This flexibility helps in reducing monitory and job stress and the job satisfaction is high.

49

Employee Relationship management On the pattern of customer relationship management, the concept of employee relationship management has developed. While CRM is the external response to „why an organization does business. Employee relation management is internal response to „how‟ an organization does business Employee relationship management is wider set of functional that encomes learning performance and incentives guidance, workforce analysis, and host of others operational issues related to managing human resource. Researches show that changing jobs by employees is a painful decision with repercussions on a family‟s stability, spouse‟s career, and children education, social network in the present location and employment, and uncertainty in the next job. Unless te person feel quite strongly about issues such as equity, morale, relations with immediate superior and opportunities outside, he is unlikely to change jobs. Therefore, the employing organization should take care to develop employee relationship based on the above factors. Many software developers have developed human capital management solution in which employee relationship management is included as a capsule. HCM solution keeps track of employee satisfaction or dissatisfaction. If a key employees dissatisfaction level goes beyond a certain level at which he is likely to be attractive by a offer for job, HCL solutions brings into the organization in HR personally take a immediate step overcome this problem. Besides the above measures, an organization can use persuasion to retain key employees. If key employees can be brought in through persuasion, they can be retained through persuasion too. In persuasion skills of the chief executive or HR personnel are important. In fact, many progressive organizations rely on this method to retain key employees. MANAGING RETENTON The task of managing employees can be understand as a three stage process 1. Identify the cost of employee turnover 2. Understand why employee leave 3. Implement retention strategies

50

Identify the cost employee turnover: The organization should start with identifying the employee turnover rates within a particular time period and benchmark it with the competitor organizations. This will help in assessing the whether the retention rates are healthy in the company. Secondly, the cost of employee turnover can be calculated. According to a survey, on an average, attrition costs companies 18 month‟s salary for each manager or professional who leaves, and 6 month‟s pat for each hourly employee whole leaves. This amounts to major organizational and financial stress, considering that one out of every three employees plans to leave his or her job in the next two years. Understand why employees leave: Why employees leave often puzzles top management. Exit interviews are an ideal way of recording and analyzing the factors that have led employees to leave the organization. They allow an organization to understand the reasons for leaving and underlying issues. However employees never provide appropriate response to the asked question. So an impartial person should be appointed with whom the employees feel comfortable in expressing their opinions. Implement retention strategy: Once the causes of attrition are found, a strategy is to be implemented so as to reduce employee turnover. The most effective strategy is to adopt a holistic approach to dealing with attrition. An effective retention strategy will seek to ensure: 

Attraction and recruitment strategies enable selection of the „right‟ candidate for each role/organization.



New employee‟s initial experiences of the organization are positive.



Appropriate development opportunities are available to employees, and that they keep aware of their likely career with the organization.



The organization‟s reward strategy reflects the employee drives.



The leaving process is managed effectively.

   

SEPARATIONS: Separations mean termination of employment by either of the parties or both the parties via, employee, separation may be natural, voluntary and mandatory.

51

TYPES OF SEPARATIONS: (1) NATURAL SEPARATIONS: Natural separations take naturally without any special initiation by the employee or by the company. Natural separations include; employee retirements, employee deaths and company closure. Retirement: The agreement between the employee and employer at the time of employment specifies the age of retirement of the employee from service of the company based on the provisions of the labour laws in force of the land or the policies of the company. Age of retirement is varied from organization to organization. It is 62 years in case of central government universities, 60years in case of universities of a number of universities,58 years in case of a n state government universities in India. It is 58 years in case of national employees working in government organizations. Employees separate naturally from the organization as a regular employee when they naturally retire. Employees after retirement are eligible to get various retirement benefits like pension, provident fund and gratuity. •

Re-Employment after Retirement:

Some organization re-employee the retired employees on contracts basis due to shortage of experienced and skilled manpower. •

Employee Death:

Employees naturally separate from the organization when they die. •

Company closure:

Some companies are closed due to various reasons like poor financial position, adverse business conditions, out-dated technology like companies producing manual type writing machines, carbon papers, pagers, computer floppies and the like. Employees working in such companies separate from companies (2) EMPLOYEE-INITIATED SEPARATIONS Employee voluntary separate or voluntary quite the job for various reasons like dissatisfaction over current job, getting better job in term of salary and status in other

52

organization, start of business on their own, continuous ill-health, family reasons, contentment over career in of earning or job status and the like. The expanding business opportunities across the globe created a number of new jobs in software and other high technology industries during 19972000.Consequently,the employees working in various organizations resigned their jobs in order to new organizations. Voluntary separations are two types viz…, resignations and voluntary retirement. •

Employee Resignations:

Employees tender their resignations, due to various reasons as specified in the voluntary separations, when alternatives arrangements like retirement are not available as retirement enables employees to receive different kinds of facilities like pension\provident funds, and gratuity. Thus employees tender resignations when the perceived benefits from the new jobs or alternative careers would be more than the probable loss of retirement benefits and salary from the current job. •

Voluntary retirements:

Some organizations provide an opportunity of „voluntary retirement „to employees, which carry proportionate \pro-rata amount of retirement benefits. Employees, who completed specified length of service, are normally eligible for voluntary retirement. Organizations provide this facility to enable employees to separate from the organization with retirement facilities, when the employees face health problems or have better career opportunities or organization face the problem of over staffing. Most of the public sector organization in different countries including India announced voluntary retirement facilities to employees, when they realized the problem of over staffing consequent upon competition and globalization in 1991.The economic policy of 1991 provided for the voluntary retirement facility to employees based on their exit policy. Voluntary exit policy and practice: The new economic policy of 1991 brought significant changes in industrial and business sectors. One of the important aspects of the new economic policy is the exit policy. Exit policy refers to the policy and action programme of retrenching the surplus human resources resulting from restructuring, modernizing, reducing the activities, closure of a part

53

or total unit, adopting new technology or new methods of operations, redeg and re-allotting the jobs in an industrial or business organization. Government’s policy before 1991 and its consequences: Government specified its policy regarding employment before 1991, in various industrial policies. One of objectives of government in establishing and developing public sector was to create or generate employment opportunities. The government aimed at solving the unemployment problem by encouraging the small , tiny and cottage industries. Further government used to appreciate the large scale private sector industry, if it was employment – oriented. The huge size and ever growing population and unemployment problem was the reasons for formulating such a policy by the government. Consequent upon the implementation of government policies regarding employment and other practices of the industries result in surplus human resources and disguised unemployment in industrial in unit in India. This problem is predominant in public sector compared to that of private sector. Extent of surplus The surplus of human resources of two dimensions viz.., •

Surplus of human resources even with the existing level of technology,

•

Surplus of human resources, if the technology is upgraded. India industrial units employ more number of workers compared to that of the foreign

organization with similar nature and level of technology. Consequence of surplus man power •

Surplus human resource results in high labour cost. Increased labour cost leads to

high production cost and high price of the product or service. •

Surplus human resource, high cost of labour and high cost of production reduces

the organization competitive ability. •

Surplus labour and there by disguised un employment reduces employment efficiency

and labour productivity.

54

•

Surplus labours create organizational politics.

•

Surplus human resource poses threat for technological up-gradation. But, technological up-

•

gradation is an essential factor in market economies.

•

Surplus labour may lead to industrial unrest and poor industrial relations

VOLUNTARY RETIREMENT SCHEME One of the techniques of trimming the workforce is voluntary retirement scheme. This is generous, tax-free severance payment to persuade the employees to voluntary retire from the company. The scheme has its origin during early 1990s in u.s.a. This scheme is also known as „Golden Handshake‟ as it is the golden route to retrenchment. The voluntary retirement scheme is the most humane techniques for downsizing the workforce. The voluntary retirement scheme was announced by the government to cover the public sector employees. The scheme was later introduced In private sector industries. Benefits under this scheme The employee for voluntary retirement entitles for 45 days emoluments for each completed year of service or monthly emoluments at the time of retirement multiplied by the remaining months of services before normal date of retirement whichever is less. In addition to these emoluments, the employee will get his provident fund and gratuity dues. The VSR originally granted tax-exemption for amount up to 5 lakhs received by a public sector employee as high severance pay-package. Eligibility for VRS The eligibility criterion for VRS varies from one company to the other. In case of public sectors units, employees who have attained 40 years of age or completed 10 years of service are eligible for voluntary retirement under the scheme. Merits of VRS  1. It offers the best and humane route to retrenching excess work force. 2. Lucrative settlement prevents resentment. 3. Voluntary nature precludes the need for enforcement.

55

4. It allows specific division to be down sized. 5. It allows for lowering the overall wage bills and enables for increase in salaries. Demerits of VRS The employees of the company may accept the deal and leave the company 1. It creates a sense of fear and uncertainty among those employees who stay with the company. 2. Severance costs may outpace productivity gains. 3. Trade unions and individual workers may protest the operation of the scheme and these protests may disrupt operation. 4. Operation of the scheme may create a bad reputation for the company. National Renewal Funds National renewal fund was established to help the workers affected by industrial restructuring, modernization or closure of the units. The objectives of the national. •

To provided assistance to firms to cover the cost of retraining and redeployment of employees

arising as a result of modernization and technological up-gradation of existing capacities and from industrial restructuring. •

To provide funds for compensation to employees affected by restructuring or closure

of industrial units, both in the public and private sectors. •

To provide funds for employment generation schemes in the organized and un-

organized sectors in order to provide social safety net for labour Measures to minimize the Limitations. •

The organizations may make use of the following measures to reduce the limitations of

the scheme. •

The management should involve the unions in the process of decision-making, formulating

the rules and regulations of the scheme and in implementing the scheme. •

Increase the benefits to make the severance package more attractive.

56



Motivate the managers through counseling.

The challenges of Employees Exit Reducing the excess manpower in organization is not an easy task. There are a number of challenges of this task. •

Establish the compulsion of manpower reduction.

•

Manage downsizing without disrupting the organization.

•

Ensure that employees participate in the decision to down size.

•

Match of focus of manpower reduction to corporate strategy.

•

Ensure a transparent system for choosing people to be eased out.

•

Maintain contract and relationships with former employees.

•

Manage the psychological and social fallout on exiting employees.

•

Prevent the company from being branded anti-people.

•

Develop a post downsizing manpower deployment plans.

Manage Employee Exit People who contribute significantly to the organization goals are the organization‟s assets. These assets are turned into liabilities due to obsolescence of their skills, Knowledge and abilities consequent upon the technological up-gradation or change in the organizational requirements. Added to this, intensifying competition and recession in business create the need for eliminating the non-performing employees or the liabilities. Mergers, t ventures, takeover also cause reduction of excess manpower. After identifying the excess manpower, prepare for the reduction by identifying the departments with high wage bills and low productivity. Then; initiate the process of reduction of the manpower. (3) EMPLOYER-INITIATED SEPARATIONS Employers also initiate separations due to performance and in-disciplinary issues, inability of employer to provide continuous employment due to supply-chain management problems in

57

the entire business process. Thus, employer-imitated separations include discharges lay-off and retrenchment. Discharge/Dismissal: The reasons for dismissal or discharge are due to the employee‟s inability to follow organizational rules and regulations of employment. Thus employers initiate the employee separations when the employees fail to follow organizational rules and regulations of employment. These reasons include, but not limited to poor performance, continuous absenteeism without proper approval, misbehavior, misconduct, theft of company‟s property and illegal acts Layoff: Organization separates the employees temporarily due to its inability to provide employment in view of supply-chain management problems like lack of/inadequate raw materials, other kinds of inputs, power, working capital, breakdown of machinery, decline in sales and other any temporary problems. Legal provisions: Employers pay lay-off compensation to employees during lay-off period as employees are laid off due to the employer- centered reasons. The amount of lay-off compensation to be paid as per the section-25 of industrial disputes Act,1947 is half of the normal wages, According to the Industrial Disputes Act,1947,industrial units employing more than 100 employees require prior permission from the government for layoff‟s retrenchment and closures. Employers have to make the basis for lay-off clear like seniority or performance junior employees are laid-off first and the senior employees are laid off at the end, if the organizations follow the seniority as the basis for lay-off. Senior employees are called back to work first and the junior employees are called back to work at the last, when the business operations are restored. Similarly, if the organizations follow merit as the basis for lay off, employees with least performance appraisal scores are laid off first and highest performance appraisal scorers are laid off at end. Employees with highest performance appraisal scores are called first and the least appraisal scorers are called back at the end, when the business operations are restored.

58

RETRENCHMENT Retrenchment is separation of employees relatively on permanent basis by employers due to the latter‟s inability to provide employment .Thus organization retrench employees due to adaption of modern manufacturing technology, adaption of robotics in business operations, adaption of information technology, shifting of manufacturing locations to less manufacturing cost centers, economics recession and adverse business conditions relevant to s particular company. However, some 34w`companies recover and turnaround from adverse business conditions, recessionary impacts and boost-up the business growth. Companies in such cases of recovery and turn-around can reemploy the qualified retrenched employees. Manufacturing Technology and Retrenchment Sophisticated equipment and automated manufacturing technology perform a number of functions hither to perform by manual labour in the past. As such automated and modern technology eliminated a number of manual and lower level jobs. Consequently, companies adapted automated technology found surplus staff in production department and plan for retrenchment of staff. In addition, automated technology requires highly skilled employees, who would replace a large number of employees with traditional skills. Thus, modern manufacturing technology resulted in employees with traditional skills. Robotics and Retrenchment Robotic is an important technology of modern manufacturing in most of the companies. Most of the factories have been using robots on an increased scale. Robots have already started replacing menial and repetitive jobs. Therefore, Companies adapting robots started retrenching employees. INFORMATION TECHNOLOGY AND RETRENCHMENT Information technology perform a number of jobs like processing data and information ,communication, clerical jobs and a number of office maintenance jobs. In addition, information technology helps in fast performance of a number of jobs in ing, finance, human resource and marketing. Thus, information technology enhances performance and productivity. In order word, less number of people can do more work with help of information technology. Consequently most of the offices that adapted information technology found surplus number of employees and resorted to retrenchment.

59

Globalization and Retrenchment in Advanced Countries Globalization and consequent competition brought paradigm shifts in location of business operations from high manufacturing cost destinations to low manufacturing cost locations. Consequently, most of the multinational companies shifted their manufacturing and some other business location for advanced economies like USA, UK and to India, China and brazil. This in turn resulted in loss of jobs in MNC‟S locations of advanced countries. MNC‟S found surplus staff in their location in advanced economies and hence retrenched them. Economic Recession and Retrenchment The economic recession that began in December 2007 and still continuing even in 2011 resulted in decline in business activity of a number of countries. The impact of economic recession is severe in case of advanced countries like USA, UK and Italy. In fact, the world trade in term of exports and imports declined during 2007 and 2011 due to economic recession. Thus the economics recession resulted in decline in demand for products and services, output, marketing activities, loss of jobs and loss of income. Companies reduced their business operations consequent upon reduction in sales due to economic recession. Reduction in business operations forced the companies to reduce employees through retrenchment. Retrenchment, consequent upon recession affected all kinds of employees like young and old. Inexperienced and experienced and unskilled and skilled employees. Though it is said that the recession officially ended in June 2009, unemployment didn‟t peak until 2010,after which it declined slightly. Adverse Business Conditions and Retrenchment Adverse business conditions like decline in demand for the product or service following shifts in customer preferences, tastes and fashions, redundancy of the product owning to technology shifts, competitors ,strategies, poor financial management, mismanagement inability of the human resources to be innovative and change ahead of the environmental shifts. Legal Provisions Governing Retrenchment and Compensation Under the industrial dispute Act, 1947,a company has the right to retrench employees for any reasons what‟s ever other than disciplinary reasons. Retrenchment procedures are

60

governed by the Last in firs out method.Section25-G of the industrial disputes Act,1947 states that, an employer should only retrench employees who have been most recently hired. According to Section 25(f) of industrial disputes Act, 1947, companies have to pay retrenchment compensation to retrenched employees equivalent to 15 days average pay for every completed year of continuous service. According to the industrial disputes Act, 1947, industrial units employing more than 100 employees require prior permission from the government for layoff, retrenchment and closure.23public sectors units retrenched 264 employees in 2007 in India due to closure of the industrial units. Employee turnover in Nava Bharat ventures limited A Nava Bharat venture limited (sugar division) is a seasonal factory as the production of the sugarcane crop is seasonal. The crop is sugarcane is produced only for 6 months of the year. During those months only sugar manufacturing is done. Turnover mainly exists at production which involves machine work. The manufacturing of sugar employs only in seasonal employees. Seasonal Employees Generally seasonal employees are hired to work on a part-time basis by companies that need extra help to particularly season. Seasonal jobs can offer out-of-work employees the opportunity to earn income to pay down bills, for example, or earn money for holiday gift giving. In addition, since many seasonal jobs can be performed on evenings and weekend, regular employees can earn a second income for a certain period of time as a seasonal employee.

 

Law concerning employee treatment, benefits, and policies of part-time, temporary, or seasonal employees a covered by both federal and state laws.



The permanent industry has high turnover compared to that of seasonal industry because the work schedule is very busy at the permanent industry.



It involves in the continuous working of the employees.



In seasonal industry, people have change in the work and are interested in the work.



Turnover in the Nava Bharat is less the maximum turnover in the company is due to retirement. The turnover is less because the wages and salaries provided to the employee is satisfactory.



The istrative staff has less work as during off season they complete their work.



Contract employees are continuing their work for the next year.

61



The turnover is less because the wages and salaries provided to the employee is satisfactory.



The istrative staff has less work as during off season they complete their work.



Contract employees are continuing their work for the next year.

62

CHAPTER-5 DATA ANALYSIS AND INTERPRETATION

63

DATA ANALYSIS AND NTERPRETATION 1)How you feel with your job? a)Satisfied

b)Dissatisfied

c)Neither Both

Table No:5.1 Employee response towards job S.No

Response

No. of Respondents 23

Percentage of Respondents 46

1

Satisfied

2

Dissatisfied

22

44

3

Neither both

5

10

Total

50

100

Graphical representation :No: 5.1

Employee response towards job 25 20 Satisfied

15

dissatisfied 10

neither both

5 0

Analysis: From the above table and graph out of 50 employees,23 are satisfied with the present job and 22 are dissatisfied the remaining 5 have no feeling regarding the job. Inference: Most of the employees are satisfied with the job.

64

2)As a new employee at the organization, did you receive an Orientation package? a)Compensation

b)Employee Skills

c)Lack of relationship

Table No:5.2Response towards receiving of orientation package S.No

Response

No.

of

Respondents

Percentage of Respondents

1

Yes

24

48

2

No

10

20

3

Not fully

8

16

4

Partial

8

16

Total

50

100

Graphical representation: No: 5.2

Response towards receiving of orientation package 30 25 20

no

15

not fully 10

5 0

Analysis:

From the above table and graph out of 50 employees,24 are yes with the present job and 10 are no and 8 are not fully receiving packages and remaining 8 have partial regarding the package. Inference: Most of the employee said that they are receiving of orientation packing. 65

3)For how many years you are working in the current organization? a) Less than 2 years

b)More than 2 years

c)More than 5 years

d)More than 8 years

Table No:5.3 Work experience in current organization S.No

Response

No.

of

Respondents

Percentage of Respondents

1

Less than 2 year

7

14

2

More than 2 year

10

20

3

More than 5 years

15

30

4

More than 8 years

18

36

50

100

Total

Graphical representation: No: 5.3

Work experience in current Organization 20 15

less than 2 year more than 2 year

10

more than 5 years 5

more than 8 years

0

Analysis: From the above table and graph out of 50 employees,7 are less than 2 years with the work experience in current organization and 10 are more than 2 year with the present job and more than 5 years with the current organization and remaining 18 more than 8 years with the work experience in current organization. Inference: Most of the employees are satisfied with work Experience in Current organizations. 66

4)

What kind of following benefits will attract you to stay in the current organization?

a) Incentives

b) Fringe benefits

c) Hikes in salaries

d) Prerequisites

Table No:5.4 Benefits that attract to stay in the organization. S.No

Response

No.

of Percentage of

Respondents

Respondents

1

Incentives

18

36

2

Fringe benefits

7

14

3

Hikes in salaries

19

38

4

Prerequisites

6

12

Total

50

100

Graphical representation: No:5.4

Benefits that attract to stay in the organization 20 incentives

15

fringe benefits

10

hikes in salaries 5

prerequisites

0

Analysis: From the above table and graph out of 50 employees,18 are said that incentives. with the present 6 are prerequisites. Inference: Most of the employees are satisfied with benefits to stay in the organization.

67

5)Are you satisfied with your working hours? a)Satisfied

b)Partial satisfied

c)Dissatisfied

d)Partial Dissatisfied

Table No:5.5 Satisfaction with working hours S.No

Response

No.

of Percentage of

Respondents

Respondents

1

Satisfied

14

28

2

Partial satisfied

26

52

3

Dissatisfied

4

8

4

Partial dissatisfied

6

12

Total

50

100

Graphical representation: No: 5.5

Satisfaction towards working hours 30 25 20 partial satisfied 15

dissatisfied 10

5 0

Analysis: From the above table and graph out of 50 employees,14 are satisfied with the working

hours and 26 are partial dissatisfied and 4 are dissatisfied and remaining 6 have partial dissatisfied with working hours . Inference: Most of the employee are partially satisfied with the working hours.

68

6) Are you satisfied with your salary? a)Satisfied

b)dissatisfied

Table No:5.6Satisfaction with salary S.No

Response

No.

of Percentage Of

Respondents

Respondents

1

Satisfied

40

80

2

Dissatisfied

10

20

Total

50

100

Graphical representation:No:5.6

Analysis: From the above table and graph out of 50 employees,40 are satisfied with the salary and 10 are dissatisfied with toward salary. Inference: Most of the employees are satisfied with salary.

69

7) Do you have freedom at work environment? a)Agree b)Extremely agree c)Disagree d)Extremely disagree Table No:5.7 Freedom at work environment S.No

Response

No.

of Percentage of

Respondents

Respondents

1

Agree

14

28

2

Extremely agree

31

62

3

Disagree

4

8

4

Extremely disagree

1

2

Total

50

100

Graphical representation:No:5.7

Freedom at work environment 40 Agree

30

extremely disagree

20

Disagree 10

extremely disagree

0

Analysis: From the above table and graph out of 50 employees,14 are agree with work environment and 31 are extremely agree and 4 are disagree with work environment and remaining 1 have extremely disagree with freedom at work environment.. Inference: Most of the employees said that they have freedom at work environment.

70

8) Is employer paid for overtime if they work above their contracted hours? a)Yes

b)No

Table No:5.8 Payment of overtime if worked above contracted hours S.No Response

No.

of Percentage of

Respondents

Respondents

1

Yes

29

58

2

No

21

42

Total

50

100

Graphical representation:No:5.8

Payment for overtime 35 30 25 20

yes

15

no

10 5 0

Analysis: From the above table and graph out of 50 employees,29 are yes said that payment for overtime and remaining 21 said no to the above statement . Inference: Most of the employees responded that Payment is done for overtime.

71

9) As per your concern which causes may affect for the employee turnover? a)compensation

b)Employee Skill

c)Lack of relationship

Table No:5.9Causes may effect employee turnover S.No Response

No.

of Percentage of

Respondents

Respondents

1

Compensation

20

40

2

Employee skills

11

22

3

Lack

19

38

50

100

Of Relationship Total

Graphical representation:No:5.9

Causes of employee turnover 25 20 15

compensation employee skills

10

lack of relationship

5 0

Analysis: From the above table and graph out of 50 employees,20 are said that causes of employee turnover with the present job and 11 due to employee skills and 19 due to lack of relationship. Inference: Most of the employees are satisfied with compensation.

72

10)How much physical stress at work environment? a)Heavy

b)Normal

c)Comfort

d)Discomfort

Table No:5.10Physical stress at work environment S.No

Response

No. of

Percentage of

Respondents

Respondents

1

Heavy

3

6

2

Normal

24

48

3

Comfort

16

32

4

Discomfort

7

14

Total

50

100

Graphical representation:No:5.10

Physical stress at work environment 30 25 Heavy 20 Normal 15 comfort 10

discomfort

5 0

Analysis: From the above table and graph out of 50 employees,3 are heavy with physical stress at work environment and 24 are normal with the present job and 16 are comfort and remaining 7 have discomfort feeling regarding the job. Inference: Most of the employees said that physical stress at work environment

73

11) For which reason you prefer change the job? a)Health ground

b)Family issues

c)Monetary benefits

d)Any other

Table No:5.11Reason to change the job S.No

Response

No. of

Percentage of

Respondents

Respondents

1

Heath ground

20

40

2

Family issues

22

44

3

Monetary benefits

5

10

4

Any other

3

6

Total

50

100

Graphical representation:No:5.11

Reasons to change the job 25 20

health ground

15

family issues

10

monetary benefits any other

5 0

Analysis: From the above table and graph out of 50 employees,20 said that reasons to change the job and 22 are family issues and 5 due to monetary benefits and 3 have any other reason. Inference: Reasons for changing the job is health ground and family issues.

74

12) Overall, what is your satisfaction of the job with the organization? a)Satisfied

b)Dissatisfied

c)both a &b

Table No:5.12 Overall satisfaction towards job S.No

Response

No.

of Percentage of

Respondents

Respondents 64

1

Satisfied

32

2

Dissatisfied

14

28

3

both

4

8

50

100

Total

Graphical representation:No:5.12

Overall satisfaction toward job 35 30 25 satisfied

20

dissatisfied

15

both

10 5 0

Analysis: From the above table and graph out of 50 employees,32 are satisfied with overall satisfaction toward job and 14 are dissatisfied the remaining 4 have both. Inference: Most of the employees said that overall satisfaction toward job.

75

13) Have you received adequate training on employee motivation? a)Yes b)No Table No:5.13 Receiving of adequate training on employee motivation

S.No

Response

No.

of Percentage of

Respondents

Respondents

1

Yes

28

56

2

No

22

44

Total

50

100

Graphical representation:No:5.13

30 25

Response towards receiving adequate training on employee motivation

20 yes no

15 10 5 0

Analysis: From the above table and graph out of 50 employees, 28 respondents are said that response towards receiving adequate training on employee motivations and remaining 22 said no to the above statement. Inference: Most of the employees responded that they have adequate training is providing on employee motivation.

76

14) Are the employees leaving your organization frequently? a)Yes

b)No

Table No:5.14 Are the employees leaving the organization frequently S.No Response

No. of Respondents

Percentage of Respondents

1

Yes

10

20

2

No

40

80

Total

50

100

Graphical representation:No:5.14

50

Employees are leaving the organization frequently

40 30

yes

20

no

10

0

Analysis: From the above table and graph out of 50 employees 10 respondents said that employees are leaving the organization frequently and remaining 40 said no to the above statement. Inference: Most of the employees responded that Job in security is the main reason for leaving the organization frequently.

77

15) What is your opinion of the working conditions at your job? a)good

b)Bad

c)Average

Table No:5.15. Opinions on working conditions of the job S.No Response

No. of

Percentage of

Respondents Respondents 1

good

28

56

2

Bad

6

12

3

Below Average

16

32

Total

50

100

Graphical representation:No:5.15

Opinion on working conditions of the job 30 good

20

bad 10

average

0

Analysis: From the above table and graph out of 50 employees, 28 are good opinion on working conditions of the job. And 6 are bad with job and 16 are average with working condition of the job. Inference: Most of the employees got satisfied with the working condition of the job.

78

CHAPTER-6 FINDINGS SUGGESTIONS

CONCLUSION

79

FINDINGS 1. Most of the employees are satisfied with job. 2. Most of the employees are satisfied with benefits to stay in the organization.

3. Most of the employees are satisfied with salary. 4. Most of the employee said that physical stress at work environment. 5. Reasons for changing the job are health ground and family issues. 6. Most of the employees responded that Job insecurity is the main reason for the leaving the organization frequently.

80

SUGGESTIONS After conducting the study on “Employee Turnover” with respect to Nava Bharat Ventures Ltd. By collecting the opinions from 50 respondents through questionnaire, the information which was collected is stored and analyzed by using different statistical tools like „tables‟, „Graphs‟. After this extensive and well performed analysis of the data, some of the findings and suggestions from the respondents with regard to the improvements that have to be made with respect to “employee turnover” have been identified. The data so collected have been analyzed in different chapters and conclusions have been drawn. 

Every employee in the organization should have a personal development plan for the coming year.



Provide opportunities considering the overall development of an employee



Take appropriate measures to avoid burnout in the employees.



Retain your best people to gain competitive edge with suitable measures.



Create great jobs through information sharing and encouragement.



Create rotational schedule for roles with sets of tasks that cycle 2 or 3 times a year.



Encourages employee pride by offering innovate programs that demonstrate that they are important to the success of the organization

      

81

CONCLUSION Employee turnover is a burning issue for any organization. The study found that low level salary and benefits packages are significantly reasoned for employee turnover. In particularly, lack of career advancement, job dissatisfaction, leaders unwillingness to allow staff participate in the decision making process of the organizational matters, inadequate training opportunities directly impacted on the staff turnover and separations. It was revealed that unfavorable employee related factors low level of team work, impartiality of management over benefits, lack of flexible working conditions and other related factors increased employee dissatisfaction, lack of commitment, in the end result was resignation. It is important for managers to have an understanding of why people would leave the organization and it is equally important to identify those factors that attract people to the organization. This researcher will help the organization to make the necessary measures to retain the employees. This will certainly bring down the causes for employee turnover and helps the management to reduce the employee turnover. So it leads the organization to retain their employees.

82

BIBLIOGRAPHY

83

BIBLIOGRAPHY • L.M.PRASAD‟S “HUMAN RESOURCE MANAGEMENT • K.ASWATHAPPA‟S “HUMAN RESOURCE MANAGEMENT” Tata McGraw Hill Fifth Edition-2009. • P.SUBBA RAO‟s Human resource Management and Industrial Relations Himalaya Publishing House • HRD and management by Ghosh

WEBSITES: WWW.HRMGUIDE.UK WWW.MAHALIBRARY.COM WWW.GOOGLE.COM WWW.EN.WIKIPEDIA.ORG

84

ANNEXURE QUESTIONNAIRE BIO-DATA

Employee Turnover QUESTIONNAIRE NAME: GENDER: AGE:

1) How you feel with your job? a) Satisfied

b) Dissatisfied

c) Neither both

2) As a new employee at the organization, did you receive an orientation package ? a )Yes

b) No

c) Not fully

3) For how many years you are working in the current

d) partial organization?

a)Less than 2 year b) More than 2year c) More than 5years d) More than 8years 4) What kind of following benefits will attract you to stay in the current organization?

a) Incentives

b) Fringe benefits

c) Hikes in salaries d) Prerequisites 5) Are you satisfied with your working hours? a) Satisfied c) Dis-satisfied

b) Partial satisfied d) Partial dissatisfied

6) Are you satisfied with your salary? a) Satisfied

b) Dissatisfied

7) Do yo u have freedom at work environment? a) Agree

b) Extremely agree c) Disagree d) Extremely disagree

8) Is employer paid for overtime if they work above their contracted hours?

a) Yes

b) No

9) As per your concern which causes may affect for the employee turnover? a)Compensation

b)Employee skill

c)Lack of relationship

10) How much physical stress at work environment? a) Heavy

b) Normal

c) Comfort

d) Discomfort

11) For which reason you prefer change the job? a) Health ground

b) Family issues

c)Monetary benefits d) Any other 12) Overall, what is your satisfaction of the job with the organization? a) Satisfied

b) Dissatisfied

c)both a & b

13) Have you received adequate training on employee motivation? a) Yes

b) No

14) Are the employees leaving your organization frequently? a) Yes

b) No

15) What is your opinion of the working conditions at your job? a) Good

b) Bad

c) Average

BIODATA NAME

: V.KRANTHI

FATHER‟S NAME

: V.GANGADHAR RAO

SEX

: FEMALE

DATE OF BIRTH

: 23-07-1996

AGE

: 21

RELIGION

: HINDU

NATIONALITY

: INDIAN

LANGUAGES KNOWN

: TELUGU,ENGLISH

MARITAL STATUS

: UNMARRIED

EDUCATIONAL QUALIFICATIONS: S.NO NAME OF THE COURSE

NAME

OF THE

YEAR

INSTITUTION

PERCENTAGE

OF ING

1.

MBA

ADITYA PG COLLEGE

2018

GRADUATION

YRL DEGREE COLLEGE

2016

B.Sc

OF

PURSUING

(HR,MARKETING) 2.

ARTS

76

,

SCIENCE&TECHNOLOGY 3.

4.

INTERMEDIATE

PRAGATHI

VIDHAYALA

(BI.P.C)

JUNIOR COLLEGE

SSC

MOHAN HIGH SCHOOL

2013

80

2011

62