SCDL MBA PROJECT - A Study of HR Practices in ITC

A Study of HR Practices in ITC

1. Declaration 2. Acknowledgement 3. Preamble 4. Objective 5. Certification of ITC 6. Policies of ITC 7. Company profile 8. Growth history 9. SWOT Analysis 10. 11. 12. 13. 14. 15. 16. 17. ITC Philosophy HR Management HR Practices at ITC Action Plan Graphical representation of data Research Methodology Questionnaire Results & Conclusion

18.

Suggestion

ITC has won the Golden Peacock Awards for 'Corporate Social Responsibility (Asia)' in 2007, the Award for CSR in Emerging Economies 2005 and Excellence in Corporate Governance' in the same year. These Awards have been instituted by the Institute of Directors, New Delhi, in association with the World Council for Corporate Governance and Centre for Corporate Governance ITC's cigarette factory in Kolkata is the first such unit inIndia to get ISO 9000 quality certification and the first among cigarette factories in the world to be awarded the ISO 14001 certification ITC Maurya in New Delhi is the first hotel in India to get the coveted ISO 14001 Environment Management Systems certification. ITC Filtrona is the first cigarette filter company in the world to obtain ISO 14001 ITC Infotech finds pride of place among a select group of SEI CMM Level 5 companies in the world.

ITC's Green Leaf Threshing plant in Chirala is the first in India and among the first 10 units in the world to bag the Social Accountability (SA 8000) certification ITC Chairman Y C Deveshwar has received several honors over the years. Notable among them are:
Year 2007 2006 2006 2005 2001 1998 1996 1994 1986 Award SAM/SPG Sustainability Leadership Award conferred at the International Sustainability Leadership Symposium,Zurich. Business Person of the Year from UK Trade & Investment, the UK Government organisation that supports overseas businesses in that country. Inducted into the `Hall of Pride' by the 93rd Indian Science Congress Honoured with the Teacher's Lifetime Achievement Award Manager Entrepreneur of the Year from Ernst & Young Retail Visionary of the Year from Images, India's only fashion and retail trade magazine Honorary Fellowship from the All IndiaManagement Association Distinguished Alumni Award from IIT,Delhi Marketing Man of the Year from A&M, the leading marketing magazine Meridien Hotelier of the Year

ITC

has

won

the 'Enterprise

Business

Transformation Award' for Asia Pacific (Apac), instituted by Infosys Technologies and Wharton School of the University of Pennsylvania for its celebrated e-Choupal initiative. ITC is the only Indian FMCG Company to have featured in the Forbes 2000 list. The Forbes

2000 is a comprehensive ranking of the world's biggest companies, measured by a composite of sales, profits, assets and market value. The list spans 51 countries and 27 industries. ITC continues its dominance of The Economic Times' Brand Equity listing of India's 100 Biggest FMCG Brands, with three brands from its stable making it to the top biggest five. FMCG Gold brand in Flake remains India's

terms of sales. Navy Cut ranks at No. 4. ITC's Scissors brand ranks at No 5 and is the only new entrant into the top 10. Restaurant magazine has chosen Bukhara at the ITC Maurya, New Delhi as the best Indian restaurant in the world and the best restaurant in Asia. Bukhara has also been adjudged one of the top 50 restaurants in the South worldby Food Asian the London based Guide'.Bukhara is magazine 'The the only Good

restaurant to figure in the list.

ITC's Award"

Lifestyle for

Retailing

Business and

Division

(LRBD) has won the "Best Supply Chain Practices time-effective cost-efficient Logistics Management in Organized Retail. The awards were organized by Retailers Association of India (rai) in association with ITW Signode the International leaders in packaging solutions.
ITCs market strategies are:

Create multiple drivers of growth by developing a portfolio of world class businesses that best matches organizational capability with opportunities in domestic and export markets. Continue to focus on the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agri Business and Information Technology. Benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality. Ensure that each of its businesses is world class and internationally competitive.

Enhance the competitive power of the portfolio through synergies derived by blending the diverse skills and capabilities residing in ITCs various businesses. Create top distributed leadership for within each of the the organisation by nurturing talented and focused management teams businesses. Continuously strengthen and refine Corporate Governance processes and systems to catalyse the entrepreneurial energies of management by striking the golden balance between executive freedom and the need for effective control and accountability.

ITC's EHS Policy

ITCs mission is to sustain and enhance the wealth-generating capacity of its portfolio of businesses in a progressively globalising environment. As one of Indias premier corporations employing a vast quantum of societal resources, ITC seeks to fulfil a larger role by enlarging its contribution to the society of which it is a part. The trusteeship role related to social and

environmental resources, aligned to the pursuit of economic objectives, is the cornerstone of ITCs Environment, Health and Safety philosophy. ITCs EHS philosophy cognises for the twin needs of conservation and creation of productive resources. In the multi-business context of ITC, Corporate Strategies are designed to create enduring value for the nation and the shareholder, through leadership in each business and the attainment of world-class competitive capabilities across the value chain. The objective of leadership extends to all facets of business operations including Environment, Health and Safety. ITC is, therefore, committed to conducting its operations with due regard for the environment, and providing a safe and healthy workplace for each employee. Various international and national awards and accreditations stand testimony to ITCs commitment to EHS. Such external recognition further reinforces the need to direct the collective endeavour of the Companys employees at all levels towards sustaining and continuously improving standards of Environment, Health and Safety in a bid to attain and exceed benchmarked standards, whether regulatory or otherwise.

In particular, it is ITCs EHS policy

To contribute to sustainable development through the establishment and implementation of environment standards that are scientifically tested and meet the requirement of relevant laws, regulations and codes of practice.

To take account of environment, occupational health and safety in planning and decisionmaking.

To provide appropriate training and disseminate information to enable all employees to accept individual responsibility for Environment, Health and Safety, implement best practices, and work in partnership to create a culture of continuous improvement.

To instil a sense of duty in every employee towards personal safety, as well as that of others who may be affected by the employees actions.

To provide and maintain facilities, equipment, operations and working conditions which are safe for employees, visitors and contractors at the Companys premises.

To ensure safe handling, storage, use and disposal of all substances and materials that are classified as hazardous to health and environment.

To reduce waste, conserve energy, and promote recycling of materials wherever possible. To institute and implement a system of regular EHS audit in order to assure compliance with laid down policy, benchmarked standards, and requirements of laws, regulations and applicable codes of practice.

To proactively share information with business partners towards inculcating world-class EHS standards across the value chain of which ITC is a part. All employees of ITC are expected to adhere to and comply with the EHS Policy and Corporate Standards on EHS. ITCs EHS Policy extends to all sites of the Company. It will be the overall responsibility of the Divisional/SBU Chief Executives, through the members of their Divisional Management

Committees, General Managers and Unit Heads, to ensure implementation of this Policy and Corporate Standards on EHS, including formation of various committees and designating individuals for specific responsibilities in respect of their Division/SBU.

The Corporate EHS Department is responsible for reviewing and updating Corporate Standards on EHS, and for providing guidance and support to all concern.

Corporate Governance
Preamble
Over the years, ITC has evolved from a single product company to a multi-business corporation. Its businesses are spread over a wide spectrum, ranging from cigarettes and tobacco to hotels, packaging, paper and paperboards and international commodities trading. Each of these businesses is vastly different from the others in its type, the state of its evolution and the basic nature of its activity, all of which influence the choice of the form of governance. The challenge of governance for ITC therefore lies in fashioning a model that addresses the uniqueness of each of its businesses and yet strengthens the unity of purpose of the Company as a whole. Since the commencement of the liberalisation process, India's economic scenario has begun to alter radically. Globalisation will not only significantly heighten business risks, but will also compel Indian companies to adopt international norms of transparency and good governance.

Equally, in the resultant competitive context, freedom of executive management and its ability to respond to the dynamics of a fast changing business environment will be the new success factors. ITC's governance policy recognises the challenge of this new business reality inIndia.

DEFINITION AND PURPOSE

ITC defines Corporate Governance as a systemic process by which companies are directed and controlled to enhance their wealth generating capacity. Since large corporations employ vast quantum of societal resources, we believe that the governance process should ensure that these companies are managed in a manner that meets stakeholders aspirations and societal expectations.

CORE PRINCIPLES
ITC's Corporate Governance initiative is based on two core principles. These are :

i.Management must have the executive freedom to drive the enterprise forward without undue restraints; and ii.This freedom of management should be exercised within a framework of effective accountability.

ITC believes that any meaningful policy on Corporate Governance must provide empowerment to the executive management of the Company, and simultaneously create a mechanism of checks and balances which ensures that the decision making powers vested in

the executive management is not only not misused, but is used with care and responsibility to meet stakeholder aspirations and societal expectations.

Cornerstones From the above definition and core principles of Corporate Governance emerge the cornerstones of ITC's governance philosophy, namely trusteeship, transparency,

empowerment and accountability, control and ethical corporate citizenship. ITC believes that the practice of each of these leads to the creation of the right corporate culture in which the company is managed in a manner that fulfls the purpose of Corporate Governance. Trusteeship : ITC believes that large corporations like itself have both a social and economic purpose. They represent a coalition of interests, namely those of the shareholders, other providers of capital, business associates and employees. This belief therefore casts a responsibility of trusteeship on the Company's Board of Directors. They are to act as trustees to protect and enhance shareholder value, as well as to ensure that the Company fulfils its obligations and responsibilities to its other stakeholders. Inherent in the concept of trusteeship is the responsibility to ensure equity, namely, that the rights of all shareholders, large or small, are protected. Transparency : ITC believes that transparency means explaining Company's policies and actions to those to whom it has responsibilities. Therefore transparency must lead to maximum appropriate

disclosures without jeopardising the Company's strategic interests. Internally, transparency means openness in Company's relationship with its employees, as well as the conduct of its business in a manner that will bear scrutiny. We believe transparency enhances accountability. Empowerment and Accountability : Empowerment is an essential concomitant of ITC's first core principle of governance that management must have the freedom to drive the enterprise forward. ITC believes that empowerment is a process of actualising the potential of its employees. Empowerment unleashes creativity and innovation throughout the organisation by truly vesting decisionmaking powers at the most appropriate levels in the organisational hierarchy. ITC believes that the Board of Directors are accountable to the shareholders, and the management is accountable to the Board of Directors. We believe that empowerment, combined with accountability, provides an impetus to performance and improves effectiveness, thereby enhancing shareholder value. Control : ITC believes that control is a necessary concomitant of its second core principle of governance that the freedom of management should be exercised within a framework of appropriate checks and balances. Control should prevent misuse of power, facilitate timely management
response to change, and ensure that business risks are pre-emptively and effectively managed.

Ethical Corporate Citizenship :

ITC believes that corporations like itself have a responsibility to set exemplary standards of ethical behaviour, both internally within the organisation, relationships. as well as in their that external unethical We believe

behaviour corrupts organisational culture and undermines stakeholder value.

ITC Ltd. Policy on Human Rights

ITC believes that all its employees must live with social and economic dignity and freedom, regardless of nationality, gender, race, economic status or religion. In the management of its businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO. Policy ITC upholds international human rights

standards, does not condone human rights abuses, and creates and nurtures a working environment where human rights are respected without prejudice. Implementation The Corporate Human Resources function of ITC is responsible for the Human Rights Policy design, implementation and updation.The policy is implemented at all locations of ITC through a set ofseparate policies and procedures covering each of the main constituents of human rights applicable at the workplaces. Monitoring&Audit The assessment procedures for different constituents of this policy are defined against each specific policy.
Consideration of Human Rights Impacts Across the Supply Chain

As a large and multi-product enterprise whose products are benchmarked nationally and internationally, ITC's main supply chains can be grouped as follows: 1. For all its operations, technology, machinery and equipment are sourced from reputed and globally benchmarked suppliers/vendors who are expected to follow internationally accepted norms and standards on human rights. 2. ITC's major businesses are vertically integrated across several Divisions. A substantial part of the supply chain is therefore internal through strategic backward linkages. Common values relating to human rights performance are shared across this supply chain. 3. Being a major agri-based company, the agriculture sector is a major supplier of inputs for its operations. The bulk of agricultural commodities are procured from state controlled trading platforms and the open market.

A very small proportion of ITC's business consists of supply chains comprising local vendors and suppliers. The policy framework for such entities is enunciated separately in 'Policy to Ensure Respect for Human Rights across the Supply Chain'.

Policy to Prevent Discrimination at Workplace ITC acknowledges that every individual brings a different and unique set of perspectives and capabilities to the team. A discrimination-free workplace for employees provides the environment in which diverse talents can bloom and be nurtured. This is achieved by ensuring that a non-discrimination policy and practice is embedded across the Company in line with

corporate principles and benchmarked business practices. Policy ITC's approach to its human resources is premised on the fundamental belief in fostering meritocracy in the organisation which, pari passu, promotes diversity and offers equality of opportunity to all employees. ITC does not engage in or support direct or indirect discrimination in recruitment, compensation, access to training, promotion, termination or retirement based on caste, religion, disability, gender, age, race, colour, ancestry, marital status or affiliation with a political, religious, or union organization or minority group. Implementation The policy is communicated to all employees through induction programmes, policy manuals and intranet portals.

The custodian of this policy is the head of each operational unit and Divisional Chief Executives of the respective business. ITC's complaints on the higher resolution freedom officials For of procedure employees the beyond is to premised approach immediate

his/her unionised

superior.

employees, compliance of the policy is ensured through a robust grievance handling procedure and the presence of a union that brings violations to the notice of the unit HR head. Monitoring&Auditing The accountability for the application of the nondiscrimination employment policy rests with the Unit Head who reviews anti-discriminatory complaints annually or on a case-by-case basis. The Corporate Human Resources function conducts non-discrimination reviews annually on a sample basis with unit heads and through on-site assessments
ITC's Core Values are aimed at developing a customer-focused, high-performance organisation which creates value for all its stakeholders:

Trusteeship As professional managers, we are conscious that ITC has been given to us in "trust" by all our stakeholders. We will actualise stakeholder value and interest on a long term sustainable basis. Customer Focus We are always customer focused and will deliver what the customer needs in terms of value, quality and satisfaction.

Respect For People

We are result oriented, setting high performance standards for ourselves as individuals and teams. We will simultaneously respect and value people and uphold humanness and human dignity. We acknowledge that every individual brings different perspectives and capabilities to the team and that a strong team is founded on a variety of perspectives. We want individuals to dream, value differences, create and experiment in pursuit of opportunities and achieve leadership through teamwork.
Excellence

We do what is right, do it well and win. We will strive for excellence in whatever we do.
Innovation We will constan