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A REPORT ON PHILIPS EMPLOYEE RETENTION SURVEY HUMAN RESOURCE MANAGEMENT

GROUP D SECTION C

Submitted by: Sahil Bhambri (097) Saksham Sharma (098) Sawan Gupta (104) Tanuj Arora (117) Abhishek Bansal (134)

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TABLE OF CONTENTS
1. COMPANY OVERVIEW ......................................................................................... 2 Philips Electronics India Limited ................................................................................................... 2 2. SWOT ANALYSIS .................................................................................................... 3 Strengths ........................................................................................................................................ 3
Weakness ....................................................................................................................................... 3 Opportunities ................................................................................................................................. 3 Threats ........................................................................................................................................... 3

3. INTRODUCTION ..................................................................................................... 3 Retention A Big Challenge ......................................................................................................... 4 4. HYPOTHESIS ........................................................................................................... 5 Null hypothesis: ............................................................................................................................. 5
Alternate hypothesis: ..................................................................................................................... 5 Description and Definition of Retention Factors ........................................................................... 6

5. RETENTION STRATEGIES AT PHILIPS .............................................................. 6 Unique organizational structure strategy ....................................................................................... 6

Variable benefit strategy .............................................................................................................. 10

6. QUESTIONNAIRE ................................................................................................. 14 7. ANALYSIS .............................................................................................................. 15 8. OUR RECOMMENDATIONS ................................................................................ 20 Internal advertisement strategy .................................................................................................... 20

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1. COMPANY OVERVIEW Koninklijke Philips Electronics N.V. (Royal Philips Electronics, commonly known as Philips) is a Dutch multinational electronics company headquartered in Amsterdam. It was founded in Eindhoven in 1891 by Gerard Philips and his father Frederick. It is one of the largest electronics companies in the world and employs around 122,000 people across more than 60 countries. Philips is organized into three main divisions: Philips Consumer Lifestyle (formerly Philips Consumer Electronics and Philips Domestic Appliances and Personal Care), Philips Healthcare (formerly Philips Medical Systems) and Philips Lighting. As of 2012 Philips is the largest manufacturer of lighting in the world. Philips has a primary listing on the Euronext Amsterdam stock exchange and is a constituent of the AEX index. It has a secondary listing on the New York Stock Exchange.

Philips Electronics India Limited Philips Electronics India Limited, a subsidiary of the Netherlands-based Royal Philips Electronics, is the leading Health and Wellbeing Company. Today, Philips is a simpler and more focused company with global leadership positions in key markets of Healthcare, Lighting and Consumer Lifestyle, addressing peoples Health and wellbeing needs and aspirations as its overarching theme. As one of the nation's most well-known and well-loved brands, Philips is a part of practically every Indian's life. With recent launch of Philips Respironics product categories in obstructive sleep apnea management and home respiratory care, home decorative lighting range and ALU range, Philips products find use in virtually every aspect of an individuals daily life 24X7 - at home, at work, on the move and at rest. Philips stands as a source of easy to use, trendy and innovative internationally acclaimed products with superior design and technology that enhance the quality of consumers' professional and personal lives. Philips has been operating in India for over 75 years and employs over 4,500 employees around the country. The company has an excellent pan India distribution and after-sales service network.

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2. SWOT ANALYSIS

Strengths Wide range of products and features are present The products are of high quality. Sales are growing every year

Weakness Weaker Distribution network than Competition The inability to get product to market first Poor business level strategy

Opportunities Increasing industrialization of developing countries More electrification Higher demand for (sustainable and energy saving) lightning

Threats Competition Cheaper technology Economic slowdown Exchange rate fluctuations Lower cost competitors or imports

3. INTRODUCTION

The purpose of the research is to test the applicability of two strategies, which could solve the problem of employee retention in Philips. Satisfied employees (showing the tendency to stay the company or retention).

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Indifferent employees (Neither satisfied nor dissatisfied or indifferent). Dissatisfied (showing the tendency to quit the company or attrition)

To find out the applicability of the first retention strategy, the researcher has classified number of employees comes under the above three categories in to two other categories; the employees who prefer position titles when they change the company and employees who prefer all other benefits except position titles. To find out the applicability of the second retention strategy, the same three categories have been classified under the employees who prefer variable benefit structure and employees who do not prefer variable benefit structure. A questionnaire survey has been conducted and classified the respondents in to respective categories.

Retention A Big Challenge

Fundamental changes are taking place in the work force and the workplace that promise to radically alter the way companies relate to their employees. Hiring and retaining good employees have become the chief concerns of nearly every company in every industry. Companies that understand what their employees want and need in the workplace and make a strategic decision to proactively fulfill those needs will become the dominant players in their respective markets.

The fierce competition for qualified workers results from a number of workplace trends, including:

A robust economy Shift in how people view their careers Changes in the unspoken "contract" between employer and employee Corporate cocooning A new generation of workers Changes in social mores

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Life balance

Concurrent with these trends, the emerging work force is developing very different attitudes about their role the workplace. Today's employees place a high priority on the following:

Family orientation Quality of life issues Autonomy Social status of the job

To hold onto your people, you have to work counter to prevailing trends causing the job churning. Smart employers make it a strategic initiative to understand what their people want and need -- then give it to them. Division of the organization but it directly affects the Human Resource division as well. The organizations are competing each other to acquire the scarce talent pool. Internal advertisement simply meant to tell the employee that the organization, which they are working, is good and a company favorable comparison should be given to employees to solve the inequity they perceive. The major difference with internal advertisement is that the communication channel is different from that of marketing channels.

4. HYPOTHESIS

Null hypothesis:
The employees are willing to stick onto their present job and are not looking for better job opportunities outside. Organizational culture values will have a significant influence on retention rates, after the exogenous effects of labor market factors and employee gender and marital status have been accounted for.

Alternate hypothesis:
The employees are not willing to stick onto their present job and are looking for better job opportunities outside. Organizational culture values will have a significant influence on retention

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Description and Definition of Retention Factors

5. RETENTION STRATEGIES AT PHILIPS

Unique organizational structure strategy Variable benefit strategy Unique organizational structure strategy

Creating a company-specific organization structure and position title is the crux of this theory. This will reduce the employees tendency to compare his position title and benefits

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with that of same in other companies. Rather than force the employee to confine his talents to structured jobs, set job titles according to the knowledge, skill and ability of the employee. If an organization possess a unique structure with position titles and its responsibilities will keep the employee concentrated in the same company rather than choosing the job in other companies. Following important factors must be present in the unique organizational structure. a) Set Clear Expectations: When people enter in a company for the first time as an employee, he/she may have many expectation regarding the salary, work environment etc. the primary need for the employee is to yearn a decent salary to live, when this objective is fulfilled the employee will look for social status such as attractive position titles and benefits structure which satisfy the egoistic needs of human being. So the company must manage this expectation by understanding the employees perception.

What is the employees attitude to other organization and its benefit structure for the same position? What are the employees expectations from employers/team-members? What are the parameters to measure their performance? A good communication channel present in the organization. What will be the rewards, if the employees exceed the expected level?

If the employees are not having any expectations, how an employer is going to appraise, the employees? This must be based on some standard. The employee must have the feeling that his role is important for the company. Also his position title must be socially acceptable. It should fulfill the egoistic needs of the employee. Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what's expected of them. When expectations are not clear, employees may not be in sync with their job's current demands and priorities. Setting expectations is not a once and done activity. Jobs change. Priorities change. Resources change. Managers need to revise and set new expectations throughout the year. Setting expectations revolves around the following three areas:

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Key job responsibilities Performance factors and standards Goals

Why is a setting expectation important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. If your employees know what is expected of them, it allows them to focus on results and to monitor themselves against the set standards. Environments in which expectations are not clear, or change from week to week, seldom create high-performing work groups. The three principles that should drive expectations are clarity, relevance, and simplicity. b) Clarity: Expectations should focus on outcomes, not activities. In other words, employee achieves clarity when the employer identifies the expected results rather than the method for achieving them. Managers often make the mistake of attempting to direct the process that an employee will use rather than being clear about results. Defining the objective often requires some thought on the part of the manager because it is easy to fall into the "activities trap." While developing a strategic plan for a department or division is a worthy activity, it does not represent an outcome. In the activities trap, developing a plan is the goal, rather than increasing your market share. c) Relevance: The principle of relevance helps define the "why" of the assignment. If your employees have a full understanding of the project's importance, they can make adjustments as unanticipated factors crop up within the process. They probably also will be more committed to the result because they can see more easily how it fits into the big picture and how their efforts impact the company. This understanding typically is accomplished through dialogue between the manager and subordinate, which allows for a more thorough review of the situation and for feedback and discussion. This process builds good will with the employee and sets the stage for additional responsibilities.

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d) Simplicity: Simplicity creates a sense of grounding for employees as they endeavor to carry out assignments. If managers identify the work in simple, straightforward terms, employees will find it much easier to follow through on managers' wishes. To accomplish this, a manager must identify the key message in a fashion that the employee can embrace. e) Talent and skill utilization: Talent and skill utilization is another environmental factor your key employees seek in your workplace. A motivated employee wants to contribute to work areas outside of his specific job description. How many people could contribute far more than they currently do? You just need to know their skills, talent and experience, and take the time to tap into it. As an example, in a small company, a manager pursued a new marketing plan and logo with the help of external consultants. An internal sales rep, with seven years of ad agency and logo development experience, repeatedly offered to help. His offer was ignored and he cited this as one reason why he quit his job. In fact, the recognition that the company didn't want to take advantage of his knowledge and capabilities helped precipitate his job search. In this case the manager can easily change the position title of the employee and include the relevant job description in the position title. f) Fairness and equitable treatment: The perception of fairness and equitable treatment is important in employee retention. In one company, a new sales rep was given the most potentially successful, commission-producing accounts. Current staff viewed these decisions as taking food off their tables. The employer can bet a number of them are looking for their next opportunity. In another instance, a staff person, just a year or two out of college, was given 20,000 in raises over a six month time period. Information of this type never stays secret in companies so the employer must know, beyond any shadow of a doubt; the morale of several other employees will be affected. g) Career growth: The best employees, whom you want to retain, seek frequent opportunities to learn and grow in their careers, knowledge and skill. Without the opportunity to try new opportunities, sit on challenging committees, attend seminars and read and discuss books, they feel they will

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stagnate. A career-oriented, valued employee must experience growth opportunities within your organization. Variable benefit strategy

Periodical change in the benefit structure leads to increased awareness and satisfaction with the benefits. One of the purposes of benefit structure is to motivating the employee. Unfortunately continues enjoyment of the benefits leads to reduced satisfaction and motivation. This can be solved by periodical change in benefit structure, i.e. periodically introduce new benefits and remove the old benefits. Following are the important factors present in the variable benefit structure. a) Proper Rewarding: Proper rewarding is important for the employee to be motivated during the job. A research reports says that in today's scenario,

70% of the employees are less motivated today than they used to be. 80% of the employees could perform significantly better if they wanted to. 50% of the employees only put enough effort into their work to keep their job.

Employee Reward covers how people are rewarded in accordance with their value to an organization. It is about both financial and non-financial rewards and embraces the strategies, policies, structures and processes used to develop and maintain reward systems. The ways in which people are valued can make a considerable impact on the effectiveness of the organization, and is at the heart of the employment relationship. b) Attracting the employees: The aim of employee reward policies and practices, if any in your organization is to help attract, retain and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees. Personnel and development professionals will be involved frequently in reward issues, whether they are generalists or specialize in learning and development or employee relations. Keep following parameters in mind, while designing a reward policy:

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c) Recognition of the work: Recognition is the most cost-effective motivator. While the high cost of other rewards forces us to give them sparingly, recognition can be given any time, at very little cost. Some very ordinary items and events can be imbued with extraordinary motivational significance, far in excess of their monetary value, motivation of a pizza or movie tickets can be high if it is given with sufficient appreciation. A sincere thank you can be delivered at any place and at any time, costs absolutely nothing and can be more motivationally powerful than a substantial monetary bonus. Organizations can provide innovative recognition in an infinite number of ways. Highly motivating organizations even celebrate small successes. A health-conscious company distributes fruit bowls to employees' work areas when key personal milestones are attained. Another company uses a more fattening approach: fresh-baked chocolate-chip cookies to say thank you. Clearly the traditional "pay for loyalty" systems in most organizations need to be changed. Don't let attendance be your major criterion for rewards. Most employees resent those who only put in their time and yet receive the same reward as those who go the extra mile. Today's employees have higher expectations for what work can and should be, and they want to receive rewards that reflect their personal efforts and contributions. This is why so many companies are moving toward performance-based rewards, including performance bonuses, gain-sharing and non-monetary recognition. Although not a panacea, companies are finding that these new reward systems do allow them to give substantial rewards to those who really deserve them. Smart organizations are looking for opportunities to reduce across-the-board entitlements, and thereby find more resources for discretionary performance-based rewards, without increasing the total cost of rewards. The Law of Rewards - "What you reward is what you get" - Is extremely powerful. No matter what your orientation materials or job description might say, it is the rewards your organization gives that communicate the real expectations. The most important question to ask in evaluating the reward system in your organization is, do the rewards we are giving elicit the performance we want? Start with the results you want to achieve and then pinpoint

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the types of behaviors needed to achieve them. For example: Also, don't confuse employees with too many rewards. It is better to focus rewards on the critical few behaviors and results, rather than diluting them by rewarding the trivial many. d) Timely action: Rewards should be given as soon as possible after the performance has taken place. This is why the most successful gain-sharing programs pay employees monthly, rather than quarterly or annually as in the past. There is a well-accepted law of behavioral psychology, that if you want someone to repeat a behavior, you should positively recognize it immediately. From this law, smart supervisors and managers can learn a vital lesson: Look for any employee doing something right, right now, and recognizes it. e) Type of reward: Rewards are as different as the people who receive them and it doesn't make sense to give rewards that recipients don't find rewarding. For example, some people prefer more pay, while others prefer more time off. A promotion might be more rewarding to one person, while a job-sharing arrangement might be more rewarding for another. Some people are excited about sports events, others about movies. Some employees would love a dinner in a romantic restaurant, others a book by their favorite author. Food, fun, education, improved work environment, gifts, travel, and family-oriented activities - the options are endless. How do you know what will be rewarding to employees? Ask them. Smart organizations are also letting employees choose their own rewards from reward menus and catalogs. Personalizing rewards shows that a company cares enough to discover what "interests" each employee, rather than just distributing generic items. It also reduces the following danger: In one organization I was visiting, an employee opened a big drawer in his desk and disdainfully showed me all the "worthless trinkets" he had collected over the years. f) Longevity of the reward: Increase the longevity of rewards can be done in a number of ways: One of the keys to reward longevity is symbolism. The more symbolic an item is of the accomplishment, the

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more likely it is to continue reminding the employee of why it was given. For instance, a Tshirt of coffee mug with a meaningful inscription will continue rewarding those who wear it, or use it, long after its initial receipt. There are many tokens of appreciation I still keep on or near my desk that remind me of the joy of past accomplishments, while the monetary rewards I have received are long spent and long forgotten. Another way to increase the longevity of rewards in your organization is by using some kind of point system. Rather than rewarding each individual behavior or accomplishment, points can be awarded, which employees can accumulate and eventually trade for items from a reward menu or gift catalog. This keeps the anticipation of rewards fresh for longer periods of time. It also addresses the need for reward individualization. One company that designs motivational systems offers an electronic debit-card system to help larger clients cope with the complexity of distributing, tracking and redeeming employees' points. Employees can use their points to purchase virtually anything they want, from sports equipment and clothing to automobiles and overseas vacations. They only caveat for such programs is to make sure that the recognition value of the rewards isn't lost because of the impersonal nature of the technology. g) Decrease the de-motivators: Interestingly, when researchers have investigated the motivational dynamics of these workplace games, they have found that the major motivator is the playing, not the prize. Most de-motivators can be dramatically reduced by soliciting employee involvement in identifying highest-priority de-motivators and by enlisting top-management commitment to support their reduction. It is probably self-evident that considerable sensitivity is needed in the administration of any reward system. One de-motivator that is probably endemic in any reward system modification (especially as an organization moves from entitlements to more performancebased rewards) is a sense that something is being taken away. Employees need to be educated about the reasons that this is being done, understand the ultimate benefits to them and the organization, and should probably have some input into the change process.

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h) Avoid perception errors: To avoid the perception of unfairness, it is important, first and foremost, that the process for allocating rewards is viewed by employees as being impartial. This requires an objective measurement system that few organizations have. Without such objective measurement, any reward system is probably destined to failure.

6. QUESTIONNAIRE

1. If you look for a new Job, (in a new company) what will be your preference? * Improvement in Position Not improvement in position (Increase in other benefits)

2. What is your opinion about replacing the old benefits with new benefits on a monthly basis in your organization? * Improve satisfaction from the benefits No improvement in satisfaction from the benefits 3. Are you satisfied with the current job

0 very high

4 not at all

4. To what extend do you feel that quitting the present job will give you a satisfied job.

0 not at all

4 very high

5. To what extend you are emotionally attached to your company. *

0 not at all

5 very high

6. Is there any internal communication channel in your organization?1- any one channel,2- 2 channels, 3- 3 channels

0 no channel

4 4 or above

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7. What is the frequency of the internal communication in your organization?(1) Very less (2) Moderate (3) Fairly enough

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0 nil

4 very high

8. Do you have accessibility to the communication channels present in your organization?(1) Very less (2) Moderate (3) Fairly enough

0 no accessibility

4 very high

9. What is your opinion about creating awareness on company values and Employee benefits to its own employees to retain them?(1) Very less (2) Moderate (3) Good

0 not useful

4 very high

10. Do you have Rewards and recognition for your achievements? * yes no 11. Is it important that appreciation for your work by your coworkers and supervisors is necessary? * yes no 12. Are you satisfied with the Facilities provided by the organization? * yes no

7. ANALYSIS

Are you sa@sed with current job

0 1 2 3 4

10% 10%

30%

30%

20%

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To what extend do you feel that quiNng the present job will give you a sa@sed job

3 45%

1 22%

2 33%

To what extend you are emo@onally aRached to the company.

2 3 4

30% 40%

30%

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300.00% 70% 400.00% 100.00% 10% 10% 200.00% 10% 3 30% 2 40% 4 20% 1 10%

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Is there any internal communica@on channel in your organiza@on

What is the frequency of the internal communica@on in your organiza@on

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30% 50% 20% 2 50% 3 40% 1 10%

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Do you have accessibility to the communica@on channels in organiza@on

What is Your Opinion about crea@ng awareness on company values and Employee Benets
2 3 4

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80% 20% 82% 18%

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Do you have Rewards and recogni@on for your achievements

no yes

Is it important that apprecia@on for your work by your coworkers and supervisors is necessary?
no yes

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64% 36%

20

Are you sa@sed with the Facili@es provided by the organiza@on?

no yes

8. OUR RECOMMENDATIONS

Internal advertisement strategy

It communicates the advantages and benefits an employee received from the company. The theory holds that an organization must extend its marketing strategies to inside the organization. Competition is not just confined to marketing division of the organization but it directly affects the Human Resource division as well. The organizations are competing each other to acquire the scarce talent pool. Internal advertisement simply means to tell the employee that the organization, which they are working, is good and a company favorable comparison should be given to employees to solve the inequity they perceive. The major difference with internal advertisement is that the communication channel is different from that of marketing channels.

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a) Communications Communication is the first step toward creating the kind of environment that people care about, and if they care, they just may stay. Keep the employees in the loop about what's happening with the company. At any time, all of your employees should have a pretty good idea of how business has been, and they should be aware of what issues the company is attempting to address. Regularly keep the employees up to date with important events affecting the company. If November was good, let them know, and while you're at it, tell them what you expect to happen in December. Share good news, as well as points of concern. Listen to the employees when they have ideas for improvement. Again, the benefits extend beyond just making people feel appreciated for their contributions. These are, after all, the people who do the work every day. They may have some ideas to improve productivity, and when the employees do come up with one, let everybody know where it came from. Post a "brag board" in your break room, or circulate an internal newsletter that touts these contributions. The pay-off is a contagious feeling of pride and, perhaps, some new efficiency that saves the company money.

b) Speak freely The ability of the employee to speak his or her mind freely within the organization is another key factor in employee retention. Does the organization solicit ideas and provide an environment in which people are comfortable providing feedback? If so, employees offer ideas, feel free to criticize and commit to continuous improvement. If not, they bite their tongues or find themselves constantly "in trouble" - until they leave.

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