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Case let 1:

Trust them with knee-jerk reactions," said Vikram Koshy, CEO, Delta Software India, as he looked at the quarterly report of Top Line Securities, a famous equity research firm. The firm had announced a downgrade of Delta, a company listed both on Indian bourses and the NASDAQ.  The reason? "One out of every six development engineers in the company is probable to be benched throughout the remaining part of the year." Three analysts from Top Line had spent some time at Delta three weeks ago. Koshy and his team had described how benching was no different from the problems of excess inventory, idle time and surplus capacity that firms in the manufacturing sector face on the regular basis, "Delta has witnessed a scorching pace of 30 percent growth throughout the last five years in a row," Koshy had said, "What is happening is a corrective phase." However, evidently, the analysts were unconvinced.

Why Bench?

Clients suddenly decide to cut back on the IT spends Project mix gets skewed, affecting work allocation Employee productivity is set to fall, making slack working conditions. High degree of job specialization leads to the redundancy.

What are the options?

Quickly cut costs in areas that are non-core look for learning’s from the manufacturing sector Focus on alternative markets such as Europe and Japan Move to products, where margins are better. Of course, the Top Line report went on to cite several other "signals," as it said: the rate of annual hike in salaries at Delta would come down to 5 % (from between 20 and 30 per cent last year); the entry-level intake of engineers from campuses in June 2001, would refuse to 5% (unlike the traditional 30 per cent addition to manpower every year); and earnings for the next 2 years could dip by between 10 and 12 percent. And the loftiest of them all: "The meltdown at Nasdaq is unlikely to reverse in near future." ‘Some of the signals are no doubt valid. And ominous,’ said Koshy, addressing his A-Team, which had assembled for the routine morning meeting. "However, clearly, everyone is reading too much to this business of benching. However, benching is one of the many options which our principals in the US have been pursuing as part of cutting costs right since September, 2000. They are as well expanding the share of off-shore jobs.

Five of our principals have confirmed that they would outsource more from Delta in India-which is likely to hike their billings by regarding 30 percent. At one level, this is an opportunity for us. At the other, of course, we should be jubilant, as they have asked for a 25-30 per cent cut in billing rates. Our margins will take a hit, except we cut costs and enhance productivity. Productivity is clearly a matter of priority now, said Vivek Varadan, Vice-President (Operations). If you consider benching as a non-earning mode, we do have big patches of it at Delta. As you are aware, it has not been simple to secure 70 percent utilization of our manpower, even in normal times. Ii is needed to look at why we have 30 per cent bench before observing how to turn it into an asset. There are many reasons remarked Achyut Patwardhan, Vice-President (HR). And a lot of it has to do with the nature of our business that is more project-driven than product-driven. Whenever you are managing a number of overseas and domestic projects simultaneously, as we do at Delta, people tend to go on bench. They wait, as they complete one project and are assigned the next. There are problems of coordination between projects, associated to the logistics of moving people and resources from one customer to the other. However, fine-tuning our monthly manpower utilization report to give a breakup of bench costs into specifics-leave period, training programs travel time, buffers, acclimatization period at all. It would be worthwhile following the business model used by US principal Techno Inc, said Aveek Mohanty, Director (Finance). The company has a pipeline of projects; however it doesn’t manage project by project. What it does is to slice each project into what it calls 'activities'. For illustration, communication networking; user interface development; scheduling of processes are activities common to all projects. People move from one project to the other. This is somewhat like the Activity Based Costing. It throws up the bench time straightaway, that helps us control costs and revenue better. We should reduce our dependence on projects and move into products, said Praveen Kumar, Director (Marketing). That is where the opportunity for brand building lies. However, now is the time to get our technology guys included in marketing. Multiskilling helps reduce the bench time. Benching has an analogy in the manufacturing sector, said Girish Shahane, Vice-President (Services). We could look for learning's there. Most of the firms have adopted Just-In-Time (JIT) inventory as part of eliminating idle time. This would be worthwhile exploring the possibility of JIT. However the real learning lies in standardization of work. It is linked to what Mohanty said about managing by activities. At a broader level, I see several other opportunities, said Koshy, We can fill in the space vacated by US firms and move up the value chain. However before we do so, Delta must consolidate its position as the premier outsourcing centre. As there are only two ways in which we can produce revenue-sell expertise or sell products-we should move towards a mix of both. Tie-ups with global majors will help. Now is the time to look beyond the US and strike alliances with firms in Europe- and also Japan-as part of developing new products for the global markets.


problem 1: Should benching be a matter of concern at Delta?

problem 2: What are the risks included in moving from a project-centric mode to a mix of projects and products?

Case let 2:

The contexts in which human resources are managed in nowadays organizations are constantly, changing. No longer do firms employ one set of manufacturing processes, employ a homogeneous group of loyal employees for long periods of time or develop one set way of structuring how work is completed and supervisory responsibility is assigned. Continuous changes in who organizations employ and what such employees do require HR practices and systems that are well conceived and efficiently implemented to make sure high performance and continued success.

A) Automated technologies nowadays need more technically trained employees possessing multifarious skills to repair, adjust or enhance existing processes. The firms can't expect such employees (Gen X employees, possessing superior technical knowledge and skills, whose attitudes and perceptions toward work are significantly distinct from those of their predecessor organizations: like greater self control, less interest in job security; no expectations of long term employment; greater participation urge in work actions, demanding opportunities for personal growth and creativity) to stay on without attractive compensation packages and novel reward schemes.

B) Technology driven companies are led by project teams, possessing diverse skills, experience and expertise. Flexible and dynamic organizational structures are required to take care of the expectations of managers, technicians and analysts who combine their skills, expertise and experience to meet the changing customer requirements and competitive pressures.

C) Cost cutting efforts have led to the decimation of unwanted layers in the organizational hierarchy in recent times. This, in turn, has brought in the problem of managing plateau employees whose careers seem to have been hit by the delivering process. Organizations are, thus, made to find out alternative career paths for such employees.

D) Both young and old workers, these days, have values and attitudes which stress less loyalty to the company and more loyalty to oneself and one's career than such shown by employees in the past, Organizations, thus, have to devise suitable HR policies and strategies so as to prevent the flight of talented employees.


problem 1: Discuss that technological breakthrough has brought a radical changes in the HRM.

problem 2: Several kinds of interviews are generally used depending on the nature & importance of the position to be filled within an organization. describe the various types of Interviews.

problem 3: Describe the legal provisions regarding safety of workers.

HR Management, Management Studies

  • Category:- HR Management
  • Reference No.:- M9520

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