The Hindu Business Line : ‘Competency-based assessment, open appraisal preferred’

Attrition and high employee turnover are most often associated with companies in the IT and ITeS sectors. However, other industry segments also face similar challenges, not least a niche category like the tobacco industry.

Godfrey Phillips India Ltd (GPIL), the second largest cigarette company in the country with a 12.5 per cent market share, has witnessed a 10 per cent employee turnover over the last year. The turnover at the managerial level was slightly less than that at the first-line level.

The company, in which Philip Morris and the K.K. Modi group hold a 36 per cent stake each, has faced poaching of staff even at the factory level, says Arun Kumar, Executive Vice-President, Human Resources.

According to him, the buoyant economy had thrown up a number of opportunities for experienced workers, some of whom had even found jobs with overseas companies like Dubai Cigarette Manufacturing Company.

The HR department in the company has conducted several workshops to find out the reasons why employees were leaving. All its HR operations from recruitment to training were reviewed and employees’ views were sought on areas that needed to be redesigned.

Among the three focus areas that emerged were competency-based assessment; an open appraisal procedure accessible on the official intranet, and mentoring for new staff. The company had also launched a number of HR initiatives aimed at encouraging total quality management, high productivity, employee involvement and engagement with staff.

Queried about the pressure to raise compensation levels in tune with other industry segments, he said that their salary levels were pegged competitively. However, in an effort to build more flexibility into the compensation structure the company had adopted the CTC (cost-to-company) model and management staff were given more flexibility in the choice of perks such as transport entitlements. On the other hand, the compensation package for workers was based on long-term agreements worked out with the union.

Exit interviews

Besides, the company has also been conducting exit interviews with a view to understanding the reasons why employees leave the organisation. According to Kumar, no resignation letter is accepted without an exit interview. The interviews, usually conducted by the employee’s immediate senior, were now available online also.

According to him, the study of such exit interviews over a couple of years had given the HR department insight into the reasons behind an employee’s decision to quit.

Among the more important employee concerns was career growth prospects. Wherever possible, the company was trying to place internal candidates in new positions as and when they came up.

GPIL has 1,400 employees, 400 of whom are in the supervisory cadre. The company, headquartered in New Delhi, has five branch offices and two manufacturing facilities. Besides, it has processing operations in both Andhra Pradesh and Mysore.

The company services about 40 per cent of the country, predominantly in the North and West.

According to Kumar, HR initiatives that are blindly imposed on an organisation would not yield the desired results. People policies had to be tailored to the specific needs of the company and its culture. At GPIL, the HR steering committee adopted the joint decision-making process, he said.