RESEARCH REPORT

ON
IMPACT OF OUTSOURCING HR ACTIVITIES ON
PRODUCTIVITY OF
MAHINDRA AND MAHINDRA LTD.
Acknowledgement
Expression of sincere gratitude is just a partial acknowledgement. My vocabulary
falls short of word to express my sincere gratitude to All faculty members of
PGM under whose guidance ! had the opportunity to carry out the present
work.
"he objective of research report is to provide us with an opportunity to
experience the practical aspects of management and its functioning.
"his project report not be possible without the guidance of My All faculty
members #PGM$%who inspired& gave their valuable suggestion.
"hanks are due to my learned faculty member's professor for their constant
encouragement and giving me this opportunity of doing summer training.


VIKAS ARORA
PREFACE
The project prepared gave me an opportunity of learning the impact of
outsourcing HR activities

! learned and discussed important points that are related to my report !
learned and study on different topics of P"A li#e HR$ %performance
appraisal% jo& evaluation % industrial relation
The purpose of this report is to provide an accessi&le account of the #ey
issues currently confirming the industries The report loo#s at a couple of the
&asic function of personnel department and the perception of 'or#er and
management regarding (IMPACT OF OUTSOURCING HR
ACTIVITIES ON PRODUCTIVITY)
! studied a&out the *ahindra " *ahindra+s history% functions% products%
performance appraisal % departments li#e recruitment and selection and many
more
CONTENTS
Executive
summary
About the topic
Outsourcing is subcontracting a process% such as product design or
manufacturing% to a third(party company. "he decision to outsource is often made
in the interest of lowering firm or making better use of time and energy costs%
redirecting or conserving energy directed at the competencies of a particular
business% or to make more efficient use of land% labor% capital% #information$
technology and resources
Types of Outsourcing
)usiness Process *utsourcing
!nformation "echnology ( +,-
.uman /esources 0 12-
3ales & Marketing 0 14-
5inance 0 11-
Administrative 0 6-
Least ommonly Outsourced !unctions
Performance Management 7-
3trategic )usiness Planning 0 8-
Policy evelopment9!mplementation 0 8-
Employee :ommunication Plans 0 1;-
The objectives of study are:
"o reali<e economies of scale and achieve standardi<ation of services.
To define the concept of hire on contract policies" promotion
To descri&e the various procedure follo'ed &y *ahindra " *ahindra
To assess the vie's of the 'or#er and management in conte,t of these
scheme
Why Outsource?
- Allow ./ to focus on core competencies
= :reates strategic opportunities for ./ professionals
= !mprove >uality% efficiency% and effectiveness
= /elief from administrative burdens
= /educe operating costs
Impact on ompanies
=Employee reactions
= ./ executives taking part in operational and strategic decisions
=Elimination of bureaucracy
=:ustomer service improvements
=Growth of self(service platform
=3limming down staff
=:ost savings
I"TRO#$TIO"
What is Outsourcing?
"he performance by outside parties% on a recurring basis% of tasks that would
otherwise be performed in(house.
Outsourcing is subcontracting a process% such as product design or
manufacturing% to a third(party company. "he decision to outsource is often made
in the interest of lowering firm or making better use of time and energy costs%
redirecting or conserving energy directed at the competencies of a particular
business% or to make more efficient use of land% labor% capital% #information$
technology and resources
%uman Resource Outsourcing
*ne very important trend in the recent times has been the growth of human
resource outsourcing. ./ outsourcing is the outsourcing of peripheral but
necessary administrative tasks such as payroll% benefits% education9training%
recruiting personnel% administration% to reali<e economies of scale and achieve
standardi<ation of services.
/apidly changing market dynamics and global competitive pressures have
caused organi<ations to spend more time focusing on their core business.
*rgani<ations are fast reali<ing that they can?t be all things to all people. 3o
companies now% be it a software company% a service provider or a manufacturing
firm% decide what they are good at and outsource everything else% i.e.% focus on
their core competency% and let someone else do the rest in a more efficient and
cost(effective manner.
As a result% human resources outsourcing is becoming increasingly prevalent.
"he number of companies outsourcing ./ activities continues to rise% and the
scope of outsourced ./ activities continues to expand. ./ outsourcing can
happen in ./ functions% like payroll administration #producing checks% handling
taxes% dealing with sick(time and vacations$% employee benefits #.ealth% Medical%
@ife insurance% :afeteria% etc$% human resource management #hiring and firing%
background interviews% exit interviews and wage reviews$% risk management% etc.
*utsourcing has become a common response to manage people and technology
resources strategically% enhance services% and manage costs more effectively.
*utsourcing noncore activities allows ./ professionals to move away from
routine administration to a more strategic role. "he organi<ation can focus on
higher value(added activities while the outsourcing provider takes care of the
day(to(day administration. :ritical internal resources% such as technology and
talent% can be devoted to company?s core business. *utsourcing reduces the
need for large capital expenditures in noncore functions. "hus% outsourcing
becomes a strategy for reducing the capital intensity of the business. "his
strategy has gained popularity as companies aim to become more nimble and
gain the speed and flexibility necessary to compete in today?s business
environment. A growing number of executives understand the benefits it can
bring in terms of not only cost savings% but also heightened strategic focus. Many
recogni<e outsourcing relationships as long(term partnerships created to further
the strategic goals of the organi<ation
"he ./ outsourcing business opportunity is large and !ndia is likely to garner a
larger and larger piece of this pie in the future. !ndia% with its intrinsic advantages
such as low cost% ready pool of English speaking manpower and geographic
positioning% is emerging as a viable destination for ./ outsourcing companies to
set up their businesses.
)ut still here people are not very clear about what exactly is manpower
outsourcing all about% and issues like >uality and trust needs to be addressed
properly. Experts say the basic reasons hampering the growth of ./ outsourcing
in !ndia are confidentiality and cost factors. Moreover% the fear of losing jobs%
losing control over confidential data% ethics and >uality of outsourcing vendors%
security breaches and overall confidence in the vendors deters many
organi<ations. "he biggest problem ( and this is why the ./ outsourcing industry
in !ndia is on the back foot ( is the government and the industry?s failure to tackle
issues like data security and data privacy. "his is where !ndian ./ outsourcing
companies face a major handicap. "he !ndian government is still grappling with
drafting a data protection law designed to >uell growing privacy concerns from
their offshore clients.
.owever% the future seems to be very promising. !t?s set to become a A 41 billion
market worldwide in +;;4% representing 76 per cent of the total business process
outsourcing revenue. Estimates show that the latent si<e of ./ outsourcing in
!ndia is about A + billion with a current market of A +B million and it is growing at
an alarming rate of about 4; per cent. !ndia has immense potential as more than
,;- of fortune 1%;;; companies are discussing ./ outsourcing as a way to cut
costs and increase productivity.
/ight now% !ndia is barely skimming the surface of the ./ outsourcing market
potential. !ndian life .ewitt #!@.$% 5!E@!"C% EDE@" and MA5*! are some of the
prominent ./ outsourcing services providers in !ndia and the clients include
giants of manufacturing% software and service industries like GE :apital% 5ord
Motors% .yundai Motors% 3atyam Group% !nfosys% Enron% .aldia Petrochemicals
and .3):% to name a few% but many more needs to be added to that list.
./ outsourcing has a huge potential for employment also. Fasscom numbers
are a million software jobs by +;;4G ./* would be about a +4 per cent of that.
Experts believe that in present times ./ outsourcing is undergoing a transition
phase% it would still be sometime before we see increased levels of ./ activities
being outsourced to !ndia as lack of domain knowledge and >uality are some of
the critical issues.
ACTIVITIES TO OTSO!CE"
Payroll
)enefits
/ecruiting% 3taffing% & 3earch
"raining
./!3 & Heb(based services
I .ow many of you outsource all of your ./ functionJ
I Hhat led to the decision to consider outsourcingJ
&'y Outsource(
I Allow ./ to focus on core competencies
I :reates strategic opportunities for ./ professionals
I !mprove >uality% efficiency% and effectiveness
I /elief from administrative burdens
I /educe operating costs
Ot'er )enefits to %RO
I Access to outside ./ expertise
I Greater diversity of ./ services
I @everage vendor investments in technology rarely available to ./ organi<ation
I @imit fiduciary% audit% and litigation risks and liabilities
I Epgrade level of customer service
I Ease time pressure demands
IK)etter% faster% cheaperL
Risks
I *ver promise and under deliver
I Fonperformance of key function
I :ost
I @oss of institutional knowledge
I ifficulty managing vendor relationship
I :hange in provider's business or financial stability
I @ack of fit with company culture
I *rgani<ational resistance or unreadiness
onsiderations
I :ore :ompetencyJ
I )est in :lassJ
1. Hhat is your vision for your ./M businessJ
+. Hhat metrics will measure progress toward visionJ
7. Hhat business outcomes are needed from the ./M aspects of the
businessJ
Outsourcing Myt's
I *utsourcing is just a fad
I *utsourcing can be kept secret from employees
I *utsourcing is only for the largest companies
I Messes must be fixed before outsourcing
I *utsourcing is for everyone
Trends in %R Outsourcing Market
I 3peciali<ation
I Globali<ation
I 3tandardi<ation
I /egionali<ation
I :onsortia )uying
I Mid(market Mania
I Etility Model Evolution
I :onsolidation and Partnering
T'e !uture of %RO
1. Growth(Maturation of ./* market
+. !ncreasing weight of non(cost drivers
7. K:ommodi<ationL of ./ functions
8. Few roles for internal ./ departments
4. Few career opportunities for ./ professionals
2. Expansion of small9mid(si<ed ./* markets
B. emographic changes
,. !mproved ./* metrics
6. /eshaping of industry
Impact on ompanies
I Employee reactions
I ./ executives taking part in operational and strategic decisions
I Elimination of bureaucracy
I :ustomer service improvements
I Growth of self(service platform
I 3limming down staff
I :ost savings
I Model will serve to guide other organi<ational functions #!"% accounting$
Impact on %R *rofession
I !nternal ./ at significant disadvantage in cost per transaction
I @oss of control of key processes
I Enhanced credibility
I 3trategic focus
I ecentrali<ed structure
I !nternal politics 0 ./ as business partner
I Move to customer service culture
I Management and *rgani<ational evelopment 0 big picture view
I Few roles 0 consultant and ./ strategist
I evelop competencies to remain valuable
I ./ is exposed and more visible as organi<ational function
I ./ is far more measurable
I Align ./ strategy with corporate goals
"efinitions
OTSO!CIN#
"he transfer of the provision of services previously performed by in(house
personnel to an external organi<ation% usually under a contract with
agreed standards% costs% and conditions. Areas traditionally outsourced
include legal services% transport% catering% and security. An increasing
variety of activities% including !" services% training% and public relations are
now being outsourced. *utsourcing% or contracting out% is often introduced
with the goal of increasing efficiency and reducing costs% or to enable the
organi<ation to develop greater flexibility or to concentrate on core
business activities. "he term subcontracting is sometimes used to refer to
outsourcing.
$!O"CTIVIT%
Maintaining a high productivity is the life of a successful business all around the
world. Fo matter how much money you invest in your business without
productivity implementation strategies your business would not progress and
would eventually collapse.
*roducti+ity in an industrial conte,t is output of an aspect of
production per unit of input.
!t is a method used to measure the >uantity of output of worker% machine% or an
entire national economy in the making of good% services% or commodities to
produce income.
Other "efinitions
!n.sourcing
Off.shoring
Co.sourcing
/eo.sourcing
Outplacement
)-"-!ITS O! *RO#$TIVIT.
!n improving the productivity of a company% the business will gain many benefits.
"hese can includeI
!ncrease in income9profitability.
@owering running costs9operational costs.
Maximi<ing the use of all of the company's resources such as land%
e>uipments9machineries% factory% workers% and etc.
Gaining a greater share of the market.
More cash flows mean more opportunity for the company to expand and
grow.
WHY THE OUTSOURCING RUSH?
What are the reasons for the growth in HR outsourcing? How do
companies gain by outsourcing their HR activities? HR outsourcing is
considered a viable option, if a company lacks internal expertise and
confidentiality and requires unbiased opinion on human resources.
utsourcing is also gaining importance as most companies do not have
the time or the expertise to deal with situations.
utsourcing has become popular because companies are finding that
external vendors!through technology and economies of scale!can
provide more efficient and cost!effective HR services than in!house
departments. "he best example of a firm that has reaped early
benefits from outsourcing is #$. %n &''', it outsourced its activities to
(xult in the )*+ and ), for services like payroll, recruiting,
expatriation, records management, vendor management and
relocation services for -., /// employees.
"he only function that remained in!house was #$0s learning and
development program in the )nited *tates. ver the last two years,
the company has reaped many benefits from this arrangement. $ayroll
processing became more timely and accurate. (mployees got their
benefits questions answered sooner. HR processes have been
standardi1ed across the company. +nd for the first time, #$ has
measurable data on which HR activities are effective.
+s a result, its core HR staff has been slashed by -2 percent!from &//
to .2 people. *uch success stories have propelled companies like
*ony, +"3" and +merican (xpress to outsource HR activities. ne of
the main reasons for HR outsourcing that most companies quote is
that such outsourcing helps them to get rid of routine transactional HR
work. *ome of the companies which have gone ahead with even
manpower hiring outsourcing practices are 4isco, 5(, Honeywell, *un.
BENEFITS OF OUTSOURCING
When a number of companies are outsourcing their HR activities, there
must be certain benefits associated with it. "he ma6or advantage is the
cost and the time factor. +ccording to %ndia 7ife Hewitt, 8ice!$resident,
7eo 9ernandes, :9or large organi1ations to service their mammoth
payroll by themselves is a huge drain on their resources. utsourcing
this one activity alone is huge direct cost saving for large legacy
companies which could be in the range of ;/ to </ per cent.=
;

"he ma6or benefits of HR outsourcing are as follows>
? 9osters %nnovation
? %ncreased speed to market
? %mproved quality
? 9ocus on core competence
? 4ost reduction
? Reduced administrative costs
? %mproved customer service
? %nsufficient staff
? 4onserve 4apital
THE INDIAN SCENARIO
%ndian companies are also not lagging behind in outsourcing their HR
activities. 75 *oft %ndia has outsourced its $9 management, (scosoft
has outsourced payroll processing, execution of training programmes
and survey conduction. @epending on their need, outsourcing can be
transactional or HR 4onsulting. %n %ndia transactional outsourcing is
more prevalent .
%n the value chain, it falls at the lower!end compared to HR
consultancy, although it happens to be an essential function. +ccording
to Harish 4hopra, whose firm Harish 4hopra 3 +ssociates has garnered
a large chunk of financial sector HR over the years> :+n investment
bank would prefer to recruit investment bankers rather than HR
specialists. +nd given their minimum salaries and establishment costs,
HR administration would cost them twice as much
<
.A
"he HR outsourcing fever has not only spread to large companies but
many small and medium si1ed companies are also welcoming this
trend. *alary and #enefits $rocessing, #enefits +dministration, and
4ompensation #enchmarking 3 @esign are the most frequently
outsourced HR activities in %ndia. +ccording to a study conducted by
the %nstitute of Banagement +ccountants C%B+D in mid &''/s, mid!
si1ed companies spent more on the routine transactional work in
finance and accounting services than large companies and maintain E'
percent more headcount
.
"his kind of cost is felt even more in the routing HR work. +ccording to
the survey more that FE percent of the funds mid!si1ed companies0
budget for finance and HR go towards routine processing transactions,
rather than policy making strategies and analysis that
could move their business forward. "his is clearly counterproductive
for organi1ations set on high productive model
INDIA AS AN HR OUTSOURCING DESTINATION
%ndia is emerging as a ma6or player in HR outsourcing. "hough there
are hardly five to six names in this market, they are trying to make a
mark for themselves and tap the potential of providing HR outsourcing
services. 4ompanies like Bahindra and mahindra are expanding their
hori1ons by extending their services to the indian region. However,
overseas HR servicing companies are beginning to view the %ndian
market as a viable investment destination, where they can set up their
operations and cater to the rest of the international market.
"he G<2/!million (xult %nc. started a E/!people outfit in Bumbai. 9rom
the tactical and straightforward handling of payroll and benefits, HR
services providers are moving into the strategic world of #$. HR!
enablers are helping HR managers free themselves from the routine
6obs and work towards taking employee services to a higher level.
%ndia, with its intrinsic advantages such as low cost, ready pool of
(nglish speaking manpower and geographic positioning is emerging as
a viable destination for HR outsourcing companies to set up their
businesses. "he HR outsourcing business opportunity is large and %ndia
is likely to emerge as a ma6or player in this market. $atni 4omputer
*ystems is looking to leverage its work done on </&, pension plans to
get into HR. @aksh has started payroll processing. "he G2!billion
payroll processor, +utomatic @ata $rocessing is also planning to start
operations in Hyderabad.
"he various HR processes that companies are venturing into include
data entry, payroll processing, staffing, training, resume management,
compensation, employee communications, pension plans, leave
administration and HR data analytics. "he popular delivery models for
HR services outsourcing are self service, call center back up or shared
services involving high caliber HR professionals who play a consultative
role to line managers.
When compared to other regions, %ndia holds an advantage in HR
outsourcing because of cost factor and education of the workers.
IS THE MARKET STILL UNEXPLOITED IN INDIA?
@espite all these figures and numbers mentioned above, HR
outsourcing is still considered to be unexploited. "here are a number
of deterrents that are keeping companies from moving to HR
outsourcing.
"he basic reasons hampering the growth of HR outsourcing in %ndia
are confidentiality and cost factors. Bany companies outsource only a
bit of their requirements because of the above two factors.
#esides, the fear of losing 6obs, losing control over confidential data,
ethics and quality of outsourcing vendors, security breaches and
overall confidence in the vendor deter many organi1ations. +ccording
to 8. ,artikeyan, the director!human resources of "exas
%nstruments %ndia,
:*ome companies can also be reluctant because they may not have an
adequate grip over the cost!benefit equation of outsourcing.
4ompanies need to be convinced before they can outsource select HR
activities.A
-
"he basic cultural mindset and the acceptance at the
psychological level add to the deterrents. +n in!house HR person
handles certain situations that an outsourcing agency cannot handle
well Cthings like building employee incentive programmes, taking care
of recognition for employeesD.
+t times, many employees would want someone in!house to resolve
their work!related problems or disputes. +ll this is only possible if
there is an in!house HR team, which interacts with the employees on a
daily basis. Huality at times forms another roadblock. "he issues of
pricing also play an important role as there is no standards benchmark
for pricing and it varies from vendor to vendor. @oing reference check
helps a lot in this case.
THE FUTURE AHEAD
"he future of HR outsourcing in %ndia is poised to be very effective
because of its intrinsic advantages such as low cost, ready pool of
(nglish speaking manpower and geographic positioning is emerging as
a viable destination for HR outsourcing companies to set up their
businesses. While currently there are only a few ma6or players the
trend seems to be catching up as companies are showing marked
interest to improve on services such as pay roll benefits as well as
complete HR delivery.
4ompanies are looking to outsourcing the complete range of HR
delivery and designing products on policies, compensation, structure,
and recruitment. %ndian companies are not only providing services for
the clients abroad but are also catering to the local market. Boreover
these players are moving up the value chain.
Bafoi has emerged as a ma6or HR outsourcing center CRefer exhibit on
HR outsourcing at Bafoi consultantsD. %t is estimated that currently the
organi1ed sector of HR is catering to only two percent of the whole
market . "his is the right time for the players to tap this emerging
market.
Contract-To-Hire And Recruiting Agencies
Cou may be wondering how staffing companies recruit applicants. "hey can
recruit in a number of ways. "hey may advertise in newspapers% through job
fairs% virtual communities% and online job boards.
Cou may have seen ads in newspapers for contract(to(hire positions. A majority
of these ads are placed by staffing companies to recruit applicants or contractors.
"hey normally don't reveal the name of the hiring company until they set you up
with an interview.
Mob fairs are a second method used to find potential applicants. !f you're
interested in attending a job fair% you normally find them advertised in
newspapers. Cou may even do a search on the !nternet for job fairs in your area.
*nline job forums are an effective recruiting method. "he service is generally free
and does not take very much time to post. "he recruiter normally posts the job
description% re>uirements% and the contact information. Applicants generally are
asked to send a copy of their resume and a cover letter explaining why they think
they are a good fit.
"he fourth recruiting method is online job boards. "hese are similar to newspaper
ads% but are placed online at employment sites. Cou can expect the ads to read
much like a newspaper ad.
Contract-To-Hire: Why Use A Staffing Agency?
"here are many benefits to using the services of a staffing company. 3taffing
companies have staffing and recruiting teams. "heir job is to recruit% pre(screen%
and test individuals. )y the time an applicant is sent on an interview% that person
has already been tested thoroughly and his skills have been assessed. 3taffing
companies are interested in keeping their clientsG therefore% they work hard at
matching an individual with the company or position that best suits him. Everyone
wins in this case. "he staffing company keeps the client happyG the applicant
thrives on his job because he's capable of performing the duties well% and the
hiring company gets a capable% productive potential employee.
Another benefit to using a staffing company's services is that they are
responsible for conducting credit and background checks. Especially if your
business deals with sensitive% confidential information% you can feel confident that
contractors sent to you have already gone through all the screening checks.
3till another benefit% if for whatever reason you decide that things are not working
out% you simply terminate the contract. "here is no legal obligation to keep the
contractor any longer than you need or wish to keep him. !f you are the
contractor% using a staffing company benefits you% because if you decide that you
don't want to continue with a certain company% you too can terminate the contract
without any legal obligations.
Contract-To-Hire Employment
"his type of position is becoming more popular and easy to find. !f you prefer to
seek employment on your own rather than through a staffing company% you can
still succeed. Cou would proceed the same way as with a direct hire position.
@ook in newspapers. Make sure that the contact information is for the hiring
company and not for a staffing agency. Go to online employment sites and enter
a search for the term Kcontract(to(hireL in your area. @arger companies
sometimes have job fairs. Cou can do a search for job fairs in your area as well%
and make sure you attend.
.aving your resume ready% your work history% and references along with a cover
letter increases your chances of finding a position. /esumes and cover letters
take time to put together. !f you have these items ready% you can forward them as
soon as you see an ad. All you will need to do is update the position on the
resume. "he cover letter may re>uire a few more updates such as the position%
contact person% and maybe their address. Make sure you have the correct date.
!ESEA!C& ANA'%SIS
OVE!VIEW
Payroll
"he term ?payroll? encompasses every employee of a company who receives a
regular wage or other compensation. 3ome employees may be paid a steady
salary while others are paid for hours worked or the number of items produced. A
payroll specialist calculates all of these different payment methods and the
appropriate paychecks are issued. :ompanies often use objective measuring
tools such as timecards or timesheets completed by supervisors to determine the
total amount of payroll due each pay period.
3etting up an effective payroll system is not especially difficult for trained
accountants% but it can be very time consuming. 3ome smaller businesses rely
on user(friendly computer software to set up a simple payroll system complete
with check printers and file storage. @arger companies may assign trained
accountants to handle payroll issues as part of their overall duties. )ut many
businesses without the means to maintain their own payroll systems choose to
farm out this task to outside specialists.

%R onsultation ser+ices

Personnel Policies
/ecords /etention :onsultation
:ompensation9)enefits Analysis and Planning
Employee "raining and *rientations
3uccession Planning
3trategic Planning
Hage and .our consultation
5M@A9*5@A :onsultation
Employee /elations :onsultation
"eam )uilding and !ssue /esolution 5acilitation
T!AININ#
!-AT$R-S
!ncreases knowledge and skills for doing a job.
)ridges the gap between job neegs and employee skills 9 knowledge and
behavior.
Mob(oriented process% vocational in nature.
3hort(term activity% desinged essentially for operative.
IM*ORTA"- O! -M*LO.-- TRAI"I"/
R-#$TIO" I" OST O! *RO#$TIO"0 Efficient workers do their works in
the best possible manner. they make the maximum utili<ation of materials and
machines. thus% the cost of production is reduced.
MA1IM$M $TILI2ATIO" O! MAT-RIALS A"# MA%I"-S0 "raining teaches
the employees of the enterprise the method of doing their job in the best possible
manner.
MI"IM$M *OSSI)ILIT. O! AI#-"T0 "rained worker know the methods of
doing their jobs in the re>uired manner. the know(how to use the machines in the
best possible manner. it reduces the possibility of accidents to the minimum.
STA)ILIT. I" OR/A"I2ATIO"0 "raining brings stability in organi<ation%
because it reduces the rate of absenteeism and labor turnover. it enables the
worker to do their works in the absence of any supervision.
%I/% MORAL-0 As the trained workers are capable in doing their jobs in most
suitable manner and can understand the procedures and methods easily% it
increases their morale. it gives them satisfaction in their work.
IM*ROV-M-"T I" T%- 3$ALIT. A"# 3$A"TIT. O! *RO#$TIO"0
"raining increase the efficiency of employee which increases the >uantity of
production and improves its >uality.
MI"IM$M "--# O! S$*-RVISIO"0 A trained worker can do his work himself
efficiently. thus% the training reduces the need of supervision to minimum.
%-L*!$L TO MA"A/-RS0 As there is minimum need of supervision% it helps
the managers of the enterprise to concentrate upon the important problems of
enterprise. they have not to waste their valuable time on supervising the workes.
Ty(es of Outsourcing
: 0usiness Process Outsourcing
1 !nformation Technology . 234
1 Human Resources 5 674
1 Sales " *ar#eting 5 684
1 9inance 5 664
1 Administrative 5 :4
1 All Others 5 224
&o) Co**on is &!O?
+,- of co*(anies outsource so*e &! function.
: /0- of co*(anies )ith 10 bi22ion3 annua2 revenues are no) considering &!O4
: &!O gre) .,- fro* second ha2f of .556 to first ha2f of .55+6
Other Ty(es of &! Outsourcing
: Pension )enefits Administration 0 44-
I "emporary 3taffing 0 48-
I /etirement )enefits Administration 0 8B-
I Payroll & 3oftware 3ervices 0 8,-
I /ecruiting% 3taffing & 3earch
Fon(executives ( 7;-
Executives ( +6-
I Employee /elocation 0 +6-
I "raining and evelopment 0 +1-
I !ncentives 0 16-
I ./!3 & Heb(based 3ervices 0 14-
I /eference :hecks
I PE*s and A3*s
I 3ourcing :onsultants & @egal 3ervices
I 3creening & Horkplace 3ecurity
I Process% Project% and 3ystems Management
Least ommonly Outsourced !unctions
I Performance Management 7-
I 3trategic )usiness Planning 0 8-
I Policy evelopment9!mplementation 0 8-
I Employee :ommunication Plans 0 1;-
/ ; < - F &/
(mployee 4ommunication
$lans
$olicy
@evelopmentI%mplementation
*trategic #usiness $lanning
$erformance Banagement
*eries&
Audience Survey
1 Ho' many of you outsource part of your HR function;
Payroll
0enefits
Recruiting% Staffing% " Search
Training
HR!S " <e&.&ased services
1 Ho' many of you outsource all of your HR function;
1 <hat led to the decision to consider outsourcing;
Why Outsource?
1 Allo' HR to focus on core competencies
1 Creates strategic opportunities for HR professionals
1 !mprove =uality% efficiency% and effectiveness
1 Relief from administrative &urdens
1 Reduce operating costs
Other 7enefits to &!O
1 Access to outside HR e,pertise
1 /reater diversity of HR services
1 >everage vendor investments in technology rarely availa&le to HR organi?ation
1 >imit fiduciary% audit% and litigation ris#s and lia&ilities
1 @pgrade level of customer service
1 Ease time pressure demands
1(0etter% faster% cheaper)
Impact on .our areer
I "ransformation 0 from transactional administrator to business partner that sets
strategy
I evelop competencies to negotiate and manage vendor relationships
I emonstrate ability to provide business solutions for employee and customer
problems
I :hange bureaucratic culture
I evelop strategic expertise necessary to manage human capital
I eliver exceptional customer service
I 3harpen your skills
I )uild9evelop your network
I 3tay on top of trends and their implications
I Etili<e vendors now so that they can help
you later
Satisfaction
/ecent survey of 1+6 large companies representing + million employees6I
I ,6- satisfied with outsourcing arrangement
I ,4- achieved hoped(for benefits
I Additional +;- achieved unexpected benefits
/ ;/ </ -/ F/ &//
achieved unexpected
benefits
achieved hoped!for
benefits
satisfied
*eries&
O+er+iew of *rocess
45 *lanning
65 -,ploring strategic initiati+es
75 Analy8ing costs9performance
:5 Selecting pro+iders
;5 "egotiating terms
<5 Transitioning resources
=5 Managing relations'ips
0 *repare %R
evelop and communicate new ./ strategy
efine new roles and responsibilities
/estructure ./
.ire new employees to fill skill gaps
Provide training for employees in new roles
0 *repare Organi8ation
evelop ./ strategy within overall organi<ational strategy
:ommunication plan
I /esolve issue of whose payroll individuals
are now on
Are ./ employees actually employees
of providerJ
oes head of ./ work for company or provider
0 Assessment
3elf examination
3H*" of department
*rgani<ational scan
I efine opportunities and benefits
I )uild the business case 0 consider all costs and impacts on organi<ation
I All functions that are not core competencies should be considered for ./* 0
nothing is sacred
I :onsider the driver behind ./* decision
Analy8ing ost9*erformance
I Enderstand market trends and competitive position
I !dentify goals and objectives
I etermine added value
I Gather baseline ./ costs and metrics
I :ompare current ./ operations to benchmarks
I etermine which processes have highest strategic importance and add most
value
"egotiating Terms
IKGood contracts make good partnersL
I Maintain heat of competition during negotiation
I /easonable% but clearly established% expectations
I Hell(documented deliverables regarding every aspect of deal
I Attorney involvement
Specifications of ontract
:ontract uration
Exact beginning and ending dates
5inancial penalties for early termination
0 *arties to t'e ontract
Allow for additions or deletions #in case of ac>uisitions or
divestitures$
/e>uire vendor to name all subcontractors and give you right of
approval for those introduced later
Ser+ices *erformed
3pecify all functions to be provided
*utline all support services
Ensure escalation process and dispute governance included
0 *erformance Standards
"weak standard performance guarantees
/einforce performance guarantees through at(risk fees
I%old>%armless Statement
0 !ees
0 #ata Security
0 ommunication Re+iew
0 ontingency *lans
0 Audits
0 !inal ontract Re+iew
!ESEA!C&
8ET&O"O'O#%
R-S-AR% *RO)L-M
! have selected that IS *RO#$TIVIT. I"R-AS- T%RO$/% %R
Outsourcing as research problem for my research report.
As a research problem is the situation that causes the researcher to feel
apprehensive% confused and ill at ease. !t is the demarcation of a problem area
within a certain context involving the H.* or H.A"% the H.E/E% the H.EF
and the H.C of the problem situation.
!ESEA!C& O79ECTIVE
.ow productivity relates with performance appraisal. !n addition% the
major factors of performance appraisal% which have taken a part in
increasing productivity of the organi<ation.
!ESEA!C& "ESI#N SE"
As research design is si*(2y the fra*e)or: or (2an for a study ie used
as a guide in collecting and analy?ing the data Research design can &e
grouped into three categories.e,ploratory research% descriptive research and
casual research
! have used e;(2oratory research design in my project
E<$'O!ATO!% !ESEA!C&
E,ploratory research studies are also termed as formulating studies The
main purpose of such studies that of formulating of the pro&lem for more
precise investigation or of developing the 'or#ing hypotheses from an
operational point of vie' An E,ploratory Research focuses on the discovery
of ideas and is generally &ased on secondary data !t consistsA
Search of secondary data and literature
Survey
Case study
SEA!C& O= SECON"A!% "ATA AN" 'ITE!AT!E:>
The =uic#est and most economical 'ay is to find possi&le hypotheses from
the availa&le literature The past researcher may &e suita&le sources of
information to develop ne' hypotheses The researcher can search them for
his research purposes
S!VE%:>
Survey means the survey of people 'ho have had practical e,perience 'ith
the pro&lem to &e study These individual can &e top e,ecutives% sales
manager% 'holesaler and retailer processing valua&le #no'ledge and
information a&out the pro&lem environment
CASE ST"%: >
The case study method is a techni=ue &y 'hich individual factor 'eather it
&e an institution or just an episode in the life of an individual or a group in
its relationship to any other in the group
!ESEA!C& INST!8ENT SE"
! have used the follo'ing research instruments in my project1.
?ESTIONNAI!E: >
The term =uestionnaire usually refers to a self.administered process
'here &y the respondent himself read the =uestion and records 'ithout
the assistance of an intervie'er
O7SE!VATION 8ET&O": >
The o&servation method is useful to #no' the reaction of
handicapped information
INTE!VIEW: >
The intervie' method of collection data involves presentation of oral.
ver&al stimuli and reply in terms of oral. ver&al response
SA8$'IN# TEC&NI?E SE"
<hen field studies are under ta#en in practical life% consideration of time
cost and some other factors almost invaria&ly lead to a selection of
respondents The selected respondents constitute a sa*(2e and the selection
process is called sa*(2ing techni@ueA

A sample design is definite plan determined &efore any data are actually
collected for o&taining a sample from a given population Samples can &e
either pro&a&ility sample or non.pro&a&ility sample
! have selected si*(2e rando* sa*(2ing in my project%
SI8$'E !AN"O8 SA8$'IN#
This type of sampling is also #no'n as chance sampling or pro&a&ility
sampling 'here each item in the population has an e=ual chance of &eing
selected in the sample
SA8$'E SIBE
<hen a survey is underta#en and 'hen it is not possi&le to cover the entire
population the researcher has to ans'er the &asic =uestion 5 ho' large
should &e sample &e; The sample si?e decision is related directly to research
cost
The intended sample si?e is the num&er of participants planned to &e
included in the trial% usually determined &y using a statistical po'er
calculation The achieved sample si?e is the num&er of participants enrolled%
treated% or analy?ed in the study
! have ta#en +5 people in my sample si?e% as the sample si?e should &e
neither so small nor so large
8ET&O" SE" =O! "ATA CO''ECTION
The tas# of data collection &egins after a research pro&lem has &een defined
and research design chal#ed out <hile deciding a&out the method of data
collection to &e used for the study the researcher should #eep in mind t'o
types of data.
6 Primary data
2 Secondary data
0A $!I8A!% "ATA .
Those data that have &een o&served and recorded &y the researchers for
the first time in their #no'ledge
SourcesC
Buestionnaire
!ntervie' method
.A SECON"A!% "ATA>
Those data that have &een compile &y some agency other than user
SourcesC
Case study
ANA'%TICA' TOO'S SE"
The term analysis refers to the computation of certain measures along 'ith
searching for patterns of relationship that e,ists among data group Analysis
is essential for a scientific study and for ensuring that 'e have all relevant
data for ma#ing contemplated comparisons Therefore% ! have used
Tabu2ationD #ra(hs E Charts in my project
ANA'%SIS
6 !nduction training is of sufficient duration;
CaDEes 7F4 C&D no G84 CcD can+t say F84
!nterpretation
According to the study 7F 4 employee are satisfy duration of training " G84 employee
are not satisfy " 84 say can+t say
2 !nduction training is given ade=uate importance in your organi?ation;
CaD Ees 2G C&D no HF CcDcan+t sayFH
!nterpretation
According to the study 2G4 employee are training ade=uate important in organi?ation &ut
HF4 employee are not important for organi?ation " H4 say can+t say
G !nduction training provides an e,cellent opportunity for ne'comers to learn
comprehensively a&out the organi?ation;
CaDEes HF C&Dno 23 CcDcan+t say2
!nterpretation
According to the study HF4 training an e,cellent opportunity for ne' employee " 234
employee say no " 24 say can+t say
I Senior management ta#es interest and spends time 'ith the ne' staff during
induction training;
CaDEes2F C&DnoH8 CcDcan+t say8
!nterpretation
According to study 2F4 employee ta#es interest to spend time 'ith the ne' employee
&ut H84 are not " 8 4 say can+t say
8 The ne' recruits find induction training very useful in your organi?ation;
CaDyes G8 C&Dno 88 CcDcan+t say6F
!nterpretation
According to study G84 recruitment are useful for organi?ation &ut 884 say no " 6F 4
say can+t say
7 The induction training is periodically evaluated and improved;
CaDyes 78 C&Dno 28 CcDcan+t say 05

!nterpretation
According to study 784 training is periodically evaluated " improved &ut 28 4 say no
4 6F 4 say can+t say
H The employees are helped to ac=uire technical #no'ledge and s#ills through
training;
CaDyesI: C&Dno I2 CcDcan+t say:
!nterpretation
According to study I:4 employee are help to ac=uire technical #no'ledge " s#ills &ut
I2 4 say no " : 4 say can+t say
3 There is ade=uate emphasis on developing managerial capa&ilities of the
managerial staff through training;
CaDyes7F C&Dno G8 CcDcan+t say8
!nterpretation
According to study 7F 4 say to develop employee capa&ilities &ut G8 4 say no " 8 4
say can+t say
: Human relations competencies are ade=uately developed in your organi?ation
through training in human s#ills;
CaDyes II C&Dno 8F CcDcan+t say7

!nterpretation
According to study II 4 say human relation competencies are important for organi?ation
&ut 8F 4 say no " 7 4 say can+t say
6F Training of 'or#ers is given ade=uate importance in your organi?ation;
CaDyes 8F C&Dno I8 CcDcan+t say8
!nterpretation
According to study 8F4 say training of 'or#er is given ade=uate important in
organi?ation &ut 8F4 say no " 8 4 say can+t say
=indings
Pro&lem 'hich associated 'ith the program are that many employee are not
a'are to the HR policy of the organi?ation
*any employee have no complete #no'ledge a&out the Training " !nduction
process
*any employee are not satisfied the process of the Training " !nduction program
*any employee are not #no' the organi?ation policy " practices
Conc2usions
!ndia% with its intrinsic advantages such as low cost% ready pool of English
speaking manpower and geographic positioning is emerging as a viable
destination for ./ outsourcing companies to set up their businesses.
"ill that time% ./ outsourcing in !ndia remains to be a gold mine waiting to be
unearthed...
&. 4ost!benefit advantage ! lower cost of outsourcing vi1!a!vi1
outsourced
contentIprocesses
;. 4onfidentiality of processes ! away from in!house leaks
.. (xternal expertise as compared to existing in!house expertise
<. "ime advantage ! timely process completion commitments and
easier
time!to!market processesIproductsIservices.
2. 9ocus internally on innovativeIcreativeIstrategic work and to do
away
with in!house with mundane, time consuming processes
-. 5reater ob6ectivityIcredibility gain amongst employees
E. 4onfidence of top management on external professionalism and
proven expertise
F. *trategic intent of doing away with high, permanent salaryIpay
loads
'. 4lient preference, especially overseas clients
&/.#randingIcredibility enhancement by associating globally renowned
outsourcing 4ompanies
&&.,eep organi1ational headcount and reporting structure flat and
flexible.
Suggestions
!f employee are clear #no'ledge a&out their practice " policy they are
development of fair relationship &et'een employee %employer " management
To development s#ills of their employee
They provide full information a&out their 'or#
To improvement their Training " !nduction process
To develop good relationship &et'een ne' employee " old employee
!nternal " e,ternal employee support the Training " !nduction process
Each level of employee should &e formally inducted and introduced to the
$epartmental Head !f not all levels% at least Asst *anager and a&ove category of
employees
E,ternal source should &e given e=ual importance 'ith internal source 0y 'hich
Ne' &rain the in company 'ith s#ill% talent% efficiency etc
)I)LIO/RA*%.
#-SI/"I"/ A"# MA"A/I"/ %$MA" R-SO$R- S.ST-M
???5$dai *arek @ T5V5Rao
*-RSO""-L MA"A/-M-"T
NNN..5 )5 MAMORIA
Audit report of M@M
outsoursing maga8ine of %R e,posoure
I"T-R"-T
3uestionnaire
6 !nduction training is of sufficient duration;
CaDEes 7F4 C&D no G84 CcD can+t say F84
2 !nduction training is given ade=uate importance in your organi?ation;
CaD Ees 2G C&D no HF CcDcan+t sayFH
G !nduction training provides an e,cellent opportunity for ne'comers to learn
comprehensively a&out the organi?ation;
CaDEes HF C&Dno 23 CcDcan+t say2
I Senior management ta#es interest and spends time 'ith the ne' staff during
induction training;
CaDEes2F C&DnoH8 CcDcan+t say8
8 The ne' recruits find induction training very useful in your organi?ation;
CaDyes G8 C&Dno 88 CcDcan+t say6F
7 The induction training is periodically evaluated and improved;
CaDyes 78 C&Dno 28 CcDcan+t say 05
H The employees are helped to ac=uire technical #no'ledge and s#ills
through training;
CaDyesI: C&Dno I2 CcDcan+t say:
3 There is ade=uate emphasis on developing managerial capa&ilities of the
managerial staff through training;
CaDyes7F C&Dno G8 CcDcan+t say8
: Human relations competencies are ade=uately developed in your
organi?ation through training in human s#ills;
CaDyes II C&Dno 8F CcDcan+t say7
6F Training of 'or#ers is given ade=uate importance in your organi?ation;
CaDyes 8F C&Dno I8 CcDcan+t say8