Watson Wyatt Worldwide

Watson Wyatt (NYSE:WW) is the trusted business partner to the worlds leading
organizations on people and financial issues. The firm global services include: managing
the cost and effectiveness of employee benefit programs; developing attraction, retention
and rewards strategies; advising pension plan sponsors and other institutions on optimal
investment strategies; providing strategic and financial advice to insurance and financial
services companies; and delivering related technology, outsourcing and data services.
Watson Wyatt has 6,000 associates in 30 countries.

Watson Wyatt Total Rewards Survey ™ - India Salary Trends

The Watson Wyatt India Total Rewards survey covered 6 sectors, 100 companies and
2,75,000 employees
The respective salary increase for the various sectors is as follows.
Salary Increases (Percentage) – 2007
Lower Lower Upper Upper
Sector Decile Quartile Median Quartile Decile
Financial Services 11.7 12.3 13.2 14.1 18.6
Manufacturing/
Engineering 11.6 12.0 12.5 15.0 16.2
IT 11.6 14.0 15.0 15.7 20.4
Pharmaceutical 8.9 9.1 12.0 15.0 20.8
ITeS 14.0 15.0 15.5 19.0 33.0
* Source – Watson Wyatt India Total Rewards SurveyTM

* Source – Watson Wyatt India Total Rewards SurveyTM

Attrition trends

General industry attrition rate-

Lower Lower Upper Upper

Decile Quartile Median Quartile Decile
• Across all
6.8 12.0 16.5 21.0 29.4
levels
• Senior
1.9 4.4 5.0 10.0 11.9
Management
• Middle
2.0 5.0 10.0 13.0 15.2
Management
• Junior
11.7 15.0 20.0 25.0 29.4
Management
• Customer
Service
10.5 12.6 19.3 28.5 40.5
Representativ
e
• Critical Skill
- 1.2 1.3 3.2 -
Employees
• Top
Performing 1.4 2.0 3.0 5.0 5.5
Employees
* Source – Watson Wyatt India Total Rewards SurveyTM

• 30.0% of the companies have difficulty in attracting the right talent

• 16.0% of companies have difficulty in retaining the top performers
• 68.0% of companies have reward strategy for superior performance

Parameters for attracting potential employees

Percentage of companies
a. Variable Pay 54.0
b. Career Growth Opportunities 70.0
c. Additional Benefits 22.0
d. Stock Options 22.0
e. Flexible Work Schedules 20.0
f. Advance Training 46.0
g. Others 16.0
* Source – Watson Wyatt India Total Rewards SurveyTM
Reasons for leaving the organisation
Percentage
Top Senior Middle Junior
Management Management Management Management
a. Better pay opportunities
16.0 36.0 58.0 60.0
elsewhere
b. Dissatisfaction at work
4.0 4.0 12.0 18.0
place
c. Better growth / career
24.0 40.0 54.0 46.0
opportunities
d. Employee has personal
14.0 22.0 34.0 42.0
reason
e. Others 6.0 4.0 6.0 18.0
* Source – Watson Wyatt India Total Rewards SurveyTM

Factors used to differentiate rewards for superior performers

Percentage of companies
a. Giving them higher salaries 48.0
b. Faster growth opportunities 62.0
c. Better performance based bonus amounts 46.0
d. Additional perquisites 4.0
e. Advanced training opportunities 38.0
f. Projects abroad 24.0
g. Recognition awards 54.0
h. Reflects in the salary increase 50.0
i. Others 4.0
* Source – Watson Wyatt India Total Rewards SurveyTM
• Upward trajectory in salary trends across sectors.
• Compensation & Benefits continue to be a prominent focus area within the HR
domain.
• IT / ITES sectors continue to show prominent salary increase, similar to previous
years.
• Variable pay becoming an increasingly popular option with 84 % of the
companies linking compensation & benefits to performance.
• Attrition rates across sectors alarming, especially among junior managers and
front end roles.
• 68 % companies have strategies aimed at rewarding superior performers.
• Significant numbers of companies face difficulty in retaining top performers.
Watson Wyatt Total Reward Survey India tracks the movement in the market in terms of
salary increases, bonuses and staff turnover.

Market Expansion Strategies of Maruti Udyog

The case 'Market expansion strategies of Maruti Udyog' examines the market expansion
strategies adopted by Maruti Udyog Limited (MUL), India's biggest carmaker, in
response to intense competition and a decline in sales of its bread-and-butter model - the
Maruti 800. MUL enjoyed a near-monopoly status, until the Government of India
liberalized the economy in 1991.

This led to the entry of foreign players like Hyundai, Fiat, Mitsubishi, and Toyota. Even
Indian auto players like Tata Motors and Mahindra and Mahindra entered the fray to give
MUL tough challenges. MUL began to introduce new models, and upgrade its existing
models in response to market demand.

For instance, the company introduced the hatchback 'Swift' to shed its image of being a
manufacturer of low-cost staid cars. The case study looks into how MUL came back from
the crunch to retain its place as the top carmaker in India. It also deals with the tussle
between Suzuki Motor Corporation and the Government of India over ownership issues.

The case highlights the promotional offers undertaken by MUL in its quest for market
dominance and examines how the company was able to mould itself according to the
market requirements, by entering new domains and reaching out to potential customers
through its 'True Value' and other promotional offers.

Launch of new variants and models

Despite analysts predicting that the M-800, the bread and butter model of MUL, would be
phased out, the company asserted that it would take necessary steps to maintain its
leadership position. MUL had three compact car models -- Alto, WagonR, and Zen --
competing with Hyundai Santro, Tata Indica, and Fiat Palio...

Increasing dealer profitability

During 2003 and 2004, MUL visualized and implemented a strategy for its dealers to
increase their profitability levels in view of increased competition. According to the
strategy, the 300-odd dealers of the company were asked to strengthen their manpower,
increase the salaries of their sales agents, and offer them better incentives...

Promotional offers

Faced with stiff competition and declining market shares, MUL focused its promotions
strategy on targeting two-wheeler owners...
'Change Your Life' campaign

In 2003, MUL launched novel offers like "Change Your Life" campaign and also offered
vehicle insurance 'for Rupee One only', to attract customers...

Television campaigns

In 2003, MUL came out with a toy car advertisement that became popular for its
simplicity and straightforward message. The advertisement depicted a child playing with
a toy car. When reprimanded by his father the child replies, 'Kya karoon papa petrol
khatam hi nahin hota' (What should I do? The petrol never finishes)

'2599' offer

In 2004, MUL introduced the '2599' offer under which a consumer could buy an M-800
by paying an EMI of Rs 2,599 only, for a period of seven years. The down payment was
fixed at Rs 40,000. MUL entered into an agreement with the State Bank of India (SBI),
the largest bank in India, to promote this scheme...

'Teacher Plus' scheme

To further penetrate into the market, MUL continued to focus its efforts on the rural
markets and specific target groups. In 2004, it introduced the 'Teacher plus' scheme, in a
tie-up with SBI, aimed at teachers who were interested in buying a new car...

Maruti 'True Value'

There was a gradual decline in the market share of MUL over the years from 1999 to
2004. This happened even though MUL had slashed prices of certain models on a couple
of occasions...

Conclusion

The company's change in strategy and emphasis on developing effective marketing

communications began to yield results. In the J.D. Power Asia Pacific 2004 India APEAL
study, WagonR and Zen were ranked first and third in the premium compact segment;
Esteem was picked as the best entry level car in the mid-size category.

MUL also topped the J.D. Power Asia Pacific 2005 India Sales Satisfaction Index in
terms of customer satisfaction with the new vehicle sales process.

As per the J.D. Power Asia Pacific 2005 India Customer Satisfaction study , MUL ranked
highest in customer satisfaction with after-sales service for the sixth consecutive year.
"Maruti's consistent performance in the study over the past several years has resulted in a
steady increase in the percentage of its customers who say they intend to remain loyal to
the brand," said Mohit Arora, India director, J.D. Power Asia Pacific.