A PROJECT REPORT ON MANAGEMENT CONTROL SYSTEM AT ITC

Subject: - Management Control System (MCS)

Prepared By: (1) Alay H. Desai (1038) (2) Mitesh Rajput (1044) (3) Nimesh Chavda (1049)

Guided By:Mrs. Chetna Makwana NCM,Bharuch

Narmada College of Management, Bharuch

Gujarat Technological University, Ahmedabad MBA April-2012

Contents
CHAPTER 1 .................................................................................................................................................... 4 ITC LIMITED ................................................................................................................................................... 4 INTRODUCTION ......................................................................................................................................... 5 Organizational Structure ........................................................................................................................... 6 Chairman ............................................................................................................................................... 6 Executive Director ................................................................................................................................. 6 Non-Executive Director ......................................................................................................................... 7 Divisional / SBU Chief Executive Officer (CEO) ..................................................................................... 7 Control System .......................................................................................................................................... 7 ROLES OF VARIOUS ENTITIES ................................................................................................................ 7 Advantage ............................................................................................................................................. 8 Compensation Management and Remuneration System......................................................................... 8 Remuneration committee..................................................................................................................... 8 Composition .......................................................................................................................................... 8 Remuneration of Directors ................................................................................................................... 8 Employee Stock Option Schemes.......................................................................................................... 9 Service Contracts, Severance Fee and Notice Period ........................................................................... 9 MANAGEMENT COMMUNICATION SYSTEM........................................................................................... 10 Policies on human Rights .................................................................................................................... 10 Policy to Ensure Respect for Human Rights Policy across the Supply Chain ...................................... 11 Policy to Prevent Discrimination at Workplace .................................................................................. 12 Policy on Freedom of Association ....................................................................................................... 13 Policy on Information and Consultation on Changes.......................................................................... 13 CHAPTER 2 .................................................................................................................................................. 15 ITC HOTELS .................................................................................................................................................. 15 STRATEGIC BUSINESS UNIT ITC FIVE BRANDS OF HOTELS ................................................................ 16 ITC HOTELS- Luxury Collection, Organizational Structure ...................................................................... 16 The organizational structure at ITC Hotels ............................................................................................. 17 COMMUNICATION .................................................................................................................................. 18 PERFORMANCE MANAGEMENT AT ITC HOTELS ..................................................................................... 18 MANAGEMENT CONTROL IMPLICATIONS .............................................................................................. 20

MANAGEMENT STYLE AND SIX SIGMA CONTROL SYSTEMS ................................................................... 20 1) WOW Ratios .................................................................................................................................... 21 2) Model Areas .................................................................................................................................... 21 3) Process Line Charts ......................................................................................................................... 21 Culture and the Management Style ........................................................................................................ 21 AWARDS .................................................................................................................................................. 22

CHAPTER 1 ITC LIMITED

INTRODUCTION
ITC is one of India's foremost private sector company. It is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC also ranks among India's top 10 `Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. The ancient Imperial Tobacco Company of India Limited is ITC Limited today, which was incorporated in August 24, 1910. The growth after long way in its journey, ITC posted its face as sector leader in its traditional businesses and spread over more than 60 locations across India. ITC has commitment with the business segments of Cigarettes Hotels Paperboards & Specialty Papers Packaging, Agri-Business Packaged Foods & Confectionery Information Technology Branded Apparel Personal Care Stationery Safety Matches and Other FMCG products.

The Company's ownership progressively Indianised and the name of the Company was changed to I.T.C. Limited in 1974. As a strategic backward integration for ITC's Cigarettes business, the Packaging & Printing Business was set up in 1925. It is today India's most sophisticated packaging house. Spanning the network the company has 11 Subsidiaries, 3 JV Companies and 2 Associate Companies. The Company continuously endeavors to enhance its wealth generating capabilities in a globalizing environment.

Organizational Structure
Board of Directors Audit Committee Compensation Committee Nominations Committee Investor Services Committee

Corporate Management Committee Divisional/Strategic Business Unit (SBU) Management Committees, each headed by a Divisional/SBU Chief Executive Businesses include: FMCG, Hotels, Paperboards, Specialty Papers & Packaging and Agri-Business Corporate Functions, each headed by a HOD

Corporate Functions include: Planning and Treasury, Accounting, Legal, Secretarial, EHS, Human Resources, Communications, Internal Audit and Information Technology

Chairman The Chairman of ITC is the Chief Executive of the Company. He is the Chairman of

the Board and the CMC. His primary role is to provide leadership to the Board and the CMC for realizing Company goals in accordance with the charter approved by the Board. He is responsible, inter alia, for the working of the Board and the CMC, for ensuring that all relevant issues are on the agenda and for ensuring that all Directors and CMC members are enabled and encouraged to play a full part in the activities of the Board and the CMC, respectively. He keeps the Board informed on all matters of importance. He is also responsible for the balance of membership of the Board, subject to Board and Shareholder approvals. He presides over General Meetings of Shareholders.
Executive Director The Executive Directors, as members of the CMC, contribute to the strategic

management of the Companys businesses within Board approved direction / framework. Executive Directors assume overall responsibility for the strategic management including governance processes and top management effectiveness for businesses / functions reporting to them. In the context of the multi-business character of the Company, an Executive Director is in the nature of a Managing Director for those businesses and functions reporting to him. As an Executive Director accountable to the Board for a wholly owned subsidiary or its wholly owned subsidiary, he acts as the custodian of ITCs interests and is responsible for its governance in accordance with the charter approved by the Board.

Non-Executive Director Non-Executive Directors, including Independent Directors, play a

critical role in imparting balance to the Board processes by bringing an independent judgment on issues of strategy, performance, resources, standards of Company conduct etc.
Divisional / SBU Chief Executive Officer (CEO) The Divisional / SBU CEO for a business has

the overall executive responsibility for its day-to-day operations and provides leadership to the DMC / SBU MC in its task of executive management of the business.

Control System

Strategic supervision

BOARD OF DIRECTORS

Strategic management

Corporate Management Committee

Executive management

Divisional / Strategic Business Unit (SBU) Chief

ROLES OF VARIOUS ENTITIES Board of Directors (Board) The primary role of the Board is that of trusteeship to protect and

enhance shareholder value through strategic supervision of ITC, its wholly owned subsidiaries and their wholly owned subsidiaries. As trustees, the Board ensures that the Company has clear goals relating to shareholder value and its growth. The Board sets strategic goals and seeks accountability for their fulfillment. The Board also provides direction and exercises appropriate control to ensure that the Company is managed in a manner that fulfils stakeholders aspirations and societal expectations. The Board, as part and parcel of its functioning, also periodically reviews its role.
Corporate Management Committee (CMC) The primary role of the CMC is strategic

management of the Companys businesses within Board approved direction / framework. The CMC operates under the strategic supervision and control of the Board.

Divisional Management Committee (DMC) / SBU

Management Committee (SBU MC): The primary role of the DMC / SBU MC is executive management of the Divisional / SBU business to realize tactical and strategic objectives in accordance with Board approved plan.

Advantage

The three-tier governance structure ensures that: (a) Strategic supervision (on behalf of the shareholders), being free from involvement in the task of strategic management of the Company, can be conducted by the Board with objectivity, thereby sharpening accountability of management; (b) Strategic management of the Company, uncluttered by the day-to-day tasks of executive management, remains focused and energised; and (c) Executive management of a Division or Business, free from collective strategic responsibilities for ITC as a whole, focuses on enhancing the quality, efficiency and effectiveness of the business.

Compensation Management and Remuneration System

Remuneration committee

The Remuneration Committee of the Board, under the nomenclature 'Compensation Committee', inter alia, recommends to the Board the compensation terms of Executive Directors and the senior most level of management immediately below the Executive Directors. This Committee also has the responsibility for administering the Employee Stock Option Schemes of the Company.
Composition

The Compensation Committee presently comprises five Non-Executive Directors, four of whom are Independent Directors. The Chairman of the Committee is an Independent Director. The names of the members of the Compensation Committee, including its Chairman, are provided under the section 'Board of Directors & Committees' in the Report and Accounts.
Remuneration of Directors

Remuneration of Chairman and other Executive Directors is determined by the Compensation Committee comprising only Non-Executive Directors. The recommendations of the Compensation Committee are considered and approved by the Board subject to the approval of the Shareholders. The Chairman and Executive Directors are entitled to Performance Bonus for each financial year up to a maximum of 200% and 150% of their consolidated salary,

respectively, and as may be determined by the Board on the recommendation of the Compensation Committee, based on qualitative and quantitative assessment of Company performance. Non-Executive Directors are entitled to remuneration by way of commission for each financial year, up to a maximum of 6, 00,000/- individually, as approved by the Shareholders. NonExecutive Directors' commission is determined by the Board based, inter alia, on Company performance and regulatory provisions and is payable on a uniform basis to reinforce the principle of collective responsibility. Non-Executive Directors are also entitled to sitting fees for attending meetings of the Board and Committees thereof, the quantum of which is determined by the Board, within the limit approved by the Shareholders. The sitting fees, as determined by the Board, are presently 20,000/- for attending each meeting of the Board, Audit Committee, Compensation Committee, Nominations Committee and Sustainability Committee and 5,000/for each meeting of the Investor Services Committee. Non-Executive Directors are also entitled to coverage under Personal Accident Insurance.
Employee Stock Option Schemes

The Company granted 42,30,600 Options during the financial year to the eligible employees of the Company and some of its subsidiary companies. Pursuant to the Shareholders' approval on 23rd July, 2010 to the Bonus share issue, in the ratio of 1 Bonus share for every existing 1 Ordinary share, adjustment was made to the outstanding Options with respect to the number of Options and the exercise price, in accordance with the Employee Stock Option Schemes of the Company read with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, consequent to which 1,92,80,432 Bonus Options were allocated during the year.
Service Contracts, Severance Fee and Notice Period

The appointment of the Executive Directors is governed by resolutions passed by the Board and the Shareholders of the Company, which cover the terms and conditions of such appointment read with the service rules of the Company. A separate Service Contract is not entered into by the Company with those elevated to the Board from the management cadre, since they already have a Service Contract with the Company. There is no separate provision for payment of severance fee under the resolutions governing the appointment of Executive Directors who have all been drawn from amongst the management cadre. The statutory provisions will however apply. In terms of the Articles of Association of the Company, a notice of one month is required to be given by a Director seeking to vacate office and the resignation takes effect upon the expiration of such notice or its earlier acceptance by the Board. ITC also empowers the employees with the following options like: Gives them an option to switch division if the person can perform better in some other division.

Company also encourage cross business movements for the capable employee. A constant focus is given on the career development of the employees- the organization provides opportunities for learning and growth, it is the individual's responsibility to ensure he/she enhances his/hers competencies to shoulder higher responsibilities. There is no age barrier when it comes to growth. They have a proper performance system in place - The cornerstone of the performance management system is the Appraisal System. The individual agrees to performance objectives at the beginning of the year with his/her superiors. These objectives naturally flow from the objectives of the unit/business. At the end of the year the individual's performance is assessed against the objectives set. The appraisal attaches as much importance to ''how'' results were achieved as to the results themselves. The rating is determined by the manager's boss and endorsed by his boss. Therefore, two individuals are involved in assessing a manager's performance The appraisal process also gives the individual an opportunity to share in a formal manner his/her own career aspirations and what the individual needs from the organization to enhance Their compensation package is very comprehensive - Apart from the monetary component which comprises Consolidated Salary and Supplementary Allowance, managers are provided with quality accommodation, medical assistance for self and family, leave travel assistance, etc. At middle and senior levels, managers are provided with company maintained cars and the facility of a club membership for business purposes. All managers are members of ITC's Retirement Funds, the Pension Scheme being one of the most attractive in the country. Other benefits include the facility of holiday homes, assistance for further education/self development etc.

MANAGEMENT COMMUNICATION SYSTEM

ITC management communication system that it follows across the groups to avoid asymmetry of information within the group. This it has a very robust and a clear cut defined communication strategy that it follows:
Policies on human Rights

ITC believes that all its employees must live with social and economic dignity and freedom, regardless of nationality, gender, race, economic status or religion. In the management of its businesses and operations therefore, ITC ensures that it upholds the spirit of human rights as enshrined in existing international standards such as the Universal Declaration and the Fundamental Human Rights Conventions of the ILO.

Policy

ITC upholds international human rights standards, does not condone human rights abuses, and creates and nurtures a working environment where human rights are respected without prejudice.
Implementation

The Corporate Human Resources function of ITC is responsible for the Human Rights Policy design, implementation and updation. The policy is implemented at all locations of ITC through a set of separate policies and procedures covering each of the main constituents of human rights applicable at the workplaces.
Monitoring & Audit

The assessment procedures for different constituents of this policy are defined against each specific policy. Consideration of Human Rights Impacts Across the Supply Chain As a large and multi-product enterprise whose products are benchmarked nationally and internationally, ITC's main supply chains can be grouped as follows: 1. For all its operations, technology, machinery and equipment are sourced from reputed and globally benchmarked suppliers/vendors who are expected to follow internationally accepted norms and standards on human rights. 2. ITC's major businesses are vertically integrated across several Divisions. A substantial part of the supply chain is therefore internal through strategic backward linkages. Common values relating to human rights performance are shared across this supply chain. 3. Being a major agri-based company, the agriculture sector is a major supplier of inputs for its operations. The bulk of agricultural commodities are procured from state controlled trading platforms and the open market. 4. A very small proportion of ITC's business consists of supply chains comprising local vendors and suppliers. The policy framework for such entities is enunciated separately in 'Policy to Ensure Respect for Human Rights across the Supply Chain'.
Policy to Ensure Respect for Human Rights Policy across the Supply Chain

ITC provides products and services of superior quality and value by sourcing its technologies, equipment and inputs from reputed international and Indian manufacturers and suppliers. Common values, relating to human rights performance, are shared across the entire supply chain because ITC is committed to the importance of a socially responsible and accountable supply chain.
Policy

ITC nurtures an internal working environment which respects human rights without prejudice.

Likewise, it expects its business partners to establish a human rights compliant business environment at the workplace.
Implementation

The responsibility for implementation of this policy rests with the Divisional Chief Executive of the concerned business and the Unit Manager. The policy is communicated internally through policy manuals and intranet portals, and externally by the HR personnel of concerned units to vendors/suppliers.
Monitoring & Audit

ITC has established a policy intent for mapping/monitoring progress and performance of existing and potential vendors/suppliers on human rights performance.
Policy to Prevent Discrimination at Workplace

ITC acknowledges that every individual brings a different and unique set of perspectives and capabilities to the team. A discrimination-free workplace for employees provides the environment in which diverse talents can bloom and be nurtured. This is achieved by ensuring that a non-discrimination policy and practice is embedded across the Company in line with corporate principles and benchmarked business practices.
Policy

ITC's approach to its human resources is premised on the fundamental belief in fostering meritocracy in the organization which, pari passu, promotes diversity and offers equality of opportunity to all employees. ITC does not engage in or support direct or indirect discrimination in recruitment, compensation, access to training, promotion, termination or retirement based on caste, religion, disability, gender, age, race, color, ancestry, marital status or affiliation with a political, religious, or union organization or minority group.
Implementation

The policy is communicated to all employees through induction programmes, policy manuals and intranet portals. The custodian of this policy is the head of each operational unit and Divisional Chief Executives of the respective business. ITC's complaints resolution procedure is premised on the freedom of employees to approach higher officials beyond his/her immediate superior. For the unionized employees, compliance of the policy is ensured through a robust grievance handling procedure and the presence of a union that brings violations to the notice of the unit HR head.
Monitoring & Auditing

The accountability for the application of the non-discrimination employment policy rests with the Unit Head who reviews anti-discriminatory complaints annually or on a case-by-case basis. The Corporate Human Resources function conducts non-discrimination reviews annually on a sample basis with unit heads and through on-site assessments.

Policy on Freedom of Association

ITC's culture is characterized by cooperative relationships and high employee involvement that relies on building partnerships and interdependence. Adhering to these principles has helped build, sustain and strengthen harmonious employee relations in the organisation.
Policy

ITC respects the employees' right to organize themselves into interest groups as initiatives of the workers, independent from supervision by the management. In keeping with the spirit of this Policy, employees are not discriminated against for exercising this right.
Implementation

The policy is communicated to all employees through induction programmes, policy manuals and intranet portals. The custodian of this policy is the HR head of each operational unit who reports directly to Unit Head on such issues. The actualization of this policy is evident from the joint agreements and minutes that are signed between the union and the management.
Monitoring & Audit

Each ITC Unit has appropriate systems and checks to ensure compliance with the Policy and statutory provisions, including means for filing of grievances, collective bargaining agreements and minutes from worker meetings. Compliance with the Policy is regularly monitored by Divisional and Corporate HR.
Policy on Information and Consultation on Changes

ITC's core values support an employee engagement process that aligns its employees with a shared vision and purpose of the Company in the belief that every individual brings a different perspective and capability to the team. ITC thus harnesses the creative potential of all its employees by promoting a culture of partnerships to unleash relevant synergies between different groups of employees.
Policy

All major changes in operations involving work processes, manning norms and other productivity linked issues are carried out after discussions with the employees and the recognized unions at each location.
Implementation

Business plans are shared with employees at all units through a series of formal communication meetings, and through the intranet portals. Unionised employees at the concerned units are informed of all major changes well in advance through their representatives. The responsibility for the implementation of the policy rests with the Unit's HR Department in the case of unionized employees and with the concerned Divisional Management Committees for other employees.

The employees are given enough time to consider the implications of change and an opportunity to discuss their apprehensions, if any, with the management. The Policy is actualized through consultative meetings with representatives of employees, culminating in joint minutes/agreements.
Monitoring & Auditing

Compliance with the Policy is regularly monitored by the Unit Head.

CHAPTER 2 ITC HOTELS

STRATEGIC BUSINESS UNIT ITC FIVE BRANDS OF HOTELS

ITC Hotels - Luxury Collection are super deluxe and premium hotels, located at strategic business and leisure locations. ITC-Welcome group Sheraton Hotels offer warm, comforting services to the global traveler and a chance to connect. Welcome Hotels offer five-star hospitality for the discerning business and leisure traveler. Fortune Hotels offer full service properties all over India, including smaller towns and cities, ideal for the budget traveler. Welcome Heritage brings together a chain of palaces, forts, havelis and resorts that offer a unique experience.

ITC HOTELS- Luxury Collection, Organizational Structure

ITC Hotels follows a functional organizational structure. This type of structure involves a manager who brings specialized knowledge to bear on decisions related to a specific function, as contrasted with the general-purpose manager who lacks that specialized knowledge. A skilled marketing manager and a skilled production manager are likely to make better decisions in their fields than would a manager responsible for both functions. Moreover, the skilled specialist should be able to supervise workers in the same function better than the generalist would, just as skilled higher-level managers should be able to provide better supervision of lower-level managers in the same or similar function. Thus, an important advantage of a functional structure is efficiency. There are even a few disadvantages attached to a functional structure. First, in a functional organization there is no unambiguous way of determining the effectiveness of the separate functional managers because each function contributes jointly to the organizations final output. Therefore, there is no way of measuring what fraction of determining how much of the profit was earned respectively by the several production departments, the product engineering department and the sales office. Second, if the organization consists of managers in one function who report to higher-level managers in the same function who in turn, report to still high-level managers in that function, then a dispute between managers of different functions can be resolved only at the top, even though it may have originated at a much lower organizational level. Thirdly, functional structures are inadequate for a firm with diversified products and markets. Finally, functional structures prevent cross-functional coordination in areas such as new product development. However, this problem can be eliminated by supplementing the vertical functional structure with lateral cross-functional processes such as cross-functional job rotation and teambased rewards.

The organizational structure at ITC Hotels

The organizational structure at ITC Hotels consists of eight functional departments, namely: 1. 2. 3. 4. 5. 6. 7. 8. Food and Beverages Production Food and Beverages Service Front Office Housekeeping Engineering Sales Finance Human Resource

Every department has its respective head of the department (HOD) as shown in the chart below:

GENERAL MANAGER

F&B MANAGER

EXECUTIVE CHEF

FRONT OFFICE MANAGER

EXECUTIVE HOUSEKEEPER

CHIEF ENGINEER

SALES MANAGER

UNIT FINANACIAL CONTROLLER

HUMAN RESOURCE MANAGER

ASSISTANT F&B MANAGER

SENIOR SOUS CHEF

ASSISTAN FRONT OFFICE MANAGER

ASSISTANT HOUSEKEEPER

ASSISTANT CHIEF ENGINEER

ASSISTANT SALES MANAGER

ASSISTANT FINANCIAL CONTROLLER

ASSISTANT HR MANAGER

F&B EXECUTIVE

JUNIOR SOUS CHEF

FRONT OFFICE EXECUTIVE

HOUSEKEEPING EXECUTIVE

SALES EXECUTIVE

HHR EXECUTIVE

ASSISTANT MASTER CHEF

MANAGER LEARNING SERVICES

Under every department, there are two to three executives who report to the supervisor above them and to the respective HODs and all the HODs report to the general manager, who is at the top of the hierarchy. Each department has a clearly defined responsibility and thereby accountability and authority attached to it.

COMMUNICATION
ITC Hotels follow a participative, two-way communication system where the flow of information is from top to bottom and from the bottom to top. Since, it is a service industry where the organization delivers experience, there needs to be proper coordination and communication among all the departments which is maintained through daily morning meetings among all the HODs and the general manager to discuss the guest feedback and daily issues.

PERFORMANCE MANAGEMENT AT ITC HOTELS

Every organization has goals. An important role of management control systems is to motivate organizational members to attain those goals. Each organization has a strategy and the strategys success depends on its soundness. A performance management system is simply a mechanism that improves the likelihood that the organization will implement its strategies successfully. What needs to be done here, is designing a performance measurement system, that measures and rewards people to carry on tasks and targets that help the company achieve its strategy. Each professional working in the organization is a cost to company and return on this investment should be calculated wisely. This is taken care of by appraising every employees performance from time to time and making his contribution to the overall organization as objective as possible. A doctors skill can be measured by the success ratio of operations, but in a service unit, where each guest is looking for a different experience, its difficult to suggest the skills of people involved very objectively. The performances of employees who are in constant touch with the guests are more scrutinized in behavioral aspects while those involved in providing food and beverage have a lot to do with their skills and knowledge in their area. The management realizes the importance of appraising and evaluating each employees contribution objectively, and hence follows an yearly appraisal system. The various attributes on which they are rated are: 1) 2) 3) 4) 5) 6) JOB KNOWLEDGE SKILLS CO-OPERATION RESPONSIBILITY ATTITUDE TOWARDS WORK INITIATIVE

7) EFFICIENCY 8) ATTENDANCE 9) PUNCTUALITY 10) DISCIPLINE

Each of these attributes carries certain weight age depending upon their importance to the overall performance target of an individual. The employee is scored on a likert scale of 1 to 5, each level representing a certain level of behavior or skill. The score is further multiplied to the weights and scores for each attribute is finally added. Score for each attribute : weight of attribute * score on likert scale Depending upon the overall score, there are various actions that are taken and ratings are provided to the concerned employee. Such an appraisal system followed by ITC HOTELS is known as FACTOR RATING METHOD

For e.g.: SCORE 0-25 25-60 60-80 80-100 OBSERVATION Re Rating Needs further input Needs to be groomed Should be retained RATING Poor Worker Average Worker Good Excellent RECOMMENDATIONS File needs to be built One increment Two increments Three increments/Promotion

The likert scale so developed is a modification of BARS, i.e. Behavioral Anchored Rating Scale. Behaviorally anchored rating scales (BARS) are rating scales whose scale points are defined by statements of effective and ineffective behaviors. They are said to be behaviorally anchored in that the scales represent a continuum of descriptive statements of behaviors ranging from least to most effective. An evaluator must indicate which behavior on each scale best describes an employee's performance.

Each attribute in the appraisal tells about different levels of behaviors. For e.g.: OPERATION. ATTRIBUTE CO OPERATION 0 1 Co-operates Gives limited grudgingly, Co operation inclined to be troublesome 2 Co operates to an adequate degree 3 Co operates willingly, fits easily to his group

CO-

4 Co operates willingly and helps others fit into the group easily.

MANAGEMENT CONTROL IMPLICATIONS

Following a strict and regular appraisal system helps the organization have a clear account of average, good and excellent performers and further helps in taking important decisions that involve considerable budget, time and other resources: 1) Training of individuals, deciding who needs to be trained and in which area. 2) Deciding on who needs what level of increments. 3) Understanding who needs to be retained in the organization and who needs to be layed off. 4) Controlling employees behavior and check its sync with the organization culture and values.

MANAGEMENT STYLE AND SIX SIGMA CONTROL SYSTEMS

With over 100 hotels at more than 90 destinations across the country, ITC Hotels offers traditional Indian Hospitality combined with globally benchmarked services and sustainable business practices. A good indicator of this dedication to excellence is the fact that ITC Hotels have been regularly voted as amongst the best employers in Asia in the hospitality sector (latest being in 2009). ITC Hotels is well known for its participative style of management. Everyday the HODs and General Managers meet to discuss feedback on the previous days performance. Employees are constantly encouraged to recommend any process improvements and are regularly asked for recommendations. In addition to this the company is following the requirements of Six Sigma inorder to ensure quality control. A separate department has been set up in each of its hotels called the 6 Sigma Assurance Department.This department is responsible for quality control and maintaining operational efficiency.The department comprises of 2 to 3 people and focuses on streamlining hotel processes.The following are a few examples of the work this department is responsible for:-

1) WOW Ratios

At the daily meetings each department submits its WOW ratios. These ratios indicate the performance of each department on a likert scale as per the previous day. The performance of each department is compared on a monthly basis the best performing department is rewarded for theyre performance in the form of incentives and perks.
2) Model Areas

Each month departments have to take up Model Areas. Each department has to choose a specific area within the organization ,not necessarily relating to their functional area , for the purpose of improvement. For example: Assuming the HR department decided to undertake improvement of the laundry room of the hotel. They would be required to submit their recommendations and costing to the senior management on how they can improve this space. Each of the hotels department then compete with each other on the basis of the above mentioned plans for improvement and the best recommendation is rewarded.
3) Process Line Charts

The 6 Sigma Assurance department also looks at Process line charts.Which clearly defines the process flow of any department or function. The department look into the old process charts and tries to make process improvements .Based on industry benchmarks and research it then goes ahead and creates a new improved process chart. For example: The process of availing of a duplicate key in case an employee misplaced his/hers involved contacting an HR representative and gaining access to the duplicate. The problem with this process was that the HR representatives left the office at 6 every evening and in case of an emergency duplicate keys were not available. The new process required two individuals who would be incharge of duplicate keys in 2 shifts i.e one in the morning and one at night. Permission for access would be granted by an HR representative over the phone and this improved the efficiency of the process and saved time. Thus the Six Sigma Assurance Department plays a major role in controlling employee performance by motivating them through rewards and incentives. Moreover constant involvement of employee in process improvements encourages a sense of loyalty and ensures that the hotel is adopting best practices.

Culture and the Management Style

The culture, as well as the management style, has been kept in line with ITCs core values, promoting diversity and offering equality of opportunity to all employees fostering meritocracy in the organisation. It acknowledges that every individual brings a different and unique set of perspectives and capabilities to the team. A discrimination-free workplace for employees

provides the environment in which diverse talents can bloom and be nurtured. This is achieved by ensuring that a non-discrimination policy and practice is embedded across the Company in line with corporate principles and benchmarked business practices. There have been various examples to prove why the subsidiary is recognized and praised worldwideIndias best companies to work for 2009 -2010 Rank: 14 Gender Ratio (F:M): 1:11.8 Employee Turnover: 9% Workplace Quotient: The hotel community works as one big family, serving dollops of commitment to a common goal. Best Practices: Its a never-ending engagement. There is postretirement counseling on health and finance matters for the retiree and spouse. They are also provided medical reimbursement as long as they live. With more than 200 associates/managers from the DAP (Differently-Abled People) category, the company conducts elaborate programmes to educate all employees on disabilities and how to work with disabled people.

AWARDS
ITC Hotels awarded as Hewitt Best Employers in Asia for the Year Indias management culture has been moving away from a traditional top-down culture where age equals seniority toward a merit-driven system that promotes young achievers and strives to bring out the best in employees. In the same regards, Hewitt produced a separate list of the five best hotel employers, the winners of this category being Four Seasons, Resort Langkawi, Malaysia, Indias ITC Hotels, JW Marriott Hotel Bangkok, The Conrad Bangkok and The RitzCarlton Millenia, Singapore. According to Hewitts research, Hotels as an industry understood very strongly the link between the employee, the interaction with the customers, and business results. Government of India honored ITC Hotels with Best Employer National Award for Empowerment of Persons with Disabilities The Government of India, Ministry of Social Justice and Empowerment had conferred ITC Hotels with the 2011 Best Employer National Award for Empowerment of Persons with Disabilities. The award was presented by Minister of Social Justice and Empowerment, Shri Mukul Wasnik, in recognition of ITCs philosophy of an equal opportunities employer in keeping with its policy to ensure respect for Humans Rights and Prevention of Discrimination at Workplace.

Dipak Haksar, COO, ITC Hotels, said, The recognition further validated the fact that our company starts with the work culture and weve really focused on making ITC Welcomgroup an organization where employees grow beyond professionals.'' ITC Welcome group- empowering differently-abled people -Everyone should be treated with sympathy and empathy. -Opportunity to work and become self-sufficient -People involved in Housekeeping, Teleworking, Bakery and as Musicians. How do they do it? Over the years, ITC Hotels has been redefining standards, showcasing the best from India to the world. There lies a spirit of excellence that pervades at all ITC Hotels in key business and leisure locations. ITC Hotels is the only hospitality chain, perhaps in the world to have a unique programme like the "Welcomlegionnaire". This competitive hotel management programme, recruits students on their completion of class 12 for a 4-year course. The first two years are devoted to the basics in hoteliering, personality development, culture building, etc., along with a bachelors in Tourism Administration. The remaining 2 years are spent as Hotel Executive Trainees in sync with in house Management Training Programmes, thus providing the students valuable hands on practical experiences with solid theoretical knowledge. The two institutes are

The Welcomgroup Management Institute, Gurgaon The Welcomlegionnaire Programme