A Study of Employee Perception on Talent Management Practices in Cement Industries in Rajasthan

Transcription

1 A Study of Employee Perception on Talent Management Practices in Cement Industries in Rajasthan Hitesh Chelawat V.H. Enterprises Udaipur, Rajasthan, India Abstract Cement Sector is one of the most important sectors in the World, as it provides the basic material for infrastructure development, the basis of economic development and progress. The industry has been growing at a rapid pace across the world, but is facing a shortage of talent. Indian cement industry has realised the importance of talent and the perceived talent shortage. The industry has started emphasising on talent management practices for the last five years. The paper tries to study the employee perception on talent management practices in their organisation. A sample of 200 employees from 8 different cement industries in state of Rajasthan was used for the study. The statistical techniques of Chi-Square and ANOVA were used for the analysis. The results showed that there was no significant difference in the employee perception regarding the talent management practices in their organisations. CEMENT INDUSTRY AN OVERVIEW Cement is the building block of construction industry. It is classified as portland, blended or speciality cement. With the rapid pace of urbanization and development, the demand and use of cement has been increasing consistently. Cement demand is primarily driven by housing sector (67%), infrastructure (13%), commercial construction (11%), and industrial construction (9%). Thus, till 2012, for more than a decade, cement industry was seeing a rapid growth of over 8%, especially due to high demand from China and India. The global production for cement had risen to 4.3 billion tonnes in 2014 (Fig. 1). But, recently owing to financial crisis in Europe and recession in China, the growth rates have come down to almost about 4-5%. Source: CEMBUREAU Fig. 1: World Cement Production in 2014 (in percentage) > RJSSM: Volume: 05, Number: 5, September 2015 Page 20

2 China is the largest producer of Cement in the world contributing about 56.5% of world production. It is also the largest consumer of cement with 58% of world consumption. India is the second largest producer of cement in the world with 7% of global production. Iran is now the 4 th largest cement producer in the world and has increased its output by over 10% from 2008 to Due to climbing energy costs in other major cement-producing countries, Iran has a unique position as a trading partner, utilizing its own surplus petroleum to power clinker plants. Cement Industry, in the recent years, have been characterised with mergers and acquisitions to have competitive advantages like lowcost and better reach. Lafarge and Holcim with their merger in July 2015, to form LafargeHolcim, has become the largest cement producing multinational company with installed capacity of 340 MT/yr and presence in 62 countries across the world. INDIAN CEMENT INDUSTRY Today, the Indian cement industry is second only to China in terms of installed capacity, and has grown at a very fast pace in recent years. Cement production in India increased at a compound annual growth rate (CAGR) of 9.7 per cent in the period , producing 360 million tonnes (MT) by end of financial year The production capacity is projected to reach 550 MT by FY Figure 2 shows the installed capacity and actual production figures and estimates for cement production in India for FY Source: IBEF Fig 2: Cement Production in India Although, the Indian cement industry has some multinational cement giants, like Holcim and Lafarge, which have interests such as ACC, Ambuja Cement and Birla Cement, the Indian cement industry is broadly home-grown. UltraTech Cement, the country s largest firm in terms of cement capacity, holds around 22% of the domestic market, with ACC (50%-owned by Holcim) and Ambuja (50%-owned by Holcim) having 15% and 13% shares respectively. Many of the remaining dozen top players are Indian including Jaiprakash Associates (10%), The India Cements Ltd (7%), Shree Cements (6%), Century Textiles and Industries (5%), Madras Cements (5%), Lafarge (5%), Birla Cement (4%) and Binani Cement (4%). The top 12 cement firms have around 70% of the domestic market. Around 100 smaller players produce and grind cement on a wide range of scales but are often confined to small areas. The Indian cement industry, is not only large, but also one of the most energy efficient, according to the World Business Council for Sustainable Development's (WBCSD) Cement Sustainability Initiative s (CSI) Getting the Numbers Right (GNR) data programme. India performed very favourably > RJSSM: Volume: 05, Number: 5, September 2015 Page 21

3 in terms of specific energy consumption per tonne of clinker produced, with an average 3130MJ/t across the 50% of cement capacity that the GNR programme received data on. Brazil and China, which also have rapidly-developing large cement industries, performed slightly less well. In India, the efficiency is further enhanced by the work of dedicated plant engineers who seek to maximise the efficiency of the equipment due to the fact that expensive foreign coal is the dominant fuel for the cement industry. Coal is also a reliable and stable kiln fuel, which means that Indian kilns can be very finely tuned and hence can be made more efficient than if a less reliable or variable/alternative fuel mix were to be used. When it comes to CO 2 emissions per tonne of clinker, India performs less well, making 837kg/t of clinker. This is close to the global average but behind those industries that have successfully implemented alternative fuel substitution such as Germany. Meanwhile, the Indian Government s 12th Five-Year Plan, which runs for 2013 to 2017, states that India will require a cement capacity in the region of 480Mt/yr by the end of It states that a further 150Mt/yr of capacity will be required to accomplish this. With the per capita consumption of cement in India still substantially low at about 192 kg compared with the world average of about 365 kg (excluding China) and the Government initiatives for the economic development of country and the growth of cement sector, there underlies a tremendous scope for growth of Indian cement industry in the long term. CHALLENGES FOR CEMENT INDUSTRY The cement industry faces number of challenges. These include: Economic scenario Cement industry growth and cement demand are directly linked to GDP of the country. Thus, good economic growth leads to higher demand of cement due to housing, infrastructure and commercial development while recession leads to low cement demand. Cost structure and competitiveness Cost structure and competitiveness is very important for cement industries as margins are low. Companies with cost advantages due to having access to cheaper power source, quality limestone reserve, or being close to bigger markets have the competitive advantage. Legal, regulatory, and environmental scenario The cement industry is highly affected by regulatory norms. It is prominent in developed countries where environmental issues are more stringent. These have further increased the cost of production. Technological advancement Technological advantage can give companies competitive advantage as when companies moved from the wet manufacturing process to the dry manufacturing process, there was a cost savings of 5% 10% in the overall cost structure. Geographic advantages It s an advantage for companies to be near limestone mines or waterways. Ease of transportation is an advantage. IMPORTANCE OF TALENT MANAGEMENT Talent Management is a set of integrated organizational Human Resource (HR) processes designed to attract, develop, motivate, and retain productive, engaged employees. The goal of talent management is to create a high-performance, sustainable organization that meets its strategic and operational goals and objectives. Talent management describes the process through which all organizations anticipate their human capital needs and set about meeting them. Decisions about talent management shape the competencies that organizations have and their ultimate success, and from the perspective of individuals, these decisions determine the path and pace of careers. The core of Talent Management is about developing the intrinsic human capacities to learn, think, relate and act. Talent Management market has surpassed $5bn in year 2014 with a growth rate of 17% over previous year. The market is expected to surpass $6bn by next year. According to a study by Bersin & Associates, 85% of organisations are experiencing recruitment difficulties, 77% of organisations are experiencing retention problems, 53% of employees leaving job reported greater promotion or development opportunities outside the company, 60% of HR Directors said they would not re-employ their workforce and 80% of people leave their managers not their job. The Employment Policy > RJSSM: Volume: 05, Number: 5, September 2015 Page 22

4 Foundation, USA estimated the cost of losing staff at around $15,000 per employee. McKinsey found that 75% of corporate officers were concerned about talent shortages and Deloitte reported that retaining the best talent is a top priority for 87% of surveyed HR directors. A survey released by ORC Worldwide, a New York-based provider of human resource management consulting and data services found that 62% top HR executives rated talent management as most strategic issue, 33% felt that talent management, encompassing acquisition, assessment, development and retention of a workforce will consume majority of their time and 7.7% felt that Cultural Transformation & Pay for Performance will be their major concern. Among the most important issues ranked by HR executives, leadership development, succession planning, workforce planning, compensation and diversity ranked at the top. TALENT MANAGEMENT IN INDIAN CEMENT INDUSTRY Indian Cement Industry has also been facing the problems of employee retention. Till a few years ago, the industry was marred by high attrition rates with little or no emphasis on talent management. In the recent years, The Indian Cement Industry has very effectively realised the importance of talent management for sustainability, competitive advantage and cost effectiveness. It is aware of the scarcity of available talent pool, the difficulties in attracting, selecting, recruiting, training and retaining talent. The industry has realised that talent management is going to be the biggest challenge the industries are going to face in the coming years. Thus, the Indian cement companies have formulated talent management strategies and implemented them. In the recent years, most Indian cement companies have taken talent management initiatives, with Aditya Vikram Birla Group, being the leader. The results of the recent initiatives by the companies have also started showing-up with a sharp fall in attrition rates in the last five years. RESEARCH METHODOLOGY The research has been undertaken realising the importance of talent management in the global arena and lack of research in the cement industry on the aspect. The research has been undertaken among the employees of cement companies in the geographical boundaries of the state of Rajasthan. Eight Cement Companies, viz. Ambuja Cements Ltd., Binani Cement Ltd., Birla Cement Works, J.K. Cement Ltd., J.K. Lakshmi Cement Ltd., Shree Cement Ltd., Ultratech Aditya Cement Works and Wonder Cement Ltd. were selected for the study. A sample of 200 executives, 25 from each unit was chosen. The sample was selected using simple random sampling. A questionnaire was developed for the study. The executives were asked to rate the talent management practices in their organisations on a five point Likert scale, with 1 as Strongly Disagree and 5 as Strongly Agree. Twenty questions divided in four categories, viz. Organisation Culture and Policy, Interpersonal Relationship, Career Growth & Development and Compensation & Benefits were asked in the questionnaire. 182 completely filled questionnaires were received and analysed, the response rate being 91%. Chi Square and Analysis of Variance (ANOVA) was used to analyse the data. HYPOTHESIS H 01 : There is no significant relationship between the ages of employees with their satisfaction with talent management practices in their organisation. H 02 : There is no significant relationship between the experiences of employees with their satisfaction H 03 : There is no significant difference in the satisfaction levels of employees of various organisations H 04 : There is no significant difference in the impact of different parameters on the satisfaction level of employees DATA ANALYSIS AND INTERPRETATION 182 complete responses were received and were used for the analysis. Figure 3, 4 and 5 represents the age, experience and organisation wise classification of the executives. > RJSSM: Volume: 05, Number: 5, September 2015 Page 23

5 Hypothesis I H 01 : There is no significant relationship between the ages of employees with their satisfaction with talent management practices in their organisation. Table 1: Age-wise Responses of Executives Age (in years) Agree Neutral Disagree Total & above Total Table 1 shows the age-wise classification of responses of executives. Chi Square test was used to analyse the above hypothesis. Table 2 shows the results of Chi Square test. Table 2: Chi Square Test Results Degrees of Freedom 6 Chi Square Calculated 6.85 Chi Square Tabulated Interpretation: The chi-square calculated is less than the chi-square tabulated. Thus, the null hypothesis is accepted. i.e., there is no significant relationship between the ages of employees with their satisfaction Hypothesis II H 02 : There is no significant relationship between the experiences of employees with their satisfaction Table 3: Experience-wise Responses of Executives Experience (in years) Agree Neutral Disagree Total & above Total Table 3 shows the experience-wise classification of responses of executives. Chi Square test was used to analyse the above hypothesis. Table 4 shows the results of Chi Square test. Table 4: Chi Square Test Results Degrees of Freedom 6 Chi Square Calculated 8.26 Chi Square Tabulated Interpretation: The chi-square calculated is less than the chi-square tabulated. Thus, the null hypothesis is accepted. i.e., there is no significant relationship between the experiences of employees with their satisfaction Hypothesis III H 03 : There is no significant difference in the satisfaction levels of employees of various organisations Table 5: Organisation-wise Responses of Executives Organisation Agree Neutral Disagree Total ACL BCL > RJSSM: Volume: 05, Number: 5, September 2015 Page 24

6 BCW JK JKLC SCL UT WCL Total Table 5 shows the organisation-wise classification of responses of executives. Chi Square test was used to analyse the above hypothesis. Table 6 shows the results of Chi Square test. Table 6: Chi Square Test Results Degrees of Freedom 6 Chi Square Calculated Chi Square Tabulated Interpretation: The chi-square calculated is less than the chi-square tabulated. Thus, the null hypothesis is accepted. i.e., there is no significant difference in the satisfaction levels of employees of various organisations Hypothesis IV H 04 : There is no significant difference in the impact of different parameters on the satisfaction level of employees Table 7: Category-wise Responses of Executives X 1 X 2 X 3 X Total X 1 Organisation Culture and Policy X 2 Interpersonal Relationship X 3 Career Growth and Development X 4 Compensation and Benefits Table 7 shows the category wise responses of the executives. ANOVA was used to test the hypothesis. Table 8 shows the results of the test. Table 8: Anova: Single Factor SUMMARY Groups Count Sum Average Variance Column Column Column Column ANOVA Source of Variation SS df MS F P-value F crit Between Groups Within Groups > RJSSM: Volume: 05, Number: 5, September 2015 Page 25

7 Total Interpretation: The F calculated value of is less than the F critical value of Thus, the null hypothesis is accepted. i.e., there is no significant difference in the impact of different parameters on the satisfaction level of employees with talent management practices in their organisation. CONCLUSIONS The study shows that there is no significant difference in satisfaction level of employees of different age, experience and organisations with the talent management practices in their organisations. The study also concluded that there is no significant difference in the impact of four different parameters, viz. organisation culture & policy, interpersonal relationship, career growth & development and compensation & benefits, on the satisfaction level of employees with talent management practices in their organisation. LIMITATIONS OF THE STUDY Though meticulous care has been taken in each and every aspect of study, but certain limitations are likely to be there in the study: A few executives were hesitant in filling responses and thus bias may have crept in replies of respondents. The resources available for the study were limited and thus in-depth and extensive study could not be carried out. Including more respondents from more plants and companies in and outside Rajasthan could have given an overall view of the industry. The study could have deeper insights into the various talent management practices being implemented in the organizations and their impact on the employee satisfaction levels. References Bersin, J. (2006). Talent Management -What is it? Why now?. Accessed June 26, 2015: Cembureau (2015), Cement & Concrete: Facts and Figures, Accessed June 26, 2015: Deloitte, Touche Tohmatsu. (2003). Aligned at the Top? Survey of CEOs and HR Directors Perceptions of HR. Accessed June 26, 2015: Dessler, G., (2007). Human Resource Management. New Delhi: Prentice Hall (India) Private Limited. IBEF (2015), Cement Industry in India, Sectoral Report, October 2014, Accessed June 26, 2015: McKinsey and Co. (2006). Global Survey of Business Executives. The McKinsey Quarterly. Accessed June 26, 2015: McKinsey and Co. (2007). The organizational challenges of global trends: A McKinsey Global Survey. Accessed June 26, 2015: > RJSSM: Volume: 05, Number: 5, September 2015 Page 26