A

PROJECT REPORT

ON
MODERN PAY SYSTEM

IN

“PRUDENT GLOBALTECH SOLUTION PVT. LTD.”

SUBMITTED BY

M.

H.T.NO:

Submitted In Partial Fulfillment of the Requirement for the Award of The

MASTER OF BUSINESS ADMINISTRATION

1
 INDEX

Ch. No. PARTICULARS Page No.

1.1 INTRODUCTION
CHAPTER -1i 1.2 OBJECTIVESOFSTUDY
1.3 NEEDFORTHESTUDY
1.4 SCOPEOFSTUDY
1.5 LIMITATIONSOFSTUDY

2.1REVIEW OF LITERATURE
I I

CHAPTER -2i 2.2 THEORITICAL FRAMEWORK

CHAPTER-3 3.1COMPANY PROFILE

I

3.2INDUSTRYPROFILE
CHAPTER -4i 4.1 DATA ANALYSIS AND
INTERPRETATION
CHAPTER-5 5.1FINDINGS
5.2SUGGESTIONS
5.3CONCLUSIONS

BIBILOGRAPHY

2
 LIST OF TABLES
 Are you satisfied or dissatisfied towards the variable pay?

 Can you balance of personal life and career work?

 Do you satisfied or dissatisfied towards loading pay sheet in software?

 Do you satisfied/dissatisfied towards the Measurement of client’s

requirements by the organization.

 Do you satisfied/dissatisfied towards the usage of new software for pay

process.

 Do you satisfied/dissatisfied towards the measurement of delivery of pay

report to clients.

 Do you satisfied/dissatisfied towards the Measurement of complaints

rectification.

 Do you satisfied/dissatisfied towards rewards and promotion.

 Do you satisfied/dissatisfied towards the Measurement of team’s

coordination with software technology team.

 Do you satisfied/dissatisfied towards the Measurement of client’s input.

 Do you satisfied/dissatisfied towards the Measurement of training given

to employees.

 Do organisation maintains records as per government norms.

 Do you satisfied/dissatisfied towards maintains of client details

confidentially.

 Do you satisfied/dissatisfied towards which the employee’s interface with

HR department for pay process of clients.

3
LIST OF GRAPHS

 Are you satisfied or dissatisfied towards the variable pay?

 Can you balance of personal life and career work?

 Do you satisfied or dissatisfied towards loading pay sheet in software?

 Do you satisfied/dissatisfied towards the Measurement of client’s

requirements by the organization.

 Do you satisfied/dissatisfied towards the usage of new software for pay

process.

 Do you satisfied/dissatisfied towards the measurement of delivery of pay

report to clients.

 Do you satisfied/dissatisfied towards the Measurement of complaints

rectification.

 Do you satisfied/dissatisfied towards rewards and promotion.

 Do you satisfied/dissatisfied towards the Measurement of team’s

coordination with software technology team.

 Do you satisfied/dissatisfied towards the Measurement of client’s input.

 Do you satisfied/dissatisfied towards the Measurement of training given

to employees.

 Do organisation maintains records as per government norms.

 Do you satisfied/dissatisfied towards maintains of client details

confidentially.

 Do you satisfied/dissatisfied towards which the employee’s interface with

HR department for pay process of clients.

4
 ABSTRACT

Modern Pay System pays greater emphasis on variable pay, rather than an automatic increase
each year. In other words, the base wage is seen as what the job is worth on the open market
(determined by surveys, supply and demand, specialty, etc.). while merit pay is a reward for
the results by employee each year. With this system, an employee can get a raise either by
increasing his job's value or by performing well.

This study on modern pay system has been compiled with the help of primary data
and secondary data. Primary data were collected from 50 respondents with the help of
structured interview and Observation method. Since the study was the Population Study, the
data were collected from all the employees in the pay department. The Secondary sources of
data were collected through company profile, organization Website and other related library
books.

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 CHAPTER – I

INTRODUCTION

6
 INTRODUCTION

A pay system is the method used to determine what a position should pay and how much a
person should earn. It may take into consideration a person's experience, knowledge, and the
skills necessary to complete a job. It also provides a fair and consistent method for
determining a pay rate. For instance, if a new employee starts at a company, a pay system can
help to weigh that person's skill and years' experience to find a fair pay rate compared to what

other employees are earning.

The modern pay system is based on:

➢ Variable pay

➢ Based on business performance

➢ Differentiated

➢ Based on individual performance

➢ Based on team and organisational performance

this "base pay" system is one that most people are familiar with. Often, it includes a set salary or
wage, a set schedule for merit increases, and a set benefits package.
Modern Pay System
Modern Pay System pays greater emphasis on variable pay, rather than an automatic increase
each year. In other words, the base wage is seen as what the job is worth on the open market
(determined by surveys, supply and demand, specialty, etc.), while merit pay is a reward for the
results by employee each year. With this system, an employee can get a raise either by
increasing his job's value or by performing well.

Some companies are using a three-way system to determine annual increases: Did the
employee accomplish his goals? Did the company reach its targets? Did the employee act in
accordance with the established competencies for his job?
Some companies are creating broader bands in their salary structures. In the past, large
companies had many complicated salary levels in each department, which made it difficult for
employees to move to different jobs because they would have to take a pay cut. For example,

7
by creating 5 large bands, rather than 25 narrow bands, employees can seek more
opportunities in other areas of the company without penalty.

Additionally, there are bonuses, team-based incentive/gain sharing, profit sharing, quality
awards, stock purchase options, etc. in Modern Pay System.

Establishing Pay Plans

Objectives of Compensation Management:
The basic objective of compensation management can be briefly termed as meeting the needs
of both employees and the organization. Since both these needs emerge from different sources,
often, there is a conflict between the two. This conflict can be understood by agency theory
which explains relationship between employees and employers. The theory suggests that
employers and employees are two main stakeholders in a business unit, the former assuming
the role of principals and the latter assuming the role of agents. The compensation paid to
employees is agency consideration.
Each party to agency tries to fix this consideration in its own favour. The employers want to
pay as little as possible to keep their costs low. Employees want to get as high as possible. The
compensation management tries to strike a balance between these two with following specific
objectives:

Attracting and Retaining Personnel:

From organization’s point of view, the compensation management aims at attracting and
retaining right personnel in the organization. In the Indian corporate scene, there is no dearth
of personnel at operative levels, but the problems come at the managerial and technical levels
particularly for growing companies. Not only they require persons who are well qualified, but
they are also retained in the organization. In the present-day context, managerial turnover is a
big problem particularly in high knowledge-based organizations.

Motivating Personnel:
Compensation management aims at motivating personnel for higher productivity. Monetary
compensation has its own limitations in motivating people for superior performance. Alfie
Kohn has gone to the extent of arguing that corporate incentive plans not only fail to work as
intended but also undermine the objectives they intend to achieve.

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• Rewards punish people - their use confirms that someone else is in control of the employee.
• Rewards rupture relationships - they create competition where teamwork and
collaboration are desired.
• Rewards ignore reasons - they relieve managers from the urgent need to explore why an
employee is effective or ineffective.
• Rewards discourage risk taking - employees tend to do exactly what is required to earn
the reward, and not anymore.
• Rewards undermine interest - they distract both manager and the employee from
consideration of intrinsic motivation.
Notwithstanding these arguments, compensation management can be designed to motivate
people through monetary compensation to some extent.

Optimizing Cost of Compensation:

Compensation management aims at optimizing cost of compensation by establishing linkage
with performance and compensation. It is not necessary that higher level of wages and salaries
will bring higher performance automatically but depends on the kind of linkage that is
established between performance and wages and salaries.

Compensation management tries to attempt at this. Consistency in Compensation:

Internal consistency involves payment based on criticality of jobs and employees' performance
on jobs. Thus, higher compensation is attached to higher-level jobs. Similarly, higher
compensation is attached to higher performers in the same job. Level of jobs within an
organization is determined by job evaluation. External consistency involves similar
compensation for a job in all organizations. Though there are many factors involved in the
determination of wage and salary structure for a job in an organization which may result into
disparity in the compensation of a particular job as compared to other organizations,
compensation management tries to reduce this disparity.

Compensation Management Process:

In order to achieve the objectives of compensation management, it should proceed as a
process.
This process has various sequential steps as shown:
- Organization’s strategy - Compensation policy
- Analysis of contingent factors

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- Design and implementation of compensation plan
- Evaluation and review

Organization’s Strategy:
Organization’s overall strategy though not a step of compensation management, is the starting
point in the total human resource management process including compensation management.
Companies operating in different types of market/products having varying level of maturity,
adopt different strategies and matching compensation strategy and blend of different
compensation methods. Thus, organizations follow different strategies in different market
situations and align their compensation strategy and contents with these strategies.

In a growing market, an organization can expand its business through internal expansion or
takeover and merger of other organizations in the same line of business or a combination of
both. In such a growing market, the inputs, particularly human resources, do not grow in the
same proportion as the business expands. Therefore, to make the growth strategy successful,
the organization must pay high cash to attract talents. For example, information technology is
a fast-growing business presently and we find maximum merger and higher managerial
compensation in this industry.

In mature market, the organization does not grow through additional investment but stabilizes
and the growth comes through making the present investment more effective, known as
learning curve growth. In such a situation, average cash and moderate incentives may work.
The benefits which have been standardized have to be maintained.

In the declining market, the organization has to harvest profit through cash generation and cost
cutting and if this cannot be sustained over the long run, the possible retrenchment of business
to invest somewhere else. In such a case, compensation strategy involves cost control with
below average cash and incentive payments.

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Cascio has observed that in viewing the compensation from strategic point of view, the
companies do the following:

- They recognize remuneration as a pivotal control and incentive mechanism that can be used
flexibly by the management to attain business objectives.
- They make the pay system an integral part of strategy formulation.
- They integrate pay considerations into strategic decision-making processes, such as those
that involve planning and control.
- They view the company's performance as the ultimate criterion of the success of the strategic
pay decisions and operational remuneration programmes.

Management Strategy
This relates to the basic existence of any organization its objectives and goals i.e., vision and
mission of the enterprise, for which human resources are hired, and the organization pays to its
employees to keep them motivated for accomplishing those set objectives in a cost-effective
manner.

Business Strategy –This defines the direction in which organization is going in relation to its
environment to achieve its objectives.

Compensation Philosophy consists of a set of beliefs which underpin the reward/

compensation strategy of the organization and govern the reward policies that determine how
reward processes operate.

Compensation Strategy defines the intentions of the organization on reward policies,

processes and practices required to ensure that it has the skilled, competent and well-
motivated workforce it needs to achieve its business goals. A strategic perspective on
compensation takes the position that how employees are compensated can be a source of
sustainable competitive advantage.
Compensation strategies can affect many facts of the business. Such as:
 Improved employee morale and retention
 Increased employee engagement and productivity
 Strengthened governance and compliance with company vision and mission

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HR Strategy is aligning the goals of HR to the goals or strategy of the organisation;
recruitment, retention and termination are a small part of it. In developing HR strategy two
critical questions must be addressed.
 What kinds of people do we need to manage and run our business to meet our strategic
business objectives?
 What people programs and initiatives must be designed and implemented to attract,
develop and retain staff to compete effectively?

In order to answer these questions four key dimensions of an organization must be addressed.
These are:
Culture: the beliefs, values, norms, and management style of the organization
Organization: the structure, job roles and reporting lines of the organization
People: the skill levels, staff potential and management capability
Human resources systems: the people focused mechanisms which deliver the strategy -
employee selection, communications, training, rewards, career development, etc.
Compensation Policy:
Compensation policy is derived from organizational strategy and its policy on overall human
resource management. To make compensation management to work effectively, the
organization should clearly specify its compensation policy, which must include the basis for
determining base compensation, incentives and benefits and various types of perquisites to
various levels of employees. The policy should be linked with the organizational philosophy
on human resources and strategy.

Besides, many external factors which impinge on, the policy must also be taken care of Job
Analysis and Evaluation. Job analysis provides basis for defining job description and job
specification with the former dealing with various characteristics and responsibilities involved
in a job and the latter dealing with qualities and skills required in job performer. Job analysis
also provides base for job evaluation which determines the relative worth of various jobs in
the organization. The relative worth of various jobs determines the compensation package
attached with each job.

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Analysis of Contingent Factors:
Compensation plan is always formulated in the light of various factors, both external and
internal, which affect the operation of human resource management system.
Various external factors are conditions of human resource market, cost of living, level of
economic development, social factors, pressure of trade unions and various labour laws
dealing with compensation management.
Various internal factors are organization’s ability to pay and employees' related factors such as
work performance, seniority, skills, etc. These factors may be analysed through wage/salary
survey.

Design and Implementation of Compensation Plan:

The organization may be able to design its compensation plan incorporating base
compensation with provision of wage/salary increase over the period, various incentive plans,
benefits and perquisites. Sometimes, these are determined by external party, for example, pay
commissions for Government employees as well as for public sector enterprises. After
designing the compensation plan, it is implemented. Implementation of compensation plan
requires its communication to employees and putting this into practice.

Evaluation and Review:

A compensation plan is not a rigid and fixed one but is dynamic since it is affected by a
variety of factors which are dynamic. Therefore, compensation management should have a
provision for evaluating and reviewing the compensation plan. After implementation of the
plan, it will generate results either in terms of intervening variables like employee satisfaction
and morale or in terms of end result variable like increase of productivity. However, this latter
variable is more important. The evaluation of compensation plan must be done in this light. If
it does not work as intended, there should be review of the plan necessitating a fresh look.

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NEED FOR THE STUDY:
The following are the needs to do the research at Prudent Globaltech Solutions Pvt. Ltd.

 Rewards, in general could be described as important motivators. Their effectiveness

depends upon three factors: drives, preference value and satisfying value of goal
objects.
 Monetary rewards imply external motivation, non-monetary incentives involve
internal motivation. Both are important. It is a judicious mix up of the two that tends
to cement rewards with motivation.

 A reward plan may consist of both monetary and non-monetary elements. Mixed
elements can provide the diversity needed to match the needs of individual
employees.

 The timing, accuracy and frequency of incentives are the very basis of a successful
incentive plans.

 The plan requires that it should be properly communicated to the employees to

encourage individual performance, provide feedback and encourage redirection.

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OBJECTIVES

 To understand the modern pay system.

 To review the effectiveness of the modern pay process of Prudent Globaltech Solutions
Pvt. Ltd.

 To understand financially or non-financial depends upon satisfying values of goal.

 To find about the software’s used in Pay process and satisfactory level of employees
using this software’s.

 To analysis whether these software’s are user friendly.

 To Suggest if, any

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SCOPE OF THIS STUDY

 The study of project on Modern Pay System at Prudent Globaltech Solutions Pvt. Ltd.

 The study of project limited to 45day only unable cover complete data from the
company.

 The study of project through questionnaire and survey and develop from the
responses.

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LIMITATIONS OF THIS STUDY

 The respondent attitude did not allow me to get their true feelings.

 Most of the respondent feared to give their name.

 Most of the employees were busy with their tight work and they do not want to be

disturbed.

 Employees are very limited, and duration is limited.

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RESEARCH METHODOLOGY

RESEARCH DESIGN:

A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure.

EXPLORATORY RESEARCH:

Exploratory research focuses on collecting data using an unstructured formal

or informal procedures to capture data and to interpret them. It is often used to classify the
problems or opportunities and it is not intended to provide conclusive information from
which a particular course of action can be determined.

SAMPLING DESIGN:

A sample design is a definite plan for obtaining a sample from a given population

POPULATION:

The employees of Prudent Globaltech Solutions Pvt. Ltd. will constitute the entire
population. Here the entire population is considered for my study because the population is
limited.

DATA COLLECTION:

Data is recorded measure of phenomena. While deciding about the method of data collection,
the researcher should keep in the mind about two types of data. They are, Primary Data and
Secondary Data

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Primary data

Primary data represent the first-hand raw data that have been specifically collected for the
current research problem. Primary data are raw, unprocessed and yet to receive any type of
meaningful interpretation. Sources of primary data tend to be the output of conducting some
type of exploratory, descriptive, or casual research.

DATA COLLECTION:
OBSERVATION, INTERVIEW

Directness of the observation

Based on the directness of observation, it can be grouped as direct or indirect. Direct
observation happens when the observer is physically present and monitors while the event is
taking place. This is highly flexible as the observer can decide what to observe, how much
time to spent on observation of an aspect, when to shift focus etc. The observer may feel
bored or frustrated by constantly being on the watch and may tend to lose focus. This might
reduce the accuracy and completeness of the observation. Another weakness is that the
observer may be overloaded when the events take place quickly which cannot be kept track
of or recorded.

Secondary data
The secondary data is the historical data previously collected and assembled for some
other research problem. Secondary data can be usually gathered at faster and economical
manner than the primary data. However, the data may not fit in the researcher’s information
need. The secondary data can be obtained from the libraries, website, published as well as
unpublished documents etc.,

Sampling methodology and procedure

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 Non-probability sampling the research finding cannot be generalized and the
sampling error cannot be assessed. The findings are limited to the sample, which provided the
original raw data. However non-probability sampling may be the only choice in case where
the population cannot be ascertained.

PURPOSIVE SAMPLING
A purposive sample is a non-representative subset of some larger population and is constructed
to serve a very specific need or purpose. A researcher may have a specific group in mind,
such as high-level business executives. It may not be possible to specify the population --
they would not all be known, and access will be difficult. The researcher will attempt to zero
in on the target group, interviewing whoever is available

Sample size

The sample size for the given project is 50.

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CHAPTER – II

21
 Review Literature

According to” steven m. Bragg” (2011), pay management is designed for both professional
accounts and students. Since both can benefit from its detailed descriptions of pay systems,
control, procedures and regulation.
According to chetan wain (2014), pay being the most vital part of HR generalist have
maximum number of jobs to offer and make enable them to handle pay calculation of
employees independently.
Ajit yadav (2014) said that pay is also incredibly important to its recipents: employee of a
company. Employee moral can be negatively affected by errors and irregulaties in pay, so an
organisation must distribute pay in a appropriate manner.
Charlie (2000) defined that “Pay strategies increases profitability, maximize employee
efficiencies, reduce time in transactional HR areas”.
Robert leach (1999), “Pay function could be better integrated into the HR function, whether
any of the information held by the pay function could usefully be shared”. According to kyle
pomerleau (2014), “Government levy pay taxes on both the employee and the employer,
though both are ultimately paid by wage earners”.

While the effect of minimum wages on employment has been heavily researched in the
developed world, much less is known about their impact in emerging economies. Yet there
are important reasons to believe that the impact of minimum wages might be different in such
settings. On the one hand, larger effects might be expected due to the fact that minimum
wages in emerging economies are often set at a very high level (Herr and Kazandziska, 2011;
World Bank, 2008) or because a greater proportion of the workforce is unskilled and earning
at or near the minimum wage (Cunningham, 2007).

In addition, and particularly in Latin American and Caribbean (LAC) countries, minimum
wages frequently have an impact higher up the income distribution because they have tended
to be used as an index for wage adjustments more generally, with wages and benefits
expressed in multiples of the minimum wage (Maloney and Mendez, 2004). However, there
are also many reasons to expect the minimum wage to have very little impact on employment
in emerging economies. One reason is that, in environments characterised by high levels of

22
inflation, it may be very difficult to increase the real value of the minimum wage (Lustig and
McLeod, 1997).

Another, and possibly more important, reason is that the level of compliance with the
minimum wage is frequently very low in these countries (Bhorat and Stanwix, 2013). This
may be because the minimum wage is either set too high or too low (Saget, 2008; Lee and
Sobeck, 2012; Rani et al., 2013), the system is too complex (Cunningham, 2007; Rani et al.,
2013), there are no legislated fines/punishments for non-compliance, or the minimum wage is
simply not enforced, possibly due to a lack of resources (Kristensen and Cunningham, 2006).

One reason why the minimum wage might be difficult to enforce in emerging economies is
the existence of a large informal sector. In such contexts, increases in the minimum wage
may have no effect on overall employment because a fall in formal sector employment may
simply be compensated by a rise in informal sector employment as displaced workers migrate
from one sector to the other. This generates a shift in the parameter of interest from the
number of jobs that are available to the quality of jobs that people hold, and therefore the
research (and policy) question may not necessarily be what impact the minimum wage has on
employment overall, but rather on the split between formal and informal employment. That
said, the effect of minimum wages in the informal sector may be hard to predict. In some
countries, minimum wages are interpreted as a signal of what constitutes a fair wage and are
complied with even in the informal sector (Cunningham, 2007). Cunningham (2007), for
instance, show that there is a significant spike in wages at or around the minimum wage level
in a number of emerging economies, even in the informal sector.

Some authors (Gramlich, 1976; Hamermesh, 1996; and Card and Krueger, 1995) have argued
that the impact on informal sector wages depends on the price elasticity of demand for formal
sector workers and that, under certain circumstances, an increase in formal sector wages
could also drive up wages in the informal sector.

A number of papers have found a positive (negative) effect of minimum wages on formality
(informality) (e.g. Foguel, 1998 for Brazil; Mora, 2007 for Colombia; Magruder, 2013 for
Indonesia; Bhorat et al., 2014 for South Africa), and there are a number of ways in which one
might be able to rationalise such a finding. One of these is a labour supply effect, with higher
wages in the formal sector incentivising workers to look for a formal job (Fajnzylber, 2001).

23
Another possibility is that income effects are at play, combined with intra-household
substitution effects, so that when the minimum wage increases for household members
employed in the formal sector, other household members can afford to reduce their labour
supply in the informal sector (Fajnzylber, 2001). A third explanation is similar to the reason
why positive employment effects of a minimum wage rise might be found in developed
economies: i.e. increases in the minimum wage, through their effects on consumption and
aggregate demand, raise the number of (formal) jobs in the economy (Magruder, 2013).

Electronic Payment Systems

Information Communication Technology (ICT) has over the years been used by various
institutions to develop new ways of carrying out their operations. The challenges of the return
mechanised vouchers system have compelled several nations to move to the use of ICT based
pay systems in their bid to find solutions to this problem (Ovaga and Eme, 2013).

The new payment technique entails that money meant for the departments and agencies
would now be sent to banks directly from the government account and other sources (Nnanta
and Eme 2013).

To collect salaries and other emoluments, staff would need to deal directly with banks. In the
old system, civil servants had an account with specific banks and at the end of each month
their respective accounts with their respective banks will be credited by their cashier of the
CAGD (Sumanjeet, undated).

The electronic payment system focuses on electronic fund transfer, (EFT), electronic cash,
electronic billing and automated tellers machine, credit and debit cards respectively. The
concept of accounting is developed in parallel with its functional development, where it
witnessed a transformation from manual system to computerized accounting system. Sanni, et
al (2008) defines accounting as the recording, classification, analysis, summarizing and
interpretation of financial transactions to show how they affect the operational performance
of a business entity. However, it must be noted that the decision to adopt manual or
computerized accounting system is dependent on the nature of the organization and the
complexity or otherwise of the transactions/items being accounted for (Sumanjeet, undated;
Seif and Qusim, 2011).

24
Accounting for employees‟ monthly emolument using computerized accounting system has
attracted so much argument due to the peculiarities and issues associated with wage and
salary administration. Some people argue that conventional accounting is considered better
and more reliable than the use of computerized accounting system, while some other people
think otherwise. The assessment of every wage/salary administration system is dependent on
the efficacy of the settlement and fund transfer approach. A computerized accounting system,
sequel to its speed and accuracy feature, may help in faster computation and payment of
employees‟ monthly emolument. Using information technology (including computerized
accounting system) has become the target of many public and private organizations, which
encouraged competition and technological progress on the computerization of information
systems with the latest technology of computers, where the system helps to plan, organize,
control, and supervise (Seif and Qusim, 2011).

Therefore, there is need to keep pace with the evolution in e-governmental system, e-
commerce, e-payments, etc, which are all affiliated to computer system, most employers of
labour, especially in relatively large organizations, now prefer to use an in-house
computerized pay system (Natailie 2010).

All the employer has to do is to buy the pay software and employ a staff to perform the pay
processing. Recently, electronic payment (e-payment) of salaries to staff has become a
common feature of most government institutions and corporate bodies vis-à-vis employee’s
wages and salaries administration. E-payment of salaries was introduced with the view to
tackling such issues as ghost workers syndrome, delay in salary payment, errors caused by
manual computation of staff emoluments and other pay misconducts. E-payment has to do
with the use of electronic means and platforms to make payments. Nevertheless, the adoption
of computerized accounting system in wages and salaries administration has its attendant pros
and cons (International Records Management Trust, 2008).

In view of the peculiarities of the local government system, and the felt need to ensure the
maximum utilization of the manpower resources, most especially the scarce high calibre
ones, enhance the ability of the local government to attract, retain and maintain credible
career structures for capable hands in the service and preserve the significant gains made in
building the local government system, the need to pay salaries adequately to local

25
government workers as in other tiers of government, becomes imperative. As in other
government establishments, payment of salaries to local government workers is not
negotiable since it is a statutory obligation. To ensure regular, accurate and prompt payments
at the end of every month, pay section of the Controller and Accountant General‟s
Department has been empowered by law to be solely responsible for the preparation of
workers‟ salaries month by month. It is on this premise that this study focuses on assessing
the challenges of the return mechanised voucher system, with a view of suggesting pragmatic
solutions to this problem (Ghana Public Expenditure and Financial Accountability, 2009;

Conceptualization of Paying and Computerized Accounting

Paying is the process of listing the names of people employed by a company showing the
amount of money to be paid to each of them (Hornby, 2001: 857). It is obvious from the
above statement that paying is an exercise that is done in every establishment that has some
employees, which in all intent, are paid by the employers. In this respect, paying becomes an
exercise that is carried out both in the private and public organizations. Therefore, it may not
be out of place if paying, with respect to local government system, is defined as the listing of
all the people who are employed by the local government council, showing the actual amount
to be paid to each worker at the end of every month. In other words, before any person is paid
in the local government, he or she must be a bonafide worker of the council. Pay software
programs are becoming more popular every day. A growing number of business, both small
and large, are using computer accounting solutions to automate the process of paying salaries
and wages.

A pay verification exercise conducted in the early 2000s validated 310,502 public sector
employees, excluding the military, casual labour and State Owned Enterprises. This compares
with a total of 320,466 employees on the computerised government pay at that time. Publicly
available figures for the total strength of the public service are difficult to find. The Auditor
General‟s Report for 2003 referred to 391,573 on CAGD‟s pay as at 31 December 2003,
compared with about 400,000 in 2002, totals that presumably included categories excluded
from the validation exercise. The emoluments of government employees are paid from public
funds allocated by the Ghana Parliament‟s annual appropriation. It has been estimated that
the ratio of the wage bill to current revenue is 35%, nearly twice that of Botswana and more
than twice that of Indonesia and Korea (Amoako-Tuffour, 2002).

26
Subvented organisations, such as the Police, Army, Internal Revenue and universities, have
their own pays. Moneys are released by central government to the subvented organisations,
but the organisations are not required to report accurately on their pay. For example, the
University of Ghana in 2007 reported on budgeted salaries rather than actual salaries;
generally the universities are overspent on salaries. This situation results in poor public
financial management and disjointed information about the public service .The Integrated
Personnel and Pay Database (IPPD) is the centralised computer system that handles pay and
personnel information for civil servants, teachers and health workers

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 THEORETICAL FRAMEWORK

Pay for Performance: Perspectives and Research

The committee's charge from the Office of Personnel Management included an examination
of research on the effects of performance appraisal and merit pay plans on organizations and
their employees. We have extended the scope of our review to include research on the
performance effects of pay for performance plans more generally (merit, individual, and
group incentive pay plans) and other research on pay system fairness and costs. We did this
for two reasons. First, we found virtually no research on merit pay that directly examined its
effects. Second, the research on pay for performance plans makes it clear that their effects on
individual and organization performance can not be easily disentangled from other aspects of
pay systems, other pay system objectives, and the broader context of an organization's
strategies, structures, management and personnel systems, and environment (Galbraith, 1977;
Balkin and Gomez-Mejia, 1987a; Ehrenberg and Milkovich, 1987; Milkovich and Newman,
1990).

This chapter is organized around these points. The first section describes merit, individual,
and group incentive pay for performance plans and classifies them in a matrix formed by two
major dimensions of plan design. We next use this matrix to review research on the influence
of different pay for performance plans on the pay system objectives that organizations
typically report—improving the attraction/retention/performance of successful employees,
fair treatment and equity, and cost regulation, with the trade-offs among other pay objectives
it entails. When relevant, we describe the contextual conditions that appear to influence plan
effects or are associated with unintended, negative consequences when pay for performance
plans are used. We then summarize our conclusions drawn from this research and discuss
their implications for federal policy makers.

PAY FOR PERFORMANCE PLANS: A FIELD GUIDE

Although there is a startling array of pay for performance plan designs in use, they can be
described and classified on some common design dimensions. In Figure 5-1 we have
classified pay for performance plans in a two-dimensional matrix. The first dimension
represents design variation in the level of performance measurement—individual or group—
to which plan payouts are tied. The group level of measurement encompasses work group
performance, facility (plant or department) performance, and organization performance. The

28
second dimension represents design variation in the plan's contribution to growth in base pay:
some plans add payouts to base salary; others do not.

The matrix cells provide examples of pay for performance plans distinguished on both design
dimensions. Merit plans are an example of pay for performance plans found in the first cell.
They are tied to individual levels of performance measurement (typically performance
appraisal ratings), and the payouts allocated under merit plans are commonly added into an
individual employee's base salary. The performance appraisal ratings used with merit plans
often combine both behavioral (for example, provided timely feedback to employees) and
outcome (for example, reduced overhead 10 percent) measures of performance. Performance
appraisal ratings are used along with the employee's pay grade, position in grade, and the
company's increase budget to determine the payout each employee will receive. The average
payout offered by a merit plan is typically smaller than that offered by other types of plans
and is provided annually (HayGroup, Inc., 1989). (Merit pay increases do, however,
compound from one year to the next—over time, outstanding performers will reach a
significantly higher pay level than average performers.) Merit plans are used across the
spectrum of employee groups, from hourly and clerical to high-level managers.

Examples of individual pay for performance plans in which payouts are not

added to base salaries—cell b—include piece rate and sales commission plans. Piece rate
plans involve engineered standards of hourly or daily production. Workers receive a base
wage for production that meets standard and incentive payments for production above
standard. Piece rate plans are most commonly found in hourly, clerical, and technical jobs.
Sales commission plans tie pay increases to specific individual contributions, such as
satisfactory completion of a major project or meeting a quantitative sales or revenue target.
These plans are most commonly found among sales employees. Payouts under individual
incentive plans are typically larger than those found under merit plans (HayGroup, Inc.,
1989) and are often made more frequently (piece rate plans, for example, can pay out every
week).

It is important to note that, although individual incentive plans can offer relatively large
payouts that increase as an employee's performance increases, they also carry the risk of no
payouts if performance thresholds are not reached. Thus, unless employers make market or
cost-of-living adjustments to base salaries, individual incentives pose the risk of lower

29
earnings for employees and the potential advantage of lower proportional labor costs for
employers. The same is true of group incentive plans.

The matrix in Figure 5-1 helps to simplify and guide our discussion of research on pay for
performance plans, but it is difficult to classify all plans neatly into one cell or another. Bonus
plans—particularly those typical for managerial and professional employees—are a good
example. These plans often combine both individual- and group-level measures of
performance, with an emphasis on the latter. For example, a managerial bonus plan may
combine measures of departmental productivity and cost control with individual behavioral
measures, such as ''develops employees." Like the other individual and group incentive plans,
these bonus plans offer relatively large payments that are not added into base salaries
(HayGroup, Inc., 1989), but they do not necessarily pay out more than once a year. We
consider these types of bonus plans under research on group incentives.

Pay for performance plans tied to group levels of measurement can, in principle, also be
divided into those that add payouts to base salaries and those that do not. However, few
examples of group plans that add payouts into base salaries exist (cell d in Figure 5-1). More
common are plans that tie payouts to work group, facility (such as a plant or department), or
organization performance measures and do not add pay into base salaries (cell c). There are
many variations on profit-sharing plans, but most link payouts to selected organization profit
measures and often pay out quarterly. A cash profit-sharing plan, for example, might specify
that each employee covered will receive a payout equal to 15 percent of salary if the
company's profit targets are met. Gainsharing plans, like profit-sharing, come in many forms,
but all tie payouts to some measure of work group or facility performance, and most pay out
more than once a year. Traditional gainsharing plans, such as Scanlon, Rucker, or Improshare
plans (named by or for their inventors), commonly provide a monthly bonus to workers of a
production line or plant. The bonus is based on value added or cost savings, defined as the
difference between current production or labor costs and the historical averages of these costs
(as established by accounting data). Savings are split between employees and management;
the employees' share of the savings is then typically allocated to each employee as some
uniform percentage of base pay.

Our choice of matrix dimensions was deliberate; they distinguish the major differences
between merit pay and other types of pay for performance plans, and they reflect distinctions
made in the research we reviewed. We refer to the matrix throughout our review of research

30
to help distinguish the four types of pay for performance plans and the research findings
related to each.

PAY FOR PERFORMANCE: RESEARCH FINDINGS

Organization pay objectives include motivating employees to perform, as well as attracting

and retaining them; the fair and equitable treatment of employees; and regulating labor costs.
We are interested in research on how pay for performance plans influence an organization's
ability to meet these objectives and in the conclusions we can draw—particularly regarding
merit pay plans. Obviously, the pay objectives listed are related, and organizations will face
trade-offs in trying to meet them, whether a particular pay for performance plan or no pay for
performance plan is adopted. We deal with these trade-offs in a subsequent section.

Do pay for performance plans help sustain or improve individual and group or organization
performance? Research examines this question most directly, and we review it first.

Motivating Employee Performance

The research most directly related to questions about the impact of pay for performance plans
on individual and organization performance comes from theory and empirical study of work
motivation. The social sciences have produced many theories to explain how making pay
increases contingent on performance might motivate employees to expend more effort and to
direct that effort toward achieving organizational performance goals. Expectancy theory
(Vroom, 1964) has been the most extensively tested, and there appears to be a general
consensus that it provides a convincing (if simplistic) psychological rationale for why pay for
performance plans can enhance employee efforts, and an understanding of the general
conditions under which the plans work best (Lawler, 1971; Campbell and Pritchard, 1976;
Dyer and Schwab, 1982; Pinder, 1984; Kanfer, 1990). Expectancy theory predicts that
employee motivation will be enhanced, and the likelihood of desired performance increased,
under pay for performance plans when the following conditions are met:

Employees understand the plan performance goals and view them as "doable" given their
own abilities, skills, and the restrictions posed by task structure and other aspects of
organization context;

31
There is a clear link between performance and pay increases that is consistently
communicated and followed through; and Employees value pay increases and view the pay
increases associated with a plan as meaningful (that is, large enough to justify the effort
required to achieve plan performance goals).

Goal-setting theory (Locke, 1968; Locke et al., 1970), also well tested, complements
expectancy theory predictions about the links between pay and performance by further
describing the conditions under which employees see plan performance goals as doable.
According to Locke et al. (1981) the goal-setting process is most likely to improve employee
performance when goals are specific, moderately challenging, and accepted by employees. In
addition, feedback, supervisory support, and a pay for performance plan making pay
increases—particularly "meaningful" increases—contingent on goal attainment appear to
increase the likelihood that employees will achieve performance goals.

Taken together, expectancy and goal-setting theories predict that pay for performance plans
can improve performance by directing employee efforts toward organizationally defined
goals, and by increasing the likelihood that those goals will be achieved—given that
conditions such as doable goals, specific goals, acceptable goals, meaningful increases,
consistent communication and feedback are met.

Individual Incentive Plans

Among the pay for performance plans displayed in our matrix (Figure 5-1, cell b), individual
incentive plans, such as piece rates, bonuses, and commissions, most closely approximate
expectancy and goal-setting theory conditions. Individual incentive plans tie pay increases to
individual level, quantitative performance measures. It is generally believed that employees
view individual-level measures as more doable, because they are more likely to be under the
individual's direct control. This is in contrast to group incentive plans (cells c and d in Figure
5-1), which are typically tied to measures of work group, facility, or organization
performance. Similarly, quantitative measures are seen as more acceptable to employees
because their achievement is less likely to be distorted and more directive because they
dictate specific goals. This is in contrast to merit plans (cell a in Figure 5-1), which are
typically tied to more qualitative, less specific measures of performance (see Lawler, 1971,
1973, for a more detailed analysis of these points). Individual incentive plans also typically
offer larger, and thus potentially more meaningful, payouts than most merit pay plans.

32
Given that individual incentive plans meet several of the ideal motivational conditions
prescribed by expectancy and goal-setting theories, it is not surprising that related empirical
studies tend to focus on individual rather than merit or group incentive plans. In reviews of
expectancy theory research, Campbell and Pritchard (1976), Dyer and Schwab (1982), and
Ilgen (1990) all agree that these studies establish the positive effect of individual incentive
plans on employee performance. The studies reviewed include both correlational field studies
and experimental laboratory studies, with the correlational studies predominating. While
these studies were primarily designed to test specific components of expectancy theory
models, they all show simple correlations, ranging from .30 and .40, between expectancy
theory conditions and individual performance measures; this means that, when these
conditions are met, 9 to 16 percent of the variance in individual performance can be
explained by differences in incentives.

Cumulative studies (primarily laboratory) also support goal-setting theory predictions that
specific goals, goal acceptance, and so forth, will increase employee goal achievement—in
some cases, by as much as 30 percent over baseline measures (Locke et al., 1981). A
laboratory study by Pritchard and Curts (1973) also reported that individual pay incentives
increased the probability of goal achievement, but only if the incentive amount was
meaningful. In this study "meaningful" was three dollars versus fifty cents versus no payment
for different levels of goal achievement on a simple sorting task. Only the three-dollar
incentive had a significant effect on individual goal achievement. Similar findings have been
reported by others (see Terborg and Miller, 1978).

There are also some early field studies of piece-rate-type individual incentive plans
conducted in the wake of claims made by Frederick W. Taylor (1911), the prophet of
"scientific management" and inventor of the time and motion study. The more
methodologically sound studies generally compared the productivity of manufacturing
workers paid by the hour and those paid on a piece rate plan, reporting that workers paid on
piece rates were substantially more productive—between 12 and 30 percent more productive
—as long as 12 weeks after piece rates were introduced (Burnett, 1925; Wyatt, 1934;
Roethlisberger and Dickson, 1939).

Viewed as a whole, these studies establish that individual incentives can have positive effects
on individual employee performance. But it is also important to understand the restricted
organizational conditions under which these results are observed without accompanying
unintended, negative consequences. Case studies suggest that individual incentive plans are

33
most problem-free when the employees covered have relatively simple, structured jobs, when
the performance goals are under the control of the employees, when performance goals are
quantitative and relatively unambiguous, and when frequent, relatively large payments are
offered for performance achievement.

There are a number of case studies that document the potentially negative, unintended
consequences of using individual incentive plans outside these restricted conditions. Lawler
(1973) summarizes the results of these case studies and their implications for organizations.
He points out that individual incentive plans can lead employees to (1) neglect aspects of the
job that are not covered in the plan performance goals; (2) encourage gaming or the reporting
of invalid data on performance, especially when employees distrust management; and (3)
clash with work group norms, resulting in negative social outcomes for good performers.

Babchuk and Goode (1951) reported an example of neglecting aspects of a job not covered
by plan performance goals. Their case study of retail sales employees in a department store
showed that when an individual incentive plan tying pay increases to sales volume was
introduced, sales volume increased, but work on stock inventory and merchandise displays
suffered. Employees were uncooperative, to the point of "stealing" sales from one another
and hiding desirable items to sell during individual shifts. Whyte (1955) and Argyris (1964)
provided examples of how individuals on piece rate incentives or bonus plans tied to budget
outcomes distorted performance data. Whyte described how workers on piece rate plans
engaged in games with the time study man who was trying to engineer a production standard;
Argyris described how managers covered by bonus plans tied to budgets bargained with their
supervisors to get a favorable budget standard. Many studies of individual incentive plans—
from the Roethlisberger and Dickson field experiments to case studies like those of Whyte—
have shown clashes between work group production norms and high production by individual
workers, which led to negative social sanctions for the high performers (for example, social
ostracism by the group).

These studies also suggested that development of restrictive social norms had some economic
foundation: employees feared that high levels of production would lead to negative economic
consequences such as job loss, lower incentive rates, or higher production standards.
Restrictive norms were also more common when employee-management relations were poor,
and employees generally distrusted managers.

34
These findings suggest the dangers of using individual incentive plans for employees in
complex, interdependent jobs requiring work group cooperation; in instances in which
employees generally distrust management; or in an economic environment that makes job
loss or the manipulation of incentive performance standards likely. Indeed, a recent study by
Brown (1990) reported that manufacturing organizations were less likely to use piece rate
incentives for hourly workers when their jobs were more complex (a variety of duties) or
when their assigned tasks emphasized quality over quantity. Since many modern
organizations face one or both of these conditions—especially complex, interdependent jobs
—but may still be unwilling to bypass the potential performance improvements promised by
individual incentives, some researchers suggest that they have adopted merit plans and group
incentive plans in an effort to reap those benefits without the negative consequences (Lawler,
1973; Mitchell and Broderick, 1991).

Merit Pay Plans

It is not difficult to view merit pay plan design as a means of overcoming some of the
unintended consequences of individual incentive plans. This is especially true when merit
plans are considered in the context of more complex managerial and professional jobs. As we
document in the next chapter, merit pay plans are almost universally used for managerial and
professional employees in large private-sector organizations. The most common merit plan
design is a "merit grid" that directs supervisors to allocate annual pay increases according to
an employee's salary grade, position in the grade, and individual performance appraisal
rating. The type of performance appraisal most commonly used for managerial and
professional jobs involves a management-by-objective (MBO) format in which a supervisor
and an employee jointly define annual job objectives—typically both qualitative and
quantitative ones. The rating categories or standards generated from MBO appraisals are
usually qualitative and broadly defined. Most organizations use three to five categories that
differentiate among top performers, acceptable performers (one to two categories), and poor
or unsatisfactory performers (one to two categories), with the acceptable category (or
categories) covering the majority of employees (Wyatt Company, 1987; Bretz and Milkovich,
1989; HayGroup, Inc., 1989). Merit plan payouts are relatively small (in the private sector the
average payout for the last five years has hovered around 5 percent of base salary, compared
with middle management/professional bonus payouts of 18 percent plus—HayGroup, Inc.,
1989); however, they are added into an employee's base salary while bonuses typically are

35
not. This addition of payouts to base offers the potential for cumulative long-term salary
growth not typical of other salary plans.

The use of an objectives-based performance appraisal format might be reasonably viewed as

recognition that it is difficult to capture all the important aspects of managerial and
professional jobs in a single, comprehensive measure such as "sales volume"; multiple
measures, quantitative and qualitative, might be developed in such appraisal formats, thus
decreasing the probability that important aspects of a job will be ignored. The choice of a
performance appraisal format may also assume that the perspectives of both supervisor and
employee are needed to set appropriate objectives and avoid gaming. The broader
performance appraisal rating categories typical of merit pay plans may also tend to decrease
clashes between work group norms and an individual performer, since the majority of
employees are rated as acceptable. The relatively smaller payouts and their addition to base
salaries could also make merit plans seem less economically threatening than individual
incentive plans.

Merit plan design characteristics, intended to diminish the potentially negative consequences
of individual incentive plans, can, however, also dilute their motivation and performance
effects. Performance appraisal objectives are typically less specific than the quantitative ones
found under individual incentive plans. Employees may thus see them as less doable and
more subject to multiple interpretations, and their attainment may be less clearly linked to
employee performance. Pay increases are smaller and may be viewed as less meaningful; the
addition of pay increases into base salaries may also dilute the pay for performance link
(Lawler, 1981; Krzystofiak et al., 1982). Many management theorists have suggested that
employers focus on the process aspects of performance appraisal and merit plans in order to
enhance their motivational potential (see Hackman et al., 1977; Latham and Wexley, 1981;
and Murphy and Cleveland, 1991, for reviews). For example, employee-supervisor
interaction and bargaining during performance appraisal objective-setting could increase an
employee's commitment and understanding of goals and feelings of trust toward
management. Training both supervisors and employees in how to use performance appraisal
objective-setting, feedback, and negotiation effectively is recommended. Communication of
merit pay plans as a means of differentiating individual base salaries according to long-term
career performance is also suggested as a means of helping employees to see these plans as
providing meaningful pay increase potential. Our review of merit pay practices in the next
chapter shows that some organizations are following these recommendations.

36
There is very little research on merit pay plans in general nor on the relationship between
merit pay plans and performance—either individual or group—in particular.

In a recent review of research on merit plans, Heneman (1990) reported that studies
examining the relationship between merit pay and measures of individual motivation, job
satisfaction, pay satisfaction, and performance ratings have produced mixed results. The field
studies comparing managers and professionals under merit plans with those under seniority-
related pay increase plans, or no formal increase plan, suggest that the presence of a merit
plan positively influences measures of employee job satisfaction and employee perceptions of
the link between pay and performance. In several of these studies, the stronger measures of
job satisfaction and of employee perceptions of pay-to-performance links found under merit
pay plans were also correlated with higher individual performance ratings (Kopelman, 1976;
Greene, 1978; Allan and Rosenberg, 1986; Hills et al., 1988). However, other field studies,
notably those of Pearce and Perry (1983) and Pearce et al. (1985), reported that over the three
years following merit plan implementation among Social Security officemanagers,
perceptions of pay and performance links declined, and department level measures of
performance did not change.

Heneman's review and the reports of the other researchers cited all point out the many
methodological limitations on the few existing studies: their correlational nature, the lack of
good baseline measures, reliance on opinions for performance measurement, and the lack of
control over organizational factors that might be expected to work against positive merit pay
plan effects. Although many of these limitations probably reflect organizational reality, it is
impossible to draw conclusions about the relationships between merit pay plans and
performance from this research. The research also offers no means for comparing the short-
or long-term performance effects of merit plans with those of other incentive plans.

Group Incentive Plans

The adoption of group incentive plans may provide a way to accommodate the complexity
and interdependence of jobs, the need for work group cooperation, and the existence of work
group performance norms and still offer the motivational potential of clear goals, clear pay-
to-performance links, and relatively large pay increases. Most of the group incentives used
today—gainsharing and profit-sharing plans—resemble individual incentive plans; they are
tied to relatively quantitative measures of performance, offer relatively large payouts, and do
not add payouts into base salaries. Unlike individual incentive plans, however, group

37
incentives are tied to more aggregate measures of performance—at the level of the work
group, facility/plant/office, or organization, so that the link between individual employee
performance and payoff is sharply attenuated.

While group incentive plans might reasonably be predicted to offer some motivational
potential for performance improvements, such a prediction requires a sizable inferential leap
from the expectancy and goal-setting literature. Two of the three conditions of expectancy
theory—that goals be doable and that the link between employee performance and pay be
clear—are not well satisfied. The major motivational drawback to group incentives appears to
be the difficulty an individual employee may have in seeing how his or her effort gets
translated into the group performance measures on which payouts are based. Academics and
other professionals experienced in the design and implementation of group incentive plans
emphasize the importance of organization conditions that foster employees' beliefs about
their ability to influence aggregate performance measures (O'Dell, 1981; U.S. General
Accounting Office, 1981; Graham-Moore and Ross, 1983; Bullock and Lawler, 1984; Hewitt
Associates, 1985).

Examples of such conditions include the following: management willingness to encourage

employee participation in group plan design and in day-to-day work decisions; an emphasis
on communications and sharing of information relevant to plan performance; joint employee-
management willingness to change plan formulas and measures as needed; cooperation
among unions, employees, and managers in designing and implementing the group plan and
tailoring plans to the smallest feasible group; and an economic environment that makes plan
payouts feasible. All of these suggestions seem reasonable but are largely the product of
expert judgment, not empirical studies.

Renewed interest in gainsharing, profit-sharing, and other types of group incentives during
the 1980s (although not necessarily accompanied by increased adoption of such plans, as we
document in the next chapter) has led to several reviews of research on group incentives
(Milkovich, 1986; Hammer, 1988; Mitchell et al., 1990). Two methodologically rigorous
gainsharing studies examined the productivity effects of traditional gainsharing plans
covering nonexempt employees in relatively complex, interdependent jobs in manufacturing
plants. Schuster's (1984a) was a controlled, longitudinal study (five years) examining the
effects of introducing gainsharing plans on measures of plant productivity; he reported that
for half of the 28 sites, there were immediate, significant productivity gains over baseline
measures and continued effects over the study period. He noted that less successful plans

38
tended to be in sites where many different plans were adopted to cover work group teams
instead of a plant-wide plan, when infrequent bonus payments were made, when union-
management relations were poor, and when management attempted to adjust standards and
bonus formulas without employee participation. Wagner et al. (1988) also examined five
years of plant productivity data before and after the introduction of gainsharing and also
reported significant increases in plant productivity.

Much of the research on gainsharing is based on single case studies lacking rigorous
methodological controls. There are few reports of gainsharing "failures." In general, the case
studies report multiple, beneficial effects from gainsharing: enhanced work group
cooperation, more innovation, and more effort; improved management-labor relations; higher
acceptance of new technologies; worker demands for better, more efficient management; and
higher overall productivity. Mitchell et al. (1990:69-71) note that an analysis of this case
study literature leaves the impression that job design enabling team work, smaller
organizational size and more flexible technology, employee participation, and favorable
managerial attitudes about gainsharing plans may all be critical to their success in improving
productivity, but that the research does not allow conclusions beyond "gainsharing may work
in different situations for different reasons." This suggests that many beneficial effects
attributed to gainsharing—including productivity effects—may be as much due to the
contextual conditions as to the introduction of gainsharing. Indeed, there is an emerging case
study literature supporting this view (see Beer et al., 1990). Some go so far as to suggest that
organizational context should be the only focus of productivity improvement efforts; that pay
for performance plans will ultimately depress productivity (Deming, 1986; Scholtes, 1987).
The research evidence cannot confirm or deny any of these alternatives.

Gainsharing plans have been most common in manufacturing settings, covering mostly
nonmanagement employees, and the research on gainsharing is thus restricted to these
private-sector settings and employees. Mitchell et al. (1990) report that research on profit-
sharing plans covering nonmanagerial employees is even more scarce and less rigorous than
research on gainsharing. They note that the limited case study research available suggests that
profit-sharing plans are less likely than gainsharing plans to improve performance of
nonmanagerial employees. Expectancy and goal-setting theories would predict this result
because it is difficult to see how these employees would translate their job efforts into
organizational profit improvements. Advocates of profit-sharing plans (Metzger, 1978;
Profit-Sharing Council of America, 1984), however, point out other potential benefits of plan

39
adoption, most notably the improved employee commitment to the organization and
understanding of its business that can emerge when information relevant to profit generation
is shared with employees as part of the plan. As we noted for gainsharing plans, it is possible
that these benefits would result from organization conditions like information sharing absent
a profit-sharing plan. Profit-sharing plans and managerial bonus plans have traditionally been
used as part of executive and middle management compensation packages; typically they tie
payments to organizational financial outcomes (such as return on assets, return on equity, and
so forth). Most of the studies of executive compensation (reviewed by Ehrenberg and
Milkovich, 1987), however, examine the relationship between overall compensation levels
and firm performance, not between profit-sharing and firm performance.

However, a recent study by Kahn and Sherer (1990) explored the impact of managerial bonus
plans on the performance of managers in the year following a bonus award. The company
studied had a bonus plan for which all middle-to higher-level managers were eligible, but
which in practice targeted critical higher-level managers for the most substantial performance
payments. Targeted managers were eligible for bonuses representing 20 percent of base
salaries; other managers were eligible for 10 percent bonuses. The bonus plan was tied to a
management-by-objective appraisal system that used some common individual-level
behavioral and outcome measures for all managers. Controlling for pay level, previous
performance, and seniority, Kahn and Sherer found that the targeted critical managers had
significantly higher performance ratings in the year following bonus payment than less
critical, nontargeted managers. They suggested that higher potential payouts were highly
correlated with higher performance effects.

Another recent study by Gerhart and Milkovich (1990) analyzed five years of firm
performance and compensation data for 16,000 mid-level managers and professionals in 200
large corporations. They controlled for individual, job, andorganizational conditions and
found that firms in which managers and professionals had higher profit-sharing bonus
potential (measured as the percentage of base salary represented by the bonus) also had better
performance (measured as return on assets) in the year following the bonus payment.
Specifically, every 10 percent bonus increase was associated with a 1.5 percent increase in
return on assets. This association, while not statistically significant, is certainly not trivial in
absolute terms. Although the study did not control for prior profit history, these results
suggest that profit-sharing plans may have a positive impact on organizational performance
among the higher-level managerial and professional employees whose jobs are most directly

40
related to financial outcomes. However, another study by Abowd (1990) qualifies these
results, suggesting that profit-sharing bonuses for higher-level employees will be more likely
to improve firm performance when economic conditions make such improvements realistic.

Employee Attraction and Retention

Organizations typically report that they want their pay systems to help them attract and retain
higher-quality, better-performing employees. A conceptual case can be made for how pay for
performance plans might influence the attraction and retention of these better employees. An
underlying framework in many social science disciplines describes the employee-employer
relationship as an exchange in which the employer offers inducements (certain working
conditions, opportunities, pay, job security, and so forth) in exchange for employee
contributions that include joining and remaining in the organization (see, for example, March
and Simon, 1958; Mahoney, 1979). This framework assumes that employees globally assess
the inducements (including pay) an employer offers relative to their own preferences, their
abilities and skills, and their other employment opportunities, and then make decisions about
joining the organization accordingly. Similarly, employees already within the organization
make global assessments of the continuing inducements offered relative to their own
contributions. (The employer side of this exchange is primarily concerned with the relative
benefits gained given the cost of inducements; this is discussed in our review of research on
pay for performance and cost regulation.)

Unfortunately, the empirical research examining the relationship of pay to an employer's

ability to attract and retain high-performing employees is limited, and there is virtually no
research examining the impact of pay for performance on these objectives. In a 1990 review
of research on the strategies that organizations use to attract employees, Rynes and Barber
note support for the importance of pay in employee assessments of the inducements an
employer offers, and for the ability of relatively higher pay inducements (specifically salaries,
recruitment and retention bonuses, and educational incentives) to increase the quality and
quantity of an organization's recruitment pool. These findings provide some support for
conceptual proposals about pay and the attraction of better employees, but they do not help us
pinpoint the influence of pay for performance. In a review of research on turnover and
retention, we found only one experimental study relating retention to the adoption of a merit
pay system involving nonclerical, white-collar workers in U.S. Navy labs (U.S. Office of
Personnel Management, 1988b). This study reported modest reductions in overall voluntary
turnover and considerable reductions in turnover among superior performers (as rated by the

41
performance appraisal system) in the labs using merit pay plans. One study is not sufficient to
support any general propositions about the relationship of pay for performance and retention.
However, if high wages generally reduce turnover, we can infer that merit pay probably has a
positive influence on the retention of those employees who receive high performance ratings
and, therefore, the largest pay increases from one year to the next.

In summary, the role that pay for performance plans can play in an organization's ability to
attract and retain the best performers can be conceived in terms of an inducements-
contributions exchange between employee and employer. This conceptual framework
suggests that an employee assesses the pay for performance plan relative to other payments,
working conditions, and other employment or promotional opportunities in deciding to join
or remain with the organization. Certainly, if all else is equal, pay for performance plans
should help attract and retain better performers. This framework assumes the importance of
context; it also emphasizes that individuals will assess pay for performance plans and other
payments relative to everything else the organization offers, thus placing pay in a potentially
less prominent position than does the research on performance motivation. For example,
some individuals, though opposed to pay for performance plans, might still be willing to stay
with an organization offering a challenging job, pleasant working conditions, and
opportunities for promotion. Unfortunately, although a conceptual case can be made for the
ability of pay for performance plans to help an organization attract and retain the best
performers, the research does not allow us to confirm it.

Fair Treatment and Equity

The adoption of pay for performance plans that treat employees fairly and equitably seems an
inherently good and ethical pursuit in and of itself. While organizations undoubtedly
recognize this, they also realize that different people have different definitions of what is fair
and equitable. Organizations thus frame their objectives pragmatically. They want their pay
systems to be viewed as fair and equitable by multiple stakeholders: employees; managers,
owners, and top managers; other interested parties at one remove, such as unions,
associations, regulatory agencies; and the public (Beer et al., 1985). Employee perceptions of
pay system fairness are thought to be related to their motivation to perform, and this is one
reason that organizations are interested in fairness. Organizations are also interested in pay
system fairness because there are laws and regulations that require it, because employees and
their representatives (unions and associations) demand it, and because society (representing

42
potential constituents, clients, or customers) is thought to smile on organizations with a
reputation for treating their employees fairly.

The research on fair treatment and equity in organizations has been mostly concerned with
employee perceptions (as opposed to the perceptions of unions, associations, or other
interested organization stakeholders). Theories of organizational justice distinguish between
distributive and procedural concerns (Cohen and Greenberg, 1982; Greenberg, 1987; for a
detailed review of theory and research on organizational justice, see Greenberg, 1990). In
application to pay, theories of distributive justice suggest that employees judge the fairness of
their pay outcomes by gauging how much they receive, relative to their contributions, and
then making comparisons against the reward/contribution ratios of people or groups they
consider similar in terms of contributions. If the employee judges that he or she is
comparatively unfairly paid, negative reactions are predicted (such as higher absenteeism,
lower performance, higher grievance rates, and so forth) (see Adams, 1965; Mowday, 1987).
Pay distribution concerns would involve employee perceptions of the fairness of pay
outcomes such as the leve of pay offered, the pay offered for different types of jobs, and the
amount of pay increase received.

Distributive justice theories also predict that some employees, particularly those managing or
administering pay systems, will be concerned with distributing pay increases according to
rules that the majority will view as fair, thereby reducing conflict (Greenberg and Levanthal,
1976). These distribution concerns encompass employee perceptions of the fairness of basic
pay policies, especially those about how pay increases are allocated. Examples of pay
increase policies include increases tied to performance, increases based on seniority, across
the board (or equality) increases, and higher increases for those with greater needs.

Procedural justice theories suggest that employees have expectations about how organization
procedures will influence their ability to meet their own goals, and that these expectations
will be shaped by both individual preferences and prevailing moral and ethnical standards
(Walker et al., 1979; Brett, 1986). Work in procedural justice also suggests that the
consistency with which procedures designed to ensure justice are followed in practice is an
important determinant of their perceived fairness (Levanthal et al., 1980). In application to
pay, procedural concerns would involve employee perceptions about the fairness of
procedures used to design and administer pay. The extent to which employees have the
opportunity to participate in pay design decisions, the quality and timeliness of information
provided them, the degree to which the rules governing pay allocations are consistently

43
followed, the availability of channels for appeal and due process, and the organization's
safeguards against bias and inconsistency are all thought to influence employees' perceptions
about fair treatment (Greenberg, 1986a).

Research examining distributive and procedural theories in a pay context is scarce; there are
no studies that can directly answer questions about the perceived fairness of different types of
pay for performance plans. The existing research on distributive justice does suggest that
employee perceptions about the fairness of pay distributions do affect their pay satisfaction.
Research on procedural justice suggests that employee perceptions about the fairness of pay
design and administration procedures can also affect their pay satisfaction, as well as the
degree to which they trust management and their commitment to the organization. None of
this research, however, allows us to determine causality.

Early research (mostly case studies and laboratory experiments) examining employee
perceptions of the fairness of pay distribution focused on differences in pay for different jobs
or specific tasks (Whyte, 1955; Livernash, 1957; Jaques, 1961; Adams, 1965; Lawler, 1971).
It supported theoretical predictions that employees do judge the ratio of their pay outcomes to
their work contributions against selected comparison groups, and that negative reactions—
primarily pay dissatisfaction—can occur if comparisons are unfavorable. It also suggested at
least three major pay comparison groups—employees in similar jobs outside the organization,
employees in similar jobs within the organization, and employees

44
CHAPTER – III

45
 INDUSTRY PROFILE

The global sourcing market in India continues to grow at a higher pace compared to the IT-
BPM industry. India is the leading sourcing destination across the world, accounting for
approximately 55% market share of the US$ 200-250 billion global services sourcing
business in 2019-20.

The IT industry accounted for 8% of India’s GDP in 2020. Exports from the Indian IT industry
are expected to increase by 1.9% to reach US$ 150 billion in FY21. In 2020, the IT industry
recorded 138,000 new hires. According to STPI (Software Technology Park of India), the
software exports by its registered units increased by 7% YoY to reach Rs. 5 lakh crore (US$
67.40 billion) in FY21 from Rs. 4.66 lakh crore (US$ 62.82 billion) in FY20, driven by rapid
digitization and the IT industry's timely transition to remote working environments that
helped to keep up the industry’s growth amid coronavirus pandemics.

Market Size

The IT & BPM industry’s revenue is estimated at ~US$ 194 billion in FY21, an increase of
2.3% YoY. The domestic revenue of the IT industry is estimated at US$ 45 billion and export
revenue is estimated at US$ 150 billion in FY21. According to Gartner estimates, IT spending
in India is estimated to reach US$ 93 billion in 2021 (7.3% YoY growth) and further increase
to US$ 98.5 billion in 2022.

Indian software product industry is expected to reach US$ 100 billion by 2025. Indian
companies are focusing to invest internationally to expand global footprint and enhance
their global delivery centres. In line with this, in February 2021, Tata Consultancy Services
announced to recruit ~1,500 technology employees across the UK over the next year. The
development would build capabilities for TCS to deliver efficiently to the UK customers.

The data annotation market in India stood at ~ US$ 250 million in FY20, of which the US
market contributed ~ 60% to the overall value. The market is expected to reach ~ US$ 7
billion by 2030 due to accelerated domestic demand for AI.

46
Investments/ Developments

Indian IT's core competencies and strengths have attracted significant investment from
major countries. The computer software and hardware sector in India attracted cumulative
foreign direct investment (FDI) inflows worth US$ 62.47 billion between April 2000 and
September 2020. The sector ranked 2nd in FDI inflows as per the data released by
Department for Promotion of Industry and Internal Trade (DPIIT).

Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra are diversifying their
offerings and showcasing leading ideas in blockchain and artificial intelligence to clients
using innovation hubs and research and development centres to create differentiated
offerings.

Some of the major developments in the Indian IT and ITeS sector are as follows:

 In April 2021, Infosys and BP (a global integrated energy provider) signed a

memorandum of understanding (MoU) to implement an integrated energy as-a-
service (EaaS) offering that will include end-to-end management of a customer's
energy assets and services.
 In April 2021, Accenture acquired Pollux (a provider of industrial robotics and
automation solutions) to further expand its technological capabilities.

 In April 2021, Accenture acquired Core Compete (a provider of cloud analytics

services) to expand AI-based supply chain capabilities.

 In April 2021, Infosys collaborated with ArcelorMittal to deliver the next-generation

application and business process management services to the company’s
(ArcelorMittal) European operations.

 In April 2021, Accenture and SAP SE announced to extend their partnership to help
businesses embed sustainability across the wide range of business processes—from
planning to execution—in order to complete new value across their industries and
supply chains.

47
  In April 2021, Tata Consultancy Services announced that Wavin, a Netherlands-based
global innovative solutions provider for the building and infrastructure industries,
has successfully implemented the TCS ERP on cloud platform to achieve expansion in
new growth markets in Indonesia and India.

 In April 2021, TCS partnered with Ericsson to assist the company in the
establishment and growth of its cloud-based R&D digital workplace.

 In April 2021, Microsoft launched ‘Dynamics 365 Business Central’, a cloud business
management solution for Indian small and midsized businesses (SMEs).

Government Initiatives

Some of the major initiatives taken by the Government to promote IT and ITeS sector in
India are as follows:

 In order to establish an enabling environment for the IT industry, in April 2021, the
Development of Advanced Computing (C-DAC) launched three innovatice
technologies Automatic Parallelizing Compiler (CAPC), Cyber Security Operation
Centre (CSoC) as a Service, and C-DAC’s indigenous High-performance Computing
software solutions—Parallel Development Environment (ParaDE).
 In Budget 2021, the government has allocated Rs. 53,108 crore (US$ 7.31 billion) to
the IT and telecom sector.

 Department of Telecom, Government of India and Ministry of Communications,

Government of Japan signed a MoU to enhance cooperation in areas of 5G
technologies, telecom security and submarine optical fibre cable system.

 In 2020, the government released “Simplified Other Service Provider” (OSP)

guidelines to improve the ease of doing business in the IT Industry, Business Process
Outsourcing (BPO) and IT-enabled Services.

Road Ahead

India is the topmost offshoring destination for IT companies across the world. Having proven
its capabilities in delivering both on-shore and off-shore services to global clients, emerging
technologies now offer an entire new gamut of opportunities for top IT firms in India. The

48
industry is expected to grow to US$ 350 billion by 2025 and BPM is expected to account for
US$ 50 55 billion of the total revenue.

India is the world's largest sourcing destination with largest qualified talent pool of technical
graduates in the world. According to National Association of Software and Service
Companies (Nasscom), the Indian IT industry’s revenue is estimated to reach US$ 194 billion
in FY21, an increase of 2.3% YoY. The sector is the largest employer within the private
sector.
This push towards cloud services has boosted hyper-scale data centre investments, with
global investments estimated to exceed ~US$ 200 billion annually by 2025. India is expected
to gain a significant share in the global market, with the country's investment expected to hit
~US$ 5 billion annually by 2025.
In Budget 2021, the government has allocated Rs. 53,108 crore (US$ 7.31 billion) to the IT
and telecom sector.
The IT industry accounted for 8% of India’s GDP in 2020. Exports from the Indian IT
industry are expected to increase by 1.9% to reach US$ 150 billion in FY21. In 2020, the IT
industry recorded 138,000 new hires.
The IT & BPM industry’s revenue is estimated at ~US$ 194 billion in FY21, an increase of
2.3% YoY. The domestic revenue of the IT industry is estimated at US$ 45 billion and export
revenue is estimated at US$ 150 billion in FY21.
Artificial Intelligence (AI) is expected to boost India's annual growth rate by 1.3% by 2035,
as per NITI Aayog. A substantial increase in AI by Indian firms can result in a 2.5% increase
in India’s Gross Domestic Product (GDP) in the immediate term. In September 2020,
NASSCOM FutureSkills and Microsoft collaborated to launch a nationwide AI skilling
initiative to train one million students in AI technology by 2021.
The computer software and hardware sector in India attracted cumulative foreign direct
investment (FDI) inflows worth US$ 62.47 billion between April 2000 and September 2020.
The sector ranked 2nd in FDI inflows as per the data released by Department for Promotion
of Industry and Internal Trade (DPIIT).
In 2020, PE investments in the sector stood at US$ 7.5 billion. IT & BPM led the venture
capital (VC) investment with 380 deals in in 2020, contributing 71% to the total deal count.

49
The COVID-19 pandemic has accelerated the demand for third-party data centre services in
India.
The Government of India has extended tax holidays to the IT sector for Software Technology
Parks of India (STPI) and Special Economic Zones (SEZs). As of February 2020, there were
421 approved SEZs across the country, with 276 of them from IT & BPM and 145 as
exporting SEZs.

COMPANY PROFILE

Prudent technologies & Consulting, Inc. is a full-service information technologies

consulting firm with more than 18 years of specialization in IT staffing, Data Analytics and
Customer Application Development Solutions. Service range from IT Project Solutions to
Offshore IT Solutions to IT Staffing Solutions. Prudent works with mid-size to Fortune 500
organizations all across the United States and has offices in Dallas, TX; Houston, TX;
Milwaukee, WI; Washington D.C.; and Hyderadad, India. For more information, visit
www.prudentconsulting.com and follow @prudentcareers

Our Solutions

For over 20years Prudent Technologies & Consulting has helped customers
secure the resources they need to deliver their critical IT initiatives. From
general IT Consulting and Staff Augmentation Services to technology specific
Professional Services in Salesforce, Splunk, Cybersecurity, and AI & Automation,
Prudent delivers results time and time again.

Dallas, Texas – March 8, 2017 Prudent Technologies & Consulting, Inc. (PRUDENT), a
leading staffing agency in the IT industry announced today they have won Inavero’s Best of
Staffing® Client Award for providing superior service to their clients. Presented in
partnership with CareerBuilder, Inavero’s Best of Staffing Client winners have proven to be
industry leaders in service quality based completely on the ratings given to them by their
clients. On average, clients of winning agencies are 2.5 times more likely to be completely
satisfied with services provided compared to those working with non-winning agencies.

Focused on helping US/International companies find the right people for their job
openings, PRUDENT received satisfaction scores of 9 or 10 out of 10 from 95.2% of their

50
clients, significantly higher than the industry’s average of 29%. Award winners make up less
than 2% of all staffing agencies in the U.S. and Canada who earned the Best of Staffing
Award for service excellence.

“Trust, efficiency, and quality is what defines PRUDENT. Knowing that we received a client
approval rating at more than 3 times the national average is so rewarding to share with our
team. This client satisfaction award is powerful as it aggregates our customer’s opinion of
PRUDENT” PRUDENT’s President and CEO, Praveen Panchakarla said.

"Staffing firms are giving top companies a competitive advantage as they search for talent
in North America," said Inavero's CEO Eric Gregg. "The 2017 Best of Staffing winners have
achieved exceptionally high levels of satisfaction and I'm proud to feature them on
BestofStaffing.com."

Salesforce is the #1 cloud-based CRM software used by 83% of Fortune 500 companies as of
Sep 2018. Salesforce evolved as the world’s best CRM platform, owing to its innovative,
reliable and secured services over the years. Salesforce CRM can tremendously improve the
way you run your business operations in the following ways:

Considering the vast possibilities, it offers, Prudent Technologies & Consulting Inc. has
embraced Salesforce as a Service to help small to mid-size companies and large enterprises
unlock a plethora of opportunities in the Customer Relationship Management (CRM) arena.

Implementing Salesforce could possibly turn out to be a complex and time-consuming

process that needs extensive experience and a strategic implementation partner who brings
in experienced resources with best practices to fully utilize all the features and functionality
within Salesforce CRM.
Prudent’s Salesforce Consulting team has experiences across almost every industry
vertical and has architected and delivered several of use cases. If you are a current
Salesforce customer, we can help you maximize your Salesforce investment through our
service offerings. And if you are considering Salesforce to as one of the ways to improve
the business operations, we can help you further define use cases, architect a solution,
deliver a POC, and deploy the solution.

51
As part of their continued investment in AI and Automation, Prudent Technologies and
Consulting is pleased to announce a strategic partnership with award winning AI vendor
Digitate

Digitate’s flagship product, ignioTM, is a cognitive system that helps organizations deliver
business assurance, drive business agility and fulfill their digital transformation objectives.
Digitate recently won the AI Breakthrough award for best AI company.

ACCOUNTS PAYABLE SERVICES

Reinvent accounts payable with intelligent automation to improve cash flow, boost
compliance with consistent data and enhance supplier and user experiences.

OUR APPROACH
We combine process knowledge with digital technologies to break functional silos in AP
and deliver superior outcomes. Our experience in delivering accounts payable services
managing over 120 million invoices per year helps organizations become agile.

Senior executives share their views on finance transformation in our study

Companies have new expectations from their finance functions. And right now, they
need faster forecasts and insights to make more confident decisions in uncertain
times. The finance teams that have embedded digital technologies and embraced new
roles are best placed to support their businesses. Especially when CFOs have taken on
the critical role of enterprise data guardian. We surveyed 500 senior finance
executives to understand how they are transforming their functions to meet changing
expectations.

We have accounts payable solutions that fit your needs

Our accounts payable services and technology solutions automate your invoice processing
and payment function to maintain cash flow and enhance business relations with suppliers.

Invoice receipt and capture

Receive invoices electronically and straight into your ERP from multiple sources. Cora
APFlow prioritizes invoices based on the rules you set for timely invoice processing and
payment.

52
Accounts payable process analytics

Configure AP reports and dashboards on key performance indicators to get visibility down
to the transaction level.

e-Invoicing

Accepts invoices in multiple formats from leading global e-invoicing networks. While
ensuring compliance with country specific regulations, e-Invoicing also enables faster
payments and more predictable cash flows for your suppliers. It enabled AP automation and
unbinds the AP team to focus on supporting the business to run more efficiently and to
improve supplier relationships by driving on-time payments.

Touchless invoice optimizer

Cora APFlow uses machine learning to predict delays in invoice processing and suggest
actions that buyers should take to resolve exceptions. It has built-in reminders for escalations
to deliver faster approvals and resolve pending invoices so you can pay vendors on time.

Requestor prediction

Cora APFlow now enables missing requestor prediction in an invoice. Powered by machine
learning web service it identifies probable requestors based on past data for invoices with
missing requestor information.

Supplier management

With improved supplier data management, Cora APFlow can automate your supplier set-up
and maintenance for greater accuracy, faster cycle times, lower costs, and enhanced
controllership. And since suppliers have real-time access to their invoice status and payment
information, they don't have to contact the accounts payable helpdesk.

Early payment discounts

Cora APFlow enables suppliers the ability to take discounts on specific invoices so they can
get paid faster. It helps to configure and control early payment discount program, improve
supplier relationships, and deliver cost savings.

53
Fraud detection and prevention

Cora APFlow creates a unified and automated system of invoice processing that helps in
reducing expense fraud. It identifies potentially fraudulent demands by flagging if there's
invoice duplication, abnormal invoice value, or other characteristics that raise doubts about
demand authenticity.

Highly scalable infrastructure

Cora APFlow thrives on ready-to-use functionalities built on a proven SaaS platform. It has
multi-lingual and multi-currency support with built-in fail-over and disaster recovery. Cora
APFlow is a System of Engagement that builds on your existing IT infrastructure and
integrates rapidly with seamless upgrades.

BOARD OF DIRECTORS

Praveen Panchakarla- President

Mary Ann Knecht

Vice President of Operations

John “Gid” Lockhart

Vice President

Rajesh Cherukupalli-

Managing Director - Salesforce

Natraj Sowmitri –

Hyderabad CEO

54
HR Consulting & Training

Consulting Corporate Training Training Packages

Organizational Reviews like morale, Team Building Campus2Corporate

satisfaction etc

Development of assessment tools Mind Mapping Fun@Work

Coaching & Mentoring Conflict Resolution Corporate Women

Personal Effectiveness Performance

Total HR Solutions Programs appraisal &
feedback

Creative Problem Corporate wives

Team Synergies & Effectiveness
Solving

Corporate Training Communication & Public Talks

Interpersonal Skills

Self-Awareness & Personal Effectiveness Presentation Skills Motivation Talks

Leadership & Managerial Effectiveness Effective meeting skills Emotional

Intelligence

Time Management Customer Interface Customer Delight

Skills

Stress Management Interviewing skills Good-to-Great

Cross Cultural Sensitivity & Business Train The Trainer Self Management
Etiquette - International and General Work
Place Ethics

55
An organization's workforce needs to constantly evolve skills to keep abreast with changing
business climes. Prudent Globaltech solutions leverages on its years of expertise honed for
over a decade to provide to all categories of Industry verticals. Prudent Globaltech solutions
training modules are devised by domain experts and are implemented through customized
and established processes What makes us unique are our extensive pre and post training
assessment and an experiential methodology to ensure complete transfer of learning. We
believe in unique requirements of each company and hence each module is customized to suit
the client.

Transaction Processing

Prudent Globaltech solutions Transaction processing division assists organizations in

managing multi-activity and large data related activities. Prudent Globaltech solutions has the
ability to take up seasonal assignments for statutory compliance like tax-returns, PF, ESI and
data archiving.
Book-keeping is an important aspect of corporate control over its finances. Prudent
Globaltech solutions is equipped with experts conversant with the intricacies of business
finance and compliance. We customize MIS as required by the enterprise which ensures fool-
proof accountability.
We specialize in various transaction processing activities like -

 Statutory Compliances
 Data Management

 Account Reconciliation

 Peak Load activities in Human Resource & Finance

 Bill processing for channel partners etc.

Prudent Globaltech solutions is among the fast-growing Human Resources service providers
worldwide, offering customized solutions with cutting-edge technology.

Prudent Globaltech solutions is equipped with world-class technology and infrastructure and
a pan India presence with skilled personnel.

56
The company is providing its services from medium size companies to large, multi-national
corporations. Located in six major cities, and utilizing an experienced, multi-talented
workforce, Prudent Globaltech solutions can address all Human Resources needs in India.

CHAPTER – IV

57
 DATA ANALYSIS

LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

SATISFIED 45 90

DISSATISFIED 3 6

NEUTRAL 2 4
 Are you satisfied or dissatisfied towards the variable pay?

Satisfied dissatisfied neutral

CHART

About 90% of the Employees are satisfied by the variable pay and we need to more focus on
the 6 % dissatisfied and 4% not yet responded.

 Can you balance of personal life and career work?

Yes No

58
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 41 82

NO 9 18
CHART

SOURCE: PRIMARY DATA

SOURCE: PRIMARY DATA

Among 50 employees 82 % of the employees are respondents on YES and helps for future
growth that they had improved themselves after the program. 18 % of the employees are
respondents on NO helps for future growth.

 Do you satisfied or dissatisfied towards loading pay sheet in

software?

Satisfied Dissatisfied neutral

59
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

SATISFIED 45 90

DISSATISFIED 0 0

NEUTRAL 5 10
CHART

SOURCE: PRIMARY DATA

SOURCE: PRIMARY DATA

About 90 % of the Employees are satisfied by the software and we need to more focus on
10% not yet responded.

 Do you satisfied/dissatisfied towards the Measurement of

client’s requirements by the organization.

Yes No

60
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 35 70

NO 15 30

SOURCE: PRIMARY DATA

Interpretations

About 70 % of the Employees are satisfied to meet the clients’ requirements and we need to
more focus on 30% of employee

 Do you satisfied/dissatisfied towards the usage of new software for

pay process.

Satisfied Dissatisfied Neutral

61
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

SATISFIED 38 76

DISSATISFIED 12 24

NEUTRAL 0 0
SOURCE: PRIMARY DATA

Interpretations

About 76 % of the Employees are satisfied with the calculation and we need to more focus on
24% of employees dissatisfied

 Do you satisfied/dissatisfied towards the measurement of delivery of

pay report to clients.

Satisfied Dissatisfied Neutral

62
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

SATISFIED 30 60

DISSATISFIED 5 10

NEUTRAL 15 30

CHART

SOURCE: PRIMARY DATA

Interpretations

About 60 % of the Employees are satisfied by the delivery and we need to more focus on the
10% dissatisfied and 30% not yet responded.

 Do you satisfied/dissatisfied towards the Measurement of complaints

rectification.

Satisfied Dissatisfied Neutral

63
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

SATISFIED 20 40

DISSATISFIED 5 10

NEUTRAL 25 50
CHART

SOURCE: PRIMARY DATA

Interpretations

About 40 % of the Employees are satisfied by the software version and we need to more
focus on the 10% dissatisfied and 50% not yet responded.

 Do you satisfied/dissatisfied towards rewards and promotion.

Yes No

64
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 47 94

NO 3 6

CHART

SOURCE: PRIMARY DATA

SOURCE: PRIMARY DATA

About 94 % of the Employees are satisfied by the rewards and promotion and we need to
more focus on the 6 % dissatisfied.

 Do you satisfied/dissatisfied towards the Measurement of team’s

coordination with software technology team.

65
 Yes No

LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 48 96

NO 2 4

CHART

SOURCE: PRIMARY DATA

SOURCE: PRIMARY DATA

About 96 % of the Employees are satisfied by the software development and we need to more
focus on the 4 % dissatisfied.

 Do you satisfied/dissatisfied towards the Measurement of client’s

input.

66
 Yes No

LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 42 84

NO 8 16
CHART

SOURCE: PRIMARY DATA

Interpretation

About 84 % of the Employees are satisfied by the clients input records and we need to more
focus on the 16 % dissatisfied.

 Do you satisfied/dissatisfied towards the Measurement of training

given to employees.

67
 Yes No

LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 30 60

NO 20 40
CHART

SOURCE: PRIMARY DATA

Interpretation

About 60 % of the Employees are satisfied by the software training and we need to more
focus on the 40% dissatisfied with training.

 Do organisation maintains records as per government norms.

Yes No

68
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 50 100

NO 0 0
CHART

SOURCE: PRIMARY DATA

Interpretation

About 100 % of the Employees are satisfied by the organization maintains all reports
according to government norms.

 Do you satisfied/dissatisfied towards maintains of client details

confidentially.

Yes No

69
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 46 92

NO 4 8
CHART

SOURCE: PRIMARY DATA

Interpretation

About 92% of the Employees are satisfied by the maintains of client inputs and we need to
more focus on the 8 % dissatisfied.

 Do you satisfied/dissatisfied towards which the employee’s interface

with HR department for pay process of clients.

Yes No

70
 LEVEL OPTIONS NO. OF RESPONDENTS % OF RESPONDENTS

YES 32 64

NO 18 36
CHART

SOURCE: PRIMARY DATA

Interpretation

About 64% of the Employees are satisfied by the clients HR and we need to more focus on
the 36% dissatisfied.

71
 CHAPTER – V

FINDINGS, SUGGESTIONS

FINDINGS

 The effectiveness of the existing software system in Prudent Globaltech Solutions

Pvt. Ltd. is measured by using the following variables,

72
  Software (sap)
 Import of data in software
 Software calculation
 Accept & implement change
 Flexibility
 Company policies
 Education &Computer Skills
 Client Relation.

 About 90% of the Employees are satisfied by the variable pay and we need to more
focus on the 6 % dissatisfied and 4% not yet responded.

 Among 50 employees 82 % of the employees are respondents on YES and helps for
future growth that they had improved themselves after the program. 18 % of the
employees are respondents on NO helps for future growth.

 90 % of the Employees are satisfied by the software and we need to more focus on
10% not yet responded.
 70 % of the Employees are satisfied to meet the clients’ requirements and we need to
more focus on 30% of employee
 76 % of the Employees are satisfied with the calculation and we need to more focus
on 24% of employees dissatisfied.
 60 % of the Employees are satisfied by the delivery and we need to more focus on the
10% dissatisfied and 30% not yet responded
 40 % of the Employees are satisfied by the software version and we need to more
focus on the 10% dissatisfied and 50% not yet responded
 94 % of the Employees are satisfied by the rewards and promotion and we need to
more focus on the 6 % dissatisfied.

 96 % of the Employees are satisfied by the software development and we need to

more focus on the 4 % dissatisfied.
 84 % of the Employees are satisfied by the clients input records and we need to more
focus on the 16 % dissatisfied.

73
  60 % of the Employees are satisfied by the software training and we need to more
focus on the 40% dissatisfied with training.
 100 % of the Employees are satisfied by the organization maintains all reports
according to government norms.
 92% of the Employees are satisfied by the maintains of client inputs and we need to
more focus on the 8 % dissatisfied.
 64% of the Employees are satisfied by the clients HR and we need to more focus on
the 36% dissatisfied.

SUGGESTIONS

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 One of the reasons pay for performance fails is because we don’t trust our managers
to truly evaluate performance well. According to CEB, “90 percent of HR leaders say
the process doesn’t even yield accurate information.” One of the keys to performance
management is developing consistency across managers about what good
performance looks like. Hold calibration sessions for managers to agree on the key
aspects of good performance for the roles in your organization.

 Another reason we fail to trust performance management is that it’s not frequent
enough. To be effective, conversations and feedback about performance have to
happen frequently, or in real time. For some, this will mean manager to employees,
for others, they’ll build in 360 mechanisms to deliver performance. I spoke with a
hospital recently who said their feedback system wouldn’t work if patients weren’t
also able to provide direct feedback. What will make feedback most meaningful in
your organization?
 When you ask some people about paying for performance, they immediately think of
bonuses, incentives, commissions and the like. Others think of base pay and a merit
matrix. There are a lot of ways of connecting the dots between performance and pay.
The right way will depend on the culture of your organization. Here’s a bonus tip:
don’t underestimate the value of peer recognition attached to a monetary value.

 The first time I heard about a biggest mistake contest, I thought it was too good to be
true. What better way to underscore the benefit of learning than to share the biggest
failures that led to the best lessons? Make it fun, make it public, and get your
executives involved.

 As with any shift you make in your organization, make sure you have clear goals:
what is the change you’re hoping to see in your culture? Take some time to evaluate
how it’s going three months, six months, a year, two years down the road.

CONCLUSION

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 From this study, it is found that majority of the workers were satisfied with individual
performance.

 I heard from one organization that when they rolled out their new performance-based
pay plan, they took a full year to shop the plan and three to develop, implement and
evaluate the plan. Depending on the size of your organization you may be able to
accelerate that pace, however it often takes longer than we think it will and the shift to
a pay-for-performance culture is not a small one. At the end of the day, the time spent
in transition is worth it. While any change can be uncomfortable, change is pretty
much the only thing we can count on as we move into a tech-enhanced, more
uncertain, highly mobile future.

 I hope that the suggestion given in the report may be implemented in future course for
the benefit of the employees and the company.

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 BIBLIOGRAPHY

BIBLIOGRAPHY
BOOKS

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  Fisher shoenfelt Shaw-Human resource management-4th edition-macmilan
Press limited.

 Kothari C.R research Methodology-Methods and techniques (2 nd edition)-new

age International (pvt) Limited.

 Bratton John and Gold Jeffery (1994)-HRM-Theroy and practice, 6 th edition-

Macmillan pres Limited.

 Mamoria C.B-Human Resource Management-Himalaya publishin home, 11 th

edition 1993.

REFERENCES

 Sasmita Polo-National Journal on Personnel Management-VOL-XXII, No.3,

Pg no.16-20

 Parveen Ahmed Alan and Mr. Kaushik-Personnel Today-Indian Journal on

personnel management-VOL.XXIX, NO.2, Pg No.13-15.

 Prof.Bata.K.Dey-Indian Journal on Personnel Management-VOL XXIX-NO.2,

pg no. 9-12.

Websites

 WWW.HVS INTERNATIONAL JOURNALS.COM

 WWW.Google.com

 WWW.SLIDESHARE.COM

 WWW.SCRIBD.COM

 WWW.CITEHR.COM

 WWW.MANAGEMENTPARADISE.COM

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 QUESTIONNAIRE

QUESTIONNAIRE

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 INTERVIEW QUESTIONS

QUESTION FOR HR EXECUTIVES AND HR HEADS.

 Are you satisfied or dissatisfied towards the variable

pay?

Satisfied dissatisfied neutral

 Can you balance of personal life and career work?

Yes No

 Do you satisfied or dissatisfied towards loading pay sheet in

software?

Satisfied Dissatisfied neutral

 Do you satisfied/dissatisfied towards the Measurement of client’s

requirements by the organization.

Yes No

 Do you satisfied/dissatisfied towards the usage of new software for

pay process.

Satisfied Dissatisfied Neutral

 Do you satisfied/dissatisfied towards the measurement of delivery of

pay report to clients.

Satisfied Dissatisfied Neutral

 Do you satisfied/dissatisfied towards the Measurement of complaints

rectification.

Satisfied Dissatisfied Neutral

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 Do you satisfied/dissatisfied towards rewards and promotion.

Yes No

 Do you satisfied/dissatisfied towards the Measurement of team’s

coordination with software technology team.

Yes No

 Do you satisfied/dissatisfied towards the Measurement of client’s

input.

Yes No

 Do you satisfied/dissatisfied towards the Measurement of training

given to employees.

Yes No

 Do organisation maintains records as per government norms.

Yes No

 Do you satisfied/dissatisfied towards maintains of client details

confidentially.

Yes No

 Do you satisfied/dissatisfied towards which the employee’s interface

with HR department for pay process of clients.

Yes No

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