A COMPREHENSIVE PROJECT REPORT ON A study on existing employee retention practices at chemical industry in dahej Submitted to SHRI MANILAL KADAKIA

COLLEGE OF MANAGEMENT & COMPUTER STUDIES, HANSOTROAD, ANKLESHWAR. IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION IN GUJARAT TECHNOLOGICAL UNIVERSITY UNDER THE GUIDANCE OF Faculty Guide Ms. Rashmi Ghamawala Ms. Hetal panseriya HR Faculty, KIMCOS. Submitted By Navrang Vasava [Batch 2010-2012, Enroll. No: 107710592014] MBA SEMESTER III/IV KIMCOS MBA PROGRAMME Affiliated to Gujarat Technological University Ahmadabad May-2012 Company Guide

Declaration
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I , NAVRANG VASAVA hereby declare that the report for Comprehensive Project entitled A STUDY ON EXISTING EMPLOYEE RETENTION PRACTISES is a result of our own work and our indebtedness to other work publications, references, if any, have been duly acknowledged. Place: Date NAVRANG VASAVA (Signature)

ACKNOWLEDGEMENT
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It gives us great ecstasy of pleasure to convey our deep and sincere thanks to our Mr. Nimesh Joshi (I/C Director) for his kind support, which helped us to complete the project successfully. We have great pleasure in expressing our sincere gratitude and hearty thanks to our beloved Faculty, Ms. Rashmi Ghamawala, Ms. Hetal Panseriya(HR FACULTY). For consenting to be our guide. She had been a great source of encouragement and inspired us throughout our project. thankful to her for everything she has done for us. We are greatly

YOURS SINCERELY, NAVRANG VASAVA

TABLE OF CONTENTS
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SR. NO. 1.

PARTICULARS PART I GENERAL INFORMATION 1.1 About the Chemical Industry 1.2 Overview of World Chemical Industry 1.3 Overview of Indian / Gujarat Chemical Industry 1.4 Overview of Gujarat Chemical Industry About major Companies in the Industry Product Profile (Major Products) PART II PRIMARY STUDY Introduction of the Study 4.1 Literature Review 4.2 Background of the Study 4.3 Problem Statement 4.4 Objectives of the Study Research Methodology 5.1 Research Design 5.2 Sources of Data 5.3 Data Collection Method 5.4 Population 5.5 Sampling Method 5.6 Sampling Frame 5.7 Data Analysis

PAGE NO 5 8 11 14 15 22 26 26 33 36 36 37 37 37 38 38 38 38 38

2 3 4

PART-1 GENERAL INFORMATION ABOUT THE CHEMICAL INDUSTRY

In the 1830s and 1840s, the British had the world's dominant chemical industry, which was focused on production of inorganic chemicals. Inorganic
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compounds are those taken from the earth, such as salt and minerals, and processed into useful products employed directly or used in further processing. One leading set of products is the alkalis, such as lime, soda ash, and caustic soda, used extensively in textiles, glass making, fertilizers, etc.; another includes acids such as sulfuric and nitric, which are often used in tanning, textiles, dyeing, and a myriad other applications. Alkalis and sulfuric acid produced in large quantities are commonly referred to as heavy chemicals. Currently, organic chemicals such as ethylene, benzene, and propylene, which are produced in large quantities, are more typical examples of heavy chemicals. [1] The early version of the inorganic chemical industry was in some sense closer to mining than the science-based chemistry of today. Perkin's discovery in 1856 launched the modern organic chemical industry. Since then, organic compounds have proved the most important class of chemicals, because they are more varied and pervasive than the inorganic compounds. Organic chemistry begins with inputs that contain hydrocarbons (composed of hydrogen and carbon), e.g., coal, oil, and natural gas, which form the backbone of final organic chemical outputs. In the first stage of processing, these raw materials are refined to produce primary outputs, such as benzene and ethylene. In subsequent processing, chemicals such as chlorine and oxygen are added to the hydrocarbon backbones to give the compounds their desired characteristics. The final output may, for example, be nylon or polyester fiber, a plastic, or a pharmaceutical product. The hydrocarbon backbone for British dyestuffs, and for organic chemistry throughout almost all of the nineteenth century, was provided by coal. [1]

Britain dominated the dyestuff industry until the 1870s. These were glory times for England. The nation was rich. Its organic chemical industry making dyestuffs had the technical know-how, the largest supply of basic raw material (coal), and the largest customer base (textiles). But those advantages slipped away, and by the end of the 1880s the Germans dominated the organic
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chemical industry. By 1913, German companies produced about 140,000 tons of dyes, Switzerland produced 10,000 tons, and Britain only 4,400 tons. The American industry was a large producer of basic inorganic, chemicals, but for its organic chemicals it depended mainly on German dyestuff and other imports, except for domestic production of explosives. [1] World War I changed the relative positions of nations in the chemical industry, at least for a few years. The United States was cut off from German dyestuffs and built its own organic chemical industry. The German industry, shattered by war, fell on hard times. Both Britain and Germany sought to create chemical companies that could be national standard bearers. In 1925, Germany formed the IG Farben company, merging all dye firms into one company. Britain created Imperial Chemical Industries (ICI) through a merger of smaller entities in 1926. In the U.S. a number of consolidations took place among private companies, forming such large and competitive entities as DuPont, Union Carbide. Allied Chemical, and American Cyanamid. IG Farben soon regained Germany's former dominance over the European chemical industry and formed numerous cartels to prop up prices and limit competition. At the same time, the U.S. chemical industry was gaining strength through the development of a large petroleum refining base, and also building its skill in designing large-scale continuous processing plants through the use of expert chemical engineering tools (Landau 1997 ). [1] World War II resulted in the physical destruction of a significant portion of the German chemical industry. The U.S. industry was now using petrochemicals to produce fibers, plastics, and many other products, while dyestuffs shrank in importance. America's chemical industry grew enormously and dominated the market at least until the 1970s. However, as world prosperity returned in the decades after World War II, so did a successful chemical industry in Germany, and in Europe more generally. Advantage at the firm level truly came to the fore, with different companies in different countries excelling at particular skills or products and trading extensively with one another. Japan was an exception. Although the Japanese chemical industry grew to become the second largest in the world by providing inputs for Japan's home market, it
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has not vet become a major player in international markets for products or technology. Note that the underlying science has been generally available for a long time; science in itself conveys no contribution to national wealth; only its commercialization by risk-taking investments will produce increases in productivity and the standard of living. [1] http://findarticles.com/p/articles/mi_m1094/is_4_34/ai_56973853/pg_3/? tag=content;col1[1]

1.1 GLOBAL CHEMICAL INDUSTRY

OVERVIEW

Chemicals are essential to millions of consumer goods, enabling hi-tech advances in industries as diverse
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as

aerospace,

computing

and

telecommunications. The chemical industry comprises companies engaged in

the conversion of raw materials oil, natural gas, air, water, metals -- that are then used to make a wide variety of consumer goods, as well as inputs for agriculture, manufacturing and construction industry. [2] Globally, the chemical industry is mainly concentrated in three areas of the world: Western Europe, North America and Japan. The European community is the largest producer, followed by the U.S. and Japan. The chemical industry, one of the largest. [2] The U.S. chemical industry operates through 170 major chemical companies with international operations spanning more than 2,800 facilities outside the U.S. and 1,700 foreign subsidiaries or affiliates. The sector generates an annual chemical output worth $400 billion. The U.S. industry records large trade surpluses and employs around a million people. It is also the second largest consumer of energy in the manufacturing sector. [2] OUTLOOK

The recession had hit the chemical industry hard. Shying from a lack of demand, chemical companies shelved their growth strategies. With plants idled or running at historically low rates, the companies looked for avenues to streamline operations and increase productivity. Accordingly, they resorted to restructurings, plant closures, and layoffs. Cost-cutting initiatives at industrial majors -- The Dow Chemical Company (DOW) and EI DuPont de Nemours & Co. (DD) [2]

The global chemical industry is, however, recovering from the recession-hit lows. Domestically, chemical production volumes have increased across all regions of the United States in 2010, reversing the steep declines experienced in 2008 and 2009. The largest gains have occurred in the Gulf Coast and Ohio Valley regions, boosted by export demand for basic chemicals and plastics. Output is expected to grow moderately in all regions in 2011 and continue to improve through 2012. [2]
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Growth in export markets has been driven by several factors. These include favorable energy costs, resulting from developments in extracting natural gas from shale; and demand from emerging markets, where recovery and expansion have been the strongest. As per the American Chemistry Council (ACC), U.S. exports would grow by 9.7% in 2011, outpacing the expected 7.8% growth in imports. [2] Further, the cost-containment measures implemented by chemical

companies, such as plant shutdowns, aggressive cost cutting and production improvements, should continue to bolster industry-wide margins. The resultant large cash flows could then be leveraged for growthopportunities. [2] Following a massive decline in fertilizer sales and consumption in 2009, the speed and extent of the recovery in the first half of 2010 has been stellar, leading to an annual increase of 13% and 7% over 2009, respectively. The International Fertilizer Industry Association (IFA) is projecting growth in global fertilizer consumption of 4.7% for 2010/2011 and 3.8% for 2011/12. By 2011/12, nutrient application rates would fully recover to levels seen prior to the economic crisis of 2008. [2] End-Market Scenario The U.S. home building sector is a major consumer market for the chemicals industry accounting for about 10% of chemical demand. According to the ACC, every 100,000 group of housing starts generates $1.5 billion in chemical sales. As per the National Association of Home Builders (NAHB), new housing starts marginally rose 7% for 2010. However, on the plus point, NAHB expects annual housing starts for single-family homes to climb a much stronger 21% to 575,000 units in 2011. On the flipside, U.S. unemployment will remain high in 2011; credit markets remain tight and mortgage rates will likely increase in 2011, thus limiting any noteworthy rebound in the housing market. We expect the housing sector to begin a slow recovery toward its prerecession peaks in 2011. [2] The Auto sector accounts for 10% of the chemical industrys demand. The automotive industry has started showing signs of recovery. The ACC
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estimates U.S automobile sales will reach 12.7 million units in 2011. The remaining demand comes from the agriculture, architectural and industrial coatings, paper and textile, electronics and other industries. [2]

Growing emerging markets should propel production in the paper and textile industry while the electrical industry is expected to pick up with increased industrial investment. Other industries, including food and agriculture, are also likely to gain momentum with the recovering economy. [2] http://www.zacks.com/stock/news/46513/Chemical+%26amp %3B+Fertilizers+Industry+Outlook[2]

1.2 OVERVIEW OF INDIAN / GUJARAT MARKET

INTRODUCTION

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Chemical Industry in India is one of the fastest growing industries under the Indian Economy. At the same time it is also one of the oldest domestic industry of India which started working soon after India's independence in 1947. From those early years, the Chemical Industry in India continued to contribute to the Economic Growth of Indian Economy. At present, the industry accounts for almost 13% of Indian GDP. [3] The Chemical Industry in India which generates almost 13% of country's total export is growing annually at a growth rate anywhere between 10% and 12%. Now we can discuss the growth rates and other important things of Chemical Industry in India sector wise. [3] The Chemical Industry in India is based on the idea of Diversification. The industry is a multi product and multi-faceted one. Depending on these product categories we can divide the Chemical Industry in India in following sectors:

Inorganic Chemicals-In this sector the growth rate is near about 9% and the chemicals produced in this sector are mainly used in alkalis, fertilizers, detergents and glass.

Drugs and Pharmaceuticals- This sector of Indian Chemical Industry holds the 4th place in the world in terms of volume. Export led growth is the characteristics of this sector.

Plastics and Petrochemicals-This sector of the Indian Chemical Industry is the fastest growing one among all the sectors. Reliance Petrochemical is the company which dominates this sector.

Pesticides, Fertilizers and other Agro-chemical products- This sector of the Chemical Industry in India account for almost 2.5% of the global market. It possesses an impressive domestic market growth rate of 10%.

Specialty and Fine Chemicals like Dyes and Paints- This sector is characterized by high level of fragmentation. The sector is involved in production of paints, dyes, inks, polymers and a lot of other chemical products. The sector has a growth rate of near about 12%.[3] http://www.economywatch.com/world-industries/chemical/india.html[3]
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Performance The Indian chemicals industry has shown rapid growth for more than fifty years with the fastest growing areas being in the manufacture of synthetic organic polymers used as plastics, fibres and elastomers. The chemicals industry generated over USD30 billion in 2006, contributing 3% of GDP and has been a front runner in terms of growth. The industry is highly fragmented and widely dispersed, consisting of stockists and dealers spread all over India addressing small segments and the retail market. Large players dominate the bulk chemicals segment but there is a mix of both large and small players in the life science and specialty chemicals segments. The geographical distribution of the industry is also very skewed, with Western India accounting for close to half of the total Indian chemical industry. [4] The Indian chemical industry has evolved a lot over the past decade. Today, India has a significant presence in the production of basic organic and inorganic chemicals, pesticides, paints, dyestuffs and intermediates, petrochemicals, fine and specialty chemicals, cosmetics and toiletry product segments. [4] Thus, due to its diversity, the chemical industrys fortunes are inextricably linked to both, the absolute domestic economic growth as well as the leading contributors to and quality of growth. It also has strong linkages with the rest of the world in terms of international trade, investment flows and technology transfers. [4]

Growth potential Going forward, reduced tariffs will help larger chemical companies grow even more. Competitive advantages, like having competence in the areas of high value added chemicals and conforming to international quality standards will be even more highly valued. Leveraging advanced technology and strong research capabilities and developing
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domestic

capacity

to

reduce

dependence on imported raw materials are will also be key. But all of these changes have to go hand in hand with a concerted effort to make the industry more organized and systematic. [4] Future prospects Candidates with the requisite skills and qualifications can choose from a wide range of options within the industry. Pharmacists, chemical engineers, process managers, sales personnel and research and development are but a few of the options that can be pursued. The growth prospects of the industry remain very rosy, given the unrelenting demand for chemical outputs both in consumer and industrial applications, so applicants can be assured of a large number of opportunities with good compensation. [4] http://info.shine.com/Industry-Information/Chemicals/926.aspx[4]

1.3 OVERVIEW OF GUJARAT CHEMICAL INDUSTRY Gujarat is the chemical hub of the country, contributing around 55% of the Indian chemical industry's annual turnover. [5] Ahmadabad alone has around 700 chemical companies. And, the size of the industry is set to grow further in Gujarat. [5]

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SC Gupta, joint secretary, department of chemicals & petrochemicals, ministry of chemicals & fertilizers, Government of India, said here that the industry in Gujarat would grow to Rs5,08,750 crore by 2020, up 140% from the present Rs2,14,000 crore. [5] The Indian chemicals industry currently has a turnover of Rs3,88,500 crore ($84 billion), which includes chemicals, petrochemicals, speciality chemicals and pharmaceuticals. It is likely to grow at the rate of 9% per annum, the rate at which the Indian economy is growing. By 2020, the Indian chemical industry is expected to grow to Rs9,25,000 crore ($200 billion), Gupta said. [5] http://www.dnaindia.com/money/report_gujarat-chemical-industry-to-grow-tors5-lakh-crore_1440405[5]

2.

ABOUT MAJOR COMPANIES IN THE INDUSTRY

LIST OF TOP CHEMICAL COMPANIES IN INDIA

Aarti Industries Ltd Ciba India Ltd(BASF)

Alkali Metals Ltd DCW Ltd

Atul Ltd Deepak Nitrite Ltd

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Elantas Beck India ltd GeeCee Ventures

English Indian Clays Ltd Ltd GHCL Ltd

Foseco India Ltd India Glycols Ltd

(Lanxess India) IOL Chemicals and Kanoria Chemicals and Mawana Sugars Ltd Industries Ltd National (NOCIL) Navin International Ltd SI Group India Ltd Standard Industries Ltd Fluorine Phillips Carbon Black Ltd Punjab Chemicals & Crop Protection Ltd Sudarshan Industries Ltd Chemicals Organic National Peroxide Ltd

Pharmaceuticals Ltd Meghmani Organics Ltd

Chemical Industries Ltd

http://poonamdoshi.blogspot.com/2010/06/list-of-top-chemical-companies-inindia.html[6]

GUJARAT ALKALIES AND CHEMICALS LIMITED (GACL) : Gujarat Alkalies and Chemicals Limited (GACL) was incorporated on 29th March, 1973 in the State of Gujarat by Gujarat Industrial Investment Corporation Limited (GIIC), a wholly owned company of Govt. of Gujarat, as a Core Promoter. [7] GACL has two units located at Vadodara and Dahej , both in the State of Gujarat. It has integrated manufacturing facilities for Caustic Soda, Chlorine, Hydrogen Gas, Hydrochloric Acid, Chloromethane, Hydrogen Peroxide,
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Phosphoric Acid, Potassium Hydroxide, Potassium Carbonate, Sodium Cyanide, Sodium Ferrocyanide. The Dahej unit also has 90 MW Captive Power Plant (CPP) for regular and economical power supply. [7] GUJARAT ALKALIES AND CHEMICALS LIMITED (GACL), DAHEJ UNIT commercial production commenced in August, 1998, with and installed capacity 100000 MTA. As a whole, GACL (RANOLI) installed capacity of 153500 MTA & (DAHEJ) installed capacity of 116500 MTA is largest Caustic Soda manufacturer in INDIA. GACL (Dahej Unit) production capacity utilization is 130.04%. [7] http://www.emtindia.net/eca2006/Award2006_CD/06ChlorAlkali/GujaratAlkaliesandChemical sLtdDahej.pdf[7]
Products Caustic Soda Group Caustic Soda Flakes Caustic Soda Lye Caustic Soda Prills Sodium Hypo Chlorite Liquid Chlorine Compressed Gas Hydrochloric Acid Caustic Potash Group Caustic Potash Flakes Caustic Potash Lye Potassium Carbonate Chloromethane Group Methyle Chloride Methylene Chloride 16 Hydrogen Sodium Group Sodium Cyanide Sodium Ferro Cyanide Hydrogen Peroxide Group Hydrogen Peroxide Bleachwin Phosphoric Acid Group Phosphoric Acid Calcium Chloride Flakes Calcium Chloride Powder Others Dilute Sulphuric Acid Scalewin Aluminum Anhydrous New Products Chloride

Carbon Tetrachloride Chloroform

Poly Aluminum Chloride Stable Bleaching Powder

http://www.gujaratalkalies.com/new/products_main.htm[8]

GUJARAT FLUOROCHEMICALS LIMITED (GFL) Gujarat Fluor chemicals Limited (GFL) is a public limited company, listed on both the leading stock exchanges of India the Bombay Stock Exchange and the National Stock Exchange. It was incorporated in 1987, and commenced commercial operations in1989. [9] GFL has a market capitalization close to US $ 1 Billion , Gross Fixed Assets of US $ 225 million, Net Worth of US $ 250 million, and strong cash profits in excess of US $ 100 Million per annum. GFL is rated AA- (stable) by CRISIL, Indias largest rating agency. [9] GFL attained a key milestone in 2007, when it commissioned Indias largest PTFE plant. PTFE is an extremely specialized engineering plastic, and only a select few firms the world over have the technology for PTFE manufacture. GFL also operates Indias largest refrigerant plant, which exports refrigerants to more than 75 countries across the globe. [9] Chemical Business

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GFL has set up, at Dahej, Gujarat, an integrated chemical complex, which comprises of a 52,500 tpa Caustic Soda / Chlorine plant, a 40,000 tpa Chloromethane plant, and a 30 MW gas-based captive power plant. These facilities were set up at a total investment of Rs 500 crores, and have commenced commercial operations in 2007. These facilities will significantly enhance GFLs cost competitiveness due to the advantages of backward integration, besides adding to GFLs product portfolio, top-line and bottom-line from FY2008-09 onwards. These facilities also have a significant potential for de-bottlenecking, with marginal investments, to further improve profitability once full capacity has been reached. [9]

MAJOR PRODUCT

http://www.gfl.co.in/chemicals_pro.htm http://www.gfl.co.in/[9] MEGHMANI ORGANICS LIMITED We were founded in 1986 as a partnership, under the name M/s Gujarat Industries, to manufacture Pigments by our Executive Chairman Mr Jayanti Patel, together with our Managing Directors, Mr Ashish Soparkar and Mr Natwarlal Patel, as well as two of our Executive Directors Mr Ramesh Patel and Mr Anand I Patel (collectively the "Founders"). [10]

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On 2 January 1995, our Company, Meghmani Organics Limited, was incorporated as a joint stock company with limited liability pursuant to Part IX of the Indian Companies Act. Under Section 566 of the Indian Companies Act, "joint stock company" means a company having a permanent paid-up or nominal share capital of fixed amount divided into shares. Upon incorporation, our Company acquired the business and all existing assets and liabilities of the partnership M/s Gujarat Industries and the Founders became shareholders of our Company. [10] Our Company has received several awards for our outstanding export performance and excellent performance since the date of our incorporation. [10] Our Pigment Products We manufacture the following Pigment products:

Pigment Green - Pigment Green 7; Pigment Blue - CPC Blue, Alpha Blue and Beta Blue. [10]

Our Agrochemical Products Agrochemical products fall into three main categories:

Pesticide Intermediates Technical Grade Pesticides Pesticide Formulations

http://www.meghmani.com/prod.htm[10]

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GCPTCL
Gujarat Chemical Port Terminal Co. Ltd. (GCPTCL) is a commercial Port and Storage Terminal, dedicated for handling Liquid & Gaseous Chemicals falling in "A", "B" & "General" Classes, including petroleum products. It is a modern Port & Storage Terminal, fully computerized, with state-of-the-art technology and added levereage of "Single-Window" Operations. GCPTCL an opportunity foever, for importers and exporters - is all set to revolutionize the chemicals traffic for both domestic and International business. [11] The Jetty can berth ships of 6,000 DWT to 60,000 DWT and the initial capacity of the Storage Terminal is more than 3 hundred thousand cubic metres. Additional capacities can be created to suite specific requirements of the customer at attractive commercial terms. [11] PRODUCT HANDING GCPTCL mainly handles the following products, apart from other compatible product at present and can create facilities to handle more products as per future needs on attractive commercial terms.[11]
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Propylene Propane Butadiene Naphtha n-Parafins Benzene Mixed-Xylene Styrene Methanol Caustic Lye LPG

http://www.gcptcl.com/aboutus.html[11]

3. PRODUCT PROFILE (MAJOR PRODUCTS)

The Indian chemical industry deals in products like 1. fertilizers, 2. bromine compounds, 3. catalyst, 4. sodium and sodium compounds, 5. dye intermediates, 6. inks and resins, 7. phosphorous, 8. paint chemicals, 9. coatings, 10. isobutyl, 11. zinc sulphate, 12. zinc chloride, 13. water treatment chemicals, 14. organic surfactants, 15. pigment dispersions, 16. Industrial aerosols and many more. [12]
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Chemical Industry is highly heterogeneous with following major sectors:

Petrochemicals Inorganic Chemicals Organic Chemicals Fine and specialties Agrochemicals [12]

Petrochemicals Petrochemicals is one of the major category in the chemicals. It is one of the fastest sectors at 13% plait covers :

Basic chemicals like Ethylene, Propylene, Benzene and Xylene etc. Intermediates like MEG, PAN and LAB etc. Synthetic fibres like Nylon, PSF and PFY etc. Polymers like LDPE/HDP E, PVC, Polyester and PET etc. [12]

Major Players in Petrochemicals are as follows:

Reliance Industries Ltd IPCL Baroda Nagothane Gandhar Haldia Petrochem GAIL NOCIL [12]

Inorganic Chemicals Inorganic chemicals has US$ 2.5 Billion industry. It covers basic products like Caustic, Chlorine, Sulphuric Acid etc. Inorganic chemicals are mostly used in detergents, glass, soap, fertilizer, alkalis etc.Competition from imports are on the rise. [12]

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Major Products of Inorganic Chemicals

Installed Capacity Soda ash Caustic Soda Liquid Chlorine Carbon Black Installed Capacity Calcium carbide Titanium dioxide Aluminium fluoride Potassium chloride Sodium chlorate Red phosphorous [12]

Organic Chemicals Organic Chemicals has 1 Billion Dollar industry. It covers a wide range of chemicals. Its units concentrated mostly in the Western India[12] Major Organic Chemicals

Methanol Formaldehyde Acetic acid Phenol Acetone Acetic anhydride Nitrobenzene Chloromethane Aniline Maleic anhydride Pentaerithitol PNCB
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MEK Citric acid ONCB Iso butyl alcohol [12] Agrochemical India is a large agricultural economy which is the major user. Average Indian consumption is very low (1/20th of world average).Agrochemical Consumption varies depending on crop and region. Cash crops like sugarcane, tobacco etc. [12]

Major players of Agrochemicals

India: United Phosphorus, Rallis and Excel MNC: Hoechst Agrevo, Novartis, Bayer etc http://chemicals.indiabizclub.com/info/major_players [12]

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PART II PRIMARY STUDY

4. INTRODUCTION OF THE STUDY:
4.1 LITERATURE REVIEW: According to (Harter, Schmidt and Hayes, 2002), the most important strategy employed by various organizations, to increase employee retention is the use of training and learning opportunities for all members. This increases employee competence as well as making them more productive when they realize that their employer is concerned about the future of their career. Consequently, they will be indebted to work at their place of work for a particular period as a sign of appreciation for the employer. The other strategy involves the adoption of motivational measures for the employees which increases their commitment as well as ensuring that they remain in the same workplace for a longer period. Motivation increases employee retention in any organization as they are accorded appropriate recognition. [13] The second article incorporates the nature of working environment as a factor in influencing employee retention. Working environments, which are
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composed, of members portraying respect, trust and care when treating their colleagues create a homely environment which significantly boosts employee retention. Such an environment enables employees to feel at ease, and their efforts are dedicated towards the creation of good working relations with their colleagues. Similarly, employers who are friendly and understanding the influence the rate of employee retention in an organization due to the nature of relations exhibited by both parties. Employees are capable of remaining at the same workplace for prolonged periods when they understand that their employer has set up adequate measures to ensure that their safety is guaranteed. This makes them feel at ease hence they stick to the same organization for quite some time (Wilkinson, 2004). [13] http://academicwritingtips.org/component/k2/item/1076-summaries-of-articlespublished-about-employee-retention.html[13] The retention of employees has been shown to be significant to the development and the accomplishment of the organizations goals and objectives. Retention of employees can be a vital source of competitive advantage for any organization. This study attempted to explore the main factors that contribute to employee retention existing in the private sector in Kuwait. The next paragraphs discuss the background of the study by clarifying the theoretical framework for the main problems with employee retention. [14] Today, changes in technology, global economics, trade agreements, and the like are directly affecting employee/employer relationships. Until recently, loyalty was the cornerstone of that relationship. The loss of talented employees may be very Detrimental to the companys future success. Outstanding employees may leave an organization because they become dissatisfied, under paid or unmotivated (Coff1996), and while trying to retain employees within the organization they may present other challenges as well. They may demand higher wages, not comply with organization practices, and not interact well with their coworkers or comply with their managers directions. [14]

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Besides these problems asymmetric information or lack of information about the employees performance may complicate an organizations Endeavour to retain productive employees. Without adequate information an organization may not be able to distinguish productive workers from non-productive ones. Employees often may take credit for the successes and deflect failures to other employees. This is known as a moral hazard problem. In many in stances companies may reward or punish employees for an organization out come for which they had no impact (Kerr1975). Insufficient information about employees performance may result in adverse selection by them (Gross man & Hart 1986). The better employees may move to other organizations for better opportunities. The coworkers who cannot improve their positions are more likely to stay. This is especially possible when due to Inadequate information outstanding performance is not rewarded. Non productive and productive workers end up receiving the same or nearly the same Compensation and package of perks because of managements in ability to distinguish talented employees from the rest of the labor force in the organization. The problem of attempting to keep talented members of the work force is further Complicated because of bounded rationality (Simon 1976). It is another result of Asymmetric in formation where both the manager does not know the information for which to ask from the employee and the employee does not know what to provide. Therefore, productive workers cannot distinguish themselves from nonproductive coworkers. [14] Even if an organization is fortunate enough to retain talented employees, the company may still have to cope with agency costs resulting from them and their colleagues. When information about an employees activities are difficult to gather, the employee may be motivated to act in his own interest which may diverge from the interest of the organization. This divergence of interests results in costs to the organization in the form of excessive perquisite consumption, shirking of job responsibilities and poor investment decision making. Jensen and Meckling (1976) explained that it is in an employees interest to over consume perks and shirk job responsibilities of the firm if they are not sole owners of the organization.Employees may also be enticed to make suboptimal investment decisions for the firm. Since most company
27

employees have their wealth tied up in the organization for which they work, employees may attempt to make investment decisions which are less risky than the stock holders of the firm would prefer. This is done to reduce the risk of failure by the company, which protects the no diversified employee from loss of wealth. This investment strategy may also reduce the return on investment that the diversified owners of the firm desire (Murphy 1985). [14] The employees or agents of the organization may also use a short sighted approach in investment selection to enhance their own career chances (Narayanan 1985).The employee can signal the labor market his superiority through the selection of a fast starting project, which may fizzle out later for the firm. This strategy may cause the firm to miss profitable long-term projects or much needed research and development. Employees may also attempt to increase the size of the firm through acquisitions and project selection regard less of the effect on company profitability in order to increase their own power base within the firm. [14] Another area contributing to decreased employee satisfaction is that of a companys motivational style. For example, Weinberg (1997) states that Most companies relied in the past on two traditional strategies for managing turnover. First, they raised wages until the situation stabilized. If that did not work, they Increased training budgets for new hires and first-level supervisors. These solutions do not work anymore. [14] Retention defined as an obligation to continue to do business or exchange with a particular company on an ongoing basis (Zineldin, 2000, p. 28). A more detailed and recent definition for the concept of retention is customer liking, identification, commitment, trust, readiness to recommend, and repurchase intentions, with the first four being emotional-cognitive retention constructs, and the last two being behavioral intentions (Stauss et al., 2001). Studies have indicated that retention driven by several key factors, which ought to be managed congruently: organizational culture, strategy, pay and benefits philosophy, and career development systems (Fitzenz 1990). The above mentioned definitions explain many situations in our contemporary life
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while many employees are no longer having the sense of organization loyalty once they leaved. Increasing numbers of organization mergers and acquisitions have left employees feeling displeased from the companies that they work and haunted by concerns of overall job security. As a result, employees are now making strategic career moves to guarantee employment that satisfy their need for security. On the other hand, employers have a need to keep their stuff from leaving or going to work for other companies. This is true because of the great expenses associated with hiring and retraining new employees. The adage, good help is hard to find, is even truer these days than ever before because the job market is becoming increasingly tight (Eskildesen 2000, Hammer 2000). [14] Literature of employees retaining again show that attracting existed employees costs less than acquiring new talents as organizations know their employees and what they want, and the initial cost of attracting the new employees has already been expended (Davidow and Uttal, 1989). Employees retention also attain benefits such as customers satisfaction, better service, lower costs (Reichheld,1995), lower price sensitivity, positive word-of-mouth, higher market share, higher productivity and higher efficiency (Zineldin, 2000). [14] Based on a review of the literature, many studies has investigate employees intentions to exist, for example Eskildsen and Nussler (2000) in their research suggested that employers are struggling to be talented employees in order to maintain a successful business. In the same bases, Mark Parrott (2000), Anderson and Sullivan (1993) and Rust and Zahorik (1993) believe that, there is a straight line linking employee satisfaction and customer satisfaction. Thus, high satisfaction has been associated to retention of both customers and employees. The literature of employee retention clearly explain that satisfied employees who are happy with their jobs are more devotion to doing a good job and vigorous to improve their organizational customers satisfaction (Hammer2000; Marini 2000; Denton 2000). Employees who are satisfied have higher intentions of persisting with their organization, which results in
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decreased turnover rate (Mobley et al., 1979). Fishbein and Ajzens (1975) attest the theory of reasoned action as the heart retention of both the employee and the customer links between satisfaction and behavior. PotterBrotman (1994) in his research explained how service could affect retention and may result in improving the value of teaching employees to be service providers, with the capability to enhance interaction with customers rather than endanger them. In the same research, the authors recommended that firms should focus on hearing customers unique voices as result to find out what kind of service they consider to be extraordinary. [14] The earlier efforts of Desai and Mahajan (1998) in examine the concepts of acquiring customers from a rational and affective perspective provides us with different approaches of how cognition and affects are implemented to increase retention. The authors recommended that in order to retain employees, companies must continually develop their products and services so as to meet the evolving needs of customers. Desai and Mahajan (1998) assumed that retained customers are in fact satisfied, and not simply retained because of habit, indifference or inertia. Included in retention strategies are the development of new products and services to meet and satisfy the evolving required of the customers; thus satisfaction is a component of retention. [14] However, Johnston (2001) in his research negated the relationship between customer's satisfaction and their retention clarifying that such relation is very weak. He explain that an understanding of the two concepts cannot always be achieved by isolating them from each other, but rather by examining the relationship between them. Gerpott et al. (2001) in his research attest Johnston (2001) as he mentioned that customer retention and customer satisfaction should be treated as distinct, but causally inter-linked constructs. Rust and Subramanian (1992), in their study, link quality to customer satisfaction and argue that this has a direct effect on customer retention and market share. In the same bases Athanassopoulos (2000) explain satisfaction as an antecedent of customer retention. The authors study customer
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satisfaction cues in retail banking services in Greece. The fining of his study shows that product innovativeness, convenience, staff service, price and business profile are dimensions of customer satisfaction. The authors also mentioned that customers do not consider switching banks until they have encountered a series of negative effects. [14] Heskett et al. (1994) and Schneider and Bowen (1999) suggested that, in some cases, service suppliers may be unable to retain even those employees who are satisfied. Thus, satisfaction itself may not be sufficient enough to ensure long-term workers commitment to an organization. Instead, it may be essential to look beyond satisfaction to other variables that strengthen retention such as conviction and trust (Hart and Johnson, 1999). This explanation is consistent Morgan and Hunt (1994) research on marketing channel, which shows that organizations often look beyond the concept of satisfaction to developing trust and ensure long term relationships with their employees. Further, this suggestion is based on the principle that once trust is built into a relationship, the probability of either party ending the relationship decreases because of high termination costs. [14] http://www.masterstudies.net/media/pdf/MBA%20Proj/employees %20retention%20in%20private%20sector%20an%20exploratory%20study %20in%20the%20state%20of%20kuwait.pdf[14]

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4.2 BACKGROUND OF THE STUDY I am preparing my project work on Employee Retention.The simple meaning of Employee Retention as Organizational policies and practices designed to meet the diverse needs of employees and create an environment that encourages employees to remain employed. [15] http://www.tbs-sct.gc.ca/gui/hrpg/hrpg-prh-02-eng.asp?for=execs[15] DEFINITION OF RESEARCH CONCEPTS

EMPLOYEE RETENTION:
Effective employee retention is a systematic effort by employers to

create and foster an environment that encourages current employees to remain employed by having policies and practices in place that address their diverse needs. A strong retention strategy becomes a powerful recruitment tool.[16] http://ezinearticles.com/?Recruiting,-Retaining-and-Rewarding-theRight-People-Are-Challenges-the-Employers-Face!&id=1240153.[16]
Employee retention refers to the ability of an organization to retain its

employees. Employee retention can be represented by a simple

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statistic (for example, a retention rate of 80% usually indicates that an organization kept 80% of its employees in a given period).[17] http://en.wikipedia.org/wiki/Employee_retention)[17]

THE THREE RS OF EMPLOYEE RETENTION:

To keep employees and keep satisfaction high, you need to implement each of the three Rs of employee retention: respect, recognition and rewards. Respect is esteem, special regard, or particular consideration given to people. As the pyramid shows, respect is the foundation of keeping your employees. Recognition and rewards will have little effect if you dont respect employees. Recognition is defined as special notice or attention and the act of perceiving clearly. Many problems with retention and morale occur because management is not paying attention to peoples needs and reactions. Rewards are the extra perks you offer beyond the basics of respect and recognition that make it worth peoples while to work hard, to care, to go beyond the call of duty. While rewards represent the smallest portion of the retention equation, they are still an important one. IMPORTANCE OF EMPLOYEE RETENTION

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The process of employee retention will benefit an organization in the following ways:
The Cost of Turnover: The cost of employee turnover adds hundreds

of thousands of money to a

company's expenses. While it is difficult

to fully calculate the cost of turnover (including hiring costs, training costs and productivity loss), industry experts often quote 25% of the average employee salary as a conservative estimate.

Loss of Company Knowledge: When an employee leaves, he takes

with him valuable knowledge about the company, customers, current projects and past history (sometimes to competitors). Often much time and money has been spent on the employee in expectation of a future return. When the employee leaves, the investment is not realized.

Interruption of Customer Service: Customers and clients do

business with a company in part because of the people. Relationships are developed that encourage continued sponsorship of the business. When an employee leaves, the relationships that employee built for the company are severed, which could lead to potential customer loss.
Turnover leads to more turnovers: When an employee terminates,

the effect is felt throughout the organization. Co-workers are often required to pick up the slack. The unspoken negativity often intensifies for the remaining staff.
Goodwill of the company: The goodwill of a company is maintained

when the attrition rates are low. Higher retention rates motivate potential employees to join the organization.

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 Regaining efficiency: If an employee resigns, then good amount of

time is lost in hiring a new employee and then training him/her and this goes to the loss of the company directly which many a times goes unnoticed. And even after this you cannot assure us of the same efficiency from the new employee.

WHAT MAKES EMPLOYEE LEAVE? Employees do not leave an organization without any significant reason. There are certain circumstances that lead to their leaving the organization. The most common reasons can be:
Job is not what the employee expected to be: Sometimes the

job responsibilities dont come out to be same as expected by the candidates. Unexpected job responsibilities lead to job dissatisfaction.

Job and person mismatch: A candidate may be fit to do a

certain type of job which matches his personality. If he is given a job which mismatches his personality, then he wont be able to perform it well and will try to find out reasons to leave the job.

No growth opportunities: No or less learning and growth

opportunities in the current job will make candidates job and career stagnant.

Lack of appreciation: If the work is not appreciated by the

supervisor, the employee feels de-motivated and loses interest in job.

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4.3 RESEARCH TITLE: A study on existing employee retention practices at chemical industry

4.4 PROBLEM STATEMENT: In a chemical industry find out the benefit that are offered to the employees, engagement program conducted in the company and level of satisfaction of employees with respect to employee retention. 4.5 OBJECTIVES OF THE STUDY: 1. To explore benefits those are important for the employees retention. 2. To assess existing employee retention strategies. 3. To investigate the issues related to organizational culture which affects employees retention. 4. To assess the effect of employee satisfaction on employee retention. 5. To assess the effect of employee engagement program in employee retention. 5. RESEARCH METHODOLOGY The section of a research proposal in which the methods to be used are described. The research design, the population to be studied, and the research instruments, or tools, to be used are discussed in the methodology. . 5.1 RESEARCH DESIGN: The research design indicates the type of research methodology under taken to collect the information for the study. The researcher used descriptive
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research design for his research study. The main objective of using descriptive research is to describe the state of affairs as it exists at present. It mainly involves surveys and fact finding enquiries of different kinds. .
5.2 SOURCES OF THE DATA:

For the purpose of the study both primary and secondary sources are use to collect data Primary data is the new or fresh data collected from the respondents through structured Questionnaire. The secondary data are collected through the structured questionnaire, literature review and also from the past records maintained by company.

5.3 DATA COLLECTION METHOD:Data was collected using Structured Questionnaire and interview. A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. 5.4 POPULATION Sample of the study is 100(approximately) employees. 5.5 SAMPLING METHOD The researcher adopted simple random sampling for the study
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5.6 SAMPLE FRAME:Sample Element/unit Employees who work in Chemical Company in Dahej

5.7 DATA ANALYSIS:I am going to analyze data though content analysis and statistical method represent finding with the use of table and charts.

REFERENCE
1. http://findarticles.com/p/articles/mi_m1094/is_4_34/ai_56973853/pg_3/ ?tag=content;col1[1]
2. http://www.zacks.com/stock/news/46513/Chemical+%26amp

%3B+Fertilizers+Industry+Outlook[2]
3. http://www.economywatch.com/world-industries/chemical/india.html[3]

4. http://info.shine.com/Industry-Information/Chemicals/926.aspx[4]
5. http://www.dnaindia.com/money/report_gujarat-chemical-industry-to-

grow-to-rs5-lakh-crore_1440405[5]
6. http://poonamdoshi.blogspot.com/2010/06/list-of-top-chemical-

companies-in-india.html[6]
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7. http://www.emt-

india.net/eca2006/Award2006_CD/06ChlorAlkali/GujaratAlkaliesandCh emicalsLtdDahej.pdf[7]
8. http://www.gujaratalkalies.com/new/products_main.htm[8] 9. http://www.gfl.co.in/chemicals_pro.htm http://www.gfl.co.in/[9] 10. http://www.meghmani.com/prod.htm[10] 11. http://www.gcptcl.com/aboutus.html[11] 12. http://chemicals.indiabizclub.com/info/major_players
[12]

13. http://academicwritingtips.org/component/k2/item/1076-summaries-of-

articles-published-about-employee-retention.html[13]
14. http://www.masterstudies.net/media/pdf/MBA%20Proj/employees

%20retention%20in%20private%20sector%20an%20exploratory %20study%20in%20the%20state%20of%20kuwait.pdf[14]
15. http://www.tbs-sct.gc.ca/gui/hrpg/hrpg-prh-02-eng.asp?for=execs[15] 16. http://ezinearticles.com/?Recruiting,-Retaining-and-Rewarding-the-

Right-People-Are-Challenges-the-Employers-Face!&id=1240153.[16]
17. http://en.wikipedia.org/wiki/Employee_retention)[17]

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