Project Title:COMPENSATION BENCHMARKING Name of the Company :- VERTEX SOFTWARE PVT.

LTD Name of the institute:- Amity Global Business School, Pune Project Duration:- 3.6.2010 31.7.2010 Year :- 2009 2010 Submitted by: Amrita Padhiary Student AGBS, Pune MBA (20092011) Towards the Partial Fulfilment of MASTER OF BUSINESS ADMINISTRATION AMITY GLOBAL BUSINESS SCHOOL, PUNE

Faculty Guide:
Prof. Geetanjali Sharma HRM Faculty AGBS Pune

Industry Guide:
Mr. Rajesh Bharatiya Senior manager, HR Vertex Software Pvt Ltd.

ACKNOWLEDGEMENT:1

It is a great sense of satisfaction and matter of privilege for me to work with the HR Department of Vertex Software Pvt. Ltd, Pune. I owe my deepest appreciation to the entire group of Vertex Software for providing me the opportunity to an exposure to the corporate world. I express my deepest gratitude to Mr. Ajit Patil (Executive Director & CEO, Vertex Software Pvt. Ltd ) who accepted me as a project trainee in the esteemed organization and providing me the opportunity to undergo and develop the project in the HR Department. I convey my sincere thanks to Mr. Sanjay Khorate (V.P HR) who gave me , opportunity to learn many exclusive things in the organization. I pay my sincere indebtedness to Mr. Rajesh Bhartiya (Senior Manager HR) and the entire HR Team for providing me continuous help and guidance during my project at the cost of their own valuable time. Without their help and guidance my project couldnt have been successful. I also express my gratitude to Prof. Geetanjali Sharma (Mentor Summer Training) Amity Global Business School, Pune for her constant inspiration, keen interest and constructive criticism in bringing up the project successfully.

PREFACE:2

This report has been prepared to have a record of what I have done at and learnt about Vertex Software Pvt. Ltd Ltd. This report contains a basic introduction of Vertex Software Pvt. Ltd as an organization and Compensation Benchmarking with respect to other competitor organizations, which is one of the main aspects of the Core HR. I hope that this report provides sufficient information regarding my work on the project. I would consider my efforts to be fruitful if it proves useful to the organization at any stage.

ABSTRACT:-

The objective of this project is to observe the salaries paid in the various tier-1, tier-2 and tier-3 IT companies and to ascertain whether the Compensation structure at Vertex software is adequate and appropriate or not. Compensation systems can help an organization achieve and sustain competitive advantage

How do we define a Tier-1, Tier-2 and Tier-3 IT Company?

Tier-1 IT Company:Any IT company whose annual turnover is more than $200 million i.e more than INR 960crores. Tier-2 IT Company:Any IT company whose annual turnover is more than $50 million i.e INR 240crores and less than or equal to $200 million i.e INR 960crores.

Tier-3 IT Company:Any IT company whose annual turnover is upto $50 million i.e INR 240crores.

This study involves:

The grouping of the various IT companies into the Tier-1, tier-2 and tier-3 companies on the basis of their annual turnover.

Collection of the secondary data:The resumes of the employees of the various tier-1, tier-2 and tier-3 IT Companies on the basis of their work experience of 0year 10years, software skills such as java and J2EE are collected from the job-portal such as www.naukri.com . The sample size for each of these tier-1, tier-2 and tier-3 companies is about 1000 2000 employees in each category.

Calculations and results:In each of the above 3 categories, there are about 8 sub-groups formed on the basis of the work experience. Eg:-0-2years, 2-4years.8-10years. The minimum, maximum and average CTC is calculated for each sub group, (eg:- the minimum, maximum and average salary for an employee having a work experience of say 2-4years). The results are tabulated and interpreted with t he help of line-charts , Bargraphs and Hypothesis testing using SPSS.

Similar process is followed for the employees of the various tier-1, tier-2 and tier-3 IT Companies on the basis of their work experience of 0year 10years, software skills such as Automation testing and qtp.

Table of Contents:-

Sr. no 1. 2. 3. 4. 5. 7. 8. 9. 10. 11. 13. 14.

CONTENTS Objective Scope Methodology About the Industry & the Company. Basics of Compensation benchmarking. Statistical analysis Observations and Inference. Limitations. Recommendations & Implications for the Future Research. Overall experience & learning Bibliography Appendices

Page nos. 7 7 7-8 9 - 23 24 - 33 34 - 41 42 43 44 45 46 47

My Project at Vertex software Pvt. Ltd:-

I)OBJECTIVE:I did a project on Compensation- benchmarking. The main objective of this project was to observe the salary paid to the employees in various Tier-1, Tier-2 and Tier-3 IT companies, based on the work experience and designations of the employees and to compare with the average salary paid at VERTEX SOFTWARE, for different designations and work experience of the employees.

II)SCOPE:-

While doing the Compensation benchmarking, only the Cash Compensation is considered.

III)METHODOLOGY:-

The rationale of this project was to observe the current compensation trend in the various IT Companies and as well as to evaluate the Compensation structure of Vertex software pvt. Ltd. With the help of websites like google, Dataquest, business directory etc. , initially, all the IT companies , present in Pune, Mumbai, Bangalore, Delhi and Hyderabad were categorized into three categories tier-1, tier-2 and tier-3 companies.

The

secondary data in the form of the resumes of employees of various

organizations were collected from the job portals. These resumes were grouped into many sub-categories based on the work experience range of one year.
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Eg:- employees having work experience of 0-2years were grouped together. Similarly 2-4years, 4-6years till 8 10years formed 5 sub- categories under each category. For each sub category, the Maximum, minimum average salary was calculated, and was recorded in a tabular form. Ms-Excel was widely used for recording the data and doing the calculations. The final conclusion was interpreted with help of graphs, line charts and SPSS software.

IV)About the Industry and theCompany:IT Industry:-

Information technology (IT) is "the study, design, development, implementation, support or management of information systems". Information technology is a general term that describes any technology that helps to produce, manipulate, store, communicate, and/or disseminate information. The information technology (IT) industry has become of the most robust industries in the world. IT, more than any other industry or economic facet, has an increased productivity, particularly in the developed world, and therefore is a key driver of global economic growth. Economies of scale and insatiable demand from both consumers and enterprises characterize this rapidly growing sector. The Information Technology Association of America (ITAA) explains 'information technology' as encompassing all possible aspects of information systems based on computers. Both

software development and the hardware involved in the IT industry include everything from computer systems, to the design, implementation, study and development of IT and management systems.

Owing to its easy accessibility and the wide range of IT products available, the demand for IT services has increased substantially over the years. The IT sector has emerged as a major global source of both growth and employment.

Features of the IT Industry at a Glance:

Economies of scale for the information technology industry are high.

The marginal cost of each unit of additional software or hardware is insignificant compared to the value addition that results from it.

Unlike other common industries, the IT industry is knowledge-based. Efficient utilization of skilled labor forces in the IT sector can help an The IT industry helps many other sectors in the growth process of the

economy achieve a rapid pace of economic growth.

economy including the services and manufacturing sectors.

The Role of IT Industry:The IT industry can serve as a medium of e-governance, as it assures easy information. The use of information technology in the service sector improves operational efficiency and adds to transparency. It also serves as a medium of skill formation.

Indian IT industry:-

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The Indian information technology (IT) industry has played a major role in placing India on the international map. The industry is mainly governed by IT software and facilities for instance System Integration, Software experiments, Custom Application Development and Maintenance (CADM), network services and IT Solutions. According to Nasscom's findings Indian IT-BPO industry expanded by 12% during the Fiscal year 2009 and attained aggregate returns of US$ 71.6 billion. Out of the derived revenue US$ 59.6 billion was solely earned by the software and services division. Moreover, the industry witnessed an increase of around US$ 7 million in FY 2008-09 i.e. US$ 47.3 billion against US$ 40.9 billion accrued in FY 2008-09. According to DIT, the Indian software and services exports is expected to reach US$ 49.7 billion in 2009-10 as compared to US$ 47.1 billion in 2008-09, registering an increase of 5.5 per cent in dollar terms. Further, the IT services exports is estimated to grow from US$ 25.8 billion in 2008-09 to US$ 27.3 billion in 2009-10, showing a growth of 5.8 per cent.

IT Outsourcing in India:As per NASSCOM, IT exports in business process outsourcing (BPO) services attained revenues of US$ 48 billion in FY 2008-09 and accounted for more than 77% of the entire software and services income. Over the years India has been the most favorable outsourcing hub for firm on a lookout to offshore their IT operations. The factors behind India being a preferred destination are its reasonably priced labor, favorable business ambiance and availability of expert workforce. Some big deals in the outsourcing space include:

Wipro Ltd, an IT services company, has entered into a strategic collaboration with Hitachi Data Systems, to offer co-branded products and services on Hitachi Technology in India.

Software company, Tata Consultancy Services (TCS) has won a multi-year outsourcing contract from Norway-based telecom company, Telenor Norway to provide application maintenance and development services.

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HCL Technologies has entered into a five-year IT infrastructure outsourcing deal with Singapore Exchange (SGX) for US$ 110 million. The company has also won a US$ 500 million strategic IT outsourcing contract from USbased drug manufacturer, Merck Sharp and Dohme (MSD).

Computer services firm, Mahindra Satyam has signed a four- year offshore contract with Denmark-based IT company, KMD for US$ 48 million. Software exporter Patni Computer Systems won a five-year IT and back-office contract potentially worth around US$ 200 million from US-based health insurance provider Universal American.

Future of Indian IT Industry:The Indian IT sector persists to be one of the flourishing sectors of Indian financial system indicating a speedy expansion in the coming years. As per NASSCOM, the Indian IT exports are anticipated to attain US$ 175 billion by 2020 out of which the domestic sector will account for US$ 50 billion in earnings In total the export and domestic IT sector are expected to attain profits amounting to US$ 225 billion along with new prospects from BRIC nations and Japan for its outsourcing operations.

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VERTEX SOFTWARE PVT. LTD Introduction:Vertex was founded by a group of technology professionals in 1996. By offering superior IT services, Vertex grew and worked with Microsoft, Mitsui, NTT DoCoMo and a number of innovative software product companies in US and Japan. Expansion continued to include offices in Boston and Tokyo, besides the head office in Pune, India. In Nov 2007, NTT DATA - Japans largest and Worlds 8th largest IT Services Company, acquired majority stake in Vertex, further extending its ability to serve customers.

Office Setups / Partners India : Head Office in Pune, with around 250 employees. Japan : 100% subsidiary in Tokyo, around 30 employees stationed in Japan US in US : 100% subsidiary in Boston, around 20+ employees stationed

Vertex is ISO 9001:2000 27001 and ISO 27001:2005 certified Profitable since inception. Debt free company for last four years.

Key focus area : Offshore development services in 1. Customized E-Business solutions - e Commerce

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- Finance - Manufacturing 2. Mobile application development 3. Software Product Development Outsourcing

SERVICES Core Product Development Services include:

Product Development, Re-Engineering, QA and Testing, Implementation, Maintenance

Our services span:

Product Conceptualization Product Migration & Software Porting Independent Quality Assurance & Testing Product Re-engineering Full Product / Software Testing Cycle & quality assurance (QA) Product Enhancements Product Maintenance & Support.

The product QA services offerings are:

Quality Assurance Design, development and execution of test plans and test cases Black-box Testing White-box Testing Functional Testing Usability Testing Performance Testing Regression Testing

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Mobile Technology Services

Mobile Product Engineering Services Handset Porting Platform Porting SMS, MMS & WAP enabled services.

Software Testing Services

Functionality Testing. Systems Integration Testing. Compatibility testing. Automated Regression testing.

Content Management Services

Vertex has experience in implementation of Web Content Management Systems (WCMS) and development of WCMS product itself.

SAP Services

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Vertex SAP Practice endeavors to deliver best of class services on SAP by offering a complete portfolio of services for the entire lifecycle of your business. These services include SAP consulting, system development and customer support. With NTT Data global reach and a SAPs worldwide partner since 1993, the SAP strategy and direction, software releases and functionality help Vertex achieve the delivery of best possible solutions to our customers.

The product QA services offerings are:

Quality Assurance Design, development and execution of test plans and test cases Black-box Testing White-box Testing Functional Testing Usability Testing Performance Testing Regression Testing

Infrastructure
Ergonomic workplace Canteen facilities Dedicated training facility CMM-L5 compliant processes

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CUSTOMERS

North America

Europe

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Japan

GLOBAL DELIVERY

In an era of global broadband links and Enterprise OpenSource software, it is an imperative to gain access to high quality global software development model. Vertex people & processes with a rich set of collaboration tools and infrastructure ensure effective and efficient software development model for your company.

PARTNERS

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Consulting Partners

Technology Partners

WORK CULTURE AT VERTEX

Vertex does not discriminate in employment opportunities or practices on the basis of race, color, religion, sex, nationality, age, disability, or any other characteristic protected by law.

Our Philosophy

We want to prove that following principles work!! Trust & Transparency Loving & Sharing
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 Infinite Potential and Maturity Passion for Performance and Meritocracy This culture will extend to all our relations employees, customers, vendors & investors alike. What Does It Mean? -

Trust & Transparency

(Blindly) Trust peoples integrity Empower and entrust Decentralize decision making mechanism Make all relevant information available to everyone Trust that they wont misuse it.

Eliminate any aspect of the policy, which undermines trust

Loving & Sharing Care and Respect for individuals. Every aspect of our policy/way of working should reflect love Management by love is the way. Fear is out. Politeness is not optional Go out of way to extend help to individuals in times of need. Share prosperity as much as possible

Ensure high job security

Infinite Ability and Maturity

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Create an environment which would help individuals realize their infinite potential Treat people as mature and responsible individuals. Let our policies reflect it (e.g. Leave, Comp Off) Provide high degree of freedom Help individuals canalize their potential Dont write off non performers easily Reward grand failures. Punish mediocre success

Passion for Performance and Meritocracy

Excellence in Appraisal Process Measure performance with the intention to help and not discourage Promotion / increments based on Merit Performance matters more than age or experience

Groups at Vertex
Envision Team This team has representatives from all Departments and Designation. It plays a key role in bringing forth various concerns of all employees to Management. It also plays a vital role in reviewing various policies before it is published to the organization.

Resource Management Group - RMG

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This group consists of one HR representative and two Project Managers/VicePresidents/Delivery Manager. Its primary responsibility is allocation of resources to various projects.

Zelus This group is primarily responsible for carrying out various extracurricular activities.

Software Quality Assurance Group- SQAG This group is primarily responsible for carrying out various quality related activities.

Technical Management Group - TMG TMG acts as a technical problem solving group at vertex to resolve technical queries by means of the Vertex Technical Forum. TMG also conducts good knowledge sharing sessions which are driven by any TMG member or any Vertexian who wants to share their project learnings.

TRAININGS Employees are provided with required training as and when required to enable them in order to upgrade theirr skills. The training needs are identified by the respective Project Managers with regards to their projects and forwarded to the Skills Enhancement Group (SEG). The Training needs are also identified through the inputs received from the Appraisal Process. The training needs can be communicated to SEG through Helpdesk. The employees can access Helpdesk through intranet. They can refer to the intranet for the detailed training process.
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We also encourage Vertexians to take up various certifications. Incase if they are interested in taking up certifications; they can inform their concerned Project Manager/VP about the same. If the request is approved by their Project Manager/VP, Vertex will reimburse 50% of the certification exam cost.

VERTEX RENAISSANCE This is an overall satisfaction survey that is done for all Vertexians, once in a year. It captures the feedback for various departments in the organization. HR department captures the inputs received through this survey. The top action items are identified in consultation with the ENVISION group and presented to the Strategy Steering Team (SST). The action items derived in consultation with SST for the various groups in Vertex are then published on the intranet for all Vertexians.

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v) BASICS OF COMPENSATION BENCHMARKING:-

Compensation means something that counterbalances, offsets, or makes up for something else. However, employees may see Compensation as a return in an exchange between their employer and themselves, as an entitlement for being an employee of the company, or as a reward for a job well done. The employees invest in education and training; they contribute their time and energy at the workplace. Compensation is their return on those investments and contributions.

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Total Total Compensation

Cash Compensation

Short-term incentives Base Merit / Cost of Living Work/Life Balance

Benefits

Long-term incentives

Income Protection

Allowances

Compensation systems can help an organization achieve and sustain competitive advantage.

For Managers, Compensation influences their success in two ways. First, it is a major expense. Competitive pressures, both global and local, force managers to consider the affordability of their compensation decisions. Beyond treating pay as an expense, a manager also uses it to influence employee behaviors and to improve the organizations performance. The way the people are paid affects the quality of their work; their attitude toward customers; and their willingness to be flexible, learn new skills, or suggest innovations. On the other hand, people may become interested in unions or legal action against their employer based on how they are paid. This potential to influence employees behaviors, and subsequently the

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productivity and effectiveness of the organization, makes the study of compensation worth your time. Hence the Compensation objectives are:

Improving performance, increasing quality, delighting customers and stockholders. Controlling labor costs.

At some point in our career, We will almost certainly be in a position where you need to benchmark you salary. The process of benchmarking takes some time and effort on your part, but it is well worth your time to ensure that your salary is comparable and appropriate for your position and profession.

Since only the Cash-Compensation is considered and is analyzed during this project Compensation benchmarking. Lets understand the meaning of Salary benchmarking.

What is a salary benchmark?

Put simply, a salary benchmark is how you compare your salary (or potential salary) to comparable positions across the same or different industries. There is more to it than just a dollar amount, though, as there may be wide variations in salary due to location, cost of living, experience, and other such influencing factors. A salary benchmark is not an absolute figure stating what you should be earning, but rather an educated gathering of information to determine where your salary falls in comparison to other similar positions.

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Why benchmark your salary?

Periodic benchmarking of your salary is a great way to ensure your compensation tracks with general compensation trends in your profession and/or position. It can be used as a component to assess your career status and set future goals, or it can be used for the purpose of negotiating a salary change. If you benchmark your salary and find your current salary is not in line with the benchmark then you may be in a good position to go to your employer to ask for a salary revision. The timing of such a request is often important, with your chances of success increased if the topic is discussed during a positive performance review or during a time of budget development. Another reason to benchmark a salary is if you are searching for a new job and you want to ascertain if the salary range for an open position is reasonable. Benchmark information will also help you during salary negotiations if you are offered a new position, as you will be prepared with solid reasons to back up your salary request.

Where do you find benchmark information?

Benchmark salary information can be found in a number of places, both online and in published form. Professional associations, industry and trade associations, Chambers of Commerce, and economic development agencies are generally good sources of salary benchmark statistics. Pay attention to whether the study you obtain is national, regional or local in scope, as that will have an impact on how you compare your salary to what is in the study.

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Factors considered for doing a Compensation-benchmarking:In addition to considering location, industry and regional factors, there are some other considerations to keep in mind when benchmarking the salary.

Public vs. private - There can be significant differences between salaries paid by private entities in comparison to public entities such as governments, utilities, etc. You can expect public entity salaries to be somewhat lower than private entity salaries, but be careful to consider other aspects of compensation, too. Public entities often provide more robust benefit packages than private entities, which may offset differences in salary.

Supply vs. demand - Some professions are more in demand than others, leading to corresponding differences in benchmark salaries. Pay attention also to projected demand for the future, as this can be a good indicator of future trends in salary levels.

Size of the Company There is a difference in the salary paid to the employees at the similar designations in different companies depending on whether the employee works for a Tier-1, Tier-2 or a Tier-3 organization.

Work-experience Benchmarking is also done based on the work experience of the employees. Generally the salary shows an increasing trend with the increasing work experience.

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Compensation Benchmarking comes under the External-Competitiveness, which is one of the five strategic choices to develop a Total Compensation Strategy in any Organization. So, the major decisions in setting externally competitive pay and designing the corresponding pay structures include:a) Specify the Employers competitive pay policy:-

The first decision, determining the external competitive pay policy is by setting a pay level that is above, below or equal to that of the competitors. Surveys provide the data for translating that policy into pay levels, pay mix, and structures.
b) Define the purpose of the benchmarking survey:-

An Employer conducts or participates in a survey for a number of reasons like: To adjust the pay level in response to changing rates paid by the competitors. To set the mix of pay forms relative to that paid by the competitors. To establish or price a pay structure. To analyze pay related problems. To estimate the Labor costs of product /service market competitors.
c) Select Relevant Market Competitors:-

To make decisions about pay level, mix, and structures, a relevant labor market must be defined that includes employers who compete in one or more of the following areas: The same occupations or skills. Employees within the same geographic area. The same products and services.
d) Design the survey:-

Designing a survey requires answering the following questions:

Who should be involved in the survey design? How many employers should be included? Which jobs should be included? What information should be collected?

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In most organizations, the responsibility for managing the survey lies with the Compensation managers. But since the Compensation expenses has a powerful effect on the profitability, including managers and employees on task makes sense. There are no firm rules on how many employers to include in the survey. Large firms with a lead policy may include only a few (6-10) top- paying competitors. National surveys conducted by consulting firms often include more than 100 employers. The jobs included must have stable job content, must be common across different employers, and include sizable numbers of employees. Three basic types of data typically are requested: Information about the organization. Information about the total compensation system. Specific pay data on each incumbent in the jobs under study.
e) Interpret the survey results and construct a Market line:-

After the survey data are collected, the next step is to analyze the results and use statistics and to construct a market line.

Verify Data : A common first step is to check the accuracy of the job matches, and then anomalies(i.e an employer whose data are substantially out of line from the data of others). For example in this project, years of work experience, annual salaries, name of the organization etc.

Accuracy of Match: If the company job is similar but not identical, some companies use survey leveling; that is, they multiply the survey data by some factor that the analyst judges to be the difference between the company job and the survey job.

Anomalies: This means to remove or discard those data which are the outliers and the presence of which leads to wrong results.

f) Comparison of the present Compensation Structure of the organization

with the Market line:-

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After obtaining the market line, the present compensation structure of the organization has to be done , in order to complete the Compensation- Benchmarking Process.

DATA SOURCES:-

There are several ways of collecting the data, which differ considerably in context of money, time and other resources at the disposal of researcher. There are mainly two types of data: a) Primary Data b) Secondary Data

Primary Data: The primary data is that data that is collected as fresh and for the first time and thus happens to be original in nature. In order to achieve the above set of objectives the researcher for collecting the data uses Survey Method.

Data Sources: The primary data is collected on the basis of survey method with the help of questionnaires, and interviews, personal observation, direct consultation with respondents.

Secondary Data: The secondary data is that which already exists and has been collected and analyzed by someone else for some other purpose but it is also useful for our present study.

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Data sources: Here the secondary data is collected through the job portal- naukri.com

RESEARCH INSTRUMENTS:
Here the collection of secondary and analyzing it with the help of MS-Excel and SPSS was used as research instruments.

SAMPLING TECHNIQUES:
It refers to the individuals who are to be surveyed in the study and it is the builders and ultimately customer who is using or who wants to buy the products for ultimate use. These should be selected to collect the information from them. The samples are selected because to cover all the area it takes time and lot of resources get engaged in the process. For this purpose the samples are selected who represent the all area and its characteristic for which researcher is looking for. From the data collected the necessary inferences are drawn to have results out of it. The simple random sampling technique is used for sampling.

SAMPLE: The selected sample was in the form of resumes collected from the job-portal from Pune, Bangalore, Chennai, Mumbai, Chennai, Hydrabad .

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Sample Size: Around 2000 resumes were collected from each of Tier-1, Tier-2 and Tier-3 IT Companies.

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VI) Statistical Analysis :Note:- all figures in the second, third and the fourth column are in INR Lacs.

1) Maximum CTC for employees:Skills:- Java , J2ee Work experience:-0years 10 years Work ex. (yrs)
0-2 2-4 4-6 6-8 8 - 10

Tier-1 510000 114500 0 110000 0 125000 0 140000 0

Tier-2 600000 700000 100000 0 140000 0 180000 0

Tier-3
380000 700000 1060000 1200000 1750000

2) Minimum CTC for employees:-

Skills:- Java , J2ee Work experience:-2years 10 years Work ex. (yrs)

0-2 2-4 4-6 6-8 8 - 10

Tier-1 95000 95000 210000 400000 620000

Tier-2 100000 170000 210000 400000 450000

Tier-3
105000 140000 100000 240000 510000

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3) Average CTC for employees:-

Skills:- Java , J2ee Work experience:-2years 10 years

Work ex. (yrs)

0-2 2-4 4-6 6-8 8 - 10

Tier-1 314417 377043 526418 702308 959552

Tier-2 263659 371833 555405 821039 106535 7

Tier-3
258362 365690 539806 716316 1055000

Vertex
250000 366500 545000 780000 1060000

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4) Maximum CTC for employees:Skills:- Automation Testing, qtp Work experience:-0years 10 years Work ex. (yrs)
0-2 2-4 4-6 6-8 8 - 10

Tier-1 850000 107000 0 101500 0 126000 0 175000 0

Tier-2 485000 900000 122500 0 136000 0 160000 0

Tier-3
320000 575000 875000 1235000 1390000

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5) Minimum CTC for employees:-

Skills:- Automation Testing, qtp Work experience:-0years 10 years

Work ex. (yrs)

0-2 2-4 4-6 6-8 8 - 10

Tier-1 100000 100000 100000 260000 350000

Tier-2 100000 105000 100000 245000 345000

Tier-3
110000 120000 220000 300000 305000

6) Average CTC for employees:Skills:- Automation Testing, qtp Work experience:-0years 10 years

Work ex. (yrs) 0-2 2-4 4-6 6-8 8 - 10

Tier-1 298643 366553 508518 672130 860949

Tier-2 252941 383882 552592 740381 964511

Tier-3 227949 344035 489815 667813 892308

Vertex 246000 400000 540000 720000 900000

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1) Analysis using SPSS:Hypotheses testing:Output Data:One-Way ANOVA:Variables Annual salary(INR)

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By Variables Tier of the Company * (Tier is coded as Tier-1=1, Tier-2=2, Tier-3=3) Analysis of Variance:-

ANOVA CTC Sum of Squares Between Groups Within Groups Total 1.329E12 1.319E14 1.332E14 df 2 3208 3210 Mean Square 6.644E11 4.112E10 F 16.159 Sig. .000

Variables Annual salary(INR) By Variables work experience * ( work experience is recoded as 0-2yrs=1, 2-4yrs=2, 4-6yrs=3, 6-8yrs=4, 8-10yrs=5) Analysis of Variance:-

ANOVA CTC Sum of Squares Between Groups Within Groups Total 4.208E13 1.604E13 5.812E13 df 102 1852 1954 Mean Square 4.125E11 8.663E9 F 47.623 Sig. .000

Here for respondents (employees) having software skills- JAVA and J2EE, We have assumed two hypotheses:-

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Null hypotheses:a) The average monthly salary is same for all the three Tiers.

b) The block (work experience) has no effect on the average monthly salary of the respondents. Alternate Hypotheses:a) The average monthly salary is different for all the three Tiers.

b) The block (work experience) has effect on the average monthly salary of the respondents. Findings:a) The value of F for Tier arrived at through the F-test is 47.623 and its

significance is 0.000 which is less than 0.05(because we have taken 95% confidence level). b) The value of the block factor (work experience) is 872.681 and its significance is 0.000 which is less than 0.05(because we have taken 95% confidence level). Inference:a) As 0.000<0.05, the null hypothesis is rejected and we infer that the average monthly salary is different for all the three Tiers. b) As 0.000<0.05, the null hypothesis is rejected and we infer that the block (work experience) has effect on the average monthly salary of the respondents.

2)Analysis using SPSS:Hypotheses testing:Output Data:One-Way ANOVA:Variables Monthly salary(INR) By Variables Tier of the Company
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* (Tier is coded as Tier-1=1, Tier-2=2, Tier-3=3) Analysis of Variance:ANOVA Monthly salary(INR) Sum of Squares Between Groups Within Groups Total 3.813E11 3.127E14 3.131E14 df 2 4960 4962 Mean Square 1.906E11 6.305E10 F 3.023 Sig. .049

Variables Monthly salary(INR) By Variables work experience * ( work experience is recoded as 0-2yrs=1, 2-4yrs=2, 4-6yrs=3, 6-8yrs=4, 8-10yrs=5) Analysis of Variance:-

ANOVA Monthly salary(INR) Sum of Squares Between Groups Within Groups Total 1.824E12 3.112E14 3.130E14 df 4 4817 4821 Mean Square 4.561E11 6.460E10 F 7.061 Sig. .000

Here for respondents(employees) having skills - Automation testing and qtp, We have assumed two hypotheses:41

Null hypotheses:a) The average monthly salary is same for all the three Tiers.

b) The block (work experience) has no effect on the average monthly salary of the respondents. Alternate Hypotheses:a) The average monthly salary is different for all the three Tiers.

b) The block (work experience) has effect on the average monthly salary of the respondents. Findings:a) The value of F for Tier arrived at through the F-test is 7.061 and its

significance is 0.049 which is less than 0.05(because we have taken 95% confidence level). b) The value of the block factor (work experience) is 7.061 and its significance is 0.000 which is less than 0.05(because we have taken 95% confidence level). Inference:a) As 0.049 <0.05, the null hypothesis is rejected and we infer that the average monthly salary is different for all the three Tiers. b) As 0.000<0.05, the null hypothesis is rejected and we infer that the block (work experience) has effect on the average monthly salary of the respondents.

VII) Observations:-

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The above graphs show that the there is not much difference between the maximum, minimum and average salaries paid by the Tier-1 and the Tier-2 IT Companies. It is also observed that at higher work experience, sometimes the Tier-2 companies pay more. The salaries paid by Vertex (a Tier-3 company) is at par with the Industry Standards. Initially, the Tier-1 companies pay a higher salary in order to attract talent. But, for a higher work experience, in order to retain the employees, the Tier-2 companies do pay a higher salary.

VIII) Limitations:-

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The CTC mentioned in the resumes, collected from the earlier mentioned secondary sources do not give the complete break-up of the CTC. This prevents us from doing a precise comparison of the various components included in the CTC. It might be possible that the CTC mentioned in resumes could be self claimed data, that is, they may not be authentic. The variations in the annual salary due to different locations of the employees, age of the company and the employee-turnover of the respective companies is not analyzed.

IX) Recommendations and Implications for the Future Research:

This research can be further extended by conducting surveys and finding the actual salary-breakups of the employees from different organizations.
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This survey can also be done by interviewing the employees who have worked with different organizations and are currently working with Vertex. This would help us to consider all the factors of Compensation i.e the Cash Component and the Non- Cash Component vis--vis benefits, which would provide us with more accurate results on Compensation Benchmarking. The data could be analyzed to check if the location of the employees, age of the companies and the employee turnover of the respective companies has any effect on the Compensation.

My overall experience and Learnings at Vertex software pvt. Ltd:Since I am a fresher, my internship was the first my exposure to the corporate world .

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I was under a very strong impression that I will have to struggle a lot. And no one would be there to help me or teach me the basic things, I thought that I would only deal with my Summer Project like every other Summer Intern. But, I was fortunate to get an an opportunity to get involved in the recruitment and selection process. In this way, I got this opportunity to learn the practical aspects of the Recruitment and Selection process, which is a very important function of HR. I found the entire HR team to be so supportive and cordial. So, my overall experience with the company was a great learning and memorable experience for me.

Bibliography:-

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COMPENSATION by George T Milkovich , Jerry M Newman and C S Ratnam. BUSINESS STATISTICS by S.P Gupta and M.P Gupta. MARKETING RESEARCH by Rajendra Nargunkar. Dataquest Business directory www.mercer.com www.watsonwyat.com www.hewitt.com www.economywatch.com www.naukri.com www.business.mapofindia.com www.hindubusinessline.com www.ibef.org www.professional-resumes.com www.cmie.com www.wikipedia.org www.vertexsoft.com www.salary.com www.top-consultant.com
www.payscale.com

www.justcareers.com

Appendices:-

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Certificate of Completion of Summer Internship Project from Vertex Software Pvt. Ltd. Letter of Appreciation from Vertex Software Pvt. Ltd. Spreadsheets containing the data.

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