Human Resources in Sri Lankas IT Sector

kind-hearted Re originations in Sri Lankas IT SectorCHAPTER 1 baseFor an souration to survive and expand in the rapidly competitive environs dominated by s eeral players, it is paramount for an institution to perform. The transcription doing would be measure according to several variables such(prenominal) profitability, sales, crossroadion smell and market sh atomic topic 18, however, few organizations give prominence for the most principal(prenominal) factors which is gay mental imagerys hunt down pop. harmonize to HRM commentators retention and victimisation of the organization employees atomic number 18 pivotal for organization implementation.The every(prenominal)where exclusively purpose of kind-hearted vision caution is to ensure that the organization is able to strike their success with bulk. Ulrich and Lake (1990) states that HRM systems wad be the source of organisational capabilities that allow firms to learn and capitalize on new opportunities . scarce in the former(a)wise hand HRM has an ethical dimension as swell up, which manner it should also concern the rights and ineluctably of population in an organization.With the enlarged competition, globalization, illimitable technological advances, -companies argon forced to think active the factors like HRM, surroundings and so onto run the unnecessary mile ahead of the some others. Therefore nowa days employers make water out investments on the HRM functions argon very signifi preservet and essenceive, rather than seeing it as just a cost.As it shown above, HRM should be incorporated with each and both(prenominal) function with in an organization. Starting from the recruitment process to the training and development, murder appraisal, capital punishment incentives, promotion system , design of work and workings milieuetc should aligned with effective HRM practices as it go out slenderise the direct collateral employee grievances which results in a h ighly tripd and pleased workforce, which in unloosen invites on the all overall organization performances.When considering the structure of the Human resource instruction, in that location argon twain categories1. Managerial Functions2. Operative functionsFunctions of HRMManagerial Functions Operative Functions prep Employment Organising Human Resource Directing Development Controlling wages Human relations Recent trend in HRM1. Managerial functions It imply Planning, organizing, directing and supreme. Planning is the chief(prenominal) activity that a coach-and- quartet has to consider. The worry has to decide what to do and how to do to contact the objective of the organization. Management uses this process to plan the future of the participation, decide what actions they are going to make to turn a elbow room difficult problems etc. (Bateman, Snell, 2007). Organizing is established in the internal structure of the organization. It in the first place concern s the flow of entropy within the attach to, division and coordination. Manager has to know what the subordinates throw out do and what kind of training they subscribe to. To achieve the objectives set in the readiness process at that place should be a proper organization of work. In here the management set the tasks, responsibilities and authorities to the employees. The manager has to discuss the tasks with the employees and has to brighten what to do, how to do and make them recognise virtually the seam (Allen, G, 1998). then(prenominal) it is comfortable to achieve the objective. Directing is the attached stage after completing intend and organizing. This is to execution of the plan. It influences the people to achieve the objectives in a correct way finished need, communication, and leadership. The proper direction of employees get out impress the motion of the objectives. The manager has to switch a proper relationship with the employees in the friendship, a nd because they great deal easily direct the employees to achieve the target. Controlling involves checking, verifying and comparing of the essential with the plan that the company set. Actions and operations are adjusted to identified plans and standards through control. The training programs, conducting interviews, analyzing labor turnover details are roughly of the controlling functions that a manager can work out. Controlling allows setting the performance standards within the groups and to do the proper communication.2. Operative functions These activities are related to particular proposition activities such as, employment, gay resources development, compensation, tender-hearted relations and recent trends in homophile resource management. Employment This means securing and employing the people with the relevant qualifications to achieve the organisational objectives. The functions accommodate in employment are, Job analysis, merciful resource planning, recruitment, pickaxe, placement and induction. Human resource development This is the process of improving directments, knowledge, attitudes, aptitudes, loyalty etc. depending on the organizational requirements. The functions involve in human resource development are Performance appraisal, training, management development, career planning and development, promotion, demotion and channelize and organization development. Compensation This is the process of providing sufficient, equal and fair issue to all employees. The functions include in compensation are Job evaluation, incentives, wage and salary, bonus, fringe benefits, brotherly security and measures. Human Relations It is the process of interaction amid people. The management can practice antithetical human resource policies to interact with the people. smashing relationship leave motivate people to do a reveal antic In the organization. The functions in human relations include make the employees, developing the communica tion skills, developing leadership skills, providing comfortable work milieu to the people, improving quality of work disembodied spirit of employees and boosting employee morale. Recent trend in human resource management This area is always developing. It is advancing at a fast rate. The recent trends in human resource management is Quality of work life, recent techniques of Human resource management and sum of money quality in human resources.In 1989 David Guest describes a human resource bewilder according to what he thought. . This model consists of four elementsHuman resource policies and practicesHuman resource consequencesOrganizational outcomesLeadership1. Human resource policies and practices when an organization is introduced at that place are many policies accessible in a company. They areOrganization and patronage designManagement of changeRecruitment, selection and socialisationAppraisal, training and developmentReward systemsCommunicationAccording to this mode l human resource policies are design to achieve the four primaeval human resource outcomes which explains as the blurb element of this model.2. Human resource outcomes The model include followingsCommitmentQualityFlexibilityStrategic integrationQuality is not precisely concern about the quality of manufacturing crossing or the services provided by the company, it includes the quality of the workforce, the management of the workforce and the human resource policies used in the company. Flexibility is the facility to change the cables people are doing, working arrangement such as number of hours they are working and the nature of employees contract. Strategic integration is the wed between human resource strategy and business strategy. Guest explains that integration requires an organizational agri glossiness where managers work or share. The commitments have a direct relationship with precious business consequences. He says that commitment is confused and that the relationshi p between commitment and the performance is difficult to establish. When an employee commitment is higher means that employee is contented about the facilities and the way the company treat to employees. When they are genial performance will be automatically higher in the organization.3. Organizational outcomes The organizational outcomes include followingHigh line of business performanceHigh problem solventHigh innovationLow turnover, absenceHigh cost intensity level4. Leadership Leadership is the most important element to make all these outcomes success.With the construeing of importance of the involvement of HRM for the betterment of an organization, this paper is about the effect of HRM development to the IFS business success.1.1 Aims and objectives of the airfieldDuring the recent years IT sector began to flower and many leash IT professionals fortified the future of their companies by investing in Sri Lanka. Within few years it begins to expand and now a days it has become a study business sector which support the prudence and which provides enormous career opportunities to the younger generation.Latest s show that, over 175 package developments companies are actively operating in Sri Lanka, which are originated from both national and international grounds and they are providing services for both the export and domestic markets. Some of these companies and their products are already well recognize and performing extremely well in the IT sector by competing with other foreign markets. Among these, companies like,Millennium Information Technologies- who not only turned the Colombo declivity exchange in Sri Lanka into the worlds first ever event-driven exchange but with their diverse automated trading system have powered the Boston caudex exchange among several other clients in the United States, as well as exchanges in Europe, Asia Pacific and AfricaVirtusa Corporation- one of the fastest growing software package services firms in the US with seven years of consecutive emergence and the largest technology center base in Sri Lanka and Informatics- a local company whose telecom product is in operation at the regional sites of some of the worlds leading telecom operators, such as Cable Wireless of UK and Millicom of Luxembourg, are leading the way, marking the name of Sri Lanka in the world. Furthermore international name likeIFSfrom Sweden have set up their research and development center employing over 700 people and recently MicrosoftandOraclehave also opened offices in Sri Lanka.graph1 This is an effort to puzzle out the involvement of human resource to the success of Sri Lankan IT sector and how well they are managed for them to get ready to face the future challenges in ever changing world. Taking the IFS Sri Lanka Ltd as the Reference point, the research will taper on interpreting the influence of Human Resource Management on the companys success. interrogation as a whole, is a process to find an cause t o a specific question. The initial objectives of this study are to formalize the prerequisite procedures and questions to be answered, in order to gather the intended information, which will be desirable in finding an answer to the core research question.To achieve the above objectives, following are the outline of the information that will feat to gather, to be used in developing proper evaluations conclusions.Actions taken to motivate the employees.Established procedures on providing demarcation contentment to the employees.The process of developing employee skill and how the company utilize it.How strong is the employee-employer relationshipLevel of performance of the company and how the employees contribute its success.1.2 Company BackgroundIFS, is one of the worlds leading providers of component-based business software developed using open standards. Since 1983, IFS has been a provider of business applications focused on meeting the necessitate of selected industries. B asically, IFS operates in two areas lifecycle management, where asset and product lifecycle management are critical knows, and mid market ERP (Enterprise resource planning), which covers dissemination and manufacturing in midsize companies. Mainly company operates in Europe, the US, the UK, Australia and Asia with the head office set in Linkoping, Sweden and having the employs about 2,723.Today, IFS is a global software company that helps leading enterprises improve efficiency, cut costs, react swiftly to market conditions, and take returns of new business opportunities. IFS Applications, IFS suite of more than 60 web-based components, is the only truthful component-based business solution on the market, allowing deploying the software trample by step as companys needs and budget dictate. Using open standards, IFS makes it easier to stay up-to-date with technology and integrate with legacy systems. And only IFS offers total lifecycle management, enabling their customers to maximize profitability over the lifecycles of your products, customers, and assets. IFS superior technology, functionality, and Industry focus have win praise from some of the worlds leading analyst firms. Gartner recognizes IFS as all a visionary or a leader in all four of its ERP and asset management Magic Quadrants. intimately important, IFS legendary commitment to customer service has never wavered. Today, IFS has an impressive roster of satisfied customers, ranging from mid-size companies to global labor leaders such as PepsiCo, General Electric, Lockheed Martin, General Dynamics, DuPont, Volvo, BMW, Deere Co., and Rockwell Automation.Since the day, IFS was founded, they have condition a salienter importance for the customer service. Therefore today, IFS has become the only enterprise software provider that offers a global product for the mid-market together with local support. IFS has support centres in each country in which it operates, ensuring that you will receive t he shell customer support anywhere in the world. IFS stay on track of your unique component configuration patch levels, and customizations, ensuring that the information is available globally to all IFS support centres. Therefore it has become the huge interlock of all the information required to solve the customer issues without any excess delays.Within the huge IFS meshing, office in Sri Lanka has a major importance, as it is one of the two IFS R D centres in world and major part of software development is make there, with having more than 700 employees in two local country offices. The focus group for the study is mainly taken from Sri Lankan offices and depending on the opportunities employees from the other locations were involved in the study.1.2.1 Financial HighlightsBased on the IFS one-year report 2008, it illustrate that the company is having growth in every department. Mid 2008, IFS has announced long-term financial targets entailing that, in the next quin year s, product revenue will double through organic growth and acquisitions, the operating margin will accession to15 percent, the dividend will rise to 50 percent of earnings after tax and surplus liquidity will be used to repurchase shares. Furthermore, report says that IFS has signed 10 largest licence agreements during the year had an aggregate value of SKr 141 gazillion where as the corresponding for 2007 was SKr 103 million. A total of 20 license agreements valued at more than US$ 0.5 million each were signed. And In all, 215 (177 in 2007) new customers were added, and 760 (778 in 2007) customers either upgraded or expanded their existing solutions.Annual Net RevenueAnnual Earnings Before Interest Tax (EBIT) ValueNet DebtIn order to summarize the success I have extracted the above deuce-ace from the report which explains the rudimentary factors of companys growth. Net revenue ( 7) amounted to SKr 2,518 million (2,356 in 2007), an increase of 7 percent, which is the highest re venue the company achieved per year for the last 4 years. EBIT (Earnings out front Interest Tax) value turns out to be Skr, million 154, which is a great turn over compared to the value, SKr million -128 in 2004. Furthermore, as the 9 shows, IFS have succeeded in diminishing their debts. They have being able to reduce the debts from Skr, million 363 to Skr, million 3, which is a sole evidence for the success of the company.Variation of come up Assets function of employeesWhile pertain of their financial growth, IFS seems dedicated to the expansion of the company. From 2004 to 2008, their asset, as well as number of employees has increased continuously in a similar rate.1.3 Significance of the researchSuccess and development of any company is depends on the level of human resource involvement. Therefore it is most important to maintain motivated and satisfied workforce to obtain the very best results of its investment. Skill development, employer employee relationship, grade p ay structure employee benefits are some of the key factor which directly related with the motivating of the work force.Purpose of study is to find out how well the importances of above factors are absorbed in the Sri Lankan IT sector within IFS Sri Lanka Ltd. The research will try to extract the information related to the specific factors and analyze them with the every aspect of the companys performances.1.4 Structure of the Research workWith having the text divided in to the several sections, the dissertation starts with an introduction, which provides the sanctioned understanding of HRM and its functions. It concludes with an overview of the whole thesis including the information helpful for the reader to understand the topic and related facts, we are going to discuss about. The next section is the literature review, which explains relevant theories that will help to support the topic and it is followed by the research orderology which explains the research approach, and how the aims and objectives are planned to achieved. Moreover it, distinctly explain the methods that used to collect the relevant data and explained the reasons why there are chosen. The result section provides the actual results I have obtained, carrying out the research, and within the analysis section, it exploits the information gathered, and structured a comprehensive analysis. finis and Recommendation sections conclude the research with interpreting the gathered data and results obtained in Analysis section, along with the aims and objectives discussed at the beginning and provide the necessary recommendations based on the live facts and exhibit the virtue of the research.1.5 Limitations of researchThe main boundary of this research is getting the access to the employees within the selected company. The results would be much significant if the researcher is succeeded in involving many several(prenominal)s as possible. Therefore it would be a greater challenge to formalize an easy and simple method to acquire the relevant information from the employees, to make sure that they dont feel it as an extra burden. Time can be considered as the other major issue since I have to formalize the whole process with in a very short time period and to make sure it has take h out of date many individuals as possible.CHAPTER 2LITERATURE REVIEWJob comfortJob blessedness is one of the most important aspects related to the employee management as it is directly related to the performance of an organization. Because of humans tends to listen to the feelings cabalistic in their thoughts, its not enough to full fill every other issues, if the employee is not satisfied with what he/she does.Job ecstasy is not aforesaid(prenominal) as the motivation but it linked. Job design is aimed to enhance job satisfaction and performance by using different design methods such as Job rotation, job enlargement, job enrichment etc. Job satisfaction can be viewed as a pleasurable or i rresponsible emotional state resulting from the appraisal of ones job experience (Lock 1976). When someone is satisfied with his/her job that is job satisfaction, or when any job is fulfilled ones panorama that is job satisfaction. Job satisfaction mainly considers the attitudes and feelings that people have about the work. The Guion (1958) defines morale as the consequence to which an individuals needs are satisfied and the extent to which the individual perceives that satisfaction as stemming from his total work situation. However there are some features of job satisfaction identified by capital of Minnesota Spectors (1985) such as, Pay- amount and fairness or equity of salary, Promotion-opportunities and fairness of promotion, charge-fairness and competence at managerial tasks by ones supervisor, Benefits- insurance, vacation, and fringe benefits, Contingent procedures-sense of respect, recognition and appreciation.According to While Luthan (1998) there are triplet important views to job satisfactionJob satisfaction is an emotional thing related to a job that cannot measure.It is determined by how well outcome is achieved or exceeds inhabitationsIt shows some attitudes which can be used to identify how employees think about their job and how they achieve their targets.The factors that affect the job satisfaction of an employee can be divided in to three main areasInternal factorsExternal factorsIndividual factorsInternal, international and individual factors which affect to the job satisfaction are listed in the table. Internal factors are the factors that linked to work but those are not the only factors alter job satisfaction. External factors are related to work or to the working environment and individual factors mainly consider a soulfulness and the somebodys family and network of friends.Job satisfaction factorsDescriptionInternal Factors Job varietyNumber of skills and depth of knowledge required to do the job AutonomyThe emancipation that the employee get to control their own work Goal determinationThe license that the employees get to set their own targets and the criteria to achieve those targets Feedback and recognitionThe private and domain comments that they achieve for their performanceExternal Factors AchievementThe persons success on their job. The trainings, better equipments, proper education may be the way to increase the achievement and the job satisfaction. Role ambiguity and role conflictsKnowing the position of the work place, responsibilities and agreement between roles. Clarifying the tasks in the job, and the position in the organization. When reduce role ambiguity it lead to job satisfaction OpportunityThe opportunities with the current and the other employers. If employees feel they have fewer opportunities in the current position, thus job satisfaction decrease. Job securityThe assurance that employees get to their job Social interactionThe way they deal with the others. The quality and the quantity of the interaction. SupervisionHerzberg explain this as a hygiene factor. The quality of management is affect to the job satisfaction. If the quality is lower, worker can become dissatisfied. Organizational cultureCulture and management style can increase/decrease job satisfaction. Work schedulesMatch between work schedule and the employees schedule. Flexitime may increase the job satisfaction by allowing employee to interface between work life and personal life SeniorityThe time duration that a person has held a position. When people are respect to the seniority, it will increase job satisfaction CompensationThe rewards and the role of moneyIndividual Factors CommitmentThis is the loyalty that a person is doing to his/her job. If the actions of researching, selecting and the way he/she doing the job is visible to friends and others, then the person is satisfied. ExpectationsEvery person has some expectation. Basically what people expect in return for work. Job involvement How important a job in someones life. More the person involved more satisfaction. Effort / reward ratioThis is the balance between the amount they worked and rewards received ComparisonsHow a person can rate the job with someone else jobs. If a person has a good job compared to others they are satisfied. AgeHow old someone, the people who old have more work experience, they understand what are the best thing to do, but sometimes they cannot reward with their job. Younger people have no previous experience which to compare with the current job. So they are satisfied. tabularize 1There are two main theories of job satisfaction, version theory and the model of job characteristics. According to Hackman and Oldham (1975) the variance theory explains that if you pauperism X from your work then you are satisfied to the extent that it provides you with X. The secondment model explains the causes of job satisfaction are objective characteristics. When the employees are satisfied with the ir work they tend to work more, they are become more commit to the organization, and they are more productive than previous, they try to achieve their targets in a better way. (Bravendam Research Incorporated, 2002). However job satisfaction association with organizational commitment that was not mentioned in most of the studies was noted by Elangovan (2001). A negative association between the job satisfaction, stress and commitment was indicated in his study. According to his study, higher stress leads to lower job satisfaction and this in turn results in lower commitment. Petty et al, (1984) explains that there are three possible links between performance and job satisfaction.1. triumph generates performance2. Performance generates satisfaction3. Satisfaction and performance link indirectly1. Satisfaction generates performanceWhen designing the job it should aim to produce job satisfaction. Then it will optimize worker performance.2. Performance generates satisfactionWhen a per son perform well that achievement generates job satisfaction. He/ she feel to do more for their job. So the effort should be made to improve performance then it will increase job satisfaction.3. Satisfaction and performance link indirectlyThese two are linked but under plastered conditions.Apart from the above theories, there are successful studies proving the importance and carry on of maintaining a satisfied workforce. The analysis by Vroom (1964) covered 20 studies, in each of which one or measures of job satisfaction or employee attitudes were correlated with one or more criteria of performance.Low salaries, lack of billet and social security affect the motivation. When the motivation is low, job satisfaction is low. lack of job satisfaction is a sign of turnover in an organization. The salaries and benefits which employees can achieve are related to job satisfaction.MotivationManagement is postal code more than motivating other people, is one of the most frequent proven p rinciple followed within any kind of organization.Motivation is concerned with the strength and direction of behaviour and the factors that influence individuals to behave in indisputable ways. Individuals are motivated to perform in a specific method based on their perception of the situation. Motivation primarily concerned with what energizes human behaviour, what direct or channels such behaviour, how this behaviour is maintained.Motivation concerns energy, perseverance and direction. According to Arnold et al (1991) there are three components of motivation,1. Direction -what a person is act to do2. Effort how hard a person is trying3. Persistence how long a person keeps on tryingAccording to the diagram felt need creates tension for people. Tensions motivate people to avoid it. The environment will influence to shape people needs and expectations influence the effort. Management can influence employees expectations in a different ways, by offering incentives and setting them specific goals. The persons effort and results can influence the level of performance. The rewards / outcomes are the results achieved. Outcome can come from internal / external environment. Outcomes are always not positive it can be negative as well. If it is negative, they tend to result in employee dissatisfaction / de motivation.There are number of motivation theories which are complementary to one another. The content models in motivation mainly focus on the needs that individuals are trying to satisfy in a situation. The process models focus on how managers can change the situation in a better way to tie satisfaction to performance. Reinforcement theory is as developed by Hull (1951) suggests that successes, in achieving goals and rewards act as positive incentives and reinforce the successful behaviour, which is repeated the next time a similar need emerges which is coincided with the theory by Taylor (1911), who wrote It is impossible, through any longer period of time, to get workmen to work much harder than the modal(a) men around them unless they are assured a large and durable increase in their pay. In this theory there are four principal techniques available,1. Positive reinforcement If someone encourages the people when they done something they are utilising positive reinforcement.2. Escape/avoidance reinforcement (Negative Reinforcement) This is a form of a reinforcement. It increases the behaviour of a person by taking away(predicate) something bad. The negative reinforcement is not same as punishment. It is not a form of a punishment.3. Extinction (repeated non reinforcement) Elimination of behaviour4. Punishment Most of the people are not expected to take this kind of an experience. The main idea of punishment is to withhold rewards.Motivation is only likely when a clearly perceived and usable relationship exists between performance and outcome, and the outcome is seen as a means of satisfying needs. This theory was developed by Porte r and Lawler (1968) in to a model that follows Vrooms ideas by suggesting that there are two factors determining the effort people put in to their jobs. scratch line the value of the rewards to individuals that they satisfy their needs for security, social esteem, autonomy and self actualization, and the second is that rewards depend on effort, as perceived by individuals.According to Latham and Locke (1979) motivation and performance are higher when individuals are set specific goals, when goals are difficult but accepted, and when there is feedback on performance. Abraham Maslow developed the Hierarchy of needs model in 1940s and still it valid today to understand motivation, management training and personal development. This model explains the responsibility of employers to provide the work place environment which is encourages employees to fulfill their requirements.At the same time he explains needs are interrelated with some other needs that are less understood. Those are, Kn owledge needs, understanding needs and aesthetic needs.The relationship of Maslows other needsThe need for knowledge is defined as the desire to found up facts and s. The need for understanding is an extension of the need for knowledge. This involves search for the relationships between things and what they know and it includes the search for meaning. The aesthetic needs are the beautiful things need to be surrounded.According to Maslow all these need