HL

Business and Management

IA

What non financial motivations can Ocean Exim

India Pvt. Ltd. use to increase labor productivity and
decrease labor turnover?

Name : Bhuvnesh Gupta

Main Essay : 2,665
Executive Summary : 285
Research Proposal : 667

Acknowledgements

I would like to thank and acknowledge:

- Anvita Mam- for her assistance in helping me with this report

- Mr. R.N. Gupta- for his time for the interview
- Mr. K Mittal- for his contribution to this report and time for
the interview
- Mr. Ashish Khandelwal- for typing the questionnaire in
another language.

2
 Executive Summary
The research identifies the non financial motivators of Ocean Exim
India Pvt. Ltd., one of the leading export houses in Jaipur. These
non financial motivators helped the company to increase its labor
productivity and decrease its labor turnover rate which resulted in
an increased efficiency of the company.

Due to recent economic crisis, Ocean Exim has faced a serious

threat. Ocean Exim primarily exports to USA and due to dollar
weakening and inflation the cost of production has increased and
profit margin had decreased. It is of vital importance for the
company to maintain its goodwill and efficiency in the market or
else they will face severe business losses. To achieve this,
company required a strong team and here non financial motivators
helped the company to motivate its employees.

The research starts with the introduction about the firm which
portrays the company’s background. Interview with the managing
director of Ocean Exim and survey through questionnaire acted as
the main source of primary information. Organizational structure
and the motivational strategies used by the company were
mentioned in order to find out the exact motivation required in
each field. Main results, recommendations and conclusions were
based on the analytical tool like SWOT analysis, motivational
theories and business tools like surveys and interview. Analysis
and recommendations appears to be quite beneficial for Ocean
Exim, as they helped the firm to identify there problems and also
helped to firm in plotting there the future line of action to get over
this problem.

Further discussions (like motivational theories) are used for

understanding of the problem and helping the firm in plotting there

3
line of action and also helping the firm to get the answers of some
unanswered questions.
Research Proposal
Research Question:
What non financial motivations can Ocean Exim India Pvt. Ltd.
use to increase labor productivity and decrease labor turnover?

Rationale for study:

Ocean Exim India Pvt. Ltd. recently experienced delay in its
shipments and also received a few complains regarding the
quantity as well as quality of the products. Being a part of this
export business from almost two decade, this was the first time that
Ocean Exim, reportedly got complains from its customers. The
possible reason for this problem could be decrease in the firm’s
labor productivity and increase in its labor turnover. Ocean exim
never paid importance to the non-financial motivators and this
could be one reason for its decrease in labor productivity and
increase in labor turnover. Ocean Exim would like to focus on the
Non Financial motivators, because with the recent financial
crunch, the situation is not favoring growth, today the best of the
firms are looking for survival rather. In this temporary phase of the
financial crunch it is important for Ocean Exim to use Non-
financial1 motivators, in order to cut its costs and grow at the same
time.

Theoretical Framework:
I plan to carry out my research by first analyzing the motivational
measures currently followed by Ocean Exim, and I would also
consider the measures followed by other firms, which will help me
in evaluation of the problem. To understand the situation properly,
I will do a common survey among the employees (labors); this will
prove to be a most important part of my evaluation process.
Analytical tool like SWOT and motivational theories would help
me reach the final conclusion and carry on the further discussion.
1
Appendix 2 (SWOT Analysis: Threat)

4
Key Areas of Syllabus:
Organizational Planning Tools:
- SWOT Analysis

Human Resources
2.1 Human Resource Planning
2.2 Organizational Structure
2.3 Communication
2.5 Motivation
2.6 Employer and Employee Relations

Methodology:

Primary Research:
- Interview with the Director of Ocean Exim India
Pvt. Ltd.
- Interview the HR manager.
- Survey among the labors and interview with few
of them to find out what they actually want.

Secondary Research:
- Review of the problems faced by Ocean Exim
India Pvt. Ltd.
- Comparison of the problem of Ocean Exim India
Pvt. Ltd. with other firms.
- Identification of the methods used by other similar
firms for motivating their staff.

5
 Problems
Getting appointments from the director Rescheduling the appointments by
of other firms.
Finding the exact problem among the
labors by interviewing them.
Difficulty in analyzing problems and in I would take help from my teacher.
making a comparative study with the
other firms.
Employees might be biased while
answering the questionnaire.
Not getting the right answers in the
surveys
Survey questionnaire not in there
regional language.
Solutions
ensuring the firms that knowledge used
is for educational purpose only.
Need to ensure the labors that with
there support I can really make
difference and try to come over there
problems.
Anonymous Survey
Had to take another whole survey with
the required changes and more tricky
questions.
Had to arrange for a typist who could
type and translate the exact questions
in the employee’s regional language
(Hindi).

6
Action Plan:

-25th June: Topic Selection

-30th June: Start the general outline of the topic.
-1st July: Schedule for project and take appointments from Director, HR
manager and
Director of other firms.
rd
-3 July: Preparing Research Proposal.
th
-4 July: Preparing questions for the interview and the questionnaire for the
survey.
-7th July: Taking all the interviews with the firms Managing Director,
Production
Director and the HR manager.
th
-12 July: Meeting with the Directors, interviewing the HR manager once
again for further
queries
th
-16 July: Making the firms analysis(SWOT)
-17th July: Visiting the firm again for the survey among the labors
-18th July: Analyzing from the surveys and checking the problem faced while
doing surveys.
-24th July: Another survey conducted with the necessary changes made in the
Questionnaire.
th
-24 July: Making the required changes as per recommended by the teachers.
-25th July: Identifying the exact problem and making conclusions

7
Contents

8
Introduction:
About the Firm:

Ocean Exim is an ISO certified, professionally managed and

recognized export house. It started with just one small sized
factory in the year 1979 and is now spread over more than 3
locations. The company exports home furnishing products to all
the big countries like USA, Germany, France and Japan directly as
well as through their overseas office located in USA and Japan.

All the three factories are equipped with the requisite facilities for
fabric checking, dyeing, printing, cutting, stitching, finishing and
in-house testing. Right from sourcing to dispatch, rigid tests are
carried out by the Quality Assurance team so as to conform to the
international standards. Ocean also boasts of having an in-house R
& D department that has some major innovations to its credit. The
company’s chequered history on the export front proves that it can
compete with the rest in the world.

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Problems faced by Ocean Exim India Pvt. Ltd.

Following are the problems faced by Ocean Exim because of the

decrease in labor productivity and increase in labor turn over.

1) The company saw a phenomenal increase in the number of

complaints from domestic as well as international customers.
The complains included:
i) Delay in delivery.
ii) Wrong tagging on the goods(products).
iii) Poor packing of goods which led to damaging of
goods.
iv) Less quantity received by the customers.
v) Trouble in tracking the shipments.

45
40
35
30
25
20
15
10
5
0
2005-06 2006-07 2007-08 2008-09 (till 08
November)

1.1 Number of complains from 2005 to November 2008

10
 2) Ocean Exim also experienced a dip in the sales, especially in
the export orders from the retailers.

250

200
No. of Orders

150

100

50

0
2005-06 2006-07 2007-08 2008-2009 (till
december
2008)
Year

1.2 No. of orders received by Ocean Exim from 2005 to December 2008

Ocean Exim received an outstanding number of orders in the

year 2006-07 but on the other hand they received ample
quantity of complaints (fig. 1.1) which brought down the
number of orders received by the company.

From figure 1.1 and figure 1.2 we can easily see that Number of
complaints and number of orders goes hand in hand. The reason
behind the increase in the number of the complaints is the
decrease in labor productivity and increase in labor turnover.
From the figures we can easily make out that the workforce in
Ocean Exim is quiet inefficient. One of the major problems
faced by Ocean Exim is, the company is not able to send its
employees for training consistently because of high labor
turnover2, and this affects the productivity of the employees. By
looking at the problems faced by Ocean Exim we can make out
that the firm needs to motivate its workers to increase there
efficiency, and keeping the recent economic crisis and the
2
Figure 1.3 Survey Findings

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 financial crunch under which the global market lies today,
Ocean Exim would have to look forward to the non-financial
motivators in order to cut costs.

Non- Financial motivational strategies currently followed by

Ocean Exim.

Workers can perform there best when they are motivated to do so.
Motivation could result in increase in productivity. Failure to
motivate the employees could lead to absenteeism, increased labor
turnover, poor service and low quality product.

● Ocean Exim does not involve there staff in decision making,

although sometimes there opinion are taken but decisions are taken
by the senior management of the staff. Sometimes the decision is
accepted by the worker some times they stand against it.

● All the workers are not sent for training although, experts from
different field do visit the company often and workshop is held,
hence giving a chance for the workers to grow within the company.

● Performance appraisal: Ocean Exim does not have a proper

system for performance appraisal, although the appraisal basically
depends on effective communication, timely execution of the
order, customer satisfaction, workers reports from the supervisors
and also productivity.

● There is a weekly off on Sundays, sometimes the workers are

asked to work on Sunday to finish an order. All the workers are
given extra holiday when the work load is less.

● A staff party is organized for the labor every year

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With the ineffective non-financial motivators the company is
facing a major problem of low labor productivity and high labor
turnover.

________________________________________Survey Analysis

Two surveys were conducted separately in the factory unit of

Ocean Exim India Pvt. Ltd., Jaipur. First survey was conducted on
25th July, 2008. It was an anonymous survey, so that the results
obtained can depict the true picture. However, another survey was
conducted after a few days as the prior survey findings were
considered incomplete and non reliable. The new survey was
translated in the local language, Hindi, and was explained to all
workers and labors in detail.

The survey was filled by 50 workers of the firm, including skilled

and un-skilled labors. The data obtained from the prepared
questionnaire3 gave a better insight of the problem faced by the
workers. Moreover, the survey findings were indicators of the
areas in which the company could motivate their workers and
thereby increase their productivity, benefiting both the company
and the workers, simultaneously.

3
Appendix 3: Survey Questionnaire

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Survey Findings:
Survey helped me in understanding the problems faced by the
employees, here are some important findings which became an
important part of my evaluation process.

For how mny years have you associated with the firm?

2%
16%

44%

38%

0-1 year 1-5 years 5-10 years >10 years

1.3

Figure 1.3 shows that there are very few employees who are
associated with the firm from a very long time. This shows the
increased labor turnover of the firm.

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 How well is your interaction with the firm?

10%
12% 30%

48%

Frequent, Informal, Well appreciated Rare, Informal, Well appreciated

Frequent, Formal, Not appreciated Rare, Formal, Not appreciated

1.4
Majority of the employees felt that the interaction is very well
appreciated but they also felt that it was rare. Frequent
interaction would help the firm in boosting up there morale and
hence motivating them to work more efficiently.

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 If given responsibility what would you be the first thing you
would like to change in the firm to improve work culture?

22%

56%
22%

More meetings with senior staff

Suggestion box
Separate time with management for personal problems

1.5

This question cleared the fact that one of the main reason for
decrease in labor productivity and increase in labor turnover is
that the senior management does not give the employees ample
amount of time to listen to there personal problem, it could be
regarding other employees or some other problems.

Other important findings which came to my notice are as

follows:
i) Employees are not happy with there working hours.
ii) Employees feel that they are getting less opportunity to
exhibit their skills.
iii) Employees would like to have few outings with their
colleagues, so that they get to build there social network
also.
iv) One major area of concern is hygiene. Employees want
clean drinking water and a clean refectory.

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McGregor’s Theory X and Theory Y

Douglas McGregor devised Theory X and Theory Y. This theory

represents the different assumption that managers have about their
employees. This theory actually focuses on management attitudes.
Theory X explains negative management attitude whereas Theory
Y portrays a more positive approach.
At present Theory X seems more likely to be portraying the
condition at Ocean Exim India Pvt. Ltd. I think that the senior
management follows more of centralized approach, hence making
the work less challenging and less exciting for the employees.
Senior Management (Managers) should adopt Theory Y and make
the approach more decentralized. Management should start relying
on there employees and make the work challenging for them which
will act as motivator for them. Management should also try to get
rid of less autocratic style

Maslow’s Theory

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Abraham Maslow:
Employees in Ocean Exim generally belong to the level of Security
Need, Social Needs and Esteem Needs.
Ocean Exim should set working hours in such a way that it is
suitable to both Men and Women. Ocean Exim should take care of
its employees by assuring them their job security, maternity leave.
Ocean Exim should take care of all those employees who desire to
feel safe and stable and try to bring them to next level of social
needs.
In order to fufil their social needs, Ocean Exim should organize
more outings (picnics), informal meetings, official lunch or dinner,
in order to give the employees ample amount to be a part of the
society and enjoy his/her life.
In order to fulfil employees esteem needs, Ocean Exim should start
appreciating the work of the employees more often and make
him/her feel a sense of achievement. In order to make the
employees in such a way Ocean Exim should start a ranking
method. In addition Ocean Exim should also increase internal
promotions.

Herzberg
Ocean Exim should try to focus on making the work more
challenging for the employees and the company should also give
the employee the variety in what they do, which will help the
company to make the work more interesting. By doing this
employees would feel a sense of achievement and this would help
the firm in making the employees realize there own potential and
hence making them self motivated. Employees should be in given
a place in the decision making panel which will boost their overall
morale. This should help Ocean Exim to increase the labor
productivity.

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Recommendations

● Ocean Exim should hire a well trained supervisor who could

handle the labor problem conveniently and can present the problem
to senior staff with some solutions already figured out for that.

● Conveyance facility like an office bus or a van should be started

which will make conveyance more convenient for the workers, and
this may reduce absenteeism also.

● Cafeteria should be well maintained with fresh food, fruit juices,

and cleaner.

● Company should give employees more responsible work, i.e.

more opportunities which will boost employee’s morale and may
result in the productivity.

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● Employees should be paid for there overtime work.

● Drinking water facility should be improved.

● Company should provide employees with ESI (Employee State

Insurance), and provident funds. (Delete)

● Separate time should be spent with the employees to listen to

there personal problems.

● Company should promote schooling for children of the

employees and those who can’t afford it, and then company should
help financially.

● Cultural programs, outings and reward functions should become

a common practice; this will help employee’s interaction among
each other and among the senior management also.

● A suggestion box should be added in the factory.

● Senior management should listen to employees’ problem

separately, which will arouse a feeling of faith and trust among the
employees for the senior management.

● Managers should ask workers for their ideas and suggestion

when dealing with a particular task or problem. Such participation
will allow workers to become more involved an interested in their
work.

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APPENDICES

Appendix 1

Interview with Mr. Ravindra Nath Gupta (MD)

How old is the firm?

The firm is two decade old.

Who started the company?

Initially the company was promoted by me and the present director
of the company. Before the establishing this company I was
running a business in a partnership firm engaged in printing and
dying and we use to deal with exporters, during this we thought of
establishing our own export house.

How many employees and managers are employed in your

company?
We have 23 managers and 155 employees presently working in the
company.

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What are the recruitment method opted by Ocean Exim?
We generally recruit by advertising in the news papers, placement
services and campus interviews.

What kind of training is given to your employees?

Generally we bring trainers from outside for the employees. We
also send our employees of respective field to attend various
seminars in other cities and also call experts for the interaction
with the employees.

On what basis is the performance appraisal depends?

Performance appraisal depends on the factors such as effective
communication, timely execution of the order, customer
satisfaction and there reports and also productivity.

Do you have a reward system being followed in your company?

At present there is no such reward system, usually it is the
increment by cash or a small price distribution ceremony during
the festive season.

What is the labor turn-over rate of our firm?

4 to 5 workers leaving per month.

Are you satisfied with such labor turnover rate?

No, we are not at all satisfied with it. The reason for such labor
turnover is that they get better opportunity in other companies and
one other reason which has come to my notice is that people here
are in habit of changing jobs.

Why you want to use non-financial motivators?

From last few months I have seen that the market condition is very
bad, the sales are going low and we are mainly exporting to USA
where the market has gone totally down. In such crisis we are
facing decrease in labor productivity and increase in labor
turnover, so in such financial crunch we have to grow to survive in

22
 the market and on the other hand, at the same time we have to cut
our costs also. So we would prefer non financial motivators rather
than financial motivators.

What could be the reason for decrease in labor productivity?

These days employees demand more than what they give. In my
working unit I have noticed that employees are in habit of doing
only those things what they are told to, they are not using there
brains, what we expect from a employee once we appoint him, we
don’t get the expected result from him/her. They are not self
motivated, they want to earn but they don’t want to work.

Appendix 2

SWOT analysis of Ocean Exim India Pvt. Ltd.

Strength
1. Timely quality
2. Strong goodwill in the market
3. Effective communication
4. Retention of the customers as
there is a guaranteed
satisfaction
5. Regular R&D
Opportunity
Placing a strong foothold in growing
Asian market (including domestic
market) and European market which
is still unexplored by the company.
Weakness
Ineffective marketing
Lack of managerial staff
Decrease in Labor productivity with
incease in labor turnover.
Threat
1. Competition
2. Declining global economy
threat especially USA
comprising 90% of company’s
business. This leads to the

23
 decline in demand as well as
fall in returns as dollar weakens
against Indian rupees.
3. A significant hike in inflation
rate in Indian economy further
leading to the increase in prices
in India and increase in taxes
resulting in an increased cost to
the company.

Appendix 3

Survey for the employees

Questionnaire

Don’t write your name or post on the top.

Every information gained will be remain confidential and will not
be leaked
Please answer the entire questionnaire.

1. For how many years have you been associated with the firm?

□ 0-1 year
□ 1-5 years
□ 5-10 years
□ More than 10 years

24
2. How often have you been appreciated for your work?

□ Very often
□ Sometimes
□ Rarely
□ Never

3. Are you satisfied with the remuneration given by your firm?

□ Fully Satisfied
□ Somewhat Satisfied
□ Not Satisfied
□ Highly Unsatisfied

4. How well is your interaction with the management of the firm?

□ Frequent, Informal & Well appreciated

□ Rare, Informal & Well appreciated
□ Frequent, Formal & Not appreciated
□ Rare, Formal & Not appreciated

5. According to you, what is the strongest aspect of your firm?

□ Pleasant Work Culture

□ Excellent interaction with the higher management
□ Appropriate appreciation
□ Good compensation packages

6. If given the responsibility what would be the first thing you

would like to change in firm to improve the work culture?

□ More meetings with senior managers

25
□ Suggestion Box
□ Separate time with management for personal problems.

7. If you had an option to choose from any of the 3 options given

below which you would choose.

□ More Holidays
□ Increased Pay
□ More Opportunities

8. Does your company provide further training to the current

employees in their respective field?

□ At regular intervals
□ Sometimes
□ Rarely
□ No such opportunity

9. Which do you think is most important facility that is provided to

you by the firm?

□ Cafeteria
□ Medical Insurance
□ Schooling for your children
□ Pension scheme

10. Any thing you would like to add in the firm?

□ Water coolers at various places

□ Medical Insurance
□ Replacement of any senior staff

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□ New & modern machines

Appendix 4

Organizational Structure of Ocean Exim India Pvt. Ltd.

Managing Director

Production Finance R&D Marketing Shipping & Administ

Director Manager Director Director Documentati rative
on Director Director

Production
Manager

Unit
Supervisors
Managers

27