HRM Section C Group 6 Project Report

Human Resource Management

Term Project On

Employee Benefits at

Submitted to Prof. Manoranjan Dhal

Submitted by

Section C Group: 6

PGP/16/128- Anand Ganesh Patil

PGP/16/149- Irshad Anwar

PGP/16/150- Mohamed Anas

PGP/16/155- Prabhu P

PGP/16/159- Ram Kumar Venkatesh

PGP/16/171- Shyam Prasath B


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Acknowledgement

We would like to thank our Human Resource Management subject Professor Prof.

Manoranjan Dhal for guiding us throughout the project and providing valuable inputs.

We would also like to thank the employees and management of SAP Labs India Pvt. Ltd.,

Bangalore for extending their help to understand the organization and providing us valuable

insights about the benefits being offered to them by SAP Labs India.

.


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Executive Summary

Employee Benefits are offered to improve employee engagement and retention which helps

an organization stay competitive in global marketplace. The purpose of this group project is

to critically analyse the employee benefits being offered by SAP Labs India. This analysis

studies various benefits including fringe benefits that are offered by SAP Labs India. Based

on this study the analysis further tries to answer the questions like whether the legally

required benefits are being offered by SAP Labs India, what are the contingents and deferred

benefits being offered, what are the benefits SAP Labs India has focussed on, what is the

relation between benefits and employee productivity and how SAP tries to remain

competitive through its benefits program.


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Table of Contents Acknowledgement ..................................................................................................................... 1

Executive Summary ................................................................................................................... 2

1. An Overview of the Company ............................................................................................ 4

2. What is Employee Benefit? ................................................................................................ 4

3. Need for Employee Benefits............................................................................................... 5

4. Employee Benefits at SAP Labs India ............................................................................... 5

5. Legally Required Benefits .................................................................................................. 6

5.1 Maternity Leave .......................................................................................................... 6

5.2 Gratuity........................................................................................................................ 6

5.3 Severance Pay ............................................................................................................. 6

5.4 Flexible Compensation ................................................................................................ 6

6. Contingent and Deferred Benefits ...................................................................................... 7

6.1 Life Insurance .............................................................................................................. 7

6.2 . Health Insurance ........................................................................................................ 7

6.3 SAP Child Care ........................................................................................................... 7

6.4 Illness Leave ................................................................................................................ 7

6.5 Hospitalisation Leave .................................................................................................. 7

6.6 Medical Check-ups ...................................................................................................... 7

6.7 Rewards & Recognition .............................................................................................. 7

6.8 SMP 331 ...................................................................................................................... 8

7. Other Benefits ..................................................................................................................... 8

7.1 Travel allowance and Company Cab .......................................................................... 8

7.2 Relocation Expenses ................................................................................................... 8

7.3 Employee Meal Allowances........................................................................................ 8

7.4 Club/Gym Membership ............................................................................................... 9

7.5 Special Loans and Advances ....................................................................................... 9

8. SAP Focus .......................................................................................................................... 9

8.1 Career and Higher Education ...................................................................................... 9

8.2 Employee Interest ........................................................................................................ 9

8.3 Fostering Tech Savvy Work Culture ......................................................................... 10

9. Relation between Benefits and Workplace Productivity .................................................. 10

10. Employee Benefits-The Competitive Advantage of SAP Labs India ........................... 11

11. References and Contacts ............................................................................................... 13


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1. An Overview of the Company

SAP - Systems, Applications and Products in Data Processing is a multinational German

software organization. It was founded in Walldorf, Germany in 1972, by five IBM engineers.

It makes enterprise software to manage business operations and customer relations.

Enterprise software refers to those used in organizations primarily, and not by individuals.

SAP is a market leader in enterprise application software. It is the world's largest business

software company & 3rd

highest revenue independent software provider. Some interesting

snippets about the company are that nearly 80% of the Fortune 500 use SAP software for

processes like inventory planning, and 63% of worldwide financial transactions are processed

through SAP software at one point or another. It specializes in Customer Relationship

Management (CRM), Enterprise Resource Planning (ERP), Product Life Cycle Management

(PLM), Business Warehouse, Knowledge Warehouse solutions. There are 61,344 employees

serving the organization presently.

2. What is Employee Benefit?

Employee benefits are indirect financial and nonfinancial payments employees receive for

continuing their employment with the company. Benefits are important part of compensation.

They include things like health and life insurance, pensions, time off with pay and child care

assistance. The benefits which employees get vary distinctly from country to country.

The term perks is often used to refer to benefits. Often, perks are given to employees who are

doing notably well. Common perks are take-home vehicles, hotel stays, free refreshments,

and leisure activities on work time, stationery, allowances for lunch and vacation scheduling.

Non-cash benefits, also known as fringe benefits are taxed under fringe benefits tax (FBT).

FBT helps to restore equity and fairness between those employees who receive benefits and

those who do not receive such benefits. FBT allows government to more fairly assess

taxpayer entitlement to government benefits, or liability to government taxes.


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3. Need for Employee Benefits

Employee benefits play an important role to establish relationship between the employer and

the employee. Benefits are offered to improve employee engagement and retention which

helps an organization stay competitive in global marketplace. Employee benefits increase the

economic security of staff members. Employee benefits are integral to the goals of the

organization because they promote loyalty and can save money and time. The level of

employee benefits being offered helps recruit, manage and retain employees.

Improving employee morale as well as motivation at work is difficult to accomplish. But the

most emotional connection an organization has to its employees is one that can be impacted

directly, and that is their pocketbook. This doesnt have to necessarily happen through salary

increases and bonuses. This is where employee benefits come into picture.

Hence, the purpose of employee benefit can be as follows:

To attract and hold capable workforce

To keep up with the competition

To develop good morale

To promote loyalty

To provide opportunities for advancement

4. Employee Benefits at SAP Labs India

This report has analysed mostly the infringe benefits that are offered by SAP Labs India to its

employees. The infringe benefits are the non-financial benefits and can be categorized as:

1. Legally Required Benefits:

Legally required benefits are the benefits that organization must provide certain benefits to

each employee under legal obligation. These benefits include the employer's costs for Social

Security, Medicare, Federal and State unemployment insurance and workers' compensation.

2. Contingent and Deferred Benefits:

A contingent deferred benefits (CDB) is designed to offer protections similar to those

provided by a guaranteed lifetime withdrawal benefit (GLWB), but does not require the

purchase of an underlying variable annuity. These benefits include life insurance, health


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insurance, child care, dental care, suggestion awards, service awards and share matching

program.

3. Other Benefits:

Infringe benefits which are not legally required benefits and contingent deferred benefits are

covered in this category. These benefits include travel allowance, cab facility, relocation

expenses and club/gym membership.

Apart from these benefits SAP Labs India has designed its own benefits which give

competitive advantage to the company and help SAP Labs to be among the great places to

work for in India.

5. Legally Required Benefits

5.1 Maternity Leave

A female employee can take 84 days off in total out of which not more than 6 weeks can be

taken off prior to the date of delivery. In case of a miscarriage, 6 weeks of leave can be taken

from the date of miscarriage

5.2 Gratuity

A minimum number of 3 years of service an employee should have put in, to become eligible

for gratuity. Gratuity is given according as per the Gratuity Act 1972.On a rough estimate

calculated it comes out to be 4.81% of the Annual Basic Pay.

5.3 Severance Pay

An employee with less than 1 year service receives no severance pay, between 1-25 years

they receive 3 weeks per year of service; more than 25 years of service they will receive

none.

5.4 Flexible Compensation

The Flexible Compensation Plan defines 65% of the base salary components. An employee

has the flexibility to choose from seven components and plan the salary structure to gain

maximum tax benefit. These components would typically include components like Leave

Travel Allowance, Telephone Allowance etc.


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6. Contingent and Deferred Benefits

6.1 Life Insurance

This ensures that in case of an unforeseen incident where the employee expires, the nominee

will receive a sum equivalent to three times the Total Target Cash by the service provider.

6.2 . Health Insurance

All employees and their children are covered by for a sum of Rs. 3, 00,000 per family. For

parents, employees will need to co-pay 10% of the claim up to Rs. 3, 00,000. The insurance

provider is National Insurance.

6.3 SAP Child Care

The SAP Labs India office in Bangalore has a SAP Child Care centre to take care of the

children upto the age of 5. The facility is run by a leading child care vendor in Bangalore.

The employees can drop their kids at 9 am in the morning and pick them up at 5pm in the

evening. A nominal fee is collected for the same from the employees.

6.4 Illness Leave

10 days of illness leave can be availed in a calendar year.

6.5 Hospitalisation Leave

A maximum of 60 days of leave can be availed for hospitalisation in a calendar year.

6.6 Medical Check-ups

In a calendar year 2 eye check-ups and 2 dental check-ups are organised within the office

campus for the employees.

6.7 Rewards & Recognition

Service Awards: These awards are aimed at recognizing employees for their loyalty towards

the organization on completing 3, 5, 10 and 15 years at Labs India.

Team Awards: These awards include sub categories such as Spot Award, Vibrant Team

Player Award and Peer Award.

LoB Awards: This award too has various sub categories such as The Titan (Star of the

Quarter), Best Constellation (Best Team), Guiding Star (Best Mentor), Rising Star (Most

Promising New Comer), Pole Star (Best Innovator) and Leading Star (Line Manager).


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SAP Labs India Awards: This awards recognizes employees in the following categories:

Star Value, Star CSR Volunteers, Star Trainer, Star Innovator, SAP Leader of the Year and

SAP Star of the Year.

6.8 SMP 331

This is SAPs Share Matching Plan, in which every employee who has completed 6 months

of employment in the company can participate in this plan. Every employee can buy 3 share

of SAP at 40% discount from the market price. The condition was that they have to hold

those shares for 3 years, if they do so they will get 1 free share at the end.

7. Other Benefits

7.1 Travel allowance and Company Cab

Free Transport service is provided to the employees of SAP labs entire week.

Daily shuttle Service: pick up from pre-designated points to the various SAP Labs India

offices and drop back from the office to key city points.

Late Evening Cabs: Late Evening Cabs are provided to employees working beyond 9.30 PM

every day and every one hour thereafter

Weekend /Holiday Cabs: This service is provided to pick and drop employees working on

holidays and weekends from home to office and back.

7.2 Relocation Expenses

Relocation Policy is applicable to new employees joining Labs India who move to a new

town/city to join the company. The policy is applicable Labs India employees getting a

transfer to another city from SAP India/Global Delivery Centre into Labs India. Assistance

provided under this policy covers travel, shipment, temporary living and shifting expenses

only if the relocation is company initiated.

7.3 Employee Meal Allowances

Lunch, Snacks and Dinner is provided to all SAP Labs employees at no cost. Coffee, Tea,

Fresh Fruit Juice, healthy biscuits and soups is available on each floor at the Coffee Corner

areas in both Bangalore and Gurgaon. Snacks is served in the Bangalore and Gurgaon

campus on all weekdays between 5:30 PM to 7:00 PM. Dinner is served in both the


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Bangalore and Gurgaon campus between 8:30 PM till 9:45 PM. Midnight snacks are

available for night shift employee.

7.4 Club/Gym Membership

Gymnasium: For the fitness employees, SAP Labs has a gymnasium in the Bangalore

campus. The facility, which has state of the art equipment and offers the services of an

instructor, is available at a nominal fee.

Yoga: SAP Labs India strives relentlessly to improve the wellness of employees. To this

effect, SAP Labs India has launched Wellness Sessions under the ambit of Health for Life

including Yoga as one of the fee based programs conducted by Artistic Yoga.

7.5 Special Loans and Advances

Personal Loan can be availed by confirmed employees; interest free to the extent of Rs.

75,000 in case of emergencies.

8. SAP Focus

8.1 Career and Higher Education

Higher Education: Confirmed employees can pursue higher education that will enable them

to discharge their duties better at work. This opportunity can be availed once in every 5 years.

Executive Post Graduate Program in Management: EPGP is offered to employees

interested in pursuing management studies from IIM Kozhikode (IIMK) while working with

Labs India at a subsidized amount.

German Classes: SAP being a German company, SAP Labs India encourages its employees

to learn German as a foreign language and better their interaction with colleagues in the

corporate office.

8.2 Employee Interest

Creating Interest Groups within SAP Labs promotes creative interest and fun. It helps in

building rapport and camaraderie among employees who share the same interests. It enhances

creativity and innovation, provides a refreshing break from work and brings diverse groups

within the company together. There are sixteen different interest groups in the Bangalore

campus and ten different interest groups in Gurgaon.


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8.3 Fostering Tech Savvy Work Culture

Bring Your Own Device: This policy provides employees opportunity to bring their device

(Blackberry, iPhone, iPad, Galaxy S2/S3) to work and connect to the companys network in a

secure environment and use the same for business purpose.

Direct Access: Direct Access is available for use only on Windows 7 laptops. This service is

designed to make it quicker and easier to access SAP services remotely with the help of

secure ID VPN connection.

Mobile User Backup with TLM: All employees can do data backup from laptops and

desktops. One can schedule the backup as per his/her convenience and restore data as needed

from backups.

9. Relation between Benefits and Workplace Productivity

Study reveals that employee benefits like health and wellness programs, work-life balance

programs and financial guidance programs are significantly beneficial for employers and

employees as it leads to achieve greater workplace productivity. Some of the highlights of the

study are as follows:

77% of employees stated financial guidance programs would favourably impact their

productivity

81% stated health and wellness programs would favourably impact their productivity

82% stated that work-life balance programs would favourably impact their productivity

66% stated that the benefits received at work reduced the negative mental impact and

distraction of worrying about unexpected health and financial issues and job security.

SAP follows similar framework to achieve greater employee productivity by providing

distinguished benefits to employees.


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SAP has managed to be one of the most sought after company to work for due to its benefits

program. Few achievements of SAP include-

SAP labs India featured in top 5 Great Places to work for in 2008

SAP Labs India ranked 8th in 2007 Best Workplaces in India

SAP America listed in Glassdoors 2012: 50 Best places to work for

SAP reached the 5th rank in the Best Employer in the Hi-Tech Industry 2012 surveyed

by BDI-Coface

SAP is among 100 best companies to work for in China in 2012

10. Employee Benefits-The Competitive Advantage of SAP Labs India

The Competitive advantage that SAP enjoys when compared to its competitors like Oracle,

IBM and other competitors like Salesforce.com is clearly because of its employee friendly

culture. There have been instances where the Chief HR of SAP Labs India, quit his job and

pursued the top HR job at Yahoo only to return to SAP after 3 years bringing with him a pool

of HR professionals from Yahoo with him. There have been many instances where

employees quit SAP in the pursuit of better jobs but return within a short span of time.SAP

Employee Benefits lead to->positive emotion at work place in SAP

Helps SAP employees to achieve-

> Greater task activity and persistence

> High level of motivation to work

> Greater team work responsibility sharing

Helps SAP to achieve-

> Job enrichment and productivity

> High employee retention

> reduced absenteeism


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Labs as a company is known for its employee friendly policies. Based the experience of Mr

Sateesh Pasodi, Manager, SAP Labs who was a ex Oracle employee and we quote I find

SAP to be the place for me as it gives me the freedom I want in implementing my ideas

and the culture and people here is just amazing.

SAP Labs India indeed has a HR policy for employees to be hired back to SAP. This policy is

said to a very useful policy given that many people who quit the company have actually

joined SAP again. Such a policy could be used twice, as in if someone leaves SAP they can

again join the company and someone can do likewise twice. Here is the example of one other

SAP employee (Sheela Dominic) who has been working with SAP Labs India, Bangalore

since its inception. She says and we quote I have personally grown with the organisation

and seen it go through the highs and lows. Now it has become such a important part of

my life that I cant imagine a life without it. Also I have enjoyed the benefits be it the

Higher Education Policy that helped me do a MBA in correspondence which was my

dream. As a mother it helped me with the Benefits and the most important one being

the flexible timing which really helps me manage my kids and my job. Also when my

work was becoming too much technical I felt that it was time I changed my domain and

hence I was given the job being the executive assistant to the MD, which was a major

shift in my role. SAP has been very important at every stage of my personal life and its

various benefits have been very useful to me at every stage


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11. References and Contacts

11.1 References

1. Human Resource Management by Gary Dessler and Biju Varkkey

2. http://www.sap.com/india/about/company/saplabs/index.epx

3. http://en.wikipedia.org/wiki/SAP_Labs#Organization

4. http://www.sap.com/press.epx?pressid=12670

5. http://www.informationweek.com/global-cio/interviews

6. HR Transformation SAP Way beyond HR data and payroll from

http://www.deloitte.com

11.2 Contacts

1. Sateesh Pasodi

Quality Manager,

SAP Labs India,

Whitefield, Bengaluru, India

2. Parth Yadav

Quality Engineer,

SAP Labs India,


3. Sheela Dominic

Executive Asst. to M.D.

SAP Labs India,


HRM Section C Group 6 Project Report

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