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Employee Poaching: A Case from Sheetal Structurals Private Limited*

CASE STUDY, HUMAN RESOURCE MANAGEMENT
ET Cases - GSMC, 13 Pages

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Employee Poaching: A Case from Sheetal Structurals Private Limited

 

It was a normal working day on December 24th 2014 and both the units of Sheetal Structurals Private Limited (SSPL), a tower manufacturing company based in Baghpat, India, were functioning smoothly. In the afternoon, the management was informed about the sudden resignation by the head of Production & Planning Department. It was pretty unexpected move by the head of the department. Next day, two more people from two different departments also resigned with no prior information. Abrupt resignations by three people within a span of two days were not anticipated by the management. The event severely impacted the day-to-day operations of the company.

The first resignation came from Rajesh Srivastava (Srivastava), the head of Production & Planning department. This department is the nerve center for any tower fabrication unit. The department ensures optimal utilization of resources through efficient material planning. It is also responsible for preparing the material procurement list based on tower specification and quantity. After the raw materials are received, they are released to the fabrication department as per their requirement (Exhibit I). Srivastava cited availability of better opportunities outside SSPL as one of the key reasons for his exit and requested to be relieved from duty within a week. It was difficult for the management to relieve Srivastava at such a short notice..............

Teaching Note Preview

Employee Poaching: A Case from Sheetal Structurals Private Limited

 

Synopsis

Sheetal Structurals Private Limited (SSPL), a tower manufacturing company based out of Baghpat, India, was established in 2006 for manufacturing telecom towers to cater to the need of upcoming Telecom Industry. As of 2014, the company was focused on manufacturing Electric High Voltage Transmission Towers for Power (electric) transmission. Its key customers included State Electricity Boards and Power Grid Corporation of India Ltd. SSPL was a subsidiary of Shyama Power India Limited (SPIL), a leading name for transmission line projects in the North Eastern States. SPIL acquired SSPL in 2006 to extend footprint in the tower manufacturing space.

On December 24th 2014, normal operations of the company were hit when three department heads resigned within a span of 24 hours. The events started with the resignation of Rajesh Srivastava, Manager, Production & Planning Department, followed by the resignations of Uttam Sharma (Uttam), Assistant Manager, Material Department and Manish Kumar (Manish), Manager, Finish Yard & Dispatch Division. All three of them cited availability of better opportunities outside the firm as one of the key reasons for their exit and requested to be released from duty within a week. Sudden exit of three department heads would have had a serious impact on production activity within the plant. Hiring proper replacements could take months as the company operated in a niche industry and experienced professionals were not easily available. To make the matters worse, SSPL was working on a strict deadline to deliver a batch of towers to its largest client, Power Grid Corporation of India Ltd.

Management investigated the case and found that a new upcoming tower manufacturer in Ghaziabad had lured away the employees through promises of better compensation. To minimize the impact on manufacturing activity, management decided to adopt a short-term strategy of identifying top talent within the organization and elevating them to handle the responsibilities of the employees who had left. In the longer term, the management decided to take corrective measures in the form of establishing a formal human resource department and strengthening the HR framework.................

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Abstract

Human resource is considered as the life line for any manufacturing plant. Sheetal Structurals Private Limited (SSPL) is a tower manufacturing company based in Baghpat, Uttar Pradesh. Three managers from production and planning department, raw material department and dispatch department respectively, resigned from the company one after the other because of the job offers made by an emerging competitor based in the National Capital Region. All of them were qualified and experienced. Since the industry operates in a niche segment and not many experienced professionals are available in market, hiring new workforce immediately was not feasible. In absence of any HR policies with respect to notice period and other legal implications of sudden resignation, the employees of SSPL were quite vulnerable to poaching by its competitors. The event had a severe repercussion on the day-to-day operations of the three departments. The unprecedented resignations called for an urgent damage control and throwback on the policies and procedures adopted by the organization. The organization also adopted preventive measures to retain its existing workforce.



Pedagogical Objectives

  • To understand the importance of HR practices and policies regarding recruitment, notice period, workforce retention in a manufacturing organization
  • To ponder upon the role of motivational factors in retention of existing employees
  • To discuss and debate on the ethical code of conduct among employees regarding job hopping
  • To debate on the topic, “Is satisfied employee a myth”?

Case Positioning and Setting

  • This case study can be used in BBA, MBA and Executive Development Courses with HR specialization
  • The case study intends to help develop an understanding on the importance of HR policies regarding recruitment, adherence to compulsory notice period, retention strategies and motivational factors adopted by any organization


* GSMC 2017, IIM Raipur

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