TABLE OF CONTENTS

1. Research Proposal:
Title of the Research Proposal……………………………………………… 2
Outline of the Research Proposed…………………………………………... 2
Research Brief………………………………………………………………. 2
Reasons Why Research Has Been Proposed………………………………... 4

2. Literature Review
Company Profile……………………………………………………………. 6
What are the factors that influence employee productivity? .......................... 7
Pay For Performance………………………………………………………... 7
Journal article by Tood R. Zenger; Administrative Science Quarterly, Vol. 37,
1992…………………………………………………………………………. 7

3. Methodology and Paradigm to be used for the proposed research…….. 10

4. References…………………………………………………………………... 12

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 Research Proposal

Title of the research proposal

Incentivising salary of employees for their better productivity: A case study of Hindustan
Coca Cola Beverages Pvt. Ltd. India

Outline of the research proposed:

This proposal is a research study, which would cover the objective of the research. It
would also cover the issues, on which the project would be based, the ways in which the
research would be performed, the reasons why it should be done and finally the findings
and overall result.

Research Brief:

The first thing here would be defining the industry in which the research would be carried
out. In this case it would be definitely mean the FMCG (Fast Moving Consumer Goods)
industry. Here is how one can define it: when one walks down the aisle of a local
supermarket and picks a product off the shelf, it is classified as an FMCG. This is an
English name of the grocery market or industry. It consists of products that one can buy
on a regular basis at places like a supermarket these can be things like butter, potato
chips, toothpaste, razor etc. The FMCG industry is a very stable industry unlike many
other industries like computers, airlines, automobiles etc. It is an Industry that thrives of
innovation. It gives a chance to express creativity through developing new ideas of
products, packaging, branding and advertising. Also it is considered to be high profile
industry and is never considered boring.

Since FMCG is a very fast moving industry, the job prospects are enormous and the
opportunities valuable for employees or people are in plenty. In this industry, the notion

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has been that people move around. It is said that FMCG is the industry for you eve if you
are a fresh graduate with no experience or have a good experience and is looking for a
change. People take up new roles to broaden their experience in a new area. So in order at
the people stick to one company, the company has to come up with strategies attract the
people and retain them back.

In such a scenario salary structure play a very important role. The majority of employees
shifts or under performs because they are unhappy with their current salary. Though they
feel happy about working with a branded and known company but eventually salary is
something that concerns everybody. So when a company wants to retain its employees,
they look for various options, which have to be considered. One such consideration is
given to salaries and also a focus is laid on incentives which can be offered to employees
for their loyalty.

Not only loyalty but also productivity is measured through salary structures. When an
employee is unhappy with their salary, their productivity gets affected to very large
extent. The term productivity relates to a person’s ability to produce the standard amount
or number of products, services outcomes as described in a work description. It is amount
of worked produced in a given period of time. In the FMCG industry, excellent
productivity is very important to the market in which it operates which is very high
competitive. So companies make sure that the productivity of the employee is very high
and excellent. Hence if they feel that the productivity of their employees is going down,
either they go for replacement or they opt for options through which productivity can be
improved of the present employees.

By incentivising the salary and giving them more returns, the company can make its
employees have better and good productivity. Various task needed to be done for this.
Also a lot of consideration has to be done for the same. For any company to increase or
revise their salary structure is not an easy task. There are lots of issues involved, which
would form the data of my research. Also to get a specific picture I decided to focus on a
big multinational company, which is very famous, is known and has been in the industry

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for ages. So I choose the company “Coco Cola India Pvt. Ltd.” for it and I would also
narrow down my focus to the branch of West U.P. of the company.

Reasons why research has been proposed:

The one major why I choose this topic is because I am quite interested in joining this
industry after completing my Masters in Business Administration. So for this I have been
in touch with some people who work in the same sector and with a few who work in the
same company. During my discussion with them, I came across this issue of great
concern with this industry. I saw that the companies have not been able retain their
employees. Also I learn that their exist abandon of opportunities for good employee to
learn and explore. One reason that was figured for this problem was that companies in
this industry are not good pay masters like many other companies in different industries
such as banking, insurance etc. In this manner, companies where loosing their excellent
talent. So a research was done and results were analyzed for their problems. Thus it came
into view that salary was a major concern for this problem to occur. So I thought to do
my dissertation on it.

Another reason is that I have plan of entering the FMCG industry and promote product
for a company as the carrier prospects in this industry is very attractive. I have researched
few facts about this industry is that one who joins this sector and stays here for three four
years can become a jack in many fields and than can switch to any sector as this sector
opens doors to many such opportunities. But when one joins any other sector, hey have to
compensate in case they want to change their field or industry. This can be in the form of
low paying jobs in other industries, investing huge amounts in courses which teach about
them or and so on. Also I get a feel that this field interests me so if I do m research in this
topic, I can provide solutions to companies which will prove to be special. Also than the
talent of people will come out properly due to high level of productivity. So the overall
salary structure of the industry would be studies and researched by me.

Salary structures and incentive plans are something, which impress me. Since I have
friends from this industry, I have had some exposure into this issue. Also I am aware of

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how competitive this industry is. Further it would encourage me as I would have a good
insight about the industry and its issue while researching on this topic for my dissertation.
This will help me decide if I want to stick to the industry or switch to another industry

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 Literature Review

The Indian FMCG sector is the fourth largest sector in the economy with the total market
size in excess of US $ 13.1 billion. It is the strong MNC presence and is characterized by
a well established distribution network, intense competition between the organized &
unorganized segments & low operational cost. Availability of key raw materials, cheaper
labour costs and presence across the entire value chain gives India a competitive
advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4
billion in 2015. Penetration level as well as per capita consumption in most product
categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the
untapped market potential. Burgeoning Indian population particularly the middle class
and the rural segments, presents an opportunity to makers of branded products to convert
consumers to branded products. Growth is also likely to come from consumer upgrading
in the matured products categories. With 200 million people expected to shift to
processed and packaged food by 2010, India needs around US$ 28 billion of investment
in the food-processing industry.

Company Profile
While The Coca-Cola Company is a global company with some of the world’s most
widely recognized brands, the Coca-Cola business in India, as in each country where they
operate, is a local business. Their beverages are produced locally, employing Indian
citizens, their product range and marketing reflect Indian tastes and lifestyles, and they
are deeply involved in the life of the local communities in which they operate.

After a 16-years absence, Coca-Cola returned to India in 1993. The Company’s presence
in India was cemented in November that year in the deal that gave Coca-Cola ownership
of the nation’s top soft-drink brands.
The Coca-Cola business system directly employs approximately 10,000 local people in
India. In addition, several independent studies have documented that, by providing
opportunities for local enterprises, the Coca-Cola business also generates a significant
employment ‘multiplier effect’ In India they indirectly create employment for more than

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125,000 people in related industries through our vast procurement, supply and
distribution system.

What are the factors that influence employee productivity?

To begin with, it is important to recognize the truly human element in workplace
relations. Step back and think for a moment-what makes people work harder? Is pay the
strongest motivating force in the workplace?
Many experts have noted that workers while on the job do not produce more simply
because they are being paid more. After all, it is not expected that employees will
constantly calculate the monetary value of every action they perform. Workers, for
instance, do not keep a record of how much they earn every time they send out an email,
approve a document or complete some other task. It’s just not human nature.

Pay for performance

A compensation system can be created in which the employees share the risks of business
with owners & investors. Here they earn more when productivity increases. Such plans
typically start with reduced low wages and salaries but bonuses are rewarded when
productivity is delivered and good performance is achieved.

Journal article by Tood R. Zenger; Administrative Science Quarterly,

Vol. 37, 1992
A study develops an efficiency explanation for commonly observed performance-based
compensation contracts that aggressively reward extreme performance while largely
disregarding performance distinctions for moderate performance levels. In response to
this reward the extremes contract, the paper predicts a relationship between performance
and turnover that fluctuates by performance level. Evidence of the hypothesized contract
and the resulting pattern of turnover are provided empirically with data collected from
984 engineering employees of two large high-technology companies in the San Francisco
Bay Area. The data confirm that extremely high and moderately low performers are
likely to remain in firms offering these contracts while moderately high and extremely
low performers are likely to depart.

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Numerous disciplines provide theoretical and empirical support for the efficacy of reward
schemes that par for performance. Social psychologists using experimental methods have
found that performance-based pay serves to enhance effort and upgrade workforce
quality (Landau and Leventhal, 1976; Leventhal, 1976). Economic theorists have also
argued that performance-contingent rewards motivate effort and attract talent is not easily
observed (Holmstrom, 1979; Levinthal, 1988). Organization scholars have cited similar
benefits of distributing rewards based on performance (Lawler, 1981; Milkovich and
Wigdor, 1991). Consistent with achieving these objectives, the majority of organizations
claim to use some form of performance-based pay, particularly for exempt employees
(Peck, 1984; Milkovich and Wigdor, 1991).

However, pay-for performance schemes are typically not the simply incentive contracts
or piece rates assumed and examined by expectancy and agency theorists, in which pay
increases directly with incremental gains in objectively measured performance. Instead,
these commonly used merit pay schemes subjectively assess performance and largely
restrict variation in assessments to three to five categories. Further, only a small
percentage is categorized outside one or two large central performance categories
(Medoff and Abraham, 1980; Gellerman and Hodgson, 1998; Bretz and Milkovich, 1989;
Milkovich and Wigdor, 1991: 84). Although some scholars (e.g, Abbot and Schuster,
1984) advocate forced distributions or ranking procedures to curb this clustering of
ratings, in practice such schemes appear rather infrequently (Peck, 1984). Further, other
scholars (Gellerman and Hodgson 1988; Lawler, 1990) explicitly advocate merit-pay
schemes that place 80-90 percent of employees within a single performance category.

Pay differences based on performance reflect this limited dispersion in performance

ratings. For the majority of employees, the typical performance-based contract provides
at most one performance-based pay distinction and commonly no distinction whatsoever.
Only the small percentage of employees rated in the extreme categories are
systematically granted increases substantially higher or lower than those granted to
employees in these central categories. Not surprisingly, empirical examinations of these

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pay schemes conform rather week links between pay and performance (Meyer, Kay and
French, 1965; Lawler, 1971; Medoff and Abraham, 1980).

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 Methodology and Paradigm to be used for the proposed research

A research or dissertation is done to enhance or increase your awareness and knowledge

in a topic or issue which you’re interested in or which is related to you in any way. So it
is very important that the most appropriate and correct method and path for design and
data collection is selected. Also since recommendations are to be given and solutions are
to be analyzed, so a proper methodology is very important.

Paradigm – Having the correct paradigm is the first step while doing research. A
paradigm refers to the progress of scientific practice based on people’s philosophies and
assumptions about the world and the nature of knowledge and in this context, about how
research should be conducted. It provides guidelines on how a research should be
progressed. Also it tells you about the way data can be collected. There are two types of
paradigm. They are labeled as positivist and phenomenological. The positivist paradigm
seeks the facts or causes of social phenomenon. It gives little regard to the subjective
state of any individual or thing. The phenomenological paradigm is more concerned with
understanding human behavior from the researcher’s point of view. So the act of reality
has an effect and it is more subjective.
For my research, I would be using the positivistic school of thought. This fits perfectly in
my project, as the data collection method would be through investigation. Also for this
topic, the concept logical reasoning would be applied to the research so that objectivity
and precision comes in place of experience and intuition. My topic requires a rational
explanation and has to have causal links and relationships between the different variables
or elements of the subject. So this paradigm can be the most appropriate one.
Approach – It is a process of enquiry and investigation, and helps in solving practical
problems and increase knowledge. It develops a system for the research and shows a
method that should be followed for doing the research. There are mainly two types of
approaches, which are Qualitative approach and Quantitative approach. A research where
numerical data has to be collected should adopt the Quantitative approach. On the other
hand, a research which is more subjective involves less tangible aspects should adopt the
Qualitative approach.

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For my research, the approach that I have selected is the quantitative approach. This is
because data for my topic would be more objective and numerical than subjective and
theoretical. Also the concentration would be on measuring different salary ranges and
scales in the industry, which is statistical. Further since my paradigm selected is
positivistic, the appropriate approach is quantitative one. The sample size would be high
and also the data would be highly detailed and structured. Also it is evident that such
research would be difficult to design but would be easy to collate and present statistically.

Methodology – A methodology is the overall approach to the research process, from

collecting data to analysis of it. It highlights on issues like why certain data was
collected, how it was collected, what sources were used, and how analysis would be
done. The methodology for any research is decided based on the paradigm taken an
approach selected. Since I have selected the positivistic school of thought and have
selected the quantitative approach, the ideal methodologies that can be used are surveys,
experimental studies, longitudinal studies and cross-sectional studies.
For my research, I would be using surveys cross-sectional studies as methods for
collecting data. The survey is of two types, one is descriptive survey and the other is
analytical survey. A combination of both the types would be used in my research as
identifying responses in a group would also be done and also analysis of relationship
between different variables would also be required for findings and solutions. Further the
method of cross-sectional studies would be used, as a particular time would be selected
while collecting data about the salary structures of employees in the industry. The
similarities and differences would be studied and examined or analyzed. Then results
would be derived or conclusion would be drawn.

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 References

Brown, R. C. (1993). Financial worries in the workplace. R.J.Tobacco Company, RJR

Employee Counseling. Winston- Salem, unpublished manuscript.

Edward P. Lazear (Dec, 2000) The American Economic Review, Vol. 90, No. 5

Edward P. Lazear (Jun, 1989) The Journal Of Political Economy, Vol. 97, No.3

Elizabeth E. Bailey (March, 1986) The Economic Journal, Vol. 96, No. 381

Harris, T. (July1987) Helping employees manage their finances. Managing Today

James L. Medoff, Katharine G. Abraham (Dec, 1980) The Quarterly Journal of

Economics, Vol. 95, No. 4

Journal article by Tood R. Zenger, Administrative Science Quarterly, Vol.37, 1992

Oyer, Paul and Schaefer, Scott (February 2004) “Why Do Some Firms Give Stock
Options To All Employees: An Empirical Examination Of Alternative Theories”

R.W. Griffin (October 1982) Perceived Task Characteristics and Employee Productivity
and Satisfaction Human Relations,

Williams, F, Lown, J, Haldeman, V, Garman, E.T, Fletcher, C.N. & Cramer, S. (1990).
Financial concerns of employees and their productivity. Proceedings of the Association
for Financial Counseling and Planning Education

Yeh, B.Y, Lester, D. & Tauber, D.L. (1986) Subjective stress and productivity in real
estate sales people. Psychological Reports, 58

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