Human Resource Issues Faced by Tata Motors: Employee Motivation

The aim of this report is to research Tata Motors and Indian Automotive industry to evaluate the human resource issues faced by the company while operating its business. Tata Motors is a major contender in the automotive industry in India. Employee motivation is a major issue faced by Tata Motors which reduces the performance of its employees which adversely affects the profitability of the enterprise. There are a number of factors which affect employee motivation such as negative workplace environment, lack of appreciation and recognition, no help on personal matters and lack of job security. All these factors resulted in negatively affecting the motivation of employees which increases employee retention rate in Tata Motors. Different theories such as the hierarchy of needs and two factors theory are discussed in the report to evaluate the factors which affect the motivation of employees. Various recommendations are given in the report based on which Tata Motors can motivate its employees to perform better such as providing recognition for excellent performance, providing job security, establishing communication channels, identifying needs of employees and establishing a code of conduct to promote healthy workplace environment. By complying with these factors, Tata Motors can address the issue of employee motivation and sustain its future growth.

Human Resource Management
Tata Motors

Executive Summary
The aim of this report is to research Tata Motors and Indian Automotive industry to
evaluate the human resource issues faced by the company while operating its business. Tata
Motors is a major contender in the automotive industry in India. Employee motivation is a
major issue faced by Tata Motors which reduces the performance of its employees which
adversely affects the profitability of the enterprise. There are a number of factors which
affect employee motivation such as negative workplace environment, lack of appreciation
and recognition, no help on personal matters and lack of job security. All these factors
resulted in negatively affecting the motivation of employees which increases employee
retention rate in Tata Motors. Different theories such as the hierarchy of needs and two
factors theory are discussed in the report to evaluate the factors which affect the
motivation of employees. Various recommendations are given in the report based on which
Tata Motors can motivate its employees to perform better such as providing recognition for
excellent performance, providing job security, establishing communication channels,
identifying needs of employees and establishing a code of conduct to promote healthy
workplace environment. By complying with these factors, Tata Motors can address the issue
of employee motivation and sustain its future growth.
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Table of Contents
Introduction...............................................................................................................................3
Situation Analysis.......................................................................................................................3
Research Methodology..............................................................................................................4
Objective................................................................................................................................4
Literature Review.......................................................................................................................4
Factors responsible for affecting employee motivation............................................................6
Recommendations.....................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9
List of Figures
Figure 1: Tata Motors Logo........................................................................................................3
Figure 2: Maslow Hierarchy of Needs Model.............................................................................5
Figure 3: Theoretical Model of employee motivation issues.....................................................7
Figure 4: Theoretical model linked to employee motivation....................................................8
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Introduction
In this report, Tata Motors is chosen for the research, and human resource issues associated
with the company will be discussed. Tata Motors Limited is an Indian multinational
automobile manufacturing corporation, and its headquarters is situated in Mumbai, India
(Tata Motors, 2018). The company operates in the automobile industry and offers different
products to its customers such as trucks, buses, passenger cars, military vehicles, and
others. India has the world’s largest automobile industry with an annual average production
of 24 million vehicles, and Tata Motors is a key contender in the industry. The industry has
reported a growth of 2.57 percent in 2015-16. The automobile industry contributes over $93
billion to the nations GDP which is around 7.1 percent of its total GDP (IIFL, 2016). The
Indian automotive industry is the largest truck manufacturer and second largest two-
wheeler manufacturer. This report will focus on evaluating the HR issue of employee
motivation and analysing factors which affect employee motivation in Tata Motors.
Furthermore, this report will draw a theoretical model linked to employee motivation and
provide recommendations for the enterprise.
Figure 1: Tata Motors Logo
(Source: Tata Motors, 2018)
Situation Analysis
The industry provides direct and indirect employment to over 29 million people and the
employment opportunities created for every vehicle produced, for example, 13 people are
employed for manufacturing of a truck and six people for each car (Makeinindia, 2016). The
automobile manufacturing companies face a number of human resources issues because
they employ a large number of workers. One of the biggest challenges face by Tata Motors
is employee motivation due to which it finds difficulty in attracting and retaining talented
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employees. Due to lack of effective motivation policies, the performance and profitability of
Tata Motors suffer.
Research Methodology
Objective
The main object of this report is to conduct secondary research on how employees’
motivation resulted in negatively affecting Tata Motors and evaluate various factors which
affect the motivation of employees. This report will focus on identifying the challenges faced
by Tata Motors and finding solutions to such problems by conducting secondary research on
relevant literature.
 What is employee motivation and which factors affect employee motivation at Tata
Motors?
 What actions can be taken by the HR department to address the issue of employee
motivation at Tata Motors?
Literature Review
Tata Motors provides employment to over 81 thousand employees in different
departments. The automotive industry is highly competitive, and the main competitor of
Tata Motors such as Ashok Leyland, SML Isuzu, and Eicher Motors implement strategies to
attract, hire and retain talented employees. According to Srivastava et al. (2012), the
retention of talented and experienced employees is the key focuses on HR department in
automobile manufacturing companies because these employees are highly efficient in their
work, and they are also able to train others employees as well. However, the HR
department finds it difficult to attract and retain talented and experienced employees due
to lack of employees motivation. Employees who are not motivated are less likely to achieve
their targets, and they are more likely to leave the company. Dobre (2013) defined
employee motivation as the level of energy, creativity and commitment that an employee
brings to the company while doing his/her job. In a growing economy such as India,
motivated employees are the priority of the HR department. Motivated employees
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positively contribute to the overall success of an enterprise, and they are also likely to solve
challenges, bring creativity and to reduce overall costs of operations.
As per Mitra (2011), Tata Motors find it difficult to retain talented employees because they
are not motivated to achieve common organisational objectives. Due to high work pressure,
employees find it difficult to manage their work and personal life which adversely affect
their motivation. According to Maslow Hierarchy of Needs Model, the satisfaction of basic
needs of employees is necessary in order to increase job satisfaction which is the key for
employee motivation. Gupta (2015) argued that the HR department at Tata Motors failed to
identify the basic needs of their employees because the number of employees is relatively
high and it is not possible to monitor the needs of each employee. As per Ray and Das
(2009), Tata Motors provide monetary incentives to its workers if they perform better and
achieve their targets. However, as per the hierarchy of needs theory, needs of people are
divided into five categories which include physiological, safety, belongingness, esteem and
self-actualisation needs.
Figure 2: Maslow Hierarchy of Needs Model
(Source: McLeod, 2018)
Monetary incentives can motivate low-level employees; however, they cannot motivate
middle or top level management. Rao and Kumar (2012) argued that it creates the problem
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of less motivated employees in the company who are working so that they can get the next
paycheck, and they did not contribute to the growth of the enterprise. As per Herzberg’s
Two Factor theory, there are a number of hygiene factors which resulted in positively or
adversely affecting the motivation level of employees.
Factors responsible for affecting employee motivation
 Workplace environment
Negative workplace environment creates dispute among employees which reduces their
motivation. As per Martin Cruz, Martin Perez and Trevilla Cantero (2009), employees who
are not able to find interesting work or who have to perform mundane tasks are less likely
to be motivated. The factory environment at Tata Motors is not positive which lead to job
dissatisfaction due to which employees are not motivated to perform at their highest
capacity.
 Appreciation and recognition
The HR department offers performance-based rewards to teams; however, they did not
provide recognition and appreciation to individual employees. Lazaroiu (2015) argued that
due to lack of recognition, employees do not feel like a part of the company which reduces
their motivation levels.
 Job security
Tata Motors is a private enterprise, and it focuses on hiring only the best employees to
ensure its success. However, it resulted in increasing the fear of job security among
employees which reduces their motivation. For example, in 2017, Tata Motors cuts 10-12
percent of its managerial positions which creates fear among other employees as well
(Sukumaran, 2017).
 Help with personal problems
As per Dartey-Baah and Amoako (2011), if employees do not feel part of the company, then
they are less likely to be motivated to achieve their targets. The HR department of Tata
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Motors did not get involve or help employees with their personal problems which reduce
their motivation.
Figure 3: Theoretical Model of employee motivation issues
(Source: Self Made)
Recommendations
 Identifying what motivates employees by interacting with them and understanding
their problems and addressing them. It will result in increasing the loyalty of
employees, and loyal employees are motivated to achieve corporate goals.
 Establishing a code of conduct to create a positive workplace environment which
fosters employee relationships and eliminate disputes.
 Providing recognition to employees who have performed better than their peers and
providing them appreciation through monetary or non-monetary rewards.
 Increasing job security among employees by providing them guarantee that the
company will not remove them from the job in adverse market condition.
 Increasing communication channels between employees and top-level management
to learn about the issues face by employees and providing appropriate solutions to
such issues.
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Employee
Motivation
Job Satisfaction
Quality of
workplace
environment
Job Security
Hygiene factors
Appreciation
recognition
Help with
personal
problems

Figure 4: Theoretical model linked to employee motivation
(Source: Self Made)
Conclusion
In conclusion, Tata Motors has generated a competitive advantage in the industry due to an
effective and efficient workforce, however, it is facing issues in attracting and retaining
talented employees due to lack of motivated employees. Motivated employees are key to
the success of an enterprise, and their motivation is affected by factors such as job
satisfaction and hygiene elements such as job security, recognition, workplace environment,
and help with personal problems. In order to address these issues, recommendations are
given for Tata Motors based on different employee motivation techniques.
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Employee
Motivatio
n
Identification
of problems
Code of
conduct
Communicati
on channels
Recognition
and reward
strategy
Job
guarantee

References
Dartey-Baah, K. and Amoako, G.K. (2011) Application of Frederick Herzberg’s Two-Factor
theory in assessing and understanding employee motivation at work: a Ghanaian
Perspective. European Journal of Business and Management, 3(9), pp.1-8.
Dobre, O.I. (2013) Employee motivation and organizational performance. Review of Applied
Socio-Economic Research, 5(1).
Gupta, M. (2015) A study on employees perception towards employee
engagement. Globsyn Management Journal, 9(1/2), p.45.
IIFL. (2016) The $ 93 billion automotive industry contributes 7.1% to India’s GDP. [Online]
IIFL. Available at: https://www.indiainfoline.com/article/news-top-story/the-93-billion-
automotive-industry-contributes-7-1-to-india%E2%80%99s-gdp-116112500195_1.html
[Accessed on 25th July 2018].
Lazaroiu, G. (2015) Employee motivation and job performance. Linguistic and Philosophical
Investigations, 14, p.97.
Makeinindia. (2016) Automotive Sector. [PDF] Makeinindia. Available at:
http://www.makeinindia.com/documents/10281/114126/Automotive+Sector+-
+Achievement+Report+%281%29.pdf [Accessed on 25th July 2018].
Martin Cruz, N., Martin Perez, V. and Trevilla Cantero, C. (2009) The influence of employee
motivation on knowledge transfer. Journal of knowledge management, 13(6), pp.478-490.
McLeod, S. (2018) Maslow’s Hierarchy of Needs. [Online] Simply Psychology. Available at:
https://www.simplypsychology.org/maslow.html [Accessed on 25th July 2018].
Mitra, R. (2011) Framing the corporate responsibility-reputation linkage: The case of Tata
Motors in India. Public Relations Review, 37(4), pp.392-398.
Rao, V.R. and Kumar, R.V. (2012) Customer satisfaction towards tata motors–A study on
passenger cars in Warangal district of Andhrapradesh. South Asian Journal of Marketing &
Management Research, 2(4), pp.127-150.
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Ray, S. and Das, S. (2009) Corporate Reporting Framework (CRF): Benchmarking Tata Motors
against AB Volvo and Exploring Future Challenges. Decision (0304-0941), 36(1).
Srivastava, A.K., Negi, G., Mishra, V. and Pandey, S. (2012) Corporate social responsibility: A
case study of TATA group. IOSR Journal of Business and Management, 3(5), pp.17-27.
Sukumaran, G. (2017) Layoffs resurface as Tata Motors joins the fray, 1,500 managerial staff
axed already. [Online] International Business Times. Available at:
https://www.ibtimes.co.in/layoffs-resurface-tata-motors-joins-fray-1500-managerial-staff-
axed-already-728078 [Accessed on 25th July 2018].
Tata Motors. (2018) About Us. [Online] Tata Motors. Available at:
https://www.tatamotors.com/about-us/ [Accessed on 25th July 2018].
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