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34
Employee Engagement in “IT Industry” Business Research Project Submitted to, Ms. Tripti Sharma Submitted By: Arunanshu Pal Dhiraj Agarwal Neha Sikka Rekha Mittal Sakshi Gupta Suruchi Goyal

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Page 1: Project Employee Engagement

Employee Engagement in “IT Industry” Business Research Project

Submitted to, Ms. Tripti Sharma

Submitted By:

Arunanshu Pal

Dhiraj Agarwal

Neha Sikka

Rekha Mittal

Sakshi Gupta

Suruchi Goyal

Page 2: Project Employee Engagement

Abstract Employee engagement is the level of commitment and involvement an

employee has towards their organization and its values. An engaged

employee is aware of business context, and works with colleagues to

improve performance within the job for the benefit of the organization. It

is a positive attitude held by the employees towards the organization and

its values. The project focuses on how employee engagement plays a

vital role in significantly improving the overall structure of the

organization and hence helps in substantial growth of the organization.

The project presents a generalized view of the growing importance of

employee engagement which is been used as an essential tool to solve

many problems faced by the economic environment such as .Though,

employee engagement impacts every industry ,we have concentrated

our study mainly in one of the most emergent industy,Information

Technology(IT) industry.

The advent of new technology, change in work lifestyle, emergence of

generation y in the work culture and dynamic economic environment has

led to re-think the norms and policies being carried out by the

organization .the hr department has emerged as an important area in the

organization and numerous studies are being undertaken to know the

intricacies involving employee engagement towards their work.

Our research is an outcome of collection of secondary data from various

sources to provide some knowledge towards importance of employee

engagement in IT industry, the salient features of employee engagement

and its impact on the organization as a whole.

Page 3: Project Employee Engagement

Introduction

Employee engagement is a complex equation that reflects each

individual’s unique, personal relationship with work. The term

means different things to different organizations. Some equate it

with job satisfaction, some by gauging employee’s emotional

commitment to their organization but a conclusive nature and

definition of the same cannot be obtained.

To make an effort it can be defined as aligning employees’ values,

goals, and aspirations with those of the organization in the best

method for achieving the sustainable employee engagement

requires for an organization to reach its goals.

Page 4: Project Employee Engagement

Engagement has been hailed as the secret ingredient to

competitive advantage and organizational success since through

full engagement of its employees which is seen as an alignment of

two factors simultaneously

1. Maximum job satisfaction

(“I like my work & do it well”)

2. Maximum job contribution

2. Maximum job contribution

(“I help ACHIEVE the goals of my organization”)

organization look for people who are not just committed

,passionate or proud but also have a line of sight on their future

and are enthused and geared up to use their talents and efforts to

make a difference in their employer’s quest for sustainable

business success.

Page 5: Project Employee Engagement

Industry profile The IT industry is the blend of various forms of technology to easily

disseminate the information from one place to another making all

the processes in a business all the more easy and convenient.

India is the world’s largest democracy and the second most

populous nation, with a population of over one billion people

Constituting the majority of the landmass of Southern Asia, India’s

ethnic, linguistic, religious, economic, political, and geographic

diversity is greater than perhaps any other country in the world. As

an emerging country one of the factors contributing in putting India

on the global map is The Indian information technology (IT)

industry.

A large number of companies are operating in various areas of IT

mainly BPO, Analytics, Finance & Accounting, Remote

Infrastructure Management, ADM, Cloud Services, The data centre

services, telecommunication to name a few. With the growing

market ,the IT services is expected to grow by 2.4 per cent in

2010, and 4.2 per cent in 2011 as companies coming out of

recession harness the need for information technology to create

competitive advantage.

With growing companies, more employees need to be hired and

the companies that employ technology workers face special

challenges in managing their workforces. These businesses need

highly skilled and motivated workers to operate at peak

performance in a competitive, innovative industry.

Page 6: Project Employee Engagement

Presently, the top companies in it industry shows the following

statistics of current employment which is expected to rise given the

improving market conditions.

Company

INDIAN IT COMPANIES

Employees

Wipro 41,857 Tata Consultancy Services 40,992

Infosys Technologies 35,000 HCL Ltd 22,034

Satyam Computer Services 20,000 Cognizant Technology Solutions 17,000

Patni Computers 10,000 BFL MphasiS 8,375

Polaris 6,003 I-flex 4,747

Human capital being the primary asset of these companies it is very

important for the organizations to ensure full employee engagement so

that sustainable growth is ensured.

Page 7: Project Employee Engagement

IMPORTANCE OF EMPLOYEE ENGAGEMENT IN “IT INDUSTRY”

The nature of IT work puts special pressure on employees. The work is

by definition intense, especially as technology becomes more essential

to every facet of modern global business. System downtime is

unacceptable and rapid technological change creates constant demands

on IT employees to perform at zero error levels.

Because of the 24/7 nature of the work, IT employees require maximum

flexibility in order to meet these high demands. They often need to work

nights, weekends, and overtime, and consequently require sufficient

downtime to recharge after an intense work period. This makes

timekeeping, leave tracking, and wage and hour compliance complex

and demanding for businesses. In addition to the demands of the job, IT

workers are under constant pressure to stay abreast of rapid innovation

as each generation of technology appears and then quickly becomes

obsolete. This requires employers to provide constant training and

development to their tech workers, which can create both budgetary and

time allocation issues.

In Indian context, the meaning of employee engagement is different

considering the difference in the work conditions, background and

culture of the organization as well as adaptability of the employees.

Again, reports suggest there is to be a substantial increase in the

number of recruits with respect to the positive global cues.

Page 8: Project Employee Engagement
Page 9: Project Employee Engagement

KEY FINDINGS

HCL chief executive Vineet Nayar, whose book Employees First, Customers

Second: Turning Conventional Management Upside Down hit the stands

earlier this month, spends about seven hours a week addressing and

resolving employee queries

Other studies indicate that companies found the following from their efforts to

study the links between employee satisfaction, productivity, and financial

performance

• Unhappy employees are less productive and more likely to have higher

absence rates

• Satisfied employees are more productive, innovative, and loyal

• Increases in job satisfaction lead to increases in employee morale, which lead

to increased employee productivity

• Employee satisfaction leads to customer retention ultimately to shareholder

return.

Business results supplemented by the pioneer research by Hewitt

associates which shows that leadership in employee engagement leads to

double digit growth in the companies and vice versa.

Studies such as Frederick Reich held’s “The Loyalty Effect,” (1996) and

James Heskett, W. Early Sasser, and Leonard Schlesinger’s A Watson

Wyatt Worldwide study found that the practice of maintaining a collegial,

flexible workplace is associated with the second-largest increase in

shareholder value (Nine percent), suggesting that employee satisfaction is

directly related to financial gain.

Watson Wyatt Worldwide Human Capital Index study suggests that

effective human resources practices lead to positive financial outcomes

more often than positive financial outcomes lead to good practices.

Page 10: Project Employee Engagement

There obviously seems to be a rise in the in almost every positions of

the job profile offered in IT industry along with the identification of needs

of engaging employees for overall organizational structure, so it is

important to address the main issues due to dynamic business

environment which mainly include:

aging of baby boomers and emergence of generation y

level of engagement in the company

level of seniority

task design

job tenure

All these attributes lead to different perceptions in terms of employee

engagement and the efficiency of management lies to effectively

observe the need of the individual and provide the benefits that satisfy

his needs to entirely and completely commit him to the organization.

Page 11: Project Employee Engagement

6

43

10

14

27

WORK EXPERINECE <3 YEARS

JOB SECURITY

PAY PACKAGE

BRAND

WORK ENVIRONMENTLEARNING

DESIGNATION

FUTURE GROWTHOTHERS

9

16

34

18

23

WORK EXPERIENCE 3-6 YEARS

JOB SECURITY

PAY PACKAGE

BRAND

WORK ENVIRONMENT

LEARNING

12

15

24

29

10

WORK EXPERIENCE >6 YEARS

JOB SECURITY

PAY PACKAGE

BRAND

WORK ENVIRONMENT

LEARNING

DESIGNATION

FUTURE GROWTH

OTHERS

Page 12: Project Employee Engagement

Researches shows that the employees differ in their approach towards

attrubute which contribute towards their creating a positive attitude

toward the work environment as the factors mentioned below has

different level of effect on the need of the employees depending upon

the tenure they spent in the organization.

From the above deduction we can see that the people with an

experience less than 3 years or in between 3-6 years value pay package

and work environment respectively as their primary concern while

employees who have been in the company for substantially longer time

give more emphasis to their level of seniority (position) and work

environment as their engagement determining attribute.

Page 13: Project Employee Engagement

Similarly, depending upon the level of engagement employees have

achieved we can determine the characteristics and corresponding

attitude towards their work like:

The Engaged:

High contribution

& high satisfaction

These employees are at “the apex”

where personal and organizational

interests align.

They contribute fully to the success of

the organization and find great

satisfaction in their work. They are

known for their discretionary effort

and commitment. When recruiters call,

they cordially cut the conversation

short. Organizations need to keep them

engaged, because they can transition

over time to any of the three adjacent

segments, a move that would likely

impact workforce morale and the

bottom line.

Almost Engaged:

Medium to high

contribution &

satisfaction

A critical group, these employees are

among the high performers and are

reasonably satisfied with their job.

They may not have consistent “great

days at work,” but they know what

those days look like. Organizations

should invest in them for two reasons:

They are highly employable and more

likely to be lured to greener pastures;

they have the shortest distance to travel

to reach full engagement, promising the

biggest payoff.

Page 14: Project Employee Engagement

Honeymooners & Hamsters

Medium to high

satisfaction but

low contribution

Honeymooners are new to the

organization or their role — and happy

to be there.

They have yet to find their stride and

clearly understand how they can best

contribute. It should be a priority to

move them out of this temporary

holding area to full alignment and

productivity.

Hamsters: may be working hard, but

are in effect “spinning their wheels,”

working on non-essential tasks,

contributing little to the success of the

organization. Some may even be hiding

out, curled up in their cedar shavings,

content with their position (“retired in

place”). If organizations don’t deal with

them, other employees may grow

resentful or

have to pick up the slack

Crash & Burners:

Medium to high

contribution but

Disengaged, low satisfaction

Disillusioned and potentially exhausted,

these employees are top producers who

aren’t achieving their personal

definition of success and satisfaction.

They can be bitterly vocal that senior

leaders are making bad decisions or

that colleagues are not pulling their

Weight. If left alone, they are likely to

slip down the contribution scale to

become often bringing down those

around them. They may leave, but they

are more likely to take a breather and

work less hard.

Page 15: Project Employee Engagement

We can observe that the level of engagement depends upon the tenure

of employee where increase in the number of years in an organization

leads to an automatic increase in the employee engagement. The higher

engagement being noticed in double digit companies.

But, mainly the following contributes to be the essential parameters

looked upon by the employees generally from the organization to

motivate to work beyond their capacity and portray the picture of

organization citizenship behavior.

0

10

20

30

40

50

60

70

80

LESS THAN 2 YEARS

2-5 YEARS 6-9 YEARS 10-14 YEARS

15-19 YEARS

20 OR MORE YEARS

SINGLE DIGIT GROWTH EMPLOYEE ENGAGEMENT

DOUBLE DIGIT GROWTH EMPLOYEE ENGAGEMENT

LEVEL OF ENGAGEMENT ON THE BASIS OF

TENURE

Page 16: Project Employee Engagement

Career Development- Opportunities for

Personal Development

Organizations with high levels of engagement provide employees with

opportunities to develop their abilities, learn new skills, acquire new

knowledge and realize their potential. When companies plan for the

career paths of their employees and invest in them in this way their

people invest in them.

Page 17: Project Employee Engagement

Career Development – Effective

Management of Talent

Career development influences engagement for employees and

retaining the most talented employees and providing opportunities for

personal development.

Leadership- Clarity of Company Values

Employees need to feel that the core values for which their companies

stand are unambiguous and clear.

Leadership – Respectful Treatment of

Employees

Successful organizations show respect for each employee’s qualities

and contribution –regardless of their job level.

Leadership – Company’s Standards of

Ethical Behavior

A company’s ethical standards also lead to engagement of an individual.

Empowerment

Employees want to be involved in decisions that affect their work. The

leaders of high engagement workplaces create a trustful and challenging

environment, in which employees are encouraged to dissent from the

prevailing orthodoxy and to input and innovate to move the organization

forward.

Image

How much employees are prepared to endorse the products and

services which their company provides its customers depends largely on

their perceptions of the quality of those goods and services. High levels

Page 18: Project Employee Engagement

of employee engagement are inextricably linked with high levels of

customer engagement.

Other factors

Equal Opportunities and Fair Treatment

The employee engagement levels would be high if their bosses

(superiors) provide equal opportunities for growth and advancement to

all the employees

Performance appraisal

Fair evaluation of an employee’s performance is an important criterion

for determining the level of employee engagement. The company which

follows an appropriate performance appraisal technique (which is

transparent and not biased) will have high levels of employee

engagement.

Pay and Benefits

The company should have a proper pay system so that the employees

are motivated to work in the organization. In order to boost his

engagement levels the employees should also be provided with certain

benefits and compensations.

Health and Safety

Research indicates that the engagement levels are low if the employee

does not feel secure while working. Therefore every organization should

adopt appropriate methods and systems for the health and safety of their

employees.

Job Satisfaction

Only a satisfied employee can become an engaged employee.

Therefore it is very essential for an organization to see to it that the job

given to the employee matches his career goals which will make him

enjoy his work and he would ultimately be satisfied with his job.

Communication

Page 19: Project Employee Engagement

The company should follow the open door policy. There should be both

upward and downward communication with the use of appropriate

communication channels in the organization. If the employee is given a

say in the decision making and has the right to be heard by his boss

than the engagement levels are likely to be high.

Family Friendliness

A person’s family life influences his wok life. When an employee realizes

that the organization is considering his family’s benefits also, he will

have an emotional attachment with the organization which leads to

engagement

Co-operation

If the entire organization works together by helping each other i.e. all the

employees as well as the supervisors co-ordinate well than the

employees will be engaged.

Page 20: Project Employee Engagement

MANAGING IT EMPLOYEE

Employment in all IT occupations is expected to increase by about

800,000 jobs through 2016, according to the latest projections by BLS,

up 24 percent compared with 10 percent for all occupations.

In this still rapidly expanding profession, IT workers tend to be constantly

on the lookout for new career opportunities and have both ease of

access to and familiarity with online job searches. For businesses, the

resulting rapid turnover among IT professionals is a constant concern.

Replacing an IT professional is costly not only in lost work time but also

in the loss of institutional knowledge when an employee familiar with a

company’s IT system leaves. Other management problem employers

Face is that career paths for IT employees are indefinable and therefore

a company often cannot offer employees a clear path of advancement in

the shifting landscape. The solution to this dilemma is: “Early and

Frequent communication of the relative benefits of the current

organization over labor market competitors,” combined with reliable

delivery of those benefits. To address the problem of maintaining

adequate staffing levels of quality IT professionals, many companies

have turned to outsourcing and/or off shoring their IT functions In

countries such as India which creates managing the employees in the

industry a tedious job. It has been noticed that the it industry is among

the ones burdening with the problems such as

Page 21: Project Employee Engagement

ATTRTION OF EMPLOYEES

In Asia, organizations faced an overall attrition rate of 16% in

2005. Attrition rate was 14% in 2004 and 10% in 2003.

According to the employees, attrition at the

professional/supervisor/technical level was the highest (39%) and

lowest at the senior/top management level (1% approximately).

Almost every sector in India is facing high rates of attrition these

days. A recent study revealed that employees leave either

because of compensation reasons or due to better growth

opportunities. According to NASSCOM, Indian IT-ITES industry

recorded US$ 39.6 billion in revenues in 2006-07. The revenue of

US$ 49-50 billion has been projected in 2007-08 at a growth rate

of 24-27 per cent. The IT industry's contribution to GDP was 4.8

per cent in 2005-06.

Though, the IT/ITES sector is booming, it is constantly facing high

attrition rates of 25% - 30%. Even the big brands are also facing

Page 22: Project Employee Engagement

the problem of high attrition.

ATTRITION RATES AT MAJOR IT COMPANIES IN INDIA

0

2

4

6

8

10

12

14

16

18

2008 2009 2010

TCS

INFOSYS

WIPRO

HCL

Page 23: Project Employee Engagement

The high level of attrition rates has become a major concern for the

growth of the organisatIion.The main causes of attrition being:

Designing a competitive package of benefits to attract and retain

high-caliber IT employees is a challenge for employers.

High-stress and irregular demands of the profession

Employees are particularly concerned about work-life balance and

flexibility of working hours.

IT professionals also require continuing education and training to

stay current with their rapidly changing field

Diversity in work culture to meet the globalization scenario of

present time leads to problem with adaptability.

Page 24: Project Employee Engagement

KEY FINDINGS

According to a research conducted by the state of employee engagement 2008

global report it has been found that hr and sales departments have the most

engaged (36% each), and finance and it have the least (23% and 22%

respectively).

According to Hewitt’s attrition and retention study Asia pacific 2006; the no.1

reason for this growing attrition rate is compensation unfairness. 21% of the

organizations who took part in the survey said that their employee left the

organization because they got offers from other organizations offering better

pay packages.

The Indian IT industry has witnessed higher attrition levels over the past few

quarters as increasing global demand for information technology services has

sent firms scrambling for talent.

. "IT could also be the perceived better brand value of competing employers."

leading to attrition as suggested by said Pankaj Kapoor, an analyst who tracks

HCL at RBS equities (India) ltd

BLS report indicates that subspecialties such as wireless networking will grow

rapidly through 2016 leading to high rate of attrition in search of talented

candidates."May be a disparity in salary levels or perceived differences in job

satisfaction at its peers could explain the relatively higher attrition levels at

HCL," said Pankaj Kapoor, an analyst who tracks HCL at RBS equities (India)

ltd, a subsidiary of the Royal Bank of Scotland NV.

Page 25: Project Employee Engagement

A SIGNIFICANT STEP

EMPLOYEE ENGAGEMENT

PROGRAMMES Given the importance of employee engagement in the company to

overcome the challenges faced by the organizations many IT industries

has undertaken programs to facilitate their employees and rewarding

results has been witnessed in lieu of these efforts.

TCS

Employee inputs are solicited through the annual survey called

PULSE, conducted through the Company’s digital portal, Ultimatix.

Opinion polls, Proactive Employee Engagement Programme (PEEP),

Page 26: Project Employee Engagement

open-house sessions, Process Improvement Proposals (PIPs),

grievance mechanisms, and exit interviews are some other mechanisms

to solicit feedback from employees. Cross- Functional Teams (CFTs) of

local Admin, HR and employees are deployed for seeking the feedback.

To ensure appropriate client site work environment, our work contract

provides a baseline, and HR regularly liaisons with client support groups.

Some channels of Employee Engagement in TCS are:

a) Speak Up: Speak Up is a platform for employees to discuss pertinent

matters with the Company’s seniors and to bring themselves closer to

the Company and its management; thus developing the channels of

communication between employees and the Company’s top executives.

b) Grievance Redressal System: Employee grievances are logged through

a centralized grievance redressal system. Branch Grievance

Coordinators and the Corporate Grievance Process Lead perform

weekly and monthly reviews to ensure quality grievance resolution by

the Human Resources Team within the specified timeframe. Ethics

Counselors at regional and corporate levels also play a key role in

handling the sensitive grievances.

Page 27: Project Employee Engagement

c) PIPs: Employees can log PIPs through a link in Ultimatix. To

encourage employee participation in the Endeavour, the ‘Best PIP’

award is given annually.

d) PEEP – Mentoring: PEEP is a mentoring initiative in which employees

connect one-on-one with TCS’s senior management.

e) Propel: Propel provides a forum to discuss issues and ideas, to

promote the ideas and to resolve issues at inception level itself. Propel

covers all employees across TCS. Camps and confluences are

conducted for problem solving, discovery of new ideas, dialogue,

reflection and fun. Through these sessions, the employees are provided

a platform for learning, interacting and problem solving.

f) PULSE: PULSE is the company's annual Associate Satisfaction

Survey, undertaken every year to measure and understand the TCS

Associate's attitude, opinions, motivation, aspirations and satisfaction.

Through PULSE, TCS attempts to find out opportunities for

improvement, invite suggestions, ascertain shortcomings, design

appropriate plans, which finally conclude in action. The steady rise in the

Associate Satisfaction Index (through PULSE) is an indication of TCS

culture and care for its associates.

Page 28: Project Employee Engagement

g) Stress Management: The IT industry is known for its high-pressure

work atmosphere and long working hours, which create high levels of

stress. TCS encourages its employees to de-stress by participating in

Fun@Work which is a term used across TCS to refer to any activity or

programme that is conducted during work. Fun@Work Committees are

formed across accounts which organize picnics, parties and get-

togethers with fun and games. Annual picnics take place in each region

that gives TCSers spread across a region to come together and

celebrate with their families and colleagues.

Page 29: Project Employee Engagement

HCL

Most organizations have a range of programmes to improve the

engagement level of their employees. Vivek Punekar, Associate Vice-

president, HRD, HCL Info systems, lists the initiatives made by the

organization, which start right at the selection stage:

Choosing the right fit and giving a realistic job preview

Strong induction and orientation programme

Rigorous training and development, from technical to soft skills to

leadership development programmes. Apart from this, there are

other forums like enable@HCL which has regular technical/soft-

skill updates. HCL also has a certification programme for freshers

which empowers young engineers

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To keep up the morale of people and drive them towards excellent

performance, HCL has various incentives such as recognition

letters, profit sharing schemes, long performance awards, ESOPS,

building assets like own home

Regular feedback to all people

Communication forums like the in-house magazine Intouch,

innovate@HCL (an e-forum to develop entrepreneurship), and

regular surveys and conferences

To maintain the quality of work-life and a balance between

personal/professional lives, there are recreational activities like

festivities@HCL, get-togethers@HCL, sports@HCL, etc

An open and transparent culture to empower its people and

develop entrepreneurs.

“The result of these practices is evident through the regular feedback

from our employees collected through conferences and surveys; apart

from the employee engagement survey conducted every second year.

The proof is the latest increase in employee engagement from 54

percent to 64 percent,” informs Punekar.

Page 31: Project Employee Engagement

Conclusion

KEY FINDINGS

“The Service Profit Chain” (1997) produced the first sets of hard

data quantifying the links between employee satisfaction with

productivity the study concluded that there are direct and

quantifiable links between employee variables (such as satisfaction,

enthusiasm, loyalty, commitment, capability, and internal service

quality), and financial results.

Gallup reports that highly satisfied groups of employees often

exhibit above-average levels of the following characteristics:7

• Customer loyalty (56 percent)

• Productivity (50 percent)

• Employee retention (50 percent)

• Safety records (50 percent)

• Profitability (33 percent)

The study measured participants in the five categories,

reviewed turnover rates within the participant population, and

compared this data with the organizations’ financial

performance for the following year. Findings support the idea

that employee satisfaction, behavior, and turnover predict the

following year’s profitability.

Past research has shown that companies who are better able

to engage their people also deliver better

Price Waterhouse Coopers reported in April of 2002 that 47

percent of surveyed executives from multinational companies

cite employee satisfaction and decreased turnover as major

contributors to long-term

.

Page 32: Project Employee Engagement

In rapidly changing economic and technological conditions, IT

professionals are critical to every business function it is necessary that

the reward of successfully negotiating the turbulent waters faced by the

organization is retaining a motivated, high caliber IT team with the

institutional knowledge and loyalty is what a top-notch businesses

require.

Page 33: Project Employee Engagement

Bibliography

http://www.nasscom.in/Nasscom/templates/NormalPage.aspx?i

d=55394 – Growth in IT industry

http://www.blessingwhite.com/EEE_report.asp - Employee

engagement 2011 report.

http://www.hewittassociates.com/Intl/NA/en-

US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=8775

– Engagement survey by Hewitt

http://www.siescoms.edu/images/pdf/reserch/working_papers/e

mployee_engagement.pdf - Survey by Gallup

http://www.businessweek.com/managing/content/aug2010/ca20

100813_586946.htm - Engagement levels after recession,

Bloomberg analysis

http://www.davidzinger.com/employee-engagement-50-

companies-to-admire-and-imitate-6603/ - Employee

engagement in 50 companies

http://www.hcltech.com/employee-first/ - Employee engagement

at HCL

http://www.infosys.com/iengage/platforms/Pages/employee-

engagement-platform.aspx - Engagement at Infosys

www.tcs.COM – Engagement at TCS

http://labour.nic.in/annrep/files2k1/lab18.pdf - Indian Labor

statistics.

http://retention.naukrihub.com/attrition-rates.html Attrition in IT

industry

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