Monday 1 December 2008

Employees First. Always.

Well-meaning organisations have always strived to ensure that employees are broadly satisfied with their working conditions; somewhat reminiscent of a benevolent feudal set up, where employers are part of an extended family. However, leading organisations today realise that employees, like customers, have an array of options, to stay, commit, engage or move. To keep employees loyal and at their productive best, it is no longer enough to provide them with the regular set of compensation-driven packages. It is time to start afresh and put together a benefits-driven package, with HR managers treating employees the way businesses treat customers.

Once we are able to change our mindset from that of a benefactor to a service provider, there is much that we can learn and borrow from recent developments in marketing to create a ‘wow’ experience at the workplace. From a marketing perspective, branding involves the creation of values and perceptions that help the target audience to positively relate their knowledge with respect to a particular product, service or organisation. Branding, however, is not only an opportunity to shape customers’ perceptions, it is an opportunity to shape employee perceptions as well. A brand today represents the relationship an organisation has with its employees just as much as it represents the relationship that it has with its customers. The difference though is that an employee is engaged and involved with the organisation’s brand for a much longer time and in more ways than a customer is. The now oft quoted term “Employer Branding” is in most ways an extension of traditional branding, but we do need to realise that “employer branding” encompasses a much larger environment and is a rather delicate proposition, which by its very nature requires the brand building process to be more transparent and robust.

The need of the hour is to engage leaders from across functions to commit resources to this process. Successful employment branding develops a theme and establishes an image of the employment experience at an organisation (most often aligning with the company’s corporate brand), and attracts and retains the right employees to the organisation. It is not always necessary for the corporate and employment brands to be aligned, but it makes sense to do so for various reasons. Research shows that the more an organisation’s brand persona is internalised by the employees, the better employees communicate this to the external stakeholders; and in these times of turbulence you will always find it easier to garner resources if you show a synergistic relation with the bottomline. A number of organisations with strong employer brands like Google, Honeywell and Fedex have managed to keep attrition low while making significant improvements in employee productivity.

As we keep hearing whispers of “right-sizing” in the corporate corridors, it is even more important to build the “employer brand”. Employer branding is here to stay, and those of us who are not prepared will lose the very talent we want to retain. This is a market focused on keeping the best, and we need to keep improving in order to successfully retain and expand our market share.

Saturday 1 November 2008

Feeling Bullish on Governance

You may be wondering what corporate governance and executive compensation is doing as the cover story in a Human Resources magazine, and rightly so. An audacious statement it may be, but I would gladly say that if we want to set high ethical and governance standards, HR is the function rightly poised to deliver results. After all, as every CXO loves to say, “it is all about people”.

Today when we look around, we see mammoth organisations being reduced to debris. As we probe further we realise that most failures can largely be attributed to lax governance and a culture of short-term profiteering. It then becomes obvious that what is required is a cultural shift in organisational thinking and hence a cultural change in the executives who direct the organisational strategy.

HR has evolved over time to become a key strategic player in the new-age organisation, in productivity and efficiency initiatives by sourcing work and talent for better leverage, outsourcing non-core work, and moving some talent costs from fixed to variable. For HR to remain a strategic partner in these new, anxious and unstable times, it must answer the call to support and systemise governance through a cultural shift that ensures growth without crossing the fine line between performance and greed.

A study by J. Richard Finlay, Chairman of The Centre for Corporate and Public Governance (Canada), shows that many boards devote more time and energy to executive compensation than to assure that their company adheres to its own stated standards of financial integrity and corporate responsibility.

In 2001, when Oracle made a record payout of $706 million to Larry Ellison (he exercised his stock options), the full board met only five times and acted formally or by written consent only thrice, in contrast to the compensation committee which acted 24 times in written consent or formal session.

The challenge for HR, and hence our focus till date has been to instill an entrepreneurial and business reward driven culture in our executives, in the hope of transforming corporate behemoths into nimble competitors. The challenge in the coming years will be to create corporate cultures that encourage and reward integrity as much as robust bottom lines, innovation and entrepreneurship. To do that, executives need to start at the top, becoming not only exemplary managers but also the moral compass for the company. CEOs must set the tone by publicly embracing the organisation’s values. Boards and CEOs need to be forthright in taking responsibility for shortcomings, be it an earnings shortfall, a product failure, or a flawed strategy; and show zero tolerance for those who fail to do the same by integrating these factors to pay and performance indices.

Overcoming the crisis in the corporate sector will take more than a single initiative or few. The breakdown has been so systemic and far-reaching that it will require major reforms in a number of critical areas. The HR community can play a vital role, as culture and hence people, starting at the top to the frontline, will need to transform in order to embrace a more inclusive business philosophy.

Wednesday 1 October 2008

The Journey Begins...

In view of the growing flood of the printed word, one feels compelled to justify a new magazine as self-consciously as one defends the publication of “another self help book.” The justification for the present journal is nothing less than a passionate effort to make sense of the dynamic world of human resource development as India strides towards becoming an important player in the knowledge economy. Before this point we have been taking baby steps, experimenting with form, style and content in our earlier avatar of a journal, but now we are making our first full stride into the world of elite focused magazines, not in small measure inspired by you, our readers’ feedback. We intend to take in the landscape, recording and bringing attention to the local and global employee engagement and human resource development issues as they evolve. The journey has begun.

The skill sets which modern HR professionals require to stay on top of change within their function are probably evolving more rapidly than those of other business professionals. Many HR professionals are entering uncharted territory as the function continues to transform, and this can be both daunting in the challenges it presents and satisfying when they get it right and enjoy the hard-earned business respect that comes with this.

Fittingly our launch issue addresses the much talked about but less understood issue of Emotional Intelligence and its significance in the new economy. As you would expect from us, we have explored, analysed and tried to make sense of EI from perspectives ranging from business and academia to sports, with views from top industrialists to the fastest bowler on earth! New perspectives we have promised you.

What we hope to offer you is unrivalled coverage of the Human Resource scenario in India (unrivalled in the sense of being the best but also in the sense that no one else is covering it), and to import complementary articles from the world outside. It is a lot of effort and late nights for the team at Human Factor and Planman Media, but we have unbridled joy in bringing the magazine to life and, it is because we speak directly with those of you, who toil at the leading edge of industry and academia, breaking new ground.

The Human Factor seeks to capture the history of policy evaluation and present day research in a contemporary format which is both academically rigorous and practically relevant. It pursues a tracing of the effects of education, manpower, socio-economic and political events, and welfare policies in the classroom, in the labour market, in the community, and in the lives of human beings. And by following this path, it will bring together investigators from a variety of disciplines, serving as a meeting ground for their divergent methodological approaches to a common set of problems.

We welcome your thoughts on the magazine and we can be contacted at thehumanfactor@planmanconsulting.com, and bearing in mind that this is a launch issue, you might want to join us in raising a toast in celebration at the coming of age of The Human Factor.

Saturday 1 March 2008

Is it time to call in the Experts?

The HR function in India today has transformed into a function that finds business solutions, and is becoming known for saying “this is how we can accomplish this” as compared to “you can’t do that”. The function was often perceived as a bureaucratic, compliance-driven function that is reactive versus proactive and that changes at the speed of a rock! In most organisations, that perception is well-earned, since a good number of HR processes are developed in response to a significant event and are intended to limit certain behaviours instead of enabling others. Some leading organisations are breaking with tradition - at least when it comes to talent management - and establishing new structures that factor in the realities of a dynamic Indian business environment. A fair amount of credit for this transformation goes to the major HR Consulting firms which have in the last few years established themselves in India. They brought with them Best Practices and systems, that were seriously lacking in the indigenous firms. Most C-level executives today realise the need for the HR function to remain central to the business strategy. Mid to large size firms have realised that they may not have in-house resources to transform their present HR departments to the company’s strategic advantage. These organisations are outsourcing a significant chunk of their HR processes, both administrative and strategic, to specialised HR consulting firms. Many organisations are extending the scope of HR activities to include formalised processes focusing on proactive management of the employment brand and retention of the star performers. These organisations, with expert advice from their consultants, are tearing down massive walls that years of political infighting had created between functions, in order to develop entirely new HR structures where all deliverables are integrated to “strategically” manage the portfolio of talent. No longer does the training function devise training programmes for skill sets that can more readily be acquired through recruitment. No longer do key employees leave an organisation because a bad manager kept them from advancing. No longer are offers to top candidates rejected due to inadequate market knowledge of C&B. The benefits of expert advice from an HR Consulting firm can repay the cost of consulting many times over. We have indeed achieved a lot, but there is still a long way to go before these Best Practices have a direct and positive impact on the Indian economy.

The irony specific to India is that the large companies, which already have established HR processes, consume a significant chunk of the consulting business, while the smaller firms or start-ups, which desperately need to transform their people processes, are either not aware of or do not have the means to use consultants. The 3 million SMEs in India constitute 50% of our industrial output and 42% of exports, while providing employment to 50% of the manufacturing sector workforce. Common sense says that a slight improvement in their efficiency will contribute significantly to our growth rate. Interestingly enough, a Stanford–World Bank research team is funding a study to analyse the operations of small manufacturers in India and, at the same time, offering pro-bono consulting to a select group of small companies to help enhance their HR processes. Will our own trade bodies wake-up and put resources into these efforts? It is time to step up to the plate. It is time to embrace new, proactive endeavours. Let us stop paying lip-service to strategic HR and start implementing.