REWARDS & RECOGNITION TIMES

As the job markets improve, organisations in general and human resource personnel in particular need to shift gears to innovate and improve on their total employee benefits programme to attract and retain talent. What makes it more important to create a better rewards and recognition programme is the fact that employee loyalty has eroded as an effect of the global financial crisis that forced employers to cut jobs and freeze pays. A recent Mercer survey suggests that employee engagement has reduced significantly over the last couple of years from 24 per cent in 2010 to 13 per cent in 2012. Increasing the value of people, and truly understanding why people show up to work, and why they stay for longer periods in certain environments and shorter in others is important. For every person who says that money is the biggest motivator, we today will have another saying, that other factors like recognition, workplace environment and work-life balance are bigger motivators. The other variable today in play for creating employee benefit packages is the dynamic and intrinsic nature of the new motivating factors. With organisations creating challenging and engaging assignments, allowing employees the chance to interact with charismatic leaders and path-breaking technologies, allowing flexibility in the workplace and the time to pursue their own interests, the options that employees today have are innumerable. The fact today though is that people expect both the tangible and the intangible component in equal measures. With globalisation and a diverse set of employees being a reality across most organisations, it is impossible to create best practices that can address all organisations across cultures and functions. The difficult part in creating comprehensive employee benefit plans is in understanding what motivates employees and the fact that each individual has unique motivating factors makes the process more complex. The challenge is in creating a broad framework and then adapting it to suit unique situations. Organisations are aware of these facts, and in India and across the globe, we have seen a conscious effort to create better and bespoke rewards and recognition packages that focus on capturing and addressing employee needs.

In this issue, we carry a special study by Great Place to Work® Institute and Edenred on India’s best companies for Rewards and Recognition in 2013. This study is an attempt to analyse what the best organisations in India do to create happy and productive employees through unique rewards and recognition programmes. The issue carries insights from the winning organisations on how they have been creating high performance organisations through their people practices. What is also interesting is that the best companies for rewards and recognition come from across industries. The study recognises the best while at the same time encourages other organisations to create practices that suit their own unique situations the best. We are happy and proud to partner with Great Place to Work® Institute in this endeavour.

As always, l look forward to your feedback and comments. Happy Reading!

EMPLOYEE EXPECTATIONS AND LEADERSHIP

Mainstream Human Resource literature over the years has emphasised to the point of obsessiveness the role of leaders and leadership in an organisation. The journal ‘Emerging Leadership Journeys’ shows that leaders and followers are both essential to an organisation. Unfortunately, most scholars have focused primarily on the leader and the leader’s role in motivating followers, and neglected the significance of followers. The authors who have focused on followers suggest that they are active participants in the leadership relationship and motivate themselves. The transformational leadership theory focuses on followers as recipients of leader behaviour and influence.

There has also been some research on the leadership styles of executives and leaders in different countries. Surveys have showed that leaders from America have very different priorities than those from India or from China. The interactions between leaders and followers also seem to considerably different from country to country. Most of this research is though from the leadership perspective.

Followers who perceive the leader as responsible for making decisions are less likely to take an active role in the decision-making process, thereby giving up autonomy. They may expect the leader to motivate them rather than taking the responsibility to motivate themselves. On the other hand, followers who take the initiative to motivate themselves to achieve goals view the leader more as a partner and therefore desire to collaborate with the leader in a relationship, thereby expressing autonomy. Two issues stand out. One issue points to the followers’ perception of expected leadership behaviour, and the other stems from the perception of the followers of themselves. Both perceptions can increase or decrease the effect that leader style has on the follower’s autonomy and motivation. If the follower has as much control over self perception, motivation, and behaviour, as these authors claim, then there is no reason why followers cannot determine the quality of their own followership and the leadership process.

In India where businesses operate in a multi-faceted environment, which is quick changing and diverse while being significantly influenced by culture and the socio-economic framework of different regions, there was a need to find if employees from differing regions, job functions and personality type have different expectations from their leaders. In this issue we publish a path breaking research by Professor Arindam Chaudhuri with respect to expectations of employees from their leaders in the Indian context, and how their expectations vary with differences of their geographical location, their job function and their personality type. In a large scale survey conducted across the length and breadth of India, employees from different geographies and job functions were asked to answer to questionnaire scored on the Likert Scale about their expectations from their leaders and bosses. The findings are interesting and at times counter-intuitive, as they seem to suggest that expectations from leaders are influenced by all the above factors. The findings may be able to help leaders tune their interactions for achieving the most out of their employees.

Along with the cover story you will also find perspectives of leadership from a wide range of professionals and experts. I am sure you will find this issue rewarding and impactful as always. Do write to us with your valuable feedback. Happy Reading.

ETHICS, HR AND THE ORGANISATION

In a world where corporate malpractices no longer make front page news, does it pay to be ethical? If we look at the number of Fortune 500 companies that have been charged with misconduct and unethical practices, the perception may be that it does not. The truth though is that not all organisations that are successful are sustainable. Research does suggest that organisations with a culture of fair and transparent practices and a holistic objective that is not limited to the bottom line are more likely to be successful and sustainable in the long run. Companies with a long-term vision understand that aligning business objectives to ethical values is an investment that will bear fruits. From the opposite end of the spectrum, the one lesson that has to be learnt from the financial meltdown of 2008, is that short-term profit goals have the capacity to bring down behemoths.

Today ethics is not an option, but a necessity, and a priority for organisations. At a time when information flows at the speed of light, and social media provides ordinary citizens the ability to voice their views, shape world opinion, and bring down governments, transparency fairness and ethical behaviour are necessary factors for sustainable growth in business. Ethics in organisations works at two levels, individual morals and organisational culture. In both these, the human resource function has a large role to play. When an employee engages with an organisation the first touch-point typically is the search and selection team. A clear and objective recruitment policy and transparent communication channels create the first level of trust between the employer and the employee. Successful organisations are investing in hiring policies and processes that are unambiguous and directed towards finding employees who not only have the potential to perform but also have the right fit with the organisations culture. During the life cycle of an employee, at an individual level, what directly affects the employee, whether it be personal development or performance evaluation, or for that matter separation are human resource policies. An organisation that is able to create a fair, just and humane HR system helps keep aloft individual morals and significantly removes the chances of individual impropriety. At the organisational level, while leadership has the onus of weaving a culture of ethics it is the responsibility of HR to spread the culture across every level and create a sense of collective responsibility towards all stakeholders. A community approach towards ethics also creates communal goodwill which moves beyond business objectives to serve the society. At a time when corruption is rampant and malpractice the order of the day, the society at large will willingly pay a premium to do business with an organisation that serves a greater goal than its own bottom line.

In this issue we have looked at the various facets of ethics in an organisation with special emphasis on recruitment and selection process and how HR is playing an important part in tackling it tactfully. In a business environment where the quality of our talent makes the difference between success and failure, creating a bond of trust that is based on an ethical culture will go a long way in helping both the individual and the organisation succeed. It is our opportunity to make an impact that goes beyond business-as-usual.

THE SKILLS GAP CHALLENGE

A lot has been written about the skill gap between what the industry wants and what the education system produces in India. Our government has been proactive in terms of planning ways and means to bridge this gap. The country’s present Eleventh Five Year Plan’s (2007-2012) skills development programme plans to increase the proportion of formally and informally skilled workers in its total workforce from a mere 2 per cent now to 50 per cent by 2022. This would mean leveraging our demographic dividend of a young population and creating a 500-million strong resource pool. The new Twelfth Plan estimates the present percentage of formally trained workforce, through vocational education, to be at 12 per cent and plans to increase it to 25 per cent by 2017, adding a humungous 70 million to the formally trained workforce in the next 5 years.

The push to improve quality in ITIs in particular and vocational training in general, moving from a supply-driven to a demand-driven model, has already yielded great dividends, with ITIs in certain belts claiming 100 per cent placement figures. In most other places, though the informal segment of the industry still fills in its workforce needs with fresh hands, these employees with no formal training are then trained on the job. What is of even more concern is the fact that 90 per cent of the jobs are being created in this very informal sector, which is reluctant or underprepared to hire a formally trained workforce. At the other end of the spectrum, the organised sector is still unhappy with the quality of workforce being produced through the vocational system. Employers feel the lack of basic education and the lack of the ability to learn new skills are serious impediments to hiring in these dynamic times. The capacity to produce formally trained employees has increased significantly, but as against the requirement of 80,000 trainers, the capacity to produce trainers remains at 2000; this naturally creates a great strain on the quality of the output of the institutions. It is unviable for the government to create and fund a system that can produce these numbers at the required quality level, and the government has asked the private sector to come forward. A good number of PPP initiatives at this level have already seen the light of day, but a lot more needs to be done, both for the survival of our private sector in this globally competitive economy, and for the greater good of our youth.

We need to look at newer avenues and more efficient models of training. Should we look at shorter courses with more frequent interventions like in China? Some economies have also found success in using the informal sector to train the informal sector. With our informal training sector being as large as it is, does a new avenue lie there? This issue of The Human Factor has gathered the skilled manpower needs in a host of sectors, including agriculture, banking, manufacturing, fashion, health care and education. Skill development initiatives for jail inmates, schemes for the differently abled and special plans for the deprived sections are other interesting sections you must look out for. We hope you find this issue relevant and rewarding. As always, we look forward to your feedback. Happy reading!

DECISIONS AND THE PROCESS

A key feature that we have been running from the very inception of The Human Factor is ‘HR Decisions’. As a magazine focused on human resources, we have always felt that it was important to understand what were the decisions that human resource managers thought were important to their divisions and their organisations and for the people on whom these decisions were applied. When we were researching the importance of managerial decisions in general, and HR decisions in particular, on long-term organisational outcomes, these articles and interviews turned out to be a treasure trove of information and insights. Interestingly, a fair number of these decisions had far reaching implications on organisations, but far more in number, including some that would fall in the aforementioned category, had more to do with issues close to the heart of the individual manager or leader, which may or may not have been in direct alignment with the organisational direction. This insight pushed us to delve into the process of decision-making. Were good decisions always a matter of making the right choice in the right context? Was there a science, a process or a decision tree which could point us to the right decisions? If we look at the history of organisations or even countries, it would be difficult to answer in the positive.

Some decisions that could have seemed weird at the point it was taken, may in hindsight, look momentous. Decisions that might have seemed wise and well thought out have had a strange way of turning turtle.

Before Jack Welch became synonymous with GE, he was the ultimate outsider, heaping scorn on the bureaucracy of GE headquarters, and excluded from the short list of executives chosen to succeed Reginald Jones as CEO of GE. By GE standards he was too young, too impatient, too reckless and to top it all, he stammered. And then to the horror of the old guards Reginald Jones announced Jack as the successor. Was it a great decision? Not many thought so at that time, as Jack tore up GE’s old ways and processes in his pursuit of competitiveness and became a pariah of sorts in the US world of business. It was only with the onslaught of the foreign corporations, which decimated US corporation after corporation with their lean and mean ways, did the US organisations start appreciating the wisdom of Jack’s ways. And today, whether we talk about GE or US businesses, or businesses in general, it is hard to find a book that does not talk about the ‘Jack Welch Way’. A good decision in the long term, which did not seem so great in the short term, a decision that managed to bypass what some call “the tyranny of small decisions”.

This issue should entertain you with interesting decision stories, some that have succeeded spectacularly, some that have failed miserably, but intriguing, however you look at them. We have spoken to academicians and experts, and to the decision-makers, in an effort to find a method to the decision process. As always, I hope you enjoy reading this. I look forward to your valued comments. Happy reading!

Education and the System

Over the last few years it has been fashionable in India to say that the country is just not providing enough human capital to sustain its fairy tale growth story. In the corporate sector too, almost anyone that I get into a discussion with, with regards to human resources, talk about the dearth of employable talent. Almost anyone and their dog, expects this to the a problem that needs to be sorted out by the government, and has for reasons best known to them, left the very important task of talents development to the government of the day.. To leaders of corporations in India, I say I am absolutely hyper stimulated by the confidence that you have in government, a government which by policy has allocated low resources to talent development than any other nation of the same stature.. To those in the public sector, I bow to your acceptance of the fact, that the government in all its flawed temper possibly always knows the best.

Let us look at facts as they are, in India in terms of education , employment and economic growth, the statistics are mind numbing. It will take more than an Einstein to make sense of the madness that the numbers point to. The growth that India has seen over the last two decades, unlike most other Asian economies, has been in the white collar sector. Unlike China, Vietnam, Malaysia or Thailand, where growth has been driven by the manufacturing sector, in India, growth has been driven by the Information Technology industries, or to be more precise by firms in the business process outsourcing space, a space that has by definition been driven by white-collar employees. In the inside pages you will find insights and explanations into the many reasons that the Indian economy shows up. It will however be difficult to find reason or even a rhyme to the apathy that the Indian Government in singular and Indians as a whole have treated the education sector with. We have hardly invested in developing assets that will develop our future assets and yet we expect employable and productive human capital to appear at our respective doorsteps like ‘manna from heaven‘.

It is only recently that the Ministry of Human Resources has deemed it important enough to be aired in national television that the country faces an alarming dearth of qualified teachers and mentors. We also keep hearing about stories about people who are well educated and are yet unemployed. It is a strange puzzle in a growth economy, to have a dearth of talent and yet have educated unemployed in numbers that boggles the mind. In this edition of The Human Factor we try to analyze and against insurmountable odds try to find the reasons to the anomaly that the Indian learning and teaching system is.

In this issue we have strived hard to get you perspectives from across the globe. Teachers who have taught in India and now are teaching in a system that is new. Teachers who keep trying to better the system from inside. And teachers who, while having an Indian perspective, have spent most of their educational career’s abroad. This was an issue close to heart, I have two school going children, and as always I look forward toward your comments and analyses. Happy Reading.

Step Up to the Future

Technological innovation, globalisation, geographical shifts in economic power and the changing demographics of the working population, has significantly changed the way work is conducted in today’s world. The workplace therefore is naturally undergoing changes to adapt to the new work and workers.

At first sight, the office of the future may be structurally deceptively similar to the typical workplace today, with employees still sitting at their desks, meeting in conference rooms and taking designated lunch breaks. There sure will be some visible changes, with more open-plan configurations, and new gizmos replacing today’s laptops and display devices, but the fundamental changes to the office environment would not necessarily be visible to the casual observer. With tele-working and flexible work schedules becoming more the norm than exception in the service sector, the office could lose its significance as the primary location of service and revenue generation, and become more of a meeting and coordination centre. Fixed hours, fixed location, and fixed jobs are on their way to becoming a thing of the past for many industries, as opportunities become more fluid and less predictable. The 40-hour employer mandated workweek will become less relevant as more firms leverage new age communication technologies to outsource complex projects to subcontractors, temps, and freelancers, who will log-in from cafeteria and airport lounge or home offices across the globe to collaborate and complete their work. In the United States, freelancers and subcontractors already comprise one-third of the workforce, and their numbers keep growing in an economy that is at best unpredictable.

Location-based and formal jobs will continue to exist, of course, these will become smaller slices of the overall economy. Manufacturing, agriculture, health care as well as administrative and public services will need the presence of workers on location, but technology and automation will make human intervention minimal. Some futurists have predicted the obsolescence of the corporate headquarters or the central office, but that does not seem to be likely in the near future. The increasing necessity of collaboration with the external stakeholder and the face-to-face teamwork, which would be necessary to coordinate increasingly complex projects, would keep the physical corporate office relevant. Office plans would become modular and flexible to adapt to the changing needs of the organisation.

The other fundamental change that we see happening in the workspace is in the way we measure and reward outcomes and performance. While even today many organisations measure and reward performance based on rigid and fixed working place and timings, progressive organisations are embracing the idea of measuring and rewarding performance on the basis of output and results rather than long unproductive hours. Research has produced overwhelming evidence that employees are more productive if they have greater autonomy over where, when and how they work. The Results-Only Work Environment (ROWE) work system which measures performance on the basis of results, has taken off in the private sector, and shown significant improvement in performance and job satisfaction. With governments and public sector organisations also focussing more on results, the future of the workplace looks to be more result oriented. These changes, unlike those in the physical work environment, are deep cultural changes in the way we conduct ourselves at work and away, and could be unpalatable to some. But then, as celebrated futurist Alvin Toffler said, “Change is not merely necessary to life - it is life.”