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.”

Worried about the bottom line? Have Fun!

Are you worried about being caught surfing the net, updating your Facebook status or ‘tweeting’, while at work? Surfing the web actually increases productivity according to a new study from the University of Melbourne. Dr. Brent Coker of the University of Melbourne studied 300 workers and found that employees, who took time between tasks to shop online, play online games or watch videos on YouTube were 9 per cent more productive in a given day than their colleagues who did not. The University of Melbourne study is by no means a misnomer. A University of Florida research found that workers who have a good time while they are on the clock, accomplished more, showed a higher level of creativity and extended more help to co-workers. The idea that fun and work do not walk hand-in-hand had taken a walk a few decades ago. Work and productivity may be serious business on which experts and academics rack their brains, but that does not mean employees should not be having fun in the workplace. Research over the last few years suggests that there is a positive correlation between fun in the workplace and productivity. According to the Great Place to Work(R) Institute, a research and management-consulting company, the stock-market value for Fortune magazine’s ‘100 Best Companies to Work For’ grew four times faster than the market between 1998 and 2005. No wonder the noted inventor and self-confessed workaholic Thomas Alva Edison said, “I never did a day’s work in my life. It was all fun.”

For the HR professional, the best part of implementing ‘fun at work’ activities is that it need not burst the budget. More often than not it is possible to tie-in fun activities with existing rewards and recognition programmes. These activities also typically garner more volunteers and champions then the run-of-the-mill. In times when every little increase in budget needs several rounds of management justification, fun-at-work activities is just godsend.

With the case for making the workplace fun, having been made, I must warn my colleagues in HR about the pitfalls of going over the top with fun. Making the workplace fun is serious business, and small miscalculations may be the difference between spectacular success and abysmal failure. While implementing fun at work activities it is important for us to keep the context in view at all times. Perception of fun vary between cultures and within cultures, and what works for employees in China may just be anathema to employees in India. While customers at a restaurant or retail outlet may appreciate employees having a fun time, those at a hospital emergency out-patient department could find it to be callous and insensitive. A one-size-fits-all philosophy to implementing these activities will almost certainly spell disaster.

In this issue, we bring to you a variety of perspectives on ‘fun at work’ from both employees and employers, across industries. The team talked to retirees and job-seekers, novices and experts, the blue-collared and the blue-blooded to bring in a rounded view about this much talked about subject. It was an eye-opener for us, and while we try to make working at The Human Factor more fun, I hope and believe you will find this issue actionable and impactful. Happy reading!

Innovating R&R

Acouple of months ago, while flipping through a UK-based HR journal, two news items placed side by side caught my eye. One was that Yazaki, a leader in the electrical distribution systems, has increased pension contributions to reward loyal employees, the other that Quorum Business Park, which has 3500 workers, announced a reward scheme to encourage employees to cycle to work. Two vastly different R&R designs, but both equally innovative and objective driven.

The rewards and recognition landscape has changed considerably over the last few decades, and we have seen innovation in both monetary and non-monetary systems. Some have been able to integrate with organisations’ business practices and directions, while others have helped transform organisational culture. Not all developments had a positive impact. Some R&R systems of the erstwhile banking and financial sector in the Western world and especially in Wall Street ran amok, with performance pays indexed to notional gains, and worked as a catalyst in bringing down the financial markets. The Wall Street reward system came in for a lot of flak from both ordinary people and policy makers, and we have now seen changes to make the system more transparent and ethics driven. One major fallout of the criticism of the erstwhile reward systems has been a definite move away from indexing rewards to market performance and more towards sustained and ethical business performance. The other positive out of the criticisms is that R&R designs are perceived as more fair than ever before because of the constant scrutiny that the media has subjected executive pay and perks to.

With organisations remaining conservative in their growth outlook, budgets for rewards and recognition have remained tight. Many employers are focusing on non-financial recognitions to motivate and engage employees. The other significant move in recognition systems has been towards personalisation or localisation. Personalisation certainly adds significant value to recognition and touches the heart of the receiver, making him or her feel that much more special. Communicating clearly the objectives and criterion, as well as the reasons for choosing a particular reward and recognition system has also grown in significance. Without proper communication, non-financial benefits have a tendency towards dilution and becoming something of a fad, rather than a motivator.

In this issue, in partnership with the Great Place to Work® Institute and presented by Edenred, we bring to you a study on the ‘Best Companies in India for Rewards and Recognition’. This study will help you understand the present R&R landscape and the latest innovations that organisations are designing in this space. You will also find interviews with the best companies for rewards and recognition, interviews that outline the motivations, objectives, constrain and challenges that Human Resource divisions have to keep in mind while designing and implementing these policies. It is exciting to see both large and medium size organisations, across industries, use R&R to boost employee performance as well as build their employer brand. R&R is becoming a significant tool to leverage in the ever-growing war for talent.

We hope to be able to bring to you more contemporary, actionable and cutting-edge, research and surveys in the near future. I am certain you will enjoy reading this issue, and I look forward to your feedback as always. Happy Reading!

Shaping up for the Future

The HR landscape across the globe has been changing fast, and businesses are looking up to the human resource function to play a more integrated and substantial part in the organisation’s growth story. Business leaders over the last couple of decades have realised that in a globally connected world, where technological advancement more often than not leads to standardisation of products and service, they will have to leverage human capital to create key differentiators and stay ahead of competition. The fact that we see more HR executives in the boardroom than ever before proves the point that more and more business leaders, investors and stakeholder have become aware of the crucial role that HR plays in the organisation. A Wall Street Journal survey of 101 large corporations revealed that nearly two-thirds had either a current or retired HR executive serving on their board. The transformed HR has proven itself to be capable of managing the challenges of today, as is evident from a 2010 HRPA survey, which states that most CEOs are happy with the performance of their HR leadership. CEOs interviewed for the survey felt that the HR leadership was making exceptional contributions in strategic areas, including talent management, succession planning, engagement, recruitment and retention.

We have done commendably in rising to the challenge of today. But is HR prepared for the future? Having successfully delivered as a business partner in meeting the present challenges, the business leadership will expect HR to deliver across domain expertise in the future. Demographic, economic and societal shifts combined with technological advances will change the ways people work and are managed. HR systems and processes will have to adapt to a world with dynamic team sizes, complex multi-geographic projects, independent contractors, virtual collaborations, and a new generation of workers who need flexibility and yet want a challenging work environment. Along with systems and processes we will have to fundamentally restructure the way we think about work and workers. The world is getting smarter and markets are becoming even more competitive. Jobs that once had been imported into the country may soon be exported to countries with lower cost structures. As organisations move up the value chain they will also face the inevitable talent crunch. In the face of an unpredictable future, organisations no longer are looking at ordered and structured responses. The need is to make organisations that are large and stodgy by character into firms that are nimble and fast, or as Louis V. Gerstner puts it, ‘make elephants dance’. Gerstner did make a behemoth in trouble like IBM dance and waltz its way to success, but to do that IBM had to undergo a complete overhaul of its culture and processes. Present-day businesses and HR leaders have the benefit of analysing the practices of Gerstner and other turnaround leaders and are adequately equipped to meet, if not overcome, the challenges of the future.

As always, we have reached across a cross section of CEOs, business leaders, and HR practitioners to bring forth their perspectives on what the CEO wants from his HR leadership, and how HR is shaping up to face the future. We hope you will find the articles informative and impactful. Happy Reading!

Turning it around

India’s economy is looking decidedly less flashy, and the over-hyped middle class is turning conservative in its spending patterns to cope with the high inflation and slow economic growth. The hard fact is that we are going to be looking at a period that is going to be full of uncertainty and an economic growth in the range of six per cent. This in turn would mean many organisations would put aggressive growth programmes on hold and prepare for turnarounds once demand picks up and the economy in on the upswing again.

Interestingly, when we talk about a successful turnaround we would either talk of charismatic leaders, or easing out of dead products or straightening out cash-flow issues, almost never about Human Resources. But, if we do look deep at the history of turnarounds, we will see at the centre of most turnarounds there has been a people strategy that has played a key role in delivering the results. Yet, if we look around we will see turnaround experts of every hue, finance, marketing, product management, operations, but very few in Human Resources.

From an HR standpoint, an economic as well as organisational turnaround causes many challenges. In the case of an organisation that is attempting a turnaround from the verge of failure, HR has to work on multiple fronts to help the turnaround team. In the case of a typical failing organisation, turnover of high-performing talent is high, communication channels are broken, and key executives are not connected to operations and business needs. It is the HR’s responsibility at this stage to design a workforce requirement plan for all the turnaround stages and implement the same with the leadership team at the helm of the turnaround. There is a tendency amongst organisations to attempt across the board lay-offs at such a juncture, which has more often than not proven to be counter-productive. HR also has the difficult task of managing to retain high-performing talent and ease out below-par performers. As the turnaround starts taking effect, the requirements of management keep changing in terms of talent and training, and the human resources team needs to be prepared to provide the right support at the right time. The rejuvenation of an organisation is also not complete till such time that the members of the turnaround team is reassigned to growth-oriented roles, our community is best placed to help in this transition.

In this edition, we have brought forth the turnaround experiences of a wide gamut of people from the industry, across both public and private sector. The academia has also chipped in with their analysis of successful and unsuccessful turnarounds. We believe you will find this issue impactful and of use.

Every failing company attempts a turnaround, but the success rate remains in the range of 25 to 45 per cent. Knowledge of the turnaround process can only help in turning the ratio to the successful side. It is our hope that when the time comes our HR community will be ready with the skills and knowledge required to help make an organisation turn around. Happy Reading!

Human Capital – The Intangible Asset

HR Excellence has been a buzz word in the industry for the last two decades or so. Most organisations are in agreement that human capital is presently the most important asset. In an economy driven by this intangible asset, the very survival of an organisation depends on how efficiently workforce performance is managed. What is ironic though is the fact that most organisations falter in implementing practices and processes that lead to HR Excellence. The keyword being “intangible asset” this confusion is understandable. It is always difficult for managers to wrap their heads around an asset which is by nature unpredictable and ever changing. Policies and perks that motivate the workforce in the IT sector may not be able to move employees in the automobile sector. Employees in a start-up are fuelled by challenges that may be unpalatable to the workforce of a large organisation. Within the same organisation employees in different age groups and different functions have unique expectations and motivations.

Practitioners and academicians over the years have conclusively proved that there is immense correlation between good HR practices and organisational performances. Frameworks and strategic performance management tools like the Balanced Scorecard and its variants like Result Based Management started gaining immense popularity in the late 1990s as an effective tool to control, measure and analyse input against expected outcomes. While these frameworks have been widely accepted as valuable tools, implementations of the same have not been uniformly successful, leading to further confusion. A variety of constraints, which include the scarcity of expert resources as well as investments, has also hindered full scale implementation of these frameworks. Within the HR organisation over the years we have seen the development of specialists in Compensation and Benefits, Recruitment and Manpower Planning, Performance Management Systems, Learning and Development, Employer Branding and Strategic HR. Each of these specialities have evolved their own excellence frameworks, and we have seen organisation emphasising on one or more of these areas depending on the direction and business strategy of the company at any given point. The HR community has applauded the growth of these specialists through recognitions and awards at a variety of forums. Experts like Dave Ulrich, Marshall Goldsmith and Mark Huselid have done a fabulous job in championing the cause of best practices in Human Resources and promoting the role of Human Resources as a strategic business partner in the organisation. As it should be, the parameters of excellence in HR remain dynamic in an ever evolving and uncertain business climate, and practitioners will have to grapple with new factors and realities as they try and implement best practices that are customised to their business context and aligned to their organisation strategy.

In this edition of The Human Factor we have tried to make meaning of the term “HR Excellence”. We have spoken to experts in the industry as well as in the academic world to try and define the various facets of excellence in Human Resource Management. We hope and believe you will be able to benefit from their experiences of success and failure while you implement these practices in your workplace. Happy Reading!

The Promise of Distance Education

Just a few days ago, I was part of a panel discussion, at the Indo-US Education Conclave 2011 on distance learning’s role in expanding the horizons of education. It was evident, from the discussions, that distance learning has come a long way from the age of “correspondence programmes” which was looked upon as the poor cousin of traditional programmes. Technology clearly has been the catalyst which has transformed distance learning to become an acceptable alternative to the more traditional learning methodologies. Traditional universities are looking at distance learning to supplement regular programmes, and increase engagement with students. Online universities are creating portals that aim to become a virtual campus, and create an environment that students would expect in a physical university, complete with student lounges, fraternity or special interest clubs, counselling services, the whole 9 yards. The private sector has moved a significant amount of training and development to virtual classrooms, thus allowing for standardisation and enhanced productivity, the bulwarks of corporate training. The future of distance learning seems to be unfailingly bright.

What is missing in this fairly bright picture though, is the application of the distance learning model at the primary and secondary level education. Distance learning, in these spaces, still languishes in the dark ages of “correspondence courses”. This is not to say that there is not enough quality digital or multimedia content available in these areas. There has been significant work done for generating content for K-12 programs both in India and abroad, but it has been almost exclusively targeted towards the urban, affluent students, to work as a supplement to their regular education programmes. If we could use our existing telecom infrastructure to deliver this content at remote areas of our vast country, where students of different age groups share the same physical classroom due lack of facilities, it would have done wonders to the nation’s capability building programmes. The boogie of choppy telecom infrastructure should not stop us from designing innovative delivery mechanisms for content that could reach remote locations.

The Human Factor, this time, carries a survey on the behaviour and wants of both present and potential users of distance learning. While it is clear that DL is now perceived as a fairly acceptable mode of learning, the results of the survey also throw up important questions for stakeholders and policy makers. Other than for corporate training, as an individual choice distance learning still comes a distant second to traditional programmes. Most users think of distance learning as a mode of acquiring supplemental skills, and a significant number of students already have either an undergraduate or a post graduate degree. Very few students after their K-12 look at it as a mode of further studies. This clearly shows that we are not using a potent weapon like distance education to achieve the HRD Ministry’s stated goal of doubling our Gross Enrolment Ratio to 30. The other number that is alarming is that a very large number of users are engaged for less than five hours a week with their learning material, where in the traditional programmes the average is around 25 hours a week. This could mean that our design of content and learning environment is not yet engaging enough, or that users enrolled in programmes are not committed to their learning programs.

We sure have come a long way with distance learning, but it seems we have a longer way to go to be able to leverage its full potential. Happy Reading!

Distance Learning – The Great Equaliser

Distance learning has existed for more than a century in the developed economies, for a few decades now in the other regions of the world, and has come a long way from the days of correspondence courses. While open learning has been a preferred mode of education and training delivery for adult advanced learners in developed economies, in developing nations it has played the role of reaching populations that could not be served otherwise. In India, where the sheer geography makes it difficult for education providers to reach their target audience, the recent developments in delivery technologies, allowing access over the internet, have come as a boon. In Australia, whose geographical spread is equivalent to that of India, but is extremely sparsely populated, the School of the Air, which started about 60 years ago and uses two-way radio communications, has been the only mode of access to standardised interactive education for young learners, some of whom are as young as five-year-old.

Distribution and delivery over the internet has allowed content that is interactive and exciting to be developed and delivered according to the requirements of the target audience, whether they are young learners without access to physical primary education infrastructure, or advanced learners who need flexibility in terms of location and time.

In the new global socio-economic order, which we call the knowledge economy, distance learning has been an enabler in competence acquisition for large sections of the productive population, and has changed the economic fabric of entire countries in many ways. In the case of India, it has played a significant role in the growth of the service economy through specific training delivered over the internet. Many nations have been successful in running large-scale awareness campaigns, for example, n the area of disease control, through the use of this mode. In countries where women or minorities have traditionally had lesser access to educational resources, distance education has played the role of a great enabler. For employers, it has meant the ability to standardise and deliver high-quality training to large sections of employees.

Continuous upgrade of employee skills, which large organisations today use as a strategic tool, has become cost-effective, customisable, and interactive. The use of open learning has been an accepted and efficient method of delivering training in the corporate world or in the case of advanced learners. However, in the case of primary or tertiary education, open or distance learning has not been accepted as a method with the same standard as that of traditional school-based learning, for a variety of reasons. There is probably a long way to go in terms of developing quality content, as well as in the areas of customising evaluation and assessment methodologies specific to open learning students.

As a country, it will only be to our benefit to fund the development of these areas of learning methodologies, as it can help us take a quantum leap in terms of India’s gross human resource capability growth. In the corporate world, we keep talking about the lack of talent availability, and developing better open learning methodologies may be one of the answers. In this issue, we have tried to look at various developments in open learning, and as always I hope you will find the issue interesting and useful. Happy reading!

Ethnicity and Employee Expectations

The volume of literature that is generated every year on leadership is humungous, and yet leadership remains a concept that everyone understands somewhat, but no one understands completely. The present day business leadership research can be traced back to the 1940s, and yet over the last 70 years or so, a miniscule amount of time by any research topic area, several theories and hypothesis have been propounded, postulated, criticised and put aside. The challenges of leadership have only grown with the changing and fluid nature that business has assumed today, and it is only natural that research in the area of leadership has attracted the best brains of our times. In the new global order of business, boundaries of nation are fading out fast, and the new challenge that leaders need to grapple with today is that of managing and leveraging diversity in the workplace. Changing demographics caused by globalisation, technology, mobility, and changing societal norms are creating new demands on leaders. These changes cut across ethnic, cultural, and religious divides and create a workplace that is radically different from the work environment of the yesteryear. The new-age leader needs to understand the unique needs and aspirations of this multi-ethnic workforce which differ in terms of values, cultures, expectations and perspectives, and lead them to gain an advantage in the competitive business environment.

While there is significant management literature available on how ethnicity and environment play a large role in developing a leader’s worldview, there is hardly any research available which throws light on how ethnicity influences an employee’s expectation from their leaders in the Indian context. With diversity of workforce being a constant, research that can help leaders understand the effect of ethnicity on employee expectation, will certainly help leaders with their decision making process, and is without doubt a crying need.

In this issue, Professor Arindam Chaudhuri focuses squarely on the issue of employee expectations from their leaders across ethnicity and function. A large scale survey that he conducted, over two phases, across regions in India, throws up a few surprises in terms of expectations that employees have, but also validates certain perceptions that are held in popular wisdom. While guidance and support from leaders and bosses seem to be the overwhelmingly frequent expectation that employees have across India, employees whose ethnicity categorise as being from the south of India give it much more importance than do employees from the west of India. While the general perception may be that employees want empowerment, the survey shows that not too many employees expect empowerment from their leaders. Another interesting trend seems to be that employee expectations of those from the south are somewhat similar to those from the east, while employees from the north and west have similar expectations. The second phase of survey has given interesting information and insights, and we look forward to the analysis of a much broader third phase survey.

We are certain that the meaning that will be distilled from this information will help leaders to bring out the best from their people.

HR, Soft Issues and M&As

Wall Street, Dalal Street, Canary Wharf, and for that matter the world of corporate finance thrive on mergers and acquisitions. Pick up any of the major financial dailies and the odds are you will have news of an impending M&A activity. The year 2010 saw more than 50,000 M&As announced with a total volume of more than USD 3 trillion.

India itself saw more than 50 M&As announced totalling to a volume of about USD 65 billion. Recent years have seen a significant rise in cross-border M&A activity, and Indian companies have played a crucial role both as acquirers and targets. Inorganic growth strategies like mergers and acquisitions have been championed by both Corporate Managers and Investment Bankers as important engines that help companies to grow fast, enter new markets, expand customer base, and acquire technology and expertise. Traditional wisdom would suggest that M&As should be able to unlock shareholder value through economies of scale and consolidation of assets and human capital. Research, however, shows that approximately 70 per cent of mergers and acquisitions fail to achieve expected results and about 50 per cent actually destroy value. While there are hundreds of reasons for the high failure rates of M&A, ranging from CEO ego satisfaction to incoherent due diligence methodology, a London Business School research points out that most of the key reasons can be termed “soft issues” which is management parlance for Human Resource issues like cultural differences, mismatch of leadership vision, differences in remuneration structuring and HR policies. An acclaimed McKinsey study on mergers stated that the overwhelming reason was “something loosely called culture”. Organisational culture determines and legitimises what sort of behaviour is rewarded in an organisation, and since no two organisational cultures are same, a merger announcement inevitably confuses employees as to how the new entity expects them to behave. Clearly the need of the day then would be clear and timely communication, and defining the cultural identity of the organisation. When it comes to culture, employee communication and other so-called ‘soft issues’, the Human Resource function has a role to play in making an M&A activity successful. Most experts believe that getting HR involved at the very beginning of an M&A decision would help employees deal with the culture shock post merger or acquisition. This edition of The Human Factor seeks to unveil the HR-related reasons for M&A failures, and find ways and means which could help HR managers to successfully nurture a merger or an acquisition.

With this issue, we also proudly introduce Theory i Management, a quarterly supplement to The Human Factor. Theory i Management will carry case studies and case study excerpts focused on the Indian business landscape. Going beyond just Human Resources we intend to carry case studies that cover a cross-section of industries and management functions in this supplement. It has been a long-standing complaint from students, academia and industry professionals that India lacks a good case study repository. With Theory i Management we take our first step towards fulfilling that gap, and we look forward to your support and feedback in making the supplement a success.

Pros and Cons of C&B

From the hourly rates and daily wage structures of the 1800s to today’s total rewards, it has been a long journey for the discipline of Compensation and Benefits. The changes in the methods and practices of payment have been typically triggered by imbalances arising out of an economic crisis or by shifts in the demographics of the employee pool. Recessions and depressions, as well as epidemics and natural calamities, changed the objectives of the compensation philosophy, and kick-started social security legislations in many parts of the world. The participation of women in large numbers in the workforce brought forth the need for restructuring of leave days. Advances in transportation and communication helped in the globalisation of businesses and led to transnational C&B packages.

Modern day compensation structures have been credited with the power of enhancing performance through increase in sales efficiencies and improvement in the quality of products and services. HR professionals love to tell stories about how Xerox increased sales of a particular model with a tweak in the incentive structure of the sales division, and many such stories abound. In the recent past, compensation has also been cited as a reason for failures in corporate governance and business ethics. The recent meltdown in the finance industry in the United States and in Europe has opened the eyes of the general public to the fault lines in today’s compensation practices.

This issue of The Human Factor looks at the various facets of compensation structures across industries and around the globe, both in the public and the private sectors. We have spoken to a number of experts, both in the industry and academia, to bring to you the best practices in the discipline. I believe you will find this issue to be a worthy read.

Also worthy of note was the SHRM 63rd Annual Conference & Exposition in June 2011, which took place in Las Vegas. The Human Factor was a keen participant at the world’s largest and greatest HR event, represented by Planman Media’s CEO, Deepak Kaistha. He confesses to us that it was a thrill to be one amongst the 18,000 strong contributors, over the three days of the event. Not only was this an enormous learning experience, interacting with the likes of Sir Richard Branson and Michael J. Fox, it also shed light on how HR leaders of tomorrow can tackle hurdles to emerge as HR champions.

Moreover, in this issue of the magazine we rub shoulders with Harshavardhan Neotia, Chairman of the Ambuja Realty Group. Hailing from a business family may have given him the additional jolt of confidence, but this real estate baron built everything else from scratch, as he talks to us about the foray into other sectors like hospitality, education, and healthcare. A must read.

You will be glad to know that we have been awarded “Asia’s Best HR Magazine” this year. This is a proud moment for all of us here at The Human Factor, and I would like to congratulate the entire team for their untiring efforts to keep improving the magazine. My sincere thanks to all our patrons and readers; you keep motivating us to give our best.

Inclusive Economy and the Unorganised Sector

In most forms of government, the state machinery’s stated goal is to serve its citizens. People are pivotal for the success of both corporations and nations. Nothing can be mobilised and no progress can be achieved in the absence of this essential resource. And yet when we as Human Resource professionals discuss issues of importance it is almost always with reference to the corporate sector. In the context of India, however, the corporate sector employs less than 10 per cent of the total workforce, and therefore development in employee benefits and social security in the area of corporate HR remains out of reach for the population that needs it more. The prevailing wisdom is that trying to draw up legislation to bring the large unorganised sector workforce under the regulatory framework applicable to the organised sector would create inefficiencies and market imperfections, which would, in turn, negatively affect our fledgling market-driven economy. Moreover, our cash-strapped government would have difficulties in financing the infrastructural and institutional requirements that an endeavour of this proportion would require. While the government would have to realistically play the role of a facilitator in trying to provide a safe and secure work environment to this population, it will also be to the benefit of the corporate sector to engage and uplift the employees in the informal sector. In this era of “inclusive growth”, if we fail to provide a semblance of social security and employment benefits to this large section of our fellow people, we might see our dream of double-digit growth fizzle out soon. This year we have already seen civil unrest across a large number of developing countries, both in the Middle-East and in South-East Asia, as well as in China. The root cause of these unrests remains the inability of the respective governments to give a secure and stable socio-economic environment to a large section of their population.

In this edition of The Human Factor, we have spoken to a large cross section of public policy and HR experts from academia and industry, in the United States, in Europe, in Japan, Russia, Singapore, China and India. We have tried to bring forth the experience of government and industry, in developed countries as well as developing countries, in dealing with developmental economics and human resource development. Our endeavour was to understand the impact of public policy on human resources around the world. There are stories of both success and failure, but there are learnings for both legislators and corporations, that should help us in developing a strategy to contribute to the upliftment of human resources in the unorganised sector.

The feedback that we have received from our last issue, from the entire fraternity, and especially from those involved with XLRI has been phenomenal. The legacy that XLRI has created cannot be covered in a single issue. In this issue we continue the XLRI story, featuring alumni who could not be accommodated in the last issue either due to constraints of time or those of space. We hope the community will find this issue equally engaging.

Happy Reading!

An Experience called XLRI

When a private business school with no government subsidy whatsoever is able to match the reputation of the revered IIMs with their enormous financial clout and government support, you know that there is something exceptional about the institute. XLRI has, for decades now, been recognised as the best institute for human resources in India, and has consistently been ranked amongst the best in the area of business management. The journey of XLRI from a small institute operating out of a couple of rooms in Jamshedpur to the now large campus has been steady though not entirely smooth. The institute grew in the face of adversity and fund shortages, and came out stronger and better every time.

For this issue we interacted with XLRI’s illustrious alumni, many of them at the helm of affairs in India’s largest organisations. The school has, over the years, consistently produced managerial talent that is much sought after in the country and beyond. Specifically in the areas of human resources and industrial relations, XLers have acted as change initiators, and a significant amount of the evolution of the human resource function in India, can be attributed to them. While there are quite a few excellent business schools in India, what makes XLRI stand out is its emphasis on social justice, ethics, and values. XLRI has also been at the forefront of globalising its footprint. At present, it is spreading its wings through international tie-ups and satellite programs, and is at the cusp of a great leap of introducing joint degree programmes with the Case Western University. XLRI is also unique in the way that all the stakeholders; the students, faculty, administration and alumni, are closely knit like a family. The reason possibly is the small cohort size which allows everyone to know each other, with students visiting faculty at their residence being the norm rather than an exception. This environment of collegiality and emphasis on ethics have helped XLRI to produce business managers who are socially conscious and willing to contribute to a cause that is larger than their individual needs, and that probably is XLRI’s greatest achievement.

While business schools in India keep attaining great heights, academicians of Indian origin have been creating ripples in business schools in the United States and Europe by taking up leadership positions at some of the best schools. In this issue, Professor Yash Gupta, the inaugural Dean at the Carey Business School, Johns Hopkins University, shares with us his insights into the changing face of business education and speaks about the larger responsibilities that business schools have in creating a society free of corruption and greed.

India is an economy that thrives on family-owned businesses and their contribution to the GDP. CII recently pegged this number to be at around 60 to 70 per cent. To bring to our readers a better understanding of the unique HR challenges and intricacies that a family-driven business faces, we have introduced a new section, Family, Inc. As always, we look forward to your feedback to keep improving our magazine.

Happy reading!

HR & Technology: Two to Tango

It gives me immense joy to announce the launch of The Human Factor’s digital avatar, thfdigital.com. While we already had a presence on the internet, where our readers could access our articles, stories, and archives, thfdigital.com promises to be much more than a mere repository of The Human Factor. We hope to be able to create a platform that will connect and enrich all professionals and students who are interested in the ‘human factor’ of organisations, through this digital interactive medium. As thfdigital.com takes its first baby steps, we seek your active participation, suggestions, and guidance to create a web space that we can all call our own.

This issue of The Human Factor, to mark the launch of thfdigital.com, dwells on the effects and efficiencies of technology in the Human Resource Management function. The function in organisations is undergoing rapid change in structure and objective, reacting to a changing social and organisational environment and rapidly evolving systems and processes that use technology to reduce routine work and enhance productivity. The use of technology in what we now call ‘Human Resource Management’ is not new and may be traced back to the punch card that employees would punch as soon as they arrived at their factories and workplaces to mark their attendance. With the increasing globalisation of business and a workforce that is diverse and dispersed, social and organisational changes have increased expectations from HR professionals to provide expanded services of a higher quality; faster and seamlessly linked with other corporate functions . Information technologies in general and Human Resource Information Systems (HRIS) in specific, which provide enabling technologies to assist HR professionals in the delivery of services, have also simultaneously increased the expectations that employees, managers, customers, suppliers, and regulators have for the HR function.

HRIS however has very humble historical origins. Initial efforts to manage information about personnel were mostly limited to employee names and addresses, and perhaps some employment history, often scribbled on 3x5 note cards. Interestingly enough, what triggered large scale use of technology in HRIS was not efficiency or engagement, but the volumes of regulatory data that needed to be churned out in a political landscape, where employee rights was fast becoming a lightning rod for activism. By the 1980s, the Human Resource department became one of the most important users of the exceptionally-costly computing systems of the day, often edging out other functional areas for computer access. Although HRIS systems were computerised and grew extensively in size and scope during this period, they remained (for the most part) simple record-keeping systems. It is only in the last two decades that HRIS has grown to become a business function that creates and analyses data to support and enhance business growth and productivity. Technology has dramatically affected traditional HR functions in recent years, with nearly every HR function experiencing some sort of reengineering of its processes due to developments in information technology. The modern HRIS is an integrated and complex system that not only captures data related to human resources, but also churns out analysis to help in managerial decisions for structuring both organisational and employee growth.

As always, we hope you find this issue engaging. Do write to us with your suggestions. Drop in one of these days at thfdigital.com; we look forward to your presence.