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.