HR Articles

Table of Contents:
The taxonomy of leadershipNot keen to fill ‘em up...caused by attrition
The glue that binds by M. Chandrasekaran
Finding opportunity in adversity by Rana Kapoor
Why lay-offs don’t always make sense
RPO, the future of recruitment
What can we guarantee our employees in 2009? IPL lessons for HRProactive HR function helping Indian IT firms navigate downturnHR leaders should be up to...A Tale of Two StrategiesTalent Development for India Human capital's Herodotus: Peter Cappelli HR Consulting: People, performance and pay coun Top 10 Measures of Human Capital Management HR hots up at $4 bn industry in 4 years. US troubles may increase HR outsourcing(intervi Link HR to business outcomes(interview) Freedom at work forges employee engagement Measuring the return on human capital Human resource management — New agenda for 21st Human resource management: Cultural issues


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The taxonomy of leadership
Making sense of all that has been said about leadership.
Source: BL: Monday, Sep 21, 2009— S. Subramanium Plenty to read: Even for the well-informed reader, the huge body of literature on leadership can prove overwhelming and intimidating.
Ganesh Chella

It is said that the amount of literature about leadership far exceeds the supply of leaders themselves all around the world. However, all of this literature does not seem to satiate the desire to know more about leadership, leaders and leading. So, more gets written every single day!
Even for the well informed, this huge body of knowledge can be overwhelming and intimidating. Since each author seems to view the subject from his own vantage point and his own logic bubble, readers find it hard to compare what one author said with another. The end result is more confusion and, therefore, more books!
To try and lessen this confusion, I am making an effort to present a simple taxonomy of leadership — a framework for the categorisation, classification or arrangement of all leadership literature.
In my opinion, all (or most) leadership literature can be classified into four broad groups:
Literature that deals with the task of leaders
Literature that deals with the competencies of leaders
Literature that deals with the traits and styles of leaders as well as their situational effectiveness
Literature that deals with the assessment and development of leaders
Literature that deals with the task of leaders
A very significant amount of literature, especially in more recent years, has focused on what the leader is actually supposed to do rather than who he is as a person.
Many of the classical management thinkers such as Henry Mintzberg and Peter F. Drucker have focused a lot on the work of a manager and a leader and the differences between managing and leading.
More recently, books such as Execution: The Discipline of Getting Things Done by Larry Bossidy, Ram Charan and Charles Burck have also focused significantly on the task of leadership. Many of the works of other authors on Vision, Values, Culture, Strategy and Execution have all indirectly focused on the task of leadership.
Literature relating to the task of leadership serves the important purpose of reminding executives at every level of their important leadership responsibilities.
Literature that deals with the competencies of leaders
There is an enormous amount of literature on the behaviour that differentiates a great and effective leader from an ineffective one.
While some of this literature has focused on the action dimensions of leadership competencies, others have focused on the intrapersonal and interpersonal dimensions. In the last few years, a lot of literature including the work of people like Daniel Goleman, has focused on the emotional and even the biological dimensions of leadership competencies.
There is also a huge body of knowledge around the science of defining leadership competencies in a manner that promotes the assessment, evaluation and development of leaders around these competencies.
Even as the work on leadership competencies became extremely generic and all organisations seemed to talk of the same competencies, the recent work on Leadership Brand by Dave Ulrich and Norm Smallwood attempted to reverse this trend and urged organisations to ensure that competencies represented their unique brand identity.
Literature on the traits of leaders and their situational effectiveness
It is in this area that we find the most work about leadership and, therefore, the greatest amount of confusion.
The various theories of leadership, including the great man theories and trait theories, have all focused on the belief that leaders are great and gifted men, or ones with certain traits. While we tend to dismiss the great man theory as something of the past, we are constantly reminded of the modern day fascination with this theory in the form of books by or about today’s so-called legendary leaders.
Straight from the Gut by Jack Welch, Nuts by Kevin Freiberg on Herb Kelleher and his style of leadership, My life and work by Henry Ford, Maverick by Ricardo Semler, Who says elephants can’t dance by Louis V. Gerstner, Go Kiss the world by Subroto Bagchi and Iacocca by Iacocca, to name a few, are all books that share the stories of great men and their leadership lessons.
While the motivational theory of McGregor (Theory X & Y) and the Managerial Grid model of Blake & Mouton have both focused on the impact of certain styles on motivation and effectiveness, Hersey & Blanchard’s situational leadership theory has added to the body of knowledge about the situational implications on style and their impact on leadership effectiveness.
Literature on assessment and development of leaders
The final dimension of leadership literature represents the body of knowledge about assessing people for leadership potential and developing people to become leaders. The work done by David C. McClelland in Competency Research and Testing is often considered legendary here.
The literature on psychometric testing, assessment centres and 360-degree feedback for assessing leadership competencies has grown rapidly over the years.
Equally vast is the literature on how leaders develop and what helps develop leaders. The work by institutions such as CCL has contributed significantly to this body of knowledge.
In more recent years, the field of Executive Coaching has created its own body of knowledge about the role of coaching in developing leaders and shaping leadership styles and behaviours.
Why is this taxonomy important?
The terms leader and leadership lend themselves to multiple interpretations in multiple contexts.
In the absence of a sensible means of classifying and categorising the body of knowledge about the subject, readers run the risk of picking up and applying ideas inappropriately.
Readers are likely to either over-generalise what they have read or interpret it too narrowly and literally.
This framework will hopefully provide a context to one’s quest for insights about leadership and makes the search a lot more purposeful and focused!
(The writer is the founder and CEO of totus consulting, a strategic HR consulting firm. He is also the co-founder of the Executive & Business Coaching Foundation of India Ltd. He can be reached at ganesh@totusconsulting.com)
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Not keen to fill ‘em up
Mid-size tech firms are not taking people on board to fill the gaps caused by attrition. Less is more, in slowdown times..
“For mid-size companies that are seeing less growth, the ability to take more overheads in terms of excessive manpower is restricted.”
K.K. Mustafah
Adith Charlie
Source: BL: May 18, 2009

Fewer recruitment advertisements…fewer road shows in colleges…fewer announcements…
By now, even one’s grandmother knows that IT companies are hiring fewer numbers and are taking every measure in the book to pare employee costs. The fourth quarter results of top IT companies reiterate the fact: The country’s largest ex porter TCS saw a net addition of only 521 during the quarter gone by — the fewest it hired in the last 16 quarters! The same trend was noticed in the case of Infosys and Wipro, which added 1,772 and 845 employees, respectively. Though the hiring environment is sombre, IT bellwethers are still adding to their employee base in a small way, especially for niche skill sets.
However, the same cannot be said about mid-size IT companies: listed firms with revenues of Rs 200 crore-Rs 1,000 crore. Several mid-size IT companies have seen a 2-7 per cent reduction in their overall headcount just in the space of three months. And if industry pundits are to be believed, mid-size firms will continue to rationalise their employee base as they try to stay afloat in a difficult market condition.
Other side to attrition

Employee churn or attrition, which used to be one of the most talked about ‘issues’ for IT companies in industry forums, is suddenly turning out to be a beneficial factor for mid-size firms. And this is happening at a time when the overall attrition levels are going down as fewer jobs are being created in the IT ecosystem. “We did not backfill several employee positions which were left vacant due to attrition,”says Sanjay Kalra, President-Strategic Initiatives of Tech Mahindra, which managed to increase its utilisation by 300 basis points on a sequential basis. The Mahindra group company, which recently acquired a controlling stake in Satyam Computer Services, ended the quarter with 9,238 employees, 457 fewer than what it had on board during the December quarter.
Agrees Deepak Chumble, Chief People Officer of mid-cap IT & BPO services firm Hexaware Technologies, which now has 5.7 per cent employees fewer than December 2008. “The separations in the previous quarter are more to do with not backfilling attrition. Performance-related separations have not been a major chunk in the fourth quarter.” In order to tide over the economic uncertainty, Hexaware had announced the formation of a “virtual bench” of up to 350 employees who will get a compensation equivalent to 50 per cent of their basic salary. Of this, the company recently reinstated 40 employees.
Some IT industry officials, such as Ganesh Natarajan, Deputy Chairman and Managing Director, Zensar Technologies, do not agree with the theory of companies not backfilling for attrition. Attrition levels in the industry have come down so drastically that one does not feel the need to hire for attrition, he says. However, Zensar too ended the fourth quarter of last year with 250 less on its rolls.
“A big domestic voice BPO project came to a closure this quarter. For this project we had taken 250 people on contract, who were relieved when the project came to an end. And hence, the overall headcount of the company has come down,” he explains.
Generally, the January-March quarter is when several companies have their bi-annual performance appraisal programme. Hence, there is a very fine dividing line between ‘performance based separations’ and ‘attrition’, explain analysts.
IT advisors are of the view that mid-size firms are compelled to shed employees as their margins are shrinking at a faster clip than that of the larger established players. During the fiscal gone by, the top five software companies (excluding Satyam) reported a year-on-year growth of around 15 per cent. During the same time period, mid-size IT firms have only managed growth of around 7 per cent, according to Ameet Nivsarkar, Vice-President and part of the leadership team at industry body Nasscom.
“For mid-size companies that are seeing less growth, the ability to take more overheads in terms of excessive manpower is restricted,” reasons Nivsarkar.
The outlook for mid-size vendors — at least for the current fiscal — does not look too encouraging. They are expected to show ‘marginally negative to flat growth’ during the current year, feels Avinash Vashistha, CEO of advisory firm Tholons. He says that most software companies have 30 per cent employees that are not billable. They need not have this buffer any more because of tempered growth expectations; hence the focus will be on upping utilisation to record levels, feels Vashishtha.
From a client’s perspective, one way to get price discounts is by consolidating IT vendors. “In doing so, the vendor (who benefits from the consolidation) gets a large pie than before. Hence, the vendor becomes more open to giving price cuts to the customer,” says K. Raman, practice head (telecom, media & technology) at the Tata Strategic Management Group (TSMG).
However, several mid-size companies lose out when vendor consolidation happens to either niche players or larger IT companies. “Mid-size IT companies should either have a major differentiator (either in terms of market or vertical) or have critical scale in order to compete with the big boys in the industry. Unfortunately, several of them have neither,” says Raman.
He also feels that several mid-size IT companies are not finding buyers even though they have become interesting targets for acquisition value-wise, due to the lack of service differentiator.
Hiring Outlook

Analysts are of the view that several mid-size IT companies will continue downsizing their overall employee base — at least for the better part of fiscal 2009. In the worst-case scenario, going forward, mid-size IT companies could shave off 15-20 per cent of their overall headcount, says Vashishtha of Tholons. “If the separations are more than 20 per cent of the overall headcount, it points to serious issues with the health of the company,” he cautions.
Does this mean mid-size firms would completely stop hiring in subsequent quarters? Company executives disagree. “Certainly not,” says Natarajan of Zensar. Zensar expects to hire 300 more during the course of the current year. “Of this, 60 per cent hires will be freshers,” he says. Natarajan, who is also the ex-chairman of Nasscom, expects the industry to hire 75,000-80,000 on a net basis this year, in spite of the downturn. However, this would be less than half of the 2,00,000 net addition done by the IT industry in the fiscal before that.
Hexaware Technologies is cautious about how it puts it. In Chumble’s words, Hexaware’s headcount “will not go down drastically” in subsequent quarters. “We are optimistic about the following two quarters. This optimism stems from the fact that US-based companies are more open to talks regarding new business opportunities than they were, say, six months ago,” he says.
Kalpana Jaishankar, Head of HR at Mastek, feels it is too early to comment on the HR landscape owing to uncertainty in the business environment.
Arun Jain, Chairman and CEO, Polaris Software Lab, says his company will be hiring at least 150-200 persons every quarter depending on the business need. “We have always said that we are a just-in-time hiring company. We are not a scale player recruiting so many people. So our recruitment plan doesn’t impact the kind of forecast we want to do,” he recently told analysts.
adith@thehindu.co.in
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The glue that binds
Organisational adhesives such as value systems, mission and people policies are what hold a company together.
M. Chandrasekaran

Recently, I had gone to the post office to mail a letter; yes, there are Neanderthals like me who still write letters! I purchased a stamp and with supreme confidence wetted the glued side and pasted it on the envelope. The stamp fell off. I tried again and again with similar results. I then made my way to the glue pot provided by our Government and used the brown goo to stick the stamp on the envelope.
On my way home I wondered why we use such bad glue on stamps. I reached home to find my wife having the opposite problem. She was trying to use a new stainless steel utensil and the manufacturer’s stamp affixed to it simply would not come off. We tried several ways to do it and finally it yielded to the application of heat to the utensil. I knew then that I was wrong to assume that India does not produce very strong glue!
Organisational adhesives
Organisations are held together by many types of glue — iconic leaders, historical legacies, people policies, value systems and shared vision just to name a few. The health of the system is largely determined by the strength of the types of glue that hold together each layer and the way in which many of the different layers interact and reinforce one another.
It is blithely assumed that the more fundamental types of glue are maintenance-free and as such will continue to hold things together on their own. Many a time, the glue is long gone and only the memory of it remains, much like a container that stores asafoetida continues to carry its strong smell long after the asafoetida itself has been used up.
The problem with glue is that it is virtually invisible and since it is so, we do not notice it and tend to take it for granted. Much the same thing happens with organisational glue — it is assumed to be present and doing its job well. Since the normal human tendency is to go in for breakdown maintenance rather than preventive maintenance, we never check to see if the glue is still in working condition. Very often, we find that when faced with changing and challenging circumstances, things fall apart much like an old book which is fine as long as it is not opened; the moment it is, the pages flutter away as the glue has weakened to the point of being useless. Many a time, even a crisis is not needed for this to happen; the passage of time may cause enormous damage.

Types of organisational glue
In order that an organisation thrives in good times and is able to weather stormy waters, it becomes imperative to keep a keen eye on the types of organisational glue that are needed and in what proportion they need to be present. It is also important to make sure that we check their effectiveness from time to time.
As we embark on a journey which is likely to be far choppier than what we have witnessed so far due to the disruptive influences of the marketplace, technology, globalisation, work practices and so on, it also becomes critical to add or remove certain kinds of glue as the circumstances warrant.
There are core attributes that animate the heart and soul of the company and those which are relatively more transient in nature. In many cases, those that anchor an organisation and also form the foundation on which the future is built are also the ones that are least visible and the least amenable to rational elucidation.
These factors, like the company’s vision, value systems and so on, are in some ways immutable, but that is not to say that they cannot be under challenge as time passes by. The trick is to make sure that they are kept intact, but also to make sure they are elucidated in a manner that is contemporary and understood by all the people in the system. The core cannot be diluted, but can withstand some explanatory positioning from time to time purely for establishing its criticality and relevance at all times.
The other types of organisational glue that are more visible — like leadership and people policies — may need to change from time to time to address proximate and longer term challenges. Even here, too many abrupt changes should be avoided as that can lead to disbelief and distress in the system
The glue that binds is probably best brought out by the senior folk in the system explaining and elaborating to all their purpose and efficacy; they can be assured of longevity through the power of leadership by example on a daily basis.
The time has come for each organisation’s Chairman and/or CEO to be also its ‘Chief Glue Officer’. This way, each person in the organisation has the opportunity to savour the book rather than having to make do with a loose-leaf binder.
(The writer is a Director of Manipal Education and Medical Group P Ltd and 3i Infotech Ltd and advisor to IDFC PE.)
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Finding opportunity in adversity
What YES Bank did to weather the slowdown

Rana Kapoor
The global financial and economic outlook continues to be relatively uncertain. Despite large-scale recapitalisation, write-offs and asset substitutions, sizeable chunks of assets of systemically important banks and financial institutions remain impaired. India, however, on the back of resilient domestic structural drivers of growth and a strong regulatory framework has experienced relatively limited damage.
The recent financial results of Indian banks and corporates have belied expectations and seem to suggest that, probably, the worst two quarters are behind us. However, from a stable, sound and growing economic environment we are, today, faced with a risk averse and uncertain period of painful adjustments.
In these uncertain times, the future belongs to those who have not only been proactive in building trust-based relationships with their stakeholders and engaged in ‘institutional building’, but have also used these trying times to innovate, introduce new technology and improve operational efficiencies thereby setting the base for long-term sustainable growth. There is clearly a need for structured thinking and strategic discipline, while positioning for an eventual recovery.
At our bank, the management philosophy during this period has been to look beyond the immediate downturn and pursue ‘opportunities in adversity,’ and they are numerous. We sustained pursuit of our differentiated business strategy, continued to develop our human capital base and invested significantly in building our brand.
These will, in-turn, be the key drivers of sustained growth and help propel the bank for a take-off in the medium term (2010 and beyond). One of the grave manifestations of the recent financial crisis has been risk averseness in the system leading to a near freeze on capital flows and lending. Most firms are being forced to take tough calls on capital expansion, prudent investment and capital conservation. Without losing sight of strategic projects that enable the organisation to grow, companies will need to build their competitive edge for the next favourable period.
In addition to financial capital, companies need to focus their strategy and execution on building three other crucial pillars:
Building Relationship Capital
The single biggest focus of our short- and medium-term strategy is to build strong institutional relationship capital. Relationship management in these times not only ensures sustainability during the slowdown, but positions the bank very favourably for when the economy improves.
The entire organisation has been aligned to ‘think and act’ on relationship building with a structured customer relationship management (CRM) based approach. Our CRM is built on the philosophy of ‘one bank’ wherein each client is mapped to the relevant relationship managers and partner product managers. CRM also ensures that the entire bank has a consistent and consolidated view of priorities and product sales potential.
The CRM approach has also proved to be extremely successful in ensuring a balanced multi-product focus across all our offerings , thereby ensuring integrated solutions to clients and a profitable client base. Multi-product client relationships are also more ‘sticky’, inherently have lower risks and are less prone to client churn. This forms the bedrock of our relationship management process. Companies are looking for trusted advisors to partner them in these challenging times and our unique knowledge-based diagnostic and prescriptive banking approach has proved to be a key differentiator .
Our firm belief in relationship management was further established when, during the peak of the credit and liquidity crisis, we were able to work synergistically with our clients to reduce/rebalance our loans and advances to them; and in certain cases, where it was inevitable, pass on the burden of higher capital costs to them .
Strengthening Human Capital
Challenging times also provide opportunities for organisations to ‘stress test’ their stakeholder relationship capital — investors, customers, vendors and employees. These crucial times not only challenge leaders to maintain their leadership position, but also provide opportunities for smaller players to expand their industry footprint.
Our relationship management and customer services teams are reaching out to customers in our pursuit to be recognised as trusted partners. Over the last 9-12 months, we have invested in building scalable investor relationship management, vendor management and organisational HR management frameworks.
Strong human capital is a key differentiator and source of sustainable competitive advantage for most corporates. At the onset of this year, we asked ourselves three fundamental questions which we believe will help us to successfully overcome environmental challenges and will enable us to evolve as a strong organisation:
Are our management structures agile and organised most efficiently to face the downturn and help us meet our short-, medium- and long-term objectives?
Are the right employees assigned to various roles; are they equipped with the right skill sets to ensure highest productivity and utilisation?
Is our HR programme designed to promote meritocratic, constantly evolving, learning and motivated human capital within the bank?
Actions based on an objective review of the questions above and a non-disruptive implementation of the same has reinforced the entrepreneurial fabric on which the bank has been built.
Constant engagement with employees through human capital relationship management teams and through cross-functional special project teams, with clear and transparent communication has also been a key facilitator of this change management exercise.
Internal growth and career enhancement opportunities through job-rotation are encouraged in order to build a multi-skilled workforce with a broader business perspective.
While we have embarked on a renewed thrust on improving the skill sets and knowledge of our employees through training and coaching programmes, we are also making substantial investments in inducting fresh talent into the bank. Internal communication of business priorities and expectations is also extremely critical in these times. We encourage communication - top-down and across - to build a broad consensus and debate where required. We have further launched a series of rewards and recognition programmes to create positivity and enthusiasm among the employees while encouraging them to walk the extra mile.
Employees at various levels are also empowered suitably to take decisions while building management ownership. This links very well with our `owner-manager-partner' management practice/philosophy.
Building a Leaner organisation
Entrepreneurial organisations, such as ours, without any legacy issues have a natural competitive advantage over established peers in aspects such as the ability to change and adapt and working with uncertainty.
Cost reduction or cutting the flab is usually a top priority project during a slowdown. However, few companies manage to get the right balance. The success of this project depends on the ability to inculcate a cost management culture in the organisation's DNA. For a successful/speedy execution and crystallisation of such initiatives, it is important that they are directly sponsored by the organisation's CEO. This ensures that it gets full executive support, visibility and priority. This helps mitigate the risk of costs creeping back up over a period of time or when favourable times return.
While practising our professional entrepreneurship philosophy, we continue to encourage and reward innovation and actively seek employee participation in organisational development projects. `YES Save', a sustainable waste management/cost reduction and process improvement programme, which was sponsored from my office is one example.
The bank also pursued a very counter-intuitive position with respect to cost and productivity management. In the third quarter of FY08, at the peak of the boom period, we embarked on a bank-wide cost control and productivity enhancement project. Early detection of an imminent slowdown ensured that we pursued a waste management process much before the rest of the industry.
There have been many economic downturns in corporate history. There are a number of well documented and researched strategies which are at the disposal of companies during a recession. The aforementioned pillars are simple principles which I believe are important antidotes to a slowdown. I firmly believe that the ability to align, adapt, change and aggressively execute will be a key differentiator as we navigate challenging times.
(The writer is Managing Director and CEO of YES Bank)
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Why lay-offs don’t always make sense
Workforce strategies for slow times.
Van Felisher
During this unprecedented economic crisis, reducing costs to make companies more competitive makes perfect sense. Sadly, this focus on reducing costs comes on to the action list primarily during a crisis, as a reactive measure rather than being a continuous, proactive process. A popular, though not necessarily ideal, method to reduce costs is the ‘massive staff reduction’ route. Massive staff reductions are not a new phenomenon, but the increase in their o ccurrence begs the question: What price do companies pay for a cost-cutting measure of this nature? For example, why did Caterpillar announce that it would cut 20,000 jobs and Boeing 10,000? Why did these companies choose to de-motivate their staff, who are sure to wonder when the axe will fall on them?
The only possible answer as to why such announcements are made is that they show that the company is serious about reducing costs. It seems to work in the short term, but only because the markets don’t realise the risks associated with this type of action. Nor do the markets realise that the full financial benefits being attributed to the job cuts perhaps won’t be realised. Severance pay and outplacement costs reduce the benefit and then there are the ‘phantom issues’ and the ‘defying reality’ approach.
For example, many managers when asked to reduce jobs first cut ‘phantom jobs’; they eliminate jobs that have been approved but not filled. Cost benefit? Zero.
The ‘defying reality’ approach though is the most damaging. One very large US company did it for a number of years before it went bankrupt. Assume that to balance the budget it needed to reduce costs by $100 million and the average salary across its employee group was $100,000. If all the cost reductions were to be borne by job losses, 1,000 jobs needed to be cut.
The ‘phantom jobs’ went first, followed by others. But a majority of the jobs that were cut were of support staff. These positions paid far less than the “average” salary. So the $100 million plan fell far short of its goal by eliminating ‘phantom jobs’ and low paid jobs. But more damaging was that the loss of the support jobs adversely affected the productivity of senior and highly paid staff.
Due to such policies, I’ve seen senior managers sorting mail because the mail clerk had been sacked and nurses doing things that support staff did, because the support staff were laid-off to “save costs” . Our collective experience over 15 years is that this methodology is commonplace. The bottom line is that even if all the advertised cuts happen, there is only a small chance that costs will be reduced significantly and the risks may actually be greater than the gains. For instance, some key people with attractive skills may jump the ‘sinking ship’ resulting in lost core competencies and business. The announcement that cuts are being made may boost short-term market performance, but it also damages a company’s reputation. If you were looking for a company to supply components, would you feel comfortable going to someone who just let 10,000 people go?
There are better ways. Managing resources constantly will help avoid major re-adjustments. But when a major event such as the current economic crisis hits, how can we cope and react? The first step is to think of other ways to use your staff resources; ways that will protect and grow market share. Similarly, find better ways of doing things through ‘lean thinking’; that may be able to help your company produce more, rather than run full steam ahead into retrenchment mode. Can you use the situation to improve your revenues? Technical people going out with the sales team to get closer to customers might just help you bag an order that a competitor in retrenchment mode cannot handle? With one client, following two years of layoffs, we re-engineered their sales processes and distribution channels. The result was headcount neutral, but it achieved far greater results (revenues) without needing more people who would normally have been required as a result of the growth.
If jobs must go, do it quietly via voluntary means, transfers or retirements, but take care that you don’t lose key skills.
Finally, use this slowdown to think about your layoff-based cost cutting plan. In companies that take care of their employees, the employees play a key role in ensuring that the company remains fiscally responsible through suggestions and ongoing analysis.
Mass lay-offs should always be a last resort. You are throwing away a significant training and development investment that may be used against you if the lost employees go to the competition. And, when the economy heats up — and it’s when, not if — you’ll need to rehire to quickly ramp-up to keep and capture business. Those companies that have not cut deeply will have an easier task and be able to respond much more quickly.
(The writer is a Principal of the Renoir Consulting Group.)

RPO, the future of recruitment
‘Time ripe for India to adopt this process outsourcing model’.
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RPO is the complete ‘process’ outsourcing of recruitment. The RPO vendor is accountable for transforming the client’s processes and is responsible for all areas — tactical and strategic.
-------------------------------------------------------------------------------- Sanjay Shelvankar, Vice-President, MindTree Consulting.
Anjali Prayag
The Bangalore-based IT consulting firm MindTree Consulting made a clean sweep at the annual Recruitment and Staffing Best in Class (RASBIC) Awards ceremony, winning five of the seven awards at the event held last month. It was recognised as the Best Recruiting and Staffing Organisation of the Year.
The company attributed the achievement to its talent acquisition team that had transformed recruitment from a traditional Excel-based recruiting and staffing function to a cost-effective process with a faster turnaround and better job fits.
Sanjay Shelvankar, Vice-President, MindTree Consulting, puts the company’s recruitment effectiveness down to a well-managed recruitment process outsourcing model (RPO). “RPO is the future and the rest of the world has recognised it — the time is ripe for India to replicate this model,” he says in an interview with The New Manager.
In his opinion, when the current recessionary period passes and the IT industry gets back to binge-hiring, it will be the ability to recruit large numbers, swiftly, consistently and in an inexpensive manner that will help the sector resume its high growth rate.
Please explain how an RPO vendor is different from other recruitment partners (non-RPO vendor model)?
The difference is actually that between the sky and earth. A recruitment partner is usually one of many resume sourcers (contingency hiring organisations) and in some cases may also supply contract recruiters to the client. The recruitment partner usually works in conjunction with the client’s existing recruitment teams and other sourcing vendors. Most often, the planning, processing and almost all the strategic areas of recruitment are retained by the client-side recruiter team. In this model, accountability is not passed on fully to the recruitment partner and the commercial model followed will at best be a fixed retainer fee that may or may not have a variable bonus component.
RPO is the complete ‘process’ outsourcing of recruitment. This means that the RPO vendor holds complete accountability for transforming the client’s processes and is ultimately responsible for all areas — tactical and strategic. The commercial model is a full-risk switchover to outcomes/value-based pricing, a clear departure from the traditional no-risk retainer fee model.
How is the effectiveness of the RPO vendor measured?
When we defined RPO, we realised that it would be relevant to an organisation only if it links its payments to value created and/or outcomes achieved. The challenge was to quantify the value/outcomes in detail so both parties were satisfied that they were getting a fair deal. At MindTree, it was relatively easy to get here as we had begun measuring our recruitment effectiveness internally before we implemented the RPO model. We have identified eight critical-to-quality (CTQ) items that we will monitor in the RPO engagement, namely, the fulfilment index, source mix, no-shows, offer to joining conversion rate, turnaround time, screening to interview selects, cost per hire and effort per hire.
How does RPO help in reducing the cost per hire, effort per hire and the overall candidate-job fit? Can you talk about the MindTree experience?
Since the RPO vendor takes responsibility for the entire recruitment team and its activities, the recruitment team’s direct (salary) costs are first transferred to them. Apart from this, there are at least six different cost items such as sign-on bonus, employee referral payouts, walk-in events, travel and logistics costs, etc, that are transferred to the RPO vendor.
Besides the cost-transfers, the RPO team structure ensures optimal usage of resources and there are incentives to increase productivity and minimise effort-loss. Since the RPO is accountable for the entire process, there is an incentive to continually innovate and realise process improvements rather than being content playing the paper-pushers.
The RPO vendor handles all hiring requisitions and passes them on to a preferred sourcing vendor. This ensures that there is a deep discount on the industry average of 8.33 per cent consultant payout on each joinee, ensuring that the cost per hire is significantly lower than before.
Candidate-job fit which is the ultimate deliverable is the most difficult to achieve as requisitions from our internal customers are not as clear and unambiguous as we want them to be.
Does RPO help in bringing in a JIT (just-in-time) hiring system?
RPO definitely enables JIT hiring. Our average processing time from receiving a resume to rolling out an offer is 5.6 days. This period includes tasks such as screening, arranging the interview logistics, taking the candidate through three levels of interviews and rolling out the offer letter. So, technically, we have the candidate ready to join us in a week’s time. But the JIT does not work this way as the candidates have to serve their notice periods with their previous employers; this is usually 45-60 days.
What are the drawbacks/risks associated with the RPO model?
While there are many upsides to RPO, like everything else, it also has its share of risks. Some indicative risks are: If the RPO vendor is a wrong choice it translates into a serious single point of failure; the RPO vendor in theory should have high process awareness and maturity to enter the corporate as a change agent. As it stands, there is a lack of this key ability. Like in the IT offshoring business, many first-time outsourcing organisations think that they don’t need to stay engaged once the process is outsourced. The client must watch for complacency, especially when the RPO vendor gets into the annuity business frame-of-mind. Then, getting profiles of passive job-seekers is an issue. Besides, there’s the issue of inadequate training: Since the team is predominantly on-site, RPO vendors might not invest in their team’s training.
Please tell us how bringing in an effective RPO system helped you get the recognition at RASBIC?
Out of the seven categories that are part of the RASBIC awards, MindTree won awards in five categories. These were in the areas of innovation in recruitment and staffing, technology adoption, paradigm shift in thinking, strategy and vision. Apart from this, we also got the overall best recruitment and staffing organisation of the year award.
RPO is a like an organ transplant. If it is not planned and executed properly, it has the potential to push back talent acquisition capability in the client organisation. To ensure that the RPO succeeds, we had to implement more than a dozen processes and quickly bring them to maturity.
Today, more than 95 per cent of all talent acquisition activities at MindTree are automated — this includes getting all our stakeholders onto a common platform where they can access on-demand, real-time information. We had highlighted all these in our award entry and I guess the industry saw that we had done something out-of-the-ordinary and felt that we ought to be recognised.
Are you looking at offering RPO as a business vertical? If yes, when?
Yes. We are already in talks with a few of our existing clients and reaching out to new ones. We are into our second year of RPO implementation. Our RPO consulting offering will primarily share this expertise with interested organisations. We have also built an ecosystem of like-minded RPO vendor partners that we can bring along to implement all the processes and sub-systems.


What can we guarantee our employees in 2009?


Employee welfare strategies for tough times.



— G.R.N. Somashekar
Maintaining standards: Employers should resist the temptation to cut spending on services that go to form the daily work life experience of employees whether it is the company canteen, transport services or work hours.
Ganesh Chella
The year 2009 has started off on expected lines as far as human resources (HR) is concerned: bad quarterly results and the accompanying tough measures that are impacting the lives of employees across levels and sectors. While one would imagine that organisations would focus on engaging their employees in tough times like these, I really doubt it. I doubt it for the simple reason that the kind of engagement that was practised was really ‘sophisticated welfare spend&# 8217; and there will be no money for that and most HR folk do not know of any other way of doing it.
Therefore, what is the minimum that CEOs and HR leaders can guarantee their employees in 2009? My advice to CEOs and HR leaders is that at a time like this offering employees a few basic service guarantees is the best form of engagement.
What is a service guarantee and why is it important in 2009?


A service guarantee is a promise that a service will conform to a specified standard of satisfaction and is backed by a clear set of actions that will help fulfil the promise.
During the good times, organisations led everyone to believe that they were doing a lot more for their employees than was prescribed by law or expected of them. My fear is that in the year 2009, not only will the sophisticated welfare activities disappear, but even the basics will come under threat. It is in this context that organisations will do well to guarantee at least the basics. After all, your employees are your most important customers.
The service guarantee agenda

The following are the four basic service guarantees that I would like organisations to hold out to their employees, especially in the year 2009:
Ensuring basic standards in the employee’s daily work life: The employee’s daily work life gets him/her to directly experience many of the basic policies and facilities of the organisation including work hours, transport, canteen, toilets, drinking water, work station, furniture, security staff, HR operations staff, timely payment of wages and so on.
Traditionally, these basic moments of truth were more than adequately secured through trade unions and in good times by the organisation itself. It is my fear that in the absence of trade unions, and especially in difficult times, HR professionals and CEOs are not acting as custodians to ensure basic standards in these areas. This is true of retail, manufacturing, technology and other frontline service businesses.
Overcrowded buses, unhygienic toilets, unsafe drinking water and poorly maintained furniture have a far greater impact on the daily lives of employees than the occasional picnic and party they are invited to.
What makes this service guarantee onerous to implement is the fact that the people who administer these services may not belong to or report to HR and are primarily driven by cost and not by service. What is more disconcerting is the fact that these issues do not figure on the agenda of many HR leaders.
Let us guarantee a certain minimum quality of everyday experience in 2009 irrespective of our financial condition.
Ensuring a fair appraisal experience: The annual performance assessment is perhaps the most important moment of truth in an employee’s work life and is the one that goes wrong most of the time. While it is understandable that appraisals this year will not lead to great reward outcomes, the minimum service guarantee we must offer our employees is a fair appraisal experience.
What will make a difference in 2009 is a candid conversation about performance, strengths and potential in a manner that demonstrates fairness, transparency, respect and openness without hiding behind automated systems and complicated processes. Let us compensate for the lack of money by guaranteeing ample face time and a genuine concern for employee success and development.
Ensuring a healthy managerial relationship: While it would be great if managers can be motivating, empowering, inspiring and competent, I would consider these a tall order. The least we can guarantee our employees in 2009 is a manager who will be respectful and fair.
‘Respectful’ means that all his/her interactions with team members will demonstrate his/her concern for upholding the dignity of the employees without any bias based on gender, caste or other elements. ‘Fair’ means that all the decisions or actions of the manager are based on objective criteria and free of any prejudice.
To this end, organisations must communicate a clear code of conduct for managers and train them to live up to these minimum service guarantees. HR should also ensure that managers who violate these guarantees are counselled or, in the most serious cases, removed from their managerial responsibilities.
Standing by employees who are in need: No service guarantee is complete without letting employees know that when in distress, they will be taken care of. Employees may have personal problems or may face unforeseen emergencies. They must know that in all such situations, they can fall back on a certain minimum level of support from the organisation. In 2009, this service guarantee will mean a lot to our employees.
The year 2009 will be difficult for organisations and the good news is that the employees of today understand this and are quite willing to make a few small sacrifices even as their organisations are struggling to get back into the pink of health. However, winning their support will depend on whether organisations can first deliver on these service guarantees.
Does this sound like a good Republic Day pledge to take?
(The writer is the founder and CEO of totus consulting, a strategic HR consulting firm. He is also the co-founder of the Executive & Business Coaching Foundation India Ltd. He can be reached at ganesh@totusconsulting.com)


IPL lessons for HR

Business and sport can teach each other a thing or two.


Rajesh Padmanabhan
The first Indian Premier League (IPL) tournament held earlier this year unleashed a new wave of euphoria among viewers. While there were questions about various aspects of the tournament, there is no disputing the fact that IPL has made its mark. Looking at the tournament from a people management perspective, threw up some valuable HR lessons that can benefit the corporate world.
Change management

The T20 format is definitely here to stay. Everyone involved, right from the players to the public, has embraced this change. The risk and return theory clearly approves the financial viability of the IPL business model. The message is clear: It is no more a changing world but a ‘rapidly moving world’. As players, we need to not just accept the change, but lead the process and make things happen.
Seniority Vs performance

The system initially rewarded the seniority of players by creating icons and superstars, and that influenced the contractual amounts and the selection process. But as the game progressed, performance clearly took over. Icons and stars were hardly able to justify their price tag. True value was determined by current skills, with the public backing players who endeared themselves with their on-field performances.
Similarly, in the current workplace, loyalties are being displaced by marketable skills. Holistic approaches to looking at performance and potential, in sync with the organisational requirements for today and future requirements will govern organisational success. So seniority, in terms of usability for future business requirements, coupled with performance and potential to grow and shoulder greater responsibility will override pure seniority and longevity in the workplace.
Innovation

IPL introduced a radical form of sports entertainment in India. Jaded, tried and tested principles have made way for fresh, innovative practices. In every mini-sphere within the overall T20 format, one could see innovation paving the way for best practices. IPL proved that in sports as in business, it is the innovators who will survive fiercely fought battles. Questioning the paradigm and breaking the convention are the norms to follow.
Fun@Work

Fun is an essential ingredient of life and the IPL format had this in abundance. From the high-profile launch to peppy theme songs and adrenaline-pumping cheerleaders, the tournament felt like a colourful carnival. Entertainment displaced the classical version of the stereotypical colonially-dictated approach to the game. The corporate world needs to take a leaf out of the format and include an ideal proportion of fun in the workplace.
Team work and camaraderie

Great teams are made by the complementary skills of well-rounded individuals. This was amply demonstrated by the Rajasthan Royals — a team devoid of stars and big names, who emerged clear victors towards the end. The Rajasthan Royals, under the leadership of Shane Warne, pulled together fabulously as a unit. More so, they had players who were ready to stretch themselves and their skills when it mattered. Successful outfits are the ones where people can multi-task, creating good back-up and continuity for the organisation.
Brand building

Media, communication and lifestyle complemented the T20 format. Besides leveraging teams and sponsorships, the IPL created continuous drama that kept people hooked. The branding exercise of IPL and individual teams resulted in the tournament turning out to be a much bigger hit than expected. Similarly, the people business is also about creating a brand through awareness. New generation aspirations mixed with the value systems and cultural aspirations of a mature generation can combine to create a potent brand.
Hands–on

While strategic planning was an essential requisite, it was the hands-on approach of certain teams which proved to be a big differentiator in the tournament. At times, when the victory margins were thin, the flexibility and goal-orientation of captains and players demonstrated how a hands-on approach could lead to the perfect execution of plans.
In the modern work environment, a lot of emphasis is placed on strategic thinking. While strategic vision and having a clear dream to pursue is important, it needs to be broken up into clear action plans with milestones and results tracked at periodic intervals. The strategy may need to be revised at regular intervals to realise the final destination. Only a leader who is completely hands-on will be able to guide, steer and drive the team to success. Their feet will have to be on the ground and often, they need to demonstrate and walk the talk themselves for the team to follow. Also, by being hands-on, one can alter the course of a journey with some tactical, on-the-spot decisions which are critical ingredients of success.
Cultural integration

The beauty of the IPL was the ability of a nation to look beyond regionalism and parochialism and cheer talent. A healthy mix of global players, rubbing shoulders and breaking bread together fostered a team spirit that resulted in supreme success. The same trend can be applied to our workplaces with access to multiple places and resources being used to our advantage.
Learning and development

A host of learning and development models including identification of existing competencies, upgradation of skills, imparting and exchanging knowledge, coaching, mentoring and soft skills were amply demonstrated during the course of the tournament. Almost every player in the IPL left with value added at the end of 60 days. Similarly, organisations and individuals need to gear up and look for constant skill upgrades. Those who do not could become obsolete overnight.
Rewards and recognition

Over the course of the tournament, numerous compensation and benefits models were rewritten. Rewards and recognition were offered in various forms. The IPL’s payment for performance approach was applauded by all.
Linking this to the corporate world, we are now in an era where we need to ‘pay for performance’ and offer ‘growth for potential’. Rewards and recognition have to come in different forms — qualitative appreciation; a pat-on-the-back; proper fixed pay; variable pay graded on levels of performance and organisational roles; and benefits commensurate with the stature and positioning of the employee. Finally, stock options are offered as wealth creation models similar to the large retention type contractual amounts offered in the IPL format.
Communication

The mark of a leader is in his ability to communicate clearly with team members. The IPL captains utilised the entire repertoire of communication forms to effectively achieve their goals. There were gestures, listening, preaching, screeching, praying, shouting, crying and more. The end result — communicate, communicate and communicate. The better performing teams were the ones who had clear cut strategies ably communicated to every member and a two-way flow of communication.
Employees in organisations crave to know more and more about the organisation they represent. That fosters togetherness, brings collectivism of objectives and clarity of purpose. No amount of communication is perceived to be adequate. The current generation of employees seek varied information about the organisation, ranging from strategies, business plans, results, initiatives, health, well-being and so on. The objective is to talk about it loud and clear and be expressive to walk the path collectively. Communication must be simple, transparent and must reach out before employees get information from other sources. Communication cascades to ensure that necessary information reaches each and every employee in the organisation and sends a great motivating signal and employees associate with the organisation much better.
Leadership styles

Numerous leadership traits were demonstrated by the different captains. These ranged from extreme passivity to all-out aggression; sticking to the tried and tested to high-risk strategies; submissiveness to absolute assertiveness. However, the leader who imparted role clarity and converted individual sparks into collective brilliance went on to win the tournament.
In the workplace, it is leaders who make or break the organisation with their individual style; it is important for the CEO along with HR to foster a culture of a positive, participative style of leadership. Employees will look up to a leader only if he/she has virtues that make them worthy of respect. They should involve their team, be open to feedback, involve people in decision-making and should be fair in their entire conduct. He/she should be approachable and should transform mistakes into learnings. A leader is one who people would go to and whose team people would want to be part of. No amount of individual brilliance of a leader means anything unless it is channelised to the collective achievements of a winning team.
Finally, it is the customer who decides the acceptance of the product/service. In IPL, the paying public constantly demanded quick results and backed performance, leadership and the new-age skills displayed and above all, the new format was accepted with complete delight.
The HR group in any organisation will do well to realise that all they do in the function should translate into value for the end customer.
All processes and practices should be tweaked to realise the end objective for the customer. It will be highly enriching if customer feedback is plugged back into the people processes as part of continuous improvements. HR is a line function now and is in the business of people, the sooner this realisation dawns, the better will be the workplace.
This is just the beginning of the change process and the IPL had a clear message for almost everyone. In our work environment, we need to destroy the same age-old paradigms of doing things. Challenging the status quo will become the norm of the future and change is going to be so rampant that almost all of us would need to realise and figure out newer and bolder ways of making things happen.
(The writer is Executive Vice-President and Head, Global Human Resources, Patni Computer Systems.)


Proactive HR function helping Indian IT firms navigate downturn


21 Nov 2008, 0358 hrs IST, Chiranjoy Sen, ET Bureau

Sougata’s face fell as he read the memo from the CFO’s desk, putting on hold all foreign travel for the next six months. His firm, a
transnational technology company, has been hit by slow demand and falling topline because of the recession in the US. He had no choice but to tear up his confirmed San Diego bookings.

The whiff of a recession in the US was taking its toll on India’s IT and BPO sectors, when the second whammy struck. Seismic shocks in the US financial services industry — the biggest buyers of Indian technology services — is taking the wind out of the IT sail and having a huge, tectonic effect on people in the business, the employee and the employer.

While techies are sulking over the end of a bull run of exorbitant salaries, fancy perks and high consumption lifestyles it has been a tough call for entire organisations and the HR manager especially.

The focus has shifted from quick ramp-ups to managing lay-offs , from generous perks to belt-tightening and to align the talent acquisition strategy to the firm’s long-term business needs. Says Padmaja Alaganandan, business leader human capital, Mercer, “Economic slowdown is the ultimate ‘stress test’ for human capital strategy and staying the course requires creative solutions.”

With 60% of cost in IT/ITeS firms being talent linked, the HR function is at the forefront of corporate strategy. Downsizing, deferring salary hikes, pay cuts, withdrawal of benefits, and other cost-cutting measures are strategic areas where HR leaders can play a key role in managing the difficult times.

The effects of an impending recession in the US has forced Indian companies to finally, albeit reluctantly, resort to layoffs. For the first time in India, across sectors, the spectre of retrenchment looms large and IT is no exception. For a robust and young workforce used to a world of plenty, pink slips are now a cruel reality.

While actual numbers being shed in IT might be small compared to total hires, job losses create insecurity that can kill the working environment . Employee morale sags, rumour mills work overtime and for the company’s HR head, communication becomes the key to keeping it together.

“Communicate as close to the real situation as possible. The more you hide, the more you lose,” says Gangapriya Chakraverti, head of information products solutions at Mercer . Mid-tier IT firm Axcend’s CEO Uma Balakrishnan says, “We’ve initiated clear-cut communication strategies to say there is no reason to panic. This has been done through the CEO’s direct messages and at SBU meetings.”

“Downsizing needs a more direct, oneon-one approach. The buildup can be through a general message,” says P Thiruvengadam , national leader for human capital, Deloitte India. The medium remains the same, the message becomes different: e-mails /townhall meets now talk about profit fall and project closures.

Symphony Services, for one, has a training module for HR managers on how to do employee one-on-ones . Its chief people officer C Mahalingam has been trained by a leading global outplacement firm to handle difficult situations in a manner that is professional, and least painful, to the staff. Open, clear communication that moves both ways — top-down and down-top — effectively kills rumours doing overtime during crises. “Meetings with senior managers and team briefings keep everyone together and prevent employees from finding out about their future through the media ,” says Alaganandan.


The catch though, is that firms link job-trimming to performance benchmarking. The word sacking is rarely used since people are not used to a hire and fire culture and worry about the social stigma. When media was abuzz about Satyam cutting 4,000-plus jobs, CEO Ramalinga Raju said some non-performers have been shown the door, a practice that has been going on for some time.

Performance management systems have always existed, but are being applied more stringently now. Says Chakraverti: “Weeding out non-performance cases is being done very seriously through proper performance management tools. Earlier, companies were a tad lenient on identifying such cases.” “Companies are reducing tolerance to poor performance and actively seeking resignations from non-performers ,” says Dr Srinivas Kandula, global head, HR, iGate.

Call it cuts or simply asking poor-performers to go, layoffs in Indian IT — being carried out mostly by mid-sized firms — haven’t reached alarming proportions yet. “The growth rates have dipped but are not negative . As per their future guidance , big IT firms still need people as the project pipleline hasn’t completely dried up. People needs will be muted but not non-existent .” says an IT analyst with Frost & Sullivan. So, what do IT firms do?

The mantra is to hire less but better. IT services firms typically ramped up as projects grew— a linear equation. A large part of these new hires — anywhere between 27% and 35% — would be benched. With projects, or their magnitudes, becoming uncertain , efforts are being made to break this linearity.

“A slowdown is a good time to segment talent and separate wheat from the chaff. Hiring will continue, but will be thoughtful and focus on bringing on board the right fit,” says Alaganandan. Explains Chakraverti: “IT services majors are looking at current bench strength and future bench strength very carefully. They are definitely not hiring in anticipation of future projects. But at the same time, they need to hire smart.”

Says iGate’s Kandula: “They are slowing down the hiring process in some cases, staggering , postponing or even ceasing campus or entry-level hires in other cases. Every company today is in a ‘wait-and-watch ’ mode. Perhaps by Q2 of 2009, they will have sufficient visibility to see the direction where they are headed.”

With its induction program getting staggered, Wipro has started innovating to make sure that it has ‘business-ready’ software professionals. Pratik Kumar , corporate vice-president (HR), says the group has issued as many as 13,000 ‘learning-inbox’ toolkits to fresh hires. These kits contain reading material, notes and training modules in electronic form. “As we stagger hiring, the kits help us to shave off up to two weeks of training. At the same time, we ensure that the hires come businessready ,” he said.

Mahalingam says they have been improving recruitment efficiencies like giving more emphasis to employee referrals and leveraging job boards/portals. Moreover, in slack times like this, the firm can use more internal trainers as against the more expensive external trainers. HR execs across the spectrum, however, do not favour layoffs. They would rather go for deferral of allowances and salaries, temporary withdrawal of benefits and options like leave without pay.


A senior tech professional recounts: “In an economy hit by global slowdown, an organisation of 400 people had 100 non-billable resources. With mounting costs, the firm found it difficult to hold on to these resources and had no choice but to retrench. It took its staff into confidence and they came up with a solution: a 20% salary cut across the board. With the consequent savings they held on to the 100 resources.

This proved to be a masterstroke.” Even where deals are on, there is huge pressure on pricing and margins. Which means that skyrocketing salaries are out of the window, allowances are being deferred and perks are no more. “Absurd salaries will not be there any longer,” says TV Mohandas Pai, director-HR at Infosys.

Chakraveri quantifies: “Average annual increments will come down to 8-12 % from 20-25 % in some cases earlier. IT service providers and BPO firms will bear the brunt while captive development centres could still give between 10-12 % on an average.” Says Mahalingam: “We continue to give a moderate raise to our employees.” Salary packages are being reshaped too: “Now there is higher proportion of variable pay or ‘pay at risk’.

Through the year, more and more firms have increased the use of variable pay and expanded the use of longterm incentives, both of which give employees a greater stake in the organisation’s success and performance,” says Alaganandan . “Companies are changing their compensation packages. Earlier the fixed-variable pay component used to be a 70-30 mix; now it has been revised to 50-50 ,” said People Connect CEO Sarjeev Sethi.

Thiruvengadam says companies are trying to reduce costs by doing away with fancy perks, trimming bonuses , keeping training onsite and cutting down on transportation . HR managers, he feels, do not want to touch soft perks but are very sensitive to monetary outgo. An insider at Intelenet Global Services’ backoffice operations at Navi Mumbai said that a number of measures aimed at cutting incentives and increasing employee workload have been introduced within a couple of processes. Firms are also going forward with a holistic approach towards rewards: a combination of non-cash elements and longterm elements like learning and exposure to leadership.

Every crisis has a silver lining . The huge costs of attrition that had added to business costs will be controlled by putting the retention strategy in the saddle. Infosys’ Pai, for example , has gone on record saying that middle managers are finding it extremely difficult to move out given the uncertain economic situation. No wonder that Infosys’ attrition rate has dropped to 8% in the July-September 2008 quarter from 13% in the corresponding previous quarter.

There will be pressure on retaining top talent since this segment is crucial to take the organisation through difficult times. Differentiators in pay and performance management will need to be built in, and the approach to hiring will focus on controlling talent costs strategically. But Alaganandan says the workforce will have to balance risk and rewards in their careers , giving hard thought to what it is that truly motivates them in their careers.

“A new relationship between employers and employees will require a different approach to employee retention” says Sunil Goel of GlobalHunt. “Bring in individuals who will thrive in the environment you offer, check in with them often, work with them individually, and use targeted metrics regularly to evaluate your success,” he says. Employee engagements are on the rise with staff surveys being done by Satyam and Juniper and counselling sessions being carried out by some others.


HR function redefined
Source: BL, Sept 1, 2008 by Arun Bewoor
There are frequent articles in business papers and magazines on the emerging role of the Chief Financial Officer (CFO) as a strategic partner to the CEO. (S)he is no longer a bean counter but an active player involved in determining the direction of an organisation.
Similarly, as IT gains importance in the larger scheme of things, there are new descriptors for the CIO. The HR function has not attracted all that many dissertations despite the claims of talent shortage and attrition rates. The HR function and role is as crucial for an organisation’s success and prosperity and I will attempt to summarise it in two words: Training and Assessment.
The words must be understood in their true comprehensive context and what they encompass rather than the narrow metaphors they otherwise may entail.
Training

This pertains to the aspect of recruitment, increasing competencies across the company and then setting accepted goals. In the process, teams are built, structure(s) are created and put into action and a development plan is created for each manager telling him or her what can and should be done in the context of the company’s objectives and goals. Essential to these practices are plans that cover both the short and long-term effects on and by the concerned unit.
The questions to answer are: What are the types of candidates to recruit and with what experience and education? Once they are in, what kind of training would be required to make them more effective as managers, contributing to the business and to themselves as they rise up the hierarchy? What are the discernible weaknesses that need correction and the opportunities that need to be fortified? What kind of ‘targets’ must be fixed for each individual, department and division to align them to the objectives of the organisation?
Are the goals parallel or are they pulling in different directions? Is there a distinct team spirit or is there a lack of it? Are there any disgruntled elements and misfits and why have they become so? Is it the role, position or skill factor? Are there any stragglers who are deliberately slowing the thrust and acting as detractors? Then, having resolved these basic duties and functions, what is the overall strategy to ensure that each individual and group knows where it fits in, what part and what role it is expected to play now, tomorrow and a year later.
Much of this work cannot be done easily — it requires careful thinking, planning and analysis before it can satisfy the CEO and the top management team.
Assessment

The results of the training done or not done have to be measured using a precise and accurate assessment programme. A typical example is the Performance Management System or the more common Key Result Area parameter. Are most, if not all, managers performing or not performing well? Why are these gaps occurring and how are they to be corrected?
Are the employees inspired and challenged or are they just satisfied and to that extent not pushed to work harder and smarter. What is keeping them back? Is it the environment in the company, the division, the department? Is it due to the team leader, the boss or any external factor impinging on the group? How can it be removed? Where are the ‘holes’ that need to be covered before anyone slips through? Is it only manpower? Or, is it finance or training or the lack of it? Or is it a factor that is not easily isolated and resolved?
This is where the capability of the HR manager will be put to the severest test. Can he bring in a level of expertise in human management where a blueprint better locates the fault lines and can then push forward with support from top management to decide and act at a pace that is urgent but comfortable and which does not lead to dissonance and tension?
Under assessment is the critical element of rewards and compensation. Who is rewarded and for what reasons? Who is promoted — when and why? When is a person told that (s)he cannot be promoted, or worse, when the person must part with the company?
What is the market paying compared to the organisation? What are the remuneration trends within the industry, the country, the globe? What level does the organisation want to be in when measured for total compensation? It is not necessary that all organisations want to be in the top quartile or even in the top 50 per cent. Job content, job challenge, promotion prospects, training opportunities and overseas postings can better retain and reward talent than mere compensation in financial terms. Money is a good hygiene factor but not always a great motivator.
So, an HR chief will have to determine with the help of the CEO and CFO the compensation strategy the organisation must adopt to ensure that the best managers are performing at the best level. The key assessment test will be an overall internal environment valuation across departments and hierarchies to see whether the firm is invigorating and rejuvenating employees. Is it fulfilling and meaningful to continue working for the company? The HR manager can ultimately determine these factors, measure them and take the right action when needed.
A great trainer and an accurate assessor can make for a complete HR manager.
(The writer retired as Managing Director of International Flavours and Fragrances in India and is currently President of the Madras Chamber of Commerce and Industry.)


Linking Learning to the Broader Human Capital Strategy


An IBM executive recently noted that, “Nothing is more critical to
enabling transformation than skilled, motivated people who can learn and relearn at a moment’s notice.” Of course, IBM has by its own example in transforming from hardware to services demonstrated the ef?cacy and market power behind an organization being learning, skills and competencies ready – and being positioned to leverage that into transformative prowess.

The learning and training departments of many companies admire the learning and competencies power demonstrated by IBM’s
transformation from a hardware company to a service company but are stuck trying to just meet the day-to-day training challenges of
workers. In a sense, they simply don’t have time to get transformative or strategic. The Learning Strategies thought leader panel convened
on Sept. 8, 2005 with an eye toward helping companies ?nd a path to move a bit closer to the IBM competencies level – toward a
skills development and training path that would be proactive and strategically linked to HCM. Like IBM demonstrated, the ultimate goal would be to link learning and training initiatives to the broader human capital strategy and thereby experience meaningful enterprise impact.

MOVING LEARNING FORWARD STRATEGICALLY BY GOING BACK TO COMPETENCIES MANAGEMENT

The panel’s focus was how to get learning management behaving more transformatively and strategically within the enterprise – with ties to Human Capital strategy. Paul Storfer was invited to join the panel as

its special guest to get the panel back to looking
at competency management, He was perfectly suited to topic.1 Paul is the managing partner of Human Capital Science, a ?rm dedicated to understanding how competency management impacts business performance.

Paul presented the Strategic Human Capital Map (HCM) (presented above) to illustrate the overall picture of human capital within the enterprise, and demonstrate the impacts of competency management (in the center) on all elements. The map illustrates the six main categories of human capital areas: Plan, Evaluate, Develop, Advance, Lead and Analyze. What is most critical about
the Map is that it illustrates the intersections between all human capital strategies and activities, and that “competencies” overlay all activities.

REDISCOVERING THE STRATEGIC IMPORTANCE OF LEARNING

Paul Storfer also emphasized that the ?rst step in linking learning to HCM is not building complex new training content but rather recognizing
the strategic importance of learning within the




1Prior to founding Human Capital Science, Paul was a founder and former president of Inscope Corporation, a builder of online competency based performance
improvement solutions working with Fortune 500 companies including DuPont. It developed a service known as Prodigy. Paul is one of the nation’s leading experts on competency based performance.








































enterprise. According to Storfer, “Corporations are so focused on the
operational bene?ts of maximizing the potential of human capital they lose sight of the real impact of learning.” Storfer sums up the strategic impact with two straight-forward maxims about competency and business performance:

· Behind every business problem is a human competence challenge that needs to be addressed. (He argues that
organizations spend far too much time investing in equipment, technology and other resources and far too little on meeting human development needs.)

· Understanding and developing job competencies are key
to unlocking the full pro?t power of your ?rm’s human or intellectual assets. (Thus, learning is critical to meet objectives.)

The strategic nature of learning and mapping
competencies becomes clearer if we see skills at the heart of the challenges facing organizations in the form of business problems. Instead of taking this view, Storfer insists that, “most organizations are focusing on other resource problems – giving short shrift to human capital investments and development.” Ironically, for
all the lip service on human capital, Paul Storfer notes that he once had a Senior VP of HR say, “I almost wish we’d treat our people as well as we treat our equipment – it gets attention, it gets maintenance on a regular schedule – but our people don’t have that same level of attention.” Bottomline: Storfer says that maintaining the competitive balance in companies really comes
from building human competencies.



ILLUSTRATING THE HUMAN CAPITAL MAP


So, given the strategic importance of learning and our goal to link learning to the Human Capital Strategy a question arises: how do we immerse the learning tactics used today into a strategic level human capital map? The panel suggests that the aim of such an initiative is not to transform the organization (some broad complex vision of a learning organization) per se but to simply keep it competitive as a business and
to make sure that its actually ?exible enough (like IBM was) to respond to market imperatives – which in turn may determine whether or not it
survives and is around a year from now.


Paul illustrated how the map works to get training more strategic and tied into all human capital elements: “Let’s say you ?nd a particular group – let’s say the customer service group – is having a performance issue and you need to train them. Rather than just go to the development quadrants of the Human Capital map and say we’re going
to implement some training courses to solve this, if you go through and try to understand the underlying competencies and capabilities that are needed and apply the training speci?cally to gain those competencies, then what you’ve done is taken into consideration not only the development slice but also the competency management center. That competency management center then allows you to quickly integrate
the other pieces.


If someone leaves the group and you need to replace them – the way
to do that best is to use those competencies for your recruiting process.
[That way] the people that are recruiting have a blueprint that’s an awful lot better than a job description because this competencies
map will have the required skills, required knowledge and the required behaviors to be successful in the job. The organization can begin, in a more accurate way, to recruit the kinds of people who ?t in and can work in that particular position. Of course, now that you know the
kinds of competencies you’re working toward, you can do a better job of evaluating people as well. Those same capability data points allow you to do some of your analysis, measurement and talent planning on the left hand side of this map. Understanding those skills will also help you to determine what’s necessary for someone to lead that particular
group – [so succession can be performed].”

PRINCIPLES FOR TARGETING THE LEARNING PROCESS FOR PRECISE IMPACT

Once an organization has linked learning to HCM, the learning must be proactively targeted to:

1. Maximize enterprise-wide alignment and productivity, while minimizing costs and redundancy
2. Improve adoption by reaching out to learners where they are already working, rather than forcing them to a stand- alone Web site
3. Assign the right learning to the right person based on his or her role in the organization, work location or other relevant attributes
4. Rapidly integrate internally-created and third-party content
5. Speed time-to-competence and reduce costs with blended learning
[Source: Paul Storfer, Human Capital Science]


APPLYING A MATURITY FRAMEWORK FOR COMPETENCIES

Paul also presented a Maturity Framework based on the SEI (Software Engineering Institute)
People Capabilities Maturity Model (CMM).
CMM lays out learning, development and people processes in a ?ve level maturity framework. According to Storfer, “one of the keys to successful implementation of learning is to ?rst identify where the organization is within this maturity framework and then ?gure out what
needs to occur to move organization up in level.”







































Level 1 in the Framework is the level most organizations are at. At this level learning and training largely tends to be reactive; individual needs are addressed but learning is an unstructured inconsistent process.

At Level 2 People Management starts to occur as the company starts to manage costs through content integration. Learning becomes a managed process but still hasn’t become strategic in terms of being tied into the organization. At Level 3 ?rms begin to take advantage
of the skills identi?ed and the overall capabilities of the whole organization. Level 3 organizations become much more competencies driven and begin to have competency models and measure against models. At Level 4 ?rms gain the ability to integrate the skills sets into empowered teams and start to train groups, not just individuals. At
level 5, organizations gain a long term strategic view and build ongoing processes to advance the organization.

Paul cautions that the CMM levels cannot be instantly attained and that few companies get beyond Level 3. “This is an elephant that
doesn’t get swallowed in one bite. This is not a short-term thing where

you come in and say I want to come in and
establish an integrated competencies framework and get to a level 5 organization and instantly
put that together. This is a framework that as you build from a particular business need or a
strategic business imperative you can build pieces of the framework that ultimately will create this whole integrated framework for you.”

PANEL’S MIXED REACTION TO COMPETENCIES BASED MODELS

While the thought-leader panelists all concurred that learning must become more strategic and
be tied into HCM, there was debate around how effective or broad a competencies-based initiative should be. First, permanent panelist
Angela Schwers, VP of HR at Pearson Education, noted that Pearson Education has, “shied away










































from the competencies based models in the past but is now starting
to revisit. It has been pretty successful [with competencies] and is now basing a lot of the training curriculum on the competencies. [Still],
a lot of the individual managers are remaining nervous about the competencies model.”

Josh Bersin, panelist, analyst and founder of Bersin & Associates was concerned that many companies run out of steam and support before completing sweeping competency-based initiatives and recommends a business problem centric approach:

“There’s a lot of potential in this approach. I’m an industry analyst. What we ?nd is that when companies take a skills and competencies approach to training and start there, they often never ?nish because
the problem of trying to de?ne enterprise wide skills and competencies
is a huge task which changes over time. Even if you do it, you then have to take all the training offerings and try to map them to these

skills and competencies. So most of the
companies we have talked to that have tried to do this on an enterprise basis have failed and stopped.

What we’ve seen that has worked is a much more focused, pragmatic approach where companies take either a very speci?c job function where there’s a performance problem – say within customer service or within sales – and they do
a detailed analysis of the job tasks, skills and competencies that develop success and then they come up with targeted training that is aligned to those problems. The broad theory of the model is good but the practice is quite dif?cult and harder than the theory. The uses of the model I think should be very focused, very business centric.”



A STAGED APPROACH TO INTEGRATING A MODEL FOR COMPETENCIES INTO LEARNING ACTIVITIES

Paul agrees that companies should not attempt an enterprise-wide transformation through competencies, but instead should take a staged, area or problem speci?c approach. “We would never advocate
a company saying it’s going to go through and do a competency analysis for our entire organization. Two reasons: ?rst, because it is a
daunting task even with the excellent tools now available and, second, because competencies and business challenges change. They are a
living organism. Don’t do all the competencies at once but do key job categories or problem areas. Look at critical aspects of your business.”

HOW TO DEFINE THE PROBLEM IS PART OF THE PROBLEM


John Chaisson, guest moderator for the session, refocused the discussion to an area that continues to plague many organizations seeking to improve basic learning and training and evolve to a more strategic level – the problem of simply understanding how to de?ne the problem. According to Chaisson, “Companies can see this as
an intellectual capital issue or a knowledge management issue, or a learning issue, training issue or a competencies issue. They can also struggle with whether this is a tactical issue or a strategic challenge.
The debate around whether this is a competencies concern exacerbates the de?nition problem.” Alison Rossett, panel member and Professor
of Education Technology at San Diego State University, agrees that, “the framing of the question is the heart of the matter.”

THE PERFORMANCE CONSULTING FRAME


Josh Bersin suggests that the best pragmatic approach is to see the challenge as a performance consulting one. “I think the best that I’ve seen on the training side is closer to performance consulting.
What we see in best practices organization is performance consulting
(investigating the issues, de?ning the core problem and trying to
tackle it through a speci?c set of competencies built through targeted training) rather than the development of content. If you don’t
know what the core problem is you’re trying to solve it cannot have impact.”

THE TRANSFORMATIVE FRAME


Chaisson poses the tough framing question of whether there is a
tug-of-war within HR on whether the initiative to link learning to

HCM is “transactional’” in nature (attempting to resolve process and methodology around discrete transactions) or a “transformative” in nature. Chaisson states, “We’re talking about the balancing act of dealing with the reactive, transactional nature of skills acquisition and training where most organizations are water- logged today – just trying to cover the day-
to-day training needs of individual workers. The IBM story is about staying competitive and transforming rapidly enough to stay competitive. IBM becomes a poster child for
that.” But what does an average company do?


Paul Storfer largely dismisses the “transformative” debate and offers a view that marries the transactional and transformative perspectives. “The transaction supports the living [transformative] organization. IBM is a
transformative organization – a terri?c example because it transformed itself from a hardware organization to a services organization. It did that by looking at the market and evolving and then the transactional capabilities followed
to support what the strategy was. The transformational is about proactive versus reactive. There is a strategic requirement of looking at competencies and skills in a way to anticipate the company’s needs. You need the strategic to get ahead of the curve.”

Josh Bersin echoes the idea that you cannot start at the transformation point. IBM started with a business problem not a learning strategy. “Not that many companies think
transformatively. The transactional nature seems much more common. That’s one of the reasons the competencies model has been slow to catch on. Most companies are trying to solve day-
to-day problems, ?guring out how to use this approach to solve real problems is the key. The driver tends to be business problems. You’re
not impacting the business unless you’re doing



performance consulting and as soon as you do performance consulting you’re going to ?nd skills and competencies are at the core. The more you focus on particular problems the more successful you will be.”

PITNEY-BOWES AND MICROSOFT: EXAMPLES OF DEPLOYING PROBLEM-DRIVEN STRATEGIC LEARNING THROUGH COMPETENCIES BASED HCM ACTION

Josh points out that Pitney Bowes is a great example of strategic competency based learning in action. Pitney is a postal service company, has regional centers and turnover problems, like many in
the sector. The managers within the regional centers are well trained yet Bersin says, “The person in charge of training says when someone quits in a given location they have to ?gure out who’s available and has those skills, training and level of experience. They have to have
a skills and competencies model and map people to it to ?nd these people quickly. It’s sort of a succession planning problem. They’re using an advanced LMS tool to do this.”

Josh also offered a compelling example of how Microsoft leveraged
the approach. “Microsoft has a very intense, hard driving culture. Over the years the company had tremendous success selling software and dominated markets. A couple of years ago they found an enterprise market where they sell to large corporations. They were not as successful. They were selling against companies like Sun and IBM
that were just more sophisticated at selling enterprise solutions. The initial reaction from Microsoft was, “pay these guys more money and give them more training.” But it wasn’t working. It found it didn’t know what the critical skills were to be successful at enterprise sales. Microsoft hired a third party consultant and they talked to the 20
-30 sales teams that were highly effective. They pro?led them and looked at what they did and what they knew and what the skills
and background were. They identi?ed the characteristics of a great enterprise sales person or team. They used that competency model to create training that would be applicable to everyone else. It certainly wasn’t in its culture. It wasn’t at all what they typically would have wanted to do but they found out through a business problem that
they just couldn’t solve it with training. They had to go back and get to the root of the problem. I believe that happens in a lot of
companies where they don’t necessarily have a culture for doing this, but they ?nd it mandatory to solve a problem.”

BECOMING A COMPETENCIES ASSESSOR?

Robert Tindell, audience member and VP of Human Capital Development for Goodwill of Central Arizona, focused the panel on skills needed within the learning department to start assessing competencies strategically. “What
can we do to provide people with the skills
sets to use that transformation process so that when they want to assess competencies as a practitioner they are able to be successful?”

Paul Storfer notes, “There are lots of skills that I would see as being very critical to the successful implementation. Good listening skills are high
on the list. The transformation is almost a by- product of successful implementation rather than part of a strategy. “

Josh Bersin concurs. “I think that’s a key comment on listening skills. I would presume, with IBM, without knowing precisely how they conducted the transformation from hardware and software to service that they went out
and talked to their customers and asked what it could be doing differently if the customer were to use it as a services provider. That
information starts to drive the change and the process around its competencies and skill set assessments and the acquisition strategies for who they’re looking for?”

BEYOND SKILLS BUILDING AND TRAINING: UNDERSTANDING THE
CLASH OF CULTURE AND CORE VALUES AND LEARNING

Robert Tindell, our audience member also commented: “I started my work with competencies modeling back in the 80s with PG&E, so a lot of what we’re talking about today is very familiar to me. I think my experience tells me that a lot of people jump



on the bandwagon but they’re not really skilled at understanding how to do this work. When I look at our transformation and the values
we are trying to establish as an organization [Goodwill of Central Arizona] and push out to our employees, I’m using our values as an organization to drive what our competencies should be – to make those values a living organism within our enterprise and use that to drive our development.”

The panel weighed in on the relevance and impact that culture and embedded values have on the required competencies success models
and on individual competency requirements. Paul agrees with Tindell, “One of the key pieces of any competency model of an organization is the culture. You cannot sell your ideas to an organization if you don’t ?t well in the culture of the organization. Your ideas simply won’t
get heard.” He says its critical in linking strategic competency based learning models to HCM strategies to “understand what the culture is and the intertwined values.”

FINAL THOUGHTS & TIPS ON HOW TO BE SUCCESSFUL


So, how do organizations tasked with putting out training ?res in a reactive way get strategic and proactive around competencies with shrinking bandwidth and budgets in HR and transform into a learning organization?

Alison Rossett proposes that organizations think seriously about
better business partnership with line managers to gain the momentum for strategic learning. “Partnership is not [typically] something that people in learning and development can do on their own. It has to
do with relationships and a sharing of focus with the line leadership
– what’s on their minds? What’s keeping them up at night?”


Josh Bersin cautions against too much HR alignment and advises ?rms to focus on the tangible problem being solved. “We (Bersin
& Associates) just ?nished a big research project on the alignment between HR and training and what we found was that too much alignment reduces effectiveness. I think what learning and development managers need to think about is what problem are
you trying to solve. What are you using the skills and competencies model for? Is it an enterprise-wide problem of retention or succession planning or is it a pinpointed problem that we’re not selling enough enterprise products to the enterprise accounts? Stay focused on that
problem. If you do that, you will do just enough to be successful.”

John Chaisson says that while organizations have license and ?exibility to determine how tightly learning will be linked to competencies, CMM models and HCM, they cannot abandon the talent mindset and be successful with strategic learning. “There does seem to be a
little bit of a tug of war going on. I agree with Josh that organizations should identify a real business problem and use that as a catalyst within the organization to propel competency and skills development in alignment with the Human Capital strategy. I would also say, agreeing with Paul’s earlier point, that I think
it’s very important that companies have a human capital strategy in mind – one that encompasses the entire lifecycle of talent; one that views people as unique and strategically
important and to the point illustrated with IBM today, one that views people as the source of their competitive advantage and innovation.
If we don’t embed that inside our culture, especially our talent mindset that is part of that culture, then we don’t see the big [learning] picture of the potential of what all of our talent base can do in reclaiming markets, rebuilding
our competitive advantage and building the next generation of products. When we stay
reactive – just trying to tread water to keep the skills base in line – we’re losing an opportunity
to propel our businesses forward from a competitive standpoint.”



ABOUT THE PANEL PARTICIPANTS:
The guest moderator for this open session was John Chaisson.

SARAH BEERS
FIDELITY INVESTMENTS
Sarah Beers is a Vice President in Fidelity’s Service Delivery University.
She is responsible for providing learning solutions for large scale, global training initiatives for Fidelity’s Employer Services Company (provider of HR services to corporations and tax-exempt organizations). Sarah brings twenty years of experience to her work as a performance consultant
and manager of training programs. Prior to joining Fidelity in 2000, Sarah worked at IBM, DEC and Arthur Andersen.

JOSH BERSIN
BERSIN & ASSOCIATES
Josh is the Principal and Founder of Bersin & Associates, a leading industry research and consulting ?rm in enterprise learning
technology and implementation. Josh has extensive experience in the development, implementation, marketing and sales of e-learning and other enterprise products. Josh is the author of “The Blended Learning Book: Best Practices, Proven Methodologies, and Lessons Learned”
- a comprehensive review of the principles and winning strategies for blended learning in corporate training applications - available from Wiley publishers and on Amazon.com, and he is working on an upcoming book
on Training Analytics.


VIRGINIA CLARK UNISYS
Virginia Clark, Vice President, Unisys University, has built her career in Unisys human resources since joining the company in 1983. Early on she worked as an HR generalist -- handling recruiting, labor relations,
compensation, and bene?ts for one of Unisys engineering facilities. From
2000-2003, Virginia held the position of Vice President, Global Talent Development where she was responsible for leading the development and implementation of all practices, solutions and programs related to the development of human capital. In April 2003, Virginia was appointed Vice President, Unisys University. Virginia holds a master’s degree in human resource development from Villanova University.


KELLY FAIRBAIRN
PPS INTERNATIONAL LIMITED
Kelly specializes in design and customization of instructional programs and overall human
performance consulting. Kelly holds a Master’s degree in Employee Counseling and Relations from Binghamton University and a B.A. in Public Communication from Cornell University. She is a
member of the National Society for Performance
& Instruction, Society for Human Resource Management and the National Association for Female Executives.

NEIL GRANT MARCONI
Learning & Development Director with extensive global experience in a number of
international blue-chip organisations and as an independent Consultant. Signi?cant experience as an organisational interventionist and creative
strategist with a professional and incisive approach to business and HR challenges. Personal qualities: Strategic thinker, innovative,
drive, delivery-focused, resilience, collaborative, change-oriented, resourceful, pragmatic, effective communicator

LAVERNE HIBBETT
MARSH FURNITURE COMPANY
Laverne joined Marsh Furniture Company, a manufacturer of kitchen cabinets and bathroom vanities in 1993 as Customer Service Manager. She became Training Manager in April 2000.
Laverne is responsible for leadership development for all lead people, supervisors, managers, executives and support people in key roles. She provides classroom training to these 80 students
weekly on a range of subjects.


KAREN KOCHER
CIGNA TRAINING SERVICES
Karen is employed by CIGNA as the Vice President of Enterprise Learning.
In her current role Karen has responsibility for employee development for CIGNA enterprise-wide initiatives, strategy and implementation
for technology enabled learning and education support for functional organizations such as IT, Finance and HR.

TOM PEDERSEN SKILLSOFT

ALLISON ROSSETT
SAN DIEGO STATE UNIVERSITY
Dr. Allison Rossett, a Professor of Educational Technology at San Diego State University, works most often on workforce learning, planning, and technology. Allison received ASTD’s prestigious award for Workplace Learning and Performance in 2002. She is a member of the ASTD International Board, Training magazine’s HRD Hall of Fame, and recipient
of the International Society for Performance Improvement’s highest honor, Member-for-Life. Rossett is the editor of the ASTD E-Learning Handbook: Best Practices, Strategies and Case Studies for an Emerging Field.

ANGELA SCHWERS PEARSON EDUCATION

About the Author










John Chaisson John Chaisson is a Senior Director with the Human Capital Institute and leads the Talent Acquisition thought leadership panels and webcast activities for HCI. He is also the Chief Purpose Prophet and Principal Qualitative Analyst for The Prophet Group based outside New Orleans and is responsible for uniting the leadership perspectives, approaches and tools for building leaders
and leading enterprises. John has built a career founded on the “purpose” of fostering sustainable workforces, businesses, services and products. After completing Stanford Law School, he worked as
a corporate attorney for leading law ?rms including internationally- renowned Wilson, Sonsini and later began his Silicon Valley business career as General Counsel and VP Business Development for Resumix, also supporting public software and HR services giant Ceridian Corporation. He later co-founded several market-leading technology and management consulting groups focused on ERP software and Human Capital solutions, before launching TPG. Among other roles,

he is a Member of the National Advisory Board of the Human Capital
Institute and a Board Member of consumer electronics incubator, Sector Labs.

ABOUT THE HUMAN CAPITAL INSTITUTE






The Human Capital Institute is a catalyst for innovative new thinking in talent acquisition, development and deployment. Through research and collaboration, our programs collect original, creative ideas from a ?eld of top executives
and the brightest thought leaders in strategic HR and talent management. Those ideas are then transformed into measurable, real-world strategies that help our members attract and retain the best talent, build a diverse, inclusive workplace, and leverage individual and team performance throughout the enterprise.


HR leaders should be up to managing diverse workforcesSource: BL: Monday, Aug 04, 2008

HR leaders need to be proficient at developing talent from across the globe and creating the infrastructure to build a high-performing workforce.
Anjali Prayag
Today, HR is not only grappling with issues of attrition and retention, but also of maintaining a talent pipeline, driving high performance throughout the organisation and experimenting with new compensation practices. Hewitt’s 2007 Top Companies for Leaders research shows that ‘buying’ leaders in the open market will become increasingly risky and difficult. “Building” leaders will be the only way to succeed, says Ajay Soni, Business Leader, Talent and Organisation Consulting, Hewitt Associates, in an interview with The New Manager. Over the years, HR has become strategic to business. Could you throw some light on how HR can change the economics of the business?
Hewitt’s research on Next Generation HR has placed bold bets on areas where HR can deliver most value to business:
Human capital R&D: Next Generation HR will demonstrate a causal relationship between workforce practices and business performance. This will be done through advanced data-mining and the predictive modelling of human capital processes to identify new business insights. In other words, HR would continue its focus on human capital measurement but would shift from ‘post facto’ measures to more ‘predictive’ measures allowing management to make better strategic decisions.
Talent engine: Hewitt’s experience has shown that leading companies recognise that talent management requires a disciplined and rigorous approach in the same way that organisations manage their supply chain for products and services. To drive a continuous supply of talent, HR would not only have to look at new talent acquisition, but also at articulating future critical competencies required by the business, creating mechanisms for the assessment of internal talent on these competencies, development of internal talent, creating workforce planning frameworks and determining market pay levels.
High performance: Next generation HR will be accountable for driving performance at the organisational, team, and individual levels. We believe what’s different about today’s focus on high performance is a growing recognition that many of the traditional approaches — rewards, performance management, and development — have not succeeded in driving improved productivity for many organisations.
Rather than focusing on individual motivators, HR functions will in future begin to look at driving performance as an end-to-end process that begins with goal-setting and alignment, ensures accountability for achieving results, includes thorough and consistent feedback, and ends with differentiated and targeted rewards and developmental opportunities.
Considering that HR has a pivotal role to play now, what are its responsibilities in times of a downturn/recession?
In times of downturn, leading companies begin to focus on leveraging higher performance from their workforces. This is done by better goal alignment and higher levels of stretch in targets and more rigorous performance coaching. We have seen that at such times, leading companies start paying even more attention to retaining and developing their top talent. Hewitt feels that HR technology investments, shared services, and outsourcing accelerate at such times as does a focus on the more cost-effective processes. HR professionals should also help their organisations become more nimble in adapting to change. What they do today will position their organisations to look smart as business conditions improve, or, if they do nothing, they may be playing catch-up with their more agile competitors.
Could you comment on the HR talent in the country? Do we have people with the necessary skills for a developing economy?
The HR function has gained in salience over the past two decades. It’s been a long haul from a mere support function to an indispensable asset for most companies. Given the pace at which business is changing, there is a need for HR to enhance its capabilities. There is a shortage of HR professionals today; the function is witnessing one of the highest attrition rates in the country.
In a survey for which Hewitt interviewed more than 50 CEOs and business leaders in the Asia-Pacific region, it was found that business acumen was a basic requirement expected of an HR professional. In a globalised economy, HR leaders should be prepared to manage a global workforce. Today’s talent can be sourced from across the world. HR leaders need to be proficient at developing and promoting talent from anywhere and creating the infrastructure to build a high-performing global workforce. For HR, this will mean managing new types of relationships and adapting to a diverse population in terms of needs, business requirements, and cultural expectations.
What about compensation patterns in the country?
Organisations in India are using compensation as a strategic lever to attract, retain and motivate talent. An increasing number of organisations are plagued by attrition and retention issues. Currently, organisations are trying to retain talent by keeping a closer eye on market movements. A big part of this involves frequent reviews of employee salaries. A growing number of organisations are now benchmarking salaries against best-in-class companies, leaving behind the traditional approach of benchmarking against best-in-industry organisations.
Is variable pay an accepted concept here?
Variable pay in India is an extremely well-accepted concept in India. The Hewitt Salary Increase Survey 2008 showed that 95 per cent of the participating organisations had variable pay / pay-for-performance as a component of their compensation structure. In fact, our research shows that salary increases are also performance-linked, with the highest performer, on an average, getting an increase that is 50 to 75 per cent higher than that of a performer who is rated, ‘Meets Expectations’.
Are there any innovative practices emerging in the industry?
Some of the best employers are creating organisation structures that enhance ownership and autonomy, making young managers responsible for a high level of decision-making. Leading organisations have a sharp focus on leadership development. This includes developing the top team and a leadership pipeline for the future.
They have high-potential / accelerated development programmes that offer superior development opportunities, cross-functional roles, action learning projects, accelerated vertical movement in addition to higher fixed pay and variable pay. Long-term incentives are emerging as an important retention and motivational tool for the senior and top management levels.
We find that every year, the best employer comes from the industry that is booming during the period. Does this mean that good employers only come from profitable sectors?
The Best Employers show an alignment between their people processes and business goals. The very nature of this alignment leads to engaged employees and a high level of business goal achievement.
Hewitt has seen that the Best Employers beat the rest on total shareholder returns significantly, irrespective of whether the industry is on an upswing or a downturn. The winners of the Hewitt Best Employer Study-2007 were from diverse industries: manufacturing, services, banking, IT, pharma, FMCG and retail.
Some best practices that make a company ‘best employer’ today?
This is the sixth year of the Hewitt Best Employers study in India. These studies have shown that there are clear differences between the human capital management practices followed at The Best vis-a-vis The Rest.
The best organisations have a clear focus on ensuring high-performance cultures and workplaces, supported by strong performance management and a high degree of linkage to career opportunities. For the best employers, performance assessment is an effective tool and senior leaders are not hesitant to use it. It serves the purpose of supporting the business strategy.
The board and leaders of the best are significantly more engaged in and take ownership of talent and leadership issues. They focus on performance and competency assessment as a means to segment future potential and top talent.
Source: BL, Monday, Aug 04, 2008
HR leaders should be up to managing diverse workforces’
HR leaders need to be proficient at developing talent from across the globe and creating the infrastructure to build a high-performing workforce.

Best employers build processes and practices that allow experiential learning opportunities for talent and high-potentials. They also ensure a pay-for-performance culture in their organisations and use variable compensation to motivate employees.
The ‘Best Employers’ understand the employee value preposition/ employer brand. Employees join the organisation for this promise and the organisation strives to give its employees the promised experience through its structure, processes and systems. A laser sharp focus on effective implementation of HR programmes, to be able to deliver on the employer brand.







A tale of two strategies
Source: BS: Aanand Pandey / New Delhi July 22, 2008, 0:38 IST The management of human resources has a strong link with the financial performance of a multinational company. Indian multinationals are showing how to foster it. Finally, there is empirical evidence that you and I make a difference. Two recent surveys, one by Mckinsey and the other by Boston Consulting Group (BCG), released barely a month apart, point out that in an increasingly globalised world the "people strategy" is going to be the key differentiator. A recent issue of The McKinsey Quarterly in its report, "Why MNCs are struggling with local talent", highlighted a strong link between the financial performance (measured by profit per employee) and talent management policies of top multinationals. Similarly, the BCG report, titled "Creating People Advantage" published findings from surveys covering 83 countries and markets, observed: Sourcing talented employees globally is one action that is expected to grow most quickly around the world. This means that multinationals — both foreign and Indian — need to brace themselves for a talent management turf war in the near future. Defining talentHow do MNCs define talent? Claus E Heinrich, head, global human resources and labour relations, SAP, says that a lot of human resources professionals relate the term talent with top talent. "Talent, in a company's context, is an attribute that is a combination of performance and potential."
Hema Ravichandar, an HR consultant who has also served as the global HR head at Infosys, says that ideally, an MNC should define talent as a sum total of its human capital. Interestingly, the way companies define talent also reflects their immediate talent needs. ICICI Bank, in the recent years, has established its presence across 18 countries. Much like a lot of fledgling Indian MNCs, the bank faces a peculiar young-leading-the-young paradox. For the bank, talent is not a relative but an absolute value. Which is to say that Mirza Ghalib has talent not because he is better than Daag Dehelvi but because he is, well, Mirza Ghalib. K Ramkumar, group head-HR, ICICI Bank, explains, "At ICICI, a talented employee is someone who has potential for leadership. It's not that, say, a customer service executive is devoid of it. It is our job to identify which individual has untapped potential."
Linking talent and strategyThe BCG study found out that the HR-corporate strategy links were either broken or non-existent in a majority of companies. Successful MNCs ensure the two are linked. SAP, the German business-software MNC that employs more than 50,000 people across 50 countries, has mapped each building block of its strategy pyramid to a critical talent management function. "We understand that the need to align and engage every employee in the pursuit of a company's business goals. It is a prerequisite to success," says Heinrich. Similarly, the California-based Hewlett-Packard, which has 172,000 employees working for its diverse technology solution groups in more than 170 countries, actively integrate the two. Talent management is one of the critical measures of performance for its business heads. "The balanced scorecard of a CEO has four components, one of which is human resources development," says Mayur Bharath, director, people development, H-P APAC and Japan. The link becomes even more imperative for a company like Mahindra and Mahindra, which operates in areas as diverse as automotive technology, financial services and infrastructure. The company has a network of regional and functional talent councils that is steered by a five-member apex talent council. Anand Mahindra, vice-chairman and managing director, is one of the five members of the apex council. "The company has 140 senior managers at any time of the year working on formulating talent strategies that shape the careers of 65,000 employees working across five continents," says Rajeev Dubey, president (HR, after-market and corporate services).
Managing acquired talentBuilding an HR brand is the biggest challenge that multinationals face when entering new markets. Often, companies start with offering the best packages in town. "Using compensation as a differentiator is easy, but short-lived. Any new kid on the block can take you on this one," warns Ravichandar. She suggests a three-pronged approach to building a strong HR brand. "The first is to make your arrival known." The company, she says, should talk through niche channels about their business philosophy and their commitment to the geography. The second, she says, is very critical. "At this stage, the companies should hunker down and work hard to achieve credibility among the internal as well as external stakeholders." A great HR brand would mean nothing if the employees are not saying it. In the third stage, the company should showcase its thought and execution leadership through various forums. According to Ravichandar, many companies move from the arrival stage straight to the third, ignoring the credibility phase, much to their peril. Tata Consultancy Services (TCS), which has over 10,000 employees of non-Indian origin from over 60 nationalities, has been recruiting overseas since the mid-1980s. The company has an evolved talent sourcing model both in India and abroad. Ajoyendra Mukherjee, global head-HR at TCS, says that in India alone, the company goes to 272 institutes including those located in the Tier II and III cities to recruit. Abroad, TCS follows a two-step approach to recruitment.
First it educates the candidates — the company has tied up with universities based in the respective geographies where it conducts interactive programmes with students to educate them about the future of information technology solutions and apprise them of the company's role in it. The second step is to visit job fairs where students, having heard of the company through the interactive programmes, approach the TCS recruiters. In additional to direct recruitment, TCS associates with AIESEC, the world's largest student organisation, to tap into a pool of undergraduates and graduates from 100 countries. Additionally, TCS replicates its Academic Interface Programme (AIP) at the global level to establish itself as a preferred employer at the university campuses across the Asia Pacific, the US, Canada, Latin America and Europe. Local talent, global leaders"MNCs do most of the localisation at the recruitment level. A global model can only be said to be evolved if it happens at the leadership level," says Vikram Bhalla, partner and director, BCG India. Ramkumar says that a local leader needs to show a proclivity to think globally. "We follow the GE (General Electric, one of the most admired companies) way when identifying global leaders from a local talent pool," he says. TCS takes a structured approach to leadership development at its offshore delivery centers. The initial deliveries at the offshore centres are done by Indian leaders sent on deputation. They recruit and train the local talent in development and design jobs. The company then identifies employees who can take up leadership roles at the programme management and project leadership level. The new leaders are given an intense training on the quality processes, which also involves corporate training since the local leaders will need to be in touch with the central leadership. The Indian leaders then hand over the country management to the local leaders and come back. SAP significantly raised its talent benchmarking when it introduced a global talent management programme two years ago that covered identifying talented staff and preparing them for leadership positions. Additionally, SAP launched the Career Success Center (CSC) last month. It is a global resource application that allows SAP employees to plan, manage, and develop their careers in line with the needs of the business. The company claims that, to date, 37,000 unique users, or about 92 per cent of SAP's employees, have accessed the centre. Through the various leadership development processes, the company found international leaders who started in local positions. Léo Apotheker, who recently joined the company as co-CEO, and the three newest members of the board — Bill McDermott, who will be responsible for all sales regions, Jim Hagemann Snabe, who will have full development responsibility for SAP Business Suite and the SAP NetWeaver technology platform, and Erwin Gunst, who will become the chief operating officer — all started in local management roles. Cross-border rotation plays a key role in developing global leaders. Both SAP and TCS have active support systems to encourage cross-border mobility. SAP has a global mobility department that works with the employees in identifying assignments to help broaden their career development, offering language classes and cultural coaching. TCS provides a forum called Maitree to all its employees worldwide. The forum facilitates employee engagement and helps them strike work-life balance. The company also holds an annual event called Global Village to spread cross-cultural awareness — employees from 45 nationalities participate in the event every year. Clearly, Indian multinationals have not only taken big strides in acquiring and running businesses overseas, but also positioned their organisational model well in line with their evolved international counterparts.


Talent development for India by Naresh Wadhwa Source: BL: Monday, Jul 07, 2008Corporates must take the lead in developing knowledge workers --------------------------------------------------------------------------------The talent gap presents a compelling case for private-public partnership through industry-academia alliances to enhance talent development amongst the youth at the grassroots level. --------------------------------------------------------------------------------
Where are all the workers? One of the reasons for the skills gap in the country is the quality of talent being churned out. Every year, India produces around 25 lakh university graduates, including 4 lakh engineers and 2 lakh IT professionals. Nasscom estimates that only a fourth of these technical graduates and 10-15 per cent of other graduates are considered employable by the IT and ITeS segments.

In a speech at Harvard University in 1943, Winston Churchill observed: “The empires of the future will be empires of the mind.” As The Economist recently put it, Churchill might have added that the battles of the future will be battles for talent.
Globalisation and market forces are creating opportunities across countries on a scale never seen before. Unfortunately, there is also a widening skills gap. The resulting battle for talent is not just between companies, but also between countries; notice how today ‘reverse brain drain’ is helping India’s and China’s economies.

With 900 million ‘globalised’ workers in the world, sheer numbers are not the problem in the current talent shortage. Rather, the gap is shaped by geography, migration, demographics and education, with all the signs pointing towards an even bigger problem in the coming years. Demographics is a case in point; its most dramatic effect will be in Europe and Japan. By 2025, the number of people aged 15-64 is projected to fall by 7 per cent in Germany, 9 per cent in Italy and 14 per cent in Japan. It will have an effect on China and also in the US where the retirement of the baby-boomers means that companies will lose large numbers of experienced workers over a short period.

India has the demographic advantage and this begets the question, how can a country with a billion people suffer from talent shortages? One of the reasons can be observed easily — only 11 per cent of the relevant age group in India go on to higher education. Another cause for the skill gap lies in the quality of talent being churned out. Every year, India produces around 25 lakh university graduates, including 4 lakh engineers and 2 lakh IT professionals. The National Association for Software and Services Companies (Nasscom) estimates that only 25 per cent of these technical graduates and 10-15 per cent of other graduates are considered employable by the rapidly growing IT and ITeS segments.

I believe we should see the silver lining in the talent shortage in India; there is a huge well of opportunity behind the cover of scarcity.
Nasscom predicts that India’s IT sector will face a shortfall of 5 lakh professionals by 2010 while a recent IDC report suggests India will experience a shortfall of 1.18 lakh skilled IT networking professionals in 2008 alone.
Evalueserve predicts a demand for over 1.6 lakh foreign language professionals in the Indian offshoring industry by 2010 to address the demand for language-sensitive work. And, the talent shortage goes beyond the IT industry.
Private-public partnerships
This talent gap can be addressed better if the youth of India are educated and trained at a certain level of quality. The current state of affairs presents a compelling case for private-public partnership through industry-academia alliances to enhance talent development amongst the youth at the grassroots level. Many IT companies are now partnering with engineering colleges and universities to build much-needed engagement between industry and academia, even creating universally accepted benchmarks like certifications and policy-level curriculum changes. Educational institutions can update the syllabus of professional academic courses to make them more industry relevant, with regular updates from professionals who have a deeper understanding of current business developments and technical standards.

There’s also a rising trend of talent development in organisations in India mostly through a two-pronged approach — pipeline development and workforce re-skilling. GE’s famed Learning Centre in Crotonville in the US is a great example of the success of such initiatives.

Corporate India needs to take the lead in training development to benefit the wider community and build an army of ‘knowledge workers,’ to borrow Peter Drucker’s term.

The Cisco Networking Academy programme, for instance, partners with over 170 institutes in India aiming to create a supply of world-class IT professionals in the country and help bridge the digital divide. If leading companies from across industries can step forward to advance talent development, we could make the youth of today competitive, thus supporting long-term local sustainable development and also addressing global demand.

Arguably, talent has become the world’s most sought-after commodity. I remember reading some time ago that GE Capital had boards in its Indian offices saying ‘Trespassers Will Be Recruited’! If we all work together, we can give the youth of India a better chance to follow their dreams and be assured of a place in the rapidly evolving global economy.

(The writer is President and Country Manager, India and SAARC, Cisco.)



HR Consulating: People, performance and pay counts6 Jun, 2008, 0651 hrs IST,Vinod Mahanta, TNN

People, performance and Pay is what Paul Platten has spent studying in his thirty years in Human resource (HR) consulting, so it’s quite natural that a book he has co-authored carries the same name. The global head of Watson Wyatt’s Human Capital Practice is a renowned expert on executive compensation, having worked across sectors in solving the pay and performance conundrum of leading corporates. On his maiden visit to India, he’s looking forward to understanding the HR issues of India Inc. In an hour long chat with CD, he discusses global compensation trends, the HR consulting industry and the talent puzzle. Excerpts:
What’s driving the fast growth in HR consulting?
One of the things is compliance . There are more and more regulations like Sarbannes Oxley which are coming in. That lends itself to a review of policies and procedures so that’s a growth area for us. What we are starting to find is that with the rising commodity prices and the threat of inflation, productivity is an issue. Conscionable Compensation
Earlier it was just an issue of ‘we need people.’ So they looked for areas which had lots of low-cost labour, where they could put lots of people on a problem. That’s what lead to a lot of backroom operations in low cost geographies.
Now the labour situation is getting tighter because you have so many people who actually have skills. It’s not a people issue, it’s a skill issue — it’s a matter of making sure that people are productive and perform. Economics one-on-one is about productivity, input versus output. As the cost of labour starts to increase, it costs more to produce. So productivity is going to be a big issue going forward. HR consultants need to step out of the HR world and move into a business role.
Are client briefs changing?
In the US, a lot of work has been compliance driven. When you look at Asia, especially China, you tend to see a lot of movement from the state owned companies to public companies . They are trying to move into modern HR processes. So it’s different in different places. The biggest issue is trying to understand not just the best practices in HR — what clients have traditionally tended to ask — to what is best for us.
The HR consulting space is witnessing a lot of action, with strategy consultants, accounting firms, boutique firms, and even IT firms getting into the space. How is Watson Wyatt differentiating itself?
We have collected data from all over the world, in areas like compensation, so we have institutional knowledge. There are also methodologies that we have developed over time and HR systems that we understand that others don’t because they are unique to us. We have many years of history. This isn’t a space where you can jump in and out. IT people are coming in, trying to implement an enterprise wide system. They say they can re-engineer HR systems but they are actually doing process-based consulting. They are bringing in a facilitator who then meets with a group of people to extract ideas and then implement them. That’s not the way we do it. We will do the same processes and facilitation of ideas, but we will also bring in the experience we have of our processes. I think that’s the big difference, we haven’t jumped into the space and said we are HR consultants.
Is there any big trend you are witnessing in HR right now, something like HR Outsourcing was some years ago?
One of trends we are seeing is HR global delivery systems. We had many HR services in the past, from compensation to management and other things. Today, clients want to make sure they tie these together. I have been in consulting for over thirty years and we have talked about these spheres and clients never paid attention because you would deal with very different pies in the HR area. You talk to different managers and you did not see them talk to one another or you did not think about tying them together. I think you have started to see much more demand for integrated solutions, through which you can train people properly, track their compensation, develop benefits systems that are unique to them, create integrated retention systems. Some of this not being driven by HR but by the CEO. It is also being driven by the line managers.
Any new insight you have come up in executive remuneration lately?
Our research finds executives perform better when they own a certain optimal amount of stock. If they own too much, they become conservative and risk averse which is not what you want. If they own too little, they become too risky because they want to build up as much as they can. So the key is to try and find the optimal amount and so we encourage our clients to do so. While giving stock options, executives should be required to purchase and hold shares and actually should use part of their bonus and longer termcash to purchase shares and hold them. That, to us, is the most effective way of paying for performance.
Do you think that pay and performance equation is skewed in places like India where pay hikes have been northbound for quite sometime? Are we are overpaying for talent?
Companies are starting to focus on how much people are paid but they will eventually focus on managing their performance. My question is whether companies are getting value from the amount they are throwing at people . It wasn’t a concern earlier, but now we are reaching a point when these salary increases are becoming quite meaningful. With the dollar declining, and salaries moving closer to US pay wages, productivity will be the key issue in Asia in next ten years.
HR work used to be mostly administration and bringing in some feel good factor in companies but now it’s becoming too complex. Why?
The business is getting complex too. There is a global element in business — are we located at the right place, do we have the right people, right culture, are people connected to our company. The managers coming out of MBA programs are more aware of these things now and more and more requirements are being rolled out. The issues that companies come to us with and want to have expertise in have just exploded in terms of complexity . We are manufacturing in China , distribution is in Philippines, assembling is in Mexico and we are selling in North America, help us develop a pay program. Ten years ago you didn’t have these questions.
Human capital's Herodotus: Peter Cappelli6 Jun, 2008, 0800 hrs IST,T R Vivek, TNN

It could have been the jetlag, or the whirlwind India lecture tour in hot May, or even the number of senior executives of India Inc. falling over each other wanting to pick Peter Cappelli’s brains and have a“two minute” chat.
Peter Cappelli certainly looks a worried man. It was probably mere coincidence that we met him a day after the US media was awash with reports of national confidence being at an all-time low, in the world’s biggest economy, since the Great Depression of 1929. Now Cappelli, the George W Taylor professor of management and director at the center for human resources at Wharton, is to human capital and talent managementwhat Philip Kotler is to the world marketing and business management. When he starts sounding more like Doctor Doom Marc Faber, you can be sure there’s something seriously wrong somewhere.
Cappelli’s biggest worry about the US industry seems two-fold. He contends that US companies are trying to deal with the new age issue of talent management in their old fashioned ways, and second, the attitude of top management in their near servility to stock markets and the concept of shareholder value.
“The US companies are losing global ground in a big way to European and Asian companies. London today has emerged as the world’s financial centre while there are several claimants in Asia for leadership in manufacturing and services,” says Cappelli. He says that US companies still have a lot of old, longrange plan models to deal with talent management developed in times when the business environment wasn’t changing much at all. “Today, it’s a very fast changing world,” he says. According to Cappelli, most companies design HR tools and practices for all employees assuming they would be company lifers.
Cappelli has addressed this issue in considerable detail in his latest book Talent On Demand where he suggests applying the principles of supply chain management and just-in-time in talent management as well to manage the unpredictable demand for talent.
“Companies are relying on outdated and ineffective strategies to develop their internal talent, forcing them to be dependent on talent they often have to buy off the shelves,” he says. In his book he has proposed a new model called the “Organization Man” where companies need to train employees in skills that are specific to their broader business needs, with the understanding that those employees will grow with the company.
Cappelli suggests that employers need to work on an “on-demand” talent management, model where they should work on developing workforce skills according to competencies that could be valuable no matter where their business is headed in the next 10 years.
“In the old models, companies made massive investments in people targeted to narrowly defined jobs, that were primarily process driven. They developed them for that particular job assuming they would remain the same even after several years. Today, with the pace of change, that job might not exist or that employee might not be part of the company even next year. Companies have to develop workforce skills without being too specific, but more as a means of handling uncertainty in the future,” he says.
That’s why he says, he admires several Indian companies such as Infosys and Wipro. “Wipro for instance has shown the ability to plan out detailed competencies for their employees. In the recent years, Indian companies have been more innovative talent managers than US firms. They are willing to invest more and spend more management time on it. Accenture is another company that has built a steady pipeline of talent in India through their tie ups with universities. The key here is to look at it as a business issue,” he adds.

Tackling Talent Management

No one would know the impending crisis for US better than Cappelli who is a co-director in the US Department of Education’s National Center on the Educational Quality of the Workforce, and an associate at the US National Bureau of Economic Research.
Recognised as one of the world’s most important authorities on human capital, Cappelli has worked extensively on analysing changes in the workplace and their effects on employers. In his previous books and research papers, Cappelli has written in-depth about the changes in the way companies recruit , manage talent, and appraise and manage performance.
He has also pioneered the idea of taking HR management out of standard performance metrics such as productivity, turnover and attrition to looking at it as source of revenue. In some of the more radical prescription he has to manage talent on demand, Cappelli suggests cost shared training where employees could pay for a part of their external training programmes and courses, by taking home a slightly reduced pay package.
What about some of the most lionised HR practices at companies such as GE or Google? “GE’s model only works for GE. There are very few companies in the world with GE’s size. If companies try to copy GE, they’re in for a lot of trouble. As for Google, their much publicised HR policies are in fact part of a massive branding exercise.
Google needs terrific test scores, and their lava lamps, free meals and massage chairs grab a lot of attention,” he says.
According to Cappelli, what Google is doing today isn’t too different from what a lot of dotcom companies did in the late 1990s. “All of them wanted people to be inside office for as long as they could. They didn’t want any flexibility,” he adds.
Despite, the Indian companies making rapid strides in the area of talent management, Cappelli says the supply side for talent would still be in favour of the US for the next few years because of the better education infrastructure.
“You can do IT jobs right out of college. In that sense it’s still an entry level job. China will produce a lot of graduates, as will India, but be-, there doesn’t seem to be much scope.The universities haven’t grown enough in India,” says Cappelli.
Another area where Cappelli has fulsome praise for India, and fears for US, is a sense of nation building, and a purpose higher than more profits and better shareholder value among Indian CEOs. “Indian CEOs seem quite different from their US counterparts. Almost every CEO I speak to here seem governed by good management principles and display a great deal of pride in their contribution towards the country’s progress. Now, nation building is a better rhetoric to charge up your employees than talking about shareholder value,” he says.
Cappelli reckons that the peculiar US CEO obsession about keeping the investor community happy could become their undoing as companies focussed less on innovation and long term vision.
He cites the example of two cross Atlantic companies Motorola and Phillips who went through their share of problems at around the same time. While a focus on innovation and long term strategy helped the Dutch Electronics giant come back on track, Motorola’s troubles seem unending. “The US companies are much more willing to give back money to investors, if they are not doing well. An extreme Street focus means they dont have the stomach for course correction and the rebuilding phase. If GE’s appliances division hasn’t done well for a few quarters, the solution seems to be to sell it. The analyst community too agrees with the idea,” he points out.
“Today there are more rock star CEOs and an unhealthy focus on compensation. That has resulted in a constant litany about executive malfeasance, corporate fraud and tax evasions,” he says.
According to Cappelli, US companies are not taking competitiveness too seriously. We are not investing enough on infrastructure and collective enterprises. It all might come back to hit the US hard, if it hasn’t already,” he says. THE TOP 10 MEASURES OF HUMAN CAPITAL MANAGEMENT
Source:The Top 10 Measures of Human Capital Management. HR Focus, 10596038, May2001, Vol. 78, Issue 5

The top 10 areas to measure, as recommended by Jack Fitz-enz, chair of the Saratoga Institute (now part of Spherion's Human Capital Consulting Group), in a recent issue of Workforce magazine (www.workforce.com), won't all apply to your company, but some will:
Your most important issues. These are the targets of all lower-level measures. Focus on them and ensure that your metrics lead in a direct line to them. Human capital value added. How do your workers optimize themselves for the good of the company and for themselves? This is the primary measure of an individual's contribution to profitability. Human capital ROI. This is the ratio of dollars spent on pay and benefits to an adjusted profit figure. Separation cost. How many people are leaving? From which departments? What does it cost the company? The average cost of separation for an employee is at least six months' equivalent of revenue per employee. Voluntary separation rate. Lost personnel equal potential lost opportunity, lost revenue, and the cost of workers having to fill the gaps under greater stress. Cutting the separation rate saves the cost of hiring and keeps customer service quality high. Total labor-cost revenue percentage. This is total benefits and compensation cost as a percentage of organizational revenue and shows how much of what you are taking in through revenue goes to support the company's total labor cost, including temporary, seasonal, and contract or contingent workers. This metric can help you track changes in your workforce. Best approach: Compare it to your revenue factor and compensation, benefits, and contingent off-payroll costs. If the metric is rising, determine whether compensation or benefits costs are up or revenue is down. This will help you decide what actions to take. Total compensation revenue percentage. This is the percentage of the company's revenues allocated to the direct costs of employees. It excludes costs for off-payroll employees who receive a 1099 form (as does the metric in number 6, above). Before creating strategies to address concerns, compare this metric to your revenue factor, compensation costs, and benefits costs to analyze what is happening with workers. Training investment factor. Basic skills are crucial: Workers who cannot read, write, do simple calculations, or talk intelligently with customers need to have these skill deficiencies addressed. Time to start. Recruitment will continue to be a challenge. The amount of the time it takes from approval of a job requisition until the person is on the job is a strategic indicator of revenue production. Revenue factor. This is the basic measure understood by managers HR hots up at $4 bn industry in 4 yearsSource:ET:11 Apr, 2008, Priyanka Sangani & Vinod Mahanta Giving your company a fancy descriptor is much in vogue these days. Amit Bhatia thinks his newly launched company Aspire India has a unique and a winner of a business model.
He may or may not be right, but certainly we think the descriptor he uses for the company is one of its kind. Aspire is supposedly the country’s first “human talent supply chain firm”. Beat that.
The country’s well chronicled talent crunch is reaching epic proportions. Alongside jobseekers, one of the biggest beneficiaries of the massive talent shortfall is the HR services and outsourcing business. In a matter of merely four years, HR services have become a $4-billion big industry spawning hundreds of start-ups such as Bhatia’s and attracting a horde of MNCs.
According to industry estimates, segments like staffing are doubling revenues with each passing year. To be sure, the HR Industry has itself undergone a sea change. From the handful of players in the business-that too dominated by recruitment companies-the market now has more than 20,000 players who operate in every part of the HR chain imaginable, from staffing strategy, to recruitment, technology, assessment and training.
Bhatia’s Aspire India is touted as a new B2B model where the start-up would supply clients with talent from the untapped reservoir of India’s non- metro towns after training them to meet specific job profiles and also provide sourcing software.
But why did a man who in his previous CEO avatars was the founder of Mckinsey Knowledge Center, then brought the sourcing firm Freemarkets into India, before moving on to head WNS Knowledge Services till sometime ago, start such a venture?
“I was a big recruiter in my last job. As a customer I found that vendors were never able to supply talent. There were three key problems, talent crunch, wage inflation, and high attrition. I figured out every big company will face these three problems and there was no answer to the problem in sight. So I decided to jump onto the entrepreneurial bandwagon,” he says.
At a time when talent is being touted as the most precious resource, companies are going all out to attract, retain and reward the coveted employees. That coupled with a 9 per cent GDP growth environment where companies are hiring more aggressively than ever before, has lead to a situation that is ripe for an explosion of a different kind of HR services.
The HR processes itself have become much more complex. “Firstly, the general increase in movement of people in the economy, fuelled by the sustained h i g h growth, has increased the sheer number of “transactions” in the HR system in any organisation. Secondly, the increase in the competitive pressures has made the role of talent more crucial than ever before,” explains Milind Sarwate, chief HR & Strategy, Marico.

As a result, HR processes have to deliver a higher quality on a larger number with far less elbow room to fail. All these have made each process critical and the role of expertise in each process has, to that extent, gone up substantially. HR experts say three clear trends have emerged. Line managers are expecting more out of the HR department.
HR processes themselves are getting more complicated and can’t be executed from within the company and there are several specialised service providers in the market. The more strategic functions are handled in-house and vendors are found for the rest.
The HR function has also grown to project manage vendors. “At Nokia, we handle the core processes like mentoring and the assimilation and culture building programmes in-house and outsource most of the others,” says Bimal Rath, head HR, Nokia. The handsets giant works with 35-40 vendors, not counting the one-off training sessions it conducts.
Aniruddha Limaye, chief people officer, WNS says that in high impact areas like top level searches, they prefer to work with two- three partners, while for frontend recruitment, it goes up to 25-30 vendors. With attrition rates in industries like BPO running at about 70 per cent, India has seen the highest salary growth in the Asia Pacific region for the last five years.
Also, companies like Infosys are adding nearly an equivalent of a Hindustan Unilever every year to their workforce. “Every area of HR is under pressure because of the sheer growth in the number of people and the magnitude of problems,” says Anil Sachdev, CEO, Growtalent. The ratio of HR professional to employee used to be 1:500 some years ago, and that has come to 1:100 but HR is still struggling to cope with so many demands being made in different areas.
The boom in sunrise sectors has only worsened the HR headaches. Take for example, the background screening industry that almost didn’t exist seven years ago but seems to be on rocket fuel these days. There are about 200 small and large players in that business, some even one man outfits.
“It all started with the multinationals setting up business in India, when they realised that this was one of their international best practices that could be imported here as well. Subsequently, it grew with the IT/ITES segments when clients insisted on a background check and eventually even Indian companies started seeing value in it.
Incidents like terrorists working for a BPO and cases of money being defrauded made companies realise the value of conducting background checks,” says Ashish Dehade, managing director (West Asia), First Advantage. And newer services like endto-end campus recruitment solutions, policy helpline-a service where employee queries on organisational policies are answered 24*7- and on-boarding and induction are being introduced everyday.
There is so much pent-up demand in some areas like temping, that the industry has been growing at 100% yearon-year for the last four years and is expected to continue to grow at 75-100 % for the next two years. “Regulatory issues are hindering the growth of the temping industry in India, but temp staffing is gradually being accepted as a mainstream industry,” says Manish Sabharwal, chairman, Teamlease , India’s biggest staffing company.

Traditionally when companies looked at HR outsourcing, it was only about the payroll process which was duly farmed out to accountancy firms. But as companies grew bigger with over 5,000 employees and became multi-locational, local service providers didn’t fit the bill any longer. Companies are realising that they need to move to bigger partners.
“Over the last two years, companies have understood the importance of outsourcing. For instance the recruitment process goes from talent screening to sending out an offer letter, providing information on the compensation details and updating the demographic information. Further, this can go into performance appraisals etc. So as various HR processes get more complicated, companies are realising the benefits and importance of outsourcing them.” says Rajeev Grover, Asia Pacific Head, Outsourcing, Hewitt Associates.
Companies witnessing hyper-growth are struggling with the sheer challenge of interviewing and assessing thousands of people in a day. So industries like BPO, retail, and IT services are looking at assessment services-a business that too is almost doubling every year.
Market leader Meritrac witnessed a phenomenal 170% jump in business over the past three years. “Finally the commonness of large recruitment programs involving for example 100 campuses or 25,000 candidates requiring specialist partners has meant the limelight is firmly focussed on the assessment industry,” says Madan Padaki, Co-founder, Meritrac.
Every part of the HR value chain is growing; be it strategy, processes, technology, or people. Even areas that were slow to take off like consulting are now growing at 30-40%. Till a few years ago, Hewitt used to carry out an employee engagement survey and operational compensation benefits for an Indian conglomerate.
But over the last few years, it has gone on to working on the return on investment on compensation spends, ways to enhance the quality of the workforce and engaging every month with the company on various HR and talent management related issues.
“Companies no longer view HR consultants as vendors but strategic partners. They put in a lot more faith and trust in the consultants now,” says Sandeep Chaudhary, India Leader Consulting, Hewitt. The function of HR consultancies has evolved over the last four years to go from providing merely transactional services to executive training and coaching and dealing with merger related HR issues.
The HR industry has in India has undergone the first phase of M&A activity in the last three years, with some temping companies like Mafoi, People One and some recruiting companies like ABC and Grow talent being acquired by MNCs looking to enter India or strengthen Indian operations.
Some bit of domestic M&A has also happened. First Advantage took over Verify, the second biggest player in the segment in India in February. But given the fragmented nature of the industry and the astronomical growth rates, a second round of consolidation could occur when things cool down a little.
And interestingly, the Top 10 players in the staffing business like Teamlease and Mafoi have less than 15% of the market, whereas in any industry the Top 10 players usually account for 60-80%. Surely, in the talent trade, there will be hundreds more entrepreneurs like Bhatia, and more colourful monikers and inventive business descriptors in the days to come.
'US troubles may increase HR outsourcing'6 Feb, 2008, 1353 hrs IST,Deepshikha Monga, TNN NEW DELHI: With a sluggish US economy, offshoring tasks to cut costs is bound to rise. Jay C Rising, president, HRO Outsourcing Group at Hewitt Associates, says that human resources is one area which will see increased global sourcing. While India, which offers both domain expertise and process excellence, is an ideal outsourcing destination for Hewitt, there is still time before it evolves as a lucrative market for outsourced HR services.
Excerpts:
How important is India as an outsourcing base for Hewitt?
Hewitt has about 6,000 associates in India in its outsourcing practice now, which is nearly one-third of our global presence. This includes 1,500 people in our technology support team in Bangalore. The last four years have seen us expand rapidly in India. We now do HR administration, payrolls and benefits work here as well as have call centres for our global operations. India has not only the domain expertise but also the process excellence. It’s incredible how fast our Indian associates learn the complexities of the US regulations relating to HR.
We have now set up a new centre in Noida which will have 100-150 people servicing the domestic market and another 1,000 people catering to the global operations. While we are focusing on catering to the domestic market, we are committed to India as far as outsourcing is concerned.
How do you view India as a market for outsourced HR services?
About 15-20 % of what we do out of India goes towards servicing Indian companies, with the rest focusing on multinational companies. In India, we haven’t seen many companies outsourcing their HR functions yet. The sector is highly unorganised and companies are yet to see the benefits of HR outsourcing. However, we are keeping an eye on the market.
We have seen, like in the UK, that as a market becomes more competitive, companies see greater benefits of HR outsourcing as a differentiator. Apart from the cost savings, which can be in the range 10-20%, HR outsourcing also helps companies achieve greater efficiencies and focus on core competency. We expect that to catch up in India, too.
Indian outsourcing firms are also developing capabilities in the area of HR outsourcing.How do you see that as a challenge?
The biggest advantage Hewitt has is its proprietary technology which is very important to gain scale. We have our own technology platforms based on our long experience in this area. We service 200 clients with a total of over 600,000 employees.
We have now developed a specific platform for Asia Pacific for complex transactions. With regulations and taxes changing with time, it's easier to keep systems updated with the same platform. It takes time to develop platforms and we have an edge here, over others.
How do you view the slowdown in the US impacting HR outsourcing?
We haven’t seen any impact on business due to the slowdown in the US but we are watching it closely. However, HR is such a critical function that it can’t be impacted too much. In fact, in a bid to cut costs, more organisations are expected to outsource HR functions. As it is, about 50% of an HR department’s time is spent on just the three areas of staffing/recruiting, workforce relations /communication, and workforce administration, rather than critical work. It makes sense to outsource these functions and focus energies on other critical business issues.
Link HR to business outcomes’7 Feb, 2008, 0020 hrs IST,Deepshikha Monga, TNN

Pete Sanborn, leader, Hewitt Associates’ Talent and Organistional Consulting
With scarce human capital turning out to be the biggest impediment to growth, the role of HR has become very significant. HR, however, has to move to the next level, becoming more accountable to the organisation’s business performance, says Pete Sanborn, leader in global HR consulting firm Hewitt Associates’ Talent and Organizational Consulting practice who also leads Hewitt’s Next Generation HR research, solution development and client rollout, in an interview with ET. Excerpts:
What is next-generation HR?
Hewitt conducted a research on the future of HR interviewing over 50 academicians and HR chiefs of global organisations, people like management expert Peter Capelli from Wharton, Ed Lawler from the University of Southern California, Jeff Pfeffer of Stanford University and Dave Ulrich from the University of Michigan.
We also interviewed the HR heads of companies like American Express, IBM, Starbucks and Capital One. The conclusion we arrived at was that HR has to be linked to business outcomes. It has to move from a vertical-oriented strategy — recruiting, learning and compensation & benefits — to end-to-end processes like talent supply, leadership & key talent capabilities and high performance that cut across verticals.
HR has to be made accountable to deliver business solutions. The difference in this approach is the move from process mentality to functional mentality. A good example is Cisco Systems which disbanded the recruiting function altogether as each business was doing recruitments on its own. It then appointed its senior supply chain executive in charge of the talent supply process.
The talent supply process, as opposed to the vertical functions, includes taking care of various stages from workforce planning to candidate sourcing to assessment and selection, onboarding & orientation and first year performance. It’s very important to avoid a linear growth model where revenue increase is attained by a similar growth in headcount.
What is driving this shift?
The challenge of talent shortage is the driving force behind this shift. HR is less of an art but more of a science. Look at various data points about people and connect it to the business performance. For instance, in case of a retailer, look at the high-performance stores and find out what HR practices distinguish those from the others like where are the people being sourced from. What are the challenges to this move towards next generation HR?
It involves a shift from what has been and is happening. It involves a reasonable amount of learning and thus, some initial investment. Another challenge is that while outcomes are on the plate of the CEO more than ever before, the business acumen of HR heads is still not that strong to make a case for the shift to next generation HR. The CEO’s biggest contention against the shift is that HR is not capable of it. So, there is a great focus on developing required capabilities in HR people.
Do shared services play a role in this?
The restructuring of HR functions opens it up to outsourcing. In case of a vertical-oriented strategy, it is difficult to outsource one function. But in case of processes it can be done much better by focusing on core areas and outsourcing the rest. Currently, transactions form a major part of what HR does. According to a recent study, about 83%-84% of HR’s time is spent in transactions.
Globally, companies need to reduce time spent on transactions. Technology and administrative functions can easily be outsourced using a shared service model while more strategic aspects of HR can be kept in-house like identification and development of key leadership and grooming. Large organisations are now replicating talent in various businesses by combining resources and creating centres of shared services. In the process, they use people better and free up more people for strategic thinking.
Integration, in today’s world of M&As, is a big challenge. Has HR got a role there, especially in case of Indian companies?
Most large financial services companies have a process for integration, including cultural integration. GE, which started this, has clear processes for integration. I don’t see such an emphasis on integration in India. Issues of cultural integration still remain fuzzy here. A lot of mergers in case of Indian companies still remain financial mergers. The merger is not really seen as building economies of scale at the people level. ‘Freedom at work forges employee engagement’ Business Line, Monday, Dec 03, 2007




Setting a Gallup(ing) pace: The interiors of the Park Hotel in Chennai. The hospitality chain has received the 2007 Gallup Great Workplace Award.
Tunia Cherian
It could be viewed as a sign of the times. The barriers between the customer and service provider are slowly but surely being torn down.

If you happen to visit any of The Park Hotels in the country for a drink, don’t be surprised if the steward, after serving you your drink, pours one out for himself.

“We encourage our stewards to interact with our guests and don’t not mind if they share a drink with them,” says Sundeep Kumar Mathur, Corporate Director, Human Resources, The Park Hotels.

He explains saying that the steward, who may well be earning around Rs 35,000, would know how to conduct himself at such occasions. This is just one example of the modern style of work followed at The Park. Mathur adds that a degree of freedom could go to improve employee engagement and bonding with the company.

Similarly, while taking guest orders, stewards at the hotel often crouch and speak to their guests at eye-level, rather than standing up while taking their orders.

But, that is not all. Salary, he says, is crucial to ensuring a sense of wellbeing among employees and The Park group was one of the best paymasters in the domestic hospitality sector, he said.

The HR policies of the hotel chain were rated the best in Asia, he said. The group is also one of the winners of the 2007 Gallup Great Workplace Award given by the Gallup Organisation USA.

According to Mathur, the hotel’s HR policies addressed a range of issues such as employability, welfare measures, corporate social responsibility and flexi-work options.

According to him, it was necessary to accommodate today’s employee. The hotel’s flexi-work option, for instance, enabled staff, especially women, to work part-time. Employees also had the option to opt for retainerships with the hotel or employment based on agreements.

The Survey
The Gallup survey comprised of two parts — an employee satisfaction and a customer satisfaction survey.
According to him, the 1,700-plus employees were given Gallup’s Q12 questionnaire. Officials from Gallup even visited employees at their homes and sought their views on their employment in total confidentiality. The survey was conducted over four years from 2003 through to 2006.
SAP application
In an attempt to further streamline administration of its human resources, the company has implemented SAP’s HR application. According to Mathur, the records of each one of their employees could now be viewed at the tap of a button. Since the system was Web-based, employees also had the choice to view their employment particulars. The interactive nature of the application had also encouraged employees to equip themselves with Net skills.
The six Park Hotels located at Bangalore, Chennai, New Delhi, Navi Mumbai, Kolkata and Visakhapatnam, are managed by Apeejay Surrendra Hotels.


Measuring the return on human capital
Source: ET, 25 Dec, 2006, 0052 hrs IST,Smita Anand, TNN

The goal for a business is simple: Invest capital so that it maximises shareholder value. But, not so simple are the actions that are needed for a business to achieve this goal.
Successful strategy execution depends on access to intellectual and operational knowhow, customer and supplier relationships, a committed workforce, and other such intangibles. At the heart of making these intangibles come-alive is the firm’s investment in human capital.
Capital budgeting and financial planning frameworks offer very little to guide human capital investment decisions; yet manpower costs typically constitute a significant component of operating expenses. However, it is possible to calculate return on human capital with factual analysis, which, in turn, can help develop insights into human capital management and generate sustainable economic returns.
The critical thing is to track critical employees. Our research demonstrates that the flow of pivotal employees in and out of an organisation is a strong predictor of change in CFROI® (Cash Flow Return on Investment).
Talent Quotient (TQ™) is a measure of a company’s ability to attract and retain critical employees — those who may be thought of as pivotal to business success. TQ measures two key components, (i) the proportion of pivotal employees joining an organisation as a ratio of all new hires in a given period (TQ-Attract) and, (ii) the proportion of pivotal employees leaving the organisation as a ratio of all employees leaving over a given period (TQ-Retain).
Few organisations understand their employee investments beyond the cost of salary and benefits and fewer still understand the return on their investment in employees. The fact remains that most firms lack a basis for structuring or prioritising human capital investments, and a concrete notion of what return on investment is generated over time.
There are many ways to do it. Let us take a look at a potential area of application, i.e. measuring ROI on talent retention strategies implemented by an organisation.
Measuring ROI on these strategies (e.g. long term incentives, compensation increases, etc.) could appear to be complex, but it actually is a simple task if one de-constructs the key elements that need to be tracked and correlated.
Let us assume that for our purposes ‘critical talent’ is those employees who are in the top 25% on performance. This would likely translate into these employees also being the top 25% on compensation increases for the time period (this is the investment made by an organisation). The objective should be to ensure that the organisation is able to retain this group of employees better than the rest of the employee population within the organisation (because it has invested more in this segment).
Thus, a way to measure this in a quantifiable manner could be: ROI on talent retention = 1 – (attrition rate of critical talent/attrition rate of all employees). In a market that is constantly witnessing an upsurge in salaries and shortage of skilled workforce, such measurement would enable organisations to invest in human capital in a focused manner. There are other similar simple constructs that explore the viability of talent attraction and other retention investments. The next logical step would be to establish benchmarks and develop predictive tools to help guide organisations make the right investment decisions.
If one were to look beyond the technicalities of any one particular approach, the basic need is for organisations to apply rigor in calculating the returns on the multi-million dollar investments they make each year in their employees and the ways in which they can do so.
Companies need to measure the value that employees bring to the organisation, evaluate their impact on business performance and then align them with the business results. Companies have always measured their investments in more tangible assets such as buildings, equipment and even new products. Why should talent be far behind?

Human resource management — New agenda for 21st Century
Source: Business Line, Monday, Jul 01, 2002S. Ramachander


THE perplexing subject of managing and motivating people in organisations to willingly give of their best — or HRD, to use jargon — is returning to the limelight for all sorts of reasons. The more serious media speak of the dearth of high-performance individuals, alongside the sharp rise in mid-career stagnation or, worse, unemployment.
The slump in the IT market, the reversal of the spiralling salaries of a few years ago, and the eternal issues of relating performance meaningfully to pay, with the excitement over economic value added as a tool for doing so, have all come to the fore in managerial discussions of late. All these are clear signs of a changing role of the people management function in industry.
What has changed for us in recent times are two significant breakthrough developments: The first is the dawning realisation more than ever before that managing "human resources" in practice is a line job and, therefore, can only be executed by the active involvement of a number of key frontline and senior managers.
The second aspect is a challenge to three traditional assumptions of top management i.e. that people, generally speaking, were plentifully available, easily replaceable and relatively inexpensive, compared to other critical sources of competitive advantage. In the past decade, things have changed for most corporate organisations along one or more of the three dimensions. Increasingly, it is also becoming clear that, where everything else is imitable or transferable, it is the quality of people that can make a big difference. And there is, thus, a paradoxical scarcity of really effective, talented people, amidst the apparent plenty of qualified job-seekers.
So where do we go from here, as we look out to 2005 and beyond, at the daunting prospects of ever-increasing global competition, with more and more tariff walls between economies showing signs of crumbling?
In this set of two articles, I shall try to do three things. First, look briefly at the strategic, macro, or country-level implications of globalisation.
Second, look at its managerial impact, mainly from the point of view of the CEO in the organised industrial sector, producing both goods and services.
And, last, we shall consider the corresponding effects upon people and the challenges to managing the people dimension of organisations, which are most clearly felt by us all. I shall call this Strategic Human Resources Management, or SHRM, for short.
Globalisation
How if at all, is the 21st century going to be different and why? The seeds of the future have, as ever, been sown yesterday. The most important recent development in world history is the move towards liberalised, market-based economics in all countries, regardless of their earlier political ideology. If there is one thing that unites countries today, it is this almost unanimous vote in favour of freedom, deregulation and opening-up of markets.
Fundamentally, the crux of the term "globalisation" is the closer integration of any country's economy and, therefore, its markets for goods, services as well as financial assets, with the international economy. The globalised economy is nothing new to many countries in the developing world. A country such as Sri Lanka, for example, had become a model of deregulation, free enterprise and, above all, export-led growth, even way back in the late 1970s.
The Complexity Model
Today's world has seen industry boundaries being redefined or merging. Technology convergence as, for instance, across telecommunications, computing and entertainment media, is the order of the day. Economic boundaries are collapsing or are being redrawn by common markets and by trading blocks such as Asean and Nafta, and common currencies, such as the euro. The internal factors governing the resources and capabilities of companies are also becoming increasingly similar, imitable or even shared.
Large systemic effects caused by small changes in initial conditions are noted in fields as far apart as weather forecasting and macroeconomics. We are all aware that the world economy goes through cataclysmic changes due to extraneous factors, including natural disasters (due to the El Nino effect, for instance) that have little apparent reason or logic.
The future is now
Given the complexity and the bewildering nature of the reality, do we have no signposts or road maps at all? Is there no way we can look at the future in a structured way? The prospect is not so bleak after all. For a start, let us see: What in brief terms are the significant landmarks of the 21st Century? In some sense, we do not need to be great astrologers or philosophers to be able to detect these trends because most of the trends we are going to be hit with are there for all to see, if we but cared to look and listen to what is happening elsewhere on the planet.
They are what some refer to as "weak signals" that need to be amplified. What often prevents us from seeing them is the belief in our own uniqueness and the "It won't happen here" syndrome. Let me list a few of them: One is the ending of the notion of a lifelong career with the same organisation.
People are nowadays prepared to treat each job for, say, a period of three years almost as if it were an assignment in personal development and preparation. Organisations have to come to terms with this and are prepared to make very flexible career-planning decisions and make last minute changes to them.
Second, part-time working could become the norm as in many European countries, as also working in a portfolio of jobs. Workers, of course, expect a safety net of welfare measures in an atmosphere of hire-and-fire policies, yet being 40 plus and unemployed has no longer a stigma attached to it.
Third, we all will face the need for continuous learning on the job to keep ourselves current. The simple reason for this is that knowledge is expanding exponentially. The sum total of human knowledge added in the last fifty years is greater than all the published works of the previous human history. And the rate of change is accelerating.
This leads to a fourth point, a paradox that companies are still unwilling to come to grips with, namely that they will have to invest in training and updating a fickle workforce (including managers) who might well leave them, even by virtue of the same process! Yet not doing on-the-job-training is a non-option.
Fifth, and very significant, is the changing role of women in the work-force. It is no longer enough to be able to say we offer the same salaries to women or give them special maternity benefits.
Sixth, the rate of obsolescence is so high that all organisations must invest in some form of continuous learning and "multi-skilling" their workforce. Other factors are the global mobility of human resources and global standards of compensation. When such foreign accounting firms as E&Y and management consultancies such as McKinsey came to India they at once enabled all domestic businesses in those sectors to raise salaries by a factor of two or three and, therefore, the professional fees charged!
All of the above are already happening somewhere or other already, and it is only a matter of estimating the extent to which it will happen and when, as far as other countries are concerned.
What is the impact on corporate strategy?
Now, let us turn to the arena of greater interest to us, namely, managerial actionIt used to be thought that the mandarins in the ivory towers devised strategy, be it in the public sector or in corporations.
And until the mid-1980's it was the fashion to think that this was best achieved by having a central think-tank of planners, engaged purely in crystal ball gazing, who drew up detailed five and ten year perspective plans. In the early 1980's for example General Electric US had once a famous Long Range Planning department of 200 people, until dismantled later by the CEO Jack Welch.
The upheavals of the past decade and a half have put paid to all that. Today, strategy is seen not necessarily as a deliberate process but a heuristic one, emergent, often different from the original intention.
Going with the flow, developing alternative scenarios rather than forecasts, adapting oneself opportunistically to whatever situation arises, keeping one's options open, including that of collaborating with the so called competition, all are fair game in today's world. The traditional model of comparing the industry attractiveness and one's ability to compete alone are no longer considered sufficient for strategy development.
(To be concluded)
(The author is Director IFMR and ACME, Chennai. He can be contacted at rchander@ifmr.com)

























































































































































































































Human resource management: Cultural issues
Source: Business Line, Monday, Jul 02, 2002S. Ramachander



ONE of the reasons for the increasing uncertainty and changing models in managerial strategy is the growing force of the non-economic factors in human development. In the years to come, companies that do not successfully focus on the non-financial, that is, human and cultural, issues will come to grief. At least this is what an exhaustive survey by Ernst and Young has revealed in the US.
They studied the accuracy of long-term earnings forecasts made by 600 institutional buyers and sellers on Wall Street and found that only those based on the non-financial information pertaining to companies could predict future performance with any accuracy. The correlation between pure financial numbers and future earnings was declining. What this means for the study of human resources management is that people make all the difference, as the hard differentials between companies diminish and yet the market place remains a reference point for managing all the resources.
Strategic HRM
SHRM is an approach that takes an integrated and long-term approach of people management. It is managing the people processes in a way that is not just linked to corporate goals and visions but that also broadly derives from the goals. This connection with the very culture, character and style of the company is particularly strong in service industries.
Imagine a Disney World amusement park without the vivacious, energetic and ever-smiling people dressed up as Walt Disney characters in it! Southwest Airlines in the US has had a record of no sacking of any workers during the worst of the post September 11 crisis and declared profits every year for over 12 years — the only airline to do so. The unique personnel policies of the company and its work culture are, in no small measure, responsible for this.
Beyond the calibre and the technical knowledge or skills, it is the morale and manner of the people that determine success of consumer-oriented businesses.
At the strategic level HR can make strategy happen and can create new strategic alternatives. At the operational level it can help in the effective implementation as well as improving the basic structure.
Coming challenges
Now, let me turn to the coming challenges of strategic human resources management. I would like to list ten of them here.
First, the challenge of continuing uncertainty. Please do this mental exercise with me. Think back where you were in this country, say, 15 years ago.
Look around you and see which of the things that have changed in these years you could have forecast with any accuracy — be it social, cultural, political economic or technological. Worldwide the changes wrought by technology are so self-evident that it would be superfluous to list them to an audience like this. Then ask yourself the question. Can I look forward to the next 15 years and make any kind of sensible forecast along the same lines?
The answer, obviously, would be in the negative. However, I think all of us can agree that the rate of change in the coming decade or so will, if anything, will be faster. The challenge of management in all economies of the world, therefore, is the challenge of managing change continuously.
The employment challenge
Next is the management of careers and training and development in the face of transient jobs. For this is the most demanding challenge from globalisation to the Third World: How do we create satisfying jobs for the vast numbers of the educated, English-knowing, if not speaking, young at the lowest possible per capita capital investment per job?
This also implies a secondary challenge that countries like China are addressing on an emergency basis, namely the education of thousands of people in short order, in the functional use of the English language.
Heritage values and culture
Staying with the macro level, in the realms of educational policy there is also one more area for concern with regard to globalisation. This is the issue of what sort of values and goals do we teach the young? How do we balance a necessary local orientation to culture, history and tradition while preparing them for a world in which they will be working at close quarters or in virtual offices, with people from a number of different cultures? We, as a country, are probably better-placed in this regard to begin with because of a multi-racial social history and continuous interactions with the outside world.

Still, it is important to underline this factor, as Asian countries, given their rich heritage, cannot be merely satellite or clone cultures or what Mexico is to the US. And it would be a sad day indeed if all we can aspire for is for all our towns to become a watered-down imitation of a London or New York suburb!

Policy-makers must take into account the challenge of preparing an international, liberal curriculum of general and secondary education with wide opportunities to learn foreign languages, history, customs and cultures and prepare truly enlightened citizens of the world.

Next, is the challenge of continuous learning and meeting the obsolescence due to the age of people. We all know that the young learn faster and better. They are better informed. Yet in most countries we find people well into their 60s and 70s still holding the levers of power. How do we resolve this paradox?

The challenge of thinking global and acting local is more serious that most people would believe. We must educate the young in a manner that makes them sensitive to the local culture yet be able to work with people from around the world.
T
he challenge of culture is as follows:
In a knowledge-economy, hierarchies will become less and less relevant as power will shift to the owners of specialist knowledge rather than capital. Our cultures, being more traditional, will resist the breaking down of age- and seniority-based hierarchies. The Japanese have introduced through TQM a culture of cross-functional task forces and, yet, from my experience with companies that have practiced TQM in India I can see one of the most difficult changes to introduce into an ancient country such as ours is to make a leaderless group function effectively as equals.

Related to this is the challenge of collaborating in a team while still not stifling individual excellence. People seem to believe that creativity is an individual trait whereas considerable research has shown that groups can be very creative and productive. However, creativity can flourish only in an atmosphere of freedom, trust, and even playfulness. An atmosphere of risk-aversion is hardly conducive to experimentation. This is the final leadership challenge.

The execution often suffers because inadequate attention is paid to the critical task of achieving consensus among the group working towards the goal and, more critically, drawing out the best in the individuals in the interest of the group. Techniques of facilitative leadership are rare to come by in today's world. Yet such a role, where the CEO plays mentor, coach and guide are, again and again, emphasised in articles by both thoughtful managers and writers on management such as Charles Handy of the UK and Goren Ekvall of Sweden.

These then are the significant challenges of strategic human resources management. There are seemingly imponderable questions, such as: How to find ways of enhancing organisational quality, performance and excellence as well as the overall quality of one's life — without the suffering, dislocation and waste of resources caused by internal politics, comparison and conflict?

In conclusion, I would like to look at the possible critical constraints in meeting the challenges listed above.
Our ways of technological progress have remained exactly the same in both the pre- and post-liberalised periods. We tend to look to the advanced countries for models of organisation, systems, as well as mental models. This is a dangerous trend if left unchecked. It is not enough to merely borrow managerial or technical knowledge from the West but concentrate attention on efficient and innovative knowledge creation relevant to our circumstances — not necessarily through some mindless romanticism about returning to a romanticised past but putting our modern brains to use afresh.

We must find a way to deal with technology vis-à-vis age and seniority. If necessary, we must practice some unusual methods, such as the young teaching the older employees, even to the extent of reverse mentoring.

Since creativity demands a more egalitarian culture works we need to be proactive in fitting such a culture into corporate strategy. Family-influenced businesses will, particularly, face this problem as they face the prospect of a painful change away from the patriarchal, paternalistic and autocratic forms of exercise of power to a more competence-based model.
This may mean that cultural tensions could increase between those in the society who are more globally oriented and those who are more local. This may also translate as a greater inter-regional divide as is already showing up in India, and certainly between the more urbanised and literate and those less so.

Organisations, therefore, will become instruments of a subtle but fundamental form of social change. This would demand a new generation of visionary entrepreneurs who look beyond market value of their shares as a measure of their contribution.
The government's role, too, will change dramatically in two aspects: One, dealing with a much more liberal, enlightened and globally oriented secondary education policy; and, two, providing the social investments required for the task of retraining, relocation and promoting self-employment.
The real issue is whether we realise that human resource or people-related issues do not brook a local or compartmental analysis, but demand the application of a national and apolitical, indeed global, mind.
(Concluded)
(The author is Director IFMR and ACME, Chennai. He can be contacted at rchander@ifmr.com)