Saturday, February 13, 2016

Respond Effectively to Changed Circumstances

Case Study - Is Metrics Panacea for all HR Problems in Century Software?

Century Software is one of the leading technology based companies engaged in management consulting, technology development, and outsourcing services. This company is well known for its innovative approach towards delivering business value and its commitment to sustainability. It aims at optimized utilization of natural resources, capital, and talent. It is engaged in activities like Big Data Analytics, Operational Analytics, and Supply Chain Analytics. It has 1 25,000 employees on its roll and offices in 110 cities around the world. The net revenue of this company is Rs. 13.0 billion for fiscal year 2014. In Century Software, people management cost constitutes nearly 59% of total expenses.

The HR department of this company is headed by Mr Easwaren, one of the senior leaders in the company. However, in recent times, the CEO of the company Mr Mahendra Singh has lot of worries about the functional efficiency of HR department especially in the context of serious erosion of manpower in Big Data Analytics - one of the core departments. The high attrition rate in this department has caused consternation among the top managers. The CEO and his team is wholly aware of the fact that the HR department has taken the issue seriously and conducting exit interviews to understand the root cause of the problem.  They also regularly collect information on absenteeism and turnover. However, the irony is that the top management is not informed of outcome of such exercise in desirable and actionable form for initiating necessary action. The absence of actionable report about the HR problems of Big Data Analytics department kept the top management always in tenterhooks. This is because the good and consistent performance of this department is essential for the execution of the strategic and operational plan of the whole organization.

Of late, the top managers began to believe that HR is not supporting the strategic agenda of the company. They are now toying with the idea of changing the leadership in the HR division and also effecting radical changes in the structure of the HR department.


Questions for discussions and solutions

1) Do you agree with the opinion of the top management that HR department is not effective in handling the attrition and absenteeism problems of Big Data Analytics department?
It is to be noted that that in Century Software, a management consulting, technology development & outsourcing services company having 1,25,000 employees on its payroll, offices in 110 cities globally, the people management cost constitutes nearly 59% of its total expenses. Hence it is but natural that Top Management would be concerned about the efficiency of the HR department since a sizeable portion of its revenue vis a vis expenses goes to people management. The Top Management would be looking at optimising its cost per employee of its various business departments vis a vis the revenues generated and their contribution to the overall revenue of the company. 

In the case of Century Software, one of its core departments Big Data Analytics is facing a serious erosion of manpower and has a high attrition rate. Although this issue has been identified, serious taken note of and actionable measures like Exit Interviews undertaken to get to the root cause of the problem, still there has been no significant improvement observed in stemming the flow of people leaving the organization. Hence the Top Management who would be monitoring the situation and evaluating the results of the actions taken, it’s effectiveness would naturally be concerned. If it is being reported to them by HR Head that action is being undertaken, Top Management would be looking at results, better changes and improvement in the scheme of things to come. However that was not to be seen or evident. Hence the Top Management is bound to be opined that HR department is not effective in handling the attrition and absenteeism problems of Big Data Analytics department. 

2) According to you, what needs to be done by the HR department from HR metric perspective to tackle the situation?
The HR department in order to tackle the situation from HR metric perspective should have regular reporting to the Top Management. A frequency to be defined. The HR metrics data should be collated, analysed and reported to Top Management with their comments and action plan for the future. Since the time of Top Management is valuable, the information being reported should be that which needs their urgent attention, be short, summarized and crisp. Top Management is not interested in going through volumes of reports and data. They are more interested in the outcomes and results and how it is helping the business. The information should speak the language of the Top Management.

It may help that before deciding on reporting structure, frequency, desired reporting method, etc…inputs from the Top Management to the HR Department be given as to what exact information is being desired and in what manner. Defining, in measurable, outcome-oriented terms. Clarity on this may make things easier and that may perhaps resolve the issue of reporting in desirable and actionable form for initiating necessary action. 

The HR department at Century Software may be using numerous metrics that may be providing information as to how the HR function is performing; however there may be some metrics that may be more important than others depending on the organization’s goals and strategy. At times, it is necessary to evaluate that as well i.e. effectiveness of the metrics being deployed. It may not be a bad idea to ask the Top Management for guidance as to whether this is the information which they desire or is there anything else that is required – what metrics are most important to the organization. Clarity of communication on it may help make the road ahead easier and perhaps keep the Top Management on less tenterhooks of the HR department.

3) If you were to be a HR consultant, what will be your specific suggestions and strategy to improve the efficacy of HR department?
If I were to be a HR consultant I would first of all look at the entire HR Metrics structure itself, look at the metrics being used and information being generated out of it. Four crucial considerations that need to consider when using HR metrics include:
•What metrics are most important to the organization?
•What data needs to be gathered or tracked to calculate these metrics?
•How will the data be analysed and benchmarked?
•How will the analysis be used for action planning, development/improvement, and problem-solving?

If the metrics do not satisfy any of these crucial considerations, then it needs to be looked at as to whether it makes sense to gather so much data and report when it is not really useful. Sometimes it is prudent to have only few metrics that are in line with the business requirements of the organization as compared to having many. Too much volume of data may lead to information overload and chances are that in it one may tend to miss out on crucial details that get hidden / over sighted in tonnes of data.


Have a Dashboard. A dashboard facilitates effective monitoring at all levels and makes management of implementation and related actions easier. A good dashboard that provides measures of leading indicators to help the Top Management understand what is important to the employees, how well it is delivering on those things that are important, the reaction of its employees, and the capacity of its work processes and delivery systems. With this advance knowledge, Top Management can make better decisions about the actions needed to be successful, bring more value to the workplace, and respond effectively to changing circumstances and new opportunities.

Saturday, December 5, 2015

Feedback to Rejected Was Missing

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine December 2015 edition.

Case Study - The Cause of Concern in Internal Recruitment

Hirthick & Co is a popular company engaged in textile production. It has production sites in three different places. It produces high-value pure-wool, wool-blended and premium-polyester-viscose-worsted suitings. Hirthick enjoys a sizeable market share for the finest fabrics and designer wears. 
In fact, this company has a large variety of worsted suitings to cater to the needs of the assorted customers. The company has a workforce comprising 7,500 employees. The HR department is headed by Mr Uday Shankar, the General Manager (HR). The company has HR policies and practices for almost all its staffing activities.

Hirthick's promotion policy stipulated that the company adopt internal recruitment for non-managerial and entry-level managerial cadres as a first choice, whereas, for all other ranks above the entry-level managerial position, external recruitment should be the only option. The company had a smooth sailing on the manufacturing front till a few weeks ago when Mr Suresh Kulkarni, the production chief at the level of general manager, submitted his letter of resignation. He cited personal reasons for his decision to leave the company and all the efforts of the management to persuade him to take back his resignation failed. Left with no other option, the management instructed the HR department to begin the separation process for Mr Suresh Kulkarni and the recruitment process to fill the consequent vacancy.

As regards the recruitment of a new incumbent for the vacant position, the management was in favour of external sources of recruitment as per the policy and they wanted the General Manager (HR) to search widely to choose the best candidate for the job. However, Mr Uday Shankar had different ideas for the post as he wanted to fill the vacancy by providing promotion to one of the three production managers in charge of the three production units of the company. These senior production managers had been with the company for quite a long time and had nearly unblemished service records. He believed strongly that the promotional opportunities can motivate these managers and improve their morale greatly. Therefore, he made a request to the top management for exempting this job position from the general promotion policy on a trial basis. The top management agreed to the proposal reluctantly and permitted the GM (HR) to proceed with his plan to fill the post by promoting one of the production managers as GM (Production).

As per its general promotion policy, the company adopted merit as the sole criterion for choosing the best candidate for the post. The HR department, after a series of promotional selection processes and due consideration of the past performance records of the three production managers, chose one of the managers as GM (Production). However, the promoted manager happened to be the youngest of all the three managers and had the least number of years of service in the company. The top management approved the selection done by the HR department and issued the job-offer letter to the selected manager accordingly. Soon, the news of the selection spread and the unsuccessful man-agers expressed shock and disbelief as their first reaction. They could not believe that they were less efficient than the promoted manager. They expressed their displeasure to the top management and faulted the HR department for not selecting them.

The efforts of the management to convince them bore no fruits. Their performance began to decline and they showed all symptoms of leaving the organization early. In contrast, promoted manager in his capacity of GM performed brilliantly and justified his selection. Thus, the decision of Mr. Uday Shankar produced mixed results for the company.

Questions for discussions & solutions

1. Do you agree with the decision of Mr Uday Shankar in resorting to internal recruitment for the GM (Production) post?

Yes, I agree with Mr. Uday Shankar – GM HR’s decision in resorting to internal recruitment for GM (Production) post even though the company policy stated that for all ranks above entry-level managerial position, external recruitment should be the only option.

The objective of this decision by GM HR was to promote leadership from within the organization with proven capability and track record rather than bringing in an outsider. Also internal recruitment helps to fill in the void position faster as compared to external sourcing which is a time consuming and costly activity. This would also motivate the employees as they too seek career growth opportunities at some point of time and are glad to see opportunities within the organization. Internal promotion also acts as a retention tool.

Managers have a responsibility to help employees attain their job and career progression development objectives. These provide evidence to workers that they are valued by the organization and its leaders. This, in turn, enhances employee engagement, which enhances productivity.

An internally promoted employee would know the systems and processes of the organization far better and be in a position to deliver quicker, better and faster results as compared to an outsider who would obviously need time to settle down in the new profile and understand how things work in the organization before getting to the task in hand for which recruited.

2. Had you been the GM (HR), how would you have filled up the post of GM (Production)?

Had I been the GM (HR), I would have first determined the knowledge, skillsets, attributes,             nos. of years of experience required for filling up the post of GM (Production) left void by               Mr. Suresh Kulkarni. Setting clear communication rules for the internal hiring process is vital. 
This was missing in case of Hirthick & Co’s context.

An internal recruiting policy needs to be made that will specify who can apply for internal vacancies and provide full details of open position i.e. salary, benefits, time frame an employee needs to be in his or her current position before applying for new one, etc…Although the HR Department followed a promotion selection process and gave due consideration to past performance records of the three production managers whom it had shortlisted for GM (Production) vacancy, some of the questions such as these need to be considered when establishing the company’s internal recruiting policy.

Offer feedback. Always tell candidates if they weren’t selected and why. It is to be noted that this was missing in the internal hiring process for GM (Production) at Hirthick & Co. Out of the 
3 candidates shortlisted, the unsuccessful 2 were not offered feedback as to why they were not chosen. Hence when the news broke out, shock & disbelief was the first natural reaction. If there had been some form of communication, then things would have been better managed.

From the outset, make it very clear that the organization follows meritocracy. If clear expectations are set, then these type of issues have minimal negative consequences.

3. According to you, what is the solution to the problem arising out of the internal recruitment?

When a higher post is given to a deserving employee, it motivates all other employees of the organization to work hard. However in case of Hirthick & Co, it led to resentment amongst the other 2 unsuccessful candidates. They could not believe that they were less efficient than the promoted manager and vehemently expressed their displeasure to management & HR dept. Although management tried to convince them, the efforts bore no fruits and there were indications that they would leave the organization.

Outline the promoted employee’s successes within the organization so that the other two know the things they don’t have to focus on. Then, as tactfully as possible, outline the areas where they need improvement so they can position themselves for that promotion in the future. That way, they clearly understand what they need to work on.

Honesty is crucial when delivering news in regard to a promotion. Inform the two employee's who were not promoted about the decision, and then tactfully explain the reasoning behind it.

Another solution is to get them a new internal position based on merits on an immediate basis. Delay in doing so will breed further resentment amongst them and ultimately leave Hirthick & Co with the problem it’s trying to avoid anyway.

It is easier to break challenging news when there is an alternative career plan available for an employee to go. Employees who see a future in the company, an opportunity to move up in title, a more challenging role and higher compensation tend to stick around, even if there is a setback. If they know what their target is, and there is transparency, the conversation is much easier to have!

Sunday, November 1, 2015

Hiring Process Lacks Basics

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine November 2015 edition.

Case Study - Why Mayank did not join?

Mr. Bajaj’s day was spoiled. It was month end and all financial reports were to be sent to CEO after collecting and compiling data from different business centers. Being financial controller, he was to ensure that his people deliver as expected. It was 11 Am and till that time he did not get the clue from Rahul as what was happening. Rahul joined this organization six months back as management trainee in finance department. He was chartered Accountant. His role was to get various financial reports from different facilities, compile them, put before Mr. Bajaj, for his finishing touch and finally to be sent by Mr. Bajaj to CEO. Bajaj was checking his inbox. After the mail of Rahul having reports, next was of his resignation. 

Rahul, who was merely a "trainee" having no visibility all of a sudden became very important for Me. Bajaj. He called and counseled rahul to stay back even offered to raise his salary by Rs.10k but he did not budge. He told that he will not come from next Monday. It was Tuesday Means only six days left. 

Bajaj gave a call to Mitra, Recruitment head. The conversation held between them was: 

M- Hi Bajaj ji, How are you? 

B- Not good yaar.. That CA, rahul you gave me six months back has resigned. He will leave by Monday. These young boys don't know what they think of them…. totally irresponsible and negligent. Give me some good boy this time... You HR guys also don't put your best while recruit. This time put a condition of three year bond. We can't be left behind like this. I want the replacement by Monday. 

And the call ended. 

Mitra was perplexed. He was not sure how he will meet this dead line. He searched his data bank. Coincidently, He laid his hand on a CV of a boy mayank who recently passed his CA. Mitra asked her subordinate Ruchi to coordinate for immediate interview. She gave a call to that boy. Here is the conversation: 

R-hello, I am calling from ……. co. we have your CV. Pl. come for interview tomorrow. 

Mayank- But mam can I come day after? 

R- No... No... You have to come tomorrow only otherwise you will not get this chance. 

Mayank- Ok. Mam.

Next day mayank reached office of the company. But at reception when asked, He was unable to refer the name who called her for interview. Ruchi did not tell her name. Mayank could simply tell that he got a call from this office for the interview in finance department. Receptionist inquired from Finance whether mayank was called for interview. She could not get any clue from finance even. Mayank showed her the mobile No. from call list in mobile. Receptionist then could identify that it was Ruchi's number. She gave call to Ruchi and informed about Mayank waiting at reception. 
After some time mayank was called in.... Ruchi directed him to meet Mr. Bajaj for interview. Mayank reached to Bajaj office on next floor. He was made to sit waiting for about an hour. When called in, Bajaj asked — where is your CV? 

Mayank gave copy of his CV from his document folder which luckily he carried with him. 

Interview questions: 
B- Sit down. 
M- Thank you sir. Mayank sat on the chair. 

B- So you did your CA... All in one attempt... Good. 
M- Yes sir... 

B- You will be here as management trainee and will be responsible for MIS. Is It OK? 
M- (Kept quite) 

B-I am also CA. You will report to me directly. But you have to execute three years bond. We don't want that people come here, work for few months and leave us. 
M- (Kept quite) 

B- Your salary will be … ( Bajaj Quoted some figure) 
B- Join from Monday... take this CV, and meet Mitra... 
M- Ok sir... 

Bajaj handed over his CV back to mayank. Mayank read the comments written on his CV while getting down to the floor.. Bajaj wrote — selected. 

Mayank again went to Ruchi and gave that CV to her and asked for Mr. Mitra.

Ruchi told her to wait as he was in lunch. Mayank waited for about 45 minutes. He could make out that mitra was HR/ recruitment head. 

In the meantime mayank went to wash room. One more person entered wash room behind mayank. 

Their conversation: 
P- Have you come for interview? 
M- Yes. 

P- For which post? 
M- Don't know. I am CA. just Passed. Not aware what post will be given. 

P- Hi... I am also CA. Hopefully you are for replacement of Rahul who has just resigned. 
M- Why he has resigned? 

P- Here people come and go. I will also leave shortly. Till you get a good job, it is not bad to pass some time here. 
M- But they are asking for three year bond that too as management trainee. 

P- But nobody has so far been asked for any bond. Nor I executed. 
M- Why for me then..? 

P-Don't know. 
M- How is the company? 
P- Agar kahin job nahi mile to theek Hai... 

Both came out of the wash room. 

Mayank was called by Mitra. Their conversation: 
Mitra- Sit down mayank.. Congrats.. You are selected. 
Mayank- sir, I am told that I would be as management trainee. 

Mitra- Yes. 
Mayank—for how much period? 

Mitra—Need not to worry. We are here. You are fortunate that you got this job.
Mayank- Will I be rotated to other assignments also or will do only MIS..? 

Mitra- How do you think that MIS is lower level work to be done by CA? Is company fool appointing a CA for this work? 

Mayank- three year bond will be from very first day or after training? 
Mitra- From very first day. 

Mayank-what will be the duration of Training? 
Mitra—that will be decided after looking at your performance. 
Mayank-(Kept quite) 
Mitra asked ruchi to give him offer letter. 

Mayank was handed over the offer letter asking him to join by Monday. Mitra gave a call to Bajaj and confirmed that Mayank will be joining by Monday and his problem is over now. But Mayank did not join. After one month Mayank again got a call from Mitra informing about him that co. has waived off his three years bond condition. Mayank did not join even after that. 

Case Study Analysis

1. Discuss the ingredients of Hiring process, style of interviewers, organization culture and why this recruitment failed?

Given the way recruitment was being handled at the company and treatment meted out to candidates who would come for interview, this was a disaster waiting to happen. This scenario also spoke of the disarray functioning of the HR of the company and it’s importance in scheme of things in the company. The company did not value the importance of time of Mayank whom it had called for interview. It made him wait for endless hours to meet the interviewer’s. The company that does not value prospective employee before recruitment, that employee should not expect much after joining. 

Also the interview questions asked seemed to be mere formality and were not meant to judge or gauge the skills and abilities of an aspiring candidate. There was no robustness in the hiring process like a candidate has to go through minimum 3 rounds of interview and meet different people so that the company gets a 360 degree perspective of the candidate’s skills and abilities before zeroing in on the final decision.

HR was merely looked upon as a side function to fulfil manpower needs as and when it arises and other statutory and regulatory requirements like payroll. HR dept. also seemed to be under pressure to fulfil manpower needs on urgent basis as the stem of flow of person leaving the company was high. As one of the current employee’s rightly said about the company that working here is good till such time you do not get a better offer or till you do not have any other job. So the company was basically looked upon as an option when there is no other option. It was not the preferred choice for employment.

There does not seem to exist any recruitment policy or hiring process at the company. If at all it is there, it does not seem to be effective or is outdated. There are no laid down criteria for screening of resumes, shortlisting for interview, skills / abilities to look out for when hiring a candidate, rolling out offer, acceptance of offer confirmation, pre-joining and joining formalities. Even the employee bond execution policy was not fixed nor was probation period of management trainee. It looks like that it all depended on the whims & fancies of the manager / reporting authority and the HR dept. was merely a facilitator of the same. HR had no role or say and had to merely do that which the company wanted it to do.

2. Was managements of the company failed in understanding the GEN Y kind of person and failed to meet the challenge, If so how management should have handled the situation?

Yes, the management of the company had failed in understanding the GEN Y person, his needs and aspirations, what the GEN Y person looks out for when joining a company. Firstly the reason why Rahul had put in his resignation needed to be looked into. If it was an issue related to his job profile or reporting authority, that could have been resolved through discussions and an amicable solution worked out. If Rahul was looking for more things to do in his current profile other than merely compiling data, he could have been given more work opportunities to learn and grow. 

Firstly the objective should have been to retain Rahul. Still if he had decided to move on, then an exit interview should have taken place and corrective measures on Rahul’s interview feedback acted upon so as to ensure that the next candidate joining in his place, same mistake does not happen again.  

Here, it is also to be noted that the onus lies of Mr. Bajaj, Rahul’s manager to train and develop him and make him a valuable asset for the company and thus retain him. How Mr. Bajaj engages with his subordinates and motivates them is also important. GEN Y person’s are constantly evaluating opportunities for themselves like whether they get to enjoy the work that they are currently doing, is it providing them enough learning and growth opportunities, is the work opportunity provided to them meeting their individual career goals, etc…They are looking to engage themselves more with the organization by job sharing and rotational assignments. They would not be merely satisfied with one profile. GEN Y looks at option of job rotation to help them diversify their job portfolio and gain experience in various roles.

Thirdly the Recruitment process is to be well defined and should focus on a combination of technical, behavioral and personality aspects of potential candidate before making final decision.

Fourth is to identify back up for relevant position and Cross training as a measure to be executed to ensure continuity in case of attrition as compared to existing scenario of looking for a replacement when one leaves and that there is no guarantee that the replacement may join in time.



Sunday, August 9, 2015

Audit - An Opportunity for Positive Action

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine August 2015 edition.

Hi-Tech Engineering Services Ltd is a company engaged in the business of offering a broad spectrum of engineering, design and consultancy services ranging from concept to commissioning of all types of engineering projects. It has over 3,200 design engineers and technical personnel employed in various engineering disciplines. It offers the best of the industry compensation packages to its employees, and employee satisfaction is quite high with labour turnover under complete control. 

A few months back, the management of Hi-Tech Engineering Services approved a major expansion plan of the company. The General Manager (HR), Mr. Mukesh, assured the management that the entire hiring process would be completed within three months. However, the General Manager of Marketing, Mr. Ganesh, insisted on an HR audit of all the HR policies and practices of the company before embarking on a major recruitment drive of this nature. Mr. Mukesh opposed the idea of HR audit on the ground that the existing parameters like labour turnover, industrial dispute and profitability showed no abnormality and, as such, the HR department and its practices were, according to him, up to the mark. But, Mr. Ganesh stood his ground and insisted that the company must first benchmark the HR practices through an HR audit before determining the level of HR efficiency. The top management finally decided in favour of an HR audit and also decided to hire external consultants to conduct it. Accordingly, Maxweb Consultants were appointed to carry out the HR audit of the company and the necessary instructions were issued to the HR department to cooperate with them. 

The consultants found the HR practices of their client as fairly effective except in the areas of employee hiring and performance evaluation. The recruitment and selection processes, systems and procedures were identified as ineffective. The consultants observed that though the company offered compensation packages that were the best in the industry, the company was not so successful in attracting the best talents due to a few limiting factors in the HR policies and practices. 

The HR audit report included a number of recommendations to improve the ability of the company to attract the best talents. For example, one recommendation was to revise the hiring philosophy of the company. One of the most immediate tasks set for the HR department was to redraft the job specification statement with increased emphasis on the multi-skills of the prospective applicants. The other major recommendation of the consultants was regarding the need to introduce modem techniques for evaluating the performance of the employees. In this regard, the consultants recommended the introduction of the 360-degree or even 720-degree evaluation for all the employees. 

The top management next sought the views of the HR department about the lapses identified by the external HR auditors. In a detailed response, the General Manager (HR) still defended the hiring and performance evaluation practices of the company and insisted on continuing with them, citing the positive results in traditional indicators like labour turnover ratio, productivity, and satisfactory corporate performance. The HR department also maintained that the whole HR audit was an exercise in futility. Though the top management resents the views of the HR people, it does not want to antagonize them. It is taking its own time to make its final views known to one and all. 

Questions for discussions and solutions

1. How do you view the entire development at Hi-Tech Engineering Services Ltd?

Hi-Tech Engineering Services Ltd. offers a broad spectrum of engineering design and consultancy services ranging from concept to commissioning of all types of engineering projects. The company has over 3200 employees in various engineering disciplines, offers best industry compensation packages and has a good employee satisfaction ratio with low labour turnover.

The company has earmarked major recruitment expansion plans to support its business growth objectives and although Mr. Mukesh - GM (HR) assured that the entire hiring process would be completed within 3 months time period, Mr. Ganesh – GM (Marketing) thought so otherwise and insisted to the management of the company to do a thorough HR Audit of all the HR policies and practices of the company before undertaking the recruitment expansion exercise. Obviously Mr. Ganesh would have observed some lapses in the current HR practices of the company and keeping in mind the company’s business growth plans. Mr. Ganesh’s perspective was from another department’s perspective which could be right. The HR department would be oblivious to their own functioning styles and flaws. Hence this was rightly pointed out by Mr. Ganesh.

Although the HR Dept. objected to this move fearing otherwise with reasons, the top management finally decided in favour of an HR audit and hired Maxweb Consultants to carry out HR audit of the company. HR department was instructed to cooperate with the auditors and give them all the necessary information, records, documents, reports, etc…as asked by them. The HR audit report included number of recommendations to improve the ability of the company to attract the best talents.

Top management sought views of the HR department on the audit report which went into defensive mode insisting that its current practices were right  and sought on continuing with them. The HR department termed the entire audit exercise as futile which was not liked by the top management as this seemed to be going against them. The top management was in a fix as to how to get the HR department to accept the audit results and implement the recommendations for improvement without antagonizing them.

2. If you were to be the GM (HR) of Hi-Tech, how would you have acted in this situation?

If I were the GM(HR) of Hi-Tech, I would have welcomed the audit initiative. Firstly, because the company was on a major expansion road and had huge hiring plans. Hence, to ensure that it meets its expansion objectives and that there would no issues post the expansion, it needed to get it’s systems, policies, procedures, etc… updated in line with the best industry practices and also ensure that the current laid down one’s are being followed. An audit methodology would be apt for this. 

Maxweb Consultants who carried out HR Audit of the company recommended many improvement initiatives for attracting the best talents. Example: One of the recommendations was to redraft job specification statement with increased emphasis on multi-skills of the prospective applicants. This recommendation is in line with industry best practices. These days having just one skill set is not enough for the entire career tenure. One needs to demonstrate ability to handle multiple tasks over a period of time. This is a future employer’s requirement. The consultants also recommended introduction of modern performance evaluation techniques like 360-degree or 720-degree evaluations.

The audit exercise initiated by the management of the company is in an investment effort by them to improve its HR systems. Hence, it should be reacted from a developmental perspective. It is also natural that after an audit exercise is done and once the audit findings are disclosed, the auditee’s which in this case was the HR Dept. of the company and the GM (HR) start defending themselves and their actions and look for supporting evidences to perpetuate their claim. It is futile maintaining a stand that the entire audit exercise was an effort in waste and will not do any good for improving the policies, systems, procedures of the company. Rather one should move on. Have a look at the audit recommendations, from it identify the one’s which are from a strategic perspective that can impact the business and one’s from an operational, day to day running the business of an organization perspective. Categorize the audit findings as High, Medium or Low importance and plan action accordingly.

3. How should the top management proceed in the present situation?

It is good that the top management initiated a thorough HR audit of the company’s HR policies and practices before embarking on a major recruitment expansion plan. This shows that there was planning effort by the management of the company in order to get its HR systems right, rather a preventive measure to ensure that no issues recur later and that it’s recruitment expansion and business objectives are aligned and fully met.

Once the audit exercise has been completed and results of the audit findings are known to all relevant stakeholders, the top management should take the stakeholders into confidence and in consultation with them develop action plans for areas recommended for improvement. The top management should support the GM (HR) and his team in their efforts by providing them the necessary resources to execute the action plan. It should be made known that post audit, there would be no heads rolling, rather there would be support from the management side to improve. Once that fear of being faulted and removed as a result of the lapse identified by way of an audit is done away with, then everyone will willingly participate. There will be no defensive actions or behaviors. 

There could be regular review meetings to determine progress on the audit results and do course correction, if any, if observed that the action plan execution has deviated from its path. The top management should demonstrate commitment by way of its involvement and participation in the review meetings. There should be a top-down approach.

4. Is there any need for an HR audit in the company since it is not only a non-statutory requirement but also a fee-based service?

In order to become a full-fledged Business Partner, HR Departments need to not only regularly examine whether they are doing things right but also ask whether they are doing the right things. A HR audit will cover the organization's Policies, Systems, Processes, Practices and Capabilities from a strategic perspective. Thus, this HR Audit will help the HR department at Hi-Tech Engineering Services Ltd. to meet the objectives of the company that is of helping it to both identify efficiency and effectiveness issues as well as develop short-term and long-term solutions to overcome such challenges. 

Through the audit findings, an action plan can be developed to address the findings and ensure that during the next audit they do not recur again. Thus by having regular periodic audits & by taking action on the audit findings, Hi-Tech Engineering Services will be on the path to continuous systems improvement. It is also to be noted that an audit provides information not only on key measurements, strengths and areas of enhancement but also points out opportunities that a business can leverage to become an employer of choice and meet its long-range goal of attracting, recruiting, on-boarding, deploying, developing, rewarding, leading and retaining talented employees. 

Hence the need for an HR audit is fully justified at Hi-Tech even though it is fee-based. The entire audit exercise should be looked at from a fact finding perspective and to identify opportunities for improvements and not as a fault finding exercise and then to lay blame on others after the audit findings are disclosed. 


Saturday, June 6, 2015

Make employees understand logic and rationale

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine June 2015 edition.

Natco Car Limited is a popular company in the passenger car segment of the automobile industry.     It has a significant market share. It offers five popular brands of cars to its customers. The major philosophy of this company is "customer satisfaction through employee satisfaction". It strongly believes in the HR principle of "happy employees are productive employees': This company offers one of the best and most friendly environments for the employees to grow in their organizational and personal lives. 

It has many novel incentive schemes and attractive fringe benefit schemes to attract and retain the best talents. This company's incentives and fringe benefits package alone accounted for nearly 7.6 per cent of its cost of production. In fact, the excellent cordiality in labour-management relations and the high employee productivity coupled with high product quality were viewed by the company as an outcome of this generous incentive and benefits schemes.

However, recent developments in the economy and the industry in particular suddenly made the company vulnerable in the market. These developments are (i) recessionary conditions gripping the economy, (ii) the entry of low-cost budget cars in the market, and (iii) its high health-care cost due to die recent spurt in the reimbursement requests for medical and hospital expenses. Recessionary trends led to a free fall of the prices in the market and automobile goods, being a luxury item, were obviously the worst affected. Besides, the introduction of low-cost cars by the competitors compelled the company to think seriously about cost-cutting measures. To add to its woes, in the recent past, the company received an unusually high number of medical reimbursement bills as more and more employees reported major health problems. This apparently pushed up the HR cost and caused anxiety in the company about the deteriorating conditions of the general health of the employees. As a combined effect of all these developments, the company began to lose its price advantage fast and its market share began to shrink gradually. 

The top management of the company insisted on reviewing its HR cost in order to withdraw some of the benefits offered to its employees. Understandably, the fringe benefits, particularly the health-care benefits, received top priority for cost reduction after the reviews. The management was now determined to impose stiff restrictions on the reimbursement of medical bills, thereby making it virtually impossible for the employees to get ant medical benefits.

However, the HR department was ranged against such moves. It insisted on continuing with the health-care schemes, perhaps with some minor modifications. Interestingly, it came up with an alternative proposal which suggested that the employees must be educated continuously and made aware about the health problems affecting them. It also proposed periodic medical tests at the factory premises to diagnose their health problems at an early stage. This preventive approach, the HR people believed, could help the employees attend to their health problems at the right time and avoid major health crisis and the resultant huge medical bills for the organization. The HR department emphasized that any drastic measures, like the withdrawal of health benefits, could discourage the employees, thereby jeopardizing the employee retention strategies of the organization. The suggestions of the HR department were forwarded to the top management and its response was awaited. 

Questions for discussions and solutions

1) How do you assess the situation of Natco Car Limited from HR perspective?

Natco Car Limited was a market leader in the passenger car segment of the automobile industry offering five popular car brands to it's customers. The company offered a congenial growth environment for it's employees. It believed that if it's employees were happy, then it's customers would be happier as well. The HR culture of Natco Limited was people - oriented. Keeping in line with it's HR philosophy, the company designed numerous employee retention strategies like incentive schemes and fringe benefit schemes that ultimately resulted in excellent labour-management relations, high employee productivity and high product quality.

However with the passage of time, changing economic & industry scenario, Natco Car Limited began facing business challenges. They were mainly related to recession, entry of low-cost budget cars offered by competition and internal rising costs like those of medical reimbursement claim by employees. All of these made Natco Car Limited begin to lose its competitiveness and it's market share began to shrink gradually.

In view of this shrinking market position, Top management of Natco Car Limited decided to review some of the employee benefit schemes offered to it's employees, notably the health care benefits was on their topmost agenda point for cost reduction. The HR department opposed the move fearing that it may discourage the employees, demotivate them and thus jeopardize their employee retention strategies. HR department came up with an alternative solution of educating employees continuously about the health problems affecting them. HR Department also proposed preventive measures like periodic medical tests within the factory premises to diagnose employee health problems at early stage. The objective behind this was that the employees would be able to attend to their health problems at right time and avoid major health crisis later on which would also result in savings of huge medical bills for the organization.

Drastic reduction in employee benefit measures was not the right move, hence the alternative solution offered by the HR Department seemed to be a step in the right direction keeping in line with Natco Car Limited's HR philosophy. This move of education and training could offer a cost-effective method for employee development. The employees need to be valued and this can only happen when a company is committed to their engagement, satisfaction, development, and well-being like having practices tailored to meet their home life needs. The company has already an established internal partnership i.e. labor-management cooperation. This may also be jeopardised if there were any such anti-employee move. 

2) What will be the likely response of the top management to the suggestions made by the HR department?

The top management of Natco Car Limited has to take note of the fact that by dropping financial support like imposing stiff restrictions on the reimbursement of medical bills, thereby making it virtually impossible for the employees to get any medical benefits can cost the business by way of decreasing employee loyalty which can thereby lead to lower productivity and higher absenteeism. Research has indicated that one of the of contributors to employee engagement is the extent to which the company is concerned for and supports employee health, safety and well-being.

Top Management though welcoming the alternative solution proposed by the HR Department, would like to weigh the pros and cons of it before signing it off as a policy measure. It will definitely look at the cost implications if the new proposal were to be implemented and the resultant benefits (direct/indirect) arising out of it and also in terms of money saved as a result of the new policy.         

Top Management definitely would not want to be seen themselves in the eyes of their employees as someone who is not sensitive to employee's needs and only looks at how much profit business has made and how much money has been saved.  

Employees will perform better when they understand the logic and rationale behind a move. Hence the top management must tell the employees what's coming, how they will be affected, and what's expected of them. If not communicated effectively, they will be inviting the rumor mill to fill in the blank spaces by default. Communication of any cost-cutting initiative needs to be handled carefully. 

3) If you were in charge of the HR department, what would your suggestions be to solve the problems of the company?

a) Issues and concerns related to employee health and safety be used to design the work environment. Design proactive processes with health & safety factors identified by people directly involved in the work. Track its status and progress. Start having processes in place to optimize working conditions and eliminate adverse conditions. A safe, healthful work environment contributes to better process management, higher performance, and productivity, with fewer errors and rework.

b) Root causes for health & safety problems are sytematically identified and eliminated. Corrective actions are communicated (shared) widely to help prevent the problem in other parts of the company.

c) Natco Car Limited could also look at keeping this cost reduction measure as interim till such time it overcomes it's business challenges and retains it's market leadership position. This will surely help in restoring employee confidence and strengthen their engagement with the company.

d) Motivate people to be more responsible for their health. 

Sunday, May 10, 2015

Form of participation should be suitable to work environment

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine May 2015 edition.

Karunya Fertilizers and Chemicals Ltd is a medium-sized company engaged in the production and distribution of chemicals. The company caters to the requirements of several large and medium-sized industrial customer companies. Its core policies are uncompromising quality, consistent efficiency and speedy delivery. It has a largely unionized workforce of 3500 employees. At present, its HR department is headed by the Director (HR), Mr Ashok Verma. In fact, the young and vibrant Mr. Verma took up the HR responsibility of the company just a few months back. 

After assuming office, Mr. Verma conducted several rounds of discussion with the trade unions and found a major grievance among all the three unions of the organization. All the unions in the company felt unanimously that they were not given, adequate representation in the management and the concept of WPM (workers participation in management) was hardly practised in the organization. Mr. Verma also learnt reliably from different sources that the unions resorted to several agitation tactics in the past to get their demand regarding participative management accepted by the management. However, their tactics like go-slow-in-production, non-cooperation, sit-in strikes and other forms of protests did not yield the desired results. This is because the management was never convinced of the benefits of WPM. They never had any real need to consult the employees in decision making or share any information with the workers. 

However, Mr. Verma differed from the overall perception of the management and greatly felt the need to establish necessary committees or councils at different levels of the organization with due representation for the trade unions. Personally, he also favoured the nomination of worker-directors on the board of the organization.     Mr. Verma brought this matter repeatedly to the notice of the top management and enlightened them constantly about the mutual benefits of participative management. With the help of his knowledgeable presentation and convincing arguments, Mr Verma finally managed to convince the board of directors about the necessity of WPM and made them provide due representation to the workers and their representatives. In the subsequent management—union meeting, the management agreed to establish councils at three levels of the organization:  a council at corporate level, one at the plant level and a necessary number of councils at various shop-floor levels. It also agreed to include an elected worker-director at the board level. 

During the initial phase of the establishment of the councils, the unions cooperated with the organization. Council meetings were also progressing well and bonhomie was evident in the attitude and behaviour of the workers' representatives on the board and in the councils. However, things began to change for the management and took a turn for worse after some time as the workers' representatives began to resist and even stall all the important and justifiable decisions of the management. After investigating the matter, the worried management found out that the workers' representatives began to oppose the decisions after they were accused of conniving with the management for pecuniary benefits and bartering away the future and rights of the employees. These charges were made by the rival unions, which had lost the elections for these memberships. Consequently, the union leaders instructed their representatives in the committees to adopt tough postures in the meetings and exhibit a negative attitude towards the management proposals just to retain the credibility of the union and to preserve the membership of the organization. 


The management was simply stunned by the developments and began to worry about the undue delay in the decisions of the organization and also about the need and future role of these councils in the organization. It now looked toward the HR director to provide solutions to this vexatious issue and its settlement at the earliest. 

Questions for discussions and solutions:

1) How do you assess the entire situation at Karunya Fertilizers and Chemicals Ltd?

It seems that based on past experiences, the management at Karunya Fertilizers and Chemicals believed that they seemed best to take decisions for the organization and need not involve the workers in the decision - making process lest they complicate the issues further by indulging in petty matters. The management deemed it fit for the workers to simply follow the instructions as given to them by their superiors. The management did not believe in the philosophy of participative management / consultative participation. It is to be noted that the organization had a largely unionized workforce with 3500 employees. However, this scenarion changed when a young & vibrant Mr. Ashok Verma took charge as the HR Director.

He observed that all the 3 unions of the organization needed to be given adequate representation in management decision - making. He obsrved that this was a growing requirement at the organization that needed to be addressed. Efforts had been made in the past but it did not materialise. Mr. Verma came from a different school of thought and thus felt the need to establish necessary committees / councils at different levels of the organization with due representation for the trade unions. Mr. Verma also favored nomination of worker - directors on the board of the organization. Mr. Verma was able to do this successfully by repeatedly bringing it to the notice of top management, through his knowledge-driven presentations and convincing skills. The management of Karunya Fertilizers and Chemicals Ltd taking a hint from his positive intentions agreed. 

The going was smooth initially wherein the unions cooperated with the organization in decision - making and there was an air of bonhomie between the workers and the management. However this did not last long as some worker representatives resisted management decisions and even stalled their justifiable decisions. Upon investigation, it was found that this was due to instigation by rival unions who had lost elections for representation with management and wished to stay relevant. Hence they had instructed their representatives to adopt tough postures and delay decision making. These turn of events was not foreseen by the management who began to ponder about the need and future role of these representatives / councils in the organization. They now simply looked to HR Director, Mr. Verma for solution to this issue because it was at his behest that the management had agreed to ensure workers representation in decision making and policy through various councils. However what is to be done (preventive measure) incase of turn of events such as this blind spot was not foreseen by the management nor by Mr. Verma.

Hence it's a case of coming back to the same scenario once again, whether to disown all the councils and come back to earlier style of functioning or work out a solution that was acceptable to all. If all the councils were to be disowned, then it would be a huge setback for Mr. Verma who had just taken charge and this was one of his initiatives. 

2) Do you agree with the view of Mr. Verma towards worker's participation in management (WPM) in Indian Business Environment and Trade Unions Perception?

Yes, I agree with Mr. Verma's viewpoint of worker's participation in management. Worker's participation is nothing but 'employee participation'. Workers may have ideas which can be useful since they are the ground level / shop floor people who actually do the execution part. By involving the workers a participative atmosphere is created, encourages them to contribute to group goals and share the responsibility of achievement. By involving the workers, a sense of importance, pride and accomplishment is instilled in them, a feeling of belongingness with the place of work. Hence the intention of Mr. Verma was right.

However organizations in India are mostly family owned & family managed as was the case of Karunya Fertilizers and Chemicals. They are promoter driven. Even though there is a professional organizational hierarchy in place, at times important decisions come from the direction of the promoter's. How much thought or rationale has gone in a particular decision or whether everyone's needs are taken into consideration is a huge question mark. Also for WPM schemes to be successful in Indian Business Environment Context, lot of investment has to be made in training about WPM, awareness has to be generated, it's benefits, how one can participate, etc...Lack of awareness due to absence of training initiatives is one of the major reasons for WPM to be unsuccessful. Another issue is free flow of communication and information and system of sharing.

It is also to be noted that the Management at Karunya earlier did not have a favorable attitude towards WPM due to whatsoever reasons. For WPM to be successful, there has to be trust between the two parties. Hence even though the intentions of Mr. Verma were good, he wanted to bring about change for the betterment of the organization, he should have analyzed as to whether the WPM Model will work in Indian Business Environment Context and more specifically at Karunya where he had just taken charge as HR Director. Past data, facts, it's history should have been taken into consideration before proposing the way forward. The form of participation should be suitable to the work environment in which it is going to operate.      

3) If you were the HR director, how would you have handled the issue of WPM and solve the present crisis of the organization?

The following are my suggestions for resolving the present crisis of the organization:

1) Conduct sufficient number of training programmes on WPM - what is it all about, how does it affect you & how you stand to benefit from it. Each & every employee to be trained. If training is done properly and understood by all and there is buy in on WPM concept from the participants, then everyone will be enthused and motivated to participate. It is also to be noted that the level of education of Indian worker's is low. Hence training & awareness plays a very important role.

2) The scope and functions of works committees should be clearly specified. This could probably be one of the reasons for the unrest between management and workers cropping up again and the issue becoming vexatious.

3) Management at Karunya should have a more responsive attitude towards workers. Let go of the past. Management and workers should develop an attitude of co-operation and adjustment. Both should have genuine faith in the system.

4) Make all the stakeholders understand that participation must work as complementary body to help the unions in collective bargaining. It should not be construed as an alternative to collective bargaining.

Sunday, April 5, 2015

Who was unethical - The customer or employee?

Below is a fictionalized case study that presents dilemma faced in real organizations. And written by me is the recommended solution to the problem. This has been published in Business Manager Magazine April 2015 edition.

Future Tense is a medium-sized electronic company located in a metropolis. It markets popular brands of home appliances like air conditioners, refrigerators, washing machines and microwave ovens, and undertakes post-sales maintenance. The policy of the company is to attend to the faults within 24 hours if the customer is within the city limits and within 36 hours if the customer is located outside the city limits. Obviously, the maintenance department is completely stretched and always works against stiff targets. Mr Anil Kumar is working as one of the executives in the post-sale maintenance department. He has twelve mechanics in his team. It is his responsibility to depute mechanics to attend to the complaints of the customers after they report for duty in the morning. 

The company has a  policy which indicates zero tolerance on unethical activities of the employees warranting dismissal from services. Company believes in doing business with transparency through ethical means.

The other day, Rahul, one of his most trusted and efficient employees, was assigned the duty to attend the complaint of one of the long-standing customers, Mr Suresh, whose air conditioner had developed a fault.  After attending and rectifying the complaint, rahul reported the complaint as satisfactorily closed and submitted the written report also. As a part of after service satisfaction check of customer, when  after service telemarketing employee called on suresh and verified about the airconditioner service, fault, time consumed, part replacement/repair, technician behavior etc, the customer told telemarketing employee that he was not all satisfied with the service, technician did not do much , taken money from him for replacement of one part, did not give him receipt . He also did not sign any satisfaction report. The A/c was still not functioning well. The customer also told that the technician requested him not to call office in case of  any trouble but instead call on his personal mobile number to do service and repairs. The technician gave his personal mobile no. to the customer.

At the end of the day, The after service telemarketing team employee opened the “concern form” of the customer and not all incident and submitted to Mr. Anil. On enquiry it was found the rahul was absent from duty.

When contacted on phone, Rahul informed Anil that the sudden illness and the subsequent hospitalization of his daughter was the reason for his inability  to take leave in advance and inform him about absence. He denied all allegations of the customer and said that satisfaction report was signed by him and it was he who requested him to purchase the part from open market and replace in AC  for which he gave money which he did. Rahul informed that Customer told him that earlier also other technicians did the same practice. Rahul pleaded that he did not do it with any wrong intention but only to earn the customer loyalty for company. He also explained that customer asked for his personal mobile no. in case of urgent call that’s why he gave his no.  . He also pleaded with Anil Kumar to help him out in this matter. However, the company has uncompromising policy that view dereliction of duty by employees for any reason as a major misconduct warranting immediate suspension. Adhering to the policy, Anil Kumar reported the matter to the higher authorities, who promptly suspended Rahul pending a full enquiry. The news of Rahul's suspension created widespread resentment among other technicians who sympathized with Rahul. But Anil Kumar justified his action by saying that any compromise on that ethical policy would have undermined not only the ability of his team to adhere to the after sales service policy and co. image set by the company but also the business profits itself.. He also felt that this kind of unethical behaviour would set a bad precedent, eventually bringing disrepute to the company. 

Questions for discussions and solutions:

1. How do you view the whole incident that resulted in the suspension of Rahul? 

Anil Kumar has strictly gone by the rules & policies of Future Tense Electronics Company. The Company believed in doing business with transparency through ethical means. Anil had applied the disciplinary measure when it needed to be applied. Once the customer’s complaint came on record and was brought to his notice by the after-sales representative and upon further internal inquiry by Anil, it was found that Rahul was absent from work, Anil had no choice but to suspend Rahul from duty pending a full inquiry.

Anil Lead by example. Research shows that Managers morality level determines the degree to which employees perceive the organization as ethical or unethical. For managers, the implication is clear: if you want your employees to act morally, start by acting morally yourself. This is particularly important for direct line managers which in this case was that of between Anil & Rahul.

Anil Kumar's actions are justified given the fact that any compromise on the ethical policy of the Company would have undermined not only the ability of his team to adhere to the after sales service policy and company image but also the business profits itself. Anil also felt that this kind of unethical behaviour would set a bad precedent eventually bringing disrepute to the company. Hence he had no option but to temporarily suspend Rahul from duty. 

2. If you were Anil Kumar, how would you deal with Rahul's lapse? 

Anil after coming to know of Rahul’s lapse should have looked at both the sides of the story, analyzed the same and then should have taken an well-informed decision. As Manager of Rahul, first thing is to trust him as a subordinate. Anil should have listened to Rahul’s side of story and determine whether he is telling the truth, is he being honest or are there any flaws in his version of the story? If Rahul claims that the customer has signed a satisfaction report, then Anil should have asked to see a copy of it and verified the claim of Rahul. 

Rahul claimed that his act was in best interests of the company and to retain a loyal customer. Hence this claim of Rahul should also be taken into consideration before taking any further action. If the act was indeed in company’s interests, then Rahul could be forgiven or let off but with a warning that the company will not tolerate such acts or report of incidences any more. This incidence should also act as a learning for other representatives as to what is to be done in such a scenario when dealing with such customers and what is the company’s stand vis a vis it.

Rahul was a trusted and efficient employee of the company as also was Mr. Suresh – a long standing customer of Future Tense Company. Anil could have had a dialogue with  Mr. Suresh also and cross-verified the claims of Rahul by counter-asking questions. It is not that the company does not trust it’s customers but this questioning was necessary since the act resulted in dereliction from duty of Rahul. It is also to be noted that as per the customer Mr. Suresh – it was a standard practice of all the mechanics to provide personal service to them in order to save on costs and earn some money for themselves. Mr. Suresh very well knew this and he encouraged this by saying that all earlier technicians also followed similar methods and so should Rahul.

This point is also to be investigated by Anil as to whether such malpractices really occur. Then the malaise runs deep, the problem lies in the system and the policies within the company and is just not with the case of Rahul who is just a cog in the wheel or rather the system. 

3. Do you see any lacuna in the ethical component of the rule that imposes suspension for dereliction of duty? 

A policy measure could have been in place that if an employee of the company is confronted with a situation that presents an ethical issue like in the case of Rahul dealing with the customer Mr. Suresh, he can seek guidance openly (open-door policy) from his superiors on how to handle it. 

Also it is not clear as to what is the policy of the company in terms of reporting breach of ethical behavior of others like how the customer Mr. Suresh that it is a standard practice that all earlier technicians also purchased parts from open market and gave their personal mobile number in case of further service requirements. Hence if this was happening quite regularly, why wasn’t it reported earlier or it did not come to notice. Did it come to notice only when the part supplied from the open market by Rahul turned out to be faulty and hence Mr. Suresh’s endeavor to save himself some money go waste and hence he turned in his frustration to Rahul and to the company. This aspect needs to be also looked into.

The company could provide to their mechanics company mobile phones and disallow usage of personal mobile phones during work or giving them to customers as a policy. Only company contact details including mobile numbers to be printed on visiting cards. By doing this, if an employee leaves the company, customer’s contact details remain with the company itself.

4. What is the policy measures required for the company to deal with such situations in the future?

Create a culture of caring: Create an altruistic culture. Although organizational culture cannot be created overnight, research has demonstrated that a caring culture prevents unethical work behaviors, whereas a culture of self-interest promotes them. What matters is persuading employees that the organization truly values generous, selfless behaviours.

Invest in business ethics training: Most companies can influence employees’ ethical choices via explicit educational programs. Businesses that implement formal programs to support ethical choices have reported decrease in counter productive behaviours and misconduct rates, as well as increase in employee satisfaction.

Reduce employee’s temptation: Managers can help employees who are less capable of exercising self-control by surveilling and controlling them a bit more.