Sunday, August 9, 2015
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
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
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
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.
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 March 2015 edition.
Vinod was the Works Manager of Lakshmi Engineering. Rahul was with the company as its Finance Manager and was heading the Accounts and Finance division. Rahul was reporting to the works manager directly. Rahul's general attitude was to be tight fisted in matters of finance. He was always conscious of the need to conform to company policies and procedures. He firmly opposed any deviation from policy, but was often willing to explain the reasons for his view. He prided himself as a man of principles. Vinod was a person who wanted to take action regardless of past practice or policy. He considered himself a 'resulted-oriented' manager. The differing attitudes of the works manager and the finance manager had led to conflicts on past occasions.
Vinod had even warned Rahul on two occasions that if Rahul could not carry out his instructions he was free to search for a job elsewhere. Rahul argued his case with a measure of success stating that his approach was proper and that in financial matters the policy guidelines had to be observed. One afternoon, Vinod approached Rahul and said, 'Here is an incentive plan for the maintenance group. I am notifying it today and introducing it from tomorrow. Have a look at it.' Rahul appeared to be surprised. He had not known that an incentive plan was being contemplated for maintenance workers, as the company's policy till then was to pay incentives only to direct production workers. Nevertheless, he took the plan with him and returned to Vinod a couple of hours later. 'You can't introduce this plan straightaway', Rahul said to Vinod and added, 'we have to give this some more thought. Our maintenance costs are too high mainly due to lack of adherence to norms on the consumption of spare parts. This incentive plan gives no weightage to consumption of spare parts. Further, it will only add to the maintenance costs without any real benefits to the company.'
Vinod's reaction was one of anger. 'You understand nothing of incentive plans', he retorted and added, 'spare parts consumption is high due to poor quality of spares bought by the materials department. Anyway, I don't intend to waste time on this with you. I am notifying this incentive plan today.' An altercation followed and the arguments of both Rahul and Vinod became so loud that it attracted the attention of others in the hall, outside Vinod's office. 'I am the boss here,' screamed Vinod adding, 'if you can't work with me and obey my instructions, you are free to leave your job and go elsewhere.' A few moments later Rahul was back in his office, tired and sullen. He called in his secretary and said, 'No, I have no option, please write down.' He dictated his letter of resignation.
Knowing about the resignation of rahul, HR Head also thought of meeting and discussing the matter with Vinod. He was not happy the way scene was created in the organization and impact on other managers.
Questions for discussions and solutions:
1. Discuss the leadership style used by Vinod? How effective is his style? What changes would you advise?
Vinod was the Works Manager at Lakshmi Engineering and had Rahul who was heading the Accounts & Finance division reporting to him. The working style of Vinod was ‘results-oriented’ or rather ‘execution’, ‘just do it’ irrespective of the scenario or the situation. Vinod was a delivery type person who just wanted work to happen & results. Whereas Rahul being a Finance person was more conservative & pragmatic in his approach. Since Rahul was heading Finance, he was conscious of the need of being controls – oriented in terms of cost and savings for the company and also that work has to be done as per companies policies and procedures because any lapse or error on part of Finance could result into financial loss for Lakshmi Engineering.
Hence what we see in the above scenario are two different personality styles person’s working together in a subordinate-boss relationship. Rahul who would like to apply thought to his work, why is it being done, what resultant benefit it will lead into whereas Vinod who just wanted the work to be carried out irrespective of the outcome. Vinod’s approach was such that if at all any problems arise as a result of his actions, it will be dealt with later. Vinod approach’s was so aggressive that he was even willing to fire somebody if he found that his instructions were not complied with which happened in the case with Rahul when he refused to carry out the proposed incentive plan for maintenance group from Vinod. Rahul found some loopholes in the incentive plan and being a finance person felt it should not be implemented before being rectified.
This led to a loud altercation between Vinod and Rahul such that it attracted the attention of others outside Vinod’s office and with Vinod firmly telling Rahul to go look for a job elsewhere if he were not to comply with his instructions. Rahul who has drained of energy after needlessly arguing with Vinod, tired & sullen, decided to hand over his resignation letter finding it now impossible to work with Vinod. He felt that it was no time investing energy over someone who was never going to listen and will only have things his way.
Vinod should introspect his working style and the impact that his behavior is having on others. It is good to be focused, aggressive in your work approach and be execution-oriented but not be that demanding that if things don’t go his way, then he should shout at people, get into conflicts with colleagues with the result that they leave the organization. There is a very old saying ‘People don’t leave companies, but bad bosses’. This is exactly what has happened between Vinod & Rahul.
Vinod should realize that his results-oriented working style is good at Production & Maintenance workers level where speed, efficiency and results-delivery matter but when dealing with senior colleagues especially with those reporting to him, the same working style approach will not work. The approach has to be different. Vinod should realize that he is at a Managerial level and he has other Managers also reporting to him. How he handles them as a team will determine the effectiveness of his Managerial skills. Over a period of time, as one seeks to move up the organizational ladder, it is these soft skills, people-handling skills that matter and not the technical one’s.
Vinod should take Rahul into confidence and ask him that if he has any problem working with him, he should speak out rather than keeping silent about it. Vinod should also regularly assess his working style and seek to improve upon his areas based upon feedback as necessary. It is here that the role of HR is very important in regularly providing Leadership / Managerial skills effectiveness feedback to all concerned and seeking to improve upon the same. Vinod should realize that if he doesn’t understand the consequences of his behavior, the impact it is having upon others, soon it’ll be very difficult for others to work under him. Word will spread out and Vinod as well as Lakshmi Engineering will have difficulty in attracting the right talent to work with them. Rahul will leave and he will get another job, but what about Vinod & Lakshmi Engineering. They will be left to find Rahul’s replacement and who knows that the same scenario may not repeat again unless and until some corrective measures are undertaken.
2. To what extent were Rahul’s needs being considered? What kind of organizational climate was created?
The organizational climate created was that of command & authority. Vinod wanted things to work his way, follow his orders. He disliked those who dared not to obey him. And often, he told his subordinates to go look for a job elsewhere if they disliked following his instructions. Very often, it lead to conflicting scenario’s between Vinod & Rahul whose working styles were different. This does not augur well for Lakshmi Engineering. Very soon the same scenario can spread to other departments also. Vinod will be creating a negative impression for himself as well as for those working with him. Vinod should be a team player. He must take his team into confidence and share his vision with the team about how he wants the work to be accomplished. And then leave the team to accomplish it. A good team member will have the ability to execute the Manager’s vision which was the case with Rahul.
Rahul was competent enough as a Finance Manager. Infact Rahul was brave enough to point out flaws in the proposed incentive plan by Vinod for the Maintenance team which not many reportee’s would do so for the fear of displeasing their boss. This characteristic of Rahul augured well for Lakshmi Engineering as an organization. Probably this is what the HR Manager also felt and hence intervened. He felt the need to speak to both Vinod & Rahul to resolve their differences and get them to work together amicably once again. The HR Manager also knew the impact of Rahul’s resignation have on other manager’s, how they would be feeling and the kind of negativity that can spread. It was also very important for Lakshmi Engineering as an organization that one person’s dominance should not spread across the entire organization. Too much dependency on one person’s instructions is not good. There should be teamwork. Hence Rahul’s needs were being considered and all efforts were being made to pacify him and take back his resignation.
3. What HR head should discuss with Vinod and correction measures to be undertaken to control the damage?
The HR Head at Lakshmi Engineering should have a one on one meeting with Vinod. He must explain him the scene that has been created within the office due to his altercation with Rahul. The HR Head should confront the situation with Vinod of Rahul, give specific examples when he crossed the line. And the impact it is having of the office environment on others. HR Head should also emphasize to Vinod on the need to change his managerial style – It’s My Way or The Highway. This will not work. Employees need to feel a sense of belonging to the workplace. Their contribution and inputs also need to be valued. Or else they will feel disconnected and disengaged from work. The workplace is a dynamic place with many differing personalities all needing to work together. It is not uncommon that two people just don’t click or that personality clashes will occur.
Vinod needs to be positive and respectful of the people working under him. He needs to pass on the message that he is not here to disrespect the working style of others. Vinod should rather encourage the good work being done with praise. It is easy to criticize others and criticism often leads to resentment & hostile feelings which in this case was building up between Vinod & Rahul that finally led to the tumultuous situation of Rahul tendering his resignation. Proactive praising is much more effective than reactive criticisms. This will also encourage the subordinates working under Vinod to open up and work more efficiently and productively. They will feel the ease of pressure of working rather than working in constant fear of criticism. This will also encourage teamwork & improved workplace co-ordination.
Vinod & Rahul both need to be positive and to be constructive. Focus on the problem and not the person. They should focus on how to work together. Still if things don’t work out between Vinod & Rahul or has got to the boiling point, the HR Head should look at an internal transfer for Rahul within the organization. Resigning from the current position and leaving the company is not the solution. This will also send out a strong positive message by the HR that the company cares about its employees, values them & wishes to retain them as much as possible.
Saturday, January 31, 2015
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 February 2015 edition.
Alectek Shoes is a manufacturer of popular shoes in the country. It is one of the oldest footwear manufacturers in India with a sizeable market share in the industry. It also exports considerable portions of its premium segment products to overseas markets. This company has a strong workforce of over 11,000 employees. It is engaged not only in manufacturing but also in marketing operations through its own retail outlets.
Being an old company, most of its HR policies are conventional and empirical. Based on its bitter experience in the past, the top management firmly believed that the candidates with a revolving-door approach towards a job (changing jobs frequently) are less committed employees and are prone to leave the organization early. The recruitment philosophy and policy of this company clearly reflected this and, understandably, discriminated against those candidates who changed their jobs frequently in the past. In fact, the HR people were instructed to eliminate the applicants with a poor track record of jobs stability, irrespective of their levels of skills and abilities. These candidates were eliminated by the HR department either by rejecting their application at the scrutiny stage or by eliminating them in the very early phase of the selection process. Since its compensation packages are the best in the industry, the company had so far never faced any problem in finding the required number of people to fill the job positions.
Recently, the company developed a huge manufacturing facility in a metropolitan city located in southern India in order to double its production capacity. With this production expansion, the company was looking to emerge as India's leading footwear player. As part of this expansion plan. It decided to strengthen the manufacturing, sales and marketing division with increased workforce. It decided to conduct a major recruitment drive for filling all the new vacancies in addition to the routine ones. Obviously, the number of positions to be filled up in the company just swelled. The company conducted an extensive advertisement campaign to attract the best candidates for filling the available job positions.
The recruitment campaign evoked a good response in the sense that many prospective candidates applied for the advertised positions. However, the scrutiny of these applications revealed that a significant number of these candidates had poor job stability records as they seemed to have worked in different companies for short tenures. But for this shortcoming, these candidates were found to be suitable for the offered positions. Due to this unprecedented situation, the company was now in a
quandary. If these candidates were eliminated, the company might not get a sufficient number of candidates with the required skills for filling all the existing vacancies. In contrast, if they were selected, the firm might not get a sufficient number of candidates with the required skills for filling all the existing vacancies. In contrast, if they were selected, the firm might face problems of unanticipated and untimely employee desertions and the resultant work disturbances.
However, the HR manager was clear about how this situation ought to be handled. He demanded drastic revisions in the HR policy to make it relevant for the existing labour market scenario. First of all, he wanted some major alterations in the recruitment policy to enable the organization to consider seriously and equitably the candidature of all the applicants, irrespective of their past track record about job stability. Next, he insisted that the company design and develop effective career development Programmes for the employees immediately so that there were better career prospects available for them in the company itself. This should also obviate their need for leaving the company to seek better prospects elsewhere, he averred. Moreover, a good career plan would establish long-term relationships between the organization and the employee through better employee commitment and motivation. He also insisted on evolving plans for training these employees continuously as part of the skill enhancement exercise. These measures, he believed, would bring down the chances of employee desertion and associated problems.
However, the management did not buy his arguments. It raised serious doubts about the efficacy of the HR manager's proposal. It actually feared that a better trained and skilled employee would leave the organization early as there would be an increased demand for his skills in the labour market. It also felt that it was difficult to thwart a habitual job deserter from quitting the organization, however effective the career development programme may be. Thus, the management insisted on maintaining the status quo in recruitment policy and asked the HR manager to come up with more practical suggestions for solving the present problem. Evidently, the HR manager was now frustrated with the orthodox approach of the management.
Questions for discussions and solutions:
1. What is your assessment of the whole situation in Alectek Shoes?
The HR Policies in Alectek Shoes were conventionally driven based on its past historical experiences. They needed to be updated regularly to changing competitive conditions, market scenario and keeping Alectek Shoes future growth plans in mind. The review of the HR policies process needed to be proactive rather than reacting after a situation emerged which in this case was demand for newer & more candidates for a newly setup manufacturing facility. Good, eligible candidates had applied and found to be suitable as per current market skillsets. But unfortunately, the HR policy on recruitment was found lacking to deem them fit for selection.
The HR Manager at Alectek Shoes had a solution ready to the problem faced. It was well thought out and would have been beneficial both to the company and its employees from a long – term point of view which is that of having career progression plans in place so as to retain employees and also continuously upgrading their skills by way of regular trainings. This way the employees at Alectek Shoes would have been engaged with the organization and committed to its future long-term growth. The HR Manager had analyzed the current scenario at Alectek Shoes and had thus come up with this solution.
However it was viewed with skepticism by the Management who felt that training and upgrading an employee i.e. investing in an employee and then the employee leaving the company for better prospects would endanger the company’s business profits. Hence the Management at Alectek Shoes felt that they should rather stick to their conventional HR policy of hiring only those candidates who did not change jobs frequently. The solution was downrightly rejected. The mindset of the Management at Alectek Shoes seemed to be somewhat rigid. HR function of an organization is central to the business of an organization because ultimately it is the employees who drive the future and growth of an organization. The company’s growing business scenario yearned for change but it was not supported by the Management who somewhat feared that the change management efforts may hamper its business revenues and thus in order to safeguard it decided to follow the earlier practice only.
2. What is your opinion about the role of recruitment policy in the entire controversy?
The recruitment policy needs to be reviewed such that it ensures that Alectek Shoes recruits, hires, places and retains employees who will meet skill requirements required to position the organization for future success. It must not look into their past. As the pool of skilled talent continues to shrink, it becomes more important than ever for organizations to specifically define the capabilities and skills needed by potential employees and create a work environment to attract them.
Inefficiencies in hiring may allow the competitors of Alectek Shoes to hire the best talent before it can act. Bureaucratic bungling in the hiring process also provides a glimpse of true management system and can scare off the best prospective employees.
Hiring the right employee is a key factor in the entire recruitment process. It is here that the recruitment policy of the organization plays a very pivotal role. Creating a suitable recruitment policy is the first step in the efficient hiring process. A clear and concise recruitment policy helps ensure a sound recruitment process. It specifies the objectives of recruitment and provides a framework for implementation of recruitment programme. Unfortunately the current recruitment policy at Alectek Shoes was found to be lacking towards hiring the best available talent due to past bitter experiences of the Management with some of its employees. Management viewed recruitment as a cost vis a vis the business financial implications if a newly recruited employee left. The recruitment policy needs to be unbiased. It needs to be transparent and favor merit based selection.
3. If you are made the HR manager of Alectek Shoes, what would be your suggestion to solve the problem?
The challenge in arriving at a solution for the HR Manager at Alectek Shoes is to ensure that the organization’s future needs as well career needs of aspiring candidates are not compromised while the Management also gets the desired results. The Management of Alectek Shoes did not buy the HR Manager’s proposal of being an equal opportunity employer, having effective career development programmes and continuous trainings for employees as part of skill enhancement exercise.
These measures as per the HR Manager would bring down employee attrition and its associated problems. The Management maintained an orthodox mindset and asked the HR manager to come up with alternative suggestions for resolving the present problem.
Management feared that a better trained and skilled employee would leave the organization early as there would be an increased demand for his skills in the market. It also felt that it was difficult to thwart a habitual job deserter from quitting the organization, however effective the career development programme may be.
The solution to this is to keep the existing set of employees engaged with the organization through various employee engagement activities like creation of a platform such as ‘My Voice’ to receive and to act upon employee suggestions, feedback, clarifications or grievances. Undertake process improvements on the basis of suggestions received.
Ensure Regular communication with employees by way of Mailers from Human Resource Dept. / Management of Alectek Shoes Company.
Have a Rewards & Recognition Program in Place. Recognize executives across levels for exemplary performance and consistent execution.
Do Critical review of all the policies annually and present to the Management for review. The policies to be revised on the basis of business requirements / market conditions / regulatory requirements, etc…
Adopt a work-shadow concept in the case of departing employee. A proper handover to be done by the departing individual to ensure smooth processing and continuity of operations.
By ensuring employee participation and development and valuing them may lead to development of longer-term objectives and thus stem the flow of employees leaving the organization to some extent.
4. What more can the company do in terms of career planning and development activities of the firm vis-a-is the employee attritions, besides the HR manager's suggestion?
Besides the HR Manager’s suggestion, Alectek Shoes in terms of career planning and development activities should identify critical positions and executives for succession and leadership development as a formal exercise. Succession Planning, if implemented properly will ensure an uninterrupted talent pipeline of skills.
Institutionalize a focused career progression program that aims at identifying Talent from within.
Maintain a repository of all employees who are Performance Potential and refer this repository periodically while taking key organizational decisions, fast track their career enhancement programmes.
Prepare individual development plans with all the employees to address their career and learning objectives. To achieve optimum employee productivity, Alectek Shoes must understand and address the factors promoting employee engagement such as career development. A better understanding of these factors could be developed through exit interviews with departing employees as well as through feedback from surveys of the current employees.
Sunday, December 28, 2014
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 January 2015 edition.
Kaveri Boilers Private Limited is a medium-sized company engaged in the production of industrial boilders for the past 40 years. It has 5,800 employees. It is basically a non-unionized company with traditional HR policies and practices. The performance management (PM) policy of this company primarily focused on rewarding efficiency and chastising incompetence. The company attached immense weight age to its annual performance evaluation practice and treated it as a major event in the organization. Even though the outcome of the performance evaluation process often formed the basis for compensation fixation, promotion, transfer, and disciplinary actions, many employees viewed it as a mere fault-finding exercise without any performance improvement initiative. The PM system of Kaveri worked as follows.
When an employee's performance declines beyond the permissible levels, a warning is issued to him and he is usually asked to explain the reason for the decline. In the absence of any convincing reply or significant improvement in his performance within a reasonable time-frame, the company resorts to lateral transfers and the poor performer is normally shifted out of his present department and moved to another. However, the same appraisal system is continued there too and the employee is monitored closely. If the employee still continues to fare poorly, his services are terminated after due notice. This practice goes will with the over-all objective of the company's performance management system, which focuses on quality sustenance at all levels without making any compromise even while preserving the morale of the performing employees by quickly recognising their talents and rewarding them rightly.
Although the current performance management system has succeeded in maintaining the quantity and quality of the products at barely satisfactory levels, the response of the employees to this kind of evaluation has been far from encouraging. The employees have a grudge that the appraisal system has always been keeping them on tenterhooks. To make matters worse, the indifferent attitude and low morale of those employees who have been transferred as part of the penalty has made the situation uneasy and caused anxiety among other employees. The HR manager is a mystified man and has no clues as to why the current system has not been able to produce the desired results of optimum productivity and adequate patronage of employees. Now, the challenge before the HR manager and his team is to pin-point the real reason for the problems of the organization on the labour front and then decide whether to continue with the existing evaluation system after making necessary modifications or replace it with some other system that will be more acceptable to one and all.
Questions for discussions & solutions:
1. Can we blame the existing performance management system for all the problem of the company? Are there any HR issues other than performance appraisal involved? If yes, what are they?
The objective of the annual PMS at Kaveri Boilers focused on rewarding efficiency and reprimand incompetence. The outcome of the PMS process formed the basis for compensation raise, promotion, transfer and resignations / terminations. This PMS process was not viewed favorably by the employees who merely saw it as a fault-finding exercise without any concrete performance improvement initiatives arising out of it. This led to indifference in attitudes of the employees and decline in their morale. The PMS process seemed to create a negative experience for the employees and a stressful environment overall. All of this ultimately affected work productivity for Kaveri Boilers which could not achieve optimum production output that had the HR Manager baffled.
Performance appraisals are only as good as the performance management system it operates within. Organizations that only do performance appraisals for the sake of doing them are wasting their time. Annual appraisals are carried out in order to recognize the achievement and recommendations for promotions. However this was not the scenario existing at Kaveri Boilers.
It is to be noted that during annual appraisals, most recent accomplishments and disappointments may get noticed as these are fresh in the memory while the events which date back a few quarters could go unnoticed. This is an issue with the annual appraisal system which may very well be happening at Kaveri Boilers also. One year is too long a time to wait to appraise people and get their feedback.
The existing PMS cannot be blamed for all the problems of the company. The problem lies in the work environment at Kaveri Boilers that does not seem to focus on accomplishing organizational objectives, improve performance, and attain vision. The employees at Kaveri Boilers seem to be disengaged.
There seems to be lack of initiatives to foster an open culture, open communication, and engaged employees that would otherwise help create a stronger bond between employees at all levels in the organization thereby inculcating a sense of ownership in them.
There also seems to be an issue with respect to the organization’s values and with that of the supervisors, managers, and workers throughout the organization. It is the responsibility of the top leadership at Kaveri Boilers and not of the HR Manager to ensure that organization’s values and their own actions actually guide the behavior of the entire workforce of the organization. To enhance performance the right values must be adopted.
2. If you were to be the HR manager, what will you do to resolve the crisis?
The following steps would be initiated to change the existing PMS at Kaveri Boilers and thus aim to resolve the crisis:
- Introduce mid-year performance reviews. The move is aimed at making managers and employees more accountable.
- The mid-year review should not be about ratings but geared towards reviewing and providing guidance to the employees, bringing them back on the path of growth, in case they have strayed.
- Hold structured review meetings every quarter / six months as per the needs, to keep the employees on track. The year-end process, on the other hand, should focus more on assessment and involve feedback. This will add a lot of value to the whole process of performance evaluation with the objective of helping in course correction, with an aim to give positive feedback.
- Make the performance requirements more objective so that they are easy to understand and implement. This is based on a research that shows that people to whom the performance objectives are communicated well perform 25% better.
- Put in place a workforce performance management system that ties reward, recognition, compensation, and/or incentives to the achievement of performance objectives. Match the compensation and recognition systems to the work necessary for organizational success.
- Introduce compensation and recognition approaches like rewarding exemplary team or unit performance, and links to customer-satisfaction and loyalty measures, achievement of organizational strategic objectives, or other essential organizational objectives.
- Conduct Employee Satisfaction Survey once in every 6 months by an external organization. The feedbacks from the employees to be considered while taking future policy decisions thus getting them engaged with the organization.