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.
Monday, December 1, 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 December 2014 edition.
Akhil Vikas International is a top fast-moving consumer goods (FMCG) category company in India. It has quite a few well-known branded products which offer beauty, health and wellness solutions. It also keeps several popular brands of home care products, food and beverages.
The company considers product differentiation as its main and successful marketing strategy. To achieve product differentiation, it adopts the TQM approach production process. Though the total strength of its work-force is 12,100, it enjoyed fairly good industrial relations so far. The unique HR policies and practices of the company were largely responsible for the cordial relationship between the superiors and the subordinates. There was a clear demarcation of duties and responsibilities between the supervisors and the workers, and this prevented possible conflicts and strains in the relationships.
However, the situation changed dramatically in the recent period after the company went in for the modernization of its plant. As part of its modernization programme, it recruited a big chunk of knowledge workers recently to operate high tech machines. These workers were assigned to supervisors in different production units after undergoing orientation. Contrary to expectations, the management observed some unease in the relationship between the supervisors and the newly appointed subordinates. There were frequent complaints of ill-treatment from the subordinates and of disrespect from the supervisors. Consequently, tension began to build between these two groups in the organization, leading to declining employee morale, quality levels and performance efficiency.
The management of Akhil Vikas was vexed over the development in the organization and decided to utilize the services of IDEA - an external OD agency to resolve the issues of the organization. The IDEA team, in coordination with the HR department, conducted an OD survey to identify the cause of the frequent disputes between the supervisors and the subordinates. At the end of the survey, the team identified assertive and independent behaviour of the newly appointed high-tech workers as the cause of the disputes. The supervisors apparently perceived a direct challenge to their authority from these subordinates. Thus, there was clear distrust between the supervisors and the new subordinates. However, these very supervisors maintained normal and cordial relationships with the older subordinates.
The external experts attributed the crisis to the absence of any training for the supervisors in team-building and leadership. They also found the orientation and socialization provided to the new employees as grossly inadequate. Finally, the HR department, in collaboration with the IDEA team, organized a series of training programmes for the supervisors on topics like interpersonal skill training, emotional intelligence, team building, cross-cultural understanding, motivation, personality-type training and conflict management. The HR department also increased the duration of the orientation programme for the new employees by making it more extensive and relevant. The management is now fairly optimistic about the outcome of its efforts.
Questions for discussions & solutions
1. According to you, who is to be blamed for the problems of Akhil Vikas International?
- Akhil Vikas International is a top Indian FMCG Company having a workforce of over 12000. The company follows TQM production process, it’s unique HR practices like clearly defined job responsibilities enabled cordial relations between supervisors and subordinates.
- The company recently modernized its plant operations and recruited new age knowledge workers to operate the machines. However problems started brewing between the old supervisors and the newly recruited workers inspite of the latter having undergone induction training and orientation. All of this ultimately adversely affected the company’s performance and productivity.
- The problems for Akhil Vikas International started right from the time the company decided to modernize its plant operations. These were signs of changes to come in the company which is the most difficult thing to deal with. Then came recruitment of new workers to run the machines. Usually in any organization when one is used to a certain style of working and is set and then suddenly somebody new comes into the system, it becomes difficult for the existing person to accept the new one. Reasons could be perceived job insecurity, someone new in the system having more knowledge, doing things in a new, better way, etc…
- The culture at the company seemed to be that supervisors expected the subordinates to do as per their instructions whereas they felt that since they had far better knowledge than them, they knew what to do & how to do it. There seemed to be a conflict of interest.
- It is the management of the company who is to be blamed for this scenario and not the HR dept. since it will only carry out the duties as instructed by the management. However the onus is also on the HR dept. to advise company management on the right thing to be done. Training should have been given separately to the supervisors also on the changes taking place and new people coming in the system. The supervisors should have been sensitized and trained to handle them. New sets of duties & responsibilities could have been spelt out. An outbound team – building training programme at the outset that includes both the supervisors and subordinates could have helped ease the relationships.
2. How do you assess the efficiency of the human resource department in carrying out the OD intervention programs in general?
- Management of the company perplexed by the situation in the company hired IDEA – an external OD agency to resolve the issue. The agency in co-ordination with HR dept. carried out a survey and identified various causes like lack of leadership and team-building skills with the supervisors, independent working style and assertive behavior of the workers and also process related issues like inadequate coverage during the training programme of the newly recruited workers.
- The solution to this issue was that the extensive training programs were carried for both supervisors and the workers in order to bring them all together. However this is a classic example of just-in-case training identified as a solution to a problem. Training should be linked to work requirements. Hence if the results of the survey identified leadership and team building for the supervisors, the same should have been part of the annual training calendar for them so that it is reinforced on the job regularly.
- Although the management of the company is fairly optimistic about the outcome of its efforts, the HR dept. needs to collect feedback on the appropriateness of the training. It should systematically evaluate training effectiveness on the job, collect performance data on individuals and groups trained at all levels to assess the impact of the training and periodically report to management.
- Supervisory support for the use of training on the job could be tracked and used to improve future training content, training delivery and instructional effectiveness. The failure to evaluate and improve the effectiveness of training will make it difficult to optimize individual or company-wide performance. Ineffective or inefficient training and education waste resources directly (cost of training as observed in this case analysis here - various trainings as a result of OD Intervention Survey) and indirectly (cost of lost opportunity and productivity while the workers and supervisors are receiving the training).
- Lastly, the HR dept. should periodically (e.g. once in 6 months) assess its employee engagement via various formal and informal methods. Failure to consider employee engagement and satisfaction data such as absenteeism, grievances, etc…may prevent a problem from being identified and corrected. Having already identified a problem and taken measures to correct it, the HR dept. should now ensure that it does not recur again i.e. take Corrective Action by way of employee engagement and satisfaction surveys.
3. What will be the possible outcome of the joint efforts of the HR department and IDEA in terms of organizational development and change management?
The possible outcome of the joint efforts of HR Dept. and IDEA – external organizational development (OD) agency could be as follows:
- Create a supportive work environment between the supervisors and the workers (subordinates). An environment of mutual trust and work stability will be in place.
- The employees will be more personally engaged, and demonstrate high energy in discharging their daily functions as a consequence of the training programs and OD interventions
- There will be feeling of being valued by supervisors and involvement by the subordinates.
- Improvement in knowledge, skills and abilities, everyone will work for their general betterment and the company as a whole.
Monday, September 29, 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 October 2014 edition.
Amity Brakes Limited produces automobile spare parts on a large scale and supplies them to several major automobile producers in the world. This Hyderabad multinational has a commendable sales and profit performance. It is also a market leader in its area of operations. The company has a staff strength of 9,500 on its roll. As part of its platinum jubilee celebrations, the management recently did self-introspection of its functioning; analyzing the relevance of its mission, vision, policies and programmes covering all aspects of the organization. As far as HRM was concerned, the management concluded that the workforce composition of the organization not reflecting the reality of the diversified nature of the labor market. In fact, the HR policy of the company was not offering equal opportunity to all segments of the labor market. The number of women employees in the workforce was insignificant while the number of physically challenged persons was trivial. Thus the company took an administrative decision to change its recruitment policy in a way that would reflect the labor market conditions. Also its management decided to implement these changes with immediate effect.
The proposal of the management received a mixed response from the employees. A section of the employees viewed the proposal favorably and supported it on the ground that it would do social justice, reflect reality of the market, make optimum utilization of the talents available in the market and prepare the organization for an inclusive growth. However another section of the work force viewed the proposal with doubt and disbelief as they felt that a well-performing organization like Amity should not take any unwarranted risk. They also feared that the cost of training would go up substantially. Besides, they were afraid that gender-related issues could crop up in the organization. Further, they foresaw an additional investment commitment by the management to improve the infrastructure facilities, especially for the physically challenged.
Finally, however, the company went ahead with its revised policy and implemented it. It also directed the HR department to do what was necessary for the successful implementation of the diversity-based HR policy initiatives. The HR department prepared the ground for the implementation of new ideologies and of the policies of the company. Soon after, the proportion of the employees belonging to these categories began to pick up.
Questions for Discussion and Solutions
1. How do you view the new proposal of the company in the light of the current performance of the company?
- Amity Brakes, a Hyderabad based multinational supplier of automobile spare parts to large automobile producers completed 25 years. The company was doing very well in terms of sales & profitability and commanded a market leadership position.
- The company decided to review its overall organizational vision, mission, policies & programmes with a focus on the future. As part of the review process, it was observed that the existing workforce was not reflecting the diversified nature of labour market and hence Amity Brakes Management decided to change the recruitment policy that would reflect the market conditions with immediate effect. The changes included having more women workforce & also giving equal opportunity to physically challenged people.
- Amity Brakes by addressing these changes may help to ensure a loyal and stable workforce that also represents the diverse ideas of the customer community.
- This hiring process also reflects a terrific opportunity to attract and hire workers with diverse ideas and cultures, without which it will be difficult to capitalize on diverse ideas, cultures, and thinking. This in turn may limit the ability of the organization's workforce to be engaged, innovative and empowered. Productivity suffers, as does the organization’s ability to meet the challenges of today's highly competitive labor environment.
- These changes were also aimed at bringing about labour reform legislations and to increase effectiveness of its workers to face global competition.
2. Do you foresee any problem for the company in the execution stage of the proposal?
- The proposal received mixed response from the employees. While some viewed it favorably citing the need to do social justice, adapt to changing market realities, make optimum utilization of the talent available, etc... others viewed it with doubt and disbelief fearing change. They cited factors such as increase in cost of training, gender-related issues and other cost issues like providing infrastructure facilities suited to the needs of physically challenged.
- There could be discontent brewing amongst the existing employees who are unable to cope with the changes taking place. These early warning signals should be tackled immediately and employees should be assisted to cope with the change.
- Better understanding of the ground situation is must while executing.
- Amity Brakes should look at handling internal conflicts bilaterally and resolve differences that may arise as a result of the changes taking place in the workforce especially with new employees from diverse backgrounds being recruited.
- Train supervisors to effectively communicate and deal with employee issues frontline. Constructive co-operation and respect for the human personality should be promoted. Management personnel should set high standards. Trust of the workers should be earned and they should be empowered.
3. Do you have any better suggestions and strategy for the company to adapt itself to the emerging labor market environment?
- The workforce should reflect not only the diversity of the hiring community but also the customer community. By failing to reflect the customer community, the workforce may find it difficult to develop and support strong customer relationships.
- Amity Brakes in order to adapt itself to the emerging labor market environment and given the fact that it wants to position itself for the next 25 years, the recruitment systems must be so designed as to identify the potential workforce who will inherit the organization’s culture from their seniors, enrich it with professional values & business excellence skills and hand it over to the next generation.
- Amity Brakes during its next cycle of growth process must look at hiring and retaining a very result oriented team of employees, comprising of both young and experienced personnel from almost all possible geographical regions.
- These changes should be complemented with a focus on using technology and improving processes.
- Skill mapping process should be in place. Amity Brakes before hiring new workforce members should compare the skills it needs to achieve its Vision, Mission and needs of the emerging labor market environment for the next 25 years with the skills its workforce currently possesses. By doing so, it will be able to effectively make better hiring decisions. The failure to identify the needed workforce capability and capacity increases the likelihood of not having appropriate staff in the right places.
- Invest heavily in the workforce. Training and retraining, frequent communication and career counseling to be carried out to enhance the capability and capacity of the employees focusing on the emerging labor market environment.
- Ensure Equality at the Workplace. Amity Brakes should place special emphasis on the variety of approaches used to satisfy a diverse workforce with differing needs and expectations. Examples include recreational and cultural activities, formal and informal education, flexible work hours and benefits packages. As the workforce becomes more diverse, it becomes more important to consider and support the needs of those members of the workforce with different services.
Wednesday, August 27, 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 September 2014 edition.
Rakish Iron and Steel Company is a significant player in the iron and steel industry. The company has a workforce of 18,000. With a 21 per cent market share at the national level, it occupies the fourth position in the industry. The company set for itself an ambitious target of securing the third position in three years, the second position in seven years, and industry leadership in ten years. The management of Rakish announced a major change in the business strategy of the company that would lead to the transformation of business operations. Incidentally, it prepared a blueprint for the company and chose product differentiation as its primary strategy for the future. It identified a few segments in the market like the low-value steel market where the competition was negligible. It decided to expand its product line with a focus on the consumers of these low-value products.
Pursuing this strategy, the management announced a slew of measures aimed at enhancing the width of the product line by adding a few more varieties to it. It made a huge investment commitment in the infrastructure for producing low-value steel. Within a remarkably short span of time, it introduced new products to cater to the market demand for low-value products. The market responded favorably to its new products and the turnover and profit rose appreciably. However, the competing companies understood the game plan of Rakish quickly and reacted by expanding their product line too. The advantage enjoyed by Rakish turned out to be a short-lived one and the major players once again began to dominate the market.
Once the product differentiation efforts failed, the management of Rakish changed its strategy and adopted a low-cost strategy. This required the organization to be aggressive in sales promotion measures and diligent in cost reduction in fields like marketing, advertising, distribution and services. The cost reduction measures could not help the company for two reasons. One, the cost of marketing did not have a significant influence on the price tag of the product. And two, the cost reduction efforts had a negative fall-out on sales promotion and also on the actual sales performance. Eventually, the company was forced to abandon its low-cost strategy endeavors.
When the company was almost clueless about its future strategies to accomplish the performance goals, Rajesh Sharma joined the board as the HR Director of the company. Learning about it's ill-fated strategy initiatives, he made a proposal to develop the workforce of the company as a competitive advantage in the market. The board of directors greeted the proposal with suspicion and contempt. They could not believe that the employees could be developed into a formidable force for the organization through proper HR measures and that in due course this would lead to cost reduction and quality enhancement. However having no worthwhile alternative schemes, they set aside their reservations and approved the HR director's proposal. Simultaneously, the directors allowed a huge budgetary support for drastically improving the training infrastructure and the compensation packages. The HR director's proposal began to take shape and the management kept its fingers crossed.
Discussion Questions & Solutions:
1. What could have been the reason for the failure of the earlier strategies of Rakish?
Rakish Iron & Steel Company was the 4th largest company in the industry having 21% market share. The company set itself an ambitious target of being industry leader in the next 10 years and accordingly prepared a blueprint on how to go about it. The company announced a slew of measures that would lead to transformation of its business operations. Product differentiation was identified as its primary strategy for the future and accordingly few market segments were identified where low-value steel was in demand and competition was negligible. This strategy was very well received by the market initially leading to increase in turnover and profits for the company. However, competing companies were quick to follow suit with similar strategy and began to dominate the market.
One of the reasons for the failure of the strategies of Rakish Iron & Steel Company could be the allocation of resources. The failure to allocate appropriate resources or balance resources to accomplish the strategies frequently implies that some of the plans are not accomplished due to insufficient resources, while other plans are accomplished inefficiently because of too many resources which could be the case here.
Performance Projections: Rakish Iron and Steel Company has designed a strategy to achieve market dominance position and how to go about it i.e. to win in competitive situations. However, before setting its goals, it should have also studied and made note of as to where competition would likely be in the future. It is up to the company's leadership to study, understand the likely future performance levels of key competitors and then set goals accordingly. Data from competitors, key benchmarks, and/or past performance form a valid basis for comparison. Expected future levels of competitor or comparison performance could be used to set and validate Rakish company's own plans and goals. Unless it is done so, Rakish Iron and Steel Company may find itself achieving the goals it has set for itself and still lose - finding itself behind the competition. In a competitive market, it is not good enough to achieve it's goals unless they place the company in a winning position.
2. How do you foresee the future of Mr. Rajesh Sharma's proposal in the light of the competition faced by the company?
Mr. Rajesh Sharma, newly joined HR Director of Rakish Iron and Steel company, learn't about the ill-fated strategic initiatives of the company, made a proposal to develop the workforce of the company as a competitive advantage to secure market dominance position. Mr. Sharma's proposal to develop the workforce would lead to cost reduction and quality enhancement. The Management of the company approved a huge budgetary support for drastically improving the training infrastructure and the compensation packages. The proposal was slowly beginning to take shape.
By definition, plans describe activities or actions that have not yet taken place. Many a times in order to execute the plans, the workforce must possess skills, knowledge, or abilities that they do not currently possess. Without appropriate plans to develop, acquire, or motivate the human resources necessary to carry out desired actions, Rakish Iron and Steel Company may not be able to achieve its strategic objectives. The workforce may not have the skills, knowledge, or abilities to carry out the actions required for success in the future. Hence Mr. Sharma's proposal may trigger the much needed desired change that will enable the company to achieve its goals.
Organizations must invest in their people to ensure they have the skills for today and to do what is necessary to succeed in the future.
3. What would your proposal have been if you had been the HR Director of the company?
The following would have been my proposal as HR Director of Rakish Iron & Steel Company:
- Communicate the strategy and its related action plans to the workforce thus enabling them to know as to what is required of them rather than leaving it to guess work.
- Workforce Development by ensuring that clear linkages exist between the company's strategic objectives and education and training. Workforce skills are developed based on work demands and workforce needs. Ensure that the training plans are developed based on worker and manager input.
- Address key issues of training and development, hiring, retention, workforce engagement, involvement, empowerment, and recognition and reward as a part of the human resource plan. Define appropriate measures and targets for each.
- Develop relevant metrics to monitor progress thus sending a clear message to the workforce that the plans are important. Prompt and regular feedback is provided to teams and individuals regarding their performance. Feedback covers both results and processes.
- Redesigning work to increase worker responsibility. Broadening worker responsibilities; creating self-directed or high performance work teams.
- Form partnerships with education institutions to conduct student research and develop workers and ensure a supply of well-prepared future employees.
- Developing gain-sharing or equity building compensation systems for all workers to increase motivation and productivity. Compensation, recognition, and rewards/incentives are provided for results, such as for reductions in cycle time and exceeding target schedules with error-free products or services at less-than-projected cost.