HR Globe

2nd December, 2006 - Economic Times

Think twice before you abandon that BPO job in a hurry. BPO companies such as Genpact, IBM Daksh and HCL BPO are cracking the whip on employees who leave without intimating the company or refuse to serve their notice period.

Genpact has recently started asking such workers to pay back the cost of training incurred by the company, which works out to around Rs 50,000-70,000 for a three-week schedule. IBM Daksh, which caught on last month, has begun tracking these professionals to get feedback on why they left without information. While Genpact could look at legal action against such professionals, IBM Daksh has ruled it out.

The seriousness with which these companies are viewing the issue can be gauged from the fact that IBM Daksh, which employs over 20,000 professionals, recently set up a core team to clamp down on such practices. The team includes seven to eight cross-functional executives, as well as an executive sponsor who reports directly to the company CEO.

The team will not only attempt to unravel the reasons behind this trend but will also suggest corrective action. It has contacted 100 professionals who left without notice, with a view to ascertain the cause of departure. “The company is yet to decide on corrective action. However, we do not plan to take legal action against such employees as we want to address the problem and not impose fines,” says DP Singh, vice-president, strategic, HR, IBM Daksh.

Industry experts estimate that employees who abandon duties without informing the company may be accounting for over 20% of the overall attrition numbers in the industry. They are largely agent-level employees.

“Although we have filters, including a policy of not recruiting people without a relieving letter from the previous employer, over the past two months we have started taking stringent measures to enforce discipline,” says Piyush Mehta, senior vice-president, HR, Genpact.

In fact, Genpact is asking workers who failed to turn up for work to either serve the notice period (ranging from one to 3 months) or shell out the salary equivalent for the unserved notice period. The company said that while most departing workers complied with the new directive, Genpact will not hesitate to explore the legal option against defiant professionals in the future.

Noida-based EXL, on the other hand, is addressing the issue with some rigorous screening at the hiring stage. “The seriousness of the problem has led to the number of screenings increasing at the hiring process,” says HR head Deepak Dhawan.

BPOs complain that in many cases, employees even say they had to quit because their families were unaware of their entering the sector and refused to let them continue.

HCL BPO insists that professionals joining the company furnish a bond to serve the company for a certain period. “In case they leave before the specified duration, then the cost of training has to be refunded to us,” says HR head AP Rao.

However, industry body Nasscom squarely blames BPOs for recruiting people without even insisting on relieving letters. Says Nasscom vice-president Sunil Mehta, “Players in the industry need to get their act together as hiring without a relieving letter from the previous organisation is a common practice in many BPOs. The issue will persist till such practices continue.”

1st December, 2006 - Business Standard

India has reported the highest average salary increase of 13.8 per cent in the Asia Pacific region this year, beating China which has seen a salary increase of 8 per cent.

India’s average salary increase was the highest in the region despite being marginally lower than 14.1 per cent in 2005, according to the annual Asia-Pacific Salary Increase Survey conducted by Hewitt Associates, a global human resources services company. In India, the survey was conducted across 169 organisations.

According to the survey, the average overall salary increase for 2007 could be anywhere between 12.3 per cent to 15 per cent. Employees at professional, supervisor, technical level received the highest average increase of 15 per cent, and are expected to receive same hike again next year.

Senior and top management had the highest percentage of variable pay in total cash compensation at 19.5 per cent. This is expected to rise to 20.7 per cent next year.

After India, it was the Philippines which reported the highest average overall salary increase at 8.2 per cent, while salaries in China rose by 8 per cent, down from 8.3 per cent last year.

However, though employers are reporting pay increases, salary hikes in the region have been modest in comparison to previous years and the trend is likely to continue in 2007, adds the survey.

“Asia’s markets have maintained steady growth in the last year, which has led to a stabilisation of salary increases in most markets during 2006,” the survey said.

Singapore is an exception to this trend. With the strengthening of Singapore's economy, employees experienced average salary increases of 4.6 per cent, up from 3.9 per cent in 2005, demonstrating one of the largest year-on-year hikes.

Meanwhile, Thailand and Malaysia saw raises of 6.5 per cent and 6.2 per cent respectively, marking an increase from 6.3 per cent and 5.6 per cent in 2005.

Salaries also rose in Australia, Korea and Hong Kong. “While organisations are being driven to increase their spend on compensation as a result of the ongoing attraction and retention challenges we are facing in Asia, many companies are reassessing their human resources strategies and broader business goals to ensure they are getting the most out of their talent and increasing productivity," said Nishchae Suri, head of Hewitt's Talent and Organisation Consulting Analytics practice in Asia.

1st December, 2006 - Economic Times

India, Inc. is one of the world’s best employers in terms of pay and peace of mind, if two independent HR consultancies are to be believed.

A Hewitt survey on Thursday said that Indian employees enjoy the best pay hikes among their Asia-Pac brethren, while Kelly Services found out in a study conducted among 28 countries that two-third of Indian employees were either ‘happy or very happy’ with their current positions.

India Inc, with a 13.8% average annual hike rate in salary - a tad lower than last year’s 14% - stood tall over the Philippines with a 8.2% rate and China, whose 8% was down from 8.3% last year.

According to Kelly Services, Indian employees ranked seventh out of 28 countries in the global survey for employee satisfaction. The most contented employees were in Denmark, Mexico and Sweden and the least happy in Hungary,

Russia and Turkey. That makes India share an equal first with Indonesia in the eight Asia-Pac countries surveyed.

The survey also ranked India an equal second, along with Australia in the Asia Pacific region for employer performance. New Zealand was voted as having the best bosses in the region.

The happiest employees belonged to the IT industry (66%) followed by business services (65%), engineering (65%) and financial Services (61%). And among the states, AP, Maharashtra, New Delhi and Tamil Nadu came top in happiness index. The survey was based on the views of approximately 70,000 executives, including almost 2,000 from India. The Hewitt salary survey also showed that variable pay continued to be an important means of attracting and retaining talent, with 78% of responding organisations using them.

Individual performance awards continue to be the most popular, with 56.2% of responding organisations saying they are their preferred type of variable pay plan. They also indicated individual performance awards have the highest impact on business results, followed by business incentive plans and team awards.

According to the study, companies increased variable pay out in 2006 to 14.9% of their payroll, up from 14.5% in 2005. This year, target variable pay out was highest for senior/top management at 21.8%, and is expected to rise to 22.3% in 2007.

Said Nishchae Suri, head of Hewitt’s talent and organisation consulting analytics practice in Asia, “With the pressure to retain key talent growing, an increasing number of organisations are ensuring their pay is competitive by closely monitoring market movements. Most companies review their markets annually, using multiple sources of information to benchmark compensation, such as industry surveys and information through personal contacts.”

30th November, 2006 - Business Standard

There are four common errors that organisations make when trying out a new HR programme.

We are a 1,500 employee multi-location company. A couple of years ago, we instituted a brand new performance management programme, complete with the performance scorecard design, competency frameworks etc. As this was a prestigious project, we took care to get the best in class and modern practices for ourselves.

Besides, our top management gave the project team visible support. However, two years down the line I am quite disappointed that the programme has not quite delivered. We see no visible signs of improvement in performance. There is cynicism all round. Are we judging the programme too early? Where do you think we went wrong?

This situation you has been experienced by many other companies as well. HR programmes deliver the desired results when they are completely adopted by the line managers and the workforce or there are no gaps in programme design, or sometimes both.

There are four common errors that organisations make when trying out a new HR programme:

The HR programme is over-engineered, and hence does not practically reflect business needs. Companies, in their effort to be rigorous, build in all possible functionalities irrespective of whether these enable a substantially better chance of seeing desired workforce behaviours and making significantly higher quality workforce decisions.

One company tracked 15 performance measures for each employee, in addition to the applicable 12 behavioural and technical competencies and a complex formula to determine the final performance rating.

The employee never knew what specific behaviour allowed her to earn the rating and the reward. You can imagine what behaviours will be institutionalised in this organisation.

The HR programme may not meet the ‘last mile’ application, that is, adapted to the organisation’s conditions. While one company managed to identify the appropriate set of performance measures, it did not have the supporting technology to measure the same for some employees.

Hence, there was always a lag in which performance could be measured for a sizable number of employees, while for the rest it was not a problem. Concerns about fairness started pervading the environment, until the organisation quickly resolved the issue.

The new HR programme is not in harmony with the existing HR programmes. That is, the company rewards employees for the same set of behaviours that they train for, set expectations for and measure.

A related situation that is also common is when each programme is at varying levels of maturity- a robust performance management programme akin to an automobile on a 6 cylinder engine supported by the promotions and rewards that are distributed on the basis of the archaic seniority basis of an underpowered 800 cc engine vehicle. Experience shows that employees feel most frustrated in such situations.

For example, a manufacturing company migrated to a broad-branding programme where they crunched 14 grade s to four. While employees became part of the new compensation band, they continued to be rewarded and promoted as per existing policies. Due to lack of adequate promotion opportunities and lack of clarity on career paths, the company faced a surge in employee attrition.

The HR programme has not become a habit. In my experience companies pay more attention, dedicate more organisational resources and give more senior management time at the stage when the HR programme is being designed, less so when itis implemented and probably the least to make sure it becomes a way of life.

The last two stages (implementation and institutionalisation) require more involvement of the line management. In my experience, the best implementation and institutionalisation of an HR programme happens when the organisation has a line manager leading the exercise.

On an ongoing basis, the HR function needs to keep a close ear on the concerns of line managers and the general workforce as well as periodically measure the impact on workforce behaviour and culture.

This will help the HR function to be constantly be in touch with the emerging issues and thus giving it an opportunity to address issues in a timely manner.

The author is Associate Director, PricewaterhouseCoopers.

30th November, 2006 - Business Standard

COMPETENCIES: More educational opportunities are needed in India.

Participants in the just-concluded India Economic Summit reached a consensus that the highest priority for raising India’s competitiveness is to improve the quality of the country’s higher education and technical training, and to broaden learning opportunities nationwide. However, they said that this is not to say that India’s educational system has failed.

On the contrary, said Mohamed A. Alabbar, Chairman of Emaar Properties, United Arab Emirates, India has earned a global reputation for the quality of its top graduates.

"India has done so well in education," he said. “We should really give some credit that the Indian education system has done something.”

Yet, enterprises face a growing shortage of qualified skilled workers, with many graduates ill-prepared for the real workplace. Many blame a wide disparity in the quality of education across India’s schools and universities.

To help address this problem, Minister for Commerce and Industry Kamal Nath announced that the government plans to introduce new legislation that will allow foreign educational institutions to set up in India.

The aim, he said, is not only to help retain the thousands of talented Indians who go abroad for education, but also to lure the many Indian educators teaching in universities abroad back home.

“It’s extremely good news,” said Michael Rake, International Chairman, KPMG, United Kingdom, of the draft legislation. “The depth of education needs to continue for India to remain competitive.”

Participants also stressed the importance of recruiting, managing and retaining skilled and talented workers as crucial to managing India’s growth.

“Many industries are simply competing for the same pool of labour,” said Nandan Nilekani, President, CEO and Managing Director, Infosys Technologies. “There’s a tremendous upsurge in demand.”

Panellists also stressed the need to build a reservoir of talent by creating more educational opportunities among the poor. “You can’t attack the top end unless you nurture the bottom end,” said R. Seshasayee, President of CII.

30th November, 2006 - Business Standard

STRATEGY: Flextronics has launched a slew of initiatives in integration after ownership changes.

The communications software company known as Hughes Software Systems (HSS) since its founding in 1991 has undergone a bewildering series of changes between 2004 and 2006, the latest being a change of brand identity only last month.

Aadesh Goyal, vice-president for human resources, confesses that he realised the magnitude of the transformation only a few weeks ago, when he was preparing a presentation for a conference.

In June 2004, Flextronics International, a Singapore-based provider of electronics manufacturing services, acquired Hughes Network Systems’ 55 per cent holding in Gurgaon-based HSS. The name was then changed to Flextronics Software Systems (FSS).

Meanwhile, HSS itself had acquired several companies— Johnsons Controls, Ascom, Lucent, DCM Data, Hexaware and Telenet Technologies.

They were brought under the HSS umbrella, and after the Flextronics buyout, FSS acquired Bangalore-based Deccanet Telecom and e-muzed, and Chennai-based Future Software, all of them telecom software firms.

Then, in April this year, venture capital firm Kohlberg Kravis Roberts & Co. (KKR) acquired an 85 per cent stake in Flextronics International’s software business. In end-October, the new entity changed its brand identity to Aricent. Its employee numbers have trebled to more than 6,600.

Goyal recalls thinking that employees of smaller companies should feel good about being integrated with a larger entity, but soon realised how wrong he was: “They have a sense of pride and a vision about themselves, and these issues need to be dealt with.”

So he got them to play a game called ‘open space’, designed to convert everybody into problem-solving mode, and that helped enlists their support for the merger. The idea was to figure out together how to integrate.

Explains Goyal: “In any takeover or merger situation, people are afraid that somebody else is going to tell them what to do. But when they ask questions and themselves take on the responsibility to provide solutions, it creates a sense of inclusion and equality with those with whom they will merge.”

These meetings convinced Goyal that the wiser path would be not to merge the three companies into FSS, but to create a new entity into which all three would merge.

To decide the HR policies and systems of the new company, 10 cross-functional teams were picked, each in charge of a subject such as hiring, campus recruitment, performance management, compensation management, and training and development.

The teams were asked to study the best practices in each entity and submit reports, which were then discussed at a workshop in Bangalore.

These teams found that employees considered organisational culture vital. To develop a new culture, a culture survey was conducted: A culture questionnaire was sent to each of the 4,500 employees, asking them what kind of a company they wanted to build.

“We compiled all the findings and chose the best responses in terms of quality. We have taken 12 behaviours that now drive our culture and which are based on all that these people had said,” explains Goyal.

But the integration process was not always smooth. First, employees of the smaller firms feared that they would become part of a corporate bureaucracy and feel a sense of alienation, and this wasn’t anticipated.

Second, there was some opposition from people whose roles or reporting relationships changed. Third, people from the acquired entities clung to their earlier identities and notions.

What has Goyal learned? “First, be prepared to deal with the fear and anxiety that people feel when a company is sold. Second, the period for which they will continue to associate with their old employer will not be three or four weeks, but six to 12 months. So you have to find a way to support them emotionally, while moving on in an intellectual sense.”

29th November, 2006 - Times of India

Headhunters for IT and ITES firms, sounding the alarm over the quality of fresh graduates applying for jobs, have begun asking universities to get their act right.

Addressing vice-chancellors from across the country on Tuesday, National Association of Software and Services Companies (NASSCOM) president Kiran Karnik pointed out that the entry selection average for engineers stood anywhere between 20% and 25% and dipped further to as low as 10-15% for ordinary graduates.

Focusing on the quality of engineers and technical graduates passing out of most universities at the ongoing three-day national V-Cs'meet, Karnik said, "We can't employ the 26th candidate because he is just not employable.

Most students fail to make a mark. Yes, they have a degree, but they are not employable. They lack technical and soft skills.

"He said the curriculum was outdated in most places and equipment used was obsolete; students had weak foundations because of which they were not picking up new skills. "The biggest failure is that students don't possess soft skills to discuss, present and articulate,"he added.

Karnik, in fact, blamed the education system for not emphasising on communication and articulation, or laying importance on team work.

"The only team work our students know of is when they play cricket or football,"he added. Karnik said most companies had to spend a lot of time training fresh graduates.

"You are creating graduates, but they are not employable. People invest time and money in education expecting a return; they either need to get a job or they must be able to create jobs. But that is not happening; the university system needs a shake-up," Karnik said.

The problem of finding talent is expected to come into greater focus as the industry grows further. Karnik said exports, which touched $24 billion this year, were expected to rise to $64 billion by 2010. The expansion would also create 2 million direct job opportunities.

28th November, 2006 - Economic Times

While globalisation presents the biggest market opportunity for companies today, grooming and training their managers to handle employees, customers and stakeholders across borders and in different cultures have become a challenge.

Senior management at Wipro has found an interesting way to overcome this challenge. The company has teamed up with four large multinational corporations — Nissan, Loreal, Schneider Electric and Alcan — to form a common senior management training and development programme.

Each of these companies represents diverse industries ranging from automobiles to personal care and operates in both emerging as well as mature markets. “The idea is to expose business heads to strategic issues related to globalisation from different industries and geographies,” says Ranjan Acharya, VP, Corporate HRD, Wipro.

Each of the participating companies sends six of its senior managers (vice-president and above) for this programme. For the first programme Wipro sent six VPs drawn from its various business divisions including global IT business, consumer care and infrastructure engineering.

Anchored by professor John Stopford of London Business School, the global leadership programme is split into two modules, each lasting a week. Nissan in Tokyo hosted the first module, while Wipro hosted the second module this year.

The first module exposed all the participants to common issues and challenges related to globalisation. The second module, discussed challenges faced by each companies while taking the business global.

So, while Wipro managers raised the issue of forming and managing client relationships across industries, Nissan’s challenge was how to form cross-functional teams to solve business problems and the L’oreal team worked on a herbal formulation for the Indian market.

“Most organisations tend to be very inward-focused, this programme exposes our managers to real issues faced by other global companies. They also understand how to resolve these challenges,” says Mr Acharya. Wipro then channelises this learning into its strategic planning cell.

“For me the really exciting thing was that I could sit down and chill with all these participants, not as clients but as friends, and soak up all the cultural nuances” says Sangita Singh, senior VP, EAS, Wipro Technologies, a participant in the first programme.

For someone like Ms Singh, who has spent almost her entire working life at Wipro, this provides an opportunity to “experience the insides of another organisation”. “We swapped stories about our work-life and organisational issues and I came back with some fascinating insights” she says.

One such insight came directly from the Nissan CEO Carlos Ghosn. Ms Singh had just taken over a business unit at Wipro and was struggling to come up with a vision statement for her team. During the leadership programme Nissan shared a presentation that Mr Ghosn had made to his colleagues 60 days after joining Nissan.

“Normally vision statements are made from 60,000 ft, but this was so simple, capturing all that Ghosn had learnt in his first two months at Nissan. He then followed it up with simple operational metrics with timelines in which they were to be achieved”. Ms Singh now follows the same format for her business.

What started as an experiment for Wipro has turned into a huge success internally. So positive has been the first group’s response to the global leadership programme that it has created a huge demand for more such initiatives.

The company has responded by putting together another such programme hosted by Professor Henry Mintzberg, an internationally renowned author of management, which has two other companies (one of them is Motorola) apart from Wipro.

The company sent 14 managers for this programme, which has three modules, spread over three continents. The first module was held in McGill University in Montreal, the second module will be held in IIM Bangalore.

Apart from the rich experiences that these initiatives bring to Wipro employees, the company also benefits from the fact that these programmes cost about a third of the money charged by IVY League schools such as Wharton and Stanford.

But it is the intangible benefits of the programmes that will really benefit Wipro. Its managers get to build deep and relationships with a set of people who might become a potential customer some day.

28th November, 2006 - Business Standard

Strategy issues seen through cartoons.

It’s been a tough day for Rupali Patil. The 24-year-old media planner has been at her keyboard for nearly nine hours. She has a few minutes to catch her breath before beginning on the next project.

Patil knows exactly how to unwind — she’ll log on to online game zones like games2win.com and miniclip.com or just sign into her favourite social networking site, before turning back to her documents.

At least, that’s what she would have done if her office administration hadn’t installed a firewall in the computer network. All “fun” sites are now off-limits.

Patil’s employer isn’t alone, of course. HR consultants point out that seven in 10 organisations allow their employees only limited access to the Internet.

HR heads of most large-sized corporations will tell you that it’s not just a question of productivity — unmonitored use of the Internet could have implications for business confidentiality as well.

Also, downloading music and games reduces the speed of the Internet connection for others in the office, if there’s limited bandwidth available.

Of course, the productivity issue is still the most serious. Research in the UK already points out that most people spend over two hours everyday dealing with interruptions from email, calls and colleagues. If they started playing games or chatting online, their usefulness would lessen further. Shiv Agrawal, CEO of HR consultancy firm ABC Consultants, agrees.

“Internet usage needs to be restricted, as some people may visit pornography sites or game excessively. Since companies can’t be seen playing favourites with their employees, most of them use firewalls.”

So what do companies do? While the Bharti group has installed a firewall, IT major Infosys restricts the use of the Net itself. Entry-level software engineers are allowed access to the Internet for only two hours a day: personal email is allowed at that time, but no messenger and social networking sites. Senior engineers can use the Net during the day, but even they don’t have unlimited access.

All of which is great for the organisation, but what about employees who could do with a little R&R? “Employees in most organisations these days spend 12-14 hours in office. If made to work on the trot, their decision-making ability, output and productivity will see definite drops,” says Purvi Sheth, vice president at HR consultancy Shilputsi.

Hewlett Packard, for instance, has a gymnasium and swimming pool at its Bangalore centre; ICICI Bank has a fully-equipped gym; the Bharti Group has a basketball court, apart from organising darts contests and quizzes.

Says Rajinder Matharu, general manager, HR, Bharti, “This is a high-pressure environment and money alone is no longer a motivator. Such initiatives provide a better connect with employees and increase our value proposition as an employer.”

Another option is an employee portal or an Intranet site. FMCG major Godrej Consumer Products operates a portal that offers small games, riddles and puzzles to employees, apart from offering its people access to a jogging track, table tennis, carom and chess.

Vashi-based BPO Trac Mail, too, uses this method. It also has a separate “cybercafe” near the canteen where employees can check personal mail and play games — but only during their breaks.

Don’t these initiatives also reduce productivity? ABC’s Agrawal smiles. “Since these zones are separate, employees can spend only limited time here because their breaks will be noticed by seniors and colleagues.”

Patil’s employer hasn’t yet installed a pool or a basketball court. Until that happens, a coffee break will probably mean just that.

27th November, 2006 - Economic Times

Contrary to popular perceptions, about 95 per cent under-graduates at management schools across the country are more interested in the job profile rather than the pay packet it comes with when they get offer letters. But the foreign dream is still there with 79 per cent keen to start their careers offshore.

These are the findings of a survey conducted by industry chamber Assocham which polled 271 respondents.

These studied at Indian Institute of Management (Kozhikode), Indian Institute of Foreign Trade, Birla Institute of Management Technology (both in New Delhi), Institute of Management Technology (Ghaziabad ), SP Jain Institute of Management and Research (Mumbai), Symbiosis Institute of International Business (Pune), Xavier Institute of Management (Bhubaneswar), ICFAI Business School (Hyderabad) and Institute of Agri Business (Bikaner

According to the findings, when MBA graduates do pick up a high-paying job, it’s to fund a higher standard of living, or to fulfil family expectations and responsibilities, to repay hefty education loans or to save for investment in entrepreneurship.

But when given a choice between working for a growing company or an established one, 60 per cent of the respondents opted for companies in the growth phase.

Developed economies with better working conditions, good living standard and promising growth potential lure India’s talent pool as 79 per cent of MBAs wish to work abroad. Among these, 65 per cent want to be in the US. The United Kingdom and Australia are the next favourite destinations with 34 per cent and 24 per cent respectively .

Europe, Canada, Singapore and UAE are among the other popular countries in terms of choice. In sectors, banking was the most preferred field followed by consultancy, marketing and information technology.