Friday, March 02, 2007
Employers Will Be Fined For Not Collecting TDS
20 Feb' 07 The Economic Times New Delhi Edition
Employers who are not collecting and depositing tax deducted at source (TDS) from the salary of their employees will have to pay heavy penalty from April 1 onward as the Income Tax Department has decided to tighten the noose around them. Sources in the Income Tax Department said till now no penalty is specified under the Income-Tax Act for failure to collect TDS.
However, the Central Board of Direct Taxes (CBDT) has been receiving information from various quarters that in a number of cases, employers as well as accounting departments in many corporates were not collecting and depositing the TDS, especially after the expansion of the provisions of TDS. In a recent circular, the department inserted a new Section 271ca to provide for imposition of penalty on any person who is responsible for collecting tax and has failed to collect TDS in accordance with the provisions of Act. This amendment will take effect from April 1, 2007, and will, accordingly, apply in relation to the assessment year 2007-2008 and subsequent assessment years, sources said.
Shares And Bonuses Account For Three-Quarters of Executive Salaries
2nd Mar 2007 - The Personnel Today.com
Shares And Bonuses Account For Three-Quarters Of Executive Salaries In The USShare options, bonuses and other perks account for all but a quarter of executive pay packages, with share incentives worth an average of 60 pctof salary for chief executives and 29 pct of salary for senior-level executives (below board level), according to research.
The Executive Reward Survey of more than 1,900 senior executives by HR consultancy Watson Wyatt indicated that most companies underestimate the value of their share options, believing them to be worth about 30 cct of salary.However, getting a bonus or share option has become tougher in recent years. Ms Sue Bartlett, a senior reward consultant at Watson Wyatt, said: "Performance conditions have become tougher following shareholder pressure, with many plans using multiple conditions, or requiring exceptional levels of performance for a full payout.
There have also been changes in financial conditions, especially a decrease in general levels of share price volatility, which have led to a reduced chance of significant payouts from options, and hence lower values." Last year, FTSE 100 chief executives saw their pay rise, on average, 43 pct to £2.9m - just £730,000 of which was made up by salary. The rest was made up of bonuses, share options and added perks.
Shares And Bonuses Account For Three-Quarters Of Executive Salaries In The USShare options, bonuses and other perks account for all but a quarter of executive pay packages, with share incentives worth an average of 60 pctof salary for chief executives and 29 pct of salary for senior-level executives (below board level), according to research.
The Executive Reward Survey of more than 1,900 senior executives by HR consultancy Watson Wyatt indicated that most companies underestimate the value of their share options, believing them to be worth about 30 cct of salary.However, getting a bonus or share option has become tougher in recent years. Ms Sue Bartlett, a senior reward consultant at Watson Wyatt, said: "Performance conditions have become tougher following shareholder pressure, with many plans using multiple conditions, or requiring exceptional levels of performance for a full payout.
There have also been changes in financial conditions, especially a decrease in general levels of share price volatility, which have led to a reduced chance of significant payouts from options, and hence lower values." Last year, FTSE 100 chief executives saw their pay rise, on average, 43 pct to £2.9m - just £730,000 of which was made up by salary. The rest was made up of bonuses, share options and added perks.
Thursday, March 01, 2007
The world of paradox
1st March 2007 - The Hindu Business Line
Anticipating, tackling, pre-empting or just coping with external change is the most fundamental issue facing organisations everywhere, far more so the successful ones with strong, well-defined cultures. This is true of the United Nations, a huge multi-national such as GE or Microsoft, or a smaller, entrepreneur-led firm. Despite the reams written on it, there are no clear, foolproof prescriptions for successful change.
The reason, as any honest advisor would admit, is that reality is too complex, while managerial theory is based upon a deterministic, control and prediction-oriented mental model, akin to physical sciences, which just does not fit the organisational reality. This is the one thing I wish the MBA course had taught me a long time ago.
Consider some paradoxes. We know that to deal with uncertainty outside, companies are counselled to be strongly focussed on the inside, on what they do best and to motivate people to align with the goals. Yet, organisations also have to be flexible enough to shift positions when needed, difficult as this is.
Next, internal cohesion is absolutely essential and indeed mandated in a crisis. This usually leads to centralised decision making in competitive times — which is nowadays is practically all the time!
Meanwhile, managers know in their heart of hearts that this can also lead to concentration of power, bureaucracy, arbitrary choices and even avoidable political manoeuvring. This inhibits the participation of the creative and talented people for fear of censure and loss of face, or worse. Yet, textbooks tell us, in all challenging situations, to be innovative, experiment and throw out the rulebook.
At the very least, contrarian thinking and some degree of personal freedom have to be encouraged. So how do these go together?
Take a more familiar case, of the urgent need to increase the customer responsiveness of the business and to sense their needs in advance. Moments of truth are defined as those meeting points of the customer with the front end of the organisation, which are often far away from the headquarters.
Decisions and actions must be taken with least delay and no reference to the bosses at the centre. Yet, how does one do this without creating anarchy and chaos, the nightmare of all organisation men and process-champions?
You can think of a number of such examples from your own experience. I venture to suggest to you that even to be aware of the paradoxical nature of life is beneficial. As a way of seeing life, this perspective, in today's topsy-turvy world, is superior to the traditional linear, binary, problem-solving outlook.
It is a huge shift away from the previous world-view, which treats knowledge as analytical measurement, leading to prediction and control. And it is a significant change from the linear cause-effect logic on which our education and training are founded. It also hits at the root of the notion of the CEO, as the director and master of his destiny is outdated. Life just doesn't work mechanically. Naturally occurring phenomena, be it icicles or rivers under the Antarctic ice cap, or the mango tree in your garden, exhibit an evolutionary character, which is far from the mechanistic model of how organisations work, which has crept into our thinking about management.
One of the most powerful lessons for managers is that reality is a complex system, inter-related with other systems, rather like the Internet, along with the uncertainty of saying anything definitive about it. Everything depends on everything else and all things are inter-connected.
What is more, the whole system is greater than parts put together, unlike a clock or a motorcar. This property is not unknown to science but it is not emphasised enough in the early stages of education because we are too busy seeing life as compartments.
This says two things about ordinary training and knowledge in the 21st Century economy. One, that it cannot be static; and two, if it is to be useful, we must forever erase the line between doing and learning. This is the essence of the science of Action Research or action learning, as described by Harvard professor Chris Argyris. You learn as you do and not in sequence.
(The author can be reached at sr.chander@gmail.com. His book, Manager at Work, develops these themes further.)
Anticipating, tackling, pre-empting or just coping with external change is the most fundamental issue facing organisations everywhere, far more so the successful ones with strong, well-defined cultures. This is true of the United Nations, a huge multi-national such as GE or Microsoft, or a smaller, entrepreneur-led firm. Despite the reams written on it, there are no clear, foolproof prescriptions for successful change.
The reason, as any honest advisor would admit, is that reality is too complex, while managerial theory is based upon a deterministic, control and prediction-oriented mental model, akin to physical sciences, which just does not fit the organisational reality. This is the one thing I wish the MBA course had taught me a long time ago.
Consider some paradoxes. We know that to deal with uncertainty outside, companies are counselled to be strongly focussed on the inside, on what they do best and to motivate people to align with the goals. Yet, organisations also have to be flexible enough to shift positions when needed, difficult as this is.
Next, internal cohesion is absolutely essential and indeed mandated in a crisis. This usually leads to centralised decision making in competitive times — which is nowadays is practically all the time!
Meanwhile, managers know in their heart of hearts that this can also lead to concentration of power, bureaucracy, arbitrary choices and even avoidable political manoeuvring. This inhibits the participation of the creative and talented people for fear of censure and loss of face, or worse. Yet, textbooks tell us, in all challenging situations, to be innovative, experiment and throw out the rulebook.
At the very least, contrarian thinking and some degree of personal freedom have to be encouraged. So how do these go together?
Take a more familiar case, of the urgent need to increase the customer responsiveness of the business and to sense their needs in advance. Moments of truth are defined as those meeting points of the customer with the front end of the organisation, which are often far away from the headquarters.
Decisions and actions must be taken with least delay and no reference to the bosses at the centre. Yet, how does one do this without creating anarchy and chaos, the nightmare of all organisation men and process-champions?
You can think of a number of such examples from your own experience. I venture to suggest to you that even to be aware of the paradoxical nature of life is beneficial. As a way of seeing life, this perspective, in today's topsy-turvy world, is superior to the traditional linear, binary, problem-solving outlook.
It is a huge shift away from the previous world-view, which treats knowledge as analytical measurement, leading to prediction and control. And it is a significant change from the linear cause-effect logic on which our education and training are founded. It also hits at the root of the notion of the CEO, as the director and master of his destiny is outdated. Life just doesn't work mechanically. Naturally occurring phenomena, be it icicles or rivers under the Antarctic ice cap, or the mango tree in your garden, exhibit an evolutionary character, which is far from the mechanistic model of how organisations work, which has crept into our thinking about management.
One of the most powerful lessons for managers is that reality is a complex system, inter-related with other systems, rather like the Internet, along with the uncertainty of saying anything definitive about it. Everything depends on everything else and all things are inter-connected.
What is more, the whole system is greater than parts put together, unlike a clock or a motorcar. This property is not unknown to science but it is not emphasised enough in the early stages of education because we are too busy seeing life as compartments.
This says two things about ordinary training and knowledge in the 21st Century economy. One, that it cannot be static; and two, if it is to be useful, we must forever erase the line between doing and learning. This is the essence of the science of Action Research or action learning, as described by Harvard professor Chris Argyris. You learn as you do and not in sequence.
(The author can be reached at sr.chander@gmail.com. His book, Manager at Work, develops these themes further.)
Tuesday, February 27, 2007
Public utilities go slow on recruitments
Business Standard - 27th Feb, 2007
Even though the 1.5 billion organised recruitment market is expected to grow from 30 per cent to 50 per cent by 2010 on the back of a boom in sectors such as IT, ITeS, retail and telecom, public utilities are going slow on recruitments.
Currently, each of these industries recruit about a lakh of people every year with public utilities employing about 3.5 lakh per year.
“The growth in recruitment across public utilities is just about 5-8 per cent per annum,” said Prakash Nahata, director of Anthroplace Consulting, an HR and recruitment consultant and member of Executive Recruiters Association (ERA).
Comparatively, recruitment in sectors such as IT, ITeS, retail and telecom grew at more than 60 per cent per year. According to members of ERA, foreign competition and inefficient Indian methods are causes for poor growth rate of these industries in India.
Even salary hike in public utilities are between 5 per cent and 12 per cent, whereas in other sectors it is close to 25 per cent. In booming sectors, salary hike is expected to increase to about 35 per cent by 2010, while not much of a difference could be expected for the rest.
“Graduates or undergraduates in these sectors earn close to Rs 8,000 on an average per month,” said Nahata.
Attrition rate, however, is surprising low across the public utilities (10 per cent) because of less opportunity within these industries.
In booming sectors, attrition rate is not less than 35 per cent of recruitment, although companies resort to frequent salary hikes and promotions to combat this, said R P Yadav, managing director, Genius Consultants Limited, another HR and recruitment firm and member of ERA.
“Another reason for limited recruitment growth in these industries is the fact that promotions are often only on the basis of experience and not merit,” said Nahata.
As a result, top management level employees are almost always 55 years of age, and mid-level managers resort to changing jobs or even domain areas in order to grow faster.
Comparatively, in booming sectors the employable age is gradually coming down, so much so that even a 40-year–old these days is eligible to be the CEO of a company.
“Thanks to the exposure, children have access to information through internet and TV channels. By the time they reach the employable age, they have enough knowledge on managing the corporate world. But, due to growing demand in infrastructure and plastics industry, recruitment across industries like iron and steel, oil and refinery, jute, chemical, industrial, and trading, that have otherwise been very low on recruitment growth for the last few years, may grow at close to 20 per cent by 2010,” Yadav said.
Once these sectors modernise and gear up to compete with the growing sectors, even salary hikes could improve and go up to 30 per cent per annum
Even though the 1.5 billion organised recruitment market is expected to grow from 30 per cent to 50 per cent by 2010 on the back of a boom in sectors such as IT, ITeS, retail and telecom, public utilities are going slow on recruitments.
Currently, each of these industries recruit about a lakh of people every year with public utilities employing about 3.5 lakh per year.
“The growth in recruitment across public utilities is just about 5-8 per cent per annum,” said Prakash Nahata, director of Anthroplace Consulting, an HR and recruitment consultant and member of Executive Recruiters Association (ERA).
Comparatively, recruitment in sectors such as IT, ITeS, retail and telecom grew at more than 60 per cent per year. According to members of ERA, foreign competition and inefficient Indian methods are causes for poor growth rate of these industries in India.
Even salary hike in public utilities are between 5 per cent and 12 per cent, whereas in other sectors it is close to 25 per cent. In booming sectors, salary hike is expected to increase to about 35 per cent by 2010, while not much of a difference could be expected for the rest.
“Graduates or undergraduates in these sectors earn close to Rs 8,000 on an average per month,” said Nahata.
Attrition rate, however, is surprising low across the public utilities (10 per cent) because of less opportunity within these industries.
In booming sectors, attrition rate is not less than 35 per cent of recruitment, although companies resort to frequent salary hikes and promotions to combat this, said R P Yadav, managing director, Genius Consultants Limited, another HR and recruitment firm and member of ERA.
“Another reason for limited recruitment growth in these industries is the fact that promotions are often only on the basis of experience and not merit,” said Nahata.
As a result, top management level employees are almost always 55 years of age, and mid-level managers resort to changing jobs or even domain areas in order to grow faster.
Comparatively, in booming sectors the employable age is gradually coming down, so much so that even a 40-year–old these days is eligible to be the CEO of a company.
“Thanks to the exposure, children have access to information through internet and TV channels. By the time they reach the employable age, they have enough knowledge on managing the corporate world. But, due to growing demand in infrastructure and plastics industry, recruitment across industries like iron and steel, oil and refinery, jute, chemical, industrial, and trading, that have otherwise been very low on recruitment growth for the last few years, may grow at close to 20 per cent by 2010,” Yadav said.
Once these sectors modernise and gear up to compete with the growing sectors, even salary hikes could improve and go up to 30 per cent per annum
Don`t miss out the `people` factor
Business Standard - February 27, 2007
WHAT THEY DON`T TEACH YOU AT B-SCHOOL
It is more than 30 years since I first entered the Indian Institute of Management in Kolkata, but I remember being overwhlemed at becoming part of one of the premier business schools in the country. Like my batchmates, I felt it was the first step towards building a promising career.
Three decades later, though, some questions arise: Where are you? What could you have done better if you could relive the experience? What have you learnt? And more importantly, what did you not learn?
Whichever way you look at them, B-schools provide a learning environment and great networking prospects. They give you an opportunity to meet intellectually-driven, bright, ambitious and competitive students.
While most of the alumni have become celebrated front-runners in business and academia, the few who may not have achieved success in the conventional sense of the word, nonetheless, lead mainly happy and content lives.
That said, I wish I had a few years of work experience before joining my MBA. Also, while the educational curriculum may not have changed drastically, there are areas in which a degree of change is desired in order to equip students to adapt their education to corporate business realities.
Learning and understanding the building and sustaining of businesses is one aspect. However, turnarounds of businesses require a different application. B-schools teach us financial structuring and marketing strategies to aid business turnarounds, but the crux is cultural change.
Another critical issue, often overlooked, is understanding the “people” factor and integrating old and new ideas. Privatisation is going to be a key factor for businesses.
When we graduated, we couldn’t comprehend globalisation from an Indian perspective. Transnational corporations, their merits and demerits, were the most sought-after trends. But now, innovation is the new buzzword.
Good leadership skills are the key to being successful. The selection processes employed in business schools are stringent and it is assumed that only a bunch of potential leaders can gain entry. But B-schools can improve in the area of leadership. It is quite possible to develop leadership skills, enhance them and hone them.
Today, we see a lot of non-MBAs at the helm of change in big companies and multinationals.Today, the industry and business schools are working together so that common needs can be fulfilled and success maximised. This is a step in the right direction.
Gautam Vir graduated from IIM, Kolkata in 1978
WHAT THEY DON`T TEACH YOU AT B-SCHOOL
It is more than 30 years since I first entered the Indian Institute of Management in Kolkata, but I remember being overwhlemed at becoming part of one of the premier business schools in the country. Like my batchmates, I felt it was the first step towards building a promising career.
Three decades later, though, some questions arise: Where are you? What could you have done better if you could relive the experience? What have you learnt? And more importantly, what did you not learn?
Whichever way you look at them, B-schools provide a learning environment and great networking prospects. They give you an opportunity to meet intellectually-driven, bright, ambitious and competitive students.
While most of the alumni have become celebrated front-runners in business and academia, the few who may not have achieved success in the conventional sense of the word, nonetheless, lead mainly happy and content lives.
That said, I wish I had a few years of work experience before joining my MBA. Also, while the educational curriculum may not have changed drastically, there are areas in which a degree of change is desired in order to equip students to adapt their education to corporate business realities.
Learning and understanding the building and sustaining of businesses is one aspect. However, turnarounds of businesses require a different application. B-schools teach us financial structuring and marketing strategies to aid business turnarounds, but the crux is cultural change.
Another critical issue, often overlooked, is understanding the “people” factor and integrating old and new ideas. Privatisation is going to be a key factor for businesses.
When we graduated, we couldn’t comprehend globalisation from an Indian perspective. Transnational corporations, their merits and demerits, were the most sought-after trends. But now, innovation is the new buzzword.
Good leadership skills are the key to being successful. The selection processes employed in business schools are stringent and it is assumed that only a bunch of potential leaders can gain entry. But B-schools can improve in the area of leadership. It is quite possible to develop leadership skills, enhance them and hone them.
Today, we see a lot of non-MBAs at the helm of change in big companies and multinationals.Today, the industry and business schools are working together so that common needs can be fulfilled and success maximised. This is a step in the right direction.
Gautam Vir graduated from IIM, Kolkata in 1978
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