nhrd network journal issn - 0974 - 1739 · pdf filehuman resources management in rapid growth...

Human

Resources

Management

in Rapid

Growth

Organizations

ISSN - 0974 - 1739

NHRD Network JournalJuly 2010 Volume 3 Issue 3

www.nationalhrd.org

A Quarterly Publication by The National HRD Network

Padmaja Palekar

Dr Vasanthi Srinivasan

Dr Sunil Singh

Dr D Prasanth Nair

Dr C Balaji

Tanusree Mazumder

Sudheesh Venkateshan

Dr.Pallab Bandyopadhyay

Lokesh Tripathi

Tanzilur Rahman

P Thiruvengadam

Reshmi Dasgupta

Sushma Belliappa

Jason Geller

Anandhi Sridharan

Dr P V R Murthy

NHRD Network Journal

Human Resources Management inRapid Growth Organizations

Volume 3 Issue 3 July 2010

NHRD Network Board MembersNational President: NS Rajan, Partner, Human Capital and Global Leader – HR Advisory,

Ernst & Young

Past National Presidents: Aquil Busrai, ED-HR, IBM India Limited,

Dwarakanath P, Director-Group Human Capital, Max India

Dr. Santrupt Misra, Director Aditya Birla Group

Regional Presidents:

East: Saurav Das Patnaik, HR Director, Apeejay-Surrendra Group

South: Gopalakrishna M, Director Incharge, A.P. Gas Power Corporation Ltd.

West: Satish Pradhan, Executive VP, Group HR, Tata Sons

North: Sy. Siddiqui, MEO (Admn - HR,Fin & IT), Maruti Suzuki India

National Secretary: Pankaj Bansal, Co-Founder & EVP, PeopleStrong HR Services

National Treasurer: Ashok Reddy B, VP-HR, Info Tech Enterprises

Executive Director: Mohit Gandhi

Editorial Board Dr. Vasanthi Srinivasan, IIM, Bangalore

[email protected](Guest Editor for this issue)

Dr. PVR Murthy, Managing Editor,CEO, Exclusive Search Recruitment Consultants,[email protected]

Dr. Pallab Bandyopadhyay, Director- Human ResourcesCitrix R&D India Pvt. [email protected]

Aquil Busrai, Executive Director, Human Resources, IBM India Ltd.,[email protected]

Publisher, Printer, Owner Mohit Gandhi on behalf of National HRD Network,and Place of Publication National HRD Network Secretariat, C 81 C, DLF Super Mart, DLF City,

Phase IV, Gurgaon122 002. Tel +91 124 404 1560

Printed at Nagaraj & Co. Pvt. Ltd., 156, Developed Plots Industrial Estate,Perungudi, Chennai 600 096. Tel : 044 - 66149291

The views expressed by the authors are of theirown and not necessarily of the editors nor of thepublisher nor of authors’ organizations

Copyright of the NHRD Journal, all rights reserved.Contents may not be copied, emailed or reproducedwithout copyright holders’ express permission in writing.

CONTENTSS.No. Title of Article Author Page No.

1. Changes in HR practices in large Rapid Padmaja Palekar 1Growth Firms in the Indian Software Dr. Vasanthi SrinivasanServices Industry

2. Socialization of New Employees in Indian IT Dr. Sunil Singh 8Firms: Interplay or Organization SocializationEfforts and New Employees ProactiveBehaviour

3. Organization in Rapid Growth Stage : Dr. D. Prasanth Nair 17Challenges and way Forward

4. Developing People Managers : Sharing the Dr. C. Balaji 23experiences of Symphony Corporates

5. Training Trends Over The Last Decade : Tanusree Mazumder 29The Wipro Experience

6. HR Practices in Rapid Growth Environment Sudheesh Venkateshan 33

7. Problem of Smart and Fast- Growth through Dr. Pallab Bandyopadhyay 40Merger & Acquisition – Reflections from anHR Practitioner

8. Human Capital Management: Bridging Lokesh Tripathi 49process and technology gap Tanzilur Rahman

9. Rapid Growth Organizations : Demands of a P. Thiruvengadam 56Dynamic Workforce Deloitte Reshmi Dasgupta

Sushma BelliappaJason Geller

10. An Insider’s Dilemma Anandhi Sridharan 61

11. Reflective Practice Dr. Vasanthi Srinivasan 67Dr. P.V.R. Murthy

S.No. Title of Article Reviewed by Page No.

CRITICO LITERATURE (Book Review)

12. Redefining Global Strategyby Pankaj Ghemawat Dr. Vasanthi Srinivasan 72

13. India Arriving - ” - 73by Rafiq Dossani

14. India’s Global Powerhouses; How they - ” - 73are taking on the worldby Nirmalya Kumar

15. The India Way - ” - 74by Peter Capelli

16. Winning in Emerging Markets - ” - 75by Tarun Khanna & Krishna G. Palepu

EDITORIAL COMMENTS

While 17% of world’s population is in India, its GDP is only1.87% of world’s GDP. But due to the Indian economy’s

fundamental strengths, it did not get into recession mode evenwhilst a major part of global economy was reeling under recession.The Indian economy experienced only a slow-down. When Dr. PVRMurthy asked me to guest edit an issue of the NHRD journal,Indian industry was just beginning to recover from the slowdown.All projections indicate that the industry is poised for a growthtrajectory quite similar to the one that it witnessed prior to 2008.It was in this context that the theme of “Human ResourcesManagement in Rapid Growth Organizations” seemedrelevant. Little did I realize at that time what a challenge this wouldpose. While practitioners were trying to make sense of and managerapid growth in an effective manner, they were often confrontedwith situations which had no prior precedent or occurrence fromwhere they could draw their learning.

The objective of this special issue was to get reflective practitionerswho had engaged with rapid growth to make sense of it “post facto”.We decided to use Barringer’s definition of rapid growth as “thosecompanies which grow in terms of number of employees at anaverage rate greater than 20% year on year for at least four or fiveyears in a row”. Since the phenomena was of recent origin, it wasfelt that there should be a mix of academic, scholarly, reflective,practice-based and personal experience sharing articles. The articlespresented in this issue reflect this perspective.

Padmaja Palekar and Sunil Singh draw up on their empirical workin rapid growth organizations to describe the phenomena of changein HR practices. Prasanth Nair takes an evolutionary life cycleperspective to understand the growth of HR practices within anorganization and also proposes a model to explain the phenomenon.The three authors, Balaji C, Tanusree Mazumdar and SudhirVenkatesh talk about the growth of HR practices within specificorganizations. Their contribution in explaining the specific contextof their organizations and the manner in which the interventionswere done is useful.

Pallabh Bandyopadhyay’s rich experience in being a part of anumber of Mergers and Acquisitions which is the inorganic growthroute of the organization is a key challenge for HR managers todayand in the future. The question whether organizations are managingtechnology well enough in rapid growth context is addressed by

Dr. VasanthiSrinivasan

(Guest Editor forthis Issue)

Dr. VasanthiSrinivasan is aproduct of XLRIand IIM -Bangalore andcurrently facultyat IIM-B.

Dr. PVR MurthyHonorary ManagingEditor on behalf ofthe Editorial Team

Aquil Busrai Dr. PallabBandyopadhyay

Lokesh Tripathi and Tanzilur Rahman in their article. Consultantshave played a significant role in rapid growth. Jason Geller,P. Thiruvengadam, Reshmi Dasgupta, and Sushma Belliappa ofDeloitte attempt to make sense of rapid growth and the strategicgrowth of HR. Last but not the least, Anandhi Sridharan’s articlehas written from an employee perspective. As a young employee inan organization, who is trying to make sense of the reality aroundher, her life story, I hope will leave all of us reflecting on the futurerole of HR as a function performed by line managers and HR as adepartment tasked with an agenda of building Human resources.

Dr. PVR Murthy and I decided that we would have a segmentwhere leading HR practitioners from different sectors would sharetheir perspectives on the rapid growth context by identifying thekey challenges faced by them, Changing role of HR and line andfinally,

While the focus of the issue is on rapid growth organizations, thegrowth story of India is no less attractive. In the book review section,this time we present to the readers five books which are a must readfor HR professionals. Each of the books addresses a different facetof the growing India, with its contradictions, plurality andchallenges. Being a part of this growth story means that each of usneed to make sense of the phenomenon.

July | 2010 NHRD Network Journal 1

CHANGES IN HUMAN RESOURCE PRACTICES INLARGE RAPID GROWTH FIRMS IN THE INDIAN

SOFTWARE SERVICES INDUSTRYPADMAJA PALEKAR and Dr VASANTHI SRINIVASAN

About the Authors

Ms. Padmaja Palekar is a doctoral student at the Indian Instituteof Management, Bangalore in the OB & HRM area and expectsto graduate in March 2011. She has presented her research atvarious international and national conferences, the most recentbeing the International Human Resource ManagementConference at Birmingham, UK in June 2010, and the conferenceon Global competitiveness through human resourcemanagement organized by IIMB Management Review. Her

proposal has been accepted for presentation at the prestigious SMS conference tobe held in Rome in September 2010.

Vasanthi Srinivasan, a product of XLRI, has pursued the Fellow Program inManagement, Indian Institute of Management Bangalore. She iscurrently the Associate Professor in the Department ofOrganizational Behaviour & Human Resources Management,IIM – Bangalore.

Dr. Srinivasan is the Chairperson in The Centre for CorporateGovernance and Citizenship.

She is a Life Member of the National HRD Network India and aMember of the National Institute of Personnel Management,Bangalore chapter. She is also a Member of the CII Bangalore sub committees onCorporate Social Responsibility and Disability. She is the Regional co-coordinatorfor the South and East Asia on the Global Survey of Business Ethics Ms. VasanthiSrinivasan has contributed to various articles and publications in national andinternational forums.

Introduction

In the last decade and a half, India hasemerged as a major exporter of software

on the international map. The softwareservices industry has grown from USD 4billion in revenues in 1998 to a USD 64billion industry in 2009, employing over 2million people. Its contribution to India’s

GDP has gone up approximately five timesfrom 1% to 5%, in the last decade(Nasscom, 2008). Arora et al (2001) intheir study on the Indian software industryconcluded that the industry ischaracterized by services rather thanproduct orientation, export oriented, andlargely managed by professionalsand entrepreneurial managements. This

2 July | 2010 NHRD Network Journal

industry is highly labour intensive,requires less capital, and is characterizedby knowledge workers who areprofessionals. Given its export orientation,the industry is global in nature. Apart fromthe traditional explanations of growingdigitization, wage arbitrage, and growingpool of English speaking softwareengineers (Arora et al., 2001; Kapur &Ramamurti, 2001; Ethiraj et al., 2005), thesuccess of the Indian software industry canbe attributed largely to its ability totransform the programming skills of thelabour force into firm-specific capabilities,assemble teams of talented engineers, anddeliver technical, outsourced service to acustomer anywhere in the world (Athreye,2005). Human capital has been a significantcontributor of growth in this industry.

Human Resources as Key Contributorsto the Success of IT Industry

Rapid growth of both Indian andmultinational software companies in Indiahas increased the competition in the labourmarket. As a result, attracting and retainingpeople has been one of the biggestchallenges faced by the software industry,along with the challenges of having aworkforce ready to deliver on the latesttechnologies. In spite of the numerouschallenges faced by the software industryon the people management, the success ofthe industry given its people intensivenature, suggests that the human resourcepractices have made significantcontributions to the growth of theorganizations in this industry. What thesoftware organizations did differently tohelp this kind of a growth, especially thegrowth in the number of employees, andhow the HR practices contributed to thisgrowth is the focus of this paper.

We briefly present the findings of theresearch study on understanding the

changes in HR Practices in Indian softwareservices organizations, namely,Recruitment, Selection, Training andDevelopment, Performance Appraisal, andCompensation through 1996 – 2006. Aqualitative research method was used toperform this study in the three Indiansoftware services organizations, whichwere amongst the top ten largeorganizations in the industry. In depthinterviews were collected with nineteenkey HR personnel who were responsiblefor initiating and implementing variousinitiatives in three organizations during thedecade and have witnessed the changes inHR practices through the rapid growthphases.

In the following paragraphs we shallbriefly describe the phenomenon of rapidgrowth, and the HR challenges faced byrapid growth organizations, followed by adiscussion on how HR practices havechanged in large rapidly growing Indiansoftware services organizations in theperiod 1996 – 2006.

HR Challenges in Rapid GrowthOrganizations

Literature defines rapid growth companiesas those which grow in terms of numberof employees at an average rate greaterthan 20% year on year for at least four orfive years in a row (Barringer et al., 2005).Increase in absolute number of employeesin a short span of time poses numerouschallenges and many of the challengesfaced would revolve around people(Hambrick and Crozier, 1985). Accordingto Hambrick and Crozier (1985), rapidlygrowing firms constantly face the challengeof instant increase in size, a sense ofinfalliability, internal turmoil, andextraordinary resource needs. In theirscheme of study, they suggested that ability


to envision and anticipate, build teams,reinforce culture and pay for performancewere the key capabilities required forrapidly growing organizations to beeffective.

Kotter and Sathe (1978) identified threemajor human resource challenges in arapid employee growth organization. Thefirst is the need for rapid decisions. Sincethe time available for decision-making isless and the entire process demandsintellectual and emotional application, ittends to create enormous pressureparticularly among the new and youngmanagers. Also, the organization structureand culture face the impact of rapidgrowth. The second challenge is copingwith the rapidly expanding job demands.The inability of the key managers to changetheir attitudes and behaviors in keepingwith the changing needs of theorganization poses a challenge. Expandingjob demands would require different waysof managing through formal and informalstructures, and managers would need toengage in greater degrees of delegationand development, which they areunable to do effectively since there are notenough experienced people within theorganization to delegate to. The thirdproblem is the large recruiting and trainingdemands. Fast employee growth requiresthe recruitment, selection and assimilationof large numbers of people in short periodsof time. The informal structure and cultureof the organization is affected since largenumbers of managers are also recruitedfrom outside and the informal interactionamong groups is unlikely to be as close knitand based on understanding as in a smallorganization. All this results in a highdegree of ambiguity and uncertainty in theorganization. Having understood thevarious HR challenges faced by rapidgrowth organizations, we now move on to

describe how HR practices changed inlarge Indian software servicesorganizations as they experienced rapidgrowth.

Changes in HR practices in IndianSoftware Services Organizations from1996 – 2006

The findings of the study show that therewere clear patterns of changes observedacross each of the practices studied. Thereappeared to be three distinct phases ofgrowth, namely, 1996–2000, 2000–2004, and2004–2006. These three phases of growth,which emerged naturally from the data,have been used as the basis for theanalysis of data. It was observed that therecruitment practices experienced changeson the following dimensions – (i) TargetApplicant Pool, (ii) Recruitment Sources,and (iii) Recruitment Timings. Asorganizations experienced rapid growthand also faced labour shortages, theylowered the educational qualificationsrequired for the job. In early stages, theyhave Engineers with background inComputer science and electronics only,gradually they moved to hiring otherengineers, subsequently they began to hireapplicants with a Masters degree incomputer applications and finally theybegan to hire graduates and train them onprogramming skills. This shift is indicativeof a larger labour shortage as the economybegan to experience growth rates of 8% andmany other sectors were also experiencingrapid growth. They also began to invest inmultiple recruitment sources to attracttalent. In early years, campus was theprimary source of recruitment. Overthe years, lateral recruitments fromother organizations, use of search agenciesand placement agencies increased.Similarly, the use of job portals andwalk-ins was also prevalent. The timingwhen recruitment would happen also


underwent changes. At the campuses,students were hired in the third yearinstead of the fourth year, newcomerswho were not a part of the campusrecruitment process were invited to applydirectly to the organizations and finally ayear round hiring for lateral recruitsfrom other organizations was introduced.This in turn meant that recruitmentincreasingly acquired a dominantmarketing emphasis with organizationsinvesting in building academicpartnerships, investing in facultydevelopment, supporting campuses withresources and infrastructure which all wenttowards building the employer brand.

It was observed that in selection practices,the following three selection methodsexperienced changes as large organizationsgrew rapidly – (i) Employment Tests,(ii) Employment interviews, and(iii) Reference Checks. It was observed thatthough technological mediation inconducting employment tests wasdesirable, the lag between organizationsin house infrastructure and the externalinfrastructure was too high. For eg., whileorganizations had developed employmenttests, their ability to administer thistest across a number of geographicallocations and campuses was low. Theinfrastructure needed to make this happenon a large scale was not available with theeducational institutions. The usage oftechnology towards managing the largescale recruitment began to happen only inthe early 2000 onwards. The data alsoindicated that the external factors likecompetitors’ selection methods and labourmarket conditions will influence thedecision on using any particular selectionmethod. Therefore, despite a very sizeableincrease in the recruitment, the willingnessof organizations to experiment withemployment tests was quite limited.

Employment interviews experiencedchanges especially in the interview panelselection process. Prior to 2003, a numberof organizations used psychometric tests,systematic training programs to equip theirmanagers in interviewing skills, andmaking recruitment & selection as a partof the job description and responsibility ofthe line manager began to change. Giventhat the IT services organizations wereadding a number of employees at thebottom of the organization, and a numberof new young managers were entering theworkforce, there were more ad hocpractices like selecting people based on theavailability, and training interviewers onlyif needed or time permitted began to bepracticed in the organization. This meantthat as managers with low tenure in theorganization began to hire new employees,their understanding of the organizationculture was poor and this resulted in hiringemployees on skills/knowledge ratherthan the fit with the organization. This inturn led to increased attrition and a viciouscycle set in within large organizations.

It was also interesting to note that referencechecks as a selection method which wasinherently a descriptive people intensiveculture fit assessment process, was seldomused as organizations grew rapidly.Instead, with the changing business contextand the customers’ need for security, aninherently investigative backgroundverification process, which was not a partof the HR policy, became a part of the HRpolicy. Background verification process isfor the purpose of immigration and not forthe purpose of selection.

It was observed that in the trainingand development function, significantshifts occurred on the following threedimensions – (i) Training needs analysis,(ii) Instructional strategies and trainingmethods, (iii) Structure of the training


department. During the decade, thetraining needs of the organizations shiftedfrom Technology, task and project basedtraining to domain and organizationalneed based training. This shift also signifiesthe ascent of the IT industry in the valuechain —from focussing largely on low endmaintenance projects and Y2K projects tomore software development, applicationand domain knowledge centered projects.The Instructional strategies and trainingmethods experienced changes, both on thecontent and process of delivery. In thetraining content, during the first phase,emphasis was on skills training primarilyfocussed on building technical expertise,in the second phase the focus was onbuilding domain and cross-technologyexpertise and in the last five years, theemphasis is on building business relevantand solution providing orientation whichwill allow employees to deliver value totheir clients.

The behavioural training focussed on basiccommunication skills training in the firstphase. Competency based training in thesecond phase, and leadership andmanagement skills training in the lastphase. As organizations expanded theirgeographical presence and started hiringglobally, Cross cultural etiquette trainingin the first phase gave way to culturalsensitivity training in the second phase,and training for creating global mindsetsin the organizations took priority in thethird phase. The Classroom based trainingswere extensively in the first phase,followed by a mix of Computer based andclass room based training in the secondphase and followed by e-learning andblended learning in the last phase. Thestructure of the training departmentbecame more decentralized over the periodof rapid growth, and the technical trainingand leadership training became two

different specialized sub functions. Thechange in the nomenclature of thedepartment from Training to learning anddevelopment happened over the decade.

In the performance appraisal, till 2000, goalsetting process and feedback were anannual process. It was primarily a paper-pencil appraisal. This method resulted inlot of delays in the appraisal outcomes, andthere was no consistency across projectsand departments. In the second phase,organizations were into delivering projectsto their clients, and many employeesworked on multiple projects during oneappraisal cycle. Realizing the importanceof capturing feedback on each project,organizations moved to project-endappraisals for employees, and thencollating all the project-end appraisals forthe final appraisal. Thus the goal settinghappened at the beginning of every newproject for the employee. The feedbackprocess happened at the time of completionof the project. Organizations moved togathering a multilevel feedback from thepeer group. Given the increasingcomplexity in the process, and theincreasing scale, organizations decided toautomate the appraisal process. Thisresulted in timely appraisals and thequality of appraisals improved. In the lastphase, organizations had a more globalworkforce. Goal setting for an employeewas primarily project based, but therewas a periodic review of the goals.Organizations moved to half yearly andquarterly review and feedback process forall employees to reduce the discrepanciescaused by the fact that only employeesmoving across several projects would getcontinuous feedback. Organizations hadstarted implementing a more sophisticatedERP driven appraisal system. Increasingglobal workforce and virtual teamsrequired the increased use of high end


technology. Organizations appear to havebeen making numerous attempts to copewith the appraisal process.

It was observed that the compensation plansexperienced a shift as organizationsexperienced rapid growth. In the first phase,the organizations started differentiatingsalaries of employees, primarily based onindividual performance, though thedifferentiating amount was really verysmall. Organizations followed the gradestructure to administer the salaries, andthere were about 13 to 14 grades in anorganization. Stock options were used byorganizations, primarily to attract and retainemployees. Subsidised loans were a veryprominent benefit offered by organizations.In the second phase, organizations were intodelivering projects to their clients, and manyemployees worked on multiple projectsduring one appraisal cycle. The proportionof variable pay increased in this period.Organizations had moved to adopting thebanding structure for administering salaries,and they had four bands to start with, whichaggregated people with similar roles underone band. Given the volatility in the market,stock options were no more a lucrativebenefit, and they were used sparingly byorganizations. With dramatic changes in thetax regulations of the country, and loanavailability made easy, organizations movedaway from the lifestyle based benefits, andincreased the cash based benefits. In the lastphase, variable pay was a commoncomponent in the salary structures, andorganizations were linking the variable payto both the organization’s and theindividual’s performance. Bandingstructure was used, but the structure wasgetting more and more complex because ofinclusion of multiple sub-bands within themain band. This allowed organizations theflexibility to deal with their increasing salarycosts. Apart from cash benefits and rewards,

organizations focussed on providingemployee friendly benefits like flexi-timepolicies, gymnasium facilities, clubmemberships, etc., which would promotebetter work-life balance amongstemployees.

Discussion

The findings indicated that there was asignificant shift around variousdimensions of HR practices as largeorganizations experienced rapid growth.While the organizations were experiencingrapid growth, environmental factors likethe industry growth rate, the labour marketconditions and competition in the marketwere catalysts to the changes thatorganizations experienced over a period ofrapid growth. For example most of theshifts in the recruitment practices wereprimarily because of tightness in the labourmarket, increasing competition and theincreasing attrition experienced by theorganizations. The changes in thecompensation structures were primarilydriven by changes in the Income Tax act,easy availability of loan and a willingnessamong the young employees to go for EMIbased purchases. Technology interventionsand structural changes facilitated andsupported the rapid growth endeavours oforganizations.

The May 2008 online issue of Dataquest(www.dqindia.ciol.com) reported thataccording to the website of 24 x 7 Learning,a leading finishing school, “for every5 hires, there are 250 near hires. All that isrequired to convert the ‘near-hire’ into ahire is relevant IT and behaviouraltraining”, emphasizing the need forbehavioural training. Interestingly, whilethe recruitment department, while hiring,relied on the internal training, the trainingdepartment assumed that an externalsource would have already taken care of


References

Arora, A., Arunachalam, V., Asundi, J., and Fernandes, R. (2001). The Indian software services industry. Research Policy, 30(8),

1267–1287.

Athreye, S. (2005). The Indian software industry and its evolving service capability. Industrial and Corporate Change, 14(3), 393-418.

Barringer, B. R., Jones, F. F., and Neubaum, D. O. (2005). A quantitative content analysis of the characteristics of rapid-growth firms

and their founders. Journal of Business Venturing, 20, 663 - 687.

Ethiraj, S. K., Kale, P., Krishnan, M. S., and Singh, J. V. (2005). Where do capabilities come from and how do they matter? A study in

the software services industry. Strategic Management Journal, 26(1), 25-45.

Hambrick, D. C., and Crozier, L. M. (1985). Stumblers and stars in the management of rapid growth. Journal of Business Venturing,

1, 31-45.

Kapur, D., and Ramamurti, R. (2001). India’s emerging competitive advantage in services. The Academy of Management Executive,

15(2), 20–33.

Kotter, J. P., and Sathe, V. (1978). Problems of human resource management in rapidly growing companies. California Management

Review, 21(2), 29-36.

NASSCOM: Strategic Review 2008.

this need. Therefore, this raises the questionof alignment of the two HR practices,recruitment and training.

This study indicated that as organizationsgrow rapidly, the administrative andtransactional elements in each practice getmore attention because of the increasingnumbers and the time pressures. Wenoticed that HR departments tend to investa lot of time and effort on recruitment,training, appraisal administration and

salary administration rather than inbuilding career systems, investing inpotential assessment, strengthening jobrotation, building capabilities of employeesthrough developmental opportunities.While rapid growth environments demandchange agent capabilities of the HRdepartment, in reality, most of them endup becoming administrative experts. Thestrategic imperatives pertaining to thehuman dimension in rapid growth tend toget deferred.


About the Author

Dr. Sunil Kumar Singh has completed his doctorate fromIndian Institute of Management Bangalore. He currently headsthe OD & Talent Management for Punj Lloyd Group. Hisexpertise lays in the areas of organizational design, successionplanning, manpower planning, competency assessment andleadership development areas. He started his career fromMineral Exploration Corporation Limited. His last assignmentprior to Punj Lloyd was as Head (HR) of Gulf Oil Corporation

Ltd. He has published his papers in the areas of National Culture, Leadership,and Innovation etc. and has also presented papers at multiple internationalconferences.

SOCIALIZATION OF NEW EMPLOYEES IN INDIAN ITFIRMS: INTERPLAY OF ORGANIZATIONAL

SOCIALIZATION EFFORTS AND NEW EMPLOYEESPROACTIVE BEHAVIOR

Dr SUNIL SINGH

Abstract

Organizational socialization of new employees has always been a critical processfor most of the organizations. The socialization research has been viewedfrom multiple perspectives. Initially it was viewed as the process through

which organizations acculturate the new entrants. Recent researchers have viewedit as a learning process in which the new entrants’ role is much moreimportant and organization needs to manage that process effectively.

In rapid growth organizations, with large numbers of new recruits comingin to the organization, socialization assumes particularly

higher significance. This paper has taken an interactionist perspective and hasinvestigated the link between socialization tactics and newcomer’s proactivity.

The study has been carried out in Indian IT industry that has been characterizedby rapid employee growth.

Introduction

Early work has characterizedsocialization as thrust upon

newcomers in organizations. (Schneider,1983; as quoted in Chatman, 1991). Aprimary goal of the socialization process

from this perspective was towardsdeveloping of new organizationalmembers and understanding of thecompany’s culture and shared values(Chatman, 1991). Some authors pointed outthat newcomers are active participants who


make sense of their environment (Louis,1980), seek information (Ashford & Black,1996), develop social support (Fisher, 1985),and master skills (Morrison, 1993a)through their own efforts. Taormina (1997)defines it as ‘the process, by which a personsecures relevant job skills, acquires afunctional level of organizationalunderstanding, attains supportive socialinteractions with coworkers, and generallyaccepts the established ways of a particularorganization’.

Socialization Tactics

Socialization tactics has beenconceptualized as organization’s effortsaimed at shaping specific socializationexperiences for the newcomer withultimate aim being desired socializationoutcomes. These socialization tactics arebased on the assumption that “what peoplelearn about their work roles inorganizations is often the direct result ofhow they learn it” (Van Maanen & Schein,1979, pp. 209).

Socialization tactics refer to the methodsorganizations use to help newcomersadapt to early entry experiences; to reduceuncertainty and anxiety associated withthe reality shock of joining a neworganization; and to acquire desired ornecessary attitudes, behaviors, andknowledge (Jones, 1986; Van Maanen &Schein, 1979). Van Maanen and Schein(1979) suggested that the tacticsorganizations use when newcomers enterthe organization could be usefullyclassified into six types: collective-individual, formal-informal, sequential-random, fixed-variable, serial-disjunctive,and investiture-divestiture.

With collective socialization tactics,newcomers experience common learningexperiences such as with a group or cohort,

whereas with individual tactics, eachnewcomer is exposed to learningexperiences individually. Formal tacticssegregate newcomers into clearly definedsocialization activities such as trainingclasses while they learn their roles, whereasinformal tactics involve learning on the jobduring activities that may not be clearlydefined socialization activities. Sequentialtactics provide specific information tonewcomers about the sequence of learningactivities and experiences, whereas thissequence is unknown in a random process.Fixed tactics provide information tonewcomers about the timing associatedwith completing each socialization stage orstep, whereas this timing is unknown in amore variable process. Serial tacticsprovide experienced organizationalmembers as role models or mentors,whereas disjunctive tactics do not provideexperienced models. Investiture tacticsprovide newcomers positive social supportfrom experienced organizational members,whereas divestiture tactics provide morenegative social feedback until newcomersadapt.

Building on Van Maanen and Schein, Jones(1986) suggested that the six tactics form agestalt that he termed institutionalizedsocialization.According to Jones, collective,formal, sequential, fixed, serial, andinvestiture tactics provide information thatreduces the uncertainty and anxietyinherent in early work experiences, andthey encourage newcomers to passivelyaccept preset roles, thus reproducing thestatus quo (‘‘custodial role orientation’’).Conversely, at the opposite end of thecontinuum, individual, informal, random,variable, disjunctive, and divestiture tacticsencourage newcomers to challenge thestatus quo and develop their ownapproaches to their roles (‘‘innovative role


orientation’’). Thus, Jones termed thisend of the continuum individualizedsocialization.

Jones (1986) developed a measure basedon these six socialization tactics.Organizations may choose one or the otherdepending on the nature of the position,the numbers recruited, the experience ofthe new comers etc.

Proactivity And InformationAcquisition By Newcomers

With Louis (1980) paper titled ‘surprise andsensemaking: what newcomers experiencein entering unfamiliar organizationalsettings’, the newcomers’ role andstrategies to deal with uncertainty and toadjust with new environment became oneof the key perspective in the organizationalsocialization research. Morrison (1993a)argued that information and feedbackseeking are the two primary ways in whichnew entrants display proactivity duringsocialization process. New entrants byengaging in information and feedbackseeking behavior actively manage andcontrol the socialization process (Major &Kozlowski, 1997)

Morrison (1993b) investigated five types ofinformation that newcomers seek:technical, referent, normative, performancefeedback, and social feedback. This studyhad explored in detail the threeinformation types and two feedback typessuggested by Morrison (1993b).

Information seeking: Employee’s interactionwithin organization at any momentinvolves information seeking. However itis particularly unique and important forthe new entrants (Miller & Jablin, 1991), asit involves new entrant’s learning of job,role, norms and values. Morrison (1993b)argued that newcomers seek followinginformation: technical, referent, andnormative. Newcomers acquire

information directly from othernewcomers, coworkers, supervisors,mentors, or written materials, or fromobserving others. Technical informationpertains to the information about how toperform one’s job/task. The greater use oftechnical information seeking will result ingreater degree of task related learning.Referent Information provides informationabout role demands and expectations. Thegreater use of referent information will helppeople in development of greater roleclarity and group level learning. This willhelp newcomers in greater task masteryand role clarity. Normative information isabout expected behaviors and attitudes. Ithelps individuals in work groupintegration and cultural adaptation.Referent and normative informationseeking will be helpful in newcomer’slearning of group processes andorganizational norms and values.

Feedback Seeking: Feedback seeking isdefined as conscious devotion of efforttoward determining the correctness andadequacy of behaviors for attainingthe valued end states (Ashford &Cummings, 1983). Morrison (1993b) hasidentified two types of feedback seeking:performance feedback and social feedback.Information about others perception andevaluation of newcomer’s job performanceis defined as performance feedback. Socialfeedback relates to the information aboutacceptability of newcomer ’s non taskbehavior by others. Individual will developthe task related learning by seekingperformance feedback, whereas socialfeedback will help him/her in group andorganization related learning.

Socialization as Interplay ofOrganizational Socialization Tacticsand Newcomers’ Proactive Behavior

Many organizational socializationresearchers (Griffin et al., 2000; Jones, 1983;Kammeyer-Mueller & Wanberg, 2003; Kimet al., 2005; and Reichers, 1987) have argued


that socialization process can be betterunderstood if we utilize the knowledgeabout organizational context and strategiesand pair that knowledge with anunderstanding of individual adjustment.This study is designed to explore the linkbetween organizational socializationtactics and newcomer proactivity.

The model tested in this study examinedthe link between three socializationdimensions and their impact upon the useof three types of information seeking andtwo types of feedback seeking. This modelis placed shown in Figure – 1.

FIGURE 1 Organizational SocializationTactics and Newcomer proactivity

Institutionalized Context and NewEntrant’s Information/FeedbackSeeking

Organizations institutionalize the contextof the socialization process by providingstructured and planned socialization/orientation experiences to new entrants. InInstitutionalized context, new entrants areprovided detailed information and are alsotold about the places where they can getthe requisite information which can helpthem know the new organization and thejob. Formal and collective socialization ofnew entrants involves planned separationof new entrants from the otherorganizational employees and trainingoccurs in a formal place in collective/groupsetting. The formal and collective natureof the context reduces the initialuncertainty/anxiety of the newcomers and

+

+

+

+

+

++

-

+

-

+

+

+

+

Performance Feedback

Institutionalized Context Aspect

Institutionalized Content Aspect

Institutionalized Social Aspect

Technical Information

Referent Information

Normative Information

Social Feedback

HYPOTHESIS DEVELOPMENT

in turn increases the information andfeedback seeking behavior. Theinstitutionalized context would howeverincrease the social cost for social feedbackand referent information becauseindividuals may hesitate to ask questionsthat would exhibit their lack ofunderstanding or ignorance. In the case ofcontext aspect of socialization beinginstitutionalized there will be reducedsocial cost associated with normativeinformation, technical information andperformance feedback while social costassociated with referent information andsocial feedback may still be higher.

H1a : Institutionalized Context tactics willbe positively associated with newentrant’s normative informationseeking

H1b: Institutionalized Context tactics willbe positively associated with newentrant’s technical informationseeking.

H1c : Institutionalized Context tactics willbe positively associated with newentrant’s referent informationseeking.

H1d: Institutionalized Context tactics willbe positively associated with newentrant’s performance feedbackseeking.

H1e : Institutionalized Context tactics willbe positively associated with newentrant’s social feedback seeking.

Institutionalized Content and NewEntrant’s Information/FeedbackSeeking

In case of content dimension ofsocialization tactics, moreinstitutionalization means that each of thenewcomers has to go through predefinedschedule of events and all of them willspend similar time on those activities(Griffin et al., 2000). This offers a situation


in which role progression and roledemands are made clear to the newcomers.It will result in decreased uncertaintypertaining to technical and normativeinformation. When role demands are clear,Employees engage in information seekingbehavior which helps them in clarifyingexpectations; whereas they engage infeedback seeking to monitor progresstowards goal when role demands are clear(Morrison & Weldon, 1990). Herenewcomers are faced with a situationwhere they know what the various rolesthey will be playing are and for how long.It will mean that new entrants will seekreferent information, performancefeedback and social feedback. For thetechnical information and normativeinformation content being institutionalizedwouldn’t affect in a much significantmanner. In fact the seeking of those twomay go down if the content aspect ofsocialization is institutionalized becauseinstitutionalized content will considerablyreduce the uncertainties related to technicalinformation and normative information.This will mean that new entrants will havedetailed information availability providedby the organization pertaining to their roleand career progression. It will result indecrease in the need for technical andnormative information.

H2a : Institutionalized Content tactics willbe positively associated with newentrant’s referent informationseeking.

H2b: Institutionalized Content tactics willbe positively associated with newentrant’s performance feedbackseeking.

H2c : Institutionalized Content tactics willbe positively associated with newentrant’s Social feedback seeking.

H2d: Institutionalized Content tactics willbe negatively associated with new

entrant’s technical informationseeking.

H2e : Institutionalized Content tactics willbe negatively associated with newentrant’s normative informationseeking.

Institutionalized Social Aspect andInformation/Feedback Seeking

In case of social aspect of socialization beinginstitutionalized, newcomers will get a lotof social support and role modeling.Reichers (1987) observed that interactionwith organizational insiders is an importantway by which they gain information. As thesocial tactics is institutionalized, it will resultin availability of different support systemslike mentors, buddies etc. these socialsupport systems will encourage newentrant’s to seek more information andfeedback. This will happen becauseorganizational insiders will be ready to helpthe new entrants by providing differenttypes of needed information and feedback.Morrison (2002) suggested that feedbackseeking is related to perceived value offeedback and perceived credibility andexpertise of potential feedback source. Itwould mean that in a situation whereorganization offers planned interaction withrole models, the perceived value of feedbackand perceived credibility and expertise ofpotential feedback source will be high.Hence this will mean that newcomers willdisplay greater performance and socialfeedback seeking behavior when socialaspect is institutionalized. As this will alsomean that role models are the individualswho had earlier hold the responsibilities forwhich new entrant has been hired, it willalso result in greater normative, technicaland referent information seeking behavior.

H3a : Institutionalized Social tactics willbe positively associated with newentrant’s normative informationseeking.


H3b: Institutionalized Social tactics willbe positively associated with newentrant’s technical informationseeking.

H3c : Institutionalized Social tactics willbe positively associated with newentrant’s referent informationseeking.

H3d: Institutionalized Social tactics willbe positively associated with newentrant’s performance feedbackseeking.

H3e: Institutionalized Social tactics willbe positively associated with newentrant’s Social feedback seeking.

4. Method

4.1 Sample and Context of Study

In order to obtain the data, eightorganizations were contacted as potentialparticipants in the study. Four of theseorganizations finally agreed to participate.The organization chosen were from IT/Software domain. We received 669 filledquestionnaires out of 889 distributedquestionnaires. The usable questionnaireswere 584.

4.2 Operationalization of Measures

Independent Variables

Organizational Socialization Tactics: Thiswas operationalized using Jones’ (1986) 30item questionnaire. There are 10 items eachfor the three aspects of socialization tactics.The responses were measured on a 7 pointscale ranging from strongly disagree (1) tostrongly agree (7). The chronbach alphasfor all three dimensions were above 0.79.

Dependent Variables

Newcomer proactivity: The Morrison’s(1993b) measure of information andfeedback seeking was used. It contains7 items (first three items represent

enquiry mode and last four monitoringmode) each for normative information,technical information, referent information,performance feedback, and socialfeedback. The responses of these 35 itemswere captured on a scale of 1 (veryinfrequently) to 7 (very frequently). Thechronbach alphas for all five dimensionswere above 0.77.

Results

Organizational Socialization Tactics andNewcomer Proactivity

The hypotheses pertaining to impact oforganizational socialization tactics(context, content, and social) on thenewcomer proactivity (information andfeedback seeking behavior of newcomer)were tested series of regression models.Each of the 3 information seeking variablesand 2 feedback seeking variables wasregressed on the control variables and threesocialization tactics. Five regression modelsusing enter method were also tested. Themulticollinearity was also tested for and noevidence of the multicollinearity wasfound.

Institutionalized Context and NewEntrant’s Information/FeedbackSeeking

Hypothesis 1a, 1b, 1c, 1d, and 1e describethe relationship between institutionalizedcontext and five types of information andfeedback seeking behaviors. The coefficientof Context socialization is significant andpositive for all 3 types of newcomerinformation seeking at p=0.01 and 2 typesof feedback seeking behavior at p=0.05. Allof these hypotheses were supported.

Institutionalized Content and NewEntrant’s Information/Feedback Seeking

Hypothesis 2a, 2b, 2c, 2d, and 2e describethe relationship between institutionalizedcontext and five types of information andfeedback seeking behaviors. The coefficient


of Content socialization is significant andpositive for social feedback seeking atp=0.05 and for social feedback seeking atp=0.1. For three information types thecoefficient of content aspect of socializationwas not found significant. Hypothesis 2a,2b, and 2c were not supported, whereas 2dand 2e were supported.

Institutionalized Social Aspect andNew Entrant’s Information/FeedbackSeeking

Hypothesis 3a, 3b, 3c, 3d, and 3e describethe relationship between institutionalizedcontext and five types of information andfeedback seeking behaviors. The coefficientof social aspect of socialization issignificant and positive for all 3 types ofnewcomer information seeking at p=0.01and 2 types of feedback seeking behaviorat p=0.01. These entire hypotheses weresupported.

DISCUSSION & MANAGERIALIMPLICATION

The result of the hypothesis testingpertaining to the impact of organizationalsocialization tactics on newcomerproactivity (information and feedbackseeking) has thrown some surprisingresults which may have implications for theorganizations. Two critical dimensionswhich emerged as having greater impacton newcomer socialization tactics is that ofcontext and social aspect dimension ofsocialization tactics. Contrary to priorfindings where most often it is contextdimension which have the least impact, inthis study of software professionals it isfound that content dimension have theleast impact on newcomers’ behavior.Content dimension pertains the planningdone by organization towards the mannerin which role transition of newcomerhappens over a period of time and how onedevelops in a particular role. This studyfound that newcomers’ information and

feedback seeking behavior are primarilyimpacted by context and social dimension.Content dimension only affected feedbackseeking behaviors of newcomers. The onereason which may be assigned for this isthe peer comparison is very high in IT/software industry coupled with the feelingthat it is a highly competitive and dynamicindustry. The social aspect dimension wasin accordance with prior socializationstudies which have found that socialsupport plays a very big role insocialization of the newcomers.

These findings will clearly be helpful toorganizations in better designing ofsocialization process of their newemployees. The managerial implications ofthe study in rapid growth contexts are

a) Role Modeling :

Role modeling has been practiced by manyorganizations in one form or the other. Thisresearch has further reaffirmed the need fora structured form of a role modeling. Theoutcome suggests that structured rolemodeling provides the maximum relief tonewcomer from entry shock, roleuncertainty and role ambiguities. There hasbeen multiple form of role modelingvariants in use like buddy system,mentoring etc. This research suggests thatcontinue to use them with greater structurearound them so that secret sauce ofbecoming successful in the organization isbeing clarified to the newcomers with farmore success.

b) Reaffirm the Faith in Newcomer:

Many a time organizations treat newemployees as naïve. Outcome of thisresearch suggest that this kind oforganizational behavior in high growthcontext is highly immature. New entrantsneed to be given early assurances of theircompetence in form of structuredchallenging assignments. By doing this


organization repose their faith in thecompetence of the new employees. Thiscompetence doesn’t mean only technicalcompetence but social competence. Itreferes to the new employees need toquickly be part of the organizationalgroups and value system. This emphasisis required, because many organizations doprovide challenging assignments but theyare discconnected to existing socialsystems. The merit lies in providing thisby connecting the new employees with theexisting groups.

c) Career path is not enough, newentrant is more concerned about wherethey are:

There has been a lot of work done ondeveloping the career path within theorganizations. Outcome of this researchsuggest that it has a negligible influenceon the employees proactivity. This alsosuggests that merely having a career pathis a matter of hygiene. The important

element is about the presence of rolemodels within organization which hastraveled through this defined or undefinedpath. These role models are more effectivein converting an outsider to insider than adefined/undefined career path. These rolemodels help them find out where they arein terms of career stage. In the case of highgrowth context this can be further clarifiedby making new employees part ofcommunities of practices as role modelreferences can be both internal as well asexternal.

d) Provide Structure:

At the cost of repetition, I would like re-emphasize the need for a defined structureand location for the first 90 days. Althoughit might sound contradictory to secondsuggestion of reconfirming the faith in thenew-comers, New Employees look for adefined structure and place forsocialization experiences in a group set-upcompared to individualized learning.

References

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Ashford, S.J. (1986). “Feedback-seeking in individual adaptation: A resource perspective”. Academy of Management Journal, 29(3):465-487.

Ashford, S. J., & Black, J. S. (1996). “Proactivity during organizational entry: The role of desire for control”. Journal of Applied Psychology,81, 199–214.

Ashford, S.J. & Cummings, L.L. (1983). “Feedback-seeking in individual adaptation: A resource perspective”. Organizational Behaviorand Human Decision Process, 32: 370-398.

Ashford, S.J. & Cummings, L.L. (1983). “Feedback as an individual resource: Personal strategies for creating information”. OrganizationalBehavior and Human performance, 32: 370-389.

Ashford, S.J. & Cummings, L.L. (1985). “Proactive feedback seeking: The instrumental use of the information environment”. Journal ofOccupational Psychology, 58: 67-79.

Bauer, T. N., & Green, S. G. (1998). “Testing the combined effects of newcomer information seeking and manager behavior onsocialization”. Journal of Applied Psychology, 83(1): 72–83.

Chatman, J. A. (1991). “Matching people and organizations: Selection and socialization in public accounting firms”. AdministrativeScience Quarterly, 36(3): 459–484.

Finkelstein, L.M.; Kulas, J.T.; & Dages, K.D. (2003). “Age Differences in Proactive Newcomer Socialization Strategies in Two Populations”.Journal of Business and Psychology, 17(4): 473-502.


Fisher, C. D. (1985). “Social support and adjustment to work: A longitudinal study”. Journal of Management, 11: 39-53.

Jones, G. R. (1983). “Psychological orientation and the process of organizational socialization: an interactionist perspective”. Academyof Management Review, 8(3): 464-474.

Jones, G. R. (1986). “Socialization tactics, self-efficacy, and newcomers’ adjustments to organizations”. Academy of ManagementJournal, 29(2): 262-279.

Kammeyer-Mueller, J. D., & Wanberg, C. R. (2003). Unwrapping the organizational entry process: Disentangling multiple antecedentsand their pathways to adjustment. Journal of Applied Psychology, 88(5): 779–794.

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Mignerey, J. Rubin, R., & Gordon, W. (1995). “Organisational entry: An investigation of newcomer communication behaviour anduncertainty”. Communication Research, 22: 54-85.

Miller, V.D., & Jablin, F.M. (1991). “Information seeking during organizational entry: Influences, Tactics, and a model of the process”.Academy of Management Review, 16(1): 92-120.

Morrison, E. W. (1993a). “Longitudinal study of the effects of information seeking on newcomer socialization”. Journal of AppliedPsychology, 78: 173-183.

Morrison, E. W. (1993b). “Newcomer information seeking: exploring types, modes, sources, and outcomes”. Academy of ManagementJournal, 36(3): 557-589.

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About the Author

Dr. D. Prasanth Nair is a Mechanical Engineer. He has pursuedthe Fellow Programme in Management from the IIM -Ahmedabad, specializing in HR Management. Post his Doctoralstudies, he was associated with the RPG Group and Wockhardt.Dr. Nair joined Thomas Cook (India) as President & Head – HR& Special Projects for the company’s operations in India, SriLanka and Mauritius. Dr. Nair has contributed papers and

articles to various magazines and journals. Currently, Dr. Nair is the Co-Chairmanof the Bombay Chamber of Commerce & Industry HR Management Committee.He is the Chairman of the Bombay Management Association HR ConventionCommittee.

ORGANIZATIONS IN RAPID GROWTH STAGE:CHALLENGES AND WAY FORWARD

Dr D PRASANTH NAIR

Abstract

Given the fact that organizations would need to scale up and grow to tap the opportunities,

managing rapid growth is of critical importance to organizational leaders. Thechallenges of managing growth can be classified as Operational, Strategic and

Cultural, the intensity of which would be based on the context of growth as definedby the mode of growth and degree of diversity. For effective growth, it is necessary

to manage culture, processes, leadership team and talent while aligning theorganization constantly with the business and engaging with employees.

Depending on intensity of the challenges as stated above,the actions would need to be prioritized.

Context

The Indian business environment todayis characterized by opportunities

and challenges. Thanks to the unshacklingof the Indian Economy in the earlynineties, the economy, at this juncture,appears to be poised for a big growth.

Our success in the global market,stemming from the value proposition,has created the ‘India brand’ in the globalarena. A report by Goldman Sachs titled‘Dreaming with BRICs (Brazil, Russia,India and China): The Path to 2050’predicts that India’s economy could belarger than Japan’s by 2032, effectively


catapulting India into the top threeeconomies of the world. Driven bytechnological, social, political andeconomic factors, the Indian growth storyis robust and sustainable. To takeadvantage of the market opportunities,Indian companies have spread anddiversified themselves, growing through aprocess of both organic and inorganic.Further over the last couple of years, whenmost parts of the developed world wentthrough one of the worst recession inhistory, Indian companies have expandedtheir footprints in other parts of the worldas well.

But rapid growth posits its own challenges– strategic, marketing, financial,organizational and people related. Thepaper strives to understand theorganizational and human resourceschallenges associated with rapid growthand comes up with suggestive actions tomanage these.

Managing Growth:

As mentioned in the introduction, it iscritical to manage growth failing which,growth can lead to chaos – reflectingin confusion in organizational direction,failure of systems which have previouslyworked well and work methods/stylesof the past not able to address theissues. Research in this field has helpedus understand the phenomenon betterand to better understand the challengesin rapid growth, a brief review of literatureis done.

One of the organizational growth modelshas been developed by Larry E. Greinerwho originally proposed the Greiner modelin 1972 with five phases of growth. Later, asixth phase was added (Harvard BusinessReview, May 1998). This model describesphases that organizations evolve as theygrow, reflecting also the crisis at the end ofeach such phase.


The Greiner model does not mention acrisis after this, but from the study oforganizations gone through the phase, wecould mention that managing differentcultures would be a challenge.

The model enabled the study oforganizations going through the process ofgrowth and taking this further, in order tobring out the importance of ‘time’ as avariable, Covin and Slevin (1997) proposeda “complexity management model offirm growth” that indicates the pointsin the growth process where quick andbroad based actions need to be taken thatre-establishes the firm’s fit with both

external dynamics and internal processes.The process of growth leads to managerialcomplexity which gives rise toorganizational problems. These issues needto be resolved in ‘quick time’ to ensurethe efficient operation of the business.Such resolution would involve transitioningto more suitable organizational modelswhich would reestablish complementaritiesbetween key organizational systemelements and critical organizational skillsenabling building up of requiredcompetencies.

The above studies help us in understandingthe fundamental nature of growth process

Below are short descriptions of the growth phase and crisis.

Phase Growth Leading to Crisis of

1 Creativity: In this early stage, Leadership: As the companyvery few people who know each other gets larger, it gets increasinglywell and share their experience, difficult to do everything in aknowledge, and information. mutual effort. There is a

requirement of a strong leader.

2 Direction: Now the company is able to Autonomy: Too muchgive direction to the organization and centralization creates work loadallocate tasks, usually, these are problems thus sacrificinghighly centralized. efficiency and effectiveness.

3 Delegation: Management delegates some tasks, Control: With Departmentsfunctions and authorities to others in company coming up and focusing onand to drive efficiency through specialization, their activity, there would be aDepartments emerge, developing their need to control the activities.core skills and (perspective).

4 Co-ordination: Coordination becomes Red Tape: This coordinationimportant between departments for can lead to a high level ofensuring completion of projects and bureaucracy, taking up timetasks with multiple department and effort resulting in noninvolvement. responsiveness to external

market requirement.

5 Collaboration: The co-operation Internal Growth: Thebetween all parts of the company is so Organization struggles to growwell organized that they really can internally because ofwork together effectively in whatever constraints.situation.

6 Alliances: Growth may continuethrough merger, outsourcing, networksand other solutions involving other companies.


Deg

ree

of D

iver

sity

and the important managerial issues faced.In addition, in the current context, whathave significantly impacted the challengesare the dynamic nature of growth – both inthe degree / magnitude of changes andrapid nature associated with these change,influenced by a great extent by thetechnological advances and thephenomenon of globalization.

Derived from the research above and froma primary understanding of organizationsin rapid growth phase, an attempt has beenmade to bring out the human resourceschallenges faced and evolve managerialactions required to address them.

Human Resource Challenges

To understand the nature of humanresources challenges, it is important tocontextualize the rapid growthphenomenon. In this article, rapid growthneeds to be seen in the context of the ‘mode’in which it takes place and also the ‘degreeof diversity’ that it brings in. ‘Mode ofRapid Growth’ refers to whether thegrowth takes place through organic mode– in which the firm grows on its own; orinorganic mode – in which the firm growsthrough alliances, mergers, acquisitions orjoint ventures. The ‘degree of diversity’refers to the ‘extent of non-uniformity’ inthe firm brought in through growth –referring to the differences in thecountries/markets it operates, industriesthe organization is present in and level ofmulti-culturalism (extent of differences incultures). The ‘Degree in Diversity’ wouldvary from a scenario of low degree –characterized by, low differences, lessdivergence, small scale and spread - to ascenario of high degree – characterized byhigh degree of differences, diversification,and huge scale of operations. Although‘Degree of Diversity’ would exist along acontinuum, for ease of explaining andgaining a better perspective, we would becategorizing it as low and high. Taking

these variables together please find a twoby two matrix below, giving rise to fourscenarios of rapid growth.

High Scenario 2: Scenario 4:Organic Mode, Inorganic Mode,High Diversity High Diversity

Low Scenario 1: Scenario 3:Organic Mode, Inorganic Mode,Low Diversity Low Diversity

Organic Inorganic

Mode of Rapid Growth

Figure 1: Scenario defining the contextof rapid growth

The HR challenges and the kind ofmanagerial actions required would bebased on the context defined by the modeof rapid growth and the degree of diversity.

Broadly speaking, the challenges faced incontext of Rapid growth can be classifiedunder three heads:

1. Operational (O): this would includeissues like recruitment, training,induction among others. With scaleincreasing, managing the increasednumbers would be a challenge.

2. Strategic (S): At an organizationalpoint of view, growth brings inchallenges on the optimalorganization structure which willensure focus on the strategicbusiness objectives. Very closelylinked to it would be the decision onkey performance measures for thebusiness units and the individuals.

3. Cultural (C): Organizations whenthey grow may be required to re-examine their preferred way ofworking on matters like the level ofempowerment, the decision makingmatrix, and the code of conductgoverning formal and informalrelationships in the organization, thedynamics of power among others.


The extent of the operational, strategic andcultural challenges would be based on thecontext of rapid growth defined by modeof growth and degree of diversity, differingin intensity based on the scenarios asmentioned in Figure 1 above. From aperceptive understanding of the cases ofrapid growth, a hypothesis is drawn up onthe intensity of the challenges as in thetable below.

2. Business Organization Alignment

3. Synergy in Leadership team

4. Talent Management

5. Managing Processes

6. Communication and Employeeengagement

Managing Culture and Value Inculcation:When firms grow, it needs to look at oldways of working and re-calibrate it to whatis required from a strategic point of view.We also need to factor in the fact there couldbe new industries that organization ispresent in, different geographies ofoperations and if the growth is through in-organic route, different organizationcultures. This is in context that managingculture becomes an extremely importantaction. Managing culture does not mean thatwe need to strive for uniformity ineverything – but indicates that organizationneed to put in place what is absolutelysacrosanct from its existential point of viewand what parameters can be flexible.Depending on what the organizationdesires, it needs to choose between a localor global culture. Some of the best practicesare when organizations put in place somecore values which are global in nature butfactors in the local context and tailor thesame in its overall design. The fundamentalvalues would need to be inculcated,providing absolute clarity to the employeeson what is acceptable and what is not.Further, this needs to be the base for thedesign of systems, processes andinterventions. Controlling the organizationthrough a common value system is far moresustainable than through any other means.

Business Organization Alignment: In aprocess of Rapid growth, it is critical thatHuman Resource actions are alwaysfocused on the strategic objectives of thefirm – both in short and long term. The

Table 1 Intensity of challenges

Opera- Strategic Culturaltional

Scenario 1: High Medium LowOrganic Mode,Low Diversity

Scenario 2: High Medium MediumOrganic Mode,High Diversity

Scenario 3: High High MediumInorganic Mode,Low Diversity

Scenario 4: High High HighInorganic Mode,High diversity

HR Action Plan

As mentioned above, during the processof Rapid growth, there are significantchallenges at operational, strategic andcultural dimensions, the intensity of whichwould vary depending on the scenarios asdefined above. Managing HumanResources is of critical importance duringthis phase as this enables the organizationto stay focused on its objectives and if notmanaged well, there is a chance of‘organization drift’ taking place, defeatingthe very purpose of growth. This can beachieved by focusing on key HR actions asmentioned below.

1. Managing culture and ValuesInculcation


organization design - the optimal structure,the capabilities required and theperformance measures need to be alignedwith the business needs, taking care toensure scale up capability in operations.

Synergy in Leadership Team: The topmanagement plays a directional role inthe entire process. At times of rapidgrowth to ensure focus on objectives‘complementarity’ of skills should be builtin the leadership team. In addition, theleadership teams needs to work together.This ensures robustness in decisionmaking, clarity in way forward plan andfaster execution.

Talent Management: During the growthphase, organization need to make sure thatit has the required capabilities to managethe process. For this, recruiting theemployees with desired skills, developingthe skills in existing employees, nurturingthe employees who demonstrate the passionand retaining key / critical employees areextremely important. During these times,managing diversity and ability to makedecisions under conditions of uncertaintyare critical skills which need to be embeddedin the organization.

Managing Processes: To ensure thatdecision making is robust, to mitigate risksboth at operational, financial and strategiclevels, people management systems andprocesses need to be put in placeand adhered to. One of the pitfallsassociated with this is the temptationof over-designing the systems, whichwill lead to not only delayed decision

making but result in perception of lackof empowerment at various levels inorganization. Thus, process managementshould ensure an optimal balance betweenrisk mitigation and objectivity on one handand enabling fast execution on the other.

Communication and Employeeengagement: During the phase of growth,HR needs to make sure that the energylevel of the employees is high. It is notuncommon to have feelings of uncertaintyand ambiguity during this period. HRneeds to continuously communicate andengage with employees, giving clarity tothe extent possible.

The specificity of the HR action would bebased on the context of rapid growth asdefined by the Scenarios (in figure 1).

Conclusion:

The objective behind this paper is toenhance understanding of rapid-growthand draw upon the challenges faced byorganizations growing rapidly. Thechallenges faced depend on the stage ofgrowth to the mode of growth and the HRactions that are required to deal with thechallenges faced. Even though moreresearch needs to be done to scientificallyvalidate the hypotheses arrived at in thispaper; the paper serves the objective toestablish an overall framework tounderstand the challenges associated withrapid growth. Managing growth ischallenging, but given the inevitability ofthe same, is a reality, need to managed byunderstanding the specific challengesthrough focused interventions.

References1. Alvarez, Pilar and Rodríguez, Buylla: “How to Manage Rapid Growth”, tu-91.167; Seminar in Strategy and International Business;

Helsinki University of Technology: Department of Industrial Engineering & Management, Institute of Strategy and InternationalBusiness.

2. Greiner, Larry: “Evolution and revolution as organizations growth”; Harvard Business Review. 1972 and Harvard Business Review,May 1998.

3. Slevin, D. P. & Covin, J. G. (1997): Time, growth, complexity and transitions: Entrepreneurial challenges for the future.Entrepreneurship: Theory and Practice, 22(2), 43-68


In an environment that is rapidlychanging, readiness to change becomes

an important quality in employees.Particularly, those who manage peopleneed to be doubly ready to change. It iswell known that resistance to changefar outstrips readiness to change.Management and leadership developmentprograms – that intend to bring aboutappropriate changes in people – typicallyaim at changing the knowledge, skills andbehaviors of people. While they have theirown value, the famous “knowing-doing”gap, shows clearly that such programsare woefully inadequate to overcomeresistance to change: having acquired moreknowledge, commonly, people do notpractice these. Several scholars havesuggested many ‘transfer of training’theories (see Yamnill and McLean 2001 fora summary of these theories; see also Egan2008; Ciabruru and Lindsay 2008). Whatappears to be needed is a paradigm shift –a transformation of mindset – to effect

putting into practice what people learn. Inthis article I will (a) describe a managementdevelopment program that shows that it ispossible to achieve this paradigm shiftwhich impacts actions that producebusiness results; and (b) share my reflectionon what seems to have contributed to thispossibility.

The Context

Symphony Services Corporation is aleading global specialist providingsoftware product engineering outsourcingservices. Independent Software Vendors(ISVs), software enabled businessesand companies whose products containembedded software partner withSymphony Services to achieve theirbusiness goals. Founded in 2002,the company has been recognizedconsistently as a global leader in outsourceproduct engineering services. Havingserved over 150 clients and with 1200product releases annually, it has had an

DEVELOPING PEOPLE MANAGERS:SHARING THE EXPERIENCE OF

SYMPHONY SERVICES CORPORATIONDr C BALAJI

About the Author

Dr. Balaji currently heads the Symphony University, the corporateUniversity of Symphony Services Corporation Limited. A Postgraduate in Social Work and a Fellow of IIM-Ahmedabad, he was afaculty member at the Institute of Rural Managementfor 13 years. Thereafter he was the director of the Academy ofHRD. Dr. Balaji has contributed to several publications and hasconducted events for various NGOs, educational institutions, ruralcommunities as well as commercial organizations.


impressive growth of almost 40%per annum. Given its technology anddomain agnostic nature, the company’s3000 strong professionals have deepexpertise in a wide range of technologiesand domains.

Right from the start, line managers ofSymphony Services had the responsibilityand accountability for managing peopleas an important part of their role. Duringthe initial years, managers were inductedand oriented into their people managementroles through a two-day program. As thecompany grew at a scorching pace,the number of managers – particularly inthe junior and middle management ranks– swelled. A large proportion of suchmanagers were hired laterally, and hencethe pre-socialised backgrounds of thesemanagers are very diverse. Further, thegrowth of the company also brought in aprocess-driven culture; the design of thecompany (including strategy, structure andoperations) became more complex. Thepressure to deliver to the customers tooincreased with increasing competition.All these necessitated the managers to laya renewed emphasis on managingemployees.

It was against this background that thethree-month long “People ManagementModule (PMM)” was designed anddelivered as an in-house program. In abouttwo years, seven batches of the PMM havebeen conducted and over 150 junior-leveland middle-level managers havecompleted it.

Results at a Glance

Box 1: Sample of Business ResultsProduced By the Participants of PMM

• A check-list for inducting new teammembers into the team has a potentialto save USD 1.05 mn per year throughpreventing revenue leakage.

• A team of testing engineers develops anautomated testing tool saving anoutflow of Rs 42 lakhs.

• A team earns an additional businessworth USD 600,000.

• A team saves Rs 2.5 lakhs by beingprecise in the commitments its makes.

• A senior management team saved overRs 7.5 lakhs in a year by reducing thecycle time of a HR process.

• The ramp-up time for the team reducedresulting in a potential saving of at leastRs 2.11 lakhs per annum.

• A team improves the performance of acustomer product from sub-50% to over99.9% in three weeks.

• A unit has a vendor rating of below-1on a scale of 1 to 4; the rating goes up to3+ in a span of 4 months.

• A newly-added work station getsremoved resulting in the safety of 150employees in case of fire.

• A Project Manager becomes a memberof the Chairman’s Committee of acustomer organisation.

• The number of appreciation mails fromthe customer increases from 8 to 10 ayear to 15 in 3 months.

• Several projects / activities get donewith 75% or less effort than earlier.

Apart from the knowledge they gain aboutpeople management (see section Contentsof PMM), participants also report thedifferences the program made to them interms of actions, behaviors, mind-set, andfeelings. The actions that they takeproduce financially measurable resultsduring the program itself. A sample of suchresults is given in Box 1.


Objectives of PMM

PMM aims at developing capabilitiesamongst people managers so that they

• Delight employees

• Inspire employees be emotionallyconnected with the company

• Manage employees effectively andefficiently for performance

Contents of the PMM

The program focuses on the followingpeople management activities:

• Employee entry

• Setting goals and other expectations

• Performance review, appraisal andfeedback

• Competency assessment anddevelopment

• Acknowledging, recognising andrewarding

• Building strong teams

• Handling employee concerns

• Handling employee exit

In each of the activities mentioned above,participants learn

• The essential concepts and theories

• Symphony Service’s expectations frompeople managers

• The company’s policies, processes andsystems regarding each of these

• To apply the above

A foundation session is held prior to thepeople management module whichconsists of

• Being oriented to business results andthe role of people management inbusiness results

• Managerial-leadership

• Integrity

• Gaining power

• Power of conversations

PMM Flow

The program’s flow is as follows:

• The program is announced through thetraining calendar to all the managersof the company and a copy of theannouncement is sent to their respectivereportees. The managers nominate theirreportees (who are or are slotted to bepeople managers) either on their ownor upon the request of their reportees.

• Those who are nominated complete aRegistration Form that (a) requires themto study the PMM brochure carefullyand (b) provide learning relatedinformation. Amongst the informationsought are a list of three topics in peoplemanagement that they want to learnthe MOST (with reason/s), a list ofthree topics that may not interest them(with reason/s), and how they gotnominated. To prepare them to get themaximum value from the program, thenominees are asked to explain howparticipating in this program will bevaluable to them and what will she/hebring forth to derive this value.Nominees who are not found to beserious about the program (they don’tseem to have studied the brochure orthey say that they were nominated bytheir manager and they don’t have achoice) their nominations are rejected.

• Those who are accepted for the programare invited for a ‘creation session.’ Thecreation session intends to

¶ Provide the participants allinformation they need about thePMM.


¶ Get the participants prepared forwhat is in it for them byparticipating in the PMM.

¶ Handle any concerns thatparticipants may have about thePMM and/or their participation inthe PMM.

¶ Provide them the choice ofparticipating or not participating inthe PMM.

¶ Create Class Room for those whochoose to participate in the PMM.

The following aspects of the program areexplained and emphasized during thecreation session:

• The PMM will be based on action-basedlearning; participants must be open toself- and peer-learning.

• Participants must be open to challengetheir perspectives on many matters;often the program will involve deep,powerful emotions or beliefs and whichwill be evidenced in action.

• Participants have the opportunity to becoached personally to deal with anybarriers that may come up for themduring the program.

• Participants must attend all theclassrooms; if they miss any classroom,they will not continue in the program.

• Participants may choose to receive acertificate of successful completion(for which their performance willbe assessed) or a certificate ofparticipation.

Those who opt to continue in the programproceed with the remainder of the program

The remainder of the program comprises:

• Eight to 10 full-day classroom sessions,once a fortnight.

• Real-time, on-job assignments andprojects to be carried out.

• Working in groups and with theirrespective buddies.

• Self-learning through readings andcritical reflection.

• Personalized coaching, when needed.

• A program-end report by eachparticipant.

The program ends with a ‘completionsession’ in which

• The participants invite their respectivemanagers and reportees; other inviteesare the top management of thecompany, managers of the variousunits, HR managers and SymphonyUniversity team.

• The participants share the difference thePMM made to them; the reportees sharethe difference they experience with theparticipants; others share their viewsabout the program based on what theyheard.

• The participants are handed over theircertificates and a gift.

• Those whose performance in the PMMhas been exemplary are given away apersonalized letter acknowledgingspecifically what was exemplary abouttheir performance.

Reflection

In this section, I will share my reflectionon what seems to have contributed to theparadigm shift which got the participantsto take actions and behaviors thatproduced measurable business results. Tobegin with, recall the sample of businessresults stated in Box 1. These were theconsequences of the actions and behaviorsof the participants during the program,


which actions and behaviors came out ofparadigm shifts.

• The contents of program-end reportssubmitted by the participants andperiodic conversations with theparticipants show that paradigm shiftshappened, inter alia, in:

• Making things possible and happenproactively, instead of being reactive,procrastinating, cynical, skeptical orresigned.

• Being oriented to producingmeasurable business results, instead offocusing on fighting fires related todelivery to customers.

• Simple thinking and actions, instead ofcomplicating affairs that renders peoplepowerless to act.

• Being sensitive to the needs, aspirationsand potentials of people, instead oftreating them as ‘head counts’ and cogs-in-the wheels.

• The area of commitments – from beingnoncommittal or making vaguecommitments, to making bold andprecise commitments and treating themwith deep respect.

• Understanding of themselves – whothey are, what their potentials are etc.

• Most frequently, people’s actions havebeen in the following peoplemanagement activities:

¶ Goal setting

¶ Delegation and participativedecision making

¶ Conducting one-on-one meetings

¶ Communication

¶ Acknowledgment

¶ Learning

• The foundational perspectives –particularly about integrity, gainingpower and conversations – seem tohave contributed to the paradigm shiftsimmensely.

Paradigm shifts that lead to actions thatproduce measurable business results seemto be possible at this intersection

• When I asked people to share, “Whataspects of the PMM made such adifference?” I could sense a struggle inthem. Though they mentioned somespecific aspects (like certain topics,structure, actions taken, reflectionopportunities, new perspectives givenas inputs, and so on), I sensed thatthe participants were left somewhatincomplete about what they shared. Aslightly longer conversation on thisshows that it is a set of factors that actedin an integrated way to make this shift.Let me delve a bit deeper on this.

¶ There are three kinds of learning:transmissional, transactional andtransformational. Transmissionallearning has to do with acquiringknowledge through A transmittingthe knowledge to B. Transactionallearning happens throughexperience (action), inquiry, criticalreflection and interaction withothers. Transformational learning isa process which leads the learnerto re-evaluate past beliefs andexperience which had previouslybeen understood withinassumptions derived from others.

¶ In the PMM, deep paradigm shiftsseem to have happened when allthese three kinds learninghappened in an interactive way.This is represented in the diagram.

¶ The specific nature of the interactionand the point in the program that


this interaction happens for aparticipant may not be predictable.

¶ These interactive efforts happenquite subtly – often brought out onlywhen a reflective conversationhappens.

¶ The impacts of the PMM last longtime after the program when theparadigm shifts happen and nototherwise.

ReferencesChiaburu, DS and Lindsay, DR (2008). Can Do Or Will Do? The Importance of Self-efficacy and Instrumentality for Training Transfer,

Human Resource Development International, 11(2), 199-206.

Egan, TM (2008). The Relevance of Organizational Subculture for Motivation to Transfer Learning, Human Resource DevelopmentQuarterly, 19(4), 299-322.

Holton III, EE, Bates, RA and Ruona, WEA (2000). Development of a Generalized Learning Transfer System Inventory, Human ResourceDevelopment Quarterly, 11(4), 333-360.

Yamnill, S and McLean, GN (2001). Theories Supporting Transfer of Training, Human Resource Development Quarterly, 12(2),195-208.

This process of deepening of insights isan ongoing journey, not an episodic orevent related phenomenon. It is tacitand evolutionary in nature. This is thebeginning of a journey to becoming amore effective people manager. Thechallenges in the field of learningand development today are the nonavailability of metrics to evaluate suchphenomenon.

ACKNOWLEDGEMENTSOur profound thanks to all the contributors of articles and book reviewer whohave taken time off from their busy schedules out of their dedicated interestto the field of Human Resources.

The editorial team acknowledges the excellent contribution of the guest editorDr. Vasanthi Srinivasan, Associate Professor in the Department ofOrganizational Behaviour & Human Resources Management, Indian Instituteof Management, Bangalore.

We also acknowledge the support from Ms. Saathvika Raj, Exclusive Search.

Our special thanks to Ms. Bina Raju for her painstaking editorial support.


TRAINING TRENDS OVER THE LAST DECADE— THE WIPRO EXPERIENCE

TANUSREE MAZUMDER

Abstract

This paper attempts to explore Training Trends over the last decade while also drawingparallels with the growth in the IT industry. The IT industry is a people intensive business.

Working with the sharpest, best and brightest minds in turn means investing in peopledevelopment to create a win- win for the customer and for the organization.

About the Author

Ms. Mazumdar holds a Masters in Human Development with aspecialization in counseling from Bombay University. She isactive in various initiatives like competency profiling,assessment, development, design and execution of assessmentcenters and OD interventions like culture building, HR capabilitybuilding program, change and transition management andemployee engagement initiatives. She has facilitated several

leadership development sessions for a diverse audience. She has been with Intelfor 2 years. Currently, Tanusree is Senior Manager & Head Personal LeadershipDevelopment at Wipro Corporate HRD.

With most large organizationsrecording an average growth rate of

25% year on year in the IT services industryin the last decade, training as a HR functionbegan to assume greater significance inorganization. The metamorphosis of theTraining organization from being a “mereservice provider based on the inputsprovided by the business units” toenvisioning employee developmentcharter for the organization has been quickand rapid. Training in the nascent stageslooked primarily at addressing the explicitneeds articulated by the business leaders.Therefore, it was largely short term focusedtraining programs to meet the needs ofcurrent professional development ofemployees. The function has over the years

evolved to articulating the futuredevelopmental needs of not just theemployees but the organization as itcharters its strategic journey. The trainingdepartment today assists in the employeedevelopment charter which is drawn up inclose consultation with the business leader.

Let us explore the key themes during the‘90s which formed the mainstay fortraining in the IT industry. In the 90’s thekey thrust of the function was towardsequipping employees with technicaltraining skills which led to practitionersdebating over the issues of “pull vs. pushfor training”. Technical training wasviewed as a stepping stone towardsenhanced career growth and higher


employability; hence created a greater pullfactor. This was about the same time thatthe industry was setting up ODCs or“offshore development centers” whichcreated an impetus towards soft skillstraining namely communication,presentation skills, cross cultural skills andteam skills. Training measurement andmetrics was a crucial determinant of theoutcome of these skills based training.Kirkpatrick’s framework of evaluation wasused and assessment of trainingeffectiveness was done based on level 1 andlevel 2 was the cornerstone of trainingmetrics. The emphasis was clearly datacentric with data on both people andprogram coverage and since much of thetraining was focused on skills, there was agreat deal of emphasis on measuring theeffectiveness of training which the Trainingdepartment could perform effectively.

By early 2000, the business model in theindustry had changed. Most of the ITservices organizations were servicing adiverse client base and post Y2K, the offshoring of software development to Indiaincreased. The prime focus during thisperiod was towards competencydevelopment. This included identificationof role based competencies, definition,assessment and measurement ofcompetencies. Programs were designedand deployed around competencies Someof the common programs across roles wereleadership transition programs from a firsttime people manager to a manager ofmanagers’ to a business Leader with P&Lresponsibility. The usage of developmentcenters (DC) for assessing the strengthsand areas of development for mid tosenior level managers increased.Increased usage of e-learning withcomputer based learning followed withmore and more employees embracingsuch methods. Learning managementsystems (LMS) made an early foray intothe training arena. Grooming skills, India

cross culture programs were also of keeninterest as customers now wanted tounderstand India and the psyche of thesuccessful IT programmer.

The key shifts that one observed duringearly 2000 was the growth in managementand leadership skills. Many businessleaders voluntarily expressed keennessto understand, explore and developleadership orientations. This was adramatic shift with Business Unitleaders proactively owning the leadershipdevelopment charter. Focusedinterventions to groom and develop “HiPotential leaders” gained prominence.With the advent of the Next gen or“millennial” in the workforce along withsocial media playing a visible role, newdimensions to people development wouldbecome imperative to explore andinstitutionalize.

The next section of the paper focuses onthe leadership development efforts atWipro. The Corporate Human ResourceDevelopment (CHRD) has been inexistence for 23 years now and has playedan integral role in the evolution ofthe leadership development journey atWIPRO. The leadership developmentjourney started in 1988 with thefirst Wipro Manager ’s Program. TheLeadership life cycle programs are basedon WIPRO leaders’ qualities and focus ondevelopment for leaders across thecorporation very early on in their careers.The WIPRO Leaders Qualities Surveyconsists of 6 key competencies namelyachievement orientation, spirit of WIPRO,customer centricity, collaborative working,organizational talent building and strategicleadership. Each year a 360 degreefeedback on these competencies is done forall leaders. This feedback provides data forself development.

With each additional increase inresponsibility, managers will need different


kinds of programs that cater to the needs.Wipro has program for “New leaders”,who have made a transition fromindividual contributor roles to managinga team for the very first time. The otherprograms like Business Leaders program,Strategic Leaders program support thetransition in a leader’s journey All theseprograms are conducted on campus while,each program duration is over a three to asix day period, participants have theopportunity to learn, interact and meetwith fellow leaders from across businessgroups and the corporation.

Personal Leadership Development is toequip leaders to identify and leverage ontheir strengths across all leadership levelsthrough personalized coaching andstructured one on one dialogue sessions.Some of the common psychometric toolslike Myers Briggs Type Indicator (MBTI),Personality and Preference Inventory (PAPI)and FIRO B which helps leaders increaseawareness and also evaluate theirorientations are administered. Theinventory feedback is used primarily tofacilitate developmental discussions aroundtransitions, leading change and leveragingon one’s preference/natural strengths.

The learning methodology is primarilyexperiential, with the leader playing a veryactive role in the learning journey. Theteaching and learning methodology iseclectic with a mix of on- the job learning,case method, minimal lecture method,video based and action learning. All theleadership development programs areconducted at the Leadership developmentcenter based in Bangalore which can house500 participants on any given day. TheLeadership center rooms are furnished insuch a way that depending on the trainingrequirement seating can be changed(around 200 ways of chair and tablearrangements are possible) to facilitatelearning.

Leadership capability development at theBusiness unit level is also actively lookedat and championed by the Business Leader.HIPOs or High Potential LeadershipDevelopment programs too are deployedacross business units to groom and developleaders for future roles based on potential,performance and capability.

Wipro also began conducting a“Development center” to identifydevelopment areas for the leaders andfollowed it up with one on one individualcareer plan discussion. These leaders weresupported with on the job learning tools,customized monthly programs and wereprovided a cafeteria of training programoptions to choose from for their personaldevelopment. Business unit Leaders, havebeen actively leading this charter.Leadership development is reviewed on aperiodic basis and active evaluation of thetalent pipeline is done and a leadershipdevelopment roadmap for a business isarrived at championed by the businessleaders.

Another, new program called as “AdjunctFaculty Development program” saw someinteresting results. This program was a newinitiative to develop line managers asfaculty with the intent to bring experienceinto the classroom. This was also done tocapitalize and tap into the rich experiencepool of the leaders, to help facilitatecreation and communication of “teachableinsights”. This is a two way process, bywhich line managers enrich their skills andexpertise (enhanced client presentations,communication and relationship building)through this structured experience of theadjunct faculty development program, anduse this platform to enrich and refine theirclient presentation skills, communicationskills and relationship building skills.

WIPRO has experimented successfullywith varied methodologies to Leadership


Development. Right from a consortiumbased learning approach which is aninnovative learning methodology thatbrings several companies onto the sameplatform to leverage and learn from peerswhile also working on real time businessproblems. Action learning, on the joblearning and coaching is all activelypursued with review and mentoring oflearning goals. One on one coaching ishugely impactful at a personal andorganizational level leading to a moreengaged workforce.

Leadership development is incompletewithout a mention of the key competenciesfor a HRD professional in the fieldof leadership development. Some of thekey competencies are communication,persuasiveness, facilitation skills anddomain knowledge combined withpersonal credibility. LeadershipDevelopment is a specialist function anddoes require specialist orientation or in theT model, in-depth understanding of theapproaches to development and athorough understanding of the businesslandscape. For example, the technology lede-learning programs, webex learning arean attempt to address the learning needsof the leader who travels frequently andyet feels the need to address his/herdevelopment. Therefore, a leadershipdevelopment specialist has to possessnot just an understanding of themethodologies related to leadershipdevelopment, but has also to understand

the technology of learning and blend theseto manage development effectively. AtWIPRO we have senior faculty mentorjunior faculty by sitting through sessionsand providing feedback on improvementareas. Faculty Development is a continuousdevelopment agenda for the function.

Leadership Development over the next fewyears is likely to undergo significantchanges. With advances in technologybecoming fast paced and short lived, theneed to continuously innovate and remainagile and keep leadership developmentcontemporary is a challenge. With themillennial generation in the workforce, itis important to remain relevant, engagecreatively, meaningfully and useappropriate methodologies like socialnetworking and other peer learningplatforms to further the learning agenda.

In summary, what is emerging in the Wiprocontext is that if process, content andstructure were the key defining elements oftraining in the last decade, this decade islikely to be characterized by the ability toexperiment, innovate, reinvent and redefinenext generation process, content, andstructure. Training industry for the futurewill play a defining role in mirroring thechanges in business models and innovationsin the field of information and technology.As a HRD professional the key levers tosuccess are the ability to constantly learn,remain agile, reinvent and walk the pathtowards a trusted advisor.


In any organization, HR practices areconstantly evolving, however in a rapid

growth phase, the trajectory these changestake are a little different from organizationswhere growth is more organic and stable.This paper reflects on the experience atTesco’s Shared Service Centre in Bangalore,as the organization grew from employeestrength of 0 to 4200 people in 6 years,between 2004 and 2010.

Backdrop:

Tesco is the world’s third largest and fastestgrowing retailer. It has a multi formatbusiness — hypermarkets, supermarketsand convenience stores in 14 countries. Ithas a turnover of $ 110 billion and employs475,000 people.

Tesco established a Shared Service Centrein Bangalore in 2004. This has now grownto 4200+ people spread across variousservice lines and enabling services. It isorganised as IT Services, Finance Services,Business Services and CommercialServices. Tesco was a relatively late entrant

in India in the setting up of its sharedservices. Other large MNC’s had asignificant presence in the Indian marketbefore.

The operations and the expectationshave changed over time:

The Shared Services for Tesco was not justabout saving costs, but about creatingvalue for the organization. A consciousand well thought of approach of evolutionas against revolution was adopted forthis shared service centre and thereforecreating value did not happen by chance.For well over the years, the strategy has beendelivering strong and consistent growth.

Tesco developed this centre for the futureby being low on risk, and ensuringhigh probability of success. The companystarted off with the off shoring of ITand Finance operations and then movedto other areas like Commercial Services.

As the business grew, the human resourcepractices also evolved to support thebusiness agenda.

HR PRACTICES IN A RAPID GROWTH ENVIRONMENTSUDHEESH VENKATESHAN

About the Author

Sudheesh Venkateshan is Shared Services Lead for Tesco UK’sPeople programme. Prior to this role, he was Head of HR ofTesco in India for and has been associated with the firm for sevenyears. Earlier to Tesco, Sudheesh has worked in Operations andHR - a decade with Asian Paints and five years with Collabera.He has also worked on an assignment with Booz & Co on“Organization & Strategy”. Sudheesh Venkateshan is an

Electronics engineer and has done his MBA from Indian Institute of Management,Kolkata.


Its more than just off shoring…

CHEAPER OPERATION

BETTER OPERATION

SIMPLER OPERATION

BETTER, SIMPLER, CHEAPER

Increase Value & Simplify ProcessImprove Capability & Reduce Cost

StepChange

Simpler Processes

A Leaner Team

Baseline

Migrate

The changes in the HR practices, as Tesco traversed this journey, could probably beclassified into 4 distinct stages:

2004 2004 -2007 2007-2009 2009 onwards

Get going

Focus on getting the first few hires right

•Take on HR practices fromthe UK parent company.

•Overlay good Local HR prac ices

•High touch

•Central HR function

The foundation years

Good processes &

systems

Operating at scale

•Have a design inmind for HR, and bewilling to change if the business needs it.

•Strong Induction forall new starters

•Keep people busy

•Live the values

•Build the employerbrand making employees feelproud about who theywork for.

•Broaden the base of the pyramid

•Invest in people processes & IT Systems that makework simpler forpeople.

•Measure & Improve

•Devolve more & more of HR to line Managers

•Time to find the nextpeak to scale & rallypeople.

•Start to rotate people Into different jobs. Keepthem refreshed.

•Retain capability & do not mind losingcapacity. Capacity canbe quickly re-built.

•Listen ever more

carefully to people


Getting going (2004):

By 2004, the Indian IT and businessprocessing industry was already a force toreckon with globally. 135 of the Fortune500 companies had already establishedtheir presence in Bangalore. Tesco was alate entrant and had to make its presencefelt in the employment market. It wasfelt that a visible print media presence with

a powerful advertising campaign wasneeded to announce the arrival of Tesco.It was felt that such a series ofadvertisements would give visibility to theorganization in the minds of the existingtechnology professionals in the Indianmarket. The ad below was one of theearliest ads that Tesco used to announceits arrival.

This is how we announced Tesco’s arrival

Making it feel exclusive…

Tesco realized that the initial employeesmade a critical difference to the DNA ofthe organization. The importance of hiringthe first set of employees who wouldinstitutionalize the culture of theorganization is well known. The CEO andthe HR Head met every one of the first 200people who joined the organization. Theconversion rate was running at 3% (3people were selected for every 100applicants) interviewed. All attempts weremade by the CEO and HR head to persuadethose candidates who were undecided on

whether to join Tesco or not. ‘Like begetslike’ and Tesco believes that the team todayis a reflection of the initial hires and theinvestment made then.

Tesco brought in HR practices from theirworldwide operations and overlaid it withthe local HR practices that they hadsurveyed and found to be good in India. Afew examples:

• Realizing that work-life balance wasbecoming an important need for thenew generation workforce, Tesco choseto have 40 days of leave and holiday in


a year, when the practice in the industrywas 25 days.

• More people in urban India werechoosing to adopt children and keepingthis in mind, Tesco introducedAdoption Leave.

• With nuclear families, Tesco realizedthat fathers were shouldering anincreasingly important responsibility ofchild care and Tesco introducedPaternity Leave.

• The organization firmly believed thatthey had enough rigour in theirselection process and that only the rightemployees get in. There is no probationfor the staff at Tesco and everyemployee is listed as a ’confirmedemployee’ from Day 01.

• Tesco’s compensation structure wasvery attractive right from the beginningand this ensured that they hadcandidates with credibility and richexperience

As one would see, Tesco’s HR services inthis phase were trend setting.

All HR functions were centralized. Thiswas important for efficiency of scale. Andmore importantly, this was done toimplement standardized metrics, minimizeduplication, leverage technology andidentify best practices. Once good practiceswere standardized, some portions weredecentralized for flexibility to meetthe needs of each specific businessunit, ensuring quality, and help build astronger, more credible relationship withbusiness units.

In this phase of Tesco’s growth, doing itright was as important as doing it fast.

The Foundation years (2004 – 2007):

Tesco had a defined people plan and adesign in mind for HR. The people

practices at this Shared Service are areflection of UK policies with the flexibilitylocally to respond to the needs of achanging business.

HR enables the line managers to lead theirpeople effectively and Tesco built simplesystems - fit for purpose tools - that madework simpler for them. Tesco also realizedthat communicating the right message atthe right time to the staff will be crucial tobusiness success and therefore invested ina strong Communication team during theinitial years.

There is no over-emphasizing the value ofa strong Induction for the new recruits.Tesco has a 5-day induction programmethat covers the vision, the business, thevalues and the skills required to operate atTesco. All employees go through a five-daytraining, which is often seen as too long,especially for experienced people.However, the belief at Tesco is that a stronginduction contributes to the longer tenureof employees in the organization.

At Tesco, the Values - No one tries harderfor customers and Treat people how we liketo be treated - are the cornerstone foreffectiveness. These values shape theactions of the staff and define the way theydo business.

The customer value reflects the passion toprovide customers with value and serviceoverriding all else. By living the peoplevalue, the staff creates a great place towork. Tesco provides employees anenvironment that is based on trust andrespect. The company has learnt over theyears that well motivated and engagedstaff will give customers great service.

It was vital to build an employer brand,which employees felt proud to workfor, and Tesco realized that the valueproposition that it brought to theemployees were different from what other


IT Services companies offered and it wasimportant for the organization to not fallinto the trap of getting compared withother IT companies.

Tesco uses its Media and Public Relationsto drive home its messages and it is clearthat their staff would be their strongestbrand ambassadors. It was absolutelyessential that their staff found Tesco agreat place to work, because when theydid; their word-of-mouth would have aforce-multiplier effect.

Tesco’s business units wanted quick resultsfrom HR and ready people capability. Thisreflected in their demands to hire skilledstaff no matter what the cost, disregardingwhether such hires would be long term betsor not. The business units, for the rightreasons, did not have the patience to ‘growtheir timber ’. However, it was veryimportant for HR to negotiate and securepatience from the business managers, oftenacting as a brake when the business wantedto go full speed. In fact, it is this ability togo carefully and hire the right peopleduring the period of rapid growth thathelped the businesses to grow faster too.Building people capability takes time, wasthe biggest learning that the organizationhad at this time.

What is the right size of the HR team? Thisis a question that has been debatedextensively with benchmarks from variouscompanies being liberally touted. Tescobelieves in what the Chairman of Xeroxhimself said - ‘Benchmark by all means, butfor God’s sake, do what is right for yourcompany’. With the benefit of hindsight,Tesco should have over-invested in HRcapability at this stage and did not doenough of that. The HR function’s cost is arelatively small proportion to the overallprogramme costs. Tesco ought to have builtstronger HR capability, putting it ahead ofthe principle of running with a low-costHR team.

In this phase, it was important to underpromise and over deliver.

Good processes and systems(2007 – 2009):

Tesco built some basic capability and it wasimportant for the company to turn theireyes to cost and careers. Like what has beendone so well in the IT Services industry,they hired young talent fresh fromcampuses and trained them to itsrequirements. This served the twinobjectives of reducing the cost of operationand providing the business with acontinuous supply of talent that serves theneeds of the future.

Tesco chose a few campuses and builtrelationships with them. The company alsooffered off-campus opportunities fordeserving candidates. There was no ServiceBond & this helped Tesco attract goodtalent who interestingly have chosen tostay on building a psychological bond withthe company.

One of the factors that have contributed toTesco’s success around the world is itscontinuous drive to make work simplerfor its staff and to provide tools that helpthem do their jobs better. The companyrealised that in its context this meantstaff getting their solutions at their desktop.And for speed, this also meant decisionsshould be taken at a level no higherthan necessary. The method by whichthis was tried to achieve was investing ina few purpose-built HR systems. Theystuck to the principle of ‘Work Levels’and kept the organization lean. TheseWork Levels are broad and rich and peopledo not feel they are being micro managed.However, over the years, it has beenfound that layers within Work Levelshave crept in. No doubt this has thebenefit of breaking spans and providingpeople a ‘sense of growth’ by steppinginto intermediate levels, but this has


chipped away at some of the benefits listedearlier.

HR has a challenge to continuously provethe value it delivers and metrics alone canmake the performance transparent.Otherwise, perceptions rule and that is notreally helpful. Further, the only way to lookat what has changed and what should getbetter is with metrics. While it doesn’t comenaturally to many in HR, the value of thiscannot be under estimated. This was a timefor Tesco to measure and improve.

In this phase, it was important for us todiscover rules that work for us and not

copy what has worked for others

Operating at scale (2009 onwards):

Having embedded a number of HRprocesses centrally and made themrepeatable, this was the time for Tesco tostart thinking about how to devolve theseto line managers. The line managers areindeed the people managers and it wasagreed that the HR function’s job is to equipline managers to do precisely this.

It was becoming ‘business as usual’ for thecentre and Tesco ran the risk of the routinelulling the centre into complacency.Therefore, Tesco embarked on identifyingthe next peak to scale, and tried to picturethe ‘next version of their centre’. Thisinfused some freshness and energy andstarted to rally people towards the next setof goals. They refreshed their values for thepeople reminding them that the Values arethe bedrock of their success. Tesco valuessit at the heart of the business and thebusiness sits at the heart of the values.

The values were developed in 1997 fromdiscussions with thousands of staff on whatthey thought Tesco stood for, and what theywanted it to stand for. Ten years later, staffrefreshed these values to reflect thebusiness today.

Tesco realised that many of its people hadbeen doing their jobs for a few years nowand a good way of keeping them refreshedwas to rotate them into different jobs. Thecompany implemented ‘Open postings’putting the power to choose their careersfirmly in the hands of the people. This was


not easy because this would, for a while,erode the capability just when the companyhad established it. On reflection, Tesco haveonly gained by broadening the skill sets ofits people. A study conducted showed thatpeople who had stayed with Tesco forlonger than 36 months, had inevitably gota role change in that time and conversely,people who hadn’t got a role change hadleft the company. However, it is difficultfor any organization to rotate people toofrequently.

At this stage, it was imperative for Tescoto distinguish between capacity andcapability of its people. ‘Capacity’ is thenumber of people the company has, whodeliver the operations. ‘Capability’ ispeople with expertise who cannot bereplaced easily and are critical tooperations. Tesco feels it is key to retaincapability, while it will inevitably lose somecapacity. This is reflecting in their pay andretention strategies. Tesco gives significanthikes in pay to people who they call‘Critical talent’ and have raised the exitbarrier in many ways. These people areidentified based on two parameters:

• Critical to Process – staff who have theright knowledge and skill set requiredfor the job and hence cannot be replaced

• Critical to Tesco – Staff who have thepotential to grow

The organization is now reasonably big:4200+ people. It is difficult to know whatis happening with every person and inevery pocket of the centre. Paradoxically,never has it been more important than now,to listen to the people. Hence, Viewpoint(the staff survey), Leaders walking the floorand the CEO Blog have become morecritical than ever before.

This phase is about keeping everything‘continuously refreshed’.

Summary:

In summary, HR practices do not stand stillin any company and evolve constantly.This paper has traced the trajectory of thesechanges at Tesco’s Shared Service Centrein Bangalore, as the centre grew from astanding start to 4200 people in 6 years.

There has been many a learning - theimportance of doing things right and fast,the value of under promising and overdelivering, the need to discover rules thatwork for each company however temptingit may be to follow what has worked forothers, the patience to stay the course, sinceinevitably, things get worse before they getbetter and the need to keep everythingcontinuously refreshed.

Like with everything else in life, inbuilding organizations too, we reap

what we sow.


PROBLEM OF SMART AND FAST- GROWTHTHROUGH MERGER AND ACQUISITION —

REFLECTIONS FROM AN HR PRACTITIONERDr PALLAB BANDYOPADHYAY

About the Author

Dr. Pallab Bandyopadhyay currently heads the country HRfunction for India for both R&D and Sales as Director-Humanresources for Citrix based at Bangalore. A doctoral fellow inHRD from XLRI, he has more than twenty four yearsof professional experience. Prior to joining Citrix, he was withDell Services, India. A member at the National HR and IR/ERcommittee of CII. Published several papers in leading HR

journals and also the guest editor for NHRD Journal. Dr. Pallab is an honorarymember of the HR Academic Area Advisory Council of Symbiosis Institute ofBusiness Management and also a research guide for PhD students under the Facultyof Management Symbiosis International. He is an expert reviewer at HarvardBusiness School Press.

In recent years, there have been a spateof mergers and acquisitions which has

resulted in rapid growth in organizationsinorganically. The role of a HR professionalin such mergers and acquisitions shouldbe of interest to practitioners. This paperis an attempt to synthesize personalreflections of the author and to examine theHR challenges faced by professionals inmergers and acquisitions.

Mergers and acquisitions are increasinglybecoming one of the most used routes fororganizations today to achieve fastergrowth. There are number of studies toindicate that many a times well intendedmergers and acquisitions fail to achievetheir stated goals and as a result of whichfail in their effort to satisfy the stakeholders,namely share holders, employees andregulatory authorities. While reasons for

such failure could be many ranging fromlack of focus, inadequate financialplanning, overestimating leadershipstrength, lack of adequate directions fromboard on financial and strategicperspectives, a considerable number ofmergers and acquisitions efforts failbecause of human resource related issues.

In recent times, mergers and acquisitionsefforts at India have attempted torestructure organizations to primarilyenhance value in an ever-increasingcompetitive environment. Ten years back ,when the economy was not at the currentpace of globalization, a report preparedby CMIE (Monthly Review of IndianEconomy, CMIE, 2002) during financialyear 2001- 2002, the number of merger andacquisition deals were 1344 worth rupees35,360 Crores. The current number would


be manifold by now and therefore clearlyindicate that merger and acquisitions havebecome a very popular route to achievecorporate growth, in India. The reason forsuch growth can be attributed to thefollowing factors:

• Open and supportive governmentpolicies

• Manifold increase in corporateinvestments in Indian industry

• Relatively higher Economic stabilitycoupled with democraticgovernance

• More globalized outlook with “opento experiment” attitude of newgeneration of Indian industrialist

• Emergence of India as a net supplierof educated and well skilledprofessional

• India’s growing middle classpopulation who has higherdisposable income making India asone of the biggest emerging marketamong developing nations.

Sectors like pharmaceuticals, IT, ITES,Telecommunications, Steel, Construction,etc, have proved their worth in theinternational scenario and the risingparticipation of Indian firms in signinglarge mergers and acquisitions deals hasfurther triggered the acquisition activitiesin India. In spite of the massive downturnin 2009, the future of M&A deals in Indialooks promising. Indian telecom majorBharti Airtel is all set to merge with itsSouth African counterpart MTN, with adeal worth USD 23 billion making it oneof the biggest deals in the recent past.Needless to say, Tata group has alreadyshown the path with huge internationaldeals in automobile as well as steel sectormaking them front runners in the worldtoday as organization capable of achieving

huge growth through successful megacross-cultural merger and acquisitiondeals.

In this article I have tried to explore someimportant human resource related issuesin the merger and acquisition process.Researchers have in the past hadrecognized that Merger and acquisitionimpact employees to a great extent. Asaptly put across by Buono and Bowditch(1989); “Some mergers do fail because offinancial and economic reasons. However,because of the myriad questions aboutmerger and acquisition success, attentionhas begun to shift toward human resourceconcerns, the cultural ramifications ofmerger activity, management of the overallcombination process, and specific effortsaimed at post- combination integration. Infact, most of the problems that adverselyaffect the performance of a merged firm aresuggested to be internally generated by theacquirers and by dynamics in the newentity. The reality may be that manymerger- and acquisition-related difficultiesare simply self-inflicted”

Haspeslagh and Jemison (1991) alsofocused on the employee side of the mergerand acquisition integration process. Theypostulated that an atmosphere thatstimulates peoples’ willingness to worktogether is critical, and that the barriers tocooperation in ana merger and acquisitioncontext that ought to be managed includefears about job security, a loss of power andresources, process changes, reward systemchanges, and fear of the unknown.

In this article however, I plan to draw upon my life experience of having managedseventeen mergers and acquisitions tobuild a grounded “reflective practitioner”perspective to this area. I also believe thatthe current discourse on mergers andacquisitions lacks a strong experiential


perspective. Every practicing managermay not endorse my view point completelybut might accept them in understandingthe predicament of an HR professionaloften caught between leading the peoplerelated processes in mergers andacquisitions and completing it in time(Smart and Fast) and making sure the“fairness “principle is adhered to whilemaking people related decisions.

Human Resource (HR) Related Mergersand Acquisitions (M&A) Issues

1) M & A and the Support/stafffunctions

One of the major factors that I have seenimpacting employees is the uncertaintyinvolving support functions in theorganization post merger. Most employeesin support groups begin to experience jobuncertainty, loss of security and transfersduring early phase of merger andacquisition. In addition, other factors likenew performance evaluation system,changes in reporting relationships, andlack of communication in the area of longterm career perspective add a variety ofnegative psychological impacts onemployees of support functions. I haveseen many employees in HR, Finance andFacilities team suffering from depressionand anxiety disorders during and after themerger. In one of the organizations whereI represented the acquiring organizationthe first challenge came from the HR headof the acquired company. After the mergerwas announced, I had to visit this office formy first meeting with the managementteam of the acquired company. Afterreaching there I realized there were nocabins available for me to conduct mymeetings. The facilities manager came tome and asked when he would have to tellthe HR head to vacate his cabin so that Ican occupy this room. I sensed a bigdiscomfort on the part of the facilitiesmanager. On enquiring I came to know that

the HR head was very fond of his cabin.Incidentally it was also the largest room inthat building. Going against the normalpractice of dislodging the HR head Idecided to continue to conduct mymeetings at a conference room and allowedhim to continue in his cabin. It was aboutthree months after which the HR headresigned and quit. However, this smallgesture helped me immensely in the wholeprocess of merger and acquisition. The HRhead collaborated with me at all themeetings, provided all data that wererequired and went out of the way toprovide me deep insight which eventuallyhelped me to win trust of the seniormanagement leaders in the acquired firm.If I was not sensitive as a managementrepresentative of the acquiring company tothis common problem, often witnessed inmerger and acquisition situation I wouldhave definitely faced hostility and non-cooperation resulting into loss of talent,energy and most importantly productivityof the workforce.

If one is not sensitive to such individualissues it can really have negative impactson post merger scenarios. I have alsowitnessed a senior HR leader of a largeOrganizaton being largely blind to thelong-term consequences of insensitivehandling of individual issues resulting in

• Clashes of ego between the seniorleaders of merging companiesgreatly undermining the originalvalue of the merger.

• Inadequate and insensitive handlingof formal and informalcommunication systems significantlyundermining the integration ofresources within the mergedcompanies.

• Significant drop in employee moraleimpacting synergy level that is oftenrequired for an organization that is


competing within a rapidlychanging industry.

• Employees starting to talk to theirfriends and colleagues about howterrible it is to work at the“Acquiring” company.

Many human resources professionals areadequately prepared and trained to playthe role of integrator in mergers andacquisitions but are greatly underutilized.I have also seen on the other hand manyexecutives who had no training orexperience in handling the HR issues thatresult from the merger process, oftenare forcing them to influence majorhuman resource related decisions. Thesedecisions may involve terminations,pre-mature retirement, transfers,demotions, promotions, layoffs, relocationof work, or resolving major conflictsbetween employees. Mergers andacquisitions by their very nature are themost profound change interventionundertaken by the leaders. Therefore it isabsolutely critical for organizations to havea well thought out strategy for involvingthe support functions of both acquiring andacquired organization so as to achievesynergy.

However, on the positive side, I havewitnessed that merging companies arebeginning to become more aware of theirresponsibilities to their employees. Thischange in emphasis has occurred on accountof number of large organizations findingthemselves faced with the above describedproblems after their first attempt at mergingwith another organization. Organizationalleaders are beginning to appreciate that lawfirms and investment bankers cannot solelylead the mergers and acquisitions. Lawyersand financiers can plan and execute thedeal, but it is the managers from supportfunctions who make the mergedorganizations work. Organizations are nowincreasingly involving their support teams

in the planning processes of any majorM&A deal.

2) M & A and the Due Diligence

In mergers and acquisitions, the role of duediligence in the success of the partnershipis very critical. Being involved in manysuch interventions, I have understood itsimportance in identifying what could bethe “deal breakers” as well as “dealmakers” that might impact the merger andacquisition process adversely or helpin sailing through apparently hardnegotiation and bargaining. However, oncethey are identified, it is not very unusualto witness a level of complacency to set inand the whole process to loose rigorand intensity. This phenomenon of “shortcut” often impact gathering of vitalinformation that could influenceintegration decisions and pave the way fora way more complications in the future.HR professionals need to be aware ofthis because they hold a significantresponsibility for integration. Ultimately,they carry the responsibility for “people”related issues ranging from the integrationof compensation and benefits toorganizational restructuring. And yetI have experienced that many a time theHR function is neither invited norconsidered to be a competent partner inthis entire exercise. It is ironical that otherfunctional areas like finance, strategy andoperations become powerful actors in theearly stages of the due diligence process.Yet when the due diligence fails, it is oftenthe human resources dimensions which arehard to integrate.

In one of the multi country acquisitionprocess where I was involved I experienceda similar problem. While in other countriesthe process went smoothly, I stumbledupon a complex issue when it came toseverance of one of the CEOs in Europe,Middle East Africa region. Whilenegotiating the severance, which had to be


done based on local laws as well asprevious legal contract, I found that theseverance package was far more thanitwhat was budgeted. Going to the root ofthe problem, I discovered that the local HRdirector was not involved at the early phaseof the due diligence process resulting inincurring huge out of budget cost that theorganization did not account for whilenegotiating the deal.

A smooth approach to the due diligenceprocess would be to involve HR earlierin the process even before negotiationbegins for final valuation. One need toremember that though a hassle freetransition is an important goal to achieveduring the merger and acquisition process,it is also important to ensure thatorganizations involved realizes themaximum value from the deal. Thoughcorporate decision makers need to beeducated about the role than HR can playin making a merger and acquisition processsuccessful, it is also the onus of HRprofessionals to assertively put forwardtheir case to get involved during the earlystages of due diligence process.

3) M & A and the Communication

In a successful merger, the newly createdorganization needs to derive a synergy bypooling the best features of the twoorganizations. The key to this success is awell planned communication strategy thatis built on the founding principle ofopenness, trust and consistency. Thepeople related issues in the mergers andacquisitions normally are experienced intwo distinct phases, namely the pre-mergerphase and the post merger phase.

Based on my experience I am puttingforward a set of questions that employeeswill look forward to get answers for fromthe leaders in both the organizations. Thesecan be certainly being pre empted througha proper communication strategy based on

fairness and trust. I have identified a list ofquestions that employees ask for duringthis stage. (Refer appendix 1)

The pre acquisition phase entails anassessment of the cultural aspect and therole of leaders of the acquired organization,and therefore communication at this stageespecially for employees in the acquiredorganization requires very carefulhandling of issues. The news of merger andacquisition often can lead to a traumaticexperience for the employees of acquiredorganization; the impact can range fromanger to depression and sometimecomplete mental isolation from theorganization and complete break - downof psychological contract with thenewly formed merged entity. If thecommunication is not handled in a fair,consistent and more importantly in anempathetic manner the result could beextremely negative resulting into highturnover, low morale as well as de-motivation leading to low productivity.These can consequently snowball intoother negative impacts like changes in theHR policies, downsizing/rightsizing, RIF(Reduction in Force), new compensationand benefit structure, new performanceevaluation and ambiguity in newinformation system, which are verycommon in such situations.

4) M & A and the Talent Assessment

The uncertainty that prevails during themerger and acquisition process many atimes compels employees to focus on issueslike job security, title, individual careerpathing, changing work norm, newreporting relationship and many otheraspects of work-life which they had notperhaps not focused earlier. During mergerprocess one of the most important aspectsthat employees look for is fairness in thetalent assessment process. During thetransition period, the single mostimportant issue that I have witnessed is the


senior-management team from acquiringorganization struggle with is to convincethe employees of the acquired organizationis that they are part of new entity and theirconcerns will be taken care of. The majorchallenge that I have encountered in simplyconvincing employees especially of theacquired organization that “employees inthe merged entity will be selected on basisof merit.” Crux of the issue lies in fairnessand transparency being the key in thiswhole process. In one of the mergerexperience I had seen the managementafter all sweet talk followed the principleof “to the acquirer go all the primepositions”. The news spread like a wild fireand almost all the talented and competentemployees began looking out for betteropportunity. As a result of which the newentity lost many key people in a period ofcouple of weeks. Time. The acquiring firmhad to spend much more than the budgetedcost to recruit outside talent to keep theircritical clients engaged and maintains thepre-merger revenue stream. From myexperience I am putting below some thealternate approaches that I have seenworking. These are as follows

a) Bring in a “New Leader” - In thisapproach a single leader get selected ineach functional area after following atransparent merit based selectionprocess from both the acquired andacquiring organization pool ofdeserving candidates. Advantages ofthis approach are many. A leaderselected through a “Meritocracy Route”tends to select his ‘her team purelybased on merit. As a result the newlymerged organization achieves synergyfaster by tapping right talent from thewhole pool. Needless to say that it alsocommunicates the culture that is goingto be embraced by the new entity whichalso ensures that the talented andcompetent employees stick to their jobresulting in higher productivity.

Though this is the most ideal approachbut less likely practiced because of“loyalty vs. competency conflict”.

b) “Adopt “Two in a Box.” - In thisapproach, both organizations select aleader for each functional area, and bothare advised to work together to form atransitional dual lead task force. Theadvantage in this approach is theknowledge that both of them bring onthe table about capabilities, resources,cultural aspect and more importantlytheir own relationship with theirrespective employees and their seniormanagement team. The disadvantageof course lies in the potential conflictthat may arise when the organizationneed to make its final choice. The“runner up” may more likely to leaveconsidering it as a loss of face. Howeverit can work well, especially in transition,especially when there is a merger of theequals.

c) Bring in a “Third Party Consultant”-In this approach an independentmanagement consulting firm is giventhe responsibility of choosing the bestamong all aspirants through a fairselection process. I have seen this beingused successfully since it minimizesfears of favoritism, speed up decision-making, and more importantlyprovides an independent assessment ofoverall talent map of the merged entity.Disadvantages for this processobviously is additional cost followed byrejected employees who become upsetand start engaging into disruptivecommunication with fellow employeessince they believe that these rankoutsiders are not competent as theirbosses to assess their true potential.However I have also seen this approachworking in cases of “Key LeadershipSelection Process”. Variation of thisprocess could culminate in using the


third party consultant after all availablepositions are posted internally to attractall deserving employees and thendelegating the process of fair selectionto them with clearly stated criterion,which the new entity wants to instill inits employees as a first step towardsbuilding a new culture.

5) M & A and the Culture

This article will be incomplete without thislast piece. Researchers in the area of mergerand acquisitions have identified this as anessential pre-requisite for its success.Nahavandi and Malekzadeh (1988) definedit very aptly as “.the beliefs andassumptions shared by members of anorganization”. While looking at culture,HR professionals need to be aware oftwo levels of culture. Especially largeorganizations will always be very strongin what often is referred as “corporateculture”. This is primarily “how anorganization accomplishes its objectives”and underlying that would be “what isright and what is wrong while achievingthese objectives” which are nothing butvalues and beliefs. However theseorganizations will also have “subcultures”that may exist in different SBUs and/orgeographical locations. The matter of factin any merger and acquisition is thatsomething in cultural aspects needsto change to derive synergy out of thiswhole process. The change managementchallenges increase when both thesetwo different set of cultures requiresintervention to change. That’s where theprocess of acculturation assumes asignificant importance in the wholeprocess.

Berry (1983) propagated a three-stageprocess of acculturation involving Contact,Conflict and Adaptation. Needless to say,faster the organizations can achieveadaptation; lower become the risks ofunproductive conflicts.

Researchers like Chatterjee et al (1992)found a strong negative correlationbetween the perceived cultural differencesbetween the two top management teamsand stock market gains to the acquiringorganizations. Nahavandi andMalekzadeh (1988) on the other handargued that the process of acculturationwould depend on how the acquiredorganization values its own culture andseeks to preserve it, and its perception ofthe attractiveness of the acquirer. If, forinstance, the acquired firm highly valuesits culture and does not rate the acquireras highly attractive, then its acculturationis likely to be “separation”, in which it willseek to avoid the acquirer’s culture. Fromthe perspective of the acquirer, the twodimensions driving the acculturationprocess are the degree of tolerance formulticulturalism versus seeking one,unified culture, and the degree ofrelatedness between the merging firms.

Cartwright and Cooper (1992) concludedthat it is not cultural differences thatmatter per se, but rather that the twocompanies’ ability to work together. This,in turn, is driven by the extent to whichemployee individual freedom is affected.

Forstmann (1998) developed a “CulturalAnalysis” to be used during the mergernegotiations. He also proposed that that theprocess by which cultural acculturationoccurs determines the success of themerger. There are many instrumentsdeveloped by researchers to assess culturalcompatibility.

In my own experience, I have also comeacross many such instruments developedindigenously by many organizations.I have found them very insightfulespecially in the context of designing shortand long-term change managementinterventions. However I have alsoexperienced that the following practicescreate very conducive environment while


managing acculturation process. These arelisted below

1) Training managers on themanagement of Transition andChange

2) Individual and Family assistanceprograms by making availabletrained counselor (physically) or byPhone).

3) Formal Stress Managementprogram.

4) Cultural Orientation programs.

5) Career Pathing /ManagementProgramme explaining new rolesthat might emerge in the new entity.

6) Helping employees who lost jobs tooutplace them through professionalagencies.

7) Team building interventions at anappropriate leadership/team level

8) Anonymous feedback helpline foremployees

Conclusion

Bridges (1991) while identifying transitionas the most important aspect of changemanagement said “The single best reasonorganizational changes fail is that no onethought about endings or planned tomanage their impact on people. Naturallyconcerned about the future, planners andimplementers usually forget that peoplehave to let go of the present first. Theyforget that while the first task of changemanagement is to understand thedestination and how to get there, the firsttask of transition management is toconvince people to leave home.”

Human resource related issues willcontinue to be one of the most complexissues while making a merger andacquisition process succeed in achievingits objectives. In this endeavor HR

professionals need to take a lead inconvincing people to leave home……………and only if they are successfulin this effort, they will be rewarded andrespected for their meaningful contributionin merger and acquisition process.

Appendix 1:

Common questions asked by Employeesduring Pre merger period:

• What is the Offer? Please give us thedetails?

• When do we find out whether theoffer has been accepted? Will it beformally communicated to theemployees or we need to know frompress?

• What happens if there is another bidfor our Organization? And do weexpect there to be a counter offer?

• What will happen if the Offer isaccepted?

• Why has the Board recommendedthe Offer?

• What is the strategic rationale forthis transaction?

• How does this fit with what we aretrying to achieve currently at ourorganization?

• How many job losses will there beas a result of this acquisition?

• There will be an inevitableduplication of some roles carried outat the between the offices of X and Y– what will be the process forcoming up with a new structure?

• How will the organization bestructured?

• What brand will we trade under?

• What are we going to be saying toour customers about the acquisition?


At what stage we will startcommunicating? Will there be aguideline provided to us?

• Will we be provided training forlearning new skills?

• What future communication aboutthe acquisition/integration willthere be from the leadership? Whatwill be the frequency?

• Can I apply for jobs that arecurrently being posted in the careersite of the acquiring organization?

• Who will I work for and will myplace of work change?

• I currently work out of ABC Office– does that mean the offices willclose and I need to shift?

• Will people be given the option ofredundancy?

• Will there be any changes to termsand conditions of employment and/or compensation and benefits?

• What will happen to my pension ifthe acquisition goes ahead?

• What about future benefits? Will itbe the same or better scheme?

• What will happen to share options/share/RSU awarded to me underthe present schemes?

• What happens to my current yearbonus? Will I be paidproportionately or it will not be paidat all.

• What will happen to the salaryreview for this year? Will this willcontinue in line with currentpractice.

• What if I leave voluntarily before thedeal closes? Will it be treated asnormal resignation?

• What if I leave voluntarily after thedeal closes? Will I be treated thesame manner I am treated before thedeal closes?

ReferencesBerry, J. W. 1983. Acculturation: A comparative analysis of alternative forms. In R. J. Samuda and S. L. Woods (Eds.), Perspectives onimmigrant and minority education. Lanham, MD: University Press of America.

Bridges, W, 1991, Managing Transition: Making the Most of Change. Cambridge, MA: Perseus Books

Buono, A. F. & Bowditch, J.L. 1988. The human side of mergers and acquisitions: Managing collisions between people and organizations.San Francisco: Jossey-Bass.

Cartwright, S. & Cooper, C.L. 1992. Mergers and acquisitions: The human factor. Oxford: Butterworth-Heinemann Ltd.

Chatterjee, S., Lubatkin, & Weber, Y. 1992. Cultural differences and shareholder value in related mergers: Linking equity and humancapital. Strategic Management Journal, 13: 319-34.

Forstmann, S. 1998. Managing cultural differences in cross-cultural mergers and acquisitions. In M. C. Gertsen, A.M. Soderberg &J. E. Torp (Eds.), Cultural dimensionsof international mergers and acquisitions. Berlin: deGruyter.

Haspeslagh, P.C. & Jemison, D.B. 1991. Managing acquisitions: Creating value through corporate renewal. New York: The Free Press.

Nahavandi, A. & Malekzadeh, A.R. 1988. Acculturation in mergers and acquisitions. Academy of Management Review, 13: 79-91.


HUMAN CAPITAL MANAGEMENT:BRIDGING PROCESS AND TECHNOLOGY GAP

LOKESH TRIPATHI and TANZILUR RAHMAN

About the Authors

Lokesh currently works as a Senior Product Manager with AribaTechnologies in Bangalore. Prior to this he was working withSAP Labs. Earlier he worked as a talent development consultantwith SAP. Lokesh has completed his Post Graduate program inSoftware Enterprise Management (PGSEM) from Indian Instituteof Management - Bangalore and is a graduate from IndianInstitute of Technology, Roorkee.

Tanzilur Rahman works as Senior Solutions Consultant withOracle India Field Sales Consulting and has more than sevenyears of experience working with organizations such as Oracleand PeopleSoft in consulting, solution selling andimplementation of enterprise solutions. Tanzilur Rahman is anEngineering Graduate from Aligarh Muslim University, Aligarhwith a management degree in Post Graduate Program inSoftware Enterprise Management from Indian Institute of Management, Bangalore.

Much has been written in the popularpress and the academic literature

about the role of technology in HRM.There is a growing recognition thathuman resources could be a source ofcompetitive advantage for organizations.Competitive advantage is gained byimplementing a value creating strategythat competitors cannot easily copy andsustain and for which there are no readysubstitutes (Barney, 1991). One of theways of achieving this competitive edgeis through the people capability. Thetalent management processes in anorganization can provide a pipeline ofengineers, leaders and managers who candrive value in businesses in perpetuity.A strong talent management processassumes the existence of robust data

pertaining to all aspects of an employeein the organization. The data that isrequired often pertains to backgrounddetails of employees, assessments fromthe time of entry through their careerin the organization, the projects done,the special assignments posted to,performance metrics, contribution tobusiness results, managerial feedback andmany others. Maintaining this kind ofdata in rapid growth organizations is achallenge.

Over the last decade, a number oforganizations have implementedEnterprise Resource Planning systems(ERP). The impact of technology onenhanced efficiency of the HR departmentis well documented. However its role


in strengthening talent managementprocesses in organization is yet to beunderstood. It is in this context thatthe authors who are both softwareprofessionals working as Human CapitalManagement solution consultants decidedto embark on a study to understand themanner in which their clients in threedifferent sectors namely IT services,

banking and manufacturing have usedtechnology in managing the talentmanagement process in theirorganizations.

A survey conducted by McKinsey in which9300 executives participated found thatCost and Availability of Talent are the twotop constraints for growth.

In such a situation, talent management isseen as one of the most critical drivers ofgrowth. The key question that this paperattempts to understand is the manner inwhich in rapid growth organizations,implementation of technology basedsolutions for talent management has beendone.

Talent Management Solutions

Most ERP solutions provide a suite ofHuman Capital Management (HCM)applications. All HCM solutions havemodules which provide HR operationalefficiency, HR process streamlining andTalent Management applications that bring

together the critical factors that driveemployee performance and ultimatelyorganizational success. The Strategic HCMsolutions by leading providers such asOracle PeopleSoft and SAP provide a suiteof applications which together constitutean integrated Talent Management LifeCycle based on Gartner’s framework givenbelow.

Jim Holincheck, Gartner ’s lead HCManalyst and one of the leading voices onHCM states in Gartner ’s WorkforceEffectiveness Research that most largecompanies that have implemented anintegrated set of administrative humancapital management applications are now

Got Talent?McKinsey survey of 9,300 executives:

Cost & availability of talent is the second highest constraint to growth1

73% of executives ranked talent management second only to competitive threat (77%) as a constraint to future growth

SOURCE: 1 “What Executives Think About Growth and Risk ” Global Survey of Business Executives, McKinsey & Co.0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Inadequate infrastructure

Rising Pension costs

Rising cost of internal resources

Rising health care costs

Inadequate Government/Legal Protection

Lack of access to capital

Excessive Regulations

Solutions/Innovations by competitors

Increasingly Sophisticated Consumers

Cost & Avaialbility of Talent

Competitive Environment

Fig 2: McKinsey Survey on Constraint to growth


Fig 5: Gartner Ideal HCM Solution

A comparison of the Oracle PeopleSoft Enterprise Talent Management suite with Gartnerideal talent management application suite is presented below.

Fig 6: PeopleSoft Enterprise application suite

Source: Oracle (March 2008)

turning their attention to strategic talentmanagement applications to get morevalue from their investments in people.Companies want fewer, more integratedsolutions to support more-strategic humancapital management. A comprehensivetalent management application suiteincludes these applications:

• Workforce planning• Talent acquisition• Performance management• Career development• Succession planning• Learning management• Compensation management


It appears that the suite of applicationsavailable in the field of HR offers anopportunity for HR professionals toprovide effective talent managementsupport to the managers and theorganization which can act as a source ofcompetitive advantage. The key questionhowever is to what extent do HRprofessionals use the features provided bythe solutions to manage talent effectively.We decided to gain an in depthunderstanding of client organizationswhich had implemented either PeopleSoftor SAP. Three organizations, one each fromthe banking, automobile and IT servicesindustry were chosen where ERPimplementation had happened over thelast five years. Both the bank and the ITservices company operated in rapidgrowth context. The manufacturingorganization operated in a more stableenvironment. Semi structured interviewswere held with the respondents both fromHR and IT departments who wereresponsible for implementing the software.In the interviews, the following broadthemes were explored:

a. An explanation of the kinds of softwareused by HR department to manageemployee data.

b. What kinds of challenges arise out ofHR implementation?

c. What kinds of information pertainingto the talent management process areavailable and used by the communitywithin an organization?

d. Extent to which the current softwareapplications do or do not satisfy userexpectations.

e. What are the organizational challengesthat impact the implementation?

It was interesting to note that the kind ofissues that were facing each of theseorganizations in their HR informationsystem implementation were different. Inthe case of the IT services company, which

was experiencing rapid growth, a numberof custom and 3rd Party systems had beendeveloped over the years to manage thegrowth. As one respondent in the ITservices company mentioned “SAP HRserved as the main repository of employeedata and a number of applications werebuilt around this. An internally developedsystem was used as the main applicationfor Employee Self Service. Synergy is beingused for handling all recruitment dataincluding integration with agencies and jobportals. Data is moved into SAP once theemployee is hired. A separate system wasbeing used to allocate the resources to theprojects and this system would move thedata in to Synergy. There was also projectmanagement software which wasintegrated with an MS project. TheTimesheet data from this software flowsinto SAP. Leave Management andappraisals were handled by separateOracle based applications. For Payroll, anintermediate system takes compensationand benefits data from SAP and sends it toexternal vendors for payroll processing.After the payroll processing is donethrough external vendors; the data ispushed into SAP. Pay slips are separatelyemailed to each employee in text format.”As is evident from above, the challenge inthe IT services organizations has been theintegration of technology in an incrementalmanner. This has an impact on the talentmanagement processes such as, forecastinghuman resource demand. tracking ofemployees across the globe, deliveringtargeted development programs to theworkforce and managing complexmatrix organization and responsibilityrelationships. Apart from this, there is nocentralized competency framework whichserves as the backbone of the talentmanagement process. Only recently havecompanies begun to invest in buildingcompetency frameworks.

In the services industry, the role ofmanaging employees is critical but it seems


that most of these organizations have notbeen able to fully leverage HCM solutionsbecause of presence of multiple systems fordifferent functions with disparatearchitecture. However, there is now agrowing realization for an integratedsolution that integrates business processesacross the Project Pipeline, ResourceManagement and HCM.

In the last five years, most banks both frompublic and private sectors in India haveimplemented or are in the process ofimplementing HCM solutions. Howevermost of them are not leveraging it forstrategic gains at this stage. At best, systemsare providing operational efficiencyin handling HR transactions andimplementing best practices in workforcelifecycle management and payroll. Theorganizations which have achieved firstlevels of efficiency and system stability arenow contemplating to bring in talentmanagement components such asPerformance Management, LearningManagement and Recruiting andWorkforce Planning Solutions.

In the case of the automotive manufacturer,which has implemented a HCM solutionwe found that in the first level ofimplementation the focus was purely tohandle Transactional HR processes andsystems. Of late in the ongoing secondphase of implementation there has been astrong realization to capitalize on theStrategic HR components of the system.

Some key findings that emerged acrossthe organizations pertaining toimplementation of HCM are as follows:

a. The adoption of HCM solutions byemployees and HR administrators hasbeen very high. However, the usage bymanagers and the senior managementteam has been average.

b. The usage of HCM applications forroutine, administrative and transactionoriented HR activities are high;

however, using HCM applications forstrategic value creation activities isweak.

c. The role of the HR department is quitecritical in the manner in which HCMsolutions are leveraged. In ourassessment, most HR managers werenot technology aware to be able tovisualize how the HCM can help themleverage strategic advantage.

d. The usage of self service was highest inthe IT services organization but in otherorganizations its usage is very limitedand leveraged only to the extent ofemployee information disseminationand approval transaction such as leaveand muster.

e. The ownership of HCM solution is achallenge. What is the role of the HRdepartment and the IT departmentrequires greater clarity. This conflictbetween HR and IT departmentsresults in adverse impact on theimplementation.

f. Another important issue is the lackof resource commitment by theorganizations in implementing HCMsolutions. HR department in theseorganizations is generally overworkeddue to high centralization and firmsare not able to commit right businessusers to the project during theimplementation resulting in processholes in the product implementation.This also results in the lack ofchampioning from the business users.

g. The Strategic HR offerings of the majorERP vendors are fairly advanced andcater to the latest thought solutionsin the Human Capital Management.There are some weak linkages in TalentManagement especially in the areasof Career Planning and Advancementthat need to evolve further. There arealso weak linkages in planning andscenario based what-if analysis inPerformance Management, Rewards


and Advancement resulting indifficulty in assessment of financialimpact of promotions and increments.There are some integration gapsbetween HCM and other productssuch as Customer RelationshipManagement, Enterprise ServicesAutomation/Financials and EnterprisePerformance Management. Theseintegrations are critical forforecast-to-fulfilment processintegration in professional servicesorganization. Some transactional areassuch as Onboarding and Separationneed enhancement due to complexityof the process in Indian context andhigh volumes due to growth hiring andhigh attrition.

h. The current implementations are notfully leveraged. The transactionalHR modules are implemented andbeing used to a large extent but theutilization of Strategic HR modules isfairly low. In many cases modules werebought but never deployed. Most of theHR time is going into Employee recordkeeping and it not being invested intomore critical areas such as talentdevelopment. User adoption seems tobe a major issue with Line Managers notbeing able to use the system beyond thetransactional approvals such as leavesand time.

i. Most of the large firms have investedin technology solutions to manage HRfunctions. However, most of thesesystems are characterised andIncremental application developmentand roll-out based on situationalfunctional requirements rather than awell thought out HCM strategy. Thisresults in incremental operationalefficiency and does not give any realcompetitive edge. The currentimplementations are also not able tosupport the complexity in organizationstructures and People Managementpractices in the organizations.

j. The level and complexity of HCMimplementations across differentorganizations is different. For IT Servicescompanies, talent management is not anisolated process but is closely integratedwith People Supply Chain Excellence.Therefore a solid implementation ofHCM will not bring in businesstransformation required for next levelof strategic growth. BusinessTransformation can only be achievedthrough the tight linkage of PeopleSupply Chain and Integrated TalentManagement. On the other hand, in BFSIfirms, although integrated talentmanagement is a central requirement forHCM, People Supply chain excellence isnot a central requirement. Based on ourstudy, six key variables seem to emergeas drivers that decide the nature andcomplexity of HCM implementations.These six variables can be classifiedalong two dimensions; Scale andSophistication which form the basis ofthis S2 framework.

Scale: The scale of required HCMimplementation is derived from thefollowing variables and can be furtherclassified as Low, Medium and High.• Organization Size• Geographical Spread• Global Mobility

Sophistication: The sophistication ofrequired HCM implementation isderived from the following variablesand can be further classified as Low,Medium and High.• People Demand Uncertainty• Product/Service Diversity• Talent Scarcity in the industry

All these variables can also be classifiedas Low, Medium and High andcontribute equally to the mainparameters of Scale and Sophistication.Based on the assessment on the type ofHCM implementation required for their


Fig. 13: The S2 Framework

References, Citations & BibliographyHusled, Beacker,Beaty, The Workforce Score CardAMR Research Paper on Human Capital Management (2007)Aberdeen Group Paper, Best in Class Organizations using Integrated HCM (2008)Unfinished Business-Mastering HR Business Design, Mercer Consulting (2004)Enterprise-wide Talent Management –White Paper HR.comJohn Ingham, Strategic Human Capital ManagementEnterprise Talent Management, Oracle (2008)Service Supply Chain Management, PeopleSoft (1999)Global Workforce Study 2007, Towers Perrinhttp://www.sap.com/http://www.oracle.com/http://www.HR.com/http://www.sdn.sap.com/

Indian economy has witnessed amanufacturing revolution spurred on bythe increasing presence of multinationals,scaling up of operations by the domesticcompanies and expanding domesticmarket. The sector has been averaging 9per cent since 2004 (2004-08), and hasshowed its robustness even in the event offinancial crisis that engulfed almost theentire World economy. Such a stronggrowth has posed challenges in attracting

and retaining skilled manpower in thesector. At the same time the services sectoris taking substantial share of talent fromthe market. In such a scenario there is astrong need of transcending the HCMsolution from merely being Transactionalto being more Strategic. This calls forimplementing and harnessing the StrategicHR capabilities of the advanced HCMsolutions available in the market.

firm, organization should define theintegrated business processes, deploy

integrated systems and build integratedimplementation teams.


RAPID GROWTH ORGANIZATIONS: DEMANDS OF ADYNAMIC WORKFORCE

JASON GELLER, P. THIRUVENGADAM, RESHMI DASGUPTAand SUSHMA BELLIAPPA

About the Authors

Jason is a principal with Deloitte Consulting LLP’s (Deloitte Consulting) HumanCapital practice where he leads the U.S. HR Transformation market offering groupand is the Global HR Transformation Leader.

P. Thiruvengadam is a Senior Director at Deloitte Touche Tohmatsu India Pvt.Ltd., where he leads the Human Capital Advisory Services practice. He has ledseveral projects in various areas. He has also conducted several Leadership,communication and training/workshops Programs and presented papers inNational and International Seminars.

Ms. Sushma Beliappa and Ms. Reshmi Dasgupta also work with Deloitte ToucheTohmatsu India Pvt. Ltd.

This monograph is about the HR relatedissues and challenges that are faced by

organizations in a rapid growth mode,whereby rapid growth is defined by 20%YOY increase in employee strength ordouble the employee strength over a 5 yearperiod.

Words like rapid growth, high growth, andfast growth have been used interchangeably.

High growth organizations face peopleissues that are unique and HumanResource Management (HRM) in suchorganizations needs to play a morestrategic role in understanding thesechallenges and devising ways of tacklingthe same. Growth often entails increasingnumbers of people who bring differenttypes of complexity to organization andmanagement. Fast-growth firms haveconsiderable recruitment and training

needs but may also be under significantcost pressures. Balancing these factors toensure that the organization’s growthagenda is on track can be a daunting taskfor HR leadership.

A recent survey covering the views of 658CEOs from more than 40 countries, hasfound that the primary focus of leadershipsurveyed is on how to sustain and generategrowth. According to financial analysts,global merger and acquisition activity isat an all-time high, and the value ofdeals keeps climbing. Seeking to improvetheir competitive position at home andabroad, high growth organizations face aconstantly escalating war for talent, wheredemand is outstripping supply and globalcompetition has become fierce.1

In growth firms there may well be a tensionbetween high degree and relatively less


formalization of HRM policies andpractices. But the point is that fast growthcan strain internal organizational resourcesand systems which, in turn, can putpressure on managers and employees toreact to the fast changing landscape.2

Strategic HR can Step up to a HighGrowth — Dynamic WorkforceEnvironment

Many HR leaders agree that emphasis ongrowth in their organization can create anavenue for HR to:

• Align to the core businesses

• Improve the company’s brand as adesirable and viable place to work

• Emphasize long-term workforceplanning

• Develop leadership

In line with the above strategicimperatives, the tactical areas of focus forHR would be:

1. Articulating a distinct employee valueproposition

2. Developing new learning programs,leading to new executive teambehaviors and helping leaders to framethe growth challenge for theorganization

3. Designing and staffing the growth-related organization and redefining therole and work of top leaders in thegrowth agenda

4. Nurturing and encouraging a mindsetthat moves away from silo business-lineworking style to a holistic businessapproach

For the purpose of this article, Deloitte hasexplored two areas from the above list tounderstand the subtleties and actions thatdrives HR during high growth.

1A. Managing a Growing Workforce

HR leaders, who view growth as high onthe executive team’s agenda, recognize thatattracting and recruiting top talent is acritical means to this end and put it at thetop of their list. The mind-boggling growthrates of certain sectors, and increasingcomplexity of jobs has generated atremendous demand for talent andbusinesses are finding it difficult to findqualified talent in existing and newmarkets. Once someone is hired, HR wouldplay a key role in:

• Bringing the new talent up to speed ina demanding work environment,integrating cultures and ethics, whilemeaningfully engaging the hires to helpensure prolonged employment

• Identifying, recruiting and, ultimately,engaging “innovators” in anenvironment that unleashes theircreativity. These actions are essential tosupport a business strategy thatpromotes growth

• Helping new hires to rapidly establish abroad network of relationships withco-workers that they could tap to obtainthe information they need to becomeproductive. A key challenge with newhires, both entry-level and lateral, is tobe able to quickly tap into their creativityand jump-start their productivity3

• Using a mentoring program to helpemployees adjust to the culture andvalues of their new firm

An interesting aspect of hiring talent is thatcompanies tend to focus on not bringingin wrong candidates, but in times whenskilled resources are in low supply andtalent demand is high, the objective shouldbe not only to avoid the wrong hire butmore importantly, not to reject or lose thefew candidates who may be right for theposition. One way to achieve a fast andreliable hiring process is to involve just a


few highly qualified assessors-individualsof extremely high calibre and competencefor the task, properly empowered, with theright motivation and no conflicts ofinterest.4

1B. Planning to Meet WorkforceDemands

Rigorous workforce planning has becomethat much more important to companysuccess, given the need for fast-pacedgrowth, that is taking place in an uncertainbusiness environment.

Cappelli, Head of Wharton’s Centre forHR, summarizes the dangers of having a‘deep bench’ or a ‘big talent pipeline’. Aninventory of talent is costly and ifmaintained for too long, the organizationtends to risk losing the talent andalongwith it, the investment made in hiringand training such talent. He refers to atechnique from operations research-the‘portfolio approach’ that could help reducethe odds of being wrong while forecastingtalent needs. Other operations researchpractices that Cappelli relates to talentdevelopment include shortening theforecasting cycle, reorganizing the deliveryof development programs to improveresponsiveness, and working out“queueing problems”.

Effective workforce planning in today’senvironment requires an even greaterdegree of preparedness and flexibility thanwas necessary in the past. Four key aspectsneed to be considered.

• First, companies should prepare formultiple future scenarios and createworkforce plans that reflect thesedifferent possible futures. Thesescenarios need not be limited toprojections for the next year, but canlook up to five years out, involvemultiple growth scenarios and a varietyof potential future locations

• Second, while projections can beaggregated to the total workforce levelfor purposes of planning, the mosteffective planning will involveprojections for specific segments of theworkforce whose skills are most criticalto the business

• Third, it will also be important forcompanies to remain flexible as eventsunfold in the larger environment. Highgrowth may require companies torevise their plans frequently to adapt tocircumstances in the business and labormarkets

• Finally, real-time information andtechniques will help enableorganizations to respond to rapidchanges. Companies in rapid growthmode are generally already usingleading practices such as developing aneffective balance of local and expatriatetalent, implementing systematicmentoring and coaching programs, anddefining appropriate succession plans;and in addition, combining thesepractices with tools such as humancapital dashboards to put powerful, up-to-date human capital information atthe fingertips of managers. 5

2A. Leading the growth organization

HR will need to add to its list, thedevelopment of leaders who can identifyand execute new ideas in new spaces andthe realignment of the organization systemsand structures for growth. Investing inleadership development is a part ofinstitutionalizing organic growth capability.

A former chief HR officer at a Fortune 500consumer goods company, voices concernsabout growth and leadership to managesuch growth. He notes that the company’srevenue growth has doubled in the last sixyears, but today the biggest obstacle tocontinued growth is leadership capacity.Success drivers include three key


leadership attributes for a high growthorganization: the willingness to embracechange, a knack for collaboration bothinternally and externally, and the ability toexecute a plan.

2B. Leadership at all Levels

We believe high growth organizations willneed to move from executive to distributedleadership in order to keep pace and themore organizations disperse leadershipthroughout their structure, the moreeffective and agile they can become. Whileeffective leadership at the top is needed forthe organizations’ effective functioning,this alone isn’t sufficient for organizationalsuccess.

Distributed leadership has four corecapabilities and HR would need to play acrucial role in identifying, segregating anddeveloping these capabilities:

• Sense making – The first core leadershipcapability involves making sense of thecontext in which the organization isoperating, reading the opportunitiesand threats of a changing environment.

• Relating – Involves developing keyrelationships within and acrossorganizations and bringing commitmentand energy to the task.

• Visioning – It is a process of articulatingwhat members of an organization maybe able to create in the future.

• Inventing – The final leadershipcapability is about coming up withinnovative solutions and designingnew ways of working together to realizethe vision.6

The Future HRM Trend

Global Workforce for Rapid GrowingOrganization: Is HR Equipped?

Globalization is an integral part of agrowing business. Global markets,

customers, and talent pools are centralto the growth plans of many, andperhaps most companies. For manyorganizations, growth hinges onpenetrating rapidly growing and emergingmarkets unlocked by globalization.That’s a tough challenge, especially whenthe critical opportunities and critical talentare often not in the same country. To a largeextent, future success for many companieswill depend on how well they canconnect their talent with the most profitableand strategically important businessopportunities, wherever they may be.Yet a surprising number of companiesstruggle to effectively manage this aspectof HRM.

Regardless of whether they operate inmature or rapidly developing markets,companies today have a critical needfor speed and efficiency to moveprofessionals, around the world, to preparefor and respond to opportunities inglobal production, research anddevelopment, and innovation, as wellas to optimize customer sales, service,and growth.

Companies need the ability to get the rightpeople to the right places at the right cost –quickly and efficiently. Companies alsoface an increasing need to attract, develop,deploy, and retain employees and leaderswho know how to think and operateglobally. All the while, employeeexpectations, including the different viewsof multiple generations of workers, areevolving.

In short, Deloitte believes that companiesneed a global workforce, and globalmobility, now more than ever. At the sametime, while global mobility is essential forgrowth and survival in an increasinglyglobal business environment, manycompanies aren’t sure how to build therequired capabilities.


HR Reinvention to Handle Talent Issuesin a High-growth Organization

HR demonstrated in the earlier period thatit can be a strategic player in efficiencyinitiatives by sourcing work and talent formore effective leverage, outsourcingroutine work, and moving some talentcosts from fixed to variable. For HR toremain a strategic partner in the new,growth-driven future, it must answer thecall to support and systemize innovationsthat achieve the growth goals.

Regardless of industry or sector, it isinevitable that organizations today willencounter talent management and humanresources issues with the potential toadversely impact enterprise performance.Sustained, steady top-line growth,including the creation of new growthplatforms, has real implications for HR in

innovation. This growth phase requiressignificant retooling, and the reinventionmust come most dramatically in the areasof workforce planning, leadershipdevelopment and organization design andchange.

While sustained competitive advantageand business growth is derived, not fromHRM practices themselves but the waythey are developed and integrated toachieve strategic business objectives: it isthe management’s ability to configureHRM to fit with business strategy in wayswhich are organization-specific, that leadsto competitive advantage. Growth orientedfirms can benefit from increasedinvestment in human resources andunderstanding what kind of HRMpractices and programs are most likely tobe critical for their success.

References1. Aligning HR to the CEO Growth Agenda, Donald Laurie and Richard Lynch, 2007

2. Growth and HRM, Vincent Giuca and Professor Rowena Barrett, 2009

3. Getting New Hires Up to Speed Quickly, Keith Rollag, Salvatore Parise and Rob Cross, 2005

4. Making People Decisions in the New Global Environment, Claudio Fernández-Aráoz, 2007

5. Why Workforce Planning Still Matters, Rick A. Guzzo, Jason Jeffay, 2009

6. Deborah Ancona and Henrik Bresman (2007). X-Teams: How to Build Teams That Lead, Innovate, and Succeed. Harvard BusinessPress


AN INSIDER’S DILEMMAANANDHI SRIDHARAN

About the Author

Ms. Anandhi Sridharan is an alumnus from the Indian Instituteof Bangalore. She currently manages software quality andreliability across multiple modules for the world’s largest RetailERP software. Prior to her experience in ERP, she has workedwith Indian software giant to design and develop bespokesoftware in large teams.

Prologue

It was 4.00 a.m. Monday morning and Iwas returning from work after twenty

fatiguing hours in office. I floundered overhuddled figures of construction workersgetting their eight hours as I parked thebike and threaded my way home. Earlierat work I had fought to keep myconcentration on the Rational XDEsequence diagram suffering partly fromfatigue and partly from anger. I was notthe only one.

“Kurien I can’t concentrate. Can’t we dothis tomorrow? It’s already 2.00 a.m.”

“No, this has to be delivered today, at anycost.” I wondered when Kurien wouldever understand that at 2.00 a.m. fewthings can be effective except sleep. Thereview had to be done here and now. I gaveup and stared with unseeing eyes at themonitor.

As my head hit the pillow at the ungodlyhour of 4.15 a.m. I mused comically at howexcited I had earlier been to shift toBangalore and work on this project. I had

been recruited for ABC Corporation, a USclient. I got used to my new workplace. Itdid seem a little too easy initially, settlingin and making friends and no sooner had Ithought how wonderful it was, the realitywas catching up. I was returning homefrom work later and later. Fire-fightingbecame the norm rather than otherwise.

From Within

Being an insider, the thought of why somany good people left our project keptgnawing me. The attrition was at anincredible eighteen percent. I had beenrecruited for this project called ABCCorporation - Hollywood EntertainmentCompany from the Chennai Centre. Thefirst month at work was a cakewalk - in at8.30 a.m. and out by 6.00 p.m. Mahesh, whobecame my first friend in this new project,laughed at me when I said I was going toenroll in the gym. When I asked him why,he said, “By the time this project startsyou’ll be sleeping at your desk here”. Bynature a little foolhardy, I dismissed whathe had said. Little did I realize how wrongI was.


Fourteen months into this project, I hadslept in office at least seven times, hadnot seen the sunset for almost eightmonths, weekends included. I watchedmany of my good friends and team matesquit the company. I myself would have runfrom the juggernaut had it not been for thefact that the organization was partlyfunding a higher education course thatI had enrolled in and I had to honour thecontract or pay the bond sum which I couldnot afford.

I wondered why so many good people leftthe project at crucial times. There was onlyone answer - the IT market was doing great,people got better salaries, and they weretempted to leave. Would that beoversimplifying the phenomenon? Also,what about the high level of anger andfrustration within the existing team? Whatcould account for that? So I startedanalyzing the reason why so many peopleleft the project, that too with so much angerinside.

Through this narrative, I have attemptedto address questions pertaining to HumanResources Management that employeesface and many times are unable to explain.

The context

The project was a star in terms oftechnology, functionality and visibility. Itwas won by a business Centre of Excellenceand was a strategic win for the organizationto move up the Value Chain in the RetailBusiness Domain. The success of thisproject was critical to the company makingfurther inroads into the market. This projectshould have been a dream come true foreverybody involved in every role. Thebusiness analyst should have beencheering for the richness of functionalitythe application offered. The SolutionArchitects should have been raring to make

this challenge a success. The designers anddevelopers should have been excited athaving been given the opportunity tochurn out code in C++. The Centre ofExcellence head was also the AccountManager for the project. A Centre ofExcellence was predominantly a workinggroup that interfaced with clients, triednew initiatives in the business domain anddeveloped solutions to engage with thelatest developments in the market place.I remember clearly, how my frame ofmind was, when I joined the team onJanuary 2003.

It was exciting to work on new technology,in a development project. I was genuinelyenthusiastic about being part of this projectas was the other team members who hadbeen initially recruited. In the beginningwe were a small team of around six-sevenmembers.

The Project Manager Conundrum

Soon there were new team memberscoming in, almost at the rate of three perweek. And in about three weeks’ time, bymid February, 2003, we were a team ofabout fifteen persons. The High LevelDesign was in progress and soon thedetailed designing of the system wouldbegin. There was a project kick-off meetingwhere the project was formally started andexpectations were set. We had to deliverthis solution in June no matter what. Therewere four months and everyone realizedthe deadlines were much too aggressive tobe realistic. That’s what came across mostclearly.

And then in a couple of weeks’ somethingfunny started happening. Rumourscirculated that Romi the project manager,was quitting. Kurien was her replacement.The whole affair was shrouded in mystery.Why was Romi quitting? When was she


quitting? Why was Kurien not beingintroduced to the team formally?

Being curious by nature I tried gettinginformation about this from the oldest teammembers, who had worked with Romifor the last three-four years. Romi wastouted to be the Project Manager, she hadloads of objectivity. She had been at theclient’s site during the requirementsgathering phase. When the team hears of aproject manager quitting, right after therequirement phase, it sends all the wrongsignals. Almost all responses I got werepointed in only one direction. We can neverdeliver in June. We oversold to the client.Romi knows it and she does not want toget mired into it.

A lot of the team members were grapplingwith this issue, but this was not discussedin the open. In fact the way we got toknow the Project Manager had actuallyofficially been replaced was when ourinternal websites reflected Kurien’s nameas our manager. Seeds of doubt abouttransparency were sown.

ABC Corporation Project: A typical dayat work

When I got to work between 8.45 and 9.15a.m. the entire wing was empty save for afew early worms like Romi, Srija, Rahul,and Mahesh. The morning would trudgeon and till about 11.00 a.m. the office worea deserted look.

Those of us already in, worked onwhatever we might have. Any clarifi-cations that needed to come either from theProject Manager, Module lead or fromanyone who was not around had to waittill these people arrived.

It can be very frustrating to come in earlyin the morning and wait for inputs frompeople who have not yet come in. To be

fair to all those who would walk in late –things usually began at about 4.00 p.m. atABC Corporation. People would berunning around for answers, clarifications,updates, teleconferences and whatnot. Telephonic conferences were a normand they would usually get scheduledafter 8.30 p.m. and would go on tillwell past midnight, thanks to the timedifference. More than exchanginginformation over emails both the client andthe offshore stakeholders preferredt-conferences, usually late night India time.That was one reason why timings were sorandom.

Deliveries of design/specifications wouldusually be scheduled for a Thursday orFriday. And the entire team would know itwould be nearly impossible to take it toconclusion even with 95% service level.So people would be requested, asked,cajoled, ordered and threatened to workextra hours, put in their best and makethe delivery. Of the latest delivery, on the25th of February, 2004, I remember, therewere about 200 defects to be fixed inthree weeks by a team of less thanten people. The time given was at least30% less. The over-worked and harriedteam that had withstood the onslaughtfor more than a year was in no positionto respond. There was fatigue written allover the place.

All this was in early 2004. The tone washowever set at the very beginning.Somewhere in March-April, 2003, even thebiggest dreamers and greatest survivorswere forced into disbelieving that theproject could ever be successful.

And then they left…….

Smriti was part of the core Retail team thathad gone to the client site for the


requirements. She came back fromthe client site in January. She was asincere, enthusiastic professional in herlate twenties. She was a knownperformer and had a tendency to takeup additional responsibilities and go theextra mile although she had nigglinghealth problems. Smriti was made theco-coordinator for the External Interfacesmodule. However the account managerwas not comfortable with her since she wasa new member and an “outsider to theorganization”. She was also one of the bestpeople that the team lost.

Recently, I met Smriti and we talked aboutthe old times in the project. She admittedthat even though she was part of therequirements gathering team, she had beenrequesting the manager to release her to aproject where she would not be stretchedto remain in office for over twelve hours.She had wanted to start a family, sheconfided. Smriti and the manager had hadseveral rounds of discussions about thetopic, but nothing concrete came out of it,in Smriti’s favour.

Over the next few months her personalproblems only got aggravated since shebecame pregnant. She had to spendinordinate long hours at work. Sherequested Kurien for a back-up planand asked that all her knowledge andresponsibilities be shadowed by someoneelse in the external interfaces team.The response: “There are no moreresources available. The project is fixedprice. Everyone is loaded to themaximum.” A known performer, whoenjoyed responsibility and challenge,became jaded and became disengaged.The worst happened when sometime inJune 2003 she miscarried. She tried tonegotiate for leave of absence for twomonths, but quit when her requests wereturned down.

And Then There Were None

Arun, another core team member, on hisreturn from onsite, put in his papers. He toldme that he was tired of fourteen hour workdays. He was ambitious but not at the costof wanting rewards or promotions by beingover-worked in a death march project. Hewould be content to do something wherehe was counted and had time to engage inhis interests outside of work.

Vaibhav Tiwari, the second in command,followed suit to pursue higher studies.Strangely, Romi, who was supposed toresign around this time, did not. Therewere enough rumours about what madeher stay. It was said that she used the threatof resignation to negotiate a higher salaryfor herself. However, she sustained aterrible back injury and had to rest for thetwo crucial months that the project wouldhave needed her.

Soon other members on the projectfollowed suit. The reasons carried littlevariants of “terribly long work hours, notenough understanding from the projectmanagement about achievable realisticgoals”.

First were the developers to resign. Thedesigners and the solution architectsfollowed at crucial stages. (Every stage wascrucial). The knowledge was getting lostand the systems were failing.

It came to a state with the functionalexperts were reduced to just two and werethrowing up their hands having to explainprocesses to a new team every other week.

The count had reached the high teens.

And then there were none…..

I was trying to arrive at a pattern to thismass exits. The Table below gives anindication of the reasons why people leftfrom the point of view as an insider.


From Without :

The Casualty Table

Name Age Total IT Years with Company Business Stated reason(years) Experience DELONIX joined Unit for quitting

Arun 28 >5 2 GE- TCS Retail Hectic schedule

Vaibhav 22 1 1 SP Jain Retail Higher studies

Rohit 23 1.5 1.5 CTS Retail Terrible schedule/no commensuraterewards

Sanjiv 31 >8 <1 CTS GMSBU Hectic schedule/blame game/bigger salary

Subrat 33 >10 <1 Intel GMSBU Hectic schedule/bigger salary

Smriti 28 5 5 Accenture Retail Project worsenedhealth/miscarriage

Jeena 27 4 <1 Intel GMSBU Personal Time/Salary

Moumita 28 4 <1 Back GMSBU Health worsened

Gaurav 28 4 <1 Back GMSBU Health worsened

MSSS 29 >6 <1 Intel GMSBU Hectic schedule/bigger salary

Vinod R 28 >6 <1 Intel GMSBU Hectic schedule

Romi 40 >15 >4 Retail Health concerns

Ranjit 22 1.5 1.5 IBM Retail Better salary

Gangadhar 28 >5 <1 GMSBU Hectic schedule

Vikas 22 1.5 1.5 SAP Retail

Anandravi 35 >8 <1 TIS Hectic schedule/better salary

Thaneesh 28 >5 <2 Verizon GMSBU Hectic schedule/higher salary/move to anothercity

Ramesh 27 >5 1 Satyam TIS Not comfortable inDELONIX


Pattern of Attrition

Looking at the employees who left thecompany from this project, there is apattern that emerged. The key facts thatstruck me I have listed below.

Everyone (except one person) had anexperience of over four years in theindustry.

Thirteen of them had been with theorganization for less than two years – 75%roughly.

Nine of them had not yet completed oneyear and this was their first project in anyorganization.

When I critically examined the backgroundof each of the persons who quit the projectwithin one year of joining, all of themhad joined the organization from muchsmaller software services companies. Apartfrom the salary increase that is usuallyguaranteed while shifting employment,the important factor in choosing theorganization happened to be the strongbrand name, stability and opportunitiesfor growth (vertically) that it offered.Many of my new team mates hadbeen in awe of the company before theyjoined the company. Within two monthsof joining the project, seeds of doubt

were sown about the fundamental beliefsthey carried.

The fundamental beliefs that they carriedabout the organization was that as areputed brand, they would respect theemployees, time and space, they would befair in their rewards and recognition andabove all they would invest in employeesin extenuating/trying circumstances andcare for them.

HRM Practices within Project teams

These were some questions that began toplague me as an employee and for which Isought answers. When employees exit insuch large numbers, what is the role of HRdepartment? What would the role of theline managers be in such tricky andextenuating circumstances? How shouldthey engage with recent employees in anongoing basis?

In project based organizations, whatshould be the role of HR department?Knowing that this was a high pressureproject and critical to the organization, howshould the project team selection andstaffing be done? How should the HumanResource managers engage with newemployees?

I wish I had the answers to these crucialquestions.


REFLECTIVE PRACTICEVASANTHI SRINIVASAN and P V R MURTHY

About the Authors

Vasanthi Srinivasan, a product of XLRI, has pursued the FellowProgram in Management, Indian Institute of ManagementBangalore. She is currently the Associate Professor in theDepartment of Organizational Behaviour & Human ResourcesManagement, IIM – Bangalore.

Dr. Srinivasan is the Chairperson in The Centrefor Corporate Governance and Citizenship.

PVR Murthy studied at IIT Kharagpur, IIM Calcutta and GujratUniversity, founder CEO of a search firm – Exclusive SearchRecruitment Consultants. On the boards of various bodies. e-mail:[email protected]

Recent reports indicate that the hiringsentiment is at a high after nearly18 months across all sectors and

functions. Hiring at the junior and entrylevels are likely to make a strong comeback.And it looks like Indian organizations arepoised for another rapid growth run.Against this background, we sent out asurvey questionnaire to some senior HRprofessionals who have spent over two tothree decades in the profession to reflecton four questions:

a. What were the challenges faced by theorganizations during the period ofrapid growth?

b. Has the role of line managers changedover the period of rapid growth?

c. Has the role of HR professionalschanged over the period of rapidgrowth?

d. What are the innovations thatorganizations have used during thisperiod?

e. What challenges do they foresee in thenext phase of rapid growth?

f. Any key learning from the past that HRmanagers need to remember for thefuture?

1We got quality responses from sixHR professionals and their views havebeen combined to enable a meaningfulunderstanding of the overall context ofrapid growth.

1 Grateful to following Respondents:

Ashok Reddy: Director HR at Infotech; Dr. S. Chandrasekar: VP - HR (India/South Asia) at IBM India PvtLtd; Emmanuel David: VP - HR at Ramky; L. Prabhakar: VP - HR Agri Business at ITC; Dr. SandeepKrishnan: VP - HR and Corporate Development at Acropetal Technologies; S. Y. Siddiqui: M.E.O(Administration HR, Finance, IT & COSL) at Maruti Suzuki India Ltd.


This note captures the personal views ofthe authors in their roles as HRprofessionals. We have used the phrasesthat they had used in their responsesverbatim, but have attempted to drawsome systemic conclusions out of theirexperiences. Given that they collectivelyhave experience in a number of sectors anddifferent kinds of organizations, we believetheir thoughts reflect the ideas andthoughts of the HR profession.

The first question on challenges faced bythe organizations during the period ofrapid growth yielded about 18observations which could be broadlyclassified in to three themes:

1. Creating and adding value to businessin managing and driving change. Thisincludes

� Encouraging organizational inno-vation & job content challenge

� Driving change towards developing& sustaining the competitive edge

� Alignment with organization visionand values

� Creating a high performanceoriented environment to make surethese professionals deliver

� Balancing the grown and growingparts of the same organization. Asorganizations grow over the years,there are parts of the organizationwhere existing employees expect theorganization to have matureprocesses and stable structures, butthere could be part of theorganization where growthconstantly disturbs the structuresand the equilibrium.

� Ability to size up/forecast the nextwave of growth -in terms ofstructure, skills and competenciesand leadership positions.

2. Capability of development of people -both talent pipeline and leadershippipeline

� Talent to support the new businessgrowth

� Building capabilities of employeesat the customer interface functions

� Strengthening leadership talentpipeline

� Creating a cost-effective supplychain of skills and talent to meet therapidly changing demands ofgrowth

� Creating and finding enoughleaders in time to meet the demandsof growth

3. Scaling up on HR processes andsystems to manage efficient delivery

� Putting in place quickly processes tomanage engagement, Retention andtraining of employees.

� Delivery of HR services from aconsistency, speed and uniformityperspective

� Effective On Boarding is a practicalchallenge of growth

� Attract and select high caliberprofessionals

On the second question on how the role ofline managers changed during the periodof rapid growth, there was unanimousacknowledgement that the role of linemanagers vis a vis HR has changedsignificantly during the period of rapidgrowth. In the best of companies, the linebetween Staff and Line in the context of HRis blurring. Many of the earlier functionsof HR are being now routinely andefficiently delivered by line managers. Linemanagers are increasingly beginning totake responsibility for their peopleincluding their development. This


response is more visible among the linemanagers in manufacturing contexts, sincethey have not experienced attrition in suchlarge numbers earlier.

The third question on the changing roleof the HR profession over the period ofrapid growth evoked some interestinginsights. All the respondents mentioned ofincreased expectations at senior levels thatHR would understand business. Somequotes were:

“Understand business and theeconomics of operations better”

“Need to be savvier on business andcommercial orientation”

“Delivering through collaboration withinternal and external partners”

“Expected to be able to pass thebusiness literacy test around customer,financial, strategic, industry, regulationsand competitor trends”

“Expected to be change agents onorganizational initiatives”

“HR Professionals is to auditorganization capabilities to make surethat the organization culture andprocesses reflect customer and investorexpectations”

As one respondent summed it up well,“we are expected to play all the four rolesof HR that Dave Ulrich articulatedwith equal proficiency — we have to bean administrative expert and an employeechampion; be a change agent and aBusiness partner — all in simultaneity inrapid growth organizations.”

Anecdotal evidence from the HRcommunity over the last few years seemsto also suggest that in rapid growthcontexts where there is scale andcomplexity occurring simultaneously the

transactional and transformational roles ofHR function is constantly getting re-examined.

The fourth question was the about theinnovations in HR practices that wereattempted during the period. Some of thekey innovations include:

a. Intense communication to employeeson policy changes in particular

b. Decentralization of HR - Getting closerto the business verticals and ourbusiness teams - e.g. Engineering HR& Commercial HR

c. Development of our channel partners -Vendor HR Functional Maturity Project- to uplift the HR functional capabilitiesof our vendor companies.

d. Benchmarking our HR policies andpractices

e. Constant two way communicationthrough various forums

a) Tea group meetings

b) Buddy system and mentoringprogram for campus joinees andlaterals

f. Employee connect initiatives - trainingof spouses

g. Outbound training series for shop-floortechnicians

h. Job Rotations - Cross FunctionalExposure

i. Proactive IR - Engagement model inmanaging industrial relations

j. Proactive strengthening of employeevalue proposition to ensure qualitypipeline of senior leaders

k. Dedicated teams working on growthprojects in collaboration withbusinesses


l. Hiring the first few top notch leadersfrom competition at a cost that isviewed as investment

m. Creating viable collaborations withTraining and Education institutes toensure a steady supply of talent.

n. Building a powerful employer brandand communicating the same.

o. Investing upfront on scaled versions ofall infrastructure required for people

p. Thoughtful and quick mergerintegrations which are run like projects

As is evident, rapid growth organizationsare faced with challenges of stability andgrowth simultaneously. As organizationsdouble in employee strength, theemployees within in the organization whohave spent long years expect stabilitywithin the structures, processes andpolicies of the organization. Too much ofinstability and inequilibrium can createperceptions of anarchy in minds ofemployees. As is often mentioned, the rateat which organizations change theirstrategies, plans and structures is not therate at which the average individualemployee changes. Therefore, most of theinnovations in HRM are about aligning theindividuals and teams with the intent ofthe organization.

The fifth question pertained to thechallenges that organizations are likely toexperience over the next decade given therapid growth that is envisaged at theeconomy level. A number of challenges areenumerated below. We have not attempteda thematic analysis because we believe theyare the critical areas for HR professionalswho are reading this article.

• Finding enough people with requiredskills

• Finding enough leaders

• Rapidly enabling and empoweringmanagers and devolving people -management responsibility onto them

• Engaging stakeholders to ensureharmonious co-existence

• Aligning and managing the ‘extendedorganisation’, which are an integral partof the value chain

• Managing Diversity

• Developing a multi-disciplinaryappreciation of human resourceconcepts and principles andunderstanding the science behind them

• Managing Change

• Encouraging Innovation

• Engagement and Retention of KeyTalent

• Leadership Development

• Succession Planning

• Developing Competence of HRManagers

• Managing Technological Challenges

• Managing Knowledge Workers

It is interesting to note that many of thesechallenges mentioned above by HRprofessionals are very similar to the onesthat are mentioned by CEO's and Boardsof corporations as things that keep themawake at night. Has the board roominfluenced the HR professional or is the HRprofession shaping its role to meet thedemands of a future organization?

The last question pertained to the learningsfrom the early period of rapid growthwhich needs to be ensured during the nextphase of growth. Only :

• Ensure that “values” remain the glue

• Apply filter of ‘sustainability’ in alldecisions


• Wear the hat of a Trustee

• Paradoxes will exist and needs to bemanaged

• Ability to effectively engage the mindand heart of ‘people’ across the valuechain is the key to a sustained success

• Avoiding the temptation of short cutsand quick fixes - under the highpressure of growth.

• Preventing wage inflation dilutingproductivity.

• Laying the right foundations of ethics,values and people governance.

• Do not fill your organization withpeople who lack talent, basiccompetencies, or fit with organizationalvalues and culture. In long run it

can affect the very soul of theorganization.

If organizations have to indeed managerapid growth in a sustainable manner, thereis a need to think systematically andwholistically and avoid the mistakes thatwere committed during the previousgrowth cycle. It is interesting to note that anumber of our respondents mentionedintegrity and values as critical to maintain.Our deep concern over the last decade hasbeen the missing discourse on ethics of HRprofessionals. One of the authors was oncetold to choose a more contemporary practiceto speak on when it was suggested that shewould address on Ethics of HRprofessionals. As we go forward,“Responsible HRM”, “Green HRM” and“Sustainable HRM” may well become buzzwords in the HR dictionary.


BOOK REVIEWS

RECOMMENDED READ FOR HR PROFESSIONALSDr VASANTHI SRINIVASAN

Each issue of the NHRD journal contains abook review. When PVR Murthy mentioned

to me that the role of the special issue editor isto identify books pertaining to the theme of theissue, I began to screen for books which coveredthe theme of rapid employee growthorganizations. My initial reaction was that a bookof this kind is likely to be published in the field ofstrategy or organization theory. When we beganto shortlist the books, we found that there werenone that covered this theme. It then occurredto me that while we were talking about rapidlygrowing organizations and the challenges facedby them, the reality was that the Indian contextin which they were operating was also growingat a similar pace. A large number of first timeentrants were entering the workforce becauseof rapid growth. Therefore, it was decided thatbooks that had been published on the Indiagrowth story would be identified and the keymessages from those books would becrystallized for the readers. This is not a bookreview section; what we have attempted to dois to identify popular and thought provokingbooks written on Indian growth story which wouldbe a good read for HR professionals. We believethat the insights that they bring to the table areunique, new and are likely to change thelandscape of global trade and commerce.

In 2007 Prof. Pankaj Ghemawat wrote abook titled ‘Redefining global strategy’ inwhich he raised an interesting questionas to why do so many global corporations faildespite powerful brand and border crossingadvantages? He introduced the term “semiglobalization” and argued that the real state ofthe world is semi global and that it will continueto remain so for decades to come. A semi-globalized world perspective helps companiesto create cross border strategy that have contentdistinct from the single country one size fits allstrategy. According to Prof. Ghemawat, crossborder differences are larger than the one sizefits all approach that characterizes much of whatwe know in the field of management. TheCultural, Administrative, Geographical andEconomic distances (CAGE) create differencesthat need to be understood so that organizationscan identify barriers and also create bridges thatwill allow them to create value for theirorganizations. His final recommendation is thatorganizations must have three broad strategiesfor dealing with cross border differences namely,Adaptation to adjust to differences, Aggregationto overcome differences and finally Arbitrage toprofit from the inevitable imbalances betweenmarkets. The AAA strategies require someconceptualization of organizations and

Redefining Global Strategy: Crossing Borders

in a World Where Differences Still Matter

Author : Pankaj Ghemawat

Publisher : Harvard Business School Press

ISBN NO. : 978 -1-59139-866-0


organizing and it is this capability to create andimplement such strategies effectively which isneeded in a semi globalized world.

2008 saw the publication of the book ‘IndiaArriving’ by Rafiq Dossani. Dossani’s bookcan also be read as a collection of essayschronicling the history and economic growthof India. As an expert in Indian public policy,Dossani combines the history, politics,economics and culture of India to explainand illustrate the growth of India as aneconomic power. Drawing on anecdotes andevents from Indian organizations that he hasstudied over the years, Dossani’s book isscholarly and yet written in a style which makesan easy read for managerial audience. Thebook is not about something new that anaverage Indian reader is unfamiliar; it is in thenarration of the familiar and reconstruction ofthe social milieu in the context of economicgrowth and change.

In 2009, Prof. Nirmalya Kumar of LondonBusiness School, wrote the book ‘India’s GlobalPowerhouses: how they are taking on the world’,where he chronicles the genesis and growth ofnine of India’s large global companies. The styleused is similar to Gita Piramal’s books on Indianbusinesses. A detailed description both of thesecondary literature on these companies alongwith primary data collection through interviewsis used to describe these organizations whichhave grown to become global business houseschanging the landscape of the industry. Heidentifies five key challenges for IndianMultinationals – bureaucratic restraint,infrastructure failures, Brand India perceptions,cross border acquisition and integrationchallenges and finally talent managementchallenge which include creating and developingboth a global and an innovative mind set.

While Dossani and Ghemawat have attemptedto do a China India comparison, the book titled

India Arriving: How This Economic Powerhouse Is Redefining

Global Business

Author : Rafiq Dossani

Publisher : AMACOM books

ISBN NO. : 978-0-8144-7424-2

India's Global Powerhouses: How They Are Taking on the World

Author : Nirmalya Kumar


ISBN NO. : 978-1-4221-4078-9


‘Getting China and India right’” by Profs. Anil KGupta and Prof. Haiyan Wang begins with acentral premise that being present in India andChina is not the same things as getting Chinaand India right. The authors posit that China andIndia are the only countries in the world that havefour stories simultaneously to tell, each of whichis game changing – China and India are megamarkets for almost every product or service, theyare platforms to dramatically reduce acompany’s global cost structure, they areplatforms to significantly boost a company’sglobal technology and innovation base andfinally they are the springboards for theemergence of a new breed of globalcompetitors. Building a robust growth for anorganization would mean leveraging on allthe four stories. Exploring a China + Indiastrategy for growth would allow companies toleverage the scale of both, complement thestrengths and weaknesses of each other,transfer learning from one market to another andleverage dual presence to reduce risks. Theauthors conclude by noting that the successfulglobal corporation of tomorrow will be one thatfigures out how to take advantage of threerealities: rapid growth of emerging markets andgrowing multipolarity of the world economicorder; enduring cultural, political and economicdistances across countries; and the rapidlygrowing integration of national economies.The challenges for organizing and leadershipin such organizations are worthy of beingexamined critically.

It is just seven months in to 2010 and alreadythere are two best sellers on India in the market.

The first one is book by Profs. Tarun Khannaand Krishna G Palepu titled ‘Winning inEmerging’”. The word “Emerging Markets” hasbeen abused with multiple definitions andinterpretations being offered by all. The authorstake a structural perspective to definingemerging markets. According to them, theemerging markets reflect those transactionalarenas where buyers and sellers are not easilyand efficiently able to come together. Everyeconomy would provide a range of institutionsto facilitate the functioning of markets, butdeveloping countries fall short on this. These“institutional voids” make a market emerging andare a primary source of higher transaction costsand operating challenges in such markets.Companies operating in such markets facesome strategic choices – whether to replicateor adapt, compete alone or collaborate, acceptor attempt to change the market context orwhether to enter, wait or exit such markets.Through a wide variety of examples fromdifferent countries the authors provide aframework for managers to analyze theircontexts.

‘The India Way’ penned by Prof. Peter Capelliand his colleagues is the latest addition to thegrowing body on India. What is howeverinteresting about this book is a survey conductedwith human resource practitioners in India byWharton School faculty for the National HRDNetwork. The survey results are published inthe book and a comparison of the findings witha similar survey conducted in the US is alsopresented.

The India Way: How India's Top Business Leaders Are

Revolutionizing Management

Author : Peter Capelli


ISBN NO. : 978-1-4221-4759-7


Winning in Emerging Markets: A Road Map for Strategy and

Execution

Author : Tarun Khanna & Krishna G. Palepu


ISBN NO. : 978-1-4221-6695-6

It must be noted that all the books have authorsor co-authors of Indian origin and therefore, onecould argue that their understanding and insightson the contextual aspects of the emerging Indiashould be valuable. Yet, what is also worryingis that it is the same dozen high profile Indiancompanies that seem to be covered acrossthese books. Are there no other success storiesin India or is it that many of the Indianorganizations do not know how to articulate whatthey do or is it just a case of not being interestedin showcasing.

Isn’t this the time for the HR community and theNHRD fraternity to embark on some longitudinal

studies, which will capture the evolution ofHR practices in India? An initiative of this kindexists globally. The Cranfield University hasbeen capturing data on HRM practices ofcompanies for long years now. This hasdeveloped in to a global project called CRANETwhich has been systematically collectingdata on comparative HRM practices acrosscompanies. This data is used for researchpurposes to examine the trends in the fieldof HRM. The need of the hour in India isfor such collaboration across academicinstitutions and organizations that will promoteand further the context specific understandingof the Indian economy.

NHRD firmly believes in and respects IPR and we appeal to thecontributors and readers to strictly honour the same.

For any further clarifications, please contact :

The Managing EditorDr. P V R Murthy, CEO, Exclusive Search Recruitment Consultants,

#8, Janaki Avenue, Off 4th Street, Abhiramapuram, Chennai 600 [email protected]

ABOUT THE JOURNAL

The National HRD Network publishes a semi-academic quarterly journal where in each issue isdedicated to a theme.

The journal publishes primarily three categories of articles :

• Conceptual and research based

• Contributions from thought leaders including a limited number of reprints with due permission

• Organizational experiences in HR interventions/mechanisms

Publications so far include on the themes “IT in HR”, ”Performance Management”, “Attracting andRetaining Talent”, “Career Management”, “Organizational Change”, “Global HRM”, “Women in CorporateLeadership Roles”, “Organization Development” and “Learning and Development”, “Leadership”,“Work-Life Balance”, “Institution Building” and “Coaching For Performance and Development.”

The current issue is on the theme of “Human Resources Management in Rapid Growth Organizations”.

The following persons have agreed to anchor as guest editors for the future issues :

1. Dr. Pallab Bandyopadhyay, Director - Human Resources, Citrix R&D India Pvt. Ltd. on the themeHR Competence.

2. Dr. Santrupt B Misra, CEO, Carbon Black Business & Director, Group H.R. Aditya Birla ManagementCorporation Pvt. Ltd. on the theme CEOs.

Editorial Board Members :

Dr. P.V.R. Murthy, Managing Editor is a product of I.I.T., Kharagpur and IIM, Calcutta with close to thirtyyears experience in H.R. field. He is founder and runs an executive search firm Exclusive SearchRecruitment Consultants. He is associated with a number of academic institutions. He is trained inTQM in Japan and in human processes from ISABS and NTL, U.S.A. He is the Immediate Past NationalSecretary of National HRD Network.

Aquil Busrai is Executive Director Human Resources with IBM India. He has over 36 years HRexperience, both in strategic and operational HR with blue chip organisations like Unilever in Kenyaand India, Motorola in Asia Pacific and Shell in Malaysia. He is the Immediate Past National Presidentof National HRD Network.

Dr. Pallab Bandyopadhyay is Director - Human Resources Citrix R&D India PVT Ltd. A doctoral fellowfrom XLRI and AHRD, he is trained in OD and Human Processes from NTL, USA and he believes inapplying HR concepts to practice to make it more meaningful and effective. He is a mentor and coachto many young HR professionals.

www.nationalhrd.org

National HRD Network

The National HRD Network, established in 1985, is an

association of professionals committed to promoting

the HRD movement in India and enhancing the

capability of human resource professionals, enabling

them to make an impactful contribution in enhancing

competitiveness and creating value for society.

Towards this end, the National HRD Network is

committed to the development of human resources

through education, training, research and experience

sharing. The network is managed by HR professionals

in an honorary capacity, stemming from their interest

in contributing to the HR profession.

The underlying philosophy of the NHRDN is that every

human being has the potential for remarkable

achievement. HRD is a process by which employees in

organizations are enabled to:

• acquire capabilities to perform various tasks

associated with their present and future roles;

• develop their inner potential for self and

organisational growth;

• develop an organisational culture where networking

relationships, teamwork and collaboration among

different units is strong, contributing to

organisational growth and individual well-being.

nhrd network journal issn - 0974 - 1739 · pdf filehuman resources management in rapid growth...

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