Article on "Organisation Culture - Business Manager"

Article -Organisation Culture - Business Manager HR magazine - Sept. 013

Organization culture is one of those important areas of business that is neither fully understood nor utilized to get success. It is difficult to define it in absolute terms because there is no culture absolute. It is relative. It is not feely component. It is not intangible. It is not vibe. It is one of the most important drivers that if not evolved, set and nurtured over a period of time consciously, will not bring long term sustainable success. Culture of the organization is the shadow of the leader. It cannot be manufactured. It has to be genuinely nurtured by everyone from the leader top down.
Now it comes to understanding what drives the culture of an organization? Is it power or ego of the leader? Is it encouragement or empowerment at all levels? Leadership fuels culture and culture fuels actions that consistently reflect values and beliefs. Having values and beliefs on papers in board room is one thing but making them alive and modeled throughout is another thing. Bringing the values of the organization to the life of the employees is the role of HR people. To create value driven culture, you have to hire persons using values as filter. Authenticity and value have long life.
Vibrant work culture requires openness, cross department collaboration, encouragement, empowerment, team work, trust, transparency and high EI (emotional intelligence) of people. It requires environment to flourish. Environment is built up by managers through strategic clear communication to behave, act and decide in a way that make values and beliefs alive. High EI of managers helps building environment that energize people.
HR professionals have the opportunity to act as culture builder because HR practices have significant, positive and meaningful relationship with organization culture. Such practices become the means whereby work culture is created, developed and maintained.HR can become powerful lever for shaping the culture. They are key internal catalysts for supporting and enabling the organization values. HR has to move from subject expert giving operational excellence to culture builder of the organization.
While the values of the organization are set by top leaders, it is HR that needs to act as mirror of those values and facilitate leaders in taking decisions that support and nurture those values set by them. It can also be a challenge for HR to influence the thought process of business leaders in this respect.
This month's cover theme is about organization culture. Management thinkers, professionals and experts from different industries and business organizations have captured the subject, discussed different dimensions, raised possibilities and posed many questions too for all of us to ponder.
regds,

source :
Business Manager-HR magazine
www.businessmanager.in

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ATTENTION - Pay For Performance: Innovation Killer

Pay For Performance: Innovation Killer

Pay For Performance: Innovation Killer
Frank Kalman | Talent Management

As pay for performance - linking employee compensation to effort or productivity - is increasingly accepted as a way to ensure employees are maximizing output amid an increasingly competitive economy, one study reveals the model is actually detrimental to another highly sought-after organizational goal: innovation.

Pay for performance is effective for employees in operational roles, such as a painter painting houses or a salesman hitting quotas. But when it comes to employees responsible for finding creative solutions to problems, the model is ineffective, said Gustavo Manso, co-author of a 2012 study published in the July issue of Management Science.

This is because a straight pay-for-performance model does not have a tolerance for early failure, a component essential to innovation, said Manso, an associate professor of finance at the University of California at Berkeley. Innovation is a "trial and error process," Manso said. "You have to try things that you don't know if they're going to work."

Manso and the study's co-author, Florian Ederer of the University of California at Los Angeles, argue that the perfect compensation structure for innovation is one that provides security of early failures while rewarding for long-term success.

To prove this, the authors used a lab environment with the premise of managers conceiving a lemonade stand. The study tasked three groups with coming up with all the strategic components of setting up a stand - price, location, mix of sugar and lemon. Each group was compensated under separate models: The first group would receive a fixed wage, the second group a pay-for-performance model, and the third group a hybrid "exploration" model.

The authors' hypothesis: The group operating under the hybrid model would explore more and be more likely to find superior strategy than the subjects in the two other compensation models.

The results proved just that. The subjects in the hybrid, exploration compensation model ended the experiment with the best location for the lemonade stand 80 percent of the time. Meanwhile, the subjects in the fixed wage and pay-for-performance model ended up in the best location 60 percent and 40 percent of the time, respectively.

"The problem is the subjects in the standard pay-for-performance model [are] too worried from the beginning to get it right," Manso said. "They don't try to explore a lot.

"Subjects under the fixed-wage model experiment a lot because they don't have any consequence. However, they are not keeping track of what they're doing.

Manso said the third compensation scheme ended up most successful because the group was not afraid to explore and fail early in the process. While the experiment moves along they became motivated by the prospect of being rewarded for long-term success, in turn narrowing the early exploration findings into new and more creative solutions.

In the real world, Manso said some of the most innovative companies have adopted similar schemes. This is seen most commonly with executives through the use of rewards systems built on managerial entrenchment, golden parachutes and option pricing - linking a company's long-term performance directly with an executive's compensated equity stake.

Other innovation- and creativity-driven firms have adopted similar schemes, according to the study, with some systems not only tolerating early failure but also rewarding it.

Still, the percentage of firms that properly identify and apply this kind of hybrid innovation-driven compensation structure is small, said John Bremen, managing director of talent and rewards at human resources consultancy Towers Watson.

What's important, Bremen said, is for companies to create a culture that recognizes and rewards innovation properly through compensation. He said the hybrid model showcased in the study is valid, but not enough companies properly apply it, instead creating a one-size-fits-all model where every employee is expected to spur innovation.

"It doesn't mean pay for performance isn't valid," Bremen said. "I would argue it's a different pay for performance," where employees in operational roles are rewarded for short-term results while those with long-term, transformation duties are rewarded in a longer view.

SOURCE :
[About the Author: Frank Kalman is an associate editor for Talent Management magazine.]

Bajaj Auto strike analysis- Don't Compromise on Business Vaues and Being tough pays sometime

Dear Friends,

The fifty day long workers strike at Chakan plant (Pune) of Bajaj Auto ended on 13 August 2013 with the workers union unconditionally calling it off and deciding to go to work from 14 August 2013. Around 80% workers reported for work next day. Workers union called for strike on 25 June 2013.

It can be termed as a case where to resolve the industrial relations stalemate created by workers union on certain unrealistic issues far from economic reality, if you take a tough stand; it is bound to bring results due to conviction to the cause.

In management-labour stand off, resolving the issues may be easy, but selling the solution to workers is by and large difficult. This has happened in Bajaj Auto case where union leaders pushed themselves to a wall from where there was no exit, but to surrender by withdrawing the 50 day long strike unconditionally.

Strike has never brought win-win situation in labour management relations. This should be properly understood by workers and their union leaders. Union leaders in this case made mistakes one after another and the consequences are catastrophic for workers, because they did not get anything and have lost 50 days wages. 22 workers are subjected to disciplinary proceedings. It is not loss of salary but also a loss of self respect and pride for workers. Union leaders have made the workers laughing stock. On the other hand management also lost sale of around 20,000 units in June alone.

This is the first strike at the Chakan plant of Bajaj Auto in its 16 years of operations.

Management and workers union executed an agreement in March 2010 for 9 years which lasts till 2019 with a clause that provides wage revision in three years. This wage revision was due in March-13. But union arbitrarily terminated the agreement and raised demands on the management. According to labour department workers demanded an annual hike of Rs. 10,000/- with an additional correction of Rs. 5,000/- apart from benefits of variable dearness allowance. The union had then submitted separate list of 37 demands which also seek clarity on the company’s promotion policy, eligibility for a housing loan of Rs. 5 lakh, education loan of Rs. 2 lakh and marriage loan of Rs. 50,000/-. Union also separately demanded a work study at the site to measure how much production is possible in 480 minutes.

Over and above union made audacious demand of allotting 500 shares of the company to each worker at Rs. 1/- only. The point here is to analyze what inspired workers union to raise such a absurd demand. Probably due to leading perception amongst workers that automation and improvement in productivity has resulted in a significant growth in profitability of the company and the benefits are not being shared equitably by the management, union without giving a serious thought raised the demand and gave workers a false hope.

Management moved to Industrial Labour Court against the workers union by filing unfair labour practice complaint and declaring the strike illegal. Union had no moral courage to face the court and avoided to take the notice. In the mean time management shifted the production to Aurangabad and Waluj plant and also kept Chakan plant running through trainees to some extent. From the very beginning management strategy was to be tough on the issue of discipline and share demand and make workers hiring. Further Bajaj Auto M.D. statement that the company will not agree to the demand to allot shares to employees even if the strike goes to for 500 days as even the top management has not been allotted shares, built further pressure on workers and union leaders.

Actually employees’ stock options have never been offered to blue collar employees’ in Indian manufacturing industry. This practice has only been with few IT Organisations. Tata Motors and Mahindra & Mahindra allotted shares only to top management in the R&D division and not to workers. In manufacturing culture loyalty of the employees cannot be bought by giving shares to them. Moreover, the ESOP has never been a part of union negotiations in Indian industry. It can be said that Mr. Bajaj has done a good job by rejecting this demand firmly from the day one. His stand has insulated the entire manufacturing sector of the country from such absurd demand of unions. In future workers unions will think twice before raising such demand.

Side by side management also suspended 22 workers who were found involved in various issues of indiscipline and go-slow.

At the end, workers union could not get even a face saving medium. Suspended workers have not been taken back and management only assured that suspension cases would be considered “objectively and sympathetically”. The cause as well as timing of the strike was wrong. They had to call off strike without any of their demands-including substituting new wage agreement-met.

The lesson from Bajaj Auto case is clear-management should never compromise with their basic business values and principles. In labour management conflicts, opting for short term peace will surely breed long term problems that develop in to more complex relationship and lastly workers unions should demonstrate enough maturity while raising demands. Being tough in IR is not bad always.

source :

www.businessmanager.in

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ATTENTION TO THE NEW JOB SEEKER IN IT (UTMOST IMPORTANT)

ATTENTION TO THE NEW JOB SEEKER IN IT (UTMOST IMPORTANT)

Why IT firms will hire fewer techies this year

• Posted by Gagan Randhawa on August 5, 2013 at 6:04pm in Articles

India’s IT sector might add to the nation’s woes of unemployment. Increase in automation and low attrition in the information technology sector may be hindrance for job seekers.

Job opportunities in this sector is expected to come decline by up to 17 percent to 1,50,000 in the current fiscal, according to Nasscom, a trade association of Indian information technology and business process outsourcing industry.

The $108-billion Indian IT-ITeS sector provides employment to about 3 million professionals.

When asked about the hiring environment, Nasscom President Som Mittal told PTI, “I think we will have net additions of 150,000-180,000 this year. Last year it was about 180,000.”

Explaining the declining job market, he added: "It might be less than last year, as it is getting non-linear and lower-end jobs are getting automated. The profile is changing and we need more Domain experts."

As against the industry average of 20 percent, attrition levels have also come down to around 14-15 percent. Mittal also mentioned that campus hiring may drop significantly due to change in hiring patterns.

"Campus hiring may be 60 percent of what it was last year," he said, pointing to the fact that employers are now focusing more on soft skills and leadership qualities when compared to technical skills.

Analysis showed that three years ago 80 percent focus for hiring professionals in the IT sector was based on technical skills.  "But now only 40 percent focus is on technical skills and the rest is on soft skills and Domain," Mittal assured.
 
India's four largest IT companies hiring data suggested a decline by over 60 percent in the April-June quarter of this year, according to media reports.

PTI reported that the top four IT services exporters made net additions of about 4,100 to their workforce during the quarter this year, against around 10,900 in the year-ago period.