Key Terms
Topic 1: Introduction to HRM
Human Resource Management:
The process of managing human talent to achieve an organization’s objectives.
HRM Objectives:
Is to ensure the availability of a competent and willing work force to an organization.
Societal objectives:
To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization.
Organizational objectives:
To recognize the role of HRM in bringing about organizational effectiveness.
Functional objectives:
To maintain the department’s contribution at a level appropriate to the organization’s needs.
Personal objectives:
To assist employees in achieving their personal goals, at least insofar as these goals enhance the individual’s contribution to the organization.
Human Capital Management[HCM]:
HCM refers to the task of measuring the cause and effect relationship of various HR programmes and policies on the bottom line of the organization.
HR Specialist:
These jobs are usually the entry-level positions. Included would be such roles as interviewer, compensation analyst, benefits coordinator, job analyst, and trainer in large firms there may be promotional opportunities within the specialized function.
9. HR Manager:
The HR manager is a generalist who administers and coordinates programmes cutting across functional areas. He is usually a top-ranking person, expected to know all the areas of HRM, because he has to oversee the implementation of the HR policies at the facility and advise line managers on HR issues.
HR Executive:
He is usually the vice-president of an organization, has the responsibility of linking the firm’s corporate policy and strategy with HRM.
Employee Empowerment:
Granting employees’ power to initiate change, thereby encouraging them to take charge of what they do.
Human Resource Development[HRD]:
A planned way of developing individual employees, groups and the total organization to achieve organizational goals, in an atmosphere of mutual trust and cooperation.
HR Policy:
Policies are the guidelines for action. They offer the general standards or parameters based on which decisions are reached. They serve as a road map for managers of a number of issues such as recruitment, selection, promotion and compensation.
Employee counseling:
The process through which employees are given advice in solving work related as well as personnel problems.
Collaborative work:
Technological change has resulted in hierarchical distinctions being blurred and more collaborative teamwork where managers, technicians and analysts work together on projects.
Telecommuting:
It is where employees work at home, usually with computers and use phones and the internet to transmit letters, data and completed work to the home office.
Employee Diversity:
The situation that arises when employees differ from each other in terms of age, gender, ethnicity, education. Etc.,
Flexi time:
A work scheduling system that allows employees some discretion over when they arrive at work and leave.
Disparate treatment:
When an employer treats people differently or evaluates by different standards depending on their age, sex race, or other protected categories.
Glass ceiling:
Refer to an invisible barrier that prevents women from advancing to higher levels within the organization.
Plateaued employees:
Employees who are at a standstill in their jobs, either organizationally, through a lack of promotional opportunities or personally, through lack of ability or desire.
Knowledge workers:
Workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving.
Human Resource Information Systems[HRIS]:
A computerized system that provides current and accurate data for purposes of control and decision making.
Downsizing:
Planned elimination of jobs.
Outsourcing:
Contracting outside the organization has work done that formerly was done by internal employees.
Off shoring:
The business practice of sending jobs to other countries.
Employee leasing:
The process of dismissing employees who are them hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees.
Managing diversity:
Being aware of characteristics common to employees, while also managing employees as individuals.
Employee Advocacy Role:
The role helps to define how management should be treating employees, makes sure employees can contest unfair practices, and represents the employees’ interests within the framework of its main obligation to senior management.
Nontraditional workers:
Workers who hold multiple jobs or who are “contingent” or part-time workers, or people working in alternative work arrangements.
Human Capital:
The knowledge, education, training, skills, and expertise of a firm’s workers.
Metrics:
A set of quantitative performance measures HR managers use to assess their operations.
HR Scorecard:
Measures the HR function’s effectiveness and efficiency in producing employee behaviors needed to achieve the company’s strategic goals.
Equal Employment Opportunity Commission[EEOC]:
The commission, created by Title VII, is empowered to investigate job discrimination complaints and sue on behalf of complainants.
Affirmative action:
Steps that are taken for the purpose of eliminating the present effects of past discrimination.
Sexual harassment:
Harassment on the basis of sex that has the purpose or effect of substantially interfering with a person’s work performance or creating an intimidating, hostile, or offensive work environment.
Adverse impact:
The overall impact of employer practices that result in significantly higher percentages of members of minorities and other protected groups being rejected for employment, placement, or promotion.
Disparate rejection rates:
A test for adverse impact in which it can be demonstrated that there is a discrepancy between rates of rejection of members of a protected group and of others.
Strategic Human Resource Management:
Formulating and executing HR systems-HR policies and activities- that product the employee competencies and behaviors the company needs to achieve its strategic aims.
Human Resource Planning[HRP]:
The process of anticipating and providing for the movement of people into within, and out of an organization.
Culture audit:
Audits of the culture and quality of work life in an organization.
Case Study:
Starbucks' Human Resource Management Policies and the Growth Challenge
The relationship we have with our people and the culture of our company is our most sustainable competitive advantage."
-Howard Schultz, chairman and chief global strategist of Starbucks, in 2002.1
"My biggest fear isn't the competition, although I respect it. It's having a robust pipeline of people to open and manage the stores who will also be able to take their next steps with the company."
-Jim Donald, president, Starbucks North America in 2005.2
Introduction
In January 2005, when Starbucks Coffee Company (Starbucks) was placed second among large companies in the Fortune "Best Companies to Work For" survey, it was no surprise to those familiar with the company's human resources management policies and work culture. In general, the retail industry is notorious for its indifferent attitude towards employees. Despite the fact that employees, especially those on the frontline, are critical to the success of retail businesses, most companies do not have a strong relationship with their employees, and consequently suffer from a high rate of employee turnover (In the early 2000s, employee turnover in the retail industry was around 200 percent).
In this scenario, Starbucks stood out for its employee-friendly policies and supportive work culture. The company was especially noted for the extension of its benefits program to part-time workers - something that not many other companies offered. As a result, Starbucks employees were among the most productive in the industry and the company had a relatively low employee turnover.
Though it was popular as an employer, Starbucks' main challenge in the early 2000s was whether it would be able to continue to attract and retain the right kind of employees in the right numbers, to man its rapid expansion program. Although it experienced slow growth in the initial years the company expanded rapidly after its Initial Public Offer (IPO) in 1992 and grew at an average rate of around 20 percent per annum. Analysts said that, in the light of its ambitious expansion program, Starbucks' generous human resource policies made sound strategic sense, as they kept the turnover low and provided a ready pool of experienced employees to support expansion.
However, by the early 2000s, three possible problems had to be considered - would the company be able to support its staff with the same level of benefits in the future, given the large increase in the number of employees; would the company be able to retain employees if it made any move to lower its human resource costs by cutting down on benefits; and would Starbucks be able to maintain its small company culture, an important element in its past growth.
Starbucks was founded in 1971, by three coffee lovers, Gordon Bowker (Bowker), Jerry Baldwin (Baldwin), and Zev Siegl (Siegl). Baldwin and Bowker were fond of Peet's coffee, which they drank when they were
at college in San Francisco. Even after they moved to Seattle, they continued ordering Peet's coffee by mail.
On one such occasion, Bowker got the idea of opening a coffee shop in Seattle to supply world-class coffee to Seattle residents. He talked it over with Baldwin and his neighbor Siegl, and together, the trio set up the first Starbucks store in Seattle. (Starbucks originally sold only whole bean coffee. The coffee bar concept evolved much later).
Starbucks grew at a slow pace initially and at the end of its first decade (1981), there were four Starbucks stores. The partners also opened a roasting plant in Seattle. In 1981, Howard Schultz (Schultz), a house wares company executive from New York, became interested in Starbucks.
He went to Seattle to meet the partners and learn more about the business. What he saw of Starbucks interested Schultz immensely, and he soon convinced the partners to hire him in a marketing position at the company.
Schultz saw the potential of serving ready-to-drink coffee by the mug, and suggested introducing the concept in the US. The partners however, were reluctant to extend their brand into espresso drinks, and it took Schultz a year to convince them of the potential of the idea.
Eventually, Starbucks started serving espresso coffee in 1985, when it opened its sixth store in downtown Seattle. The concept was an immense success and within two months, the store was serving over 800 customers a day (espresso sales were much higher than sales of the best selling whole bean coffee).
Schultz was keen on extending this concept to the other stores as well, but Baldwin believed that selling beverages distracted the company from the core business of selling top quality, whole bean coffee. Eventually, in 1985, Schultz left Starbucks and started his own coffee bar called Il Giornale. Bowker and Baldwin, along with a few private investors provided financial backing for this venture, and Starbucks supplied the coffee beans.
Schultz had opened Giornale in partnership with Dave Olsen (Olsen), who was previously the owner of Café Allegro, a coffee bar. Olsen and Schultz had a strong partnership as Schultz took care of the external aspects of the business, while Olsen brought his experience to the making and serving of coffee.
In 1987, Baldwin, Bowker and Siegl decided to sell Starbucks, with its six retail stores, roasting plant, and the corporate name. Schultz, along with a group of local investors bought Starbucks for $3.7 million. Eventually, he changed Giornale's name to Starbucks Coffee Company, and merged the two businesses.
Starbucks grew rapidly under Schultz's leadership. During the late 1980s, the company expanded into Chicago, Vancouver and Portland, and Schultz promised investors that Starbucks would have 125 locations by the early 1990s.
Human Resources Management at Starbucks
Starbucks realized early on that motivated and committed human resources were the key to the success of a retail business. Therefore the company took great care in selecting the right kind of people and made an effort to retain them. Consequently, the company's human resource policies reflected its commitment to its employees. Starbucks relied on its baristas and other frontline staff to a great extent in creating the ‘Starbucks Experience' which differentiated it from competitors. Therefore the company paid considerable attention to the kind of people it recruited. Starbucks' recruitment motto was "To have the right people hiring the right people."
Starbucks hired people for qualities like adaptability, dependability and the ability to work in a team. The company often stated the qualities that it looked for in employees upfront in its job postings, which allowed prospective employees to self-select themselves to a certain extent. Having selected the right kind of people, Starbucks invested in training them in the skills they would require to perform their jobs efficiently. Starbucks was one of the few retail companies to invest considerably in employee training and provide comprehensive training to all classes of employees, including part-timers.
The Human Resources' Challenge
Analysts said that Starbucks biggest challenge in the early 2000s would be to ensure that the company's image as a positive employer survived its rapid expansion program, and to find the right kind of people in the right numbers to support these expansion plans. Considering the rate at which the company was expanding, analysts wondered whether Starbucks would be able to retain its spirit even when it doubled or tripled its size. By the early 2000s, the company began to show signs that its generous policies and high human resource costs were reflecting on its financial strength.
Although the company did not reveal the amount it spent on employees, it said that it spent more on them than it did on advertising, which stood at $68.3 million in fiscal 2004.
That the company was finding its human resource costs burdensome was reflected in the fact that it effected an increase of 11 cents on its beverage prices in mid-2004. Analysts wondered whether the company's cost problems could be met by a price increase, as customers already paid a premium for Starbucks beverages. On the other hand, it would not be easy for the company to cut down on benefits, as it could result in a major morale problem within the company.
1] "The Culture Connection," www.apm.com, June 2002.
2] Gretchen Weber, "Preserving the Starbucks' Counter Culture," Workforce Management, February 2005.
Topic 2: Human Resource Planning
Human Resource Planning[HRP]:
The process of deciding what positions the firm will have to fill and how to till them.
Trend analysis:
Study of a firm’s past employment needs over a period of years to predict future needs.
Ratio analysis:
A forecasting technique for determining future staff needs by suing ratios between, for example sales volume, and umber of employees needed.
Computerized forecast:
Determination of future staff needs by projecting sales, volume of production, and personnel required to maintain this volume of output, suing software packages.
Qualifications inventories:
Manual or computerized records listing employees’ education, career and development interests, languages, special skills, and so on, to be used in selecting inside candidates for promotion.
Personnel replacement charts:
Company records showing present performance and promotability of inside candidates for the most important positions.
Position replacement card:
A card prepared for each position in a company to show possible replacement candidates and their qualifications.
Staffing tables:
Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those hobs and future (monthly or yearly) employment requirements.
Markov analysis:
A method for tracking the pattern of employee movements through various jobs.
Skill inventories:
Files of personnel education experience, interests, skills, and so on that allows managers to quickly match job openings with employee backgrounds.
Succession planning:
The process of identifying, developing, and tracking key individuals for executive positions.
Outplacement:
The process of helping unwanted present employees find new jobs with other firms.
Job:
A group of related activities and duties.
Position:
The direct duties and responsibilities performed by only one employee.
Job family:
A group of individual jobs with similar characteristics.
Task inventory analysis:
An organization- specific list of tasks and their descriptions used as a basis to identify components of jobs.
Job design:
An outgrowth of job analysis that improves jobs through technological and human considerations in order to enhance organization efficiency and employee job satisfaction.
Job characteristics model:
A job design theory that purports that three psychological states(Experiencing meaningfulness of the work performed, responsibility for work outcome and knowledge of results of the work performed) of a job holder result in improved work performance, internal motivation, and lower absenteeism and turnover.
Industrial engineering:
A field of study concerned with analyzing work methods and establishing time standards.
Ergonomics:
An inter-disciplinary approach to designing equipments and systems that can be easily and efficiently used by human beings.
Employee Involvement groups[EIs]:
Groups of employees who meet resolve problems or offer suggestions for organizational improvement.
Employee teams:
An employee contributions technique whereby work functions are structured for groups rather than for individuals and teams members are given discretion in matters traditionally concerned management prerogatives, such as process improvements, product or service development, and individual work assignments.
Job engineering:
Job engineering focuses on the tasks to be performed, methods to be used, workflows among employees, layout of the workplace, performance standards, and interdependencies among people and machines.
Techno stress:
Techno stress is stress caused by new and advancing technologies in the workplace, mostly by information technology.
Job analysis:
The procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it.
Job description:
A list of a job’s duties, responsibilities, reporting relationships, working conditions, and supervisory responsibilities- one product of a job analysis.
Job specification:
A list of job’s “human requirements”, that is the requisite education, skills, personality, and so on- another product of a job analysis.
Organization Chart:
A chart that shows the organization wide distribution of work, with titles of each position and interconnecting lines that show who reports to and communicates to whom.
Process chart:
A work flow chart that shows the flow of inputs to and outputs fro a particular job.
Participant diary/logs:
Daily listings made by workers of every activity in which they engage along with the time each activity takes.
Position Analysis Questionnaire[PAQ]:
A questionnaire used to collect quantifiable data concerning the duties and responsibilities of various jobs.
U.S.Department of Labor (DOL) job analysis
procedure:
A standardized method by which different jobs can be quantitatively rated, classified, and compared based on data, people and things scored.
Functional Job Analysis:
A method for classifying jobs similar to the DOL method, but additionally taking into account the extent to which instructions, reasoning, judgment, and mathematical and verbal ability are necessary for performing job tasks.
Job summary:
It describes the general nature of the job, and includes only its major functions or activities.
Job enlargement:
Assigning workers additional same level activities, thus increasing the number of activities they perform.
Job rotation:
Systematically moving workers from one job to another to enhance work team performance and/or to broaden his or her experience and identify strong and weak points to prepare the person for an enhanced role with the company.
Job enrichment:
Redesigning jobs in a way that increases the opportunities for the worker to experience feelings of responsibility, achievement, growth, and recognition.
Dejobbing:
Broadening the responsibilities of the company’s jobs, and encouraging employees not to limit themselves to what’s on their job descriptions.
Boundryless organization:
Organization marked by the widespread use of teams and similar structural mechanisms that reduce and make more permeable the boundaries that typically separate departments.
Competencies:
Demonstrable characteristics of a person that enable performance of a job.
Competency-based job analysis:
Describing a job in terms of the measurable, observable, behavioral competencies an employee must exhibit to do a job well.
Case Study:
Human Resource Management - Best Practices at Marriott International
"That guest's room may be our product, but our associate's caring attitude is our value. We can't measure it with statistics, and we can't manufacture it. We can deliver that value only if we can attract, retain and inspire the best people - with what we call 'The Spirit to Serve.'''1
- JW Marriott Jr., CEO, Marriott International.
"The comments from our customers is not about how nice the building is but about how nice the people are, how good the service is, how hospitable the employees are. That is what makes the difference, because people from the top all the way down to the organization really care."2
- JW Marriott Jr., CEO, Marriott International.
The Spirit to Serve
Once, when a customer checked in at an Anaheim Marriott hotel, she was in a very disturbed state of mind. It was on her way to the hotel that she learnt of her sister's death. The worst part was that she had to wait the whole night at the hotel to board a flight the next morning.As she checked into the hotel, Charles, who was looking after room service, asked her why she was upset. On hearing her reply, he assured her of any help she might need through the night. Soon after, Charles returned with a pot of coffee and a piece of apple pie, at his own expense. He also handed her a sympathy card, signed by seven of his colleagues.
By pooling some money contributed by his colleagues, he brought some flowers and gave them to her, saying, "We just wanted you to know you're not among strangers here."3
Narrating this incident to JW Marriott Jr., the CEO of Marriott International Inc4 (Bill Marriott), the customer wrote, "Mr. Marriott, I'll never meet you. And I don't need to meet you because I met Charles. I know what you stand for.
I know what your values are. I want to assure you that as long as I live; I will stay at your hotels and tell my friends to stay at your hotels. That night I realized that you care more about me as a person than you do about the few dollars I spent at your hotel."5
The Spirit to Serve Contd...
The warm and considerate attitude of employees like Charles is, perhaps, the major reason why customers across the world remain loyal to one name in the hospitality industry -Marriott. Charles, through his conduct, reflected the attitude of the 128,000 Marriott employees who strive to work with the 'spirit to serve.'Commenting on how Marriott creates loyal customers, JW Marriott said, "Our people care a lot about the guests and we work very hard to encourage our people to do so. We have reward programmes, employee celebrations and a lot of stroking of our people to make sure they recognize the value of the guest."6
Background Note
In 1927, J. William Marriott (JW Marriott) set-up a nine-seat root beer7 shop in Washington. After some time, William started serving hot food along with the root beer and named the shop as 'The Hot Shoppe.' In 1929, Hot Shoppe was officially incorporated as Hot Shoppes Inc and in 1937, Hot Shoppe, ventured into airline catering at Washington airport, serving the Eastern, American and Capital airlines.Over the next three decades, Hot Shoppes diversified into other businesses including food services management8 by starting a cafeteria at the US Treasury Building in Washington DC and the Highway Division. In 1966, the company ventured overseas, acquiring an airline catering kitchen in Caracas, Venezuela. In November 1967, its name was changed to the Marriott Corporation (Marriott).
In 1982, Marriott acquired Host International, a leading hospitality services provider in the US, becoming the largest operator of airport terminal food, beverage and merchandise facilities in the US. In the 1980s, Marriott acquired several companies including the American Resorts Corporation (vacation business, 1984), Gladieux Corporation (food service company, 1985), Service Systems (contact food service company, 1985), Howard Johnson Company (hotels & inns, 1985) and Residency Inn Company9 (1987). With the acquisition of the Saga Corporation, a diversified food service management company in 1986, Marriott became the largest food service management company in the US.
Marriott also diversified into the moderate price segment of hotels under the brand name 'Courtyard' (1983). In 1987, Marriott entered the field of economy lodging by launching the first Fairfield Inn in Atlanta, Georgia. That year, Marriott also launched its worldwide reservation centre (WRC)10 at Omaha, Nebraska. This centre became the largest one-point reservation operation in the US hotel industry...
The Marriott Way
Marriott's history of taking care of its employees dated back to its early days, when its founder, JW Marriott, counselled the company's employees individually on their personal problems at his first hotel. He valued their presence, kept them posted about the latest happenings in Marriott and gave them excellent training. JW Marriott always ensured that employees who joined the company felt themselves a part of the Marriott family. He made managers responsible for the satisfaction of their subordinates.
JW Marriott was always conscious of the fact that in the hospitality industry, providing the best service to customers was paramount...
The HR Practices
Apart from providing a competitive pay package, Marriott strived to give its employees a good work life. The company gave equal importance to non-monetary factors such as work-life balance, good leadership, better growth opportunities, a friendly work environment and training.
Employees stayed longer with Marriott as they were happy with these non-monetary factors and thought them more important.
Marriott's culture and guiding principles had a significant influence on the company's HR practices including manpower planning, recruitment and selection; training and development, employee retention and welfare initiatives and grievance redress.
Manpower Planning, Recruitment and Selection
Marriott attached a lot of importance to manpower planning. It started right from entry level and went through to higher positions. Every unit of Marriott (division or department) prepared its expansion plans over the next couple of years, and, in the process, decided on the number of entry level and managerial employees required for the expansion.Details on the number of new units planned in the given time frame (two to five years), a rough picture of the likely organization structure, the time required to develop employees who could take managerial positions, current availability of employees within Marriott and the necessity to recruit externally - all these were determined during the planning process...
Training and Development
Once the right candidates were recruited, it was important to get them accustomed to the company's unique work environment. Training and development played a key role here. These programs varied between frontline employees and managerial personnel. Over time, training programs evolved from classroom- based teaching to interactive multimedia training. Fresh recruits went through an eight-hour initial training session, during which they were given an overview of Marriott and their individual roles.
A unique feature was that senior hotel employees served lunch at the first session. During the three- month training period which followed, a mentor, addressed as 'buddy' was allotted to each recruit. The mentor guided the trainee. All trainees attended refresher sessions after the first and second months. On the final day of training, recruits enjoyed a sumptuous feast at a Marriott hotel...
Employee Retention and Welfare Initiatives
Retaining employees in the hospitality industry was vital as the cost of recruiting and training new employees was very high. Marriott operated in an industry where every day counted and weekends and holidays generated more business than weekdays.
Customer service had to be provided on a 24/7/365 basis. The implication was that employees had to go through a hectic work schedule; an average work week lasted more than 50 hours. With the increasing work load due to rising customers in the late-1990s, several key managers at Marriott left.
They wanted to devote more time to their personal lives and their jobs at Marriott were not helping the cause.
Facing this challenge, Marriott launched a new program called Management Flexibility in February 2000 on a pilot basis at three of its hotels.The aim was to assist Marriott's managers in balancing their professional and personal lives, without negatively affecting customer service or the company's financials...
Grievance Redressal System
By the mid-1990s, Marriott had a comprehensive complaint resolution system in place, known as the Guarantee of Fair Treatment (GFT), to ensure that employee grievances were addressed.
Under GFT, complaints passed through successive stages in Marriott's hierarchy, starting with the immediate superior, depending on whether or not the said employee was happy with the redress response given at each stage.
However, given the decentralized nature of Marriott's operations, and with managers handling several tasks, resolution of complaints through GFT did not quite produce the desired results.
It, therefore, decided to try new methods of complaint resolution while continuing with GFT. These methods included mediation, a toll-free hotline and peer-review...
The Benefits Reaped
Marriott's efforts over the decades to develop an employee-friendly work place earned it widespread recognition in the hospitality industry. The awards it received for 'the best place to work' were testimony. (Refer Exhibit IV for awards received by Marriott). The company reaped benefits like higher employee satisfaction and less turnover. Employee satisfaction could be gauged from the 2003 Associate Opinion Survey, in which 90% of employees surveyed expressed great pride in working for Marriott...
6] Watkins, Edward, Bill Marriott speaks, Lodging Hospitality, September 1997.
7] A carbonated soft drink made from extracts of certain plant roots and herbs.
8] Serving of food items at office buildings and large complexes through cafeterias. Normally, these cafeterias are fully dedicated to the particular office building in which they operate.
9] An all-suite hotel chain targeted at extended stay travellers.
10] WRCs are physical set-ups (like centralized train reservation centres) connected through computer networks.
1] Marriott, Jr., J.W, Our Competitive Strength, Vital Speeches of the Day, January 1, 2001.
2] Mary Zachariah, Employees cornerstone of Marriott culture, Business Times (Malaysia), September 08, 2000.
3] Marriott, Jr., J.W, Our Competitive Strength, Vital Speeches of the Day, January 1, 2001.
4] Marriott International is a leading lodging company with more than 2,800 lodging properties in the US and 69 other countries in the world. Marriott operates and franchises hotels under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Residence Inn, Courtyard, Towneplace Suites, Fairfield Inn, Springhill Suites, Ramada International and Bulgari brand names. It develops and operates vacation ownership resorts under the Marriott Vacation Club International, Horizons, The Ritz-Carlton Club and Marriott Grand Residence Club brands; operates Marriott Executive Apartments; provides furnished corporate housing through its Marriott ExecuStay division; and operates conference centres. The company is headquartered in Washington DC, and has approximately 128,000 employees. In the fiscal year 2003, Marriott International reported sales from continuing operations of $9 bn.
5] Terry McKenna, "Customer: service or care?" National Petroleum News, June 2002.
Volvo's HR Practices - Focus on Job Enrichment
To create an environment that will give satisfaction to the employees in their daily tasks is a matter for society as a whole. Due to the advanced economic and social structure of Swedish society, we have encountered earlier than more countries new problems in the organization of jobs and the working environment. We do not look upon these problems as a threat. Our familiarity with this type of question could well lead to an improvement in competitive ability."1
- Pehr G Gyllenhammar, Former President, Volvo Group in 1973.
"By creating value for our customers, we create value for our shareholders. We use our expertise to create transport-related products and services of superior quality, safety and environmental care for demanding customers in selected segments. We work with energy, passion and respect for the individual."
- Volvo's Mission Statement, www.volvo.com.
Introduction
In May 1993, the Swedish automobile major, Volvo AB (Volvo) announced the closure of its car manufacturing facility at Uddevalla, Sweden, barely five years since its launch in 1989. A year later, the company had to shutdown yet another world famous facility, the car assembly plant at Kalmar, also in Sweden.
Reacting to the two closures within a year's gap, analysts said Volvo's human centric approach towards automobile manufacturing was no longer feasible in the fiercely competitive scenario of the 1990s, with most companies striving hard to improve production efficiency. Volvo was well recognized in the industry for its employee-friendly policies ever since its inception.
Guided by the 'Volvo Way,' the company had made conscious efforts to implement job enrichment concepts such as job rotation, job enlargement and employee work groups in its manufacturing facilities (Refer Exhibit I for the Volvo Way). In the late 1960s and early 1970s, when the company faced the problem of increasing employee turnover and absenteeism, it introduced these concepts and obtained positive results.
Volvo was inspired to build a new facility keeping this work design as a basis. This reiterated the company's belief that industry needed to adapt itself to the people's requirements and not vice-versa. This concept was implemented successfully in other plants of the company too in the 1970s. The best practices in Human Relations (HR) tried and tested in these plants were passed on to new plants established in the 1980s. While investing heavily in developing new plants like Kalmar and Uddevalla, where new work design concepts were implemented, Volvo was conscious of the risks involved and the possible effect on the company's financial performance if the experiments failed.
Acknowledging this, Gyllenhammar, in Harvard Business Review wrote, "Volvo's Kalmar plant, for example, is designed for a specific purpose: car assembly in working groups of about 20 people. If it didn't work, it would be a costly and visible failure, in both financial and social terms. We would lose credibility with our people and those who are watching from outside."2
Gyllenhammar's apprehensions proved correct when Volvo closed down Kalmar plant in 1994. However, Volvo's efforts in bringing changes in work design offered valuable lessons to both the academic and corporate community.
Analysts appreciated Volvo for its constant emphasis on learning from experiences and implementing the lessons so learnt in its new initiatives. This contributed significantly to the development of human-centric production systems. These systems brought to life several theories and concepts, which had earlier only been enunciated in textbooks but rarely practised with the kind of seriousness with which Volvo did.
Background Note
Volvo was founded on July 25, 1924, when Gaustaf Larson (Larson), an engineer and Assar Gabrielsson (Gabrielsson), an economist, met over a meal and agreed to build a car suited for Sweden's roads and climatic conditions.
The two founders had worked earlier for SKF, a famous Swedish bearings manufacturer, where they nurtured the dream of building a car. In 1926, the duo prepared 10 prototypes of the car to convince SKF into investing in their company.
SKF not only agreed to invest SEK 200,000 kroner, but also lent its patented name, AB Volvo. On April 14, 1927, the new company rolled out its first car, the OU4, from a factory near Goteberg, Sweden. The day marked the official date of inception of AB Volvo (Volvo)3. In September 1929, Volvo reported its first ever profits. In 1934, Volvo launched its first bus, the B-1. The product rapidly gained acceptance as a vehicle fit for rural areas.
By the time World War II broke out in 1939, Volvo had established itself as a profitable automobile manufacturer with a broad product range.
The company's automobile engines were known for their reliability and were used in cars, buses, boats, fire tenders and military tanks. Volvo began exporting vehicles on a major scale to Latin America, Japan, China, Israel, Ireland, Holland and Belgium. Volvo's financials were boosted during the war period (1939-1945), when it supplied a large number of vehicles to the military.
In 1946, Volvo introduced its first diesel bus, the B-56, which became immensely popular as a city bus as well as a tourist coach. By 1948, Volvo emerged as a major tractor manufacturer. In 1949, Volvo rolled out its 100,000th vehicle from its assembly lines. In 1955, the company began exporting to the US.
In 1963, Volvo commenced car production in Canada, becoming the first European automobile manufacturer to set up such facilities in North America. Its manufacturing facility in Belgium became operational in 1965. Volvo created a separate truck division in 1968.The 1970s witnessed a significant change in Volvo's operations, under the leadership of Gyllenhammar. In 1972, the Volvo Technical Centre (VTC) was established, which had The HR Problem
Volvo was among Sweden's leading employers with employees numbering 41,000 in company-owned plants. Its dealer network provided employment to an additional 10,000 people as of 1973. An additional 15,000 people were employed through Volvo's sub-contractors. Volvo's products were marketed in 120 countries with 75% of its total production exported mainly to other European countries and the US...
The Job Enrichment Experiments
The changes in the organization structure facilitated easier implementation of job enrichment concepts. Volvo's efforts involved both employees and the management. The management decided to experiment with five job enrichment measures - job rotation, management-employee councils, small work groups, change implementation and employee-oriented facilities - at its manufacturing facilities. Job Rotation
Job rotation involved shifting around of jobs among workers according to a pre-determined plan. Each employee within a group was offered a job, which was different both physically and psychologically from his/her previous job...
The New HR Initiatives
Volvo introduced three new HR programs in the late 1970s and early 1980s. These were Match Project, Full Rulle (Full Speed Ahead) and Dialog. The first was introduced in 1983. It aimed at achieving five HR objectives, which were:
• Training new recruits intensively.
• Disseminating organizational objectives to all employees in the company.• Framing rules and regulations for employees to establish discipline...
The Uddevalla Plant
Uddevalla offered the best work environment for employees. Developing staff competence was deemed vital by Volvo to build quality cars as well as to achieve the organizational objectives of improving productivity, flexibility and efficiency. Also, operations had to be scaled up as Kalmar could accommodate only 600 employees, which was not sufficient. Employee representatives were involved in the plant's planning group, which had a team of researchers with diverse backgrounds ranging from engineering to psychology...
End of the Socio-Technical Approach?
While Volvo was going ahead with its human-centric approach, the external market forces in the automotive industry were changing. This forced the company to take serious measures, which stopped the progress of its job enrichment initiatives. In the early 1990s, with the declining demand for cars in the global market, it was no longer feasible for Volvo to continue operating in relatively smaller facilities like Kalmar and Uddevalla...
R&D facilities, including a safety centre and an Emission Laboratory...
1] Taylor, Lynda King, Worker participation in Sweden, Industrial & Commercial Training, January 1973.
2] Gyllenhammar, Pehr G, How Volvo adapts work to people? Harvard Business Review, July/August 1977
Topic 3:Recruitment & Selection
Recruiting yield pyramid:
The historical arithmetic relationships between recruitment leads and invitees, invitees and interviews, interviews and offers made, and offers made and offers accepted.
Job posting:
Publicizing an open job to employees (often by literally posting it on bulletin boards) and listing its attributes, like qualifications, supervisor, work schedule, and pay rate.
Posting vacancy notice and marinating lists of employees looking for upgraded positions.
On Demand Recruiting Services[ODRS]:
A service that provides short-term specialized recruiting to support specific project without the expenses of retaining traditional search firms.
Application form:
The form that provides information on education, prior work record, and skills.
Employee referral:
Employee referrals can be a good source of recruitment. When employees recommend successful referrals, they (the former) are paid monetary incentives which are called “finder fees”.
Nepotism:
A preference for hiring relatives of current employees.
Employee leasing:
The process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees.
Yield ratio:
The percentage of applicants from a recruitment source that make it to the next stage of the selection process.
Realistic Job Preview[RJP]:
Informing applicants about all aspects of the job, including both its desirable and undesirable facets.
Negligent Hiring:
Hiring workers with questionable backgrounds without proper safeguards.
Selection:
The process of choosing individuals who have relevant qualifications to fill existing or projected job openings.
Reliability:
The degree to which interviews, tests, and other selection procedures yield comparable data overtime and alternative measures.
Validity:
The degree to which a test or selection procedures measures a person’s attributes.
Criterion-related validity:
The extent to which a selection tool predicts, or significantly correlates with, important elements of a work behavior.
Concurrent Validity:
The extent to which test scores (or other predictor information) match criterion data obtained at about the same time from current employees.
Predictive validity:
The extent to which applicants’ test scores match criterion data obtained from those applicants/employees after they have been on the job for some indefinite period.
Cross-validation:
Verifying the results obtained from a validation study by administering a test or test battery to a different sample (drawn from the same population).
Validity generalization:
The extent to which validity coefficient can be generalized across situations.
Content validity:
The extent to which a selection instrument, such a test, adequately samples the knowledge and skills needed to perform a particular job.
Construct validity:
The extent to which a selection tool measures a theoretical construct or trait.
Aptitude tests:
Measures of a person’s capacity to learn or acquire skills.
Achievement tests:
Measures of what a person knows or can do right now.
Expectancy chart:
A graph showing the relationship between test scores and job performance for a group of people.
Interest inventories:
A personal development and selection device that compares the person’s current interests with those of others now in various occupations so as to determine the preferred occupation for the individual.
Work samples:
Actual job tasks used in testing applicants’ performance.
Work sampling technique:
A testing method based on measuring performance on actual basic job tasks.
Management assessment center:
A simulation in which management candidates are asked to performed realistic tasks in hypothetical situations and are scored on their performance. It usually also involves testing and the use of management games.
Unstructured or nondirective interview:
An unstructured conversational style interview in which the interviewer pursues points of interest as they come up in response to questions.
Structured or directive interview:
An interview following a set sequence of questions.
Situational interview:
A series of job-related questions that focus on how the candidate would behave in a given situation.
Behavioral interview:
A series of job-related questions that focus on how the candidate reacted to actual situations in the past.
Job-related interview:
A series of job-related questions that focus on relevant past job-related behaviors.
Stress interview:
An interview in which the applicant is made uncomfortable by a series of often rude questions. This technique helps identify hypersensitive applicants and those with low or high stress tolerance.
Unstructured sequential interview:
An interview in which each interviewer forms an independent opinion after asking different questions.
Structured sequential interview:
An interview in which the applicant is interviewed sequentially be several persons; each rates the applicant on a standard form.
Panel interview:
An interview in which a group of interviewers questions the applicant.
Mass interview:
A panel interviews several candidates simultaneously.
Behavioral Description Interview[BDI]:
An interview in which an applicant is asked questions about what he or she actually did in a given situation.
Compensatory model:
A selection decision model in which a high score in one area can make up for a low score in another area.
Multiple cutoff model:
A selection decision model that requires an applicant to achieve some minimum level of proficiency on all selection dimensions.
Multiple hurdle model:
A sequential strategy in which only the applicants with the highest scores at an initial test stage go on to subsequent stages.
Candidate-order error:
An error of judgment on the part of the interviewer due to interviewing one or more very good or very bad candidates just before the interview in question.
Selection ratio:
The number of applicants compared with the number of people to be hired.
Case Study:
Recruiting - The Cisco Way
"Our philosophy is very simple - if you get the best people in the industry to fit into your culture and you motivate them properly, then you're going to be an industry leader."
- John Chambers, CEO, Cisco Systems, in September 1997
Introduction
In 1995, global networking major, Cisco, found that despite hiring an average of 1,000 people every three months during the year, the company still had hundreds of openings. The recruitment pressure further increased the following year, when Cisco hired more than 1,000 employees every quarter - around 10% of the total jobs generated through the Internet in Silicon Valley1. When Cisco's sales soared to $ 6.4 billion in fiscal 1997 and profits to $ 1.4 billion, (a 53% increase over the previous year), the company had to double its workforce and at the same time hire the best people. The Cisco management realized that it had to adopt innovative recruitment measures to get the best people and remain the leader in the Internet era.
Foremost among these was the first of its kind online recruitment called the 'Friends program'. Michael McNeal, Director, Corporate Employment said, "Friends is designed to put some grace into the hiring process." Cisco recruiters also began to target passive job seekers, who were content and successful in their existing jobs.
Analysts said that Cisco had maintained its lead in the global infotech industry, largely due to its streamlined and modernized recruitment policies.
In 2001, the company recruited around 40-50% of its employees through 'Make a friend@Cisco' online program and other such initiatives.
Background Note
Cisco was founded in 1984 by a group of computer scientists at Stanford, who designed an operating software called IOS (Internet Operating System).
This software could send streams of data from one computer to another, which was loaded into box containing microprocessors specially designed for routing. This machine, called the router, made Cisco a hugely successful venture over the next two decades (Refer Table I for Cisco's growth).
In 1985, the company started a customer support site from where customers could download software over FTP2 and also upgrade the downloaded software. It also provided technical support to its customers through emails. In 1990, Cisco installed a bug report database in its site. The database contained information about potential software problems to help customers and developers.
It allowed customers to know whether a specific problem was unique and if not how other customers had solved it.
By 1991, Cisco's support centre was receiving around 3,000 calls a month which increased to 12,000 by 1992. To deal with the large volume of transactions, it built an online customer support system on its site.
In 1993, Cisco installed an Internet-based system for large multinational corporate customers. The system allowed customers to post queries related to their problems. Cisco also installed a trigger function called the Bug Alert on its web site. The Bug Alert sent emails on software problems within 24 hours of their discovery.
Encouraged by the success of its customer support site in 1994, Cisco launched Cisco Information Online, a public website that offered not only company and product information but also technical and customer support to customers. By 1995, it introduced applications for selling products or services on its website.
This was done mainly to transfer paper, fax, emails and CD-ROM distribution of technical documentations and training materials to the web to save time for employees, customers and trading partners, besides broadening Cisco's market reach.
In 1996, the company introduced a new Internet initiative, 'Networked Strategy' to leverage its enterprise network to foster interactive relationships with prospective customers, partners, suppliers and employees.
Recruitment at Cisco
Cisco sources revealed that the company had a policy of attracting the 'top 10-15%' people in the networking industry. It believed that if it could get the best people in the industry and retain them, it would remain the industry leader. According to Cisco's vision statement, "Attracting, growing and retaining great talent is critical to sustaining Cisco's competitive advantage."
Thus, effective recruitment was used as a powerful strategic weapon by the company. The company began to use revolutionary techniques like the 'build-the-buzz' strategy, which was centered on the primary market for its products, i.e. the Internet.
Cisco's recruiting team identified the candidates whom they felt the company 'should hire,' and then figured out the way those potential candidates did their job hunting and designed hiring processes to attract them to the company.
Cisco recruiters targeted even passive job seekers - people who were happy and successful in their current jobs. Barbara Beck (Beck), Vice President, Human Resources said, "The top 10% are not typically found in the first round of layoffs from other companies, and they usually aren't cruising through the want ads." Since the most sought after employees were not accessible, Cisco deviced a strategy to lure them. As part of its strategy to attract the best talent, Cisco changed the way it used wanted advertisements in newspapers.
Reaping the Benefits
Cisco believed that its new recruitment philosophy should also be made a part of the overall corporate culture. By late 1999, Cisco's job page was recording around 500,000 hits per month. The company generated a stream of reports about who visited the site and fine-tuned its strategy accordingly. By the time the new recruitment initiatives were established, Cisco, which was hiring approximately 8,000 people a year, received 81% of the resumes were from the web. Eventually, 66% of the new recruitments were from the candidates who had sent their resumes through the Cisco website.
It was also reported that about 45% of company's new recruits came from the Amazing People program.
1] A nickname for the region south of San Francisco that has a high number of computer companies. Silicon is the most common semiconductor material used to produce computer chips, and hence the name.
2] Acronym for File Transfer Protocol. The most common way to download and upload (get and put) files on the Internet. When you download something from a shareware page, you are connected to an FTP site, and your computer and the server use the FTP to send you the file.
Topic 4: Wage and Salary Administration
1. Valued-added compensation:
Evaluating the individual components of the compensation program to see whether they advance the needs of employees and the goals of the organization.
2. Pay-for-performance standard:
A standard by which managers the compensation to employee effort and performance.
3. Pay equity:
An employee’s perception that compensation received is equal to the value of the work performed.
4. Hourly work:
Work paid on an hourly basis.
5. Piecework:
Work paid according to the number of units produced.
6. Nonexempt employees:
Employees covered by the overtime provisions of the Fair Labor Standards Act.
7. Exempt employees:
Employees not covered by the overtime provisions of the Fair Labor Standards Act.
8. Consumer Price Index(CPI):
A measure of the average change in prices over time in a fixed “market basket” of goods and services.
9. Escalator clauses:
Clauses in labor agreements that provide for quarterly cost-of-living adjustments in wages, basing the adjustments on changes in the consumer price index.
10. Real wages:
Wage increases larger than rises in the consumer price index; that is, the real earning power of wages.
11. Job evaluation:
A systematic process of determining the relative worth of jobs in order to establish which jobs should be paid more than others within an organization.
12. Job ranking system:
The simplest and oldest system of job evaluation by which jobs are arrayed on the basis of their relative worth.
13. Job classification system:
A system of job evaluation in which jobs are classified and grouped according to a series of predetermined wage grades.
14. Point system:
A quantitative job evaluation procedure that determines the relative value of a job by the total points assigned to it.
15. Work valuation:
A job evaluation system that seeks to measure a job’s worth through its value to the organization.
16. Hay profile method:
A job evaluation technique using three factors- knowledge, mental activity, and accountability- to evaluate executive and managerial positions.
17. Wage and salary survey:
A survey of the wages paid to employees of other employers in the surveying organization’s relevant labor market.
18. Wage curve:
A curve in a scatter gram representing the relationship between relative worth of jobs and wage rates.
19. Pay grades:
Groups of jobs within a particular class that are paid the same rate.
20. Red circle rates:
Payment rates above the maximum of the pay range.
21. Competence-based pay:
Pay based on an employee’s skill level, variety of skills possessed, or increased job knowledge.
22. Comparable worth:
The concept that male and female jobs that are dissimilar, but equal in terms of value or worth to the employer, should be paid the same.
23. Wage-rate compression:
Compression of differentials between job classes, particularly the differential between hourly workers and their managers.
24. Variable pay:
Tying pay to some measure of individual, group, or organizational performance.
25. Straight piecework:
An incentive plan under which employees receive a certain rate for each unit produced.
26. Differential piece rate:
A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount.
27. Standard hour plan:
An incentive plan that sets rates based on the completion of a job in a predermined standard time.
28. Bonus:
An incentive payment that is supplemental to the base wage.
29. Spot bonus:
An unplanned bonus given for employee effort unrelated to an established performance measure.
30. Merit guidelines:
Guidelines for awarding merit raises that are tied to performance objectives.
31. Lump-sum merit program:
Program under which employees receive a year-end merit payment, which is not added to their base pay.
32. Straight salary plan:
A compensation plan that permits sales people to be paid for performing various duties that are not reflected immediately in their sales volume.
33. Straight commission plan:
A compensation plan based on a percentage of sales.
34. Combined salary and commission plan:
A compensation plan that includes a straight salary and a commission.
35. Perquisites:
Special non monetary benefits given to executives; often referred to as perks.
36. Team incentive plan:
A compensation plan in which all team members receive an incentive bonus payment when production or service standards are met or exceeded.
37. Gain sharing plans:
Programs under which both employees and the organization share financial gains according to a predetermined formula that reflects improved productivity and profitability.
38. Scalon plan:
A bonus incentive plan using employee and management committees to gain cost-reduction improvements.
39. Ruker plan:
A bonus incentive plan based on the historic relationship between the total earnings of hourly employees and the production value created by the employees.
40. Improshare:
A gain sharing program under which bonuses are based on the overall productivity of the work team.
41. Profit sharing:
Any procedure by which an employer pays, or makes available to all regular employees, in addition to base pay, special current or deferred sums based on the profits of the enterprise.
42. Employee Stock Ownership Plans (ESOPs):
Stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees.
43. Flexible benefit plans (Cafeteria plans):
Benefit plans that enable individual employees to choose the benefits that are best suited to their particular needs.
44. Worker’s compensation insurance:
Federal-or stare-mandated insurance provided to workers to defray the loss of income and cost of treatment due to work related injuries or illness.
45. Health Maintenance Organizations (HMOs):
Organizations of physicians and healthcare professionals that provide a wide range of services to subscribers and dependents on a prepaid basis.
46. Preferred Provider Organization (PPO):
A group of physicians who establish an organization that guarantees lower healthcare costs to the employer.
47. Consumer –Driven Health Plan (CDHP):
A medical insurance plan financed by employer contributions to an employee’s individual healthcare spending account.
48. Supplemental Unemployment Benefits (SUBs):
A plan that enables an employee who is laid off to draw, in addition to state unemployment compensation, weekly benefits from the employer that are paid from a fund created for this purposes.
49. Silver handshake:
An early-retirement incentive in the form of increased pension benefits for several years or a cash bonus.
50. Contributory plan:
A pension plan in which contributions are made jointly by employees and employers.
51. Non contributory plan:
A pension plan in which contributions are made solely by the employer.
52. Defined-benefit plan:
A pension plan in which the amount an employee is to receive on retirement is specifically set forth.
53. Defined-contribution plan:
A pension plan that establishes the basis on which an employer will contribute to the pension fund.
54. Vesting:
A guarantee of accrued benefits to participants at retirement age, regardless of their employment status at that time.
55. Employee Assistance Programs (EAPs):
Services provided by employers to help workers cope with a wide variety of problems that interfere with the way they perform their jobs.
56. Elder care:
Care provided to an elderly relative by an employee who remains actively at work.
57. Employee compensation:
All forms of pay or rewards going to employees and arising from their employment.
58. Direct financial payments:
Pay in the form of wages, salaries, incentives, commissions, and bonuses.
59. Indirect payments:
Pay in the form of financial benefits such as insurance.
60. Salary compression:
A salary inequity problem, generally caused by inflation, resulting in longer-term employees in a position earning less than workers entering the firm today.
61. Salary survey:
A survey aimed at determining prevailing wage rates, a good salary survey provides specific wage rates for specific jobs. Formal written questionnaire surveys are the most comprehensive, but telephone surveys are the most comprehensive, but telephone surveys and newspaper ads are also sources of information.
62. Benchmark job:
A job that is used to anchor the employer’s pay scale and around which other jobs are arranged in order of relative worth.
63. Compensable factor:
A fundamental, compensable element of a job, such as skills, effort, responsibility, and working conditions.
64. Job classification (or grading) method:
A method for categorizing jobs into groups.
65. Classes:
Grouping jobs based on a set of rules for each group or class, such as amount of independent judgment, skill, physical effort, and so forth, required. Classes usually contain similar jobs.
66. Grades:
A job classification system likes the class system, although grades often contain dissimilar jobs, such as secretaries, mechanics, and firefighters. Grade descriptions are written based on compensable factors listed in classification systems.
67. Grade definition:
Written description of the level of, say, responsibility and knowledge required by jobs in each grade. Similar jobs can then by combined into grades or classes.
68. Factor comparison method:
A widely used method of ranking jobs according to a variety of skill and difficulty factors, then adding up these ranking to arrive at an overall numerical rating for each given job.
69. Pay grade:
A pay grade is comprised of jobs of approximately equal difficulty.
70. Pay ranges:
A series of steps or levels with in a pay grade, usually based upon years of services.
71. Broad banding:
Consolidating salary grades and ranges into just a few wide levels or “bands”, each of which contains a relatively wide range of jobs and salary levels.
72. Comparable worth:
The concept by which women who are usually paid less than men can claim that men in comparable rather than in strictly equal jobs are paid more.
73. Law of individual difference:
The fact that people differ in personality, abilities, values, and needs.
74. Expectancy:
A person’s expectation that his or her effort will lead to performance.
75. Instrumentality:
The perceived relationships between successful performance and obtaining the reward.
76. Valence:
The perceived value a person attaches to the reward.
77. Variable pay:
Any plan that ties pay to productivity or profitability, usually as one-time lump payments.
78. At-risk variable pay plan:
Plans that put some portion of the employee’s weekly pay at risk, subject to the firm’s meeting its financial goals.
79. Golden parachutes:
Payments companies make in connection with a change in ownership or control of a company.
80. Sick leave:
Provides pay to an employee when he or she is out of work because of illness.
81. Severance pay:
A one-time payment some employers provide when terminating an employee.
Case Study:
EVA and Compensation Management System at Tata Consultancy Services
"The power of EVA is not simply the potential for staff to share the wealth creation with shareholders and to align long-term interest. It is more importantly a mindset change towards ownership, and is really a strategic tool to empower staff at all levels, releasing and multiplying their energies." 1
- Ho Ching, Executive Director and CEO, Temasek Holdings2 in February 2004.
"The 'economic value added' model that we follow at TCS ensures that the compensation packages of our employees are determined by the value they bring to the organization. The more they deliver, the more are their rewards."
- Tata Consultancy Services, Careers.
Introduction
During the first quarter of the financial year 2005-06, about 1000 employees whose performance was not up to the mark were asked to leave Tata Consultancy Services (TCS), the largest IT company in India. HR experts believed that this decision was based on the implementation of the EVA3 based model for assessing employees' contributions, at the company.
The first two year cycle of EVA had just been completed when the retrenchment decision was taken. Those who were asked to leave had obtained low ratings in their performance appraisal for two consecutive years, despite being under mentorship. At a time when IT manpower was in short supply and IT and BPO companies were going out of their way to reduce employee attrition, TCS's decision to retrench employees made headlines in several Indian news dailies. On April 19, 2005, TCS announced its annual results for the fiscal 2004-05. The company declared total revenues of US$ 2.24 billion and net profit of US$ 0.51 billion. TCS had been the first Indian IT company to achieve the US$ 1 billion revenue milestone in the fiscal 2002-03.
It continued its success story when it became the first Indian IT company to earn revenues of more than US$2 billion per annum.
S. Ramadorai (Ramadorai), CEO & Managing Director of TCS commented, "Consistent with our position as the pioneer of the Indian IT industry, TCS is proud to be the first IT Company to cross the two billion dollar milestone. Through our strategic initiatives we have managed to double our revenues in the last two years. We are alive to the challenges facing the industry and are geared to enhance our leadership position."4 TCS aimed at earning revenues of US$ 5 billion by 2010. The EVA compensation model was used as a basis for giving incentives to employees and the bonus declared was a part of improved EVA achieved. In the EVA model, the components of fixed and variable pay were determined. Fixed pay comprised of wages and pension while the variable pay had components like bonus, profit sharing and stock options.
1] Speech at Institute of Policy Studies Corporate Associate Lunch www.tamasekholdings.com, February 2004.
2] Temasek Holdings holds the Singapore government's investments in companies and businesses and acts as the monitoring arm of the ministry of finance. It was incorporated in 1974.
3] EVA, Economic Value Added, a name trademarked by Stern Stewart & Co. measures the value created by the company for its shareholders. It helps determine the total value created after taking into account the cost of capital. While conventional accounting methods include only the interest on debt when calculating the cost, EVA takes into account the opportunity cost of holding equity in the company - determined by the amount shareholders would have earned by investing in companies with similar profiles. EVA encourages companies to review activities that give low returns and invest in projects that maximize returns.4] "TCS - First Indian IT firm to cross $2 b rev," www.ciol.com, April 19, 2005.
According to Ramadorai, "There's no ceiling on the bonus. It can be equal to the fixed portion of the salary, providing the cell has shown that kind of EVA growth. It is not just compensation, we wish our employees to also get a feeling of ownership for their own unit, and its performance. We want each employee to feel as if they are running their business. They have to think like entrepreneurs and know the cost attached to their business and how will they add value to the investment."5
Background Note
TCS started operations in 1968, as a division of Tata Sons Limited, one of Asia's largest business conglomerates, with a wide range of interests in engineering, telecommunications, energy, financial services and chemicals. The initial journey in the IT business was not easy for TCS.
During the first two decades of its operations, TCS faced many hurdles due to the rigid government licensing system, which made it difficult to import computers. Describing the difficulties in doing business during those times, Ramadorai said, "It would take us two years in India and almost a year in the US to get all the clearances we needed to import computers. By the time we got the approvals, the model of the computer would have changed.
Then we had to explain to Indian customs officers that model numbers don't mean much, etc. But they would say, go back and get the license amended. On top of that, we had to pay 300 per cent import duties and give export commitments that were sometimes 250 per cent the value of the computers we were importing. Those were painful processes. Very few companies would have persisted through all of that."6
F C Kohli (Kohli) was the first CEO of TCS (from 1972 - 1996). In 1969, the company had 10 consultants and 200 operators who carried out IT assignments in Tata group companies. One of the first assignments that TCS undertook was the punch card managements system for Tata Iron and Steel Company (TISCO). One of the first projects done for external clients was the Inter Bank Reconciliation System (IBRS) for Central Bank of India in 1969. TCS worked on similar project for 14 other banks, and also went on to work for municipal authorities and telephone companies. During the 1970s, TCS aimed at serving foreign clients, mainly to improve its own systems and procedures, as the foreign clients demanded high service quality and capability.
5] "TCS Shifts to Performance-linked Salary Structure," The Economic Times, November 27, 2000.
6] "India's Software Patriarch Still a Pace-Setter," The Business Times, November 05, 2001.
The HR Policies
TCS gave utmost importance to its human resource function. The company believed in the premise that "good ideas can come from any level of the organization and teams can do better than the individuals."
The mission statement of HR division at TCS states, "The role of HR is to provide the context for energizing and developing people to play effective roles in ensuring that TCS becomes one of the top global consulting firms. Towards achieving this we will identify, develop, facilitate, and measure the human and technological processes in the pursuit of excellence. We will foster the values of the TATA group." (Refer Exhibit II for Vision, Mission and Values of TCS). In TCS, the HR division acted as a facilitator. The company had institutionalized all HR processes. TCS firmly believed that recruiting the right people was the secret of success of any organization especially when the supply of talent was much below the demand...
The EVA Model
TCS adopted EVA in 1999, when the company had a staff of around 15000, working at several locations across the world. Through the EVA model, TCS aimed at creating economic value by concentrating on long term continuous improvement.
EVA measured operating and financial performance of the organization and the compensation of all employees was linked to it. TCS went in for the EVA as during that time, the company was not a public limited company and hence could not have a stock option plan. There were several people who played an important role in the success of the organization, who needed to be recognized. As there was no wealth sharing mechanism in place, EVA was adopted to focus on continuous improvement rather than short term goals and also to motivate employees. Commenting on this, S Mahalingam (Mahalingam), CFO and Head Global Finance for TCS said, "We wanted to construct a defined incentive system, which would reward on the basis of profitability...
EVA-Linked Compensation System
In 1996, TCS was organized into a three dimensional model with the first dimension comprising of industry practices, which included engineering, transportation and telecom; the second dimension comprising of service practices like e-business, outsourcing, technology consulting; while global and regional operating areas formed the third dimension.
A business unit could be a part of a service, a practice, a geographical unit or a combination of all the three. Every unit was considered to be a revenue center and had its own EVA target. The units that did not fall under the purview of any of these were corporate offices and research & development, the costs of which were divided among all the units. Through EVA-linked compensation, employees could claim stakes at three EVA levels - at the organization level, at the business unit and the individual level. The individual was informed how he or she could contribute to the EVA enhancement at all three levels. EVA was controlled by revenues, capital and costs, and an individual could contribute in any or all of these areas at all the three levels...
The Benefits
The benefits of EVA were realized across all levels in the organization. Employees became aware of their responsibilities and their share in increasing the EVA of the unit and organization. All the units could determine how they had fared against the targets.
The bonus banks also helped in sustaining performance from the individuals, with close relationship between pay and performance. There was an increased sense of belonging among the employees and the employees were motivated to increase their contribution as they were also equally benefited by the increase in EVA.
EVA was not just a performance metric but an integrated management process aimed at achieving long term goals. One of the major benefits of implementing EVA in TCS was increased transparency in the organization. The internal communication within a unit had increased considerably. The decision making process became more decentralized..
The Drawbacks
The EVA-based compensation system received severe criticism during the initial years of its implementation. Industry analysts commented that EVA concentrated mainly on return on investments, due to which the growth of TCS could be restricted. In 2003, TCS caused an uproar in the IT industry when it reduced the variable salaries of employees by 10%. This was the initial impact of EVA which was implemented in the company from April 01, 2003. The reduction in the variable salary resulted in an overall reduction of monthly take-home salary for most of its employees.
Topic 5: Appraising and Managing Performance:
1. Performance appraisal:
Evaluating an employee’s current and/or past performance relative to his or her performance standards.
A process, typically performed annually by a supervisor for a subordinate, designed to help employees understand their roles, objectives, expectations, and performance success.
2. Performance management:
A process that consolidates goal setting, performance, appraisal, and development into a single, common system, the aim of which is to ensure that the employee’s performance is supporting the company’s strategic aims.
The process of creating a work environment in which people can perform to the best of their abilities.
3. Graphic rating scale:
A scale that lists a number of traits and a range of performance for each. The employee is them rated by identifying the score that best describes his or her level of performance for each trait.
4. Alternation ranking method:
Ranking employees from best to worst on a particular trait, choosing highest, them lowest, until all are ranked.
5. Paired comparison method:
Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.
6. Forced distribution method:
Similar to grading on a curve; predetermined percentages of ratees are placed in various performance categories.
7. Critical incident method:
Keeping a record of uncommonly good or undesirable examples of an employee’s work-related behavior and reviewing it with the employee at predetermined times.
8. Behaviorally Anchored Rating Scale (BARS):
An appraisal method that aims at combining the benefits of narrative critical incidents and quantified ratings by anchoring a quantified scale with specific narrative examples of good and poor performance.
9. Management By Objective (MBO):
Involves setting specific measurable goals with each employee and then periodically reviewing the progress made.
10. Electronic Performance Monitoring (EPM):
Having supervisors electronically monitor the amount of computerized data an employee is processing per day, and thereby his or her performance.
11. Unclear standards:
An appraisal that is too open to interpretation.
12. Halo effect:
In performance appraisal, the problem that occurs when a supervisor’s rating of a subordinate on one trait biases the rating of that person on other traits.
13. Central tendency:
A tendency to rate all employees the same way, Such as rating them all average.
14. Strictness/Leniency:
The problem that occurs when a supervisor has a tendency to rate all subordinates either high or low.
15. Bias:
The tendency to allow individual differences such as age, race, and sex to affect the appraisal ratings employees receive.
16. Appraisal interview:
An interview in which the supervisor and subordinate review the appraisal and make plans to remedy deficiencies and reinforce strengths.
17. Manager and/or supervisor appraisal:
A performance appraisal done by an employee’s manager and often reviewed by a manager one level higher.
18. Self-appraisal:
A performance appraisal done by the employee being evaluated, generally on an appraisal form completed by the employee prior to the performance interview.
19. Subordinate appraisal:
A performance appraisal of a superior by an employee, which is more appropriate for developmental than for administrative purposes.
20. Peer appraisal:
A performance appraisal done by one’s fellow employees, generally on forms that are compiled into a single profile for use in the performance interview conducted by the employee’s manager.
21. Team appraisal:
A performance appraisal, based on TQM concepts, that recognizes team accomplishment rather than individual performance.
22. Customer appraisal:
A performance appraisal that, like team appraisal, is based on TQM concepts and seeks evaluation from both external and internal customers.
23. Recency error:
A performance-rating error in which the appraisal is based largely on the employee’s most recent behavior rather than on behavior throughout the appraisal period.
24. Contrast error:
A performance-rating error in which an employee’s evaluation is biased either upward or downward because of comparison with another employee just previously evaluated.
25. Similar-to-me error:
A performance-rating error in which an appraiser inflates the evaluation of an employee because of a mutual personal connection.
26. Mixed-standard scale method:
A trait approach to performance appraisal similar to other scale methods but based on comparison with (better than, equal t, or worse than) a standard.
27. Essay method:
A trait approach to performance appraisal that required the rater to compose a statement describing employee behavior.
28. Behavior Observation Scale (BOS):
A behavioral approach to performance appraisal that measures the frequency of observed behavior.
29. Career:
The occupational positions a person has had over many years.
30. Career management:
The process for enabling employees to better understand and develop their career skills and interests, and to use these skills and interests more effectively.
31. Career development:
The lifelong series of activities that contribute to a person’s career exploration, establishment, success, and fulfillment.
32. Career planning:
To deliberate process through which someone becomes aware of personal skills, interests, knowledge, motivations, and other characteristics; and establishes action plans to attain specific goals.
33. Career planning and development:
The deliberate process through which a person becomes aware of personal career-related attributes and the lifelong series of steps that contribute to his or her career fulfillment.
34. Reality shock:
Results of a period that may occur at the initial career entry when the new employee’s high job expectations confront the reality of a boring, unchallenging job.
35. Mentoring:
Formal or informal programs in which mid-and senior-level managers help less experienced employees-for instance, by giving them career advice and helping them navigate political pitfalls.
36. Promotions:
Advancements to positions of increased responsibility.
37. Transfer:
Reassignments to similar positions in other parts of the firm.
38. Retirement:
The point at which one gives up one’s work, usually between the ages of 60 and 65.
39. Preretirement counseling:
Counseling provided to employees who are about to retire, which covers matters such as benefits advice, second careers, and so on.
Topic 6: Training and Development:
1. Employee Orientation:
A procedure for providing new employees with basic background information about the firm.
The formal process of familiarizing new employees with the organization, their jobs, and their work units.
2. Training:
The process of teaching new employees the basic skills they need to perform their jobs.
3. Negligent training:
A situation where an employer falls to train adequately, and the employee subsequently harms a third party.
4. Task analysis:
A detailed study of a job to identify the specific skills required.
The process of determining what the content of a training program should be on the basis of a study of the tasks and duties involved in the job.
5. On-the-job training(OJT):
Training a person to learn a job while working on it.
A method by which employees are given hands-on experience with instructions from their supervisor or other trainer.
6. Apprenticeship training:
A structured process by which people become skilled workers through a combination of classroom instruction and on-the-job training.
A system of training in which a worker entering the skilled trades is given thorough instruction and experience, both on and off the job in the practical and theoretical aspects of the work.
7. Job Instruction Training (JIT):
Listing each job’s basic tasks, along with key points, in order to provide step-by-step raining for employees.
8. Programmed learning:
A systematic method for teaching job skills involving presenting questions or facts, allowing the person to respond, and giving the learner immediate feedback on the accuracy of his or her answers.
9. Simulated training:
Training employees on special off-the-job equipment, as in airplane pilot training, so training, costs and hazards can be reduced.
10. Job aid:
Is a set of instructions, diagrams, or similar methods available at the job site to guide the worker.
11. Electronic Performance Support Systems (EPSS):
Sets of computerized tools and displays that automate training, documentation, and phone support, integrate this automation into applications, and provide support that’s faster, cheaper, and more effective than traditional methods.
12. Management development:
Any attempt to improve current or future management performance by imparting knowledge, changing attitude, or increasing skills.
13. Succession planning:
A process through which senior-level openings are planned for and eventually filled.
14. Action learning:
A training technique by which management trainees are allowed to work full-time analyzing and solving problems in other departments.
15. Case study method:
A development method in which the manger is presented with a written description of an organizational problem to diagnose and solve.
16. Management game:
A development technique in which teams of managers compete by making computerized decisions regarding realistic but simulated situations.
17. Role playing:
A training technique in which trainees act out parts in a realistic management situation.
18. Behavior modeling:
A training technique in which trainees are first shown good management techniques in a film, are asked to play roles in a simulated situation, and a re then given feedback and praise by their supervisor.
A approach that demonstrates desired behavior and gives trainees the chance to practice and role-play those behaviors and receive feedback.
19. In-house development center:
A company-based method for exposing prospective managers to realistic exercises to develop improved management skills.
20. Outsourced learning:
The outsourcing of companies learning functions to major consulting firms.
21. Organizational development:
A special approach to organizational change in which employees themselves formulate and implement the change that’s required.
22. Controlled experimentation:
Formal methods for testing the effectiveness of a training program, preferably with before-and –after tests and a control group.
23. Organization analysis:
Examination of the environment, strategies, and resources of the organization to determine where training emphasis should be placed.
24. Competency assessment:
Analysis of the sets of skills and knowledge needed for decision oriented and knowledge intensive jobs.
25. Person analysis:
Determination of the specific individuals who need training.
26. Instructional objective:
Desired outcomes of a training program.
27. Behavior modification:
A technique that operates on the principle that behavior that is rewarded, or positively reinforced, will be exhibited more frequently in the future, whereas behavior that is penalized or unrewarded will decrease in frequency.
28. Cooperative training:
A training program that combines practical on-the-job experience with formal educational classes.
29. Internship program:
Programs jointly sponsored by colleges, universities, and other organizations that offer students the opportunity to gain real life experience wile allowing them to find out how they will perform in work organizations.
30. E-learning:
Learning that takes place via electronic media.
31. Transfer of training:
Effective application of principles learned to what is required on the job.
32. Benchmarking:
The process of measuring one’s own services and practices against the recognized leaders in order to identify areas for improvement.
33. Cross-training:
The process of training employees to do multiple jobs within an organization.
Case Study:
Employee Training and Development at Motorola
"Few companies take their commitment to employability of people more seriously than Motorola."1
- Sumantra Ghoshal, Christopher a Bartlett & Peter Moran2 in Sloan Management Review.
"Training and a strong learning ethic are embedded parts of Motorola's culture...The corporation learned some time ago that dollars spent on training programs not only empowered their employees but provided the necessary skills for the company's marketplace dominance."3
- James Borton, Columnist, Asia Times.
Top Training Company in the World
For nearly eight decades, the US based Motorola Inc. (Motorola) has been recognized as one of the best providers of training to its employees in the world. Motorola began training its employees' right in 1928, the year of its inception, on the factory floor as purely technical product training.
Training, at that time, just meant teaching new recruits how to handle the manufacturing equipment to perform various predetermined tasks assigned to them. But by the 1980s, Motorola had emerged as a model organization in the corporate world for employee education, training and development.
The innovative training programs of Motorola turned training into a continuous learning process. In the 1980s, the training initiatives of the company culminated in the setting up of the Motorola Education and Training Center, an exclusive institute to look after the training and development requirements of Motorola's employees.
The institute was later elevated to the status of a university - Motorola University - in 1989. These training experiments became such a resounding success that employee productivity improved year after year and quality-wise Motorola's products became synonymous with perfection.Leading companies all over the world visited Motorola's headquarters to study the high-performance work practices of the company. They discovered that Motorola's success was built on the strong foundations of corporate-wide learning practices and that Motorola University was the cornerstone of corporate learning.
Top Training Company in the World Contd...
In recognition of its excellent training and development practices, the American Society for Training and Development (ASTD)4 named Motorola the ‘Top Training Company' and conferred on Robert Galvin (Galvin), the former CEO of the company, its ‘Champion of Workplace Learning and Performance Award' for the year 1999. Speaking on Motorola's training initiatives and Galvin's contribution, Tina Sung, President and CEO of ASTD, said, "Galvin is a true champion of employees being an integral part of the organizational success. He set the corporate standard for investing in education and has demonstrated that training and development pay off in productivity, performance and quality."5
In recognition of its excellent training and development practices, the American Society for Training and Development (ASTD)4 named Motorola the ‘Top Training Company' and conferred on Robert Galvin (Galvin), the former CEO of the company, its ‘Champion of Workplace Learning and Performance Award' for the year 1999. Speaking on Motorola's training initiatives and Galvin's contribution, Tina Sung, President and CEO of ASTD, said, "Galvin is a true champion of employees being an integral part of the organizational success. He set the corporate standard for investing in education and has demonstrated that training and development pay off in productivity, performance and quality."5
Background Note
Motorola was founded in 1928 when the Galvin brothers, Paul and Joseph, set up the Galvin Manufacturing Corporation, in Chicago, Illinois, USA. Its first product was a "battery eliminator," which allowed the consumers to operate radios directly using household current instead of batteries.
In the 1930s, the company successfully commercialized car radios under the brand name "Motorola," a word which suggested sound in motion by combining "motor" with "Victrola6." In 1936, Motorola entered the new field of radio communications with the product Police Cruiser, an AM automobile radio that was pre-set to a single frequency to receive police broadcasts.
In 1940, Daniel Noble (Noble), a pioneer in FM radio communications and semiconductor technology, joined Motorola as director of research. Soon, the company established a communication division followed by a subsidiary sales corporation, Motorola Communications and Electronics in 1941.
The Motorola trademark was so widely recognized that the company's name was changed from Galvin Manufacturing Corporation to Motorola Inc. in 1947.
Motorola entered the television market in 1947. In 1949, Noble launched a research & development facility in Arizona to explore the potential of the newly invented transistor. In 1956, Motorola became a commercial producer and supplier of semiconductors for sale to other manufacturers.The company began manufacturing integrated circuits and microprocessors in a bid to find customers outside the auto industry. In 1958, Motorola opened an office in Tokyo, to
Training and Development Initiatives
The Initial Efforts
Motorola had started training its employees' way back in the 1920s, and the importance of training continued to grow. Till the early 1980s, Motorola had its own standard employee development activities in which training was the key element.
During those days, when people were recruited for manufacturing, the company looked for three essential qualities in the employees - the communication and computational skills of a seventh grader; basic problem solving abilities both in an individual capacity and as a team player; and willingness to accept work hours as the time it took to achieve quality output rather than regular clock hours.
The quality of the output was the primary consideration for Motorola, and employees were expected to make full efforts to achieve quality. Most of the employees learned their job through observing the seniors at work and learning through the trial and error method. The training lessons imparted to them involved techniques to improve their communication skills and sharpen their calculation skills...
The Motorola University
After conducting various training experiments that spanned a few decades, Motorola came to understand that training involved more than designing and implementing one particular program for a set of employees. To keep improving performance, training should be a continuous learning process involving each and every person in the organization. Normally, training was an ad hoc measure, whereas education gave the recipient a vision. Education was viewed as an investment rather than a cost. Therefore, Motorola decide to elevate MTEC to the status of a university in 1989...
Focus on e-Learning
Motorola University created a new internal institute named College of Learning Technologies (CLT) to develop educational delivery systems through satellite, Internet and virtual classrooms.
This department was responsible for providing innovative learning via virtual classrooms, online experiences, use of CD-ROMS and through multimedia such as video and satellite conferences. The university placed a large selection of courses and training materials on its intranet , available around the world at any time to its employees...
4] Founded in 1944, ASTD is the world's largest association dedicated to workplace learning and performance professionals.
5] "ASTD recognizes Robert Galvin," www.qualitydigest.com, November 2000.
6] Victrola is a brand of gramophones made by the Victor Talking Machine Company.
1] Sumantra Ghoshal, Christopher A Bartlett & Peter Moran, "A New Manifesto for Management," Sloan Management Review, Spring 1999.2] At the time of writing the above mentioned article (1999), Sumantra Ghoshal was a strategic leadership professor at the London Business School; Christopher A. Bartlett was a professor of business administration at the Harvard Business School; and Peter Moran was an assistant professor of strategic and international management at the London Business School.
3] James Borton, "Motorola University scores high grades in China," www.news.cens.com, July 04, 2002.
Training Employees of IBM Through e-Learning
E-learning is a technology area that often has both first-tier benefits, such as reduced travel costs, and second-tier benefits, such as increased employee performance that directly impacts profitability."
- Rebecca Wettemann, research director for Nucleus Research.1
Introduction
In 2002, the International Business Machines Corporation (IBM)2 was ranked fourth by the Training3 magazine on its 'The 2002 Training Top 100' list (Refer Exhibit I). The magazine ranked companies based on their commitment4 towards workforce development and training imparted to employees even during periods of financial uncertainty. Since its inception, IBM had been focusing on human resources development. The company concentrated on the education and training of its employees as an integral part of their development. During the mid 1990s, IBM reportedly spent about $1 billion for training its employees.
However, in the late 1990s, IBM undertook a cost cutting drive, and started looking for ways to train its employees effectively at lower costs.
After considerable research, in 1999, IBM decided to use e-learning (Refer Exhibit II) to train its employees. Initially, e-learning was used to train IBM's newly recruited managers.
IBM saved millions of dollars by training employees through e-learning. E-learning also created a better learning environment for the company's employees, compared to the traditional training methods. The company reportedly saved about $166 million within one year of implementing the e-learning program for training its employees all over the world. The figure rose to $350 million in 2001.
During this year, IBM reported a return on investment (ROI)5 of 2284 percent (Refer Exhibit III) from its Basic Blue e-learning program. This was mainly due to the significant reduction in the company's training costs and positive results reaped from e-learning.
Andrew Sadler, director of IBM Mindspan Solutions6, explained the benefits of e-learning to IBM, "All measures of effectiveness went up. It's saving money and delivering more effective training, while at the same time providing five times more content than before." By 2002, IBM had emerged as the company with the largest number of employees who have enrolled into e-learning courses.
However, a section of analysts and some managers at IBM felt that e-learning would never be able to replace the traditional modes of training (Refer Exhibit IV) completely.
Rick Horton, general manager of learning services at IBM, said, "The classroom is still the best in a high-technology environment, which requires hands-on laboratories and teaming, or a situation where it is important for the group to be together to take advantage of the equipment."Though there were varied opinions about the effectiveness of e-learning as a training tool for employees, IBM saw it as a major business opportunity and started offering e-learning products to other organizations as well. Analysts estimated that the market for e-learning programs would grow from $2.1 billion in 2001 to $33.6 billion in 2005 representing a 100 percent compounded annual growth rate (CAGR).
Background Note
Since the inception of IBM, its top management laid great emphasis on respecting every employee. It felt that every employee's contribution was important for the organization. Thomas J. Watson Sr. (Watson Sr.)7, the father of modern IBM had once said, "By the simple belief that if we respected our people and helped them respect themselves, the company would certainly profit." The HR policies at IBM were employee-friendly...
Online Training at IBM
In 1999, IBM launched the pilot Basic Blue management training program, which was fully deployed in 2000. Basic Blue was an in-house management training program for new managers. It imparted 75 percent of the training online and the remaining 25 percent through the traditional classroom mode.
The e-learning part included articles, simulations, job aids and short courses. The founding principle of Basic Blue was that 'learning is an extended process, not a one-time event.' Basic Blue was based on a '4-Tier blended learning model' (Refer Table I). The first three tiers were delivered online and the fourth tier included one-week long traditional classroom training.
The program offered basic skills and knowledge to managers so that they can become effective leaders and people-oriented managers. The managers were divided into groups of 24 members each.
Each group then entered the first tier of the Basic Blue program (without interaction with the other members of the group - learning from information)...
e-Learning at IBM - Future Plans
The e-learning projects of IBM had been successful right from the initial stages of their implementation. These programs were appreciated by HR experts of IBM, and other companies. The Basic Blue program bagged three awards of 'Excellence in Practice' from the American Society for Training & Development (ASTD) in March 2000. It was also included among the ten best 'world-class implementations of corporate learning' initiatives by the "e-Learning across the Enterprise: The Benchmarking Study of Best Practices" (Brandon Hall) in September 2000...
5] A measure of a corporation's profitability calculated by dividing the fiscal year's income with common stock and preferred stock equity plus long-term debt. In general, ROI can be considered the income which an investment returns in a year.
6] IBM's e-learning division. It offered e-learning consulting, content development and solutions installations to large corporations worldwide.7] Watson Sr. joined IBM in 1914 as the managing director and later on, took control of the company after the death of the chairman, George W Fairchild, in 1924.
1] As quoted in 'E-Learning delivers a 2284% ROI for IBM,' www.elearningmag.com, October 2001. Headquartered in Wellesley, Massachusetts, Nucleus Research is a company involved in ROI research. It also offers expert advice, analyses, and financial modeling tools to help companies calculate the actual return that technology brings to the corporate bottom line.
2] IBM is the world's leading manufacturer of computer hardware. Some of its products include desktop and notebook PCs, mainframe and servers, storage systems, and peripherals. IBM is also the second largest software provider (the first one is Microsoft) and one of the leading manufacturers of semiconductors.
3] Training magazine is a professional development magazine that promotes training and workforce development as a business tool. The magazine covers management issues like leadership and succession planning, HR issues like recruitment and retention, and training issues like learning theory, on-the-job skills assessments, and aligning core workforce competencies to enhance the impact of training and development programs on the company's bottom line.
4] Apart from the pay and other incentives, these companies concentrated on building a corporate culture that encouraged creation and application of knowledge, not only for the betterment of the company, but also for the betterment of individual employees.
Topic 7: Recent Trends in HR
1. International HRM:
International HRM is the resoult of an interplay among the three dimensions human resource activities, types of employees and countries of operation.
2. Host Country Nationals (HCNs):
HCNs also called as local nationals, they are the employees from the local population. A worker from Tamilnadu employed by an American firm operating in India would be considered a host country national.
3. Parent or Home Country Nationals (PCNs):
PCNs also called as expatriates, they are the people sent from the country in which the organization is headquartered. An American manager on assignment in India is an expatriate.
4. Third Country Nationals (TCNs):
TCNs are from a country other than where the parent organizations’ headquarters or operations are located. If the American firm employs a manager from Great Britain at facilities in India, he would be considered a third country nationals.
5. Ethnocentrism:
It is a cultural attitude marked by the tendency to regard one’s own culture as superior to others. Sending home country executives abroad- thinking that they will be able to deliver the goods – may be an appropriate strategy in the initial stages of expanding company operations world-wide as these officials know what to do immediately.
6. Polycentrism:
In the polycentric corporation, there is a consciousbelief that only host country managers can ever really understand the culture and behavior of the host country market; therefore, the foreign subsidiary should be managed by local people.
7. Geocentrism:
Geocentrism assumes that management candidates must be searched on a global basis, without favoring anyone. The best manager for any specific position anywhere on the globe may be found in any of the countries in which the firm operates.
8. Culture shock:
It refers to the frustration and confusion (experienced by people who settle overseas) that result from being constantly subjected to strange and unfamiliar cues about what to do and how to get it done.
9. Balance sheet approach:
Compensation system designed to match the purchasing power in a person’s home country.
10. Codetermination:
Representation of labor on the board of directors of a company.
11. Industrial relations:
It generally refers to the collective relations between employers and employees as a group.
12. Industrial conflict:
Organized protest against prevailing industrial conditions raised by a group or a class of workers.
13. Strike:
A collective stoppage of work by a group of workers.
14. Lock-out:
Closing down of an undertaking or the suspension of work or the refusal of an employer to continue to employ any number of persons employed by him.
15. Closure:
In case of closure the employer not only shuts down the place of business but also suspends all the transactions of his business.
16. Layoff:
In case of layoff some workers are refused employment whereas under lock out all the workers are refused work. Under layoff theplce of employment need not be closed.
17. Retrenchment:
Termination by the employer of the services of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action.
18. Arbitrator:
A person who is appointed to play the role of an mpire while resolving differences and disputes between two parties.
19. Standing orders:
Rules and regulations which govern the conditions of employment of workers.
20. Code of discipline:
It consists of a set of self-imposed obligations voluntarily formulated by the central organization of workers and employers.
21. Conciliation:
The practice by which the services of neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement or agreed solution.
22. Voluntary arbitration:
The process in which the disputing parties show willingness to go to an arbitrator (a third party) and submit to his decision voluntarily.
23. Adjudication:
It is the process of settling disputes through the intervention of a third party appointed by the Government.
24. Industrial dispute:
Any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen which is connected with the employment or non-employment or the terms of employment or with the conditions of labor of any person.
25. Grievance:
Any discontent or dissatisfaction, whether expressed or not, whether valid or not, arising out of anything connected with the company which employee thinks, believes or even feels to be unfair.
26. Whistle blowing:
Employee disclosure of an employer’s illegal, immoral or illegitimate practices to persons or organizations that may be able to take connective actions.
27. Just cause:
Sufficient justification for taking employment related actions.
28. Due process:
In employment matters, the opportunity for individuals to explain and defend their actions against charges of misconduct or other reasons.
29. Right to privacy:
Defined in legal terms for individuals as the freedom from unauthorized and unreasonable intrusion into their personal affairs.
30. Employment at will:
The right of an employer to fire an employee without giving reason and the right of an employee to quit when he or she chooses.
31. Misconduct:
Violation of established rules and norms of behavior (both formal and informal).
32. Standing orders:
Service rules and other agreed terms of employment certified by an authority as per the provisions of the Industrial Employment (Standing orders) Act, 1946.
33. Discipline:
In a restricted sense, it is the act of imposing penalties for wrong behavior; broadly speaking, it is orderliness, conformance to established rules and codes of conduct.
34. Wrongful discharge:
Occurs when an employer terminates an individual’s employment for reasons that are illegal or improper.
35. Downsizing:
The process of reducing, usually dramatically, the number of people employed by the firm.
36. Suspension or layoff:
A situation in which the employees are temporarily taken off work, being told there is no work for them but that management intends to recall them when work is available.
( Applicable only to lay-off, in suspension, the employee is not allowed to work until departmental enquiry leads to further course of action, spanning a range of possibilities from reinstatement to dismissal.)
37. Dismissal:
Termination from employment for any of the misconducts mentioned in the Industrial Employment(Standing orders) Act, 1946.
38. Termination interview:
The interview in which an employee is informed of the fact that he or she bas been dismissed.
39. Grievance mediation:
Process where a neutral party assists in the resolution of an employee grievance ( that is moving toward or is actually at impasse).
40. Arbitration award:
Final and binding award issued by an arbitrator in a labour-management dispute.
41. Domestic enquiry:
An opportunity provided to an accused person to defend himself by presenting his own witnesses and other evidence.
42. Lock-out:
Temporary closure of a unit.
43. Red-hot stove rule:
The theory that discipline should be immediate, consistent, and impersonal, and should include a warning.
44. Collective bargaining:
A procedure by which the terms and conditions of employment of workers are governed by agreements between their bargaining agents and employers.
45. Negotiation:
An interpersonal process used by two or more parties whereby both or all modify their demands to reach an agreement.
46. Conciliation:
It is a method of setting industrial disputes with the help of an outsider.
47. Arbitration:
It is a way of settling industrial disputes between two or more parties by means of a decision of an impartial body in cases where efforts towards conciliation have failed.
48. Labor contract:
A labor contract is a formal agreement between a union and management which specifies the conditions of employment and the union-management relationship over a mutually agreed upon period of time.
49. Strike:
A cessation of work by a body of persons employed in any industry acting in combination or a concerted refusal or refusal under common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment (ID Act).
50. Lockout:
The temporary closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him (ID Act).
51. Representative union:
As per Bombay Industrial Relations Act, a union, which is able to muster 15 percent of the total number of employees employed in one industry.
52. Good faith bargaining:
Both parties are making every reasonable effort to arrive at agreement; proposals are being matched with counter proposals.
53. Bargaining zone:
Area within which the union and the employer are willing to concede when bargaining.
54. Quality of Work Life (QWL):
QWL denotes all the organizational inputs which aim at the employee’s satisfaction and enhancing organizational effectiveness. It also refers to favorableness and unfavorableness of the job environment for people.
Case Study:
Managing Attrition in the Indian Information Technology Industry
"Our assets walk out of the door each evening. We have to make sure that they come back the next morning."
- N R Narayana Murthy, Chairman and Chief Mentor, Infosys Technologies Limited in 2005.1
Introduction
The year 2004-2005 was another successful year for the Information Technology (IT) industry in India with total software and services revenues recording a high of $22 billion for the year 2004-2005 (Refer Exhibit I). The employee base also showed a whopping increase to cross the one million mark in the year 2005. However, despite the growth in the overall employee base, companies were struggling to retain their existing employees. Analysts observed that managing attrition in the industry was important because skilled professionals formed the crux of this knowledge-intensive industry. What's more, the cost of recruitment and training was a huge expense for most IT firms.
Handling the menace of attrition was therefore very important to IT companies. Attrition affected the quality of service and also led to higher Training & Development expenditure, affecting the overall performance of the organization. IT companies in India were taking steps to counter the rising levels of attrition.
Companies were beginning to realize the importance of factors other than salary with which to motivate their employees to stay. A healthy work environment, continuous employee learning, work-life balance, recognition and corporate brand building were some of the key initiatives taken up by IT companies in recent years to manage attrition. In 2004, Infosys Technologies Limited (Infosys)2 devised a policy of taking security deposits from fresh graduates who joined the company at the entry level to discourage them from leaving the company during the training period whereas Wipro Technologies Ltd3 (Wipro) started a matchmaking service for its employees.
The purpose of this service was to help employees chose their life partners within Wipro in the hope that if employees picked spouses from the same company, they could spend more time together, say while traveling/dining etc. thereby improving the work-life balance.
Trends in Attrition
Liberalization of the Indian economy in 1991 paved the way for the growth of the IT industry. The most prominent players in the Indian IT industry by the mid-1990s were Tata Consultancy Services4 (TCS), Infosys, Wipro, Satyam Computer Services Limited5 (Satyam), Polaris Software Labs6 (Polaris), and Patni Computer Systems Limited7 (Patni) (Refer Exhibit II).
By 1995 there was a new trend of ‘poaching' of employees by rival IT firms. Poaching necessarily meant luring skilled employees of a rival company by offering better pay and fringe benefits.
Over the years, more and more software professionals were also emigrating to foreign countries, particularly to the US.
By late 1998, the Y2K8 problem was hanging over companies across the globe and software services from Indian IT service companies were increasingly in demand. In 1999, of the total number of H1-B visas given to foreign workers by the US, half were to Indian IT professionals. The average starting yearly salary in computer software jobs, in that year was $ 60,000 - nearly 10 times the average salary for a computer professional in a comparable job in India. The employee turnover in 1999-2000 in Indian IT companies was around 15-20% with the cost of replacing an employee running at over 120% of the salary per employee.
Combating Attrition
Experts are of the view that since the IT industry thrives on individuals with a vital knowledge base, the industry should help employees develop their knowledge base further in addition to giving them appropriate monetary and other compensation in order to retain talent. Combating attrition involves management of people and a thorough understanding of the human psyche. High levels of employee turnover occur due to a combination of various workplace environment influences and personal choices made by the employees. In 2003, a National Association of Software and Service Companies (NASSCOM) survey identified some of the major drivers of attrition (Refer Table I)...
RecruitmentEffective recruitment strategies can help organizations in employee retention. Companies following the traditional methods of recruitment observed that a major drawback of the traditional selection processes was either a poor response or a mismatch between company goals and individuals' expectations...
Compensation and Rewards
Incentives to employees play a vital role in motivating and retaining them in the organization. Compensation and rewards in the IT industry have long included a basic pay component along with a bonus pay when the company made higher profits. Later firms initiated performance based pay that rewarded the employee based on his contribution to the overall company profits...
Organization Culture
Studies and surveys analyzing the psyche of the employee have found that the work environment has a major impact on the behavior of an employee. An effective retention strategy would involve acknowledging the employee as the internal customer and aligning the organizational strategies with employee needs and wants...
Work-Life Balance
Employees differentiate a good employer from any other employer through the feeling of ‘wellbeing' that is generated at the workplace. A balance between work and the personal goals and wants of an employee contributes positively to the retention of employees...
Learning & Growth
The dynamic nature of technology requires the IT industry to upgrade its operations frequently. So, another way to retain employees is to help them update their knowledge from time to time through training programs...LeadershipSurveys also identified poor leadership as one of the reasons for employee attrition. It was observed that leaders incapable of motivating and guiding employees pushed employees to change jobs frequently. Wipro initiated the ‘Wipro Leaders' Qualities Survey' in 1992...
Emerging Challenges
By 2004, most Indian IT companies started positioning themselves as global firms. Many companies already had offices in foreign countries. For instance, Infosys had development centers in Canada, China and the Czech Republic...
4] Tata Consultancy Services is an Information Technology consulting services and business process outsourcing organization. It was established in 1968. The company posted revenues of Rs. 97.27 billion and a net profit of Rs.22.56 billion for the financial year 2004 - 2005.5] Satyam Computer Services Limited, established in 1987 is a leading global consulting and IT services company. For the financial year 2004-2005, Satyam reported revenues of Rs. 71.164 billion and a net profit of Rs.34.64 billion.
6] Polaris Software Lab limited, incorporated in 1993, is a technology solutions provider in the Banking and Financial Services sector. Around 58 per cent of the company's revenues come from the financial sector. The company reported revenues of Rs.7.87 billion and a net profit of Rs. 0.74 billion for the financial year 2004-2005.
7] Patni Computer Systems limited, established in 1978, is a global IT Services provider. Patni posted revenues of Rs. 14.13 billion and a net profit of Rs 2.51 billion for the financial year 2004.
8] The Y2K problem refers to a software error due to the small memory space of the first generation computers. To save on space on the first generation computers' memory, the four-digit Gregorian year was abbreviated to the last two digits. This was all right in the twentieth century. With the advent of year 2000, representation of the year in two digits would have caused failures in arithmetic, incorrect software would have assumed that the maximum value of a year field was "99" and would roll systems over to "00" which could be mistakenly interpreted as 1900 rather than 2000, resulting in negative date calculations and thereby causing worldwide information collapse.
1] R. Subramanium, "Infy stresses more on human assets", www.economictimes.com, May 22, 2005.
2] Infosys Technologies Ltd, established in 1981, provides consulting and IT services to clients globally. The company for the financial year 2004-2005 recorded revenues of Rs.71.296 billion and a net profit of Rs.18.917 billion.
3] Wipro Technologies Ltd., was established in 1980 and provides IT Services, Solutions & Products. The company recorded revenues of Rs. 81.70 billion and a net profit of Rs. 16.21 billion for the financial year 2004-2005.
Case 1:Cirque Du Soleil's Human Resource Management Practices
Introduction
In April 2004, Montreal, Canada-based Cirque du Soleil (Cirque)2 had to pay US$ 600,000 to settle an HIV discrimination case against it. A performer with Cirque, Matthew Cusick (Cusick), filed a discrimination complaint against the company in the federal court after he was asked to leave as he was tested HIV+ve. This settlement mandated that the anti-discrimination policies of the company should be revised and all the employees should be provided anti-discrimination training. Talking about the incident, Suzzane Gagnon (Gagnon) Vice President, Human Resources, Cirque, remarked, "It's too bad that it did happen, but I think we have better management practices today.
Following this settlement, Cirque worked hard to ensure that its reputation remained untarnished by the incident. The HR department was given training on the prevailing discrimination laws and the responsibilities of the employers. All the employees spread across the world were educated about HIV and other diseases by experts in the field.
The case proved to be an eye opener for Cirque, which had always had a reputation of being an undiscriminating, gay-friendly organization. Commenting on the case, Hayley Gorenberg, Cusick's attorney, said, "The case called (Cirque's gay-friendly image) into question for a lot of folks, and justifiably so.
But Cirque showed a certain willingness on their part to be fully engaged in making the changes that they need to make."4 As a result of the case, Cirque came up with new HR policies and practices. Cirque, an entertainment company, had shows combining several entertainment elements like traditional circus, ballet, opera, and theater. The company organized both permanent shows and touring shows.
Cirque had changed the face of circus with its innovative practices. As of 2007, 3,000 people, with average age of 35 years, from more than 40 countries were employed with Cirque. To manage such a diverse workforce, it had a dynamic HR team which had to be 'constantly on the move'.
Talking about how difficult the HR task at Cirque was at times, Gagnon said, “Guy Laliberte (Cirque du Soleil's founder) says that we reinvented the circus. But sometimes you have to reinvent HR.”5In a span of over two decades, Cirque which began as a small company with 73 performers, had spread its operations across the world. The company had two regional offices at Amsterdam and Las Vegas in addition to the headquarters in Montreal.
As the company grew, Cirque had to undergo a complete paradigm shift when it came to recruitment, training, and even planning out HR policies for its employees.
For instance, in early 2005, Sylvain Carrier (Carrier), Director – Compensation, Benefits, and HR Systems, and his team reviewed and revamped Cirque's group insurance system. For this purpose, they had to measure the liabilities and risks of general insurance and human capital.
They wanted a consistent insurance policy and insurance provider for all employees of the company. However, this was very difficult to achieve because of the global spread of the Cirque employees and so the company decided to differentiate its insurance coverage on the basis of four geographical locations – the International Headquarters in Montreal, the Las Vegas office, the Amsterdam office, and the touring shows (all tours grouped as one location).
Such a policy ensured that the performers got satisfactory coverage, wherever they were located in the world. Cirque was quite clear that it wanted only the best talent as its performers...
Background Note
In 1980, Gilles Ste-Croix (Ste-Croix), with skills in stilt-walking , along with some performers founded Les Echassiers de Baie-Saint-Paul (Les Echassiers), and began street performances. Soon Laliberte and Daniel Gauthier (Gauthier) joined the group. In the same year, Gauthier and Ste-Croix planned to turn Le Balcon Vert, a performing artists' youth hostel that they managed into an organized performing troupe...
Recruitment and Selection
Cirque's management believed that the company was as good as its employees. However, they did not have any predefined rule that only experienced people would be selected. While recruiting new employees, five major attributes were evaluated – creativity, commitment, responsibility, team-play and passion.
Only the quality of people mattered. Gagnon said, “The two owners of this company started it because no one would give them jobs. They were too young and had no experience.
Training
Of the total, almost seventy five percent of Cirque's performers were selected from competitive sports and then over about six months, they were trained to become artists, which meant that other than acrobatics, they learnt to act, sing, and play music. Interestingly, Cirque functioned without any make-up artists...
Culture and Work Environment
At Cirque, the artists were given their own space and a creative environment where they were free to share their ideas. Cirque also provided the artists an opportunity to grow both professionally and personally. The work place was projected as a home-away-from-home and the colleagues were more like family members than co-workers.The artists were allowed to bring their families along on tours. At Cirque, the work place was more like a playground. The atmosphere was open and inviting.
Managing Cultural Diversity
Starting with Alegria in 1995, Cirque saw an influx of Chinese, Russian, Asian, French, and English speaking artists and employees. This resulted in vast cultural gaps which made communication difficult between artists and technicians.
It also affected the quality of the show. In an effort to overcome this problem, Cirque's HR team undertook a basic language training program for the performers to close such gaps. There were also many conflicts that arose due to cultural diversity.
For example, the laws regarding sexual harassment were more stringent in the US than in Canada. Kissing to greet friends and co-workers was quite regular in Canada but could be considered a form of sexual harassment in the US and some Asian cultures. In such cases, any complaint from an employee would lead to the company facing legal issues.
Communication
Open and unhindered communication within Cirque was like a corporate policy which insiders at Cirque cited as the reason for problems getting addressed and solved so quickly, worldwide. Whenever employees had a problem or an issue they could easily write or talk to their supervisors about it and expect the issue to be addressed...
The Future Beckons
It was important for Cirque to retain artists who were very talented and rare to find. A case in point was the 25-year-old Brazilian dwarf, Alan J. Silva (Silva), who was spotted in Sao Paulo. In the Las Vegas show Zumanity, Silva performed in a role especially created for him. He performed with a female gymnast who was almost 6 feet tall. The problem arose when he had to be replaced for a few days due to a shoulder injury. Although another dwarf was brought in from Brazil to perform the role, it just didn't work out and so Silva's part was removed till he was ready to perform...
1] Arupa Tesolin, "Business at the Big Top: Four Rings for Creativity and Innovation," August 08, 2007.
2] Cirque Du Soleil, which means "Circus of the Sun" in French is a privately held entertainment company headquartered in Montreal, Quebec, Canada. It is estimated that the annual revenue of the company is about US$ 600 million.
3] Cindy Waxer, "Cirque du Soleil's Balancing Act,"
www.workforce.com, January 2005.
4] Cindy Waxer, "Cirque du Soleil's Balancing Act,"
www.workforce.com, January 2005.
5] Cindy Waxer, “Cirque Du Soleil's Balancing Act,”
www.workforce.com, January 2005.
Pink Slip Parties - A New Human Resource Buzzword
When you come to an event like this, you realize you are not alone, and that helps."
- An Enthusiastic Attendee of Pink Slip Parties, in March 2000.
A Party with a Difference
It was a late Wednesday evening in April, 2002. Hundreds of people crowded before the 'Hush' restaurant in New York. Their cars jammed the entire street and spilled over onto the adjacent lanes as well. These people had gathered for a party that was scheduled to begin at 7.00 pm. At seven sharp, the people were allowed into the restaurant and the party began. Like all other parties, this one had food, music and drinks. However, there was something unusual about this party. All the attendees wore glow-in-the-dark bands on their wrists in red, green and yellow colors. And despite the fact that many people seemed to be relaxing, tapping their feet to the music (and a few dancing), there was a strong undercurrent of gloom.
Though there were many who were making new acquaintances and forming new friendships, many others were found sitting in the hall's dark corners looking gloomy and sipping drinks. After around only two hours, the party came to an end.
For the uninitiated, a party that wound up so early, and at which no particular announcements were made, would perhaps seem rather strange. However, for many people (especially those in the information technology sector) who had lost their jobs in the wake of the slowdown in global economy, such parties were a blessing in disguise. Popularly known as 'pink slip parties,' these parties were becoming popular in many parts of the world during the 21st century. Personnel from the human resources (HR) departments of many companies, especially those in the information technology (IT) sector, were amongst the most frequent visitors to such parties.
By late-2002, the concept of pink slip parties had become an integral part of HR. It was increasingly being seen as a 'new age' recruitment avenue that not only helped companies get qualified employees easily, but also helped thousands of laidoff employees revive their careers and lives...
About Pink Slips Parties
Pink slip parties derive their name from the 'pink slip' - a piece of paper given to employees, informing them that they have been permanently discharged from their jobs, and asking them to seek employment elsewhere. The use of pinkslips started in the US in 1915. As these discharge slips were written on pink colored paper, they came to be known as pink slips, and the name stuck. A 'Pink Slip Party' is essentially a party for bringing together discharged/laidoff employees and prospective employers. Pink slip parties are thus like networking events/career fairs. They act as forums that help in the quick establishment of new relationships between employees and employers, and help people find a new job or a new employee (as the case may be)...
Attending the Party
Pink slip parties were usually held once every month on a specified day (such as the first Wednesday of the month, the last Friday of the month, second Monday of the month etc). In some cases, these parties were held on a weekly basis. The ideal candidates for pink slip parties were skilled professionals in need of a job, employers, professional recruiters (consultancy firms), human resource directors and support service providers (for laidoff employees). Many job seekers, though not confident of securing a job immediately at the party, just attended the party in order to network with recruiters and people from various business backgrounds and to enjoy the free food and drinks...
After the Party
While there were many supporters of pink slip parties, the concept also attracted a lot of criticism by late-2002. According to some attendees who failed to secure a job immediately, these parties were of no help. Analysts said that before the IT sector downturn, IT professionals were able to secure a new job in just two to six weeks, while after the downturn; the time had increased to three to four months. Hence it was not appropriate to say that pink slip parties did not work if they did not yield immediate employment opportunities.
3 comments:
Hi
I like this post:
You create good material for community.
Please keep posting.
Let me introduce other material that may be good for net community.
Source: Employee appraisal form
Best rgs
Peter
Wow, you seem to be very knowledgable about this kind of topics.”-”;’ supplier quality control
We thank you for this great article
شركة تلميع سيارات بالرياض
شركة تلميع أسطح سيارات بالرياض
شركة غسيل سيارات بالرياض
شركة تلميع سيارات بجنوب الرياض
شركة تلميع سيارات بشمال بالرياض
Post a Comment