Curve in a Bell Curve

So much these days over Bell Curve that it has become infamous for its inability to earn employee trust. At least that is what one can read from the recent trend of HR moving away from Bell Curve method of performance management. Is the system at fault or the process at fault? or is it that the nature of organisation has changed over the last couple of decades that such a method is out of sync to the emerging business needs. It could also well be that all had its say.

Classification of performance standards is a scientific approach. However segregation methods adopted can dilute its integrity. For eg what criteria is laid down for a 'superlative'/'oustanding' performance. Is it based on 'a recent event' or over one year or rather a consistency in 'lower level of performance' for say , 'excellence/very good' last 3 years, or 'weighted average' rating from multiple raters or that rank within an alternate ranking  amongst such 'superlative' performers. In any case it cannot be based on short duration of a business cycle. In other words the reliability of the system depends on how well the 'curve' from 'excellence/very good' to 'outstanding/superlative' is managed; and how well this gets transparently administered restores the faith of employees in the system.

The duration of the curve is so vital that it should pre-empt such ratings from knee-jerk reactions or pre-conceived 'quota' fixations. Many companies fix some 'x' % as outstanding or 'y' percentage as poor ratings, and the requirement for testing for the curve process gets lost. The management/duration of the curve is more significant for 'poor' rating classification. Else , the main intent of performance management ie 'motivation' will get lost. That could also result in throwing the baby along with bath water during downside lay-offs.

succession for sustainability or growth ?

Organisations too grow via 'connecting dots'. Control on that connecting process alone can help ensure growth and development of an organisation. One can reflect on the  integrity of the process, its potential to fuel future business cycles. for eg we know that any succession planning aim for business continuity with progression rather than regression. often leaders take a short term view on this and lose sight of long term implications.

We know the process need to facilitate sustainability; that the successor should be able to take the mantle from where his predecessor left off and move forward.  Creativity and innovation values gets cultured in a 'people setting' ,from such capabilities. However leaders can be seen relying on market sources ( read new hires ) for props. The process ,then drains the knowledge momentum, leaving little potential for innovation or growth.

The successor has a great opportunity to infuse a positive climate, for employees  'to perform' and see value in 'capitalising' their potential. Lack of an alert succession planning system often point to leadership failure and non compliance to stated values of the organisation. Even in adverse market conditions, an effective succession planner will focus on building base strength, so that organisations can rebound with vigour when market normalises. Such companies often can be seen taking pivotal roles in an industry displacing companies which focused on downsizing alone during adverse market conditions. Some fail to see that window of opportunity during dips in the cycle.

C level analytics

Analytical ability transcends knowledge of tools or basic cognitive abilities. Delegating that activity to lower levels makes no sense. Real time analytics happens inside Board room. Data gets integrated to business priorities and to drive timely decisions to influence and steer future course of business direction. It is a forward oriented activity. Not a statistical dumb report.

One fails to understand why the analyitical tools and products in the market project their ability to dissect base data. Who needs that and for what ? Does it make sense to know demographics on a daily basis via a dashboard ?  Any analytical tool for that matter should help to steer business drivers , real time, with changing market dynamics. It is a strategic handle and not a ctv monitor. Not an OTC drug like the way many IT companies sells.

Business analytics is a cognitive activity that should help one to steer strength and weaknesses to manage external market to make it conducive. eg. The projected attrition rate for Sales personnel correlated with your Sales talent bank in recruitment should help you to drive expansion plans of marketing zones. You can then have a fair assessment of your marketing reach for next year. Any business analytics need to carry the potential to influence a C level decision. If not throw it in dust bin.

Soul of an organisation

Organisations normally turn out as an insensitive soul less commercial entity with blinkers to see only accounting numbers. Few take pains to build an identity and consciousness to its policies based on values, beliefs, product or the service it extends to society.

The sensitivity of external policies; for its alignment to international covenants, trade protocols, competition laws, patent regulations, environment and sustainability standards are well known. However when it comes to internal practices values stated for the market get sidestepped. Practices comes from employee thoughts, their ego and behavior. It has no written policy basis for controls or documentation.; gets firmed up over period of time. The only witness to internal practices are its employees.  It is a mark of leadership quality if an organisation pays attention to the practices in vogue. An ombudsman or an independent committee or external experts on Board helps. Unionised collective bodies also does this watchdog function to certain extent.

Recently Boards were pulled up for their failure to have women members on board, despite the label of equanimity they carried. Many still avoid to give even employees' a representative sitting member status in the Board room. Many muffle employee voices by keeping it subordinate to financial function inside the Board room.

HR representation on the Board is vital for any economic enterprise that capitalize human potential. Leadership thoughts is as critical as employee thoughts; in fact carries a greater influence on latter in turn employee behavior and practices ; hr leader being the conscious keeper he has a critical agenda inside Board room to influence leadership socially conscious. an eg: we see  some generic drug companies taking pain in fighting patenting practices for upholding their conscious belief that health care for the larger poor is more vital to society than minority shareholder profits.

Social consciousness is an essential ingredient to any business service. People these days absolves that responsibility to CSR.  There is a need to help employees make conscious of the social needs to ensure their support for business practices to connect with such social needs. We see leaders who have missed out doing that, when they were in the helm of their affairs later turn to set up charity foundations when they step down. Perhaps the hr leaders in those companies failed to connect business objectives with the inner consciousness of its employees; CEO included.

Tips and Tricks

These days one can come across many mails and articles promoting consultancy business related to various areas of people management. Many areas within HR, as we learnt in school, have outgrown into separate industry by themselves. It started with training and research areas which later spread to recruitment, compensation and now even to areas like pay roll management, employee relations via call centers, automated systems. This trend came from the changed outlook of leadership to outsource these functions and their whims by keep the noise and cost outside the corridors of Board. One leading consultant in one such industry has written an article "Tips and Tricks to negotiate for salary rise ". In the comments, many have responded with their successes and failures after following those tips and tricks while seeking salary raise for themselves in their workplaces. What such consultants obliquely aim is to sell their salary surveys to both parties on the table, highlighting how useful it is for both to have benchmarks , numbers on top of their head for a 'smart' negotiation ! Employers miss out to see long term value in demonstrating to employees the need to have transparent systems that are aligned to paying capacities within the business cycle. Instead both come prepared for that one to one closed door meeting with 'tips and tricks' of the external expert or some survey report ! Surely the meeting will throw out only one beaming face; as if he has won yet another battle. For that both will spend valuable time prior to meeting without realizing the damage it does in the working environment and value systems. Not just in C&B, but such high costs you end up in paying in other outsourced areas as well, if you see 'managing your employees' as a 'cost' and not as an 'asset' that has invaluable potential. These days you 'hire' heads believing the headhunter, delegate orientation , training and even development to 'external experts', salary management based on 'valuations' done by a non-industry player and even maintain relations via a call center guy located miles away. Wonder who is actually dis-engaged , employee or employer ..! The enlightened one may say, as Eckhart says, detached attachment ! and that's not bad.

mergers and acquisitions - an opportunity

Economic growth cycles often triggers need for re-alignment of industry in many segments. companies exploit opportunities within those re-alignments to strengthen their presence. mergers and acquisitions is a usual strategy. benefits like economic of scales, synergy, operating economies are cited. underlying intent will be growth and profitability always. it could be for consolidation of market segments or even for diversifying the risks with strength. The latter often with an ulterior motive to limit severity of competition by increasing market power. Because of these tendencies, primal it may be, the legal safe guards and governance systems are also largely around financials, market, and resource allocations and at times extending to shareholder rights. For these reasons, the primary law remained to be Companies Act 1956 for a long time. The recent Competition law of 2002, also aims to regulate such ulterior motives mentioned above. FEMA and SEBI's interventions are largely for shareholder rights and investor obligations from a governance perspective. The missing link continues to be on statutes governing HR of the affected companies. The limited scope for intervention provided under ID Act, 1947 has limitations once such a merger or acquisition gets the High Court's stamp of approval. The labour machineries within the ID Act will be forced to recognise and comply with High Court's order. In fact the Industry HR professionals have a greater role to play in such events where a dedicated third party advisor will be essential. HR strategies need to tailored for eg whether it is a vertical, horizontal or conglomerate merger or acquisition. on the other hand in case of an amalgamation, a more synergistic approach maybe needed. Similarly take overs, especially hostile, may need to face equally hostile employee sentiments direct as well as indirect. Conventional hr management exposure and experience becomes irrelevant or challenging for screening lay offs, consolidating functions/departments, weeding out peripheral product and service lines, integrating new talent, streamlining work schedules, defining meaning of 'employee welfare', or merging different payment cycles, shift schedules, integrating cultures, whether it is uniforms, canteen cuisine, children education policy or maternity leave and other absence practices, consolidating conflicting wage elements, or even in deciding which CEO to remain ultimately..!

Lay off: what is in it for long term?

A dilemma for HR ; especially when industry growth goes into dip or remains stagnant. staffing needs are seen as a short term liability rather than a long term asset. While one can understand the need for exercising constraints on operating expenses side, eg on perquisites and other employee related costs, viewing 'employees' themselves as costs, in short term, carry longer term opex risk. To list: talent search, attraction and development costs nowadays far outweigh basic salary costs during recession; especially during growth/revival phase. One cannot escape from those costs, at higher rates, once the revival mode sets in. Research studies show that attrition rate falls when industry growth stagnates or product price margins falls. eg FMCG companies. The inverse correlation with salary growth does not happen when industry is not competitive. Hence reducing operating costs during a recession by tightening wage bills will not increase attrition levels. On the other hand the advantages are manifold for long term operating cost controls. It will help avoid altogether the excessive hiring costs later. Recession phase is a great opportunity to review internal policies and practices, without compromising basic welfare facilities for employees and assuring them job security. That will well turn out to a small price for the huge gains later when industry turn cycles. HR need to be farsighted when Industry faces a rough patch especially in industries where talent needs remain stable over long periods of business cycles. Exception is in case of IT companies where companies use lay-off as a strategy to enrich talent mix during recession, keeping an eye on future talent needs.