Human Capital utilisation

Often companies measure human capital in terms of its headcounts on pay-rolls; stretched to perhaps number of approved positions as well; assuming a hypothetical 100% staffing. In reality actual utilisation levels will be much lower. This often gets overlooked while framing staffing strategies. In fact only full working time measurements need to be taken into account for measuring actual utilisation. That way only you can measure capital overheads , drains from total CTC against actual engagement time. This measurement becomes critical and pivotal in arriving at accurate staffing level needs for each activity during major transformation initiatives, eg mergers or acquisitions. Howver it is also critical not to lose sight of control levels needed especially when there is a need to cover larger work areas. There is also the need for safe operational requirements to be seen before finding base for synergistic gains.

hr capital - performance based?

Transparency in capital utilisation is a hallmark of business ethics. This is measurable only if corporates disclose all aspects of capital investment as well as value addition to all stakeholders including its own employees. While the degree of disclosure may vary, the reasons for non disclosure, extent of non disclosure, both, cannot remain under carpet. The expectations of stakeholders' engagement and their long term commitment is very much dependent on the extent and manner of such transparency. We see the conditions these days that govern the CBR agreements in financial / banking sector. End of the day, it is not that how much profit you make that matters but rather how you make that profit, a by-product,  that is scrutinised. Product pricing is vital than product price. Many corporates hide real elements of value addition and thereby conceal values that rightfully belong to others in the business chain, perhaps even customers and its own employees.

Cartels justify and support one another for such concealment as an 'industry norm'. International quality governors turn a blind eye on such acts during ratings, for,  such bodies could be dependent on the support of such industry cartels. Gaps get overlooked, are never benchmarked but covered through 'standardisaton' norms. One reason for rising fines and claims imposed by third parties/ governments over many multi national corporates is this; be it automobile or finance sector. It is not known to what extent the price cycles say for eg in a commodity sector, is being engineered by the industry cartels or is it a natural phenomenon from supply-demand relationships with end customers. Industries even strategically use natural resources for social controls and cultural engineering. They then cannot themselves embrace transparency, even though they argue as being ethical.

The point is, the philosophy with which you run the industry on above lines, over time, seeps into your internal functions down to often employee related policies, practices on employee valuations and costings. It will be rare to see employee valuations based on performance factors in such companies; nor be transparent or followed with integrity. This over time corrodes employee engagement and commitment. The key for integrating values across the business chain is with people; be it  employee valuation by HR or product pricing by leadership. They are just two ends of same thread.

Vectors of value addition by HR

The normal 'activity chain' of human resource management function starts with procurement, then development which covers learning as well as training, compensation within the larger scope of personnel & administration maintenance activity, integration in terms of relations, engagement and motivation and finally separation including off-boarding and extended post separation engagement initiatives. Various systems, tools, techniques , be it MSS or Dashboard, or an ERP, all supports many pivots within that chain.

However, at a macro level, the 'activity chain' per-se need to be integrated into larger business value addition chain, which also is an extended scope of  hr management and reflects leadership commitment and concern to integrate people with business and community. This segment can be seen as 'planning axis' of hrm function.

The sectors within this axis can vary from business environment, business evolution stage, business need analysis, talent availability to costs, compliance and shareholder relations. Each of those sectors carry potential to significantly alter the 'activity chain'.

The conventional reactive approach for driving HR function makes it defensive and weak; rather the need is to pro-actively influence business directions as a 'business partner' in the above sectors. Strategic HR is all about latter, especially these times, through which employee engagement comes in by default; This approach appears gaining ground fast giving a new direction and scope for adding value.

staffing gaps and functional integrity

we often come across situations when critical positions remain vacant for short periods at times extending to couple of months. Normally this comes when the real holder needs to be away for emergencies, long training programmes, short term external assignments, sick leave or even say a maternity leave. Most companies do have a back up arrangement for some one else, normally a direct subordinate, to be kept on 'officiating' or 'acting' basis. He or she then holds dual position till the actual incumbent returns. While this work arrangement is fine in general terms, there need to be closer scrutiny of the operational decisions the temporary guy takes during such period. In fact such a period all financial authorities should be withdrawn and taken to next level. The temporary incumbent should be allowed to have only administrative authorities for business continuity. There are companies where that temporary holder gets subjected to an additional level of appraisal of the deliverables from such an 'acting' role. This is only to avoid incumbent causing irreversible damages to work culture, policies and practices of the company and also to avoid having potenial conflict of interests between the two roles. Say cases like finalising long term contracts, terminating employees, promoting employees, taking decisions having recurring financial implications etc.  There should be a mandatory handover log report on all such matters which the 'acting' or 'officiating' employee need to submit when the real incumbent resumes duty. Such an arrangement  reduces operational risks, induces transparency and increases accountability and above all immensily increases employee faith and trust over management decisions be it related to human resource or non-hr.

organisation design..aesthetics vs utility

The objective is extrinsic as well as intrinsic. Extrinsically, design integrates matter with space around. Intrinsically, it balances duality for harmony and quality of life.

Organisation design too, need to integrate internal culture and community needs to respective larger culture and community around within which it operates. often we see demographic cultural norms influencing leadership values and unwritten norms and practices. Decision levels in an organisation hierarchy cannot overlook such norms even if impacts say member rights in an apex Governance forum. This impacts communication channels, teams/working units, mental blocks, shared values, reporting channels and behaviours.

Intrinsically, an effective design also need to address the duality that we see, experience in any organisation in a more meaningful, positive way, to inspire and get inspired to do activities to enhance those very same basic elements that form or support such a design.

Decision making rules ( eg an  approved document of table of authority)/forums need to recognise decision making act as well. In more clear terms does the apex decision making authority recognises demographic differentiators, their needs be it gender or community. The constitution of the Board, its sub committes, membership and norms that govern the selection into these apex decision making forums have a significant influence to organisation design at all levels that report into such an apex forum. like a membership norm that irons out the gender duality can enhance execution agility of functional strategies.

People are often compelled to perform or motivated by role models. However assumptions and biasnesses can cover real potential of such role models. work schedule designs that overlook the individual goals and aspirations of a 'new mother' is a classic example. At times it takes a woman CEO to rewrite the performance standards for working woman who has attained new motherhood. Organisation design need to address the need to balance the duality.

On the hardware side too: the nervous system of an organisation design, information flow, is also equally vital. An effective design need to built in technology networks that can seamlessly integrate right information to right people at the right time in a secure, respectful, encouraging, without breaching individual privacy rights; to have conversations, collaborations at personal levels that can immensely flatten organisational hierarchy and reduce the number of levels.

In fact the design need to respect and reflect the organisation leadership intent. Create an environment that is seamlessly integrated to needs of your customers, near and away, provides equal opportunities, good place to work for. It is a balancing act. Like life..

elimination and preservation - scope of JD.

Recently got a chance to review a selection process by an industry leader globally ranked 3rd, so to say. They have been diligently asking all their candidates for any position, from operational level to senior manager levels, to go through a 10 minute test to screen candidates. It was a pressure test to take 50 questions within 10 minutes. While the content was of high quality , the fact they were administering it to all positions at all levels was a bit odd. Selection criteria need to cover a range of objectives. From elimination to preservation. HR tools and methodologies should not lose sight of business needs in the process. While the particular test in this case was a valid one, it was less effective when applied for jobs where experience or other broader parameters mattered. Where the test results were to be seen as a supplementary, its weight as a 'necessary' condition was self defeating. One size does not fit all in all cases. In fact  each Job Description need to have component for 'testing protocols' which an hiring action need to comply. Most companies leave this vital aspect to HR for applying some 'standard scales' and tools. That will end up in having a 'standard' test to screen rather than select. like companies obsessed with english language tests over technical skill tests for  jobs where the latter is more critical.

medical and psychiatric aspects in an industry setting:

The genesis of people management has roots on social work philosophy too. Something that helps differentiate best employers from rest of the ordinary greedy commercial entities. Years back, there was this bright IITian getting picked up through a hiring campaign; some viewed it as a prized 'catch', typical of general fishing approaches in hiring. A bright young Process engineer with excellent Chemical engineering OGPA score and IQ and personality obviously looked good.His initial induction phase as Chemical Engineer Trainee inside plant and back offices went well and got placed as a Process engineer after normal assessments.The story changed when for a plant emergency he had to stay back a little late in one evening. Seeing his difficulties in climbing down the steps while coming out of offfice his Manager referred him for a medical re-examination. His telescopic vision got noticed that way and a referral to rehabilitation assignment became necesary. He slipped in his ratings that year and the vision handicap affected his self esteem especially before his fiancee. HR need to step in to provide an 'anchor' to the employee at such times to help him overcome and adapt to the handicap. In such cases, professional social work interventions, medical and/or psychiatric interventions for rehabilitation to a suitable assignment becomes necessary. Also, deviant behaviour coming from addictions or coping with impaired faculties from occupational hazards, like exposure to chemicals, gases , heat and sound can potentially damage human esteem. Companies need to have a system to isolate such cases, do causative studies, set up preventive mechanisms and own up responsibilities for rehabilitation as a CSR. Progressive companies who are really committed to CSR takes care and recognise such boundary issues of HR management. Others justify performance reasons for expulsion of such employees to the society damaging community harmony. Green? hardly.