Thursday, August 28, 2008

Leadership Vs Management

Management and leadership are different but complementary, and that in a changing world, one cannot function without the other. Managers promote stability while leaders press for change, and only organizations that embrace both sides of that contradiction can thrive in turbulent times.

As per John Kotter- Leaders don't make plans; they don't solve problems; they don't even organize people. What leaders really do is prepare organizations for change and help them cope as they struggle through it

Leadership isn't mystical and mysterious. It has nothing to do with having "charisma" or other exotic personality traits. It is not the province of a chosen few. Nor is leadership necessarily better than management or a replacement for it. Rather, leadership and management are two distinctive and complementary systems of action. Each has its own function and characteristic activities. Both are necessary for success in an increasingly complex and volatile business environment.

Most corporations today are over managed or under led. They need to develop their capacity to exercise leadership. Successful corporations don’t wait for leaders to come along. They actively seek out people with leadership potential and expose them to career experiences designed to develop that

With careful selection, nurturing, and encouragement, dozens of people can play important leadership roles in a business organization. But while improving leadership ability to lead, companies should remember that strong leadership with weak management is no better, and is sometimes actually worse, than the reverse. The real challenge is to combine strong leadership and strong management and use each to balance the other.

Of course, not everyone can be good at both leading and managing. Some people have the capacity to become excellent managers but not strong leaders. Others have great leadership potential but, for a variety of reasons, have great difficulty becoming strong managers. Smart companies value both kinds of people and work hard to make them a part of the team.

But when it comes to preparing people for executive jobs, such companies rightly ignore the recent literature that says people cannot manage and lead. They try to develop leader-managers. Once companies understand the difference between leadership and management, they can begin to groom their top people to provide both The Difference between Management and Leadership Management is about coping with complexity. Its practices and procedures are largely a response to one of the most significant developments of the twentieth century: the emergence of large organizations. Without good management, complex enterprises tend to become chaotic in ways that threaten their very existence. Management is about coping with Complexity. Leadership, by contrast, is about coping with change.

These two different functions–coping with complexity and coping with change, shape the characteristic activities of management and leadership. Each system of action involves deciding what needs to be done, creating networks of people and relationships that can accomplish an agenda, and then trying to ensure that those people actually do the job. But each accomplishes these three tasks in different ways.

Companies manage complexity first by planning and budgeting-settmg targets or goals for the future (typically for the next month or year), establishing detailed steps for achieving those targets, and then allocating resources to accomplish those plans. By contrast, leading an organization to constructive change begins by setting a direction, developing a vision of the future (often the distant future) along with strategies for producing the changes needed to achieve that vision. Management develops the capacity to achieve its plan by organizing and-creating an organizational structure and set of jobs for accomplishing plan requirements, staffing the jobs with qualified individuals, communicating the plan to those people, delegating responsibility for carrying out the plan, and devising systems to monitor implementation. The equivalent leadership activity, however, is aligning people. This means communicating the new direction to those who can create coalitions that understand the vision and are committed to its achievement. Finally, management ensures plan accomplishment by controlling and problem solving, monitoring results versus the plan in some detail, both formally and informally, by means of reports, meetings, and other tools; identifying deviations; and then planning and organizing to solve the problems. But for leadership, achieving a vision requires motivating and inspiring-keeping people moving in the right direction, despite major obstacles to change, by appealing to basic but often untapped human needs, values, and emotions.

A closer examination of each of these activities will help clarify the skills leaders need.
*John Kotter

Tuesday, August 26, 2008

India Inc.- Do we have the right leadership?

As India Inc is growing, the need for organizations to put the right leaders in place is also increasing. Shortage of top talent coupled with increase in demand for top professionals have pushed companies to take a dual approach: hiring experienced Expatriates and developing in-house talent.

Examples of such changing trends are plenty specially in Retail, Aviation, IT & telecom sectors. A recent research shows India Inc needs 1000 CEO’s across sectors. The ever increasing need for good professionals has led companies to provide learning and development opportunities to talented executives so as to build a pipeline of future leaders. Companies are also putting their middle management cadre on fast growth track and arming them with overseas experience to maintain a healthy pipeline.

Talent acquisition & talent development are not new to India. Citibank, Oberoi, HUL have been talent warehouse for long. However India Inc needs to focus on leadership development as its takes off in its journey of exponential growth globally. The aim is to cultivate a global mindset and learn the international best practices. Today companies like Wipro and Infosys have identified talented executives as future leaders and are mentoring them involving highest level of management.

As more and more Indian companies set off for a global journey and global MNC’s setup their Indian operations, India’s corporate sector is increasingly looking for people with global exposure who can handle the complexities of domestic and international operations.

As companies grow and accumulate a strong and diverse pool of talent, the role of top management executives is going to evolve with equal emphasis on business growth and talent development.

Monday, August 25, 2008

Talent Development

With the increasing strategic importance of attracting talents and transforming those talents into leaders, companies need to equip themselves with an appropriate wealth of knowledge and skills at an international level. As we march forward in the changing world economies those responsible with the task of workforce readiness face a daunting task. The whole portfolio of how to attract and retain employees is now called by a body of knowledge as “Talent Management

The new age economy, with its paradigm shifts in relation to the human capital, in terms of its acquisition, utilization, development and retention, has placed a heavy demand on today's HR profession. Today HR professionals are expected to comprehend, conceptualize, innovate, implement and sustain relevant strategies and contribute effectively towards giving the company its winning edge. Faced with a tough proposition in attracting and retaining talent, HR heads of companies have started applying what is better known as 'employer branding' strategies.

Talent Management implies recognizing person's inherent skills, traits, personality and offering him a matching job. While there are no magic formulae to manage talent, the trick is to locate it and encourage. Talent management is beneficial to both the organization and the employees.

Essentials of Talent Management
Talent management is the activity of identifying, realizing, and guiding untapped potential in people.
It means nurturing and developing those people identified of having ability and potential and it should form part of any organizations recruitment and retention strategy.
It involves individual and organizations’ development in response to a changing and complex operating environment. It includes the creation and maintenance of supportive people oriented organizational culture.

Talent management brings together a number of important human resources and management initiatives. Organizations that, formally decide to manage their talent undertake a strategic analysis of their current HR process. Talent management approach is adopted and focused on coordinating and integrating the following.

Recruitment- ensuring right people ore attracted to the organization.
Retention- developing and implementing practices that reward and support employees.
Employee development- ensuring continuous formal and informal learning and development.

Changing Trends in Recruitments

The increasing globalization of the marketplace combined with an ever increasing shortage of skilled staff and advances in technology have resulted in large scale changes to recruitment practices throughout the world. The recruitment industry is gearing up for these changes by developing strategic alliances and global partnering to ensure access to the best candidates world wide. Talking of the Indian scenario, the following trends are being seen in recruitment:

Outsourcing: In India, the HR processes are being outsourced from more than a decade now. A company may draw required personnel from outsourcing firms. The outsourcing firms help the organisation by the initial screening of the candidates according to the needs of the organisation and creating a suitable pool of talent for the final selection by the organisation. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge a service fees to the client organization.

Talent Poaching: “Buying talent” (rather than developing it) is the latest mantra being followed by the organisations today. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry; the organisation might be a competitor in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions, better than the current employer of the candidate. It has become a challenge for human resource managers to face and tackle poaching, as it weakens the competitive strength of the firm.

E-Recruitment: Many big organizations use Internet as a source of recruitment. E- Recruitment is the use of technology to assist the recruitment process. Organizations advertise job vacancies through internet and job seekers send their applications or curriculum vitae i.e. CV through e mail using the Internet. Alternatively job seekers place their CV’s on the various job portals, which can be drawn by prospective employees depending upon their requirements. This reduces the time and cost investment in the recruitment process for the organizations.

Sunday, August 24, 2008

Recruitment- Challenges faced

Recruitment is a function which requires business perspective, expertise, ability to find and align the best potential candidate for the organization, marketing & selling skills and intelligence to align the recruitment process for the benefit of the organization. The HR professionals associated with the recruitment function are constantly facing new challenges. The biggest challenge for HR professionals is to attract and recruit the best potential candidate for their organization.
Some of the major challenges faced by the HR professionals are;

Adaptability to globalization: The HR professionals are expected to keep in themselves in tune with the changing times, i.e. the global trends. HR should maintain the timeliness of the process
Lack of motivation: Recruitment is considered to be a thankless process. Even if the organization is faring well, the HR department or professionals are never given the credit for hiring the right professionals.
Process Analysis: The immediacy and speed of the recruitment process are the main concerns of the HR in recruitment. The process should be flexible, adaptive and responsive to the immediate requirements. The recruitment process should also be cost effective.

Strategic prioritization: The emerging new systems are both an opportunity as well as a challenge for the HR professionals. Therefore, reviewing staffing needs and prioritizing the tasks to meet the changes in the market has become a challenge for the recruitment professionals.

Saturday, August 23, 2008

Recruitments- The story of perfect fit.

In present day scenario of growing economies, companies are always on the lookout for talented professionals to be part of their teams. At any given point, recruitment for positions across various levels in an organisation would be on in full swing. It may be impossible to fill all the positions immediately. Therefore, it’s an imperative need to identify the critical positions that require immediate attention and action. Organisations have seen an increased focus on the development and selection of key talent.

Recruitment is not just a process for filling vacant positions. Today recruitment and redundancy are factors of utmost importance to bring about organizational growth. Keeping in mind an Organisations short term & long term goals, a fully structured and regulated recruitment strategy should be formulated for successful hiring of talented professionals. An unregulated & unstructured recruitment strategy can be a catastrophe leading to a loss of bright & prospective candidates. To attract and increase inflow of quality candidates, few steps that can be followed:

Website: A window for the world to know what’s happening in the organization. A well structured and user friendly website can be of great help. The website should be checked regularly to view fresh applications. Candidates’ expectations from prospective employers are also rising. So, we should be more innovative in attracting talent. The website should also showcase the benefits of working in the organization.

Screening of profiles: Firstly a detailed Job Description should be published. This helps in narrowing down the candidate pool and makes the process easier. We should avoid overlooking the qualification of the candidate and reason for leaving his previous company. Sometimes the recruitment process slows down significantly as we end up interviewing people who should not be applying for the position in the first place. Proper screening of the resumes received viz a viz the detailed Job Description can help us ride over this issue and in turn save time and effort.

Interviewing and selecting prospective employees: The recruitment decision in most cases is based on the outcome of a face-to-face interview. For outstation candidates, video-conferencing or conference calls can also be used. During an interview, the most widely asked questions are:

* How would you best describe yourself?
* What is your major achievement— professional and personal?
* Why would you like to leave your current organisation?
* How do you see yourself five years down the line?
* What is your career objective in the years to come?

To accomplish successful recruitment, better compliance and retention, we should watch out for the softer elements while evaluating a candidate. We should check his preference areas, what does the candidate seek in an organisation – a good work profile, compensation or fast career growth? We should also take into consideration the candidate’s team management abilities, his response either positive or negative in terms of experience in his previous company and his flow of thoughts. The body language and eye contact of the candidate is also important.

Communication: A proper and candid feedback should be provided to candidates appearing for the interview. This helps build a very strong brand image. Even if the results are negative, a proper feedback will leave a positive and long lasting impression about the organisation in the candidate’s mind which can have multiplier effect in terms building strong brand equity.

Interview Dos and Don’ts for candidates:


o Dress appropriately for the industry. Your personal grooming and cleanliness should be impeccable.
o Be sure to find out the exact time and location of the interview.
o Arrive early: 10-minutes prior to the scheduled time.
o Maintain good eye contact during the interview.
o Sit still during the interview. Avoid fidgeting and slouching.
o Request a clarification if you don’t understand a question.
o Be thorough in your response, while being concise.


o Don’t make excuses. Take responsibility for your decisions and actions.
o Don’t make negative comments about previous employers or professors.
o Don’t falsify application material or answers to interview questions.
o Don’t chew gum during the conversation.
o If you smoke, ensure that the smell of smoke is neutralized with deodorant/mouth freshener.
o Don’t allow your cell phone to ring during the interview. Do not answer a phone call during the interview.
o Don’t treat the interview casually, as if you’re are shopping around and doing the interview for practice.
o Don’t display frustration or a negative attitude in an interview.

Dos and Don’ts for interviewers:

* Put the candidate at ease.
* Offer a glass of water/tea/coffee.
* Explain the purpose of the interview.
* Help the candidate to speak as much about him/her on relevant subjects.
* Give the candidate a chance to ask questions.


* Don’t make the person wait. Try your best to be on time.
* Don’t ask irrelevant personal questions like references to marital status, disability and religious beliefs.
* Do not answer phone calls during the interview.
* Spend at least a few minutes in going through the resume of the candidate before you begin the interview.

Wednesday, August 20, 2008

HR Trends- Staffing & Compensation

Gangapriya Chakraverti, Business Leader, Information Product Solutions, Mercer India shares some highlights of Mercer 'All Industries Compensation Survey 2007-2008' by pointing out emerging salary trends, taking place in the HR domain:
Sectoral Analysis
The compensation in the Human Resources function is seen to vary across different sectors in India and some sectors seem to be commanding a premium over certain others. One striking example of this is the Financial Services industry, where the compensation of HR professionals shows a huge premium over any other sector in India. This is true across 4 representative levels which are most common in the industry, namely the officer cadre, the managerial cadre, the senior manager cadre and the top management cadre. This observation is seen to be true for Annual Guaranteed Cash, as well as the Annual Total remuneration, suggesting strongly the premium that HR professionals command in the Financial Services sector.

On the other end of the spectrum is the Auto Component industry, where the compensation for HR professionals across levels seems to be below any other sector in consideration. The other sectors where the compensation figures for HR professionals seem to suggest a premium is the Consumer Goods (FMCG) sector and the Information Technology sector. However, unlike the financial services sector, where this premium is commanded across levels, it is observed that the top management compensation in IT and the Senior Manager level in FMCG lag the market while all other levels seem to be above the market.

Career Progression Analysis
The career progression in any function is linked to compensation and this section explores the increase in compensation during a career jump within the HR function across sectors. It is seen that the most striking increase in compensation is when one moves from an officer level to a managerial level. This is seen to be true across sectors without exception. Even the degree of increase is seen to be fairly consistent across sectors, with the increase being in the range of 180% (FMCG) to 240% (Pharmaceutical).

The increase noted when there is a progression from Management to Senior Management in HR is less dramatic. This is true for all sectors, without exception. However, it is seen that some sectors downplay this progression, notably the Consumer Goods industry (30%) while some other sectors have more telling hikes in compensation (Financial Services and Pharmaceutical sectors giving 89% and 75% resp).
This trend continues in the progression from the Senior Management level to the Top Management level. Here, the most striking example is the Consumer Goods or FMCG sector, where the sector seems to reward this movement very well, with the increase to the tune of 130%. Other sectors are less striking in their increases, with increases ranging from 63% (Pharmaceuticals) to 109% (Financial Services).

Sub Function Analysis

Different sectors are seen to reward different skill sets within the HR function. Compensation and Benefits specialization in HR is seen to command a slight premium in the market across sectors at the managerial level with sectors like FMCG paying more to a Compensation and Benefits manager as compared to an HR Generalist. This could be in light of Rewards as a philosophy for Attraction and Retention emerging into the limelight. This premium is seen to be almost 33% in sectors like FMCG. Further, even in sectors like IT, this trend is noted, though the premium is not of the magnitude seen in the Consumer Goods space. In this sector, Recruitment as a specialization is seen to command a premium, with Recruitment Managers getting paid differentially. Another observation is that Employee Relations Manager commands a premium in manufacturing sectors like Auto Components industry. A slightly deviant trend is noted in the pharmaceutical industry, where the HR Generalist is paid well above any of the sub function managers.

Variable Pay Analysis
The emphasis on Variable Pay or Pay for performance continues to be paramount, with companies in every sector using this as a tool for attracting and retaining talent. This trend is consistent across sectors; however the extent of variable pay in the annual total remuneration of an incumbent varies widely. A notable example here is the Oil and Gas industry, where the variable pay as a component of total CTC is the highest seen across levels. At the top management level, the sectors which are seen to pay a huge portion of CTC as variable pay are Oil and Gas and Financial Services. This percentage is seen to be as high as 27% in these sectors for the top HR executive. This percentage does not show much variation in any other sector, with values ranging between 20 to 23%. At the junior levels, (HR officer) the chemical industry is seen to pay a higher variable pay portion than any other sector. The FMCG space is seen to be paying a good percentage as variable pay to the senior management and above, with the variable pay at the managerial and officer level falling below that of other sectors.

* Reference Times Ascent

Tuesday, August 12, 2008

Aligning Human Resources and Business

Attracting the best and brightest employees, developing them and retaining them is a challenge for any organization. The role of the Human Resources function has changed dramatically over the past few decades and will become increasingly more strategic in nature in the future. With the changing landscape of Human Resources management in the years to come, strategic planning will be the key for HR to meet those needs and to succeed.

It seems that finally CEO’s are willing to give HR Managers a significant role in strategic decisions. To gain a stake as “Strategic Partners”, HR professionals should focus on two major issues- Return & Growth. Hr professionals can create economic value from these sources:

Employee turnover and retention
Revenue Vs Employee Costs
Expenditure on the HR function and related activities

These three factors relate to three important HR goals:

Attracting, developing and retaining staff
Aligning, engaging, measuring and rewarding performance
Controlling or reducing HR costs
HR related measures for growth needs to be handled with care and should be tailored to the organizations' goals. HR measures should be devised keeping in mind increase in performance & profitability. Following can be attributed as growth related HR measures:

Leadership Development
Increased employee engagement
Diversity in work force
Work-Life balance

Thursday, August 7, 2008

Key trends in human capital- Perspective 2008

Maximizing the value of organizational resources has never been more challenging as in this phase of turbulent world economy. Evaluation of human capital policies and processes should be directly related to the business performance and financial obejctives of the organization. This is the only way people will be given due recognition and rewards that their efforts deserve changing HR function from "resource Absoring" to " Value Adding " business investment.

There are these four human capital drivers that will have the most significant influence on organization performance. They Constitute:

Talent management
Learning & Innovation

These drivers are closely interrelated and the inability to excel and compete in any of these drivers will result in failure in all of them. Effective leadership is essential to gain full engagement of employees. Engagement is essential if talent is to be attracted and retained. Learning and skills development will contribute to the development of innovatory breakthrough s to produce essential competitive results.

Leadership driver remains at the op of human capital agenda. In this tig,htened global business environment, demand for enhanced leadership skills is even greater. Leadership has been defined in various ways but its essentially the ability to influence people to work effectively towards the achievement of organization’s goals. Leadership in today’s business environment is increasingly seen as a shared responsibility rather than a domain of an individual. As per PWC report, if leadership of an organization is effective then its comparative positioning against its competitors would be superior.

Employers over recent years have shown increasing interest in engagement of their workforces. Research has shown a link between highly engaged employees and the bottom line results. There is also a close relationship between employee engagement and customer satisfaction.
Managing talent effectively is a competitive necessity. Filling critical roles with competent and committed people at the right time is a major business requirement. It provides a performance edge that is important for sustainable growth. The War for Talent has gained significant momentum.

The ability of an organization to innovate remains one of the major contributors to its continued sustainable economic performance. The ability of an organization to produce the innovation essential to remain competitive depends on the range of other actions its undertaking including its leadership development, its talent bank, engagement of employees, plus the infrastructure it has in place for exploring new customer offerings.

All the above four drivers are critical to human capital’s impact on an organization’s performance. It is possible that different approaches may be needed ; Identification of ‘pivotal employees’ in talent management, the concept of shared leadership, identifying more focused points of engagement for employees and building innovation requirements into all employee roles.