Conceptual Roadmap for HR in Hi-Tech Industry

Sidarth R. & Rajendra P.

XLRI, Jamshedpur

Introduction:

High Tech Industries are universally identified by the research spend and also the criticality of human resources for their survival. The Organisation for Economic Co-operation and Development (OECD) identifies high-tech industries based on a comparison of industry R&D intensities, calculation dividing industry R&D expenditures by industry sales. These industries represent almost 15 percent of world-manufactured output. The global market for products manufactured by them is growing more than twice as fast as that for other manufactured goods and is driving national economic growth around the world. These constitute what is essentially called the knowledge economy.

The most important resource these organisations can possess today is indeed Homo sapiens and this has enhanced or increased the focus and importance of HR. In traditional brick and mortar industry and to some extent even in service industries, personnel were but an additional input factor. The focus was on developing existing personnel including training them and to ensure proper appraisal processes so that right people can gravitate. The focus on recruitment and retaining were but secondary. Knowledge possessed was never the main criterion for valuing this resource. The high tech industry and in general the present scenario is quite the opposite. Knowledge workers are defining all aspects of organisations. HR is a vital function that needs to alter its focus and operating procedure.

High Tech Industries are at the pinnacle or near the zenith of the knowledge industries. The whole industry revolves around research and is subject to fast changes. All surveys conducted on both sides of the Atlantic have indicated that a massive skill shortage exists within the high tech industries. Apart from a few countries, the problem that exists is that the high tech industries do not have the image that attracts young people as they come through the education system. Information Technology does not have the status of other engineering qualifications and those that do enter into the industry are usually tagged as geeks and nerds. Whilst our graduates become ever more computer-aware, their desire to become involved in the development of technology is diminishing.

Although the growth figures of the IT industry are quite impressive, but the high growth and profitability of this sector has it’s own problems. The management of these knowledge industries across the globe has been investing a lot of money, time and energy on people related issues. It has become a common phenomenon that important projects get delayed because the key person has decided to switch the boats. The departing employee not only creates a vacuum in the working team, but he also takes away a lot of tacit knowledge that can be utilised elsewhere. And we all know that in this fast changing, highly competitive market where is the time to experiment and learn from your own mistakes. The winner is the organisation, which learns from the environment and is also able to retain the knowledge available with the organisation. So nowadays, newer and newer methods are being tried to retain employees and the tacit knowledge associated with them.

The time has now come for HR to evaluate its priorities. The functions that need to be given greater importance now are recruitment and retention. These are the to points of exit and entry of this resource. Retention just does not mean the retention of personnel but also the knowledge. This is where concepts like learning organisations and knowledge management system are gaining ground very fast. In all these the HR plays the pivotal role. The HR in any high tech industry needs to follow the following strategies to address the above issues.

Recruitment: Organisations need to go in for innovative HR practices. This is not only essential for the survival of organisation but also for the role holders in HR. Some of the measures adopted are:

e Establishing cross-industry partnership: This signifies the tie-up between firms in the same industry but either catering to different segments or peddling different wares to share valuable human resources. The employee gets multi- project rich experience apart from higher compensation. Hence both the employee and employers gain.

e Competency based recruitment: HR professionals should identify the competencies required to succeed in this Industry and even particular to their individual companies, and use this as a selection tool. It has been proved that deeper levels of competency presence like at motives, value, etc stages will lead to higher productivity, satisfaction and retention.

e Financial Benefits: A variety of methods are being adopted these days like ESOPs, cafeteria methods, sweat equity, leveraged salaries, etc. These have reached their saturation levels and the industry is awaiting for something radical to be established.

Retention: This is a much wider aspect and our primary focus is towards this. Retention is not only as mentioned an aspect of physical resource but also the retention of knowledge. Retention is one of the most critical in any high tech industry where the knowledge employees are the key drivers to success. A good HR manager must understand that all the employees in the organization have different aspirations, values and resources. So any strategy for the employees should keep the individuality of the employees in mind. Nowadays the concept of MBO (Management By Objective) is a much talked about topic for aligning the individual goals with the organizational goals. It is also believed that the MBO concept not only helps in achievement of organizational goals in an effective manner but also it also helps in improving the satisfaction level of the employees.

NEO Triangulation model :

Based on the concepts of MBO we hereby propose our NEO Triangulation Method for the new knowledge worker. Although this model can be applicable to all the organizations, but the given the typical nature of High tech industries where the employees are the key to the success, this model assumes greater significance. It can be essential in helping draft not only mission and policies but also to help assess satisfaction levels within the organization.

Our model is based on the triple forces of NEEDS, EXPECTATIONS & OPPORTUNITY. These act simultaneously on any employee in an organization, which ultimately decide the satisfaction, growth and retention of the employee. Apart from this the various ENVIRONMENTAL factors also affect the employee. These forces can be defined as under:

Needs: These refer to the basic needs of the employee i.e. physiological needs, need for security, self – esteem combined with the needs for power, achievement and affiliation. The employee tries to fulfil these needs in the job and will try to grow high up the hierarchy level for effective fulfillment of theses needs.

Expectations: This is nothing but the cognitive factors related to the job. These factors depend on the personality of the person. Some of these factors could be attitude, values match, self-concept etc. The satisfaction level of the employee would be determined by these factors.

Opportunities: Here this factor represents the capability of the employee in terms of competency, resources at disposal etc. This is basically a balancing factor that helps the employee to find the fit in the organization according to his capability. The employee continuously evaluates the resources or personal competence at his disposal and tries to get a job that gives him the optimum utilization of the opportunity.

The above three forces can be represented by the sides of a triangle. Here the lengths of the sides of the triangle represent the quantum of force.

Environment: This refers to the forces such as type of industry, market competition, health of the organization, organization culture etc. The employee is continuously subjected to these dynamic forces.

These three forces of the NEO triangle, which are at individual level, have a great impact on the employee. In fact throughout the life employee tries to balance these forces so as to be at a stable position. The stable position can be arrived when all the sides of the above NEO triangle are equal in length. But because of many variables and uniqueness of every employee the triangle is always misbalanced. Some person might have need as his/her basic motivation in the job, while some person might stress on the fulfilment of their expectations as per their personality. It would be very difficult to find a person whose forces can be represented by an equilateral triangle (depicting a balanced position). If we plot the NEO triangle for the employees then most of them will have unbalanced positions and hence living in stress. Some of the unbalanced triangles under stress could be:

Apart from balancing the three sides of the triangle the employee also tries to shift the triangle within the circle of environment so as to minimize the pressure of the environmental forces. He will keep on changing the organization so as to achieve the best fit possible under the given constraints For example, if the employee feels that given the Needs, Expectations and opportunities he/she is better fit in the consultancy organization then he might jump to it from the software development field. In fact this balancing process is the main reason behind the high turnover rates prevalent in any industry.

Since all the forces i.e. NEO and environmental are very dynamic in the high tech industry so HR should take extra precaution in designing it’s strategy and practices. Since All the employees have a different triangle so all the strategies for retention should be focussed to convert these triangles into equilateral triangles. The HR professionals should customize the training programs, career progression paths etc. so as to reduce the length of the sides (representing quantum of forces) of triangles as well as to balance all the forces. The HR interventions should act as pincers to reduce or generous enough to increase the sides, so that the length of the sides to form a equilateral triangle. Some of the HR initiatives to take care of each side are:

Needs : Promotions, Incentive scheme, ESOPs, Flexi-working etc.

Expectations : Social recognition, Challenging jobs, Work culture etc.

Opportunities: Cross functionality, Job rotations, Training interventions etc.

The same triangle can be drawn for the group of employees as well as for the organization itself. The task of the HR professionals is to align the centroid of the each individual triangle with the organisation’s Meta-NEO-Triangle, which will clearly align the individual’s goals with the organisation’s goal. Once the proper match between the individual NEO triangle and the organizational group level NEO triangle is found the attrition rate of the High Tech industry will directly go down. Also the synchronous motion of Individual and organization will fuel the organization’s growth.

Building a learning organization:

One of the major responsibilities of the HR department in a high tech industry is to build a learning organization. Learning Organisation is a group of people continually enhancing their capacity to create what they want to create. The HR has to develop an ingrained philosophy for organization’s ability to anticipate, react and respond to change, complexity and uncertainty of the environment. The success of any knowledge organization will depend on what it knows and how well it harness. This fact should be a compelling reason for organizational governance and management to nurture most diligently the people and the systems that create, preserve, disseminate, renew and deploy knowledge. The advent of the knowledge economy thrusting the knowledge factor into the cores of corporate strategies and the HR has the responsibility to achieve the goals. The HR professional have to develop a culture that continuously observe all the changes happening in the market and develop the strategy to respond to these changes. While making strategies it should take into consideration the learning curves of other organizations.

Tacit knowledge, which is available with all the employees, is of utmost importance for the organization. Tapping and enhancing the Tacit Knowledge is an essential component of HR mangers in this industry. The effective utilization of this will lead the organization to success. HR has to focus on the following two facets for harnessing this tacit knowledge:

› Human capital: It comprises of individual talents and knowledge that is acquired through education, training, experience, and cognition. The HR has a direct role to play in developing and utilize this.

› Knowledge capital: It consists of the artifacts of the human minds that are also stored outside the minds of their authors, and can therefore be available to whoever seek them. Lack of participation of the employees could spell death knell for gathering this knowledge. People still need other people to support their learning. Technology alone is not sufficient to motivate, encourage and sustain people who are choosing to engage in learning. Here too HR has to develop a proper culture of knowledge sharing and development in the organization. The most important issue for companies is to ensure that they focus on the synergy of data and information processing capacity of information technologies, and the creative and innovative capacity of their human members.

Culture of creativity and inquiry

Creativity and inquiry-driven learning may be difficult to achieve within traditional command-and-control paradigm. The knowledge workers of the high tech industry would also need to have an overall understanding of the business of their organization and how their work contexts fit within it. Such understanding is necessary for their active involvement in the organizational unlearning and relearning processes. Only if they understand the implications of changes in their work contexts for the business enterprise, can they be instrumental in synchronizing the organizational ‘best practices’ with the external reality of the business environment. Hence the human resource function should make conscious efforts to address this issue.

Conclusion:

The high tech industry differs a lot from the traditional organizations in many aspects. Hence the human resources department in these organizations has to customize itself to cater to the fast changing needs of the organization due to the dynamic and hostile environment. The important measures that HR should focus to overcome the problems are the concepts of learning organization, knowledge management system and the application of NEO Triangulation method. The latter method is in its conceptual stage hence its utility and validity has not yet been established. We request interested researches and authorities to put this theory to test and help build on this foundation which has been laid. These measures if adopted in their true sense will definitely lead the organization on a fast track of success.

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