The single most important characteristic of the Indian software industry
is the supply-demand gap. In this context, the authors have tried repositioning
HRM by proposing a marketing mindset to attract and retain the best. The mindset
has been explained by introducing two concepts - HR-keting and Cusmoyees. The concepts are explained based on the 4 P's of marketing.
The implementation prescriptive is aimed at redesigning the six generic
functions of HRM.
Indian
software companies find it difficult to attract and retain quality talent. This
affects the competitive advantage enjoyed by them in the world market. As a
result of high demand-supply ratio, employees can afford to leave organizations
that fail to provide acceptable rewards, satisfy their desire for participation,
provide challenging work and freedom to perform. This paper presents a new
concept, HR-keting, a marketing mindset for HR, targeting reduction in attrition
rates.
HR-keting
is a strategy, an idea, a program, a practice, or a system that provides an
insight into aligning the six generic functions of HRM (recruitment &
selection, performance management, training & development, rewards &
benefits, organizational design and communication) with the organizational
goals. The motives of HR-keting could be employee reduction, train a better
workforce and beyond. This paper concentrates on the existing Indian software
scenario where the need of the hour is 'employee retention'.
The
top threats to employee retention as identified by research are higher salaries
offered by competitors, dissatisfaction with career development plan, lack of
appreciation and job burnout. The main causes for employee turnover according to
researchers are compensation, career development, work hours, job fit,
manager-employee relations, corporate culture, recognition, family obligations,
physical work environment and employee communications. (www.pstc.com) HR-keting
is a way to look at these threats.
The
information from the exit interviews can also serve as a resource to help
identify what to avoid and what to treasure. This information gathering will
help in organizational design.
Instead
of getting constrained by working within the framework and aligning itself to
the organization strategy, the HR department has to position itself as HR-keters
by marketing the company to it’s employees. Since software companies have no
existence apart from their employees, marketing the company essentially means
marketing the employees to themselves. Moreover, it is much more than a one-time
sale; rather it is an every day affair.
HR
professional also has to decide how (s)he will sell the company to its potential
employees. The role of HR executive according to the new concept of HR-keting
includes making the company relevant to the potential employees. It aims at
positioning the image of the company as a living, learning, growing and adapting
group of people who are proud to own the company and proud to be owned and not
one of a dead dry organization.
This
concept of creating value by applying the marketing angle to HR has got special
relevance in the light of the future where a shakeup is imminent and which will
see the firms who don’t shape up being shaken out of the competition.
The
striking similarity between the relations between HR and employees and the
marketer and the customer is evident. Once
the HR department has made up it's mind on the 4 P’s, the onus lies on it to
communicate the same to its employees.
This
concept is embodied in the term 'HR-keting'.
However,
HR-keting is different from traditional marketing.
|
|
Traditional
Marketing |
HR-keting |
|
Product |
|
|
|
Customer |
Ø
The
people who buy |
Ø
The
present & future manpower |
In
HR-keting, the product being marketed includes the image of the company, which
includes the present employees also. The customer base we are trying to present
is a mix of potential and present employees. But this throws up an interesting
situation: the existing employee should be thought of as the customer besides
being an employee of the company.
Since
the existing employees are both customers and employees at the same time the
present manpower would be aptly called 'cusmoyees'
The
implementation of the HR-keting concept can be visualized as shown below
Since
HR-keting is at a higher level of abstraction, the implementation has to be
explained in terms of the six generic functions.
Assessment
ought to be a two way process - management assessing the extent to which
candidates meet the position's selection criteria and the candidates gathering
data about the organization and the available position. Since candidates
frequently share this information with their peers, negative information can
reduce the pool of qualified candidates who might apply or accept employment
with an organization. (Jones,
1991) On the other hand, positive impressions can do just the
reverse, providing the organization with an edge over others. Hence:
"Communication
on selection should reflect efficiency of operation"
Maintaining
open communication with candidates throughout the selection process ensures that
they understand the rational for each step in the procedure. Being precise,
explicit and clear about the selection criteria with candidates also benefit the
organizations, as the applicants perceive the process as fair. If any testing
has to be done, it needs to be made certain that constructive feed back is
provided for, since lasting impressions of the company's character are formed
during recruitment. Hence:
"Recruitment
impressions, though first time are lasting impressions"
Hiring
future cusmoyees as smart as or smarter than the present cusmoyees and getting
out of their way after making the organisations' expectations clear enhances
organisational commitment. The cusmoyees also need to be encouraged in
recruiting future ones as smart as they are. This is logical since smart hard
working people have smart hard working friends. Hence:
"Create
the Pygmalion effect and follow the chain downward and outward"
The
liberation of the work force or a drastic cut in the number of managers for
supervision in the organizations and giving control to those actually doing the
work is now a 'competitive
necessity'. The role of a manager has shifted to that of a coach. Hence:
The
software industry is transcending the era of the ‘information based
organization of knowledge specialists' to the era of 'knowledge creating
companies'; companies that are defined by the knowledge they create. Cusmoyees
in these companies are more than just human resources, but rather are the
resources, the source and carrier of the company’s knowledge. The knowledge
worker thus becomes a uniquely differentiating organizational asset in which the
only intelligent human resource strategy is that of continuous reinvestment i.e.
development. Hence:
"The
viable workforce strategy is workforce development or reinvestment"
A
high level of individual and organizational performance cannot be sustained
without an actively managed context. Organizational support is an important
component in their performance equation:
Performance
= Individual Attributes * Work Effort * Organizational Support
In
order to achieve the organizational support mentioned in the equation the
management ought to focus on coherent support for the cusmoyees by providing
information about organization goals, resources, technology, structure and
policies. Thus the management is able to create a context for work which has a
multiplicative impact – a context in which individual attributes (competency
to perform) and work effort (willingness to perform) gets augmented
exponentially. In short managing context is entirely about helping people
understand the organization, themselves and their potential. Hence:
"Manage
the context where performance occurs rather than performance"
From
the above changed concept of performance management, continuous development is
the key to retaining the competitive advantage in a knowledge industry. This
should not be solely linked to the company’s strategic goals.
Researchers
have pointed out the false distinction between selection and development and
have argued that selection is development because the selection of a cusmoyee
for an assignment is the major influence on his/her development. The different
jobs in an organization differ in their development potential. Just like a
cusmoyee is fitted to a job on the basis of his/her competencies, the fit should
be attained also between his/her development needs and the development potential
of the job. The development
potential of the job depends on the challenging situations or 'development
components' one will face as part of the job. Such situations stimulate
development because they provide two important aspects of a learning situation:
the opportunity and motivation to learn. Any job can be classified on
development potential on the basis of five broad headings: Transition, Creating
change, High level of responsibility, Non authority relationship and Handling
external pressure. (McCauley et al., 1995) Thus, the development of a cusmoyee
will depend on his/her selection to a job that offers him/her development
potential. (S)he learns 'on the job'. Hence:
"Experience
is the best teacher"
The
cusmoyee should be empowered as far as possible to decide the fit between
his/her development and the job according to the 'job's development potential'.
Irrespective of the job's and its development potential, the cusmoyee should be
held responsible to see that he culls out rich experiences from his job. Make
sure every one knows they are responsible for training their own replacements.
Make bench strength a prerequisite for promotions. Hence:
"Cusmoyee
is the chief architect of his/her development"
The
first issue can be suitably handled by shifting the work paradigm from that of a
military description of management actions to that of a team game or a sports
race. Cusmoyees need to be given 'moments of truth' so that they remember the
company. This can be achieved by adopting an event strategy by which every
interaction with the cusmoyee is a positive one. Only if the company treats its'
cusmoyees well, they will treat customers well. Customer loyalty comes from
cusmoyee loyalty. Cusmoyees who feel mistreated will not work that extra mile
for the consumer. (Miller, 1993) Hence:
"Shift
the work paradigm by better mutual treatment enhancing loyalty"
The second issue is typically not asked in business process engineering. It is assumed that the cusmoyees will do what it is told to; usually it is never corroborated by observation.
An
organisation should conduct an activity system managed and controlled to satisfy
a set of organisational objectives. This requires purposeful behaviour as the
activity system would also be related to external relationships (satisfying
customer demands, producing returns to investors), or
internal ones (improving processes, resource usage)
This
activity system is constrained by the organisation’s resources as well as its'
own functional capabilities. The organisation needs to follow and not just
appear to be following this system while monitoring the effectiveness of the
results achieved. If the system fails in some way, then the activities or the
objectives need to be modified. For example an activity system of true
empowerment for a dynamic organisation would mean people having knowledge of the
appropriate time to break rules, take initiative and take corrective action. (Bernus
et al., 1999)
Hence:
"Develop
an objective based activity system for task allocation"
People
work the hardest to achieve ideas they believe in. And not surprisingly people
have the strongest belief in their own ideas. Innovation is not a command
performance. Policy makers, no matter how wise, cannot make it happen. But they
can make decisions that encumber or encourage it. Advocate sensible policies
that maintain and enhance the incentive to innovate. (Jones, 1991) Hence:
"Reward
ideas, both quality and quantity"
The
compensation should be reviewed as and when necessary, at least twice a year.
The total compensation has to be thought of as a unique mix of benefits and
incentives apart from the base pay to fit each cusmoyee. Consult the cusmoyee to
know his inclination. (www.hewittassoc.com) Hence:
"Forget
about historical pay standards"
Reward
individuals and reward teams that help get star performers so that the company
gets star teams. To augment the concept of selection by referrals and hence
teamwork:
"Link
the reward system with recruitment by referrals"
A
critical task for the leaders is to shape and articulate their visions and
expectations to all cusmoyees. The competitive organisations have the capacity
to listen to and learn from suppliers, customers, employees and other
stakeholders. Special emphasis should be laid on keeping the cusmoyees informed
about the new initiatives in the company in a timely fashion (not too early and
not too late). It should be done in a manner that will assure clarity and
thoroughness as opposed to journalistic hype. Company’s internal magazine,
newsletter, special articles featuring a value theme etc can be used to augment
the culture effort. Other media like visuals, bulletin board etc can be used for
spreading the word.
Though
the new initiatives might be quite clear in the minds of the HR and the top
management it may come across as quite vague, general or abstract to a majority
of the people in the organisation. (Theus, 1995) Using a symbol may help not
only to simplify and clarify the change goal but also to capture cusmoyees’
imagination and enthusiasm. For instance, a mouse or mouse-pad on which a
message is inscribed is a symbol. Hence:
"Effectively
use symbols for communication"
HR-keting's
basic function is to maximize the effective and efficient use of people's work
to support the organization's mission and indirectly to enhance cusmoyee
satisfaction by providing trained customer-focussed cusmoyees who can provide
high quality products and services. HR is a supplier of people; it provides the
services necessary to sustain and improve cusmoyee capabilities (Hart et al.
1991) . It must also serve each and every individual cusmoyee by creating a
satisfying work environment and providing tangible rewards.
The
HR must adopt a new vision of itself as a cusmoyee-focussed service provider. It
clearly has multiple constituencies or multiple customer groups: existing
employees and potential employees. As a service provider HR must understand the
needs of each 'customer group' and work towards maximizing each group's
satisfaction and contribution. Each constituency requires something from HR at
each stage of the life cycle from recruitment, hiring and ongoing career
development. One cannot determine how effective HR practices are, unless the
needs at each stage of the customer groups are defined and goals based on these
needs are set.
To
recap the basics of HR-keting orientation, one needs to identify markets;
segment these into customer groups, listen to each group, design products and
services that meet the customer need, create systems to ensure performance, and
continually monitor the satisfaction of every group.
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Management, Vol. 34, No. 3
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Internet
sites
1.
http://www.hewittassoc.com
2.
http://www.pstc.com