Case Study: The Generation Gap

The Digit World E-Commerce was one of the most talked about company among young organizations. A typical e-commerce but focusing on a niche segment, the company surely has made it’s followers and patrons within three years of it’s existence. Very recently, Anurag joined them as their first head for human resource function. Impressed by the young breed of entrepreneurial people at the organization, including the founder and CEO, Anurag made this career movement. The organization received some fresh funding from major VCs and was also in process of generating another couple of rounds of fund raising. This further consolidated the move of the the new HR head for the company.

Barring couple of people, most of the people were in late twenties or early thirties. Hence most of the leaders believed a lot in open culture, flexible work timing, working as a team, no boss and subordinate culture and a non-hierarchical approach.  Anurag, being a young HR leader himself, propelled the culture after he joined the organization a couple of months of ago.

Contrary to most of the organization, the finance team was still believing in classical old world organizational culture which was largely driven by the leader of the team. Ramesh was heading the team for last couple of years- almost two third of the time since the company came into existence. Father of two teenaged daughters, he had a rich experience of almost 14 years before joining the company. Starting his career with few years in a CA audit firm followed by couple of years in paints industry, he worked for nine years in an automobile plant before joining the company. He was surely one of the best person to understand managing of funds, vendor payments, compliances and other financial issues. His ‘above his age’ approach and a religious south Indian family background made him appear a bit older than he actually was.

He was a conservative accountant like any other accountant but sometimes much more than required. Couple of times Anurag also wondered about him as he questioned couple of costs regarding employee benefit programs. In any modern day organizations, those programs were a minimum basic but as per Ramesh, they were frills and cost.

Ramesh was a strong believer of clocking 9.5 hours or more in office. Reaching office on time, having minimal breaks, being there on time and being available even late in the night if he wants the team to be were some of his major expectations. Hence most of the team members hired by him were commerce graduates with couple of years of experience. This helped him in stating his authority over the team. Despite being a Vice President himself, he did not have any intermediate managers and entire team used to report to him directly. However, there were couple of young and fresh chartered accountants also in the team. They soon became restless because of the old world approach.  Khushi, a young hot headed Punjabi girl was one of the two outliers in the team who were qualified and not willing to accept the authority unless satisfied with proper logic and answer. Ever since Anurag joined, he found both Khushi and Ramesh at the loggers head. Both of them took turns to come to Anurag and complain about the other person.

Khushi’s complaints were typically about Ramesh not being a good guide, being biased towards graduates as they are under awe of him and do not confront, being a micro-manager etc. On the other hand Ramesh had a complaint box which mentioned about Khushi’s attitude during early stage of her career, challenging his decisions, reaching out to other people in business and by-passing him.

It was a daily affair for Anurag to listen to their cribs. One fine day, Khushi sent the mail to the CEO with Anurag in the loop. The mail was as below

Dear Sir,

It is getting difficult to work with Ramesh. There are some of his behavior/ incidents below which has upset me and it is repeated often. Hence I would like to resign. Please accept.

1.      I’m blamed for a mistake committed by anyone in the team irrespective of whether it was done based on his instructions.

2.      I’ve been insulted in front of the auditors by saying I may provide wrong information and directing them to someone else.

3.      He has asked my team members to report directly to him and I’m not being marked in emails but am expected to know everything that is happening in my team.

4.      Also yesterday he woke up all of a sudden to an apparent mistake made by me (again by following his instructions) while making the report for last month. When I asked him to explain how it is to be done he explained in a way I did not understand. When I told him so he said if you can’t understand what can I do and that why am I here.

5.      Further he has also on occasions told me that I’m not fit to be here and that he doubts me being a Chartered Accountant.

6.      In cases where there is any question raised regarding any work done by me I’m talked to as though I’m always committing errors. And when there is a question raised regarding anyone else in the  team the most stupidest explanation is given to cover it up.

7.      I’m required to rectify/ reconcile all the mistakes that happen irrespective of whether or not they were committed by me. These days any mistake committed in the  accounts has to be done by me as the rest of the team is all knowing.

8.      I’ve spent months together training people in the team and am give absolutely no credit. Moreover I’m told that I’m always trying to break the team and that I’m not a team player.

9.      There is no respect he has for anyone in the office. When the customer service and sales process was to be explained to the auditors he told me not to expalin as I may do it incorrectly and the I must ask the respective team to explain. Later when based on the explanation a question was asked,  he said you have asked “some local person” to explain which is not correct.

10.  He has told me may times that “XYZ is a better worker as he works on Saturdays and Sundays too without making any noise.”

11.   At the time of the death of my aunt I wanted to go for the last rites to Punjab, I was asked to first complete the MIS and then leave.

12.  There is gender bias which was evident when the awards were given to only the male members in the team.

13.  There is also a bias based on the language and region from where the individual comes.

14.  There is negativity towards me as he assumes that I’m complaining about him to people. On various occasions others have been asked if I were complaining to him although we were only discussing work.

15.  He also spies on me when I talk to anyone in the office by joining the conversation and passing comments or just standing there to hear the conversation.

He takes revenge for his personal grudges against me on every step. Its highly impossible to work with him anymore.

Surely, the written complaint called for some action.  Anurag was wondering whether the allegations are true or bloated out of proportion? Definitely there were some behavioral issues with Ramesh but the complaint definitely showed them in an enlarged manner.

Also, what shall be his approach now? Get somebody senior to Ramesh who can drive a younger culture? Look for a younger replacement? Ignore as it could be a reckless resignation mail? Anurag was wondering what shall be his approach towards his peer and counterpart from Finance team.  

Scene 2

Ramesh meets Anurag and asks him to ask Khushi if she would like to continue in the system. Anurag himself has a mixed feeling about it as he sees it as a temporary solution. What shall be his approach?

Human Resource Complexities@ e-commerce

E-commerce, a big buzz word these days! Aspirational place for all premier school pass-outs! A revolution which is changing the way India shopped for generations!! A buzz, which is giving dizziness to all the brick and mortar as well as mom and pop stores in terms of their business and also the HR function for reasons more than one to be worried about.

Human Resource in e-commerce industry is very different as well as difficult. There are many reasons which makes an HR person’s life difficult in such organizations.  The major few are detailed as below.

1.       Youngistan: Typically most of the e-commerce companies in India are started by premium engineering college pass-outs. Some of them may have begun their career with an e-commerce company abroad and hence picked up certain tricks there. This entrepreneur group is young, dynamic and passionate and often is carried away by their objective and goals. The lack of industry experience and their extreme passion to create something different, sometimes are marked by less experience towards people and people management skills.

2.       Subordinate is senior to Boss: Founded by a young person or a group of friends in their twenties, most of the e-commerce companies were joined by a group of friends who divided certain portfolios between them and started heading it. As the time progressed, with increased internet penetration and changing consumer behavior, the organizations grew and then they started to engage the industry veterans. People experienced in supply chain, garments, vendor management etc. were needed to improve the financial and operation efficiencies. The experts often come up with more than a decade of experience. Hence these experts are much senior to the founders and initial joiners of the organization. As a result, we get a situation where bosses are at least 7-8 years younger in terms of age and experience. Sometimes this gap is as wide as almost a decade and a half especially in field of finance, supply chain and human resource.

3.       E-commerce- not a defined industry: E-commerce as an industry is not well defined under India legal system. Some of the clauses of classical industrial acts are redundant for e-commerce companies while some clauses are adapted as per convenience to show some level of compliances. . Compounded by FDI regulations, the companies try to adopt to convenient rules and closest possible fit. Hence, different organizations may have different understanding of the ‘borrowed’ rules which makes it difficult for inspecting bodies and internal inspectors like HR to say what is right and cent per cent compliant.

4.       Sudden mushrooming with limited resource pool: Most of the e-commerce companies started almost at similar time between 2007 and 2009 and grew almost simultaneously. This resulted in all companies vying for same talent pool- be it for marketing, merchandizing or even delivery people. This led to either overpricing of resource or accepting a 70% fitment. Either ways, it is a challenging situation for the HR function. Both the situation has to be mitigated over a period and it is not so easy to neutralize the effect of mistake committed at the beginning of the journey. After few years of experience in the sector, most of the trained resource of e-commerce are now hot resources in the job market where e-commerce is the preferred employment sector; making retention a tough job.

5.       Many industries come together as one: E-commerce industry is an unusual set up as it is not one but many industries coming together. The technology provides the interface, the supply chain and operations provide the agility, retail aids selling,  customer support which is built on a BPO model provides require help to the customers while logistics and warehousing form the neural network. Since the organization is young and is breathing on investors’ money, the finance controllers are equally important. In short, there are people from varied background, with preference towards different environment and set up need to be brought under one ecosystem. Hence, hiring strategy, competitor analysis, retention programs and any other people approach needs to be very diverse despite being one organization.

6.       Confused identity: The e-commerce companies in India are often confused whether they are a technology company or an online retail company. We have seen lot of companies going through a metamorphosis over last couple of years which means internal employer branding, people approach, hiring strategy and projections, everything to be overhauled by the human resource function. The lack of identity also leads to blind aping of certain best practices followed at certain global giants. However, this leads to certain problem due to diverse population, different business and the stage of organization life cycle.

7.       Everything is trial and error: The e-commerce industry is new to India. Internet penetration in India is in lower single digit percent. Thus, data to predict things accurately about consumer and their online buying pattern may be not be sufficient or conclusive. In such situation, an extrapolation with certain assumptions is maximum accuracy one can achieve. Lot of decisions in e-commerce industry is pure gut feeling and can always backfire in terms of area targeted, timing or logistical and vendor support. Human resource need to support all such brave hearts appropriately differentiating between courageous and over ambitious people.

  

8.       KRA is dynamic: As mentioned in earlier points, e-commerce is an unchartered territory in India. Thus one really needs to find his way out from the maze which has probably only one way out.  The course of KRA changes very frequently during initial times as one realizes that the way ahead will hit the dead end. This makes job difficult for people and hence the motivation level fluctuates. HR who is battling the change in strategy themselves, also need to hold all the employees together during the initial roller coaster ride. The performance management during such time takes a subjective route as not many results are there to showcase. Bringing in fairness in a subjective environment is tough job for Human resource function.  

What is the solution?

There is no prescribed solution for HR function of e-commerce company. An HR needs to be agile, experimental, adaptive and receptive to environment around. Though these requirements are applicable for any HR but in commerce industry, these things are much more important sue to lack of previous instances to refer. Till we reach a point where e-commerce sector becomes established in India, the HR function needs to work with more trial and error and some borrowed solutions-tweaked to match the requirement and still have the approach which is not disturbing the harmony between diverse groups within the company.

Case Study: Shattered Dreams

Shattered Dreams

Mohan was very enthusiastic as he was joining allsold.com, a leading e-commerce organization as a head HR for the organization. E-commerce was growing big time in the country and among all e-retailers who have mushroomed in last 4-6 years, allsold.com held a special place. The company held almost 20% of the total market share by number of online shopping transactions and was very popular among young consumers owing to the speed and quality of service it provided.

About allsold.com

It was surely a matter of pride to be associated with such big name in Indian retail. Everyone today was well familiar with the name of allsold.com, thanks to their customer focus, discounted pricing and some aggressive advertising and marketing campaigns. Allsold.com was a young, dynamic and vibrant company with average age of the employees being around 27 years. Most of the senior management people were also below 30 years and had been with the company for more than 3 years. They all had a good pedigree and for most of them, it was the first job. They have built the business from scratch and have brought it to the current level. The founders also were around 30 years age bracket and had short stint in corporate before they made their entrepreneurial plunge.

The organization had around thirty percent of the population who have spent more than a year and a half in the system and almost one third of them have already got the long term tenure award as they had completed three years in the organization. Obviously for an organization just four and a half years old, this was an achievement. There has been no visible people issue in the past. It was like a small close knit family. In last one year, the population of the organization had gone up three times to around two and a half thousand employees as the business grew many folds. However, the rapid growth in number of employees never made anyone feel that there is any segmentation among employee groups based on tenure. Everyone remained busy in their own little world and kept working towards their assigned individual objectives.

As it would be for most young organizations, the place had a free work culture. Free snacks and cold drinks, a carom and foosball table in pantry, no work timings or dress code and bean bags around work stations were just some of the enablers organization had in place. People coming in shorts and t-shirt and enjoying a game of carom between the works was a common site. Office in central posh locality of the city where lot of youth hangout places were around just added further charm to the entire work environment that organization had created.

Manager- team interaction was very friendly at allsold.com. Since the team comprised of similar people in terms of pedigree and age-group, they gelled well- more like friends than manager-subordinate. In some cases it was extension of college senior-junior relationship. Most of the discussions were informal and over a tea-smoke break. Hence some of the formal serious business meetings were also very ‘cool’ in the way they were conducted, though the debated topic were often found to be a burning problem.

About Mohan

If organization was a popular name to be associated with then Mohan too was regarded as one of the most reputed HR professional of his experience level in the industry. He has worked with big IT and ITES organizations in his earlier stints. He was known for some employee friendly policies he had introduced while working with one of the IT majors. The basket of benefits he introduced helped his previous employer in retaining people as the IT company was facing stiff competition from it’s competitors. He is still basking in the glory of the job he did almost 7-8 years ago. Mohan also carried a reputation to be a great and aggressive task master and had delivered on numerous occasions for his organization. With experience of 15 years and a relevant masters’ degree from Cambridge, allsold.com could not have got a better person for the top HR job.

About the industry

The e-retail industry being young, technology focused and in innovative space, is becoming a popular choice among the young job seekers if they had to select between Indian companies. The e-commerce industry needs people to work in technology, retail, customer-support and supply chain. The new form of organization had flavour of several industries in one. Era of old world IT services companies was now over and the e-retail was all set to rule the roost as preferred employer. The rapid growth and uncertainty ahead became key points of attraction for the young brigade as their KRAs are not pre-scripted. Since the entire industry itself is going through a metamorphosis, all e-retailers need to have their employees on edge of their seats. Despite being in existence for more than six years, we can say that the industry is still in infant state as far as India is concerned. Hence, the actions need to be dynamic and real time. One has to adapt quickly to the change in strategy and focus areas of the company and this has become their selling point as an employer. Apart from a pretty volatile work environment, the new generation of job seekers surely have their preference towards a ‘cool company’ where they are free to dress their way and be independent of time schedule, unlike some IT services where clocking of minimum hours and a severe dress code were followed in stringent way.

When Mohan joined the organization and found most of the stories heard about the organization is true. He found that there is no dearth of growth stories of individuals. Lot of people in business functions have grown very fast as the company grew exponentially in last two years. He was glad that he joined an organization which is already having a great culture and environment. From HR stand point, the only area he felt that required to be uplifted was having standard HR processes in place. Hence to begin with, he decided to focus on strengthening of key HR processes. He wanted the processes to be the DNA of the organizations. He very well knew the importance of having a process driven system in larger organizations. Allsold.com was growing to become a mid-size organization and it was important for them to adopt processes even in their HR activities, be it induction, performance management and appraisal, any development program or support in terms of travel, phone reimbursement or broadband connections. He knew that it is important to drive standard policies around these areas. He also wanted to give a formal structure to manager-subordinate interaction in order to have a serious and formal career discussion. His initial thrust and focus drew a lot of resistance from senior business managers and criticism for him stating that he is over aggressive, killing the DNA of the young company and is a non-friendly HR head. However, he was unfazed by the attack and kept progressing diligently highlighting one process gap after another. Sometimes he even got the feedback from founders to become less process oriented as HR processes are new for the organization. Hence he should bring them in slowly and shall not burden managers with HR paraphernalia. Mohan was becoming unpopular among the business leaders and a few even called him a cultural misfit for the organization. On the other hand, Mohan was toying with some other ideas altogether. He wanted the organization to be established as a brand. He wanted them to be regarded as one of the best employers. This could be done when an organization participate in such surveys and is rated well. Any such survey has several parameters like people-processes, friendly environment and growth stories.

As an experienced HR person, he knew the parameters on which such evaluations are done. He has been part of teams who were in the top quadrant as best employer during his previous stints. Friendly manager-team interaction, friendly work environment, growth stories were already there and now with some focus on processes, Mohan was sure that he will make a big bang announcement soon. With base already set up, Mohan decided to go for the final kill and go aggressive with his process drives. Mohan invited people from one of the HR institutions who perform such surveys globally to visit the office of allsold.com. The vibrant office impressed them too and some minor feedbacks were shared. Buoyant by their encouragement, Mohan registered with one of the leading business magazine too for such survey. Both the surveys were around three months apart with the business magazine having the survey later and Mohan believed that it will be consolidation of the point he wants to make.

The entry into top employer of the country club will catapult Mohan’s name in the industry and establish his authority in the organization, something he has been trying to do during last six months- since he joined. He knew that young blood organizations have the history to spoil the party for big companies when it comes to being the best employers. There were numerous examples in last five years when a young, innovative and a company with less than fifteen hundred employees has done well in such surveys. Barring some MNCs who were recognized globally for their people support, Mohan was confident of beating most of the competition.

The day came nearer. Sample population was chosen to pilot the survey tool and avoid any technical glitches. The parameters and some of the highlights about the organization were talked about through company-wide mailers from founders’ email id and posters. This was first of its kind initiative for the organization. In all possible way, Mohan and his team were trying to generate the pride in the employee while they are associated with allsold.Com. Last fifteen days before the survey witnessed the bombardment of mails. They kept sharing the growth in customer base, top line, bottom line, employee base, category wise growth to showcase all that has been achieved. Survey was opened for four days and within first day itself, around 70% of the employees took the pretty lengthy survey of around 75 odd questions. They finally ended the campaign with around 95% employee participation. Mohan was feeling proud and was keeping his fingers crossed. The results would take around three months and in the meanwhile the second survey would be done too. He thought for a moment that he would not get some time to improve the areas of concern highlighted by the survey but soon he was out of it as he was confident that there will not be many such areas. All he wanted to ensure that some of the points are reinforced.  He wanted most people to participate and that too under the ‘halo’ and ‘recency’ effect of the mailers.

The second survey also happened with the same fanfare.  Now, there was a lot of buzz on the floor as the result of the earlier survey was about to come. The surveying institution shared the survey result with Mohan a day before they were to put the list of top 100 employers and the extended list on their website. While opening the email, Mohan felt that he is opening his report card shared by his class teacher.

Mohan was shocked to see that they do not feature in top 100 at all- nowhere in the top quadrant. Most of the scores were between 60^th to 70^th percentiles. Even the absolute scores were not encouraging. Some of the major concerns highlighted by employees were communication in the organization, fairness by managers as well as management, people development, training and support from manager for development. Trust in managers and management was very low as per the response given. Surely all the informal interaction with managers and mailers from founders’ email id has not worked for Mohan and allsold.com. All the enablers like free snacks, work timings etc were merely captured by the employees during the survey. It was a significant cost for the organization but went purely unnoticed.  

Now Mohan was worried. Tomorrow the results will go public and everyone will know the fact. Today he is having meeting with management team to share the results. He is absolutely clueless about the poor show. He was almost certain of a top 100 finish if not top 50 as it was their first entry. He doesn't know how to tackle the today's meeting with top management. 

Few months later

Mohan has decided to put down his papers. The second survey results were worse than the first. All his plans and ‘BHAG’ came down crumbling. The attrition in the organization has been on upward trend only since the survey happened. Few people blamed him for triggering a chain reaction of resignations by starting such surveys. In his illustrious career, this was perhaps the only black spot and his decision led to his shortest stint with any organization. There is no buzz about the best employer survey now. Neither anyone is talking about the survey nor there are any plans to focus on next year’s surveys. The show was over for Mohan, allsold.com and employees- Curtains !!

Some open ended questions related to the subject

• What makes Google the best employer? Most of the surveys have Google as best employer (2014) in India.
• In 2013, an old world industry like NTPC with 25000+ employees and a new age venture Make my trip with 1500 employees featured in top 10 as per Great Place to Work (GPTW). Is there a common practice between the two contrasting organizations?
• In 2014, all of top 10 employers as per GPTW, had an employee base less than 9000. Is it a coincidence?
• Is it right to segment employers as per employee strength during such rankings?
• Below is the list of best employers ranked by business today magazine. Do we see a trend?

References

http://businesstoday.intoday.in/story/business-today-peoplestrong-best-companies-to-work-for-2013/1/208130.html

http://www.greatplacetowork.in/publications/blog-posts-articles-and-news/771-indias-best-retail-companies-to-work-for-2014

http://www.greatplacetowork.in/best-companies/indias-best-companies-to-work-for/740-2013

HR in an Organization Part- 3: HR and ROI

Introduction

Human Resources is a key enabling function for any organization. You may call it a support function or even a cost center. This means, that the function is not directly contributing towards the revenue or profit for the organization but surely adds to the overall running cost. Obviously, no organization will be foolish to incur a cost without any returns coming from it. Most of the times, HR in an organization is not valued as they are termed as very subjective function without any objective measure. Hence, HR needs to create a system where some of the key HR functions are able to show value addition to the entire organization. The return may be tangible or intangible but a definite measure will surely make the case stronger for HR to partner strategically with the business and demonstrate their value and interventions.  

Scorecard approach

Scorecard is best way to show the progress over a period of time if the parameters are correctly captured and measured. The scorecard for HR shall be strategically aligned to business strategy. This means, that HR shall be supporting the vision an organization has chartered for itself for the given period. However, we often make a mistake of not aligning the two. The non congruence of business and HR scorecard causes friction between the two functions and thus the required benefit of the scorecard implementation is not reaped.

Any HR scorecard at the time of development shall consider four major areas of impact

Financial impact: At the end of the day, any function shall be able to give a considerable value to the organization, either in terms of revenue or in terms of savings and it is going to be no different for HR. some of the measures can be

• Revenue per employee which also reflects the correct skill identified for the job and hired
• Cost or percentage cost of employees underutilized 
• Employee cost for pipeline projects

Value for customer: the HR processes shall be able to deliver value to internal as well as external customers. The HR interventions can mean some direct output for external customers if they see

• The organization has thought leaders who are respected in the competitive space 
• People engaged in their project are competent and skilled
• They see their job going as per schedule and skillfully done

Development of people and retention: The scorecard shall measure the association people are having with the organization. The association determines the productivity at the work. Frequent turnover of teams or disengaged employee always causes loss of productivity. Some of the measures can be 

• Intellectual property
• Proportion of people progressed internally
• Number of upward movement an employee sees during his tenure
• Average growth rate of an employee
• Tenure in organization

Efficiency of internal processes: The internal processes shall always improve and facilitate the desirable outcome. From a process standpoint, it can be considered effective if there is 

• Quality assurance at every process
•  The process is helping in reducing the number of transactions
• Reduction in turnaround time
• Compliance

Approach towards Scorecard: DMAIC and Pareto

While coming to scorecard and it’s implementation, it is important to have a systematic quality approach. DMAIC and Pareto principle put together can help in creating one scorecard for the organization. There could be N variables while we are creating the problem equation from an HR standpoint. We cannot approach all the problems simultaneously. Without understanding the impact, reasons and the measure of the problem area, any approach will be similar to shooting in the dark. To have a proper solution, we need to go for the most systematic process. Pareto principle gives us the most impactful problem area(s) and DMAIC gives a definite measure and steps to improve.

The first step is to make a complete laundry list of problem areas in purview of HR with their respective reasons and impacts. Problem can be in areas of talent acquisition, talent development, talent engagement or the process part. Within every area, there can be different sub areas to improve. For instance, talent acquisition may have problems in sourcing effectiveness, sourcing channel, turnaround time or candidate experience. Similarly, the talent development can have problems areas as identification of competency at each level, required training skills in organization, succession planning etc. Hence it is important to make complete list of areas that can be worked upon.

Define: Out of the laundry list, it is important to segregate the problem areas which are impactful. Not every step of process can be worked upon simultaneously as it may be biting more than that can be chewed. For instance, in talent management area, attrition, employee satisfaction, development of people and succession planning can be areas to consider. They all may be related but the source could be one or two. Defining of the problem statement accurately will help in bringing the correct focus while targeting the areas.

Measure: Performance measure for the parameter needs to be defined correctly to ensure the right tracking of data. The defining of measure also ensures consistency of measure over a period of time. For instance, an organization may select to target attrition and define it as voluntary attrition over an employee base. The other definition can be overall attrition over employee base. Both the definitions are accurate and organization can adapt one as per the need but they need to be consistent over a considerable period to track the changes.

Analyze: After defining the problem and how/ what to measure, it is important for HR to do industry benchmarking of the parameter and set the standard for itself. Setting the standard for self can be dependent on lot of other areas apart from industry benchmark. An organization having compensation bracket much higher to others in the market would like to see a better standard than industry benchmark for attrition. The organization is incurring extra salary cost and hence would like to see greater returns compared to peer organizations. Apart from setting up the performance goals, this step shall also identify sources of variation.

Improve: After identification of parameter, process, standard and measure, the job ahead of HR is to improve the score by taking certain measures around people and process practices. The intervention has to be definite, time bound and target driven. A vague improvement plan without target and timeline may not give us the required result. Accurate design of operating limits and interdependency of variables shall be considered while making any improvement plans.

Control: No race is won till finish line is crossed. A good start if not sustained, will never give organization the desired result. Most of the HR initiatives die as they are unable to give long term sustenance to their ideas.  HR shall do any course correction if required to ensure that defined end results and timeline remain unaltered.

Some of the metrics for different function can be as below,

Talent Acquisition

It is important for talent acquisition to show the return of their initiatives and team structure. Recruitment system, use of placement consultants or any other sourcing channel and resources are cost for recruitment. Some of the desirable outputs for recruitment to showcase can be 

• Turnaround time
• Cost per hire over a period of time
• Breakeven period for capital investments

Talent Management

Any step taken by talent management team can mean huge financial impact depending on the population of the business unit. Fairness and differentiation needs to be carefully balanced for the desired output which is engaged and efficient workforce.Some of the measures for talent management team can be 

• Attrition- critical and otherwise
• ESAT
• Average tenure
• Performance data
• Percentage of open position closed through internal movements (horizontal as well as vertical)

Leadership and Development

Leadership and development is important function of HR and is responsible for development and capability of employees in the organization. This function is not in visible action on a daily basis and hence for this function it might be difficult to prove it's worth. A permanent capability building team as well as external trainers, both are sizable cost. To give a proper return, the function can measure some of the below parameters

• People out of eligible population being promoted to next level
• People having concerns about training
• Number of vacancies at senior leadership filled internally

Compensation and Benefits

This team has lot of competitive benchmarking to do. The team while defining the compensation plan has to ensure that company gets the benefit of incurred cost. The success measure can be

• Attrition due to compensation and to competition
• Mix of long term and short term incentive
• Differentiating package or component introduced

Shared Services

Shared services have lot of supporting roles to all the other functions of HR. Any lapse from their end can impact the effectiveness of other areas and overall cost for the organization. 

• Lapse in background verification
• Lapse in salary processing like PF, gratuity, ESIC etc.

Sample Scorecard

Function	Parameter	Description	Industry standard	Target	Actual achieved	Score out of 10	Weightage %	Weighted Score	Trend / Change from last period
Talent Acquisition	Turn around time	Average time to close a position	45 days	30 days	39	7	10%	0.7	Up
Talent Acquisition	Cost per hire	Total expenses/ number of hires	INR 3000	INR 3000	INR 2000	10	15%	1.5	Up
Talent Acquisition	Percentage sourcing through referral	Profiles hred through internal reference/ Total no. of hires	40%	40%	33%	10	8%	0.8	Up
Talent Management	Infant attrition	No. of people leaving in first 90 days/ total no. of hires during the period	<5%	5%	9%	6	8%	0.48	Down
Talent Management	Critical Attrition	No. of people with ratings 1/ No. of employees in rating 1	<5%	<5%	7%	7	15%	1.05	Down
Talent Management	ESAT	Score as per survey	4	4.2	4	9	8%	0.72	Up
Leadership and development	Leadership position filled internally	Positions filled internally above a certain level	NA	4 No	2	5	10%	0.5	Down
Leadership and development	Number of training mandays per employee	No. of people attending the no. of days of training/ total no. of employees	4	6	3	5	10%	0.5	Up
Shared services	Payrolling	Errors in payroll	0	0	1	8	10%	0.8	Same
Shared services	Non compliance	Adherence to required norms	0 Non compliance	0	1	7	6%	0.42	Same
							100%	7.47

Problems vary with organization lifecycle

We cannot use same scorecard for every organization. As an organization grows and the competitive space changes for the organization, the parameters and measure of the scorecard has to change accordingly. A young organization may focus more on parameters like talent acquisition while a matured organization’s focus area can be development of individuals and creation of brand value for the organization. Change of competitive space can also lead to change in approach. A sudden spring up of competitors may force organization to have attrition as focus area. In an industry which highly research oriented, creation of intellectual property can be critical component of scorecard. The scorecard needs constant customization as the situation for organization changes, both internally and externally.

Conclusion

We need to understand that not every problem can be solved. We need to prioritize the problem areas and act. Some of the problems may be miniscule in impact but will require a lot of effort to bring in the required change. Hence, it is important to prioritize not only in terms of impact but also to segregate the low hanging fruits from far-fetched dreams. Hence scorecard should be impactful and precise instead of laundry list. Most of the times organizations make the mistake of putting lot of action items in the scorecard and thus as a result, the impact attached to any parameter has to be reduced to accommodate more line items. If the number of factors remain finite, realistic and impactful, due impact number can be accordingly attached.