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Human asset and HR policies

March 30, 2009

MOST of the businesses do not have a human resource (HR) department and the owner, usually not trained in the field, takes the major decisions.

Also, ironically, some organisations that claim to be spearheads of change, neither have appropriately qualified HR personnel nor the transparent policies. However in many other leading organisations, competent HR personnel lay down policies and work quite efficiently in line with those policies.

What organisations need to do to promote a more creative, productive and satisfied workforce? Companies need to realise the difference between fixed assets and human assets where the former only needs a certain level of maintenance expenditure for it to work effectively. It is not the same when it comes to human assets. While the fixed assets would only perform some pre-specified functions, human assets can be improved further by effective training and appropriate policies.

When Larry Bossidy took over as the head of AlliedSignal in 1991, he very aptly described the kind of qualities that should form a part of a manufacturing leader---someone, “... who would empower, not micromanage; lead not administer; and understand technology, but not act like a technician.”

With that spirit in action, there should be a promotion of feeling of openness throughout the organisation, within and amongst hierarchies to bring up issues and possible solutions at every level. Clarity, transparency and consistent application of organisational policies form the requisite for organisational justice.

An organisation can outperform others with a right mix of people. There are many companies that have an ethnocentric collection of groups of people.

Other organisations disregard the apparent flags of non-discrimination they hold and recruit and retain from amongst members of a particular sect, community or even gender. This practice spoils the earnest efforts these companies make to justify their policies since employees tend to lose confidence in the leadership. Also, this promotes a less competent workforce.

Also important is the challenge in the work environment and opportunity to learn each day. It means making the work more exciting and meaningful to everyone. This also inculcates outlining the growth prospects and path of growth for workers.

The culture of effective rewards needs to be developed. Most companies take their reward systems as something taken for granted and something which could not be changed. To succeed in the competitive arena, quality talent needs to be rewarded with fixed as well as variable pay structures. There should be a dual emphasis on internal consistency; pay structures within the company and external equity; market-based pay scales and a balance between individual performances of employees and administrative procedures.

The feedback mechanism within the company could be considered an integral system which could be amazingly effective catharsis for employees across the hierarchy. Access to the leadership and decision makers is important, however, there has to be trust developed in employees about the management's reputation which needs to be upheld as one that lives up to its commitments; not just doing lip-service.

This is of critical importance since many managers feel they can improve the morale by lighting false hopes amongst employees. Despite being somewhat dicey but highly attractive proposition to some managers, this never works in the long-run and only further tarnishes the organisational repute.

In conclusion, there could be various reasons and motivations behind employees working for a company; the management could do many things to make their companies more preferred workplace, in effect, getting as well as retaining talent. I would put the words Azim Premji of WIPRO to justify the efforts required to improve 'Talented men leave; dead wood doesn't.' The choice is not difficult, is it?