Poor pay for contract labourers and inequality seen as an important trigger for violence

July's violence at Maruti Suzuki's Manesar plantclaimed the life of a general manager, cost hundreds of workers their jobs and caused the company a production loss of close to a quarter of a billion dollars.

It also threw lighton the disproportionately high use of contract workers by India's manufacturing companies, a practice that helps them manoeuvre around the country's rigid labour rules.

Contract labourers have been found to be often poorly paid in comparison to permanent workers. And the visible inequality that this arrangement spews is seen as an important trigger for violence.

Sure enough, in the aftermath of the violence, Maruti has decided to bid goodbye to the contract labour system. It might be on the back-foot for the time being in India, but in Europe, things are only getting more attractive for contract or temporary labour.

Brian Wilkinson, executive board member of the over 16 billion HR solutions company Randstad Holding, points to "a kind of convergence happening toward the freeing up of the labour markets" in those parts.

Policymakers everywhere confront seemingly conflicting pressures from two important constituencies: industry, which wants liberal labour laws, and workers, who want more protection. The European convergence that Wilkinson is referring to addresses them both.

One aspect of it is the easing of barriers to flexible working. There have been rules, particularly in southern Europe, regarding where temporary staff can be used and for how long.

A convention of the International Labour Organization, the UN agency looking at labour issues, is aimed at doing away with such restrictions. "India isn't a signatory but that's something the Indian Staffing Federation is pushing for, because there's a clear correlation between labour market flexibility and employment generation."

The temporary workers have something to look forward to as well. "There's an equally-strong move toward greater security for temporary workers," he says. That will come in the form of equal pay (parity with permanent employees). Two years ago, UK made it possible for temps to qualify for equal pay after being in an assignment for 13 weeks. Germany has now passed a similar law, he says.

"The removal of restrictions opens up the market. And the extension of greater protection to temporary staff also increases the availability of candidates," Wilkinson says. "You create a virtuous circle, where everyone has more flexibility and are able to respond to lifestyle circumstances and production needs."

That's a path India may want to think of in future, says Wilkinson. "When I started out in the UK 30 years ago, it was like this (India). It was poorly regulated." Not any more.

Clearly, the contract worker system is in its nascent stages in countries such as India and China. And it shows. Wilkinson talks about there being "a marked difference between the more mature markets and emerging ones" when it comes to use of contract workers.

The difference is as basic as why they are being used in the first place. In India, he says, the driver is the lower labour cost. "And that's driven by regulation. What Indian employers lack is the ability to flex their workforce."

B-schools including IIMs reviewing human resource curriculum after Maruti's Manesar violence

A month after labour unrest and violence erupted at Maruti Suzuki's Manesar factory, the reverberations are now being felt at some of India's top business schools. Many of them, including at least two IIMs, are reviewing their human resource curriculum to re-include industrial relations. Companies are also pushing B-schools to rebalance human resource (HR) courses to ensure that industrial relations (IR) skills aren't ignored. 

Post-liberalisation, with the growth of the services sector over the past two decades, HR management issues such as employee engagement, talent acquisition, compensation and organisation development have edged out 'personnel management' inB-school curriculum. Industrial relations gave way to strategic HR. But clashes at Maruti Suzuki are forcing a rethink. 

IIM-Ranchi, the only IIM that has a dedicated two-year programme on HR management, will soon roll out a full-time course on industrial relations, apart from increasing the IR component in its HRM course. 

IIM-Ahmedabad, which scrapped a planned executive course on industrial relations a couple of years ago due to lack of corporate nominations, is holding such a programme in October, indicating renewed demand. 

"Everyone is concerned about the situation. Suddenly, IR is becoming important, particularly in manufacturing, though it could spread to the services sector as well," says MJ Xavier, director, IIM-Ranchi. The institute is organising a two-day conclave on September 21-22, where the Manesar turmoil will be the major theme. 

NEED TO LOOK INTO LABOUR RELATIONS 

"Business schools should refocus their curriculum. The events at Manesar were due to various specific causes but point out a need to look into labour relations and how we can unleash the potential of workers to create a competitive, fair and inclusive workplace," says Rajeev Dubey, president (group HR, corporate services and after-market), Mahindra & Mahindra. 

The curriculum of B-schools was one of the issues discussed when industry bodies met recently to explore the way forward to create conditions where workplaces can be free from violence. "We have B-schools curriculum on our radar. We will see how to bring it up with the institutes," says Dubey. 

Ninety-nine per cent of summer internships are projects on strategic HR, says A Sudhakar, HR head of Dabur India, pointing to the inadequate weightage given to personnel management. "We are talking to Symbiosis in Pune to start orienting students to IR issues. We have asked them to ensure that each student goes through at least one practical factory situation," he adds. 

IIM-Calcutta is also closely tracking the events at Manesar. "We need to rebalance the emphasis on IR...While some faculty is following the events at Maruti's Manesar factory, we need to study this more before taking a call on realignment of our syllabus," says Amit Dhiman, assistant professor of HR at the institute. 

Top management institutes such as the Tata Institute of Social Sciences and XLRI, Jamshedpur - which are among the handful in the country that offer a range of compulsory courses on personnel management, IR and labour law - are also tracking the incidents to incorporate the emerging trends while revising their curriculum. "Our business schools should lay emphasis on industrial relations," says Bino Paul, professor of labour economics and chairperson of the Centre for HRM and Labour Relations at TISS. 

ISB is exploring the need for a separate programme on IR. "This is a hot topic," says Deepak Chandra, deputy dean, ISB. "It will be discussed in our quarterly meeting on product ideas." 

"IR courses in top B-schools in core programmes and executive programmes had almost disappeared post-liberalisation in the absence of takers," says Biju Varkkey, professor of personnel and industrial relations at IIM-A. "Only a limited number of text books on IR have been published in the past few years, whereas the number of books on HRM has been phenomenal," he adds. 

Academicians such as Paul from TISS feel the conflict is not confined to the manufacturing sector and could soon explode in the services sector too. This is where the education institutions have a crucial role to play in training future managers and help create a communication channel between the white-collared and blue-collared employees, he says. 

"Manesar is not an isolated example," says Varkkey of IIM-A. "There has been a trend in these violent incidents over the past couple of years... the contractualisation of labour force is pushing people to periphery." He goes on to argue that both trade unions and managements have lost the people skills needed to deal with this. 

"Years ago, working in a manufacturing set-up was one of the most fundamental experiences of an HR manager; you did not get a ticket to rise otherwise," says Yashwant Mahadik, VP (HR), Indian subcontinent, Philips. "But for youngsters now, working in corporate offices is far more attractive. If things continue like this, we will lose our skills and competence in that area," he adds. 

Only a few companies such as HUL, ITC and Philips emphasise on building IR strengths in their management trainees. "It is made attractive for them (trainees), and that's what needs to be done," he says, adding companies that don't focus properly on IR are more susceptible to agitation and low productivity. 

Manesar has provoked Indian academia to don their thinking caps to bring back the lost focus on IR, and to try and wipe out the dichotomy between the white-collared and blue-collared workforce. 

India Inc gets lessons from sports legends, including Martina Navratilova, Narain Karthikeyan and Anil Kumble

What do Martina Navratilova, Narain Karthikeyan, Viren Wilfred Rasquinha, Venkatesh Prasad and Anil Kumblehave in common? All these sporting stalwarts have turned coaches for India Inc executives and employees. Companies across sectors are getting them to help employees beat stress, push performance, handle anxiety or even learn the difficult art of clinching a deal. 

When technology company SAP Labs India decided to make its managers learn the art of turnaround, they turned to Shah Rukh Khan-owned Kolkata Knight Riders (KKR). Team director Joy Bhattacharjya will conduct sessions with 40 managers of the tech giant on how to shortlist the right talent for their groups to facilitate turnaround. 

The method of training will be similar to how the players are selected in IPL. In an Indian Premier League auction, every team is given a certain number of players and it bids for the rest by gauging a player's record. A similar mock auction will be conducted at the firm's Bangalore office since no manager has the luxury of starting a team from the scratch and has to work around members he already has along with only a few additions. 
Bhattacharjya will help them spot talent that makes a squad win. "We chose Kolkata Knight Riders because after a dreary performance in the first three IPL seasons, the team qualified till play-offs in the fourth and won the championship in the fifth season," said Bhuvaneswar Naik, HR vice-president at SAP Labs India. "The process of building a team can get jaded, both in sports as well as management. The managers need to see winning qualities in members and bring in team members, according to the team's requirement," Bhattacharjya added. 

There are enough eager takers for lessons from these sporting legends on topics like ways of managing a team, competitiveness, team spirit and handling stress. "Achievers associated with IPL and Olympics will strike a greater chord than a regular coach or consultant," says Atanu Ghosh who teaches strategy and leadership at IIT-Bombay's Shailesh J Mehta School of Management. 

At a session with IBM India's clients and employees in October, 18-times Grand Slam winner Martina Navratilova said,"What it takes to be successful in tennis and business is not very different. The mark of a champion is how good you are at your worst." Navratilova session was on how to cope up with change and she explained it through examples of how she had to start playing with metal rackets during French Open after using wooden ones for years. IBM's software group holds these townhalls where around 1,500 employees and clients participate. 

Formula One racer Narain Karthikeyan is holding a similar session this week. These talks are motivational and are applicable to corporate life. Says Anil Menon, director, marketing for general business and geo expansion for IBM software group, "Sports is just like the national flag that immediately gets young India connected." 

Sports seem to have a more universal connect in the Indian branch than its global counterparts. In other IBM offices, authors as coaches are more popular for conducting learning sessions, but back home sports stalwarts are a better bet, said Menon.

Indian IT's HR headache: 1 in 5 CVs fake

Last month, R Nandan, a 33-year-old employee of IBM, was discovered to have used his wife's academic credentials to get his Rs 24-lakh-a-year job, putting the spotlight on rampant resume fraud faced by India's $100-billion information technology services sector.

Had it not been for falling out with his wife, Nandan's fraud may never have been exposed. Every year, despite the IT industry's stated resolve to stamp out the problem of applicants lying about their academic qualifications and work experience, thousands like Nandan manage to sneak in. This is raising questions about whether companies are serious about tackling an issue which has the potential to harm India's reputation as the world's preferred location for outsourcing technology services.

One in every five CVs floating in the Indian IT industry is suspect, industry insiders and hiring experts say.

"At any given point in time, up to 10 per cent of the existing workforce in companies would be caught for fabricating or exaggerating their qualifications if verification tests are conducted," said Aditya Mishra, head of staffing business at Ma Foi Randstad, a leading HR services company in India.

HR experts say that the issue of resume fraud is very closely related to the integrity of the employees and their employer, and such instances would definitely have an impact on India's image.

"If companies don't get their act together on this, their reputation will be impacted. It speaks about their integrity," said Ganesh Shermon, partner and country head for human capital advisory services at KPMG.

The industry's inability to stop candidates who seek to game the system has partly got to do with lack of firm commitment from companies to follow uniform practices across the industry. "Honestly, most IT firms don't care; they just terminate these employees and forget about it. Unless employees, who fake their credentials, are taken to the police, this issue will never come to an end," a senior executive of another Bangalore-based IT company said, on condition of anonymity.

Continued high prevalence of resume fraud also raises questions about the efficacy of National Skills Registry, an initiative that industry body Nasscom started over five years ago as a long-term solution to the problem. As many as 118 large companies are members of the registry, which currently has a database of 1.1 million candidates, according to Nasscom. Of this, nearly 8 million candidate profiles have been vetted, so far, with the help of some 17 third-party background verification agencies.

"When hiring and employee churn happens at such a large scale, some of these fraudsters manage to sneak in and that is bound to happen where things happen at this scale," said Nasscom president Som Mittal, who did not think that resume fraud has reached a proportion where it threatens India's image as preferred offshore location. "Of course it is best if we can eliminate the problem. We will crack this." The industry body expects it would take another 18 months before the registry would achieve critical mass of candidates and becomes a de facto choice for companies.

Meanwhile companies claim that they have deployed checks and balances to ensure that bad apples don't sneak in and create a stink risking the entire firm's reputation.

Wipro said typically 20 per cent or one in every five resumes in the industry is fake or has forged information. Wipro has deployed an e-Recruitment system, which brings down the fake resume rate to less than 1 per cent of the total active applications, the company said.

Infosys said that it conducts several rounds of interviews before making an offer but still comes across cases of fraud. "We conduct a verification of credentials given by the candidate, mainly education and previous employment record. We do get occasional cases of fraud which we deal with strictly as per our code of conduct," an Infosys spokeswoman said in an email response.

Most large IT companies also outsource some of the background verification to third-party agencies such as Authbridge, Pinkerton, and Crederity.

Once university databases becomes accessible online and electronic marksheets are available, companies will likely have better chance at catching the black sheep, but till then the industry will have to rely on eternal vigil by hiring agencies and HR managers to ensure that the sector's reputation is not affected.

Uninor to cut 2,000 jobs in 4 circles

Telecom service provider Uninor is scaling down operations in four circles and laying off 2,000 workforce from those four circles — Karnataka, Tamil Nadu, Kerala and Orissa. But the company has adopted a unique human resource model where it is inviting its competitors to come and hire from its retrenched staff.

"Around 2,000 people are affected due to this scaling down of operations, of which 400 are direct employees . There are total 17,500 employees in Uninor. We have appointed an outsourcing agency to help them (retrenched employees ) find employment outside . We have been in touch with the HR departments of our competitors and all have expressed interest," Sigve Brekke, managing director , Uninor said here on Tuesday. They are trying to absorb some of the employees in other circles.

A help desk will also be set up within Uninor to facilitate the process, he said. Although the company is yet to analyse the number of employees that it is going to reinstate. "Mapping in this regard is on," a company official said.

Uninor, is a joint venture between Norwegian telecom major Telenor and Indian realty biggie Unitech . The Telenor Group holds 67.25% in Uninor. It is present in 21 circles across the country, out which it was strong in 13 circles.

At present, Telenor and Unitech are engaged in a legal battle and plans to part ways

More “Naked Resignations” among Chinese workers

While Chinese workers are generally known for their diligent and hardworking nature, the term “naked resignation” is increasingly becoming more common in China.

The catch phrase “naked resignation” means quitting a job without having another one in the works. According to a recent survey by Global Times and Sohu.com, almost half (43%) had done, or were considering “naked resignation”.

Among them, more than half explained that the main reason for this was the lack of satisfaction and happiness at work.

Job analysts say that one factor that has led to “naked resignation” is the change in mindsets of Chinese youth, especially those in the post 80s generation. These young workers value career satisfaction and work-life balance, which is a marked difference from the older generation.

In another survey by Qianjiang Evening News to investigate the phenomenon of “naked resignation”, 48% of respondents preferred to stay at home due to the heavy workload and poor salary, while 27% considered their current jobs valueless and meaningless, so they would rather resign and study more.

Companies skilled at core HR practices experience superior economic performance, says new study

Based on a survey of more than 4,200 HR and non-HR managers in more than 100 countries worldwide across a broad range of industries, the report compares the practices of high-performing companies against those of lower-performing ones in 22 key people-management areas.

The correlation between economic performance and capability in these 22 HR areas was especially striking in six contexts: 1) recruiting, 2) on boarding of new hires and employee retention, 3) talent management, 4)employer branding, 5) performance management and rewards, and 6) leadership development.
In three pivotal areas—leadership development, talent management, and performance management and rewards—the high-performing companies differentiated themselves dramatically. In each one, these companies engaged in more activities and provided more options, did so more often, and were generally more effective.
"Overall, what these findings reveal is that 'people' companies are far more proactive and more strategic about ensuring they have the talent they need—today and in the future. They fully understand the connection between talent and sustainable performance," says Rainer Strack, a senior partner at BCG and a coauthor of the report. Adds Horacio Quiros, president of the WFPMA and another coauthor, "We've always believed that companies that have good people-management practices perform better. But we now have uncontestable evidence of this correlation."
Among the key differences the study found between highly capable and less capable companies:

• In leadership development, high-performing companies rely more on leadership models that clarify leaders' expected contributions and behavior. They also make people development a central element of leaders' job requirements, using incentives such as compensation and career advancement.
• In talent management, high-performing companies know that the talent pipeline must extend beyond the successors to top management. Consequently, they offer more development programs for a broader range of talent. They also try to attract more international talent. These companies are proactive with talent reviews and create ample career-advancement opportunities--including horizontal as well as vertical ones. They also do more to nurture employees' individual growth and keep them fulfilled professionally.
• In performance management, high-performing companies treat and track performance with transparency. They recognize the value of fair and transparent measurement and rewards systems in promoting a culture of meritocracy. They more often align and motivate their people with clear norms, expectations, and global standards. They reward behavior, not just results, to a greater degree than low-performing companies.

Excelling in leadership development, talent management, and performance management, however, is not enough. Being a “people company” means doing more across the entire spectrum of people management activities, from employer branding to employee retention. Furthermore, notes Jean-Michel Caye, senior partner at BCG and a coauthor of the report, "It's not enough to carry out people management activities in a linear and separate fashion. There is an integrated logic in how a company builds, for example, its talent-management, leadership-development, and performance-management efforts." The demonstrable economic benefits of people management have important implications for companies that may be weighing cutting back on the sorts of programs and activities that have a hard-to-quantify return on investment. As Pieter Haen, secretary-general of the WFPMA and a report coauthor, cautions, "These findings should be a wake-up call for executives and HR people everywhere. As the talent crisis worsens, those who don't make a commitment to attracting, developing, and retaining talent put their future performance at risk."
According to the press release, "From Capability to Profitability: Realizing the Value of People Management" is a preview of findings from the 2012 BCG/WFPMA global survey on people management. The full findings will be discussed in a larger report due in October as part of the Creating People Advantage series that BCG has published annually since 2007, together with the WFPMA and the European Association for People Management (EAPM).