Wednesday, 16 December 2015

Thanks Readers for helping me achieve my first Milestone of more than 5000 Page views !!!

Dear Globe Readers,

I sincerely thank each one of you from various countries for liking my blogs and giving regularly valuable inputs.These inputs really matters a lot to me as they not only refine my own thoughts on subjects I cover in my blogs but also in conducting further possible studies. May one-day these inputs converge into a world changing Business Model.

Because of your reading & liking, I could achieve my first milestone of more than 5000 page views in a very short span of time. More importantly, comments and views, I received.

I will keep putting across my views on various Business subjects and hope getting your comments and views as before.

Wishing all my readers Merry Christmas & Happy New Year-2016!!!

With wishes,

Rajesh 

Tuesday, 17 November 2015

Removing gender bias is a collaborative effort


The article contributed in the monthly HR Magazine " Human Capital", November-2015 issue

Friday, 13 November 2015

ICE Model of Business Strategy Implementation

Success begets success. An old idiom and perhaps the genesis of competitive benchmarking or different strategy matrices. The reason of benchmarking is to get ahead of competitors. It has been used extensively across one and all type of industries and companies. Essentially for reasons where companies easily get business performance numbers to compete for, like performance parameters, process parameters etc. But the question is, does benchmarking get the expected success for organisations?

I see an inherent fallacy in this process of what I call - imitating others. What goes in benchmarking, I examined and found that the entire process is faulty. In general, organisations try imitating other successful organisations on certain characteristics which seemingly has brought success to them. These characteristics could be defined by a business strategy – a culmination of various processes to run a business. Even ‘personal benchmarking’ has its parallel where individuals get into this trapping by following blindly any other successful person.  Close examination reveals that imitation of characteristic does not include a very critical element but primarily imitates only content of a strategy as organisations do not share entire spectrum of a strategy & the thought behind it. Competition only try imitating based on whatever information or content is leaked out in the market.   To certain extent besides content, how the content is implemented in the organisation is also known in the market, although in a limited manner.  The study across industries concludes that imitation per se has given very limited success to organisations. In some instances, imitation has even derailed the progress.

Based on study, failure or limited success happens for the reason that the entire process of benchmarking lacks the most critical element in it. To summarise, in the current state of benchmarking, only two elements i.e. Content and Execution process are known to competitions which are looking for quick success by imitating business strategy without knowing details of conditions and circumstances which necessitated the specific strategy in the successful organisation. The third element – the very purpose of the benchmarking as per study is Intent which is most critical for the success to achieve. I have found many organisations struggling, first to define & decide upon the Intent per se and second, making all its employees aligned to it. Inconsistency and incoherent definition do provide another challenging aspects to organisation with regard to a strategy. The success can only be achieved when intent or purpose is clearly defined and pursued by an organisation.

Conclusively, three elements, namely Intent, Content and Execution make a unique relationship among themselves and gives ICE Model of Business Strategy.  The relationship is unique in its effect on each other. It is unilateral between Content and Execution but two dimensional between Intent & Content and Execution & Intent as shown below:


Primarily, Intent of a business strategy defines the content but based on execution experience, Intent can be modified and resultantly content needs to be rebuilt. In the same manner, Execution also helps in reconsidering Intent based on changed circumstances and conditions in the market while implementing a business strategy. Intent and Execution need to be dynamic in nature to match the market needs.

But, relationship between Content and Execution is unidirectional in nature. Based on Content and its requirement, execution strategy is developed and implemented. Any experience while implementing a strategy may give rise to new dimensions but that should not be taken to change the content itself of a strategy. Reason, any change in the content may lead to change in the entire purpose & execution and therefore, the selected strategy may lose its direction & intended goal.

Intent is most critical in this three dimension model as it is always very specific time, situations and resources required to achieve a strategy. It is this Intent which provides basic purpose for an organisation moving from its current position to another but desired position. Intent to Intent is very different and specific. Therefore, benchmarking or Imitation of a successful strategy in an organisation may not be as successful as intent may have either changed or necessitate a change due to change conditions and environment in a particular organisation. Organisations should restrain from copying & pasting Content & Execution.  Advisable is first deciding upon the purpose per se and then take help of other successful organisations by looking at their content and execution strategy if intent has some common characteristics and not placing Content and Execution of a different Intent, having no linkages among these three elements..


·         Copyright - "ICE Model of Business Strategy"

Tuesday, 3 November 2015

Friday, 30 October 2015

A Strategy cannot run a short distance

Strategy is the one word in Corporate that is being used & misused by individuals in their own ways. A highlight of these mis/interpretations to me is, when it is used for a plan. There are many more such examples. However, there is a catch here: Even if people use the word strategy for various other distorted reasons & meanings but still can strategize & achieve what they want to, perhaps, word meaning should not count much. But, reality is far from this?

I have come across organisations which could not distinguish between their present and future needs and; strategize around  them. Mere focusing on the present may give you short term profit; but believe me “A strategy cannot run a short distance”. The strategy has a soul and a body – something to be seen now and something to seen then - the future. Aptly defined “It’s fundamentally the movement of an organisation from its present position to a desirable but inherently uncertain future position. The path from here to there is both analytical and behavioural.”

Organisations fail on “behaviour” more often than not. Short run success, better balance sheet, squeezing the present, maximum profit is what they aim and primarily companies do; leaving no room for future and building its behaviour. It seems to me; knowingly companies are being created for ‘now’. Market is also supporting it today as e-commerce companies are created and sold routinely. Reason for this, no time and efforts are being made to make an ‘Organisational behaviour’ that gives a longer perspective and regular returns to shareholders.

While laying down a strategy, more and more emphasis is given to what to do, without giving any direction on what not to do to achieve end goals. Organisational predisposition should be around ‘what not to do’ equally as a behavioural perspective of its culture. Majority of organisations however, do it other way round. That’s the reason perhaps there are only a few companies which are in the market for a longer period.

It is well accepted notion around that behaviour is not built overnight. So, sow the seed of behaviour & water it regularly and wait patiently to get the results. Don’t, uproot the plant and check its roots.


Lastly, whenever an organisation is laying down its strategy for creating everlasting business, equal importance be given to  culture besides factors like where to play & how to play- a mere analytical in nature. Remember, analytical factors are easily copied & pasted by competitors but extremely difficult to do it for a behaviour. 

Sunday, 4 October 2015

PAPPA: Discover it in you, to succeed against all Odds

In this cut-throat environment wherein anyone and everyone aims for success, getting success at last is what one should look for. Nevertheless, the success differs from person to person.  Some seeks solace in financial success and some look for spiritual or like that in their life. But, one thing is quite clear that one cannot sit idle and has to look for success coming one’s way. Success has to be planned, efforts are to be made. Real, sensible efforts.

In my eyes, success is generally aimed for, without choosing its direction. The decision where people generally struggle is in taking a decision. Aimlessly, as the world makes some float and look for success, people in mass you may find around. This will not let one even inch closer to the success, one desires for.

In Indian context, collective wisdom, sprinkled with parents and well-wishers at large defines the direction for people in mass, without realising capabilities and interest of people. Perhaps, main reason for not letting individuals plan for themselves in their life is this application of collective wisdom.

Everyone has the potential to drive oneself, only thing required is the ignition to light it. In the moments when you're in touch with your inner strength and wisdom, the part of you that can accomplish whatever you put your mind to, it seems that anything is possible and I believe it is. Figure out what is important and dream for it.  As rightly quipped by our Late President APJ Abdul Kalan, “Dream is not what you see in sleep, but is the thing that doesn't let you sleep.” Get the time for your dream, responsibility lies on oneself. We tell ourselves that we want to spend time on the important things of life, but there never is any time.

Fact of the life is that life slips by and our most meaningful dreams slide silently to the side while we're getting everything else done.  At any point in life, age does not matter, whether you're young or old, this issue can keep us from doing what matters most. Worse yet, we don't have all the time in the world to get back on track. Life goes quickly and more so with every passing moment. Awake, arise and do solemnly achieve your dream.
If the purpose of life is to contribute to the happiness and well-being of self, family and society and do not procrastinate your getting down to your vision for self. As I remember, one evening sitting alone in quite, serene environment, introspecting; surprisingly got to know it was my PAPPA which made me achieve whatever I could, till date. This PAPPA is very different from biological Pappa. This PAPPA for me is – Passion, Ambition, Perseverance, Personal Values and Adaptability.
Instead of looking at what one has or does not; instead of cribbing about reality around - write a vision for your life; because if you don't know where you're going, you'll never get there. And besides, the best way to develop your gifts and talents is to really use them.
  
Guiding factor to personal vision is to know what the purpose of life is. People tend to think of this as one of life's greatest mysteries. But the good news is that you already know the answer. It's not as if you have to come up with something new or feel guilty because you've been purposeless up till now. Just give yourself a bit of time to think and it will reveal itself. Self-discovery will let you come across limitless opportunities to fulfil your purpose every day.
Mind it, ‘your life purpose, as distinct from your goals, is ongoing and never-ending. It's the context for all that you do and for the goals that you set for yourself’.
What's great about knowing your purpose is that you can consciously act in accordance with it. And one thing I know for sure, the more I'm wasting time doing things that don't really matter, the more I suffer; and the more I live in alignment with my purpose, the greater my happiness and satisfaction.
One of the most important points to remember is that your purpose is not something you’re going toward or want to achieve nor a destination. Rather, it has the potential to shape whatever you do in every moment. It's the journey, not the destination that brings the joy.

Get up, look at your PAPPA and begin the journey- future is shining out there in the sky.



Wednesday, 16 September 2015

Does Spot Running make you run a Distance?

Once again yesterday I was confronted by an employee who inquired about his not getting growth despite his doing wonderful job since so many years. This confrontation again brought to me back the same old query – Does spot running make you run a distance?

Interestingly, since the day of my joining the corporate,I am hearing and is generally advised that it is the soft skills which are more responsible to succeed in career then functional & technical skills; still people do connive with and do not want to understand it. People however, in private discussions, accept and vouch for the behaviour’s importance in success.

I see two reasons of this immature behaviour of people - Education system & Culture in corporate - responsible for giving growth to employees based on their technical/functional skills.

At Education level, primarily focus is on imparting technical knowledge and to some extent in whatever way, providing opportunity to students that can make them acquire skill that is again technical in nature. Look at the course curriculum, its out & out very technical in nature. Soft development is missing entirely. Nowhere, the need is felt providing knowledge, irrespective of course one is pursuing, in soft subjects like psychology, basic neuroscience and anthropology. Mistake lies at the end of policy makers not to include such subjects in pure technical programs like engineering, medicine and technology. Yes, when I see some students of Physics, Chemistry and Biology, opting for psychology as a secondary subject, a find a sense of relief in me, but it doesn't give me full satisfaction as still such subjects are optional and  not compulsory to pursue. 

The corporate level, on one hand keep beating its chest of not having sufficient talent and on other, keep repeating the same mistake by promoting people based on their technical skills. That’s why, people with technical knowledge entering corporate remain focussed on their technical skills only.  The realisation that it is not only technical but more of behavioural skills required to be successful, it was already too late for them to correct the mistake. And then we face such questions from employees about their not getting growth. They think they can be successful by doing more of what they were doing before and telling others to do the same. But I find it running on a sport, dreaming to cover a distance.

It’s high time to introspect to correct our ways to make people more human and not robot. Perhaps, it will help people to get growth in their respective working domains and also in making a better society at large.

Growth is a function of behaviour with technical knowledge to create the base for it.


Thursday, 3 September 2015

Experience & biases attached to it

In one of my earlier blogs, talked about undue importance being given to ‘Experience’ while ascertaining relevance of a person to a job. It is being proved time & again by youngsters today who are yet to graduate out of their colleges that it is not experience but certain mettle which counts more. Some, at this point may get into arguments with some numbers about a large number of start-ups failing to prove that experience is more important, but so is the case with ‘experienced CEOs'.  Count, how many CEOs do give back to their shareholders continuous better than average returns. At the same time, even I go to the extent of not denying peeved impact of experience on many decisions, where we feel, right decision are taken due to having some experience. But experience alone is not what makes one successful. 

Observations around and top of that research in the field of Neuroscience has made considerably clear that experience has its own biases which effect decisions as equally bad as taken by a novice. Although, further research may give us some more insight about our brain functioning and decision-making ability in near future.

Research studies, so far had proved that experience has much little importance to play in our decision making ability, again due to human biases. Errors & judgements prima-facie effect our decision making. This happens due to two hard-wire processes for decision making. One, where brain assesses what’s going on using PATTERN RECOGNITION and how does a person react or ignore to that pattern/ information. Other is EMOTIONAL TAGGING that reveals that decision making takes effect due to emotional tags that are stored in our memories. Biases of what you did last, effect decision today.

Both these processes are very important for human beings to take decisions but due to inherent challenges, these processes mislead us. For example pattern recognition misleads a person while dealing seemingly with familiar situations where brain assumes being taken right decisions, but that is not the fact. So, is the case with Emotional Tagging, whereby people taking decisions, do give un-due importance to their experience or emotional tags.

It can be merit out of the fact that an issue arising at different times, needs different solutions, keeping in view circumstances & facts; and not simply copy-past of someone’s success on the issue in the past. Many times, you see professionals failing due to their emotional tags or pattern of the past being pasted in current work-related challenges. Try relieving one's own past and looking at the situation in right & new perspective is what is more desirable.

Monday, 31 August 2015

Product: Not a reason for Success

While doing a study of companies which are been seen successful in market, I have not come across a single company - having rested on the glory of a product or even products in its portfolio; that has given better than average returns to its shareholders for a reasonable period of time. I say 10 years.

Question comes to mind, why is it so?

Going through many a renowned & successful CEOs speeches, I found one thing common- no one talked much about the basket of products they have. They primarily talked about the culture, people and adopted processes which made people to come out of award winning products for their organisations, continuously – that made their respective organisations successful. In total, I can say it is their Winning Aspiration which made it happen.

Many CEOs have categorically put across their views and success mantras that they were or are successful due to their ability of laying down ‘Aspirations’ that helped them getting a continuous stream of products, enabling them to carve out success stories for their respective organisations.

Isn't it a simple thought? but still leaders fail to adopt & adapt it.

As rightly said by Peter Drucker, ‘The purpose of an organisation is to create a Customer’.

Another facet of success as per these successful leaders is that while having a winning aspiration, one should only play to win and not merely to play. Thus, making it clear that playing a game in business does not guarantee success. Playing to win leads to a situation wherein leaders have to take hard choices, dedicated efforts and substantial investment. Look out for one’s biggest competitor and lay down strategy to fight it out of the game. Marketing Myopia does come in the way that may toss you off the track but overcoming it, is what a leader should possess in him.


Product or products will spin-off continually & automatically, if a leader is focussed on a winning culture & Aspiration, conjoint with hard choices. Else, wait for the time, when time will go anti- clock wise for the leader and the organisation.

Contingent Workforce


Contingent Workforce is the tactical strategy to meet quality manpower requirement. This is well captured in the magazine People & Management, August-2015 issue.

Monday, 27 July 2015

5Qs that spell Success

In a research , it was revealed that the role of IQ in success is limited to 20% and rest is due to EQ. But, there are three other Qs which are as important as EQ. In my attached article , I tried giving some insight on it.

Friday, 17 July 2015

People Pay for Satisfactory Responses to perceived Problems or Opportunities

Different customers and various products together give a complex matrix to deal with by selling people to change and fine-tune their selling behaviour. This is the catch generally being faced by organisations & fail to understand their falling sales. Distinctions in selling behaviour therefore is of paramount importance to understand to succeed in selling.

In a research done by McKinsey on more than 1200 managers who were ‘Purchasing Decision Makers’, a big gap was found in what managers ‘said’ was important , generally it was price and product features and what actually drove their decisions about vendors.

The study clearly identified that the Attitude Scales & Responses thereon do not come out to be positively effecting buying decision. It means, factors like Eco-friendly products, green products although being talked about a lot, but study shows that in reality, such attitude does not influence positively buying decisions.

Another factor which came out of the McKinsey study is that ‘not having adequate product knowledge and contacting customers too frequently by a sales person’ undermines selling. The study clearly come out on that customers look for fewer but more meaningful interactions.

In short, it can be said that ‘People pay for satisfactory responses to perceived problems or opportunities.’ Eg. Theodore Levitt said, people don’t buy 2 inches drill bits but 2 inches hole. Levitt has said that Organisations are infected with ‘Marketing Myopia’ i.e. focussing on product features than benefits. He said that marketing myopia makes organisations fail to understand - Market Scope, Product Substitutes and Customer motivations to buy or not.  He said, customers ‘hire’ products to get their jobs done.

It therefore can be concluded that organisation should have a product or service with benefits, relevant to customer. A clear distinction between features and benefits.


The MARKETING STRATEGY should focus on driving relative importance of FEATURES and BENEFITS.

Sunday, 12 July 2015

Mindless experience to mindful actions




It is a fact that 'experienced' people emphasize on their experience rather on the content they gathered when they were being experienced.. Getting old, no one can stop. Watch keep ticking. The said article focus on how mindful actions make a difference and not the mindless experience.
The article published in the magazine HUMAN CAPITAL, JULY -2015

Monday, 6 July 2015

All customers are not same


Products manufactured has no value, until sold and money due realised. Conversely, selling if not tuned to a product, it remains a heroic act. It can therefore be said that it is the alignment of selling behaviours with sales tasks i.e. critical to managing performance of the organisation.

Selling behaviour alignment has come into prominence as research conducted to find out reasons of failure of start-ups. It is found that nearly 44000 companies were founded in the year 2000. Out of them, fewer than 6% achieved more than $10 million in revenues by 2010 and fewer than 2% more than $ 50 million.

Companies generally begin with the ‘Product Performance Advantage’ – advantage that product drives into the market, finding a gap in a product category. This advantage is diluted slowly as other products or even new products in the same category start filling in the gap and companies first fail to comprehend reasons of their product failure and eventually not able to build on their initial product performance advantage by translating their strategy into business development initiatives. In other words, failure at the end of a leadership team to define core competencies of the organisation and their core customers.

Business development is driven by selling skills tuned to buying behaviour of core customers.

There are lots of ways to sell but an organisation has to choose a specific way, appropriate to the organisational strategy and core competency. Here comes the rule of ‘understanding target customers and their buying behaviour’.

All customers are not same.



Saturday, 4 July 2015

Outsider CEO in as cos think out-of-box

Growth generally stunts due to lack of ideas. Homogeneity builds up in ideas & thought process when a set of people lives for a longer time, together. Therefore, there is no other option but to bring someone from outside to take care of business growth through heterogeneity.

Monday, 8 June 2015

Business Strategy for Efficient Markets & Economic Rents

Every organisation that is in the market for profit, aims to having equal access to all information pertaining to economic actors, so that it can formulate and execute winning strategy for itself. It thus means, although preferring to be alone but having no option, organisations fight for market information. Thus, giving rise to ‘EFFICIENT MARKETS’. In essence market is built of many organisations but is characterised & known by behaviours of those actors which are dominant in the market. Consequently, prices are known to every one for a product, as they are in a chain from raw material to finished goods; only changing their role of input to output.  It does mean that one has to price its product in such a way that it is neither overpriced nor under-priced.  Overpriced products will not get sufficient buyers and under-priced products will be deluged with buyers and therefore may not be able to supply to all. Automatically efficient markets eliminate odds and works for bringing in equilibrium constantly.

Despite having Efficient or perfect markets, organisations work for better & better ECONOMIC RENTS that is better than average return on investment.

This pull and push of the market and its players, forces to look for strategies which can adequately support a player’s wish for higher rent. But incoherent selection of business strategy instead of helping a business may lead to its failure and wiping off from the market. There are innumerable strategies in the business literature from Ansoff’s Strategy Matrix to Porter’s five forces but they are based on different dimensions and meant to be used for different situation. For example BCG matrix is to know cash flow status of an organisation while Porter’s work well for setting up a new business and that too should be used for single business. These strategies are generally employed to increase economic rent and very precisely make an organisation know what factors can effect it so that the organisation can take counter steps.

Another important aspect to know is difference between business tools and full-fledged business strategies. Like, SOWT analysis, Learning & Experience Curve, Life Cycle are some of the tools being used to decipher a business health. These tools entirely differ and therefore be used not as a strategy as is the case for BCG Matrix, GE/McKinsey Matrix etc.


Strategists and readers, when you look for a tool or technique, first you should clearly spell out what are you looking for.

Thursday, 4 June 2015

11 skills successful organisations must have

Times Jobs

11 skills successful organisations must have

Comments
image
A high-performing team comprises of distinctly defined roles and well-rounded collection of personality archetypes

 By Rajesh Tripathi

Working with a team can be exhilarating and challenging too. In the world of business, this means that when individual roles and responsibilities aren’t well-defined, individuals get testy, the team dynamics go haywire and the project suffers as a result.

Popular theories say a high-performing team comprises of distinctly defined roles and well-rounded collection of personality archetypes.

Here’s a guide to 11 personality types that forms a successful team:

1. An expert: Expertise is the one skill a team cannot do without. Every new team needs at least one genius to get off the ground.This is the person that possesses intimate knowledge in a field that your project encompasses. This person gets down to business and accomplishes tasks.

2. A leader: This person is responsible for mediating conflicts, facilitating communications between team members, and keeping everyone on course. The leader will schedule and guide the course of meetings but that doesn’t mean being the only speaker or leading all meetings. A good leader sets appropriate standards of behaviour, knows how to delegate and let go of the reins and provides members with development opportunities and coaching.

3. The researcher: The researcher is always asking questions and then finding answers. If you need more information to complete your project, it’s important to have a strong researcher who can get it for you. Their special talent is that they ask the overlooked questions that can avert a future impediment. This natural private eye knows the quickest way to the best resources and is the person everyone goes to with the most puzzling questions.

4. The planner: Planners are naturally self-motivated. They’re also driven to organise processes and give order to the world around them (good news for others working in their orbit). Rather than being people-pleasers, they’re more dedicated to making decisions for the good of the project over winning a popularity contest. Trust that their skills will deliver the project in the estimated period of time. Natural planners love lists, charts, and calendars. They’re punctual, able to see the curve in the road (and incoming curve balls) and often have strategies for improving a process or increasing team efficiency.

5. The communicator: It talks about natural communicators, not just the talkative ones but individuals who are naturally inclined to reach out to others and share information with the entire team. Communicators are also good at persuading just about anyone to jump on board and give the team the help it needs. Your communicator might be the person with the longest list of contacts, and knows someone for just about anything you need.

6. The connector: Shows respect for the views and contributions of other team members, shows empathy, listens, supports and cares for others, consults others and shares information and expertise with them, builds team spirit and reconciles conflict, adapts to the team and fits in well.

7. The networker: This member easily establishes good relationship internally and externally, relates well to people at all levels, builds wide and effective networks of contacts and uses humour appropriately to bring warmth to relationships with others.

8. The visionary: This member is able to see the big picture and then develop the plan on how to get there. The person understands the need for meaning and purpose in followers, and uses that need to inspire followers to achieve more and to build better futures. Followers feel motivated by the vision and often feel a sense of solidarity within the group because of the common cause.

9. The creative: These members have a tendency to get caught up in their world of imagination, problem solving, and conceptualising. They might not always be the clearest communicators, diplomats or deadline-makers, but pair them with a savvy planner and you could almost spin gold! Every team benefits from a creative thinker in the group, someone who can deliver fresh ideas and solutions that let the team’s work stand out from the crowd.

10. Commercial acumen: This member keeps up to date with competitor information and trends, identifies business opportunities for the organisation, maintains awareness of developments in the organisational structure, demonstrates financial awareness, controls costs and thinks in terms of profit, loss and added value.

11. The flexible – A flexible team member can consider different points of views and compromise when needed. He or she doesn’t hold rigidly to a point of view and argue it to death, especially when the team needs to move forward to make a decision or get something done. Strong team players are firm yet open to what others have to offer — flexibility at its best.
The author is vice-president and head corporate HR at GHCL

Wednesday, 27 May 2015

Pay based on Position, Person and Performance

Of late, a challenge is being seen in organisations to pursue a model to compensate their employees in such a way that motivates them, as well as does not impact their profitability. In the same context, I tried simplifying all related concepts, here.

Industrialisation brought in the challenge of how and what to be paid to workers being employed to undertake certain jobs. These jobs primarily were having tasks which were repetitive in nature and therefore, once a skill was developed, more or less all workers were equal in their performance. This sowed the seed of Pay for Position or Job based Pay, whereby based on the knowledge and skill, a person was having and were being utilised by him to perform to achieve certain pre-determined level of performance, equal wages were paid. This led to a model that focused on compensation tiers tied to job titles. In a way, additional levels of responsibility combined with senior level job titles with higher compensation are a clear path for employee’s career development.  But with changed scenario today, this Pay for Position model promotes mediocre or average instead of excellent or extraordinary. In earlier times of less business urgency, the mediocre factor was an insignificant issue. Mediocrity is promoted when everyone is lumped into the same bucket. Paying the position suggests that all employees are identical in the contribution and their value. Pay for Position can very well be defined as how and how much employees should be compensated for fulfilling their position’s responsibilities, ensuring internal equity and external competitiveness. This model emphasises on slotting of each position into a grade level and weighted based on the education and experience the job requires and the number of staff who report directly to the person in the position. Pay raises are scheduled as an employee's tenure with the practice increases.

The alternative to job-based pay is to compensate staff according to the value of their skills in the market. The most common approach is Competency-based pay or Pay for Person. With the change in the business function and realisation of the fact that it is not only Knowledge and Skill which are important to perform a job, it is more important what all competencies one display. These competencies have become paramount today. To explain it further, if a person is having knowledge and skill but not right abilities or competencies to use them in today’s VUCA world, he may not be successful in driving himself and ultimately achieving desired results. These competencies do vary in degree of presence from person to person. This variation leads to the need to compensate for competencies and their importance to organisation. Business today involves a greater sense of urgency than in years past. There is less patience and a higher demand for obtaining results. Business today is more about delivering value and therefore, more about paying for performance. “Paying the person” in today’s business model is equivalent to paying for performance. It is a known fact today that not all employees are identical. Therefore, their efforts and their performance is not identical. Therefore their total compensation should not be identical. Pay for Performance can be defined as how and how much employees should be rewarded for their own contributions to the organization’s annual results due to one’s competencies, ensuring internal equity and external competitiveness, and ensuring alignment with corporate values and capacity-to-pay guidelines.

Along with these two, the other fact came into prominence was the real reason of recruiting a person and this is that the person has to perform to the maximum level, he can. A person is to perform to the extent of Knowledge, Skill and Abilities one is possessing and therefore, came in existence Pay for Performance into the market. Under this model, both short and long term rewards are considered.
On screening business needs, it would be quite clear that all these three models go together in any organisation. I will try explaining it with an illustration:
There is a need to hire a General Manager, for example in Production Department of a company. The first this which shall be done in any situation is to lay down the basic requirement for the position. Say, one should be having a Graduate degree in Chemical Engineering with 20 yrs of experience and has handled a team of 20 people etc. It means one cannot become General Manager-Production until one has these requisite qualification. Thereupon, based on demand and supply of such professional, market fixes a range of compensation to be paid to the role holder.  It means all General Managers if start at the same time, would be commanding salary within a specified range in an organisation.  It is only one’s coming on board, differentiation can be seen among all General Managers in terms of outputs through unique display of competencies. In case the new General Manager displays extra ordinary competencies, knowledge and skills remain more or less constant, he commands higher compensation on pay revisions. It means due to his display of unique competencies, he being compensated higher. This is called as Pay for Person. The other model of Pay for Performance can also be seen in paly depending upon the performance of the individual, year to year and accordingly, variation on bonus etc. being paid to him. In case the new General Manager continues to be extraordinary in his displaying competencies and achieving results, then he can be elevated to next level and be paid higher compensation that will differentiate him, but comparable to all new peers in the higher level.

The management however must also keep an eye on other factors too, like although a person can be extremely talented but even then also, there should be linear link in compensation among all comparable General Managers. It is recommended that whatever said & done, a range should be of 0.8 to 1.2. It means all factors like knowledge, skills remain constant, competencies can make a person outperform and demand a salary 40% higher than the lowest paid in the category. If it is more than that then the person is promoted to next level with higher compensation & responsibilities.

Conclusively, all three models of Pay for Position, Pay for Person and Pay for Performance play their role in defining the compensation of an individual.

 


 

Tuesday, 12 May 2015

Importance of Project Management in Learning

“A recent research has revealed that organisations that excel in project management meet their goals two and a half times more often and waste about 13 times less money than organisations that are poor at project management.”

Seems something new, as research is supported by some data – making a reality more real. But fact remains as it is. When an activity is taken without having a goal, a well thought of ‘where to reach target’, activity only provides some people some experience. In my words experience is nothing but repetition of same mistake again and again. Therefore no learning occurs, even at the cost of expenses incurred by the organisation. On top of that it brings to the organisation a culture of negativity and avoiding change.

Every activity, should therefore be taken as a project with well-defined path and target to achieve them. It will help in providing learning and overall, successful organisation to its people.