Month: September 2022

Double taxation is a situation associated with how corporate and individual income is taxed and is, therefore, susceptible to being taxed twice.

Categories of Double Taxation

1. Corporate Double Taxation

It is a situation in which corporate earnings are taxed twice at two different levels but include the same income. A corporate organization’s net income is taxed as corporate tax, and when the same income is distributed to shareholders as a dividend, it is again taxed by way of a dividend tax. Corporate double taxation is common not only in the United States but in several countries around the world.

Arguments against corporate double taxation indicate that as shareholders are the owners of a corporation in which corporate tax is levied on profits attributable to the owners, income distributed to them as dividends and taxed with dividend tax at a personal level represents the same income stream being taxed twice.

However, arguments for the maintenance of the double taxation regime contend that since a corporation in the form of a company is a separate legal entity divorced from the company’s individual owners, taxation on both corporate earnings and dividends is justified.

2. International Double Taxation

International double taxation mainly concerns multinational entities that operate in jurisdictions other than their home country, but it can also affect foreign income earned by individuals in foreign countries. There are instances where foreign income is taxed in the country where the income is derived and the country where an investor resides.

Hence, double taxation induces a hardship on taxpayers through an increased tax burden on the investor and can result in the increase of the price of goods and services, discourages cross border investment through curtailing capital movement, and violates the tax fairness principle.

Measures to Avoid Double Corporate Taxation

1. Legislation

Legislation must be enacted to remove elements of double taxation, which is inefficient and discourages investment. If investors are able to receive their dividends tax-free, they will be inclined to invest more rather than retain profit, especially for mature companies that do not need much capital.

2. Pass-through taxation

It involves structuring the business as a sole proprietorship, a partnership, or an LLC adopt pass-through taxation features. There are no dividends in such structures, as profits are shared between the owner(s)/partners. However, the strategy is only applicable to small organizations.

3. Absence of dividend payments

Avoiding payment of dividends and retaining profits in the business to generate growth. The strategy works for start-ups and organizations in the growth phase of the business life cycle. It is critical to growing product scope and market share. Shareholders of mature companies with stable cash flows and very little cash appetite expect dividend compensation.

4. Personal income tax status

Shareholders can add themselves as employees in smaller companies or as executive directors in larger companies and get paid a salary; however, they would still be taxed on their salary through a personal tax rate. It would not qualify as double taxation.

Managing International Double Taxation

The best way to manage the challenge of international double taxation is to come up with tax treaties between countries and legal jurisdictions. The treaties involve collaboration between jurisdictions and the exchange of information. They are established to reduce or eliminate illegal taxation practices, promote trade efficiency between nations, prevent tax evasion, and ensure tax certainty.

Double Taxation Agreements (DTA)

A double taxation agreement (DTA) refers to an agreement signed between two countries to prevent or minimize territorial double taxation of the same income by the two countries. DTAs are put in place to ensure they alleviate double taxation, which undoubtedly discourages international trade. Given the global village the world has become, double taxation is counterproductive and discourages investment flows.

DTAs encourage cross-border trade and investment between countries. When trade between two countries is growing, and both countries anticipate further growth, they usually facilitate the signing of a DTA to eliminate double taxation and improve trade between them. The DTA establishes rules and regulations of how income earned through cross-border transactions is treated and ensures that the income is not compromised through double taxation.

A DTA can require that tax is charged in the investor’s home country and is exempt in the country where the income is generated. Alternatively, an investor may be levied tax where the income arises, and the investor will receive a foreign tax credit in the home country.

Double Taxation Relief

1. Exemption method

Under the exemption method, a taxpayer is exempt from tax in their resident country or jurisdiction regardless of where the income is generated. However, taxpayers are liable to pay tax in the host country where income is generated. The exemption method encourages cross-border investments by investors in their resident countries and removes barriers to free trade, thereby increasing trade and the globalization of business.

Countries that solely use the exemption method are termed tax havens, as they do not tax –or apply low tax rates to foreign earned income by resident corporations and individuals.  Most tax havens attract wealthy individuals, multinational corporations, and financial institutions that seek to minimize tax liabilities.

However, tax havens are being criticized for helping protect the financial transactions of criminals and shady businesses and facilitate money laundering. Examples of tax havens include The Cayman Islands, Bermuda, The Bahamas, and Cyprus.

2. Foreign tax credit (FTC)

The foreign tax credit method taxes the income of residents regardless of where it arises. The FTC method requires the home country to allow a credit against domestic tax liability where a resident pays tax in a country where the revenue arises.

The tax paid in one country is used to offset the tax liability in another country. This method helps businesses to operate normally within existing tax regulations. FTC can also be termed the Capital Export Neutral System.

Tax Residency Certificate

The Government of India has made it mandatory for assessor’s to obtain Tax Residency Certificate (TRC) from the country of residence to avail the benefits of the Double Taxation Treaty in India.

DTAA Agreement with Mauritius

India has a comprehensive DTAA agreement with Mauritius wherein the capital gains arising from the sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Therefore, a Company incorporated in Mauritius selling shares of an Indian Company will not pay capital gains tax in India. Further, since there is no capital gains tax in Mauritius, the entire gain on capital gains arising from the sale of shares will not be taxed. Hence, this unique feature of the DTAA agreement between India and Mauritius is used by many Foreign Institutional Investors to trade in the Indian stock markets and avoid capital gains tax in India and Mauritius.

India has DTAA agreements that are similar to the India; Mauritius DTAA Agreement with Singapore and Cypriot. Hence, many Indian Companies and Foreign Investors invest through these foreign companies in foreign countries into India.

List of Countries having Double Taxation Treaty with India

The following are the list of countries having the Double Taxation Treaty with India:

• Armenia
• Australia
• Austria
• Bangladesh
• Belarus
• Belgium
• Botswana
• Brazil
• Bulgaria
• Canada
• China
• Cyprus
• Czech Republic
• Denmark
• Egypt
• Estonia
• Ethiopia
• Finland
• France
• Georgia
• Germany
• Greece
• Hashemite Kingdom of Jordan
• Hungary
• Iceland
• Indonesia
• Ireland
• Israel
• Italy
• Japan
• Kazakastan
• Kenya
• Korea
• Kuwait
• Kyrgyz Republic
• Libya
• Lithuania
• Luxembourg
• Malaysia
• Malta
• Mauritius
• Mongolia
• Montenegro
• Morocco
• Mozambique
• Myanmar
• Namibia
• Nepal
• Netherlands
• New Zealand
• Norway
• Oman
• Philippines
• Poland
• Portuguese Republic
• Qatar
• Romania
• Russia
• Saudi Arabia
• Serbia
• Singapore
• Slovenia
• South Africa
• Spain
• Sri Lanka
• Sudan
• Sweden
• Swiss Confederation
• Syrian Arab Republic
• Tajikistan
• Tanzania
• Thailand
• Trinidad and Tobago
• Turkey
• Turkemistan
• UAE
• UAR (Egypt)
• UGANDA
• United Kingdom
• Ukraine
• United Mexican States
• United States of America
• Uzbekistan
• Vietnam
• Zambia

Developing compensation plans for managers or professionals is similar in many respects to developing plans for any employee. The basic aim is the same: to attract and keep good employees. And job evaluation classifying jobs, ranking them, or assigning points to them, for instance is about as applicable to managerial and professional jobs as to production and clerical ones.

There are some big differences though Managerial jobs tend to stress harder to quantify factors like judgment and problem solving more than do production and clerical jobs. There is also more emphasis on paying managers and professionals based on results based on their performance or on what they can do rather than on the basis of static job demands like working conditions. And there is also the considerable challenges of having to compete in the market place for executives by some standards are paid like rock stars. So, job evaluation while still important usually plays a secondary role to non salary issues like bonuses, incentive, market rates, and benefits

Compensating Executive and Managers

Compensation for a company’s top executives usually consists of four main elements; base pay, short term incentives, long term incentive and executive benefits and perks. Base pay includes the person’s fixed salary as well as, often guaranteed bonuses such as 10% of pay at the end of the fourth fiscal quarter, regardless of whether or not the company makes a profit. Short term incentives are usually cash or stock bonuses for achieving short terms goals, such as year to year increase in sales revenue. Long term incentives aim to encourage the executive to take actions that drive up the value of the company’s stock, and include things like stock options; these generally give the executive the right to purchase stock at a specific price for a specific period. Finally, executive benefits and perks might include supplemental executive retirement pension plans, supplemental life insurance and health insurance without a deductible or coinsurance. With so many complicated elements employers must also be alert to the tax and securities law implications of their executive compensation decisions.

How to determines executive pay

The traditional wisdom is that company size and performance significantly affects top managers’ salaries. Studies show that company size and company performance explain only about 30% of the variation in CEO pay. Instead each firm seems to take a unique approach: In reality CEO pay is set by the board taking into account a variety of factors such as the business strategy, corporate trends and most importantly where they want to be in a short and long term. Anther study concluded that CEOs pay depends on the complexity and unpredictability of the decisions they make. In this study, complexity was a function of such things as the number of businesses controlled by the CEO’s firm, the number of corporate officers in each firm, and the level of R&D and capital investment activity. In practice CEOs may have considerable influence over the boards of directors who theoretically set their pay. So, while some CEOs may be paid like top athletes their pay is sometimes not based on the arms length market based negotiation that the athletes (or rock stars) are.

However we’ll see that shareholder activism has tightened the restrictions on what companies pay top executives. For example, share holders in pharmaceuticals firm Glaxo Smithkline voted to reject the board’s recommendation to pay its chief executive $35 million if he lost his job and to enhance the pension plans of both him and his wife.

Elements of Executive Pay

Salary is traditionally the cornerstone of executive compensation it’s element on which employers layer benefits, incentives and perquisites – all normally conferred in proportion to base pay. Executive compensation emphasizes performance incentives more than do other employees’ pay plans, since organizational results are likely to reflect executives’ contributions more directly than lower echelon employees. Indeed boards are boosting the emphasis on performance based pay (in part due to shareholder activism). The big issue here is identifying the appropriate performance standards and then determining how to link these to pay. Typical short term measures of share holder value include revenue growth and operating profit margin. Long term shareholder value measures include rate of return above some predetermined base, and what is known as economic value added.

Team-based organizations vary from traditionally hierarchical, directive organizations. Instead of having a supervisor or manager focus on facilitation, teams focus on achieving objectives together. This allows true collaboration in the workplace. Major characteristics of team-based organization include trust, empowerment, goal setting, autonomy, team accountability and shared leadership.

Team-Based Organizations

The purpose of this paper is to introduce the concept of team-based organizations. It provides an overview and definition of this concept. Furthermore, the concept of team-based organization is explored and advantages and disadvantages phased by organizations using this strategy is provided. In addition, the paper introduces the concept of employee motivation, its effectiveness, and effect on employee morale and organizational culture.

Team Based Organization-Defined A team-based organization is a company that relays on a team making decisions together and working as a unit to achieve team and company objectives. “Team-based organizations require that all employees participate in the decision-making process”. Below the structure, benefits, and disadvantages this kind of strategy might bring to a company are discussed.

Better Communication

The primary advantage of a team-based organization is that because there are usually no managers or only one manager supervising multiple teams, communication between employees is much more free-flowing and effective. Team-based organizations lack the multiple layers that employees would otherwise have to go through before making a suggestion or receiving the go-ahead to implement a new idea.

Teams Resolve Problems Quicker

This improved communication also means that companies can resolve work issues quicker because employees can share information at a faster rate, which speeds up responsiveness.

Flexible and Empowered Workforce

Another advantage is that team-based organizations are more flexible than organizations that are traditionally structured. As a business owner, you can shift employees from one team to another to maximize their skills and talent and to also keep them motivated with new challenges. Employees that work in teams is also more likely to understand their specific roles in the organization and are also more likely to feel validated and empowered.

Increased efficiency

Because professionals can communicate more effectively within an organization, they increase the efficiency of outputting projects. This means that they can often complete more tasks quickly than professionals in other organizational structures because they understand more information that goes into a single project. This increased efficiency works its way through an organization in other ways, too. For example, the organization might take on more projects that are like each other at once because they complete projects faster and understand creation processes more fully. Finally, organizations that are more efficient may receive both better contracts and more contracts from their clients.

Encourages innovation

Because professionals in an organization with a team-based structure feel more empowered, they can bring ideas to their team leaders and other management professionals in their organization. This includes new ideas for markets an organization can enter, new processes to help production increase, ways to increase a sense of community within the organization and other innovations that help an organization grow. Each team may also develop new processes to increase their own production and then share those ideas with other teams to help them.

Empowered professionals

Professionals who are part of a team, developing skills and working on a variety of projects may derive more satisfaction from their jobs. This means they can feel empowered because they have a lot of skills they can use and know that an organization can help them grow as a professional. This allows them to focus their energy at work on creating high-quality products and delivering on their commitments instead of worrying about their future within the organization and whether they’re progressing in their field. Empowered professionals may also feel more comfortable approaching leadership with ideas.

Human Resources Investment Considerations

• Management values
• Risk and return on HR investment
• Economic rationale for investment in training
• Utility theory
• Outsourcing

An Investment Prospective of Human Resource Management

• HRM practitioners & Scholars have long advocated that HR should be viewed from investment prospective.
• Current practices indicate employees as valuable investment but still some organizations view employees as variable cost and there is little recognition about employees training & development, recruitment & replacement cost.
• Investment only in physical resources does not give organizations a competitive edge as systems, processes can be duplicated, cloned or reversed engineered.
• Maintainable edge / advantage drives from the level of skills of employees, their knowledge and capabilities.
• Management scholar Edward Lawler described investment in Human Resources as:
• “to be competitive, organizations in many industries must have highly skilled and knowledgeable workforce. They must also have a relatively stable labour force since employee turnover works directly against obtaining the kind of coordination and organizational learning that leads to fast response and high quality products and services.”
• Due to forecast of shifts in skills need from manual to cerebral (intellectual), investment for enhancing employee’s knowledge & skills become more important.

Human Resource is one of the most important resources in an organization. The success or failure of an organization largely depends on how human resource is used to utilize other resources available to the organization. As a result, the focus of human resource management has shifted towards increasing the return on investment by maximizing the productivity of human resource. Therefore, evaluating the quality, costs and benefits of HR are very crucial to organizations much like any other capital investment.

Since human resource is a crucial resource in organization, human resource practitioners and management scholars have promoted the concept of adopting an investment perspective in human resource. It involves developing policies and programmes in human resources in order to increase its value to the organization and to the market, just like other asset in the organization.

The notion of viewing human resource as human asset, and adopting an investment perspective enable the organization to invest in people in order to earn the best return from them.

When an organization views human resource as an investment, rather than a variable cost, it has to consider costs, risks and return when making human resource decisions. The organization has to consider the suitability of the candidates to the jobs, and to train them much like servicing machineries. The opportunity cost of releasing the employees for training has to be considered along with the cost of conducting such trainings when comparing the return from those trainings such as potential increase in loyalty and motivation.

Once an organization has developed a competitive advantage in human resource, the competitors may try to attract those competent employees. The competitor might even be at a better position to offer a higher pay, as they do not have to spend on training and development. Therefore, organizations have to develop their human resource management policies and strategies in such a way to retain the employees and to transfer the knowledge from employee to employee within the organization. Moreover, viewing human resource management from an investment perspective allows organizations to be more proactive and protect their own the knowledge as they are being created.

Adopting an Investment Perspective

1. Characterizing employees as human assets implies the strategic management of human resources should include considering HR from an investment perspective.
2. Cost/Benefit basis analysis may be used to evaluate HR programs, such as training and development.
3. Investment perspective toward human assets facilitates their becoming a competitive advantage as most other resources/assets can be cloned, copied or imitated by competitors.
4. A strategic approach to HR, however, does not always involve a human relations approach to employee relations, as noted in the Managing Employees at United Parcel Service example
5. Investments in employees must be undertaken in tandem with strategies to retain employees long enough to realize an acceptable return on investments in employees. This requires valuation of the employee as an asset, which can be difficult to do.

In an increasingly competitive business world, top talent is in high demand. If you aren’t making your top workers happy, another company may come along to steal them away. Here are ten tips that will help you make sure your employees are around for many years

Hire the Right Employees

As you’re screening candidates, pay close attention to signs that you may have a job-hopper. While there’s nothing wrong with someone switching jobs if it provides career advancement, look for someone who is interested in growing with your company rather than getting experience to take somewhere else.

Create the Right Culture

Finding employees who will feel a strong bond with your company starts with creating an environment that attracts those employees. Your company culture should match the type of employee you want to employ, whether you opt for a by-the-book, strict workplace or a more casual, laid-back atmosphere.

Offer Training

Businesses expect their professionals to arrive fully trained and certified. Yet too many aren’t willing to invest in helping them maintain those credentials. Whether you send employees to a learning center or you provide membership to one of the many e-learning sites available, when you take your employees’ education seriously, they see it as an investment in their career.

Provide Guidance

Your employees should be fully aware of their job duties and how they’re doing in performing them. You can accomplish this by first having a job plan in place and providing regular feedback on an employee’s performance. If an employee feels confused about his role in your organization, he’s more likely to feel disgruntled and begin searching for something else.

Pay Well

As difficult as it is to pay competitive salaries when funds are low and budgets are tight, calculate the cost to replace employees. It can cost as much as 30 percent to 50 percent of an entry-level employee’s annual salary just to replace him. Employees often find they can enjoy a 10 to 20 percent salary increase by simply moving from one company to the next, which makes jumping ship attractive.

Don’t Punish Competence

Managers often spend much of their time on employees who are struggling, leaving the talented ones completely neglected. Over time, this can lead to resentment as star employees start to feel unnoticed and unsupported. Managers must make an effort to let top performers know their hard work isn’t going unnoticed.

Be More Flexible

Workers have expressed a preference for flexible working conditions. If you expect your best employee to answer his phone when a client calls at seven o’clock on a Friday night, you should also understand when that employee comes in late one morning or needs to take off early.

Offer Benefits

Small businesses often struggle to compete with larger corporations in providing benefits. While you don’t have to beat big business in the healthcare options you offer, you can offer things they won’t get elsewhere, such as the ability to work from home, more flexible vacation offerings, and performance bonuses.

Provide Unique Perks

Another way businesses can compete without breaking the budget is through offering perks they can’t get elsewhere. Silicon Valley has become notorious for its free meals and nap pods, but you can increase retention by coming up with creative perks. Use your connections to get free VIP tickets to special events or special discounts at local retailers.

Don’t Take Yourself Too Seriously

As much work as you try makes your company attractive to talented people, the truth is employees might be leaving because of their bosses. In fact, research has shown people tend to quit their bosses, not companies. If you can cultivate an environment where employees feel rewarded and gratified, you’ll already be ahead of a great deal of other bosses out there.

Job Security is an assurance that an individual will keep his or her job without the risk of becoming unemployed. S/he will have continuity in employment and it may be from the terms of a contract of employment, collective bargaining agreement, or labor legislation that prevents arbitrary termination.

Assurance (or lack of it) that an employee has about the continuity of gainful employment for his or her work life. Job security usually arises from the terms of the contract of employment, collective bargaining agreement, or labor legislation that prevents arbitrary termination, layoffs, and lockouts. It may also be affected by general economic conditions.

Employee job Security

Employers must not overlook the importance of offering employees long-term job security, as this allows employees to feel secure in their work and makes them more willing to contribute more time and effort to their companies.

With greater job security, employees would be more eager to think of novel ideas for enhancing the competitiveness of their companies in their field and in society.

Ultimately, this is beneficial to the companies and would greatly improve overall performance. Thus, offering long-term job security for employees could be viewed by companies as a means to motivate workers and increase productivity. It is in fact more important than salary alone.

Salaries can always be increased when contracts are negotiated and renewed at the end of every contracted period. Although some may argue that a high salary could motivate employees to work harder and put in extra hours, as well as compensating them for their efforts during office hours, pay alone is no guarantee of satisfaction or fulfillment. Even employees on a high salary might not truly contribute much to a business they don’t feel part of. Jobseekers are more concerned about the availability of, and being able to secure, long-term employment than just a satisfactory income.

Human Resource Investment Considerations

Several factors will be considered in the discussion of strategic human resource investment decisions. As noted earlier, these will include management’s values, views of risk, the economic rationale for investment in training, utility theory, and alternatives to human resou1rce investments. Investments in training are covered in this section because they are fundamental to the formation of human capital. Firms also invest in many other human resource practices with the expectation that there will be impacts on performance and financial returns.

Management Values

Fundamental values must be addressed in many human resource issues, particularly those involved in major strategic initiatives. When senior managers formulate and implement strategies, their values and philosophies are communicated to members of the organization through human resource policies and practices.

For example, senior managers who are committed to the preservation of the organization’s human resources can manage the stress associated with major strategic events, through such measures as dealing with rumors and providing accurate information, so that mis-information does not have such a debilitating impact on employees.

Risk and Return on Investment

Although there are a number of important benefits to investments in human resources, such investments contain an element of risk. Investing in human resources is inherently more risky than investing in physical capital because the employer does not own the resource. Employees are free to leave, although contractual arrangements may limit their mobility. In order for investments in human resources to be attractive, the returns must be great enough to overcome the risks. Further, for some investments, such as cash outlays to maintain no-layoff policies, the benefits are not easily quantified and there are meaningful costs. Decision makers have to be prepared to trade off current costs for long-term strategic benefits, such as a more flexible, committed workforce and related positive aspects of the organizational culture to which such policies contribute.

Investment in Management Development

The continued development of managerial personnel is a critical strategic issue in most organizations and a particularly difficult challenge given the massive shifts in strategy. Before considering management development, it is useful to quickly review some evolving and forecasted trends in the managerial environment. It is clear that organizations are becoming less hierarchical and that many middle-management positions have been eliminated. Further, larger numbers of workers are better educated and many are professionals. As a result, they expect to participate more in decision making. In the future, more work is expected to be performed in task force or project teams, power will be shared, managerial status will be deemphasized, and leadership responsibilities may be rotated. Because of the participative aspect of these empowerment trends, many professionals and highly educated employees may have more exposure to managerial responsibilities and may develop related skills as a natural part of their work.

Job Enrichment and Job Satisfaction

Job-enrichment practices, such as those building in increased responsibility or autonomy, knowledge of results, meaningful work, knowledge of how assigned tasks contribute to the greater activity of the larger organization, and skill variety, have been found to produce moderate reductions in turnover. Practices that enhance job latitude and job satisfaction also have a positive impact on employee retention. However, when high-performing employees feel undervalued, they tend to have higher turnover rates. Another company from Fortune top 100 companies provides a good example of the retention effects of job enrichment and job satisfaction:

“Being at a good company is like having a good wife,” says Floyd Williams, a senior production manager at sports gear maker K2 (No. 52), who gushes about the opportunity to work on as many as 25 projects at a time. “When you get used to a certain level of freedom and excitement, you don’t want to leave.” In fact, none of Williams’ three marriages has lasted as long as his 28-year career with the company. “One wife told me it was either K2 or me. And I said, ‘Well, I’m not leaving K2!’

There can be two types of disabled employees

1. Disabled: While employed: i.e. the person was fit and sound during the start of employment relationship, however, during the tenure of his/her service he turned disable, which can be either:

• On-the-job: This is during the work hours while working at premises.
• Off-the-job: This is not at work premises, but surely after the start of employment relationship.

2. Disabled: Prior to employment: Here the employer is well aware of the disability yet employ the person for the job.

Disabled: While Employed

There can be short- and long-term disability (STD and LTD).While dealing with such a case the employer must follow the following procedure.

The Interactive Process, whereby through an informal open discussion with the disabled employee, the precise job related limitation imposed by the employee’s disability are being realized and how those limitations could be overcome with a reasonable accommodation. Even if the department’s ability to accommodate the employee’s disability seems doubtful, the department must still conduct a good-faith interactive process.

There are four levels of possible accommodation:

1. Job Accommodation: Modification of job duties, job environment and/or work schedule.
2. Modified Work: Lateral transfer into an existing position for which employee is qualified.
3. Transferable Skills: Transfer to “demoted” position or position of lesser terms/conditions (“last resort accommodation.”).
4. Alternate Work: However, consideration should be given to his present salary and the distance of the new work place from his residence.

Consider the preference of the individual to be accommodated and select and implement the accommodation that is most appropriate for both the employee and the employer. The employer should not accommodate the employee in case:

1. The disabled employee cannot perform the essential functions of the job; and that no reasonable accommodation exists.
2. The person would create an imminent and substantial danger to him/her self or to others by performing the job; and there is no way to remove or reduce the danger.

In such a scenario employer may use medical separation and also appoint a rehabilitation counselor for the disabled employee.

2. Disabled: Prior to Employment

There could be any form of disability namely

1. Mental health
2. Physical Disability
3. Learning Disability

which the employer is aware of prior to employment. But still considers their employment as a part of social responsibility, alongside trusting their capability to perform the task fit for them.

The trend of employing disabled as well as keeping provisions for employees disabled after employment is gaining momentum which can be due to:

• Realization of social responsibility by employers.
• Government intervention
• Trade benefit schemes, tax benefits etc.

Reasons for this change

Disability Confident employers will have access to a wider talent pool. Technological developments and increasing use of flexible working mean that organisations are able to create enabling environments where more disabled people can contribute to business success.

Engaging with Potential Employees (Disabled)

• Attracting talented disabled candidates can be problematic. Experience of leading employers suggests that multiple (project based) recruitment tends to attract more disabled candidates than single-post advertising.
• Employer needs to build a   brand which symbolize welcome and fair treatment.
• Consider offering work experience and internship opportunities to disabled people.
• Sector based initiatives can help to change people’s views of working in a particular industry.

Considering high staff turnover and an acute shortage of skilled workforce, qualified technical people who are disabled can be good alternative. Unfortunately when it comes to recruitment, employers tend to look the other way if the job candidate is a person with disability.

But still the percentage of disabled employees is very low. Most employers are reluctant to employ the disabled because of concerns regarding safety regulations, the need to modify premises such as installing ramps, disabled-friendly toilets and extra medical costs.

Even if they are employed, the system that is being followed in the organization does not work in their  favor   There is, however, concern that some management practices, even those imposed without prejudice on all employees, might have a disparate effect on the health and performance of some disabled employees.

With the advancement in technology, the potential of these employees can be enhanced to a higher level. For example, speech device can be used as a tool to support the person who is verbally impaired. Similarly, visually disabled can convey through special computers. Thus we need such things along with training for the disabled employees as well as the normal employees to help them adjust to the changes, and their differently-abled employees. Though, this may seem as an investment but the benefits are far reached and rewarding. Return on investment is far greater considering people with disabilities tend to be appreciative and loyal employees, because they have difficulties finding jobs. Their commitment to work has to do with their self-esteem. This notion of work, as a prideful activity, is something they definitely feel.

Cost to Keep Disabled Employee (Employed)

Employers experience multiple direct and indirect benefits such as retaining qualified employees, considering

1. The cost of training the new employee
2. Productivity of retained employee is higher
3. Cost of accommodation is lower than inducting new employee
4. Employers want to retain valued and qualified employees.

There are lot many industries which have a scope of employing disabled employee. its just the initiative which is required, considering Titan, Tata group which is one of the world’s largest timepiece manufacturers started introducing disabled employees to it’s facility since 80’s . “Titan was clear that these people are an intrinsic part of our society and need understanding, support and opportunities, not charity or misplaced compassion,” says Mamatha Bhat. Thus, the capable candidates of 18 -24 yrs were adopted and proper measures were taken to get them into main stream, like

1. Ergonomically designed workspaces
2. Training to enhance technical competence
3. Non-discriminating policies, effective grievance handling, counseling etc.

With time, Titan has realized that the disabled members of its family are more loyal and far more focused on the job. Despite the physical shortcomings of these employees, productivity and quality had never been an issue. Titan’s children of a lesser god  are no longer classified as disabled, merely ‘differently-abled’.

Thus, such an investment is worth not only for it’s return in terms of loyalty earned. But, employers should consider their responsibility towards the society and help in making these people self dependent and getting them into the main stream.

The Benefits of Strategic HR Planning

Human resource planning refers to the process of formulating HR strategies and designing programs and schemes to carry out their implementation. If done the right way, strategic HR planning results in several direct and indirect advantages for the organization.

Proactive Instead of Reactive Behavior

Proactive behavior refers to looking forward and having a clear vision and aims regarding the future of the company and how Human resources can be used to achieve the goals set. On the other hand, being reactive means dealing with issues as they simultaneously arise. In general, a reactive company could risk losing sight of the long-term course that should be set for the organization. In the past three years, the number of bankruptcies has greatly increased which is why any firm needs to make sure they keep a strong grip on their vital talent and try to introduce special incentives that would give a boost to any key performer going through a rough patch. While it may seem strange to be spending on employees when the company is going through hard times economically, it is necessary if the company wishes to keep its star employees on board. Strategic human resource planning allows an organization to formulate a clear set of objectives that capitalizes on its key talents and knowledge.

Managers tend to rely on their perspectives, experiences, and viewpoints to handle problems and make business choices. The assumptions on which their decisions are based are followed by success only if it has ecological validity in terms of the environment where the business operates. Conversely, this can lead to serious issues when the assumptions made are no longer of relevance. Strategic HR planning encourages critical thinking along with the creation of fresh initiatives only in the case of there being continued progress instead of a stiff process with a distinct start and a specific end date for completion. This is why many firms have designed an executive committee that is comprised of the CEO and an HR profession who discuss strategic problems regularly and alter the organization’s whole HR strategic and program structure every so often. Strategic human resource planning allows a company to understand where they stand presently and visualize where they aim to be in the future.

When the business strategy of the overall organization is combined with strategic human resource planning, organizations can identify any possible issues that may arise and any opportunities with consideration to the individuals responsible for the implementation of the strategy.

Companies, in general, hold a strong idea of who they tend to perform better than those who do not, especially when it comes to long-term performance. Strategic HR planning allows an organization to strengthen, modify and even readdress the present values of the company and maintain a culture that values aspects such as growth, innovation, teamwork and customer focus.

HR Strategies for Improving Company Performance

There is no textbook definition of what constitutes a good or bad HR strategy. Instead, the effect of an HR strategy always relies on how well it aligns with the rest of the factors involved. This statement leads to a basic yet important expectation from HR strategies that are broadly supported by research. When a company matches its HR strategies with other factors concerning the issue, it eventually results in better performance and if this alignment does not take place then there is inevitable incompetence and lack of consistency in the company’s performance.

The four factors that the company must keep in mind when deciding what HR strategies, they need to implement for there to be a positive impact on the organization’s performance: the firm’s strategies, characteristics, capabilities as well as its environment.

An HR strategy contributes to the positive growth of an organization. This is achieved when the company has a good fit between the human resource strategies and the general strategic direction of the company. The HR strategies applied in a company need to be in harmony with the environment in which the organization operates and be closely adjusted to the particular organization’s features. The strategies should allow capitalization of the key capabilities of the firm and be equally consistent and coordinate accordingly.

A corporation can have several businesses that are somewhat related or are entirely different. When it comes to corporate strategy, it refers to the unique combination of businesses every corporation chooses to take hold of and how resources are managed and inter-flow through these businesses. The key strategic business-related decisions that occur when a firm is at a corporate level involve factors such as growth, acquisition, diversification, and divestment. Business strategies in an organization refer to the development and application of strategies by fairly independent organizations, even if they belong to a bigger corporation.

Corporate Strategies

Corporate strategies with matching HR strategies are broadly divided into two main types. Companies that take on evolutionary business strategies tend to take part in the vigorous acquisition of new and upcoming businesses even if these businesses have no general relation to one another. Managing change in evolutionary firms is the key to survival. Entrepreneurship is reinforced and gaining control does not have a lot of importance considering each sector is generally autonomous. Fast responses, entrepreneurship, sharing risks and flexibility are all that proper HR strategy foster in businesses. Evolutionary corporations are not dedicated to a singular industry or business and may appoint employees from the outside market based on requirement and let go of them to minimize costs if necessary, with no promises of being rehired. Such HR strategies are suitable since they accept the reality that change, and development are constant in an organization. On the other hand, some corporations tend to be somewhat picky about their method of growth. They refrain from the acquisition of firms that are unrelated to their current industry and even companies in that particular industry that is not the same as them.

Developing and implementing an effective HR strategy:

Align to business needs

A business strategy dictates how a business will achieve its goals and grow in both the near- and long-term. An HR strategy complements this by creating the internal infrastructure that can effectively activate its people and processes to reach those goals.

It goes without saying that building an HR strategy cannot be done in a vacuum. In fact, it must cascade down from an organization’s broader business strategy and, more importantly, position an organization’s employees as the glue that connects HR strategy to business strategy.

Identify what success looks like

As with setting any goal or objective, simply putting a strategy together is only half of the battle. It’s never a ‘one and done’ process by any stretch of the imagination. In fact, everything else you do once the ink has dried on your HR strategy is all about what needs to happen in order to drive incremental success until you reach or even surpass your stated goals.

So as you develop your HR strategy, you should repeatedly ask yourself, “What does success look like?” After all, it’s easier to build a strategy around a desired end state versus coming up with a strategic framework and then leaving the rest to chance. To help keep this goal-setting process a bit more organized, consider building your HR strategy around four key internal levers:

• Culture: How will this strategy fix, change, amplify, or even transform certain aspects of the day-to-day leadership and employee experience within your organization?
• Organization: How will this strategy optimize the hierarchical structure of your organization, refine reporting lines, and identify new job role needs?
• People: How will this strategy support the ongoing development, growth, success, and happiness of the people within your organization?
• HR Systems: How will this strategy streamline the processes used across the talent management spectrum, from recruiting to training to compensation (and beyond)?

Focus on collaboration

Even though you’ve taken the necessary steps to align your HR strategy to broader business goals and objectives, you still need support and buy-in from key stakeholders and other business partners across the organization. After all, HR is a lever of support for every department in an organization. How you end up achieving your strategic goals will depend heavily on every department being active participants in that effort.

In other words, you must work with stakeholders to collaborate on priorities, identify what is most important or achievable in the coming year, and then chart a clear path towards achieving those goals as well as the KPIs you’ll use to measure progress against those goals.

Drive engagement through communication

In a similar vein as the above, not only do you need key stakeholders across the organization to bless your HR strategy, but you also need them to be its most active supporters. Otherwise, even the best strategies to ever see the light of day will fall flat from day one.

Not everyone in an organization needs to hear HR’s strategic elevator pitch directly. But there always are people in every department who can carry the torch on your behalf. These are the people you need to reach out to first and eventually convert into ambassadors and advocates of your strategy, vision, and properties. These are the people who can then cascade that information across their leadership ranks and down the line to their teams, ensuring that everyone is on the same page in terms of what HR will expect from them throughout the year.

Just keep in mind that everyone’s communication styles are a little different. Some people digest information like this better in a one-to-one setting (even if that just so happens to take place over a Teams video call), while others just need a detailed email to get the wheels in motion. The likely case is that you’ll end up using multiple communications channels, including workshops and even text-based chats, to create a ‘domino effect’ that eventually gets the HR strategy firmly ingrained in the minds of everyone within an organization.

Measure results in real-time

This part might sound obvious especially after what we outlined in point number two above but the key takeaway here is simple: Measure, measure, measure!

You’ve established KPIs in order to have a consistent way to track progress against your goals. Now you just need to make sure that regular reporting, either monthly or quarterly (or both!), on key data and analytics is part of your broader and ongoing strategic plan.

But don’t let this simply become a regular data dump that gets buried in the depths of your team’s email inboxes. Take the time to study what the data is telling you, pull together some actionable insights from it, and make a point to present your learnings regularly. Doing so will only make your HR strategy stronger and reinforce its importance among all key stakeholders.