Principle of Talent Management

Principle 1: Reduce the Risk of Being Wrong

In manpower anticipations for future an organization can ill afford to be wrong. It’s hard to forecast talent demands for future business needs because of the uncertainty involved. It is therefore very important to attune the career plans with the business plans. A 5 year career plan looks ridiculous along with a 2 year business plan.

Further, long term development and succession plans may end up as a futile exercise if the organization lacks a firm retention strategy.

Principle 2: Avoid Mismatch Costs

In planning for future manpower requirements, most of the HR professionals prepare a deep bench of candidates or manpower inventory. Many of the people who remain in this bracket start searching for other options and move when they are not raised to a certain position and profile. In such a scenario it is better to keep the bench strength low and hire from outside from time to time to fill gaps. This in no way means only to hire from outside, which leads to a skill deficit and affects the organizational culture.

Such decisions can be taken by thinking about the ‘Make or Buy’ decision. Perhaps questions like – How accurate is the demand forecast? How long is the talent required? Can we afford to develop? Answers to these questions can better help the talent management to decide on whether to develop or buy talent.

Principle 3: Recoup Talent Investments

Developing talent internally pays in the longer run. The best way to recover investments made in talent management is to reduce upfront costs by finding alternative and cheaper talent delivery options. Organizations also require a rethink on their talent retention strategy to improve employee retention.

Another way that has emerged of late in many organizations is sharing development costs with the employees. Many of TATA companies for example sponsor their employees’ children education. Similarly lots of organizations use ‘promote then develop’ programs for their employees where the cost of training and development is shared between the two. One important way to recoup talent investments is spotting the talent early, this reduces the risk. More importantly this identified lot of people needs to be given opportunities before they get it elsewhere.

Principle 4: Balancing Employee Interests

How much authority should the employees’ haves over their own development? There are different models that have been adopted by various corporations globally. There is ‘the chess master model’, but the flipside in this is that talented employees search for options. Organizations can also make use of the internal mobility programs which are a regular feature of almost all the top organizations.

Principle 5: Alignment with Strategy

Corporate strategy is the natural starting point for thinking about talent management. Given the company’s strategy, what kind of talent do we need?

Principle 6: Internal Consistency

There also needs to be internal consistency when it comes to talent management. The talent department cannot run on its own without taking into account the other areas of a company. For example, there has to be a basis for competitive and fair compensation in the company. The talent department cannot just hire people for the same position at all different rates of pay. It also has to focus on retaining employees. If there is no consistency, then it will be difficult to retain high-performing employees.

Principle 7: Integrating Culture

The third principle is to integrate the culture into the talent management process. It is important to keep the culture in mind when hiring and retaining employees. Every company has a culture that is embedded into its workforce. For example, Google has a unique company culture; it has been known to look for ‘Goodliness’ during the hiring process. This ensures that the new candidates will be a good fit into the company culture.

Role of HR in Talent Management

Talent acquisition and management has emerged as a key strategic process in an organization. Though there is a better availability of workforce in the market than ever before, yet the challenge to acquire the right talent still persists for any organization, worldwide. This is essential to achieve the strategic objectives and ensure long term success of an organization. Thus, enhanced corporate competitiveness and globalization has transformed the regular process of human resource recruitment into talent acquisition.

Moreover, the work of an organization these days does not end with hiring of the right talent into the organization. There is a wide spectrum of activities like career management, leadership development, talent planning, etc. which are constantly buzzing in the HR departments of organizations. Such activities fall into the realm of talent management.

Talent management is all the more essential to keep up with the future needs of the organization. Otherwise, if the organization does not focus on talent management within itself then it will have to resort to the process of recruitment every time the need for appropriate talent arises. Hence, we can say that talent management is all about nurturing and guiding the talent in your organization in alignment to the strategic and long run goals of the organization. It is the succeeding step to talent acquisition.

An organization generally avails the services of an HR Consulting Firm to provide with a cost-effective and quick, yet high quality, talent acquisition and management process. An HR Consulting Firm efficiently and effectively contributes towards recruiting the best and the most appropriate person for the organization with the allocation of minimal resources and within a short period of time. Also, HR Consulting Firm provides the right analysis, strategies, and plans for the management of talent in an organization.

As far as talent acquisition is concerned, an HR Consulting Firm maintains a highly effective research team which keeps a detailed track of the requirements of both the organization as well as the candidate. It may be possible that an HR firm may specialize in certain industries or sectors as far as acquisition of talent is involved. This helps the HR Firm in maintaining high standards of success in meeting the talent demands in particular industries by employing in depth knowledge and research in those industries.

The Firm conducts behavioral interviews with the prospective candidate to obtain a comprehensive analysis of the leadership, team-building, decision-making and problem solving skills of the candidate. Also, the candidate is thoroughly assessed for his attitude towards working in a team, response to change management and reaction towards the cultural climate of the prospective organization. Such analysis helps the organization in not only recruiting a candidate with right educational and professional experience, but also one with the required attitude and flexibility to be a part of the organization.

The HR Consulting Firm undertakes following steps for talent acquisition process in an organization:

  • Comprehend the business strategy of the organization.
  • Assess the talent availability within the organization.
  • Discuss the talent requirements of the organization with the management.
  • Analyze the gap areas between availability and requirement.
  • Build strategies and plans to meet these gap areas.
  • Measure the success of the implemented plans.

Talent management basically works in creating a pool of talent within the organization which helps in achieving the strategic objectives of the organization in the long run. This requires the HR Firm to work on the present set of employees of the organization and polish them so as to align their talent with the strategic objectives of the organization. Talent management process also requires an HR Firm to:

  • Analyze the talent strategy and succession planning of organization.
  • Develop a talent plan as required for strategic long run success of organization.
  • Review talent in the organization.
  • Plan various tools and techniques to develop talent within the organization.

Talent management process:

  • Carry out performance management
  • Develop career management plans
  • Benchmarking talent activities
  • Leadership development programs
  • Team building exercises
  • Action learning programs
  • Interactive workshops
  • Individual development guidance and coaching
  • 360 degree feedback

Recruiting

The foundation of talent management is hiring the right people. The best recruiting processes support those efforts by carefully defining job descriptions, using an applicant tracking system to help manage the workflow of the interview process, and carefully interviewing applicants to select the strongest candidates.

Career Management

Managing your employees’ career paths can help increase satisfaction while reducing costly turnover. Building on the information collected during annual reviews, companies can learn more about employees’ Strengths and interests. With that in mind, it’s possible to work with employees on long-term career development plans. Whether you’re dealing with someone on the management track or someone interested in being a highly skilled individual contributor, career management is a critical component of talent management and employee satisfaction.

Performance Management

Once employees have been hired, it’s essential to have the right processes in place to successfully manage them. HR technology and service solutions in areas such as time and attendance can help track productivity and performance. Regular review processes help keep lines of communications open between management and staff, allowing workers to get feedback on what’s going well and where they need to improve their performance.

Organizational Strategy

Talent management activities rarely happen in isolation. Instead, strategic recruiting and support of workforce development begins with a company-level commitment. Your HR team may play a leading role in making this happen, from identifying talent management as a strategic priority to determining how and where that focus will be applied.

Focusing on talent management is a critical component of your broader workforce management strategy, because recruiting, training, retaining, and promoting the right people are essential steps in reaching your staffing goals. While human capital management initiatives encompass talent management and much more, understanding and executing the day-to-day activities of recruiting, leadership development, strategy creation, and career management are essential for successful HCM.

Leadership Development

Have you identified the next generation of leaders within your organization? That’s a vital part of the talent management process. Once these high-performance, high-potential individuals have been located, businesses need to consider the best way to retain them over the long-term. Often, this process requires a focus on training, stretch assignments, and mentoring.

Role of Talent Management in building Sustainable Competitive advantage to an organization

Organizations work towards the achievement of their mission and strategic objectives. This requires a thorough understanding of the resources required for achieving the same. Resources here imply financial and non-financial both and they are equally important and interdependent.

Technically these resources have been divided into two, non-contingent and differentiating capabilities. Whereas non contingent capabilities are basics that enable an organization to compete and exist in the marketplace, differentiating capabilities are those that differentiate an organization from that of the other and offer competitive advantage. Effective marketing management, for example can be one of non-contingent capabilities. Similarly, many HR processes aspire to develop non contingent capabilities but they often fail to align with the strategy and offer competitive advantage. Most of these processes end up developing people in similar areas and similar capacities as their rival firms but this fails to provide any competitive advantage.

For organizations to develop competitive advantage through HR processes it is very important to define strategic differentiating capabilities and then develop a process for identifying and developing the same. This empowers the HR people to create an impact on the organizational strategy and also provides a link between talent management and strategy.

For HR to prove that talent management can be of strategic importance to organizations, the critical relationship between the two must be proven. Talent management specially needs to be projected as a differentiating strategic capability that can offer real and substantial competitive advantage.

According to research conducted by various bodies it was found out that creation of differentiating strategic capabilities signifies the relationship between business strategy and human resources. Human resources, it was deduced are the primary sources of strategic advantage. The research study was primarily based on Resource based view (RBV) of an organization. This view has gained significant ground among HR practitioners as basis of models for formation and structure of resources.

Unlike other non-contingent capabilities that can be developed easily and cannot contribute to a large extent towards the development of a sustainable competitive advantage, differentiating strategic capability such as strategic HR through talent management can. However, for human resources to qualify as potential sources of competitive advantage they should fulfil the following criteria:

  • Strategic Value: The resource has to contribute substantially and add value in his/her area of expertise.
  • Rare: Unique in terms of skills, knowledge and abilities in order to qualify as rare.
  • Appropriable: The extent to which the resource is owned by the firm.
  • Inimitable: Such that the resource cannot be replaced even after the competitors having spotted the same.
  • Cannot be Substituted: This means that the resource cannot be substituted by the rival firms and that there is no match for the talent.

There are not many things in the business environment that can fulfill all the above criteria and offer unique competitive advantage except human resources and that is under the jurisdiction of talent management. There is also a need to understand the strategic intent of the organization before defining strategic capabilities.

Strategies:

  1. Adopt a growth mindset. A scalable and expanding customer and values-driven mindset is a living, breathing thing. It begins with the existing leadership of the organization and permeates throughout the organization, its functions, and its stakeholders. It is not only led but managed and habitually normal; it is culture. This mindset connects the organization to the people who matter.
  2. Have organizational character. Reference and align the corporate vision, values and mission. Know and understand the current/future state of the organization and industry. Integrate strategy and aspirations for any innovation, disruption and digital strategies. Be prepared and flexible as the progression of transformation takes place and begins to thrive.
  3. Have ethics. Good business practices create good business value.
  4. Embrace technology. Digital, automation and self-service technologies are creating change in talent management services.
  5. Rethink the HR lifecycle. Address the future of automation and technology, analytics, service models, governance, etc. to ensure it is affording the organization value now and in the future. The future of talent management strategies are flexible, people-oriented and reliable.
  6. Champion the strategy. Existing leadership teams should collaborate to prioritize, support and lead the success of the organization’s talent management strategy.
  7. Assess and redesign talent management programs to support all levels of leadership in the organization. Keep them people-centric through experiential learning to ensure they are ready to lead. These programs should support and measure cultural diversity, creativity and legacy, leadership and team excellence, brand equity, employee engagement and productivity, and revenue prosperity.
  8. Conduct assessments. Align talent to future value. Develop individual career frameworks and leadership plans for effective insight, growth and success.
  9. Develop your workforce. With scarcity in talent and the ever-growing desire for job security, it is critical organizations provide professional development programs to up-skill and reskill their workforce. Enabling the workforce to thrive ensures positive and lasting employee experience and engagement, resulting in positive productivity and profitability.
  10. Create a brain trust. Develop an internal and external data source that attracts social interaction from employees, stakeholders and suppliers. Utilize the data to analyze, validate and identify innovation, disruption and key business information to support leadership decisions and corporate strategy.
  11. Redefine metrics. Redefine traditional performance management to a coaching culture. Align metrics to mirror the organization’s mission, vision, strategic initiatives, transformational goals and milestones, all while streamlining incentives and rewards accordingly.

Talent Management Meaning, History, Scope, Need

Talent Management (TM) refers to the anticipation of required human capital for an organization and the planning to meet those needs. The field has been growing in significance and gaining interest among practitioners as well as in the scholarly debate over the past 10 years, particularly after McKinsey’s 1997 research and the 2001 book on The War for Talent. Talent management in this context does not refer to the management of entertainers.

Talent management is the science of using strategic human resource planning to improve business value and to make it possible for companies and organizations to reach their goals. Everything done to recruit, retain, develop, reward and make people perform forms a part of talent management as well as strategic workforce planning. A talent-management strategy should link to business strategy and to local context to function more appropriately.

Components:

Attract, develop, motivate and retain: This is not a comprehensive list. Talent management touches on all key HR areas, from hiring to employee onboarding and from performance management to retention.

  • The full scope of HR processes:

Talent management is about a set of HR processes that integrate with each other. This means that talent management activities are larger than the sum of the individual parts. This also means that a talent management strategy is required to capitalize on its full potential. More about this later.

  • High-performing employees:

The purpose of talent management is to increase performance. It aims to motivate, engage, and retain employees to make them perform better. This is why the importance of talent management is so significant. When it’s done right, companies can build a sustainable competitive advantage and outperform their competition through an integrated system of talent management practices that are hard to copy and/or imitate.

Focus:

  • Employer reputation:

Reputation is related to employee branding. However, reputation is more affected by external media the company has less control over. An example of reputation gone wrong is the banking sector in recent years, especially after the 2008 financial crisis.

  • Employer branding:

Having a strong brand attracts even the best candidates.

  • Candidate experience:

The experience of the candidate influences the employer brand.

  • Referrals:

Talent knows talent. Referral programs are effective as they help to pick up candidates that onboard quicker and perform better. We listed 7 employee referral programs examples you can take a look at to get inspired.

  • Onboarding:

Getting people up to speed as quickly as possible helps to make them more productive and increases employee retention.

  • Selection:

Spotting and selecting the best is a critical part of talent management.

  • Inboarding:

Yes, you read it right. When people are promoted internally, they also need support to achieve maximum productivity. This is called inboarding.

  • Engagement:

Engaged employees are motivated, perform well, and are more likely to stay.

  • Retention:

Retention strategies help to keep the best people on board. An example is succession planning.

  • Succession planning:

You want to be able to fill crucial top positions whenever they become vacant. Having a talent pipeline that ensures succession planning is a key element in this.

  • Learning and Development:

This is not only a common talent management practice, it’s also a Human Resource best practice. Educating employees helps increase performance and retention. After all, once you’ve recruited the best people, you want to make sure they remain the frontrunners in the field, right?

  • Performance management:

An essential part of managing talent is tracking and improving their performance.

  • HR analytics:

As we’ve said before, by leveraging data you can ensure that you’re hitting the right KPIs that have an impact on business outcomes.

History

The precursor to “Talent management” seen extensively in firms during the latter part of the 20th century was centered around internal talent development. An overemphasis was placed on the training and evaluation of managerial positions creating an excess supply of middle-management talent. Poor business forecasting of economic downturn in the 1970s combined with no-layoff policies for white-collar workers resulted in corporate bloat. Recession throughout the 1980s saw large increases in unemployment as firms restructured, placing less importance on internal development. As a result the hiring of outside talent largely replaced the internal development schemes seen in businesses earlier in the century and by the late 1990s had reached its limit. Firms found they were both attracting and losing experienced employees at the same rate and needed to explore new ways of retaining and nurturing incumbent employees.

The term was coined by McKinsey & Company following a 1997 study. The following year in 1998 “Talent management” was entered in a paper. Written by Elizabeth G. Chambers, Mark Foulon, Helen Handfiled-Jones, Steven M. Hankin, and Eduard G. Micheals III. However, the connection between human resource development and organizational effectiveness has been established since the 1970s.

The profession that supports talent management became increasingly formalized in the early 2000s. While some authors defined the field as including nearly everything associated with human resources, the NTMN defined the boundaries of the field through surveys of those in corporate talent management departments in 2009–2011. Those surveys indicated that activities within talent management included succession planning, assessment, development, and high potential management. Activities such as performance management and talent acquisition (recruiting) were less frequently included in the remit of corporate talent management practitioners. Compensation was not a function associated with talent management. Lastly, the strategy of using talent management help organizations with workforce during WWII.

Scope:

India is one of the rapidly emerging markets in South East Asia. Recently companies in India have started to focus on their talent management programs. There are two classes of labour in India; skilled and unskilled, and it pays a lot to be skilled in India. Minimum wage of an unskilled labour lies somewhere in between US$1,400 to $1,500 per annum, which is very low by international standards. But if you are equipped with tertiary skills you can easily make a good living. This difference in the wages can be comprehended with the help of a simple economics’ concept of supply in demand. High skilled workers are a scarce resource everywhere and therefore they are valued more, which explains the higher wages.

Even with the higher wages, a job-hopping attitude is clearly visible in the Indian workforce, especially the millennial. A survey found out that 54% of the Indians consider leaving their current job because of the lack of growth opportunities. This percentage rises even more when the sample is taken from age-bracket of 16–24-year-olds. The talented and ambitious youth of the country, greatly values the skill development opportunities provided by their employers.

  • Talent Acquisition:

All organizations today want the sun and the moon and the stars but often land up only reaching the tree tops. Business firms are looking for employees who have excellent functional skills, social skills and strategic skills but, it is almost impossible to find one candidate who has best of all skills. Hence organizations make do with what they get. Identifying and acquiring talented workforce is one of the most important stages of talent management as they say, “Well begun is half well completed.”

  • Talent Development:

Once you have hired the right set of employees into the organization, it is imperative to develop them in the areas that are important to the organization. Some competencies are stable whereas some are dynamic competencies. The stable competencies include the enduring characteristics of individuals which remain more or less the same over time and the dynamic competencies include knowledge and skills that are continuously changing.

Talent development primarily aims to develop the dynamic competencies of individuals through interventions such as formal training programmes, coaching and mentoring by senior leaders of the organization, job rotations, on the job learning, special assignments, action learning, committee work, stretch assignments, developmental assignments, job shadowing, etc.

  • Talent Engagement:

Hiring and developing talent does not ensure that we have engaged employees. Having employees who go out of their way to help others, having employees who do not restrict their work tasks to their job descriptions and having employees who are more willing to work on holidays or extra time is a blessing in today’s competitive environment. These things will happen only and only if the employees are truly engaged with the organization.

Having engaged employees is truly an asset to the company and a success story towards talent management. With organizational citizenship, behaviour is often used as a parameter to gauge employee engagement, what is often overlooked as a factor has increased engagement in mentoring the employees. Mentoring is when senior and more experienced individuals in the organization take keen interest in the personal and professional development of junior and less experienced individuals in the same organization.

  • Talent Retention:

Hiring the right talent, investing in further developing them and engaging them is a futile effort if it does not lead to talent retention. All the hard work and efforts of the HR team go in vain when employees want to exit early from the organization. Not all exits are bad but when employees want a separation without having contributed enough, is where the problem lies. Some companies especially in the Information

Technology sector are trying to remedy this situation by asking employees to sign a bond. A bond that is a contract between the employer and the employee that makes them agree to terms and condi­tions stating that they will not leave the organization for a minimum period of xyz years as decided by the company. In case they violate this clause of the Memorandum of Understanding, there is a huge monetary fine associated with the same.

Need

No process or organization is any good without the right talent managing it. The right people can create the right design, the right processes and adopt the right technology to propel any organization in the desired direction. Talent management is all about having the right person at the right place at the right time for the optimum time and at the right price. Organizations have now realized that people could be that crucial differentiating edge for them in the increasingly competitive marketplace.

There are various reasons for which a company would need talent management as summarized below:

  1. To align the workforce with the business needs:

Talent management is about identifying the right talent for the right role. It implies fitment of right set of skills to the right set of job requirements. This alignment of skills to job tasks ensures synergy between the staffing process and the business demands.

  1. To engage the workforce for establishing and sustaining highest level of productivity:

An engaged workforce leads to a productive workforce. Establishing and sustaining highest level of productivity implies a lot of things including creating and maintaining a talent culture. This culture creates an enabling environment for employees to learn, grow and excel at their work. We propose an EVOSKILLS model to create and sustain a talent culture in an organization that will enable highest level of productivity.

  1. Effective talent management helps in increasing the employee satisfaction:

Employee satisfaction can be understood as cognitive, emotive and social comfort that is achieved by working in an organization which has fair policies that respect employee sentiment. Developing fair transparent and just employee related policies and ensuring their smooth execution is very much an integral part of talent management.

All the great places to work that have achieved the Great Place to Work title by employee votes are places that guarantee employee satisfaction through effective talent management processes.

  1. To effectively develop leaders in the organization who can use their expertise to help in the growth of the company:

Talent management includes talent development. Developing talent does not only mean developing technical skills and functional skills of employees, it also includes developing behavioural skills of employees including those of the leaders. Many organizations have tie-ups with leading B-schools of the world to help the organizational leaders develop the right set of competencies through different educational programmes. In turn, these leaders are expected to serve the company for a minimum specified period of time, especially if the educational programme is sponsored by the organization, partly or fully.

  1. To effectively balance diversity in workforce enabling highest possible employee engagement:

Workforce diversity is a challenging theme. Organizations are today spending on diversity training among other things on a high priority basis. If not dealt with elegance and dignity, it can backfire big time. People want to know how much you can before they care how much you know. Employees belonging to different age groups, gender, race, community, linguistic groups and religions, all expect and rightly so to be treated fairly to say the least. Beyond the fairness paradigm is the legitimacy and access paradigm that claims to use diverse backgrounds of employees for business gain.

Impact of Reorganization: Gain or Loss to Stakeholders, Implementation of Objectives, Integration of Businesses and Operations, Post Merger Success and Valuation and Impact on Human and Cultural Aspects

Gain or Loss to Stakeholders

In mergers and acquisitions it largely depends upon the terms and conditions of the merger and the track record of the transferee or acquirer company. Based on the cardinal principle, every buyer, in other words transferee or acquirer has to pay more than the book value of the transferor or target company. However, the terms and conditions of the transaction depend upon their present operations and past historical records.

Implementation of Objectives

We have so far discussed various objectives, motives, reasons and purposes which are to be achieved and accomplished by implementing them after completion of merger, amalgamation or acquisition. Much of the senior management’s attention must be focused on developing a ‘post-transaction’ strategy and integration plan that will generate the revenue enhancements and cost savings that initially prompted the merger or acquisition. After merger or acquisition, the resources of two or more companies should be put together for producing better results through savings in operating costs because of combined management of production, marketing, purchasing, resources etc. These economies are known as synergistic operative economies. Synergy is also possible in the areas of Research and Development function of the combined company for optimum utilization of technological development, which could not be taken up by the separate companies for want of resources.

A key challenge in mergers and acquisitions is their effective implementation as there are chances that mergers and acquisitions may fail because of slow integration. The key is to formulate in advance integration plans that can effectively accomplish the goals of the M&A processes. Since time is money and competitors do not stand still, integration must not only be done well but also done expeditiously.

To implement the objectives of mergers or acquisitions, there are various factors, which are required to be reorganized in the post merged or acquired company. Such factors can be grouped in the followed heads:

(i) Legal Requirements

Fulfilment of legal requirements in post-merger reorganisation of any amalgamating company becomes essential for an effective and successful venture. The quantum of such obligations will depend upon the size of company, debt structure and profile of its creditors, compliances under the corporate laws, controlling Integration of Businesses and Operations regulations, distribution channels and dealers network, suppliers relations, labour etc.

(ii) Combination of operations

The amalgamating company has to consolidate the operations of the transferor company’s operations with its own. This covers not only the production process, adoption of new technology and engineering requirements in the production process but also covers the entire technical aspects like technical know-how, project engineering, plant layout, schedule of implementation, product designs, plant and equipment, manpower requirements, work schedule, pollution control measures, etc. in the process leading to the final product.

Integrating two different technological systems for complex business entities while continuing to run the business can be a massive challenge. It requires proper planning for phased transitions, extensive preparation and intensive testing. It is necessary to define workable implementation plans as to what needs to be integrated, when it should happen and how it can be done successfully.

(iii) Top Management Changes

The takeover or merger of one company with another affects the senior managerial personnel. A cohesive team is required both at the board level as well as at senior executive level. The reorganisation would involve induction of the directors of the transferor company on the Board of the amalgamating company, or induction of reputed and influential persons from outside who have expertise in directing and policy planning to broad base the Board for public image as well as smooth functioning of the company. Selection of directors, finalising their term of holding the office as directors, managerial compensation and other payments or reimbursements of expenses etc. are issues to be sorted out.

At the senior executive level also, changes are required particularly in respect of compensation depending upon the terms and conditions of merger, amalgamation or takeover and to adjust in suitable positions the top executives of the amalgamated company to create a congenial environment and cohesive group leadership within the organisation. Understanding different cultures and where and how to integrate them properly is vital to the success of an acquisition or a merger. Important factors to be taken note of would include the mechanism of corporate control particularly encompassing delegation of power and power of control, responsibility towards accounting, management information system, to and fro communication channels, interdivisional and intra-divisional harmony and achieving optimum results through changes and motivation.

(iv) Management of financial resources

Takeover, merger, amalgamation or demergers facilitate the attainment of the main objectives of achieving growth of the company’s operations. Growth is dependent upon the expansion, modernization or renovation or restructuring. Generally, the management plans in advance about the financial resources which would be available to the company to finance its post-merger plans. Such preplanning is based on certain assumptions which might change post-merger depending upon the volatility of a variety of factors involved.

(v) Financial Restructuring

Financial restructuring becomes essential in post merger reorganisation. Financial restructuring is characterised by liquidity crisis, ‘abnormal’ balance sheets and negative equity. The ‘clean-up’ must happen fast. Replacement of costlier fundings by cheaper borrowings on a long and short term basis as per requirement is one of the several ways and means of financial restructuring for a company. This being an important aspect concerns most of the top management, creditors, bankers, shareholders, regulatory bodies like stock exchange, SEBI as well as the government where provisions of corporate laws are attracted and their permissions or approvals for planned changes are required. Generally, financial restructuring is done as per the scheme of arrangement, merger or amalgamation approved by the shareholders and creditors but in those cases where takeover or acquisition of an undertaking is made by one company of the other through acquiring financial stake by way of acquisition of shares, e.g. IPCL by RIL, reorganisation of financial structure would be a post-merger event which might compel the company to change its capital base, revalue its assets and reallocate reserves.

Post Merger Success and Valuation and Impact on Human and Cultural Aspects

Every merger is not successful. The factors which are required to measure the success of any merger:

  1. The earning performance of the merged company can be measured by return on total assets and return on net worth. It has been found that the probability of success or failure in economic benefits was very high among concentric mergers. Simple vertical and horizontal mergers were found successful whereas the performance of concentric mergers was in between these two extremes i.e. failure and success.
  2. Whether the merged company yields larger net profit than before, or a higher return on total funds employed or the merged company is able to sustain the increase in earnings.
  3. The capitalisation of the merged company determines its success or failure. Similarly, dividend rate and payouts also determines its success or failure.
  4. Whether merged company is creating a larger business organisation which survives and provides a basis for growth.
  5. Comparison of the performance of the merged company with the performance of similar sized company in the same business in respect of (I) Sales, (ii) assets, (iii) net profit, (iv) earning per share and (v) market price of share.

In general, growth in profit, dividend payouts, company’s history, increase in size provides base for future growth and are also the factors which help in determining the success or failure of a merged company

  1. Fair market value is one of the valuation criteria for measuring the success of post merger company. Fair market value is understood as the value in the hands between a willing buyer and willing seller, each having reasonable knowledge of all pertinent facts and neither being under pressure or compulsion to buy or sell. Such valuation is generally made in pre merger cases.
  2. In valuing the whole enterprise, one must seek financial data of comparable companies in order to determine ratios that can be used to give an indication of the company position.
  3. Gains to shareholders have so far been measured in terms of increase or decrease in share prices of the merged company. However, share prices are influenced by many factors other than the performance results of a company. Hence, this cannot be taken in isolation as a single factor to measure the success or failure of a merged company.
  4. In some mergers there is not only increase in the size of the merged or amalgamated company in regard to capital base and market segments but also in its sources and resources which enable it to optimize its end earnings.
  5. In addition to the above factors, a more specific consideration is required to be given to factors like improved debtors realisation, reduction in non-performing assets, improvement due to economies of large scale production and application of superior management in sources and resources available relating to finance, labour and materials.

Human and Cultural Aspects

The merger is a period of great uncertainty for the employees of the merging organizations. The uncertainty relates to job security and status within the company leading to fear and hence low morale among the employees. It is natural for employees to fear the loss of their revenue or change in their status within the company after a merger since many of these employees literally invest their whole lives in their jobs. Hence the possibility of a change in their position is likely to be viewed with fear and resentment. The possibility of a change in compensation and benefits also creates a feeling of insecurity and unease. The influx of new employees into the organisation can create a sense of invasion at times and ultimately leads to resentment. Further, the general chaos which follows any merger results in disorientation amongst employees due to ill defined role and responsibilities. This further leads to frustrations resulting into poor performance and low productivity since strategic and financial advantage is generally a motive for any merger. Top executives very often fail to give attention to the human aspects of mergers by neglecting to manage the partnership in human terms. By failing to give attention to the problems faced by their employees, they fail to fully develop their companies’ collaborative advantage.

The successful merger demands that strategic planners are sensitive to the human issues of the organizations. For the purpose, following checks have to be made constantly to ensure that:

sensitive areas of the company are pinpointed and personnel in these sections carefully monitored;

  • Serious efforts are made to retain key people;
  • A replacement policy is ready to cope with inevitable personnel loss;
  • Records are kept of everyone who leaves, when, why and to where;
  • Employees are informed of what is going on, even bad news is systematically delivered. Uncertainty is more dangerous than the clear, logical presentation of unpleasant facts;
  • Training department is fully geared to provide short, medium and long term training strategy for both production and managerial staff;
  • Likely union reaction be assessed in advance;
  • Estimate cost of redundancy payments, early pensions and the like assets;
  • Comprehensive policies and procedures be maintained up for employee related issues such as office procedures, new reporting, compensation, recruitment and selection, performance, termination, disciplinary action etc.;
  • New policies to be clearly communicated to the employees specially employees at the level of managers, supervisors and line manager to be briefed about the new responsibilities of those reporting to them;
  • Family gatherings and picnics be organized for the employees and their families of merging companies during the transition period to allow them to get off their inhibitions and breed familiarity.

Conflicts & Negotiation Handling in Project Management

Conflicts

Project Vision

In an ideal construction project, everyone has the same vision for the project as the client or project manager. Everyone should be working towards the same goal of making the client happy. This type of conflict arises when workers have different ideas for the overall construction project. People will always have their own opinions. Teams may think that they need extra materials while some argue that there are enough materials to finish the job. Out of the 5 types of conflict in project management, differences in project vision don’t happen too often, but they can still cause problems while on the construction site.

Lack of Communication

Out of the 5 types of conflict in project management, a lack of communication can be the costliest for people working in construction. By far, a lack of communication will do the most damage to a construction project. Giving wrong or unclear instructions can set a project back. As a project manager, you have to communicate with each worker what needs to be done, when it needs to be done, and how they should go about completing it. A project manager that fails to communicate in a clear way will set up the project for failure.

A lack of communication can delay a project by a lot of time and will increase costs as a result. Communicating with your workers is crucial. It gives the project manager the ability to oversee how the project is developing and also gives them insight on some of the problems happening onsite.

Conflict Disagreements

When there are conflicts on the construction site, people should work together to come up with possible solutions. Working together usually solves the initial conflict, but if there are differing opinions on the solution another conflict can be born. This conflict is the disagreement on what to do about the initial problem. Out of the 5 types of conflict in project management, conflict disagreements don’t happen too often, but when they do they can delay a project for a decent amount of time. It can also create bad blood between workers who get too emotionally involved. It’s crucial that you solve this conflict quickly for the sake of your project.

Poor Leadership

As a project manager, you need to have the ability to lead your workers towards a finished project. You need to be able to hand out instructions that are very clear and need to supervise the progress of the project to make sure everything is going smoothly. A great project manager can bring out the best in any employee and will complete a project either on time or ahead of schedule. These are the qualities of a great leader, but what type of conflict occurs when there’s poor leadership?

Poor leadership can happen when a construction manager is not performing at an optimal level and is slowing down the progress of the project. When there is poor leadership, problems such as time constraints, unclear instructions, and confusion about worker roles occur. These problems slow down the pace of the project and increase the overall costs. Compared to a lack of communication, poor leadership is just as bad, if not the worst conflict to have out of the 5 types of conflict in project management.

Group Differences

Construction is all about teamwork. You need to have workers that are knowledgeable enough to make their own judgments and are team-oriented for the sake of the project. Group differences, one of the 5 types of conflict in project management, can happen when two different groups of workers don’t work efficiently due to their differences. Workers that can’t be team players and get along with their fellow construction workers make construction work a lot harder than it needs to be.

Workers with group differences will slow down the flow of the construction project. Whether there are communication problems or a difference in personality, workers have to overcome their differences for the benefit of the project. Workers that get along, work as a team, and set aside their differences will always finish a construction project faster and more efficiently than those who don’t.

Negotiations

A project manager wears many hats during a project. One of two hats that the project manager always seems to wear is that of a negotiator. Negotiations can occur during any phase of the project and multiple times during each phase. Project managers can negotiate with the project team, customers, and stakeholders. Some project managers are very good at negotiating, while others are not quite as good. A good negotiator knows there are two main classifications of negotiations: competitive and collaborative.

A competitive negotiation is a type of negotiation that is like a winner-takes-all battle royal. One side tries to get all of the resources and not share. This is a dangerous type of negotiation as bridges can be burned and feelings hurt.

A collaborative negotiation is the opposite of a competitive negotiation. This type tries to make both parties winners, also known as win-win negotiations. Most project managers look to use collaborative negotiations, as it will build long term alliances and decrease the chance of conflict later.

Conflict Resolution

The second hat that a project manager always seems to wear is the conflict resolver. Conflict resolution, just like negotiations, can occur during any stage of the project and can occur between the project team, stakeholders, and customers. So, how does a project manager resolve conflict? Well the first thing he should do is:

Separate

The first item a project manager must do is separate the conflict down into issues and people. The project manager must always remember that people have feelings and can harbour hard feelings for a while. The project manager must remember people are people, and issues are, well, issues–that is a long-winded way of saying work is work. After separation, the project manager can confront the parties, withdraw from the conflict, or step in and provide a resolution.

Confront

On a project, the project manager (most of the time) is the final authority when it comes to conflict resolutions. The project manager confronts both parties and hears them out for a quick resolution. The project manager has the authority to make decisions in favour of one or the other party.

Withdraw from Conflict

This is where the project manager will withdraw from the conflict and let things work themselves out. Years of experience have taught veteran project managers this is not a good way to solve conflict.

Compromise

The project manager will negotiate a collaborative solution to the conflict. The project manager will try to find a happy medium to allow both parties to walk away feeling as though they won. This will help smooth things over with each side.

Concede

Some conflicts are not worth the time of both parties. When the project manager determines what the issue is, he can arrange for one party to have a win and the other party to walk away. This would be like competitive negotiations.

There are five general techniques for resolving conflict. Each technique has its place and use:

1) Withdraw/avoid. Retreating from an actual or potential conflict situation; postponing the issue to be better prepared or to be resolved by others.

2) Smooth/accommodate. Emphasizing areas of agreement rather than areas of difference; conceding one’s position to the needs of others to maintain harmony and relationships.

3) Compromise/reconcile. Searching for solutions that bring some degree of satisfaction to all parties in to temporarily or partially resolve the conflict. This approach occasionally results in a lose-lose situation.

4) Force/direct. Pushing one’s viewpoint at the expense of others; offering only win-lose solutions, usually enforced through a power position to resolve an emergency. This approach often results to a win-lose situation.

5) Collaborate/problem solve. Incorporating multiple viewpoints and insights from differing perspectives; requires a cooperative attitude and open dialogue that typically leads to consensus and commitment. This approach can result in a win-win situation.

Indian Approach to Motivation

There are four methods:

1. Three Paths of Yoga. According to this, traditionally, four paths have been suggested to motivate.

(1) Cyan Yog: Path of knowledge of right or wrong and person is motivated through discussions, debate and contemplation.

(2) Bhakti Yog: Emotional path; he feels that devotion alone will satisfy his psychological needs.

(3) Karma Yog: Action orientation: Cause and effect relationship. He takes right step. Does his duty religiously. Gita teaches karma yog.

(4) Raj Yog: Mystic experiences: Internal psyche brings in a change.

According to the pshyce of an individual, any one or a mix of the above-mentioned methods can be adopted to motivate an individual.

2. LAW OF PURUSHARTHA: According to this tradition, a person is motivated to satisfy fourfold Purusharthas or missions of life. They are Dharma, Artha, Kama and Moksha. The word Purushartha is derived from two Sanskrit words ‘Purusha’ meaning person, and ‘Artha’ meaning aim or goal. Therefore, the term Purushartha means aim of life or missing of life.

(1) Dharma: It is the rightful duty of a person. An individual is guided by his inner instincts to follow his Dharma. Also, one has to follows one’s ‘Swadharma’ which is beneficial to him as well as to the society.

(2) Artha: It is the pursuit of material wealth. However, Artha is only a means to achieve the ends, viz., to get comforts of life. But it must be remembered that Artha hopas to be acquired through dharmic means only. The most important thing to remember is that one should not have any attachment with money.

(3) Kama: It means ‘desire’. According to this, one’s desires (needs) must be fulfilled. However, one must keep desires to a minimum level so as not to miss the ultimate aim of life, which is to realise the soul within oneself.

(4) Moksha: It means ‘liberation’. It implies self-realisation which is the ultimate aim of a human being. It is the ultimate experience of union of self with the superme self. By obtaining Artha, through Dharma, one fulfills one’s Kama – desires and finally attains Moksha.

3. THEORY OF RIN: According to this theory, man is born to repay the ‘Rin’ (Debts) of all his past lives. This motivates a person to act in such a manner so as to repay these debts. Right from the birth, one is indebted to the following:

(1) Deva Rin: Here, Deva means all the Pancha Bhutas viz., Agni Dev, Varun Dev (Air), Vasundhara (Earth), Akash Dev, and Jal Dev. All living beings should be indebted to these five cosmic forces for their existence. They should repay their debt by preserving them.

(2) Rishi Rin: Our Rishis have given us great scriptures which have enriched our lives. Therefore, it is our duty to live our lives according to these thoughts. So also, we must spread the knowledge given in the scriptures.

(3) Guru Rin: Our teachers have taught us so many things in life and made it wonderful. Hence, we should feel indebted to them and repay these debts by using this knowledge. Also, we must respect our teachers.

(4) Pitru Rin: Our parents and grandparents have brought us into this world and gave us the value system which gives us peace. Therefore, we are indebted to them. We should do our best to look after them.

(5) Matru Rin: The word ‘Matru’ has double meaning. The first one is mother, who rears a child in her womb and brings him/her in this world and sacrifices her life for her children. The second one is the mother earth which sustains the life of all the living beings without any expectation.

(6) Bandhav Rin: Man is a social animal. Therefore, besides having good mental and physical health, he must possess a good social health. For good social health, one must contribute towards society’s improvement and peace. According to Indian ethics, we believe in ‘VASUDEV KUTUMBKAM’ which means that entire world is our family and therefore we must take care and love every human being in this world.

(7) Nrip Rin: ‘NRIP’ means the King. In the present context, it means the government. In this sense, we must be indebted to the government and be a law-abiding citizen.

(8) Bhuta Rin: According to this concept, a man is indebted to all his ancesstors who have died. Indians worship their deceased forefathers. For this purpose they perform ‘SHRADDHA’ a ritual, every year, to remember their departed forefathers.

Also, Indians believe that an indebted man cannot go to heaven, after death. Therefore, every Indian would like to repay all his debts, before leaving this world.

4. Ancient Technique of Motivation: According to this technique, there are four methods of motivation, viz., SAAM (Association), DAAM (Reward), DAND (Punishment) and BHED (Difference).

(1) SAAM: Man is social animal and he would like to be a part of the group to which he belongs. Therefore, a person can be motivated by the values, beliefs, ideology and lifestyle habits of the social and official groups.

(2) DAAM: Man can be motivated by offering rewards. Rewards should be such so as to satisfy the unfulfilled needs of an individual. These can be in terms of money or recognition, or both.

(3) DAND: Sometimes fear of punishment or losing a thing, may motivate a person to do a job.

(4) BHED: This technique believes in the method of ‘DIVIDE AND RULE’. Groups are created in the society and competition is set between them. This competition motivates the individuals in the groups.

Difference between Virtual Organization and Traditional Organization

Virtual Teams

A virtual team is a group of people who work for a common purpose but in separate locations. The concept of the virtual team has been introduced with the enhancement of technology. In these teams, people perform jobs in a virtual work environment created and maintained through IT and software technologies. The virtual team concept is relatively new to project management areas and IT. Most of the processes are outsourced in a virtual work environment. Since virtual team solely rely on electronic communication media, they work in different time zones and a variety of cultural boundaries. More diversified team members may work in a virtual team.

Virtual team management includes the following:

  • Training: Team leader sets targets and develops the team member until he meets the standard level.
  • Assembling: Probation periods are the measurable indicator to be applied when commencing with remote teamwork organization.
  • Managing: Use of telecommunication technologies to manage ongoing projects and jobs of remote group members.
  • Controlling: Team leader establishes performance indicators to evaluate the performance of team members.

Traditional Teams

A traditional team, also known as an intact team, is a functional team in which experts work together and share a common path to achieve their team’s processes and goals. In some cases, traditional teams are an entire department. Leadership is undertaken by a senior-level manager. New recruitments to the team are based on their technical skills and competency. Traditional teams mostly engage in described routine jobs.

Organization Structure: Compared to the traditional teams, virtual teams support flatter organization structure with dim lines of authorities and hierarchies. This is required to survive in hypercompetitive market, deliver results faster and encourage creativity which are actually the primary objectives for forming a virtual team.

Selection of Team Members: In case of traditional teams, members are largely selected based on their functional skills. But performing in a virtual team environment is not easy for everyone. Lack of face-to-face interactions and social focus in a virtual setting might lead to isolation and loneliness. It calls for managing ambiguity, proactive networking, exceptional time management and work discipline, ability to learn new technologies, and the ability to collaborate across functional and cultural boundaries. So, in the selection of a virtual team member, there is a need to look into these core competencies in addition to the basic functional skills.

Accountability

In a team-based organization, team members are accountable to each other, and to the team as a whole. This mutual accountability means that the entire team is responsible for its collective actions. This is the opposite of accountability at an individual level inherent in traditional organizations.

Although there are times when teams could have collectively performed better, lack of effort and accountability are rarely intentional. According to a February 2020 Harvard Business Review article, a team’s underperformance is most likely due to limited resources, ambiguity regarding roles, a poor strategy and/or unrealistic goals.

Leadership Style: In virtual team setting, managers cannot physically control the day-to-day activities and monitor each team members’ activities, therefore they need to delegate little more as compared to traditional teams. The command-and-control leadership style of yester years is giving way to the more democratic and coaching style of today.

Relationship Building: When traditional team members meet in the workplace every day they tend to develop close social ties with each other. They strike rapport with each other when they interact face-to-face. In the virtual team the interactions are tend to be more task-focused. Further, lack of verbal cues and gestures in virtual setting does not allow any scope for personal touch in the communication.

Psychological Contract: The foundation of psychological contract is more fragile in the virtual environment. Smaller instances of misunderstanding or gaps in communication result in violation of the psychological contract which has negative effects on the team’s effectiveness. Virtual teams also experience difficulties in building trust, cohesion and commitment among its members.

Knowledge Exchange & Decision-taking: Many a times in traditional teams, information is being exchanged during informal discussions. But in case of virtual teams, members have a very limited or no informal access to the information. Hence there is a need for more frequent updates on project status and building a shared database to provide all the important information to the team. Considering the time zone differences in global virtual teams, it becomes difficult to schedule meetings. Thus, in case of virtual teams many a times delay occurs in fixing a problem or reaching a consensus, whereas in traditional teams a meeting can be called at any time of the day when all the members are present together in the office, resulting quick decisions and problem solving.

HRM Perspectives in Training and Development Meaning, Advantages

Training means imparting the knowledge, skills and aptitudes necessary to undertake the required jobs efficiently with a view to developing the worker to his fullest potential. As an organised activity, training is designed to create a change in the thinking and behaviour of people. Training is a two-way and continuous process because there is no end to learning and secondly, a person gets to learn new technology, new patterns etc., continuously.

The training acquaints the employee with the requisite skill, real life situations at the work place and helps him in the faultless accomplishment of the work. Training, thus, involves the development of the manual and mental skills that are necessary for performing a specific work, through instruction, drill and discipline.

“Training is a process by which the attitudes, skills and abilities of employees to perform specific jobs are increased.” Micheal J. Jucious

“Training is the act of increasing the knowledge and skill of an employee for doing a particular job.” Edwin B. Flippo

“Training is the organised procedure by which people learn knowledge and/or skill for a definite purpose.” E. F. L. Breach

Character

  • Training helps to perform the role of different sections of em­ployees, the managerial responsibility and the importance of communication and participation.
  • Training must be help to create an attitudinal change by creating awareness of the overall process.
  • It must enhance skills in organizational and managerial areas
  • Proper orientation and training should be given to the new en­trants.
  • It must make orient new entrants in the organization to the dis­cipline and culture requirement of the organization.
  • An effective training programme should process the following characteristics.
  • Training programmes should be chalked out after identifying needs or goals.
  • An effective training programme should be flexible.
  • It should have relevance to the job requirements.
  • It should make due allowance for the differences among the in­dividuals in regard to ability, aptitude, learning capacity, emo­tional make-up, etc.
  • Training programmes should be conducted by well qualified and experienced trainers.
  • An effective training programme should have the support from top management.
  • A good training performance should prepare the trainee mentally before they are imparted any job knowledge or skills.
  • Top management can gently influence the quality of training in the organization by the policies it adopts and the extent to which it supports training programmes.
  • An effective training programme should be supported by critical appraisal of the outcome of the training efforts.

Purposes:

  • Training is necessary to prepare existing employees for higher level jobs (promotion).
  • Newly recruited employees require training so as to perform their tasks effectively and efficiently. Instructions, guidance, coaching help them to handle jobs competently without any wastage.
  • Existing employees require refresher training so as to keep abreast of the latest developments in the job operations. In the phase of rapid technological changes, this is an absolute necessity.
  • Better performing workers are less likely to make operational mistakes. Quality increases may be in relationship to a company product or services or in reference to the intangible organisational employment atmosphere.
  • Instruction can help employees increase their level of performance on their present assignment. Increased human performance often directly leads to increased operational productivity and increased company profit.
  • Training is necessary when a person moves from one job to another (transfer). After training, the employee can change jobs quickly, improve his performance levels and achieve career goals comfortably.
  • Training is necessary to make employees mobile and versatile. They can be placed on various jobs depending on organizational needs.
  • Training is needed to bridge the gap between what the employees have and what the job demands. Training is needed to make employees more productive and useful in the long run.
  • Organisations that have a good internal educational programme will have to make less drastic manpower changes and adjustments in the event of sudden personnel alterations. When the need arises, organizational vacancies can be more easily staffed from internal sources, if a company initiates and maintains an adequate instructional programme for both its non- supervisory and managerial employees. So, it will help company to fulfil its future personnel needs.
  • An endless chain of positive reactions results from a well-planned training programme. Production and product quality may improve, financial incentives may then be increased, there is a boost for internal promotions, less supervisory pressure and base pay rate increases result. Increased morale may be due to many factors but one of them is current state of an organization’s educational endeavour. Thus, it will improve overall organizational climate.
  • Training and development programmes foster the initiative and creativity of employees and help to prevent manpower obsolescence, which may be due to age or temperament or motivation or the inability of a person to adapt him to technological changes.
  • On a personal basis employees gain individually from their exposure to educational experiences. Again management development programmes seem to give participants a wider awareness, an enlarged skill and enlightened altruistic (kindness) philosophy and enhance personal growth.
  • Proper training can help to prevent industrial accidents. A safer work environment leads to more stable mental attitudes on the part of employees. Managerial mental state would also improve if supervisors know that they can better themselves through company designed development programmes. So it improves health and safety.
  • Training is needed for employees to gain acceptance from peers, (learning a job quickly and being able to pull their own weight is one of the best ways for them to gain acceptance).

Objectives

To Remain Competitive in the Market:

To tackle the immensely growing competition in the target market, it is important for an employer to increase the productivity of its workers while reducing the cost of production of the products. Training, therefore, aims to bring about efficiency and effectiveness in an organization to enable it to remain competitive in a highly competitive market situation and for the achievement of organizational goals.

To Increase Productivity of Employees:

Training helps in developing the capacities and capabilities of the employees-both new and old, by upgrading their skills and knowledge so that the organization could gainfully avail their services for higher grade professional, technical, sales or production positions from within the organization. In case of new employees, training aims to provide them with basic knowledge and skill they need for an intelligent performance of their specific tasks.

To Change Attitude of the Workers:

Training not only provides new knowledge and job skills to employees, but also brings about a change in their attitude towards fellow workers, supervisor and the organization. It increases job satisfaction among employees and keeps them motivated. It gives them security at the workplace and as a result, labour turnover and absenteeism rates are reduced. It also develops in them self-consciousness and a greater awareness to recognize their responsibilities and contribute their very best to the organization.

To Mitigate the Risk of Accidents:

Trained workers can handle the machines safely. They also know the use of various safety devices in the factory. Thus, they are less prone to industrial accidents.

To Reduce Wastage of Time and Resources:

Training aims at making employees efficient in handling materials, machines and equipment and thus to avoid wastage of time and resources. It also helps in imparting new skills among the workers systematically so that they may learn quickly. If the workers learn through trial and error, they will take a longer time and even then, may not be able to learn right methods of doing work.

To Enable Workers to Adapt Quickly to Changes:

Technology is changing at a fast pace. Technological changes like automation and development of highly mechanized and computer-oriented systems, threaten the survival of dynamic companies by creating new problems, new methods, new procedures, new equipment’s, new jobs, new skills and knowledge, new product and services etc.

In such a situation, the employees may find themselves helpless to adapt to the changes and may feel frustrated and compelled to leave their jobs. Thus, training acts as a continuous process to update the employees in the new methods and procedures and make them efficient in handling advanced technology.

To Provide Growth Opportunities to Existing Employees:

Sometimes, it may not be possible for the management to fill in higher work positions from outside. Under such conditions, the apprenticeship programmes aiming at improving the skills of the present employees come to the aid of the company by make available their requirements of the personnel from within the organization. This reduces the need for recruiting people from outside and also improves the morale of the existing employees.

To Make the Management Effective:

One of the primary objectives of training and development process is to give rise to a new and improved management which is capable of handling the planning and control without any serious problem. Knowledge and experience gathered through training enables them to handle the tough situations and confusing realities, thus opening the way for bigger and better opportunities for business. It can also be used for strengthening values, building teams, improving inter- group’s relations and quality of work life.

Levels of training of the employees:

  1. Training to Unskilled Workers:

Unskilled workers require training to acquaint themselves with improved methods of handling their work to reduce the cost of production and do the job in the most economical and efficient way. Such employees are given training on the job itself and the training is imparted either by their immediate superior officers, or foremen.

  1. Training to Semi-Skilled Workers:

This category of employees requires training to cope with the requirements of the industry arising out of the adoption of mechanisation and rationalisation. These employees are given training either in the section or department itself, or in segregated training shops, where machines and other facilities are easily available. The training is usually imparted by more proficient workers and it lasts for a few hours or weeks, depending upon the number of operations and speed and accuracy required.

  1. Training to Skilled Workers:

Skilled workers are given training through the system of apprenticeship, varying in length up to a period of 5 years. Crafts training is imparted through training centres and the industry itself.

  1. Training to Senior and Supervisory Staff:

Since the supervisors form a very important link in the chain of administration, therefore, they need advanced up-to-date training at frequent intervals. The training programmes for the supervisory staff must be specific and tailor-made to fit the need of the undertaking.

They are generally given training in:

(a) Organisation and control of production, maintenance and materials handling at the departmental levels.

(b) Planning, allocation and control of work and personnel.

(c) Planning their own work and allocation of time to their various responsibilities.

(d) Effect of industrial legislation at the departmental level.

(e) Cost factors and costs control.

(f) Accident prevention.

(g) Training of subordinates.

(h) Communication, effective instructing, report-writing.

(i) Handling and settling human/Labour problems.

(j) Leadership for effective working of the undertaking.

  1. Training to Other Staff:

5esides the above categories of unskilled, semi-skilled and skilled workers, other employees are also required to be trained; they are computer operators, typists, stenographers, accounts clerks, etc. They need training in their field but such training is usually not provided. Salesmen are also given training about the nature of the products; routine involved in putting through the deal and art of salesmanship, along with the latest knowledge of the products being developed in the organisation.

Advantage

Lesser Supervision:

Well-trained employees have the knowledge about their jobs and equipment’s and can do their work efficiently. Thus, the training reduces the need of supervision to bare minimum.

Improvement in Production and Productivity:

Training helps to improve the efficiency and productivity of employees. Well-trained employees make better use of materials and machinery. Wastage is reduced and as a result quality and quantity of production becomes higher.

Maximum Utilisation of Materials and Machines:

Training teaches the employees the method of doing their job in the best possible manner. They have knowledge of operating machines and equipment’s and handles them properly and methodically. As a result of it, they make the best possible utilisation of materials and machines.

High Morale:

Effective training improves the self-confidence and job satisfaction of employees. Well-trained employees take greater interest in their job and derive a sense of security. By boosting the morale of employees, training helps to reduce absenteeism and improve labour turnover.

Better Chances of Promotion:

As the trained employees have the requisite qualifi­cation and training, they can be promoted to higher grades and position more easily than untrained workers.

Better Safety:

Human error or negligence is the major cause of accidents in the industry. Due to the operational efficiency of the trained workers and the complete knowledge about the working of the plants and machines, chances of accidents are reduced.

Stability and Flexibility in the Organisation:

An enterprise, where trained personnel are available, can expand and grow easily. Its survival is not threatened when a few key personnel are lost because proper replacements are available. Well- trained employees can be transferred from one job to another in order to meet the requirements of other departments. Thus, training also lends flexibility to the organisation.

Global Staffing, Selection Criteria

Staffing for global operations is quite a complex affair. It involves activities on a global basis, including candidate selection, assignment terms and documentation, relocation processing and vendor management, immigration processing, cultural and language orientation and training, compensation administration and payroll processing, tax administration, career planning and development, and handling of spouse and dependent matters. In global staffing, companies need to choose from various types of global staff members and need to have specific approaches and strategies to global staffing. Global staff members are selected from among three different types: expatriates, host-country people and third-country nationals. Expatriate is a person who belongs to the country in which the organization is headquartered and not a citizen of the country in which the company operates. A host-country national is a citizen of the country in which the subsidiary company is located. A third-country national is a citizen of a country, but works in another country and employed by an organization headquartered in a third country.

Types of International Employees

International employees can be placed in three different classifications.

An expatriate is an employee working in a unit or plant who is not a citizen of the country in which the unit or plant is located but is a citizen of the country in which the organization is headquartered.

A host-country national is an employee working in a unit or plant who is a citizen of the country in which the unit or plant is located, but where the unit or plant is operated by an organization headquartered in another country.

A third-country national is a citizen of one country, working in a second country, and employed by an organization headquartered in a third country. Each of these individuals presents some unique HR management challenges. Because in a given situation each is a citizen of a different country, different tax laws and other factors apply. HR professionals have to be knowledgeable about the laws and customs of each country. They must establish appropriate payroll and record-keeping procedures, among other activities, to ensure compliance with varying regulations and requirements.

Selection Criteria of Global Staffing

Experts sometimes classify top executives’ values as ethnocentric, polycentric, or geocentric, and these values translate into corresponding corporate behaviors and policies. These values translate into three broad international staffing policies. The vital factors that affect Multinational enterprises (MNEs) staffing include strategy, organizational structure, and subsidiary specific factors such as its duration of operations, technology, production and marketing technologies, and host country characteristics such as level of economic and technology development, political stability, regulations and culture. Thus the philosophies of staffing abroad are ethnocentric, polycentric, regiocentric and geocentric.

Ethnocentric Staffing: In ethnocentric staffing, Parent Country Nationals (PCNs) are selected for key position regardless of location. Japanese, European, U.S and Korean firms utilise ethnocentric staffing. With an ethnocentric staffing policy, the firm fills key management jobs with parent country nationals. Reasons given for ethnocentric staffing policies include lack of qualified host-country senior-management talent, a desire to maintain a unified corporate culture and tighter control, and the desire to transfer the parent firm’s core competencies to a foreign subsidiary more expeditiously.

Polycentric Staffing: The polycentric staffing policy requires host-country nationals to be hired to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. Although home-country personnel fill top management positions, this is not always the case. For example, many US MNCs use home-country managers to get the operations started, and then hand it over to the host-country managers. Hindustan Lever Ltd, (HLL), the Indian subsidiary of Unilever, has local as its chiefs. Preference for home-country citizens for key positions does not fit into a pattern, unless government interventions dictate selection processes. In Brazil, for example, two-thirds of the employees in any foreign subsidiary traditionally had to be Brazilians. In additions, many countries exert real and subtle pressures to staff the upper management ranks with nationals. The polycentric approach to staffing has both merits as well as demerits. Hiring host country nationals eliminates language barriers, expensive training periods and cross-cultural adjustment problems of managers and their families. The disadvantages of the polycentric approach are equally strong. Local managers may have difficulty bridging the gap between the subsidiary and the parent company, because the experience and exposure they possess may not have prepared them to work as part of global enterprises. Language barriers, national loyalties, and a range of cultural differences may isolate the corporate headquarters staff from the various foreign subsidiaries. Finally, consideration of only home and host-country nationals may result in the exclusion of competent executives.

Regiocentric Staffing: With regiocentric approach, a firm’s recruitment for its international operation is done on a regional basis and the managers are selected on the basis of ‘the best in the region’ with international transfers that are restricted to regions. Regiocentric approach takes a somewhat larger operational view than that of polycentric approach as it covers a trade region like European Union and allowing managers to move between business units in various countries of the same region. In this staffing approach, a mix of Parent-country nationals, host-country nationals and third-country nationals can be used depending on the specific needs of the company. The regiocentric approach has recently become more popular as many multinational companies are choosing to organize in regional basis. One of the main advantages of this approach is that it reduces the need for costly duplication of support services. Most multinational companies regiocentric rather than truly international and majority of their sales and operations are concentrated on the region. When it comes to the corporate level, the regiocentric approach is may be limiting as ethnocentric approach as multinational companies are failing to understand the features of the regions outside of their home-region. The regional structure may also lead to the mergence of silo-mentalities as regional managers will be trying to hold and protect their top talent within the region rather than allowing them to develop outside their region.

Geocentric Staffing: This staffing philosophy seeks the best people for key jobs throughout the organization regardless of nationality. Seeking the best person for the job, irrespective of nationally is most consistent with the underline philosophy of a global corporation. Colgate-Palmolive is an example of a company that follows the geocentric approach. A geocentric policy is based on assumptions that, highly competent employees are available not only at headquarters, but also in the subsidiaries; international experience is a condition for success in top position; managers with high potential and ambition for promotion are always ready to be transferred from one country to another; competent and mobile managers have an open disposition and high adaptability to different conditions in their various assignments; and those not blessed initially with an open disposition and high adaptability can acquire these qualities as their experience abroad accumulates. The geocentric approach has merits and demerits. Among its advantages is the possibility of making the best use of its human resources and it enables the firm to build a cadre of international executives who feel at home working in a number of cultures. In addition, the multinational composition of the management team that results from geocentric staffing tends to reduce cultural myopia and to enhance local responsiveness. Thus, other things being equal, a geocentric policy seems to be the most attractive. Among the disadvantages, the restrictions imposed on staffing by host governments that a high number of their citizens are to be employed in subsidiaries, the increased training and relocation costs and a remuneration structure with standardized international base pay are the prominent.

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